G.R. No. 118141.

September 5, 1997]
LEONILA GARCIA-RUEDA, Petitioner, v. WILFREDO L.
PASCASIO, RAUL R. ARNAU, ABELARDO L. APORTADERA JR.,
Honorable CONDRADO M. VASQUEZ, all of the Office of the
Ombudsman; JESUS F. GUERRERO, PORFIRIO MACARAEG,
and GREGORIO A. ARIZALA, all of the Office of the City
Prosecutor, Manila,Respondents.
DECISION
ROMERO, J.:
May this Court review the findings of the Office of the Ombudsman?
The general rule has been enunciated in Ocampo v.
Ombudsman 1 which states:
In the exercise of its investigative power, this Court has consistently
held that courts will not interfere with the discretion of the fiscal or
the Ombudsman to determine the specificity and adequacy of the
averments of the offense charged. He may dismiss the complaint
forthwith if he finds it to be insufficient in form and substance or if
he otherwise finds no ground to continue with the inquiry; or he
may proceed with the investigation of the complaint if, in his view, it
is in due and proper form.
Does the instant case warrant a departure from the foregoing
general rule? When a patient dies soon after surgery under
circumstances which indicate that the attending surgeon and
anaesthesiologist may have been guilty of negligence but upon their
being charged, a series of nine prosecutors toss the responsibility of
conducting a preliminary investigation to each other with
contradictory recommendations, ping-pong style, perhaps the
distraught widow is not to be blamed if she finally decides to accuse
the City Prosecutors at the end of the line for partiality under the
Anti-Graft and Corrupt Practices Act. Nor may she be entirely
faulted for finally filing a petition before this Court against the
Ombudsman for grave abuse of discretion in dismissing her
complaint against said City Prosecutors on the ground of lack of
evidence. Much as we sympathize with the bereaved widow,

however, this Court is of the opinion that the general rule still finds
application in instant case. In other words, the respondent
Ombudsman did not commit grave abuse of discretion in deciding
against filing the necessary information against public respondents
of the Office of the City Prosecutor.
The following facts are borne out by the records.
Florencio V. Rueda, husband of petitioner Leonila Garcia-Rueda,
underwent surgical operation at the UST hospital for the removal of
a stone blocking his ureter. He was attended by Dr. Domingo
Antonio, Jr. who was the surgeon, while Dr. Erlinda Balatbat-Reyes
was the anaesthesiologist. Six hours after the surgery, however,
Florencio died of complications of unknown cause, according to
officials of the UST Hospital.2
chanrob lesvi rtua llawlib ra ry

Not satisfied with the findings of the hospital, petitioner requested

the National Bureau of Investigation (NBI) to conduct an autopsy on
her husbands body. Consequently, the NBI ruled that Florencios
death was due to lack of care by the attending physician in
administering anaesthesia. Pursuant to its findings, the NBI
recommended that Dr. Domingo Antonio and Dr. Erlinda BalatbatReyes be charged for Homicide through Reckless Imprudence before
the Office of the City Prosecutor.
During the preliminary investigation, what transpired was a
confounding series of events which we shall try to disentangle. The
case was initially assigned to Prosecutor Antonio M. Israel, who had
to inhibit himself because he was related to the counsel of one of
the doctors. As a result, the case was re-raffled to Prosecutor
Norberto G. Leono who was, however, disqualified on motion of the
petitioner since he disregarded prevailing laws and jurisprudence
regarding preliminary investigation. The case was then referred to
Prosecutor Ramon O. Carisma, who issued a resolution
recommending that only Dr. Reyes be held criminally liable and that
the complaint against Dr. Antonio be dismissed.
The case took another perplexing turn when Assistant City
Prosecutor Josefina Santos Sioson, in the interest of justice and
peace of mind of the parties, recommended that the case be re-

raffled on the ground that Prosecutor Carisma was partial to the

petitioner. Thus, the case was transferred to Prosecutor Leoncia R.
Dimagiba, where avolte face occurred again with the endorsement
that the complaint against Dr. Reyes be dismissed and instead, a
corresponding information be filed against Dr. Antonio. Petitioner
filed a motion for reconsideration, questioning the findings of
Prosecutor Dimagiba.
Pending the resolution of petitioners motion for reconsideration
regarding Prosecutor Dimagibas resolution, the investigative
pingpong continued when the case was again assigned to another
prosecutor, Eudoxia T. Gualberto, who recommended that Dr. Reyes
be included in the criminal information of Homicide through
Reckless Imprudence. While the recommendation of Prosecutor
Gualberto was pending, the case was transferred to Senior State
Prosecutor Gregorio A. Arizala, who resolved to exonerate Dr. Reyes
from any wrongdoing, a resolution which was approved by both City
Prosecutor Porfirio G. Macaraeg and City Prosecutor Jesus F.
Guerrero.
Aggrieved, petitioner filed graft charges specifically for violation of
Section 3(e) of Republic Act No. 3019 3 against Prosecutors
Guerrero, Macaraeg, and Arizala for manifest partiality in favor of
Dr. Reyes before the Office of the Ombudsman. However, on July
11, 1994, the Ombudsman issued the assailed resolution dismissing
the complaint for lack of evidence.
In fine, petitioner assails the exercise of the discretionary power of
the Ombudsman to review the recommendations of the government
prosecutors and to approve and disapprove the same. Petitioner
faults the Ombudsman for, allegedly in grave abuse of discretion,
refusing to find that there exists probable cause to hold public
respondent City Prosecutors liable for violation of Section 3(e) of
R.A. No. 3019.
Preliminarily, the powers and functions of the Ombudsman have
generally been categorized into the following: investigatory powers,
prosecutory power, public assistance function, authority to inquire
and obtain information, and function to adopt, institute and
implement preventive measures. 4
chanroblesvi rtual lawlib rary

As protector of the people, the Office of the Ombudsman has the

power, function and duty to act promptly on complaints filed in any
form or manner against public officials and to investigate any act or
omission of any public official when such act or omission appears to
be illegal, unjust, improper or inefficient. 5
chanroble svirtuallaw lib rary

While the Ombudsman has the full discretion to determine whether

or not a criminal case should be filed, this Court is not precluded
from reviewing the Ombudsmans action when there is an abuse of
discretion, in which case Rule 65 of the Rules of Court may
exceptionally be invoked pursuant to Section I, Article VIII of the
1987 Constitution.6
chanrob lesvi rtua llawlib ra ry

In this regard, grave abuse of discretion has been defined as where

a power is exercised in an arbitrary or despotic manner by reason of
passion or personal hostility so patent and gross as to amount to
evasion of positive duty or virtual refusal to perform a duty enjoined
by, or in contemplation of law. 7
chanroblesvi rtua llawli bra ry

From a procedural standpoint, it is certainly odd why the successive

transfers from one prosecutor to another were not sufficiently
explained in the Resolution of the Ombudsman. Being the proper
investigating authority with respect to misfeasance, non-feasance
and malfeasance of public officials, the Ombudsman should have
been more vigilant and assiduous in determining the reasons behind
the buckpassing to ensure that no irregularity took place.
Whether such transfers were due to any outside pressure or ulterior
motive is a matter of evidence. One would have expected the
Ombudsman, however, to inquire into what could hardly qualify as
standard operating procedure, given the surrounding circumstances
of the case.
While it is true that a preliminary investigation is essentially
inquisitorial, and is often the only means to discover who may be
charged with a crime, its function is merely to determine the
existence of probable cause. 8 Probable cause has been defined as
the existence of such fact and circumstances as would excite the
belief, in a reasonable mind, acting on the facts within the

knowledge of the prosecution, that the person charged was guilty of

the crime for which he was prosecuted.9
chanroble svirtuallaw lib rary

Probable cause is a reasonable ground of presumption that a matter

is, or may be, well founded, such a state of facts in the mind of the
prosecutor as would lead a person of ordinary caution and prudence
to believe, or entertain an honest or strong suspicion, that a thing is
so. The term does not mean actual and positive cause nor does it
import absolute certainty. It is merely based on opinion and
reasonable belief. Thus, a finding of probable cause does not require
an inquiry into whether there is sufficient evidence to procure a
conviction. It is enough that it is believed that the act or omission
complained of constitutes the offense charged. Precisely, there is a
trial for the reception of evidence of the prosecution in support of
the charge.10
chanroblesvi rt uallawl ibra ry

In the instant case, no less than the NBI pronounced after

conducting an autopsy that there was indeed negligence on the part
of the attending physicians in administering the anaesthesia. 11 The
fact of want of competence or diligence is evidentiary in nature, the
veracity of which can best be passed upon after a full-blown trial for
it is virtually impossible to ascertain the merits of a medical
negligence case without extensive investigation, research,
evaluation and consultations with medical experts. Clearly, the City
Prosecutors are not in a competent position to pass judgment on
such a technical matter, especially when there are conflicting
evidence and findings. The bases of a partys accusation and
defenses are better ventilated at the trial proper than at the
preliminary investigation.
A word on medical malpractice or negligence cases.
In its simplest terms, the type of lawsuit which has been called
medical malpractice or, more appropriately, medical negligence, is
that type of claim which a victim has available to him or her to
redress a wrong committed by a medical professional which has
caused bodily harm.
In order to successfully pursue such a claim, a patient must prove
that a health care provider, in most cases a physician, either failed

to do something which a reasonably prudent health care provider

would have done, or that he or she did something that a reasonably
prudent provider would not have done; and that that failure or
action caused injury to the patient.12
chanroble svirtual lawlib rary

Hence, there are four elements involved in medical negligence

cases: duty, breach, injury and proximate causation.
Evidently, when the victim employed the services of Dr. Antonio and
Dr. Reyes, a physician-patient relationship was created. In
accepting the case, Dr. Antonio and Dr. Reyes in effect represented
that, having the needed training and skill possessed by physicians
and surgeons practicing in the same field, they will employ such
training, care and skill in the treatment of their patients.13 They
have a duty to use at least the same level of care that any other
reasonably competent doctor would use to treat a condition under
the same circumstances. The breach of these professional duties of
skill and care, or their improper performance, by a physician
surgeon whereby the patient is injured in body or in health,
constitutes actionable malpractice.14 Consequently, in the event that
any injury results to the patient from want of due care or skill
during the operation, the surgeons may be held answerable in
damages for negligence.15
chanroble svirtuallaw lib rary

Moreover, in malpractice or negligence cases involving the

administration of anaesthesia, the necessity of expert testimony and
the availability of the charge of res ipsa loquitur to the plaintiff,
have been applied in actions against anaesthesiologists to hold the
defendant liable for the death or injury of a patient under excessive
or improper anaesthesia.16 Essentially, it requires two-pronged
evidence: evidence as to the recognized standards of the medical
community in the particular kind of case, and a showing that the
physician in question negligently departed from this standard in his
treatment.17
chanroblesvi rtual lawlib rary

Another element in medical negligence cases is causation which is

divided into two inquiries: whether the doctors actions in fact
caused the harm to the patient and whether these were the
proximate cause of the patients injury.18 Indeed here, a causal
connection is discernible from the occurrence of the victims death

after the negligent act of the anaesthesiologist in administering the

anesthesia, a fact which, if confirmed, should warrant the filing of
the appropriate criminal case. To be sure, the allegation of
negligence is not entirely baseless. Moreover, the NBI deduced that
the attending surgeons did not conduct the necessary interview of
the patient prior to the operation. It appears that the cause of the
death of the victim could have been averted had the proper drug
been applied to cope with the symptoms of malignant hyperthermia.
Also, we cannot ignore the fact that an antidote was readily
available to counteract whatever deleterious effect the anaesthesia
might produce. 19 Why these precautionary measures were
disregarded must be sufficiently explained.
The City Prosecutors were charged with violating Section 3(e) of the
Anti-Graft and Corrupt Practices Act which requires the following
facts:
1. The accused is a public officer discharging administrative or
official functions or private persons charged in conspiracy with
them;
2. The public officer committed the prohibited act during the
performance of his official duty or in relation to his public position;
3. The public officer acted with manifest partiality, evident bad faith
or gross, inexcusable negligence; and
4. His action caused undue injury to the Government or any private
party, or gave any party any unwarranted benefit, advantage or
preference to such parties. 20
chanroblesv irt uallawl ibra ry

Why did the complainant, petitioner in instant case, elect to charge

respondents under the above law?
While a party who feels himself aggrieved is at liberty to choose the
appropriate weapon from the armory, it is with no little surprise that
this Court views the choice made by the complainant widow.
To our mind, the better and more logical remedy under the
circumstances would have been to appeal the resolution of the City

Prosecutors dismissing the criminal complaint to the Secretary of

Justice under the Department of Justices Order No.
223, 21 otherwise known as the 1993 Revised Rules on Appeals
From Resolutions In Preliminary Investigations/Reinvestigations, as
amended by Department Order No. 359, Section 1 of which
provides:
Section 1. What May Be Appealed. - Only resolutions of the Chief
State Prosecutor/Regional State Prosecutor/Provincial or City
Prosecutor dismissing a criminal complaint may be the subject of an
appeal to the Secretary of Justice except as otherwise provided in
Section 4 hereof.
What action may the Secretary of Justice take on the appeal?
Section 9 of Order No. 223 states: The Secretary of Justice may
reverse, affirm or modify the appealed resolution. On the other
hand, He may motu proprio or on motion of the appellee, dismiss
outright the appeal on specified grounds. 22
chanroble svirtuallaw lib rary

In exercising his discretion under the circumstances, the

Ombudsman acted within his power and authority in dismissing the
complaint against the Prosecutors and this Court will not interfere
with the same.
WHEREFORE, in view of the foregoing, the instant petition is
DISMISSED, without prejudice to the filing of an appeal by the
petitioner with the Secretary of Justice assailing the dismissal of her
criminal complaint by the respondent City Prosecutors. No costs.
SO ORDERED.

THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellee,

vs.
NARCISO VISTAN Y DE LA CRUZ, defendant-appellant.
Ross & Lawrence, and Ewald E. Selph for appellant.
Acting Attorney-General Tuason for appellee.
VILLAMOR, J.:
The appellant was prosecuted in the Court of First Instance of Manila for the crime of
serious physical injuries through reckless imprudence and sentenced to imprisonment
for three months of arresto mayor, with the corresponding accessory penalties and to
pay the costs.
The complaint is as follows:
That on or about the 10th day of April, 1920, in the city of Manila, Philippine Islands,
while street car No. 203 of the Manila Electric Railroad and Light Co. was receiving
passengers at the intersection of M. H. del Pilar and Isaac Peral Streets of this city,
said accused, who was then and there the conductor in charge of said street car, did
then and there wilfully, unlawfully, and feloniously and with reckless imprudence
signal the motorman to go ahead without minding and without taking into account that
one Hugo Borromeo, whom he could then see was at that very moment about to board
the car with one foot on the running board, thereby causing the said Hugo Borromeo
to be thrown down by the jerk of the moving car and his foot overrun by the rear
wheels of said car No. 203 upon falling on the ground, with the result that his left foot
was crushed and injured to such an extent as to require medical attendance and
prevent the said offended party from engaging in his habitual work for a period of
more than ninety days; that due to said accident Hugo Borromeo lost his left foot
which had to be amputated. Contrary to law.
It appears from the record that on April 10, 1920, after two sons of the offended the
street car No. 203 which had stopped at the intersection of M. H. del Pilar and Isaac
Peral Streets of this city, and also in attempting to board the same car, the said Hugo
Borromeo with his right hand took a hold of the iron bar on the right side of the only
entrance door, and with the left the iron bar in the middle of the entrance. When he
had his right foot on the platform, the conductor in charge of the car, the accused

herein, gave the signal to start. Thereupon the car suddenly moved forward with a jerk
thus causing his left hand to slip off while the right one was pinioned between the iron
bar and the woodwork upon which it was fixed and he was unable to draw it out
immediately due to the speed of the car. In the meantime he was momentarily dragged
along and when his knees were touching the ground, he felt that his left foot had
become numb, unaware that his foot was overrun by the wheel, until he was on the
ground about 10 meters, more or less, from the place where the car had started.
The defense tried to prove that the street car being in motion, the offended party ran
after it and attempted to board it, but unfortunately missed the running board and upon
falling down one of his feet was caught by the wheels of the car. The witnesses who
testified to this fact undoubtedly referred to the fact related by the aggrieved party
himself when he gave the tails as to how he was for a time dragged by the car. It was
not necessary for the offended party to run after the car in order to board it, as it was
stopped when his two sons entered it, behind whom he was with his hands holding the
bars of the car, and was then placing his right foot on the running board when the car
started in response to the signal to start given at that very moment by the accused. The
fact is that due probably to the abrupt motion of the car in starting, the left hand of the
offended party slipped off and his right hand was caught between the iron bar and
woodwork upon which it was attached and having lost the equilibrium he was dragged
along for a short distance until his left foot was caught by the wheels of the car. This
fact, which was seen by the witness Lawson who was some distance behind the car,
might cause the impression that the offended party was running after the car when he
fell down, and, we believe, the witness testified under this impression.
We believe it to be clear that at the time of boarding the car, the offended party was
watching the man who gave the signal to start, that is, the conductor, and the latter,
who, had his eyes toward the door, seeing the nobody was alighting or boarding the
car, rang the bell, whereupon the car started. It is not improbable that when the
accused saw the last passenger with both hands clinging to the holding device of the
car and one foot on the running board, he thought that the passenger had completely
boarded the car and that is why he gave the signal to start. The question that present

itself is whether or not the accused acted with reckless negligence as alleged in the
information.
In the case of U.S. vs. Gomez (R. G. No. 14068), 1 the accused was convicted of the
crime of homicide through reckless negligence. The accused was the motorman of a
street car that collided with a carabao cart at the intersection of Concepcion and
Arroceros Streets of the city of Manila. As a result of the collision, one of the
occupants of the cart, Santos Alcartado, was thrown under the car and killed. In
discussing the responsibility of the accused, this court, among other things, said:
Upon the other point, whether the negligence or imprudence of the accused can
properly be denominated rash it is to be observed that the amount of care and
diligence which a man is required to use in a particular situation in order to avoid the
imputation of negligence varies with the obviousness of the risk. If the danger of
doing injury to the person or property of another by the pursuance of a certain line of
conduct is great, the individual who proposes to pursue that particular course is bound
to use great care in order to avoid the foreseeable harm. On the other hand, if the
danger is slight, only a slight amount of care is required. It is thus seen that there are
infinite shades of care or diligence, from the slightest momentary thought or transient
glance of attention to the most vigilant anxiety and solicitude, and whether a person is
bound to use a high or a low degree of care depends upon the situation presented in
the particular case. Now the term negligence is used to indicate the legal delinquency
which results wherever a man fails to exhibit the care which he ought to exhibit,
whether it be slight, ordinary or great; and it is clear that in a situation where
immediate danger to an individual is indicated the requirement for the exercise of a
high degree of care is more exigent than where nothing more than possible harm to
inanimate things is concerned. As experience only too well teaches collisions between
cars and vehicles carrying people in the streets are fraught with a high degree of
danger to the passengers, and it results that a high degree of care is required of those
who have control of the agencies involving such danger. The failure to use the
requisite care in such cases is properly denominated gross negligence or rash
imprudence if the actor, having at his command the means of avoiding the harm, fails
to avail himself of it.
[[ ]]

The term "rash imprudence," as used in the Spanish Code, would seem to be
approximately equivalent to the "gross negligence" of the common law; and as was
once observed by a brilliant English judge, gross negligence is only negligence with a
vituperative epithet (Rolfe, B., in Wilson vs. Brett [1843], Mees. and Wels., 113). The
same may substantially be said of the term "rash imprudence" in Spanish law. It is
imprudence with a vituperative epithet. In common usage the word "rash" seems
sometimes to imply a wanton disregard of consequences, indicative of a state of mind
bordering upon deliberate intention to inflict a positive injury. The legal import of the
expression is in our opinion of somewhat greater latitude, since it wholly excludes the
idea of malice and under conditions more readily felt than defined is satisfied by proof
of mere lack of foresight.
"Reckless imprudence consists in doing or not doing voluntarily, but without malice,
an act, from which material injury results due to lack of foresight, unexcusable on the
part of the person executing or omitting to do it." (Decision of the supreme court of
Spain, May 14, 1904, referred to by Viada in his Commentaries, 5 Supp., 457.)
"Reckless imprudence, punishable as crime, consists in the lack of prevision and
rational precaution with which all acts must be executed, from which probable injury
or damage may easily result." (Decision of the supreme court of Spain, March 16,
1905, referred to by Viada in his Commentaries, 5 Supp., 461.)
The distinction between simple imprudence, which is a constitutive element of a
misdemeanor under article 590 of the Penal Code, and rash imprudence, which is a
constitutive element of the offense punishable under article 580 of the same Code, is
not clearly indicated in the books; but we think the weight of authority will be found
to support the proposition that where immediate personal harm, preventable in the
exercise of reasonable care, is threatened to a human being by reason of a course of
conduct which is being pursued by another, and the danger is visible and consciously
appreciated by the actor, the failure to use reasonable care to prevent the threatened
injury constitutes reckless negligence.

Simple imprudence, on the other hand, is a mere lack of prevision in a situation where
either the threatened harm is not immediate or the danger is not openly visible. The
following is cited in Viada as a case of simple imprudence: A man goes hunting and
raises his gun to shoot at a bird. Upon lowering the gun without firing, he negligently
fails to lower the hammer; and while the gun is being thus carried cocked, it is
accidentally discharged with the result that a person casually in range of the gun is
wounded. As will be seen in this case, although there is imprudence on the part of the
hunter, there is not a conscious advertance to the danger to which the other person is
being subjected. Said the court:
"The fact set forth as proved in the first finding of the court below is not sufficiently
such as would indicate real reckless imprudence on the part of Cecilio Mogarra,
inasmuch as the act of lowering his gun ad putting it under his arm without lowering
the hammer, which constitute negligence, does not show grave fault, but only mere
lack of foresight chargeable as simple imprudence." (Decision of the supreme court of
Spain, March 12, 1904, referred to by Viada in his Commentaries, 5 Supp., 457.)
Taking into consideration all the circumstances of the case at bar, we are of the
opinion that the act of the accused in giving the order to start the car, when the
offended party had his hands already on the holding devices of the car and his foot on
the running board, constitutes carelessness or negligence, but does not show grave
fault amounting to reckless imprudence and the accused having acted with simple
imprudence or negligence, has incurred the penalty provided by article 590, case No.
4, of the Penal Code.
The judgment appealed from is modified, and the accused and appellant is sentenced
to pay a fine of 60 pesetas and to suffer the corresponding subsidiary imprisonment in
case of insolvency and to censure, with the costs of this instance de oficio. So ordered.
MARCIAL F. SAMSON, City Mayor of Caloocan City, THE CITY TREASURER, THE CITY AUDITOR,
both of Caloocan City, and HERMOGENES LIWANAG, Petitioners, v. THE HONORABLE COURT OF
APPEALS, CFI-RIZAL AND FELICIANO C. TALENS, Respondents.
Hermenegildo V. Lopez and Amado B. Cresini, Jr., for Petitioners.
Dominador G. Magno for Private Respondent.

SYLLABUS

1. STATUTORY CONSTRUCTION; CIVIL SERVICE LAW; EXCEPTIONS UNDER SECTION 5 THEREOF STRICTLY
CONSTRUED. As a general rule, position in all branches, subdivisions and instrumentalities of the
government, including those in government owned or controlled corporations, belong to the competitive
service. The only exceptions are those expressly declared by law to be in the non-competitive service and
those which are policy-determining, primarily confidential or highly technical in nature. (Section 3, R.A.
2260, as amended by R.A. No. 6040).. Under the rules of statutory construction, exceptions, as a general
rule; should be strictly, but reasonably construed; they extend only so far as their language fairly warrants,
and all doubts should be resolved in favor of the general provisions rather than the exception. Where a
general rule is established by statute with exceptions, the court will not curtail the former nor add to the
latter by implication . . . (Francisco, Statutory Construction, p. 304, citing 69 C.J., Section 643, pp. 10921093, Italics supplied). The exceptions provided for in Section 5 of Republic Act No. 2260, as amended
should be, therefore, strictly construed. It follows then that on this general governing principle, the position
of assistant secretary to the City Mayor of Caloocan City should be considered as belonging to the noncompetitive service.
2. ADMINISTRATIVE LAW; SECTION 5(F), REPUBLIC ACT NO. 2260; POSITIONS OF SECRETARY TO THE
MAYOR AND ASSISTANT SECRETARY TO THE MAYOR DISTINGUISHED AND EXPLAINED. It is not the
powers and duties exercised and discharged by the Assistant Secretary to the Mayor as may be delegated
and assigned by the Mayor that makes the position of Assistant Secretary primarily confidential. While duties
possibly involving confidential matters are sometimes handled by the Assistant Secretary to the Mayor, this
does not necessarily transform the nature of the position itself as one that is primarily and highly
confidential. It should be stressed that the position of Secretary to the Mayor and that of Assistant Secretary
to the Mayor are two separate and distinct positions. While both individuals may be called "secretary",
nevertheless, one is certainly of a higher category and rank than the other with the added distinction that a
Secretary must enjoy the confidence of the Mayor. However, the position of Assistant Secretary being of a
lower rank, need not carry the requisites attaching to the primarily confidential position of the actual
Secretary to the Mayor. Moreover, if it was the intention of Congress to include the Assistant Secretary
within the purview of Section 5(f) of R.A. No. 2260, as amended, so that Assistant Secretaries are could
have been easily worded "secretaries and their assistance."
3. ID.; ID.; ID. What petitioners fail to consider is that an "assistant secretary", although described as
secretary, technically differs in function from the "Secretaries." An "assistant" merely helps, aids or serves in
a subordinate capacity to the person who is actually clothed with all the duties and responsibilities Of
"secretary." Needless to say, the functions strictly attributable to a "secretary" and which would repose on
such person the trust and confidence of the employer, is not automatically vested or transferred to as
"assistant secretary", because the latter simply assists or aids the former in the accomplishment of his
duties.

DECISION

ALAMPAY, J.:

The sole issue to be resolved in this case is the legality of Administrative Order No. 3, issued on January 10,
1972, by the then mayor Marcial F. Samson, of Caloocan City, one of the petitioners herein, whereby
petitioner mayor summarily terminated the services of the private respondent, Feliciano C. Talens, who held
the position of Assistant Secretary to the Mayor, on the ground of "lack and loss of confidence" and
appointing in place of the latter Hermogenes Liwag, a co-petitioner in this case. Cited in support of the
challenged administrative order is section 5(f) of Republic Act No. 2260, otherwise known as the Civil
Service Act of 1959, as amended. The above-cited provision declares the position of secretaries to city
mayors non-competitive and this was interpreted by herein petitioner Mayor as to include the position of
Assistant Secretary to the Mayor.
In a resolution dated October 29, 1982, this Court granted the motion of the widow of private respondent to
substitute the heirs of private respondent Feliciano C. Talens in place of respondent, in view of the latters
death on August 28, 1982.

