VALENTIN L. LEGASPI, petitioner, vs.

CIVIL SERVICE COMMISSION,

respondent.
CORTES, J.:
The fundamental right of the people to information on matters of public
concern is invoked in this special civil action for mandamus instituted by
petitioner Valentin L. Legaspi against the Civil Service Commission. The
respondent had earlier denied Legaspi's request for information on the civil
service eligibilities of certain persons employed as sanitarians in the Health
Department of Cebu City. These government employees, Julian Sibonghanoy
and Mariano Agas, had allegedly represented themselves as civil service
eligibles who passed the civil service examinations for sanitarians.
Claiming that his right to be informed of the eligibilities of Julian Sibonghanoy
and Mariano Agas, is guaranteed by the Constitution, and that he has no other
plain, speedy and adequate remedy to acquire the information, petitioner
prays for the issuance of the extraordinary writ of mandamus to compel the
respondent Commission to disclose said information.
This is not the first tune that the writ of mandamus is sought to enforce the
fundamental right to information. The same remedy was resorted to in the
case of Tanada et. al. vs. Tuvera et. al., (G.R. No. L-63915, April 24,1985,136
SCRA 27) wherein the people's right to be informed under the 1973
Constitution (Article IV, Section 6) was invoked in order to compel the
publication in the Official Gazette of various presidential decrees, letters of
instructions and other presidential issuances. Prior to the recognition of the
right in said Constitution the statutory right to information provided for in the
Land Registration Act (Section 56, Act 496, as amended) was claimed by a
newspaper editor in another mandamus proceeding, this time to demand
access to the records of the Register of Deeds for the purpose of gathering
data on real estate transactions involving aliens (Subido vs. Ozaeta, 80 Phil.
383 [1948]).
The constitutional right to information on matters of public concern first
gained recognition in the Bill of Rights, Article IV, of the 1973 Constitution,
which states:
Sec. 6. The right of the people to information on matters
of public concern shall be recognized. Access to official
records, and to documents and papers pertaining to
official acts, transactions, or decisions, shall be afforded
the citizen subject to such limitations as may be provided
by law.
The foregoing provision has been retained and the right therein provided
amplified in Article III, Sec. 7 of the 1987 Constitution with the addition of the
phrase, "as well as to government research data used as basis for policy
development." The new provision reads:
The right of the people to information on matters of public
concern shall be recognized. Access to official records,
and to documents, and papers pertaining to official acts,
transactions, or decisions, as well as to government
research data used as basis. for policy development, shall
be afforded the citizen, subject to such stations as may be
provided by law.
These constitutional provisions are self-executing. They supply the rules by
means of which the right to information may be enjoyed (Cooley, A Treatise on
the Constitutional Limitations 167 [1927]) by guaranteeing the right and
mandating the duty to afford access to sources of information. Hence, the
fundamental right therein recognized may be asserted by the people upon the
ratification of the constitution without need for any ancillary act of the
Legislature. (Id. at, p. 165) What may be provided for by the Legislature are
reasonable conditions and limitations upon the access to be afforded which
must, of necessity, be consistent with the declared State policy of full public
disclosure of all transactions involving public interest (Constitution, Art. 11,
Sec. 28). However, it cannot be overemphasized that whatever limitation may
be prescribed by the Legislature, the right and the duty under Art. III Sec. 7
have become operative and enforceable by virtue of the adoption of the New
Charter. Therefore, the right may be properly invoked in a mandamus
proceeding such as this one.
The Solicitor General interposes procedural objections to Our giving due
course to this Petition. He challenges the petitioner's standing to sue upon the
ground that the latter does not possess any clear legal right to be informed of
the civil service eligibilities of the government employees concerned. He calls
attention to the alleged failure of the petitioner to show his actual interest in
securing this particular information. He further argues that there is no
ministerial duty on the part of the Commission to furnish the petitioner with
the information he seeks.
1. To be given due course, a Petition for mandamus must have been instituted
by a party aggrieved by the alleged inaction of any tribunal, corporation, board
or person which unlawfully excludes said party from the enjoyment of a legal
right. (Ant;-Chinese League of the Philippines vs. Felix, 77 Phil. 1012 [1947]).
The petitioner in every case must therefore be an "aggrieved party" in the
sense that he possesses a clear legal right to be enforced and a direct interest
in the duty or act to be performed.
In the case before Us, the respondent takes issue on the personality of the
petitioner to bring this suit. It is asserted that, the instant Petition is bereft of
any allegation of Legaspi's actual interest in the civil service eligibilities of
Julian Sibonghanoy and Mariano Agas, At most there is a vague reference to an
unnamed client in whose behalf he had allegedly acted when he made
inquiries on the subject (Petition, Rollo, p. 3).
But what is clear upon the face of the Petition is that the petitioner has firmly
anchored his case upon the right of the people to information on matters of
public concern, which, by its very nature, is a public right. It has been held
that:
* * * when the question is one of public right and the
object of the mandamus is to procure the enforcement of a
public duty, the people are regarded as the real party in
interest and the relator at whose instigation the
proceedings are instituted need not show that he has any
legal or special interest in the result, it being sufficient to
show that he is a citizen and as such interested in the
execution of the laws * * * (Tanada et. al. vs. Tuvera, et.
al., G.R. No. L- 63915, April 24, 1985, 136 SCRA 27, 36).
From the foregoing, it becomes apparent that when a mandamus proceeding
involves the assertion of a public right, the requirement of personal interest is
satisfied by the mere fact that the petitioner is a citizen, and therefore, part of
the general "public" which possesses the right.
The Court had opportunity to define the word "public" in the Subido case,
supra, when it held that even those who have no direct or tangible interest in
any real estate transaction are part of the "public" to whom "(a)ll records
relating to registered lands in the Office of the Register of Deeds shall be open
* * *" (Sec. 56, Act No. 496, as amended). In the words of the Court:
* * * "Public" is a comprehensive, all-inclusive term.
Properly construed, it embraces every person. To say that
only those who have a present and existing interest of a
pecuniary character in the particular information sought
are given the right of inspection is to make an
unwarranted distinction. *** (Subido vs. Ozaeta, supra at
p. 387).
The petitioner, being a citizen who, as such is clothed with personality to seek
redress for the alleged obstruction of the exercise of the public right. We find
no cogent reason to deny his standing to bring the present suit.
2. For every right of the people recognized as fundamental, there lies a
corresponding duty on the part of those who govern, to respect and protect
that right. That is the very essence of the Bill of Rights in a constitutional
regime. Only governments operating under fundamental rules defining the
limits of their power so as to shield individual rights against its arbitrary
exercise can properly claim to be constitutional (Cooley, supra, at p. 5).
Without a government's acceptance of the limitations imposed upon it by the
Constitution in order to uphold individual liberties, without an
acknowledgment on its part of those duties exacted by the rights pertaining to
the citizens, the Bill of Rights becomes a sophistry, and liberty, the ultimate
illusion.
In recognizing the people's right to be informed, both the 1973 Constitution
and the New Charter expressly mandate the duty of the State and its agents to
afford access to official records, documents, papers and in addition,
government research data used as basis for policy development, subject to
such limitations as may be provided by law. The guarantee has been further
enhanced in the New Constitution with the adoption of a policy of full public
disclosure, this time "subject to reasonable conditions prescribed by law," in
Article 11, Section 28 thereof, to wit:
Subject to reasonable conditions prescribed by law, the
State adopts and implements a policy of full public
disclosure of all its transactions involving public interest.
(Art. 11, Sec. 28).
In the Tanada case, supra, the constitutional guarantee was bolstered by what
this Court declared as an imperative duty of the government officials
concerned to publish all important legislative acts and resolutions of a public
nature as well as all executive orders and proclamations of general
applicability. We granted mandamus in said case, and in the process, We
found occasion to expound briefly on the nature of said duty:
* * * That duty must be enforced if the Constitutional right
of the people to be informed on matters of public concern
is to be given substance and reality. The law itself makes a
list of what should be published in the Official Gazette.
Such listing, to our mind, leaves respondents with no
discretion whatsoever as to what must be in included or
excluded from such publication. (Tanada v. Tuvera, supra,
at 39). (Emphasis supplied).
The absence of discretion on the part of government agencia es in allowing
the examination of public records, specifically, the records in the Office of the
Register of Deeds, is emphasized in Subido vs. Ozaeta, supra:
Except, perhaps when it is clear that the purpose of the
examination is unlawful, or sheer, idle curiosity, we do not
believe it is the duty under the law of registration officers
to concern themselves with the motives, reasons, and
objects of the person seeking access to the records. It is
not their prerogative to see that the information which the
records contain is not flaunted before public gaze, or that
scandal is not made of it. If it be wrong to publish the
contents of the records, it is the legislature and not the
officials having custody thereof which is called upon to
devise a remedy. *** (Subido v. Ozaeta, supra at 388).
(Emphasis supplied).
It is clear from the foregoing pronouncements of this Court that government
agencies are without discretion in refusing disclosure of, or access to,
information of public concern. This is not to lose sight of the reasonable
regulations which may be imposed by said agencies in custody of public
records on the manner in which the right to information may be exercised by
the public. In the Subido case, We recognized the authority of the Register of
Deeds to regulate the manner in which persons desiring to do so, may inspect,
examine or copy records relating to registered lands. However, the regulations
which the Register of Deeds may promulgate are confined to:
* * * prescribing the manner and hours of examination to
the end that damage to or loss of, the records may be
avoided, that undue interference with the duties of the
custodian of the books and documents and other
employees may be prevented, that the right of other
persons entitled to make inspection may be insured * * *
(Subido vs. Ozaeta, 80 Phil. 383, 387)
Applying the Subido ruling by analogy, We recognized a similar authority in a
municipal judge, to regulate the manner of inspection by the public of criminal
docket records in the case of Baldoza vs. Dimaano (Adm. Matter No. 1120-MJ,
May 5, 1976, 71 SCRA 14). Said administrative case was filed against the
respondent judge for his alleged refusal to allow examination of the criminal
docket records in his sala. Upon a finding by the Investigating Judge that the
respondent had allowed the complainant to open and view the subject
records, We absolved the respondent. In effect, We have also held that the
rules and conditions imposed by him upon the manner of examining the
public records were reasonable.
In both the Subido and the Baldoza cases, We were emphatic in Our statement
that the authority to regulate the manner of examining public records does
not carry with it the power to prohibit. A distinction has to be made between
the discretion to refuse outright the disclosure of or access to a particular
information and the authority to regulate the manner in which the access is to
be afforded. The first is a limitation upon the availability of access to the
information sought, which only the Legislature may impose (Art. III, Sec. 6,
1987 Constitution). The second pertains to the government agency charged
with the custody of public records. Its authority to regulate access is to be
exercised solely to the end that damage to, or loss of, public records may be
avoided, undue interference with the duties of said agencies may be
prevented, and more importantly, that the exercise of the same constitutional
right by other persons shall be assured (Subido vs. Ozaetal supra).
Thus, while the manner of examining public records may be subject to
reasonable regulation by the government agency in custody thereof, the duty
to disclose the information of public concern, and to afford access to public
records cannot be discretionary on the part of said agencies. Certainly, its
performance cannot be made contingent upon the discretion of such agencies.
Otherwise, the enjoyment of the constitutional right may be rendered
nugatory by any whimsical exercise of agency discretion. The constitutional
duty, not being discretionary, its performance may be compelled by a writ of
mandamus in a proper case.
But what is a proper case for Mandamus to issue? In the case before Us, the
public right to be enforced and the concomitant duty of the State are
unequivocably set forth in the Constitution. The decisive question on the
propriety of the issuance of the writ of mandamus in this case is, whether the
information sought by the petitioner is within the ambit of the constitutional
guarantee.
3. The incorporation in the Constitution of a guarantee of access to
information of public concern is a recognition of the essentiality of the free
flow of ideas and information in a democracy (Baldoza v. Dimaano, Adm.
Matter No. 1120-MJ, May 5, 1976, 17 SCRA 14). In the same way that free
discussion enables members of society to cope with the exigencies of their
time (Thornhill vs. Alabama, 310 U.S. 88,102 [1939]), access to information of
general interest aids the people in democratic decision-making (87 Harvard
Law Review 1505 [1974]) by giving them a better perspective of the vital
issues confronting the nation.
But the constitutional guarantee to information on matters of public concern is
not absolute. It does not open every door to any and all information. Under
the Constitution, access to official records, papers, etc., are "subject to
limitations as may be provided by law" (Art. III, Sec. 7, second sentence). The
law may therefore exempt certain types of information from public scrutiny,
such as those affecting national security (Journal No. 90, September 23, 1986,
p. 10; and Journal No. 91, September 24, 1986, p. 32, 1986 Constitutional
Commission). It follows that, in every case, the availability of access to a
particular public record must be circumscribed by the nature of the
information sought, i.e., (a) being of public concern or one that involves public
interest, and, (b) not being exempted by law from the operation of the
constitutional guarantee. The threshold question is, therefore, whether or not
the information sought is of public interest or public concern.
a. This question is first addressed to the government agency having custody
of the desired information. However, as already discussed, this does not give
the agency concerned any discretion to grant or deny access. In case of denial
of access, the government agency has the burden of showing that the
information requested is not of public concern, or, if it is of public concern,
that the same has been exempted by law from the operation of the guarantee.
To hold otherwise will serve to dilute the constitutional right. As aptly
observed, ". . . the government is in an advantageous position to marshall and
interpret arguments against release . . ." (87 Harvard Law Review 1511
[1974]). To safeguard the constitutional right, every denial of access by the
government agency concerned is subject to review by the courts, and in the
proper case, access may be compelled by a writ of Mandamus.
In determining whether or not a particular information is of public concern
there is no rigid test which can be applied. "Public concern" like "public
interest" is a term that eludes exact definition. Both terms embrace a broad
spectrum of subjects which the public may want to know, either because these
directly affect their lives, or simply because such matters naturally arouse the
interest of an ordinary citizen. In the final analysis, it is for the courts to
determine in a case by case basis whether the matter at issue is of interest or
importance, as it relates to or affects the public.
The public concern invoked in the case of Tanada v. Tuvera, supra, was the
need for adequate notice to the public of the various laws which are to
regulate the actions and conduct of citizens. In Subido vs. Ozaeta, supra, the
public concern deemed covered by the statutory right was the knowledge of
those real estate transactions which some believed to have been registered in
violation of the Constitution.
The information sought by the petitioner in this case is the truth of the claim
of certain government employees that they are civil service eligibles for the
positions to which they were appointed. The Constitution expressly declares
as a State policy that:
Appointments in the civil service shall be made only
according to merit and fitness to be determined, as far as
practicable, and except as to positions which are policy
determining, primarily confidential or highly technical, by
competitive examination. (Art. IX, B, Sec. 2.[2]).
Public office being a public trust, [Const. Art. XI, Sec. 1] it is the legitimate
concern of citizens to ensure that government positions requiring civil service
eligibility are occupied only by persons who are eligibles. Public officers are at
all times accountable to the people even as to their eligibilities for their
respective positions.
b. But then, it is not enough that the information sought is of public interest.
For mandamus to lie in a given case, the information must not be among the
species exempted by law from the operation of the constitutional guarantee.
In the instant, case while refusing to confirm or deny the claims of eligibility,
the respondent has failed to cite any provision in the Civil Service Law which
would limit the petitioner's right to know who are, and who are not, civil
service eligibles. We take judicial notice of the fact that the names of those
who pass the civil service examinations, as in bar examinations and licensure
examinations for various professions, are released to the public. Hence, there
is nothing secret about one's civil service eligibility, if actually possessed.
Petitioner's request is, therefore, neither unusual nor unreasonable. And when,
as in this case, the government employees concerned claim to be civil service
eligibles, the public, through any citizen, has a right to verify their professed
eligibilities from the Civil Service Commission.
The civil service eligibility of a sanitarian being of public concern, and in the
absence of express limitations under the law upon access to the register of
civil service eligibles for said position, the duty of the respondent Commission
to confirm or deny the civil service eligibility of any person occupying the
position becomes imperative. Mandamus, therefore lies.
WHEREFORE, the Civil Service Commission is ordered to open its register of
eligibles for the position of sanitarian, and to confirm or deny, the civil service
eligibility of Julian Sibonghanoy and Mariano Agas, for said position in the
Health Department of Cebu City, as requested by the petitioner Valentin L.
Legaspi.
--
RICARDO VALMONTE, OSWALDO CARBONELL, DOY DEL CASTILLO,
ROLANDO BARTOLOME, LEO OBLIGAR, JUN GUTIERREZ, REYNALDO
BAGATSING, JUN "NINOY" ALBA, PERCY LAPID, ROMMEL CORRO and
ROLANDO FADUL vs. FELICIANO BELMONTE, JR.
CORTES, J.:
Petitioners in this special civil action for mandamus with preliminary injunction
invoke their right to information and pray that respondent be directed:

(a) to furnish petitioners the list of the
names of the Batasang Pambansa
members belonging to the UNIDO and
PDP-Laban who were able to secure
clean loans immediately before the
February 7 election thru the
intercession/marginal note of the then
First Lady Imelda Marcos; and/or
(b) to furnish petitioners with certified
true copies of the documents
evidencing their respective loans;
and/or
(c) to allow petitioners access to the
public records for the subject
information. (Petition, pp. 4-5;
paragraphing supplied.]
The controversy arose when petitioner Valmonte wrote respondent Belmonte
the following letter:
June 4, 1986
Hon. Feliciano Belmonte
GSIS General Manager
Arroceros, Manila
Sir:
As a lawyer, member of the media and plain citizen of our
Republic, I am requesting that I be furnished with the list
of names of the opposition members of (the) Batasang
Pambansa who were able to secure a clean loan of P2
million each on guarranty (sic) of Mrs. Imelda Marcos. We
understand that OIC Mel Lopez of Manila was one of those
aforesaid MPs. Likewise, may we be furnished with the
certified true copies of the documents evidencing their
loan. Expenses in connection herewith shall be borne by
us.
If we could not secure the above documents could we have
access to them?
We are premising the above request on the following
provision of the Freedom Constitution of the present
regime.
The right of the people to information
on matters of public concern shall be
recognized. Access to official records,
and to documents and papers
pertaining to official acts, transactions
or decisions, shall be afforded the
citizen subject to such limitation as
may be provided by law. (Art. IV, Sec.
6).
We trust that within five (5) days from receipt hereof we
will receive your favorable response on the matter.,
(Sgd.) RICARDO C. VALMONTE
[Rollo, p. 7.]
To the aforesaid letter, the Deputy General Counsel of the GSIS replied:
June 17, 1986
Atty. Ricardo C. Valmonte
108 E. Benin Street
Caloocan City
Dear Compaero:
Possibly because he must have thought that it contained
serious legal implications, President & General Manager
Feliciano Belmonte, Jr. referred to me for study and reply
your letter to him of June 4, 1986 requesting a list of the
opposition members of Batasang Pambansa who were able
to secure a clean loan of P2 million each on guaranty of
Mrs. Imelda Marcos.
My opinion in this regard is that a confidential relationship
exists between the GSIS and all those who borrow from it,
whoever they may be; that the GSIS has a duty to its
customers to preserve this confidentiality; and that it
would not be proper for the GSIS to breach this
confidentiality unless so ordered by the courts.
As a violation of this confidentiality may mar the image of
the GSIS as a reputable financial institution, I regret very
much that at this time we cannot respond positively to
your request.
Very truly yours,
(Sgd.) MEYNARDO A. TIRO
Deputy General Counsel
[Rollo, p. 40.]
On June 20, 1986, apparently not having yet received the reply of the
Government Service and Insurance System (GSIS) Deputy General Counsel,
petitioner Valmonte wrote respondent another letter, saying that for failure to
receive a reply, "(W)e are now considering ourselves free to do whatever action
necessary within the premises to pursue our desired objective in pursuance of
public interest." [Rollo, p. 8.]
On June 26, 1986, Valmonte, joined by the other petitioners, filed the instant
suit.
On July 19, 1986, the Daily Express carried a news item reporting that 137
former members of the defunct interim and regular Batasang Pambansa,
including ten (10) opposition members, were granted housing loans by the
GSIS [Rollo, p. 41.]
Separate comments were filed by respondent Belmonte and the Solicitor
General. After petitioners filed a consolidated reply, the petition was given due
course and the parties were required to file their memoranda. The parties
having complied, the case was deemed submitted for decision.
In his comment respondent raises procedural objections to the issuance of a
writ of mandamus, among which is that petitioners have failed to exhaust
administrative remedies.
Respondent claims that actions of the GSIS General Manager are reviewable by
the Board of Trustees of the GSIS. Petitioners, however, did not seek relief
from the GSIS Board of Trustees. It is therefore asserted that since
administrative remedies were not exhausted, then petitioners have no cause of
action.
To this objection, petitioners claim that they have raised a purely legal issue,
viz., whether or not they are entitled to the documents sought, by virtue of
their constitutional right to information. Hence, it is argued that this case falls
under one of the exceptions to the principle of exhaustion of administrative
remedies.
Among the settled principles in administrative law is that before a party can be
allowed to resort to the courts, he is expected to have exhausted all means of
administrative redress available under the law. The courts for reasons of law,
comity and convenience will not entertain a case unless the available
administrative remedies have been resorted to and the appropriate authorities
have been given opportunity to act and correct the errors committed in the
administrative forum. However, the principle of exhaustion of administrative
remedies is subject to settled exceptions, among which is when only a
question of law is involved [Pascual v. Provincial Board, 106 Phil. 466 (1959);
Aguilar v. Valencia, et al., G.R. No. L-30396, July 30, 1971, 40 SCRA 210;
Malabanan v. Ramento, G.R. No. L-2270, May 21, 1984, 129 SCRA 359.] The
issue raised by petitioners, which requires the interpretation of the scope of
the constitutional right to information, is one which can be passed upon by
the regular courts more competently than the GSIS or its Board of Trustees,
involving as it does a purely legal question. Thus, the exception of this case
from the application of the general rule on exhaustion of administrative
remedies is warranted. Having disposed of this procedural issue, We now
address ourselves to the issue of whether or not mandamus hes to compel
respondent to perform the acts sought by petitioners to be done, in pursuance
of their right to information.
We shall deal first with the second and third alternative acts sought to be
done, both of which involve the issue of whether or not petitioners are entitled
to access to the documents evidencing loans granted by the GSIS.
This is not the first time that the Court is confronted with a controversy
directly involving the constitutional right to information. In Taada v. Tuvera,
G.R. No. 63915, April 24,1985, 136 SCRA 27 and in the recent case of Legaspi
v. Civil Service Commission, G.R. No. 72119, May 29, 1987,150 SCRA 530, the
Court upheld the people's constitutional right to be informed of matters of
public interest and ordered the government agencies concerned to act as
prayed for by the petitioners.
The pertinent provision under the 1987 Constitution is Art. 111, Sec. 7 which
states:
The right of the people to information on matters of public
concern shall be recognized. Access to official records,
and to documents, and papers pertaining to official acts,
transactions, or decisions, as well as to government
research data used as basis for policy development, shall
be afforded the citizen, subject to such limitations as may
be provided by law.
The right of access to information was also recognized in the 1973
Constitution, Art. IV Sec. 6 of which provided:
The right of the people to information on 'matters of
public concern shall be recognized. Access to official
records, and to documents and papers pertaining to
official acts, transactions, or decisions, shall be afforded
the citizen subject to such limitations as may be provided
by law.
An informed citizenry with access to the diverse currents in political, moral
and artistic thought and data relative to them, and the free exchange of ideas
and discussion of issues thereon, is vital to the democratic government
envisioned under our Constitution. The cornerstone of this republican system
of government is delegation of power by the people to the State. In this
system, governmental agencies and institutions operate within the limits of
the authority conferred by the people. Denied access to information on the
inner workings of government, the citizenry can become prey to the whims
and caprices of those to whom the power had been delegated. The postulate
of public office as a public trust, institutionalized in the Constitution (in Art.
XI, Sec. 1) to protect the people from abuse of governmental power, would
certainly be were empty words if access to such information of public concern
is denied, except under limitations prescribed by implementing legislation
adopted pursuant to the Constitution.
Petitioners are practitioners in media. As such, they have both the right to
gather and the obligation to check the accuracy of information the
disseminate. For them, the freedom of the press and of speech is not only
critical, but vital to the exercise of their professions. The right of access to
information ensures that these freedoms are not rendered nugatory by the
government's monopolizing pertinent information. For an essential element of
these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of
the State that the channels for free political discussion be maintained to the
end that the government may perceive and be responsive to the people's will.
Yet, this open dialogue can be effective only to the extent that the citizenry is
informed and thus able to formulate its will intelligently. Only when the
participants in the discussion are aware of the issues and have access to
information relating thereto can such bear fruit.
The right to information is an essential premise of a meaningful right to
speech and expression. But this is not to say that the right to information is
merely an adjunct of and therefore restricted in application by the exercise of
the freedoms of speech and of the press. Far from it. The right to information
goes hand-in-hand with the constitutional policies of full public disclosure *
and honesty in the public service. ** It is meant to enhance the widening role
of the citizenry in governmental decision-making as well as in checking abuse
in government.
Yet, like all the constitutional guarantees, the right to information is not
absolute. As stated in Legaspi, the people's right to information is limited to
"matters of public concern," and is further "subject to such limitations as may
be provided by law." Similarly, the State's policy of full disclosure is limited to
"transactions involving public interest," and is "subject to reasonable
conditions prescribed by law."
Hence, before mandamus may issue, it must be clear that the information
sought is of "public interest" or "public concern," and is not exempted by law
from the operation of the constitutional guarantee [Legazpi v. Civil Service
Commission, supra, at p. 542.]
The Court has always grappled with the meanings of the terms "public
interest" and "public concern". As observed in Legazpi:
In determining whether or not a particular information is
of public concern there is no rigid test which can be
applied. "Public concern" like "public interest" is a term
that eludes exact definition. Both terms embrace a broad
spectrum of subjects which the public may want to know,
either because these directly affect their lives, or simply
because such matters naturally arouse the interest of an
ordinary citezen. In the final analysis, it is for the courts to
determine on a case by case basis whether the matter at
issue is of interest or importance, as it relates to or affects
the public. [Ibid. at p. 541]
In the Taada case the public concern deemed covered by the constitutional
right to information was the need for adequate notice to the public of the
various laws which are to regulate the actions and conduct of citezens. In
Legaspi, it was the "legitimate concern of citezensof ensure that government
positions requiring civil service eligibility are occupied only by persons who
are eligibles" [Supra at p. 539.]
The information sought by petitioners in this case is the truth of reports that
certain Members of the Batasang Pambansa belonging to the opposition were
able to secure "clean" loans from the GSIS immediately before the February 7,
1986 election through the intercession of th eformer First Lady, Mrs. Imelda
Marcos.
The GSIS is a trustee of contributions from the government and its employees
and the administrator of various insurance programs for the benefit of the
latter. Undeniably, its funds assume a public character. More particularly, Secs.
5(b) and 46 of P.D. 1146, as amended (the Revised Government Service
Insurance Act of 1977), provide for annual appropriations to pay the
contributions, premiums, interest and other amounts payable to GSIS by the
government, as employer, as well as the obligations which the Republic of the
Philippines assumes or guarantees to pay. Considering the nature of its funds,
the GSIS is expected to manage its resources with utmost prudence and in
strict compliance with the pertinent laws or rules and regulations. Thus, one of
the reasons that prompted the revision of the old GSIS law (C.A. No. 186, as
amended) was the necessity "to preserve at all times the actuarial solvency of
the funds administered by the System" [Second Whereas Clause, P.D. No.
1146.] Consequently, as respondent himself admits, the GSIS "is not supposed
to grant 'clean loans.'" [Comment, p. 8.] It is therefore the legitimate concern
of the public to ensure that these funds are managed properly with the end in
view of maximizing the benefits that accrue to the insured government
employees. Moreover, the supposed borrowers were Members of the defunct
Batasang Pambansa who themselves appropriated funds for the GSIS and were
therefore expected to be the first to see to it that the GSIS performed its tasks
with the greatest degree of fidelity and that an its transactions were above
board.
In sum, the public nature of the loanable funds of the GSIS and the public
office held by the alleged borrowers make the information sought clearly a
matter of public interest and concern.
A second requisite must be met before the right to information may be
enforced through mandamus proceedings, viz., that the information sought
must not be among those excluded by law.
Respondent maintains that a confidential relationship exists between the GSIS
and its borrowers. It is argued that a policy of confidentiality restricts the
indiscriminate dissemination of information.
Yet, respondent has failed to cite any law granting the GSIS the privilege of
confidentiality as regards the documents subject of this petition. His position
is apparently based merely on considerations of policy. The judiciary does not
settle policy issues. The Court can only declare what the law is, and not what
the law should be. Under our system of government, policy issues are within
the domain of the political branches of the government, and of the people
themselves as the repository of all State power.
Respondent however contends that in view of the right to privacy which is
equally protected by the Constitution and by existing laws, the documents
evidencing loan transactions of the GSIS must be deemed outside the ambit of
the right to information.
There can be no doubt that right to privacy is constitutionally protected. In the
landmark case of Morfe v. Mutuc [130 Phil. 415 (1968), 22 SCRA 424], this
Court, speaking through then Mr. Justice Fernando, stated:
... The right to privacy as such is accorded recognition
independently of its identification with liberty; in itself, it is
fully deserving of constitutional protection. The language
of Prof. Emerson is particularly apt: "The concept of limited
government has always included the idea that
governmental powers stop short of certain intrusions into
the personal life of the citizen. This is indeed one of the
basic distinctions between absolute and limited
government. UItimate and pervasive control of the
individual, in all aspects of his life, is the hallmark of the
absolute. state, In contrast, a system of limited
government safeguards a private sector, which belongs to
the individual, firmly distinguishing it from the public
sector, which the state can control. Protection of this
private sector protection, in other words, of the dignity
and integrity of the individual has become increasingly
important as modem society has developed. All the forces
of technological age industrialization, urbanization, and
organization operate to narrow the area of privacy and
facilitate intrusion into it. In modern terms, the capacity to
maintain and support this enclave of private life marks the
difference between a democratic and a totalitarian society."
[at pp. 444-445.]
When the information requested from the government intrudes into the
privacy of a citizen, a potential conflict between the rights to information and
to privacy may arise. However, the competing interests of these rights need
not be resolved in this case. Apparent from the above-quoted statement of the
Court in Morfe is that the right to privacy belongs to the individual in his
private capacity, and not to public and governmental agencies like the GSIS.
Moreover, the right cannot be invoked by juridical entities like the GSIS. As
held in the case of Vassar College v. Loose Wills Biscuit Co. [197 F. 982
(1912)], a corporation has no right of privacy in its name since the entire basis
of the right to privacy is an injury to the feelings and sensibilities of the party
and a corporation would have no such ground for relief.
Neither can the GSIS through its General Manager, the respondent, invoke the
right to privacy of its borrowers. The right is purely personal in nature [Cf.
Atkinson v. John Doherty & Co., 121 Mich 372, 80 N.W. 285, 46 L.RA. 219
(1899); Schuyler v. Curtis, 147 N.Y. 434, 42 N.E. 22, 31 L.R.A. 286 (1895)),
and hence may be invoked only by the person whose privacy is claimed to be
violated.
It may be observed, however, that in the instant case, the concerned
borrowers themselves may not succeed if they choose to invoke their right to
privacy, considering the public offices they were holding at the time the loans
were alleged to have been granted. It cannot be denied that because of the
interest they generate and their newsworthiness, public figures, most
especially those holding responsible positions in government, enjoy a more
limited right to privacy as compared to ordinary individuals, their actions
being subject to closer public scrutiny [Cf. Ayer Productions Pty. Ltd. v.
Capulong, G.R. Nos. 82380 and 82398, April 29, 1988; See also Cohen v.
Marx, 211 P. 2d 321 (1949).]
Respondent next asserts that the documents evidencing the loan transactions
of the GSIS are private in nature and hence, are not covered by the
Constitutional right to information on matters of public concern which
guarantees "(a)ccess to official records, and to documents, and papers
pertaining to official acts, transactions, or decisions" only.
It is argued that the records of the GSIS, a government corporation performing
proprietary functions, are outside the coverage of the people's right of access
to official records.
It is further contended that since the loan function of the GSIS is merely
incidental to its insurance function, then its loan transactions are not covered
by the constitutional policy of full public disclosure and the right to
information which is applicable only to "official" transactions.
First of all, the "constituent ministrant" dichotomy characterizing
government function has long been repudiated. In ACCFA v. Confederation of
Unions and Government Corporations and Offices (G.R. Nos. L-21484 and L-
23605, November 29, 1969, 30 SCRA 6441, the Court said that the
government, whether carrying out its sovereign attributes or running some
business, discharges the same function of service to the people.
Consequently, that the GSIS, in granting the loans, was exercising a
proprietary function would not justify the exclusion of the transactions from
the coverage and scope of the right to information.
Moreover, the intent of the members of the Constitutional Commission of
1986, to include government-owned and controlled corporations and
transactions entered into by them within the coverage of the State policy of
fun public disclosure is manifest from the records of the proceedings:
xxx xxx xxx
THE PRESIDING OFFICER (Mr. Colayco).
Commissioner Suarez is recognized.
MR. SUAREZ. Thank you. May I ask the Gentleman a few
question?
MR. OPLE. Very gladly.
MR. SUAREZ. Thank you.
When we declare a "policy of full public
disclosure of all its transactions"
referring to the transactions of the
State and when we say the "State"
which I suppose would include all of
the various agencies, departments,
ministries and instrumentalities of the
government....
MR. OPLE. Yes, and individual public officers, Mr. Presiding
Officer.
MR. SUAREZ. Including government-owned and controlled
corporations.
MR. OPLE. That is correct, Mr. Presiding Officer.
MR. SUAREZ. And
when we say
"transactions"
which should be
distinguished from
contracts,
agreements, or
treaties or
whatever, does the
Gentleman refer to
the steps leading
to the
consummation of
the contract, or
does he refer to the
contract itself?
MR. OPLE. The
"transactions" used
here I suppose is
generic and,
therefore, it can
cover both steps
leading to a
contract, and
already a
consummated
contract, Mr.
Presiding Officer.
MR. SUAREZ. This
contemplates
inclusion of
negotiations
leading to the
consummation of
the transaction.
MR. OPLE. Yes,
subject only to
reasonable
safeguards on the
national interest.
MR. SUAREZ. Thank
you. [V Record of
the Constitutional
Commission 24-
25.] (Emphasis
supplied.)
Considering the intent of the framers of the Constitution which, though not
binding upon the Court, are nevertheless persuasive, and considering further
that government-owned and controlled corporations, whether performing
proprietary or governmental functions are accountable to the people, the
Court is convinced that transactions entered into by the GSIS, a government-
controlled corporation created by special legislation are within the ambit of
the people's right to be informed pursuant to the constitutional policy of
transparency in government dealings.
In fine, petitioners are entitled to access to the documents evidencing loans
granted by the GSIS, subject to reasonable regulations that the latter may
promulgate relating to the manner and hours of examination, to the end that
damage to or loss of the records may be avoided, that undue interference with
the duties of the custodian of the records may be prevented and that the right
of other persons entitled to inspect the records may be insured [Legaspi v.
Civil Service Commission, supra at p. 538, quoting Subido v. Ozaeta, 80 Phil.
383, 387.] The petition, as to the second and third alternative acts sought to
be done by petitioners, is meritorious.
However, the same cannot be said with regard to the first act sought by
petitioners, i.e., "to furnish petitioners the list of the names of the Batasang
Pambansa members belonging to the UNIDO and PDP-Laban who were able to
secure clean loans immediately before the February 7 election thru the
intercession/marginal note of the then First Lady Imelda Marcos."
Although citizens are afforded the right to information and, pursuant thereto,
are entitled to "access to official records," the Constitution does not accord
them a right to compel custodians of official records to prepare lists,
abstracts, summaries and the like in their desire to acquire information on
matters of public concern.
It must be stressed that it is essential for a writ of mandamus to issue that the
applicant has a well-defined, clear and certain legal right to the thing
demanded and that it is the imperative duty of defendant to perform the act
required. The corresponding duty of the respondent to perform the required
act must be clear and specific [Lemi v. Valencia, G.R. No. L-20768, November
29,1968,126 SCRA 203; Ocampo v. Subido, G.R. No. L-28344, August 27,
1976, 72 SCRA 443.] The request of the petitioners fails to meet this standard,
there being no duty on the part of respondent to prepare the list requested.
WHEREFORE, the instant petition is hereby granted and respondent General
Manager of the Government Service Insurance System is ORDERED to allow
petitioners access to documents and records evidencing loans granted to
Members of the former Batasang Pambansa, as petitioners may specify,
subject to reasonable regulations as to the time and manner of inspection, not
incompatible with this decision, as the GSIS may deem necessary.
--
FRANCISCO I. CHAVEZ vs. PUBLIC ESTATES AUTHORITY and AMARI
COASTAL BAY DEVELOPMENT CORPORATION

CARPIO, J.:

This is an original Petition for Mandamus with prayer for a writ of preliminary
injunction and a temporary restraining order. The petition seeks to compel the
Public Estates Authority (PEA for brevity) to disclose all facts on PEAs then
on-going renegotiations with Amari Coastal Bay and Development Corporation
(AMARI for brevity) to reclaim portions of Manila Bay. The petition further
seeks to enjoin PEA from signing a new agreement with AMARI involving such
reclamation.

