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Islamic Dawah Council of the Phil., Inc. vs.

Office of the Executive Secretary, 405

SCRA 497 (2003)
FACTS: Petitioner IDCP, a corporation that operates under DSWD, is a nongovernmental organization that extends voluntary services to the Filipino people,
especially to Muslim communities. Among its functions is to conduct seminars,
orient manufacturers on halal food and issue halal certifications to qualified
products and manufacturers.
In 2001, respondent Office of the Executive Secretary issued EO 46 creating the
Philippine Halal Certification Scheme and designating respondent OMA to oversee
its implementation. Under the EO, respondent OMA has the exclusive authority to
issue halal certificates and perform other related regulatory activities. OMA warned
Muslim consumers to buy only products with its official halal certification since
those without said certification had not been subjected to careful analysis and
therefore could contain pork or its derivatives.
IDCP contends that the subject EO violates the constitutional provision on the
separation of Church and State because said scheme is a function only religious
organizations, entity or scholars can lawfully and validly perform for the Muslims. A
food product becomes halal only after the performance of Islamic religious ritual
and prayer. Thus, only practicing Muslims are qualified to slaughter animals for
food. A government agency like herein respondent OMA cannot therefore perform a
religious function like certifying qualified food products as halal.
ISSUE: WON OMA violated the clause on non-establishment and free exercise of
religion of Article III, Section 5 of the 1987 Constitution?
RULING: Yes. Classifying a food product as halal is a religious function because the
standards used are drawn from the Quran and Islamic beliefs. By giving OMA the
exclusive power to classify food products as halal, EO 46 encroached on the
religious freedom of Muslim organizations like herein petitioner to interpret for
Filipino Muslims what food products are fit for Muslim consumption. Also, by
arrogating to itself the task of issuing halal certifications, the State has in effect
forced Muslims to accept its own interpretation of the Quran and Sunnah on halal
Only the prevention of an immediate and grave danger to the security and welfare
of the community can justify the infringement of religious freedom. If the
government fails to show the seriousness and immediacy of the threat, State
intrusion is constitutionally unacceptable. The State must minimize its interference
with the affairs of its citizens and instead allow them to exercise reasonable
freedom of personal and religious activity.

Alejandro Estrada Vs. Soledad S. Escritor, A.M. No. P-02-165, June 22, 2006
FACTS: Alejandro Estrada requested Judge Jose F. Caoibes, Jr., presiding judge of
Branch 253, Regional Trial Court of Las Pias City, for an investigation of respondent
Soledad Escritor, court interpreter in said court, for living with a man not her
husband, and having borne a child within this live-in arrangement. Estrada believes

that the immoral act tarnishes the image of the court, thus she should not be
allowed to remain employed therein as it might appear that the court condones her
act. Consequently, respondent was charged with committing disgraceful and
immoral conduct under the Revised Administrative Code.
Escritor admitted the facts. But as a member of the religious sect known as the
Jehovahs Witnesses and the Watch Tower and Bible Tract Society, she asserted that
their conjugal arrangement is in conformity with their religious beliefs and has the
approval of her congregation. In fact, after ten years of living together, she
executed on July 28, 1991, a Declaration of Pledging Faithfulness. For Jehovahs
Witnesses, the Declaration allows members of the congregation who have been
abandoned by their spouses to enter into marital relations. The Declaration thus
makes the resulting union moral and binding within the congregation all over the
world except in countries where divorce is allowed. Moreover, the Jehovahs
congregation believes that once all legal impediments for the couple are lifted, the
validity of the declarations ceases, and the couple should legalize their union.
ISSUE: WON the right to religious freedom may be invoked even if the act is
RULING: Yes. In resolving claims involving religious freedom (1) benevolent
neutrality or accommodation, whether mandatory or permissive, is the spirit, intent
and framework underlying the religion clauses in our Constitution; and (2) in
deciding respondents plea of exemption based on the Free Exercise Clause (from
the law with which she is administratively charged), it is the compelling state
interest test, the strictest test, which must be applied.
In this case, the governments conduct may appear innocent and nondiscriminatory
but in effect, it is oppressive to the minority. Thus, substantive equalitya reading
of the religion clauses which leaves both politically dominant and the politically
weak religious groups equal in their inability to use the government (law) to assist
their own religion or burden othersmakes the most sense in the interpretation of
the Bill of Rights, a document designed to protect minorities and individuals from
mobocracy in a democracy (the majority or a coalition of minorities).