There is no dispute as to the factual antecedents of this case. Private respondent Feliciano C. Talens, a civil
service eligible, was appointed on March 16, 1970 by then City Mayor Macario Asistio of Caloocan City, as
Assistant Secretary to the Mayor. His appointment was attested to as a permanent one under Section 24(b)
of Republic Act No, 2260, as amended by the Commissioner of Civil Service. He performed the duties of
Assistant Secretary to the Mayor and even twice received increases in salary.
On January 11, 1972, City Mayor Marcial F. Samson, who succeeded City Mayor Macario Asistio, furnished
private respondent herein with the questioned Administrative Order No. 3, which is hereunder
reproduced:
jg c:chan roble s.com.p h

"TO: Mr. Feliciano C. Talens

Assistant Secretary to the Mayor
Caloocan City
"Pursuant to the provision of Sec. 5(f) of R.A No. 2260, otherwise known as the Civil Service Act of 1959, as
amended, making the positions of Secretaries of City Mayors, among others, noncompetitive, and it being
the inherent nature of your position to be primarily and highly confidential, you are hereby informed and
advised that effective the closing hours of January 10, 1972, your services as Assistant Secretary to the
Mayor are hereby TERMlNATED for lack and loss of confidence.
"You are therefore directed to turnover all official documents, papers and all other government records to
Atty. Casiano P. Anunciacion, Jr.
(SGD.) MARCIAL F. SAMSON
City Mayor" (Rollo, p. 20)
Private respondent acknowledging receipt of said order demurred on the ground that his position as
Assistant Secretary to the Mayor was not covered by Sec. 5(f) of the Civil Service Law, which specifies as
non-competitive only the positions of "secretaries of provincial city and municipal boards and councils" He
asked that the administrative order be recalled as he was permanently appointed to a classified position in
the city government and that in accordance with Section 32 of the Civil Service Law, he can be removed
only for cause and after due process has been observed.
On January 17, 1972, petitioner Mayor, in a letter-reply sent to private respondent, declined to recall
Administrative Order No. 3, reiterating the reasons set forth in the order. Consequently, a petition
forcertiorari, prohibition, mandamus and quo warranto was filed with the then Court of First Instance of
Caloocan City on January 21, 1972 by the private respondent in order to annul the disputed administrative
order, to enjoin the petitioner mayor, treasurer and auditor from enforcing the same, and to compel all the
said public officials to pay to private respondent the salaries and emoluments due to him as Assistant
Secretary to the Mayor. He also sought the ouster from the disputed position of Hermogenes Liwag, one of
the petitioners herein, who was appointed by Mayor Samson as Assistant Secretary to the Mayor, in place of
private Respondent.
The Court of First Instance ruled in favor of the plaintiff Feliciano C. Talens, by declaring Administrative
Order No. 3 null and void, and granting all the aforestated reliefs claimed by Feliciano C. Talens. On Appeal
of the said judgment to the Court of Appeals, the decision of the trial court was affirmed. Hence this
petition.
According to petitioners, the only issue which this Court has to resolve is the legality of the termination of
private respondent Talens services as assistant secretary to the Mayor of Caloocan City (Petitioners Brief,
p. 4).
Petitioners contention is that the termination of private respondents services is authorized by Section 5(f)
of Republic Act No. 2260, as amended by Republic Act No. 6040 which declares the position of Secretaries of
City Mayors as belonging to the non-competitive service. Petitioners further aver that termination of the
services of private respondent Talens is justified by the fact that the disputed position of Assistant Secretary
to the Mayor is inherently and primarily highly confidential in nature.
Section 5 of Republic Act No. 2260, as amended by Republic Act No. 6040 provides that "The non-

competitive service shall be composed of positions expressly declared by law to be in the non-competitive
service and those which are policy determining, primarily confidential or highly technical in nature" and
continues with an enumeration of specific officers and employees embraced within the scope of noncompetitive service. Among those included in the enumeration are heads of departments created in charters
of cities and secretaries of provincial governors, city mayors and municipal mayors.
Although the position of assistant secretary to the city mayor is not among those expressly declared in
Section 5 of Republic Act No. 2260, as amended, to be within the non-competitive service,Petitioners,
however, argue that an assistant secretary is also a secretary, and thus comprised within the general term
"secretaries" as provided for in Section 5(f).
We are not persuaded and find unacceptable such submission of the herein petitioners. As may be noted,
the general purpose of the Civil Service Law (Republic Act No. 2260) is "to insure and promote the
constitutional mandate regarding appointments only according to merit and fitness, and to provide within
the public service a progressive system of personal administration to insure the maintenance of an honest
and efficient progressive and courteous civil service in the Philippines." (Section 2, R.A. 2260).
As a general rule, position in all branches, subdivisions and instrumentalities of the government, including
those in government owned or controlled corporations, belong to the competitive service. The only
exceptions are those expressly declared by law to be in the non-competitive service and those which are
policy-determining, primarily confidential or highly technical in nature. (Section 3, R.A. 2260, as amended
by R.A. No. 6040).
cralawnad

Under the rules of statutory construction, exceptions, as a general rule, should be strictly, but reasonably
construed; they extend only so far as their language fairly warrants, and all doubts should be resolved in
favor of the general provisions rather than the exception. Where a general rule is established by statute with
exceptions, the court will not curtail the former nor add to the latter by implication . . . (Francisco, Statutory
Construction, p. 304, citing 69 C.J., Section 643, pp. 1092-1093,Emphasis supplied).
Where a statute enumerates the subjects or things on which it is to operate, it is to be construed as
excluding from its effects all those not expressly mentioned (Martin, Statutory Construction, 1979 ed., p. 71
citing Daves Place v. Liquor Control Comm., 269 N.W., p. 504).
The exceptions provided for in Section 5 of Republic Act No. 2260, as amended should be, therefore, strictly
construed. It follows then that on this general governing principle, the position of assistant secretary to the
City Mayor of Caloocan City should be considered as belonging to the non-competitive service.
The parties are agreed that the nature of the functions attaching to office or position ultimately determines
whether such position is policy-determining, primarily confidential or highly technical. It is the nature of the
position which finally determines a position to be primarily confidential (Leon A. Pinero, Et. Al. v. Rufino
Hechanova, Et Al., 18 SCRA 421). Stated differently, it is not the powers and duties exercised and
discharged by the Assistant Secretary to the Mayor as may be delegated and assigned by the Mayor that
makes the position of Assistant Secretary primarily confidential. While duties possibly involving confidential
matters are sometimes handled by the Assistant Secretary to the Mayor, this does not necessarily transform
the nature of the position itself as one that is primarily and highly confidential.
It should be stressed that the position of Secretary to the Mayor and that of Assistant Secretary to the
Mayor are two separate and distinct positions. While both individuals may be called "secretary,"
nevertheless, one is certainly of a higher category and rank than the other with the added distinction that a
Secretary must enjoy the confidence of the Mayor. However, the position of Assistant Secretary being of a
lower rank, need not carry the requisites attaching to the primarily confidential position of the actual
Secretary to the Mayor.
Moreover, if it was the intention of Congress to include the Assistant Secretaries within the purview of
Section 5(f) of R.A. No. 2260, as amended, so that Assistant Secretaries are also embraced in the noncompetitive service, the law could have been easily worded "secretaries and their assistance."
cralaw virtua1aw l ibrary

Petitioners also contend that an assistant secretary is also a secretary and thus included in the general term
"secretaries" as provided for in Section 5(f) in the above-quoted provision. From this premise, the
conclusion drawn by petitioners is that the position of Assistant Secretary to the Mayor should be considered
as in the non-competitive service and that the tenure of assistant secretary lasts only as long as the Mayors
confidence in him remains. Petitioners submission is that the assistant secretary is no less a secretary to

the mayor.
We are not disposed to agree with petitioners. What petitioners fail to consider is that an "assistant
secretary," although described as secretary, technically differs in function from the "Secretaries." An
"assistant" merely helps, aids or serves in a subordinate capacity to the person who is actually clothed with
all the duties and responsibilities of "secretary." Needless to say, the functions strictly attributable to a
"secretary" and which would repose on such person the trust and confidence of the employer, is not
automatically vested or transferred to an "assistant secretary," because the latter simply assists or aids the
former in the accomplishment of his duties.
The rulings of this Court in De Los Santos v. Mallare, 87 Phil. 289 and Besa v. PNB, 33 SCRA 330 which have
been invoked by the petitioners do not provide support to petitioners case. The aforestated cases have no
parallel to the case at bar. The case of De los Santos v. Mallare, relates to a quo warranto proceeding,
questioning the legality of the appointment of the respondent therein to the office of the City Engineer for
the City of Baguio which petitioner De los Santos was then occupying. Said position was in fact declared to
be neither primarily confidential, policy-determining, nor highly technical and petitioner therein was
adjudged to be entitled to remain in office and the respondents appointment was declared ineffective.
Neither would the other case of Besa v. PNB find any application to the instant case because the position
therein involved was that of Chief Legal Counsel which, by its very nature, was rightfully ruled to be both
impressed with a highly technical aspect and confidential character. It can be readily noted that the facts
and circumstances in the present case and even the principal issue involved in the case at bar are distinctly
different from the cases cited by petitioners.
More pertinent and relevant are the pronouncements in Ingles v. Mutuc, 26 SCRA 177, wherein We stated:

cralaw nad

". . . On the contrary, the compensation attached and the designation given thereto suggest the purely, or,
at least, mainly clerical nature of their work. The fact that they, at times, handle confidential matters does
not suffice to characterize their positions as primarily confidential. Indeed, it is admitted that plaintiffs,
likewise, handle other routine matters, and it has not even been shown that their work is, at least,
principally confidential."
cralaw vi rtu a1aw lib rary

WHEREFORE, the decision appealed from is hereby AFFIRMED but considering the notice of death given to
this Court of the death of the herein private respondent Feliciano C. Talens, on August 28, 1982 (Rollo, p.
184), the dispositive portion of the subject decision of the trial court in Civil Case No. C-2308, is hereby
MODIFIED, to now read as follows:
jgc:c han robles. com.ph

"IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, the Court hereby renders judgment in favor of
Petitioner Feliciano C. Talens, and against the Respondents, and
1.) Declaring Administrative Order No. 3, dated January 10, 1972, of Respondent City Mayor Marcial F.
Samson, null and void;
2.) Ordering Respondents, except private respondent Hermogenes Liwag, to pay Petitioner Feliciano C.
Talens, all the salaries and emoluments appurtenant to and due to the latter as Assistant Secretary to the
Mayor of Caloocan City, but for a limited period of three years. Without costs."
cralaw virt ua1aw lib rary

SO ORDERED.

G.R. No. 110954 May 31, 1995

DELFIN N. DIVINAGRACIA, JR., AND ALEXIS D. SAN
LUIS, Petitioners, v. HON. PATRICIA A. STO. TOMAS, RAMON P.
ERENETA, JR., and PRESCILLA B. NACARIO,Respondents.
chanrobles vi rtua l law lib rary

BELLOSILLO, J.:

The primordial purpose of our civil service laws is to establish and

maintain a merit system in the selection of public officers and
employees without regard to sex, color, social status or political
affiliation. But there are times when appointments to public office
are dominated by partisan favoritism and patronage, where tenurial
rights are subject to the whims of officialdom.
chanro blesvi rt ualawlib ra rychan roble s vi rtual law lib rary

On 1 August 1980 Filomena R. Mancita was appointed Municipal

Development Coordinator (MDC) of Pili, Camarines Sur, in a
permanent capacity. On 14 March 1983 when the Local Government
Code took effect, the office was renamed Municipal Planning and
Development Coordinator (MPDC). 1 On 28 March 1983
the Sangguniang Bayan of Pili approved Resolution No. 38 creating
and organizing the Office of MPDC. 2 Mancita held over the position
until 1985.
chanroblesv irt ualawli bra rycha nrob les vi rtual law lib rary

On 1 January 1985 the Joint Commission on Local Government

Personnel Administration approved the reorganization plan and
staffing pattern of the Municipality of Pili. 3 In a letter dated 17 June
1985 Mayor Anastacio M. Prila notified Mancita that her services
were being terminated effective at the close of office hours on 1 July
1985 on the ground that the Office of MDC was abolished as a result
of the reorganization of the local government of Pili. Private
respondent Prescilla B. Nacario who was then the Municipal Budget
Officer was appointed MPDC on 10 June 1985 to take effect on 1
July 1985. 4Nacario was replaced by Digna Isidro as Municipal
Budget Officer. Isidro was succeeded a year later by Eleanor
Villarico who served until 1990.
chanroblesvi rtua lawlib rary chan roble s virtual law l ibra ry

In 1988 the Local Government Officers Services, which included the

local Budget Office, was nationalized and placed under the
Department of Budget and Management. As a result, the authority
to appoint the Budget Officers of the different local government
units devolved upon the Secretary of the Budget. When Villarico
resigned on 1 March 1990 the Budget Office became vacant until 30
September 1991, or for more than a year, owing to the lack of a
qualified candidate that the Secretary of the Budget could appoint.
In the meantime, Juan Batan, the former Municipal Budget Officer
of Baao, Camarines Sur, was appointed Officer-in-Charge of the

Municipal Budget Office of Pili. He was later replaced by Francisco

Deocareza, the former Budget Officer of Naga City, in the same
capacity. 5
On 1 October 1991, petitioner Alexis D. San Luis, Cashier II of the
Department of Environment and Natural Resources (DENR), was
temporarily appointed Municipal Budget Officer of Pili by Secretary
Guillermo N. Carague of the Department of Budget and
Management. When control over the Local Government Officers
Services was returned to the local government units by virtue of
the Local Government Code of 1991 (R.A. 7160 as implemented by
E.O. 503), San Luis was reappointed to the same position on 22
June 1992, this time in a permanent capacity, by petitioner Delfin N.
Divinagracia, Mayor of Pili. 6
San Luis started in the career civil service in 1977 as a casual clerk
in the DENR, rising from the ranks until he was appointed Cashier II
based in Legaspi City, the position he was holding when appointed
Municipal Budget Officer of Pili. 7
Meanwhile, Mancita appealed her termination to the Merit Systems
and Protection Board (MSPB). 8 On 20 June 1989 the MSPB declared
her separation from the service illegal, holding that the Office of the
Municipal Development Coordinator was abolished by the Local
Government Code of 1991 and not by the reorganization of the
Municipality of Pili as claimed by Mayor Prila. According to the
MSPB, Mancita was in fact qualified for the newly-created position of
MPDC since the powers and duties of the two positions were
essentially the same. The MSPB ordered Mayor Divinagracia to
reinstate Mancita to the position of MPDC or to an equivalent
position, and to pay her backwages from the date of her
separation. 9 The decision of MSPB was appealed by Mayor
Divinagracia to the Civil Service Commission but the appeal was
dismissed on 16 July 1990 per CSC Resolution No. 90-657. 10 On 15
October 1990, Mayor Divinagracia informed private respondent
Nacario that she was being relieved of her position as MPDC
effective 16 November 1990 in order to comply with the MSPB
decision to reinstate Mancita as MPDC.
chanroblesv irtualawli bra rycha nrob les vi rtua l law lib rary

On 8 November 1990 private respondent Prescilla B. Nacario filed a

Petition for Declaratory Relief and Prohibition with Preliminary
Injunction with the Regional Trial Court of Pili, Br. 31, docketed as
Civil Case No. P-17819, against CSC Chairperson Patricia A. Sto.
Tomas, Mayor Delfin N. Divinagracia, Jr., Elium Banda, Regional
Director of CSC in Region 5, and Filomena R. Mancita, praying for
the annulment of CSC Resolution No. 90-657. Presiding Judge
Ceferino P. Barcinas of Br. 31 issued a temporary restraining order
enjoining the implementation of the questioned CSC resolution and
set the date for the hearing of the application for preliminary
injunction. Mancita filed a motion to dismiss on the ground that the
trial court had no jurisdiction over the subject matter. Her motion
was denied. Mancita then filed a special civil action
for certiorariunder Rule 65 before this Court questioning the denial
of her motion. Through Mr. Justice Teodoro R. Padilla we granted
the petition and held that the lower court had no jurisdiction over
the case since all decisions, orders and resolutions of the Civil
Service Commission were subject to review only by this Court
on certiorari under Rule 65 of the Rules of Court. 11
While the petition of Mancita was pending with us, Nacario sent a
query to public respondent Commission asking about her status as a
permanent employee of the Municipality of Pili after she had
accepted the position of MPDC. In a letter dated 8 December 1992
public respondent opined that the reinstatement of Mancita to the
position of MPDC was not a valid cause for Nacario's termination,
and since she was the former Municipal Budget Officer she had the
right to return to that position. 12
On 15 March 1993 Mayor Divinagracia wrote to CSC Chairperson
Patricia A. Sto. Tomas seeking a reconsideration of her opinion of 8
December 1992. Mayor Divinagracia explained the factual
circumstances behind the ouster of Mancita and the resulting
appointment of Nacario to the position of MPDC, arguing that San
Luis was validly appointed by the Secretary of the Budget and
confirmed by the CSC, hence, entitled to security of tenure. 13
On 27 May 1993 public respondent issued CSC Resolution No. 931996 denying the request of Mayor Divinagracia for a

reconsideration. Upholding Nacario's right to security of tenure the

CSC held that the reinstatement of Mancita to the position of MPDC
could not be a valid cause for the termination of Nacario. Public
respondent relied on Sec. 13, Rule VI, of the Omnibus Rules
Implementing Book V of E.O. No. 292, otherwise known as
the Revised Administrative Code of 1978 in directing the restoration
of Nacario to her former position. Sec. 13 mandates the return of an
appointee, in a chain of promotions, to his former position once his
appointment is subsequently disapproved.
chanroblesv irt ualawli bra rychan rob les vi rtual law lib rary

Petitioners have come to us for relief praying that CSC Resolution

No. 93-1996 be nullified for having been issued with grave abuse of
discretion. On 5 October 1993, upon motion of petitioners, this
Court issued a status quo ante order enjoining the enforcement of
the questioned CSC order. 14 Petitioners contend that Sec. 13, Rule
VI, of the Omnibus Rules Implementing the Revised Administrative
Code (E.O. 292) does not apply to the present case because the
rule covers only appointments in a chain of promotions and not
where a public officer was merely transferred to another position of
the same rank, grade and level.
chanroblesvi rtua lawlib rary chan roble s virtual law lib rary

Petitioners further contend that Nacario was deemed to have

vacated her position as Budget Officer when she accepted her
appointment as MPDC considering that there were several
appointments made to the Budget Office in the past eight (8) years
since her transfer. 15 According to petitioners, San Luis was also
denied his right to be heard when public respondent ordered him to
vacate his position without affording him an opportunity to contest
the claim of Nacario thus violating his constitutional right to due
process. 16
Upon the other hand, private respondent claims that she did not
voluntarily apply for transfer from the Budget Office to the Office of
MPDC but was constrained to "accept" the new position because of
Mayor Prila. She was, in her own words, "a passive participant in
the movement of personnel" in the municipal government of Pili
having acted as a "subservient public official" in assuming the
position of MPDC.
chanroblesvi rtualaw lib raryc han robles v irt ual law l ibra ry

Nacario maintains that her "acceptance" of the position of MPDC

which she admits is of the same rank, salary grade and level was
motivated by her respect for Mayor Prila who was then her superior.
In fact, according to her, she applied for the position of Budget
Officer with the Department of Budget and Management while she
was MPDC indicating that she did not abandon or relinquish her
former position as alleged by petitioners. 17
For their part, public respondents Sto. Tomas and Ereneta, Jr.,
insist on the application to the present case of the automatic
reversion rule provided under Sec. 13, Rule VI, of the Omnibus
Rules Implementing Book V of E.O. 292. They submit that the term
"chain of promotions" must not be interpreted in a literal, rigid and
narrow sense but must be construed liberally in favor of private
respondent who merely accepted the position of MPDC to
accommodate her superior unaware that her new appointment
thereto would be infirmed. 18
We deny the petition. Petitioner Alexis D. San Luis cannot hold on to
the position of Municipal Budget Officer. On the other hand,
respondent Prescilla B. Nacario who is protected by law in her
security of tenure should be reinstated thereto.
chanroblesv irt ualawli bra rycha nrob les vi rtua l law lib rary

Sec. 13 of the Omnibus Rules Implementing Book V of E.O. 292

provides that Sec. 13. All appointments involved in a chain of promotions must be
submitted simultaneously for approval by the Commission. The
disapproval of the appointment of a person proposed to a higher
position invalidates the promotion of those in lower positions and
automatically restores them to their former positions. However, the
affected persons are entitled to the payment of salaries for services
actually rendered at a rate fixed in their promotional appointments.
Under the aforecited section, before a public official or employee
can be automatically restored to her former position, there must
first be a series of promotions; second, all appointments are
simultaneously submitted to the CSC for approval; and third, the
CSC disapproves the appointment of a person proposed to a higher
position.
chanroble svi rtualaw lib raryc han robles vi rt ual law li bra ry

The essential requisites prescribed under Sec. 13 do not avail in the

case at bench. To start with, the movement of Nacario from the
Budget Office to the Office of MPDC cannot be considered a
promotion for the term connotes an increase in duties and
responsibilities as well as a corresponding increase in
salary. 19 Conformably therewith, we find the movement of Nacario
one of lateral transfer. 20
A careful examination of the qualifications, powers and duties of a
Budget Officer and an MPDC provided under Secs. 475 and 476 of
the Local Government Code of 1991 shows that the latter office is
not burdened with more duties and responsibilities than the former.
It is also interesting to note that there was, on the contrary, a
reduction in the basic salary of Nacario, from P30,505.20 per
annum 21 as Budget Officer to P27,732.00per annum 22 as MPDC.
Moreover, private respondent admitted in her comment and in her
memorandum that the position of Budget Officer and MPDC were of
the same rank, salary grade and level. 23 This was attested to by
Vilma J. Martus, the Human Resource Management Officer of Pili,
who certified that per Position Allocation List (PAL) of the
municipality the Budget Officer and MPDC are of equal level. 24
Aside from the lack of a series of promotions, the other two (2)
requisites are not also present, i.e., the appointments of the parties
concerned were not simultaneouslysubmitted to the CSC for
approval - the appointment (permanent) of Nacario was approved
by the CSC on 13 June 1985 while the appointment (permanent) of
San Luis was approved by the CSC on 9 February 1993 - and, the
ouster of Nacario from the Office of MPDC was a result of the MSPB
decision directing the reinstatement of Mancita and not because the
CSC disapproved her appointment as MPDC.
chanroblesvi rtua lawlib raryc han robles v irt ual law l ibra ry

While the contemporaneous construction of Sec. 13 by the CSC is

entitled to great weight and respect, this Court shall depart from
such interpretation when it is clearly erroneous 25 or when there is
no ambiguity in the rule, 26 as in the instant case, and yield to the
letter of the law taking its terms in their plain, ordinary and popular
meaning. 27

Let us now examine whether the lateral transfer of private

respondent was validly made in accordance with Sec. 5, par. 3, Rule
VII, Omnibus Rules Implementing Book V of E.O. 292. If not, then
private respondent is entitled to be protected in her security of
tenure.
chanroblesvi rtua lawlib rary chan roble s virtual law l ibra ry

Sec. 5, par. 3, of Rule VII provides that Transfer shall not be considered disciplinary when made in the
interest of public service, in which case, the employee concerned
shall be informed of the reasons therefor. If the employee believes
that there is no justification for the transfer, he may appeal his case
to the commission. (emphasis supplied)
According to Nacario she never applied or sought appointment by
transfer to the position of MPDC since she even had no prior
knowledge of her appointment. 28 She assumed the new
position only in order to comply with the move of Mayor Prila to
supposedly "reorganize" the municipal government of Pili. Nacario
did not question her transfer because she revered the mayor and
did not in any way intend to displease him.
chanroblesv irtualawl ibra rycha nrob les vi rtua l law lib rary

The submissive attitude displayed by private respondent towards

her transfer is understandable. Although Nacario was not informed
of the reasons therefor she did not complain to the mayor or appeal
her case to the CSC if in fact the same was not made in the interest
of public service. For it is not common among local officials, even
those permanent appointees who are more secured and protected in
their tenurial right, to oppose or question the incumbent local
executive on his policies and decisions no matter how improper they
may seem.
chanroblesv irtualawli bra rycha nrob les vi rtua l law lib rary

Even as early as 1968, in Nemenzo v. Sabillano,

29

we held that -

There are altogether too many cases of this nature, wherein local
elective officials, upon assumption of office, wield their new-found
power indiscriminately by replacing employees with their own
proteges, regardless of the laws and regulations governing the civil
service. Victory at the polls should not be taken as authority for the
commission of such illegal acts.

