Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 208566

November 19, 2013

GRECO ANTONIOUS BEDA B. BELGICA JOSE M. VILLEGAS JR. JOSE L. GONZALEZ REUBEN M.
ABANTE and QUINTIN PAREDES SAN DIEGO, Petitioners,
vs.
HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA JR. SECRETARY OF BUDGET AND
MANAGEMENT FLORENCIO B. ABAD, NATIONAL TREASURER ROSALIA V. DE LEON SENATE
OF THE PHILIPPINES represented by FRANKLIN M. DRILON m his capacity as SENATE
PRESIDENT and HOUSE OF REPRESENTATIVES represented by FELICIANO S. BELMONTE, JR.
in his capacity as SPEAKER OF THE HOUSE, Respondents.
x-----------------------x
G.R. No. 208493
SOCIAL JUSTICE SOCIETY (SJS) PRESIDENT SAMSON S. ALCANTARA, Petitioner,
vs.
HONORABLE FRANKLIN M. DRILON in his capacity as SENATE PRESIDENT and HONORABLE
FELICIANO S. BELMONTE, JR., in his capacity as SPEAKER OF THE HOUSE OF
REPRESENTATIVES, Respondents.
x-----------------------x
G.R. No. 209251zn
PEDRITO M. NEPOMUCENO, Former Mayor-Boac, Marinduque Former Provincial Board
Member -Province of Marinduque, Petitioner,
vs.
PRESIDENT BENIGNO SIMEON C. AQUINO III* and SECRETARY FLORENCIO BUTCH ABAD,
DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
DECISION
PERLAS-BERNABE, J.:
"Experience is the oracle of truth."1
-James Madison
Before the Court are consolidated petitions 2 taken under Rule 65 of the Rules of Court, all of which
assail the constitutionality of the Pork Barrel System. Due to the complexity of the subject matter, the
Court shall heretofore discuss the systems conceptual underpinnings before detailing the particulars
of the constitutional challenge.
The Facts
I. Pork Barrel: General Concept.

"Pork Barrel" is political parlance of American -English origin.3 Historically, its usage may be
traced to the degrading ritual of rolling out a barrel stuffed with pork to a multitude of black
slaves who would cast their famished bodies into the porcine feast to assuage their hunger
with morsels coming from the generosity of their well-fed master. 4 This practice was later
compared to the actions of American legislators in trying to direct federal budgets in favor of
their districts.5 While the advent of refrigeration has made the actual pork barrel obsolete, it
persists in reference to political bills that "bring home the bacon" to a legislators district and
constituents.6 In a more technical sense, "Pork Barrel" refers to an appropriation of government
spending meant for localized projects and secured solely or primarily to bring money to a
representative's district.7 Some scholars on the subject further use it to refer to legislative
control of local appropriations.8
In the Philippines, "Pork Barrel" has been commonly referred to as lump-sum, discretionary
funds of Members of the Legislature,9 although, as will be later discussed, its usage would
evolve in reference to certain funds of the Executive.
II. History of Congressional Pork Barrel in the Philippines.
A. Pre-Martial Law Era (1922-1972).
Act 3044,10 or the Public Works Act of 1922, is considered 11 as the earliest form of
"Congressional Pork Barrel" in the Philippines since the utilization of the funds
appropriated therein were subjected to post-enactment legislator approval. Particularly,
in the area of fund release, Section 3 12 provides that the sums appropriated for certain
public works projects13"shall be distributed x x x subject to the approval of a joint
committee elected by the Senate and the House of Representatives. "The committee
from each House may also authorize one of its members to approve the distribution
made by the Secretary of Commerce and Communications." 14 Also, in the area of fund
realignment, the same section provides that the said secretary, "with the approval of
said joint committee, or of the authorized members thereof, may, for the purposes of
said distribution, transfer unexpended portions of any item of appropriation under this
Act to any other item hereunder."
In 1950, it has been documented15 that post-enactment legislator participation
broadened from the areas of fund release and realignment to the area of project
identification. During that year, the mechanics of the public works act was modified to
the extent that the discretion of choosing projects was transferred from the Secretary of
Commerce and Communications to legislators. "For the first time, the law carried a list
of projects selected by Members of Congress, they being the representatives of the
people, either on their own account or by consultation with local officials or civil
leaders."16 During this period, the pork barrel process commenced with local
government councils, civil groups, and individuals appealing to Congressmen or
Senators for projects. Petitions that were accommodated formed part of a legislators
allocation, and the amount each legislator would eventually get is determined in a
caucus convened by the majority. The amount was then integrated into the
administration bill prepared by the Department of Public Works and Communications.
Thereafter, the Senate and the House of Representatives added their own provisions to
the bill until it was signed into law by the President the Public Works Act. 17 In the
1960s, however, pork barrel legislation reportedly ceased in view of the stalemate
between the House of Representatives and the Senate.18
B. Martial Law Era (1972-1986).
While the previous" Congressional Pork Barrel" was apparently discontinued in 1972
after Martial Law was declared, an era when "one man controlled the legislature," 19 the
reprieve was only temporary. By 1982, the Batasang Pambansa had already introduced
a new item in the General Appropriations Act (GAA) called the" Support for Local

Development Projects" (SLDP) under the article on "National Aid to Local Government
Units". Based on reports,20 it was under the SLDP that the practice of giving lump-sum
allocations
to
individual
legislators
began,
with
each
assemblyman
receiving P500,000.00. Thereafter, assemblymen would communicate their project
preferences to the Ministry of Budget and Management for approval. Then, the said
ministry would release the allocation papers to the Ministry of Local Governments,
which would, in turn, issue the checks to the city or municipal treasurers in the
assemblymans locality. It has been further reported that "Congressional Pork Barrel"
projects under the SLDP also began to cover not only public works projects, or so- called
"hard projects", but also "soft projects", 21 or non-public works projects such as those
which would fall under the categories of, among others, education, health and
livelihood.22
C. Post-Martial Law Era:
Corazon Cojuangco Aquino Administration (1986-1992).
After the EDSA People Power Revolution in 1986 and the restoration of Philippine
democracy, "Congressional Pork Barrel" was revived in the form of the "Mindanao
Development Fund" and the "Visayas Development Fund" which were created with
lump-sum appropriations of P480 Million and P240 Million, respectively, for the funding
of development projects in the Mindanao and Visayas areas in 1989. It has been
documented23 that the clamor raised by the Senators and the Luzon legislators for a
similar funding, prompted the creation of the "Countrywide Development Fund" (CDF)
which was integrated into the 1990 GAA 24 with an initial funding ofP2.3 Billion to cover
"small local infrastructure and other priority community projects."
Under the GAAs for the years 1991 and 1992, 25 CDF funds were, with the approval of the
President, to be released directly to the implementing agencies but "subject to the
submission of the required list of projects and activities."Although the GAAs from 1990
to 1992 were silent as to the amounts of allocations of the individual legislators, as well
as their participation in the identification of projects, it has been reported 26 that by
1992, Representatives were receivingP12.5 Million each in CDF funds, while Senators
were receiving P18 Million each, without any limitation or qualification, and that they
could identify any kind of project, from hard or infrastructure projects such as roads,
bridges, and buildings to "soft projects" such as textbooks, medicines, and
scholarships.27
D. Fidel Valdez Ramos (Ramos) Administration (1992-1998).
The following year, or in 1993,28 the GAA explicitly stated that the release of CDF funds
was to be made upon the submission of the list of projects and activities identified by,
among others, individual legislators. For the first time, the 1993 CDF Article included an
allocation for the Vice-President.29 As such, Representatives were allocated P12.5 Million
each in CDF funds, Senators, P18 Million each, and the Vice-President, P20 Million.
In 1994,30 1995,31 and 1996,32 the GAAs contained the same provisions on project
identification and fund release as found in the 1993 CDF Article. In addition, however,
the Department of Budget and Management (DBM) was directed to submit reports to
the Senate Committee on Finance and the House Committee on Appropriations on the
releases made from the funds.33
Under the 199734 CDF Article, Members of Congress and the Vice-President, in
consultation with the implementing agency concerned, were directed to submit to the
DBM the list of 50% of projects to be funded from their respective CDF allocations which
shall be duly endorsed by (a) the Senate President and the Chairman of the Committee
on Finance, in the case of the Senate, and (b) the Speaker of the House of

Representatives and the Chairman of the Committee on Appropriations, in the case of

the House of Representatives; while the list for the remaining 50% was to be submitted
within six (6) months thereafter. The same article also stated that the project list, which
would be published by the DBM, 35 "shall be the basis for the release of funds" and that
"no funds appropriated herein shall be disbursed for projects not included in the list
herein required."
The following year, or in 1998,36 the foregoing provisions regarding the required lists
and endorsements were reproduced, except that the publication of the project list was
no longer required as the list itself sufficed for the release of CDF Funds.
The CDF was not, however, the lone form of "Congressional Pork Barrel" at that time.
Other forms of "Congressional Pork Barrel" were reportedly fashioned and inserted into
the GAA (called "Congressional Insertions" or "CIs") in order to perpetuate the ad
ministrations political agenda.37 It has been articulated that since CIs "formed part and
parcel of the budgets of executive departments, they were not easily identifiable and
were thus harder to monitor." Nonetheless, the lawmakers themselves as well as the
finance and budget officials of the implementing agencies, as well as the DBM,
purportedly knew about the insertions. 38Examples of these CIs are the Department of
Education (DepEd) School Building Fund, the Congressional Initiative Allocations, the
Public Works Fund, the El Nio Fund, and the Poverty Alleviation Fund. 39 The allocations
for the School Building Fund, particularly, shall be made upon prior consultation with
the representative of the legislative district concerned. 40 Similarly, the legislators had
the power to direct how, where and when these appropriations were to be spent. 41
E. Joseph Ejercito Estrada (Estrada) Administration (1998-2001).
In 1999,42 the CDF was removed in the GAA and replaced by three (3) separate forms of
CIs, namely, the "Food Security Program Fund,"43 the "Lingap Para Sa Mahihirap Program
Fund,"44and the "Rural/Urban Development Infrastructure Program Fund," 45 all of which
contained a special provision requiring "prior consultation" with the Member s of
Congress for the release of the funds.
It was in the year 2000 46 that the "Priority Development Assistance Fund" (PDAF)
appeared in the GAA. The requirement of "prior consultation with the respective
Representative of the District" before PDAF funds were directly released to the
implementing agency concerned was explicitly stated in the 2000 PDAF Article.
Moreover, realignment of funds to any expense category was expressly allowed, with
the sole condition that no amount shall be used to fund personal services and other
personnel benefits.47 The succeeding PDAF provisions remained the same in view of the
re-enactment48 of the 2000 GAA for the year 2001.
F. Gloria Macapagal-Arroyo (Arroyo) Administration (2001-2010).
The 200249 PDAF Article was brief and straightforward as it merely contained a single
special provision ordering the release of the funds directly to the implementing agency
or local government unit concerned, without further qualifications. The following year,
2003,50 the same single provision was present, with simply an expansion of purpose and
express authority to realign. Nevertheless, the provisions in the 2003 budgets of the
Department of Public Works and Highways51 (DPWH) and the DepEd52 required prior
consultation with Members of Congress on the aspects of implementation delegation
and project list submission, respectively. In 2004, the 2003 GAA was re-enacted. 53
In 2005,54 the PDAF Article provided that the PDAF shall be used "to fund priority
programs and projects under the ten point agenda of the national government and shall
be released directly to the implementing agencies." It also introduced the program
menu concept,55 which is essentially a list of general programs and implementing

agencies from which a particular PDAF project may be subsequently chosen by the
identifying authority. The 2005 GAA was re-enacted 56 in 2006 and hence, operated on
the same bases. In similar regard, the program menu concept was consistently
integrated into the 2007,57 2008,58 2009,59 and 201060 GAAs.
Textually, the PDAF Articles from 2002 to 2010 were silent with respect to the specific
amounts allocated for the individual legislators, as well as their participation in the
proposal and identification of PDAF projects to be funded. In contrast to the PDAF
Articles, however, the provisions under the DepEd School Building Program and the
DPWH budget, similar to its predecessors, explicitly required prior consultation with the
concerned Member of Congress61anent certain aspects of project implementation.
Significantly, it was during this era that provisions which allowed formal participation of
non-governmental organizations (NGO) in the implementation of government projects
were introduced. In the Supplemental Budget for 2006, with respect to the appropriation
for school buildings, NGOs were, by law, encouraged to participate. For such purpose,
the law stated that "the amount of at least P250 Million of the P500 Million allotted for
the construction and completion of school buildings shall be made available to NGOs
including the Federation of Filipino-Chinese Chambers of Commerce and Industry, Inc.
for its "Operation Barrio School" program, with capability and proven track records in
the construction of public school buildings x x x." 62 The same allocation was made
available to NGOs in the 2007 and 2009 GAAs under the DepEd Budget. 63 Also, it was in
2007 that the Government Procurement Policy Board 64(GPPB) issued Resolution No. 122007 dated June 29, 2007 (GPPB Resolution 12-2007), amending the implementing rules
and regulations65 of RA 9184,66 the Government Procurement Reform Act, to include, as
a form of negotiated procurement, 67 the procedure whereby the Procuring Entity 68 (the
implementing agency) may enter into a memorandum of agreement with an NGO,
provided that "an appropriation law or ordinance earmarks an amount to be specifically
contracted out to NGOs."69
G. Present Administration (2010-Present).
Differing from previous PDAF Articles but similar to the CDF Articles, the 2011 70 PDAF
Article included an express statement on lump-sum amounts allocated for individual
legislators and the Vice-President: Representatives were given P70 Million each, broken
down into P40 Million for "hard projects" and P30 Million for "soft projects"; while P200
Million was given to each Senator as well as the Vice-President, with a P100 Million
allocation each for "hard" and "soft projects." Likewise, a provision on realignment of
funds was included, but with the qualification that it may be allowed only once. The
same provision also allowed the Secretaries of Education, Health, Social Welfare and
Development, Interior and Local Government, Environment and Natural Resources,
Energy, and Public Works and Highways to realign PDAF Funds, with the further
conditions that: (a) realignment is within the same implementing unit and same project
category as the original project, for infrastructure projects; (b) allotment released has
not yet been obligated for the original scope of work, and (c) the request for
realignment is with the concurrence of the legislator concerned. 71
In the 201272 and 201373 PDAF Articles, it is stated that the "identification of projects
and/or designation of beneficiaries shall conform to the priority list, standard or design
prepared by each implementing agency (priority list requirement) x x x." However, as
practiced, it would still be the individual legislator who would choose and identify the
project from the said priority list.74
Provisions on legislator allocations75 as well as fund realignment76 were included in the
2012 and 2013 PDAF Articles; but the allocation for the Vice-President, which was
pegged at P200 Million in the 2011 GAA, had been deleted. In addition, the 2013 PDAF
Article now allowed LGUs to be identified as implementing agencies if they have the

technical capability to implement the projects. 77 Legislators were also allowed to identify
programs/projects, except for assistance to indigent patients and scholarships, outside
of his legislative district provided that he secures the written concurrence of the
legislator of the intended outside-district, endorsed by the Speaker of the
House.78 Finally, any realignment of PDAF funds, modification and revision of project
identification, as well as requests for release of funds, were all required to be favorably
endorsed by the House Committee on Appropriations and the Senate Committee on
Finance, as the case may be.79
III. History of Presidential Pork Barrel in the Philippines.
While the term "Pork Barrel" has been typically associated with lump-sum, discretionary funds
of Members of Congress, the present cases and the recent controversies on the matter have,
however, shown that the terms usage has expanded to include certain funds of the President
such as the Malampaya Funds and the Presidential Social Fund.
On the one hand, the Malampaya Funds was created as a special fund under Section 8 80 of
Presidential Decree No. (PD) 910, 81 issued by then President Ferdinand E. Marcos (Marcos) on
March 22, 1976. In enacting the said law, Marcos recognized the need to set up a special fund
to help intensify, strengthen, and consolidate government efforts relating to the exploration,
exploitation, and development of indigenous energy resources vital to economic growth. 82 Due
to the energy-related activities of the government in the Malampaya natural gas field in
Palawan, or the "Malampaya Deep Water Gas-to-Power Project", 83 the special fund created
under PD 910 has been currently labeled as Malampaya Funds.
On the other hand the Presidential Social Fund was created under Section 12, Title IV 84 of PD
1869,85 or the Charter of the Philippine Amusement and Gaming Corporation (PAGCOR). PD
1869 was similarly issued by Marcos on July 11, 1983. More than two (2) years after, he
amended PD 1869 and accordingly issued PD 1993 on October 31, 1985, 86 amending Section
1287 of the former law. As it stands, the Presidential Social Fund has been described as a
special funding facility managed and administered by the Presidential Management Staff
through which the President provides direct assistance to priority programs and projects not
funded under the regular budget. It is sourced from the share of the government in the
aggregate gross earnings of PAGCOR.88
IV. Controversies in the Philippines.
Over the decades, "pork" funds in the Philippines have increased tremendously, 89 owing in no
small part to previous Presidents who reportedly used the "Pork Barrel" in order to gain
congressional support.90 It was in 1996 when the first controversy surrounding the "Pork Barrel"
erupted. Former Marikina City Representative Romeo Candazo (Candazo), then an anonymous
source, "blew the lid on the huge sums of government money that regularly went into the
pockets of legislators in the form of kickbacks." 91 He said that "the kickbacks were SOP
(standard operating procedure) among legislators and ranged from a low 19 percent to a high
52 percent of the cost of each project, which could be anything from dredging, rip rapping,
sphalting, concreting, and construction of school buildings." 92 "Other sources of kickbacks that
Candazo identified were public funds intended for medicines and textbooks. A few days later,
the tale of the money trail became the banner story of the Philippine Daily Inquirer issue of
August 13, 1996, accompanied by an illustration of a roasted pig." 93 "The publication of the
stories, including those about congressional initiative allocations of certain lawmakers,
including P3.6 Billion for a Congressman, sparked public outrage."94
Thereafter, or in 2004, several concerned citizens sought the nullification of the PDAF as
enacted in the 2004 GAA for being unconstitutional. Unfortunately, for lack of "any pertinent
evidentiary support that illegal misuse of PDAF in the form of kickbacks has become a common
exercise of unscrupulous Members of Congress," the petition was dismissed. 95