The Facts

On November 20, 1973, the government, through the Commissioner of Public
Highways, signed a contract with the Construction and Development
Corporation of the Philippines (CDCP for brevity) to reclaim certain foreshore
and offshore areas of Manila Bay. The contract also included the construction
of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itself to
carry out all the works in consideration of fifty percent of the total reclaimed
land.

On February 4, 1977, then President Ferdinand E. Marcos issued Presidential
Decree No. 1084 creating PEA. PD No. 1084 tasked PEA to reclaim land,
including foreshore and submerged areas, and to develop, improve, acquire,
x x x lease and sell any and all kinds of lands.[1] On the same date, then
President Marcos issued Presidential Decree No. 1085 transferring to PEA the
lands reclaimed in the foreshore and offshore of the Manila Bay[2] under the
Manila-Cavite Coastal Road and Reclamation Project (MCCRRP).

On December 29, 1981, then President Marcos issued a memorandum
directing PEA to amend its contract with CDCP, so that [A]ll future works in
MCCRRP x x x shall be funded and owned by PEA. Accordingly, PEA and
CDCP executed a Memorandum of Agreement dated December 29, 1981,
which stated:

(i) CDCP shall undertake all reclamation, construction, and such other works
in the MCCRRP as may be agreed upon by the parties, to be paid according to
progress of works on a unit price/lump sum basis for items of work to be
agreed upon, subject to price escalation, retention and other terms and
conditions provided for in Presidential Decree No. 1594. All the financing
required for such works shall be provided by PEA.

x x x

(iii) x x x CDCP shall give up all its development rights and hereby agrees to
cede and transfer in favor of PEA, all of the rights, title, interest and
participation of CDCP in and to all the areas of land reclaimed by CDCP in the
MCCRRP as of December 30, 1981 which have not yet been sold, transferred
or otherwise disposed of by CDCP as of said date, which areas consist of
approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473)
square meters in the Financial Center Area covered by land pledge No. 5 and
approximately Three Million Three Hundred Eighty Two Thousand Eight
Hundred Eighty Eight (3,382,888) square meters of reclaimed areas at varying
elevations above Mean Low Water Level located outside the Financial Center
Area and the First Neighborhood Unit.[3]

On January 19, 1988, then President Corazon C. Aquino issued Special Patent
No. 3517, granting and transferring to PEA the parcels of land so reclaimed
under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP)
containing a total area of one million nine hundred fifteen thousand eight
hundred ninety four (1,915,894) square meters. Subsequently, on April 9,
1988, the Register of Deeds of the Municipality of Paraaque issued Transfer
Certificates of Title Nos. 7309, 7311, and 7312, in the name of PEA, covering
the three reclaimed islands known as the Freedom Islands located at the
southern portion of the Manila-Cavite Coastal Road, Paraaque City. The
Freedom Islands have a total land area of One Million Five Hundred Seventy
Eight Thousand Four Hundred and Forty One (1,578,441) square meters or
157.841 hectares.

On April 25, 1995, PEA entered into a Joint Venture Agreement (JVA for
brevity) with AMARI, a private corporation, to develop the Freedom Islands.
The JVA also required the reclamation of an additional 250 hectares of
submerged areas surrounding these islands to complete the configuration in
the Master Development Plan of the Southern Reclamation Project-MCCRRP.
PEA and AMARI entered into the JVA through negotiation without public
bidding.[4] On April 28, 1995, the Board of Directors of PEA, in its Resolution
No. 1245, confirmed the JVA. [5] On June 8, 1995, then President Fidel V.
Ramos, through then Executive Secretary Ruben Torres, approved the JVA.[6]

On November 29, 1996, then Senate President Ernesto Maceda delivered a
privilege speech in the Senate and denounced the JVA as the grandmother of
all scams. As a result, the Senate Committee on Government Corporations
and Public Enterprises, and the Committee on Accountability of Public Officers
and Investigations, conducted a joint investigation. The Senate Committees
reported the results of their investigation in Senate Committee Report No. 560
dated September 16, 1997.[7] Among the conclusions of their report are: (1)
the reclaimed lands PEA seeks to transfer to AMARI under the JVA are lands of
the public domain which the government has not classified as alienable lands
and therefore PEA cannot alienate these lands; (2) the certificates of title
covering the Freedom Islands are thus void, and (3) the JVA itself is illegal.

On December 5, 1997, then President Fidel V. Ramos issued Presidential
Administrative Order No. 365 creating a Legal Task Force to conduct a study
on the legality of the JVA in view of Senate Committee Report No. 560. The
members of the Legal Task Force were the Secretary of Justice,[8] the Chief
Presidential Legal Counsel,[9] and the Government Corporate Counsel.[10] The
Legal Task Force upheld the legality of the JVA, contrary to the conclusions
reached by the Senate Committees.[11]

On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published
reports that there were on-going renegotiations between PEA and AMARI under
an order issued by then President Fidel V. Ramos. According to these reports,
PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo and retired Navy
Officer Sergio Cruz composed the negotiating panel of PEA.

On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for
Prohibition with Application for the Issuance of a Temporary Restraining Order
and Preliminary Injunction docketed as G.R. No. 132994 seeking to nullify the
JVA. The Court dismissed the petition for unwarranted disregard of judicial
hierarchy, without prejudice to the refiling of the case before the proper
court.[12]

On April 27, 1998, petitioner Frank I. Chavez (Petitioner for brevity) as a
taxpayer, filed the instant Petition for Mandamus with Prayer for the Issuance
of a Writ of Preliminary Injunction and Temporary Restraining Order.
Petitioner contends the government stands to lose billions of pesos in the sale
by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly
disclose the terms of any renegotiation of the JVA, invoking Section 28, Article
II, and Section 7, Article III, of the 1987 Constitution on the right of the people
to information on matters of public concern. Petitioner assails the sale to
AMARI of lands of the public domain as a blatant violation of Section 3, Article
XII of the 1987 Constitution prohibiting the sale of alienable lands of the
public domain to private corporations. Finally, petitioner asserts that he seeks
to enjoin the loss of billions of pesos in properties of the State that are of
public dominion.

After several motions for extension of time,[13] PEA and AMARI filed their
Comments on October 19, 1998 and June 25, 1998, respectively. Meanwhile,
on December 28, 1998, petitioner filed an Omnibus Motion: (a) to require PEA
to submit the terms of the renegotiated PEA-AMARI contract; (b) for issuance
of a temporary restraining order; and (c) to set the case for hearing on oral
argument. Petitioner filed a Reiterative Motion for Issuance of a TRO dated
May 26, 1999, which the Court denied in a Resolution dated June 22, 1999.

In a Resolution dated March 23, 1999, the Court gave due course to the
petition and required the parties to file their respective memoranda.

On March 30, 1999, PEA and AMARI signed the Amended Joint Venture
Agreement (Amended JVA, for brevity). On May 28, 1999, the Office of the
President under the administration of then President Joseph E. Estrada
approved the Amended JVA.

Due to the approval of the Amended JVA by the Office of the President,
petitioner now prays that on constitutional and statutory grounds the
renegotiated contract be declared null and void.[14]

The Issues

The issues raised by petitioner, PEA[15] and AMARI[16] are as follows:

I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT
AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;

II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE
PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;

III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF
ADMINISTRATIVE REMEDIES;

IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;

V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES
OFFICIAL INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL
AGREEMENT;

VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE
AGREEMENT FOR THE TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED
AND STILL TO BE RECLAIMED, VIOLATE THE 1987 CONSTITUTION; AND

VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF
WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.

The Courts Ruling

First issue: whether the principal reliefs prayed for in the petition are moot
and academic because of subsequent events.

The petition prays that PEA publicly disclose the terms and conditions of the
on-going negotiations for a new agreement. The petition also prays that the
Court enjoin PEA from privately entering into, perfecting and/or executing
any new agreement with AMARI.

PEA and AMARI claim the petition is now moot and academic because AMARI
furnished petitioner on June 21, 1999 a copy of the signed Amended JVA
containing the terms and conditions agreed upon in the renegotiations. Thus,
PEA has satisfied petitioners prayer for a public disclosure of the
renegotiations. Likewise, petitioners prayer to enjoin the signing of the
Amended JVA is now moot because PEA and AMARI have already signed the
Amended JVA on March 30, 1999. Moreover, the Office of the President has
approved the Amended JVA on May 28, 1999.

Petitioner counters that PEA and AMARI cannot avoid the constitutional issue
by simply fast-tracking the signing and approval of the Amended JVA before
the Court could act on the issue. Presidential approval does not resolve the
constitutional issue or remove it from the ambit of judicial review.

We rule that the signing of the Amended JVA by PEA and AMARI and its
approval by the President cannot operate to moot the petition and divest the
Court of its jurisdiction. PEA and AMARI have still to implement the Amended
JVA. The prayer to enjoin the signing of the Amended JVA on constitutional
grounds necessarily includes preventing its implementation if in the meantime
PEA and AMARI have signed one in violation of the Constitution. Petitioners
principal basis in assailing the renegotiation of the JVA is its violation of
Section 3, Article XII of the Constitution, which prohibits the government from
alienating lands of the public domain to private corporations. If the Amended
JVA indeed violates the Constitution, it is the duty of the Court to enjoin its
implementation, and if already implemented, to annul the effects of such
unconstitutional contract.

The Amended JVA is not an ordinary commercial contract but one which seeks
to transfer title and ownership to 367.5 hectares of reclaimed lands and
submerged areas of Manila Bay to a single private corporation. It now
becomes more compelling for the Court to resolve the issue to insure the
government itself does not violate a provision of the Constitution intended to
safeguard the national patrimony. Supervening events, whether intended or
accidental, cannot prevent the Court from rendering a decision if there is a
grave violation of the Constitution. In the instant case, if the Amended JVA
runs counter to the Constitution, the Court can still prevent the transfer of
title and ownership of alienable lands of the public domain in the name of
AMARI. Even in cases where supervening events had made the cases moot,
the Court did not hesitate to resolve the legal or constitutional issues raised to
formulate controlling principles to guide the bench, bar, and the public.[17]

Also, the instant petition is a case of first impression. All previous decisions
of the Court involving Section 3, Article XII of the 1987 Constitution, or its
counterpart provision in the 1973 Constitution,[18] covered agricultural lands
sold to private corporations which acquired the lands from private parties.
The transferors of the private corporations claimed or could claim the right to
judicial confirmation of their imperfect titles[19] under Title II of
Commonwealth Act. 141 (CA No. 141 for brevity). In the instant case, AMARI
seeks to acquire from PEA, a public corporation, reclaimed lands and
submerged areas for non-agricultural purposes by purchase under PD No.
1084 (charter of PEA) and Title III of CA No. 141. Certain undertakings by
AMARI under the Amended JVA constitute the consideration for the purchase.
Neither AMARI nor PEA can claim judicial confirmation of their titles because
the lands covered by the Amended JVA are newly reclaimed or still to be
reclaimed. Judicial confirmation of imperfect title requires open, continuous,
exclusive and notorious occupation of agricultural lands of the public domain
for at least thirty years since June 12, 1945 or earlier. Besides, the deadline
for filing applications for judicial confirmation of imperfect title expired on
December 31, 1987.[20]

Lastly, there is a need to resolve immediately the constitutional issue raised in
this petition because of the possible transfer at any time by PEA to AMARI of
title and ownership to portions of the reclaimed lands. Under the Amended
JVA, PEA is obligated to transfer to AMARI the latters seventy percent
proportionate share in the reclaimed areas as the reclamation progresses. The
Amended JVA even allows AMARI to mortgage at any time the entire reclaimed
area to raise financing for the reclamation project.[21]

Second issue: whether the petition merits dismissal for failing to observe the
principle governing the hierarchy of courts.

PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief
directly from the Court. The principle of hierarchy of courts applies generally
to cases involving factual questions. As it is not a trier of facts, the Court
cannot entertain cases involving factual issues. The instant case, however,
raises constitutional issues of transcendental importance to the public.[22]
The Court can resolve this case without determining any factual issue related
to the case. Also, the instant case is a petition for mandamus which falls
under the original jurisdiction of the Court under Section 5, Article VIII of the
Constitution. We resolve to exercise primary jurisdiction over the instant case.

Third issue: whether the petition merits dismissal for non-exhaustion of
administrative remedies.

PEA faults petitioner for seeking judicial intervention in compelling PEA to
disclose publicly certain information without first asking PEA the needed
information. PEA claims petitioners direct resort to the Court violates the
principle of exhaustion of administrative remedies. It also violates the rule that
mandamus may issue only if there is no other plain, speedy and adequate
remedy in the ordinary course of law.

PEA distinguishes the instant case from Taada v. Tuvera[23] where the Court
granted the petition for mandamus even if the petitioners there did not
initially demand from the Office of the President the publication of the
presidential decrees. PEA points out that in Taada, the Executive Department
had an affirmative statutory duty under Article 2 of the Civil Code[24] and
Section 1 of Commonwealth Act No. 638[25] to publish the presidential
decrees. There was, therefore, no need for the petitioners in Taada to make
an initial demand from the Office of the President. In the instant case, PEA
claims it has no affirmative statutory duty to disclose publicly information
about its renegotiation of the JVA. Thus, PEA asserts that the Court must
apply the principle of exhaustion of administrative remedies to the instant
case in view of the failure of petitioner here to demand initially from PEA the
needed information.

The original JVA sought to dispose to AMARI public lands held by PEA, a
government corporation. Under Section 79 of the Government Auditing
Code,[26]2 the disposition of government lands to private parties requires
public bidding. PEA was under a positive legal duty to disclose to the public
the terms and conditions for the sale of its lands. The law obligated PEA to
make this public disclosure even without demand from petitioner or from
anyone. PEA failed to make this public disclosure because the original JVA,
like the Amended JVA, was the result of a negotiated contract, not of a public
bidding. Considering that PEA had an affirmative statutory duty to make the
public disclosure, and was even in breach of this legal duty, petitioner had the
right to seek direct judicial intervention.

Moreover, and this alone is determinative of this issue, the principle of
exhaustion of administrative remedies does not apply when the issue involved
is a purely legal or constitutional question.[27] The principal issue in the
instant case is the capacity of AMARI to acquire lands held by PEA in view of
the constitutional ban prohibiting the alienation of lands of the public domain
to private corporations. We rule that the principle of exhaustion of
administrative remedies does not apply in the instant case.

Fourth issue: whether petitioner has locus standi to bring this suit

PEA argues that petitioner has no standing to institute mandamus proceedings
to enforce his constitutional right to information without a showing that PEA
refused to perform an affirmative duty imposed on PEA by the Constitution.
PEA also claims that petitioner has not shown that he will suffer any concrete
injury because of the signing or implementation of the Amended JVA. Thus,
there is no actual controversy requiring the exercise of the power of judicial
review.

The petitioner has standing to bring this taxpayers suit because the petition
seeks to compel PEA to comply with its constitutional duties. There are two
constitutional issues involved here. First is the right of citizens to information
on matters of public concern. Second is the application of a constitutional
provision intended to insure the equitable distribution of alienable lands of the
public domain among Filipino citizens. The thrust of the first issue is to
compel PEA to disclose publicly information on the sale of government lands
worth billions of pesos, information which the Constitution and statutory law
mandate PEA to disclose. The thrust of the second issue is to prevent PEA
from alienating hundreds of hectares of alienable lands of the public domain
in violation of the Constitution, compelling PEA to comply with a constitutional
duty to the nation.

Moreover, the petition raises matters of transcendental importance to the
public. In Chavez v. PCGG,[28] the Court upheld the right of a citizen to bring
a taxpayers suit on matters of transcendental importance to the public, thus -

Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth
of the Marcoses is an issue of transcendental importance to the public. He
asserts that ordinary taxpayers have a right to initiate and prosecute actions
questioning the validity of acts or orders of government agencies or
instrumentalities, if the issues raised are of paramount public interest, and if
they immediately affect the social, economic and moral well being of the
people.

Moreover, the mere fact that he is a citizen satisfies the requirement of
personal interest, when the proceeding involves the assertion of a public right,
such as in this case. He invokes several decisions of this Court which have set
aside the procedural matter of locus standi, when the subject of the case
involved public interest.

x x x

In Taada v. Tuvera, the Court asserted that when the issue concerns a public
right and the object of mandamus is to obtain the enforcement of a public
duty, the people are regarded as the real parties in interest; and because it is
sufficient that petitioner is a citizen and as such is interested in the execution
of the laws, he need not show that he has any legal or special interest in the
result of the action. In the aforesaid case, the petitioners sought to enforce
their right to be informed on matters of public concern, a right then
recognized in Section 6, Article IV of the 1973 Constitution, in connection with
the rule that laws in order to be valid and enforceable must be published in
the Official Gazette or otherwise effectively promulgated. In ruling for the
petitioners' legal standing, the Court declared that the right they sought to be
enforced is a public right recognized by no less than the fundamental law of
the land.

Legaspi v. Civil Service Commission, while reiterating Taada, further declared
that when a mandamus proceeding involves the assertion of a public right,
the requirement of personal interest is satisfied by the mere fact that
petitioner is a citizen and, therefore, part of the general 'public' which
possesses the right.

Further, in Albano v. Reyes, we said that while expenditure of public funds
may not have been involved under the questioned contract for the
development, management and operation of the Manila International
Container Terminal, public interest [was] definitely involved considering the
important role [of the subject contract] . . . in the economic development of
the country and the magnitude of the financial consideration involved. We
concluded that, as a consequence, the disclosure provision in the Constitution
would constitute sufficient authority for upholding the petitioner's standing.

Similarly, the instant petition is anchored on the right of the people to
information and access to official records, documents and papers a right
guaranteed under Section 7, Article III of the 1987 Constitution. Petitioner, a
former solicitor general, is a Filipino citizen. Because of the satisfaction of the
two basic requisites laid down by decisional law to sustain petitioner's legal
standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino
citizen, we rule that the petition at bar should be allowed.

We rule that since the instant petition, brought by a citizen, involves the
enforcement of constitutional rights - to information and to the equitable
diffusion of natural resources - matters of transcendental public importance,
the petitioner has the requisite locus standi.

Fifth issue: whether the constitutional right to information includes official
information on on-going negotiations before a final agreement.

Section 7, Article III of the Constitution explains the peoples right to
information on matters of public concern in this manner:

Sec. 7. The right of the people to information on matters of public concern
shall be recognized. Access to official records, and to documents, and papers
pertaining to official acts, transactions, or decisions, as well as to government
research data used as basis for policy development, shall be afforded the
citizen, subject to such limitations as may be provided by law. (Emphasis
supplied)

The State policy of full transparency in all transactions involving public interest
reinforces the peoples right to information on matters of public concern.
This State policy is expressed in Section 28, Article II of the Constitution, thus:

Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts
and implements a policy of full public disclosure of all its transactions
involving public interest. (Emphasis supplied)

These twin provisions of the Constitution seek to promote transparency in
policy-making and in the operations of the government, as well as provide the
people sufficient information to exercise effectively other constitutional rights.
These twin provisions are essential to the exercise of freedom of expression.
If the government does not disclose its official acts, transactions and decisions
to citizens, whatever citizens say, even if expressed without any restraint, will
be speculative and amount to nothing. These twin provisions are also
essential to hold public officials at all times x x x accountable to the
people,[29] for unless citizens have the proper information, they cannot hold
public officials accountable for anything. Armed with the right information,
citizens can participate in public discussions leading to the formulation of
government policies and their effective implementation. An informed citizenry
is essential to the existence and proper functioning of any democracy. As
explained by the Court in Valmonte v. Belmonte, Jr.[30]

An essential element of these freedoms is to keep open a continuing dialogue
or process of communication between the government and the people. It is in
the interest of the State that the channels for free political discussion be
maintained to the end that the government may perceive and be responsive to
the peoples will. Yet, this open dialogue can be effective only to the extent
that the citizenry is informed and thus able to formulate its will intelligently.
Only when the participants in the discussion are aware of the issues and have
access to information relating thereto can such bear fruit.

PEA asserts, citing Chavez v. PCGG,[31] that in cases of on-going negotiations
the right to information is limited to definite propositions of the government.
PEA maintains the right does not include access to intra-agency or inter-
agency recommendations or communications during the stage when common
assertions are still in the process of being formulated or are in the
exploratory stage.

Also, AMARI contends that petitioner cannot invoke the right at the pre-
decisional stage or before the closing of the transaction. To support its
contention, AMARI cites the following discussion in the 1986 Constitutional
Commission:

Mr. Suarez. And when we say transactions which should be distinguished
from contracts, agreements, or treaties or whatever, does the Gentleman refer
to the steps leading to the consummation of the contract, or does he refer to
the contract itself?

Mr. Ople: The transactions used here, I suppose is generic and therefore, it
can cover both steps leading to a contract and already a consummated
contract, Mr. Presiding Officer.

Mr. Suarez: This contemplates inclusion of negotiations leading to the
consummation of the transaction.

Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.

Mr. Suarez: Thank you.[32] (Emphasis supplied)

AMARI argues there must first be a consummated contract before petitioner
can invoke the right. Requiring government officials to reveal their
deliberations at the pre-decisional stage will degrade the quality of decision-
making in government agencies. Government officials will hesitate to express
their real sentiments during deliberations if there is immediate public
dissemination of their discussions, putting them under all kinds of pressure
before they decide.

We must first distinguish between information the law on public bidding
requires PEA to disclose publicly, and information the constitutional right to
information requires PEA to release to the public. Before the consummation
of the contract, PEA must, on its own and without demand from anyone,
disclose to the public matters relating to the disposition of its property. These
include the size, location, technical description and nature of the property
being disposed of, the terms and conditions of the disposition, the parties
qualified to bid, the minimum price and similar information. PEA must
prepare all these data and disclose them to the public at the start of the
disposition process, long before the consummation of the contract, because
the Government Auditing Code requires public bidding. If PEA fails to make
this disclosure, any citizen can demand from PEA this information at any time
during the bidding process.

Information, however, on on-going evaluation or review of bids or proposals
being undertaken by the bidding or review committee is not immediately
accessible under the right to information. While the evaluation or review is
still on-going, there are no official acts, transactions, or decisions on the
bids or proposals. However, once the committee makes its official
recommendation, there arises a definite proposition on the part of the
government. From this moment, the publics right to information attaches,
and any citizen can access all the non-proprietary information leading to such
definite proposition. In Chavez v. PCGG,[33] the Court ruled as follows:

Considering the intent of the framers of the Constitution, we believe that it is
incumbent upon the PCGG and its officers, as well as other government
representatives, to disclose sufficient public information on any proposed
settlement they have decided to take up with the ostensible owners and
holders of ill-gotten wealth. Such information, though, must pertain to
definite propositions of the government, not necessarily to intra-agency or
inter-agency recommendations or communications during the stage when
common assertions are still in the process of being formulated or are in the
exploratory stage. There is need, of course, to observe the same restrictions
on disclosure of information in general, as discussed earlier such as on
matters involving national security, diplomatic or foreign relations, intelligence
and other classified information. (Emphasis supplied)

Contrary to AMARIs contention, the commissioners of the 1986 Constitutional
Commission understood that the right to information contemplates inclusion
of negotiations leading to the consummation of the transaction. Certainly, a
consummated contract is not a requirement for the exercise of the right to
information. Otherwise, the people can never exercise the right if no contract
is consummated, and if one is consummated, it may be too late for the public
to expose its defects.

Requiring a consummated contract will keep the public in the dark until the
contract, which may be grossly disadvantageous to the government or even
illegal, becomes a fait accompli. This negates the State policy of full
transparency on matters of public concern, a situation which the framers of
the Constitution could not have intended. Such a requirement will prevent the
citizenry from participating in the public discussion of any proposed contract,
effectively truncating a basic right enshrined in the Bill of Rights. We can allow
neither an emasculation of a constitutional right, nor a retreat by the State of
its avowed policy of full disclosure of all its transactions involving public
interest.

The right covers three categories of information which are matters of public
concern, namely: (1) official records; (2) documents and papers pertaining to
official acts, transactions and decisions; and (3) government research data
used in formulating policies. The first category refers to any document that is
part of the public records in the custody of government agencies or officials.
The second category refers to documents and papers recording, evidencing,
establishing, confirming, supporting, justifying or explaining official acts,
transactions or decisions of government agencies or officials. The third
category refers to research data, whether raw, collated or processed, owned by
the government and used in formulating government policies.

The information that petitioner may access on the renegotiation of the JVA
includes evaluation reports, recommendations, legal and expert opinions,
minutes of meetings, terms of reference and other documents attached to
such reports or minutes, all relating to the JVA. However, the right to
information does not compel PEA to prepare lists, abstracts, summaries and
the like relating to the renegotiation of the JVA.[34] The right only affords
access to records, documents and papers, which means the opportunity to
inspect and copy them. One who exercises the right must copy the records,
documents and papers at his expense. The exercise of the right is also
subject to reasonable regulations to protect the integrity of the public records
and to minimize disruption to government operations, like rules specifying
when and how to conduct the inspection and copying.[35]

The right to information, however, does not extend to matters recognized as
privileged information under the separation of powers.[36] The right does not
also apply to information on military and diplomatic secrets, information
affecting national security, and information on investigations of crimes by law
enforcement agencies before the prosecution of the accused, which courts
have long recognized as confidential.[37] The right may also be subject to
other limitations that Congress may impose by law.

There is no claim by PEA that the information demanded by petitioner is
privileged information rooted in the separation of powers. The information
does not cover Presidential conversations, correspondences, or discussions
during closed-door Cabinet meetings which, like internal deliberations of the
Supreme Court and other collegiate courts, or executive sessions of either
house of Congress,[38] are recognized as confidential. This kind of
information cannot be pried open by a co-equal branch of government. A
frank exchange of exploratory ideas and assessments, free from the glare of
publicity and pressure by interested parties, is essential to protect the
independence of decision-making of those tasked to exercise Presidential,
Legislative and Judicial power.[39] This is not the situation in the instant case.

We rule, therefore, that the constitutional right to information includes official
information on on-going negotiations before a final contract. The information,
however, must constitute definite propositions by the government and should
not cover recognized exceptions like privileged information, military and
diplomatic secrets and similar matters affecting national security and public
order.[40] Congress has also prescribed other limitations on the right to
information in several legislations.[41]

Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI
of lands, reclaimed or to be reclaimed, violate the Constitution.

The Regalian Doctrine

The ownership of lands reclaimed from foreshore and submerged areas is
rooted in the Regalian doctrine which holds that the State owns all lands and
waters of the public domain. Upon the Spanish conquest of the Philippines,
ownership of all lands, territories and possessions in the Philippines passed
to the Spanish Crown.[42] The King, as the sovereign ruler and representative
of the people, acquired and owned all lands and territories in the Philippines
except those he disposed of by grant or sale to private individuals.

The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine
substituting, however, the State, in lieu of the King, as the owner of all lands
and waters of the public domain. The Regalian doctrine is the foundation of
the time-honored principle of land ownership that all lands that were not
acquired from the Government, either by purchase or by grant, belong to the
public domain.[43] Article 339 of the Civil Code of 1889, which is now Article
420 of the Civil Code of 1950, incorporated the Regalian doctrine.

Ownership and Disposition of Reclaimed Lands

The Spanish Law of Waters of 1866 was the first statutory law governing the
ownership and disposition of reclaimed lands in the Philippines. On May 18,
1907, the Philippine Commission enacted Act No. 1654 which provided for the
lease, but not the sale, of reclaimed lands of the government to corporations
and individuals. Later, on November 29, 1919, the Philippine Legislature
approved Act No. 2874, the Public Land Act, which authorized the lease, but
not the sale, of reclaimed lands of the government to corporations and
individuals. On November 7, 1936, the National Assembly passed
Commonwealth Act No. 141, also known as the Public Land Act, which
authorized the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals. CA No. 141 continues to this day as the general
law governing the classification and disposition of lands of the public domain.

The Spanish Law of Waters of 1866 and the Civil Code of 1889

Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and
all waters within the maritime zone of the Spanish territory belonged to the
public domain for public use.[44] The Spanish Law of Waters of 1866 allowed
the reclamation of the sea under Article 5, which provided as follows:

Article 5. Lands reclaimed from the sea in consequence of works constructed
by the State, or by the provinces, pueblos or private persons, with proper
permission, shall become the property of the party constructing such works,
unless otherwise provided by the terms of the grant of authority.

Under the Spanish Law of Waters, land reclaimed from the sea belonged to the
party undertaking the reclamation, provided the government issued the
necessary permit and did not reserve ownership of the reclaimed land to the
State.

Article 339 of the Civil Code of 1889 defined property of public dominion as
follows:

Art. 339. Property of public dominion is

1. That devoted to public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, riverbanks, shores, roadsteads, and that
of a similar character;

2. That belonging exclusively to the State which, without being of general
public use, is employed in some public service, or in the development of the
national wealth, such as walls, fortresses, and other works for the defense of
the territory, and mines, until granted to private individuals.

Property devoted to public use referred to property open for use by the public.
In contrast, property devoted to public service referred to property used for
some specific public service and open only to those authorized to use the
property.

Property of public dominion referred not only to property devoted to public
use, but also to property not so used but employed to develop the national
wealth. This class of property constituted property of public dominion
although employed for some economic or commercial activity to increase the
national wealth.

Article 341 of the Civil Code of 1889 governed the re-classification of property
of public dominion into private property, to wit:

Art. 341. Property of public dominion, when no longer devoted to public use
or to the defense of the territory, shall become a part of the private property
of the State.

This provision, however, was not self-executing. The legislature, or the
executive department pursuant to law, must declare the property no longer
needed for public use or territorial defense before the government could lease
or alienate the property to private parties.[45]

Act No. 1654 of the Philippine Commission

On May 8, 1907, the Philippine Commission enacted Act No. 1654 which
regulated the lease of reclaimed and foreshore lands. The salient provisions
of this law were as follows:

Section 1. The control and disposition of the foreshore as defined in existing
law, and the title to all Government or public lands made or reclaimed by the
Government by dredging or filling or otherwise throughout the Philippine
Islands, shall be retained by the Government without prejudice to vested rights
and without prejudice to rights conceded to the City of Manila in the Luneta
Extension.

Section 2. (a) The Secretary of the Interior shall cause all Government or
public lands made or reclaimed by the Government by dredging or filling or
otherwise to be divided into lots or blocks, with the necessary streets and
alleyways located thereon, and shall cause plats and plans of such surveys to
be prepared and filed with the Bureau of Lands.

(b) Upon completion of such plats and plans the Governor-General shall give
notice to the public that such parts of the lands so made or reclaimed as are
not needed for public purposes will be leased for commercial and business
purposes, x x x.

x x x

(e) The leases above provided for shall be disposed of to the highest and best
bidder therefore, subject to such regulations and safeguards as the Governor-
General may by executive order prescribe. (Emphasis supplied)

Act No. 1654 mandated that the government should retain title to all lands
reclaimed by the government. The Act also vested in the government control
and disposition of foreshore lands. Private parties could lease lands
reclaimed by the government only if these lands were no longer needed for
public purpose. Act No. 1654 mandated public bidding in the lease of
government reclaimed lands. Act No. 1654 made government reclaimed lands
sui generis in that unlike other public lands which the government could sell
to private parties, these reclaimed lands were available only for lease to
private parties.

Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters
of 1866. Act No. 1654 did not prohibit private parties from reclaiming parts
of the sea under Section 5 of the Spanish Law of Waters. Lands reclaimed
from the sea by private parties with government permission remained private
lands.

Act No. 2874 of the Philippine Legislature

On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the
Public Land Act.[46] The salient provisions of Act No. 2874, on reclaimed
lands, were as follows:

Sec. 6. The Governor-General, upon the recommendation of the Secretary of
Agriculture and Natural Resources, shall from time to time classify the lands of
the public domain into

(a) Alienable or disposable,

(b) Timber, and

(c) Mineral lands, x x x.

Sec. 7. For the purposes of the government and disposition of alienable or
disposable public lands, the Governor-General, upon recommendation by the
Secretary of Agriculture and Natural Resources, shall from time to time declare
what lands are open to disposition or concession under this Act.

Sec. 8. Only those lands shall be declared open to disposition or concession
which have been officially delimited or classified x x x.

x x x

Sec. 55. Any tract of land of the public domain which, being neither timber
nor mineral land, shall be classified as suitable for residential purposes or for
commercial, industrial, or other productive purposes other than agricultural
purposes, and shall be open to disposition or concession, shall be disposed of
under the provisions of this chapter, and not otherwise.

Sec. 56. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

(b) Foreshore;

(c) Marshy lands or lands covered with water bordering upon the shores or
banks of navigable lakes or rivers;

(d) Lands not included in any of the foregoing classes.

x x x.

Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six
shall be disposed of to private parties by lease only and not otherwise, as soon
as the Governor-General, upon recommendation by the Secretary of
Agriculture and Natural Resources, shall declare that the same are not
necessary for the public service and are open to disposition under this
chapter. The lands included in class (d) may be disposed of by sale or lease
under the provisions of this Act. (Emphasis supplied)

Section 6 of Act No. 2874 authorized the Governor-General to classify lands
of the public domain into x x x alienable or disposable[47] lands. Section 7
of the Act empowered the Governor-General to declare what lands are open to
disposition or concession. Section 8 of the Act limited alienable or disposable
lands only to those lands which have been officially delimited and classified.

Section 56 of Act No. 2874 stated that lands disposable under this title[48]
shall be classified as government reclaimed, foreshore and marshy lands, as
well as other lands. All these lands, however, must be suitable for residential,
commercial, industrial or other productive non-agricultural purposes. These
provisions vested upon the Governor-General the power to classify inalienable
lands of the public domain into disposable lands of the public domain. These
provisions also empowered the Governor-General to classify further such
disposable lands of the public domain into government reclaimed, foreshore
or marshy lands of the public domain, as well as other non-agricultural lands.

Section 58 of Act No. 2874 categorically mandated that disposable lands of
the public domain classified as government reclaimed, foreshore and marshy
lands shall be disposed of to private parties by lease only and not otherwise.
The Governor-General, before allowing the lease of these lands to private
parties, must formally declare that the lands were not necessary for the public
service. Act No. 2874 reiterated the State policy to lease and not to sell
government reclaimed, foreshore and marshy lands of the public domain, a
policy first enunciated in 1907 in Act No. 1654. Government reclaimed,
foreshore and marshy lands remained sui generis, as the only alienable or
disposable lands of the public domain that the government could not sell to
private parties.

The rationale behind this State policy is obvious. Government reclaimed,
foreshore and marshy public lands for non-agricultural purposes retain their
inherent potential as areas for public service. This is the reason the
government prohibited the sale, and only allowed the lease, of these lands to
private parties. The State always reserved these lands for some future public
service.

Act No. 2874 did not authorize the reclassification of government reclaimed,
foreshore and marshy lands into other non-agricultural lands under Section 56
(d). Lands falling under Section 56 (d) were the only lands for non-agricultural
purposes the government could sell to private parties. Thus, under Act No.
2874, the government could not sell government reclaimed, foreshore and
marshy lands to private parties, unless the legislature passed a law allowing
their sale.[49]

Act No. 2874 did not prohibit private parties from reclaiming parts of the sea
pursuant to Section 5 of the Spanish Law of Waters of 1866. Lands reclaimed
from the sea by private parties with government permission remained private
lands.

Dispositions under the 1935 Constitution

On May 14, 1935, the 1935 Constitution took effect upon its ratification by
the Filipino people. The 1935 Constitution, in adopting the Regalian doctrine,
declared in Section 1, Article XIII, that

Section 1. All agricultural, timber, and mineral lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all forces of
potential energy and other natural resources of the Philippines belong to the
State, and their disposition, exploitation, development, or utilization shall be
limited to citizens of the Philippines or to corporations or associations at least
sixty per centum of the capital of which is owned by such citizens, subject to
any existing right, grant, lease, or concession at the time of the inauguration
of the Government established under this Constitution. Natural resources,
with the exception of public agricultural land, shall not be alienated, and no
license, concession, or lease for the exploitation, development, or utilization
of any of the natural resources shall be granted for a period exceeding twenty-
five years, renewable for another twenty-five years, except as to water rights
for irrigation, water supply, fisheries, or industrial uses other than the
development of water power, in which cases beneficial use may be the
measure and limit of the grant. (Emphasis supplied)

The 1935 Constitution barred the alienation of all natural resources except
public agricultural lands, which were the only natural resources the State could
alienate. Thus, foreshore lands, considered part of the States natural
resources, became inalienable by constitutional fiat, available only for lease for
25 years, renewable for another 25 years. The government could alienate
foreshore lands only after these lands were reclaimed and classified as
alienable agricultural lands of the public domain. Government reclaimed and
marshy lands of the public domain, being neither timber nor mineral lands,
fell under the classification of public agricultural lands.[50] However,
government reclaimed and marshy lands, although subject to classification as
disposable public agricultural lands, could only be leased and not sold to
private parties because of Act No. 2874.