The Constitution adheres to the benevolent neutrality approach that gives room for
accommodation of religious exercises as required by the Free Exercise Clause. Thus,
in arguing that respondent should be held administratively liable as the
arrangement she had was illegal per se because, by universally recognized
standards, it is inherently or by its very nature bad, improper, immoral and contrary
to good conscience, the Solicitor General failed to appreciate that benevolent
neutrality could allow for accommodation of morality based on religion, provided it
does not offend compelling state interests.
Finally, even assuming that the OSG has proved a compelling state interest, it has
to further demonstrate that the state has used the least intrusive means possible so
that the free exercise is not infringed any more than necessary to achieve the
legitimate goal of the state, i.e., it has chosen a way to achieve its legitimate state
end that imposes as little as possible on religious liberties. Again, the Solicitor
General utterly failed to prove this element of the test. Other than the two

documents offered as cited above which established the sincerity of respondents

religious belief and the fact that the agreement was an internal arrangement within
respondents congregation, no iota of evidence was offered. In fact, the records are
bereft of even a feeble attempt to procure any such evidence to show that the
means the state adopted in pursuing this compelling interest is the least restrictive
to respondents religious freedom.
Thus, we find that in this particular case and under these distinct circumstances,
respondent Escritors conjugal arrangement cannot be penalized as she has made
out a case for exemption from the law based on her fundamental right to freedom of

Eliseo F. Soriano Vs. Ma. Consoliza P. Laguardia etc., G.R. No. 164785/G.R. No.
165636, April 29, 2009
FACTS:Petitioner, Soriano, as host of the program Ang Dating Daan, aired on UNTV
37, made the following remarks:
Lehitimong anak ng demonyo; sinungaling;
Gago ka talaga Michael, masahol ka pa sa putang babae o di ba. Yung putang babae
ang gumagana lang doon yung ibaba, [dito] kay Michael ang gumagana ang itaas, o
di ba! O, masahol pa sa putang babae yan. Sabi ng lola ko masahol pa sa putang
babae yan. Sobra ang kasinungalingan ng mga demonyong ito.[1] x x x
The show was suspended for 3 months, in accordance with the IRR of MTRCB.
Soriano seeks to nullify and set aside an order and a decision of the MTRCB in
connection with certain utterances he made in his television show, Ang Dating
Daan. Soriano contends the notion of religious freedom, submitting that what he
uttered was religious speech, adding that words like putang babae were said in
exercise of his religious freedom.
ISSUE: WON the utterances made by Soriano in the TV show were in exercise of his
religious freedom
RULING: No, it is not within Sec. 5, Article III of the 1987 Constitution on religious
freedom because there is nothing in petitioners statements subject of the
complaints expressing any particular religious belief, nothing furthering his avowed
evangelical mission. Plain and simple insults directed at another person cannot be
elevated to the status of religious speech.
Soriano was moved by anger and the need to seek retribution, not by any religious
His claim, assuming its veracity, that some INC ministers distorted his statements
respecting amounts Ang Dating Daan owed to a TV station does not convert the foul
language used in retaliation as religious speech.
They simply illustrate that petitioner had descended to the level of name-calling and
foul-language discourse. Petitioner could have chosen to contradict and disprove his
detractors, but opted for the low road.