Recently, or in July of the present year, the National Bureau of Investigation (NBI) began its
probe into allegations that "the government has been defrauded of some P10 Billion over the
past 10 years by a syndicate using funds from the pork barrel of lawmakers and various
government agencies for scores of ghost projects." 96 The investigation was spawned by sworn
affidavits of six (6) whistle-blowers who declared that JLN Corporation "JLN" standing for Janet
Lim Napoles (Napoles) had swindled billions of pesos from the public coffers for "ghost
projects" using no fewer than 20 dummy NGOs for an entire decade. While the NGOs were
supposedly the ultimate recipients of PDAF funds, the whistle-blowers declared that the money
was diverted into Napoles private accounts. 97 Thus, after its investigation on the Napoles
controversy, criminal complaints were filed before the Office of the Ombudsman, charging five
(5) lawmakers for Plunder, and three (3) other lawmakers for Malversation, Direct Bribery, and
Violation of the Anti-Graft and Corrupt Practices Act. Also recommended to be charged in the
complaints are some of the lawmakers chiefs -of-staff or representatives, the heads and other
officials of three (3) implementing agencies, and the several presidents of the NGOs set up by
Napoles.98
On August 16, 2013, the Commission on Audit (CoA) released the results of a three-year audit
investigation99 covering the use of legislators' PDAF from 2007 to 2009, or during the last three
(3) years of the Arroyo administration. The purpose of the audit was to determine the propriety
of releases of funds under PDAF and the Various Infrastructures including Local Projects
(VILP)100 by the DBM, the application of these funds and the implementation of projects by the
appropriate
implementing
agencies
and
several
government-owned-and-controlled
corporations (GOCCs).101 The total releases covered by the audit amounted to P8.374 Billion in
PDAF and P32.664 Billion in VILP, representing 58% and 32%, respectively, of the total PDAF
and VILP releases that were found to have been made nationwide during the audit
period.102 Accordingly, the Co As findings contained in its Report No. 2012-03 (CoA Report),
entitled "Priority Development Assistance Fund (PDAF) and Various Infrastructures including
Local Projects (VILP)," were made public, the highlights of which are as follows: 103
Amounts released for projects identified by a considerable number of legislators
significantly exceeded their respective allocations.
Amounts were released for projects outside of legislative districts of sponsoring
members of the Lower House.
Total VILP releases for the period exceeded the total amount appropriated under the
2007 to 2009 GAAs.
Infrastructure projects were constructed on private lots without these having been
turned over to the government.
Significant amounts were released to implementing agencies without the latters
endorsement and without considering their mandated functions, administrative and
technical capabilities to implement projects.
Implementation of most livelihood projects was not undertaken by the implementing
agencies themselves but by NGOs endorsed by the proponent legislators to which the
Funds were transferred.
The funds were transferred to the NGOs in spite of the absence of any appropriation
law or ordinance.
Selection of the NGOs were not compliant with law and regulations.
Eighty-Two (82) NGOs entrusted with implementation of seven hundred seventy two
(772) projects amount to P6.156 Billion were either found questionable, or submitted

questionable/spurious documents, or failed to liquidate in whole or in part their

utilization of the Funds.
Procurement by the NGOs, as well as some implementing agencies, of goods and
services reportedly used in the projects were not compliant with law.
As for the "Presidential Pork Barrel", whistle-blowers alleged that" at least P900 Million from
royalties in the operation of the Malampaya gas project off Palawan province intended for
agrarian reform beneficiaries has gone into a dummy NGO." 104 According to incumbent CoA
Chairperson Maria Gracia Pulido Tan (CoA Chairperson), the CoA is, as of this writing, in the
process of preparing "one consolidated report" on the Malampaya Funds.105
V. The Procedural Antecedents.
Spurred in large part by the findings contained in the CoA Report and the Napoles controversy,
several petitions were lodged before the Court similarly seeking that the "Pork Barrel System"
be declared unconstitutional. To recount, the relevant procedural antecedents in these cases
are as follows:
On August 28, 2013, petitioner Samson S. Alcantara (Alcantara), President of the Social Justice
Society, filed a Petition for Prohibition of even date under Rule 65 of the Rules of Court (Alcantara
Petition), seeking that the "Pork Barrel System" be declared unconstitutional, and a writ of prohibition
be issued permanently restraining respondents Franklin M. Drilon and Feliciano S. Belmonte, Jr., in
their respective capacities as the incumbent Senate President and Speaker of the House of
Representatives, from further taking any steps to enact legislation appropriating funds for the "Pork
Barrel System," in whatever form and by whatever name it may be called, and from approving further
releases pursuant thereto.106 The Alcantara Petition was docketed as G.R. No. 208493.
On September 3, 2013, petitioners Greco Antonious Beda B. Belgica, Jose L. Gonzalez, Reuben M.
Abante, Quintin Paredes San Diego (Belgica, et al.), and Jose M. Villegas, Jr. (Villegas) filed an Urgent
Petition For Certiorari and Prohibition With Prayer For The Immediate Issuance of Temporary
Restraining Order (TRO) and/or Writ of Preliminary Injunction dated August 27, 2013 under Rule 65 of
the Rules of Court (Belgica Petition), seeking that the annual "Pork Barrel System," presently
embodied in the provisions of the GAA of 2013 which provided for the 2013 PDAF, and the Executives
lump-sum, discretionary funds, such as the Malampaya Funds and the Presidential Social Fund, 107 be
declared unconstitutional and null and void for being acts constituting grave abuse of discretion. Also,
they pray that the Court issue a TRO against respondents Paquito N. Ochoa, Jr., Florencio B. Abad
(Secretary Abad) and Rosalia V. De Leon, in their respective capacities as the incumbent Executive
Secretary, Secretary of the Department of Budget and Management (DBM), and National Treasurer, or
their agents, for them to immediately cease any expenditure under the aforesaid funds. Further, they
pray that the Court order the foregoing respondents to release to the CoA and to the public: (a) "the
complete schedule/list of legislators who have availed of their PDAF and VILP from the years 2003 to
2013, specifying the use of the funds, the project or activity and the recipient entities or individuals,
and all pertinent data thereto"; and (b) "the use of the Executives lump-sum, discretionary funds,
including the proceeds from the x x x Malampaya Funds and remittances from the PAGCOR x x x from
2003 to 2013, specifying the x x x project or activity and the recipient entities or individuals, and all
pertinent data thereto."108 Also, they pray for the "inclusion in budgetary deliberations with the
Congress of all presently off-budget, lump-sum, discretionary funds including, but not limited to,
proceeds from the Malampaya Funds and remittances from the PAGCOR." 109 The Belgica Petition was
docketed as G.R. No. 208566.110
Lastly, on September 5, 2013, petitioner Pedrito M. Nepomuceno (Nepomuceno), filed a Petition dated
August 23, 2012 (Nepomuceno Petition), seeking that the PDAF be declared unconstitutional, and a
cease and desist order be issued restraining President Benigno Simeon S. Aquino III (President
Aquino) and Secretary Abad from releasing such funds to Members of Congress and, instead, allow
their release to fund priority projects identified and approved by the Local Development Councils in
consultation with the executive departments, such as the DPWH, the Department of Tourism, the

Department of Health, the Department of Transportation, and Communication and the National
Economic Development Authority.111 The Nepomuceno Petition was docketed as UDK-14951.112
On September 10, 2013, the Court issued a Resolution of even date (a) consolidating all cases; (b)
requiring public respondents to comment on the consolidated petitions; (c) issuing a TRO (September
10, 2013 TRO) enjoining the DBM, National Treasurer, the Executive Secretary, or any of the persons
acting under their authority from releasing (1) the remaining PDAF allocated to Members of Congress
under the GAA of 2013, and (2) Malampaya Funds under the phrase "for such other purposes as may
be hereafter directed by the President" pursuant to Section 8 of PD 910 but not for the purpose of
"financing energy resource development and exploitation programs and projects of the government
under the same provision; and (d) setting the consolidated cases for Oral Arguments on October 8,
2013.
On September 23, 2013, the Office of the Solicitor General (OSG) filed a Consolidated Comment
(Comment) of even date before the Court, seeking the lifting, or in the alternative, the partial lifting
with respect to educational and medical assistance purposes, of the Courts September 10, 2013 TRO,
and that the consolidated petitions be dismissed for lack of merit. 113
On September 24, 2013, the Court issued a Resolution of even date directing petitioners to reply to
the Comment.
Petitioners, with the exception of Nepomuceno, filed their respective replies to the Comment: (a) on
September 30, 2013, Villegas filed a separate Reply dated September 27, 2013 (Villegas Reply); (b)
on October 1, 2013, Belgica, et al. filed a Reply dated September 30, 2013 (Belgica Reply); and (c) on
October 2, 2013, Alcantara filed a Reply dated October 1, 2013.
On October 1, 2013, the Court issued an Advisory providing for the guidelines to be observed by the
parties for the Oral Arguments scheduled on October 8, 2013. In view of the technicality of the issues
material to the present cases, incumbent Solicitor General Francis H. Jardeleza (Solicitor General) was
directed to bring with him during the Oral Arguments representative/s from the DBM and Congress
who would be able to competently and completely answer questions related to, among others, the
budgeting process and its implementation. Further, the CoA Chairperson was appointed as amicus
curiae and thereby requested to appear before the Court during the Oral Arguments.
On October 8 and 10, 2013, the Oral Arguments were conducted. Thereafter, the Court directed the
parties to submit their respective memoranda within a period of seven (7) days, or until October 17,
2013, which the parties subsequently did.
The Issues Before the Court
Based on the pleadings, and as refined during the Oral Arguments, the following are the main issues
for the Courts resolution:
I. Procedural Issues.
Whether or not (a) the issues raised in the consolidated petitions involve an actual and justiciable
controversy; (b) the issues raised in the consolidated petitions are matters of policy not subject to
judicial review; (c) petitioners have legal standing to sue; and (d) the Courts Decision dated August
19, 1994 in G.R. Nos. 113105, 113174, 113766, and 113888, entitled "Philippine Constitution
Association v. Enriquez"114 (Philconsa) and Decision dated April 24, 2012 in G.R. No. 164987, entitled
"Lawyers Against Monopoly and Poverty v. Secretary of Budget and Management" 115 (LAMP) bar the
re-litigatio n of the issue of constitutionality of the "Pork Barrel System" under the principles of res
judicata and stare decisis.
II. Substantive Issues on the "Congressional Pork Barrel."

Whether or not the 2013 PDAF Article and all other Congressional Pork Barrel Laws similar thereto are
unconstitutional considering that they violate the principles of/constitutional provisions on (a)
separation of powers; (b) non-delegability of legislative power; (c) checks and balances; (d)
accountability; (e) political dynasties; and (f) local autonomy.
III. Substantive Issues on the "Presidential Pork Barrel."
Whether or not the phrases (a) "and for such other purposes as may be hereafter directed by the
President" under Section 8 of PD 910,116 relating to the Malampaya Funds, and (b) "to finance the
priority infrastructure development projects and to finance the restoration of damaged or destroyed
facilities due to calamities, as may be directed and authorized by the Office of the President of the
Philippines" under Section 12 of PD 1869, as amended by PD 1993, relating to the Presidential Social
Fund, are unconstitutional insofar as they constitute undue delegations of legislative power.
These main issues shall be resolved in the order that they have been stated. In addition, the Court
shall also tackle certain ancillary issues as prompted by the present cases.
The Courts Ruling
The petitions are partly granted.
I. Procedural Issues.
The prevailing rule in constitutional litigation is that no question involving the constitutionality or
validity of a law or governmental act may be heard and decided by the Court unless there is
compliance with the legal requisites for judicial inquiry, 117 namely: (a) there must be an actual case or
controversy calling for the exercise of judicial power; (b) the person challenging the act must have
the standing to question the validity of the subject act or issuance; (c) the question of
constitutionality must be raised at the earliest opportunity ; and (d) the issue of constitutionality must
be the very lis mota of the case. 118 Of these requisites, case law states that the first two are the most
important119 and, therefore, shall be discussed forthwith.
A. Existence of an Actual Case or Controversy.
By constitutional fiat, judicial power operates only when there is an actual case or controversy. 120 This
is embodied in Section 1, Article VIII of the 1987 Constitution which pertinently states that "judicial
power includes the duty of the courts of justice to settle actual controversies involving rights which
are legally demandable and enforceable x x x." Jurisprudence provides that an actual case or
controversy is one which "involves a conflict of legal rights, an assertion of opposite legal claims,
susceptible of judicial resolution as distinguished from a hypothetical or abstract difference or
dispute.121 In other words, "there must be a contrariety of legal rights that can be interpreted and
enforced on the basis of existing law and jurisprudence." 122 Related to the requirement of an actual
case or controversy is the requirement of "ripeness," meaning that the questions raised for
constitutional scrutiny are already ripe for adjudication. "A question is ripe for adjudication when the
act being challenged has had a direct adverse effect on the individual challenging it. It is a
prerequisite that something had then been accomplished or performed by either branch before a
court may come into the picture, and the petitioner must allege the existence of an immediate or
threatened injury to itself as a result of the challenged action." 123 "Withal, courts will decline to pass
upon constitutional issues through advisory opinions, bereft as they are of authority to resolve
hypothetical or moot questions."124
Based on these principles, the Court finds that there exists an actual and justiciable controversy in
these cases.
The requirement of contrariety of legal rights is clearly satisfied by the antagonistic positions of the
parties on the constitutionality of the "Pork Barrel System." Also, the questions in these consolidated
cases are ripe for adjudication since the challenged funds and the provisions allowing for their

utilization such as the 2013 GAA for the PDAF, PD 910 for the Malampaya Funds and PD 1869, as
amended by PD 1993, for the Presidential Social Fund are currently existing and operational; hence,
there exists an immediate or threatened injury to petitioners as a result of the unconstitutional use of
these public funds.
As for the PDAF, the Court must dispel the notion that the issues related thereto had been rendered
moot and academic by the reforms undertaken by respondents. A case becomes moot when there is
no more actual controversy between the parties or no useful purpose can be served in passing upon
the merits.125 Differing from this description, the Court observes that respondents proposed line-item
budgeting scheme would not terminate the controversy nor diminish the useful purpose for its
resolution since said reform is geared towards the 2014 budget, and not the 2013 PDAF Article which,
being a distinct subject matter, remains legally effective and existing. Neither will the Presidents
declaration that he had already "abolished the PDAF" render the issues on PDAF moot precisely
because the Executive branch of government has no constitutional authority to nullify or annul its
legal existence. By constitutional design, the annulment or nullification of a law may be done either
by Congress, through the passage of a repealing law, or by the Court, through a declaration of
unconstitutionality. Instructive on this point is the following exchange between Associate Justice
Antonio T. Carpio (Justice Carpio) and the Solicitor General during the Oral Arguments: 126
Justice Carpio: The President has taken an oath to faithfully execute the law, 127 correct? Solicitor
General Jardeleza: Yes, Your Honor.
Justice Carpio: And so the President cannot refuse to implement the General Appropriations Act,
correct?
Solicitor General Jardeleza: Well, that is our answer, Your Honor. In the case, for example of the PDAF,
the President has a duty to execute the laws but in the face of the outrage over PDAF, the President
was saying, "I am not sure that I will continue the release of the soft projects," and that started, Your
Honor. Now, whether or not that (interrupted)
Justice Carpio: Yeah. I will grant the President if there are anomalies in the project, he has the power
to stop the releases in the meantime, to investigate, and that is Section 38 of Chapter 5 of Book 6 of
the Revised Administrative Code128 x x x. So at most the President can suspend, now if the President
believes that the PDAF is unconstitutional, can he just refuse to implement it?
Solicitor General Jardeleza: No, Your Honor, as we were trying to say in the specific case of the PDAF
because of the CoA Report, because of the reported irregularities and this Court can take judicial
notice, even outside, outside of the COA Report, you have the report of the whistle-blowers, the
President was just exercising precisely the duty .
xxxx
Justice Carpio: Yes, and that is correct. Youve seen the CoA Report, there are anomalies, you stop and
investigate, and prosecute, he has done that. But, does that mean that PDAF has been repealed?
Solicitor General Jardeleza: No, Your Honor x x x.
xxxx
Justice Carpio: So that PDAF can be legally abolished only in two (2) cases. Congress passes a law to
repeal it, or this Court declares it unconstitutional, correct?
Solictor General Jardeleza: Yes, Your Honor.
Justice Carpio: The President has no power to legally abolish PDAF. (Emphases supplied)

Even on the assumption of mootness, jurisprudence, nevertheless, dictates that "the moot and
academic principle is not a magical formula that can automatically dissuade the Court in resolving a
case." The Court will decide cases, otherwise moot, if: first, there is a grave violation of the
Constitution; second, the exceptional character of the situation and the paramount public interest is
involved; third, when the constitutional issue raised requires formulation of controlling principles to
guide the bench, the bar, and the public; and fourth, the case is capable of repetition yet evading
review.129
The applicability of the first exception is clear from the fundamental posture of petitioners they
essentially allege grave violations of the Constitution with respect to, inter alia, the principles of
separation of powers, non-delegability of legislative power, checks and balances, accountability and
local autonomy.
The applicability of the second exception is also apparent from the nature of the interests involved
the constitutionality of the very system within which significant amounts of public funds have been
and continue to be utilized and expended undoubtedly presents a situation of exceptional character
as well as a matter of paramount public interest. The present petitions, in fact, have been lodged at a
time when the systems flaws have never before been magnified. To the Courts mind, the
coalescence of the CoA Report, the accounts of numerous whistle-blowers, and the governments own
recognition that reforms are needed "to address the reported abuses of the PDAF" 130 demonstrates a
prima facie pattern of abuse which only underscores the importance of the matter. It is also by this
finding that the Court finds petitioners claims as not merely theorized, speculative or hypothetical. Of
note is the weight accorded by the Court to the findings made by the CoA which is the
constitutionally-mandated audit arm of the government. In Delos Santos v. CoA, 131 a recent case
wherein the Court upheld the CoAs disallowance of irregularly disbursed PDAF funds, it was
emphasized that:
The COA is endowed with enough latitude to determine, prevent, and disallow irregular, unnecessary,
excessive, extravagant or unconscionable expenditures of government funds. It is tasked to be
vigilant and conscientious in safeguarding the proper use of the government's, and ultimately the
people's, property. The exercise of its general audit power is among the constitutional mechanisms
that gives life to the check and balance system inherent in our form of government.
It is the general policy of the Court to sustain the decisions of administrative authorities, especially
one which is constitutionally-created, such as the CoA, not only on the basis of the doctrine of
separation of powers but also for their presumed expertise in the laws they are entrusted to enforce.
Findings of administrative agencies are accorded not only respect but also finality when the decision
and order are not tainted with unfairness or arbitrariness that would amount to grave abuse of
discretion. It is only when the CoA has acted without or in excess of jurisdiction, or with grave abuse
of discretion amounting to lack or excess of jurisdiction, that this Court entertains a petition
questioning its rulings. x x x. (Emphases supplied)
Thus, if only for the purpose of validating the existence of an actual and justiciable controversy in
these cases, the Court deems the findings under the CoA Report to be sufficient.
The Court also finds the third exception to be applicable largely due to the practical need for a
definitive ruling on the systems constitutionality. As disclosed during the Oral Arguments, the CoA
Chairperson estimates that thousands of notices of disallowances will be issued by her office in
connection with the findings made in the CoA Report. In this relation, Associate Justice Marvic Mario
Victor F. Leonen (Justice Leonen) pointed out that all of these would eventually find their way to the
courts.132 Accordingly, there is a compelling need to formulate controlling principles relative to the
issues raised herein in order to guide the bench, the bar, and the public, not just for the expeditious
resolution of the anticipated disallowance cases, but more importantly, so that the government may
be guided on how public funds should be utilized in accordance with constitutional principles.