The prohibition on private parties from acquiring ownership of government
reclaimed and marshy lands of the public domain was only a statutory
prohibition and the legislature could therefore remove such prohibition. The
1935 Constitution did not prohibit individuals and corporations from
acquiring government reclaimed and marshy lands of the public domain that
were classified as agricultural lands under existing public land laws. Section
2, Article XIII of the 1935 Constitution provided as follows:

Section 2. No private corporation or association may acquire, lease, or hold
public agricultural lands in excess of one thousand and twenty four hectares,
nor may any individual acquire such lands by purchase in excess of one
hundred and forty hectares, or by lease in excess of one thousand and twenty-
four hectares, or by homestead in excess of twenty-four hectares. Lands
adapted to grazing, not exceeding two thousand hectares, may be leased to
an individual, private corporation, or association. (Emphasis supplied)

Still, after the effectivity of the 1935 Constitution, the legislature did not
repeal Section 58 of Act No. 2874 to open for sale to private parties
government reclaimed and marshy lands of the public domain. On the
contrary, the legislature continued the long established State policy of
retaining for the government title and ownership of government reclaimed and
marshy lands of the public domain.

Commonwealth Act No. 141 of the Philippine National Assembly

On November 7, 1936, the National Assembly approved Commonwealth Act
No. 141, also known as the Public Land Act, which compiled the then existing
laws on lands of the public domain. CA No. 141, as amended, remains to this
day the existing general law governing the classification and disposition of
lands of the public domain other than timber and mineral lands.[51]

Section 6 of CA No. 141 empowers the President to classify lands of the public
domain into alienable or disposable[52] lands of the public domain, which
prior to such classification are inalienable and outside the commerce of man.
Section 7 of CA No. 141 authorizes the President to declare what lands are
open to disposition or concession. Section 8 of CA No. 141 states that the
government can declare open for disposition or concession only lands that are
officially delimited and classified. Sections 6, 7 and 8 of CA No. 141 read as
follows:

Sec. 6. The President, upon the recommendation of the Secretary of
Agriculture and Commerce, shall from time to time classify the lands of the
public domain into

(a) Alienable or disposable,

(b) Timber, and

(c) Mineral lands,

and may at any time and in like manner transfer such lands from one class to
another,[53] for the purpose of their administration and disposition.

Sec. 7. For the purposes of the administration and disposition of alienable or
disposable public lands, the President, upon recommendation by the Secretary
of Agriculture and Commerce, shall from time to time declare what lands are
open to disposition or concession under this Act.

Sec. 8. Only those lands shall be declared open to disposition or concession
which have been officially delimited and classified and, when practicable,
surveyed, and which have not been reserved for public or quasi-public uses,
nor appropriated by the Government, nor in any manner become private
property, nor those on which a private right authorized and recognized by this
Act or any other valid law may be claimed, or which, having been reserved or
appropriated, have ceased to be so. x x x.

Thus, before the government could alienate or dispose of lands of the public
domain, the President must first officially classify these lands as alienable or
disposable, and then declare them open to disposition or concession. There
must be no law reserving these lands for public or quasi-public uses.

The salient provisions of CA No. 141, on government reclaimed, foreshore and
marshy lands of the public domain, are as follows:

Sec. 58. Any tract of land of the public domain which, being neither timber
nor mineral land, is intended to be used for residential purposes or for
commercial, industrial, or other productive purposes other than agricultural,
and is open to disposition or concession, shall be disposed of under the
provisions of this chapter and not otherwise.

Sec. 59. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

(b) Foreshore;

(c) Marshy lands or lands covered with water bordering upon the shores or
banks of navigable lakes or rivers;

(d) Lands not included in any of the foregoing classes.

Sec. 60. Any tract of land comprised under this title may be leased or sold, as
the case may be, to any person, corporation, or association authorized to
purchase or lease public lands for agricultural purposes. x x x.

Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine
shall be disposed of to private parties by lease only and not otherwise, as soon
as the President, upon recommendation by the Secretary of Agriculture, shall
declare that the same are not necessary for the public service and are open to
disposition under this chapter. The lands included in class (d) may be
disposed of by sale or lease under the provisions of this Act. (Emphasis
supplied)

Section 61 of CA No. 141 readopted, after the effectivity of the 1935
Constitution, Section 58 of Act No. 2874 prohibiting the sale of government
reclaimed, foreshore and marshy disposable lands of the public domain. All
these lands are intended for residential, commercial, industrial or other non-
agricultural purposes. As before, Section 61 allowed only the lease of such
lands to private parties. The government could sell to private parties only
lands falling under Section 59 (d) of CA No. 141, or those lands for non-
agricultural purposes not classified as government reclaimed, foreshore and
marshy disposable lands of the public domain. Foreshore lands, however,
became inalienable under the 1935 Constitution which only allowed the lease
of these lands to qualified private parties.

Section 58 of CA No. 141 expressly states that disposable lands of the public
domain intended for residential, commercial, industrial or other productive
purposes other than agricultural shall be disposed of under the provisions of
this chapter and not otherwise. Under Section 10 of CA No. 141, the term
disposition includes lease of the land. Any disposition of government
reclaimed, foreshore and marshy disposable lands for non-agricultural
purposes must comply with Chapter IX, Title III of CA No. 141,[54] unless a
subsequent law amended or repealed these provisions.

In his concurring opinion in the landmark case of Republic Real Estate
Corporation v. Court of Appeals,[55] Justice Reynato S. Puno summarized
succinctly the law on this matter, as follows:

Foreshore lands are lands of public dominion intended for public use. So too
are lands reclaimed by the government by dredging, filling, or other means.
Act 1654 mandated that the control and disposition of the foreshore and
lands under water remained in the national government. Said law allowed only
the leasing of reclaimed land. The Public Land Acts of 1919 and 1936 also
declared that the foreshore and lands reclaimed by the government were to be
disposed of to private parties by lease only and not otherwise. Before
leasing, however, the Governor-General, upon recommendation of the
Secretary of Agriculture and Natural Resources, had first to determine that the
land reclaimed was not necessary for the public service. This requisite must
have been met before the land could be disposed of. But even then, the
foreshore and lands under water were not to be alienated and sold to private
parties. The disposition of the reclaimed land was only by lease. The land
remained property of the State. (Emphasis supplied)

As observed by Justice Puno in his concurring opinion, Commonwealth Act
No. 141 has remained in effect at present.

The State policy prohibiting the sale to private parties of government
reclaimed, foreshore and marshy alienable lands of the public domain, first
implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935
Constitution took effect. The prohibition on the sale of foreshore lands,
however, became a constitutional edict under the 1935 Constitution.
Foreshore lands became inalienable as natural resources of the State, unless
reclaimed by the government and classified as agricultural lands of the public
domain, in which case they would fall under the classification of government
reclaimed lands.

After the effectivity of the 1935 Constitution, government reclaimed and
marshy disposable lands of the public domain continued to be only leased and
not sold to private parties.[56] These lands remained sui generis, as the only
alienable or disposable lands of the public domain the government could not
sell to private parties.

Since then and until now, the only way the government can sell to private
parties government reclaimed and marshy disposable lands of the public
domain is for the legislature to pass a law authorizing such sale. CA No. 141
does not authorize the President to reclassify government reclaimed and
marshy lands into other non-agricultural lands under Section 59 (d). Lands
classified under Section 59 (d) are the only alienable or disposable lands for
non-agricultural purposes that the government could sell to private parties.

Moreover, Section 60 of CA No. 141 expressly requires congressional authority
before lands under Section 59 that the government previously transferred to
government units or entities could be sold to private parties. Section 60 of
CA No. 141 declares that

Sec. 60. x x x The area so leased or sold shall be such as shall, in the
judgment of the Secretary of Agriculture and Natural Resources, be reasonably
necessary for the purposes for which such sale or lease is requested, and shall
not exceed one hundred and forty-four hectares: Provided, however, That this
limitation shall not apply to grants, donations, or transfers made to a
province, municipality or branch or subdivision of the Government for the
purposes deemed by said entities conducive to the public interest; but the
land so granted, donated, or transferred to a province, municipality or branch
or subdivision of the Government shall not be alienated, encumbered, or
otherwise disposed of in a manner affecting its title, except when authorized
by Congress: x x x. (Emphasis supplied)

The congressional authority required in Section 60 of CA No. 141 mirrors the
legislative authority required in Section 56 of Act No. 2874.

One reason for the congressional authority is that Section 60 of CA No. 141
exempted government units and entities from the maximum area of public
lands that could be acquired from the State. These government units and
entities should not just turn around and sell these lands to private parties in
violation of constitutional or statutory limitations. Otherwise, the transfer of
lands for non-agricultural purposes to government units and entities could be
used to circumvent constitutional limitations on ownership of alienable or
disposable lands of the public domain. In the same manner, such transfers
could also be used to evade the statutory prohibition in CA No. 141 on the
sale of government reclaimed and marshy lands of the public domain to
private parties. Section 60 of CA No. 141 constitutes by operation of law a
lien on these lands.[57]

In case of sale or lease of disposable lands of the public domain falling under
Section 59 of CA No. 141, Sections 63 and 67 require a public bidding.
Sections 63 and 67 of CA No. 141 provide as follows:

Sec. 63. Whenever it is decided that lands covered by this chapter are not
needed for public purposes, the Director of Lands shall ask the Secretary of
Agriculture and Commerce (now the Secretary of Natural Resources) for
authority to dispose of the same. Upon receipt of such authority, the Director
of Lands shall give notice by public advertisement in the same manner as in
the case of leases or sales of agricultural public land, x x x.

Sec. 67. The lease or sale shall be made by oral bidding; and adjudication
shall be made to the highest bidder. x x x. (Emphasis supplied)

Thus, CA No. 141 mandates the Government to put to public auction all leases
or sales of alienable or disposable lands of the public domain.[58]

Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal
Section 5 of the Spanish Law of Waters of 1866. Private parties could still
reclaim portions of the sea with government permission. However, the
reclaimed land could become private land only if classified as alienable
agricultural land of the public domain open to disposition under CA No. 141.
The 1935 Constitution prohibited the alienation of all natural resources except
public agricultural lands.

The Civil Code of 1950

The Civil Code of 1950 readopted substantially the definition of property of
public dominion found in the Civil Code of 1889. Articles 420 and 422 of the
Civil Code of 1950 state that

Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, banks, shores, roadsteads, and others of
similar character;

(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national
wealth.

x x x.

Art. 422. Property of public dominion, when no longer intended for public use
or for public service, shall form part of the patrimonial property of the State.

Again, the government must formally declare that the property of public
dominion is no longer needed for public use or public service, before the same
could be classified as patrimonial property of the State.[59] In the case of
government reclaimed and marshy lands of the public domain, the declaration
of their being disposable, as well as the manner of their disposition, is
governed by the applicable provisions of CA No. 141.

Like the Civil Code of 1889, the Civil Code of 1950 included as property of
public dominion those properties of the State which, without being for public
use, are intended for public service or the development of the national
wealth. Thus, government reclaimed and marshy lands of the State, even if
not employed for public use or public service, if developed to enhance the
national wealth, are classified as property of public dominion.

Dispositions under the 1973 Constitution

The 1973 Constitution, which took effect on January 17, 1973, likewise
adopted the Regalian doctrine. Section 8, Article XIV of the 1973 Constitution
stated that

Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and
other mineral oils, all forces of potential energy, fisheries, wildlife, and other
natural resources of the Philippines belong to the State. With the exception of
agricultural, industrial or commercial, residential, and resettlement lands of
the public domain, natural resources shall not be alienated, and no license,
concession, or lease for the exploration, development, exploitation, or
utilization of any of the natural resources shall be granted for a period
exceeding twenty-five years, renewable for not more than twenty-five years,
except as to water rights for irrigation, water supply, fisheries, or industrial
uses other than the development of water power, in which cases, beneficial
use may be the measure and the limit of the grant. (Emphasis supplied)

The 1973 Constitution prohibited the alienation of all natural resources with
the exception of agricultural, industrial or commercial, residential, and
resettlement lands of the public domain. In contrast, the 1935 Constitution
barred the alienation of all natural resources except public agricultural lands.
However, the term public agricultural lands in the 1935 Constitution
encompassed industrial, commercial, residential and resettlement lands of the
public domain.[60] If the land of public domain were neither timber nor
mineral land, it would fall under the classification of agricultural land of the
public domain. Both the 1935 and 1973 Constitutions, therefore, prohibited
the alienation of all natural resources except agricultural lands of the public
domain.

The 1973 Constitution, however, limited the alienation of lands of the public
domain to individuals who were citizens of the Philippines. Private
corporations, even if wholly owned by Philippine citizens, were no longer
allowed to acquire alienable lands of the public domain unlike in the 1935
Constitution. Section 11, Article XIV of the 1973 Constitution declared that

Sec. 11. The Batasang Pambansa, taking into account conservation,
ecological, and development requirements of the natural resources, shall
determine by law the size of land of the public domain which may be
developed, held or acquired by, or leased to, any qualified individual,
corporation, or association, and the conditions therefor. No private
corporation or association may hold alienable lands of the public domain
except by lease not to exceed one thousand hectares in area nor may any
citizen hold such lands by lease in excess of five hundred hectares or acquire
by purchase, homestead or grant, in excess of twenty-four hectares. No
private corporation or association may hold by lease, concession, license or
permit, timber or forest lands and other timber or forest resources in excess
of one hundred thousand hectares. However, such area may be increased by
the Batasang Pambansa upon recommendation of the National Economic and
Development Authority. (Emphasis supplied)

Thus, under the 1973 Constitution, private corporations could hold alienable
lands of the public domain only through lease. Only individuals could now
acquire alienable lands of the public domain, and private corporations became
absolutely barred from acquiring any kind of alienable land of the public
domain. The constitutional ban extended to all kinds of alienable lands of the
public domain, while the statutory ban under CA No. 141 applied only to
government reclaimed, foreshore and marshy alienable lands of the public
domain.

PD No. 1084 Creating the Public Estates Authority

On February 4, 1977, then President Ferdinand Marcos issued Presidential
Decree No. 1084 creating PEA, a wholly government owned and controlled
corporation with a special charter. Sections 4 and 8 of PD No. 1084, vests PEA
with the following purposes and powers:

Sec. 4. Purpose. The Authority is hereby created for the following purposes:

(a) To reclaim land, including foreshore and submerged areas, by dredging,
filling or other means, or to acquire reclaimed land;

(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease
and sell any and all kinds of lands, buildings, estates and other forms of real
property, owned, managed, controlled and/or operated by the government;

(c) To provide for, operate or administer such service as may be necessary for
the efficient, economical and beneficial utilization of the above properties.

Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying
out the purposes for which it is created, have the following powers and
functions:

(a)To prescribe its by-laws.

x x x

(i) To hold lands of the public domain in excess of the area permitted to
private corporations by statute.

(j) To reclaim lands and to construct work across, or otherwise, any stream,
watercourse, canal, ditch, flume x x x.

x x x

(o) To perform such acts and exercise such functions as may be necessary for
the attainment of the purposes and objectives herein specified. (Emphasis
supplied)

PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas
of the public domain. Foreshore areas are those covered and uncovered by
the ebb and flow of the tide.[61] Submerged areas are those permanently
under water regardless of the ebb and flow of the tide.[62] Foreshore and
submerged areas indisputably belong to the public domain[63] and are
inalienable unless reclaimed, classified as alienable lands open to disposition,
and further declared no longer needed for public service.

The ban in the 1973 Constitution on private corporations from acquiring
alienable lands of the public domain did not apply to PEA since it was then,
and until today, a fully owned government corporation. The constitutional ban
applied then, as it still applies now, only to private corporations and
associations. PD No. 1084 expressly empowers PEA to hold lands of the
public domain even in excess of the area permitted to private corporations
by statute. Thus, PEA can hold title to private lands, as well as title to lands
of the public domain.

In order for PEA to sell its reclaimed foreshore and submerged alienable lands
of the public domain, there must be legislative authority empowering PEA to
sell these lands. This legislative authority is necessary in view of Section 60 of
CA No.141, which states

Sec. 60. x x x; but the land so granted, donated or transferred to a province,
municipality, or branch or subdivision of the Government shall not be
alienated, encumbered or otherwise disposed of in a manner affecting its title,
except when authorized by Congress; x x x. (Emphasis supplied)

Without such legislative authority, PEA could not sell but only lease its
reclaimed foreshore and submerged alienable lands of the public domain.
Nevertheless, any legislative authority granted to PEA to sell its reclaimed
alienable lands of the public domain would be subject to the constitutional
ban on private corporations from acquiring alienable lands of the public
domain. Hence, such legislative authority could only benefit private
individuals.

Dispositions under the 1987 Constitution

The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has
adopted the Regalian doctrine. The 1987 Constitution declares that all natural
resources are owned by the State, and except for alienable agricultural lands
of the public domain, natural resources cannot be alienated. Sections 2 and
3, Article XII of the 1987 Constitution state that

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

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

Taking into account the requirements of conservation, ecology, and
development, and subject to the requirements of agrarian reform, the
Congress shall determine, by law, the size of lands of the public domain which
may be acquired, developed, held, or leased and the conditions therefor.
(Emphasis supplied)

The 1987 Constitution continues the State policy in the 1973 Constitution
banning private corporations from acquiring any kind of alienable land of the
public domain. Like the 1973 Constitution, the 1987 Constitution allows
private corporations to hold alienable lands of the public domain only through
lease. As in the 1935 and 1973 Constitutions, the general law governing the
lease to private corporations of reclaimed, foreshore and marshy alienable
lands of the public domain is still CA No. 141.

The Rationale behind the Constitutional Ban

The rationale behind the constitutional ban on corporations from acquiring,
except through lease, alienable lands of the public domain is not well
understood. During the deliberations of the 1986 Constitutional Commission,
the commissioners probed the rationale behind this ban, thus:

FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line
5 which says:

`No private corporation or association may hold alienable lands of the public
domain except by lease, not to exceed one thousand hectares in area.

If we recall, this provision did not exist under the 1935 Constitution, but this
was introduced in the 1973 Constitution. In effect, it prohibits private
corporations from acquiring alienable public lands. But it has not been very
clear in jurisprudence what the reason for this is. In some of the cases
decided in 1982 and 1983, it was indicated that the purpose of this is to
prevent large landholdings. Is that the intent of this provision?

MR. VILLEGAS: I think that is the spirit of the provision.

FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were
instances where the Iglesia ni Cristo was not allowed to acquire a mere 313-
square meter land where a chapel stood because the Supreme Court said it
would be in violation of this. (Emphasis supplied)

In Ayog v. Cusi,[64] the Court explained the rationale behind this
constitutional ban in this way:

Indeed, one purpose of the constitutional prohibition against purchases of
public agricultural lands by private corporations is to equitably diffuse land
ownership or to encourage owner-cultivatorship and the economic family-size
farm and to prevent a recurrence of cases like the instant case. Huge
landholdings by corporations or private persons had spawned social unrest.

However, if the constitutional intent is to prevent huge landholdings, the
Constitution could have simply limited the size of alienable lands of the public
domain that corporations could acquire. The Constitution could have followed
the limitations on individuals, who could acquire not more than 24 hectares of
alienable lands of the public domain under the 1973 Constitution, and not
more than 12 hectares under the 1987 Constitution.

If the constitutional intent is to encourage economic family-size farms, placing
the land in the name of a corporation would be more effective in preventing
the break-up of farmlands. If the farmland is registered in the name of a
corporation, upon the death of the owner, his heirs would inherit shares in the
corporation instead of subdivided parcels of the farmland. This would prevent
the continuing break-up of farmlands into smaller and smaller plots from one
generation to the next.

In actual practice, the constitutional ban strengthens the constitutional
limitation on individuals from acquiring more than the allowed area of
alienable lands of the public domain. Without the constitutional ban,
individuals who already acquired the maximum area of alienable lands of the
public domain could easily set up corporations to acquire more alienable
public lands. An individual could own as many corporations as his means
would allow him. An individual could even hide his ownership of a corporation
by putting his nominees as stockholders of the corporation. The corporation
is a convenient vehicle to circumvent the constitutional limitation on
acquisition by individuals of alienable lands of the public domain.

The constitutional intent, under the 1973 and 1987 Constitutions, is to
transfer ownership of only a limited area of alienable land of the public
domain to a qualified individual. This constitutional intent is safeguarded by
the provision prohibiting corporations from acquiring alienable lands of the
public domain, since the vehicle to circumvent the constitutional intent is
removed. The available alienable public lands are gradually decreasing in the
face of an ever-growing population. The most effective way to insure faithful
adherence to this constitutional intent is to grant or sell alienable lands of the
public domain only to individuals. This, it would seem, is the practical benefit
arising from the constitutional ban.

The Amended Joint Venture Agreement

The subject matter of the Amended JVA, as stated in its second Whereas
clause, consists of three properties, namely:

1. [T]hree partially reclaimed and substantially eroded islands along Emilio
Aguinaldo Boulevard in Paranaque and Las Pinas, Metro Manila, with a
combined titled area of 1,578,441 square meters;

2. [A]nother area of 2,421,559 square meters contiguous to the three
islands; and

3. [A]t AMARIs option as approved by PEA, an additional 350 hectares more
or less to regularize the configuration of the reclaimed area.[65]

PEA confirms that the Amended JVA involves the development of the Freedom
Islands and further reclamation of about 250 hectares x x x, plus an option
granted to AMARI to subsequently reclaim another 350 hectares x x x.[66]

In short, the Amended JVA covers a reclamation area of 750 hectares. Only
157.84 hectares of the 750-hectare reclamation project have been reclaimed,
and the rest of the 592.15 hectares are still submerged areas forming part of
Manila Bay.

Under the Amended JVA, AMARI will reimburse PEA the sum of
P1,894,129,200.00 for PEAs actual cost in partially reclaiming the Freedom
Islands. AMARI will also complete, at its own expense, the reclamation of the
Freedom Islands. AMARI will further shoulder all the reclamation costs of all
the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and
PEA will share, in the proportion of 70 percent and 30 percent, respectively,
the total net usable area which is defined in the Amended JVA as the total
reclaimed area less 30 percent earmarked for common areas. Title to AMARIs
share in the net usable area, totaling 367.5 hectares, will be issued in the
name of AMARI. Section 5.2 (c) of the Amended JVA provides that

x x x, PEA shall have the duty to execute without delay the necessary deed of
transfer or conveyance of the title pertaining to AMARIs Land share based on
the Land Allocation Plan. PEA, when requested in writing by AMARI, shall then
cause the issuance and delivery of the proper certificates of title covering
AMARIs Land Share in the name of AMARI, x x x; provided, that if more than
seventy percent (70%) of the titled area at any given time pertains to AMARI,
PEA shall deliver to AMARI only seventy percent (70%) of the titles pertaining to
AMARI, until such time when a corresponding proportionate area of additional
land pertaining to PEA has been titled. (Emphasis supplied)

Indisputably, under the Amended JVA AMARI will acquire and own a maximum
of 367.5 hectares of reclaimed land which will be titled in its name.

To implement the Amended JVA, PEA delegated to the unincorporated PEA-
AMARI joint venture PEAs statutory authority, rights and privileges to reclaim
foreshore and submerged areas in Manila Bay. Section 3.2.a of the Amended
JVA states that

PEA hereby contributes to the joint venture its rights and privileges to
perform Rawland Reclamation and Horizontal Development as well as own the
Reclamation Area, thereby granting the Joint Venture the full and exclusive
right, authority and privilege to undertake the Project in accordance with the
Master Development Plan.

The Amended JVA is the product of a renegotiation of the original JVA dated
April 25, 1995 and its supplemental agreement dated August 9, 1995.

The Threshold Issue

The threshold issue is whether AMARI, a private corporation, can acquire and
own under the Amended JVA 367.5 hectares of reclaimed foreshore and
submerged areas in Manila Bay in view of Sections 2 and 3, Article XII of the
1987 Constitution which state that:

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

x x x

Section 3. x x x Alienable lands of the public domain shall be limited to
agricultural lands. Private corporations or associations may not hold such
alienable lands of the public domain except by lease, x x x.(Emphasis
supplied)

Classification of Reclaimed Foreshore and Submerged Areas

PEA readily concedes that lands reclaimed from foreshore or submerged areas
of Manila Bay are alienable or disposable lands of the public domain. In its
Memorandum,[67] PEA admits that

Under the Public Land Act (CA 141, as amended), reclaimed lands are
classified as alienable and disposable lands of the public domain:

Sec. 59. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the government by dredging, filling, or other means;

x x x. (Emphasis supplied)

Likewise, the Legal Task Force[68] constituted under Presidential
Administrative Order No. 365 admitted in its Report and Recommendation to
then President Fidel V. Ramos, [R]eclaimed lands are classified as alienable
and disposable lands of the public domain.[69] The Legal Task Force
concluded that

D. Conclusion

Reclaimed lands are lands of the public domain. However, by statutory
authority, the rights of ownership and disposition over reclaimed lands have
been transferred to PEA, by virtue of which PEA, as owner, may validly convey
the same to any qualified person without violating the Constitution or any
statute.

The constitutional provision prohibiting private corporations from holding
public land, except by lease (Sec. 3, Art. XVII,[70] 1987 Constitution), does not
apply to reclaimed lands whose ownership has passed on to PEA by statutory
grant.

Under Section 2, Article XII of the 1987 Constitution, the foreshore and
submerged areas of Manila Bay are part of the lands of the public domain,
waters x x x and other natural resources and consequently owned by the
State. As such, foreshore and submerged areas shall not be alienated,
unless they are classified as agricultural lands of the public domain. The
mere reclamation of these areas by PEA does not convert these inalienable
natural resources of the State into alienable or disposable lands of the public
domain. There must be a law or presidential proclamation officially classifying
these reclaimed lands as alienable or disposable and open to disposition or
concession. Moreover, these reclaimed lands cannot be classified as alienable
or disposable if the law has reserved them for some public or quasi-public
use.[71]

Section 8 of CA No. 141 provides that only those lands shall be declared open
to disposition or concession which have been officially delimited and
classified.[72] The President has the authority to classify inalienable lands of
the public domain into alienable or disposable lands of the public domain,
pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,[73] the Executive
Department attempted to sell the Roppongi property in Tokyo, Japan, which
was acquired by the Philippine Government for use as the Chancery of the
Philippine Embassy. Although the Chancery had transferred to another
location thirteen years earlier, the Court still ruled that, under Article 422[74]
of the Civil Code, a property of public dominion retains such character until
formally declared otherwise. The Court ruled that

The fact that the Roppongi site has not been used for a long time for actual
Embassy service does not automatically convert it to patrimonial property.
Any such conversion happens only if the property is withdrawn from public
use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A
property continues to be part of the public domain, not available for private
appropriation or ownership until there is a formal declaration on the part of
the government to withdraw it from being such (Ignacio v. Director of Lands,
108 Phil. 335 [1960]. (Emphasis supplied)

PD No. 1085, issued on February 4, 1977, authorized the issuance of special
land patents for lands reclaimed by PEA from the foreshore or submerged
areas of Manila Bay. On January 19, 1988 then President Corazon C. Aquino
issued Special Patent No. 3517 in the name of PEA for the 157.84 hectares
comprising the partially reclaimed Freedom Islands. Subsequently, on April 9,
1999 the Register of Deeds of the Municipality of Paranaque issued TCT Nos.
7309, 7311 and 7312 in the name of PEA pursuant to Section 103 of PD No.
1529 authorizing the issuance of certificates of title corresponding to land
patents. To this day, these certificates of title are still in the name of PEA.

PD No. 1085, coupled with President Aquinos actual issuance of a special
patent covering the Freedom Islands, is equivalent to an official proclamation
classifying the Freedom Islands as alienable or disposable lands of the public
domain. PD No. 1085 and President Aquinos issuance of a land patent also
constitute a declaration that the Freedom Islands are no longer needed for
public service. The Freedom Islands are thus alienable or disposable lands of
the public domain, open to disposition or concession to qualified parties.

At the time then President Aquino issued Special Patent No. 3517, PEA had
already reclaimed the Freedom Islands although subsequently there were
partial erosions on some areas. The government had also completed the
necessary surveys on these islands. Thus, the Freedom Islands were no longer
part of Manila Bay but part of the land mass. Section 3, Article XII of the 1987
Constitution classifies lands of the public domain into agricultural, forest or
timber, mineral lands, and national parks. Being neither timber, mineral, nor
national park lands, the reclaimed Freedom Islands necessarily fall under the
classification of agricultural lands of the public domain. Under the 1987
Constitution, agricultural lands of the public domain are the only natural
resources that the State may alienate to qualified private parties. All other
natural resources, such as the seas or bays, are waters x x x owned by the
State forming part of the public domain, and are inalienable pursuant to
Section 2, Article XII of the 1987 Constitution.

AMARI claims that the Freedom Islands are private lands because CDCP, then a
private corporation, reclaimed the islands under a contract dated November
20, 1973 with the Commissioner of Public Highways. AMARI, citing Article 5
of the Spanish Law of Waters of 1866, argues that if the ownership of
reclaimed lands may be given to the party constructing the works, then it
cannot be said that reclaimed lands are lands of the public domain which the
State may not alienate.[75] Article 5 of the Spanish Law of Waters reads as
follows:

Article 5. Lands reclaimed from the sea in consequence of works constructed
by the State, or by the provinces, pueblos or private persons, with proper
permission, shall become the property of the party constructing such works,
unless otherwise provided by the terms of the grant of authority. (Emphasis
supplied)

Under Article 5 of the Spanish Law of Waters of 1866, private parties could
reclaim from the sea only with proper permission from the State. Private
parties could own the reclaimed land only if not otherwise provided by the
terms of the grant of authority. This clearly meant that no one could reclaim
from the sea without permission from the State because the sea is property of
public dominion. It also meant that the State could grant or withhold
ownership of the reclaimed land because any reclaimed land, like the sea from
which it emerged, belonged to the State. Thus, a private person reclaiming
from the sea without permission from the State could not acquire ownership
of the reclaimed land which would remain property of public dominion like the
sea it replaced.[76] Article 5 of the Spanish Law of Waters of 1866 adopted the
time-honored principle of land ownership that all lands that were not acquired
from the government, either by purchase or by grant, belong to the public
domain.[77]

Article 5 of the Spanish Law of Waters must be read together with laws
subsequently enacted on the disposition of public lands. In particular, CA No.
141 requires that lands of the public domain must first be classified as
alienable or disposable before the government can alienate them. These lands
must not be reserved for public or quasi-public purposes.[78] Moreover, the
contract between CDCP and the government was executed after the effectivity
of the 1973 Constitution which barred private corporations from acquiring any
kind of alienable land of the public domain. This contract could not have
converted the Freedom Islands into private lands of a private corporation.

Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws
authorizing the reclamation of areas under water and revested solely in the
National Government the power to reclaim lands. Section 1 of PD No. 3-A
declared that

The provisions of any law to the contrary notwithstanding, the reclamation of
areas under water, whether foreshore or inland, shall be limited to the
National Government or any person authorized by it under a proper contract.
(Emphasis supplied)

x x x.

PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because
reclamation of areas under water could now be undertaken only by the
National Government or by a person contracted by the National Government.
Private parties may reclaim from the sea only under a contract with the
National Government, and no longer by grant or permission as provided in
Section 5 of the Spanish Law of Waters of 1866.

Executive Order No. 525, issued on February 14, 1979, designated PEA as the
National Governments implementing arm to undertake all reclamation
projects of the government, which shall be undertaken by the PEA or through
a proper contract executed by it with any person or entity. Under such
contract, a private party receives compensation for reclamation services
rendered to PEA. Payment to the contractor may be in cash, or in kind
consisting of portions of the reclaimed land, subject to the constitutional ban
on private corporations from acquiring alienable lands of the public domain.
The reclaimed land can be used as payment in kind only if the reclaimed land
is first classified as alienable or disposable land open to disposition, and then
declared no longer needed for public service.

The Amended JVA covers not only the Freedom Islands, but also an additional
592.15 hectares which are still submerged and forming part of Manila Bay.
There is no legislative or Presidential act classifying these submerged areas as
alienable or disposable lands of the public domain open to disposition. These
submerged areas are not covered by any patent or certificate of title. There
can be no dispute that these submerged areas form part of the public domain,
and in their present state are inalienable and outside the commerce of man.
Until reclaimed from the sea, these submerged areas are, under the
Constitution, waters x x x owned by the State, forming part of the public
domain and consequently inalienable. Only when actually reclaimed from the
sea can these submerged areas be classified as public agricultural lands,
which under the Constitution are the only natural resources that the State may
alienate. Once reclaimed and transformed into public agricultural lands, the
government may then officially classify these lands as alienable or disposable
lands open to disposition. Thereafter, the government may declare these
lands no longer needed for public service. Only then can these reclaimed
lands be considered alienable or disposable lands of the public domain and
within the commerce of man.

The classification of PEAs reclaimed foreshore and submerged lands into
alienable or disposable lands open to disposition is necessary because PEA is
tasked under its charter to undertake public services that require the use of
lands of the public domain. Under Section 5 of PD No. 1084, the functions of
PEA include the following: [T]o own or operate railroads, tramways and other
kinds of land transportation, x x x; [T]o construct, maintain and operate such
systems of sanitary sewers as may be necessary; [T]o construct, maintain and
operate such storm drains as may be necessary. PEA is empowered to issue
rules and regulations as may be necessary for the proper use by private
parties of any or all of the highways, roads, utilities, buildings and/or any of
its properties and to impose or collect fees or tolls for their use. Thus, part
of the reclaimed foreshore and submerged lands held by the PEA would
actually be needed for public use or service since many of the functions
imposed on PEA by its charter constitute essential public services.

Moreover, Section 1 of Executive Order No. 525 provides that PEA shall be
primarily responsible for integrating, directing, and coordinating all
reclamation projects for and on behalf of the National Government. The same
section also states that [A]ll reclamation projects shall be approved by the
President upon recommendation of the PEA, and shall be undertaken by the
PEA or through a proper contract executed by it with any person or entity; x x
x. Thus, under EO No. 525, in relation to PD No. 3-A and PD No.1084, PEA
became the primary implementing agency of the National Government to
reclaim foreshore and submerged lands of the public domain. EO No. 525
recognized PEA as the government entity to undertake the reclamation of
lands and ensure their maximum utilization in promoting public welfare and
interests.[79] Since large portions of these reclaimed lands would obviously
be needed for public service, there must be a formal declaration segregating
reclaimed lands no longer needed for public service from those still needed
for public service.

Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA shall
belong to or be owned by the PEA, could not automatically operate to classify
inalienable lands into alienable or disposable lands of the public domain.
Otherwise, reclaimed foreshore and submerged lands of the public domain
would automatically become alienable once reclaimed by PEA, whether or not
classified as alienable or disposable.

The Revised Administrative Code of 1987, a later law than either PD No. 1084
or EO No. 525, vests in the Department of Environment and Natural Resources
(DENR for brevity) the following powers and functions:

Sec. 4. Powers and Functions. The Department shall:

(1) x x x

x x x

(4) Exercise supervision and control over forest lands, alienable and
disposable public lands, mineral resources and, in the process of exercising
such control, impose appropriate taxes, fees, charges, rentals and any such
form of levy and collect such revenues for the exploration, development,
utilization or gathering of such resources;

x x x

(14) Promulgate rules, regulations and guidelines on the issuance of licenses,
permits, concessions, lease agreements and such other privileges concerning
the development, exploration and utilization of the countrys marine,
freshwater, and brackish water and over all aquatic resources of the country
and shall continue to oversee, supervise and police our natural resources;
cancel or cause to cancel such privileges upon failure, non-compliance or
violations of any regulation, order, and for all other causes which are in
furtherance of the conservation of natural resources and supportive of the
national interest;

(15) Exercise exclusive jurisdiction on the management and disposition of all
lands of the public domain and serve as the sole agency responsible for
classification, sub-classification, surveying and titling of lands in consultation
with appropriate agencies.[80] (Emphasis supplied)

As manager, conservator and overseer of the natural resources of the State,
DENR exercises supervision and control over alienable and disposable public
lands. DENR also exercises exclusive jurisdiction on the management and
disposition of all lands of the public domain. Thus, DENR decides whether
areas under water, like foreshore or submerged areas of Manila Bay, should be
reclaimed or not. This means that PEA needs authorization from DENR before
PEA can undertake reclamation projects in Manila Bay, or in any part of the
country.