Villavicencio vs. Lukban, 39 Phil. 778 (1919)

FACTS: The Mayor of the city of Manila, Justo Lukban, to exterminate vice, ordered
the closure of the segregated districts of Manila against prostitutes. One hundred
seventy women (170) were kept confined to their houses in the district by the
police. The city authorities quietly perfected arrangements with the Bureau of
Labor, the Constabulary, and other government office to send the women to Davao,
Mindanao, as laborers. The women were given no opportunity to collect their
belongings, and apparently were under the impression that they were being taken
to a police station for an investigation. They had no knowledge that they were
destined for a life in Mindanao and were not asked if they wished to depart from
that region and had neither directly nor indirectly given their consent to the
ISSUE: WON the women were illegally restrained of their liberty by Justo Lukban,
Mayor of the city of Manila, Anton Hohmann, chief of police of the city of Manila, and
by certain unknown parties.

RULING: Yes. A writ of habeas corpus is applicable in restraint of liberty. The

essential object and purpose of the writ is to inquire into all manner of involuntary
restraint as distinguished from voluntary, and to relieve a person therefrom if such
restraint is illegal. Any restraint which will preclude freedom of action is sufficient.
The forcible taking of these women from Manila by officials of that city, who handed
them over to other parties, who deposited them in a distant region, deprived these
women of freedom of locomotion just as effectively as if they had been imprisoned.
Placed in Davao without either money or personal belongings, they were prevented
from exercising the liberty of going when and where they pleased. The restraint of
liberty which began in Manila continued until the aggrieved parties were returned to
Manila and released or until they freely and truly waived his right.

G.R. No. L-62100 May 30, 1986

E. CAMILON and RICARDO L. PRONOVE, JR., as Judges of the Court of First Instance
Immigration, and the Chief of the Aviation Security Command (AVSECOM),
FACTS: Petitioner Ricardo L. Manotoc, Jr., is one of the two principal stockholders of
Trans-Insular Management, Inc. and the Manotoc Securities, Inc., a stock brokerage
house. Following the "run" on stock brokerages caused by stock broker Santamaria's
flight from this jurisdiction, petitioner, who was then in the United States, came
home, and together with his co-stockholders, filed and was granted by the
Securities and Exchange Commission the appointment of a management

committee, not only for Manotoc Securities, Inc., but likewise for Trans-Insular
Management, Inc.
Pending disposition of the SEC Case, the Securities and Exchange Commission
requested the Commissioner of Immigration not to clear petitioner for departure.
When a Torrens title submitted to and accepted by Manotoc Securities, Inc. was
suspected to be a fake, six of its clients filed six separate criminal complaints
against petitioner and one Raul Leveriza, Jr., as president and vice-president,
respectively, of Manotoc Securities, Inc.
In due course, corresponding criminal charges for estafa were filed. In all cases,
petitioner has been admitted to bail.

On March 1, 1982, Manotoc filed before each of the trial courts a motion entitled,
"motion for permission to leave the country," stating as ground therefor his desire
to go to the United States, "relative to his business transactions and opportunities."
ISSUE: WON a person facing a criminal indictment and provisionally released on bail
have an unrestricted right to travel?
RULING: No. A court has the power to prohibit a person admitted to bail from
leaving the Philippines. This is a necessary consequence of the nature and function
of a bail bond.
Rule 114, Section 1 of the Rules of Court defines bail as the security required and
given for the release of a person who is in the custody of the law, that he will
appear before any court in which his appearance may be required as stipulated in
the bail bond or recognizance.
Its object is to relieve the accused of imprisonment and the state of the burden of
keeping him, pending the trial, and at the same time, to put the accused as much
under the power of the court as if he were in custody of the proper officer, and to
secure the appearance of the accused so as to answer the call of the court and do
what the law may require of him.
The condition imposed upon petitioner to make himself available at all times
whenever the court requires his presence operates as a valid restriction on his right
to travel.