Finally, the application of the fourth exception is called for by the recognition that the preparation and
passage of the national budget is, by constitutional imprimatur, an affair of annual occurrence. 133 The
relevance of the issues before the Court does not cease with the passage of a "PDAF -free budget for
2014."134 The evolution of the "Pork Barrel System," by its multifarious iterations throughout the
course of history, lends a semblance of truth to petitioners claim that "the same dog will just
resurface wearing a different collar."135 In Sanlakas v. Executive Secretary,136 the government had
already backtracked on a previous course of action yet the Court used the "capable of repetition but
evading review" exception in order "to prevent similar questions from re- emerging." 137The situation
similarly holds true to these cases. Indeed, the myriad of issues underlying the manner in which
certain public funds are spent, if not resolved at this most opportune time, are capable of repetition
and hence, must not evade judicial review.
B. Matters of Policy: the Political Question Doctrine.
The "limitation on the power of judicial review to actual cases and controversies carries the
assurance that "the courts will not intrude into areas committed to the other branches of
government."138 Essentially, the foregoing limitation is a restatement of the political question doctrine
which, under the classic formulation of Baker v. Carr, 139applies when there is found, among others, "a
textually demonstrable constitutional commitment of the issue to a coordinate political department,"
"a lack of judicially discoverable and manageable standards for resolving it" or "the impossibility of
deciding without an initial policy determination of a kind clearly for non- judicial discretion." Cast
against this light, respondents submit that the "the political branches are in the best position not only
to perform budget-related reforms but also to do them in response to the specific demands of their
constituents" and, as such, "urge the Court not to impose a solution at this stage." 140
The Court must deny respondents submission.
Suffice it to state that the issues raised before the Court do not present political but legal questions
which are within its province to resolve. A political question refers to "those questions which, under
the Constitution, are to be decided by the people in their sovereign capacity, or in regard to which full
discretionary authority has been delegated to the Legislature or executive branch of the Government.
It is concerned with issues dependent upon the wisdom, not legality, of a particular measure." 141 The
intrinsic constitutionality of the "Pork Barrel System" is not an issue dependent upon the wisdom of
the political branches of government but rather a legal one which the Constitution itself has
commanded the Court to act upon. Scrutinizing the contours of the system along constitutional lines
is a task that the political branches of government are incapable of rendering precisely because it is
an exercise of judicial power. More importantly, the present Constitution has not only vested the
Judiciary the right to exercise judicial power but essentially makes it a duty to proceed therewith.
Section 1, Article VIII of the 1987 Constitution cannot be any clearer: "The judicial power shall be
vested in one Supreme Court and in such lower courts as may be established by law. It includes the
duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of
the Government." In Estrada v. Desierto, 142 the expanded concept of judicial power under the 1987
Constitution and its effect on the political question doctrine was explained as follows: 143
To a great degree, the 1987 Constitution has narrowed the reach of the political question doctrine
when it expanded the power of judicial review of this court not only to settle actual controversies
involving rights which are legally demandable and enforceable but also 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 government. Heretofore, the judiciary has focused on the "thou shalt
not's" of the Constitution directed against the exercise of its jurisdiction. With the new provision,
however, courts are given a greater prerogative to determine what it can do to prevent grave abuse
of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of
government. Clearly, the new provision did not just grant the Court power of doing nothing. x x x
(Emphases supplied)

It must also be borne in mind that when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the other departments; does not in reality nullify or
invalidate an act of the legislature or the executive, but only asserts the solemn and sacred obligation
assigned to it by the Constitution." 144 To a great extent, the Court is laudably cognizant of the reforms
undertaken by its co-equal branches of government. But it is by constitutional force that the Court
must faithfully perform its duty. Ultimately, it is the Courts avowed intention that a resolution of
these cases would not arrest or in any manner impede the endeavors of the two other branches but,
in fact, help ensure that the pillars of change are erected on firm constitutional grounds. After all, it is
in the best interest of the people that each great branch of government, within its own sphere,
contributes its share towards achieving a holistic and genuine solution to the problems of society. For
all these reasons, the Court cannot heed respondents plea for judicial restraint.
C. Locus Standi.
"The gist of the question of standing is whether a party alleges such personal stake in the outcome of
the controversy as to assure that concrete adverseness which sharpens the presentation of issues
upon which the court depends for illumination of difficult constitutional questions. Unless a person is
injuriously affected in any of his constitutional rights by the operation of statute or ordinance, he has
no standing."145
Petitioners have come before the Court in their respective capacities as citizen-taxpayers and
accordingly, assert that they "dutifully contribute to the coffers of the National Treasury." 146 Clearly, as
taxpayers, they possess the requisite standing to question the validity of the existing "Pork Barrel
System" under which the taxes they pay have been and continue to be utilized. It is undeniable that
petitioners, as taxpayers, are bound to suffer from the unconstitutional usage of public funds, if the
Court so rules. Invariably, taxpayers have been allowed to sue where there is a claim that public
funds are illegally disbursed or that public money is being deflected to any improper purpose, or that
public funds are wasted through the enforcement of an invalid or unconstitutional law, 147 as in these
cases.
Moreover, as citizens, petitioners have equally fulfilled the standing requirement given that the issues
they have raised may be classified as matters "of transcendental importance, of overreaching
significance to society, or of paramount public interest." 148 The CoA Chairpersons statement during
the Oral Arguments that the present controversy involves "not merely a systems failure" but a
"complete breakdown of controls"149 amplifies, in addition to the matters above-discussed, the
seriousness of the issues involved herein. Indeed, of greater import than the damage caused by the
illegal expenditure of public funds is the mortal wound inflicted upon the fundamental law by the
enforcement of an invalid statute. 150 All told, petitioners have sufficient locus standi to file the instant
cases.
D. Res Judicata and Stare Decisis.
Res judicata (which means a "matter adjudged") and stare decisis non quieta et movere (or simply,
stare decisis which means "follow past precedents and do not disturb what has been settled") are
general procedural law principles which both deal with the effects of previous but factually similar
dispositions to subsequent cases. For the cases at bar, the Court examines the applicability of these
principles in relation to its prior rulings in Philconsa and LAMP.
The focal point of res judicata is the judgment. The principle states that a judgment on the merits in a
previous case rendered by a court of competent jurisdiction would bind a subsequent case if, between
the first and second actions, there exists an identity of parties, of subject matter, and of causes of
action.151 This required identity is not, however, attendant hereto since Philconsa and LAMP,
respectively involved constitutional challenges against the 1994 CDF Article and 2004 PDAF Article,
whereas the cases at bar call for a broader constitutional scrutiny of the entire "Pork Barrel System."
Also, the ruling in LAMP is essentially a dismissal based on a procedural technicality and, thus,
hardly a judgment on the merits in that petitioners therein failed to present any "convincing proof x
x x showing that, indeed, there were direct releases of funds to the Members of Congress, who

actually spend them according to their sole discretion" or "pertinent evidentiary support to
demonstrate the illegal misuse of PDAF in the form of kickbacks and has become a common exercise
of unscrupulous Members of Congress." As such, the Court up held, in view of the presumption of
constitutionality accorded to every law, the 2004 PDAF Article, and saw "no need to review or reverse
the standing pronouncements in the said case." Hence, for the foregoing reasons, the res judicata
principle, insofar as the Philconsa and LAMP cases are concerned, cannot apply.
On the other hand, the focal point of stare decisis is the doctrine created. The principle, entrenched
under Article 8152 of the Civil Code, evokes the general rule that, for the sake of certainty, a conclusion
reached in one case should be doctrinally applied to those that follow if the facts are substantially the
same, even though the parties may be different. It proceeds from the first principle of justice that,
absent any powerful countervailing considerations, like cases ought to be decided alike. Thus, where
the same questions relating to the same event have been put forward by the parties similarly situated
as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to
any attempt to re-litigate the same issue.153
Philconsa was the first case where a constitutional challenge against a Pork Barrel provision, i.e., the
1994 CDF Article, was resolved by the Court. To properly understand its context, petitioners posturing
was that "the power given to the Members of Congress to propose and identify projects and activities
to be funded by the CDF is an encroachment by the legislature on executive power, since said power
in an appropriation act is in implementation of the law" and that "the proposal and identification of
the projects do not involve the making of laws or the repeal and amendment thereof, the only
function given to the Congress by the Constitution." 154 In deference to the foregoing submissions, the
Court reached the following main conclusions: one, under the Constitution, the power of
appropriation, or the "power of the purse," belongs to Congress; two, the power of appropriation
carries with it the power to specify the project or activity to be funded under the appropriation law
and it can be detailed and as broad as Congress wants it to be; and, three, the proposals and
identifications made by Members of Congress are merely recommendatory. At once, it is apparent
that the Philconsa resolution was a limited response to a separation of powers problem, specifically
on the propriety of conferring post-enactment identification authority to Members of Congress. On the
contrary, the present cases call for a more holistic examination of (a) the inter-relation between the
CDF and PDAF Articles with each other, formative as they are of the entire "Pork Barrel System" as
well as (b) the intra-relation of post-enactment measures contained within a particular CDF or PDAF
Article, including not only those related to the area of project identification but also to the areas of
fund release and realignment. The complexity of the issues and the broader legal analyses herein
warranted may be, therefore, considered as a powerful countervailing reason against a wholesale
application of the stare decisis principle.
In addition, the Court observes that the Philconsa ruling was actually riddled with inherent
constitutional inconsistencies which similarly countervail against a full resort to stare decisis. As may
be deduced from the main conclusions of the case, Philconsas fundamental premise in allowing
Members of Congress to propose and identify of projects would be that the said identification
authority is but an aspect of the power of appropriation which has been constitutionally lodged in
Congress. From this premise, the contradictions may be easily seen. If the authority to identify
projects is an aspect of appropriation and the power of appropriation is a form of legislative power
thereby lodged in Congress, then it follows that: (a) it is Congress which should exercise such
authority, and not its individual Members; (b) such authority must be exercised within the prescribed
procedure of law passage and, hence, should not be exercised after the GAA has already been
passed; and (c) such authority, as embodied in the GAA, has the force of law and, hence, cannot be
merely recommendatory. Justice Vitugs Concurring Opinion in the same case sums up the Philconsa
quandary in this wise: "Neither would it be objectionable for Congress, by law, to appropriate funds
for such specific projects as it may be minded; to give that authority, however, to the individual
members of Congress in whatever guise, I am afraid, would be constitutionally impermissible." As the
Court now largely benefits from hindsight and current findings on the matter, among others, the CoA
Report, the Court must partially abandon its previous ruling in Philconsa insofar as it validated the
post-enactment identification authority of Members of Congress on the guise that the same was
merely recommendatory. This postulate raises serious constitutional inconsistencies which cannot be
simply excused on the ground that such mechanism is "imaginative as it is innovative." Moreover, it

must be pointed out that the recent case of Abakada Guro Party List v. Purisima 155 (Abakada) has
effectively overturned Philconsas allowance of post-enactment legislator participation in view of the
separation of powers principle. These constitutional inconsistencies and the Abakada rule will be
discussed in greater detail in the ensuing section of this Decision.
As for LAMP, suffice it to restate that the said case was dismissed on a procedural technicality and,
hence, has not set any controlling doctrine susceptible of current application to the substantive issues
in these cases. In fine, stare decisis would not apply.
II. Substantive Issues.
A. Definition of Terms.
Before the Court proceeds to resolve the substantive issues of these cases, it must first define the
terms "Pork Barrel System," "Congressional Pork Barrel," and "Presidential Pork Barrel" as they are
essential to the ensuing discourse.
Petitioners define the term "Pork Barrel System" as the "collusion between the Legislative and
Executive branches of government to accumulate lump-sum public funds in their offices with
unchecked discretionary powers to determine its distribution as political largesse." 156 They assert that
the following elements make up the Pork Barrel System: (a) lump-sum funds are allocated through the
appropriations process to an individual officer; (b) the officer is given sole and broad discretion in
determining how the funds will be used or expended; (c) the guidelines on how to spend or use the
funds in the appropriation are either vague, overbroad or inexistent; and (d) projects funded are
intended to benefit a definite constituency in a particular part of the country and to help the political
careers of the disbursing official by yielding rich patronage benefits. 157 They further state that the
Pork Barrel System is comprised of two (2) kinds of discretionary public funds: first, the Congressional
(or Legislative) Pork Barrel, currently known as the PDAF; 158 and, second, the Presidential (or
Executive) Pork Barrel, specifically, the Malampaya Funds under PD 910 and the Presidential Social
Fund under PD 1869, as amended by PD 1993.159
Considering petitioners submission and in reference to its local concept and legal history, the Court
defines the Pork Barrel System as the collective body of rules and practices that govern the manner
by which lump-sum, discretionary funds, primarily intended for local projects, are utilized through the
respective participations of the Legislative and Executive branches of government, including its
members. The Pork Barrel System involves two (2) kinds of lump-sum discretionary funds:
First, there is the Congressional Pork Barrel which is herein defined as a kind of lump-sum,
discretionary fund wherein legislators, either individually or collectively organized into committees,
are able to effectively control certain aspects of the funds utilization through various post-enactment
measures and/or practices. In particular, petitioners consider the PDAF, as it appears under the 2013
GAA, as Congressional Pork Barrel since it is, inter alia, a post-enactment measure that allows
individual legislators to wield a collective power;160 and
Second, there is the Presidential Pork Barrel which is herein defined as a kind of lump-sum,
discretionary fund which allows the President to determine the manner of its utilization. For reasons
earlier stated,161 the Court shall delimit the use of such term to refer only to the Malampaya Funds
and the Presidential Social Fund.
With these definitions in mind, the Court shall now proceed to discuss the substantive issues of these
cases.
B. Substantive Issues on the Congressional Pork Barrel.
1. Separation of Powers.
a. Statement of Principle.

The principle of separation of powers refers to the constitutional demarcation of the three
fundamental powers of government. In the celebrated words of Justice Laurel in Angara v. Electoral
Commission,162 it means that the "Constitution has blocked out with deft strokes and in bold lines,
allotment of power to the executive, the legislative and the judicial departments of the
government."163 To the legislative branch of government, through Congress, 164 belongs the power to
make laws; to the executive branch of government, through the President, 165belongs the power to
enforce laws; and to the judicial branch of government, through the Court, 166 belongs the power to
interpret laws. Because the three great powers have been, by constitutional design, ordained in this
respect, "each department of the government has exclusive cognizance of matters within its
jurisdiction, and is supreme within its own sphere." 167 Thus, "the legislature has no authority to
execute or construe the law, the executive has no authority to make or construe the law, and the
judiciary has no power to make or execute the law." 168 The principle of separation of powers and its
concepts of autonomy and independence stem from the notion that the powers of government must
be divided to avoid concentration of these powers in any one branch; the division, it is hoped, would
avoid any single branch from lording its power over the other branches or the citizenry. 169 To achieve
this purpose, the divided power must be wielded by co-equal branches of government that are
equally capable of independent action in exercising their respective mandates. Lack of independence
would result in the inability of one branch of government to check the arbitrary or self-interest
assertions of another or others.170
Broadly speaking, there is a violation of the separation of powers principle when one branch of
government unduly encroaches on the domain of another. US Supreme Court decisions instruct that
the principle of separation of powers may be violated in two (2) ways: firstly, "one branch may
interfere impermissibly with the others performance of its constitutionally assigned function"; 171 and
"alternatively, the doctrine may be violated when one branch assumes a function that more properly
is entrusted to another."172 In other words, there is a violation of the principle when there is
impermissible (a) interference with and/or (b) assumption of another departments functions.
The enforcement of the national budget, as primarily contained in the GAA, is indisputably a function
both constitutionally assigned and properly entrusted to the Executive branch of government. In
Guingona, Jr. v. Hon. Carague 173 (Guingona, Jr.), the Court explained that the phase of budget
execution "covers the various operational aspects of budgeting" and accordingly includes "the
evaluation of work and financial plans for individual activities," the "regulation and release of funds"
as well as all "other related activities" that comprise the budget execution cycle. 174 This is rooted in
the principle that the allocation of power in the three principal branches of government is a grant of
all powers inherent in them.175 Thus, unless the Constitution provides otherwise, the Executive
department should exclusively exercise all roles and prerogatives which go into the implementation of
the national budget as provided under the GAA as well as any other appropriation law.
In view of the foregoing, the Legislative branch of government, much more any of its members,
should not cross over the field of implementing the national budget since, as earlier stated, the same
is properly the domain of the Executive. Again, in Guingona, Jr., the Court stated that "Congress
enters the picture when it deliberates or acts on the budget proposals of the President. Thereafter,
Congress, "in the exercise of its own judgment and wisdom, formulates an appropriation act precisely
following the process established by the Constitution, which specifies that no money may be paid
from the Treasury except in accordance with an appropriation made by law." Upon approval and
passage of the GAA, Congress law -making role necessarily comes to an end and from there the
Executives role of implementing the national budget begins. So as not to blur the constitutional
boundaries between them, Congress must "not concern it self with details for implementation by the
Executive."176
The foregoing cardinal postulates were definitively enunciated in Abakada where the Court held that
"from the moment the law becomes effective, any provision of law that empowers Congress or any of
its members to play any role in the implementation or enforcement of the law violates the principle of
separation of powers and is thus unconstitutional." 177 It must be clarified, however, that since the
restriction only pertains to "any role in the implementation or enforcement of the law," Congress may
still exercise its oversight function which is a mechanism of checks and balances that the Constitution
itself allows. But it must be made clear that Congress role must be confined to mere oversight. Any

post-enactment-measure allowing legislator participation beyond oversight is bereft of any

constitutional basis and hence, tantamount to impermissible interference and/or assumption of
executive functions. As the Court ruled in Abakada:178
Any post-enactment congressional measure x x x should be limited to scrutiny
investigation.1wphi1 In particular, congressional oversight must be confined to the following:

and

(1) scrutiny based primarily on Congress power of appropriation and the budget hearings
conducted in connection with it, its power to ask heads of departments to appear before and
be heard by either of its Houses on any matter pertaining to their departments and its power
of confirmation; and
(2) investigation and monitoring of the implementation of laws pursuant to the power of
Congress to conduct inquiries in aid of legislation.
Any action or step beyond that will undermine the separation of powers guaranteed by the
Constitution. (Emphases supplied)
b. Application.
In these cases, petitioners submit that the Congressional Pork Barrel among others, the 2013 PDAF
Article "wrecks the assignment of responsibilities between the political branches" as it is designed
to allow individual legislators to interfere "way past the time it should have ceased" or, particularly,
"after the GAA is passed."179They state that the findings and recommendations in the CoA Report
provide "an illustration of how absolute and definitive the power of legislators wield over project
implementation in complete violation of the constitutional principle of separation of
powers."180 Further, they point out that the Court in the Philconsa case only allowed the CDF to exist
on the condition that individual legislators limited their role to recommending projects and not if they
actually dictate their implementation.181
For their part, respondents counter that the separations of powers principle has not been violated
since the President maintains "ultimate authority to control the execution of the GAA and that he
"retains the final discretion to reject" the legislators proposals. 182 They maintain that the Court, in
Philconsa, "upheld the constitutionality of the power of members of Congress to propose and identify
projects so long as such proposal and identification are recommendatory." 183 As such, they claim that
"everything in the Special Provisions [of the 2013 PDAF Article follows the Philconsa framework, and
hence, remains constitutional."184
The Court rules in favor of petitioners.
As may be observed from its legal history, the defining feature of all forms of Congressional Pork
Barrel would be the authority of legislators to participate in the post-enactment phases of project
implementation.
At its core, legislators may it be through project lists, 185 prior consultations186 or program menus187
have been consistently accorded post-enactment authority to identify the projects they desire to be
funded through various Congressional Pork Barrel allocations. Under the 2013 PDAF Article, the
statutory authority of legislators to identify projects post-GAA may be construed from the import of
Special Provisions 1 to 3 as well as the second paragraph of Special Provision 4. To elucidate, Special
Provision 1 embodies the program menu feature which, as evinced from past PDAF Articles, allows
individual legislators to identify PDAF projects for as long as the identified project falls under a
general program listed in the said menu. Relatedly, Special Provision 2 provides that the
implementing agencies shall, within 90 days from the GAA is passed, submit to Congress a more
detailed priority list, standard or design prepared and submitted by implementing agencies from
which the legislator may make his choice. The same provision further authorizes legislators to identify
PDAF projects outside his district for as long as the representative of the district concerned concurs in
writing. Meanwhile, Special Provision 3 clarifies that PDAF projects refer to "projects to be identified

by legislators"188 and thereunder provides the allocation limit for the total amount of projects
identified by each legislator. Finally, paragraph 2 of Special Provision 4 requires that any modification
and revision of the project identification "shall be submitted to the House Committee on
Appropriations and the Senate Committee on Finance for favorable endorsement to the DBM or the
implementing agency, as the case may be." From the foregoing special provisions, it cannot be
seriously doubted that legislators have been accorded post-enactment authority to identify PDAF
projects.
Aside from the area of project identification, legislators have also been accorded post-enactment
authority in the areas of fund release and realignment. Under the 2013 PDAF Article, the statutory
authority of legislators to participate in the area of fund release through congressional committees is
contained in Special Provision 5 which explicitly states that "all request for release of funds shall be
supported by the documents prescribed under Special Provision No. 1 and favorably endorsed by
House Committee on Appropriations and the Senate Committee on Finance, as the case may be";
while their statutory authority to participate in the area of fund realignment is contained in: first ,
paragraph 2, Special Provision 4189 which explicitly state s, among others, that "any realignment of
funds shall be submitted to the House Committee on Appropriations and the Senate Committee on
Finance for favorable endorsement to the DBM or the implementing agency, as the case may be ;
and, second , paragraph 1, also of Special Provision 4 which authorizes the "Secretaries of Agriculture,
Education, Energy, Interior and Local Government, Labor and Employment, Public Works and
Highways, Social Welfare and Development and Trade and Industry 190 x x x to approve realignment
from one project/scope to another within the allotment received from this Fund, subject to among
others (iii) the request is with the concurrence of the legislator concerned."
Clearly, these post-enactment measures which govern the areas of project identification, fund release
and fund realignment are not related to functions of congressional oversight and, hence, allow
legislators to intervene and/or assume duties that properly belong to the sphere of budget execution.
Indeed, by virtue of the foregoing, legislators have been, in one form or another, authorized to
participate in as Guingona, Jr. puts it "the various operational aspects of budgeting," including "the
evaluation of work and financial plans for individual activities" and the "regulation and release of
funds" in violation of the separation of powers principle. The fundamental rule, as categorically
articulated in Abakada, cannot be overstated from the moment the law becomes effective, any
provision of law that empowers Congress or any of its members to play any role in the
implementation or enforcement of the law violates the principle of separation of powers and is thus
unconstitutional.191 That the said authority is treated as merely recommendatory in nature does not
alter its unconstitutional tenor since the prohibition, to repeat, covers any role in the implementation
or enforcement of the law. Towards this end, the Court must therefore abandon its ruling in Philconsa
which sanctioned the conduct of legislator identification on the guise that the same is merely
recommendatory and, as such, respondents reliance on the same falters altogether.
Besides, it must be pointed out that respondents have nonetheless failed to substantiate their
position that the identification authority of legislators is only of recommendatory import. Quite the
contrary, respondents through the statements of the Solicitor General during the Oral Arguments
have admitted that the identification of the legislator constitutes a mandatory requirement before his
PDAF can be tapped as a funding source, thereby highlighting the indispensability of the said act to
the entire budget execution process:192
Justice Bernabe: Now, without the individual legislators identification of the project, can the PDAF of
the legislator be utilized?
Solicitor General Jardeleza: No, Your Honor.
Justice Bernabe: It cannot?
Solicitor General Jardeleza: It cannot (interrupted)