DENR also exercises exclusive jurisdiction over the disposition of all lands of
the public domain. Hence, DENR decides whether reclaimed lands of PEA
should be classified as alienable under Sections 6[81] and 7[82] of CA No.
141. Once DENR decides that the reclaimed lands should be so classified, it
then recommends to the President the issuance of a proclamation classifying
the lands as alienable or disposable lands of the public domain open to
disposition. We note that then DENR Secretary Fulgencio S. Factoran, Jr.
countersigned Special Patent No. 3517 in compliance with the Revised
Administrative Code and Sections 6 and 7 of CA No. 141.

In short, DENR is vested with the power to authorize the reclamation of areas
under water, while PEA is vested with the power to undertake the physical
reclamation of areas under water, whether directly or through private
contractors. DENR is also empowered to classify lands of the public domain
into alienable or disposable lands subject to the approval of the President. On
the other hand, PEA is tasked to develop, sell or lease the reclaimed alienable
lands of the public domain.

Clearly, the mere physical act of reclamation by PEA of foreshore or
submerged areas does not make the reclaimed lands alienable or disposable
lands of the public domain, much less patrimonial lands of PEA. Likewise, the
mere transfer by the National Government of lands of the public domain to
PEA does not make the lands alienable or disposable lands of the public
domain, much less patrimonial lands of PEA.

Absent two official acts a classification that these lands are alienable or
disposable and open to disposition and a declaration that these lands are not
needed for public service, lands reclaimed by PEA remain inalienable lands of
the public domain. Only such an official classification and formal declaration
can convert reclaimed lands into alienable or disposable lands of the public
domain, open to disposition under the Constitution, Title I and Title III[83] of
CA No. 141 and other applicable laws.[84]

PEAs Authority to Sell Reclaimed Lands

PEA, like the Legal Task Force, argues that as alienable or disposable lands of
the public domain, the reclaimed lands shall be disposed of in accordance with
CA No. 141, the Public Land Act. PEA, citing Section 60 of CA No. 141, admits
that reclaimed lands transferred to a branch or subdivision of the government
shall not be alienated, encumbered, or otherwise disposed of in a manner
affecting its title, except when authorized by Congress: x x x.[85] (Emphasis
by PEA)

In Laurel vs. Garcia,[86] the Court cited Section 48 of the Revised
Administrative Code of 1987, which states that

Sec. 48. Official Authorized to Convey Real Property. Whenever real property
of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following: x
x x.

Thus, the Court concluded that a law is needed to convey any real property
belonging to the Government. The Court declared that -

It is not for the President to convey real property of the government on his or
her own sole will. Any such conveyance must be authorized and approved by
a law enacted by the Congress. It requires executive and legislative
concurrence. (Emphasis supplied)

PEA contends that PD No. 1085 and EO No. 525 constitute the legislative
authority allowing PEA to sell its reclaimed lands. PD No. 1085, issued on
February 4, 1977, provides that

The land reclaimed in the foreshore and offshore area of Manila Bay pursuant
to the contract for the reclamation and construction of the Manila-Cavite
Coastal Road Project between the Republic of the Philippines and the
Construction and Development Corporation of the Philippines dated November
20, 1973 and/or any other contract or reclamation covering the same area is
hereby transferred, conveyed and assigned to the ownership and
administration of the Public Estates Authority established pursuant to PD No.
1084; Provided, however, That the rights and interests of the Construction
and Development Corporation of the Philippines pursuant to the aforesaid
contract shall be recognized and respected.

Henceforth, the Public Estates Authority shall exercise the rights and assume
the obligations of the Republic of the Philippines (Department of Public
Highways) arising from, or incident to, the aforesaid contract between the
Republic of the Philippines and the Construction and Development
Corporation of the Philippines.

In consideration of the foregoing transfer and assignment, the Public Estates
Authority shall issue in favor of the Republic of the Philippines the
corresponding shares of stock in said entity with an issued value of said
shares of stock (which) shall be deemed fully paid and non-assessable.

The Secretary of Public Highways and the General Manager of the Public
Estates Authority shall execute such contracts or agreements, including
appropriate agreements with the Construction and Development Corporation
of the Philippines, as may be necessary to implement the above.

Special land patent/patents shall be issued by the Secretary of Natural
Resources in favor of the Public Estates Authority without prejudice to the
subsequent transfer to the contractor or his assignees of such portion or
portions of the land reclaimed or to be reclaimed as provided for in the above-
mentioned contract. On the basis of such patents, the Land Registration
Commission shall issue the corresponding certificate of title. (Emphasis
supplied)

On the other hand, Section 3 of EO No. 525, issued on February 14, 1979,
provides that -

Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA
which shall be responsible for its administration, development, utilization or
disposition in accordance with the provisions of Presidential Decree No. 1084.
Any and all income that the PEA may derive from the sale, lease or use of
reclaimed lands shall be used in accordance with the provisions of Presidential
Decree No. 1084.

There is no express authority under either PD No. 1085 or EO No. 525 for PEA
to sell its reclaimed lands. PD No. 1085 merely transferred ownership and
administration of lands reclaimed from Manila Bay to PEA, while EO No. 525
declared that lands reclaimed by PEA shall belong to or be owned by PEA. EO
No. 525 expressly states that PEA should dispose of its reclaimed lands in
accordance with the provisions of Presidential Decree No. 1084, the charter of
PEA.

PEAs charter, however, expressly tasks PEA to develop, improve, acquire,
administer, deal in, subdivide, dispose, lease and sell any and all kinds of
lands x x x owned, managed, controlled and/or operated by the
government.[87] (Emphasis supplied) There is, therefore, legislative authority
granted to PEA to sell its lands, whether patrimonial or alienable lands of the
public domain. PEA may sell to private parties its patrimonial properties in
accordance with the PEA charter free from constitutional limitations. The
constitutional ban on private corporations from acquiring alienable lands of
the public domain does not apply to the sale of PEAs patrimonial lands.

PEA may also sell its alienable or disposable lands of the public domain to
private individuals since, with the legislative authority, there is no longer any
statutory prohibition against such sales and the constitutional ban does not
apply to individuals. PEA, however, cannot sell any of its alienable or
disposable lands of the public domain to private corporations since Section 3,
Article XII of the 1987 Constitution expressly prohibits such sales. The
legislative authority benefits only individuals. Private corporations remain
barred from acquiring any kind of alienable land of the public domain,
including government reclaimed lands.

The provision in PD No. 1085 stating that portions of the reclaimed lands
could be transferred by PEA to the contractor or his assignees (Emphasis
supplied) would not apply to private corporations but only to individuals
because of the constitutional ban. Otherwise, the provisions of PD No. 1085
would violate both the 1973 and 1987 Constitutions.

The requirement of public auction in the sale of reclaimed lands

Assuming the reclaimed lands of PEA are classified as alienable or disposable
lands open to disposition, and further declared no longer needed for public
service, PEA would have to conduct a public bidding in selling or leasing these
lands. PEA must observe the provisions of Sections 63 and 67 of CA No. 141
requiring public auction, in the absence of a law exempting PEA from holding
a public auction.[88] Special Patent No. 3517 expressly states that the patent
is issued by authority of the Constitution and PD No. 1084, supplemented by
Commonwealth Act No. 141, as amended. This is an acknowledgment that
the provisions of CA No. 141 apply to the disposition of reclaimed alienable
lands of the public domain unless otherwise provided by law. Executive Order
No. 654,[89] which authorizes PEA to determine the kind and manner of
payment for the transfer of its assets and properties, does not exempt PEA
from the requirement of public auction. EO No. 654 merely authorizes PEA to
decide the mode of payment, whether in kind and in installment, but does not
authorize PEA to dispense with public auction.

Moreover, under Section 79 of PD No. 1445, otherwise known as the
Government Auditing Code, the government is required to sell valuable
government property through public bidding. Section 79 of PD No. 1445
mandates that

Section 79. When government property has become unserviceable for any
cause, or is no longer needed, it shall, upon application of the officer
accountable therefor, be inspected by the head of the agency or his duly
authorized representative in the presence of the auditor concerned and, if
found to be valueless or unsaleable, it may be destroyed in their presence. If
found to be valuable, it may be sold at public auction to the highest bidder
under the supervision of the proper committee on award or similar body in the
presence of the auditor concerned or other authorized representative of the
Commission, after advertising by printed notice in the Official Gazette, or for
not less than three consecutive days in any newspaper of general circulation,
or where the value of the property does not warrant the expense of
publication, by notices posted for a like period in at least three public places
in the locality where the property is to be sold. In the event that the public
auction fails, the property may be sold at a private sale at such price as may
be fixed by the same committee or body concerned and approved by the
Commission.

It is only when the public auction fails that a negotiated sale is allowed, in
which case the Commission on Audit must approve the selling price.[90] The
Commission on Audit implements Section 79 of the Government Auditing
Code through Circular No. 89-296[91] dated January 27, 1989. This circular
emphasizes that government assets must be disposed of only through public
auction, and a negotiated sale can be resorted to only in case of failure of
public auction.

At the public auction sale, only Philippine citizens are qualified to bid for PEAs
reclaimed foreshore and submerged alienable lands of the public domain.
Private corporations are barred from bidding at the auction sale of any kind of
alienable land of the public domain.

PEA originally scheduled a public bidding for the Freedom Islands on
December 10, 1991. PEA imposed a condition that the winning bidder should
reclaim another 250 hectares of submerged areas to regularize the shape of
the Freedom Islands, under a 60-40 sharing of the additional reclaimed areas
in favor of the winning bidder.[92] No one, however, submitted a bid. On
December 23, 1994, the Government Corporate Counsel advised PEA it could
sell the Freedom Islands through negotiation, without need of another public
bidding, because of the failure of the public bidding on December 10,
1991.[93]

However, the original JVA dated April 25, 1995 covered not only the Freedom
Islands and the additional 250 hectares still to be reclaimed, it also granted an
option to AMARI to reclaim another 350 hectares. The original JVA, a
negotiated contract, enlarged the reclamation area to 750 hectares.[94] The
failure of public bidding on December 10, 1991, involving only 407.84
hectares,[95] is not a valid justification for a negotiated sale of 750 hectares,
almost double the area publicly auctioned. Besides, the failure of public
bidding happened on December 10, 1991, more than three years before the
signing of the original JVA on April 25, 1995. The economic situation in the
country had greatly improved during the intervening period.

Reclamation under the BOT Law and the Local Government Code

The constitutional prohibition in Section 3, Article XII of the 1987 Constitution
is absolute and clear: Private corporations or associations may not hold such
alienable lands of the public domain except by lease, x x x. Even Republic Act
No. 6957 (BOT Law, for brevity), cited by PEA and AMARI as legislative
authority to sell reclaimed lands to private parties, recognizes the
constitutional ban. Section 6 of RA No. 6957 states

Sec. 6. Repayment Scheme. - For the financing, construction, operation and
maintenance of any infrastructure projects undertaken through the build-
operate-and-transfer arrangement or any of its variations pursuant to the
provisions of this Act, the project proponent x x x may likewise be repaid in
the form of a share in the revenue of the project or other non-monetary
payments, such as, but not limited to, the grant of a portion or percentage of
the reclaimed land, subject to the constitutional requirements with respect to
the ownership of the land: x x x. (Emphasis supplied)

A private corporation, even one that undertakes the physical reclamation of a
government BOT project, cannot acquire reclaimed alienable lands of the
public domain in view of the constitutional ban.

Section 302 of the Local Government Code, also mentioned by PEA and AMARI,
authorizes local governments in land reclamation projects to pay the
contractor or developer in kind consisting of a percentage of the reclaimed
land, to wit:

Section 302. Financing, Construction, Maintenance, Operation, and
Management of Infrastructure Projects by the Private Sector. x x x

x x x

In case of land reclamation or construction of industrial estates, the
repayment plan may consist of the grant of a portion or percentage of the
reclaimed land or the industrial estate constructed.

Although Section 302 of the Local Government Code does not contain a
proviso similar to that of the BOT Law, the constitutional restrictions on land
ownership automatically apply even though not expressly mentioned in the
Local Government Code.

Thus, under either the BOT Law or the Local Government Code, the contractor
or developer, if a corporate entity, can only be paid with leaseholds on
portions of the reclaimed land. If the contractor or developer is an individual,
portions of the reclaimed land, not exceeding 12 hectares[96] of non-
agricultural lands, may be conveyed to him in ownership in view of the
legislative authority allowing such conveyance. This is the only way these
provisions of the BOT Law and the Local Government Code can avoid a direct
collision with Section 3, Article XII of the 1987 Constitution.

Registration of lands of the public domain

Finally, PEA theorizes that the act of conveying the ownership of the
reclaimed lands to public respondent PEA transformed such lands of the
public domain to private lands. This theory is echoed by AMARI which
maintains that the issuance of the special patent leading to the eventual
issuance of title takes the subject land away from the land of public domain
and converts the property into patrimonial or private property. In short, PEA
and AMARI contend that with the issuance of Special Patent No. 3517 and the
corresponding certificates of titles, the 157.84 hectares comprising the
Freedom Islands have become private lands of PEA. In support of their theory,
PEA and AMARI cite the following rulings of the Court:

1. Sumail v. Judge of CFI of Cotabato,[97] where the Court held

Once the patent was granted and the corresponding certificate of title was
issued, the land ceased to be part of the public domain and became private
property over which the Director of Lands has neither control nor jurisdiction.

2. Lee Hong Hok v. David,[98] where the Court declared -

After the registration and issuance of the certificate and duplicate certificate
of title based on a public land patent, the land covered thereby automatically
comes under the operation of Republic Act 496 subject to all the safeguards
provided therein.


3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,[99] where the Court
ruled -

While the Director of Lands has the power to review homestead patents, he
may do so only so long as the land remains part of the public domain and
continues to be under his exclusive control; but once the patent is registered
and a certificate of title is issued, the land ceases to be part of the public
domain and becomes private property over which the Director of Lands has
neither control nor jurisdiction.

4. Manalo v. Intermediate Appellate Court,[100] where the Court held

When the lots in dispute were certified as disposable on May 19, 1971, and
free patents were issued covering the same in favor of the private
respondents, the said lots ceased to be part of the public domain and,
therefore, the Director of Lands lost jurisdiction over the same.

5.Republic v. Court of Appeals,[101] where the Court stated

Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally
effected a land grant to the Mindanao Medical Center, Bureau of Medical
Services, Department of Health, of the whole lot, validly sufficient for initial
registration under the Land Registration Act. Such land grant is constitutive of
a fee simple title or absolute title in favor of petitioner Mindanao Medical
Center. Thus, Section 122 of the Act, which governs the registration of grants
or patents involving public lands, provides that Whenever public lands in the
Philippine Islands belonging to the Government of the United States or to the
Government of the Philippines are alienated, granted or conveyed to persons
or to public or private corporations, the same shall be brought forthwith under
the operation of this Act (Land Registration Act, Act 496) and shall become
registered lands.

The first four cases cited involve petitions to cancel the land patents and the
corresponding certificates of titles issued to private parties. These four cases
uniformly hold that the Director of Lands has no jurisdiction over private lands
or that upon issuance of the certificate of title the land automatically comes
under the Torrens System. The fifth case cited involves the registration under
the Torrens System of a 12.8-hectare public land granted by the National
Government to Mindanao Medical Center, a government unit under the
Department of Health. The National Government transferred the 12.8-hectare
public land to serve as the site for the hospital buildings and other facilities of
Mindanao Medical Center, which performed a public service. The Court
affirmed the registration of the 12.8-hectare public land in the name of
Mindanao Medical Center under Section 122 of Act No. 496. This fifth case is
an example of a public land being registered under Act No. 496 without the
land losing its character as a property of public dominion.

In the instant case, the only patent and certificates of title issued are those in
the name of PEA, a wholly government owned corporation performing public
as well as proprietary functions. No patent or certificate of title has been
issued to any private party. No one is asking the Director of Lands to cancel
PEAs patent or certificates of title. In fact, the thrust of the instant petition is
that PEAs certificates of title should remain with PEA, and the land covered by
these certificates, being alienable lands of the public domain, should not be
sold to a private corporation.

Registration of land under Act No. 496 or PD No. 1529 does not vest in the
registrant private or public ownership of the land. Registration is not a mode
of acquiring ownership but is merely evidence of ownership previously
conferred by any of the recognized modes of acquiring ownership.
Registration does not give the registrant a better right than what the registrant
had prior to the registration.[102] The registration of lands of the public
domain under the Torrens system, by itself, cannot convert public lands into
private lands.[103]

Jurisprudence holding that upon the grant of the patent or issuance of the
certificate of title the alienable land of the public domain automatically
becomes private land cannot apply to government units and entities like PEA.
The transfer of the Freedom Islands to PEA was made subject to the provisions
of CA No. 141 as expressly stated in Special Patent No. 3517 issued by then
President Aquino, to wit:

NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the
Philippines and in conformity with the provisions of Presidential Decree No.
1084, supplemented by Commonwealth Act No. 141, as amended, there are
hereby granted and conveyed unto the Public Estates Authority the aforesaid
tracts of land containing a total area of one million nine hundred fifteen
thousand eight hundred ninety four (1,915,894) square meters; the technical
description of which are hereto attached and made an integral part hereof.
(Emphasis supplied)

Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters
not covered by PD No. 1084. Section 60 of CA No. 141 prohibits, except
when authorized by Congress, the sale of alienable lands of the public
domain that are transferred to government units or entities. Section 60 of CA
No. 141 constitutes, under Section 44 of PD No. 1529, a statutory lien
affecting title of the registered land even if not annotated on the certificate of
title.[104] Alienable lands of the public domain held by government entities
under Section 60 of CA No. 141 remain public lands because they cannot be
alienated or encumbered unless Congress passes a law authorizing their
disposition. Congress, however, cannot authorize the sale to private
corporations of reclaimed alienable lands of the public domain because of the
constitutional ban. Only individuals can benefit from such law.

The grant of legislative authority to sell public lands in accordance with
Section 60 of CA No. 141 does not automatically convert alienable lands of the
public domain into private or patrimonial lands. The alienable lands of the
public domain must be transferred to qualified private parties, or to
government entities not tasked to dispose of public lands, before these lands
can become private or patrimonial lands. Otherwise, the constitutional ban
will become illusory if Congress can declare lands of the public domain as
private or patrimonial lands in the hands of a government agency tasked to
dispose of public lands. This will allow private corporations to acquire directly
from government agencies limitless areas of lands which, prior to such law,
are concededly public lands.

Under EO No. 525, PEA became the central implementing agency of the
National Government to reclaim foreshore and submerged areas of the public
domain. Thus, EO No. 525 declares that

EXECUTIVE ORDER NO. 525

Designating the Public Estates Authority as the Agency Primarily Responsible
for all Reclamation Projects

Whereas, there are several reclamation projects which are ongoing or being
proposed to be undertaken in various parts of the country which need to be
evaluated for consistency with national programs;

Whereas, there is a need to give further institutional support to the
Governments declared policy to provide for a coordinated, economical and
efficient reclamation of lands;

Whereas, Presidential Decree No. 3-A requires that all reclamation of areas
shall be limited to the National Government or any person authorized by it
under proper contract;

Whereas, a central authority is needed to act on behalf of the National
Government which shall ensure a coordinated and integrated approach in the
reclamation of lands;

Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as
a government corporation to undertake reclamation of lands and ensure their
maximum utilization in promoting public welfare and interests; and

Whereas, Presidential Decree No. 1416 provides the President with continuing
authority to reorganize the national government including the transfer,
abolition, or merger of functions and offices.

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by
virtue of the powers vested in me by the Constitution and pursuant to
Presidential Decree No. 1416, do hereby order and direct the following:

Section 1. The Public Estates Authority (PEA) shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on
behalf of the National Government. All reclamation projects shall be approved
by the President upon recommendation of the PEA, and shall be undertaken by
the PEA or through a proper contract executed by it with any person or entity;
Provided, that, reclamation projects of any national government agency or
entity authorized under its charter shall be undertaken in consultation with the
PEA upon approval of the President.

x x x .

As the central implementing agency tasked to undertake reclamation projects
nationwide, with authority to sell reclaimed lands, PEA took the place of DENR
as the government agency charged with leasing or selling reclaimed lands of
the public domain. The reclaimed lands being leased or sold by PEA are not
private lands, in the same manner that DENR, when it disposes of other
alienable lands, does not dispose of private lands but alienable lands of the
public domain. Only when qualified private parties acquire these lands will the
lands become private lands. In the hands of the government agency tasked
and authorized to dispose of alienable of disposable lands of the public
domain, these lands are still public, not private lands.

Furthermore, PEAs charter expressly states that PEA shall hold lands of the
public domain as well as any and all kinds of lands. PEA can hold both lands
of the public domain and private lands. Thus, the mere fact that alienable
lands of the public domain like the Freedom Islands are transferred to PEA and
issued land patents or certificates of title in PEAs name does not automatically
make such lands private.

To allow vast areas of reclaimed lands of the public domain to be transferred
to PEA as private lands will sanction a gross violation of the constitutional ban
on private corporations from acquiring any kind of alienable land of the public
domain. PEA will simply turn around, as PEA has now done under the
Amended JVA, and transfer several hundreds of hectares of these reclaimed
and still to be reclaimed lands to a single private corporation in only one
transaction. This scheme will effectively nullify the constitutional ban in
Section 3, Article XII of the 1987 Constitution which was intended to diffuse
equitably the ownership of alienable lands of the public domain among
Filipinos, now numbering over 80 million strong.

This scheme, if allowed, can even be applied to alienable agricultural lands of
the public domain since PEA can acquire x x x any and all kinds of lands.
This will open the floodgates to corporations and even individuals acquiring
hundreds of hectares of alienable lands of the public domain under the guise
that in the hands of PEA these lands are private lands. This will result in
corporations amassing huge landholdings never before seen in this country -
creating the very evil that the constitutional ban was designed to prevent.
This will completely reverse the clear direction of constitutional development
in this country. The 1935 Constitution allowed private corporations to acquire
not more than 1,024 hectares of public lands.[105] The 1973 Constitution
prohibited private corporations from acquiring any kind of public land, and
the 1987 Constitution has unequivocally reiterated this prohibition.

The contention of PEA and AMARI that public lands, once registered under Act
No. 496 or PD No. 1529, automatically become private lands is contrary to
existing laws. Several laws authorize lands of the public domain to be
registered under the Torrens System or Act No. 496, now PD No. 1529,
without losing their character as public lands. Section 122 of Act No. 496, and
Section 103 of PD No. 1529, respectively, provide as follows:

Act No. 496

Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x
x Government of the Philippine Islands are alienated, granted, or conveyed to
persons or the public or private corporations, the same shall be brought
forthwith under the operation of this Act and shall become registered lands.

PD No. 1529

Sec. 103. Certificate of Title to Patents. Whenever public land is by the
Government alienated, granted or conveyed to any person, the same shall be
brought forthwith under the operation of this Decree. (Emphasis supplied)

Based on its legislative history, the phrase conveyed to any person in Section
103 of PD No. 1529 includes conveyances of public lands to public
corporations.

Alienable lands of the public domain granted, donated, or transferred to a
province, municipality, or branch or subdivision of the Government, as
provided in Section 60 of CA No. 141, may be registered under the Torrens
System pursuant to Section 103 of PD No. 1529. Such registration, however,
is expressly subject to the condition in Section 60 of CA No. 141 that the land
shall not be alienated, encumbered or otherwise disposed of in a manner
affecting its title, except when authorized by Congress. This provision refers
to government reclaimed, foreshore and marshy lands of the public domain
that have been titled but still cannot be alienated or encumbered unless
expressly authorized by Congress. The need for legislative authority prevents
the registered land of the public domain from becoming private land that can
be disposed of to qualified private parties.

The Revised Administrative Code of 1987 also recognizes that lands of the
public domain may be registered under the Torrens System. Section 48,
Chapter 12, Book I of the Code states

Sec. 48. Official Authorized to Convey Real Property. Whenever real property
of the Government is authorized by law to be conveyed, the deed of
conveyance shall be executed in behalf of the government by the following:

(1) x x x

(2) For property belonging to the Republic of the Philippines, but titled in the
name of any political subdivision or of any corporate agency or
instrumentality, by the executive head of the agency or instrumentality.
(Emphasis supplied)

Thus, private property purchased by the National Government for expansion
of a public wharf may be titled in the name of a government corporation
regulating port operations in the country. Private property purchased by the
National Government for expansion of an airport may also be titled in the
name of the government agency tasked to administer the airport. Private
property donated to a municipality for use as a town plaza or public school
site may likewise be titled in the name of the municipality.[106] All these
properties become properties of the public domain, and if already registered
under Act No. 496 or PD No. 1529, remain registered land. There is no
requirement or provision in any existing law for the de-registration of land
from the Torrens System.

Private lands taken by the Government for public use under its power of
eminent domain become unquestionably part of the public domain.
Nevertheless, Section 85 of PD No. 1529 authorizes the Register of Deeds to
issue in the name of the National Government new certificates of title covering
such expropriated lands. Section 85 of PD No. 1529 states

Sec. 85. Land taken by eminent domain. Whenever any registered land, or
interest therein, is expropriated or taken by eminent domain, the National
Government, province, city or municipality, or any other agency or
instrumentality exercising such right shall file for registration in the proper
Registry a certified copy of the judgment which shall state definitely by an
adequate description, the particular property or interest expropriated, the
number of the certificate of title, and the nature of the public use. A
memorandum of the right or interest taken shall be made on each certificate
of title by the Register of Deeds, and where the fee simple is taken, a new
certificate shall be issued in favor of the National Government, province, city,
municipality, or any other agency or instrumentality exercising such right for
the land so taken. The legal expenses incident to the memorandum of
registration or issuance of a new certificate of title shall be for the account of
the authority taking the land or interest therein. (Emphasis supplied)

Consequently, lands registered under Act No. 496 or PD No. 1529 are not
exclusively private or patrimonial lands. Lands of the public domain may also
be registered pursuant to existing laws.

AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of
the Freedom Islands or of the lands to be reclaimed from submerged areas of
Manila Bay. In the words of AMARI, the Amended JVA is not a sale but a joint
venture with a stipulation for reimbursement of the original cost incurred by
PEA for the earlier reclamation and construction works performed by the CDCP
under its 1973 contract with the Republic. Whether the Amended JVA is a
sale or a joint venture, the fact remains that the Amended JVA requires PEA to
cause the issuance and delivery of the certificates of title conveying AMARIs
Land Share in the name of AMARI.[107]

This stipulation still contravenes Section 3, Article XII of the 1987 Constitution
which provides that private corporations shall not hold such alienable lands
of the public domain except by lease. The transfer of title and ownership to
AMARI clearly means that AMARI will hold the reclaimed lands other than by
lease. The transfer of title and ownership is a disposition of the reclaimed
lands, a transaction considered a sale or alienation under CA No. 141,[108]
the Government Auditing Code,[109] and Section 3, Article XII of the 1987
Constitution.

The Regalian doctrine is deeply implanted in our legal system. Foreshore and
submerged areas form part of the public domain and are inalienable. Lands
reclaimed from foreshore and submerged areas also form part of the public
domain and are also inalienable, unless converted pursuant to law into
alienable or disposable lands of the public domain. Historically, lands
reclaimed by the government are sui generis, not available for sale to private
parties unlike other alienable public lands. Reclaimed lands retain their
inherent potential as areas for public use or public service. Alienable lands of
the public domain, increasingly becoming scarce natural resources, are to be
distributed equitably among our ever-growing population. To insure such
equitable distribution, the 1973 and 1987 Constitutions have barred private
corporations from acquiring any kind of alienable land of the public domain.
Those who attempt to dispose of inalienable natural resources of the State, or
seek to circumvent the constitutional ban on alienation of lands of the public
domain to private corporations, do so at their own risk.

We can now summarize our conclusions as follows:

1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands,
now covered by certificates of title in the name of PEA, are alienable lands of
the public domain. PEA may lease these lands to private corporations but may
not sell or transfer ownership of these lands to private corporations. PEA may
only sell these lands to Philippine citizens, subject to the ownership limitations
in the 1987 Constitution and existing laws.

2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable
natural resources of the public domain until classified as alienable or
disposable lands open to disposition and declared no longer needed for public
service. The government can make such classification and declaration only
after PEA has reclaimed these submerged areas. Only then can these lands
qualify as agricultural lands of the public domain, which are the only natural
resources the government can alienate. In their present state, the 592.15
hectares of submerged areas are inalienable and outside the commerce of
man.

3. Since the Amended JVA seeks to transfer to AMARI, a private corporation,
ownership of 77.34 hectares[110] of the Freedom Islands, such transfer is void
for being contrary to Section 3, Article XII of the 1987 Constitution which
prohibits private corporations from acquiring any kind of alienable land of the
public domain.

4. Since the Amended JVA also seeks to transfer to AMARI ownership of
290.156 hectares[111] of still submerged areas of Manila Bay, such transfer is
void for being contrary to Section 2, Article XII of the 1987 Constitution which
prohibits the alienation of natural resources other than agricultural lands of
the public domain. PEA may reclaim these submerged areas. Thereafter, the
government can classify the reclaimed lands as alienable or disposable, and
further declare them no longer needed for public service. Still, the transfer of
such reclaimed alienable lands of the public domain to AMARI will be void in
view of Section 3, Article XII of the 1987 Constitution which prohibits private
corporations from acquiring any kind of alienable land of the public domain.

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the
1987 Constitution. Under Article 1409[112] of the Civil Code, contracts whose
object or purpose is contrary to law, or whose object is outside the
commerce of men, are inexistent and void from the beginning. The Court
must perform its duty to defend and uphold the Constitution, and therefore
declares the Amended JVA null and void ab initio.

Seventh issue: whether the Court is the proper forum to raise the issue of
whether the Amended JVA is grossly disadvantageous to the government.

Considering that the Amended JVA is null and void ab initio, there is no
necessity to rule on this last issue. Besides, the Court is not a trier of facts,
and this last issue involves a determination of factual matters.

WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari
Coastal Bay Development Corporation are PERMANENTLY ENJOINED from
implementing the Amended Joint Venture Agreement which is hereby declared
NULL and VOID ab initio.
--
Estrada vs. Escritor A.M. P-02-1651 August 4, 2003

Facts: In a sworn letter-complaint, Alejandro Estrada, complainant, wrote to
Judge Caoibes Jr. requesting for an investigation of rumors that respondent
Soledad Escritor, court interpreter of Las Pias, is living with a man not her
husband. Judge Caoibes referred the letter to Escritor, who stated that there
is no truth as to the veracity of the allegation and challenged Estrada, to
appear in the open and prove his allegation in the proper court. Judge
Caoibes set a preliminary conference and Escritor move for inhibition to avoid
bias and suspicion in hearing her case. In the conference, Estrada confirmed
that he filed a letter-complaint for disgraceful and immoral conduct under
the Revised Administrative Code against Escritor for that his frequent visit in
the Hall of Justice in Las Pias learned Escritor is cohabiting with another man
not his husband.

Escritor testified that when she entered judiciary in 1999, she was already a
widow since 1998. She admitted that shes been living with Luciano Quilapo Jr.
without the benefit of marriage for 20 years and that they have a son. Escritor
asserted that as a member of the religious sect known as Jehovahs Witnesses,
and having executed a Declaration of Pledging Faithfulness (which allows
members of the congregation who have been abandoned by their spouses to
enter into marital relations) jointly with Quilapo after ten years of living
together, her conjugal arrangement is in conformity with her religious beliefs
and has the approval of the congregation, therefore not constituting
disgraceful and immoral conduct.

Issue: Whether or not Escritor is administratively liable for disgraceful and
immoral conduct.

Ruling: Escritor cannot be penalized. The Constitution adheres to the
benevolent neutrality approach that gives room for accommodation of
religious exercises as required by the Free Exercise Clause, provided that it
does not offend compelling state interests. The OSG must then demonstrate
that the state has used the least intrusive means possible so that the free
exercise clause is not infringed any more than necessary to achieve the
legitimate goal of the state. In this case, with no iota of evidence offered, the
records are bereft of even a feeble attempt to show that the state adopted the
least intrusive means. With the Solicitor General utterly failing to prove this
element of the test, and under these distinct circumstances, Escritor cannot be
penalized.

The Constitution itself mandates the Court to make exemptions in cases
involving criminal laws of general application, and under these distinct
circumstances, such conjugal arrangement cannot be penalized for there is a
case for exemption from the law based on the fundamental right to freedom
of religion. In the area of religious exercise as a preferred freedom, man
stands accountable to an authority higher than the state.
--
LEMON V. KURTZMAN

MR. CHIEF JUSTICE BURGER delivered the opinion of the Court.

These two appeals raise questions as to Pennsylvania and Rhode Island
statutes providing state aid to church-related elementary and secondary
schools. Both statutes are challenged as violative of the Establishment and
Free Exercise Clauses of the First Amendment and the Due Process Clause of
the Fourteenth Amendment.

Pennsylvania has adopted a statutory program that provides financial support
to nonpublic elementary and [p607] secondary schools by way of
reimbursement for the cost of teachers' salaries, textbooks, and instructional
materials in specified secular subjects. Rhode Island has adopted a statute
under which the State pays directly to teachers in nonpublic elementary
schools a supplement of 15% of their annual salary. Under each statute, state
aid has been given to church-related educational institutions. We hold that
both statutes are unconstitutional.

I

The Rhode Island Statute
The Rhode Island Salary Supplement Act [n1] was enacted in 1969. It rests on
the legislative finding that the quality of education available in nonpublic
elementary schools has been jeopardized by the rapidly rising salaries needed
to attract competent and dedicated teachers. The Act authorizes state officials
to supplement the salaries of teachers of secular subjects in nonpublic
elementary schools by paying directly to a teacher an amount not in excess of
15% of his current annual salary. As supplemented, however, a nonpublic
school teacher's salary cannot exceed the maximum paid to teachers in the
State's public schools, and the recipient must be certified by the state board of
education in substantially the same manner as public school teachers.

In order to be eligible for the Rhode Island salary supplement, the recipient
must teach in a nonpublic school at which the average per-pupil expenditure
on secular education is less than the average in the State's public schools
during a specified period. Appellant State Commissioner of Education also
requires eligible schools to submit financial data. If this information indicates
a per-pupil expenditure in excess of the statutory limitation, [p608] the
records of the school in question must be examined in order to assess how
much of the expenditure is attributable to secular education and how much to
religious activity. [n2]

The Act also requires that teachers eligible for salary supplements must teach
only those subjects that are offered in the State's public schools. They must
use "only teaching materials which are used in the public schools." Finally, any
teacher applying for a salary supplement must first agree in writing "not to
teach a course in religion for so long as or during such time as he or she
receives any salary supplements" under the Act.

Appellees are citizens and taxpayers of Rhode Island. They brought this suit to
have the Rhode Island Salary Supplement Act declared unconstitutional and its
operation enjoined on the ground that it violates the Establishment and Free
Exercise Clauses of the First Amendment. Appellants are state officials
charged with administration of the Act, teachers eligible for salary
supplements under the Act, and parents of children in church-related
elementary schools whose teachers would receive state salary assistance.

A three-judge federal court was convened pursuant to 28 U.S.C. 2281
2284. It found that Rhode Island's nonpublic elementary schools
accommodated approximately 25% of the State's pupils. About 95% of these
pupils attended schools affiliated with the Roman Catholic church. To date,
some 250 teachers have applied for benefits under the Act. All of them are
employed by Roman Catholic schools. [p609]

The court held a hearing at which extensive evidence was introduced
concerning the nature of the secular instruction offered in the Roman Catholic
schools whose teachers would be eligible for salary assistance under the Act.
Although the court found that concern for religious values does not
necessarily affect the content of secular subjects, it also found that the
parochial school system was "an integral part of the religious mission of the
Catholic Church."

The District Court concluded that the Act violated the Establishment Clause,
holding that it fostered "excessive entanglement" between government and
religion. In addition, two judges thought that the Act had the impermissible
effect of giving "significant aid to a religious enterprise." 316 F.Supp. 112. We
affirm.

The Pennsylvania Statute
Pennsylvania has adopted a program that has some, but not all, of the
features of the Rhode Island program. The Pennsylvania Nonpublic Elementary
and Secondary Education Act [n3] was passed in 1968 in response to a crisis
that the Pennsylvania Legislature found existed in the State's nonpublic
schools due to rapidly rising costs. The statute affirmatively reflects the
legislative conclusion that the State's educational goals could appropriately be
fulfilled by government support of "those purely secular educational objectives
achieved through nonpublic education. . . ."

The statute authorizes appellee state Superintendent of Public Instruction to
"purchase" specified "secular educational services" from nonpublic schools.
Under the "contracts" authorized by the statute, the State directly reimburses
nonpublic schools solely for their actual expenditures for teachers' salaries,
textbooks, and instructional materials. A school seeking reimbursement must
[p610] maintain prescribed accounting procedures that identify the "separate"
cost of the "secular educational service." These accounts are subject to state
audit. The funds for this program were originally derived from a new tax on
horse and harness racing, but the Act is now financed by a portion of the state
tax on cigarettes.