Private respondent was the Budget Officer of Pili for almost eight (8)
years from August 1980 until her transfer in July, 1988. 30 Nacario
appeared to be satisfied with her work and felt fulfilled as Budget
Officer until Mayor Prila appointed her MPDC to fill up the position,
which was not even vacant at that time. It was only seven (7) days
after Nacario's appointment when Mayor Prila informed Mancita that
her services were being terminated. Simply put, Mayor Prila was so
determined in terminating Mancita that he conveniently prearranged her replacement by Nacario. Although Nacario continued
to discharge her duties, this did not discourage her from trying to
regain her former position. Undaunted, she applied with the Office
of the Budget Secretary for the position of Budget Officer upon
learning that it was placed under the Department of Budget and
Management. She was not however successful.
chanroble svirtualawl ibra ryc hanro bles vi rt ual law li bra ry

In Sta. Maria v. Lopez 31 we distinguished between a transfer and a

promotion and laid down the prerequisites of a valid transfer thus A transfer is a "movement from one position to another which is of
equivalent rank, level and salary, without break in service."
Promotion is the "advancement from one position to another with an
increase in duties and responsibilities as authorized by law, and is
usually accompanied by an increase in salary" . . . A transfer that
results in promotion or demotion, advancement or reduction or a
transfer that aims to "lure the employee away from his permanent
position," cannot be done without the employees' consent.For that
would constitute removal from office. Indeed, no permanent
transfer can take place unless the officer or employee is first
removed from the position held, and then appointed to another
position. (emphasis provided)
The rule that unconsented transfers amount to removal is not
however without exception. As we further said in Sta. Maria, Concededly there are transfers which do not amount to removal.
Some such transfers can be effected without the need for charges
being proffered, without trial or hearing, and even without the
consent of the employee . . . . The clue to such transfers may be
found in the "nature of the appointment." Where the appointment
does not indicate a specific station, an employee may be transferred

or assigned provided the transfer affects no substantial change in

title, rank and salary . . . . Such a rule does not proscribe a transfer
carried out under a specific statute that empowers the head of an
agency to periodically reassign the employees and officers in order
to improve the service of the agency . . . . Neither does illegality
attach to the transfer or reassignment of an officer pending the
determination of an administrative charge against him; or to the
transfer of an employee, from his assigned station to the main
office, effected in good faith and in the interest of the service
pursuant to Sec. 32 of the Civil Service Act.
Clearly then, the unconsented lateral transfer of Nacario from the
Budget Office to the Office of MPDC was arbitrary for it amounted to
removal without cause hence, invalid as it is anathema to security
of tenure. When Nacario was extended a permanent appointment on
1 August 1980 and she assumed the position, she acquired a legal,
not merely an equitable, right to the position. Such right to security
of tenure is protected not only by statute, but also by the
Constitution 32 and cannot be taken away from her either by
removal, transfer or by revocation of appointment, except for cause,
and after prior notice. 33
The guarantee of security of tenure is an important object of the
civil service system because it affords a faithful employee
permanence of employment, at least for the period prescribed by
law, and frees the employee from the fear of political and personal
prejudicial reprisal. 34
Consequently, it could not be said that Nacario vacated her former
position as Budget Officer or abdicated her right to hold the office
when she accepted the position of MPDC since, in contemplation of
law, she could not be deemed to have been separated from her
former position or to have terminated her official relations therewith
notwithstanding that she was actually discharging the functions and
exercising the powers of MPDC. The principle of estoppel, unlike
in Manalo v. Gloria, 35 cannot bar her from returning to her former
position because of the indubitable fact that private respondent
reluctantly and hesitantly accepted the second office. The element

of involuntariness tainted her lateral transfer and invalidated her

separation from her former position.
chanro blesvi rt ualawlib ra rychan roble s virtual law lib rary

For another thing, the appointment of San Luis as Budget Officer

carried with it a condition. At the back of his appointment is
inscribed the notation Sa kondisyon nasa ayos ang pagkakatiwalag
sa tungkulin ng dating nanunungkulan, which when translated
means "Provided that the separation of the former incumbent is in
order." Considering that the separation of Nacario who was the
former incumbent was not in order, San Luis should relinquish his
position in favor of private respondent Nacario. This is, of course,
without prejudice to San Luis' right to be reinstated to his former
position as Cashier II of the DENR, he being also a permanent
appointee equally guaranteed security of tenure.
chanroble svi rtualawl ib raryc hanrobles vi rt ual law li bra ry

A final word. Petitioners cannot claim that they have been denied
due process of law by public respondent. The records reveal that
petitioners had the opportunity to question the adverse opinion
rendered by CSC Chairperson Sto. Tomas in a letter dated 15 March
1993. 36 The correspondence which was in the nature of a motion
for reconsideration constitutes sufficient opportunity for petitioners
who felt aggrieved to inform the CSC of their side of the
controversy. What is sought to be safeguarded in the application of
due process is not the lack of previous notice but the denial of
opportunity to be heard. 37
Before we write finis to this ponencia, we remind those public
officials who flaunt their authority - and those similarly inclined - to
faithfully abide by the Constitution and observe honestly and in
good faith the tenurial security of public servants who serve the
government with sincerity and dedication. They should not be
moved or removed from their established positions without any
lawful cause and pushed at will like pawns on the bureaucratic
chessboard.
chanroblesv irt ualawli bra rycha nrob les vi rtual law lib rary

WHEREFORE, premises considered, the petition is DISMISSED. CSC

Resolution No. 93-1996 is AFFIRMED insofar as it orders the
reinstatement of PRESCILLA B. NACARIO to the Office of Municipal
Budget Officer of Pili, Camarines Sur. Accordingly, petitioner Mayor
Delfin N. Divinagracia, or whoever is now the incumbent Mayor of

Pili or acting in his behalf, is ORDERED to reinstate private

respondent Prescilla B. Nacario immediately to the position of
Municipal Budget Officer of Pili and petitioner Alexis D. San Luis to
vacate the said office without prejudice to regaining his former
position in the government if legally feasible and warranted.
chanroblesv irtualawli bra rycha nrob les vi rtua l law lib rary

SO ORDERED.
Tanada vs Angara

The emergence on January 1, 1995 of the World Trade Organization, abetted

by the membership thereto of the vast majority of countries has revolutionized
international business and economic relations amongst states. It has
irreversibly propelled the world towards trade liberalization and economic
globalization. Liberalization, globalization, deregulation and privatization, the
third-millennium buzz words, are ushering in a new borderless world of
business by sweeping away as mere historical relics the heretofore traditional
modes of promoting and protecting national economies like tariffs, export
subsidies, import quotas, quantitative restrictions, tax exemptions and
currency controls. Finding market niches and becoming the best in specific
industries in a market-driven and export-oriented global scenario are replacing
age-old beggar-thy-neighbor policies that unilaterally protect weak and
inefficient domestic producers of goods and services. In the words of Peter
Drucker, the well-known management guru, Increased participation in the
world economy has become the key to domestic economic growth and
prosperity.
Brief Historical Background
To hasten worldwide recovery from the devastation wrought by the
Second World War, plans for the establishment of three multilateral
institutions -- inspired by that grand political body, the United Nations -- were
discussed at Dumbarton Oaks and Bretton Woods. The first was the World
Bank (WB) which was to address the rehabilitation and reconstruction of warravaged and later developing countries; the second, the International
Monetary Fund (IMF) which was to deal with currency problems; and the third,
the International Trade Organization (ITO), which was to foster order and
predictability in world trade and to minimize unilateral protectionist policies
that invite challenge, even retaliation, from other states. However, for a

variety of reasons, including its non-ratification by the United States, the ITO,
unlike the IMF and WB, never took off. What remained was only GATT -- the
General Agreement on Tariffs and Trade. GATT was a collection of treaties
governing access to the economies of treaty adherents with no
institutionalized body administering the agreements or dependable system of
dispute settlement.
After half a century and several dizzying rounds of negotiations, principally
the Kennedy Round, the Tokyo Round and the Uruguay Round, the world
finally gave birth to that administering body -- the World Trade Organization -with the signing of the Final Act in Marrakesh, Morocco and the ratification of
the WTO Agreement by its members.
[1]

Like many other developing countries, the Philippines joined WTO as a

founding member with the goal, as articulated by President Fidel V. Ramos in
two letters to the Senate (infra), of improving Philippine access to foreign
markets, especially its major trading partners, through the reduction of tariffs
on its exports, particularly agricultural and industrial products. The
President also saw in the WTO the opening of new opportunities for the
services sector x x x, (the reduction of) costs and uncertainty associated with
exporting x x x, and (the attraction of) more investments into the
country. Although the Chief Executive did not expressly mention it in his
letter, the Philippines - - and this is of special interest to the legal profession - will benefit from the WTO system of dispute settlement by judicial adjudication
through the independent WTO settlement bodies called (1) Dispute
Settlement Panels and (2) Appellate Tribunal. Heretofore, trade disputes were
settled mainly through negotiations where solutions were arrived at frequently
on the basis of relative bargaining strengths, and where naturally, weak and
underdeveloped countries were at a disadvantage.
The Petition in Brief
Arguing mainly (1) that the WTO requires the Philippines to place
nationals and products of member-countries on the same footing as Filipinos
and local products and (2) that the WTO intrudes, limits and/or impairs the
constitutional powers of both Congress and the Supreme Court, the instant
petition before this Court assails the WTO Agreement for violating the
mandate of the 1987 Constitution to develop a self-reliant and independent
national economy effectively controlled by Filipinos x x x (to) give preference
to qualified Filipinos (and to) promote the preferential use of Filipino labor,
domestic materials and locally produced goods.

Simply stated, does the Philippine Constitution prohibit Philippine

participation
in
worldwide
trade
liberalization
and
economic
globalization? Does it prescribe Philippine integration into a global economy
that is liberalized, deregulated and privatized? These are the main questions
raised in this petition for certiorari, prohibition and mandamus under Rule 65
of the Rules of Court praying (1) for the nullification, on constitutional grounds,
of the concurrence of the Philippine Senate in the ratification by the President
of the Philippines of the Agreement Establishing the World Trade Organization
(WTO Agreement, for brevity) and (2) for the prohibition of its implementation
and enforcement through the release and utilization of public funds, the
assignment of public officials and employees, as well as the use of
government properties and resources by respondent-heads of various
executive offices concerned therewith. This concurrence is embodied in
Senate Resolution No. 97, dated December 14, 1994.
The Facts
On April 15, 1994, Respondent Rizalino Navarro, then Secretary of
the Department of Trade and Industry (Secretary Navarro, for brevity),
representing the Government of the Republic of the Philippines, signed in
Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay
Round of Multilateral Negotiations (Final Act, for brevity).
By signing the Final Act, Secretary Navarro on behalf of the Republic of
the Philippines, agreed:
[2]

(a) to submit, as appropriate, the WTO Agreement for the consideration of their
respective competent authorities, with a view to seeking approval of the Agreement in
accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
On August 12, 1994, the members of the Philippine Senate received a
letter dated August 11, 1994 from the President of the Philippines, stating
among others that the Uruguay Round Final Act is hereby submitted to the
Senate for its concurrence pursuant to Section 21, Article VII of the
Constitution.
[3]

On August 13, 1994, the members of the Philippine Senate received

another letter from the President of the Philippines likewise dated August 11,
1994, which stated among others that the Uruguay Round Final Act, the
[4]

Agreement Establishing the World Trade Organization, the Ministerial

Declarations and Decisions, and the Understanding on Commitments in
Financial Services are hereby submitted to the Senate for its concurrence
pursuant to Section 21, Article VII of the Constitution.
On December 9, 1994, the President of the Philippines certified the
necessity of the immediate adoption of P.S. 1083, a resolution entitled
Concurring in the Ratification of the Agreement Establishing the World Trade
Organization.
[5]

On December 14, 1994, the Philippine Senate adopted Resolution No. 97

which Resolved, as it is hereby resolved, that the Senate concur, as it
hereby concurs, in the ratification by the President of the Philippines of the
Agreement Establishing the World Trade Organization. The text of the WTO
Agreement is written on pages 137 et seq. of Volume I of the 36volumeUruguay Round of Multilateral Trade Negotiations and includes various
agreements and associated legal instruments (identified in the said
Agreement as Annexes 1, 2 and 3 thereto and collectively referred to as
Multilateral Trade Agreements, for brevity) as follows:
[6]

ANNEX 1
Annex 1A:

Multilateral Agreement on Trade in Goods

General Agreement on Tariffs and Trade 1994
Agreement on Agriculture
Agreement on the Application of Sanitary and
Phytosanitary Measures
Agreement on Textiles and Clothing
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of the
Agreement on Tariffs and Trade 1994

General

Agreement on Implementation of Article VII of the General on

Tariffs and Trade 1994

Agreement on Pre-Shipment Inspection

Agreement on Rules of Origin
Agreement on Imports Licensing Procedures
Agreement on Subsidies and Coordinating Measures
Agreement on Safeguards
Annex 1B:

General Agreement on Trade in Services and Annexes

Annex 1C:

Agreement on Trade-Related Aspects of Intellectual Property Rights

ANNEX 2
Understanding on Rules and Procedures Governing the Settlement
of Disputes
ANNEX 3
Trade Policy Review Mechanism

On December 16, 1994, the President of the Philippines signed the

Instrument of Ratification, declaring:
[7]

NOW THEREFORE, be it known that I, FIDEL V. RAMOS, President of the

Republic of the Philippines, after having seen and considered the aforementioned
Agreement Establishing the World Trade Organization and the agreements and
associated legal instruments included in Annexes one (1), two (2) and three (3) of that
Agreement which are integral parts thereof, signed at Marrakesh, Morocco on 15
April 1994, do hereby ratify and confirm the same and every Article and Clause
thereof.
To emphasize, the WTO Agreement ratified by the President of the
Philippines is composed of the Agreement Proper and the associated legal
instruments included in Annexes one (1), two (2) and three (3) of that
Agreement which are integral parts thereof.
On the other hand, the Final Act signed by Secretary Navarro embodies
not only the WTO Agreement (and its integral annexes aforementioned) but
also (1) the Ministerial Declarations and Decisions and (2) the Understanding

on Commitments in Financial Services. In his Memorandum dated May 13,

1996, the Solicitor General describes these two latter documents as follows:
[8]

The Ministerial Decisions and Declarations are twenty-five declarations and

decisions on a wide range of matters, such as measures in favor of least developed
countries, notification procedures, relationship of WTO with the International
Monetary Fund (IMF), and agreements on technical barriers to trade and on dispute
settlement.
The Understanding on Commitments in Financial Services dwell on, among other
things, standstill or limitations and qualifications of commitments to existing nonconforming measures, market access, national treatment, and definitions of nonresident supplier of financial services, commercial presence and new financial
service.
On December 29, 1994, the present petition was filed. After careful
deliberation on respondents comment and petitioners reply thereto, the Court
resolved on December 12, 1995, to give due course to the petition, and the
parties thereafter filed their respective memoranda. The Court also requested
the Honorable Lilia R. Bautista, the Philippine Ambassador to the United
Nations stationed in Geneva, Switzerland, to submit a paper, hereafter
referred to as Bautista Paper, for brevity, (1) providing a historical
background of and (2) summarizing the said agreements.
[9]

During the Oral Argument held on August 27, 1996, the Court directed:
(a) the petitioners to submit the (1) Senate Committee Report on the matter in
controversy and (2) the transcript of proceedings/hearings in the Senate; and
(b) the Solicitor General, as counsel for respondents, to file (1) a list of Philippine
treaties signed prior to the Philippine adherence to the WTO Agreement, which
derogate from Philippine sovereignty and (2) copies of the multi-volume WTO
Agreement and other documents mentioned in the Final Act, as soon as possible.
After receipt of the foregoing documents, the Court said it would consider
the case submitted for resolution. In a Compliance dated September 16,
1996, the Solicitor General submitted a printed copy of the 36volume Uruguay Round of Multilateral Trade Negotiations, and in another
Compliance dated October 24, 1996, he listed the various bilateral or
multilateral treaties or international instruments involving derogation of
Philippine sovereignty. Petitioners, on the other hand, submitted their
Compliance dated January 28, 1997, on January 30, 1997.

The Issues
In their Memorandum dated March 11, 1996, petitioners summarized the
issues as follows:
A. Whether the petition presents a political question or is otherwise not justiciable.
B. Whether the petitioner members of the Senate who participated in the
deliberations and voting leading to the concurrence are estopped from
impugning the validity of the Agreement Establishing the World Trade
Organization or of the validity of the concurrence.
C. Whether the provisions of the Agreement Establishing the World Trade
Organization contravene the provisions of Sec. 19, Article II, and Secs. 10 and
12, Article XII, all of the 1987 Philippine Constitution.
D. Whether provisions of the Agreement Establishing the World Trade
Organization unduly limit, restrict and impair Philippine sovereignty
specifically the legislative power which, under Sec. 2, Article VI, 1987
Philippine Constitution is vested in the Congress of the Philippines;
E. Whether provisions of the Agreement Establishing the World Trade
Organization interfere with the exercise of judicial power.
F. Whether the respondent members of the Senate acted in grave abuse of
discretion amounting to lack or excess of jurisdiction when they voted for
concurrence in the ratification of the constitutionally-infirm Agreement
Establishing the World Trade Organization.
G. Whether the respondent members of the Senate acted in grave abuse of
discretion amounting to lack or excess of jurisdiction when they concurred
only in the ratification of the Agreement Establishing the World Trade
Organization, and not with the Presidential submission which included the
Final Act, Ministerial Declaration and Decisions, and the Understanding on
Commitments in Financial Services.
On the other hand, the Solicitor General as counsel for respondents
synthesized the several issues raised by petitioners into the following:
[10]

1. Whether or not the provisions of the Agreement Establishing the World Trade
Organization and the Agreements and Associated Legal Instruments included in
Annexes one (1), two (2) and three (3) of that agreement cited by petitioners directly

contravene or undermine the letter, spirit and intent of Section 19, Article II and
Sections 10 and 12, Article XII of the 1987 Constitution.
2. Whether or not certain provisions of the Agreement unduly limit, restrict or impair
the exercise of legislative power by Congress.
3. Whether or not certain provisions of the Agreement impair the exercise of judicial
power by this Honorable Court in promulgating the rules of evidence.
4. Whether or not the concurrence of the Senate in the ratification by the President of
the Philippines of the Agreement establishing the World Trade Organization implied
rejection of the treaty embodied in the Final Act.
By raising and arguing only four issues against the seven presented by
petitioners, the Solicitor General has effectively ignored three, namely: (1)
whether the petition presents a political question or is otherwise not
justiciable; (2) whether petitioner-members of the Senate (Wigberto E. Taada
and Anna Dominique Coseteng) are estopped from joining this suit; and (3)
whether the respondent-members of the Senate acted in grave abuse of
discretion when they voted for concurrence in the ratification of the WTO
Agreement. The foregoing notwithstanding, this Court resolved to deal with
these three issues thus:
(1) The political question issue -- being very fundamental and vital, and being a
matter that probes into the very jurisdiction of this Court to hear and decide this case - was deliberated upon by the Court and will thus be ruled upon as the first issue;
(2) The matter of estoppel will not be taken up because this defense is waivable and
the respondents have effectively waived it by not pursuing it in any of their pleadings;
in any event, this issue, even if ruled in respondents favor, will not cause the
petitions dismissal as there are petitioners other than the two senators, who are not
vulnerable to the defense of estoppel; and
(3) The issue of alleged grave abuse of discretion on the part of the respondent
senators will be taken up as an integral part of the disposition of the four issues raised
by the Solicitor General.
During its deliberations on the case, the Court noted that the respondents
did not question the locus standi of petitioners. Hence, they are also deemed
to have waived the benefit of such issue. They probably realized that grave
constitutional issues, expenditures of public funds and serious international
commitments of the nation are involved here, and that transcendental public

interest requires that the substantive issues be met head on and decided on
the merits, rather than skirted or deflected by procedural matters.
[11]

To recapitulate, the issues that will be ruled upon shortly are:

(1)

DOES
THE
PETITION
PRESENT
A
JUSTICIABLE
CONTROVERSY? OTHERWISE STATED, DOES THE PETITION INVOLVE A
POLITICAL QUESTION OVER WHICH THIS COURT HAS NO JURISDICTION?

(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS THREE ANNEXES
CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF
THE PHILIPPINE CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS ANNEXES LIMIT,
RESTRICT, OR IMPAIR THE EXERCISE OF LEGISLATIVE POWER BY
CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH THE EXERCISE
OF JUDICIAL POWER BY THIS COURT IN PROMULGATING RULES ON
EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO AGREEMENT AND
ITS ANNEXES SUFFICIENT AND/OR VALID, CONSIDERING THAT IT DID NOT
INCLUDE THE FINAL ACT, MINISTERIAL DECLARATIONS AND DECISIONS,
AND THE UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES?

The First Issue: Does the Court Have Jurisdiction Over the
Controversy?
In seeking to nullify an act of the Philippine Senate on the ground that it
contravenes the Constitution, the petition no doubt raises a justiciable
controversy. Where an action of the legislative branch is seriously alleged to
have infringed the Constitution, it becomes not only the right but in fact the
duty of the judiciary to settle the dispute. The question thus posed is judicial
rather than political. The duty (to adjudicate) remains to assure that the
supremacy of the Constitution is upheld. Once a controversy as to the
application or interpretation of a constitutional provision is raised before this
Court (as in the instant case), it becomes a legal issue which the Court is
bound by constitutional mandate to decide.
[12]

[13]

The jurisdiction of this Court to adjudicate the matters raised in the

petition is clearly set out in the 1987 Constitution, as follows:
[14]

[15]

Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the government.

The foregoing text emphasizes the judicial departments duty and power to
strike down grave abuse of discretion on the part of any branch or
instrumentality of government including Congress. It is an innovation in our
political law. As explained by former Chief Justice Roberto
Concepcion, the judiciary is the final arbiter on the question of whether or
not a branch of government or any of its officials has acted without jurisdiction
or in excess of jurisdiction or so capriciously as to constitute an abuse of
discretion amounting to excess of jurisdiction. This is not only a judicial power
but a duty to pass judgment on matters of this nature.
[16]

[17]

As this Court has repeatedly and firmly emphasized in many cases, it will
not shirk, digress from or abandon its sacred duty and authority to uphold the
Constitution in matters that involve grave abuse of discretion brought before it
in appropriate cases, committed by any officer, agency, instrumentality or
department of the government.
[18]

As the petition alleges grave abuse of discretion and as there is no other

plain, speedy or adequate remedy in the ordinary course of law, we have no
hesitation at all in holding that this petition should be given due course and the
vital questions raised therein ruled upon under Rule 65 of the Rules of
Court. Indeed, certiorari, prohibition and mandamus are appropriate remedies
to raise constitutional issues and to review and/or prohibit/nullify, when proper,
acts of legislative and executive officials. On this, we have no equivocation.
We should stress that, in deciding to take jurisdiction over this petition, this
Court will not review the wisdom of the decision of the President and the
Senate in enlisting the country into the WTO, or pass upon the merits of trade
liberalization as a policy espoused by said international body. Neither will it
rule on the propriety of the governments economic policy of
reducing/removing tariffs, taxes, subsidies, quantitative restrictions, and other
import/trade barriers. Rather, it will only exercise its constitutional duty to
determine whether or not there had been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the Senate in
ratifying the WTO Agreement and its three annexes.
Second Issue: The WTO Agreement and Economic Nationalism
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the letter, spirit and intent of the
Constitution mandating economic nationalism are violated by the so-called
parity provisions and national treatment clauses scattered in various parts

not only of the WTO Agreement and its annexes but also in the Ministerial
Decisions and Declarations and in the Understanding on Commitments in
Financial Services.
Specifically, the flagship constitutional provisions referred to are Sec. 19,
Article II, and Secs. 10 and 12, Article XII, of the Constitution, which are
worded as follows:
Article II
DECLARATION OF PRINCIPLES AND STATE POLICIES
xx

xx
xx

xx

Sec. 19. The State shall develop a self-reliant and independent national economy
effectively controlled by Filipinos.
xx

xx
xx

xx

Article XII
NATIONAL ECONOMY AND PATRIMONY
xx

xx
xx

xx

Sec. 10. x x x. The Congress shall enact measures that will encourage the formation
and operation of enterprises whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the national economy and
patrimony, the State shall give preference to qualified Filipinos.
xx

xx
xx

xx

Sec. 12. The State shall promote the preferential use of Filipino labor, domestic
materials and locally produced goods, and adopt measures that help make them
competitive.
Petitioners aver that these sacred constitutional principles are desecrated
by the following WTO provisions quoted in their memorandum:
[19]

a) In the area of investment measures related to trade in goods (TRIMS, for

brevity):
Article 2
National Treatment and Quantitative Restrictions.
1. Without prejudice to other rights and obligations under GATT 1994. no
Member shall apply any TRIM that is inconsistent with the provisions of
Article III or Article XI of GATT 1994.
2. An Illustrative list of TRIMS that are inconsistent with the obligations of
general elimination of quantitative restrictions provided for in paragraph I of
Article XI of GATT 1994 is contained in the Annex to this
Agreement. (Agreement on Trade-Related Investment Measures, Vol. 27,
Uruguay Round, Legal Instruments, p.22121, emphasis supplied).
The Annex referred to reads as follows:
ANNEX
Illustrative List
1. TRIMS that are inconsistent with the obligation of national treatment
provided for in paragraph 4 of Article III of GATT 1994 include those
which are mandatory or enforceable under domestic law or under
administrative rulings, or compliance with which is necessary to obtain an
advantage, and which require:
(a) the purchase or use by an enterprise of products of domestic origin or
from any domestic source, whether specified in terms of particular
products, in terms of volume or value of products, or in terms of
proportion of volume or value of its local production; or
(b) that an enterprises purchases or use of imported products be limited to an
amount related to the volume or value of local products that it exports.
2. TRIMS that are inconsistent with the obligations of general elimination of
quantitative restrictions provided for in paragraph 1 of Article XI of GATT
1994 include those which are mandatory or enforceable under domestic laws or
under administrative rulings, or compliance with which is necessary to obtain
an advantage, and which restrict:

(a) the importation by an enterprise of products used in or related to the local

production that it exports;
(b) the importation by an enterprise of products used in or related to its local
production by restricting its access to foreign exchange inflows attributable
to the enterprise; or
(c) the exportation or sale for export specified in terms of particular products,
in terms of volume or value of products, or in terms of a preparation of
volume or value of its local production. (Annex to the Agreement on
Trade-Related Investment Measures, Vol. 27, Uruguay Round Legal
Documents, p.22125, emphasis supplied).
The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows:
The products of the territory of any contracting party imported into the territory of any
other contracting party shall be accorded treatment no less favorable than that
accorded to like products of national originin respect of laws, regulations and
requirements affecting their internal sale, offering for sale, purchase, transportation,
distribution or use. the provisions of this paragraph shall not prevent the application
of differential internal transportation charges which are based exclusively on the
economic operation of the means of transport and not on the nationality of the
product. (Article III, GATT 1947, as amended by the Protocol Modifying Part II,
and Article XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in relation to
paragraph 1(a) of the General Agreement on Tariffs and Trade 1994, Vol. 1, Uruguay
Round, Legal Instruments p.177, emphasis supplied).
b) In the area of trade related aspects of intellectual property rights (TRIPS,
for brevity):
Each Member shall accord to the nationals of other Members treatment no less
favourable than that it accords to its own nationals with regard to the protection of
intellectual property... (par. 1, Article 3, Agreement on Trade-Related Aspect of
Intellectual Property rights, Vol. 31, Uruguay Round, Legal Instruments, p.25432
(emphasis supplied)
(c) In the area of the General Agreement on Trade in Services:
National Treatment
1. In the sectors inscribed in its schedule, and subject to any conditions and
qualifications set out therein, each Member shall accord to services and

service suppliers of any other Member, in respect of all measures affecting

the supply of services, treatment no less favourable than it accords to its
own like services and service suppliers.
2. A Member may meet the requirement of paragraph I by according to
services and service suppliers of any other Member, either formally
identical treatment or formally different treatment to that it accords to its
own like services and service suppliers.
3. Formally identical or formally different treatment shall be considered to be
less favourable if it modifies the conditions of completion in favour of
services or service suppliers of the Member compared to like services or
service suppliers of any other Member. (Article XVII, General Agreement
on Trade in Services, Vol. 28, Uruguay Round Legal Instruments, p.22610
emphasis supplied).
It is petitioners position that the foregoing national treatment and parity
provisions of the WTO Agreement place nationals and products of member
countries on the same footing as Filipinos and local products, in
contravention of the Filipino First policy of the Constitution. They allegedly
render meaningless the phrase effectively controlled by Filipinos. The
constitutional conflict becomes more manifest when viewed in the context of
the clear duty imposed on the Philippines as a WTO member to ensure the
conformity of its laws, regulations and administrative procedures with its
obligations as provided in the annexed agreements. Petitioners further argue
that these provisions contravene constitutional limitations on the role exports
play in national development and negate the preferential treatment accorded
to Filipino labor, domestic materials and locally produced goods.
[20]

On the other hand, respondents through the Solicitor General counter (1)
that such Charter provisions are not self-executing and merely set out
general policies; (2) that these nationalistic portions of the Constitution
invoked by petitioners should not be read in isolation but should be related to
other relevant provisions of Art. XII, particularly Secs. 1 and 13 thereof; (3)
that read properly, the cited WTO clauses do not conflict with the Constitution;
and (4) that the WTO Agreement contains sufficient provisions to protect
developing countries like the Philippines from the harshness of sudden trade
liberalization.
We shall now discuss and rule on these arguments.
Declaration of Principles Not Self-Executing

By its very title, Article II of the Constitution is a declaration of principles

and state policies. The counterpart of this article in the 1935 Constitution is
called the basic political creed of the nation by Dean Vicente Sinco. These
principles in Article II are not intended to be self-executing principles ready for
enforcement through the courts. They are used by the judiciary as aids or as
guides in the exercise of its power of judicial review, and by the legislature in
its enactment of laws. As held in the leading case of Kilosbayan, Incorporated
vs. Morato, the principles and state policies enumerated in Article II and
some sections of Article XII are not self-executing provisions, the disregard of
which can give rise to a cause of action in the courts. They do not embody
judicially enforceable constitutional rights but guidelines for legislation.
[21]