G.R. Nos. 99289-90 January 27, 1993

FACTS: A case was filed against Defensor-Santiago with the Sandiganbayan for
alleged violation of Section 3(e), Republic Act No. 3019, otherwise known as the

Anti-Graft and Corrupt Practices Act. An order of arrest was issued with bail for the
release of the accused fixed at P15,000.00.
Defensor-Santiago seeks leave from the Court due to her suffering of extensive
physical injuries as a result of a vehicular collision and that she is posting bail. She
was authorized by the Sandiganbayan to post a cash bond for her provisional liberty
without need for her physical appearance until June 5, 1991 at the latest, unless by
that time her condition does not yet permit her physical appearance before said

In a later motion, Defensor-Santiago asked that her cash bond be cancelled and that
she be allowed provisional liberty upon a recognizance. She contended that for her
to continue remaining under bail bond may imply to other people that she has
intentions of fleeing, an intention she would like to prove as baseless.
Later, the Sandiganbayan issued an order deferring: (a) the arraignment of
petitioner until further advice from the Supreme Court; and (b) the consideration of
herein petitioner's motion to cancel her cash bond until further initiative from her
through counsel.
The Supreme Court rendered a decision dismissing the petition for certiorari and
lifting and setting aside the temporary restraining order previously issued. The
motion for reconsideration filed by petitioner was eventually denied with finality.
Meanwhile, a hold departure order was issued by reason of the announcement
made by petitioner, which was widely publicized in both print and broadcast media,
that she would be leaving for the United States to accept a fellowship supposedly
offered by the John F. Kennedy School of Government at Harvard University.
Petitioner likewise disclosed that she would be addressing Filipino communities in
the United States in line with her crusade against election fraud and other aspects
of graft and corruption.
ISSUE: WON the right to travel can be validly impaired
RULING: No. There is no sufficient justification for the impairment of her
constitutional right to travel; and that under Section 6, Article III of the 1987
Constitution, the right to travel may be impaired only when so required in the
interest of national security, public safety or public health, as may be provided by

G.R. Nos. 115132-34 August 9, 1995

Division) and the PEOPLE OF THE PHILIPPINES,respondents.
FACTS: Petitioner, former First Lady and widow of former President Ferdinand E.
Marcos, is the defendant in several criminal cases for violations of the Anti Graft and
Corrupt Practices Act (R.A. No. 3019) now pending in the Sandiganbayan and in the
regular courts.

In two of these cases, petitioner was found guilty by the First Division of the
Sandiganbayan of violating 3(g) of the Anti Graft and Corrupt Practices Act (R.A.
No. 3019) and was sentenced to suffer in each case imprisonment for an
indeterminate period of 9 years and 1 day as minimum to 12 years and 10 days as
maximum, with perpetual disqualification from public office. Petitioner filed a motion
for reconsideration, which is pending resolution in the Sandiganbayan.
After her conviction in the two cases, petitioner filed several "Motion for Leave to
Travel Abroad" to seek diagnostic tests and treatment by practitioners of oriental
medicine allegedly because of "a serious and life threatening medical condition"
requiring facilities not available in the Philippines.
She seeks to travel to the People's Republic of China and to places including the
United States and Europe, "if necessary," for treatment of "hypertensive heart
disease, uncontrolled angina pectoris, and anterior myocardial infarction." It was
alleged that the tests needed were not available in the Philippines.
The motion was supported by Ambulatory BP Reports, Nuclear Medicine Reports and
Computed Tomography Scan Results prepared by her physician and cardiologist, Dr.
Roberto V. Anastacio, and other doctors at the Makati Medical Center.
ISSUE: WON the motion for leave to travel abroad should be granted.
RULING: The Court was unable to determine whether the respondent court trifled
with petitioner's constitutionally guaranteed right to life, health and liberty.
It is matter of record that on three different occasions, petitioner had been
permitted to travel abroad. But her later conviction in two cases dictated the need
for greater caution. To be sure, conviction is not yet final view of a motion for
reconsideration filed by petitioner. But a person's right to travel is subject to the
usual contraints imposed by the very necessity of safeguarding the system of
justice. In such cases, whether the accused should be permitted to leave the
jurisdiction for humanitarian reason is a matter of the court's sound discretion.
This motion should be addressed to the Sandiganbayan not only because whether
petitioner should be allowed to leave the country is its primary concern but also
because the determination of petitioner's eye condition is question of fact to be
made in the first instance by the Sandiganbayan. The court should order a joint
examination of petitioner's eye condition and resolve her motion accordingly.