There are several significant statutory restrictions on state aid.
Reimbursement is limited to courses "presented in the curricula of the public
schools." It is further limited "solely" to courses in the following "secular"
subjects: mathematics, modern foreign languages, [n4] physical science, and
physical education. Textbooks and instructional materials included in the
program must be approved by the state Superintendent of Public Instruction.
Finally, the statute prohibits reimbursement for any course that contains "any
subject matter expressing religious teaching, or the morals or forms of
worship of any sect."

The Act went into effect on July 1, 1968, and the first reimbursement
payments to schools were made on September 2, 1969. It appears that some
$5 million has been expended annually under the Act. The State has now
entered into contracts with some 1,181 nonpublic elementary and secondary
schools with a student population of some 535,215 pupils -- more than 20% of
the total number of students in the State. More than 96% of these pupils
attend church-related schools, and most of these schools are affiliated with
the Roman Catholic church.

Appellants brought this action in the District Court to challenge the
constitutionality of the Pennsylvania statute. The organizational plaintiffs
appellants are associations of persons resident in Pennsylvania declaring
[p611] belief in the separation of church and state; individual plaintiffs
appellants are citizens and taxpayers of Pennsylvania. Appellant Lemon, in
addition to being a citizen and a taxpayer, is a parent of a child attending
public school in Pennsylvania. Lemon also alleges that he purchased a ticket at
a race track, and thus had paid the specific tax that supports the expenditures
under the Act. Appellees are state officials who have the responsibility for
administering the Act. In addition seven church-related schools are defendants
appellees.

A three-judge federal court was convened pursuant to 28 U.S.C. 2281
2284. The District Court held that the individual plaintiffs appellants had
standing to challenge the Act, 310 F.Supp. 42. The organizational plaintiffs
appellants were denied standing under Flast v. Cohen, 392 U.S. 83, 99, 101
(1968).

The court granted appellees' motion to dismiss the complaint for failure to
state a claim for relief. [n5] 310 F.Supp. 35. It held that the Act violated
neither the Establishment nor the Free Exercise Clause, Chief Judge Hastie
dissenting. We reverse.

II

In Everson v. Board of Education, 330 U.S. 1 (1947), this Court upheld a state
statute that reimbursed the parents of parochial school children for bus
transportation [p612] expenses. There, MR. JUSTICE BLACK, writing for the
majority, suggested that the decision carried to "the verge" of forbidden
territory under the Religion Clauses. Id. at 16. Candor compels
acknowledgment, moreover, that we can only dimly perceive the lines of
demarcation in this extraordinarily sensitive area of constitutional law.

The language of the Religion Clauses of the First Amendment is, at best,
opaque, particularly when compared with other portions of the Amendment.
Its authors did not simply prohibit the establishment of a state church or a
state religion, an area history shows they regarded as very important and
fraught with great dangers. Instead, they commanded that there should be "no
law respecting an establishment of religion." A law may be one "respecting"
the forbidden objective while falling short of its total realization. A law
"respecting" the proscribed result, that is, the establishment of religion, is not
always easily identifiable as one violative of the Clause. A given law might not
establish a state religion, but nevertheless be one "respecting" that end in the
sense of being a step that could lead to such establishment, and hence offend
the First Amendment.

In the absence of precisely stated constitutional prohibitions, we must draw
lines with reference to the three main evils against which the Establishment
Clause was intended to afford protection: "sponsorship, financial support, and
active involvement of the sovereign in religious activity." Walz v. Tax
Commission, 397 U.S. 664, 668 (1970).

Every analysis in this area must begin with consideration of the cumulative
criteria developed by the Court over many years. Three such tests may be
gleaned from our cases. First, the statute must have a secular legislative
purpose; second, its principal or primary effect must be one that neither
advances nor inhibits religion, Board of Education v. Allen, 392 U.S. 236, 243
(1968); [p613] finally, the statute must not foster "an excessive government
entanglement with religion." Walz, supra, at 674.

Inquiry into the legislative purposes of the Pennsylvania and Rhode Island
statutes affords no basis for a conclusion that the legislative intent was to
advance religion. On the contrary, the statutes themselves clearly state that
they are intended to enhance the quality of the secular education in all schools
covered by the compulsory attendance laws. There is no reason to believe the
legislatures meant anything else. A State always has a legitimate concern for
maintaining minimum standards in all schools it allows to operate. As in Allen,
we find nothing here that undermines the stated legislative intent; it must
therefore be accorded appropriate deference.

In Allen, the Court acknowledged that secular and religious teachings were not
necessarily so intertwined that secular textbooks furnished to students by the
State were, in fact, instrumental in the teaching of religion. 392 U.S. at 248.
The legislatures of Rhode Island and Pennsylvania have concluded that secular
and religious education are identifiable and separable. In the abstract, we have
no quarrel with this conclusion.

The two legislatures, however, have also recognized that church-related
elementary and secondary schools have a significant religious mission, and
that a substantial portion of their activities is religiously oriented. They have
therefore sought to create statutory restrictions designed to guarantee the
separation between secular and religious educational functions, and to ensure
that State financial aid supports only the former. All these provisions are
precautions taken in candid recognition that these programs approached, even
if they did not intrude upon, the forbidden areas under the Religion Clauses.
We need not decide whether these legislative precautions restrict the principal
or primary effect of the programs to the point where they do not offend the
Religion [p614] Clauses, for we conclude that the cumulative impact of the
entire relationship arising under the statutes in each State involves excessive
entanglement between government and religion.

III

In Walz v. Tax Commission, supra, the Court upheld state tax exemptions for
real property owned by religious organizations and used for religious worship.
That holding, however, tended to confine, rather than enlarge, the area of
permissible state involvement with religious institutions by calling for close
scrutiny of the degree of entanglement involved in the relationship. The
objective is to prevent, as far as possible, the intrusion of either into the
precincts of the other.

Our prior holdings do not call for total separation between church and state;
total separation is not possible in an absolute sense. Some relationship
between government and religious organizations is inevitable. Zorach v.
Clauson, 343 U.S. 306, 312 (1952); Sherbert v. Verner, 374 U.S. 398, 422
(1963) (HARLAN, J., dissenting). Fire inspections, building and zoning
regulations, and state requirements under compulsory school attendance laws
are examples of necessary and permissible contacts. Indeed, under the
statutory exemption before us in Walz, the State had a continuing burden to
ascertain that the exempt property was, in fact, being used for religious
worship. Judicial caveats against entanglement must recognize that the line of
separation, far from being a "wall," is a blurred, indistinct, and variable barrier
depending on all the circumstances of a particular relationship.

This is not to suggest, however, that we are to engage in a legalistic minuet in
which precise rules and forms must govern. A true minuet is a matter of pure
form and style, the observance of which is itself the substantive end. Here we
examine the form of the relationship for the light that it casts on the
substance. [p615]

In order to determine whether the government entanglement with religion is
excessive, we must examine the character and purposes of the institutions
that are benefited, the nature of the aid that the State provides, and the
resulting relationship between the government and the religious authority. MR.
JUSTICE HARLAN, in a separate opinion in Walz, supra, echoed the classic
warning as to "programs, whose very nature is apt to entangle the state in
details of administration. . . ." Id. at 695. Here we find that both statutes foster
an impermissible degree of entanglement.

(a) Rhode Island program
The District Court made extensive findings on the grave potential for
excessive entanglement that inheres in the religious character and purpose of
the Roman Catholic elementary schools of Rhode Island, to date the sole
beneficiaries of the Rhode Island Salary Supplement Act.

The church schools involved in the program are located close to parish
churches. This understandably permits convenient access for religious
exercises, since instruction in faith and morals is part of the total educational
process. The school buildings contain identifying religious symbols such as
crosses on the exterior and crucifixes, and religious paintings and statues
either in the classrooms or hallways. Although only approximately 30 minutes
a day are devoted to direct religious instruction, there are religiously oriented
extracurricular activities. Approximately two-thirds of the teachers in these
schools are nuns of various religious orders. Their dedicated efforts provide
an atmosphere in which religious instruction and religious vocations are
natural and proper parts of life in such schools. Indeed, as the District Court
found, the role of teaching nuns in enhancing the religious atmosphere has
led the parochial school authorities [p616] to attempt to maintain a one-to-one
ratio between nuns and lay teachers in all schools, rather than to permit some
to be staffed almost entirely by lay teachers.

On the basis of these findings, the District Court concluded that the parochial
schools constituted "an integral part of the religious mission of the Catholic
Church." The various characteristics of the schools make them "a powerful
vehicle for transmitting the Catholic faith to the next generation." This process
of inculcating religious doctrine is, of course, enhanced by the impressionable
age of the pupils, in primary schools particularly. In short, parochial schools
involve substantial religious activity and purpose. [n6]

The substantial religious character of these church-related schools gives rise
to entangling church-state relationships of the kind the Religion Clauses
sought to avoid. Although the District Court found that concern for religious
values did not inevitably or necessarily intrude into the content of secular
subjects, the considerable religious activities of these schools led the
legislature to provide for careful governmental controls and surveillance by
state authorities in order to ensure that state aid supports only secular
education.

The dangers and corresponding entanglements are enhanced by the particular
form of aid that the Rhode Island Act provides. Our decisions from Everson to
Allen have permitted the States to provide church-related schools with secular,
neutral, or nonideological services, facilities, or materials. Bus transportation,
school lunches, public health services, and secular textbooks supplied in
common to all students were not [p617] thought to offend the Establishment
Clause. We note that the dissenters in Allen seemed chiefly concerned with the
pragmatic difficulties involved in ensuring the truly secular content of the
textbooks provided at state expense.

In Allen, the Court refused to make assumptions, on a meager record, about
the religious content of the textbooks that the State would be asked to
provide. We cannot, however, refuse here to recognize that teachers have a
substantially different ideological character from books. In terms of potential
for involving some aspect of faith or morals in secular subjects, a textbook's
content is ascertainable, but a teacher's handling of a subject is not. We
cannot ignore the danger that a teacher under religious control and discipline
poses to the separation of the religious from the purely secular aspects of pre-
college education. The conflict of functions inheres in the situation.

In our view, the record shows these dangers are present to a substantial
degree. The Rhode Island Roman Catholic elementary schools are under the
general supervision of the Bishop of Providence and his appointed
representative, the Diocesan Superintendent of Schools. In most cases, each
individual parish, however, assumes the ultimate financial responsibility for
the school, with the parish priest authorizing the allocation of parish funds.
With only two exceptions, school principals are nuns appointed either by the
Superintendent or the Mother Provincial of the order whose members staff the
school. By 1969, lay teachers constituted more than a third of all teachers in
the parochial elementary schools, and their number is growing. They are first
interviewed by the superintendent's office and then by the school principal.
The contracts are signed by the parish priest, and he retains some discretion
in negotiating salary levels. Religious authority necessarily pervades the school
system. [p618]

The schools are governed by the standards set forth in a "Handbook of School
Regulations," which has the force of synodal law in the diocese. It emphasizes
the role and importance of the teacher in parochial schools:

The prime factor for the success or the failure of the school is the spirit and
personality, as well as the professional competency, of the teacher. . . .

The Handbook also states that: "Religious formation is not confined to formal
courses; nor is it restricted to a single subject area." Finally, the Handbook
advises teachers to stimulate interest in religious vocations and missionary
work. Given the mission of the church school, these instructions are consistent
and logical.

Several teachers testified, however, that they did not inject religion into their
secular classes. And the District Court found that religious values did not
necessarily affect the content of the secular instruction. But what has been
recounted suggests the potential, if not actual, hazards of this form of state
aid. The teacher is employed by a religious organization, subject to the
direction and discipline of religious authorities, and works in a system
dedicated to rearing children in a particular faith. These controls are not
lessened by the fact that most of the lay teachers are of the Catholic faith.
Inevitably, some of a teacher's responsibilities hover on the border between
secular and religious orientation.

We need not and do not assume that teachers in parochial schools will be
guilty of bad faith or any conscious design to evade the limitations imposed by
the statute and the First Amendment. We simply recognize that a dedicated
religious person, teaching in a school affiliated with his or her faith and
operated to inculcate its tenets, will inevitably experience great difficulty in
remaining religiously neutral. Doctrines and faith are not inculcated or
advanced by neutrals. With the best of intentions, such a teacher would find it
hard to make [p619] a total separation between secular teaching and religious
doctrine. What would appear to some to be essential to good citizenship might
well for others border on or constitute instruction in religion. Further
difficulties are inherent in the combination of religious discipline and the
possibility of disagreement between teacher and religious authorities over the
meaning of the statutory restrictions.

We do not assume, however, that parochial school teachers will be
unsuccessful in their attempts to segregate their religious belief from their
secular educational responsibilities. But the potential for impermissible
fostering of religion is present. The Rhode Island Legislature has not, and
could not, provide state aid on the basis of a mere assumption that secular
teachers under religious discipline can avoid conflicts. The State must be
certain, given the Religion Clauses, that subsidized teachers do not inculcate
religion -- indeed, the State here has undertaken to do so. To ensure that no
trespass occurs, the State has therefore carefully conditioned its aid with
pervasive restrictions. An eligible recipient must teach only those courses that
are offered in the public schools and use only those texts and materials that
are found in the public schools. In addition, the teacher must not engage in
teaching any course in religion.

A comprehensive, discriminating, and continuing state surveillance will
inevitably be required to ensure that these restrictions are obeyed and the
First Amendment otherwise respected. Unlike a book, a teacher cannot be
inspected once so as to determine the extent and intent of his or her personal
beliefs and subjective acceptance of the limitations imposed by the First
Amendment. These prophylactic contacts will involve excessive and enduring
entanglement between state and church. [p620]

There is another area of entanglement in the Rhode Island program that gives
concern. The statute excludes teachers employed by nonpublic schools whose
average per-pupil expenditures on secular education equal or exceed the
comparable figures for public schools. In the event that the total expenditures
of an otherwise eligible school exceed this norm, the program requires the
government to examine the school's records in order to determine how much
of the total expenditures is attributable to secular education and how much to
religious activity. This kind of state inspection and evaluation of the religious
content of a religious organization is fraught with the sort of entanglement
that the Constitution forbids. It is a relationship pregnant with dangers of
excessive government direction of church schools, and hence of churches. The
Court noted "the hazards of government supporting churches" in Walz v. Tax
Commission, supra, at 675, and we cannot ignore here the danger that
pervasive modern governmental power will ultimately intrude on religion and
thus conflict with the Religion Clauses.

(b) Pennsylvania program
The Pennsylvania statute also provides state aid to church-related schools for
teachers' salaries. The complaint describes an educational system that is very
similar to the one existing in Rhode Island. According to the allegations, the
church-related elementary and secondary schools are controlled by religious
organizations, have the purpose of propagating and promoting a particular
religious faith, and conduct their operations to fulfill that purpose. Since this
complaint was dismissed for failure to state a claim for relief, we must accept
these allegations as true for purposes of our review.

As we noted earlier, the very restrictions and surveillance necessary to ensure
that teachers play a strictly nonideological role give rise to entanglements
between [p621] church and state. The Pennsylvania statute, like that of Rhode
Island, fosters this kind of relationship. Reimbursement is not only limited to
courses offered in the public schools and materials approved by state officials,
but the statute excludes "any subject matter expressing religious teaching, or
the morals or forms of worship of any sect." In addition, schools seeking
reimbursement must maintain accounting procedures that require the State to
establish the cost of the secular, as distinguished from the religious,
instruction.

The Pennsylvania statute, moreover, has the further defect of providing state
financial aid directly to the church-related school. This factor distinguishes
both Everson and Allen, for, in both those cases, the Court was careful to
point out that state aid was provided to the student and his parents -- not to
the church-related school. Board of Education v. Allen, supra, at 243-244;
Everson v. Board of Education, supra, at 18. In Walz v. Tax Commission, supra,
at 675, the Court warned of the dangers of direct payments to religious
organizations:

Obviously a direct money subsidy would be a relationship pregnant with
involvement and, as with most governmental grant programs, could
encompass sustained and detailed administrative relationships for
enforcement of statutory or administrative standards. . . .

The history of government grants of a continuing cash subsidy indicates that
such programs have almost always been accompanied by varying measures of
control and surveillance. The government cash grants before us now provide
no basis for predicting that comprehensive measures of surveillance and
controls will not follow. In particular, the government's post-audit power to
inspect and evaluate a church-related school's financial records and to
determine which expenditures are religious and [p622] which are secular
creates an intimate and continuing relationship between church and state.

IV

A broader base of entanglement of yet a different character is presented by
the divisive political potential of these state programs. In a community where
such a large number of pupils are served by church-related schools, it can be
assumed that state assistance will entail considerable political activity.
Partisans of parochial schools, understandably concerned with rising costs and
sincerely dedicated to both the religious and secular educational missions of
their schools, will inevitably champion this cause and promote political action
to achieve their goals. Those who oppose state aid, whether for constitutional,
religious, or fiscal reasons, will inevitably respond and employ all of the usual
political campaign techniques to prevail. Candidates will be forced to declare,
and voters to choose. It would be unrealistic to ignore the fact that many
people confronted with issues of this kind will find their votes aligned with
their faith.

Ordinarily, political debate and division, however vigorous or even partisan,
are normal and healthy manifestations of our democratic system of
government, but political division along religious lines was one of the principal
evils against which the First Amendment was intended to protect. Freund,
Comment, Public Aid to Parochial Schools, 82 Harv.L.Rev. 1680, 1692 (1969).
The potential divisiveness of such conflict is a threat to the normal political
process. Walz v. Tax Commission, supra, at 695 (separate opinion of HARLAN,
J.). See also Board of Education v. Allen, 392 U.S. at 249 (HARLAN, J.,
concurring); Abington School District v. Schempp, 374 U.S. 203, 307 (1963)
(Goldberg, J., concurring). To have States or communities divide on the issues
presented by state aid to parochial schools would tend to confuse [p623] and
obscure other issues of great urgency. We have an expanding array of vexing
issues, local and national, domestic and international, to debate and divide on.
It conflicts with our whole history and tradition to permit questions of the
Religion Clauses to assume such importance in our legislatures and in our
elections that they could divert attention from the myriad issues and problems
that confront every level of government. The highways of church and state
relationships are not likely to be one-way streets, and the Constitution's
authors sought to protect religious worship from the pervasive power of
government. The history of many countries attests to the hazards of religion's
intruding into the political arena or of political power intruding into the
legitimate and free exercise of religious belief.

Of course, as the Court noted in Walz, "[a]dherents of particular faiths and
individual churches frequently take strong positions on public issues." Walz v.
Tax Commission, supra, at 670. We could not expect otherwise, for religious
values pervade the fabric of our national life. But, in Walz, we dealt with a
status under state tax laws for the benefit of all religious groups. Here we are
confronted with successive and very likely permanent annual appropriations
that benefit relatively few religious groups. Political fragmentation and
divisiveness on religious lines are thus likely to be intensified.

The potential for political divisiveness related to religious belief and practice is
aggravated in these two statutory programs by the need for continuing annual
appropriations and the likelihood of larger and larger demands as costs and
populations grow. The Rhode Island District Court found that the parochial
school system's "monumental and deepening financial crisis" would
"inescapably" require larger annual appropriations subsidizing greater
percentages of the salaries of lay teachers. Although no facts have been
developed in this respect [p624] in the Pennsylvania case, it appears that such
pressures for expanding aid have already required the state legislature to
include a portion of the state revenues from cigarette taxes in the program.

V

In Walz, it was argued that a tax exemption for places of religious worship
would prove to be the first step in an inevitable progression leading to the
establishment of state churches and state religion. That claim could not stand
up against more than 200 years of virtually universal practice imbedded in our
colonial experience and continuing into the present.

The progression argument, however, is more persuasive here. We have no
long history of state aid to church-related educational institutions comparable
to 200 years of tax exemption for churches. Indeed, the state programs before
us today represent something of an innovation. We have already noted that
modern governmental programs have self-perpetuating and self-expanding
propensities. These internal pressures are only enhanced when the schemes
involve institutions whose legitimate needs are growing and whose interests
have substantial political support. Nor can we fail to see that, in constitutional
adjudication, some steps which, when taken, were thought to approach "the
verge" have become the platform for yet further steps. A certain momentum
develops in constitutional theory, and it can be a "downhill thrust" easily set in
motion but difficult to retard or stop. Development by momentum is not
invariably bad; indeed, it is the way the common law has grown, but it is a
force to be recognized and reckoned with. The dangers are increased by the
difficulty of perceiving in advance exactly where the "verge" of the precipice
lies. As well as constituting an independent evil against which the Religion
Clauses were intended to protect, involvement [p625] or entanglement
between government and religion serves as a warning signal.

Finally, nothing we have said can be construed to disparage the role of church-
related elementary and secondary schools in our national life. Their
contribution has been and is enormous. Nor do we ignore their economic
plight in a period of rising costs and expanding need. Taxpayers generally
have been spared vast sums by the maintenance of these educational
institutions by religious organizations, largely by the gifts of faithful
adherents.

The merit and benefits of these schools, however, are not the issue before us
in these cases. The sole question is whether state aid to these schools can be
squared with the dictates of the Religion Clauses. Under our system, the
choice has been made that government is to be entirely excluded from the
area of religious instruction, and churches excluded from the affairs of
government. The Constitution decrees that religion must be a private matter
for the individual, the family, and the institutions of private choice, and that,
while some involvement and entanglement are inevitable, lines must be drawn.

The judgment of the Rhode Island District Court in No. 569 and No. 570 is
affirmed. The judgment of the Pennsylvania District Court in No. 89 is
reversed, and the case is remanded for further proceedings consistent with
this opinion.
--
BOARD OF EDUCATION V. ALLEN

MR. JUSTICE WHITE delivered the opinion of the Court.

A law of the State of New York requires local public school authorities to lend
textbooks free of charge to all students in grades seven through 12; students
attending private schools are included. This case presents the question
whether this statute is a "law respecting an establishment of religion, or
prohibiting the free exercise thereof," and so in conflict with the First and
Fourteenth Amendments to the Constitution, because it authorizes the loan of
textbooks to students attending parochial schools. We hold that the law is not
in violation of the Constitution.

Until 1965, 701 of the Education Law of the State of New York authorized
public school boards to designate [p239] textbooks for use in the public
schools, to purchase such books with public funds, and to rent or sell the
books to public school students. [n1] In 1965, the legislature amended 701,
basing the amendments on findings that the

public welfare and safety require that the state and local communities give
assistance to educational programs which are important to our national
defense and the general welfare of the state. [n2]

Beginning with the 1966 1967 school year, local school boards were required
to purchase textbooks and lend them without charge

to all children residing in such district who are enrolled in grades seven to
twelve of a public or private school which complies with the compulsory
education law.

The books now loaned are

textbooks which are designated for use in any public, elementary or secondary
schools of the state or are approved by any boards of education,

and which -- according to a 1966 amendment -- "a pupil is required to use as a
text for a semester or more in a particular class in the school he legally
attends." [n3] [p240]

Appellant Board of Education of Central School District No. 1 in Renesselaer
and Columbia Counties, brought suit in the New York courts against appellee
James Allen. [n4] The complaint alleged that 701 violated both the State and
Federal Constitutions; that, if appellants, in reliance on their interpretation of
the Constitution, failed to lend books to parochial school students within their
counties, appellee Allen would remove appellants from office, and that, to
prevent this, appellants were complying with the law and submitting to their
constituents a school budget including funds for books to be lent to parochial
school pupils. Appellants therefore sought a declaration that 701 was
invalid, an order barring appellee Allen from removing appellants from office
for failing to comply with it, and another order restraining him from
apportioning state funds to school districts for the purchase of textbooks to
be lent to parochial students. After answer, and upon cross-motions for
summary judgment, the trial court held the law unconstitutional [p241] under
the First and Fourteenth Amendments and entered judgment for appellants.
51 Misc.2d 297, 273 N.Y.S.2d 239 (1966). The Appellate Division reversed,
ordering the complaint dismissed on the ground that appellant school boards
had no standing to attack the validity of a state statute. 27 App.Div.2d 69, 276
N.Y.S.2d 234 (1966). On appeal, the New York Court of Appeals concluded by
a 4-3 vote that appellants did have standing, [n5] but, by a different 4-3 vote,
held that 701 was not in violation of either the State or the Federal
Constitution. 20 N.Y.2d 109, 228 N.E.2d 791, 281 N.Y.S.2d 799 (1967). The
Court of Appeals said that the law's purpose was to benefit all school children,
regardless of the type of school they attended, and that only textbooks
approved by public school authorities could be loaned. It therefore considered
701

completely neutral with respect to religion, merely making available secular
textbooks at the request of the individual student, and asking no question
about what school he attends.

Section 701, the Court of Appeals concluded, is not a law which "establishes a
religion or constitutes the use of public funds to aid religious schools." 20
N.Y.2d at 117; 228 N.E.2d at 794, 795; 281 N.Y.S.2d at 805. We noted
probable jurisdiction. 389 U.S. 1031 (1968).

Everson v. Board of Education, 330 U.S. 1 (1947), is the case decided by this
Court that is most nearly in [p242] point for today's problem. New Jersey
reimbursed parents for expenses incurred in busing their children to parochial
schools. The Court stated that the Establishment Clause bars a State from
passing "laws which aid one religion, aid all religions, or prefer one religion
over another," and bars too any

tax in any amount, large or small . . . levied to support any religious activities
or institutions, whatever they may be called, or whatever form they may adopt
to teach or practice religion.

330 U.S. at 15-16. Nevertheless, said the Court, the Establishment Clause does
not prevent a State from extending the benefits of state laws to all citizens
without regard for their religious affiliation and does not prohibit

New Jersey from spending tax raised funds to pay the bus fares of parochial
school pupils as a part of a general program under which it pays the fares of
pupils attending public and other schools.

The statute was held to be valid even though one of its results was that
"children are helped to get to church schools," and

some of the children might not be sent to the church schools if the parents
were compelled to pay their children's bus fares out of their own pockets.

330 U.S. at 17. As with public provision of police and fire protection, sewage
facilities, and streets and sidewalks, payment of bus fares was of some value
to the religious school, but was nevertheless not such support of a religious
institution as to be a prohibited establishment of religion within the meaning
of the First Amendment.

Everson and later cases have shown that the line between state neutrality to
religion and state support of religion is not easy to locate.

The constitutional standard is the separation of Church and State. The
problem, like many problems in constitutional law, is one of degree.

Zorach v. Clauson, 343 U.S. 306, 314 (1952). See McGowan v. Maryland, 366
U.S. 420 (1961). Based [p243] on Everson, Zorach, McGowan, and other cases,
Abington School District v. Schempp, 374 U.S. 203 (1963), fashioned a test
subscribed to by eight Justices for distinguishing between forbidden
involvements of the State with religion and those contacts which the
Establishment Clause permits:

The test may be stated as follows: what are the purpose and the primary effect
of the enactment? If either is the advancement or inhibition of religion, then
the enactment exceeds the scope of legislative power as circumscribed by the
Constitution. That is to say that, to withstand the strictures of the
Establishment Clause, there must be a secular legislative purpose and a
primary effect that neither advances nor inhibits religion. Everson v. Board of
Education. . . .

374 U.S. at 222.

This test is not easy to apply, but the citation of Everson by the Schempp
Court to support its general standard made clear how the Schempp rule would
be applied to the facts of Everson. The statute upheld in Everson would be
considered a law having "a secular legislative purpose and a primary effect
that neither advances nor inhibits religion." We reach the same result with
respect to the New York law requiring school books to be loaned free of
charge to all students in specified grades. The express purpose of 701 was
stated by the New York Legislature to be furtherance of the educational
opportunities available to the young. Appellants have shown us nothing about
the necessary effects of the statute that is contrary to its stated purpose. The
law merely makes available to all children the benefits of a general program to
lend school books free of charge. Books are furnished at the request of the
pupil and ownership remains, at least technically, in the State. Thus, no funds
or books are furnished [p244] to parochial schools, and the financial benefit is
to parents and children, not to schools. [n6] Perhaps free books make it more
likely that some children choose to attend a sectarian school, but that was true
of the state-paid bus fares in Everson, and does not alone demonstrate an
unconstitutional degree of support for a religious institution. Of course, books
are different from buses. Most bus rides have no inherent religious
significance, while religious books are common. However, the language of
701 does not authorize the loan of religious books, and the State claims no
right to distribute religious literature. Although the books loaned are those
required by the parochial school for use in specific courses, each book [p245]
loaned must be approved by the public school authorities; only secular books
may receive approval. The law was construed by the Court of Appeals of New
York as "merely making available secular textbooks at the request of the
individual student," supra, and the record contains no suggestion that
religious books have been loaned. Absent evidence, we cannot assume that
school authorities, who constantly face the same problem in selecting
textbooks for use in the public schools, are unable to distinguish between
secular and religious books, or that they will not honestly discharge their
duties under the law. In judging the validity of the statute on this record, we
must proceed on the assumption that books loaned to students are books that
are not unsuitable for use in the public schools because of religious content.

The major reason offered by appellants for distinguishing free textbooks from
free bus fares is that books, but not buses, are critical to the teaching process,
and, in a sectarian school, that process is employed to teach religion.
However. this Court has long recognized that religious schools pursue two
goals, religious instruction and secular education. In the leading case of Pierce
v. Society of Sisters, 268 U.S. 510 (1925), the Court held that, although it
would not question Oregon's power to compel school attendance or require
that the attendance be at an institution meeting State-imposed requirements
as to quality and nature of curriculum, Oregon had not shown that its interest
in secular education required that all children attend publicly operated
schools. A premise of this holding was the view that the State's interest in
education would be served sufficiently by reliance on the secular teaching that
accompanied religious training in the schools maintained by the Society of
Sisters. Since Pierce, a substantial body of case law has confirmed the power
of the States to insist that attendance at private schools, if it is to satisfy state
compulsory attendance [p246] laws, be at institutions which provide minimum
hours of instruction, employ teachers of specified training, and cover
prescribed subjects of instruction. [n7] Indeed, the State's interest in assuring
that these standards are being met has been considered a sufficient reason for
refusing to accept instruction at home as compliance with compulsory [p247]
education statutes. [n8] These cases were a sensible corollary of Pierce v.
Society of Sisters: if the State must satisfy its interest in secular education
through the instrument of private schools, it has a proper interest in the
manner in which those schools perform their secular educational function.
Another corollary was Cochran v. Louisiana State Board of Education, 281 U.S.
370 (1930), where appellants said that a statute requiring school books to be
furnished without charge to all students, whether they attended public or
private schools, did not serve a "public purpose," and so offended the
Fourteenth Amendment. Speaking through Chief Justice Hughes, the Court
summarized as follows its conclusion that Louisiana's interest in the secular
education being provided by private schools made provision of textbooks to
students in those schools a properly public concern:

[The State's] interest is education, broadly; its method, comprehensive.
Individual interests are aided only as the common interest is safeguarded.

281 U.S. at 375.

Underlying these cases, and underlying also the legislative judgments that
have preceded the court decisions, has been a recognition that private
education has played and is playing a significant and valuable role in raising
national levels of knowledge, competence, and experience. Americans care
about the quality of the secular education available to their children. They
have considered high quality education to be an indispensable ingredient for
achieving the kind of nation, and the kind of citizenry, that they have desired
to create. Considering this attitude, the continued willingness to rely on
private school systems, including parochial systems, strongly suggests [p248]
that a wide segment of informed opinion, legislative and otherwise, has found
that those schools do an acceptable job of providing secular education to their
students. [n9] This judgment is further evidence that parochial schools are
performing, in addition to their sectarian function, the task of secular
education.

Against this background of judgment and experience, unchallenged in the
meager record before us in this case, we cannot agree with appellants either
that all teaching in a sectarian school is religious or that the processes of
secular and religious training are so intertwined that secular textbooks
furnished to students by the public are, in fact, instrumental in the teaching of
religion. This case comes to us after summary judgment entered on the
pleadings. Nothing in this record supports the proposition that all textbooks,
whether they deal with mathematics, physics, foreign languages, history, or
literature, are used by the parochial schools to teach religion. No evidence has
been offered about particular schools, particular courses, particular teachers,
or particular books. We are unable to hold, based solely on judicial notice, that
this statute results in unconstitutional involvement of the State with religious
instruction, or that 701, for this or the other reasons urged, is a law
respecting the establishment of religion within the meaning of the First
Amendment.

Appellants also contend that 701 offends the Free Exercise Clause of the
First Amendment. However,

it is necessary in a free exercise case for one to show the [p249] coercive
effect of the enactment as it operates against him in the practice of his
religion,

Abington School District v. Schempp, 374 U.S. 203, 223 (1963), and appellants
have not contended that the New York law in any way coerces them as
individuals in the practice of their religion.