[22]

[23]

[24]

In the same light, we held in Basco vs. Pagcor that broad constitutional
principles need legislative enactments to implement them, thus:
[25]

On petitioners allegation that P.D. 1869 violates Sections 11 (Personal Dignity) 12

(Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article
XIII and Section 2 (Educational Values) of Article XIV of the 1987 Constitution,
suffice it to state also that these are merely statements of principles and policies. As
such, they are basically not self-executing, meaning a law should be passed by
Congress to clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be self-executing
principles ready for enforcement through the courts. They were rather directives
addressed to the executive and to the legislature. If the executive and the legislature
failed to heed the directives of the article, the available remedy was not judicial but
political. The electorate could express their displeasure with the failure of the
executive and the legislature through the language of the ballot. (Bernas, Vol. II, p.
2).
The reasons for denying a cause of action to an alleged infringement of
broad constitutional principles are sourced from basic considerations of due
process and the lack of judicial authority to wade into the uncharted ocean of
social and economic policy making. Mr. Justice Florentino P. Feliciano in his
concurring opinion in Oposa vs. Factoran, Jr., explained these reasons as
follows:
[26]

My suggestion is simply that petitioners must, before the trial court, show a more
specific legal right -- a right cast in language of a significantly lower order of
generality than Article II (15) of the Constitution -- that is or may be violated by the
actions, or failures to act, imputed to the public respondent by petitioners so that the
trial court can validly render judgment granting all or part of the relief prayed for. To

my mind, the court should be understood as simply saying that such a more specific
legal right or rights may well exist in our corpus of law, considering the general policy
principles found in the Constitution and the existence of the Philippine Environment
Code, and that the trial court should have given petitioners an effective opportunity so
to demonstrate, instead of aborting the proceedings on a motion to dismiss.
It seems to me important that the legal right which is an essential component of a
cause of action be a specific, operable legal right, rather than a constitutional or
statutory policy, for at least two (2) reasons. One is that unless the legal right claimed
to have been violated or disregarded is given specification in operational terms,
defendants may well be unable to defend themselves intelligently and effectively; in
other words, there are due process dimensions to this matter.
The second is a broader-gauge consideration -- where a specific violation of law or
applicable regulation is not alleged or proved, petitioners can be expected to fall back
on the expanded conception of judicial power in the second paragraph of Section 1 of
Article VIII of the Constitution which reads:
Section 1.

xxx

Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the
Government. (Emphases supplied)
When substantive standards as general as the right to a balanced and healthy ecology
and the right to health are combined with remedial standards as broad ranging as a
grave abuse of discretion amounting to lack or excess of jurisdiction, the result will
be, it is respectfully submitted, to propel courts into the uncharted ocean of social and
economic policy making. At least in respect of the vast area of environmental
protection and management, our courts have no claim to special technical competence
and experience and professional qualification. Where no specific, operable norms and
standards are shown to exist, then the policy making departments -- the legislative and
executive departments -- must be given a real and effective opportunity to fashion and
promulgate those norms and standards, and to implement them before the courts
should intervene.
Economic Nationalism Should Be Read with Other Constitutional
Mandates to Attain Balanced Development of Economy

On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying
down general principles relating to the national economy and patrimony,
should be read and understood in relation to the other sections in said article,
especially Secs. 1 and 13 thereof which read:
Section 1. The goals of the national economy are a more equitable distribution of
opportunities, income, and wealth; a sustained increase in the amount of goods and
services produced by the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all, especially the
underprivileged.
The State shall promote industrialization and full employment based on sound
agricultural development and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are competitive in both
domestic and foreign markets. However, the State shall protect Filipino enterprises
against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all regions of the country
shall be given optimum opportunity to develop. x x x
x

xxx

Sec. 13. The State shall pursue a trade policy that serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality and
reciprocity.
As pointed out by the Solicitor General, Sec. 1 lays down the basic goals
of national economic development, as follows:
1. A more equitable distribution of opportunities, income and wealth;
2. A sustained increase in the amount of goods and services provided by
the nation for the benefit of the people; and
3. An expanding productivity as the key to raising the quality of life for all
especially the underprivileged.
With these goals in context, the Constitution then ordains the ideals of
economic nationalism (1) by expressing preference in favor of qualified
Filipinos in the grant of rights, privileges and concessions covering the
national economy and patrimony and in the use of Filipino labor, domestic
materials and locally-produced goods; (2) by mandating the State to adopt
measures that help make them competitive; and (3) by requiring the State to
[27]

[28]

develop a self-reliant and independent national economy effectively

controlled by Filipinos. In similar language, the Constitution takes into
account the realities of the outside world as it requires the pursuit of a trade
policy that serves the general welfare and utilizes all forms and arrangements
of exchange on the basis of equality and reciprocity; and speaks of
industries which are competitive in both domestic and foreign markets as
well as of the protection of Filipino enterprises against unfair foreign
competition and trade practices.
[29]

[30]

It is true that in the recent case of Manila Prince Hotel vs. Government
Service Insurance System, et al., this Court held that Sec. 10, second par.,
Art. XII of the 1987 Constitution is a mandatory, positive command which is
complete in itself and which needs no further guidelines or implementing laws
or rules for its enforcement. From its very words the provision does not
require any legislation to put it in operation. It is per se judicially
enforceable. However, as the constitutional provision itself states, it is
enforceable only in regard to the grants of rights, privileges and concessions
covering national economy and patrimony and not to every aspect of trade
and commerce. It refers to exceptions rather than the rule. The issue here is
not whether this paragraph of Sec. 10 of Art. XII is self-executing or
not. Rather, the issue is whether, as a rule, there are enough balancing
provisions in the Constitution to allow the Senate to ratify the Philippine
concurrence in the WTO Agreement. And we hold that there are.
[31]

All told, while the Constitution indeed mandates a bias in favor of Filipino
goods, services, labor and enterprises, at the same time, it recognizes the
need for business exchange with the rest of the world on the bases of equality
and reciprocity and limits protection of Filipino enterprises only against foreign
competition and trade practices that are unfair. In other words, the
Constitution did not intend to pursue an isolationist policy. It did not shut out
foreign investments, goods and services in the development of the Philippine
economy. While the Constitution does not encourage the unlimited entry of
foreign goods, services and investments into the country, it does not prohibit
them either. In fact, it allows an exchange on the basis of equality and
reciprocity, frowning only on foreign competition that is unfair.
[32]

WTO Recognizes Need to Protect Weak Economies

Upon the other hand, respondents maintain that the WTO itself has some
built-in advantages to protect weak and developing economies, which
comprise the vast majority of its members. Unlike in the UN where major

states have permanent seats and veto powers in the Security Council, in the
WTO, decisions are made on the basis of sovereign equality, with each
members vote equal in weight to that of any other. There is no WTO
equivalent of the UN Security Council.
WTO decides by consensus whenever possible, otherwise, decisions of the
Ministerial Conference and the General Council shall be taken by the majority of the
votes cast, except in cases of interpretation of the Agreement or waiver of the
obligation of a member which would require three fourths vote. Amendments would
require two thirds vote in general. Amendments to MFN provisions and the
Amendments provision will require assent of all members. Any member may
withdraw from the Agreement upon the expiration of six months from the date of
notice of withdrawals.
[33]

Hence, poor countries can protect their common interests more effectively
through the WTO than through one-on-one negotiations with developed
countries. Within the WTO, developing countries can form powerful blocs to
push their economic agenda more decisively than outside the
Organization. This is not merely a matter of practical alliances but a
negotiating strategy rooted in law. Thus, the basic principles underlying the
WTO Agreement recognize the need of developing countries like the
Philippines to share in the growth in international tradecommensurate with
the needs of their economic development. These basic principles are found
in the preamble of the WTO Agreement as follows:
[34]

The Parties to this Agreement,

Recognizing that their relations in the field of trade and economic endeavour should
be conducted with a view to raising standards of living, ensuring full employment and
a large and steadily growing volume of real income and effective demand, and
expanding the production of and trade in goods and services, while allowing for the
optimal use of the worlds resources in accordance with the objective of sustainable
development, seeking both to protect and preserve the environment and to enhance the
means for doing so in a manner consistent with their respective needs and concerns at
different levels of economic development,
Recognizing further that there is need for positive efforts designed to ensure that
developing countries, and especially the least developed among them, secure a share
in the growth in international trade commensurate with the needs of their economic
development,

Being desirous of contributing to these objectives by entering into reciprocal and

mutually advantageous arrangements directed to the substantial reduction of tariffs
and other barriers to trade and to the elimination of discriminatory treatment in
international trade relations,
Resolved, therefore, to develop an integrated, more viable and durable multilateral
trading system encompassing the General Agreement on Tariffs and Trade, the results
of past trade liberalization efforts, and all of the results of the Uruguay Round of
Multilateral Trade Negotiations,
Determined to preserve the basic principles and to further the objectives underlying
this multilateral trading system, x x x. (underscoring supplied.)
Specific WTO Provisos Protect Developing Countries
So too, the Solicitor General points out that pursuant to and consistent
with the foregoing basic principles, the WTO Agreement grants developing
countries a more lenient treatment, giving their domestic industries some
protection from the rush of foreign competition. Thus, with respect to tariffs in
general, preferential treatment is given to developing countries in terms of
theamount of tariff reduction and the period within which the reduction is to be
spread out. Specifically, GATT requires an average tariff reduction rate of
36% for developed countries to be effected within a period of six (6)
years while developing countries -- including the Philippines -- are required to
effect an average tariff reduction of only 24% within ten (10) years.
In respect to domestic subsidy, GATT requires developed countries to
reduce domestic support to agricultural products by 20% over six (6) years, as
compared to only 13% for developing countries to be effected within ten (10)
years.
In regard to export subsidy for agricultural products, GATT requires
developed countries to reduce their budgetary outlays for export subsidy by
36% and export volumes receiving export subsidy by 21% within a period of
six (6) years. For developing countries, however, the reduction rate is
only two-thirds of that prescribed for developed countries and a longer period
of ten (10) years within which to effect such reduction.
Moreover, GATT itself has provided built-in protection from unfair foreign
competition and trade practices including anti-dumping measures,
countervailing measures and safeguards against import surges. Where local
businesses are jeopardized by unfair foreign competition, the Philippines can

avail of these measures. There is hardly therefore any basis for the statement
that under the WTO, local industries and enterprises will all be wiped out and
that Filipinos will be deprived of control of the economy. Quite the contrary,
the weaker situations of developing nations like the Philippines have been
taken into account; thus, there would be no basis to say that in joining the
WTO, the respondents have gravely abused their discretion. True, they have
made a bold decision to steer the ship of state into the yet uncharted sea of
economic liberalization. But such decision cannot be set aside on the ground
of grave abuse of discretion, simply because we disagree with it or simply
because we believe only in other economic policies. As earlier stated, the
Court in taking jurisdiction of this case will not pass upon the advantages and
disadvantages of trade liberalization as an economic policy. It will only
perform its constitutional duty of determining whether the Senate committed
grave abuse of discretion.
Constitution Does Not Rule Out Foreign Competition
Furthermore, the constitutional policy of a self-reliant and independent
national economy does not necessarily rule out the entry of foreign
investments, goods and services. It contemplates neither economic
seclusion nor mendicancy in the international community. As explained by
Constitutional Commissioner Bernardo Villegas, sponsor of this constitutional
policy:
[35]

Economic self-reliance is a primary objective of a developing country that is keenly

aware of overdependence on external assistance for even its most basic needs. It does
not mean autarky or economic seclusion; rather, it means avoiding mendicancy in the
international community. Independence refers to the freedom from undue foreign
control of the national economy, especially in such strategic industries as in the
development of natural resources and public utilities.
[36]

The WTO reliance on most favored nation, national treatment, and

trade without discrimination cannot be struck down as unconstitutional as in
fact they are rules of equality and reciprocity that apply to all WTO
members. Aside from envisioning a trade policy based on equality and
reciprocity, the fundamental law encourages industries that are competitive
in both domestic and foreign markets, thereby demonstrating a clear policy
against a sheltered domestic trade environment, but one in favor of the
gradual development of robust industries that can compete with the best in the
foreign markets. Indeed, Filipino managers and Filipino enterprises have
[37]

shown capability and tenacity to compete internationally. And given a free

trade environment, Filipino entrepreneurs and managers in Hongkong
have demonstrated the Filipino capacity to grow and to prosper against the
best offered under a policy of laissez faire.
Constitution Favors Consumers, Not Industries or Enterprises
The Constitution has not really shown any unbalanced bias in favor of any
business or enterprise, nor does it contain any specific pronouncement that
Filipino
companies
should
be
pampered
with
a
total
proscription of foreign competition. On the other hand, respondents clai
m that WTO/GATT aims to make available to the Filipino consumer the best
goods and services obtainable anywhere in the world at the most reasonable
prices. Consequently, the question boils down to whether WTO/GATT will
favor the general welfare of the public at large.
Will adherence to the WTO treaty bring this ideal (of favoring the general
welfare) to reality?
Will WTO/GATT succeed in promoting the Filipinos general welfare
because it will -- as promised by its promoters -- expand the countrys exports
and generate more employment?
Will it bring more prosperity, employment, purchasing power and quality
products at the most reasonable rates to the Filipino public?
The responses to these questions involve judgment calls by our policy
makers, for which they are answerable to our people during appropriate
electoral exercises. Such questions and the answers thereto are not subject
to judicial pronouncements based on grave abuse of discretion.
Constitution Designed to Meet Future Events and Contingencies
No doubt, the WTO Agreement was not yet in existence when the
Constitution was drafted and ratified in 1987. That does not mean however
that the Charter is necessarily flawed in the sense that its framers might not
have anticipated the advent of a borderless world of business. By the same
token, the United Nations was not yet in existence when the 1935
Constitution became effective. Did that necessarily mean that the then
Constitution might not have contemplated a diminution of the absoluteness of
sovereignty when the Philippines signed the UN Charter, thereby effectively

surrendering part of its control over its foreign relations to the decisions of
various UN organs like the Security Council?
It is not difficult to answer this question. Constitutions are designed to
meet not only the vagaries of contemporary events. They should be
interpreted to cover even future and unknown circumstances. It is to the
credit of its drafters that a Constitution can withstand the assaults of bigots
and infidels but at the same time bend with the refreshing winds of change
necessitated by unfolding events. As one eminent political law writer and
respected jurist explains:
[38]

The Constitution must be quintessential rather than superficial, the root and not the
blossom, the base and framework only of the edifice that is yet to rise. It is but the
core of the dream that must take shape, not in a twinkling by mandate of our
delegates, but slowly in the crucible of Filipino minds and hearts, where it will in
time develop its sinews and gradually gather its strength and finally achieve its
substance. In fine, the Constitution cannot, like the goddess Athena, rise full-grown
from the brow of the Constitutional Convention, nor can it conjure by mere fiat an
instant Utopia. It must grow with the society it seeks to re-structure and march apace
with the progress of the race, drawing from the vicissitudes of history the dynamism
and vitality that will keep it, far from becoming a petrified rule, a pulsing, living law
attuned to the heartbeat of the nation.
Third Issue: The WTO Agreement and Legislative Power
The WTO Agreement provides that (e)ach Member shall ensure the
conformity of its laws, regulations and administrative procedures with its
obligations as provided in the annexed Agreements. Petitioners maintain
that this undertaking unduly limits, restricts and impairs Philippine
sovereignty, specifically the legislative power which under Sec. 2, Article VI of
the 1987 Philippine Constitution is vested in the Congress of the
Philippines. It is an assault on the sovereign powers of the Philippines
because this means that Congress could not pass legislation that will be good
for our national interest and general welfare if such legislation will not conform
with the WTO Agreement, which not only relates to the trade in goods x x x
but also to the flow of investments and money x x x as well as to a whole slew
of agreements on socio-cultural matters x x x.
[39]

[40]

More specifically, petitioners claim that said WTO proviso derogates from
the power to tax, which is lodged in the Congress. And while the Constitution
allows Congress to authorize the President to fix tariff rates, import and export
[41]

quotas, tonnage and wharfage dues, and other duties or imposts, such
authority is subject to specified limits and x x x such limitations and
restrictions as Congress may provide, as in fact it did under Sec. 401 of the
Tariff and Customs Code.
[42]

Sovereignty Limited by International Law and Treaties

This Court notes and appreciates the ferocity and passion by which
petitioners stressed their arguments on this issue. However, while
sovereignty has traditionally been deemed absolute and all-encompassing on
the domestic level, it is however subject to restrictions and limitations
voluntarily agreed to by the Philippines, expressly or impliedly, as a member
of the family of nations. Unquestionably, the Constitution did not envision a
hermit-type isolation of the country from the rest of the world. In its
Declaration of Principles and State Policies, the Constitution adopts the
generally accepted principles of international law as part of the law of the land,
and adheres to the policy of peace, equality, justice, freedom, cooperation and
amity, with all nations." By the doctrine of incorporation, the country is bound
by generally accepted principles of international law, which are considered to
be automatically part of our own laws. One of the oldest and most
fundamental rules in international law is pacta sunt servanda -- international
agreements must be performed in good faith. A treaty engagement is not a
mere moral obligation but creates a legally binding obligation on the parties x
x x. A state which has contracted valid international obligations is bound to
make in its legislations such modifications as may be necessary to ensure the
fulfillment of the obligations undertaken.
[43]

[44]

[45]

By their inherent nature, treaties really limit or restrict the absoluteness of

sovereignty. By their voluntary act, nations may surrender some aspects of
their state power in exchange for greater benefits granted by or derived from a
convention or pact. After all, states, like individuals, live with coequals, and in
pursuit of mutually covenanted objectives and benefits, they also commonly
agree to limit the exercise of their otherwise absolute rights. Thus, treaties
have been used to record agreements between States concerning such
widely diverse matters as, for example, the lease of naval bases, the sale or
cession of territory, the termination of war, the regulation of conduct of
hostilities, the formation of alliances, the regulation of commercial relations,
the settling of claims, the laying down of rules governing conduct in peace and
the establishment of international organizations. The sovereignty of a state
therefore cannot in fact and in reality be considered absolute. Certain
restrictions enter into the picture: (1) limitations imposed by the very nature of
[46]

membership in the family of nations and (2) limitations imposed by treaty

stipulations. As aptly put by John F. Kennedy, Today, no nation can build its
destiny alone. The age of self-sufficient nationalism is over. The age of
interdependence is here.
[47]

UN Charter and Other Treaties Limit Sovereignty

Thus, when the Philippines joined the United Nations as one of its 51
charter members, it consented to restrict its sovereign rights under the
concept of sovereignty as auto-limitation.47-AUnder Article 2 of the UN
Charter, (a)ll members shall give the United Nations every assistance in any
action it takes in accordance with the present Charter, and shall refrain from
giving assistance to any state against which the United Nations is taking
preventive or enforcement action. Such assistance includes payment of its
corresponding share not merely in administrative expenses but also in
expenditures for the peace-keeping operations of the organization. In its
advisory opinion of July 20, 1961, the International Court of Justice held that
money used by the United Nations Emergency Force in the Middle East and
in the Congo were expenses of the United Nations under Article 17,
paragraph 2, of the UN Charter. Hence, all its members must bear their
corresponding share in such expenses. In this sense, the Philippine
Congress is restricted in its power to appropriate. It is compelled to
appropriate funds whether it agrees with such peace-keeping expenses or
not. So too, under Article 105 of the said Charter, the UN and its
representatives enjoy diplomatic privileges and immunities, thereby limiting
again the exercise of sovereignty of members within their own
territory. Another example: although sovereign equality and domestic
jurisdiction of all members are set forth as underlying principles in the UN
Charter, such provisos are however subject to enforcement measures decided
by the Security Council for the maintenance of international peace and
security under Chapter VII of the Charter. A final example: under Article 103,
(i)n the event of a conflict between the obligations of the Members of the
United Nations under the present Charter and their obligations under any
other international agreement, their obligation under the present charter shall
prevail, thus unquestionably denying the Philippines -- as a member -- the
sovereign power to make a choice as to which of conflicting obligations, if any,
to honor.
Apart from the UN Treaty, the Philippines has entered into many other
international pacts -- both bilateral and multilateral -- that involve limitations

on Philippine sovereignty. These are enumerated by the Solicitor General in

his Compliance dated October 24, 1996, as follows:
(a) Bilateral convention with the United States regarding taxes on income,
where the Philippines agreed, among others, to exempt from tax, income
received in the Philippines by, among others, the Federal Reserve Bank of the
United States, the Export/Import Bank of the United States, the Overseas
Private Investment Corporation of the United States. Likewise, in said
convention, wages, salaries and similar remunerations paid by the United
States to its citizens for labor and personal services performed by them as
employees or officials of the United States are exempt from income tax by the
Philippines.
(b) Bilateral agreement with Belgium, providing, among others, for the avoidance
of double taxation with respect to taxes on income.
(c) Bilateral convention with the Kingdom of Sweden for the avoidance of double
taxation.
(d) Bilateral convention with the French Republic for the avoidance of double
taxation.
(e) Bilateral air transport agreement with Korea where the Philippines agreed to
exempt from all customs duties, inspection fees and other duties or taxes
aircrafts of South Korea and the regular equipment, spare parts and supplies
arriving with said aircrafts.
(f) Bilateral air service agreement with Japan, where the Philippines agreed to
exempt from customs duties, excise taxes, inspection fees and other similar
duties, taxes or charges fuel, lubricating oils, spare parts, regular equipment,
stores on board Japanese aircrafts while on Philippine soil.
(g) Bilateral air service agreement with Belgium where the Philippines granted
Belgian air carriers the same privileges as those granted to Japanese and
Korean air carriers under separate air service agreements.
(h) Bilateral notes with Israel for the abolition of transit and visitor visas where
the Philippines exempted Israeli nationals from the requirement of obtaining
transit or visitor visas for a sojourn in the Philippines not exceeding 59 days.

(I) Bilateral agreement with France exempting French nationals from the
requirement of obtaining transit and visitor visa for a sojourn not exceeding 59
days.
(j) Multilateral Convention on Special Missions, where the Philippines agreed
that premises of Special Missions in the Philippines are inviolable and its
agents can not enter said premises without consent of the Head of Mission
concerned. Special Missions are also exempted from customs duties, taxes
and related charges.
(k) Multilateral Convention on the Law of Treaties. In this convention, the
Philippines agreed to be governed by the Vienna Convention on the Law of
Treaties.
(l) Declaration of the President of the Philippines accepting compulsory
jurisdiction of the International Court of Justice. The International Court of
Justice has jurisdiction in all legal disputes concerning the interpretation of a
treaty, any question of international law, the existence of any fact which, if
established, would constitute a breach of international obligation.
In the foregoing treaties, the Philippines has effectively agreed to limit the
exercise of its sovereign powers of taxation, eminent domain and police
power. The underlying consideration in this partial surrender of sovereignty is
the reciprocal commitment of the other contracting states in granting the same
privilege and immunities to the Philippines, its officials and its citizens. The
same reciprocity characterizes the Philippine commitments under WTOGATT.
International treaties, whether relating to nuclear disarmament, human rights, the
environment, the law of the sea, or trade, constrain domestic political sovereignty
through the assumption of external obligations. But unless anarchy in international
relations is preferred as an alternative, in most cases we accept that the benefits of the
reciprocal obligations involved outweigh the costs associated with any loss of political
sovereignty. (T)rade treaties that structure relations by reference to durable, welldefined substantive norms and objective dispute resolution procedures reduce the risks
of larger countries exploiting raw economic power to bully smaller countries, by
subjecting power relations to some form of legal ordering. In addition, smaller
countries typically stand to gain disproportionately from trade liberalization. This is
due to the simple fact that liberalization will provide access to a larger set of potential
new trading relationship than in case of the larger country gaining enhanced success
to the smaller countrys market.
[48]

The point is that, as shown by the foregoing treaties, a portion of

sovereignty may be waived without violating the Constitution, based on the
rationale that the Philippines adopts the generally accepted principles of
international law as part of the law of the land and adheres to the policy of x x
x cooperation and amity with all nations.
Fourth Issue: The WTO Agreement and Judicial Power
Petitioners aver that paragraph 1, Article 34 of the General Provisions and
Basic Principles of the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS) intrudes on the power of the Supreme Court to
promulgate rules concerning pleading, practice and procedures.
[49]

[50]

To understand the scope and meaning of Article 34, TRIPS, it will be

fruitful to restate its full text as follows:
[51]

Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings in respect of the infringement of the rights
of the owner referred to in paragraph 1(b) of Article 28, if the subject matter of a
patent is a process for obtaining a product, the judicial authorities shall have the
authority to order the defendant to prove that the process to obtain an identical
product is different from the patented process. Therefore, Members shall provide,
in at least one of the following circumstances, that any identical product when
produced without the consent of the patent owner shall, in the absence of proof to
the contrary, be deemed to have been obtained by the patented process:
(a) if the product obtained by the patented process is new;
(b) if there is a substantial likelihood that the identical product was made by
the process and the owner of the patent has been unable through
reasonable efforts to determine the process actually used.
2. Any Member shall be free to provide that the burden of proof indicated in
paragraph 1 shall be on the alleged infringer only if the condition referred to in
subparagraph (a) is fulfilled or only if the condition referred to in subparagraph
(b) is fulfilled.