Justice Bernabe: So meaning you should have the identification of the project by the individual
legislator?
Solicitor General Jardeleza: Yes, Your Honor.
xxxx
Justice Bernabe: In short, the act of identification is mandatory?
Solictor General Jardeleza: Yes, Your Honor. In the sense that if it is not done and then there is no
identification.
xxxx
Justice Bernabe: Now, would you know of specific instances when a project was implemented without
the identification by the individual legislator?
Solicitor General Jardeleza: I do not know, Your Honor; I do not think so but I have no specific
examples. I would doubt very much, Your Honor, because to implement, there is a need for a SARO
and the NCA. And the SARO and the NCA are triggered by an identification from the legislator.
xxxx
Solictor General Jardeleza: What we mean by mandatory, Your Honor, is we were replying to a
question, "How can a legislator make sure that he is able to get PDAF Funds?" It is mandatory in the
sense that he must identify, in that sense, Your Honor. Otherwise, if he does not identify, he cannot
avail of the PDAF Funds and his district would not be able to have PDAF Funds, only in that sense,
Your Honor. (Emphases supplied)
Thus, for all the foregoing reasons, the Court hereby declares the 2013 PDAF Article as well as all
other provisions of law which similarly allow legislators to wield any form of post-enactment authority
in the implementation or enforcement of the budget, unrelated to congressional oversight, as
violative of the separation of powers principle and thus unconstitutional. Corollary thereto, informal
practices, through which legislators have effectively intruded into the proper phases of budget
execution, must be deemed as acts of grave abuse of discretion amounting to lack or excess of
jurisdiction and, hence, accorded the same unconstitutional treatment. That such informal practices
do exist and have, in fact, been constantly observed throughout the years has not been substantially
disputed here. As pointed out by Chief Justice Maria Lourdes P.A. Sereno (Chief Justice Sereno) during
the
Oral
Arguments
of
these
cases: 193
Chief Justice Sereno:
Now, from the responses of the representative of both, the DBM and two (2) Houses of Congress, if we
enforces the initial thought that I have, after I had seen the extent of this research made by my staff,
that neither the Executive nor Congress frontally faced the question of constitutional compatibility of
how they were engineering the budget process. In fact, the words you have been using, as the three
lawyers of the DBM, and both Houses of Congress has also been using is surprise; surprised that all of
these things are now surfacing. In fact, I thought that what the 2013 PDAF provisions did was to
codify in one section all the past practice that had been done since 1991. In a certain sense, we
should be thankful that they are all now in the PDAF Special Provisions. x x x (Emphasis and
underscoring supplied)
Ultimately, legislators cannot exercise powers which they do not have, whether through formal
measures written into the law or informal practices institutionalized in government agencies, else the
Executive department be deprived of what the Constitution has vested as its own.
2. Non-delegability of Legislative Power.

a. Statement of Principle.
As an adjunct to the separation of powers principle, 194 legislative power shall be exclusively exercised
by the body to which the Constitution has conferred the same. In particular, Section 1, Article VI of
the 1987 Constitution states that such power shall be vested in the Congress of the Philippines which
shall consist of a Senate and a House of Representatives, except to the extent reserved to the people
by the provision on initiative and referendum.195 Based on this provision, it is clear that only Congress,
acting as a bicameral body, and the people, through the process of initiative and referendum, may
constitutionally wield legislative power and no other. This premise embodies the principle of nondelegability of legislative power, and the only recognized exceptions thereto would be: (a) delegated
legislative power to local governments which, by immemorial practice, are allowed to legislate on
purely local matters;196 and (b) constitutionally-grafted exceptions such as the authority of the
President to, by law, exercise powers necessary and proper to carry out a declared national policy in
times of war or other national emergency, 197 or fix within specified limits, and subject to such
limitations and restrictions as Congress may impose, tariff rates, import and export quotas, tonnage
and wharfage dues, and other duties or imposts within the framework of the national development
program of the Government.198
Notably, the principle of non-delegability should not be confused as a restriction to delegate rulemaking authority to implementing agencies for the limited purpose of either filling up the details of
the law for its enforcement (supplementary rule-making) or ascertaining facts to bring the law into
actual operation (contingent rule-making).199 The conceptual treatment and limitations of delegated
rule-making were explained in the case of People v. Maceren200 as follows:
The grant of the rule-making power to administrative agencies is a relaxation of the principle of
separation of powers and is an exception to the nondelegation of legislative powers. Administrative
regulations or "subordinate legislation" calculated to promote the public interest are necessary
because of "the growing complexity of modern life, the multiplication of the subjects of governmental
regulations, and the increased difficulty of administering the law."
xxxx
Nevertheless, it must be emphasized that the rule-making power must be confined to details for
regulating the mode or proceeding to carry into effect the law as it has been enacted. The power
cannot be extended to amending or expanding the statutory requirements or to embrace matters not
covered by the statute. Rules that subvert the statute cannot be sanctioned. (Emphases supplied)
b. Application.
In the cases at bar, the Court observes that the 2013 PDAF Article, insofar as it confers postenactment identification authority to individual legislators, violates the principle of non-delegability
since said legislators are effectively allowed to individually exercise the power of appropriation, which
as settled in Philconsa is lodged in Congress. 201 That the power to appropriate must be exercised
only through legislation is clear from Section 29(1), Article VI of the 1987 Constitution which states
that: "No money shall be paid out of the Treasury except in pursuance of an appropriation made by
law." To understand what constitutes an act of appropriation, the Court, in Bengzon v. Secretary of
Justice and Insular Auditor202 (Bengzon), held that the power of appropriation involves (a) the setting
apart by law of a certain sum from the public revenue for (b) a specified purpose. Essentially, under
the 2013 PDAF Article, individual legislators are given a personal lump-sum fund from which they are
able to dictate (a) how much from such fund would go to (b) a specific project or beneficiary that they
themselves also determine. As these two (2) acts comprise the exercise of the power of appropriation
as described in Bengzon, and given that the 2013 PDAF Article authorizes individual legislators to
perform the same, undoubtedly, said legislators have been conferred the power to legislate which the
Constitution does not, however, allow. Thus, keeping with the principle of non-delegability of
legislative power, the Court hereby declares the 2013 PDAF Article, as well as all other forms of
Congressional Pork Barrel which contain the similar legislative identification feature as herein
discussed, as unconstitutional.

3. Checks and Balances.

a. Statement of Principle; Item-Veto Power.
The fact that the three great powers of government are intended to be kept separate and distinct
does not mean that they are absolutely unrestrained and independent of each other. The Constitution
has also provided for an elaborate system of checks and balances to secure coordination in the
workings of the various departments of the government.203
A prime example of a constitutional check and balance would be the Presidents power to veto an
item written into an appropriation, revenue or tariff bill submitted to him by Congress for approval
through a process known as "bill presentment." The Presidents item-veto power is found in Section
27(2), Article VI of the 1987 Constitution which reads as follows:
Sec. 27. x x x.
xxxx
(2) The President shall have the power to veto any particular item or items in an appropriation,
revenue, or tariff bill, but the veto shall not affect the item or items to which he does not object.
The presentment of appropriation, revenue or tariff bills to the President, wherein he may exercise his
power of item-veto, forms part of the "single, finely wrought and exhaustively considered,
procedures" for law-passage as specified under the Constitution. 204 As stated in Abakada, the final
step in the law-making process is the "submission of the bill to the President for approval. Once
approved, it takes effect as law after the required publication." 205
Elaborating on the Presidents item-veto power and its relevance as a check on the legislature, the
Court, in Bengzon, explained that:206
The former Organic Act and the present Constitution of the Philippines make the Chief Executive an
integral part of the law-making power. His disapproval of a bill, commonly known as a veto, is
essentially a legislative act. The questions presented to the mind of the Chief Executive are precisely
the same as those the legislature must determine in passing a bill, except that his will be a broader
point of view.
The Constitution is a limitation upon the power of the legislative department of the government, but
in this respect it is a grant of power to the executive department. The Legislature has the affirmative
power to enact laws; the Chief Executive has the negative power by the constitutional exercise of
which he may defeat the will of the Legislature. It follows that the Chief Executive must find his
authority in the Constitution. But in exercising that authority he may not be confined to rules of strict
construction or hampered by the unwise interference of the judiciary. The courts will indulge every
intendment in favor of the constitutionality of a veto in the same manner as they will presume the
constitutionality of an act as originally passed by the Legislature. (Emphases supplied)
The justification for the Presidents item-veto power rests on a variety of policy goals such as to
prevent log-rolling legislation,207 impose fiscal restrictions on the legislature, as well as to fortify the
executive branchs role in the budgetary process. 208 In Immigration and Naturalization Service v.
Chadha, the US Supreme Court characterized the Presidents item-power as "a salutary check upon
the legislative body, calculated to guard the community against the effects of factions, precipitancy,
or of any impulse unfriendly to the public good, which may happen to influence a majority of that
body"; phrased differently, it is meant to "increase the chances in favor of the community against the
passing of bad laws, through haste, inadvertence, or design."209
For the President to exercise his item-veto power, it necessarily follows that there exists a proper
"item" which may be the object of the veto. An item, as defined in the field of appropriations, pertains
to "the particulars, the details, the distinct and severable parts of the appropriation or of the bill." In

the case of Bengzon v. Secretary of Justice of the Philippine Islands, 210 the US Supreme Court
characterized an item of appropriation as follows:
An item of an appropriation bill obviously means an item which, in itself, is a specific appropriation of
money, not some general provision of law which happens to be put into an appropriation bill.
(Emphases supplied)
On this premise, it may be concluded that an appropriation bill, to ensure that the President may be
able to exercise his power of item veto, must contain "specific appropriations of money" and not only
"general provisions" which provide for parameters of appropriation.
Further, it is significant to point out that an item of appropriation must be an item characterized by
singular correspondence meaning an allocation of a specified singular amount for a specified
singular purpose, otherwise known as a "line-item." 211 This treatment not only allows the item to be
consistent with its definition as a "specific appropriation of money" but also ensures that the
President may discernibly veto the same. Based on the foregoing formulation, the existing Calamity
Fund, Contingent Fund and the Intelligence Fund, being appropriations which state a specified amount
for a specific purpose, would then be considered as "line- item" appropriations which are rightfully
subject to item veto. Likewise, it must be observed that an appropriation may be validly apportioned
into component percentages or values; however, it is crucial that each percentage or value must be
allocated for its own corresponding purpose for such component to be considered as a proper lineitem. Moreover, as Justice Carpio correctly pointed out, a valid appropriation may even have several
related purposes that are by accounting and budgeting practice considered as one purpose, e.g.,
MOOE (maintenance and other operating expenses), in which case the related purposes shall be
deemed sufficiently specific for the exercise of the Presidents item veto power. Finally, special
purpose funds and discretionary funds would equally square with the constitutional mechanism of
item-veto for as long as they follow the rule on singular correspondence as herein discussed. Anent
special purpose funds, it must be added that Section 25(4), Article VI of the 1987 Constitution
requires that the "special appropriations bill shall specify the purpose for which it is intended, and
shall be supported by funds actually available as certified by the National Treasurer, or t o be raised
by a corresponding revenue proposal therein." Meanwhile, with respect to discretionary funds, Section
2 5(6), Article VI of the 1987 Constitution requires that said funds "shall be disbursed only for public
purposes to be supported by appropriate vouchers and subject to such guidelines as may be
prescribed by law."
In contrast, what beckons constitutional infirmity are appropriations which merely provide for a
singular lump-sum amount to be tapped as a source of funding for multiple purposes. Since such
appropriation type necessitates the further determination of both the actual amount to be expended
and the actual purpose of the appropriation which must still be chosen from the multiple purposes
stated in the law, it cannot be said that the appropriation law already indicates a "specific
appropriation of money and hence, without a proper line-item which the President may veto. As a
practical result, the President would then be faced with the predicament of either vetoing the entire
appropriation if he finds some of its purposes wasteful or undesirable, or approving the entire
appropriation so as not to hinder some of its legitimate purposes. Finally, it may not be amiss to state
that such arrangement also raises non-delegability issues considering that the implementing
authority would still have to determine, again, both the actual amount to be expended and the actual
purpose of the appropriation. Since the foregoing determinations constitute the integral aspects of
the power to appropriate, the implementing authority would, in effect, be exercising legislative
prerogatives in violation of the principle of non-delegability.
b. Application.
In these cases, petitioners claim that "in the current x x x system where the PDAF is a lump-sum
appropriation, the legislators identification of the projects after the passage of the GAA denies the
President the chance to veto that item later on." 212 Accordingly, they submit that the "item veto
power of the President mandates that appropriations bills adopt line-item budgeting" and that

"Congress cannot choose a mode of budgeting which effectively renders the constitutionally-given
power of the President useless."213
On the other hand, respondents maintain that the text of the Constitution envisions a process which
is intended to meet the demands of a modernizing economy and, as such, lump-sum appropriations
are essential to financially address situations which are barely foreseen when a GAA is enacted. They
argue that the decision of the Congress to create some lump-sum appropriations is constitutionally
allowed and textually-grounded.214
The Court agrees with petitioners.
Under the 2013 PDAF Article, the amount of P24.79 Billion only appears as a collective allocation limit
since the said amount would be further divided among individual legislators who would then receive
personal lump-sum allocations and could, after the GAA is passed, effectively appropriate PDAF funds
based on their own discretion. As these intermediate appropriations are made by legislators only after
the GAA is passed and hence, outside of the law, it necessarily means that the actual items of PDAF
appropriation would not have been written into the General Appropriations Bill and thus effectuated
without veto consideration. This kind of lump-sum/post-enactment legislative identification budgeting
system fosters the creation of a budget within a budget" which subverts the prescribed procedure of
presentment and consequently impairs the Presidents power of item veto. As petitioners aptly point
out, the above-described system forces the President to decide between (a) accepting the
entire P24.79 Billion PDAF allocation without knowing the specific projects of the legislators, which
may or may not be consistent with his national agenda and (b) rejecting the whole PDAF to the
detriment of all other legislators with legitimate projects. 215
Moreover, even without its post-enactment legislative identification feature, the 2013 PDAF Article
would remain constitutionally flawed since it would then operate as a prohibited form of lump-sum
appropriation above-characterized. In particular, the lump-sum amount of P24.79 Billion would be
treated as a mere funding source allotted for multiple purposes of spending, i.e., scholarships,
medical missions, assistance to indigents, preservation of historical materials, construction of roads,
flood control, etc. This setup connotes that the appropriation law leaves the actual amounts and
purposes of the appropriation for further determination and, therefore, does not readily indicate a
discernible item which may be subject to the Presidents power of item veto.
In fact, on the accountability side, the same lump-sum budgeting scheme has, as the CoA
Chairperson relays, "limited state auditors from obtaining relevant data and information that would
aid in more stringently auditing the utilization of said Funds." 216 Accordingly, she recommends the
adoption of a "line by line budget or amount per proposed program, activity or project, and per
implementing agency."217
Hence, in view of the reasons above-stated, the Court finds the 2013 PDAF Article, as well as all
Congressional Pork Barrel Laws of similar operation, to be unconstitutional. That such budgeting
system provides for a greater degree of flexibility to account for future contingencies cannot be an
excuse to defeat what the Constitution requires. Clearly, the first and essential truth of the matter is
that unconstitutional means do not justify even commendable ends.218
c. Accountability.
Petitioners further relate that the system under which various forms of Congressional Pork Barrel
operate defies public accountability as it renders Congress incapable of checking itself or its
Members. In particular, they point out that the Congressional Pork Barrel "gives each legislator a
direct, financial interest in the smooth, speedy passing of the yearly budget" which turns them "from
fiscalizers" into "financially-interested partners." 219 They also claim that the system has an effect on
re- election as "the PDAF excels in self-perpetuation of elective officials." Finally, they add that the
"PDAF impairs the power of impeachment" as such "funds are indeed quite useful, to well, accelerate
the decisions of senators."220

The Court agrees in part.

The aphorism forged under Section 1, Article XI of the 1987 Constitution, which states that "public
office is a public trust," is an overarching reminder that every instrumentality of government should
exercise their official functions only in accordance with the principles of the Constitution which
embodies the parameters of the peoples trust. The notion of a public trust connotes
accountability,221 hence, the various mechanisms in the Constitution which are designed to exact
accountability from public officers.
Among others, an accountability mechanism with which the proper expenditure of public funds may
be checked is the power of congressional oversight. As mentioned in Abakada, 222 congressional
oversight may be performed either through: (a) scrutiny based primarily on Congress power of
appropriation and the budget hearings conducted in connection with it, its power to ask heads of
departments to appear before and be heard by either of its Houses on any matter pertaining to their
departments and its power of confirmation; 223 or (b) investigation and monitoring of the
implementation of laws pursuant to the power of Congress to conduct inquiries in aid of legislation. 224
The Court agrees with petitioners that certain features embedded in some forms of Congressional
Pork Barrel, among others the 2013 PDAF Article, has an effect on congressional oversight. The fact
that individual legislators are given post-enactment roles in the implementation of the budget makes
it difficult for them to become disinterested "observers" when scrutinizing, investigating or monitoring
the implementation of the appropriation law. To a certain extent, the conduct of oversight would be
tainted as said legislators, who are vested with post-enactment authority, would, in effect, be
checking on activities in which they themselves participate. Also, it must be pointed out that this very
same concept of post-enactment authorization runs afoul of Section 14, Article VI of the 1987
Constitution which provides that:
Sec. 14. No Senator or Member of the House of Representatives may personally appear as counsel
before any court of justice or before the Electoral Tribunals, or quasi-judicial and other administrative
bodies. Neither shall he, directly or indirectly, be interested financially in any contract with, or in any
franchise or special privilege granted by the Government, or any subdivision, agency, or
instrumentality thereof, including any government-owned or controlled corporation, or its subsidiary,
during his term of office. He shall not intervene in any matter before any office of the Government for
his pecuniary benefit or where he may be called upon to act on account of his office. (Emphasis
supplied)
Clearly, allowing legislators to intervene in the various phases of project implementation a matter
before another office of government renders them susceptible to taking undue advantage of their
own office.
The Court, however, cannot completely agree that the same post-enactment authority and/or the
individual legislators control of his PDAF per se would allow him to perpetuate himself in office.
Indeed, while the Congressional Pork Barrel and a legislators use thereof may be linked to this area of
interest, the use of his PDAF for re-election purposes is a matter which must be analyzed based on
particular facts and on a case-to-case basis.
Finally, while the Court accounts for the possibility that the close operational proximity between
legislators and the Executive department, through the formers post-enactment participation, may
affect the process of impeachment, this matter largely borders on the domain of politics and does not
strictly concern the Pork Barrel Systems intrinsic constitutionality. As such, it is an improper subject
of judicial assessment.
In sum, insofar as its post-enactment features dilute congressional oversight and violate Section 14,
Article VI of the 1987 Constitution, thus impairing public accountability, the 2013 PDAF Article and
other forms of Congressional Pork Barrel of similar nature are deemed as unconstitutional.
4. Political Dynasties.