The judgment is affirmed.
--
AMERICAN BIBLE SOCIETY vs. CITY OF MANILA
FELIX, J.:
Plaintiff-appellant is a foreign, non-stock, non-profit, religious, missionary
corporation duly registered and doing business in the Philippines through its
Philippine agency established in Manila in November, 1898, with its principal
office at 636 Isaac Peral in said City. The defendant appellee is a municipal
corporation with powers that are to be exercised in conformity with the
provisions of Republic Act No. 409, known as the Revised Charter of the City
of Manila.
In the course of its ministry, plaintiff's Philippine agency has been distributing
and selling bibles and/or gospel portions thereof (except during the Japanese
occupation) throughout the Philippines and translating the same into several
Philippine dialects. On May 29 1953, the acting City Treasurer of the City of
Manila informed plaintiff that it was conducting the business of general
merchandise since November, 1945, without providing itself with the
necessary Mayor's permit and municipal license, in violation of Ordinance No.
3000, as amended, and Ordinances Nos. 2529, 3028 and 3364, and required
plaintiff to secure, within three days, the corresponding permit and license
fees, together with compromise covering the period from the 4th quarter of
1945 to the 2nd quarter of 1953, in the total sum of P5,821.45 (Annex A).
Plaintiff protested against this requirement, but the City Treasurer demanded
that plaintiff deposit and pay under protest the sum of P5,891.45, if suit was
to be taken in court regarding the same (Annex B). To avoid the closing of its
business as well as further fines and penalties in the premises on October 24,
1953, plaintiff paid to the defendant under protest the said permit and license
fees in the aforementioned amount, giving at the same time notice to the City
Treasurer that suit would be taken in court to question the legality of the
ordinances under which, the said fees were being collected (Annex C), which
was done on the same date by filing the complaint that gave rise to this
action. In its complaint plaintiff prays that judgment be rendered declaring the
said Municipal Ordinance No. 3000, as amended, and Ordinances Nos. 2529,
3028 and 3364 illegal and unconstitutional, and that the defendant be
ordered to refund to the plaintiff the sum of P5,891.45 paid under protest,
together with legal interest thereon, and the costs, plaintiff further praying for
such other relief and remedy as the court may deem just equitable.
Defendant answered the complaint, maintaining in turn that said ordinances
were enacted by the Municipal Board of the City of Manila by virtue of the
power granted to it by section 2444, subsection (m-2) of the Revised
Administrative Code, superseded on June 18, 1949, by section 18, subsection
(1) of Republic Act No. 409, known as the Revised Charter of the City of
Manila, and praying that the complaint be dismissed, with costs against
plaintiff. This answer was replied by the plaintiff reiterating the
unconstitutionality of the often-repeated ordinances.
Before trial the parties submitted the following stipulation of facts:
COME NOW the parties in the above-entitled case, thru
their undersigned attorneys and respectfully submit the
following stipulation of facts:
1. That the plaintiff sold for the use of the purchasers at
its principal office at 636 Isaac Peral, Manila, Bibles, New
Testaments, bible portions and bible concordance in
English and other foreign languages imported by it from
the United States as well as Bibles, New Testaments and
bible portions in the local dialects imported and/or
purchased locally; that from the fourth quarter of 1945 to
the first quarter of 1953 inclusive the sales made by the
plaintiff were as follows:
Quarter Amount of Sales
4th quarter 1945 P1,244.21
1st quarter 1946 2,206.85
2nd quarter 1946 1,950.38
3rd quarter 1946 2,235.99
4th quarter 1946 3,256.04
1st quarter 1947 13,241.07
2nd quarter 1947 15,774.55
3rd quarter 1947 14,654.13
4th quarter 1947 12,590.94
1st quarter 1948 11,143.90
2nd quarter 1948 14,715.26
3rd quarter 1948 38,333.83
4th quarter 1948 16,179.90
1st quarter 1949 23,975.10
2nd quarter 1949 17,802.08
3rd quarter 1949 16,640.79
4th quarter 1949 15,961.38
1st quarter 1950 18,562.46
2nd quarter 1950 21,816.32
3rd quarter 1950 25,004.55
4th quarter 1950 45,287.92
1st quarter 1951 37,841.21
2nd quarter 1951 29,103.98
3rd quarter 1951 20,181.10
4th quarter 1951 22,968.91
1st quarter 1952 23,002.65
2nd quarter 1952 17,626.96
3rd quarter 1952 17,921.01
4th quarter 1952 24,180.72
1st quarter 1953 29,516.21
2. That the parties hereby reserve the right to present
evidence of other facts not herein stipulated.
WHEREFORE, it is respectfully prayed that this case be set
for hearing so that the parties may present further
evidence on their behalf. (Record on Appeal, pp. 15-16).
When the case was set for hearing, plaintiff proved, among other things, that
it has been in existence in the Philippines since 1899, and that its parent
society is in New York, United States of America; that its, contiguous real
properties located at Isaac Peral are exempt from real estate taxes; and that it
was never required to pay any municipal license fee or tax before the war, nor
does the American Bible Society in the United States pay any license fee or
sales tax for the sale of bible therein. Plaintiff further tried to establish that it
never made any profit from the sale of its bibles, which are disposed of for as
low as one third of the cost, and that in order to maintain its operating cost it
obtains substantial remittances from its New York office and voluntary
contributions and gifts from certain churches, both in the United States and in
the Philippines, which are interested in its missionary work. Regarding
plaintiff's contention of lack of profit in the sale of bibles, defendant retorts
that the admissions of plaintiff-appellant's lone witness who testified on cross-
examination that bibles bearing the price of 70 cents each from plaintiff-
appellant's New York office are sold here by plaintiff-appellant at P1.30 each;
those bearing the price of $4.50 each are sold here at P10 each; those bearing
the price of $7 each are sold here at P15 each; and those bearing the price of
$11 each are sold here at P22 each, clearly show that plaintiff's contention
that it never makes any profit from the sale of its bible, is evidently untenable.
After hearing the Court rendered judgment, the last part of which is as
follows:
As may be seen from the repealed section (m-2) of the
Revised Administrative Code and the repealing portions (o)
of section 18 of Republic Act No. 409, although they
seemingly differ in the way the legislative intent is
expressed, yet their meaning is practically the same for
the purpose of taxing the merchandise mentioned in said
legal provisions, and that the taxes to be levied by said
ordinances is in the nature of percentage graduated taxes
(Sec. 3 of Ordinance No. 3000, as amended, and Sec. 1,
Group 2, of Ordinance No. 2529, as amended by
Ordinance No. 3364).
IN VIEW OF THE FOREGOING CONSIDERATIONS, this Court
is of the opinion and so holds that this case should be
dismissed, as it is hereby dismissed, for lack of merits,
with costs against the plaintiff.
Not satisfied with this verdict plaintiff took up the matter to the Court of
Appeals which certified the case to Us for the reason that the errors assigned
to the lower Court involved only questions of law.
Appellant contends that the lower Court erred:
1. In holding that Ordinances Nos. 2529 and 3000, as
respectively amended, are not unconstitutional;
2. In holding that subsection m-2 of Section 2444 of the
Revised Administrative Code under which Ordinances Nos.
2592 and 3000 were promulgated, was not repealed by
Section 18 of Republic Act No. 409;
3. In not holding that an ordinance providing for taxes
based on gross sales or receipts, in order to be valid under
the new Charter of the City of Manila, must first be
approved by the President of the Philippines; and
4. In holding that, as the sales made by the plaintiff-
appellant have assumed commercial proportions, it cannot
escape from the operation of said municipal ordinances
under the cloak of religious privilege.
The issues. As may be seen from the proceeding statement of the case, the
issues involved in the present controversy may be reduced to the following: (1)
whether or not the ordinances of the City of Manila, Nos. 3000, as amended,
and 2529, 3028 and 3364, are constitutional and valid; and (2) whether the
provisions of said ordinances are applicable or not to the case at bar.
Section 1, subsection (7) of Article III of the Constitution of the Republic of the
Philippines, provides that:
(7) No law shall be made respecting an establishment of
religion, or prohibiting the free exercise thereof, and the
free exercise and enjoyment of religious profession and
worship, without discrimination or preference, shall
forever be allowed. No religion test shall be required for
the exercise of civil or political rights.
Predicated on this constitutional mandate, plaintiff-appellant contends that
Ordinances Nos. 2529 and 3000, as respectively amended, are
unconstitutional and illegal in so far as its society is concerned, because they
provide for religious censorship and restrain the free exercise and enjoyment
of its religious profession, to wit: the distribution and sale of bibles and other
religious literature to the people of the Philippines.
Before entering into a discussion of the constitutional aspect of the case, We
shall first consider the provisions of the questioned ordinances in relation to
their application to the sale of bibles, etc. by appellant. The records, show that
by letter of May 29, 1953 (Annex A), the City Treasurer required plaintiff to
secure a Mayor's permit in connection with the society's alleged business of
distributing and selling bibles, etc. and to pay permit dues in the sum of P35
for the period covered in this litigation, plus the sum of P35 for compromise
on account of plaintiff's failure to secure the permit required by Ordinance No.
3000 of the City of Manila, as amended. This Ordinance is of general
application and not particularly directed against institutions like the plaintiff,
and it does not contain any provisions whatever prescribing religious
censorship nor restraining the free exercise and enjoyment of any religious
profession. Section 1 of Ordinance No. 3000 reads as follows:
SEC. 1. PERMITS NECESSARY. It shall be unlawful for any
person or entity to conduct or engage in any of the
businesses, trades, or occupations enumerated in Section
3 of this Ordinance or other businesses, trades, or
occupations for which a permit is required for the proper
supervision and enforcement of existing laws and
ordinances governing the sanitation, security, and welfare
of the public and the health of the employees engaged in
the business specified in said section 3 hereof, WITHOUT
FIRST HAVING OBTAINED A PERMIT THEREFOR FROM THE
MAYOR AND THE NECESSARY LICENSE FROM THE CITY
TREASURER.
The business, trade or occupation of the plaintiff involved in this case is not
particularly mentioned in Section 3 of the Ordinance, and the record does not
show that a permit is required therefor under existing laws and ordinances for
the proper supervision and enforcement of their provisions governing the
sanitation, security and welfare of the public and the health of the employees
engaged in the business of the plaintiff. However, sections 3 of Ordinance
3000 contains item No. 79, which reads as follows:
79. All other businesses, trades or occupations not
mentioned in this Ordinance, except those upon which the
City is not empowered to license or to tax P5.00
Therefore, the necessity of the permit is made to depend upon the power of
the City to license or tax said business, trade or occupation.
As to the license fees that the Treasurer of the City of Manila required the
society to pay from the 4th quarter of 1945 to the 1st quarter of 1953 in the
sum of P5,821.45, including the sum of P50 as compromise, Ordinance No.
2529, as amended by Ordinances Nos. 2779, 2821 and 3028 prescribes the
following:
SEC. 1. FEES. Subject to the provisions of section 578 of
the Revised Ordinances of the City of Manila, as amended,
there shall be paid to the City Treasurer for engaging in
any of the businesses or occupations below enumerated,
quarterly, license fees based on gross sales or receipts
realized during the preceding quarter in accordance with
the rates herein prescribed: PROVIDED, HOWEVER, That a
person engaged in any businesses or occupation for the
first time shall pay the initial license fee based on the
probable gross sales or receipts for the first quarter
beginning from the date of the opening of the business as
indicated herein for the corresponding business or
occupation.
x x x x x x x x x
GROUP 2. Retail dealers in new (not yet used)
merchandise, which dealers are not yet subject to the
payment of any municipal tax, such as (1) retail dealers in
general merchandise; (2) retail dealers exclusively engaged
in the sale of . . . books, including stationery.
x x x x x x x x x
As may be seen, the license fees required to be paid quarterly in Section 1 of
said Ordinance No. 2529, as amended, are not imposed directly upon any
religious institution but upon those engaged in any of the business or
occupations therein enumerated, such as retail "dealers in general
merchandise" which, it is alleged, cover the business or occupation of selling
bibles, books, etc.
Chapter 60 of the Revised Administrative Code which includes section 2444,
subsection (m-2) of said legal body, as amended by Act No. 3659, approved on
December 8, 1929, empowers the Municipal Board of the City of Manila:
(M-2) To tax and fix the license fee on (a) dealers in new
automobiles or accessories or both, and (b) retail dealers
in new (not yet used) merchandise, which dealers are not
yet subject to the payment of any municipal tax.
For the purpose of taxation, these retail dealers shall be
classified as (1) retail dealers in general merchandise, and
(2) retail dealers exclusively engaged in the sale of (a)
textiles . . . (e) books, including stationery, paper and
office supplies, . . .: PROVIDED, HOWEVER, That the
combined total tax of any debtor or manufacturer, or
both, enumerated under these subsections (m-1) and (m-2),
whether dealing in one or all of the articles mentioned
herein, SHALL NOT BE IN EXCESS OF FIVE HUNDRED PESOS
PER ANNUM.
and appellee's counsel maintains that City Ordinances Nos. 2529 and 3000, as
amended, were enacted in virtue of the power that said Act No. 3669
conferred upon the City of Manila. Appellant, however, contends that said
ordinances are longer in force and effect as the law under which they were
promulgated has been expressly repealed by Section 102 of Republic Act No.
409 passed on June 18, 1949, known as the Revised Manila Charter.
Passing upon this point the lower Court categorically stated that Republic Act
No. 409 expressly repealed the provisions of Chapter 60 of the Revised
Administrative Code but in the opinion of the trial Judge, although Section
2444 (m-2) of the former Manila Charter and section 18 (o) of the new
seemingly differ in the way the legislative intent was expressed, yet their
meaning is practically the same for the purpose of taxing the merchandise
mentioned in both legal provisions and, consequently, Ordinances Nos. 2529
and 3000, as amended, are to be considered as still in full force and effect
uninterruptedly up to the present.
Often the legislature, instead of simply amending the pre-
existing statute, will repeal the old statute in its entirety
and by the same enactment re-enact all or certain portions
of the preexisting law. Of course, the problem created by
this sort of legislative action involves mainly the effect of
the repeal upon rights and liabilities which accrued under
the original statute. Are those rights and liabilities
destroyed or preserved? The authorities are divided as to
the effect of simultaneous repeals and re-enactments.
Some adhere to the view that the rights and liabilities
accrued under the repealed act are destroyed, since the
statutes from which they sprang are actually terminated,
even though for only a very short period of time. Others,
and they seem to be in the majority, refuse to accept this
view of the situation, and consequently maintain that all
rights an liabilities which have accrued under the original
statute are preserved and may be enforced, since the re-
enactment neutralizes the repeal, therefore, continuing the
law in force without interruption. (Crawford-Statutory
Construction, Sec. 322).
Appellant's counsel states that section 18 (o) of Republic Act No, 409
introduces a new and wider concept of taxation and is different from the
provisions of Section 2444(m-2) that the former cannot be considered as a
substantial re-enactment of the provisions of the latter. We have quoted above
the provisions of section 2444(m-2) of the Revised Administrative Code and
We shall now copy hereunder the provisions of Section 18, subdivision (o) of
Republic Act No. 409, which reads as follows:
(o) To tax and fix the license fee on dealers in general
merchandise, including importers and indentors, except
those dealers who may be expressly subject to the
payment of some other municipal tax under the provisions
of this section.
Dealers in general merchandise shall be classified as (a)
wholesale dealers and (b) retail dealers. For purposes of
the tax on retail dealers, general merchandise shall be
classified into four main classes: namely (1) luxury articles,
(2) semi-luxury articles, (3) essential commodities, and (4)
miscellaneous articles. A separate license shall be
prescribed for each class but where commodities of
different classes are sold in the same establishment, it
shall not be compulsory for the owner to secure more than
one license if he pays the higher or highest rate of tax
prescribed by ordinance. Wholesale dealers shall pay the
license tax as such, as may be provided by ordinance.
For purposes of this section, the term "General
merchandise" shall include poultry and livestock,
agricultural products, fish and other allied products.
The only essential difference that We find between these two provisions that
may have any bearing on the case at bar, is that, while subsection (m-2)
prescribes that the combined total tax of any dealer or manufacturer, or both,
enumerated under subsections (m-1) and (m-2), whether dealing in one or all
of the articles mentioned therein, shall not be in excess of P500 per annum,
the corresponding section 18, subsection (o) of Republic Act No. 409, does
not contain any limitation as to the amount of tax or license fee that the retail
dealer has to pay per annum. Hence, and in accordance with the weight of the
authorities above referred to that maintain that "all rights and liabilities which
have accrued under the original statute are preserved and may be enforced,
since the reenactment neutralizes the repeal, therefore continuing the law in
force without interruption", We hold that the questioned ordinances of the City
of Manila are still in force and effect.
Plaintiff, however, argues that the questioned ordinances, to be valid, must
first be approved by the President of the Philippines as per section 18,
subsection (ii) of Republic Act No. 409, which reads as follows:
(ii) To tax, license and regulate any business, trade or
occupation being conducted within the City of Manila, not
otherwise enumerated in the preceding subsections,
including percentage taxes based on gross sales or
receipts, subject to the approval of the PRESIDENT, except
amusement taxes.
but this requirement of the President's approval was not contained in section
2444 of the former Charter of the City of Manila under which Ordinance No.
2529 was promulgated. Anyway, as stated by appellee's counsel, the business
of "retail dealers in general merchandise" is expressly enumerated in
subsection (o), section 18 of Republic Act No. 409; hence, an ordinance
prescribing a municipal tax on said business does not have to be approved by
the President to be effective, as it is not among those referred to in said
subsection (ii). Moreover, the questioned ordinances are still in force, having
been promulgated by the Municipal Board of the City of Manila under the
authority granted to it by law.
The question that now remains to be determined is whether said ordinances
are inapplicable, invalid or unconstitutional if applied to the alleged business
of distribution and sale of bibles to the people of the Philippines by a religious
corporation like the American Bible Society, plaintiff herein.
With regard to Ordinance No. 2529, as amended by Ordinances Nos. 2779,
2821 and 3028, appellant contends that it is unconstitutional and illegal
because it restrains the free exercise and enjoyment of the religious
profession and worship of appellant.
Article III, section 1, clause (7) of the Constitution of the Philippines
aforequoted, guarantees the freedom of religious profession and worship.
"Religion has been spoken of as a profession of faith to an active power that
binds and elevates man to its Creator" (Aglipay vs. Ruiz, 64 Phil., 201).It has
reference to one's views of his relations to His Creator and to the obligations
they impose of reverence to His being and character, and obedience to His Will
(Davis vs. Beason, 133 U.S., 342). The constitutional guaranty of the free
exercise and enjoyment of religious profession and worship carries with it the
right to disseminate religious information. Any restraints of such right can
only be justified like other restraints of freedom of expression on the grounds
that there is a clear and present danger of any substantive evil which the State
has the right to prevent". (Taada and Fernando on the Constitution of the
Philippines, Vol. 1, 4th ed., p. 297). In the case at bar the license fee herein
involved is imposed upon appellant for its distribution and sale of bibles and
other religious literature:
In the case of Murdock vs. Pennsylvania, it was held that
an ordinance requiring that a license be obtained before a
person could canvass or solicit orders for goods,
paintings, pictures, wares or merchandise cannot be made
to apply to members of Jehovah's Witnesses who went
about from door to door distributing literature and
soliciting people to "purchase" certain religious books and
pamphlets, all published by the Watch Tower Bible & Tract
Society. The "price" of the books was twenty-five cents
each, the "price" of the pamphlets five cents each. It was
shown that in making the solicitations there was a request
for additional "contribution" of twenty-five cents each for
the books and five cents each for the pamphlets. Lesser
sum were accepted, however, and books were even
donated in case interested persons were without funds.
On the above facts the Supreme Court held that it could
not be said that petitioners were engaged in commercial
rather than a religious venture. Their activities could not
be described as embraced in the occupation of selling
books and pamphlets. Then the Court continued:
"We do not mean to say that religious groups and the
press are free from all financial burdens of government.
See Grosjean vs. American Press Co., 297 U.S., 233, 250,
80 L. ed. 660, 668, 56 S. Ct. 444. We have here something
quite different, for example, from a tax on the income of
one who engages in religious activities or a tax on
property used or employed in connection with activities. It
is one thing to impose a tax on the income or property of
a preacher. It is quite another to exact a tax from him for
the privilege of delivering a sermon. The tax imposed by
the City of Jeannette is a flat license tax, payment of which
is a condition of the exercise of these constitutional
privileges. The power to tax the exercise of a privilege is
the power to control or suppress its enjoyment. . . . Those
who can tax the exercise of this religious practice can
make its exercise so costly as to deprive it of the resources
necessary for its maintenance. Those who can tax the
privilege of engaging in this form of missionary
evangelism can close all its doors to all those who do not
have a full purse. Spreading religious beliefs in this ancient
and honorable manner would thus be denied the needy. . .
.
It is contended however that the fact that the license tax
can suppress or control this activity is unimportant if it
does not do so. But that is to disregard the nature of this
tax. It is a license tax a flat tax imposed on the exercise
of a privilege granted by the Bill of Rights . . . The power to
impose a license tax on the exercise of these freedom is
indeed as potent as the power of censorship which this
Court has repeatedly struck down. . . . It is not a nominal
fee imposed as a regulatory measure to defray the
expenses of policing the activities in question. It is in no
way apportioned. It is flat license tax levied and collected
as a condition to the pursuit of activities whose enjoyment
is guaranteed by the constitutional liberties of press and
religion and inevitably tends to suppress their exercise.
That is almost uniformly recognized as the inherent vice
and evil of this flat license tax."
Nor could dissemination of religious information be
conditioned upon the approval of an official or manager
even if the town were owned by a corporation as held in
the case of Marsh vs. State of Alabama (326 U.S. 501), or
by the United States itself as held in the case of Tucker vs.
Texas (326 U.S. 517). In the former case the Supreme
Court expressed the opinion that the right to enjoy
freedom of the press and religion occupies a preferred
position as against the constitutional right of property
owners.
"When we balance the constitutional rights of owners of
property against those of the people to enjoy freedom of
press and religion, as we must here, we remain mindful of
the fact that the latter occupy a preferred position. . . . In
our view the circumstance that the property rights to the
premises where the deprivation of property here involved,
took place, were held by others than the public, is not
sufficient to justify the State's permitting a corporation to
govern a community of citizens so as to restrict their
fundamental liberties and the enforcement of such
restraint by the application of a State statute." (Taada and
Fernando on the Constitution of the Philippines, Vol. 1, 4th
ed., p. 304-306).
Section 27 of Commonwealth Act No. 466, otherwise known as the National
Internal Revenue Code, provides:
SEC. 27. EXEMPTIONS FROM TAX ON CORPORATIONS.
The following organizations shall not be taxed under this
Title in respect to income received by them as such
(e) Corporations or associations organized and operated
exclusively for religious, charitable, . . . or educational
purposes, . . .: Provided, however, That the income of
whatever kind and character from any of its properties,
real or personal, or from any activity conducted for profit,
regardless of the disposition made of such income, shall
be liable to the tax imposed under this Code;
Appellant's counsel claims that the Collector of Internal Revenue has
exempted the plaintiff from this tax and says that such exemption clearly
indicates that the act of distributing and selling bibles, etc. is purely religious
and does not fall under the above legal provisions.
It may be true that in the case at bar the price asked for the bibles and other
religious pamphlets was in some instances a little bit higher than the actual
cost of the same but this cannot mean that appellant was engaged in the
business or occupation of selling said "merchandise" for profit. For this reason
We believe that the provisions of City of Manila Ordinance No. 2529, as
amended, cannot be applied to appellant, for in doing so it would impair its
free exercise and enjoyment of its religious profession and worship as well as
its rights of dissemination of religious beliefs.
With respect to Ordinance No. 3000, as amended, which requires the
obtention the Mayor's permit before any person can engage in any of the
businesses, trades or occupations enumerated therein, We do not find that it
imposes any charge upon the enjoyment of a right granted by the
Constitution, nor tax the exercise of religious practices. In the case of
Coleman vs. City of Griffin, 189 S.E. 427, this point was elucidated as follows:
An ordinance by the City of Griffin, declaring that the
practice of distributing either by hand or otherwise,
circulars, handbooks, advertising, or literature of any kind,
whether said articles are being delivered free, or whether
same are being sold within the city limits of the City of
Griffin, without first obtaining written permission from the
city manager of the City of Griffin, shall be deemed a
nuisance and punishable as an offense against the City of
Griffin, does not deprive defendant of his constitutional
right of the free exercise and enjoyment of religious
profession and worship, even though it prohibits him from
introducing and carrying out a scheme or purpose which
he sees fit to claim as a part of his religious system.
It seems clear, therefore, that Ordinance No. 3000 cannot be considered
unconstitutional, even if applied to plaintiff Society. But as Ordinance No.
2529 of the City of Manila, as amended, is not applicable to plaintiff-appellant
and defendant-appellee is powerless to license or tax the business of plaintiff
Society involved herein for, as stated before, it would impair plaintiff's right to
the free exercise and enjoyment of its religious profession and worship, as
well as its rights of dissemination of religious beliefs, We find that Ordinance
No. 3000, as amended is also inapplicable to said business, trade or
occupation of the plaintiff.
Wherefore, and on the strength of the foregoing considerations, We hereby
reverse the decision appealed from, sentencing defendant return to plaintiff
the sum of P5,891.45 unduly collected from it. Without pronouncement as to
costs. It is so ordered.
--
EBRALINAG vs. DIVISION OF SCHOOLS
GRIO-AQUINO, J.:
These two special civil actions for certiorari, Mandamus and Prohibition
were consolidated because they raise essentially the same issue: whether
school children who are members or a religious sect known as Jehovah's
Witnesses may be expelled from school (both public and private), for
refusing, on account of their religious beliefs, to take part in the flag
ceremony which includes playing (by a band) or singing the Philippine
national anthem, saluting the Philippine flag and reciting the patriotic
pledge.
In G.R. No. 95770 "Roel Ebralinag, et al. vs. Division Superintendent of
Schools of Cebu and Manuel F. Biongcog, Cebu District Supervisor," the
petitioners are 43 high school and elementary school students in the
towns of Daan Bantayan, Pinamungajan, Carcar, and Taburan Cebu
province. All minors, they are assisted by their parents who belong to the
religious group known as Jehovah's Witnesses which claims some 100,000
"baptized publishers" in the Philippines.
In G.R. No. 95887, "May Amolo, et al. vs. Division Superintendent of
Schools of Cebu and Antonio A. Sangutan," the petitioners are 25 high
school and grade school students enrolled in public schools in Asturias,
Cebu, whose parents are Jehovah's Witnesses. Both petitions were
prepared by the same counsel, Attorney Felino M. Ganal.
All the petitioners in these two cases were expelled from their classes by
the public school authorities in Cebu for refusing to salute the flag, sing
the national anthem and recite the patriotic pledge as required by
Republic Act No. 1265 of July 11, 1955, and by Department Order No. 8
dated July 21, 1955 of the Department of Education, Culture and Sports
(DECS) making the flag ceremony compulsory in all educational
institutions. Republic Act No. 1265 provides:
Sec. 1. All educational institutions shall henceforth
observe daily flag ceremony, which shall be simple and
dignified and shall include the playing or singing of the
Philippine National anthem.
Sec. 2. The Secretary of Education is hereby authorized
and directed to issue or cause to be issued rules and
regulations for the proper conduct of the flag
ceremony herein provided.
Sec. 3. Failure or refusal to observe the flag ceremony
provided by this Act and in accordance with rules and
regulations issued by the Secretary of Education, after
proper notice and hearing, shall subject the educational
institution concerned and its head to public censure as
an administrative punishment which shall be published
at least once in a newspaper of general circulation.
In case of failure to observe for the second time the
flag-ceremony provided by this Act, the Secretary of
Education, after proper notice and hearing, shall cause
the cancellation of the recognition or permit of the
private educational institution responsible for such
failure.
The implementing rules and regulations in Department Order No. 8
provide:
RULES AND REGULATIONS FOR CONDUCTING THE FLAG
CEREMONY IN ALL EDUCATIONAL INSTITUTIONS.
1. The Filipino Flag shall be displayed by all educational
institutions, public and private, every school day
throughout the year. It shall be raised at sunrise and
lowered at sunset. The flag-staff must be straight,
slightly and gently tapering at the end, and of such
height as would give the Flag a commanding position
in front of the building or within the compound.
2. Every public and private educational institution shall
hold a flag-raising ceremony every morning except
when it is raining, in which event the ceremony may be
conducted indoors in the best way possible. A retreat
shall be held in the afternoon of the same day. The
flag-raising ceremony in the morning shall be
conducted in the following manner:
a. Pupils and teachers or students
and faculty members who are in
school and its premises shall
assemble in formation facing the
flag. At command, books shall be put
away or held in the left hand and
everybody shall come to attention.
Those with hats shall uncover. No
one shall enter or leave the school
grounds during the ceremony.
b. The assembly shall sing the
Philippine National Anthem
accompanied by the school band or
without the accompaniment if it has
none; or the anthem may be played
by the school band alone. At the first
note of the Anthem, the flag shall be
raised briskly. While the flag is being
raised, all persons present shall
stand at attention and execute a
salute. Boys and men with hats shall
salute by placing the hat over the
heart. Those without hat may stand
with their arms and hands down and
straight at the sides. Those in
military or Boy Scout uniform shall
give the salute prescribed by their
regulations. The salute shall be
started as the Flag rises, and
completed upon last note of the
anthem.
c. Immediately following the singing
of the Anthem, the assembly shall
recite in unison the following
patriotic pledge (English or
vernacular version), which may bring
the ceremony to a close. This is
required of all public schools and of
private schools which are intended
for Filipino students or whose
population is predominantly Filipino.
English Version
I love the Philippines.
It is the land of my birth;
It is the home of my people.
It protects me and helps me to be,
strong, happy and useful.
In return, I will heed the counsel of
my parents;
I will obey the rules of my school;
I will perform the duties of a
patriotic, law-abiding citizen;
I will serve my country unselfishly
and faithfully;
I will be a true, Filipino in thought, in
word, in deed.
xxx xxx xxx
Jehovah's Witnesses admittedly teach their children not to salute the flag,
sing the national anthem, and recite the patriotic pledge for they believe
that those are "acts of worship" or "religious devotion" (p. 10, Rollo) which
they "cannot conscientiously give . . . to anyone or anything except God"
(p. 8, Rollo). They feel bound by the Bible's command to "guard ourselves
from
idols 1 John 5:21" (p. 9, Rollo). They consider the flag as an image or
idol representing the State (p. 10, Rollo). They think the action of the local
authorities in compelling the flag salute and pledge transcends
constitutional limitations on the State's power and invades the sphere of
the intellect and spirit which the Constitution protect against official
control (p. 10, Rollo).
This is not the first time that the question, of whether the children of
Jehovah's Witnesses may be expelled from school for disobedience of R.A.
No. 1265 and Department Order No. 8, series of 1955, has been raised
before this Court.
The same issue was raised in 1959 in Gerona, et al. vs. Secretary of
Education, et al., 106 Phil. 2 (1959) and Balbuna, et al. vs. Secretary of
Education, 110 Phil. 150 (1960). This Court in the Gerona case upheld the
expulsion of the students, thus:
The flag is not an image but a symbol of the Republic
of the Philippines, an emblem of national sovereignty,
of national unity and cohesion and of freedom and
liberty which it and the Constitution guarantee and
protect. Under a system of complete separation of
church and state in the government, the flag is utterly
devoid of any religious significance. Saluting the flag
does not involve any religious ceremony. The flag
salute is no more a religious ceremony than the taking
of an oath of office by a public official or by a
candidate for admission to the bar.
In requiring school pupils to participate in the flag
salute, the State thru the Secretary of Education is not
imposing a religion or religious belief or a religious
test on said students. It is merely enforcing a
non-discriminatory school regulation applicable to all
alike whether Christian, Moslem, Protestant or
Jehovah's Witness. The State is merely carrying out the
duty imposed upon it by the Constitution which
charges it with supervision over and regulation of all
educational institutions, to establish and maintain a
complete and adequate system of public education, and
see to it that all schools aim to develop, among other
things, civic conscience and teach the duties of
citizenship.
The children of Jehovah's Witnesses cannot be
exempted from participation in the flag ceremony. They
have no valid right to such exemption. Moreover,
exemption to the requirement will disrupt school
discipline and demoralize the rest of the school
population which by far constitutes the great majority.
The freedom of religious belief guaranteed by the
Constitution does not and cannot mean exemption
from or non-compliance with reasonable and non-
discriminatory laws, rules and regulations promulgated
by competent authority. (pp. 2-3).
Gerona was reiterated in Balbuna, as follows:
The Secretary of Education was duly authorized by the
Legislature thru Republic Act 1265 to promulgate said
Department Order, and its provisions requiring the
observance of the flag salute, not being a religious
ceremony but an act and profession of love and
allegiance and pledge of loyalty to the fatherland which
the flag stands for, does not violate the constitutional
provision on freedom of religion. (Balbuna, et al. vs.
Secretary of Education, et al., 110 Phil. 150).
Republic Act No. 1265 and the ruling in Gerona have been incorporated in
Section 28, Title VI, Chapter 9 of the Administrative Code of 1987
(Executive Order No. 292) which took effect on September 21, 1988 (one
year after its publication in the Official Gazette, Vol. 63, No. 38 of
September 21, 1987). Paragraph 5 of Section 28 gives legislative cachet to
the ruling in Gerona, thus:
5. Any teacher or student or pupil who refuses to join
or participate in the flag ceremony may be dismissed
after due investigation.
However, the petitioners herein have not raised in issue the
constitutionality of the above provision of the new Administrative Code of
1987. They have targeted only Republic Act No. 1265 and the
implementing orders of the DECS.
In 1989, the DECS Regional Office in Cebu received complaints about
teachers and pupils belonging to the Jehovah's Witnesses, and enrolled in
various public and private schools, who refused to sing the Philippine
national anthem, salute the Philippine flag and recite the patriotic pledge.
Division Superintendent of Schools, Susana B. Cabahug of the Cebu
Division of DECS, and Dr. Atty. Marcelo M. Bacalso, Assistant Division
Superintendent, recalling this Court's decision in Gerona, issued Division
Memorandum No. 108, dated November 17, 1989 (pp. 147-148, Rollo of
G.R. No. 95770) directing District Supervisors, High School Principals and
Heads of Private Educational institutions as follows:
1. Reports reaching this Office disclose that there are a
number of teachers, pupils, students, and school
employees in public schools who refuse to salute the
Philippine flag or participate in the daily flag ceremony
because of some religious belief.
2. Such refusal not only undermines Republic Act No.
1265 and the DECS Department Order No. 8, Series of
1955 (Implementing Rules and Regulations) but also
strikes at the heart of the DECS sustained effort to
inculcate patriotism and nationalism.
3. Let it be stressed that any belief that considers the
flag as an image is not in any manner whatever a
justification for not saluting the Philippine flag or not
participating in flag ceremony. Thus, the Supreme
Court of the Philippine says:
The flag is not an image but a
symbol of the Republic of the
Philippines, an emblem of national
sovereignty, of national unity and
cohesion and freedom and liberty
which it and the Constitution
guarantee and protect. (Gerona, et al.
vs. Sec. of Education, et al., 106 Phil.
11.)
4. As regards the claim for freedom of belief, which an
objectionist may advance, the Supreme Court asserts:
But between the freedom of belief
and the exercise of said belief, there
is quite a stretch of road to travel. If
the exercise of said religious belief
clashes with the established
institutions of society and with the
law, then the former must yield and
give way to the latter. (Gerona, et al.
vs. Sec. of Education, et al., 106 Phil.
11.)
5. Accordingly, teachers and school employees who
choose not to participate in the daily flag ceremony or
to obey the flag salute regulation spelled out in
Department Order No. 8, Series of 1955, shall be
considered removed from the service after due process.
6. In strong language about pupils and students who
do the same the Supreme Court has this to say:
If they choose not to obey the flag
salute regulation, they merely lost
the benefits of public education
being maintained at the expense of
their fellow Citizens, nothing more.
According to a popular expression,
they could take it or leave it! Having
elected not to comply with the
regulation about the flag salute they
forfeited their right to attend public
schools. (Gerona, et al. vs. Sec. of
Education, et al., 106 Phil. 15.)
7. School administrators shall therefore submit to this
Office a report on those who choose not to participate
in flag ceremony or salute the Philippine flag. (pp. 147-
148, Rollo of G.R. No. 95770; Emphasis supplied).
Cebu school officials resorted to a number of ways to persuade the
children of Jehovah's Witnesses to obey the memorandum. In the
Buenavista Elementary School, the children were asked to sign an
Agreement (Kasabutan) in the Cebuano dialect promising to sing the
national anthem, place their right hand on their breast until the end of the
song and recite the pledge of allegiance to the flag (Annex D, p. 46, Rollo
of G.R. No. 95770 and p. 48, Rollo of G.R. No. 95887), but they refused to
sign the "Kasabutan" (p. 20, Rollo of G.R. No. 95770).
In Tubigmanok Elementary School, the Teacher-In-Charge, Antonio A.
Sangutan, met with the Jehovah's Witnesses' parents, as disclosed in his
letter of October 17, 1990, excerpts from which reveal the following:
After two (2) fruitless confrontation meetings with the
Jehovah's Witnesses' parents on October 2, 1990 and
yesterday due to their firm stand not to salute the flag
of the Republic of the Philippines during Flag
Ceremony and other occasions, as mandated by law
specifically Republic Act No. 1265, this Office hereby
orders the dropping from the list in the School Register
(BPS Form I) of all teachers, all Jehovah Witness pupils
from Grade I up to Grade VI effective today.
xxx xxx xxx
This order is in compliance with Division Memorandum
No. 108 s. 1989 dated November 17, 1989 by virtue of
Department Order No. 8 s. 1955 dated July 21, 1955 in
accordance with Republic Act No. 1265 and Supreme
Court Decision of a case "Genaro Gerona, et al.,
Petitioners and Appellants vs. The Honorable Secretary
of Education, et al., Respondents and Appellees' dated
August 12, 1959 against their favor. (p. 149, Rollo of
G.R. No. 95770.)
In the Daan Bantayan District, the District Supervisor, Manuel F. Biongcog,
ordered the "dropping from the rolls" of students who "opted to follow
their religious belief which is against the Flag Salute Law" on the theory
that "they forfeited their right to attend public schools." (p. 47, Rollo of
G.R. No. 95770.)
1st Indorsement
DAANBANTAYAN DISTRICT II
Daanbantayan, Cebu, July 24, 1990.
Respectfully returned to Mrs. Alicia A. Diaz, School In
Charge [sic], Agujo Elementary School with the
information that this office is sad to order the dropping
of Jeremias Diamos and Jeaneth Diamos, Grades III and
IV pupils respectively from the roll since they opted to
follow their religious belief which is against the Flag
Salute Law (R.A. 1265) and DECS Order No. 8, series of
1955, having elected not to comply with the regulation
about the flag salute they forfeited their right to attend
public schools (Gerona, et al. vs. Sec. of Education, et
al., 106 Philippines 15). However, should they change
their mind to respect and follow the Flag Salute Law
they may be re-accepted.
(
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(p. 47, Rollo of G.R. No. 95770.)
The expulsion as of October 23, 1990 of the 43 petitioning students of the
Daanbantayan National High School, Agujo Elementary School, Calape
Barangay National High School, Pinamungajan Provincial High School,
Tabuelan Central School, Canasojan Elementary School, Liboron
Elementary School, Tagaytay Primary School, San Juan Primary School and
Northern Central Elementary School of San Fernando, Cebu, upon order of
then Acting Division Superintendent Marcelo Bacalso, prompted some
Jehovah's Witnesses in Cebu to appeal to the Secretary of Education Isidro
Cario but the latter did not answer their letter. (p. 21, Rollo.)
The petition in G.R. No. 95887 was filed by 25 students who were similarly
expelled because Dr. Pablo Antopina, who succeeded Susana Cabahug as
Division Superintendent of Schools, would not recall the expulsion orders
of his predecessor. Instead, he verbally caused the expulsion of some
more children of Jehovah's Witnesses.
On October 31, 1990, the students and their parents filed these special
civil actions for Mandamus, Certiorari and Prohibition alleging that the
public respondents acted without or in excess of their jurisdiction and
with grave abuse of discretion (1) in ordering their expulsion without
prior notice and hearing, hence, in violation of their right to due process,
their right to free public education, and their right to freedom of speech,
religion and worship (p. 23, Rollo). The petitioners pray that:
c. Judgment be rendered:
i. declaring null and void the
expulsion or dropping from the rolls
of herein petitioners from their
respective schools;
ii. prohibiting and enjoining
respondent from further barring the
petitioners from their classes or
otherwise implementing the
expulsion ordered on petitioners;
and
iii. compelling the respondent and all
persons acting for him to admit and
order the re-admission of petitioners
to their respective schools. (p. 41,
Rollo.)
and that pending the determination of the merits of these cases, a
temporary restraining order be issued enjoining the respondents from
enforcing the expulsion of the petitioners and to re-admit them to their
respective classes.
On November 27, 1990, the Court issued a temporary restraining order
and a writ of preliminary mandatory injunction commanding the
respondents to immediately re-admit the petitioners to their respective
classes until further orders from this Court (p. 57, Rollo).
The Court also ordered the Secretary of Education and Cebu District
Supervisor Manuel F. Biongcog to be impleaded as respondents in these
cases.
On May 13, 1991, the Solicitor General filed a consolidated comment to
the petitions (p. 98, Rollo) defending the expulsion orders issued by the
public respondents on the grounds that:
1. Bizarre religious practices of the Jehovah's Witnesses
produce rebellious and anti-social school children and
consequently disloyal and mutant Filipino citizens.
2. There are no new and valid grounds to sustain the
charges of the Jehovah's Witnesses that the DECS' rules
and regulations on the flag salute ceremonies are
violative of their freedom of religion and worship.
3. The flag salute is devoid of any religious
significance; instead, it inculcates respect and love of
country, for which the flag stands.
4. The State's compelling interests being pursued by
the DECS' lawful regulations in question do not warrant