3. In the adduction of proof to the contrary, the legitimate interests of defendants

in protecting their manufacturing and business secrets shall be taken into
account.
From the above, a WTO Member is required to provide a rule of disputable
(note the words in the absence of proof to the contrary) presumption that a
product shown to be identical to one produced with the use of a patented
process shall be deemed to have been obtained by the (illegal) use of the said
patented process, (1) where such product obtained by the patented product is
new, or (2) where there is substantial likelihood that the identical product
was made with the use of the said patented process but the owner of the
patent could not determine the exact process used in obtaining such identical
product. Hence, the burden of proof contemplated by Article 34 should
actually be understood as the duty of the alleged patent infringer to overthrow
such presumption. Such burden, properly understood, actually refers to the
burden of evidence (burden of going forward) placed on the producer of the
identical (or fake) product to show that his product was produced without the
use of the patented process.
The foregoing notwithstanding, the patent owner still has the burden of
proof since, regardless of the presumption provided under paragraph 1 of
Article 34, such owner still has to introduce evidence of the existence of the
alleged identical product, the fact that it is identical to the genuine one
produced by the patented process and the fact of newness of the genuine
product or the fact of substantial likelihood that the identical product was
made by the patented process.
The foregoing should really present no problem in changing the rules of
evidence as the present law on the subject, Republic Act No. 165, as
amended, otherwise known as the Patent Law, provides a similar presumption
in cases of infringement of patented design or utility model, thus:
SEC. 60. Infringement. - Infringement of a design patent or of a patent for utility
model shall consist in unauthorized copying of the patented design or utility model for
the purpose of trade or industry in the article or product and in the making, using or
selling of the article or product copying the patented design or utility model. Identity
or substantial identity with the patented design or utility model shall constitute
evidence of copying. (underscoring supplied)
Moreover, it should be noted that the requirement of Article 34 to provide a
disputable presumption applies only if (1) the product obtained by the
patented process is NEW or (2) there is a substantial likelihood that the
identical product was made by the process and the process owner has not

been able through reasonable effort to determine the process used. Where
either of these two provisos does not obtain, members shall be free to
determine the appropriate method of implementing the provisions of TRIPS
within their own internal systems and processes.
By and large, the arguments adduced in connection with our disposition of
the third issue -- derogation of legislative power - will apply to this fourth issue
also. Suffice it to say that the reciprocity clause more than justifies such
intrusion, if any actually exists. Besides, Article 34 does not contain an
unreasonable burden, consistent as it is with due process and the concept of
adversarial dispute settlement inherent in our judicial system.
So too, since the Philippine is a signatory to most international
conventions on patents, trademarks and copyrights, the adjustment in
legislation and rules of procedure will not be substantial.
[52]

Fifth Issue: Concurrence Only in the WTO Agreement and Not in Other
Documents Contained in the Final Act
Petitioners allege that the Senate concurrence in the WTO Agreement and
its annexes -- but not in the other documents referred to in the Final Act,
namely the Ministerial Declaration and Decisions and the Understanding on
Commitments in Financial Services -- is defective and insufficient and thus
constitutes abuse of discretion. They submit that such concurrence in the
WTO Agreement alone is flawed because it is in effect a rejection of the Final
Act, which in turn was the document signed by Secretary Navarro, in
representation of the Republic upon authority of the President. They contend
that the second letter of the President to the Senate which enumerated what
constitutes the Final Act should have been the subject of concurrence of the
Senate.
[53]

A final act, sometimes called protocol de clture, is an instrument

which records the winding up of the proceedings of a diplomatic conference
and usually includes a reproduction of the texts of treaties, conventions,
recommendations and other acts agreed upon and signed by the
plenipotentiaries attending the conference. It is not the treaty itself. It is
rather a summary of the proceedings of a protracted conference which may
have taken place over several years. The text of the Final Act Embodying
the Results of the Uruguay Round of Multilateral Trade Negotiations is
contained in just one page in Vol. I of the 36-volume Uruguay Round of
Multilateral Trade Negotiations. By signing said Final Act, Secretary Navarro
as representative of the Republic of the Philippines undertook:
[54]

[55]

"(a) to submit, as appropriate, the WTO Agreement for the consideration of their
respective competent authorities with a view to seeking approval of the
Agreement in accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions."
The assailed Senate Resolution No. 97 expressed concurrence in exactly
what the Final Act required from its signatories, namely, concurrence of the
Senate in the WTO Agreement.
The Ministerial Declarations and Decisions were deemed adopted without
need for ratification. They were approved by the ministers by virtue of Article
XXV: 1 of GATT which provides that representatives of the members can
meet to give effect to those provisions of this Agreement which invoke joint
action, and generally with a view to facilitating the operation and furthering the
objectives of this Agreement.
[56]

The Understanding on Commitments in Financial Services also approved

in Marrakesh does not apply to the Philippines. It applies only to those 27
Members which have indicated in their respective schedules of commitments
on standstill, elimination of monopoly, expansion of operation of existing
financial service suppliers, temporary entry of personnel, free transfer and
processing of information, and national treatment with respect to access to
payment, clearing systems and refinancing available in the normal course of
business.
[57]

On the other hand, the WTO Agreement itself expresses what multilateral
agreements are deemed included as its integral parts, as follows:
[58]

Article II
Scope of the WTO
1. The WTO shall provide the common institutional framework for the conduct of
trade relations among its Members in matters to the agreements and associated
legal instruments included in the Annexes to this Agreement.
2. The Agreements and associated legal instruments included in Annexes 1, 2, and
3 (hereinafter referred to as Multilateral Agreements) are integral parts of this
Agreement, binding on all Members.
3. The Agreements and associated legal instruments included in Annex 4
(hereinafter referred to as Plurilateral Trade Agreements) are also part of this
Agreement for those Members that have accepted them, and are binding on those

Members. The Plurilateral Trade Agreements do not create either obligation or

rights for Members that have not accepted them.
4. The General Agreement on Tariffs and Trade 1994 as specified in annex 1A
(hereinafter referred to as GATT 1994) is legally distinct from the General
Agreement on Tariffs and Trade, dated 30 October 1947, annexed to the Final Act
adopted at the conclusion of the Second Session of the Preparatory Committee of
the United Nations Conference on Trade and Employment, as subsequently
rectified, amended or modified (hereinafter referred to as GATT 1947).
It should be added that the Senate was well-aware of what it
concurring in as shown by the members deliberation on August
1994. After reading the letter of President Ramos dated August
1994, the senators of the Republic minutely dissected what the Senate
concurring in, as follows:
[59]

was
25,
11,
was

[60]

THE CHAIRMAN: Yes. Now, the question of the validity of the submission came
up in the first day hearing of this Committee yesterday. Was the observation made by
Senator Taada that what was submitted to the Senate was not the agreement on
establishing the World Trade Organization by the final act of the Uruguay Round
which is not the same as the agreement establishing the World Trade
Organization? And on that basis, Senator Tolentino raised a point of order which,
however, he agreed to withdraw upon understanding that his suggestion for an
alternative solution at that time was acceptable. That suggestion was to treat the
proceedings of the Committee as being in the nature of briefings for Senators until the
question of the submission could be clarified.
And so, Secretary Romulo, in effect, is the President submitting a new... is he making
a new submission which improves on the clarity of the first submission?
MR. ROMULO: Mr. Chairman, to make sure that it is clear cut and there should be
no misunderstanding, it was his intention to clarify all matters by giving this letter.
THE CHAIRMAN: Thank you.
Can this Committee hear from Senator Taada and later on Senator Tolentino since
they were the ones that raised this question yesterday?
Senator Taada, please.
SEN. TAADA: Thank you, Mr. Chairman.

Based on what Secretary Romulo has read, it would now clearly appear that what is
being submitted to the Senate for ratification is not the Final Act of the Uruguay
Round, but rather the Agreement on the World Trade Organization as well as the
Ministerial Declarations and Decisions, and the Understanding and Commitments in
Financial Services.
I am now satisfied with the wording of the new submission of President Ramos.
SEN. TAADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Taada. Can we hear from Senator
Tolentino? And after him Senator Neptali Gonzales and Senator Lina.
SEN TOLENTINO, Mr. Chairman, I have not seen the new submission actually
transmitted to us but I saw the draft of his earlier, and I think it now complies with the
provisions of the Constitution, and with the Final Act itself. The Constitution does
not require us to ratify the Final Act. It requires us to ratify the Agreement which is
now being submitted. The Final Act itself specifies what is going to be submitted to
with the governments of the participants.
In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives agree: (a) to submit as
appropriate the WTO Agreement for the consideration of the respective competent
authorities with a view to seeking approval of the Agreement in accordance with their
procedures.
In other words, it is not the Final Act that was agreed to be submitted to the
governments for ratification or acceptance as whatever their constitutional procedures
may provide but it is the World Trade Organization Agreement. And if that is the one
that is being submitted now, I think it satisfies both the Constitution and the Final Act
itself.
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of
record. And they had been adequately reflected in the journal of yesterdays session
and I dont see any need for repeating the same.
Now, I would consider the new submission as an act ex abudante cautela.

THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to
make any comment on this?
SEN. LINA. Mr. President, I agree with the observation just made by Senator
Gonzales out of the abundance of question. Then the new submission is, I believe,
stating the obvious and therefore I have no further comment to make.
Epilogue
In praying for the nullification of the Philippine ratification of the WTO
Agreement, petitioners are invoking this Courts constitutionally imposed duty
to determine whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of the Senate in giving
its concurrence therein via Senate Resolution No. 97. Procedurally, a writ
ofcertiorari grounded on grave abuse of discretion may be issued by the Court
under Rule 65 of the Rules of Court when it is amply shown that petitioners
have no other plain, speedy and adequate remedy in the ordinary course of
law.
By grave abuse of discretion is meant such capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction. Mere abuse of
discretion is not enough. It must begrave abuse of discretion as when the
power is exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, and must be so patent and so gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform the duty enjoined or
to act at all in contemplation of law. Failure on the part of the petitioner to
show grave abuse of discretion will result in the dismissal of the petition.
[61]

[62]

[63]

In rendering this Decision, this Court never forgets that the Senate, whose
act is under review, is one of two sovereign houses of Congress and is thus
entitled to great respect in its actions. It is itself a constitutional body
independent and coordinate, and thus its actions are presumed regular and
done in good faith. Unless convincing proof and persuasive arguments are
presented to overthrow such presumptions, this Court will resolve every doubt
in its favor. Using the foregoing well-accepted definition of grave abuse of
discretion and the presumption of regularity in the Senates processes, this
Court cannot find any cogent reason to impute grave abuse of discretion to
the Senates exercise of its power of concurrence in the WTO Agreement
granted it by Sec. 21 of Article VII of the Constitution.
[64]

It is true, as alleged by petitioners, that broad constitutional principles

require the State to develop an independent national economy effectively

controlled by Filipinos; and to protect and/or prefer Filipino labor, products,

domestic materials and locally produced goods. But it is equally true that
such principles -- while serving as judicial and legislative guides -- are not in
themselves sources of causes of action. Moreover, there are other equally
fundamental constitutional principles relied upon by the Senate which
mandate the pursuit of a trade policy that serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality and
reciprocity and the promotion of industries which are competitive in both
domestic and foreign markets, thereby justifying its acceptance of said
treaty. So too, the alleged impairment of sovereignty in the exercise of
legislative and judicial powers is balanced by the adoption of the generally
accepted principles of international law as part of the law of the land and the
adherence of the Constitution to the policy of cooperation and amity with all
nations.
That the Senate, after deliberation and voting, voluntarily and
overwhelmingly gave its consent to the WTO Agreement thereby making it a
part of the law of the land is a legitimate exercise of its sovereign duty and
power. We find no patent and gross arbitrariness or despotism by reason of
passion or personal hostility in such exercise. It is not impossible to surmise
that this Court, or at least some of its members, may even agree with
petitioners that it is more advantageous to the national interest to strike down
Senate Resolution No. 97. But that is not a legal reason to attribute grave
abuse of discretion to the Senate and to nullify its decision. To do so would
constitute grave abuse in the exercise of our own judicial power and
duty. Ineludably, what the Senate did was a valid exercise of its authority. As
to whether such exercise was wise, beneficial or viable is outside the realm of
judicial inquiry and review. That is a matter between the elected policy
makers and the people. As to whether the nation should join the worldwide
march toward trade liberalization and economic globalization is a matter that
our people should determine in electing their policy makers. After all, the
WTO Agreement allows withdrawal of membership, should this be the political
desire of a member.
The eminent futurist John Naisbitt, author of the best seller Megatrends,
predicts an Asian Renaissance where the East will become the dominant
region of the world economically, politically and culturally in the next
century. He refers to the free market espoused by WTO as the catalyst in
this coming Asian ascendancy. There are at present about 31 countries
including China, Russia and Saudi Arabia negotiating for membership in the
WTO. Notwithstanding objections against possible limitations on national
sovereignty, the WTO remains as the only viable structure for multilateral
[65]

trading and the veritable forum for the development of international trade
law. The alternative to WTO is isolation, stagnation, if not economic selfdestruction. Duly enriched with original membership, keenly aware of the
advantages and disadvantages of globalization with its on-line experience,
and endowed with a vision of the future, the Philippines now straddles the
crossroads of an international strategy for economic prosperity and stability in
the new millennium. Let the people, through their duly authorized elected
officers, make their free choice.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
G.R. No. 162059

January 22, 2008

HANNAH EUNICE D. SERANA, petitioner,

vs.
SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, respondents.
DECISION
REYES, R.T., J.:
CAN the Sandiganbayan try a government scholaran** accused, along with her brother, of swindling
government funds?
MAAARI bang litisin ng Sandiganbayan ang isang iskolar ng bayan, at ang kanyang kapatid,
na kapwa pinararatangan ng estafa ng pera ng bayan?
The jurisdictional question is posed in this petition for certiorari assailing the Resolutions1 of the
Sandiganbayan, Fifth Division, denying petitioners motion to quash the information and her motion
for reconsideration.
The Antecedents
Petitioner Hannah Eunice D. Serana was a senior student of the University of the Philippines-Cebu.
A student of a state university is known as a government scholar. She was appointed by then
President Joseph Estrada on December 21, 1999 as a student regent of UP, to serve a one-year
term starting January 1, 2000 and ending on December 31, 2000.
In the early part of 2000, petitioner discussed with President Estrada the renovation of Vinzons Hall
Annex in UP Diliman.2 On September 4, 2000, petitioner, with her siblings and relatives, registered
with the Securities and Exchange Commission the Office of the Student Regent Foundation, Inc.
(OSRFI).3
One of the projects of the OSRFI was the renovation of the Vinzons Hall Annex.4 President Estrada
gave Fifteen Million Pesos (P15,000,000.00) to the OSRFI as financial assistance for the proposed
renovation. The source of the funds, according to the information, was the Office of the President.

The renovation of Vinzons Hall Annex failed to materialize.5 The succeeding student regent, Kristine
Clare Bugayong, and Christine Jill De Guzman, Secretary General of the KASAMA sa U.P., a
system-wide alliance of student councils within the state university, consequently filed a complaint
for Malversation of Public Funds and Property with the Office of the Ombudsman.6
On July 3, 2003, the Ombudsman, after due investigation, found probable cause to indict petitioner
and her brother Jade Ian D. Serana for estafa, docketed as Criminal Case No. 27819 of the
Sandiganbayan.7 The Information reads:
The undersigned Special Prosecution Officer III, Office of the Special Prosecutor, hereby
accuses HANNAH EUNICE D. SERANA and JADE IAN D. SERANA of the crime of Estafa,
defined and penalized under Paragraph 2(a), Article 315 of the Revised Penal Code, as
amended committed as follows:
That on October, 24, 2000, or sometime prior or subsequent thereto, in Quezon City, Metro
Manila, Philippines, and within the jurisdiction of this Honorable Court, above-named
accused, HANNAH EUNICE D. SERANA, a high-ranking public officer, being then the
Student Regent of the University of the Philippines, Diliman, Quezon City, while in the
performance of her official functions, committing the offense in relation to her office and
taking advantage of her position, with intent to gain, conspiring with her brother, JADE IAN
D. SERANA, a private individual, did then and there wilfully, unlawfully and feloniously
defraud the government by falsely and fraudulently representing to former President Joseph
Ejercito Estrada that the renovation of the Vinzons Hall of the University of the Philippines
will be renovated and renamed as "President Joseph Ejercito Estrada Student Hall," and for
which purpose accused HANNAH EUNICE D. SERANA requested the amount of FIFTEEN
MILLION PESOS (P15,000,000.00), Philippine Currency, from the Office of the President,
and the latter relying and believing on said false pretenses and misrepresentation gave and
delivered to said accused Land Bank Check No. 91353 dated October 24, 2000 in the
amount of FIFTEEN MILLION PESOS (P15,000,000.00), which check was subsequently
encashed by accused Jade Ian D. Serana on October 25, 2000 and misappropriated for their
personal use and benefit, and despite repeated demands made upon the accused for them
to return aforesaid amount, the said accused failed and refused to do so to the damage and
prejudice of the government in the aforesaid amount.
CONTRARY TO LAW. (Underscoring supplied)
Petitioner moved to quash the information. She claimed that the Sandiganbayan does not have any
jurisdiction over the offense charged or over her person, in her capacity as UP student regent.
Petitioner claimed that Republic Act (R.A.) No. 3019, as amended by R.A. No. 8249, enumerates the
crimes or offenses over which the Sandiganbayan has jurisdiction.8 It has no jurisdiction over the
crime of estafa.9 It only has jurisdiction over crimes covered by Title VII, Chapter II, Section 2
(Crimes Committed by Public Officers), Book II of the Revised Penal Code (RPC). Estafa falling
under Title X, Chapter VI (Crimes Against Property), Book II of the RPC is not within the
Sandiganbayans jurisdiction.
She also argued that it was President Estrada, not the government, that was duped. Even assuming
that she received the P15,000,000.00, that amount came from Estrada, not from the coffers of the
government.10
Petitioner likewise posited that the Sandiganbayan had no jurisdiction over her person. As a student
regent, she was not a public officer since she merely represented her peers, in contrast to the other

regents who held their positions in an ex officio capacity. She addsed that she was a simple student
and did not receive any salary as a student regent.
She further contended that she had no power or authority to receive monies or funds. Such power
was vested with the Board of Regents (BOR) as a whole. Since it was not alleged in the information
that it was among her functions or duties to receive funds, or that the crime was committed in
connection with her official functions, the same is beyond the jurisdiction of the Sandiganbayan citing
the case of Soller v. Sandiganbayan.11
The Ombudsman opposed the motion.12 It disputed petitioners interpretation of the law. Section 4(b)
of Presidential Decree (P.D.) No. 1606 clearly contains the catch -all phrase "in relation to office,"
thus, the Sandiganbayan has jurisdiction over the charges against petitioner. In the same breath, the
prosecution countered that the source of the money is a matter of defense. It should be threshed out
during a full-blown trial.13
According to the Ombudsman, petitioner, despite her protestations, iwas a public officer. As a
member of the BOR, she hads the general powers of administration and exerciseds the corporate
powers of UP. Based on Mechems definition of a public office, petitioners stance that she was not
compensated, hence, not a public officer, is erroneous. Compensation is not an essential part of
public office. Parenthetically, compensation has been interpreted to include allowances. By this
definition, petitioner was compensated.14
Sandiganbayan Disposition
In a Resolution dated November 14, 2003, the Sandiganbayan denied petitioners motion for lack of
merit.15 It ratiocinated:
The focal point in controversy is the jurisdiction of the Sandiganbayan over this case.
It is extremely erroneous to hold that only criminal offenses covered by Chapter II, Section 2,
Title VII, Book II of the Revised Penal Code are within the jurisdiction of this Court. As
correctly pointed out by the prosecution, Section 4(b) of R.A. 8249 provides that the
Sandiganbayan also has jurisdiction over other offenses committed by public officials and
employees in relation to their office. From this provision, there is no single doubt that this
Court has jurisdiction over the offense of estafa committed by a public official in relation to
his office.
Accused-movants claim that being merely a member in representation of the student body,
she was never a public officer since she never received any compensation nor does she fall
under Salary Grade 27, is of no moment, in view of the express provision of Section 4 of
Republic Act No. 8249 which provides:
Sec. 4. Jurisdiction The Sandiganbayan shall exercise exclusive original jurisdiction in all
cases involving:
(A) x x x
(1) Officials of the executive branch occupying the positions of regional director and higher,
otherwise classified as Grade "27" and higher, of the Compensation and Position
Classification Act of 1989 (Republic Act No. 6758), specifically including:

xxxx
(g) Presidents, directors or trustees, or managers of government-owned or controlled
corporations, state universities or educational institutions or foundations. (Italics supplied)
It is very clear from the aforequoted provision that the Sandiganbayan has original exclusive
jurisdiction over all offenses involving the officials enumerated in subsection (g), irrespective
of their salary grades, because the primordial consideration in the inclusion of these officials
is the nature of their responsibilities and functions.
Is accused-movant included in the contemplated provision of law?
A meticulous review of the existing Charter of the University of the Philippines reveals that
the Board of Regents, to which accused-movant belongs, exclusively exercises the general
powers of administration and corporate powers in the university, such as: 1) To receive and
appropriate to the ends specified by law such sums as may be provided by law for the
support of the university; 2) To prescribe rules for its own government and to enact for the
government of the university such general ordinances and regulations, not contrary to law,
as are consistent with the purposes of the university; and 3) To appoint, on recommendation
of the President of the University, professors, instructors, lecturers and other employees of
the University; to fix their compensation, hours of service, and such other duties and
conditions as it may deem proper; to grant to them in its discretion leave of absence under
such regulations as it may promulgate, any other provisions of law to the contrary
notwithstanding, and to remove them for cause after an investigation and hearing shall have
been had.
It is well-established in corporation law that the corporation can act only through its board of
directors, or board of trustees in the case of non-stock corporations. The board of directors
or trustees, therefore, is the governing body of the corporation.
It is unmistakably evident that the Board of Regents of the University of the Philippines is
performing functions similar to those of the Board of Trustees of a non-stock corporation.
This draws to fore the conclusion that being a member of such board, accused-movant
undoubtedly falls within the category of public officials upon whom this Court is vested with
original exclusive jurisdiction, regardless of the fact that she does not occupy a position
classified as Salary Grade 27 or higher under the Compensation and Position Classification
Act of 1989.
Finally, this court finds that accused-movants contention that the same of P15 Million was
received from former President Estrada and not from the coffers of the government, is a
matter a defense that should be properly ventilated during the trial on the merits of this
case.16
On November 19, 2003, petitioner filed a motion for reconsideration.17 The motion was denied with
finality in a Resolution dated February 4, 2004.18
Issue
Petitioner is now before this Court, contending that "THE RESPONDENT COURT COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF JURISDICTION
IN NOT QUASHING THE INFORMATION AND DISMISING THE CASE NOTWITHSTANDING
THAT IS HAS NO JURISDICTION OVER THE OFFENSE CHARGED IN THE INFORMATION." 19

In her discussion, she reiterates her four-fold argument below, namely: (a) the Sandiganbayan has
no jurisdiction over estafa; (b) petitioner is not a public officer with Salary Grade 27 and she paid her
tuition fees; (c) the offense charged was not committed in relation to her office; (d) the funds in
question personally came from President Estrada, not from the government.
Our Ruling
The petition cannot be granted.
Preliminarily, the denial of a motion to
quash is not correctible by certiorari.
We would ordinarily dismiss this petition for certiorari outright on procedural grounds. Wellestablished is the rule that when a motion to quash in a criminal case is denied, the remedy is not a
petition for certiorari, but for petitioners to go to trial, without prejudice to reiterating the special
defenses invoked in their motion to quash.20Remedial measures as regards interlocutory orders,
such as a motion to quash, are frowned upon and often dismissed.21 The evident reason for this rule
is to avoid multiplicity of appeals in a single action.22
In Newsweek, Inc. v. Intermediate Appellate Court,23 the Court clearly explained and illustrated the
rule and the exceptions, thus:
As a general rule, an order denying a motion to dismiss is merely interlocutory and cannot be
subject of appeal until final judgment or order is rendered. (Sec. 2 of Rule 41). The ordinary
procedure to be followed in such a case is to file an answer, go to trial and if the decision is
adverse, reiterate the issue on appeal from the final judgment. The same rule applies to an
order denying a motion to quash, except that instead of filing an answer a plea is entered
and no appeal lies from a judgment of acquittal.
This general rule is subject to certain exceptions. If the court, in denying the motion to
dismiss or motion to quash, acts without or in excess of jurisdiction or with grave abuse of
discretion, then certiorari or prohibition lies. The reason is that it would be unfair to require
the defendant or accused to undergo the ordeal and expense of a trial if the court has no
jurisdiction over the subject matter or offense, or is not the court of proper venue, or if the
denial of the motion to dismiss or motion to quash is made with grave abuse of discretion or
a whimsical and capricious exercise of judgment. In such cases, the ordinary remedy of
appeal cannot be plain and adequate. The following are a few examples of the exceptions to
the general rule.
In De Jesus v. Garcia (19 SCRA 554), upon the denial of a motion to dismiss based on lack
of jurisdiction over the subject matter, this Court granted the petition for certiorari and
prohibition against the City Court of Manila and directed the respondent court to dismiss the
case.
In Lopez v. City Judge (18 SCRA 616), upon the denial of a motion to quash based on lack
of jurisdiction over the offense, this Court granted the petition for prohibition and enjoined the
respondent court from further proceeding in the case.
In Enriquez v. Macadaeg (84 Phil. 674), upon the denial of a motion to dismiss based on
improper venue, this Court granted the petition for prohibition and enjoined the respondent
judge from taking cognizance of the case except to dismiss the same.