[G.R. No. 141529. June 6, 2001]

FRANCISCO YAP, JR., a.k.a. EDWIN YAP, petitioner, vs. COURT OF APPEALS and the

FACTS: For misappropriating amounts equivalent to P5,500,000.00, petitioner was

convicted of estafa. He filed a notice of appeal, and moved to be allowed provisional
liberty under the cash bond he had filed earlier in the proceedings. The motion was
denied by the trial court.

Petitioner filed with the CA a Motion to Fix Bail For the Provisional Liberty of
Accused-Appellant Pending Appeal. The Solicitor General opined that petitioner may
be allowed to post bail in the amount of P5,500,000.00 and be required to secure a
certification/guaranty from the Mayor of the place of his residence that he is a
resident of the area and that he will remain to be so until final judgment is rendered
or in case he transfers residence, it must be with prior notice to the court and
private complainant. Petitioner filed a Reply, contending that the proposed bail of
P5,500,000.00 was violative of his right against excessive bail.
ISSUE: WON the right against excessive bail, and the liberty of abode and travel,
can be invoked to set aside two resolutions of the Court of Appeals which fixed bail
at P5,500,000.00 and imposed conditions on change of residence and travel abroad.
RULING: Yes. The courts are precluded from installing devices to ensure against the
jumping of bail which may include increasing the bail bond to an appropriate level,
or requiring the person to report periodically to the court and to make an
accounting of his movements. Although an increase in the amount of bail while the
case is on appeal may be meritorious, the amount of P5,500,000.00 is
unreasonable, excessive, and constitutes an effective denial of petitioners right to
bail. The purpose for bail is to guarantee the appearance of the accused at the trial,
or whenever so required by the court. The amount should be high enough to assure
the presence of the accused when required but no higher than is reasonably
calculated to fulfill this purpose.
To fix bail at an amount equivalent to the civil liability of which petitioner is charged
(in this case, P5,500,000.00) is to permit the impression that the amount paid as
bail is an exaction of the civil liability that accused is charged of; this we cannot
allow because bail is not intended as a punishment, nor as a satisfaction of civil
liability which should necessarily await the judgment of the appellate court. In the
present case, where petitioner was found to have left the country several times
while the case was pending, the Court of Appeals required the confiscation of his
passport and the issuance of a hold-departure order against him. Under the
circumstances of this case, we find that appropriate conditions have been imposed
in the bail bond to ensure against the risk of flight, particularly, the combination of
the hold-departure order and the requirement that petitioner inform the court of any
change of residence and of his whereabouts.

G.R. No. 71169 December 22, 1988

COURT, and AYALA CORPORATION, respondents.
FACTS: Appellant-spouses were residing in Jupiter Street and in Bel-Air Village.
The parties admit that at the time Moncal purchased the subject property from the
Makati Development Corporation, there was a perimeter wall, running along Jupiter
Street, which wall was constructed by the subdivision owner; that at that time the
gates of the entrances to Jupiter Street were closed to public traffic. In short, the

entire length of Jupiter which was inside the perimeter wall was not then open to
public traffic. Subsequent thereto, Ayala tore down the perimeter wall to give way to
the commercial building fronting Buendia Avenue (now Gil J. Puyat Avenue).
On August 12, 1977, the Mayor of Makati forcibly opened and removed the street
gates constructed on Jupiter Street and Reposo Street, thereby opening said streets
to the public.
ISSUE: WON non-impairment of contracts may be invoked
RULING: No, it is only secondary to general welfare. It is not that restrictive
easements, especially the easements herein in question, are invalid or ineffective.
As far as the Bel-Air subdivision itself is concerned, certainly, they are valid and
enforceable. But they are, like all contracts, subject to the overriding demands,
needs, and interests of the greater number as the State may determine in the
legitimate exercise of police power. Our jurisdiction guarantees sanctity of contract
and is said to be the "law between the contracting parties, but while it is so, it
cannot contravene 'law, morals, good customs, public order, or public policy. Above
all, it cannot be raised as a deterrent to police power, designed precisely to promote
health, safety, peace, and enhance the common good, at the expense of contractual
The petitioners have not shown why the Court should hold otherwise other than for
the supposed "non-impairment" guaranty of the Constitution, which, as we have
declared, is secondary to the more compelling interests of general welfare. The
Ordinance has not been shown to be capricious or arbitrary or unreasonable to
warrant the reversal of the judgments so appealed. In that connection, we find no
reversible error to have been committed by the Court of Appeals.