One of the petitioners submits that the Pork Barrel System enables politicians who are members of
political dynasties to accumulate funds to perpetuate themselves in power, in contravention of
Section 26, Article II of the 1987 Constitution 225 which states that:
Sec. 26. The State shall guarantee equal access to opportunities for public service, and prohibit
political dynasties as may be defined by law. (Emphasis and underscoring supplied)
At the outset, suffice it to state that the foregoing provision is considered as not self-executing due to
the qualifying phrase "as may be defined by law." In this respect, said provision does not, by and of
itself, provide a judicially enforceable constitutional right but merely specifies guideline for legislative
or executive action.226Therefore, since there appears to be no standing law which crystallizes the
policy on political dynasties for enforcement, the Court must defer from ruling on this issue.
In any event, the Court finds the above-stated argument on this score to be largely speculative since
it has not been properly demonstrated how the Pork Barrel System would be able to propagate
political dynasties.
5. Local Autonomy.
The States policy on local autonomy is principally stated in Section 25, Article II and Sections 2 and 3,
Article X of the 1987 Constitution which read as follows:
ARTICLE II
Sec. 25. The State shall ensure the autonomy of local governments.
ARTICLE X
Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.
Sec. 3. The Congress shall enact a local government code which shall provide for a more responsive
and accountable local government structure instituted through a system of decentralization with
effective mechanisms of recall, initiative, and referendum, allocate among the different local
government units their powers, responsibilities, and resources, and provide for the qualifications,
election, appointment and removal, term, salaries, powers and functions and duties of local officials,
and all other matters relating to the organization and operation of the local units.
Pursuant thereto, Congress enacted RA 7160, 227 otherwise known as the "Local Government Code of
1991" (LGC), wherein the policy on local autonomy had been more specifically explicated as follows:
Sec. 2. Declaration of Policy. (a) It is hereby declared the policy of the State that the territorial and
political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them
to attain their fullest development as self-reliant communities and make them more effective partners
in the attainment of national goals. Toward this end, the State shall provide for a more responsive and
accountable local government structure instituted through a system of decentralization whereby local
government units shall be given more powers, authority, responsibilities, and resources. The process
of decentralization shall proceed from the National Government to the local government units.
xxxx
(c) It is likewise the policy of the State to require all national agencies and offices to conduct periodic
consultations with appropriate local government units, nongovernmental and peoples organizations,
and other concerned sectors of the community before any project or program is implemented in their
respective jurisdictions. (Emphases and underscoring supplied)

The above-quoted provisions of the Constitution and the LGC reveal the policy of the State to
empower local government units (LGUs) to develop and ultimately, become self-sustaining and
effective contributors to the national economy. As explained by the Court in Philippine Gamefowl
Commission v. Intermediate Appellate Court:228
This is as good an occasion as any to stress the commitment of the Constitution to the policy of local
autonomy which is intended to provide the needed impetus and encouragement to the development
of our local political subdivisions as "self - reliant communities." In the words of Jefferson, "Municipal
corporations are the small republics from which the great one derives its strength." The vitalization of
local governments will enable their inhabitants to fully exploit their resources and more important,
imbue them with a deepened sense of involvement in public affairs as members of the body politic.
This objective could be blunted by undue interference by the national government in purely local
affairs which are best resolved by the officials and inhabitants of such political units. The decision we
reach today conforms not only to the letter of the pertinent laws but also to the spirit of the
Constitution.229 (Emphases and underscoring supplied)
In the cases at bar, petitioners contend that the Congressional Pork Barrel goes against the
constitutional principles on local autonomy since it allows district representatives, who are national
officers, to substitute their judgments in utilizing public funds for local development. 230 The Court
agrees with petitioners.
Philconsa described the 1994 CDF as an attempt "to make equal the unequal" and that "it is also a
recognition that individual members of Congress, far more than the President and their congressional
colleagues, are likely to be knowledgeable about the needs of their respective constituents and the
priority to be given each project." 231Drawing strength from this pronouncement, previous legislators
justified its existence by stating that "the relatively small projects implemented under the
Congressional Pork Barrel complement and link the national development goals to the countryside
and grassroots as well as to depressed areas which are overlooked by central agencies which are
preoccupied with mega-projects.232 Similarly, in his August 23, 2013 speech on the "abolition" of PDAF
and budgetary reforms, President Aquino mentioned that the Congressional Pork Barrel was originally
established for a worthy goal, which is to enable the representatives to identify projects for
communities that the LGU concerned cannot afford.233
Notwithstanding these declarations, the Court, however, finds an inherent defect in the system which
actually belies the avowed intention of "making equal the unequal." In particular, the Court observes
that the gauge of PDAF and CDF allocation/division is based solely on the fact of office, without taking
into account the specific interests and peculiarities of the district the legislator represents. In this
regard, the allocation/division limits are clearly not based on genuine parameters of equality, wherein
economic or geographic indicators have been taken into consideration. As a result, a district
representative of a highly-urbanized metropolis gets the same amount of funding as a district
representative of a far-flung rural province which would be relatively "underdeveloped" compared to
the former. To add, what rouses graver scrutiny is that even Senators and Party-List Representatives
and in some years, even the Vice-President who do not represent any locality, receive funding from
the Congressional Pork Barrel as well. These certainly are anathema to the Congressional Pork
Barrels original intent which is "to make equal the unequal." Ultimately, the PDAF and CDF had
become personal funds under the effective control of each legislator and given unto them on the sole
account of their office.
The Court also observes that this concept of legislator control underlying the CDF and PDAF conflicts
with the functions of the various Local Development Councils (LDCs) which are already legally
mandated to "assist the corresponding sanggunian in setting the direction of economic and social
development, and coordinating development efforts within its territorial jurisdiction." 234 Considering
that LDCs are instrumentalities whose functions are essentially geared towards managing local
affairs,235 their programs, policies and resolutions should not be overridden nor duplicated by
individual legislators, who are national officers that have no law-making authority except only when
acting as a body. The undermining effect on local autonomy caused by the post-enactment authority
conferred to the latter was succinctly put by petitioners in the following wise: 236

With PDAF, a Congressman can simply bypass the local development council and initiate projects on
his own, and even take sole credit for its execution. Indeed, this type of personality-driven project
identification has not only contributed little to the overall development of the district, but has even
contributed to "further weakening infrastructure planning and coordination efforts of the
government."
Thus, insofar as individual legislators are authorized to intervene in purely local matters and thereby
subvert genuine local autonomy, the 2013 PDAF Article as well as all other similar forms of
Congressional Pork Barrel is deemed unconstitutional.
With this final issue on the Congressional Pork Barrel resolved, the Court now turns to the substantive
issues involving the Presidential Pork Barrel.
C. Substantive Issues on the Presidential Pork Barrel.
1. Validity of Appropriation.
Petitioners preliminarily assail Section 8 of PD 910 and Section 12 of PD1869 (now, amended by PD
1993), which respectively provide for the Malampaya Funds and the Presidential Social Fund, as
invalid appropriations laws since they do not have the "primary and specific" purpose of authorizing
the release of public funds from the National Treasury. Petitioners submit that Section 8 of PD 910 is
not an appropriation law since the "primary and specific purpose of PD 910 is the creation of an
Energy Development Board and Section 8 thereof only created a Special Fund incidental thereto. 237 In
similar regard, petitioners argue that Section 12 of PD 1869 is neither a valid appropriations law since
the allocation of the Presidential Social Fund is merely incidental to the "primary and specific"
purpose of PD 1869 which is the amendment of the Franchise and Powers of PAGCOR. 238 In view of the
foregoing, petitioners suppose that such funds are being used without any valid law allowing for their
proper appropriation in violation of Section 29(1), Article VI of the 1987 Constitution which states
that: "No money shall be paid out of the Treasury except in pursuance of an appropriation made by
law."239
The Court disagrees.
"An appropriation made by law under the contemplation of Section 29(1), Article VI of the 1987
Constitution exists when a provision of law (a) sets apart a determinate or determinable 240 amount of
money and (b) allocates the same for a particular public purpose. These two minimum designations of
amount and purpose stem from the very definition of the word "appropriation," which means "to allot,
assign, set apart or apply to a particular use or purpose," and hence, if written into the law,
demonstrate that the legislative intent to appropriate exists. As the Constitution "does not provide or
prescribe any particular form of words or religious recitals in which an authorization or appropriation
by Congress shall be made, except that it be made by law," an appropriation law may according to
Philconsa be "detailed and as broad as Congress wants it to be" for as long as the intent to
appropriate may be gleaned from the same. As held in the case of Guingona, Jr.: 241
There is no provision in our Constitution that provides or prescribes any particular form of words or
religious recitals in which an authorization or appropriation by Congress shall be made, except that it
be "made by law," such as precisely the authorization or appropriation under the questioned
presidential decrees. In other words, in terms of time horizons, an appropriation may be made
impliedly (as by past but subsisting legislations) as well as expressly for the current fiscal year (as by
enactment of laws by the present Congress), just as said appropriation may be made in general as
well as in specific terms. The Congressional authorization may be embodied in annual laws, such as a
general appropriations act or in special provisions of laws of general or special application which
appropriate public funds for specific public purposes, such as the questioned decrees. An
appropriation measure is sufficient if the legislative intention clearly and certainly appears from the
language employed (In re Continuing Appropriations, 32 P. 272), whether in the past or in the present.
(Emphases and underscoring supplied)

Likewise, as ruled by the US Supreme Court in State of Nevada v. La Grave: 242

To constitute an appropriation there must be money placed in a fund applicable to the designated
purpose. The word appropriate means to allot, assign, set apart or apply to a particular use or
purpose. An appropriation in the sense of the constitution means the setting apart a portion of the
public funds for a public purpose. No particular form of words is necessary for the purpose, if the
intention to appropriate is plainly manifested. (Emphases supplied)
Thus, based on the foregoing, the Court cannot sustain the argument that the appropriation must be
the "primary and specific" purpose of the law in order for a valid appropriation law to exist. To
reiterate, if a legal provision designates a determinate or determinable amount of money and
allocates the same for a particular public purpose, then the legislative intent to appropriate becomes
apparent and, hence, already sufficient to satisfy the requirement of an "appropriation made by law"
under contemplation of the Constitution.
Section 8 of PD 910 pertinently provides:
Section 8. Appropriations. x x x
All fees, revenues and receipts of the Board from any and all sources including receipts from service
contracts and agreements such as application and processing fees, signature bonus, discovery bonus,
production bonus; all money collected from concessionaires, representing unspent work obligations,
fines and penalties under the Petroleum Act of 1949; as well as the government share representing
royalties, rentals, production share on service contracts and similar payments on the exploration,
development and exploitation of energy resources, shall form part of a Special Fund to be used to
finance energy resource development and exploitation programs and projects of the government and
for such other purposes as may be hereafter directed by the President. (Emphases supplied)
Whereas Section 12 of PD 1869, as amended by PD 1993, reads:
Sec. 12. Special Condition of Franchise. After deducting five (5%) percent as Franchise Tax, the Fifty
(50%) percent share of the Government in the aggregate gross earnings of the Corporation from this
Franchise, or 60% if the aggregate gross earnings be less than P150,000,000.00 shall be set aside
and shall accrue to the General Fund to finance the priority infrastructure development projects and
to finance the restoration of damaged or destroyed facilities due to calamities, as may be directed
and authorized by the Office of the President of the Philippines. (Emphases supplied)
Analyzing the legal text vis--vis the above-mentioned principles, it may then be concluded that (a)
Section 8 of PD 910, which creates a Special Fund comprised of "all fees, revenues, and receipts of
the Energy Development Board from any and all sources" (a determinable amount) "to be used to
finance energy resource development and exploitation programs and projects of the government and
for such other purposes as may be hereafter directed by the President" (a specified public purpose),
and (b) Section 12 of PD 1869, as amended by PD 1993, which similarly sets aside, "after deducting
five (5%) percent as Franchise Tax, the Fifty (50%) percent share of the Government in the aggregate
gross earnings of PAGCOR, or 60%, if the aggregate gross earnings be less than P150,000,000.00"
(also a determinable amount) "to finance the priority infrastructure development projects and x x x
the restoration of damaged or destroyed facilities due to calamities, as may be directed and
authorized by the Office of the President of the Philippines" (also a specified public purpose), are legal
appropriations under Section 29(1), Article VI of the 1987 Constitution.
In this relation, it is apropos to note that the 2013 PDAF Article cannot be properly deemed as a legal
appropriation under the said constitutional provision precisely because, as earlier stated, it contains
post-enactment measures which effectively create a system of intermediate appropriations. These
intermediate appropriations are the actual appropriations meant for enforcement and since they are
made by individual legislators after the GAA is passed, they occur outside the law. As such, the Court
observes that the real appropriation made under the 2013 PDAF Article is not the P24.79 Billion
allocated for the entire PDAF, but rather the post-enactment determinations made by the individual

legislators which are, to repeat, occurrences outside of the law. Irrefragably, the 2013 PDAF Article
does not constitute an "appropriation made by law" since it, in its truest sense, only authorizes
individual legislators to appropriate in violation of the non-delegability principle as afore-discussed.
2. Undue Delegation.
On a related matter, petitioners contend that Section 8 of PD 910 constitutes an undue delegation of
legislative power since the phrase "and for such other purposes as may be hereafter directed by the
President" gives the President "unbridled discretion to determine for what purpose the funds will be
used."243 Respondents, on the other hand, urged the Court to apply the principle of ejusdem generis
to the same section and thus, construe the phrase "and for such other purposes as may be hereafter
directed by the President" to refer only to other purposes related "to energy resource development
and exploitation programs and projects of the government."244
The Court agrees with petitioners submissions.
While the designation of a determinate or determinable amount for a particular public purpose is
sufficient for a legal appropriation to exist, the appropriation law must contain adequate legislative
guidelines if the same law delegates rule-making authority to the Executive 245 either for the purpose
of (a) filling up the details of the law for its enforcement, known as supplementary rule-making, or (b)
ascertaining facts to bring the law into actual operation, referred to as contingent rulemaking.246 There are two (2) fundamental tests to ensure that the legislative guidelines for delegated
rule-making are indeed adequate. The first test is called the "completeness test." Case law states that
a law is complete when it sets forth therein the policy to be executed, carried out, or implemented by
the delegate. On the other hand, the second test is called the "sufficient standard test." Jurisprudence
holds that a law lays down a sufficient standard when it provides adequate guidelines or limitations in
the law to map out the boundaries of the delegates authority and prevent the delegation from
running riot.247To be sufficient, the standard must specify the limits of the delegates authority,
announce the legislative policy, and identify the conditions under which it is to be implemented. 248
In view of the foregoing, the Court agrees with petitioners that the phrase "and for such other
purposes as may be hereafter directed by the President" under Section 8 of PD 910 constitutes an
undue delegation of legislative power insofar as it does not lay down a sufficient standard to
adequately determine the limits of the Presidents authority with respect to the purpose for which the
Malampaya Funds may be used. As it reads, the said phrase gives the President wide latitude to use
the Malampaya Funds for any other purpose he may direct and, in effect, allows him to unilaterally
appropriate public funds beyond the purview of the law. That the subject phrase may be confined only
to "energy resource development and exploitation programs and projects of the government" under
the principle of ejusdem generis, meaning that the general word or phrase is to be construed to
include or be restricted to things akin to, resembling, or of the same kind or class as those
specifically mentioned,249 is belied by three (3) reasons: first, the phrase "energy resource
development and exploitation programs and projects of the government" states a singular and
general class and hence, cannot be treated as a statutory reference of specific things from which the
general phrase "for such other purposes" may be limited; second, the said phrase also exhausts the
class it represents, namely energy development programs of the government; 250 and, third, the
Executive department has, in fact, used the Malampaya Funds for non-energy related purposes under
the subject phrase, thereby contradicting respondents own position that it is limited only to "energy
resource development and exploitation programs and projects of the government." 251 Thus, while
Section 8 of PD 910 may have passed the completeness test since the policy of energy development
is clearly deducible from its text, the phrase "and for such other purposes as may be hereafter
directed by the President" under the same provision of law should nonetheless be stricken down as
unconstitutional as it lies independently unfettered by any sufficient standard of the delegating law.
This notwithstanding, it must be underscored that the rest of Section 8, insofar as it allows for the use
of the Malampaya Funds "to finance energy resource development and exploitation programs and
projects of the government," remains legally effective and subsisting. Truth be told, the declared
unconstitutionality of the aforementioned phrase is but an assurance that the Malampaya Funds
would be used as it should be used only in accordance with the avowed purpose and intention of
PD 910.

As for the Presidential Social Fund, the Court takes judicial notice of the fact that Section 12 of PD
1869 has already been amended by PD 1993 which thus moots the parties submissions on the
same.252 Nevertheless, since the amendatory provision may be readily examined under the current
parameters of discussion, the Court proceeds to resolve its constitutionality.
Primarily, Section 12 of PD 1869, as amended by PD 1993, indicates that the Presidential Social Fund
may be used "to first, finance the priority infrastructure development projects and second, to finance
the restoration of damaged or destroyed facilities due to calamities, as may be directed and
authorized by the Office of the President of the Philippines." The Court finds that while the second
indicated purpose adequately curtails the authority of the President to spend the Presidential Social
Fund only for restoration purposes which arise from calamities, the first indicated purpose, however,
gives him carte blanche authority to use the same fund for any infrastructure project he may so
determine as a "priority". Verily, the law does not supply a definition of "priority in frastructure
development projects" and hence, leaves the President without any guideline to construe the same.
To note, the delimitation of a project as one of "infrastructure" is too broad of a classification since the
said term could pertain to any kind of facility. This may be deduced from its lexicographic definition as
follows: "the underlying framework of a system, especially public services and facilities (such as
highways, schools, bridges, sewers, and water-systems) needed to support commerce as well as
economic and residential development." 253In fine, the phrase "to finance the priority infrastructure
development projects" must be stricken down as unconstitutional since similar to the above-assailed
provision under Section 8 of PD 910 it lies independently unfettered by any sufficient standard of
the delegating law. As they are severable, all other provisions of Section 12 of PD 1869, as amended
by PD 1993, remains legally effective and subsisting.
D. Ancillary Prayers. 1.
Petitioners Prayer to be Furnished Lists and Detailed Reports.
Aside from seeking the Court to declare the Pork Barrel System unconstitutional as the Court did so
in the context of its pronouncements made in this Decision petitioners equally pray that the
Executive Secretary and/or the DBM be ordered to release to the CoA and to the public: (a) "the
complete schedule/list of legislators who have availed of their PDAF and VILP from the years 2003 to
2013, specifying the use of the funds, the project or activity and the recipient entities or individuals,
and all pertinent data thereto" (PDAF Use Schedule/List); 254 and (b) "the use of the Executives lumpsum, discretionary funds, including the proceeds from the x x x Malampaya Funds and remittances
from the PAGCOR x x x from 2003 to 2013, specifying the x x x project or activity and the recipient
entities or individuals, and all pertinent data thereto" 255 (Presidential Pork Use Report). Petitioners
prayer is grounded on Section 28, Article II and Section 7, Article III of the 1987 Constitution which
read as follows:
ARTICLE II
Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a
policy of full public disclosure of all its transactions involving public interest.
ARTICLE III Sec. 7.
The right of the people to information on matters of public concern shall be recognized. Access to
official records, and to documents and papers pertaining to official acts, transactions, or decisions, as
well as to government research data used as basis for policy development, shall be afforded the
citizen, subject to such limitations as may be provided by law.
The Court denies petitioners submission.
Case law instructs that the proper remedy to invoke the right to information is to file a petition for
mandamus. As explained in the case of Legaspi v. Civil Service Commission: 256

While the manner of examining public records may be subject to reasonable regulation by the
government agency in custody thereof, the duty to disclose the information of public concern, and to
afford access to public records cannot be discretionary on the part of said agencies. Certainly, its
performance cannot be made contingent upon the discretion of such agencies. Otherwise, the
enjoyment of the constitutional right may be rendered nugatory by any whimsical exercise of agency
discretion. The constitutional duty, not being discretionary, its performance may be compelled by a
writ of mandamus in a proper case.
But what is a proper case for Mandamus to issue? In the case before Us, the public right to be
enforced and the concomitant duty of the State are unequivocably set forth in the Constitution.
The decisive question on the propriety of the issuance of the writ of mandamus in this case is,
whether the information sought by the petitioner is within the ambit of the constitutional guarantee.
(Emphases supplied)
Corollarily, in the case of Valmonte v. Belmonte Jr. 257 (Valmonte), it has been clarified that the right to
information does not include the right to compel the preparation of "lists, abstracts, summaries and
the like." In the same case, it was stressed that it is essential that the "applicant has a well -defined,
clear and certain legal right to the thing demanded and that it is the imperative duty of defendant to
perform the act required." Hence, without the foregoing substantiations, the Court cannot grant a
particular request for information. The pertinent portions of Valmonte are hereunder quoted: 258
Although citizens are afforded the right to information and, pursuant thereto, are entitled to "access
to official records," the Constitution does not accord them a right to compel custodians of official
records to prepare lists, abstracts, summaries and the like in their desire to acquire information on
matters of public concern.
It must be stressed that it is essential for a writ of mandamus to issue that the applicant has a welldefined, clear and certain legal right to the thing demanded and that it is the imperative duty of
defendant to perform the act required. The corresponding duty of the respondent to perform the
required act must be clear and specific Lemi v. Valencia, G.R. No. L-20768, November 29,1968,126
SCRA 203; Ocampo v. Subido, G.R. No. L-28344, August 27, 1976, 72 SCRA 443.
The request of the petitioners fails to meet this standard, there being no duty on the part of
respondent to prepare the list requested. (Emphases supplied)
In these cases, aside from the fact that none of the petitions are in the nature of mandamus actions,
the Court finds that petitioners have failed to establish a "a well-defined, clear and certain legal right"
to be furnished by the Executive Secretary and/or the DBM of their requested PDAF Use Schedule/List
and Presidential Pork Use Report. Neither did petitioners assert any law or administrative issuance
which would form the bases of the latters duty to furnish them with the documents requested. While
petitioners pray that said information be equally released to the CoA, it must be pointed out that the
CoA has not been impleaded as a party to these cases nor has it filed any petition before the Court to
be allowed access to or to compel the release of any official document relevant to the conduct of its
audit investigations. While the Court recognizes that the information requested is a matter of
significant public concern, however, if only to ensure that the parameters of disclosure are properly
foisted and so as not to unduly hamper the equally important interests of the government, it is
constrained to deny petitioners prayer on this score, without prejudice to a proper mandamus case
which they, or even the CoA, may choose to pursue through a separate petition.
It bears clarification that the Courts denial herein should only cover petitioners plea to be furnished
with such schedule/list and report and not in any way deny them, or the general public, access to
official documents which are already existing and of public record. Subject to reasonable regulation
and absent any valid statutory prohibition, access to these documents should not be proscribed.
Thus, in Valmonte, while the Court denied the application for mandamus towards the preparation of
the list requested by petitioners therein, it nonetheless allowed access to the documents sought for
by the latter, subject, however, to the custodians reasonable regulations,viz.: 259