In Manalo v. Mariano (69 SCRA 80), upon the denial of a motion to dismiss based on bar by
prior judgment, this Court granted the petition for certiorari and directed the respondent judge
to dismiss the case.
In Yuviengco v. Dacuycuy (105 SCRA 668), upon the denial of a motion to dismiss based on
the Statute of Frauds, this Court granted the petition for certiorari and dismissed the
amended complaint.
In Tacas v. Cariaso (72 SCRA 527), this Court granted the petition for certiorari after the
motion to quash based on double jeopardy was denied by respondent judge and ordered him
to desist from further action in the criminal case except to dismiss the same.
In People v. Ramos (83 SCRA 11), the order denying the motion to quash based on
prescription was set aside on certiorari and the criminal case was dismissed by this Court.24
We do not find the Sandiganbayan to have committed a grave abuse of discretion.
The jurisdiction of the Sandiganbayan is
set by P.D. No. 1606, as amended, not by
R.A. No. 3019, as amended.
We first address petitioners contention that the jurisdiction of the Sandiganbayan is determined by
Section 4 of R.A. No. 3019 (The Anti-Graft and Corrupt Practices Act, as amended). We note that
petitioner refers to Section 4 of the said law yet quotes Section 4 of P.D. No. 1606, as amended, in
her motion to quash before the Sandiganbayan.25 She repeats the reference in the instant petition
for certiorari26 and in her memorandum of authorities.27
We cannot bring ourselves to write this off as a mere clerical or typographical error. It bears
stressing that petitioner repeated this claim twice despite corrections made by the Sandiganbayan.28
Her claim has no basis in law. It is P.D. No. 1606, as amended, rather than R.A. No. 3019, as
amended, that determines the jurisdiction of the Sandiganbayan. A brief legislative history of the
statute creating the Sandiganbayan is in order. The Sandiganbayan was created by P.D. No. 1486,
promulgated by then President Ferdinand E. Marcos on June 11, 1978. It was promulgated to attain
the highest norms of official conduct required of public officers and employees, based on the
concept that public officers and employees shall serve with the highest degree of responsibility,
integrity, loyalty and efficiency and shall remain at all times accountable to the people.29
P.D. No. 1486 was, in turn, amended by P.D. No. 1606 which was promulgated on December 10,
1978. P.D. No. 1606 expanded the jurisdiction of the Sandiganbayan.30
P.D. No. 1606 was later amended by P.D. No. 1861 on March 23, 1983, further altering the
Sandiganbayan jurisdiction. R.A. No. 7975 approved on March 30, 1995 made succeeding
amendments to P.D. No. 1606, which was again amended on February 5, 1997 by R.A. No. 8249.
Section 4 of R.A. No. 8249 further modified the jurisdiction of the Sandiganbayan. As it now stands,
the Sandiganbayan has jurisdiction over the following:
Sec. 4. Jurisdiction. - The Sandiganbayan shall exercise exclusive original jurisdiction in all
cases involving:

A. Violations of Republic Act No. 3019, as amended, other known as the Anti-Graft and
Corrupt Practices Act, Republic Act No. 1379, and Chapter II, Section 2, Title VII, Book II of
the Revised Penal Code, where one or more of the accused are officials occupying the
following positions in the government, whether in a permanent, acting or interim capacity, at
the time of the commission of the offense:
(1) Officials of the executive branch occupying the positions of regional director and higher,
otherwise classified as Grade "27" and higher, of the Compensation and Position
Classification Act of 989 (Republic Act No. 6758), specifically including:
" (a) Provincial governors, vice-governors, members of the sangguniang panlalawigan, and
provincial treasurers, assessors, engineers, and other city department heads;
" (b) City mayor, vice-mayors, members of the sangguniang panlungsod, city treasurers,
assessors, engineers, and other city department heads;
"(c ) Officials of the diplomatic service occupying the position of consul and higher;
" (d) Philippine army and air force colonels, naval captains, and all officers of higher rank;
" (e) Officers of the Philippine National Police while occupying the position of provincial
director and those holding the rank of senior superintended or higher;
" (f) City and provincial prosecutors and their assistants, and officials and prosecutors in the
Office of the Ombudsman and special prosecutor;
" (g) Presidents, directors or trustees, or managers of government-owned or controlled
corporations, state universities or educational institutions or foundations.
" (2) Members of Congress and officials thereof classified as Grade "27'" and up under the
Compensation and Position Classification Act of 1989;
" (3) Members of the judiciary without prejudice to the provisions of the Constitution;
" (4) Chairmen and members of Constitutional Commission, without prejudice to the
provisions of the Constitution; and
" (5) All other national and local officials classified as Grade "27'" and higher under the
Compensation and Position Classification Act of 1989.
B. Other offenses of felonies whether simple or complexed with other crimes committed by
the public officials and employees mentioned in subsection a of this section in relation to
their office.
C. Civil and criminal cases filed pursuant to and in connection with Executive Order Nos. 1,
2, 14 and 14-A, issued in 1986.
" In cases where none of the accused are occupying positions corresponding to Salary
Grade "27'" or higher, as prescribed in the said Republic Act No. 6758, or military and PNP
officer mentioned above, exclusive original jurisdiction thereof shall be vested in the proper
regional court, metropolitan trial court, municipal trial court, and municipal circuit trial court,

as the case may be, pursuant to their respective jurisdictions as provided in Batas
Pambansa Blg. 129, as amended.
" The Sandiganbayan shall exercise exclusive appellate jurisdiction over final judgments,
resolutions or order of regional trial courts whether in the exercise of their own original
jurisdiction or of their appellate jurisdiction as herein provided.
" The Sandiganbayan shall have exclusive original jurisdiction over petitions for the issuance
of the writs of mandamus, prohibition, certiorari, habeas corpus, injunctions, and other
ancillary writs and processes in aid of its appellate jurisdiction and over petitions of similar
nature, including quo warranto, arising or that may arise in cases filed or which may be filed
under Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986: Provided, That the jurisdiction
over these petitions shall not be exclusive of the Supreme Court.
" The procedure prescribed in Batas Pambansa Blg. 129, as well as the implementing rules
that the Supreme Court has promulgated and may thereafter promulgate, relative to
appeals/petitions for review to the Court of Appeals, shall apply to appeals and petitions for
review filed with the Sandiganbayan. In all cases elevated to the Sandiganbayan and from
the Sandiganbayan to the Supreme Court, the Office of the Ombudsman, through its special
prosecutor, shall represent the People of the Philippines, except in cases filed pursuant to
Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986.
" In case private individuals are charged as co-principals, accomplices or accessories with
the public officers or employees, including those employed in government-owned or
controlled corporations, they shall be tried jointly with said public officers and employees in
the proper courts which shall exercise exclusive jurisdiction over them.
" Any provisions of law or Rules of Court to the contrary notwithstanding, the criminal action
and the corresponding civil action for the recovery of civil liability shall, at all times, be
simultaneously instituted with, and jointly determined in, the same proceeding by the
Sandiganbayan or the appropriate courts, the filing of the criminal action being deemed to
necessarily carry with it the filing of the civil action, and no right to reserve the filing such civil
action separately from the criminal action shall be recognized: Provided, however, That
where the civil action had heretofore been filed separately but judgment therein has not yet
been rendered, and the criminal case is hereafter filed with the Sandiganbayan or the
appropriate court, said civil action shall be transferred to the Sandiganbayan or the
appropriate court, as the case may be, for consolidation and joint determination with the
criminal action, otherwise the separate civil action shall be deemed abandoned."
Upon the other hand, R.A. No. 3019 is a penal statute approved on August 17, 1960. The said law
represses certain acts of public officers and private persons alike which constitute graft or corrupt
practices or which may lead thereto.31 Pursuant to Section 10 of R.A. No. 3019, all prosecutions for
violation of the said law should be filed with the Sandiganbayan.32
R.A. No. 3019 does not contain an enumeration of the cases over which the Sandiganbayan has
jurisdiction. In fact, Section 4 of R.A. No. 3019 erroneously cited by petitioner, deals not with the
jurisdiction of the Sandiganbayan but with prohibition on private individuals. We quote:
Section 4. Prohibition on private individuals. (a) It shall be unlawful for any person having
family or close personal relation with any public official to capitalize or exploit or take
advantage of such family or close personal relation by directly or indirectly requesting or
receiving any present, gift or material or pecuniary advantage from any other person having

some business, transaction, application, request or contract with the government, in which
such public official has to intervene. Family relation shall include the spouse or relatives by
consanguinity or affinity in the third civil degree. The word "close personal relation" shall
include close personal friendship, social and fraternal connections, and professional
employment all giving rise to intimacy which assures free access to such public officer.
(b) It shall be unlawful for any person knowingly to induce or cause any public official to
commit any of the offenses defined in Section 3 hereof.
In fine, the two statutes differ in that P.D. No. 1606, as amended, defines the jurisdiction of the
Sandiganbayan while R.A. No. 3019, as amended, defines graft and corrupt practices and provides
for their penalties.
Sandiganbayan has jurisdiction over
the offense of estafa.
Relying on Section 4 of P.D. No. 1606, petitioner contends that estafa is not among those crimes
cognizable by the Sandiganbayan. We note that in hoisting this argument, petitioner isolated the first
paragraph of Section 4 of P.D. No. 1606, without regard to the succeeding paragraphs of the said
provision.
The rule is well-established in this jurisdiction that statutes should receive a sensible construction so
as to avoid an unjust or an absurd conclusion.33 Interpretatio talis in ambiguis semper fienda est, ut
evitetur inconveniens et absurdum. Where there is ambiguity, such interpretation as will avoid
inconvenience and absurdity is to be adopted. Kung saan mayroong kalabuan, ang
pagpapaliwanag ay hindi dapat maging mahirap at katawa-tawa.
Every section, provision or clause of the statute must be expounded by reference to each other in
order to arrive at the effect contemplated by the legislature.34 The intention of the legislator must be
ascertained from the whole text of the law and every part of the act is to be taken into view.35 In other
words, petitioners interpretation lies in direct opposition to the rule that a statute must be interpreted
as a whole under the principle that the best interpreter of a statute is the statute itself.36 Optima
statuti interpretatrix est ipsum statutum. Ang isang batas ay marapat na bigyan ng kahulugan sa
kanyang kabuuan sa ilalim ng prinsipyo na ang pinakamainam na interpretasyon ay ang
mismong batas.
Section 4(B) of P.D. No. 1606 reads:
B. Other offenses or felonies whether simple or complexed with other crimes committed by
the public officials and employees mentioned in subsection a of this section in relation to
their office.
Evidently, the Sandiganbayan has jurisdiction over other felonies committed by public officials in
relation to their office. We see no plausible or sensible reason to exclude estafa as one of the
offenses included in Section 4(bB) of P.D. No. 1606. Plainly, estafa is one of those other felonies.
The jurisdiction is simply subject to the twin requirements that (a) the offense is committed by public
officials and employees mentioned in Section 4(A) of P.D. No. 1606, as amended, and that (b) the
offense is committed in relation to their office.
In Perlas, Jr. v. People,37 the Court had occasion to explain that the Sandiganbayan has jurisdiction
over an indictment for estafa versus a director of the National Parks Development Committee, a
government instrumentality. The Court held then:

The National Parks Development Committee was created originally as an Executive

Committee on January 14, 1963, for the development of the Quezon Memorial, Luneta and
other national parks (Executive Order No. 30). It was later designated as the National Parks
Development Committee (NPDC) on February 7, 1974 (E.O. No. 69). On January 9, 1966,
Mrs. Imelda R. Marcos and Teodoro F. Valencia were designated Chairman and ViceChairman respectively (E.O. No. 3). Despite an attempt to transfer it to the Bureau of Forest
Development, Department of Natural Resources, on December 1, 1975 (Letter of
Implementation No. 39, issued pursuant to PD No. 830, dated November 27, 1975), the
NPDC has remained under the Office of the President (E.O. No. 709, dated July 27, 1981).
Since 1977 to 1981, the annual appropriations decrees listed NPDC as a regular government
agency under the Office of the President and allotments for its maintenance and operating
expenses were issued direct to NPDC (Exh. 10-A, Perlas, Item Nos. 2, 3).
The Sandiganbayans jurisdiction over estafa was reiterated with greater firmness in Bondoc v.
Sandiganbayan.38Pertinent parts of the Courts ruling in Bondoc read:
Furthermore, it is not legally possible to transfer Bondocs cases to the Regional Trial Court,
for the simple reason that the latter would not have jurisdiction over the offenses. As already
above intimated, the inability of the Sandiganbayan to hold a joint trial of Bondocs cases and
those of the government employees separately charged for the same crimes, has not altered
the nature of the offenses charged, as estafa thru falsification punishable by penalties higher
than prision correccional or imprisonment of six years, or a fine of P6,000.00, committed by
government employees in conspiracy with private persons, including Bondoc. These crimes
are within the exclusive, original jurisdiction of the Sandiganbayan. They simply cannot be
taken cognizance of by the regular courts, apart from the fact that even if the cases could be
so transferred, a joint trial would nonetheless not be possible.
Petitioner UP student regent
is a public officer.
Petitioner also contends that she is not a public officer. She does not receive any salary or
remuneration as a UP student regent. This is not the first or likely the last time that We will be called
upon to define a public officer. InKhan, Jr. v. Office of the Ombudsman, We ruled that it is difficult to
pin down the definition of a public officer.39The 1987 Constitution does not define who are public
officers. Rather, the varied definitions and concepts are found in different statutes and jurisprudence.
In Aparri v. Court of Appeals,40 the Court held that:
A public office is the right, authority, and duty created and conferred by law, by which for a
given period, either fixed by law or enduring at the pleasure of the creating power, an
individual is invested with some portion of the sovereign functions of the government, to be
exercise by him for the benefit of the public ([Mechem Public Offices and Officers,] Sec. 1).
The right to hold a public office under our political system is therefore not a natural right. It
exists, when it exists at all only because and by virtue of some law expressly or impliedly
creating and conferring it (Mechem Ibid., Sec. 64). There is no such thing as a vested
interest or an estate in an office, or even an absolute right to hold office. Excepting
constitutional offices which provide for special immunity as regards salary and tenure, no one
can be said to have any vested right in an office or its salary (42 Am. Jur. 881).
In Laurel v. Desierto,41 the Court adopted the definition of Mechem of a public office:

"A public office is the right, authority and duty, created and conferred by law, by which, for a
given period, either fixed by law or enduring at the pleasure of the creating power, an
individual is invested with some portion of the sovereign functions of the government, to be
exercised by him for the benefit of the public. The individual so invested is a public officer."42
Petitioner claims that she is not a public officer with Salary Grade 27; she is, in fact, a regular tuition
fee-paying student. This is likewise bereft of merit. It is not only the salary grade that determines the
jurisdiction of the Sandiganbayan. The Sandiganbayan also has jurisdiction over other officers
enumerated in P.D. No. 1606. InGeduspan v. People,43 We held that while the first part of Section
4(A) covers only officials with Salary Grade 27 and higher, its second part specifically includes other
executive officials whose positions may not be of Salary Grade 27 and higher but who are by
express provision of law placed under the jurisdiction of the said court. Petitioner falls under the
jurisdiction of the Sandiganbayan as she is placed there by express provision of law.44
Section 4(A)(1)(g) of P.D. No. 1606 explictly vested the Sandiganbayan with jurisdiction over
Presidents, directors or trustees, or managers of government-owned or controlled corporations, state
universities or educational institutions or foundations. Petitioner falls under this category. As the
Sandiganbayan pointed out, the BOR performs functions similar to those of a board of trustees of a
non-stock corporation.45 By express mandate of law, petitioner is, indeed, a public officer as
contemplated by P.D. No. 1606.
Moreover, it is well established that compensation is not an essential element of public office.46 At
most, it is merely incidental to the public office.47
Delegation of sovereign functions is essential in the public office. An investment in an individual of
some portion of the sovereign functions of the government, to be exercised by him for the benefit of
the public makes one a public officer.48
The administration of the UP is a sovereign function in line with Article XIV of the Constitution. UP
performs a legitimate governmental function by providing advanced instruction in literature,
philosophy, the sciences, and arts, and giving professional and technical training.49 Moreover, UP is
maintained by the Government and it declares no dividends and is not a corporation created for
profit.50
The offense charged was committed
in relation to public office, according
to the Information.
Petitioner likewise argues that even assuming that she is a public officer, the Sandiganbayan would
still not have jurisdiction over the offense because it was not committed in relation to her office.
According to petitioner, she had no power or authority to act without the approval of the BOR. She
adds there was no Board Resolution issued by the BOR authorizing her to contract with then
President Estrada; and that her acts were not ratified by the governing body of the state university.
Resultantly, her act was done in a private capacity and not in relation to public office.
It is axiomatic that jurisdiction is determined by the averments in the information.51 More than that,
jurisdiction is not affected by the pleas or the theories set up by defendant or respondent in an
answer, a motion to dismiss, or a motion to quash.52 Otherwise, jurisdiction would become
dependent almost entirely upon the whims of defendant or respondent.53

In the case at bench, the information alleged, in no uncertain terms that petitioner, being then a
student regent of U.P., "while in the performance of her official functions, committing the offense in
relation to her office and taking advantage of her position, with intent to gain, conspiring with her
brother, JADE IAN D. SERANA, a private individual, did then and there wilfully, unlawfully and
feloniously defraud the government x x x." (Underscoring supplied)
Clearly, there was no grave abuse of discretion on the part of the Sandiganbayan when it did not
quash the information based on this ground.
Source of funds is a defense that should
be raised during trial on the merits.
It is contended anew that the amount came from President Estradas private funds and not from the
government coffers. Petitioner insists the charge has no leg to stand on.
We cannot agree. The information alleges that the funds came from the Office of the President and
not its then occupant, President Joseph Ejercito Estrada. Under the information, it is averred that
"petitioner requested the amount of Fifteen Million Pesos (P15,000,000.00), Philippine
Currency, from the Office of the President, and the latter relying and believing on said false
pretenses and misrepresentation gave and delivered to said accused Land Bank Check No. 91353
dated October 24, 2000 in the amount of Fifteen Million Pesos (P15,000,000.00)."
Again, the Court sustains the Sandiganbayan observation that the source of the P15,000,000 is a
matter of defense that should be ventilated during the trial on the merits of the instant case.54
A lawyer owes candor, fairness
and honesty to the Court.
As a parting note, petitioners counsel, Renato G. dela Cruz, misrepresented his reference to
Section 4 of P.D. No. 1606 as a quotation from Section 4 of R.A. No. 3019. A review of his motion to
quash, the instant petition forcertiorari and his memorandum, unveils the misquotation. We urge
petitioners counsel to observe Canon 10 of the Code of Professional Responsibility, specifically
Rule 10.02 of the Rules stating that "a lawyer shall not misquote or misrepresent."
The Court stressed the importance of this rule in Pangan v. Ramos,55 where Atty Dionisio D. Ramos
used the name Pedro D.D. Ramos in connection with a criminal case. The Court ruled that Atty.
Ramos resorted to deception by using a name different from that with which he was authorized. We
severely reprimanded Atty. Ramos and warned that a repetition may warrant suspension or
disbarment.56
We admonish petitioners counsel to be more careful and accurate in his citation. A lawyers conduct
before the court should be characterized by candor and fairness.57 The administration of justice
would gravely suffer if lawyers do not act with complete candor and honesty before the courts.58
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.

[G.R. No. 129029. April 3, 2000]

RAFAEL REYES TRUCKING CORPORATION, petitioner, vs. PEOPLE OF

THE PHILIPPINES and ROSARIO P. DY (for herself and on behalf of the
minors Maria Luisa, Francis Edward, Francis Mark and Francis Rafael,
all surnamed Dy), respondents.
DECISION
PARDO, J.:
The case is an appeal via certiorari from the amended decision of the Court
of Appeals affirming the decision and supplemental decision of the trial
court, as follows:
[1]

[2]

[3]

"IN VIEW OF THE FOREGOING, judgment is hereby rendered

dismissing the appeals interposed by both accused and Reyes
Trucking Corporation and affirming the Decision and
Supplemental Decision dated June 6, 1992 and October 26, 1992
respectively.
"SO ORDERED."

[4]

The facts are as follows:

On October 10, 1989, Provincial Prosecutor Patricio T. Durian of Isabela filed
with the Regional Trial Court, Isabela, Branch 19, Cauayan an amended
information charging Romeo Dunca y de Tumol with reckless imprudence
resulting in double homicide and damage to property, reading as follows:
"That on or about the 20th day of June, 1989, in the Municipality
of Cauayan, Province of Isabela, Philippines, and within the
jurisdiction of this Honorable Court, the said accused being the
driver and person-in-charge of a Trailer Truck Tractor bearing
Plate No. N2A-867 registered in the name of Rafael Reyes
Trucking Corporation, with a load of 2,000 cases of empty bottles
of beer grande, willfully, unlawfully and feloniously drove and
operated the same while along the National Highway of Barangay
Tagaran, in said Municipality, in a negligent, careless and
imprudent manner, without due regard to traffic laws, rules and
ordinances and without taking the necessary precautions to
prevent injuries to persons and damage to property, causing by
such negligence, carelessness and imprudence the said trailer
truck to hit and bump a Nissan Pick-up bearing Plate No. BBG-

957 driven by Feliciano Balcita and Francisco Dy, Jr., @

Pacquing, due to irreversible shock, internal and external
hemorrhage and multiple injuries, open wounds, abrasions, and
further causing damages to the heirs of Feliciano Balcita in the
amount of P100,000.00 and to the death of Francisco Dy, Jr.; @
Pacquing and damages to his Nissan Pick-Up bearing Plate No.
BBG-957 in the total amount of P2,000,000.00.
"CONTRARY TO LAW.
"Cauayan, Isabela, October 10, 1989.
"(Sgd.) FAUSTO C. CABANTAC
"Third Assistant Provincial Prosecutor"
Upon arraignment on October 23, 1989, the accused entered a plea of not
guilty. On the same occasion, the offended parties (Rosario P. Dy and minor
children and Angelina M. Balcita and minor son Paolo) made a reservation to
file a separate civil action against the accused arising from the offense
charged. On November 29, 1989, the offended parties actually filed with the
Regional Trial Court, Isabela, Branch 19, Cauayan a complaint against
petitioner Rafael Reyes Trucking Corporation, as employer of driver Romeo
Dunca y de Tumol, based on quasi delict. The petitioner settled the claim of
the heirs of Feliciano Balcita (the driver of the other vehicle involved in the
accident). The private respondents opted to pursue the criminal action but did
not withdraw the civil case quasi ex delicto they filed against petitioner. On
December 15, 1989, private respondents withdrew the reservation to file a
separate civil action against the accused and manifested that they would
prosecute the civil aspect ex delicto in the criminal action. However, they did
not withdraw the separate civil action based on quasi delict against petitioner
as employer arising from the same act or omission of the accused driver.
[5]

[6]

[7]

Upon agreement of the parties, the trial court consolidated both criminal and
civil cases and conducted a joint trial of the same.
The facts, as found by the trial court, which appear to be undisputed, are as
follows:
"The defendant Rafael Reyes Trucking Corporation is a domestic
corporation engaged in the business of transporting beer products
for the San Miguel Corporation (SMC for short) from the latters
San Fernando, Pampanga plant to its various sales outlets in

Luzon. Among its fleets of vehicles for hire is the white truck trailer
described above driven by Romeo Dunca y Tumol, a duly
licensed driver. Aside from the Corporations memorandum to all
its drivers and helpers to physically inspect their vehicles before
each trip (Exh. 15, pars. 4 & 5), the SMCs Traffic InvestigatorInspector certified the roadworthiness of this White Truck trailer
prior to June 20, 1989 (Exh. 17). In addition to a professional
drivers license, it also conducts a rigid examination of all driver
applicants before they are hired.
"In the early morning of June 20, 1989, the White Truck driven by
Dunca left Tuguegarao, Cagayan bound to San Fernando,
Pampanga loaded with 2,000 cases of empty beer "Grande"
bottles. Seated at the front right seat beside him was Ferdinand
Domingo, his truck helper ("pahinante" in Pilipino). At around 4:00
oclock that same morning while the truck was descending at a
slight downgrade along the national road at Tagaran, Cauayan,
Isabela, it approached a damaged portion of the road covering the
full width of the trucks right lane going south and about six meters
in length. These made the surface of the road uneven because
the potholes were about five to six inches deep. The left lane
parallel to this damaged portion is smooth. As narrated by
Ferdinand Domingo, before approaching the potholes, he and
Dunca saw the Nissan with its headlights on coming from the
opposite direction. They used to evade this damaged road by
taking the left lance but at that particular moment, because of the
incoming vehicle, they had to run over it. This caused the truck to
bounce wildly. Dunca lost control of the wheels and the truck
swerved to the left invading the lane of the Nissan. As a result,
Duncas vehicle rammed the incoming Nissan dragging it to the
left shoulder of the road and climbed a ridge above said shoulder
where it finally stopped. (see Exh. A-5, p. 8, record). The Nissan
was severely damaged (Exhs. A-7, A-8, A-9 and A-14, pp. 9-11,
record), and its two passengers, namely: Feliciano Balcita and
Francisco Dy, Jr. died instantly (Exh. A-19) from external and
internal hemorrhage and multiple fractures (pp. 15 and 16,
record).
"For the funeral expenses of Francisco Dy, Jr. her widow spent
P651,360.00 (Exh. I-3). At the time of his death he was 45 years
old. He was the President and Chairman of the Board of the

Dynamic Wood Products and Development Corporation (DWPC),

a wood processing establishment, from which he was receiving an
income of P10,000.00 a month (Exh. D). In the Articles of
Incorporation of the DWPC, the spouses Francisco Dy, Jr. and
Rosario Perez Dy appear to be stockholders of 10,000 shares
each with par value of P100.00 per share out of its outstanding
and subscribed capital stock of 60,000 shares valued at
P6,000,000.00 (Exhs. K-1 & 10-B). Under its 1988 Income Tax
Returns (Exh. J) the DWPC had a taxable net income of
P78,499.30 (Exh. J). Francisco Dy, Jr. was a La Salle University
graduate in Business Administration, past president of the Pasay
Jaycees, National Treasurer and President of the Philippine
Jaycees in 1971 and 1976, respectively, and World VicePresident of Jaycees International in 1979. He was also the
recipient of numerous awards as a civic leader (Exh. C). His
children were all studying in prestigious schools and spent about
P180,000.00 for their education in 1988 alone (Exh. H-4).
"As stated earlier, the plaintiffs procurement of a writ of
attachment of the properties of the Corporation was declared
illegal by the Court of Appeals. It was shown that on December
26, 1989, Deputy Sheriff Edgardo Zabat of the RTC at San
Fernando, Pampanga, attached six units of Truck Tractors and
trailers of the Corporation at its garage at San Fernando,
Pampanga. These vehicles were kept under PC guard by the
plaintiffs in said garage thus preventing the Corporation to operate
them. However, on December 28, 1989, the Court of Appeals
dissolved the writ (p. 30, record) and on December 29, 1989, said
Sheriff reported to this Court that the attached vehicles were
taken by the defendants representative, Melita Manapil (Exh. O,
p. 31, record). The defendants general Manager declared that it
lost P21,000.00 per day for the non-operation of the six units
during their attachment (p. 31, t.s.n., Natividad C. Babaran,
proceedings on December 10, 1990)."
[8]

On June 6, 1992, the trial court rendered a joint decision, the dispositive
portion of which reads as follows:
"WHEREFORE, in view of the foregoing considerations judgment
is hereby rendered:

"1. Finding the accused Romeo Dunca y de Tumol guilty beyond

reasonable doubt of the crime of Double Homicide through
Reckless Imprudence with violation of the Motor Vehicle Law
(Rep. Act No. 4136), and appreciating in his favor the mitigating
circumstance of voluntary surrender without any aggravating
circumstance to offset the same, the Court hereby sentences him
to suffer two (2) indeterminate penalties of four months and one
day of arresto mayor as minimum to three years, six months and
twenty days as maximum; to indemnify the Heirs of Francisco Dy.
Jr. in the amount of P3,000,000.00 as compensatory damages,
P1,000,000.00 as moral damages, and P1,030,000.00 as funeral
expenses;
"2. Ordering the plaintiff in Civil Case No. Br. 19-424 to pay the
defendant therein actual damages in the amount of P84,000.00;
and
"3. Ordering the dismissal of the complaint in Civil Case No. Br.
19-424.
"No pronouncement as to costs.
"SO ORDERED.
"Cauayan, Isabela, June 6, 1992.
"(Sgd.) ARTEMIO R. ALIVIA
"Regional Trial Judge"
[9]

On September 3, 1992, petitioner and the accused filed a notice of appeal

from the joint decision.
[10]

On the other hand, private respondents moved for amendment of the

dispositive portion of the joint decision so as to hold petitioner subsidiarily
liable for the damages awarded to the private respondents in the event of
insolvency of the accused.
[11]

On October 26, 1992, the trial court rendered a supplemental decision

amending the dispositive portion by inserting an additional paragraph reading
as follows:

"2:A Ordering the defendant Reyes Trucking Corporation

subsidiarily liable for all the damages awarded to the heirs of
Francisco Dy, Jr., in the event of insolvency of the accused but
deducting therefrom the damages of P84,000.00 awarded to said
defendant in the next preceding paragraph; and x x x"
[12]

On November 12, 1992, petitioner filed with the trial court a supplemental
notice of appeal from the supplemental decision.
[13]

During the pendency of the appeal, the accused jumped bail and fled to a
foreign country. By resolution dated December 29, 1994, the Court of Appeals
dismissed the appeal of the accused in the criminal case.
[14]

On January 6, 1997, the Court of Appeals rendered an amended decision

affirming that of the trial court, as set out in the opening paragraph of this
decision.
[15]

On January 31, 1997, petitioner filed a motion for reconsideration of the

amended decision.
[16]

On April 21, 1997, the Court of Appeals denied petitioners motion for
reconsideration for lack of merit.
[17]

Hence, this petition for review.

[18]

On July 21, 1997, the Court required respondents to comment on the petition
within ten (10) days from notice.
[19]

On January 27, 1998, the Solicitor General filed his comment. On April 13,
1998, the Court granted leave to petitioner to file a reply and noted the reply it
filed on March 11, 1998.
[20]

[21]

We now resolve to give due course to the petition and decide the case.
Petitioner raises three (3) grounds for allowance of the petition, which,
however, boil down to two (2) basic issues, namely:
1.....May petitioner as owner of the truck involved in the accident
be held subsidiarily liable for the damages awarded to the
offended parties in the criminal action against the truck driver
despite the filing of a separate civil action by the offended parties
against the employer of the truck driver?