G.R. No. 132269. April 27, 2000]

FACTS: Sometime in June of 1987 Harrison Motors Corporation through its president,
Renato Claros, sold two (2) Isuzu Elf trucks assembled using imported component
parts to private respondent Rachel Navarro, owner of RN Freight Lines, a franchise
holder operating and maintaining a fleet of cargo trucks all over Luzon. Prior to the
sale, Claros represented to Navarro that all the BIR taxes and customs duties for the
parts used on the two (2) trucks had been paid for.
Thereafter, the BIR, BOC and LTO entered into a tripartite MOA which provided that
prior to the registration in the LTO of any locally assembled motor vehicle using
imported component parts, a Certificate of Payment should first be obtained from
the BIR and the BOC to prove that all existing taxes and customs duties have been
Thus, government agents seized and detained the two (2) Elf trucks of Navarro after
discovering that there were still unpaid BIR taxes and customs duties thereon and
also ordered Navarro to pay the proper assessments or her trucks would be

Navarro went to Claros to ask for the payment of BIR taxes and customs duties;
however, Claros refused to comply. Thus, Navarro was forced to pay but demanded
a reimbursement from Claros, in which she was again ignored and filed a complaint.
Ghe trial court rendered a decision ordering Claros to reimburse Navarro in the
amount of P32,943.00 for the customs duties and internal revenue taxes the latter
had to pay to discharge her two (2) Elf trucks from government custody. Harrison
Motors argued that it was no longer obliged to pay for the additional taxes and
customs duties imposed on the imported component parts since such
administrative regulations only took effect after the execution of its contract of sale
with private respondent.
ISSUE: WON the MOAs impaired the contract entered into by Navarro and Claros
RULING: No. What Sec. 10, Art. III, of the Constitution prohibits is the passage of a
law which enlarges, abridges or in any manner changes the intention of the
contracting parties. The Memorandum Orders and the two (2) Memoranda of
Agreement do not impose any additional taxes which would unduly impair the
contract of sale between petitioner and private respondent. Instead, these
administrative regulations were passed to enforce payment of existing BIR taxes
and customs duties at the time of importation.

The records however reveal that the Memorandum Orders and Memoranda of
Agreement do not impose any additional BIR taxes or customs duties. It does not
charge any new tax. It simply provides the procedure on how owners/consignees or
their purchasers could voluntarily initiate payment for any unpaid customs duties on
locally assembled vehicles using imported component parts.

[G.R. No. 126102. December 4, 2000]

III, respondents.
FACTS: Ortigas & Company sold to Emilia Hermoso, a parcel of land in Greenhills
Subdivision IV, San Juan, Metro Manila. The contract of sale provided that the lot:
be used exclusivelyfor residential purposes only, and not more than one singlefamily residential building will be constructed thereon,No single-family residential
building shall be erecteduntil the building plans, specificationhave been
approved by the SELLER. In 1981, the Metropolitan Manila Commission (now
MMDA) enacted MMC Ordinance No. 81-01 or the Comprehensive Zoning Area for
the National Capital Region. The ordinance reclassified as a commercial area a
portion of Ortigas Avenue from Madison to Roosevelt Streets of Greenhills
Subdivision where the lot is located.
The subject property was leased by Ismael Mathay III from Hermoso. Thereupon,
Mathay constructed a single story commercial building for Greenhills Autohaus, Inc.,
a car sales company. Later, Ortigas Co. filed a complaint against Emilia Hermoso