In fine, petitioners are entitled to access to the documents evidencing loans granted by the GSIS,
subject to reasonable regulations that the latter may promulgate relating to the manner and hours of
examination, to the end that damage to or loss of the records may be avoided, that undue
interference with the duties of the custodian of the records may be prevented and that the right of
other persons entitled to inspect the records may be insured Legaspi v. Civil Service Commission,
supra at p. 538, quoting Subido v. Ozaeta, 80 Phil. 383, 387. The petition, as to the second and third
alternative acts sought to be done by petitioners, is meritorious.
However, the same cannot be said with regard to the first act sought by petitioners, i.e.,
"to furnish petitioners the list of the names of the Batasang Pambansa members belonging to the
UNIDO and PDP-Laban who were able to secure clean loans immediately before the February 7
election thru the intercession/marginal note of the then First Lady Imelda Marcos."
The Court, therefore, applies the same treatment here.
2. Petitioners Prayer to Include Matters in Congressional Deliberations.
Petitioners further seek that the Court "order the inclusion in budgetary deliberations with the
Congress of all presently, off-budget, lump sum, discretionary funds including but not limited to,
proceeds from the x x x Malampaya Fund, remittances from the PAGCOR and the PCSO or the
Executives Social Funds."260
Suffice it to state that the above-stated relief sought by petitioners covers a matter which is generally
left to the prerogative of the political branches of government. Hence, lest the Court itself overreach,
it must equally deny their prayer on this score.
3. Respondents Prayer to Lift TRO; Consequential Effects of Decision.
The final issue to be resolved stems from the interpretation accorded by the DBM to the concept of
released funds. In response to the Courts September 10, 2013 TRO that enjoined the release of the
remaining PDAF allocated for the year 2013, the DBM issued Circular Letter No. 2013-8 dated
September 27, 2013 (DBM Circular 2013-8) which pertinently reads as follows:
3.0 Nonetheless, PDAF projects funded under the FY 2013 GAA, where a Special Allotment Release
Order (SARO) has been issued by the DBM and such SARO has been obligated by the implementing
agencies prior to the issuance of the TRO, may continually be implemented and disbursements
thereto effected by the agencies concerned.
Based on the text of the foregoing, the DBM authorized the continued implementation and
disbursement of PDAF funds as long as they are: first, covered by a SARO; and, second, that said
SARO had been obligated by the implementing agency concerned prior to the issuance of the Courts
September 10, 2013 TRO.
Petitioners take issue with the foregoing circular, arguing that "the issuance of the SARO does not yet
involve the release of funds under the PDAF, as release is only triggered by the issuance of a Notice
of Cash Allocation [(NCA)]."261 As such, PDAF disbursements, even if covered by an obligated SARO,
should remain enjoined.
For their part, respondents espouse that the subject TRO only covers "unreleased and unobligated
allotments." They explain that once a SARO has been issued and obligated by the implementing
agency concerned, the PDAF funds covered by the same are already "beyond the reach of the TRO
because they cannot be considered as remaining PDAF." They conclude that this is a reasonable
interpretation of the TRO by the DBM.262
The Court agrees with petitioners in part.

At the outset, it must be observed that the issue of whether or not the Courts September 10, 2013
TRO should be lifted is a matter rendered moot by the present Decision. The unconstitutionality of the
2013 PDAF Article as declared herein has the consequential effect of converting the temporary
injunction into a permanent one. Hence, from the promulgation of this Decision, the release of the
remaining PDAF funds for 2013, among others, is now permanently enjoined.
The propriety of the DBMs interpretation of the concept of "release" must, nevertheless, be resolved
as it has a practical impact on the execution of the current Decision. In particular, the Court must
resolve the issue of whether or not PDAF funds covered by obligated SAROs, at the time this Decision
is promulgated, may still be disbursed following the DBMs interpretation in DBM Circular 2013-8.
On this score, the Court agrees with petitioners posturing for the fundamental reason that funds
covered by an obligated SARO are yet to be "released" under legal contemplation. A SARO, as defined
by the DBM itself in its website, is "aspecific authority issued to identified agencies to incur
obligations not exceeding a given amount during a specified period for the purpose indicated. It shall
cover expenditures the release of which is subject to compliance with specific laws or regulations, or
is subject to separate approval or clearance by competent authority." 263
Based on this definition, it may be gleaned that a SARO only evinces the existence of an obligation
and not the directive to pay. Practically speaking, the SARO does not have the direct and immediate
effect of placing public funds beyond the control of the disbursing authority. In fact, a SARO may even
be withdrawn under certain circumstances which will prevent the actual release of funds. On the
other hand, the actual release of funds is brought about by the issuance of the NCA, 264 which is
subsequent to the issuance of a SARO. As may be determined from the statements of the DBM
representative during the Oral Arguments:265
Justice Bernabe: Is the notice of allocation issued simultaneously with the SARO?
xxxx
Atty. Ruiz: It comes after. The SARO, Your Honor, is only the go signal for the agencies to obligate or to
enter into commitments. The NCA, Your Honor, is already the go signal to the treasury for us to be
able to pay or to liquidate the amounts obligated in the SARO; so it comes after. x x x The NCA, Your
Honor, is the go signal for the MDS for the authorized government-disbursing banks to, therefore, pay
the payees depending on the projects or projects covered by the SARO and the NCA.
Justice Bernabe: Are there instances that SAROs are cancelled or revoked?
Atty. Ruiz: Your Honor, I would like to instead submit that there are instances that the SAROs issued
are withdrawn by the DBM.
Justice Bernabe: They are withdrawn?
Atty. Ruiz: Yes, Your Honor x x x. (Emphases and underscoring supplied)
Thus, unless an NCA has been issued, public funds should not be treated as funds which have been
"released." In this respect, therefore, the disbursement of 2013 PDAF funds which are only covered by
obligated SAROs, and without any corresponding NCAs issued, must, at the time of this Decisions
promulgation, be enjoined and consequently reverted to the unappropriated surplus of the general
fund. Verily, in view of the declared unconstitutionality of the 2013 PDAF Article, the funds
appropriated pursuant thereto cannot be disbursed even though already obligated, else the Court
sanctions the dealing of funds coming from an unconstitutional source.
This same pronouncement must be equally applied to (a) the Malampaya Funds which have been
obligated but not released meaning, those merely covered by a SARO under the phrase "and for
such other purposes as may be hereafter directed by the President" pursuant to Section 8 of PD 910;
and (b) funds sourced from the Presidential Social Fund under the phrase "to finance the priority

infrastructure development projects" pursuant to Section 12 of PD 1869, as amended by PD 1993,

which were altogether declared by the Court as unconstitutional. However, these funds should not be
reverted to the general fund as afore-stated but instead, respectively remain under the Malampaya
Funds and the Presidential Social Fund to be utilized for their corresponding special purposes not
otherwise declared as unconstitutional.
E. Consequential Effects of Decision.
As a final point, it must be stressed that the Courts pronouncement anent the unconstitutionality of
(a) the 2013 PDAF Article and its Special Provisions, (b) all other Congressional Pork Barrel provisions
similar thereto, and (c) the phrases (1) "and for such other purposes as may be hereafter directed by
the President" under Section 8 of PD 910, and (2) "to finance the priority infrastructure development
projects" under Section 12 of PD 1869, as amended by PD 1993, must only be treated as prospective
in effect in view of the operative fact doctrine.
To explain, the operative fact doctrine exhorts the recognition that until the judiciary, in an
appropriate case, declares the invalidity of a certain legislative or executive act, such act is presumed
constitutional and thus, entitled to obedience and respect and should be properly enforced and
complied with. As explained in the recent case of Commissioner of Internal Revenue v. San Roque
Power Corporation,266 the doctrine merely "reflects awareness that precisely because the judiciary is
the governmental organ which has the final say on whether or not a legislative or executive measure
is valid, a period of time may have elapsed before it can exercise the power of judicial review that
may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness and justice
then, if there be no recognition of what had transpired prior to such adjudication." 267 "In the language
of an American Supreme Court decision: The actual existence of a statute, prior to such a
determination of unconstitutionality, is an operative fact and may have consequences which cannot
justly be ignored."268
For these reasons, this Decision should be heretofore applied prospectively.
Conclusion
The Court renders this Decision to rectify an error which has persisted in the chronicles of our history.
In the final analysis, the Court must strike down the Pork Barrel System as unconstitutional in view of
the inherent defects in the rules within which it operates. To recount, insofar as it has allowed
legislators to wield, in varying gradations, non-oversight, post-enactment authority in vital areas of
budget execution, the system has violated the principle of separation of powers; insofar as it has
conferred unto legislators the power of appropriation by giving them personal, discretionary funds
from which they are able to fund specific projects which they themselves determine, it has similarly
violated the principle of non-delegability of legislative power ; insofar as it has created a system of
budgeting wherein items are not textualized into the appropriations bill, it has flouted the prescribed
procedure of presentment and, in the process, denied the President the power to veto items ; insofar
as it has diluted the effectiveness of congressional oversight by giving legislators a stake in the affairs
of budget execution, an aspect of governance which they may be called to monitor and scrutinize, the
system has equally impaired public accountability ; insofar as it has authorized legislators, who are
national officers, to intervene in affairs of purely local nature, despite the existence of capable local
institutions, it has likewise subverted genuine local autonomy ; and again, insofar as it has conferred
to the President the power to appropriate funds intended by law for energy-related purposes only to
other purposes he may deem fit as well as other public funds under the broad classification of
"priority infrastructure development projects," it has once more transgressed the principle of nondelegability.
For as long as this nation adheres to the rule of law, any of the multifarious unconstitutional methods
and mechanisms the Court has herein pointed out should never again be adopted in any system of
governance, by any name or form, by any semblance or similarity, by any influence or effect.
Disconcerting as it is to think that a system so constitutionally unsound has monumentally endured,
the Court urges the people and its co-stewards in government to look forward with the optimism of

change and the awareness of the past. At a time of great civic unrest and vociferous public debate,
the Court fervently hopes that its Decision today, while it may not purge all the wrongs of society nor
bring back what has been lost, guides this nation to the path forged by the Constitution so that no
one may heretofore detract from its cause nor stray from its course. After all, this is the Courts
bounden duty and no others.
WHEREFORE, the petitions are PARTLY GRANTED. In view of the constitutional violations discussed in
this Decision, the Court hereby declares as UNCONSTITUTIONAL: (a) the entire 2013 PDAF Article; (b)
all legal provisions of past and present Congressional Pork Barrel Laws, such as the previous PDAF
and CDF Articles and the various Congressional Insertions, which authorize/d legislators whether
individually or collectively organized into committees to intervene, assume or participate in any of
the various post-enactment stages of the budget execution, such as but not limited to the areas of
project identification, modification and revision of project identification, fund release and/or fund
realignment, unrelated to the power of congressional oversight; (c) all legal provisions of past and
present Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles and the various
Congressional Insertions, which confer/red personal, lump-sum allocations to legislators from which
they are able to fund specific projects which they themselves determine; (d) all informal practices of
similar import and effect, which the Court similarly deems to be acts of grave abuse of discretion
amounting to lack or excess of jurisdiction; and (e) the phrases (1) "and for such other purposes as
may be hereafter directed by the President" under Section 8 of Presidential Decree No. 910 and (2)
"to finance the priority infrastructure development projects" under Section 12 of Presidential Decree
No. 1869, as amended by Presidential Decree No. 1993, for both failing the sufficient standard test in
violation of the principle of non-delegability of legislative power.
Accordingly, the Courts temporary injunction dated September 10, 2013 is hereby declared to be
PERMANENT. Thus, the disbursement/release of the remaining PDAF funds allocated for the year
2013, as well as for all previous years, and the funds sourced from (1) the Malampaya Funds under
the phrase "and for such other purposes as may be hereafter directed by the President" pursuant to
Section 8 of Presidential Decree No. 910, and (2) the Presidential Social Fund under the phrase "to
finance the priority infrastructure development projects" pursuant to Section 12 of Presidential
Decree No. 1869, as amended by Presidential Decree No. 1993, which are, at the time this Decision is
promulgated, not covered by Notice of Cash Allocations (NCAs) but only by Special Allotment Release
Orders (SAROs), whether obligated or not, are hereby ENJOINED. The remaining PDAF funds covered
by this permanent injunction shall not be disbursed/released but instead reverted to the
unappropriated surplus of the general fund, while the funds under the Malampaya Funds and the
Presidential Social Fund shall remain therein to be utilized for their respective special purposes not
otherwise declared as unconstitutional.
On the other hand, due to improper recourse and lack of proper substantiation, the Court hereby
DENIES petitioners prayer seeking that the Executive Secretary and/or the Department of Budget
and Management be ordered to provide the public and the Commission on Audit complete
lists/schedules or detailed reports related to the availments and utilization of the funds subject of
these cases. Petitioners access to official documents already available and of public record which are
related to these funds must, however, not be prohibited but merely subjected to the custodians
reasonable regulations or any valid statutory prohibition on the same. This denial is without prejudice
to a proper mandamus case which they or the Commission on Audit may choose to pursue through a
separate petition.
The Court also DENIES petitioners prayer to order the inclusion of the funds subject of these cases in
the budgetary deliberations of Congress as the same is a matter left to the prerogative of the political
branches of government.
Finally, the Court hereby DIRECTS all prosecutorial organs of the government to, within the bounds of
reasonable dispatch, investigate and accordingly prosecute all government officials and/or private
individuals for possible criminal offenses related to the irregular, improper and/or unlawful
disbursement/utilization of all funds under the Pork Barrel System.

This Decision is immediately executory but prospective in effect.

SO ORDERED.
ESTELA M. PERLAS-BERNABE
Associate Justice

Republic of the Philippines

Supreme Court
Manila
FIRST DIVISION
REPUBLIC OF THE PHILIPPINES,
Petitioner,

G.R. No. 170375

- versus HON. MAMINDIARA P. MANGOTARA,

in his capacity as Presiding Judge
of the Regional Trial Court, Branch
1, Iligan City, Lanao del Norte, and
MARIA
CRISTINA
FERTILIZER
CORPORATION, and the PHILIPPINE
NATIONAL BANK,
Respondents,
x-----------------------x
LAND
TRADE
REALTY
CORPORATION,
Petitioner,

G.R. No. 170505

- versus NATIONAL POWER CORPORATION

and
NATIONAL
TRANSMISSION
CORPORATION (TRANSCO),
Respondents,
x-----------------------x
NATIONAL POWER CORPORATION,
Petitioner,
- versus HON. COURT OF APPEALS (Special
Twenty-Third Division, Cagayan de

G.R. Nos. 173355-56

Oro City), and LAND TRADE REALTY

CORPORATION,
Respondents,
x-----------------------x
REPUBLIC OF THEPHILIPPINES,
Petitioner,
-

versus -

G.R. No. 173401

DEMETRIA CACHO, represented by

alleged Heirs DEMETRIA CONFESOR
VIDAL
and/or
TEOFILO
CACHO,
AZIMUTH
INTERNATIONAL
DEVELOPMENT CORPORATION and
LAND TRADE REALTY CORPORATION,
Respondents.
x-----------------------x
NATIONAL
TRANSMISSION
CORPORATION,
Petitioner,
- versus HON. COURT OF APPEALS (Special
Twenty-Third Division, Cagayan de
Oro City), and LAND TRADE REALTY
CORPORATION as represented by
Atty. Max C. Tabimina,
Respondents,
x-----------------------x
LAND
TRADE
CORPORATION,

G.R. Nos. 173563-64

REALTY

Petitioner,
- versus DEMETRIA CONFESOR VIDAL and
AZIMUTH
INTERNATIONAL
DEVELOPMENT CORPORATION,
Respondents,
x-----------------------x
TEOFILO
CACHO
and/or
ATTY.
GODOFREDO CABILDO,
Petitioner,

G.R. No. 178779

- versus -

DEMETRIA
AZIMUTH

CONFESOR VIDAL and

INTERNATIONAL

G.R. No. 178894

DEVELOPMENT CORPORATION,
Respondents.

Present:
CORONA, C.J.,
Chairperson,
VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.
Promulgated:

DECISION
LEONARDO-DE CASTRO, J.:
Before the Court are seven consolidated Petitions for Review on Certiorari and a Petition
for Certiorari under Rules 45 and 65 of the Rules of Court, respectively, arising from actions for
quieting of title, expropriation, ejectment, and reversion, which all involve the same parcels of land.
In G.R. No. 170375, the Republic of the Philippines (Republic), by way of consolidated
Petitions for Review on Certiorari and for Certiorari under Rules 45 and 65 of the Rules of Court,
respectively, seeks to set aside the issuances of Judge Mamindiara P. Mangotara (Judge Mangotara) of
the Regional Trial Court, Branch 1 (RTC-Branch 1) of Iligan City, Lanao del Norte, in Civil Case No. 106,
particularly, the: (1) Resolution[1] dated July 12, 2005 which, in part, dismissed the Complaint for
Expropriation of the Republic for the latters failure to implead indispensable parties and forum
shopping; and (2) Resolution [2] dated October 24, 2005, which denied the Partial Motion for
Reconsideration of the Republic.
G.R. Nos. 178779 and 178894 are two Petitions for Review on Certiorari under Rule 45 of
the Rules of Court, where Landtrade Realty Corporation (LANDTRADE), Teofilo Cacho, and/or Atty.
Godofredo Cabildo assail the Decision[3] dated January 19, 2007 and Resolution [4] dated July 4, 2007 of
the Court of Appeals in CA-G.R. CV No. 00456. The Court of Appeals affirmed the Decision [5] dated July
17, 2004 of the Regional Trial Court, Branch 3 (RTC-Branch 3) of Iligan City, Lanao del Norte, in Civil
Case No. 4452, granting the Petition for Quieting of Title, Injunction and Damages filed by Demetria
Vidal and Azimuth International Development Corporation (AZIMUTH) against Teofilo Cacho and Atty.
Godofredo Cabildo.
G.R. No. 170505 is a Petition for Review on Certiorari under Rule 45 of the Rules of Court in which
LANDTRADE urges the Court to reverse and set aside the Decision[6]dated November 23, 2005 of the
Court of Appeals in CA-G.R. SP Nos. 85714 and 85841. The appellate court annulled several issuances
of the Regional Trial Court, Branch 5 (RTC-Branch 5) of Iligan City, Lanao del Norte, and its sheriff, in
Civil Case No. 6613, specifically, the: (1) Order [7] dated August 9, 2004 granting the Motion for

Execution Pending Appeal of LANDTRADE; (2) Writ of Execution [8] dated August 10, 2004; (3) two
Notices of Garnishment[9] both dated August 11, 2004, and (4) Notification [10]dated August 11,
2004. These issuances of the RTC-Branch 5 allowed and/or enabled execution pending appeal of the
Decision[11] dated February 17, 2004 of the Municipal Trial Court in Cities (MTCC), Branch 2 of Iligan
City, Lanao del Norte, favoring LANDTRADE in Civil Case No. 11475-AF, the ejectment case said
corporation instituted against the National Power Corporation (NAPOCOR) and the National
Transmission Corporation (TRANSCO).
G.R. Nos. 173355-56 and 173563-64 are two Petitions for Certiorari and Prohibition under Rule 65
of the Rules of Court with prayer for the immediate issuance of a Temporary Restraining Order (TRO)
and/or Writ of Preliminary Injunction filed separately by NAPOCOR and TRANSCO. Both Petitions seek
to annul the Resolution[12] dated June 30, 2006 of the Court of Appeals in the consolidated cases of
CA-G.R. SP Nos. 00854 and 00889, which (1) granted the Omnibus Motion of LANDTRADE for the
issuance of a writ of execution and the designation of a special sheriff for the enforcement of the
Decision[13] dated December 12, 2005 of the RTC-Branch 1 in Civil Case No. 6613, and (2) denied the
applications of NAPOCOR and TRANSCO for a writ of preliminary injunction to enjoin the execution of
the same RTC Decision. The Decision dated December 12, 2005 of RTC-Branch 1 in Civil Case No.
6613 affirmed the Decision dated February 17, 2004 of the MTCC in Civil Case No. 11475-AF, favoring
LANDTRADE.
G.R. No. 173401 involves a Petition for Review on Certiorari under Rule 45 of the Rules of
Court filed by the Republic, which raises pure questions of law and seeks the reversal of the following
issuances of the Regional Trial Court, Branch 4 (RTC-Branch 4) of Iligan City, Lanao del Norte, in Civil
Case No. 6686, an action for cancellation of titles and reversion: (1) Order [14] dated December 13,
2005 dismissing the Complaint in Civil Case No. 6686; and (2) Order [15] dated May 16, 2006, denying
the Motion for Reconsideration of the Republic.
I
THE PRECEDING CASES
The consolidated seven cases have for their common genesis the 1914 case of Cacho v.
Government of the United States[16] (1914 Cacho case).
The 1914 Cacho Case
Sometime in the early 1900s, the late Doa Demetria Cacho (Doa Demetria) applied for the
registration of two parcels of land: (1) Lot 1 of Plan II-3732, the smaller parcel with an area
of 3,635 square meters or 0.36 hectares (Lot 1); and (2) Lot 2 of Plan II-3732, the larger parcel
with an area of 378,707 square meters or 37.87 hectares (Lot 2).Both parcels are situated in
what was then the Municipality of Iligan, Moro Province, which later became Sitio Nunucan, then Brgy.