2.....May the Court award damages to the offended parties in the

criminal case despite the filing of a civil action against the
employer of the truck driver; and in amounts exceeding that
alleged in the information for reckless imprudence resulting in
homicide and damage to property?
[22]

We grant the petition, resolving under the circumstances pro hac vice to
remand the cases to the trial court for determination of the civil liability of
petitioner as employer of the accused driver in the civil action quasi ex
delicto re-opened for the purpose.
In negligence cases, the aggrieved party has the choice between (1) an action
to enforce civil liability arising from crime under Article 100 of the Revised
Penal Code; and (2) a separate action for quasi delict under Article 2176 of
the Civil Code of the Philippines. Once the choice is made, the injured party
can not avail himself of any other remedy because he may not recover
damages twice for the same negligent act or omission of the accused. This
is the rule against double recovery.
[23]

In other words, "the same act or omission can create two kinds of liability on
the part of the offender, that is, civil liability ex delicto, and civil liability quasi
delicto" either of which "may be enforced against the culprit, subject to the
caveat under Article 2177 of the Civil Code that the offended party can not
recover damages under both types of liability."
[24]

In the instant case, the offended parties elected to file a separate civil action
for damages against petitioner as employer of the accused, based on quasi
delict, under Article 2176 of the Civil Code of the Philippines. Private
respondents sued petitioner Rafael Reyes Trucking Corporation, as the
employer of the accused, to be vicariously liable for the fault or negligence of
the latter. Under the law, this vicarious liability of the employer is founded on
at least two specific provisions of law.
The first is expressed in Article 2176 in relation to Article 2180 of the Civil
Code, which would allow an action predicated on quasi-delict to be instituted
by the injured party against the employer for an act or omission of the
employee and would necessitate only a preponderance of evidence to prevail.
Here, the liability of the employer for the negligent conduct of the subordinate
is direct and primary, subject to the defense of due diligence in the selection
and supervision of the employee. The enforcement of the judgment against
the employer in an action based on Article 2176 does not require the
employee to be insolvent since the nature of the liability of the employer with

that of the employee, the two being statutorily considered joint tortfeasors, is
solidary. The second, predicated on Article 103 of the Revised Penal Code,
provides that an employer may be held subsidiarily civilly liable for a felony
committed by his employee in the discharge of his duty. This liability attaches
when the employee is convicted of a crime done in the performance of his
work and is found to be insolvent that renders him unable to properly respond
to the civil liability adjudged.
[25]

[26]

As regards the first issue, the answer is in the negative. Rafael Reyes
Trucking Corporation, as employer of the accused who has been adjudged
guilty in the criminal case for reckless imprudence, can not be held
subsidiarily liable because of the filing of the separate civil action based
on quasi delict against it. In view of the reservation to file, and the subsequent
filing of the civil action for recovery of civil liability, the same was not instituted
with the criminal action. Such separate civil action was for recovery of
damages under Article 2176 of the Civil Code, arising from the same act or
omission of the accused.
[27]

Pursuant to the provision of Rule 111, Section 1, paragraph 3 of the 1985

Rules of Criminal Procedure, when private respondents, as complainants in
the criminal action, reserved the right to file the separate civil action, they
waived other available civil actions predicated on the same act or omission of
the accused-driver. Such civil action includes the recovery of indemnity under
the Revised Penal Code, and damages under Articles 32, 33, and 34 of the
Civil Code of the Philippines arising from the same act or omission of the
accused.
[28]

The intention of private respondents to proceed primarily and directly against

petitioner as employer of accused truck driver became clearer when they did
not ask for the dismissal of the civil action against the latter based on quasi
delict.
Consequently, the Court of Appeals and the trial court erred in holding the
accused civilly liable, and petitioner-employer of the accused subsidiarily
liable for damages arising from crime (ex delicto) in the criminal action as the
offended parties in fact filed a separate civil action against the employer
based on quasi delict resulting in the waiver of the civil action ex delicto.
It might be argued that private respondents as complainants in the criminal
case withdrew the reservation to file a civil action against the driver (accused)
and manifested that they would pursue the civil liability of the driver in the
criminal action. However, the withdrawal is ineffective to reverse the effect of

the reservation earlier made because private respondents did not withdraw
the civil action against petitioner based on quasi delict. In such a case, the
provision of Rule 111, Section 1, paragraph 3 of the 1985 Rules on Criminal
Procedure is clear that the reservation to file or the filing of a separate civil
action results in a waiver of other available civil actions arising from the same
act or omission of the accused. Rule 111, Section 1, paragraph 2 enumerated
what are the civil actions deemed waived upon such reservation or filing, and
one of which is the civil indemnity under the Revised Penal Code. Rule 111,
Section 1, paragraph 3 of the 1985 Rules on Criminal Procedure specifically
provides:
"A waiver of any of the civil actions extinguishes the others. The
institution of, or the reservation of the right to file, any of said civil
actions separately waives the others."
The rationale behind this rule is the avoidance of multiple suits between the
same litigants arising out of the same act or omission of the offender. The
restrictive phraseology of the section under consideration is meant to cover all
kinds of civil actions, regardless of their source in law, provided that the action
has for its basis the same act or omission of the offender.
[29]

However, petitioner as defendant in the separate civil action for damages filed
against it, based on quasi delict, may be held liable thereon. Thus, the trial
court grievously erred in dismissing plaintiffs civil complaint. And the Court of
Appeals erred in affirming the trial courts decision. Unfortunately private
respondents did not appeal from such dismissal and could not be granted
affirmative relief.
[30]

The Court, however, in exceptional cases has relaxed the rules "in order to
promote their objectives and assist the parties in obtaining just, speedy, and
inexpensive determination of every action or proceeding" or exempted "a
particular case from the operation of the rules."
[31]

[32]

Invoking this principle, we rule that the trial court erred in awarding civil
damages in the criminal case and in dismissing the civil action. Apparently
satisfied with such award, private respondent did not appeal from the
dismissal of the civil case. However, petitioner did appeal. Hence, this case
should be remanded to the trial court so that it may render decision in the civil
case awarding damages as may be warranted by the evidence.
[33]

With regard to the second issue, the award of damages in the criminal case
was improper because the civil action for the recovery of civil liability was

waived in the criminal action by the filing of a separate civil action against the
employer. As enunciated in Ramos vs. Gonong, "civil indemnity is not part of
the penalty for the crime committed." The only issue brought before the trial
court in the criminal action is whether accused Romeo Dunca y de Tumol is
guilty of reckless imprudence resulting in homicide and damage to property.
The action for recovery of civil liability is not included therein, but is covered
by the separate civil action filed against the petitioner as employer of the
accused truck-driver.
[34]

In this case, accused-driver jumped bail pending his appeal from his
conviction. Thus, the judgment convicting the accused became final and
executory, but only insofar as the penalty in the criminal action is concerned.
The damages awarded in the criminal action was invalid because of its
effective waiver. The pronouncement was void because the action for
recovery of the civil liability arising from the crime has been waived in said
criminal action.
With respect to the issue that the award of damages in the criminal action
exceeded the amount of damages alleged in the amended information, the
issue is de minimis. At any rate, the trial court erred in awarding damages in
the criminal case because by virtue of the reservation of the right to bring a
separate civil action or the filing thereof, "there would be no possibility that the
employer would be held liable because in such a case there would be no
pronouncement as to the civil liability of the accused.
[35]

As a final note, we reiterate that "the policy against double recovery requires
that only one action be maintained for the same act or omission whether the
action is brought against the employee or against his employer. The injured
party must choose which of the available causes of action for damages he will
bring.
[36]

[37]

Parenthetically, the trial court found the accused "guilty beyond reasonable
doubt of the crime of Double Homicide Through Reckless Imprudence with
violation of the Motor Vehicle Law (Rep. Act No. 4136)." There is no such
nomenclature of an offense under the Revised Penal Code. Thus, the trial
court was misled to sentence the accused "to suffer two (2) indeterminate
penalties of four (4) months and one (1) day of arresto mayor, as minimum, to
three (3) years, six (6) months and twenty (20) days of prision correccional, as
maximum." This is erroneous because in reckless imprudence cases, the
actual penalty for criminal negligence bears no relation to the individual willful
crime or crimes committed, but is set in relation to a whole class, or series of
crimes.
[38]

Unfortunately, we can no longer correct this judgment even if erroneous, as it

is, because it has become final and executory.
Under Article 365 of the Revised Penal Code, criminal negligence "is treated
as a mere quasi offense, and dealt with separately from willful offenses. It is
not a question of classification or terminology. In intentional crimes, the act
itself is punished; in negligence or imprudence, what is principally penalized is
the mental attitude or condition behind the act, the dangerous recklessness,
lack of care or foresight, the imprudencia punible. Much of the confusion has
arisen from the common use of such descriptive phrase as homicide through
reckless imprudence, and the like; when the strict technical sense is, more
accurately, reckless imprudence resulting in homicide; or simple imprudence
causing damages to property."
[39]

There is need, therefore, to rectify the designation of the offense without

disturbing the imposed penalty for the guidance of bench and bar in strict
adherence to precedent.
WHEREFORE, the Court GRANTS the petition and SETS ASIDE the
amended decision and resolution of the Court of Appeals in CA-G. R. CR No.
14448, promulgated on January 6, 1997, and the joint decision of the
Regional Trial Court, Isabela, Branch 19, Cauayan, in Criminal Case No. Br.
19-311 and Civil Case No. Br. 19-424, dated June 6, 1992.
IN LIEU THEREOF, the Court renders judgment as follows:
(1) In Criminal Case No. Br. 19-311, the Court declares the accused Romeo
Dunca y de Tumol guilty beyond reasonable doubt of reckless imprudence
resulting in homicide and damage to property, defined and penalized under
Article 365, paragraph 2 of the Revised Penal Code, with violation of the
automobile law (R. A. No. 4136, as amended), and sentences him to suffer
two (2) indeterminate penalties of four (4) months and one (1) day of arresto
mayor, as minimum, to three (3) years, six (6) months and twenty (20) days
of prision correccional, as maximum, without indemnity, and to pay the costs,
and
[40]

(2) In Civil Case No. Br. 19-424, the Court orders the case re-opened to
determine the liability of the defendant Rafael Reyes Trucking Corporation to
plaintiffs and that of plaintiffs on defendants counterclaim.
No costs in this instance.

SO ORDERED.
DIONISIO CARPIO, petitioner,
vs.
HON. SERGIO DOROJA, (Presiding Judge, MTC, Branch IV, Zamboanga City) and EDWIN
RAMIREZ Y WEE, respondents.

PARAS, J.:
Before us is a petition to review by certiorari the decision of the Municipal Trial Court of Zamboanga
City, Branch IV, which denied petitioner's motion for subsidiary writ of execution against the owneroperator of the vehicle which figured in the accident.
The facts of the case are undisputed.
Sometime on October 23, 1985, accused-respondent Edwin Ramirez, while driving a passenger
Fuso Jitney owned and operated by Eduardo Toribio, bumped Dionisio Carpio, a pedestrian crossing
the street, as a consequence of which the latter suffered from a fractured left clavicle as reflected in
the medico-legal certificate and sustained injuries which required medical attention for a period of (3)
three months.
An information for Reckless Imprudence Resulting to Serious Physical Injuries was filed against
Edwin Ramirez with the Municipal Trial Court of Zamboanga City, Branch IV. On January 14, 1987,
the accused voluntarily pleaded guilty to a lesser offense and was accordingly convicted for
Reckless Imprudence Resulting to Less Serious Physical Injuries under an amended information
punishable under Article 365 of the Revised Penal Code. The dispositive portion of the decision
handed down on May 27, 1987 reads as follows:
WHEREFORE, finding the accused EDWIN RAMIREZ y WEE guilty as a principal beyond
reasonable doubt of the Amended Information to which he voluntarily pleaded guilty and
appreciating this mitigating circumstance in his favor, hereby sentences him to suffer the penalty of
One (1) month and One (1) day to Two (2) months of Arresto Mayor in its minimum period. The
accused is likewise ordered to indemnify the complainant Dionisio A. Carpio the amount of P45.00
representing the value of the 1/2 can of tomatoes lost; the amount of P200.00 which complainant
paid to the Zamboanga General Hospital, to pay complainant the amount of Pl,500.00 as attorney's
fees and to pay the cost of this suit. SO ORDERED. (p. 7, Rollo)
Thereafter, the accused filed an application for probation.
At the early stage of the trial, the private prosecutor manifested his desire to present evidence to
establish the civil liability of either the accused driver or the owner-operator of the vehicle. Accused's
counsel moved that the court summon the owner of the vehicle to afford the latter a day in court, on
the ground that the accused is not only indigent but also jobless and thus cannot answer any civil
liability that may be imposed upon him by the court. The private prosecutor, however, did not move
for the appearance of Eduardo Toribio.
The civil aspect of the above-quoted decision was appealed by the private prosecutor to the
Regional Trial Court Branch XVI, appellant praying for moral damages in the amount of P 10,000.00,
compensatory damages at P6,186.40, and attorney's fees of P 5,000.00. The appellate court, on

January 20, 1988, modified the trial court's decision, granting the appellant moral damages in the
amount of Five Thousand Pesos (P 5,000.00), while affirming all other civil liabilities.
Thereafter, a writ of execution dated March 10, 1988 was duly served upon the accused but was,
however, returned unsatisfied due to the insolvency of the accused as shown by the sheriffs return.
Thus, complainant moved for a subsidiary writ of execution against the subsidiary liability of the
owner-operator of the vehicle. The same was denied by the trial court on two grounds, namely, the
decision of the appellate court made no mention of the subsidiary liability of Eduardo Toribio, and the
nature of the accident falls under "culpa-aquiliana" and not culpa-contractual." A motion for
reconsideration of the said order was disallowed for the reason that complainant having failed to
raise the matter of subsidiary liability with the appellate court, said court rendered its decision which
has become final and executory and the trial court has no power to alter or modify such decision.
Hence, the instant petition.
Petitioner relies heavily on the case of Pajarito v. Seneris, 87 SCRA 275, which enunciates that "the
subsidiary liability of the owner-operator is fixed by the judgment, because if a case were to be filed
against said operator, the court called upon to act thereto has no other function than to render a
decision based on the indemnity award in the criminal case without power to amend or modify it
even if in his opinion an error has been committed in the decision." Petitioner maintains that the
tenor of the aforesaid decision implies that the subsidiary liability of the owner-operator may be
enforced in the same proceeding and a separate action is no longer necessary in order to avoid
undue delay, notwithstanding the fact that said employer was not made a party in the criminal action.
It is the theory of respondent that the owner-operator cannot be validly held subsidiarily liable for the
following reasons, namely: (a) the matter of subsidiary liability was not raised on appeal; (b) contrary
to the case of Pajarito v. Seneris, the injuries sustained by the complainant did not arise from the socalled "culpa-contractual" but from "culpa-aquiliana"; (c) the judgments of appellate courts may not
be altered, modified, or changed by the court of origin; and (d) said owner was never made a party
to the criminal proceedings.
Thus, the underlying issue raised in this case is; whether or not the subsidiary liability of the owneroperator may be enforced in the same criminal proceeding against the driver where the award was
given, or in a separate civil action.
The law involved in the instant case is Article 103 in relation to Article 100, both of the Revised Penal
Code, which reads thus:
Art. 103. Subsidiary civil liability of other persons. The subsidiary liability established in the next
preceding article shall apply to employers, teachers, persons, and corporations engaged in any kind
of industry for felonies committed by their servants, pupils, workmen, apprentices, or employees in
the discharge of their duties.
Respondent contends that the case of Pajarito v. Seneris cannot be applied to the present case, the
former being an action involving culpa-contractual, while the latter being one of culpa-aquiliana.
Such a declaration is erroneous. The subsidiary liability in Art. 103 should be distinguished from the
primary liability of employers, which is quasi-delictual in character as provided in Art. 2180 of the
New Civil Code. Under Art. 103, the liability emanated from a delict. On the other hand, the liability
under Art. 2180 is founded on culpa-aquiliana. The present case is neither an action for culpacontractual nor for culpa-aquiliana. This is basically an action to enforce the civil liability arising from
crime under Art. 100 of the Revised Penal Code. In no case can this be regarded as a civil action for

the primary liability of the employer under Art. 2180 of the New Civil Code, i.e., action for culpaaquiliana.
In order that an employer may be held subsidiarily liable for the employee's civil liability in the
criminal action, it should be shown (1) that the employer, etc. is engaged in any kind of industry, (2)
that the employee committed the offense in the discharge of his duties and (3) that he is insolvent
(Basa Marketing Corp. v. Bolinao, 117 SCRA 156). The subsidiary liability of the employer, however,
arises only after conviction of the employee in the criminal action. All these requisites present, the
employer becomes ipso facto subsidiarily liable upon the employee's conviction and upon proof of
the latter's insolvency. Needless to say, the case at bar satisfies all these requirements.
Furthermore, we are not convinced that the owner-operator has been deprived of his day in court,
because the case before us is not one wherein the operator is sued for a primary liability under the
Civil Code but one in which the subsidiary civil liability incident to and dependent upon his
employee's criminal negligence is sought to be enforced. Considering the subsidiary liability imposed
upon the employer by law, he is in substance and in effect a party to the criminal case. Ergo, the
employer's subsidiary liability may be determined and enforced in the criminal case as part of the
execution proceedings against the employee. This Court held in the earlier case of Pajarito v.
Seneris, supra, that "The proceeding for the enforcement of the subsidiary civil liability may be
considered as part of the proceeding for the execution of the judgment. A case in which an execution
has been issued is regarded as still pending so that all proceedings on the execution are
proceedings in the suit. There is no question that the court which rendered the judgment has a
general supervisory control over its process of execution, and this power carries with it the right to
determine every question of fact and law which may be involved in the execution."
The argument that the owner-operator cannot be held subsidiarily liable because the matter of
subsidiary liability was not raised on appeal and in like manner, the appellate court's decision made
no mention of such subsidiary liability is of no moment. As already discussed, the filing of a separate
complaint against the operator for recovery of subsidiary liability is not necessary since his liability is
clear from the decision against the accused. Such being the case, it is not indispensable for the
question of subsidiary liability to be passed upon by the appellate court. Such subsidiary liability is
already implied from the appellate court's decision. In the recent case of Vda. de Paman v. Seneris,
115 SCRA 709, this Court reiterated the following pronouncement: "A judgment of conviction
sentencing a defendant employer to pay an indemnity in the absence of any collusion between the
defendant and the offended party, is conclusive upon the employer in an action for the enforcement
of the latter's subsidiary liability not only with regard to the civil liability, but also with regard to its
amount." This being the case, this Court stated in Rotea v. Halili, 109 Phil. 495, "that the court has
no other function than to render decision based upon the indemnity awarded in the criminal case and
has no power to amend or modify it even if in its opinion an error has been committed in the
decision. A separate and independent action is, therefore, unnecessary and would only unduly
prolong the agony of the heirs of the victim."
Finally, the position taken by the respondent appellate court that to grant the motion for subsidiary
writ of execution would in effect be to amend its decision which has already become final and
executory cannot be sustained. Compelling the owner-operator to pay on the basis of his subsidiary
liability does not constitute an amendment of the judgment because in an action under Art. 103 of
the Revised Penal Code, once all the requisites as earlier discussed are met, the employer becomes
ipso facto subsidiarily liable, without need of a separate action. Such being the case, the subsidiary
liability can be enforced in the same case where the award was given, and this does not constitute
an act of amending the decision. It becomes incumbent upon the court to grant a motion for
subsidiary writ of execution (but only after the employer has been heard), upon conviction of the
employee and after execution is returned unsatisfied due to the employee's insolvency.

WHEREFORE, the order of respondent court disallowing the motion for subsidiary writ of execution
is hereby SET ASIDE. The Court a quo is directed to hear and decide in the same proceeding the
subsidiary liability of the alleged owner-operator of the passenger jitney. Costs against private
respondent.
SO ORDERED.
G.R. No. 126297

January 31, 2007

PROFESSIONAL SERVICES, INC., Petitioner,

vs.
NATIVIDAD and ENRIQUE AGANA, Respondents.
x-----------------------x
G.R. No. 126467

January 31, 2007

NATIVIDAD (Substituted by her children MARCELINO AGANA III, ENRIQUE AGANA, JR.,
EMMA AGANA ANDAYA, JESUS AGANA, and RAYMUND AGANA) and ENRIQUE
AGANA, Petitioners,
vs.
JUAN FUENTES, Respondent.
x- - - - - - - - - - - - - - - - - - - -- - - - x
G.R. No. 127590

January 31, 2007

MIGUEL AMPIL, Petitioner,

vs.
NATIVIDAD AGANA and ENRIQUE AGANA, Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Hospitals, having undertaken one of mankinds most important and delicate endeavors, must
assume the grave responsibility of pursuing it with appropriate care. The care and service dispensed
through this high trust, however technical, complex and esoteric its character may be, must meet
standards of responsibility commensurate with the undertaking to preserve and protect the health,
and indeed, the very lives of those placed in the hospitals keeping.1
Assailed in these three consolidated petitions for review on certiorari is the Court of Appeals
Decision2 dated September 6, 1996 in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198 affirming
with modification the Decision3dated March 17, 1993 of the Regional Trial Court (RTC), Branch 96,
Quezon City in Civil Case No. Q-43322 and nullifying its Order dated September 21, 1993.
The facts, as culled from the records, are:
On April 4, 1984, Natividad Agana was rushed to the Medical City General Hospital (Medical City
Hospital) because of difficulty of bowel movement and bloody anal discharge. After a series of

medical examinations, Dr. Miguel Ampil, petitioner in G.R. No. 127590, diagnosed her to be suffering
from "cancer of the sigmoid."
On April 11, 1984, Dr. Ampil, assisted by the medical staff4 of the Medical City Hospital, performed
an anterior resection surgery on Natividad. He found that the malignancy in her sigmoid area had
spread on her left ovary, necessitating the removal of certain portions of it. Thus, Dr. Ampil obtained
the consent of Natividads husband, Enrique Agana, to permit Dr. Juan Fuentes, respondent in G.R.
No. 126467, to perform hysterectomy on her.
After Dr. Fuentes had completed the hysterectomy, Dr. Ampil took over, completed the operation
and closed the incision.
However, the operation appeared to be flawed. In the corresponding Record of Operation dated April
11, 1984, the attending nurses entered these remarks:
"sponge count lacking 2
"announced to surgeon searched (sic) done but to no avail continue for closure."
On April 24, 1984, Natividad was released from the hospital. Her hospital and medical bills, including
the doctors fees, amounted to P60,000.00.
After a couple of days, Natividad complained of excruciating pain in her anal region. She consulted
both Dr. Ampil and Dr. Fuentes about it. They told her that the pain was the natural consequence of
the surgery. Dr. Ampil then recommended that she consult an oncologist to examine the cancerous
nodes which were not removed during the operation.
On May 9, 1984, Natividad, accompanied by her husband, went to the United States to seek further
treatment. After four months of consultations and laboratory examinations, Natividad was told she
was free of cancer. Hence, she was advised to return to the Philippines.
On August 31, 1984, Natividad flew back to the Philippines, still suffering from pains. Two weeks
thereafter, her daughter found a piece of gauze protruding from her vagina. Upon being informed
about it, Dr. Ampil proceeded to her house where he managed to extract by hand a piece of gauze
measuring 1.5 inches in width. He then assured her that the pains would soon vanish.
Dr. Ampils assurance did not come true. Instead, the pains intensified, prompting Natividad to seek
treatment at the Polymedic General Hospital. While confined there, Dr. Ramon Gutierrez detected
the presence of another foreign object in her vagina -- a foul-smelling gauze measuring 1.5 inches in
width which badly infected her vaginal vault. A recto-vaginal fistula had formed in her reproductive
organs which forced stool to excrete through the vagina. Another surgical operation was needed to
remedy the damage. Thus, in October 1984, Natividad underwent another surgery.
On November 12, 1984, Natividad and her husband filed with the RTC, Branch 96, Quezon City a
complaint for damages against the Professional Services, Inc. (PSI), owner of the Medical City
Hospital, Dr. Ampil, and Dr. Fuentes, docketed as Civil Case No. Q-43322. They alleged that the
latter are liable for negligence for leaving two pieces of gauze inside Natividads body and
malpractice for concealing their acts of negligence.
Meanwhile, Enrique Agana also filed with the Professional Regulation Commission (PRC) an
administrative complaint for gross negligence and malpractice against Dr. Ampil and Dr. Fuentes,

docketed as Administrative Case No. 1690. The PRC Board of Medicine heard the case only with
respect to Dr. Fuentes because it failed to acquire jurisdiction over Dr. Ampil who was then in the
United States.
On February 16, 1986, pending the outcome of the above cases, Natividad died and was duly
substituted by her above-named children (the Aganas).
On March 17, 1993, the RTC rendered its Decision in favor of the Aganas, finding PSI, Dr. Ampil and
Dr. Fuentes liable for negligence and malpractice, the decretal part of which reads:
WHEREFORE, judgment is hereby rendered for the plaintiffs ordering the defendants
PROFESSIONAL SERVICES, INC., DR. MIGUEL AMPIL and DR. JUAN FUENTES to pay to the
plaintiffs, jointly and severally, except in respect of the award for exemplary damages and the
interest thereon which are the liabilities of defendants Dr. Ampil and Dr. Fuentes only, as follows:
1. As actual damages, the following amounts:
a. The equivalent in Philippine Currency of the total of US$19,900.00 at the rate of
P21.60-US$1.00, as reimbursement of actual expenses incurred in the United States
of America;
b. The sum of P4,800.00 as travel taxes of plaintiffs and their physician daughter;
c. The total sum of P45,802.50, representing the cost of hospitalization at Polymedic
Hospital, medical fees, and cost of the saline solution;
2. As moral damages, the sum of P2,000,000.00;
3. As exemplary damages, the sum of P300,000.00;
4. As attorneys fees, the sum of P250,000.00;
5. Legal interest on items 1 (a), (b), and (c); 2; and 3 hereinabove, from date of filing of the
complaint until full payment; and
6. Costs of suit.
SO ORDERED.
Aggrieved, PSI, Dr. Fuentes and Dr. Ampil interposed an appeal to the Court of Appeals, docketed
as CA-G.R. CV No. 42062.
Incidentally, on April 3, 1993, the Aganas filed with the RTC a motion for a partial execution of its
Decision, which was granted in an Order dated May 11, 1993. Thereafter, the sheriff levied upon
certain properties of Dr. Ampil and sold them for P451,275.00 and delivered the amount to the
Aganas.
Following their receipt of the money, the Aganas entered into an agreement with PSI and Dr.
Fuentes to indefinitely suspend any further execution of the RTC Decision. However, not long
thereafter, the Aganas again filed a motion for an alias writ of execution against the properties of PSI
and Dr. Fuentes. On September 21, 1993, the RTC granted the motion and issued the