exemption of the school children of the Jehovah's
Witnesses from the flag salute ceremonies on the basis
of their own self-perceived religious convictions.
5. The issue is not freedom of speech but enforcement
of law and jurisprudence.
6. State's power to regulate repressive and unlawful
religious practices justified, besides having scriptural
basis.
7. The penalty of expulsion is legal and valid, more so
with the enactment of Executive Order No. 292 (The
Administrative Code of 1987).
Our task here is extremely difficult, for the 30-year old decision of this
court in Gerona upholding the flag salute law and approving the
expulsion of students who refuse to obey it, is not lightly to be trifled
with.
It is somewhat ironic however, that after the Gerona ruling had received
legislative cachet by its in corporation in the Administrative Code of 1987,
the present Court believes that the time has come to re-examine it. The
idea that one may be compelled to salute the flag, sing the national
anthem, and recite the patriotic pledge, during a flag ceremony on pain of
being dismissed from one's job or of being expelled from school, is alien
to the conscience of the present generation of Filipinos who cut their
teeth on the Bill of Rights which guarantees their rights to free speech **
and the free exercise of religious profession and worship (Sec. 5, Article
III, 1987 Constitution; Article IV, Section 8, 1973 Constitution; Article III,
Section 1[7], 1935 Constitution).
Religious freedom is a fundamental right which is entitled to the highest
priority and the amplest protection among human rights, for it involves
the relationship of man to his Creator (Chief Justice Enrique M. Fernando's
separate opinion in German vs. Barangan, 135 SCRA 514, 530-531).
The right to religious profession and worship has a
two-fold aspect, vis., freedom to believe and freedom to
act on one's belief. The first is absolute as long as the
belief is confined within the realm of thought. The
second is subject to regulation where the belief is
translated into external acts that affect the public
welfare (J. Cruz, Constitutional Law, 1991 Ed., pp. 176-
177).
Petitioners stress, however, that while they do not take part in the
compulsory flag ceremony, they do not engage in "external acts" or
behavior that would offend their countrymen who believe in expressing
their love of country through the observance of the flag ceremony. They
quietly stand at attention during the flag ceremony to show their respect
for the right of those who choose to participate in the solemn
proceedings (Annex F, Rollo of G.R. No. 95887, p. 50 and Rollo of G.R. No.
95770, p. 48). Since they do not engage in disruptive behavior, there is no
warrant for their expulsion.
The sole justification for a prior restraint or limitation
on the exercise of religious freedom (according to the
late Chief Justice Claudio Teehankee in his dissenting
opinion in German vs. Barangan, 135 SCRA 514, 517) is
the existence of a grave and present danger of a
character both grave and imminent, of a serious evil to
public safety, public morals, public health or any other
legitimate public interest, that the State has a right
(and duty) to prevent." Absent such a threat to public
safety, the expulsion of the petitioners from the
schools is not justified.
The situation that the Court directly predicted in Gerona that:
The flag ceremony will become a thing of the past or
perhaps conducted with very few participants, and the
time will come when we would have citizens untaught
and uninculcated in and not imbued with reverence for
the flag and love of country, admiration for national
heroes, and patriotism a pathetic, even tragic
situation, and all because a small portion of the school
population imposed its will, demanded and was
granted an exemption. (Gerona, p. 24.)
has not come to pass. We are not persuaded that by exempting the
Jehovah's Witnesses from saluting the flag, singing the national anthem
and reciting the patriotic pledge, this religious group which admittedly
comprises a "small portion of the school population" will shake up our
part of the globe and suddenly produce a nation "untaught and
uninculcated in and unimbued with reverence for the flag, patriotism, love
of country and admiration for national heroes" (Gerona vs. Sec. of
Education, 106 Phil. 2, 24). After all, what the petitioners seek only is
exemption from the flag ceremony, not exclusion from the public schools
where they may study the Constitution, the democratic way of life and
form of government, and learn not only the arts, sciences, Philippine
history and culture but also receive training for a vocation of profession
and be taught the virtues of "patriotism, respect for human rights,
appreciation for national heroes, the rights and duties of citizenship, and
moral and spiritual values (Sec. 3[2], Art. XIV, 1987 Constitution) as part of
the curricula. Expelling or banning the petitioners from Philippine schools
will bring about the very situation that this Court had feared in Gerona.
Forcing a small religious group, through the iron hand of the law, to
participate in a ceremony that violates their religious beliefs, will hardly
be conducive to love of country or respect for dully constituted
authorities.
As Mr. Justice Jackson remarked in West Virginia vs. Barnette, 319 U.S.
624 (1943):
. . . To believe that patriotism will not flourish if
patriotic ceremonies are voluntary and spontaneous
instead of a compulsory routine is to make an
unflattering estimate of the appeal of our institutions
to free minds. . . . When they [diversity] are so harmless
to others or to the State as those we deal with here, the
price is not too great. But freedom to differ is not
limited to things that do not matter much. That would
be a mere shadow of freedom. The test of its substance
is the right to differ as to things that touch the heart of
the existing order.
Furthermore, let it be noted that coerced unity and
loyalty even to the country, . . . assuming that such
unity and loyalty can be attained through coercion is
not a goal that is constitutionally obtainable at the
expense of religious liberty. A desirable end cannot be
promoted by prohibited means. (Meyer vs. Nebraska,
262 U.S. 390, 67 L. ed. 1042, 1046.)
Moreover, the expulsion of members of Jehovah's Witnesses from the
schools where they are enrolled will violate their right as Philippine
citizens, under the 1987 Constitution, to receive free education, for it is
the duty of the State to "protect and promote the right of all citizens to
quality education . . . and to make such education accessible to all (Sec. 1,
Art. XIV).
In Victoriano vs. Elizalde Rope Workers' Union, 59 SCRA 54, 72-75, we
upheld the exemption of members of the Iglesia ni Cristo, from the
coverage of a closed shop agreement between their employer and a union
because it would violate the teaching of their church not to join any labor
group:
. . . It is certain that not every conscience can be
accommodated by all the laws of the land; but when
general laws conflict with scruples of conscience,
exemptions ought to be granted unless some
"compelling state interests" intervenes. (Sherbert vs.
Berner, 374 U.S. 398, 10 L. Ed. 2d 965, 970, 83 S. Ct.
1790.)
We hold that a similar exemption may be accorded to the Jehovah's
Witnesses with regard to the observance of the flag ceremony out of
respect for their religious beliefs, however "bizarre" those beliefs may
seem to others. Nevertheless, their right not to participate in the flag
ceremony does not give them a right to disrupt such patriotic exercises.
Paraphrasing the warning cited by this Court in Non vs. Dames II, 185
SCRA 523, 535, while the highest regard must be afforded their right to
the free exercise of their religion, "this should not be taken to mean that
school authorities are powerless to discipline them" if they should
commit breaches of the peace by actions that offend the sensibilities,
both religious and patriotic, of other persons. If they quietly stand at
attention during the flag ceremony while their classmates and teachers
salute the flag, sing the national anthem and recite the patriotic pledge,
we do not see how such conduct may possibly disturb the peace, or pose
"a grave and present danger of a serious evil to public safety, public
morals, public health or any other legitimate public interest that the State
has a right (and duty) to prevent (German vs. Barangan, 135 SCRA 514,
517).
Before we close this decision, it is appropriate to recall the Japanese
occupation of our country in 1942-1944 when every Filipino, regardless of
religious persuasion, in fear of the invader, saluted the Japanese flag and
bowed before every Japanese soldier. Perhaps, if petitioners had lived
through that dark period of our history, they would not quibble now
about saluting the Philippine flag. For when liberation came in 1944 and
our own flag was proudly hoisted aloft again, it was a beautiful sight to
behold that made our hearts pound with pride and joy over the newly-
regained freedom and sovereignty of our nation.
Although the Court upholds in this decision the petitioners' right under
our Constitution to refuse to salute the Philippine flag on account of their
religious beliefs, we hope, nevertheless, that another foreign invasion of
our country will not be necessary in order for our countrymen to
appreciate and cherish the Philippine flag.
WHEREFORE, the petition for certiorari and prohibition is GRANTED. The
expulsion orders issued by the public respondents against the petitioners
are hereby ANNULLED AND SET ASIDE. The temporary restraining order
which was issued by this Court is hereby made permanent.
--
JIMMY SWAGGART MINISTRIES, Appellant v. BOARD OF EQUALIZATION OF
CALIFORNIA
Justice O'CONNOR delivered the opinion of the Court.
This case presents the question whether the Religion Clauses of the First
Amendment prohibit a State from imposing a generally applicable sales and
use tax on the distribution of religious materials by a religious organization.
* California's Sales and Use Tax Law requires retailers to pay a sales tax "for
the privilege of selling tangible personal property at retail." Cal.Rev. &
Tax.Code Ann. 6051 (West 1987). A "sale" includes any transfer of title or
possession of tangible personal property for consideration. Cal.Rev. &
Tax.Code Ann. 6006(a) (West Supp.1989).
The use tax, as a complement to the sales tax, reaches out-of-state purchases
by residents of the State. It is "imposed on the storage, use, or other
consumption in this state of tangible personal property purchased from any
retailer," 6201, at the same rate as the sales tax (6 percent). Although the
use tax is imposed on the purchaser, 6202, it is generally collected by the
retailer at the time the sale is made. 6202-6206. Neither the State
Constitution nor the State Sales and Use Tax Law exempts religious
organizations from the sales and use tax, apart from a limited exemption for
the serving of meals by religious organizations, 6363.5.
During the tax period in question (1974 to 1981), appellant Jimmy Swaggart
Ministries was a religious organization incorporated as a Louisiana nonprofit
corporation and recognized as such by the Internal Revenue Service pursuant
to 501(c)(3) of the Internal Revenue Code of 1954, as amended, 26 U.S.C.
501(c)(3) (1982 ed.), and by the California State Controller pursuant to the
Inheritance Tax and Gift Tax Laws of the State of California. Appellant's
constitution and bylaws provide that it "is called for the purpose of
establishing and maintaining an evangelistic outreach for the worship of
Almighty God." App. 107. This outreach is to be performed "by all available
means, both at home and in foreign lands," and
"shall specifically include evangelistic crusades; missionary endeavors; radio
broadcasting (as owner, broadcaster, and placement agency); television
broadcasting (both as owner and broadcaster); and audio production and
reproduction of music; audio production and reproduction of preaching; audio
production and reproduction of teaching; writing, printing and publishing;
and, any and all other individual or mass media methods that presently exist
or may be devised in the future to proclaim the good news of Jesus Christ." Id.,
at 107-108.
From 1974 to 1981, appellant conducted numerous "evangelistic crusades" in
auditoriums and arenas across the country in cooperation with local churches.
Id., at 61. During this period, appellant held 23 crusades in Californiaeach
lasting 1 to 3 days, with one crusade lasting 6 daysfor a total of 52 days. Id.,
at 19-20. At the crusades, appellant conducted religious services that included
preaching and singing. Some of these services were recorded for later sale or
broadcast. Appellant also sold religious books, tapes, records, and other
religious and nonreligious merchandise at the crusades.
Appellant also published a monthly magazine, "The Evangelist," which was
sold nationwide by subscription. The magazine contained articles of a
religious nature as well as advertisements for appellant's religious books,
tapes, and records. The magazine included an order form listing the various
items for sale in the particular issue and their unit price, with spaces for
purchasers to fill in the quantity desired and the total price. Appellant also
offered its items for sale through radio, television, and cable television
broadcasts, including broadcasts through local California stations.
In 1980, appellee Board of Equalization of the State of California (Board)
informed appellant that religious materials were not exempt from the sales tax
and requested appellant to register as a seller to facilitate reporting and
payment of the tax. See Cal.Rev. & Tax.Code Ann. 6066-6074 (West 1987
and Supp.1989) (tax registration requirements). Appellant responded that it
was exempt from such taxes under the First Amendment. In 1981, the Board
audited appellant and advised appellant that it should register as a seller and
report and pay sales tax on all sales made at its California crusades. The Board
also opined that appellant had a sufficient nexus with the State of California to
require appellant to collect and report use tax on its mail-order sales to
California purchasers.
Based on the Board's review of appellant's records, the parties stipulated "that
appellant sold for use in California tangible personal property for the period
April 1, 1974, through December 31, 1981, measured by payment to appellant
of $1,702,942.00 for mail order sales from Baton Rouge, Louisiana and
$240,560.00 for crusade merchandise sales in California." App. 58. These
figures represented the sales and use in California of merchandise with
specific religious contentBibles, Bible study manuals, printed sermons and
collections of sermons, audiocassette tapes of sermons, religious books and
pamphlets, and religious music in the form of songbooks, tapes, and records.
See App. to Juris. Statement B-1 to B-3. Based on the sales figures for
appellant's religious materials, the Board notified appellant that it owed sales
and use taxes of $118,294.54, plus interest of $36,021.11, and a penalty of
$11,829.45, for a total amount due of $166,145.10. App. 8. Appellant did not
contest the Board's assessment of tax liability for the sale and use of certain
nonreligious merchandise, including such items as "T-shirts with JSM logo,
mugs, bowls, plates, replicas of crown of thorns, ark of the covenant, Roman
coin, candlesticks, Bible stand, pen and pencil sets, prints of religious scenes,
bud vase, and communion cups." Id., at 59-60.
Appellant filed a petition for redetermination with the Board, reiterating its
view that the tax on religious materials violated the First Amendment.
Following a hearing and an appeal to the Board, the Board deleted the penalty
but otherwise redetermined the matter without adjustment in the amount of
$118,294.54 in taxes owing, plus $65,043.55 in interest. Pursuant to state
procedural law, appellant paid the amount and filed a petition for
redetermination and refund with the Board. See Cal.Rev. & Tax.Code Ann.
6902 (West 1987). The Board denied appellant's petition, and appellant
brought suit in state court, seeking a refund of the tax paid.
The trial court entered judgment for the Board, ruling that appellant was not
entitled to a refund of any tax. The California Court of Appeal affirmed, 204
Cal.App.3d 1269, 250 Cal.Rptr. 891 (1988), and the California Supreme Court
denied discretionary review. We noted probable jurisdiction pursuant to 28
U.S.C. 1257(2) (1982 ed.) (amended in 1988), 490 U.S. 1018, 109 S.Ct. 1741,
104 L.Ed.2d 178 (1989), and now affirm.
II
Appellant's central contention is that the State's imposition of sales and use
tax liability on its sale of religious materials contravenes the First
Amendment's command, made applicable to the States by the Fourteenth
Amendment, to "make no law respecting an establishment of religion, or
prohibiting the free exercise thereof." Appellant challenges the Sales and Use
Tax Law under both the Free Exercise and Establishment Clauses.
The Free Exercise Clause, we have noted, "withdraws from legislative power,
state and federal, the exertion of any restraint on the free exercise of religion.
Its purpose is to secure religious liberty in the individual by prohibiting any
invasions thereof by civil authority." Abington School Dist. v. Schempp, 374
U.S. 203, 222-223, 83 S.Ct. 1560, 1571-1572, 10 L.Ed.2d 844 (1963). Indeed,
"a regulation neutral on its face may, in its application, nonetheless offend the
constitutional requirement for governmental neutrality if it unduly burdens the
free exercise of religion." Wisconsin v. Yoder, 406 U.S. 205, 220, 92 S.Ct.
1526, 1535, 32 L.Ed.2d 15 (1972). Our cases have established that "the free
exercise inquiry asks whether government has placed a substantial burden on
the observation of a central religious belief or practice and, if so, whether a
compelling governmental interest justifies the burden." Hernandez v.
Commissioner, 490 U.S. 680, 699, 109 S.Ct. 2136, 2148, 104 L.Ed.2d 766
(1989) (citations omitted).
Appellant relies almost exclusively on our decisions in Murdock v.
Pennsylvania, 319 U.S. 105, 63 S.Ct. 870, 87 L.Ed. 1292 (1943), and Follett v.
McCormick, 321 U.S. 573, 576, 64 S.Ct. 717, 719, 88 L.Ed. 938 (1944), for the
proposition that a State may not impose a sales or use tax on the evangelical
distribution of religious material by a religious organization. Appellant
contends that the State's imposition of use and sales tax liability on it burdens
its evangelical distribution of religious materials in a manner identical to the
manner in which the evangelists in Murdock and Follett were burdened.
We reject appellant's expansive reading of Murdock and Follett as contrary to
the decisions themselves. In Murdock, we considered the constitutionality of a
city ordinance requiring all persons canvassing or soliciting within the city to
procure a license by paying a flat fee. Reversing the convictions of Jehovah's
Witnesses convicted under the ordinance of soliciting and distributing
religious literature without a license, we explained:
"The hand distribution of religious tracts is an age-old form of missionary
evangelism . . . and has been a potent force in various religious movements
down through the years. This form of evangelism is utilized today on a large
scale by various religious sects whose colporteurs carry the Gospel to
thousands upon thousands of homes and seek through personal visitations to
win adherents to their faith. It is more than preaching; it is more than
distribution of religious literature. It is a combination of both. Its purpose is as
evangelical as the revival meeting. This form of religious activity occupies the
same high estate under the First Amendment as do worship in the churches
and preaching in the pulpits." 319 U.S., at 108-109, 63 S.Ct., at 872-873
(footnotes omitted).
Accordingly, we held that "spreading one's religious beliefs or preaching the
Gospel through distribution of religious literature and through personal
visitations is an age-old type of evangelism with as high a claim to
constitutional protection as the more orthodox types." Id., at 110, 63 S.Ct., at
873; see also Jones v. Opelika, 319 U.S. 103, 63 S.Ct. 890, 87 L.Ed. 1290
(1943); Martin v. Struthers, 319 U.S. 141, 63 S.Ct. 862, 87 L.Ed. 1313 (1943).
We extended Murdock the following Term by invalidating, as applied to "one
who earns his livelihood as an evangelist or preacher in his home town," an
ordinance (similar to that involved in Murdock ) that required all booksellers to
pay a flat fee to procure a license to sell books. Follett v. McCormick, 321 U.S.,
at 576, 64 S.Ct., at 719. Reaffirming our observation in Murdock that " 'the
power to tax the exercise of a privilege is the power to control or suppress its
enjoyment,' " 321 U.S., at 577, 64 S.Ct., at 719 (quoting Murdock, supra, 319
U.S., at 112, 63 S.Ct., at 874), we reasoned that "the protection of the First
Amendment is not restricted to orthodox religious practices any more than it
is to the expression of orthodox economic views. He who makes a profession
of evangelism is not in a less preferred position than the casual worker." 321
U.S., at 577, 64 S.Ct., at 719.
Our decisions in these cases, however, resulted from the particular nature of
the challenged taxesflat license taxes that operated as a prior restraint on
the exercise of religious liberty. In Murdock, for instance, we emphasized that
the tax at issue was "a license taxa flat tax imposed on the exercise of a
privilege granted by the Bill of Rights," 319 U.S., at 113, 63 S.Ct., at 875, and
cautioned that "we do not mean to say that religious groups and the press are
free from all financial burdens of government. . . . We have here something
quite different, for example, from a tax on the income of one who engages in
religious activities or a tax on property used or employed in connection with
those activities." Id., at 112, 63 S.Ct., at 874 (citing Grosjean v. American Press
Co., 297 U.S. 233, 250, 56 S.Ct. 444, 449, 80 L.Ed. 660 (1936)); see also 319
U.S., at 115, 63 S.Ct., at 876 ("This tax is not a charge for the enjoyment of a
privilege or benefit bestowed by the state"). In Follett, we reiterated that a
preacher is not "free from all financial burdens of government, including taxes
on income or property" and, "like other citizens, may be subject to general
taxation." 321 U.S., at 578, 64 S.Ct., at 719 (emphasis added).
Significantly, we noted in both cases that a primary vice of the ordinances at
issue was that they operated as prior restraints of constitutionally protected
conduct:
"In all of these cases in which license taxes have been invalidated the issuance
of the permit or license is dependent on the payment of a license tax. And the
license tax is fixed in amount and unrelated to the scope of the activities of
petitioners or to their realized revenues. It is not a nominal fee imposed as a
regulatory measure to defray the expenses of policing the activities in
question. It is in no way apportioned. It is a flat license tax levied and
collected as a condition to the pursuit of activities whose enjoyment is
guaranteed by the First Amendment. Accordingly, it restrains in advance those
constitutional liberties of press and religion and inevitably tends to suppress
their exercise. That is almost uniformly recognized as the inherent vice and
evil of this flat license tax." Murdock, supra, 319 U.S., at 113-114, 63 S.Ct., at
875-876 (emphasis added).
See also Follett, supra, 321 U.S., at 577, 64 S.Ct., at 719 ("The exaction of a
tax as a condition to the exercise of the great liberties guaranteed by the First
Amendment is as obnoxious as the imposition of a censorship or a previous
restraint") (citations omitted). Thus, although Murdock and Follett establish
that appellant's form of religious exercise has "as high a claim to
constitutional protection as the more orthodox types," Murdock, supra, 319
U.S., at 110, 63 S.Ct., at 873, those cases are of no further help to appellant.
Our concern in Murdock and Follett that a flat license tax would act as a
precondition to the free exercise of religious beliefsis simply not present
where a tax applies to all sales and uses of tangible personal property in the
State.
Our reading of Murdock and Follett is confirmed by our decision in
Minneapolis Star & Tribune Co. v. Minnesota Commissioner of Revenue, 460
U.S. 575, 103 S.Ct. 1365, 75 L.Ed.2d 295 (1983), where we considered a
newspaper's First Amendment challenge to a state use tax on ink and paper
products used in the production of periodic publications. In the course of
striking down the tax, we rejected the newspaper's suggestion, premised on
Murdock and Follett, that a generally applicable sales tax could not be applied
to publications. Construing those cases as involving "a flat tax, unrelated to
the receipts or income of the speaker or to the expenses of administering a
valid regulatory scheme, as a condition of the right to speak," 460 U.S., at
587, n. 9, 103 S.Ct., at 137, n. 9 (emphasis in original), we noted:
"By imposing the tax as a condition of engaging in protected activity, the
defendants in those cases imposed a form of prior restraint on speech,
rendering the tax highly susceptible to constitutional challenge. In that regard,
the cases cited by Star Tribune do not resemble a generally applicable sales
tax. Indeed, our cases have consistently recognized that nondiscriminatory
taxes on the receipts or income of newspapers would be permissible." Ibid.
(citations omitted).
Accord, Arkansas Writers' Project, Inc. v. Ragland, 481 U.S. 221, 229, 107 S.Ct.
1722, 1727, 95 L.Ed.2d 209 (1987) ("A genuinely nondiscriminatory tax on the
receipts of newspapers would be constitutionally permissible").
We also note that just last Term a plurality of the Court rejected the precise
argument appellant now makes. In Texas Monthly, Inc. v. Bullock, 489 U.S. 1,
109 S.Ct. 890, 103 L.Ed.2d 1 (1989), Justice BRENNAN, writing for three
Justices, held that a state sales tax exemption for religious publications
violated the Establishment Clause. Id., at 14-21, 109 S.Ct., at 899-903
(plurality opinion). In so concluding, the plurality further held that the Free
Exercise Clause did not prevent the State from withdrawing its exemption,
noting that "to the extent that our opinions in Murdock and Follett might be
read . . . to suggest that the States and the Federal Government may never tax
the sale of religious or other publications, we reject those dicta." Id., at 24,
109 S.Ct., at 904. Justice WHITE, concurring in the judgment, concluded that
the exemption violated the Free Press Clause because the content of a
publication determined its tax-exempt status. Id., at 24-25, 109 S.Ct., at 905.
Justice BLACKMUN, joined by Justice O'CONNOR, concurred in the plurality's
holding that the tax exemption at issue in that case contravened the
Establishment Clause, but reserved the question whether "the Free Exercise
Clause requires a tax exemption for the sale of religious literature by a
religious organization; in other words, defining the ultimate scope of Follett
and Murdock may be left for another day." Id., at 28, 109 S.Ct., at 907. In this
case, of course, California has not chosen to create a tax exemption for
religious materials, and we therefore have no need to revisit the Establishment
Clause question presented in Texas Monthly.
We do, however, decide the free exercise question left open by Justice
BLACKMUN's concurrence in Texas Monthly by limiting Murdock and Follett to
apply only where a flat license tax operates as a prior restraint on the free
exercise of religious beliefs. As such, Murdock and Follett plainly do not
support appellant's free exercise claim. California's generally applicable sales
and use tax is not a flat tax, represents only a small fraction of any retail sale,
and applies neutrally to all retail sales of tangible personal property made in
California. California imposes its sales and use tax even if the seller or the
purchaser is charitable, religious, nonprofit, or state or local governmental in
nature. See Union League Club v. Johnson, 18 Cal.2d 275, 278, 115 P.2d 425,
426 (1941); People v. Imperial County, 76 Cal.App.2d 572, 576-577, 173 P.2d
352, 354 (1946); Bank of America National Trust & Savings Assn. v. State
Board of Equalization, 209 Cal.App.2d 780, 796-797, 26 Cal.Rptr. 348, 357-
358 (1962). Thus, the sales and use tax is not a tax on the right to
disseminate religious information, ideas, or beliefs per se; rather, it is a tax on
the privilege of making retail sales of tangible personal property and on the
storage, use, or other consumption of tangible personal property in California.
For example, California treats the sale of a Bible by a religious organization
just as it would treat the sale of a Bible by a bookstore; as long as both are in-
state retail sales of tangible personal property, they are both subject to the tax
regardless of the motivation for the sale or the purchase. There is no danger
that appellant's religious activity is being singled out for special and
burdensome treatment.
Moreover, our concern in Murdock and Follett that flat license taxes operate as
a precondition to the exercise of evangelistic activity is not present in this
case, because the registration requirement, see Cal.Rev. & Tax.Code Ann.
6066-6074 (West 1987 and Supp.1989), and the tax itself do not act as prior
restraintsno fee is charged for registering, the tax is due regardless of
preregistration, and the tax is not imposed as a precondition of disseminating
the message. Thus, unlike the license tax in Murdock, which was "in no way
apportioned" to the "realized revenues" of the itinerant preachers forced to
pay the tax, 319 U.S., at 113-114, 63 S.Ct., at 875-876; see also Texas
Monthly, supra, 489 U.S., at 22, 109 S.Ct., at 903, the tax at issue in this case
is akin to a generally applicable income or property tax, which Murdock and
Follett specifically state may constitutionally be imposed on religious activity.
In addition to appellant's misplaced reliance on Murdock and Follett,
appellant's free exercise claim is also in significant tension with the Court's
decision last Term in Hernandez v. Commissioner, 490 U.S. 680, 109 S.Ct.
2136, 104 L.Ed.2d 766 (1989), holding that the Government's disallowance of
a tax deduction for religious "auditing" and "training" services did not violate
the Free Exercise Clause. Id., at 694-700, 109 S.Ct., at 2146-2149. The Court
reasoned that
"any burden imposed on auditing or training . . . derives solely from the fact
that, as a result of the deduction denial, adherents have less money to gain
access to such sessions. This burden is no different from that imposed by any
public tax or fee; indeed, the burden imposed by the denial of the
'contribution or gift' deduction would seem to pale by comparison to the
overall federal income tax burden on an adherent." Id., at 699, 109 S.Ct., at
2149.
There is no evidence in this case that collection and payment of the tax
violates appellant's sincere religious beliefs. California's nondiscriminatory
Sales and Use Tax Law requires only that appellant collect the tax from its
California purchasers and remit the tax money to the State. The only burden
on appellant is the claimed reduction in income resulting from the presumably
lower demand for appellant's wares (caused by the marginally higher price)
and from the costs associated with administering the tax. As the Court made
clear in Hernandez, however, to the extent that imposition of a generally
applicable tax merely decreases the amount of money appellant has to spend
on its religious activities, any such burden is not constitutionally significant.
See ibid.; Texas Monthly, supra, 489 U.S., at 19-20, 109 S.Ct., at 902 (plurality
opinion); see also Bob Jones University v. United States, 461 U.S. 574, 603-
604, 103 S.Ct. 2017, 1381-1382, 76 L.Ed.2d 157 (1983).
Appellant contends that the availability of a deduction (at issue in Hernandez )
and the imposition of a tax (at issue here) are distinguishable, but in both
cases adherents base their claim for an exemption on the argument that an
"incrementally larger tax burden interferes with their religious activities." 490
U.S., at 700, 109 S.Ct., at 2149. It is precisely this argumentrather than one
applicable only to deductionsthat the Court rejected in Hernandez. At
bottom, though we do not doubt the economic cost to appellant of complying
with a generally applicable sales and use tax, such a tax is no different from
other generally applicable laws and regulationssuch as health and safety
regulationsto which appellant must adhere.
Finally, because appellant's religious beliefs do not forbid payment of the sales
and use tax, appellant's reliance on Sherbert v. Verner, 374 U.S. 398, 83 S.Ct.
1790, 10 L.Ed.2d 965 (1963), and its progeny is misplaced, because in no
sense has the State " 'conditioned receipt of an important benefit upon
conduct proscribed by a religious faith, or . . . denied such a benefit because
of conduct mandated by religious belief, thereby putting substantial pressure
on an adherent to modify his behavior and to violate his beliefs.' " Hobbie v.
Unemployment Appeals Comm'n of Florida, 480 U.S. 136, 141, 107 S.Ct.
1046, 1049, 94 L.Ed.2d 190 (1987) (quoting Thomas v. Review Bd. of Indiana
Employment Security Div., 450 U.S. 707, 717-718, 101 S.Ct. 1425, 1431-1432,
67 L.Ed.2d 624 (1981)). Appellant has never alleged that the mere act of
paying the tax, by itself, violates its sincere religious beliefs.
We therefore conclude that the collection and payment of the generally
applicable tax in this case imposes no constitutionally significant burden on
appellant's religious practices or beliefs. The Free Exercise Clause accordingly
does not require the State to grant appellant an exemption from its generally
applicable sales and use tax. Although it is of course possible to imagine that
a more onerous tax rate, even if generally applicable, might effectively choke
off an adherent's religious practices, cf. Murdock, supra, 319 U.S., at 115, 63
S.Ct., at 876 (the burden of a flat tax could render itinerant evangelism
"crushed and closed out by the sheer weight of the toll or tribute which is
exacted town by town"), we face no such situation in this case. Accordingly, we
intimate no views as to whether such a generally applicable tax might violate
the Free Exercise Clause.
B
Appellant also contends that application of the sales and use tax to its sale of
religious materials violates the Establishment Clause because it fosters " 'an
excessive government entanglement with religion,' " Lemon v. Kurtzman, 403
U.S. 602, 613, 91 S.Ct. 2105, 2111, 29 L.Ed.2d 745 (1971) (quoting Walz v.
Tax Comm'n of New York City, 397 U.S. 664, 674, 90 S.Ct. 1409, 1414, 25
L.Ed.2d 697 (1970)). Appellant alleges, for example, that the present
controversy has featured on-site inspections of appellant's evangelistic
crusades, lengthy on-site audits, examinations of appellant's books and
records, threats of criminal prosecution, and layers of administrative and
judicial proceedings.
The Establishment Clause prohibits "sponsorship, financial support, and active
involvement of the sovereign in religious activity." Walz, supra, at 668, 90
S.Ct., at 1411. The "excessive entanglement" prong of the tripartite purpose-
effect-entanglement Lemon test, see Lemon, 403 U.S., at 612-613, 91 S.Ct., at
2111-2112, requires examination of "the character and purposes of the
institutions that are benefited, the nature of the aid that the State provides,
and the resulting relationship between the government and the religious
authority" id., at 615, 91 S.Ct., at 2112; see also Walz, 397 U.S., at 695, 90
S.Ct., at 1425 (separate opinion of Harlan, J.) (warning of "programs, whose
very nature is apt to entangle the state in details of administration"). Indeed, in
Walz we held that a tax exemption for "religious organizations for religious
properties used solely for religious worship," as part of a general exemption
for nonprofit institutions, id., at 666-667, 90 S.Ct., at 1410-1411, did not
violate the Establishment Clause. In upholding the tax exemption, we
specifically noted that taxation of religious properties would cause at least as
much administrative entanglement between government and religious
authorities as did the exemption:
"Either course, taxation of churches or exemption, occasions some degree of
involvement with religion. Elimination of exemption would tend to expand the
involvement of government by giving rise to tax valuation of church property,
tax liens, tax foreclosures, and the direct confrontations and conflicts that
follow in the train of these legal processes.
"Granting tax exemptions to churches necessarily operates to afford an
indirect economic benefit and also gives rise to some, but yet a lesser,
involvement than taxing them. In analyzing either alternative the questions are
whether the involvement is excessive, and whether it is a continuing one
calling for official and continuing surveillance leading to an impermissible
degree of entanglement." Id., at 674-675, 90 S.Ct., at 1414-1415.
The issue presented, therefore, is whether the imposition of sales and use tax
liability in this case on appellant results in "excessive" involvement between
appellant and the State and "continuing surveillance leading to an
impermissible degree of entanglement."
At the outset, it is undeniable that a generally applicable tax has a secular
purpose and neither advances nor inhibits religion, for the very essence of
such a tax is that it is neutral and nondiscriminatory on questions of religious
belief. Thus, whatever the precise contours of the Establishment Clause, see
County of Allegheny v. American Civil Liberties Union of Pittsburgh, 492 U.S.
573, 589-594, 109 S.Ct. 3086, 3099-3101, 106 L.Ed.2d 472 (1989) (tracing
evolution of Establishment Clause doctrine); cf. Bowen v. Kendrick, 487 U.S.
589, 615-618, 108 S.Ct. 2562, ----, 101 L.Ed.2d 520 (1988) (applying but
noting criticism of the entanglement prong of the Lemon test), its undisputed
core values are not even remotely called into question by the generally
applicable tax in this case.
Even applying the "excessive entanglement" prong of the Lemon test, however,
we hold that California's imposition of sales and use tax liability on appellant
threatens no excessive entanglement between church and state. First, we note
that the evidence of administrative entanglement in this case is thin. Appellant
alleges that collection and payment of the sales and use tax impose severe
accounting burdens on it. The Court of Appeal, however, expressly found that
the record did not support appellant's factual assertions, noting that appellant
"had a sophisticated accounting staff and had recently computerized its
accounting and that appellant in its own books and for purposes of obtaining
a federal income tax exemption segregated 'retail sales' and 'donations.' " 204
Cal.App.3d, at 1289, 250 Cal.Rptr., at 905.
Second, even assuming that the tax imposes substantial administrative
burdens on appellant, such administrative and recordkeeping burdens do not
rise to a constitutionally significant level. Collection and payment of the tax
will of course require some contact between appellant and the State, but we
have held that generally applicable administrative and recordkeeping
regulations may be imposed on religious organization without running afoul
of the Establishment Clause. See Hernandez, 490 U.S., at 696-697, 109 S.Ct.,
at 2147-2148 ("Routine regulatory interaction such as application of neutral
tax laws which involves no inquiries into religious doctrine, . . . no delegation
of state power to a religious body, . . . and no 'detailed monitoring and close
administrative contact' between secular and religious bodies, . . . does not of
itself violate the nonentanglement command"); Tony and Susan Alamo
Foundation v. Secretary of Labor, 471 U.S. 290, 305-306, 105 S.Ct.1953,
1963-1964, 85 L.Ed.2d 278 (1985) ("The Establishment Clause does not
exempt religious organizations from such secular governmental activity as fire
inspections and building and zoning regulations, Lemon, supra, 403 U.S., at
614, 91 S.Ct., at 2112, and the recordkeeping requirements of the Fair Labor
Standards Act, while perhaps more burdensome in terms of paperwork, are
not significantly more intrusive into religious affairs"). To be sure, we noted in
Tony and Susan Alamo Foundation that the recordkeeping requirements at
issue in that case "applied only to commercial activities undertaken with a
'business purpose,' and would therefore have no impact on petitioners' own
evangelical activities," 471 U.S., at 305, 105 S.Ct., at 1963, but that
recognition did not bear on whether the generally applicable regulation was
nevertheless "the kind of government surveillance the Court has previously
held to pose an intolerable risk of government entanglement with religion,"
ibid.
The fact that appellant must bear the cost of collecting and remitting a
generally applicable sales and use taxeven if the financial burden of such
costs may vary from religion to religion does not enmesh government in
religious affairs. Contrary to appellant's contentions, the statutory scheme
requires neither the involvement of state employees in, nor on-site continuing
inspection of, appellant's day-to-day operations. There is no "official and
continuing surveillance," Walz, supra, 397 U.S., at 675, 90 S.Ct., at 1414, by
government auditors. The sorts of government entanglement that we have
found to violate the Establishment Clause have been far more invasive than
the level of contact created by the administration of neutral tax laws. Cf.
Aguilar v. Felton, 473 U.S. 402, 414, 105 S.Ct. 3232, 3238, 87 L.Ed.2d 290
(1985); Larkin v. Grendel's Den, Inc., 459 U.S. 116, 126-127, 103 S.Ct. 505,
511-512, 74 L.Ed.2d 297 (1982).
Most significantly, the imposition of the sales and use tax without an
exemption for appellant does not require the State to inquire into the religious
content of the items sold or the religious motivation for selling or purchasing
the items, because the materials are subject to the tax regardless of content
or motive. From the State's point of view, the critical question is not whether
the materials are religious, but whether there is a sale or a use, a question
which involves only a secular determination. Thus, this case stands on firmer
ground than Hernandez, because appellant offers the items at a stated price,
thereby relieving the State of the need to place a monetary value on
appellant's religious items. Compare Hernandez, 490 U.S., at 697-698, 109
S.Ct., at 2148 (where no comparable good or service is sold in the
marketplace, Internal Revenue Service looks to cost of providing the good or
service), with id., at 706, 109 S.Ct., at 2152 (O'CONNOR, J., dissenting) ("It
becomes impossible . . . to compute the 'contribution' portion of a payment to
charity where what is received in return is not merely an intangible, but an
intangible (or, for that matter a tangible) that is not bought and sold except in
donative contexts"). Although appellant asserts that donations often
accompany payments made for the religious items and that items are
sometimes given away without payment (or only nominal payment), it is plain
that, in the first case, appellant's use of "order forms" and "price lists" renders
illusory any difficulty in separating the two portions and that, in the second
case, the question is only whether any particular transfer constitutes a "sale."
Ironically, appellant's theory, under which government may not tax "religious
core" activities but may tax "nonreligious" activities, would require government
to do precisely what appellant asserts the Religion Clauses prohibit:
"determine which expenditures are religious and which are secular." Lemon,
403 U.S., at 621-622, 91 S.Ct., at 2115-2116.
Accordingly, because we find no excessive entanglement between government
and religion in this case, we hold that the imposition of sales and use tax
liability on appellant does not violate the Establishment Clause.
III
Appellant also contends that the State's imposition of use tax liability on it
violates the Commerce and Due Process Clauses because, as an out-of-state
distributor, it had an insufficient "nexus" to the State. See National Geographic
Society v. California Bd. of Equalization, 430 U.S. 551, 554, 97 S.Ct. 1386,
1389, 51 L.Ed.2d 631 (1977); National Bellas Hess, Inc. v. Department of
Revenue of Ill., 386 U.S. 753, 756-760, 87 S.Ct. 1389, 1391-1393, 18 L.Ed.2d
505 (1967). We decline to reach the merits of this claim, however, because the
courts below ruled that the claim was procedurally barred.
California law provides that an administrative claim for a tax refund "shall
state the specific grounds upon which the claim is founded," Cal.Rev. &
Tax.Code Ann. 6904(a) (West Supp.1989), and that refund suits will be
entertained only if "a claim for refund or credit has been duly filed" with the
Board, 6932. Suit may thereafter be brought only "on the grounds set forth
in the claim." 6933. Thus, under state law, "the claim for refund delineates
and restricts the issues to be considered in a taxpayer's refund action. The
trial court and appellate court are without jurisdiction to consider grounds not
set forth in the claim." Atari, Inc. v. State Board of Equalization, 170
Cal.App.3d 665, 672, 216 Cal.Rptr. 267, 271 (1985) (citations omitted). This
rule serves a legitimate state interest in requiring parties to exhaust
administrative remedies before proceeding to court, for "such a rule prevents
having an overworked court consider issues and remedies available through
administrative channels." Id., at 673, 216 Cal.Rptr., at 272.
The record in this case makes clear that appellant, in its refund claim before
the Board, failed even to cite the Commerce Clause or the Due Process Clause,
much less articulate legal arguments contesting the nexus issue. See App. 34
(incorporating petition for redetermination, which in turn raised only First
Amendment arguments, see id., at 11-16). The Board's hearing officer
specifically noted, in forwarding his decision to the Board, that appellant's
"counsel does not argue nexus," id., at 22, and indeed the parties stipulated
before the trial court that appellant's request for a refund was based on its
First Amendment claim, id., at 59. Accordingly, both the trial court and the
Court of Appeal declined to rule on the nexus issue on the ground that
appellant had failed to raise it in its refund claim before the Board. 204
Cal.App.3d, at 1290-1292, 250 Cal.Rptr., at 905-906; App. 213. This
unambiguous application of state procedural law makes it unnecessary for us
to review the asserted claim. See Michigan v. Long, 463 U.S. 1032, 1041-1042,
103 S.Ct. 3469, 3476-3477, 77 L.Ed.2d 1201 (1983); Michigan v. Tyler, 436
U.S. 499, 512, n. 7, 98 S.Ct. 1942, 1951, n. 7, 56 L.Ed.2d 486 (1978).
Appellant nevertheless urges that the state procedural ground relied upon by
the courts below is inadequate because the procedural rule is not " 'strictly or
regularly followed.' " Hathorn v. Lovorn, 457 U.S. 255, 263, 102 S.Ct. 2421,
2426, 72 L.Ed.2d 824 (1982) (quoting Barr v. City of Columbia, 378 U.S. 146,
149, 84 S.Ct. 1734, 1736, 12 L.Ed.2d 766 (1964)). Appellant asserts that state
courts in California retain the authority to hear claims "involving important
questions of public policy" notwithstanding the parties' failure to raise those
claims before an administrative agency. See Lindeleaf v. Agricultural Labor
Relations Bd., 41 Cal.3d 861, 870-871, 226 Cal.Rptr. 119, 124-125, 718 P.2d
106, 112 (1986); Hale v. Morgan, 22 Cal.3d 388, 394, 149 Cal.Rptr. 375, 379,
584 P.2d 512, 516 (1978). Appellant observes, for example, that although the
Court of Appeal in this case found appellant's nexus claim to be procedurally
barred, it ignored the procedural bar and ruled on the merits of appellant's
Ninth and Tenth Amendment arguments, see 204 Cal.App.3d, at 1292-1293,
250 Cal.Rptr., at 907-908, even though those arguments were likewise not
raised in appellant's refund claim, see id., at 1292, n. 19, 250 Cal.Rptr., at
907, n. 19.
The Court of Appeal, however, specifically rejected appellant's claim that the
nexus issue raised "important questions of public policy," noting that the issue
instead "raised factual questions, the determination of which is not a matter of
'public policy' but a matter of evidence." Id., at 1292, 250 Cal.Rptr., at 907.
Even if the Court of Appeal erred as a matter of state law in declining to rule
on appellant's nexus claim, appellant has failed to substantiate any claim that
the California courts in general apply this exception in an irregular, arbitrary,
or inconsistent manner. Accordingly, we conclude that appellant's Commerce
Clause and Due Process Clause argument is not properly before us. We thus
express no opinion on the merits of the claim.
The judgment of the California Court of Appeal is affirmed.
It is so ordered.
--
IGLESIA NI CRISTO (INC.), petitioner, vs. THE HONORABLE COURT OF
APPEALS, BOARD OF REVIEW FOR MOTION PICTURES AND TELEVISION and
HONORABLE HENRIETTA S. MENDEZ, respondents.