Suarez, in Iligan City, Lanao del Norte. Doa Demetrias applications for registration were docketed as
GLRO Record Nos. 6908 and 6909.
The application in GLRO Record No. 6908 covered Lot 1, the smaller parcel of land. Doa
Demetria allegedly acquired Lot 1 by purchase from Gabriel Salzos (Salzos).Salzos, in turn,
bought Lot 1 from Datto Darondon and his wife Alanga, evidenced by a deed of sale in favor of Salzos
signed solely by Alanga, on behalf of Datto Darondon.
The application in GLRO Record No. 6909 involved Lot 2, the bigger parcel of land. Doa
Demetria purportedly purchased Lot 2

from Datto Bunglay. Datto Bunglay claimed to have

inherited Lot 2 from his uncle, Datto Anandog, who died without issue.
Only the Government opposed Doa Demetrias applications for registration on the ground that
the two parcels of land were the property of the United States and formed part of a military
reservation, generally known as Camp Overton.
On December 10, 1912, the land registration court (LRC) rendered its Decision in GLRO Record
Nos. 6908 and 6909.
Based on the evidence, the LRC made the following findings in GLRO Record No. 6908:
6th. The court is convinced from the proofs that the small parcel of land sold by
the Moro woman Alanga was the home of herself and her husband, Darondon, and was
their conjugal property; and the court so finds.
xxxx
As we have seen, the deed on which applicants title to the small parcel rests, is
executed only by the Moro woman Alanga, wife of Datto Darondon, which is not
permitted either by the Moro laws or the Civil Code of the Philippine Islands. It appears
that the husband of Alanga, Datto Darondon, is alive yet, and before admitting this
parcel to registration it is ordered that a deed from Datto Darondon, husband
of Alanga, be presented, renouncing all his rights in the small parcel of land
object of Case No. 6908, in favor of the applicant.[17] (Emphases supplied.)

In GLRO Record No. 6909, the LRC observed and concluded that:
A tract of land 37 hectares in area, which is the extent of the land under
discussion, is larger than is cultivated ordinarily by the Christian Filipinos. In the
Zamboanga cadastral case of thousands of parcels now on trial before this court, the
average size of the parcels is not above 3 or 4 hectares, and the court doubts very
much if a Moro with all his family could cultivate as extensive a parcel of land as the one
in question. x x x
xxxx
The court is also convinced from the proofs that the small portion in the
southern part of the larger parcel, where, according to the proofs, Datto Anandog

had his house and where there still exist some cocos and fruit trees, was the home of
the said Moro Datto Anandog; and the court so finds. As to the rest of the large
parcel the court does not find the title of Datto Bunglay established. According
to his own declaration his residence on this land commenced only a few days before the
sale. He admitted that the coco trees he is supposed to have planted had not yet begun
to bear fruit at the time of the sale, and were very small. Datto Duroc positively denies
that Bunglay lived on the land, and it clearly appears that he was not on the land when
it was first occupied by the military. Nor does Datto Bunglay claim to have planted the
three mango trees by the roadside near point 25 of the plan. The court believes that all
the rest of this parcel, not occupied nor cultivated by Datto Anandog, was land claimed
by Datto Duroc and also by Datto Anandog and possibly by other dattos as a part of
their general jurisdiction, and that it is the class of land that Act No. 718 prohibits the
sale of, by the dattos, without the express approval of the Government.
It is also found that Datto Bunglay is the nephew of Dato Anandog, and that the
Moro woman Alanga, grantor of the small parcel, is the sister of Datto Anandog, and
that he died without issue.
xxxx
It appears also that according to the provisions of the Civil Code as also the
provisions of the Luwaran Code of the Moros, the Moro woman Alanga has an interest in
the portion of land left by her deceased brother, Datto Anandog. By article LXXXV,
section 3, of the Luwaran Code, it will be seen that the brothers and sisters of a
deceased Moro inherit his property to the exclusion of the more distant
relatives. Therefore Datto Bunglay had no legal interest whatever in the land to sell to
the applicant, Doa Demetria Cacho. But the Moro woman, Alanga, having appeared as a
witness for the applicant without having made any claim to the land, the court finds
from this fact that she has ratified the sale made by her nephew.
The court therefore finds that the applicant Doa Demetria Cacho is
owner of the portion of land occupied and planted by the deceased Datto
Anandog in the southern part of the large parcel object of expediente No.
6909 only; and her application as to all the rest of the land solicited in said
case is denied. And it is ordered that a new survey of the land be made and a
corrected plan be presented, excluding all the land not occupied and
cultivated by Datto Anandog; that said survey be made and the corrected plan
presented on or before the 30th day of March, 1913, with previous notice to
the commanding general of the Division of the Philippines.
On the 8th day of December, the court was at Camp Overton and had another
ocular inspection of the land for the purpose of fixing the limits of the part cultivated by
Datto Anandog, so often mentioned herein, with previous notice to the applicant and her
husband and representative, Seor Dionisio Vidal. Having arrived late, Seor Vidal did not
assist in the ocular inspection, which was fixed for 3 oclock, p.m. of the day
mentioned. But the court, nevertheless, set stakes marking the N.E., S.E., and S.W.
corners of the land found to have been cultivated by the deceased Anandog. The N.E.
limit of said land is a brook, and the N.W. corner is the point where the brook intersects
the shore line of the sea, the other corners mentioned being marked with pine
stakes. And it is ordered that the new survey be made in accordance with the
points mentioned, by tracing four straight lines connecting these four
points. Between the portion cultivated by Datto Anandog and the mouth of the River
Agus there is a high steep hill and the court does not believe it possible to cultivate said
hill, it being covered with rocks and forest.[18](Emphases supplied.)

The LRC additionally decreed at the end of its December 10, 1912 Decision:

It is further ordered that one-half of the costs of the new survey be paid by the
applicant and the other half by the Government of the United States, and that the
applicant present the corresponding deed from Datto Darondon on or before the abovementioned 30th day of March, 1913. Final decision in these cases is reserved until the
presentation of the said deed and the new plan.[19]

Apparently dissatisfied with the foregoing LRC judgment, Doa Demetria appealed to this
Court. In its Decision dated December 10, 1914, the Court affirmed in toto the LRC Decision of
December 10, 1912, well satisfied that the findings of fact of the court below were fully sustained by
the evidence adduced during trial.
Eighty-three years later, in 1997, the Court was again called upon to settle a matter concerning the
registration of Lots 1 and 2 in the case of Cacho v. Court of Appeals[20] (1997 Cacho case).
The 1997 Cacho Case
On June 29, 1978, Teofilo Cacho (Teofilo), claiming to be the late Doa Demetrias son and sole
heir, filed before the RTC a petition for reconstitution of two original certificates of title (OCTs),
docketed under the original GLRO Record Nos. 6908 and 6909.
Teofilos petition was opposed by the Republic, National Steel Corporation (NSC), and the City
of Iligan.
Acting on the motion for judgment on demurrer to evidence filed by the Republic and NSC, the
RTC initially dismissed Teofilos petition for reconstitution of titles because there was inadequate
evidence to show the prior existence of the titles sought to be restored. According to the RTC, the
proper remedy was a petition for the reconstitution of decrees since it is undisputed that in Cases No.
6908 and 6909, Decrees No. 10364 and 18969, respectively, were issued. Teofilo sought leave of
court for the filing and admission of his amended petition, but the RTC refused. When elevated to this
Court in Cacho v. Mangotara, docketed as G.R. No. 85495, the Court resolved to remand the case to
the RTC, with an order to the said trial court to accept Teofilos amended petition and to hear it as one
for re-issuance of decrees.
In opposing Teofilos petition, the Republic and NSC argued that the same suffered from
jurisdictional infirmities; that Teofilo was not the real party-in-interest; that Teofilo was guilty of
laches; that Doa Demetria was not the registered owner of the subject parcels of land; that no
decrees were ever issued in Doa Demetrias name; and that the issuance of the decrees was dubious
and irregular.
After trial, on June 9, 1993, the RTC rendered its Decision granting Teofilos petition and
ordering the reconstitution and re-issuance of Decree Nos. 10364 and 18969. The RTC held that the

issuance of Decree No. 10364 in GLRO No. 6908 on May 9, 1913 and Decree No. 18969 in GLRO
Record No. 6909 on July 8, 1915 was sufficiently established by the certifications and testimonies of
concerned officials. The original issuance of these decrees presupposed a prior judgment that had
become final.
On appeal, the Court of Appeals reversed the RTC Decision dated June 9, 1993 and dismissed
the petition for re-issuance of Decree Nos. 10364 and 18969 because: (1) re-issuance of Decree No.
18969 in GLRO Record No. 6909 could not be made in the absence of the new survey ordered by this
Court in the 1914 Cacho case; (2) the heir of a registered owner may lose his right to recover
possession of the property and title thereto by laches; and (3) Teofilo failed to establish his identity
and existence and that he was a real party-in-interest.
Teofilo then sought recourse from this Court in the 1997 Cacho case. The Court reversed the
judgment of the Court of Appeals and reinstated the decision of the RTC approving the re-issuance of
Decree Nos. 10364 and 18969. The Court found that such decrees had in fact been issued and had
attained finality, as certified by the Acting Commissioner, Deputy Clerk of Court III, Geodetic
Engineer, and Chief of Registration of the then Land Registration Commission, now National Land
Titles and Deeds Registration Administration (NALTDRA). The Court further reasoned that:
[T]o sustain the Court of Appeals ruling as regards requiring petitioners to fulfill the
conditions set forth in Cacho vs. U.S. would constitute a derogation of the doctrine
of res judicata.Significantly, the issuance of the subject decrees presupposes a prior
final judgment because the issuance of such decrees is a mere ministerial act on part of
the Land Registration Commission (now the NALTDRA), upon presentation of a final
judgment. It is also worth noting that the judgment in Cacho vs. U.S. could not have
acquired finality without the prior fulfillment of the conditions in GLRO Record No. 6908,
the presentation of the corresponding deed of sale from Datto Dorondon on or before
March 30, 1913 (upon which Decree No. 10364 was issued on May 9, 1913); and in
GLRO Record No. 6909, the presentation of a new survey per decision of Judge Jorge on
December 10, 1912 and affirmed by this Court on December 10, 1914 (upon which
Decree No. 18969 was issued on July 8, 1915).
Requiring the submission of a new plan as a condition for the re-issuance of the decree
would render the finality attained by the Cacho vs. U.S. case nugatory, thus, violating
the fundamental rule regarding res judicata. It must be stressed that the judgment and
the resulting decree are res judicata, and these are binding upon the whole world, the
proceedings being in the nature of proceedings in rem. Besides, such a requirement is
an impermissible assault upon the integrity and stability of the Torrens System of
registration because it also effectively renders the decree inconclusive. [21]

As to the issue of laches, the Court referred to the settled doctrine that laches cannot bar the
issuance of a decree. A final decision in land registration cases can neither be rendered inefficacious
by the statute of limitations nor by laches.
Anent the issue of the identity and existence of Teofilo and he being a real party-in-interest, the
Court found that these were sufficiently established by the records. The Court relied on Teofilos

Affidavit of Adjudication as Doa Demetrias sole heir, which he executed before the Philippine
Consulate General in Chicago, United States of America(U.S.A.); as well as the publication in the
Times Journal of the fact of adjudication of Doa Demetrias estate. Teofilo also appeared personally
before the Vice Consul of the Philippine Consulate General in Chicago to execute a Special Power of
Attorney in favor of Atty. Godofredo Cabildo (Atty. Cabildo) who represented him in this case. The
Court stressed that the execution of public documents is entitled to the presumption of regularity and
proof is required to assail and controvert the same.
In the Resolution dated July 28, 1997, [22] the Court denied the Motions for Reconsideration of
the Republic and NSC.
As a result of the 1997 Cacho case, the decrees of registration were re-issued bearing new
numbers and OCTs were issued for the two parcels of land in Doa Demetrias name. OCT No. 0-1200
(a.f.) was based on re-issued Decree No. N-219464 in GLRO Record No. 6908, while OCT No. 0-1201
(a.f.) was based on re-issued Decree No. N-219465 in GLRO Record No. 6909.
II
THE ANTECENT FACTS
OF THE PETITIONS AT BAR

The dispute over Lots 1 and 2 did not end with the termination of the 1997 Cacho
case. Another four cases involving the same parcels of land were instituted before the trial courts
during and after the pendency of the 1997 Cacho case. These cases are: (1) the Expropriation Case,
G.R. No. 170375; (2) the Quieting of Title Case, G.R. Nos. 178779 and 178894; (3) the Ejectment or
Unlawful Detainer Case, G.R. No. 170505 (execution pending appeal before the RTC) and G.R. Nos.
173355-56 and 173563-64 (execution pending appeal before the Court of Appeals); and (4) the
Cancellation of Titles and Reversion Case, G.R. No. 173401. These cases proceeded independently of
each other in the courts a quo until they reached this Court via the present Petitions. In the
Resolution[23] dated October 3, 2007, the Court consolidated the seven Petitions considering that they
either originated from the same case or involved similar issues.
Expropriation Case
(G.R. No. 170375)
The Complaint for Expropriation was originally filed on August 15, 1983 by the Iron and Steel
Authority (ISA), now the NSC, against Maria Cristina Fertilizer Corporation (MCFC), and the latters
mortgagee, the Philippine National Bank (PNB). The Complaint was docketed as Civil Case No. 106
and raffled to RTC-Branch 1, presided over by Judge Mangotara.
ISA was created pursuant to Presidential Decree No. 2729 [24] dated August 9, 1973, to strengthen,
develop, and promote the iron and steel industry in the Philippines. Its existence was extended until
October 10, 1988.

On November 16, 1982, during the existence of ISA, then President Ferdinand E. Marcos issued
Presidential Proclamation No. 2239,[25] reserving in favor of ISA a parcel of land in Iligan City,
measuring 302,532 square meters or 30.25 hectares, to be devoted to the integrated steel program
of the Government. MCFC occupied certain portions of this parcel of land. When negotiations with
MCFC failed, ISA was compelled to file a Complaint for Expropriation.
When the statutory existence of ISA expired during the pendency of Civil Case No. 106, MCFC
filed a Motion to Dismiss the case alleging the lack of capacity to sue of ISA. The RTC-Branch 1
granted the Motion to Dismiss in an Order dated November 9, 1988. ISA moved for reconsideration or,
in the alternative, for the substitution of the Republic as plaintiff in Civil Case No. 106, but the motion
was denied by RTC-Branch 1. The dismissal of Civil Case No. 106 was affirmed by the Court of
Appeals, thus, ISA appealed to this Court. In Iron and Steel Authority v. Court of Appeals [26] (ISA case),
the Court remanded the case to RTC-Branch 1, which was ordered to allow the substitution of the
Republic for ISA as plaintiff. Entry of Judgment was made in the ISA case on August 31, 1998. In an
Order[27] dated November 16, 2001, the RTC-Branch 1 allowed the substitution of the Republic for ISA
as plaintiff in Civil Case No. 106.
Alleging that Lots 1 and 2 involved in the 1997 Cacho case encroached and overlapped the parcel of
land subject of Civil Case No. 106, the Republic filed with the RTC-Branch 1 a Motion for Leave to File
Supplemental Complaint dated October 7, 2004 and to Admit the Attached Supplemental Complaint
dated September 28, 2004[28] seeking to implead in Civil Case No. 106 Teofilo Cacho and Demetria
Vidal and their respective successors-in-interest, LANDTRADE and AZIMUTH.
MCFC opposed the Motion for leave to file and to admit the Supplemental Complaint on the ground
that the Republic was without legal personality to file the same because ISA was the plaintiff in Civil
Case No. 106. MCFC argued that the Republic failed to move for the execution of the decision in
the ISA case within the prescriptive period of five years, hence, the only remedy left was for the
Republic to file an independent action to revive the judgment. MCFC further pointed out that the
unreasonable delay of more than six years of the Republic in seeking the substitution and
continuation of the action for expropriation effectively barred any further proceedings therein on the
ground of estoppel by laches.
In its Reply, the Republic referred to the Order dated November 16, 2001 of the RTC-Branch 1
allowing the substitution of the Republic for ISA.
In an Order dated April 4, 2005, the RTC-Branch 1 denied the Motion of the Republic for leave to file
and to admit its Supplemental Complaint. The RTC-Branch 1 agreed with MCFC that the Republic did
not file any motion for execution of the judgment of this Court in the ISA case. Since no such motion
for execution had been filed, the RTC-Branch 1 ruled that its Order dated November 16, 2001, which
effected the substitution of the Republic for ISA as plaintiff in Civil Case No. 106, was an honest

mistake. The Republic filed a Motion for Reconsideration of the April 4, 2005 Order of the RTC-Branch
1.
MCFC then filed a Motion to Dismiss Civil Case No. 106 for: (1) failure of the Republic to implead
indispensable parties because MCFC insisted it was not the owner of the parcels of land sought to be
expropriated; and (2) forum shopping considering the institution by the Republic on October 13, 2004
of an action for the reversion of the same parcels subject of the instant case for expropriation.
Judge Mangotara of RTC-Branch 1 issued a Resolution[29] on July 12, 2005, denying for lack of merit the
Motion for Reconsideration of the Order dated April 4, 2005 filed by the Republic, and granting the
Motion to Dismiss Civil Case No. 106 filed by MCFC. Judge Mangotara justified the dismissal of the
Expropriation Case thus:
What the Republic seeks [herein] is the expropriation of the subject parcels of
land. Since the exercise of the power of eminent domain involves the taking of private
lands intended for public use upon payment of just compensation to the owner x x x,
then a complaint for expropriation must, of necessity, be directed against the owner of
the land subject thereof. In the case at bar, the decision of the Supreme Court in Cacho
v. Government of the United States x x x, decreeing the registration of the subject
parcels of land in the name of the late Doa Demetria Cacho has long attained finality
and is conclusive as to the question of ownership thereof. Since MCFC, the only
defendant left in this case, is not a proper party defendant in this complaint for
expropriation, the present case should be dismissed.
This Court notes that the Republic [has filed reversion proceedings] dated
September 27, 2004, involving the same parcels of land, docketed as Case No. 6686
pending before the Regional Trial Court of Lanao del Norte, Iligan City Branch 4. [The
Republic], however, did not state such fact in its Verification and Certification of NonForum Shopping attached to its Supplemental Complaint dated September 28, 2004. [It
is therefore] guilty of forum shopping. Moreover, considering that in the Reversion case,
[the Republic] asserts ownership over the subject parcels of land, it cannot be allowed
to take an inconsistent position in this expropriation case without making a mockery of
justice.[30]

The Republic filed a Motion for Reconsideration of the Resolution dated July 12, 2005, insofar as it
dismissed

Civil

Case

No.