corresponding writ, prompting Dr. Fuentes to file with the Court of Appeals a petition for certiorari
and prohibition, with prayer for preliminary injunction, docketed as CA-G.R. SP No. 32198. During its
pendency, the Court of Appeals issued a Resolution5 dated October 29, 1993 granting Dr. Fuentes
prayer for injunctive relief.
On January 24, 1994, CA-G.R. SP No. 32198 was consolidated with CA-G.R. CV No. 42062.
Meanwhile, on January 23, 1995, the PRC Board of Medicine rendered its Decision6 in
Administrative Case No. 1690 dismissing the case against Dr. Fuentes. The Board held that the
prosecution failed to show that Dr. Fuentes was the one who left the two pieces of gauze inside
Natividads body; and that he concealed such fact from Natividad.
On September 6, 1996, the Court of Appeals rendered its Decision jointly disposing of CA-G.R. CV
No. 42062 and CA-G.R. SP No. 32198, thus:
WHEREFORE, except for the modification that the case against defendant-appellant Dr. Juan
Fuentes is hereby DISMISSED, and with the pronouncement that defendant-appellant Dr. Miguel
Ampil is liable to reimburse defendant-appellant Professional Services, Inc., whatever amount the
latter will pay or had paid to the plaintiffs-appellees, the decision appealed from is hereby
AFFIRMED and the instant appeal DISMISSED.
Concomitant with the above, the petition for certiorari and prohibition filed by herein defendantappellant Dr. Juan Fuentes in CA-G.R. SP No. 32198 is hereby GRANTED and the challenged order
of the respondent judge dated September 21, 1993, as well as the alias writ of execution issued
pursuant thereto are hereby NULLIFIED and SET ASIDE. The bond posted by the petitioner in
connection with the writ of preliminary injunction issued by this Court on November 29, 1993 is
hereby cancelled.
Costs against defendants-appellants Dr. Miguel Ampil and Professional Services, Inc.
SO ORDERED.
Only Dr. Ampil filed a motion for reconsideration, but it was denied in a Resolution7 dated December
19, 1996.
Hence, the instant consolidated petitions.
In G.R. No. 126297, PSI alleged in its petition that the Court of Appeals erred in holding that: (1) it is
estopped from raising the defense that Dr. Ampil is not its employee; (2) it is solidarily liable with Dr.
Ampil; and (3) it is not entitled to its counterclaim against the Aganas. PSI contends that Dr. Ampil is
not its employee, but a mere consultant or independent contractor. As such, he alone should answer
for his negligence.
In G.R. No. 126467, the Aganas maintain that the Court of Appeals erred in finding that Dr. Fuentes
is not guilty of negligence or medical malpractice, invoking the doctrine of res ipsa loquitur. They
contend that the pieces of gauze are prima facie proofs that the operating surgeons have been
negligent.
Finally, in G.R. No. 127590, Dr. Ampil asserts that the Court of Appeals erred in finding him liable for
negligence and malpractice sans evidence that he left the two pieces of gauze in Natividads vagina.
He pointed to other probable causes, such as: (1) it was Dr. Fuentes who used gauzes in performing

the hysterectomy; (2) the attending nurses failure to properly count the gauzes used during surgery;
and (3) the medical intervention of the American doctors who examined Natividad in the United
States of America.
For our resolution are these three vital issues: first, whether the Court of Appeals erred in holding Dr.
Ampil liable for negligence and malpractice; second, whether the Court of Appeals erred in absolving
Dr. Fuentes of any liability; and third, whether PSI may be held solidarily liable for the negligence of
Dr. Ampil.
I - G.R. No. 127590
Whether the Court of Appeals Erred in Holding Dr. Ampil
Liable for Negligence and Malpractice.
Dr. Ampil, in an attempt to absolve himself, gears the Courts attention to other possible causes of
Natividads detriment. He argues that the Court should not discount either of the following
possibilities: first, Dr. Fuentes left the gauzes in Natividads body after performing hysterectomy;
second, the attending nurses erred in counting the gauzes; and third, the American doctors were the
ones who placed the gauzes in Natividads body.
Dr. Ampils arguments are purely conjectural and without basis. Records show that he did not
present any evidence to prove that the American doctors were the ones who put or left the gauzes in
Natividads body. Neither did he submit evidence to rebut the correctness of the record of operation,
particularly the number of gauzes used. As to the alleged negligence of Dr. Fuentes, we are mindful
that Dr. Ampil examined his (Dr. Fuentes) work and found it in order.
The glaring truth is that all the major circumstances, taken together, as specified by the Court of
Appeals, directly point to Dr. Ampil as the negligent party, thus:
First, it is not disputed that the surgeons used gauzes as sponges to control the bleeding of
the patient during the surgical operation.
Second, immediately after the operation, the nurses who assisted in the surgery noted in
their report that the sponge count (was) lacking 2; that such anomaly was announced to
surgeon and that a search was done but to no avail prompting Dr. Ampil to continue for
closure x x x.
Third, after the operation, two (2) gauzes were extracted from the same spot of the body of
Mrs. Agana where the surgery was performed.
An operation requiring the placing of sponges in the incision is not complete until the sponges are
properly removed, and it is settled that the leaving of sponges or other foreign substances in the
wound after the incision has been closed is at least prima facie negligence by the operating
surgeon.8 To put it simply, such act is considered so inconsistent with due care as to raise an
inference of negligence. There are even legions of authorities to the effect that such act is
negligence per se.9
Of course, the Court is not blind to the reality that there are times when danger to a patients life
precludes a surgeon from further searching missing sponges or foreign objects left in the body. But
this does not leave him free from any obligation. Even if it has been shown that a surgeon was

required by the urgent necessities of the case to leave a sponge in his patients abdomen, because
of the dangers attendant upon delay, still, it is his legal duty to so inform his patient within a
reasonable time thereafter by advising her of what he had been compelled to do. This is in order that
she might seek relief from the effects of the foreign object left in her body as her condition might
permit. The ruling in Smith v. Zeagler10 is explicit, thus:
The removal of all sponges used is part of a surgical operation, and when a physician or surgeon
fails to remove a sponge he has placed in his patients body that should be removed as part of the
operation, he thereby leaves his operation uncompleted and creates a new condition which imposes
upon him the legal duty of calling the new condition to his patients attention, and endeavoring with
the means he has at hand to minimize and avoid untoward results likely to ensue therefrom.
Here, Dr. Ampil did not inform Natividad about the missing two pieces of gauze. Worse, he even
misled her that the pain she was experiencing was the ordinary consequence of her operation. Had
he been more candid, Natividad could have taken the immediate and appropriate medical remedy to
remove the gauzes from her body. To our mind, what was initially an act of negligence by Dr. Ampil
has ripened into a deliberate wrongful act of deceiving his patient.
This is a clear case of medical malpractice or more appropriately, medical negligence. To
successfully pursue this kind of case, a patient must only prove that a health care provider either
failed to do something which a reasonably prudent health care provider would have done, or that he
did something that a reasonably prudent provider would not have done; and that failure or action
caused injury to the patient.11 Simply put, the elements are duty, breach, injury and proximate
causation. Dr, Ampil, as the lead surgeon, had the duty to remove all foreign objects, such as
gauzes, from Natividads body before closure of the incision. When he failed to do so, it was his duty
to inform Natividad about it. Dr. Ampil breached both duties. Such breach caused injury to Natividad,
necessitating her further examination by American doctors and another surgery. That Dr. Ampils
negligence is the proximate cause12 of Natividads injury could be traced from his act of closing the
incision despite the information given by the attending nurses that two pieces of gauze were still
missing. That they were later on extracted from Natividads vagina established the causal link
between Dr. Ampils negligence and the injury. And what further aggravated such injury was his
deliberate concealment of the missing gauzes from the knowledge of Natividad and her family.
II - G.R. No. 126467
Whether the Court of Appeals Erred in Absolving
Dr. Fuentes of any Liability
The Aganas assailed the dismissal by the trial court of the case against Dr. Fuentes on the ground
that it is contrary to the doctrine of res ipsa loquitur. According to them, the fact that the two pieces
of gauze were left inside Natividads body is a prima facie evidence of Dr. Fuentes negligence.
We are not convinced.
Literally, res ipsa loquitur means "the thing speaks for itself." It is the rule that the fact of the
occurrence of an injury, taken with the surrounding circumstances, may permit an inference or raise
a presumption of negligence, or make out a plaintiffs prima facie case, and present a question of
fact for defendant to meet with an explanation.13Stated differently, where the thing which caused the
injury, without the fault of the injured, is under the exclusive control of the defendant and the injury is
such that it should not have occurred if he, having such control used proper care, it affords
reasonable evidence, in the absence of explanation that the injury arose from the defendants want

of care, and the burden of proof is shifted to him to establish that he has observed due care and
diligence.14
From the foregoing statements of the rule, the requisites for the applicability of the doctrine of res
ipsa loquitur are: (1) the occurrence of an injury; (2) the thing which caused the injury was under the
control and management of the defendant; (3) the occurrence was such that in the ordinary course
of things, would not have happened if those who had control or management used proper care; and
(4) the absence of explanation by the defendant. Of the foregoing requisites, the most instrumental
is the "control and management of the thing which caused the injury."15
We find the element of "control and management of the thing which caused the injury" to be wanting.
Hence, the doctrine of res ipsa loquitur will not lie.
It was duly established that Dr. Ampil was the lead surgeon during the operation of Natividad. He
requested the assistance of Dr. Fuentes only to perform hysterectomy when he (Dr. Ampil) found
that the malignancy in her sigmoid area had spread to her left ovary. Dr. Fuentes performed the
surgery and thereafter reported and showed his work to Dr. Ampil. The latter examined it and finding
everything to be in order, allowed Dr. Fuentes to leave the operating room. Dr. Ampil then resumed
operating on Natividad. He was about to finish the procedure when the attending nurses informed
him that two pieces of gauze were missing. A "diligent search" was conducted, but the misplaced
gauzes were not found. Dr. Ampil then directed that the incision be closed. During this entire period,
Dr. Fuentes was no longer in the operating room and had, in fact, left the hospital.
Under the "Captain of the Ship" rule, the operating surgeon is the person in complete charge of the
surgery room and all personnel connected with the operation. Their duty is to obey his orders.16 As
stated before, Dr. Ampil was the lead surgeon. In other words, he was the "Captain of the Ship."
That he discharged such role is evident from his following conduct: (1) calling Dr. Fuentes to perform
a hysterectomy; (2) examining the work of Dr. Fuentes and finding it in order; (3) granting Dr.
Fuentes permission to leave; and (4) ordering the closure of the incision. To our mind, it was this act
of ordering the closure of the incision notwithstanding that two pieces of gauze remained
unaccounted for, that caused injury to Natividads body. Clearly, the control and management of the
thing which caused the injury was in the hands of Dr. Ampil, not Dr. Fuentes.
In this jurisdiction, res ipsa loquitur is not a rule of substantive law, hence, does not per se create or
constitute an independent or separate ground of liability, being a mere evidentiary rule.17 In other
words, mere invocation and application of the doctrine does not dispense with the requirement of
proof of negligence. Here, the negligence was proven to have been committed by Dr. Ampil and not
by Dr. Fuentes.
III - G.R. No. 126297
Whether PSI Is Liable for the Negligence of Dr. Ampil
The third issue necessitates a glimpse at the historical development of hospitals and the resulting
theories concerning their liability for the negligence of physicians.
Until the mid-nineteenth century, hospitals were generally charitable institutions, providing medical
services to the lowest classes of society, without regard for a patients ability to pay.18 Those who
could afford medical treatment were usually treated at home by their doctors.19 However, the days of
house calls and philanthropic health care are over. The modern health care industry continues to
distance itself from its charitable past and has experienced a significant conversion from a not-forprofit health care to for-profit hospital businesses. Consequently, significant changes in health law

have accompanied the business-related changes in the hospital industry. One important legal
change is an increase in hospital liability for medical malpractice. Many courts now allow claims for
hospital vicarious liability under the theories of respondeat superior, apparent authority, ostensible
authority, or agency by estoppel. 20
In this jurisdiction, the statute governing liability for negligent acts is Article 2176 of the Civil Code,
which reads:
Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this
Chapter.
A derivative of this provision is Article 2180, the rule governing vicarious liability under the doctrine of
respondeat superior, thus:
ART. 2180. The obligation imposed by Article 2176 is demandable not only for ones own acts or
omissions, but also for those of persons for whom one is responsible.
x x x

x x x

The owners and managers of an establishment or enterprise are likewise responsible for damages
caused by their employees in the service of the branches in which the latter are employed or on the
occasion of their functions.
Employers shall be liable for the damages caused by their employees and household helpers acting
within the scope of their assigned tasks even though the former are not engaged in any business or
industry.
x x x

The responsibility treated of in this article shall cease when the persons herein mentioned prove that
they observed all the diligence of a good father of a family to prevent damage.
A prominent civilist commented that professionals engaged by an employer, such as physicians,
dentists, and pharmacists, are not "employees" under this article because the manner in which they
perform their work is not within the control of the latter (employer). In other words, professionals are
considered personally liable for the fault or negligence they commit in the discharge of their duties,
and their employer cannot be held liable for such fault or negligence. In the context of the present
case, "a hospital cannot be held liable for the fault or negligence of a physician or surgeon in the
treatment or operation of patients."21
The foregoing view is grounded on the traditional notion that the professional status and the very
nature of the physicians calling preclude him from being classed as an agent or employee of a
hospital, whenever he acts in a professional capacity.22 It has been said that medical practice strictly
involves highly developed and specialized knowledge,23 such that physicians are generally free to
exercise their own skill and judgment in rendering medical services sans interference.24 Hence, when
a doctor practices medicine in a hospital setting, the hospital and its employees are deemed to
subserve him in his ministrations to the patient and his actions are of his own responsibility.25

The case of Schloendorff v. Society of New York Hospital26 was then considered an authority for this
view. The "Schloendorff doctrine" regards a physician, even if employed by a hospital, as an
independent contractor because of the skill he exercises and the lack of control exerted over his
work. Under this doctrine, hospitals are exempt from the application of the respondeat superior
principle for fault or negligence committed by physicians in the discharge of their profession.
However, the efficacy of the foregoing doctrine has weakened with the significant developments in
medical care. Courts came to realize that modern hospitals are increasingly taking active role in
supplying and regulating medical care to patients. No longer were a hospitals functions limited to
furnishing room, food, facilities for treatment and operation, and attendants for its patients. Thus, in
Bing v. Thunig,27 the New York Court of Appeals deviated from the Schloendorff doctrine, noting that
modern hospitals actually do far more than provide facilities for treatment. Rather, they regularly
employ, on a salaried basis, a large staff of physicians, interns, nurses, administrative and manual
workers. They charge patients for medical care and treatment, even collecting for such services
through legal action, if necessary. The court then concluded that there is no reason to exempt
hospitals from the universal rule of respondeat superior.
In our shores, the nature of the relationship between the hospital and the physicians is rendered
inconsequential in view of our categorical pronouncement in Ramos v. Court of Appeals28 that for
purposes of apportioning responsibility in medical negligence cases, an employer-employee
relationship in effect exists between hospitals and their attending and visiting physicians. This Court
held:
"We now discuss the responsibility of the hospital in this particular incident. The unique practice
(among private hospitals) of filling up specialist staff with attending and visiting "consultants," who
are allegedly not hospital employees, presents problems in apportioning responsibility for negligence
in medical malpractice cases. However, the difficulty is more apparent than real.
In the first place, hospitals exercise significant control in the hiring and firing of consultants and in the
conduct of their work within the hospital premises. Doctors who apply for consultant slots, visiting or
attending, are required to submit proof of completion of residency, their educational qualifications,
generally, evidence of accreditation by the appropriate board (diplomate), evidence of fellowship in
most cases, and references. These requirements are carefully scrutinized by members of the
hospital administration or by a review committee set up by the hospital who either accept or reject
the application. x x x.
After a physician is accepted, either as a visiting or attending consultant, he is normally required to
attend clinico-pathological conferences, conduct bedside rounds for clerks, interns and residents,
moderate grand rounds and patient audits and perform other tasks and responsibilities, for the
privilege of being able to maintain a clinic in the hospital, and/or for the privilege of admitting patients
into the hospital. In addition to these, the physicians performance as a specialist is generally
evaluated by a peer review committee on the basis of mortality and morbidity statistics, and
feedback from patients, nurses, interns and residents. A consultant remiss in his duties, or a
consultant who regularly falls short of the minimum standards acceptable to the hospital or its peer
review committee, is normally politely terminated.
In other words, private hospitals, hire, fire and exercise real control over their attending and visiting
consultant staff. While consultants are not, technically employees, x x x, the control exercised, the
hiring, and the right to terminate consultants all fulfill the important hallmarks of an employeremployee relationship, with the exception of the payment of wages. In assessing whether such a
relationship in fact exists, the control test is determining. Accordingly, on the basis of the foregoing,

we rule that for the purpose of allocating responsibility in medical negligence cases, an employeremployee relationship in effect exists between hospitals and their attending and visiting physicians. "
But the Ramos pronouncement is not our only basis in sustaining PSIs liability. Its liability is also
anchored upon the agency principle of apparent authority or agency by estoppel and the doctrine of
corporate negligence which have gained acceptance in the determination of a hospitals liability for
negligent acts of health professionals. The present case serves as a perfect platform to test the
applicability of these doctrines, thus, enriching our jurisprudence.
Apparent authority, or what is sometimes referred to as the "holding
out" theory, or doctrine of ostensible agency or agency by estoppel,29 has its origin from the law of
agency. It imposes liability, not as the result of the reality of a contractual relationship, but rather
because of the actions of a principal or an employer in somehow misleading the public into believing
that the relationship or the authority exists.30 The concept is essentially one of estoppel and has
been explained in this manner:
"The principal is bound by the acts of his agent with the apparent authority which he knowingly
permits the agent to assume, or which he holds the agent out to the public as possessing. The
question in every case is whether the principal has by his voluntary act placed the agent in such a
situation that a person of ordinary prudence, conversant with business usages and the nature of the
particular business, is justified in presuming that such agent has authority to perform the particular
act in question.31
The applicability of apparent authority in the field of hospital liability was upheld long time ago in
Irving v. Doctor Hospital of Lake Worth, Inc.32 There, it was explicitly stated that "there does not
appear to be any rational basis for excluding the concept of apparent authority from the field of
hospital liability." Thus, in cases where it can be shown that a hospital, by its actions, has held out a
particular physician as its agent and/or employee and that a patient has accepted treatment from
that physician in the reasonable belief that it is being rendered in behalf of the hospital, then the
hospital will be liable for the physicians negligence.
Our jurisdiction recognizes the concept of an agency by implication or estoppel. Article 1869 of the
Civil Code reads:
ART. 1869. Agency may be express, or implied from the acts of the principal, from his silence or lack
of action, or his failure to repudiate the agency, knowing that another person is acting on his behalf
without authority.
In this case, PSI publicly displays in the lobby of the Medical City Hospital the names and
specializations of the physicians associated or accredited by it, including those of Dr. Ampil and Dr.
Fuentes. We concur with the Court of Appeals conclusion that it "is now estopped from passing all
the blame to the physicians whose names it proudly paraded in the public directory leading the
public to believe that it vouched for their skill and competence." Indeed, PSIs act is tantamount to
holding out to the public that Medical City Hospital, through its accredited physicians, offers quality
health care services. By accrediting Dr. Ampil and Dr. Fuentes and publicly advertising their
qualifications, the hospital created the impression that they were its agents, authorized to perform
medical or surgical services for its patients. As expected, these patients, Natividad being one of
them, accepted the services on the reasonable belief that such were being rendered by the hospital
or its employees, agents, or servants. The trial court correctly pointed out:

x x x regardless of the education and status in life of the patient, he ought not be burdened with the
defense of absence of employer-employee relationship between the hospital and the independent
physician whose name and competence are certainly certified to the general public by the hospitals
act of listing him and his specialty in its lobby directory, as in the case herein. The high costs of
todays medical and health care should at least exact on the hospital greater, if not broader, legal
responsibility for the conduct of treatment and surgery within its facility by its accredited physician or
surgeon, regardless of whether he is independent or employed."33
The wisdom of the foregoing ratiocination is easy to discern. Corporate entities, like PSI, are capable
of acting only through other individuals, such as physicians. If these accredited physicians do their
job well, the hospital succeeds in its mission of offering quality medical services and thus profits
financially. Logically, where negligence mars the quality of its services, the hospital should not be
allowed to escape liability for the acts of its ostensible agents.
We now proceed to the doctrine of corporate negligence or corporate responsibility.
One allegation in the complaint in Civil Case No. Q-43332 for negligence and malpractice is that PSI
as owner, operator and manager of Medical City Hospital, "did not perform the necessary
supervision nor exercise diligent efforts in the supervision of Drs. Ampil and Fuentes and its nursing
staff, resident doctors, and medical interns who assisted Drs. Ampil and Fuentes in the performance
of their duties as surgeons."34 Premised on the doctrine of corporate negligence, the trial court held
that PSI is directly liable for such breach of duty.
We agree with the trial court.
Recent years have seen the doctrine of corporate negligence as the judicial answer to the problem
of allocating hospitals liability for the negligent acts of health practitioners, absent facts to support
the application of respondeat superior or apparent authority. Its formulation proceeds from the
judiciarys acknowledgment that in these modern times, the duty of providing quality medical service
is no longer the sole prerogative and responsibility of the physician. The modern hospitals have
changed structure. Hospitals now tend to organize a highly professional medical staff whose
competence and performance need to be monitored by the hospitals commensurate with their
inherent responsibility to provide quality medical care.35
The doctrine has its genesis in Darling v. Charleston Community Hospital.36 There, the Supreme
Court of Illinois held that "the jury could have found a hospital negligent, inter alia, in failing to have a
sufficient number of trained nurses attending the patient; failing to require a consultation with or
examination by members of the hospital staff; and failing to review the treatment rendered to the
patient." On the basis of Darling, other jurisdictions held that a hospitals corporate negligence
extends to permitting a physician known to be incompetent to practice at the hospital.37 With the
passage of time, more duties were expected from hospitals, among them: (1) the use of reasonable
care in the maintenance of safe and adequate facilities and equipment; (2) the selection and
retention of competent physicians; (3) the overseeing or supervision of all persons who practice
medicine within its walls; and (4) the formulation, adoption and enforcement of adequate rules and
policies that ensure quality care for its patients.38 Thus, in Tucson Medical Center, Inc. v.
Misevich,39 it was held that a hospital, following the doctrine of corporate responsibility, has the duty
to see that it meets the standards of responsibilities for the care of patients. Such duty includes the
proper supervision of the members of its medical staff. And in Bost v. Riley,40 the court concluded
that a patient who enters a hospital does so with the reasonable expectation that it will attempt to
cure him. The hospital accordingly has the duty to make a reasonable effort to monitor and oversee
the treatment prescribed and administered by the physicians practicing in its premises.

In the present case, it was duly established that PSI operates the Medical City Hospital for the
purpose and under the concept of providing comprehensive medical services to the public.
Accordingly, it has the duty to exercise reasonable care to protect from harm all patients admitted
into its facility for medical treatment. Unfortunately, PSI failed to perform such duty. The findings of
the trial court are convincing, thus:
x x x PSIs liability is traceable to its failure to conduct an investigation of the matter reported in the
nota bene of the count nurse. Such failure established PSIs part in the dark conspiracy of silence
and concealment about the gauzes. Ethical considerations, if not also legal, dictated the holding of
an immediate inquiry into the events, if not for the benefit of the patient to whom the duty is primarily
owed, then in the interest of arriving at the truth. The Court cannot accept that the medical and the
healing professions, through their members like defendant surgeons, and their institutions like PSIs
hospital facility, can callously turn their backs on and disregard even a mere probability of mistake or
negligence by refusing or failing to investigate a report of such seriousness as the one in Natividads
case.
It is worthy to note that Dr. Ampil and Dr. Fuentes operated on Natividad with the assistance of the
Medical City Hospitals staff, composed of resident doctors, nurses, and interns. As such, it is
reasonable to conclude that PSI, as the operator of the hospital, has actual or constructive
knowledge of the procedures carried out, particularly the report of the attending nurses that the two
pieces of gauze were missing. In Fridena v. Evans,41 it was held that a corporation is bound by the
knowledge acquired by or notice given to its agents or officers within the scope of their authority and
in reference to a matter to which their authority extends. This means that the knowledge of any of
the staff of Medical City Hospital constitutes knowledge of PSI. Now, the failure of PSI, despite the
attending nurses report, to investigate and inform Natividad regarding the missing gauzes amounts
to callous negligence. Not only did PSI breach its duties to oversee or supervise all persons who
practice medicine within its walls, it also failed to take an active step in fixing the negligence
committed. This renders PSI, not only vicariously liable for the negligence of Dr. Ampil under Article
2180 of the Civil Code, but also directly liable for its own negligence under Article 2176. In Fridena,
the Supreme Court of Arizona held:
x x x In recent years, however, the duty of care owed to the patient by the hospital has expanded.
The emerging trend is to hold the hospital responsible where the hospital has failed to monitor and
review medical services being provided within its walls. See Kahn Hospital Malpractice Prevention,
27 De Paul . Rev. 23 (1977).
Among the cases indicative of the emerging trend is Purcell v. Zimbelman, 18 Ariz. App. 75,500 P.
2d 335 (1972). In Purcell, the hospital argued that it could not be held liable for the malpractice of a
medical practitioner because he was an independent contractor within the hospital. The Court of
Appeals pointed out that the hospital had created a professional staff whose competence and
performance was to be monitored and reviewed by the governing body of the hospital, and the court
held that a hospital would be negligent where it had knowledge or reason to believe that a doctor
using the facilities was employing a method of treatment or care which fell below the recognized
standard of care.
Subsequent to the Purcell decision, the Arizona Court of Appeals held that a hospital has certain
inherent responsibilities regarding the quality of medical care furnished to patients within its walls
and it must meet the standards of responsibility commensurate with this undertaking. Beeck v.
Tucson General Hospital, 18 Ariz. App. 165, 500 P. 2d 1153 (1972). This court has confirmed the
rulings of the Court of Appeals that a hospital has the duty of supervising the competence of the
doctors on its staff. x x x.

In the amended complaint, the plaintiffs did plead that the operation was performed at the hospital
with its knowledge, aid, and assistance, and that the negligence of the defendants was the
proximate cause of the patients injuries. We find that such general allegations of negligence, along
with the evidence produced at the trial of this case, are sufficient to support the hospitals liability
based on the theory of negligent supervision."
Anent the corollary issue of whether PSI is solidarily liable with Dr. Ampil for damages, let it be
emphasized that PSI, apart from a general denial of its responsibility, failed to adduce evidence
showing that it exercised the diligence of a good father of a family in the accreditation and
supervision of the latter. In neglecting to offer such proof, PSI failed to discharge its burden under
the last paragraph of Article 2180 cited earlier, and, therefore, must be adjudged solidarily liable with
Dr. Ampil. Moreover, as we have discussed, PSI is also directly liable to the Aganas.
One final word. Once a physician undertakes the treatment and care of a patient, the law imposes
on him certain obligations. In order to escape liability, he must possess that reasonable degree of
learning, skill and experience required by his profession. At the same time, he must apply
reasonable care and diligence in the exercise of his skill and the application of his knowledge, and
exert his best judgment.
WHEREFORE, we DENY all the petitions and AFFIRM the challenged Decision of the Court of
Appeals in CA-G.R. CV No. 42062 and CA-G.R. SP No. 32198.
Costs against petitioners PSI and Dr. Miguel Ampil.
SO ORDERED.