D E C I S I O N

PUNO, J.:

This is a petition for review of the Decision dated March 24, 1995 of the
respondent Court of Appeals affirming the action of the respondent Board of
Review for Motion Pictures and Television which x-rated the TV Program Ang
Iglesia ni Cristo.

Petitioner Iglesia ni Cristo, a duly organized religious organization, has a
television program entitled Ang Iglesia ni Cristo aired on Channel 2 every
Saturday and on Channel 13 every Sunday. The program presents and
propagates petitioners religious beliefs, doctrines and practices often times in
comparative studies with other religions.

Sometime in the months of September, October and November 1992,
petitioner submitted to the respondent Board of Review for Motion Pictures
and Television the VTR tapes of its TV program Series Nos. 116, 119, 121 and
128. The Board classified the series as X or not for public viewing on the
ground that they offend and constitute an attack against other religions
which is expressly prohibited by law.

Petitioner pursued two (2) courses of action against the respondent Board. On
November 28, 1992, it appealed to the Office of the President the
classification of its TV Series No. 128. It succeeded in its appeal for on
December 18, 1992, the Office of the President reversed the decision of the
respondent Board. Forthwith, the Board allowed Series No. 128 to be publicly
telecast.

On December 14, 1992, petitioner also filed against the respondent Board
Civil Case No. Q-92-14280, with the RTC, NCR, Quezon City.[1] Petitioner
alleged that the respondent Board acted without jurisdiction or with grave
abuse of discretion in requiring petitioner to submit the VTR tapes of its TV
program and in x-rating them. It cited its TV Program Series Nos. 115, 119,
121 and 128. In their Answer, respondent Board invoked its power under P.D.
No. 1986 in relation to Article 201 of the Revised Penal Code.

On January 4, 1993, the trial court held a hearing on petitioners prayer for a
writ of preliminary injunction. The parties orally argued and then marked their
documentary evidence. Petitioner submitted the following as its exhibits, viz.:

(1) Exhibit A, respondent Boards Voting Slip for Television showing
its September 9, 1992 action on petitioners Series No. 115 as follows:[2]

REMARKS:

There are some inconsistencies in the particular program as it is very
surprising for this program to show series of Catholic ceremonies and also
some religious sects and using it in their discussion about the bible. There
are remarks which are direct criticism which affect other religions.

Need more opinions for this particular program. Please subject to more
opinions.

(2) Exhibit A-1, respondent Boards Voting Slip for Television
showing its September 11, 1992 subsequent action on petitioners Series No.
115 as follows:[3]

REMARKS:

This program is criticizing different religions, based on their own
interpretation of the Bible.

We suggest that the program should delve on explaining their own faith and
beliefs and avoid attacks on other faith.

(3) Exhibit B, respondent Boards Voting Slip for Television showing
its October 9, 1992 action on petitioners Series No. 119, as follows:[4]

REMARKS:

The Iglesia ni Cristo insists on the literal translation of the bible and says that
our (Catholic) veneration of the Virgin Mary is not to be condoned because
nowhere it is found in the bible that we should do so.

This is intolerance and robs off all sects of freedom of choice, worship and
decision.

(4) Exhibit C, respondent Boards Voting Slip for Television showing
its October 20, 1992 action on petitioners Series No. 121 as follows:[5]

REMARKS:

I refuse to approve the telecast of this episode for reasons of the attacks, they
do on, specifically, the Catholic religion.

I refuse to admit that they can tell, dictate any other religion that they are
right and the rest are wrong, which they clearly present in this episode.

(5) Exhibit D, respondent Boards Voting Slip for Television showing
its November 20, 1992 action on petitioners Series No. 128 as follows:[6]

REMARKS:

The episode presented criticizes the religious beliefs of the Catholic and
Protestants beliefs.

We suggest a second review.

(6) Exhibits E, E-1, petitioners block time contract with ABS-CBN
Broadcasting Corporation dated September 1, 1992.[7]

(7) Exhibit F, petitioners Airtime Contract with Island Broadcasting
Corporation.[8]

(8) Exhibit G, letter dated December 18, 1992 of former Executive
Secretary Edelmiro A. Amante, Sr., addressed to Henrietta S. Mendez reversing
the decision of the respondent Board which x-rated the showing of petitioners
Series No. 129. The letter reads in part:

xxx xxx xxx

The television episode in question is protected by the constitutional guarantee
of free speech and expression under Article III, Section 4 of the 1987
Constitution.

We have viewed a tape of the television episode in question, as well as studied
the passages found by MTRCB to be objectionable and we find no indication
that the episode poses any clear and present danger sufficient to limit the said
constitutional guarantee.

(9) Exhibits H, H-1, letter dated November 26, 1992 of Teofilo C.
Ramos, Sr., addressed to President Fidel V. Ramos appealing the action of the
respondent Board x-rating petitioners Series No. 128.

On its part, respondent Board submitted the following exhibits, viz.:

(1) Exhibit 1, Permit Certificate for Television Exhibition No. 15181 dated
December 18, 1992 allowing the showing of Series No. 128 under parental
guidance.

(2) Exhibit 2, which is Exhibit G of petitioner.

(3) Exhibit 3, letter dated October 12, 1992 of Henrietta S. Mendez,
addressed to the Christian Era Broadcasting Service which reads in part:

x x x

In the matter of your television show Ang Iglesia ni Cristo Series No. 119,
please be informed that the Board was constrained to deny your show a permit
to exhibit. The material involved constitute an attack against another religion
which is expressly prohibited by law. Please be guided in the submission of
future shows.

After evaluating the evidence of the parties, the trial court issued a writ of
preliminary injunction on petitioners bond of P10,000.00.

The trial court set the pre-trial of the case and the parties submitted their pre-
trial briefs.[9] The pre-trial briefs show that the parties evidence is basically
the evidence they submitted in the hearing of the issue of preliminary
injunction. The trial of the case was set and reset several times as the parties
tried to reach an amicable accord. Their efforts failed and the records show
that after submission of memoranda, the trial court rendered a Judgment,[10]
on December 15, 1993, the dispositive portion of which reads:

x x x

WHEREFORE, judgment is hereby rendered ordering respondent Board of
Review for Motion Pictures and Television (BRMPT) to grant petitioner Iglesia
ni Cristo the necessary permit for all the series of Ang Iglesia ni Cristo
program.

Petitioner Iglesia ni Cristo, however, is directed to refrain from offending and
attacking other existing religions in showing Ang Iglesia ni Cristo program.

SO ORDERED.

Petitioner moved for reconsideration[11] praying: (a) for the deletion of the
second paragraph of the dispositive portion of the Decision, and (b) for the
Board to be perpetually enjoined from requiring petitioner to submit for review
the tapes of its program. The respondent Board opposed the motion.[12] On
March 7, 1993, the trial court granted petitioners Motion for Reconsideration.
It ordered:[13]

x x x

WHEREFORE, the Motion for Reconsideration is granted. The second portion of
the Courts Order dated December 15, 1993, directing petitioner to refrain
from offending and attacking other existing religions in showing Ang Iglesia
ni Cristo program is hereby deleted and set aside. Respondents are further
prohibited from requiring petitioner Iglesia ni Cristo to submit for review VTR
tapes of its religious program Ang Iglesia ni Cristo.

Respondent Board appealed to the Court of Appeals after its motion for
reconsideration was denied.[14]

On March 5, 1995, the respondent Court of Appeals[15] reversed the trial
court. It ruled that: (1) the respondent board has jurisdiction and power to
review the TV program Ang Iglesia ni Cristo, and (2) the respondent Board
did not act with grave abuse of discretion when it denied permit for the
exhibition on TV of the three series of Ang Iglesia ni Cristo on the ground
that the materials constitute an attack against another religion. It also found
the series indecent, contrary to law and contrary to good customs.

In this petition for review on certiorari under Rule 45, petitioner raises the
following issues:

I

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN HOLDING
THAT ANG IGLESIA NI CRISTO PROGRAM IS NOT CONSTITUTIONALLY
PROTECTED AS A FORM OF RELIGIOUS EXERCISE AND EXPRESSION.

II

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN NOT
HOLDING THAT BEING AN EXERCISE OF RELIGIOUS FREEDOM, THE ANG IGLESIA
NI CRISTO PROGRAM IS SUBJECT TO THE POLICE POWER OF THE STATE ONLY
IN THE EXTREME CASE THAT IT POSES A CLEAR AND PRESENT DANGER.

III

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN HOLDING
THAT THE MTRCB IS VESTED WITH THE POWER TO CENSOR RELIGIOUS
PROGRAMS.

IV

WHETHER OR NOT THE HONORABLE COURT OF APPEALS ERRED IN HOLDING
THAT THE ANG IGLESIA NI CRISTO, A PURELY RELIGIOUS PROGRAM IS
INDECENT AND CONTRARY TO LAW AND GOOD CUSTOMS.

The basic issues can be reduced into two: (1) first, whether the respondent
Board has the power to review petitioners TV program Ang Iglesia ni Cristo,
and (2) second, assuming it has the power, whether it gravely abused its
discretion when it prohibited the airing of petitioners religious program,
series Nos. 115, 119 and 121, for the reason that they constitute an attack
against other religions and that they are indecent, contrary to law and good
customs.

The first issue can be resolved by examining the powers of the Board under
P.D. No. 1986. Its Section 3 pertinently provides:

Sec. 3 Powers and Functions. The BOARD shall have the following
functions, powers and duties:

xxx xxx xxx

b) To screen, review and examine all motion pictures as herein defined,
television programs, including publicity materials such as advertisements,
trailers and stills, whether such motion pictures and publicity materials be for
theatrical or non-theatrical distribution for television broadcast or for general
viewing, imported or produced in the Philippines and in the latter case,
whether they be for local viewing or for export.

c) To approve, delete objectionable portion from and/or prohibit the
importation, exportation, production, copying, distribution, sale, lease,
exhibition and/or television broadcast of the motion pictures, television
programs and publicity materials, subject of the preceding paragraph, which,
in the judgment of the BOARD applying contemporary Filipino cultural values
as standard, are objectionable for being immoral, indecent, contrary to law
and/or good customs, injurious to the prestige of the Republic of the
Philippines and its people, or with a dangerous tendency to encourage the
commission of violence or of a wrong or crime, such as but not limited to:

i) Those which tend to incite subversion, insurrection, rebellion or sedition
against the State, or otherwise threaten the economic and/or political stability
of the State;

ii) Those which tend to undermine the faith and confidence of the people, their
government and/or duly constituted authorities;

iii) Those which glorify criminals or condone crimes;

iv) Those which serve no other purpose but to satisfy the market for violence
or pornography;

v) Those which tend to abet the traffic in and use of prohibited drugs;

vi) Those which are libelous or defamatory to the good name and reputation of
any person, whether living or dead;

vii) Those which may constitute contempt of court or of any quasi-judicial
tribunal, or pertain to matters which are sub-judice in nature (emphasis ours).

The law gives the Board the power to screen, review and examine all
television programs. By the clear terms of the law, the Board has the power
to approve, delete x x x and/or prohibit the x x x exhibition and/or
television broadcast of x x x television programs x x x. The law also directs
the Board to apply contemporary Filipino cultural values as standard to
determine those which are objectionable for being immoral, indecent,
contrary to law and/or good customs, injurious to the prestige of the Republic
of the Philippines and its people, or with a dangerous tendency to encourage
the commission of violence or of a wrong or crime.

Petitioner contends that the term television program should not include
religious programs like its program Ang Iglesia ni Cristo. A contrary
interpretation, it is urged, will contravene Section 5, Article III of the
Constitution which guarantees that no law shall be made respecting an
establishment of religion, or prohibiting the free exercise thereof. The free
exercise and enjoyment of religious profession and worship, without
discrimination or preference, shall forever be allowed.

We reject petitioners submission which need not set us adrift in a
constitutional voyage towards an uncharted sea. Freedom of religion has been
accorded a preferred status by the framers of our fundamental laws, past and
present. We have affirmed this preferred status well aware that it is designed
to protect the broadest possible liberty of conscience, to allow each man to
believe as his conscience directs, to profess his beliefs, and to live as he
believes he ought to live, consistent with the liberty of others and with the
common good.[16] We have also laboriously defined in our jurisprudence the
intersecting umbras and penumbras of the right to religious profession and
worship. To quote the summation of Mr. Justice Isagani Cruz, our well-known
constitutionalist:[17]

Religious Profession and Worship

The right to religious profession and worship has a two-fold aspect, viz.,
freedom to believe and freedom to act on ones beliefs. The first is absolute
as long as the belief is confined within the realm of thought. The second is
subject to regulation where the belief is translated into external acts that
affect the public welfare.

(1) Freedom to Believe

The individual is free to believe (or disbelieve) as he pleases concerning the
hereafter. He may indulge his own theories about life and death; worship any
god he chooses, or none at all; embrace or reject any religion; acknowledge
the divinity of God or of any being that appeals to his reverence; recognize or
deny the immortality of his soul in fact, cherish any religious conviction as
he and he alone sees fit. However absurd his beliefs may be to others, even if
they be hostile and heretical to the majority, he has full freedom to believe as
he pleases. He may not be required to prove his beliefs. He may not be
punished for his inability to do so. Religion, after all, is a matter of faith. Men
may believe what they cannot prove. Every one has a right to his beliefs and
he may not be called to account because he cannot prove what he believes.

(2) Freedom to Act on Ones Beliefs

But where the individual externalizes his beliefs in acts or omissions that
affect the public, his freedom to do so becomes subject to the authority of the
State. As great as this liberty may be, religious freedom, like all the other
rights guaranteed in the Constitution, can be enjoyed only with a proper
regard for the rights of others. It is error to think that the mere invocation of
religious freedom will stalemate the State and render it impotent in protecting
the general welfare. The inherent police power can be exercised to prevent
religious practices inimical to society. And this is true even if such practices
are pursued out of sincere religious conviction and not merely for the purpose
of evading the reasonable requirements or prohibitions of the law.

Justice Frankfurter put it succinctly: The constitutional provision on religious
freedom terminated disabilities, it did not create new privileges. It gave
religious liberty, not civil immunity. Its essence is freedom from conformity to
religious dogma, not freedom from conformity to law because of religious
dogma.

Accordingly, while one has full freedom to believe in Satan, he may not offer
the object of his piety a human sacrifice, as this would be murder. Those who
literally interpret the Biblical command to go forth and multiply are
nevertheless not allowed to contract plural marriages in violation of the laws
against bigamy. A person cannot refuse to pay taxes on the ground that it
would be against his religious tenets to recognize any authority except that of
God alone. An atheist cannot express his disbelief in acts of derision that
wound the feelings of the faithful. The police power can be validly asserted
against the Indian practice of the suttee born of deep religious conviction, that
calls on the widow to immolate herself at the funeral pile of her husband.

We thus reject petitioners postulate that its religious program is per se
beyond review by the respondent Board. Its public broadcast on TV of its
religious program brings it out of the bosom of internal belief. Television is a
medium that reaches even the eyes and ears of children. The Court iterates
the rule that the exercise of religious freedom can be regulated by the State
when it will bring about the clear and present danger of some substantive evil
which the State is duty bound to prevent, i.e., serious detriment to the more
overriding interest of public health, public morals, or public welfare. A laissez
faire policy on the exercise of religion can be seductive to the liberal mind but
history counsels the Court against its blind adoption as religion is and
continues to be a volatile area of concern in our country today. Across the sea
and in our shore, the bloodiest and bitterest wars fought by men were caused
by irreconcilable religious differences. Our country is still not safe from the
recurrence of this stultifying strife considering our warring religious beliefs
and the fanaticism with which some of us cling and claw to these beliefs. Even
now, we have yet to settle the near century old strife in Mindanao, the roots of
which have been nourished by the mistrust and misunderstanding between
our Christian and Muslim brothers and sisters. The bewildering rise of weird
religious cults espousing violence as an article of faith also proves the wisdom
of our rule rejecting a strict let alone policy on the exercise of religion. For
sure, we shall continue to subject any act pinching the space for the free
exercise of religion to a heightened scrutiny but we shall not leave its rational
exercise to the irrationality of man. For when religion divides and its exercise
destroys, the State should not stand still.

It is also petitioners submission that the respondent appellate court gravely
erred when it affirmed the ruling of the respondent Board x-rating its TV
Program Series Nos. 115, 119, 121 and 128. The records show that the
respondent Board disallowed the program series for attacking other
religions. Thus, Exhibits A, A-1, (respondent Boards Voting Slip for
Television) reveal that its reviewing members x-rated Series 115 for x x x
criticizing different religions, based on their own interpretation of the Bible.
They suggested that the program should only explain petitioners x x x own
faith and beliefs and avoid attacks on other faiths. Exhibit B shows that
Series No. 119 was x-rated because the Iglesia ni Cristo insists on the literal
translation of the bible and says that our Catholic veneration of the Virgin
Mary is not to be condoned because nowhere it is found in the bible that we
should do so. This is intolerance x x x. Exhibit C shows that Series No. 121
was x-rated x x x for reasons of the attacks, they do on, specifically, the
Catholic religion. x x x (T)hey can not tell, dictate any other religion that they
are right and the rest are wrong x x x. Exhibit D also shows that Series No.
128 was not favorably recommended because it x x x outrages Catholic and
Protestants beliefs. On second review, it was x-rated because of its
unbalanced interpretations of some parts of the Bible.[18] In sum, the
respondent Board x-rated petitioners TV program series Nos. 115, 119, 121
and 128 because of petitioners controversial biblical interpretations and its
attacks against contrary religious beliefs. The respondent appellate court
agreed and even held that the said attacks are indecent, contrary to law and
good customs.

We reverse the ruling of the appellate court.

First. Deeply ensconced in our fundamental law is its hostility against all prior
restraints on speech, including religious speech. Hence, any act that restrains
speech is hobbled by the presumption of invalidity and should be greeted with
furrowed brows.[19] It is the burden of the respondent Board to overthrow this
presumption. If it fails to discharge this burden, its act of censorship will be
struck down. It failed in the case at bar.

Second. The evidence shows that the respondent Board x-rated petitioners TV
series for attacking other religions, especially the Catholic church. An
examination of the evidence, especially Exhibits A, A-1, B, C, and D will
show that the so-called attacks are mere criticisms of some of the deeply
held dogmas and tenets of other religions. The videotapes were not viewed by
the respondent court as they were not presented as evidence. Yet they were
considered by the respondent court as indecent, contrary to law and good
customs, hence, can be prohibited from public viewing under Section 3(c) of
PD 1986. This ruling clearly suppresses petitioners freedom of speech and
interferes with its right to free exercise of religion. It misappreciates the
essence of freedom to differ as delineated in the benchmark case of Cantwell
v. Connecticut,[20] viz.:

xxx xxx xxx

In the realm of religious faith, and in that of political belief, sharp differences
arise. In both fields, the tenets of one man may seem the rankest error to his
neighbor. To persuade others to his own point of view, the pleader, as we
know, at times, resorts to exaggeration, to vilification of men who have been,
or are prominent in church or state or even to false statements. But the
people of this nation have ordained in the light of history that inspite of the
probability of excesses and abuses, these liberties are, in the long view,
essential to enlightened opinion and right conduct on the part of the citizens
of democracy.

The respondent Board may disagree with the criticisms of other religions by
petitioner but that gives it no excuse to interdict such criticisms, however,
unclean they may be. Under our constitutional scheme, it is not the task of
the State to favor any religion by protecting it against an attack by another
religion. Religious dogmas and beliefs are often at war and to preserve peace
among their followers, especially the fanatics, the establishment clause of
freedom of religion prohibits the State from leaning towards any religion. Vis-
a-vis religious differences, the State enjoys no banquet of options. Neutrality
alone is its fixed and immovable stance. In fine, respondent board cannot
squelch the speech of petitioner Iglesia ni Cristo simply because it attacks
other religions, even if said religion happens to be the most numerous church
in our country. In a State where there ought to be no difference between the
appearance and the reality of freedom of religion, the remedy against bad
theology is better theology. The bedrock of freedom of religion is freedom of
thought and it is best served by encouraging the marketplace of dueling ideas.
When the luxury of time permits, the marketplace of ideas demands that
speech should be met by more speech for it is the spark of opposite speech,
the heat of colliding ideas that can fan the embers of truth.

Third. The respondents cannot also rely on the ground attacks against
another religion in x-rating the religious program of petitioner. Even a
sideglance at Section 3 of PD 1986 will reveal that it is not among the grounds
to justify an order prohibiting the broadcast of petitioners television program.
The ground attack against another religion was merely added by the
respondent Board in its Rules.[21] This rule is void for it runs smack against
the hoary doctrine that administrative rules and regulations cannot expand the
letter and spirit of the law they seek to enforce.

It is opined that the respondent board can still utilize attack against any
religion as a ground allegedly x x x because Section 3 (c) of PD 1986
prohibits the showing of motion pictures, television programs and publicity
materials which are contrary to law and Article 201 (2) (b) (3) of the Revised
Penal Code punishes anyone who exhibits shows which offend any race or
religion. We respectfully disagree for it is plain that the word attack is not
synonymous with the word offend. Moreover, Article 201 (2) (b) (3) of the
Revised Penal Code should be invoked to justify the subsequent punishment
of a show which offends any religion. It cannot be utilized to justify prior
censorship of speech. It must be emphasized that E.O. 876, the law prior to
PD 1986, included attack against any religion as a ground for censorship.
The ground was not, however, carried over by PD 1986. Its deletion is a
decree to disuse it. There can be no other intent. Indeed, even the Executive
Department espouses this view. Thus, in an Opinion dated November 28,
1985 then Minister of Justice, now President of the Senate, Neptali Gonzales
explained:

x x x

However, the question whether the BRMPT (now MTRCB) may preview and
censor the subject television program of INC should be viewed in the light of
the provision of Section 3, paragraph (c) of PD 1986, which is substantially the
same as the provision of Section 3, paragraph (c) of E.O. No. 876-A, which
prescribes the standards of censorship, to wit: immoral, indecent, contrary to
law and/or good customs, injurious to the prestige of the Republic of the
Philippines or its people or with dangerous tendency to encourage the
commission of violence, or of a wrong as determined by the Board, applying
contemporary Filipino cultural values as standard. As stated, the intention of
the Board to subject the INCs television program to previewing and
censorship is prompted by the fact that its religious program makes mention
of beliefs and practices of other religion. On the face of the law itself, there
can conceivably be no basis for censorship of said program by the Board as
much as the alleged reason cited by the Board does not appear to be within
the contemplation of the standards of censorship set by law. (Italics supplied)

Fourth. In x-rating the TV program of the petitioner, the respondents failed to
apply the clear and present danger rule. In American Bible Society v. City of
Manila,[22] this Court held: The constitutional guaranty of free exercise and
enjoyment of religious profession and worship carries with it the right to
disseminate religious information. Any restraint of such right can be justified
like other restraints on freedom of expression on the ground that there is a
clear and present danger of any substantive evil which the State has the right
to prevent. In Victoriano vs. Elizalde Rope Workers Union,[23] we further
ruled that x x x it is only where it is unavoidably necessary to prevent an
immediate and grave danger to the security and welfare of the community that
infringement of religious freedom may be justified, and only to the smallest
extent necessary to avoid the danger.

The records show that the decision of the respondent Board, affirmed by the
respondent appellate court, is completely bereft of findings of facts to justify
the conclusion that the subject video tapes constitute impermissible attacks
against another religion. There is no showing whatsoever of the type of harm
the tapes will bring about especially the gravity and imminence of the
threatened harm. Prior restraint on speech, including religious speech, cannot
be justified by hypothetical fears but only by the showing of a substantive and
imminent evil which has taken the life of a reality already on ground.

It is suggested that we re-examine the application of clear and present danger
rule to the case at bar. In the United States, it is true that the clear and
present danger test has undergone permutations. It was Mr. Justice Holmes
who formulated the test in Schenck v. US,[24] as follows: x x x the question in
every case is whether the words used are used in such circumstances and are
of such a nature as to create a clear and present danger that they will bring
about the substantive evils that Congress has a right to prevent. Admittedly,
the test was originally designed to determine the latitude which should be
given to speech that espouses anti-government action. Bannered by Justices
Holmes and Brandeis, the test attained its full flowering in the decade of the
forties, when its umbrella was used to protect speech other than subversive
speech.[25] Thus, for instance, the test was applied to annul a total ban on
labor picketing.[26] The use of the test took a downswing in the 1950s when
the US Supreme Court decided Dennis v. United States involving communist
conspiracy.[27] In Dennis, the components of the test were altered as the High
Court adopted Judge Learned Hands formulation that x x x in each case
[courts] must ask whether the gravity of the evil, discounted by its
improbability, justifies such invasion of free speech as is necessary to avoid
the danger. The imminence requirement of the test was thus diminished and
to that extent, the protection of the rule was weakened. In 1969, however, the
strength of the test was reinstated in Brandenburg v. Ohio,[28] when the High
Court restored in the test the imminence requirement, and even added an
intent requirement which according to a noted commentator ensured that only
speech directed at inciting lawlessness could be punished.[29] Presently in the
United States, the clear and present danger test is not applied to protect low
value speeches such as obscene speech, commercial speech and defamation.
Be that as it may, the test is still applied to four types of speech: speech that
advocates dangerous ideas, speech that provokes a hostile audience reaction,
out of court contempt and release of information that endangers a fair
trial.[30] Hence, even following the drift of American jurisprudence, there is
reason to apply the clear and present danger test to the case at bar which
concerns speech that attacks other religions and could readily provoke hostile
audience reaction. It cannot be doubted that religious truths disturb and
disturb terribly.

It is also opined that it is inappropriate to apply the clear and present danger
test to the case at bar because the issue involves the content of speech and
not the time, place or manner of speech. Allegedly, unless the speech is first
allowed, its impact cannot be measured, and the causal connection between
the speech and the evil apprehended cannot be established. The contention
overlooks the fact that the case at bar involves videotapes that are pre-taped
and hence, their speech content is known and not an X quantity. Given the
specific content of the speech, it is not unreasonable to assume that the
respondent Board, with its expertise, can determine whether its sulphur will
bring about the substantive evil feared by the law.

Finally, it is also opined by Mr. Justice Kapunan that x x x the determination
of the question as to whether or not such vilification, exaggeration or
fabrication falls within or lies outside the boundaries of protected speech or
expression is a judicial function which cannot be arrogated by an
administrative body such as a Board of Censors. He submits that a system of
prior restraint may only be validly administered by judges and not left to
administrative agencies. The same submission is made by Mr. Justice
Mendoza.

This thoughtful thesis is an attempt to transplant another American rule in our
jurisdiction. Its seedbed was laid down by Mr. Justice Brennan in his
concurring opinion in the 1962 case of Manual Enterprise v. Day.[31] By 1965,
the US Supreme Court in Freedman v. Maryland[32] was ready to hold that the
teaching of cases is that, because only a judicial determination in an adversary
proceeding ensures the necessary sensitivity to freedom of expression, only a
procedure requiring a judicial determination suffices to impose a valid final
restraint.[33]

While the thesis has a lot to commend itself, we are not ready to hold that it is
unconstitutional for Congress to grant an administrative body quasi-judicial
power to preview and classify TV programs and enforce its decision subject to
review by our courts. As far back as 1921, we upheld this set-up in Sotto vs.
Ruiz,[34] viz.:

The use of the mails by private persons is in the nature of a privilege which
can be regulated in order to avoid its abuse. Persons possess no absolute
right to put into the mail anything they please, regardless of its character.

On the other hand, the exclusion of newspaper and other publications from
the mails, in the exercise of executive power, is extremely delicate in nature
and can only be justified where the statute is unequivocably applicable to the
supposed objectionable publication. In excluding any publication for the
mails, the object should be not to interfere with the freedom of the press or
with any other fundamental right of the people. This is the more true with
reference to articles supposedly libelous than to other particulars of the law,
since whether an article is or is not libelous, is fundamentally a legal question.
In order for there to be due process of law, the action of the Director of Posts
must be subject to revision by the courts in case he had abused his discretion
or exceeded his authority. (Ex-parte Jackson [1878], 96 U.S., 727; Public
Clearing House vs. Coyne [1903], 194 U.S., 497; Post Publishing Co. vs.
Murray [1916], 23-Fed., 773)

As has been said, the performance of the duty of determining whether a
publication contains printed matter of a libelous character rests with the
Director of Posts and involves the exercise of his judgment and discretion.
Every intendment of the law is in favor of the correctness of his action. The
rule is (and we go only to those cases coming from the United States Supreme
Court and pertaining to the United States Postmaster-General), that the courts
will not interfere with the decision of the Director of Posts unless clearly of
opinion that it was wrong. (Bates & Guilid Co. vs. Payne [1904], 194 U.S., 106;
Smith vs. Hitchcock [1912], 226 U.S., 63; Masses Pub. Co. vs. Patten [1917],
246 Fed., 24. But see David vs. Brown [1900], 103 Fed., 909, announcing a
somewhat different doctrine and relied upon by the Attorney-General).

To be sure, legal scholars in the United States are still debating the
proposition whether or not courts alone are competent to decide whether
speech is constitutionally protected.[35] The issue involves highly arguable
policy considerations and can be better addressed by our legislators.

IN VIEW WHEREOF, the Decision of the respondent Court of Appeals dated
March 24, 1995 is affirmed insofar as it sustained the jurisdiction of the
respondent MTRCB to review petitioners TV program entitled Ang Iglesia ni
Cristo, and is reversed and set aside insofar as it sustained the action of the
respondent MTRCB x-rating petitioners TV Program Series Nos. 115, 119, and
121. No costs.