seeking the demolition of the said commercial structure for having violated the
terms and conditions of the Deed of Sale.
Mathay III then filed for certiorari with the CA claiming that MMC Ordinance No. 8101 classified the area where the lot was located as commercial area and said
ordinance must be read into the August 25, 1976 Deed of Sale as a concrete
exercise of police power. Ortigas and Company averred that inasmuch as the
restrictions on the use of the lot were duly annotated on the title it issued to Emilia
Hermoso, said restrictions must prevail over the ordinance, specially since these
restrictions were agreed upon before the passage of MMC Ordinance No. 81-01.
ISSUE: Whether or not the MMC Ordinance No. 81-01 be applied retroactively and
enacted in the exercise of police power be superior to non-impairment of contracts
RULING: Yes. SC affirmed the decision of CA in which the zoning ordinance be
applied retroactively and superior to the non-impairment of contracts. Although the
Court agrees that laws should be applied with prospectivity, lex prospicit, non
respicit, and such is also applicable at the time of the execution of contracts, unless
specified in the statutes to have a retroactive effect. A later law that changes the
intent of parties to the contract impairs the contract itself, thereby violating the
However, one of the exceptions to this is police power that regulates certain
activities that can be given retroactive effect and may reasonably impair vested
rights or contracts. Police power is superior to non-impairment of contracts as it
promotes health, morals, peace, education, good order, safety, and general welfare
of the people.

[G.R. No. 139256. December 27, 2002]

REPUBLIC OF THE PHILIPPINES, represented by Sugar Regulatory Administration,
petitioner, vs. SULPICIO TANCINCO,respondent.
FACTS: The National Sugar Trading Corporation (NASUTRA), a domestic corporation
created for the purpose of engaging in the trading of sugar, and a subsidiary of the
Philippine Sugar Commission (Philsucom), an entity owned and controlled by the
Philippine government, leased the warehouse of Sulpicio Tancinco in Cagayan de
Oro City. The contract was for a period of 3 months starting November 23, 1984
renewable for another 3 years.
On December 29, 1984, the eastern wall of the warehouse collapsed causing death
and injuries to several persons and damage to houses within the area. Tancinco was
constrained to incur expenses for the repair and restoration of the warehouse and
indemnity for the victims. Due to NASUTRAs refusal to reimburse Tancinco, he filed
a complaint for Damages. NASUTRA filed its Answer disclaiming any liability.
In the meantime, NASUTRA was converted into a private corporation called the
Philippine Sugar Marketing Corporation (Philsuma), the sole marketing agency for
the sugar industry to be owned completely by sugar producers. Thereafter,
Philsucom was phased out by Executive Order No. 18 in 1986, at same time creating

petitioner SRA. NASUTRA substituted petitioner SRA and filed on February 8, 1988,
an Answer putting up the defenses that it cannot be liable for NASUTRAs obligation
as it was created after the incident took place and that it is a separate and distinct
entity from the former. On May 17, 1990, respondent Tancinco died and he was
substituted by his heirs.

ISSUE: WON there was an impairment of contract

RULING: No. Indeed, Executive Order No. 18 abolished the Philippine Sugar
Commission (Philsucom) and created the Sugar Regulatory Administration (SRA).
However, the abolition of NASUTRA and eventually Philsucom did not abate the
pendency of the suits filed against them. The termination of the life of a juridical
entity does not by itself cause the extinction or diminution of the rights and
liabilities of such entity; specially in this case where, pursuant to the transitory
provision of E.O. No. 18, Philsucom, under the supervision of SRA, was allowed to
continue as a juridical entity for 3 years for the purpose of prosecuting and
defending suits by or against it and enabling it to settle and close its affairs, to
dispose of and convey its property; and to distribute its assets.
Accordingly, SRA can be held liable for Tancincos claim for damages against
NASUTRA, which claim has already been proven before the trial court.