106,

but

said

Motion

was

denied

by

Judge

Mangatora

in

Resolution[31] dated October 24, 2005.

On January 16, 2006, the Republic filed with this Court the consolidated Petition for Review
on Certiorari and Petition for Certiorari under Rules 45 and 65 of the Rules of Court, respectively,
docketed as G.R. No. 170375.
The Quieting of Title Case
(G.R.
Nos.

178779

and

178894)

Demetria Vidal (Vidal) and AZIMUTH filed on November 18, 1998, a Petition [32] for Quieting of
Title against Teofilo, Atty. Cabildo, and the Register of Deeds of Iligan City, which was docketed as
Civil Case No. 4452 and raffled to RTC-Branch 3.
In the Petition, Vidal claimed that she, and not Teofilo, was the late Doa Demetrias sole
surviving heir, entitled to the parcels of land covered by OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.). She
averred that she is the daughter of Francisco Cacho Vidal (Francisco) and Fidela Arellano
Confesor. Francisco was the only child of Don Dionisio Vidal and Doa Demetria.
AZIMUTH, for its part, filed the Petition as Vidals successor-in-interest with respect to a 23hectare portion of the subject parcels of land pursuant to the Memorandum of Agreement dated April
2, 1998 and Deed of Conditional Conveyance dated August 13, 2004, which Vidal executed in favor of
AZIMUTH.
Teofilo opposed the Petition contending that it stated no cause of action because there was no
title being disturbed or in danger of being lost due to the claim of a third party, and Vidal had neither
legal nor beneficial ownership of the parcels of land in question; that the matter and issues raised in
the Petition had already been tried, heard, and decided by the RTC of Iligan City and affirmed with
finality by this Court in the 1997 Cacho case; and that the Petition was barred by the Statute of
Limitations and laches.
LANDTRADE, among other parties, was allowed by the RTC-Branch 3 to intervene in Civil Case
No. 4452. LANDTRADE alleged that it is the owner of a portion of the subject parcels of land,
measuring 270,255 square meters or about 27.03 hectares, which it purportedly acquired through a
Deed of Absolute Sale dated October 1, 1996 from Teofilo, represented by Atty. Cabildo. LANDTRADE
essentially argued that Vidal's right as heir should be adjudicated upon in a separate and
independent proceeding and not in the instant Quieting of Title Case.
During the pre-trial conference, the parties manifested that there was no possibility of any
amicable settlement among them.
Vidal and AZIMUTH submitted testimonial and documentary evidence during the trial before
the RTC-Branch 3. Teofilo and Atty. Cabildo failed to present any evidence as they did not appear at all
during the trial, while LANDTRADE was declared by the RTC-Branch 3 to have waived its right to
present evidence on its defense and counterclaim.
On July 17, 2004, the RTC-Branch 3 rendered its Decision [33] in Civil Case No. 4452 in favor of
Vidal and AZIMUTH, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the petitioners and against
the respondents and intervenors:

1) DECLARING:
a.) Petitioner Demetria C. Vidal the sole surviving heir of the late Doa
Demetria Cacho;
b.) Petitioner Demetria C. Vidal alone has the hereditary right to and
interest in the Subject Property;
c.) Petitioner Azimuth International Development Corporation is the
successor-in-interest of petitioner Demetria C. Vidal to a portion of the
Subject Property to the extent provided in their 2 April 1998 Memorandum
of Agreement and 13 August 1998 Deed of Conditional Conveyance;
d.) Respondent Teofilo Cacho is not a son or heir of the late Dona Demetria
Cacho; and
e.) Respondent Teofilo Cacho, Godofredo Cabildo and any of their
transferees/assignees have no valid right to or interest in the Subject
Property.
2) ORDERING:
a.) Respondent Register of Deeds of Iligan City, and any other person
acting in his behalf, stop, cease and desist:
i) From accepting or registering any affidavit of selfadjudication or any other document executed by
respondents Teofilo Cacho, Godofredo Cabildo and/or any
other person which in any way transfers the title to the
Subject Property from Dona Demetria Cacho to respondent
Teofilo Cacho, Godofredo Cabildo and/or any of their
transferees/assignees, including the intervenors.
ii) From cancelling the OCTs or any certificate of title over the
Subject Property in the name of Demetria Cacho or any
successor certificate of title, and from issuing new
certificates of title in the name of respondents Teofilo Cacho,
Godofredo Cabildo their transferees/assignees, including the
intervenors.
b) Respondents
Teofilo
Cacho,
Godofredo
Cabildo,
their
transferees/assignees, and any other person acting in their behalf, to stop,
cease and desist:
i) From executing, submitting to any Register of Deeds, or
registering or causing to be registered therein, any affidavit
of self-adjudication or any other document which in any way
transfers title to the Subject Property from Demetria Cacho
to respondents Teofilo Cacho, Godofredo Cabildo and/or any
of their transferees/assignees, including the intervenors.
ii) From canceling or causing the cancellation of OCTs or any
certificate of title over the Subject Property in the name of
Demetria Cacho or any successor certificate of title, and
from issuing new certificates of title in the name of
respondent Teofilo Cacho, Godofredo Cabildo and/or any of
their transferees/assignees, including the intervenors.
iii) From claiming or representing in any manner that
respondent Teofilo Cacho is the son or heir of Demetria
Cacho or has rights to or interest in the Subject Property.
3) ORDERING respondents Teofilo Cacho and Atty. Godofredo Cabildo to pay
petitioners, jointly and severally, the following:

a) For temperate damages - P 80,000.00

b) For nominal damages - P 60,000.00
c) For moral damages - P500,000.00
d) For exemplary damages - P 500,000.00
e) For attorney's fees (ACCRA Law)-P1,000,000.00
f) For Attorney's fees - P500,000.00
(Atty. Voltaire Rovira)
g) For litigation expenses - P300,000.00
For lack of factual and legal basis, the counterclaim of Teofilo Cacho and Atty.
Godofredo Cabildo is hereby dismissed.
Likewise, the counterclaim of intervenor IDD/Investa is dismissed for lack of basis
as the petitioners succeeded in proving their cause of action.
On the cross-claim of intervenor IDD/Investa, respondents Teofilo Cacho and Atty.
Godofredo Cabildo are ORDERED to pay IDD/Investa, jointly and severally, the principal
sum of P5,433,036 with 15% interest per annum.
For lack of legal basis, the counterclaim of Intervenor Landtrade Realty
Development Corporation is dismissed.
[34]

Likewise, Intervenor Manguera's counterclaim is dismissed for lack of legal basis.

The joint appeal filed by LANDTRADE, Teofilo, and Atty. Cabildo with the Court of Appeals was
docketed as CA-G.R. CV No. 00456. The Court of Appeals, in its Decision[35] of January 19, 2007,
affirmed in toto the Decision dated July 17, 2004 of the RTC-Branch 3.
According to the Court of Appeals, the RTC-Branch 3 did not err in resolving the issue on Vidals
status, filiation, and hereditary rights as it is determinative of the issue on ownership of the subject
properties. It was indubitable that the RTC-Branch 3 had jurisdiction over the person of Teofilo and
juridical personality of LANDTRADE as they both filed their Answers to the Petition for Quieting of
Title thereby voluntarily submitting themselves to the jurisdiction of said trial court. Likewise, the
Petition for Quieting of Title is in itself within the jurisdiction of the RTC-Branch 3. Hence, where there
is jurisdiction over the person and subject matter, the resolution of all other questions arising in the
case is but an exercise by the court of its jurisdiction. Moreover, Teofilo and LANDTRADE were guilty
of estoppel by laches for failing to assail the jurisdiction of the RTC-Branch 3 at the first opportunity
and even actively participating in the trial of the case and seeking affirmative reliefs.
In addition, the Court of Appeals held that the 1997 Cacho case only determined the validity
and efficacy of the Affidavit of Adjudication that Teofilo executed before the Philippine Consulate
General in the U.S.A. The decision of this Court in the 1997 Cacho case, which had become final and
executory, did not vest upon Teofilo ownership of the parcels of land as it merely ordered the reissuance of a lost duplicate certificate of title in its original form and condition.

The Court of Appeals agreed in the finding of the RTC-Branch 3 that the evidence on record
preponderantly supports Vidals claim of being the granddaughter and sole heiress of the late Doa
Demetria. The appellate court further adjudged that Vidal did not delay in asserting her rights over
the subject parcels of land. The prescriptive period for real actions over immovables is 30
years. Vidals rights as Doa Demetrias successor-in-interest accrued upon the latters death in 1974,
and only 24 years thereafter, in 1998, Vidal already filed the present Petition for Quieting of
Title. Thus, Vidals cause of action had not yet prescribed. And, where the action was filed within the
prescriptive period provided by law, the doctrine of laches was also inapplicable.
LANDTRADE, Teofilo, and Atty. Cabildo filed separate Motions for Reconsideration of the January 19,
2007 Decision of the Court of Appeals, which were denied in the July 4, 2007 Resolution [36] of the
same court.
On August 24, 2007, LANDTRADE filed with this Court a Petition for Review on Certiorari under Rule
45 of the Rules of Court, which was docketed as G.R. No. 178779. On September 6, 2007, Teofilo and
Atty. Cabildo filed their own Petition for Review on Certiorari under Rule 45 of the Rules of Court,
which was docketed as G.R. No. 178894.
The Ejectment or Unlawful Detainer Case
(G.R. Nos. 170505, 173355-56, and 173563-64)
Three Petitions before this Court are rooted in the Unlawful Detainer Case instituted by
LANDTRADE against NAPOCOR and TRANSCO.
On August 9, 1952, NAPOCOR took possession of two parcels of land in Sitio Nunucan, Overton,
Fuentes, Iligan City, denominated as Lots 2029 and 2043, consisting of 3,588 square meters (or 0.36
hectares) and 3,177 square meters (or 0.32 hectares), respectively. On Lot 2029, NAPOCOR
constructed its power sub-station, known as the Overton Sub-station, while on Lot 2043, it built a
warehouse, known as the Agus 7 Warehouse, both for the use of its Agus 7 Hydro-Electric Power
Plant. For more than 30 years, NAPOCOR occupied and possessed said parcels of land pursuant to its
charter, Republic Act No. 6395.[37] With the enactment in 2001 of Republic Act No. 9136, otherwise
known as the Electric Power Industry Reform Act (EPIRA), TRANSCO assumed the functions of
NAPOCOR with regard to electrical transmissions and took over possession of the Overton Substation.
Claiming ownership of the parcels of land where the Overton Sub-station and Agus 7
Warehouse are located, LANDTRADE filed with the MTCC on April 9, 2003 a Complaint for Unlawful
Detainer against NAPOCOR and TRANSCO, which was docketed as Civil Case No. 11475-AF.
In its Complaint, LANDTRADE alleged that it acquired from Teofilo, through Atty. Cabildo, two
parcels of land at Sitio Nunucan, Overton, Fuentes, Brgy. Maria Cristina,Iligan City, with a combined

area of 270,255 square meters or around 27.03 hectares, as evidenced by a Deed of Absolute
Sale[38] dated October 1, 1996. Certain portions of said parcels of land were being occupied
by the Overton Sub-station and Agus 7 Warehouse of NAPOCOR and TRANSCO, through the tolerance
of LANDTRADE. Upon failure of NAPOCOR and TRANSCO to pay rentals or to vacate the subject
properties after demands to do so, LANDTRADE filed the present Complaint for Unlawful Detainer,
plus damages in the amount of P450,000.00 as yearly rental from date of the first extra-judicial
demand until NAPOCOR and TRANSCO vacate the subject properties.
In their separate Answers, NAPOCOR and TRANSCO denied the material allegations in the
Complaint and countered, by way of special and affirmative defenses, that the Complaint was barred
by res judicata; that the MTCC has no jurisdiction over the subject matter of the action; and that
LANDTRADE lacked the legal capacity to sue.
On February 17, 2004, the MTCC rendered its Decision [39] in favor of LANDTRADE. The MTCC
disposed:
WHEREFORE, premises considered, judgment is hereby rendered in favor of Plaintiff
Land Trade Realty Corporation represented by Atty. Max C. Tabimina and against
defendant National Power Corporation represented by its President, Mr. Rogelio M.
Murga and co-defendant TRANSCO represented by its President Dr. Allan T. Ortiz and
Engr. Lorrymir A. Adaza, Manager, NAPOCOR-Mindanao, Regional Center, Ma.
Cristina, Iligan City, ordering:
1. Defendants National Power Corporation and TRANSCO, their agents or
representatives or any person/s acting on its behalf or under its authority to vacate the
premises;
2. Defendants NAPOCOR and TRANSCO to pay Plaintiff jointly and solidarily:
a. Php500,000.00 a month representing fair rental value or compensation since
June 29, 1978 until defendant shall have vacated the premises;
b. Php20,000.00 for and as attorneys fees and
c. Cost of suit.
Execution shall issue immediately upon motion, unless an appeal has been
perfected and the defendant to stay execution files a sufficient supersedeas bond,
approved by this Court and executed in favor of the plaintiff, to pay the rents, damages,
and costs accruing down to the time of judgment appealed from, and unless, during the
pendency of the appeal, defendants deposit with the appellate court the amount
of P500,000.00 per month, as reasonable value of the use and occupancy of the
premises for the preceding month or period on or before the tenth day of each
succeeding month or period.[40]

NAPOCOR and TRANSCO seasonably filed a Joint Notice of Appeal. Their appeal, docketed as
Civil Case No. 6613, was initially assigned to the RTC-Branch 5, presided over by Judge Maximino
Magno Libre (Judge Libre).

LANDTRADE filed on June 24, 2004 a Motion for Execution, asserting that NAPOCOR and
TRANSCO had neither filed a supersedeas bond with the MTCC nor periodically deposited with the RTC
the monthly rental for the properties in question, so as to stay the immediate execution pending
appeal of the MTCC judgment. However, the said Motion failed to comply with the required notice of
hearing under Rule 15, Section 5 of the Rules of Court. LANDTRADE then filed a Motion to Withdraw
and/or Replace Notice of Hearing.
NAPOCOR and TRANSCO filed on July 13, 2004 a Joint Motion to Suspend Proceedings
citing Amagan v. Marayag,[41] in which the Court ruled that if circumstances should require, the
proceedings in an ejectment case may be suspended in whatever stage it may be found. Since
LANDTRADE anchors its right to possession of the subject parcels of land on the Deed of Sale
executed in its favor by Teofilo on October 1, 1996, the ejectment case should be held in abeyance
pending the resolution of other cases in which title over the same properties are in issue, i.e., (1) Civil
Case No. 6600, the action for the annulment of the Deed of Sale dated October 1, 1996 filed by
Teofilo against LANDTRADE pending before the RTC-Branch 4; and (2) Civil Case No. 4452, the
Quieting of Title Case filed by Vidal and AZIMUTH against Teofilo and Atty. Cabildo pending before the
RTC-Branch 3.
LANDTRADE filed on July 19, 2004 another Motion for Execution, which was heard together
with the Joint Motion to Suspend Proceedings of NAPOCOR and TRANSCO. After said hearing, the RTCBranch 5 directed the parties to file their memoranda on the two pending Motions.
LANDTRADE, in its Memorandum, maintained that the pendency of Civil Case No. 4452, the
Quieting of Title Case, should not preclude the execution of the MTCC judgment in the Unlawful
Detainer Case because the issue involved in the latter was only the material possession or possession
de facto of the parcels of land in question.LANDTRADE also reported that Civil Case No. 6600, the
action for annulment of the Deed of Sale dated October 1, 1996 instituted by Teofilo, was already
dismissed given that the RTC-Branch 4 had approved the Compromise Agreement executed between
LANDTRADE and Teofilo.
NAPOCOR and TRANSCO likewise filed their respective Memoranda. Subsequently, NAPOCOR filed a
Supplement to its Memorandum to bring to the attention of the RTC-Branch 5 the Decision rendered
on July 17, 2004 by the RTC-Branch 3 in Civil Case No. 4452, the Quieting of Title Case, categorically
declaring Teofilo, the predecessor-in-interest of LANDTRADE, as having no right at all to the subject
parcels of land. Resultantly, the right of LANDTRADE to the two properties, which merely emanated
from Teofilo, was effectively declared as non-existent too.
On August 4, 2004, the RTC-Branch 5 issued an Order [42] denying the Joint Motion to Suspend
Proceedings of NAPOCOR and TRANSCO. The RTC held that the pendency of other actions involving

the same parcels of land could not stay execution pending appeal of the MTCC judgment because
NAPOCOR and TRANSCO failed to post the required bond and pay the monthly rentals.
Five days later, on August 9, 2004, the RTC-Branch 5 issued another Order[43] granting the
Motion of LANDTRADE for execution of the MTCC judgment pending appeal.
The next day, on August 10, 2004, the Acting Clerk of Court, Atty. Joel M. Macaraya, Jr., issued
a Writ of Execution Pending Appeal[44] which directed Sheriff IV Alberto O. Borres (Sheriff Borres) to
execute the MTCC Decision dated February 17, 2004.
A day later, on August 11, 2004, Sheriff Borres issued two Notices of Garnishment[45] addressed to
PNB and Land Bank of the Philippines in Iligan City, garnishing all the goods, effects, stocks, interests
in stocks and shares, and any other personal properties belonging to NAPOCOR and TRANSCO which
were being held by and under the possession and control of said banks. On even date, Sheriff Borres
also issued a Notification[46] to NAPOCOR and TRANSCO for them to vacate the subject parcels of land;
and to pay LANDTRADE the sums of (a) P156,000,000.00, representing the total fair rental value for
the said properties, computed at P500,000.00 per month, beginning June 29, 1978 until June 29,
2004, or for a period of 26 years, and (b) P20,000.00 as attorney's fees.
Thereafter, NAPOCOR and TRANSCO each filed before the Court of Appeals in Cagayan de Oro City a
Petition for Certiorari, under Rule 65 of the Rules of Court, with prayer for the issuance of a TRO and
writ of preliminary injunction. The Petitions, docketed as CA-G.R. SP Nos. 85174 and 85841, were
eventually consolidated.
The Court of Appeals issued on August 18, 2004 a TRO [47] enjoining the enforcement and
implementation of the Order of Execution and Writ of Execution Pending Appeal of the RTC-Branch 5
and Notices of Garnishment and Notification of Sheriff Borres.
The Court of Appeals, in its Decision [48] dated November 23, 2005, determined that public
respondents did commit grave abuse of discretion in allowing and/or effecting the execution of the
MTCC judgment pending appeal, since NAPOCOR and TRANSCO were legally excused from complying
with the requirements for a stay of execution specified in Rule 70, Section 19 of the Rules of Court,
particularly, the posting of a supersedeas bond and periodic deposits of rental payments. The
decretal portion of said appellate court Decision states:
ACCORDINGLY, the two petitions at bench are GRANTED; the Order dated 9
August 2004, the Writ of Execution Pending Appeal dated 10 August 2004, the two
Notices of Garnishment dated 11 August 2004, and the Notification dated 11 August
2004, are ANNULLED and SET ASIDE.[49]

Displeased, LANDTRADE elevated the case to this Court on January 10, 2006 via a Petition for
Review on Certiorari under Rule 45 of the Rules of Court, which was docketed as G.R. No. 170505.
In the meantime, with the retirement of Judge Libre and the inhibition [50] of Judge Oscar
Badelles, the new presiding judge of RTC-Branch 5, Civil Case No. 6613 was re-raffled to the RTCBranch 1, presided over by Judge Mangotara. The RTC-Branch 1 promulgated on December 12, 2005 a
Decision[51] in Civil Case No. 6613 which affirmedin toto the February 17, 2004 Decision of the MTCC in
Civil Case No. 11475-AF favoring LANDTRADE.
NAPOCOR and TRANSCO filed with the RTC-Branch 1 twin Motions, namely: (1) Motion for
Reconsideration of the Decision dated December 12, 2005; and (2) Motion for Inhibition of Judge
Mangotara. The RTC-Branch 1 denied both Motions in a Resolution dated January 30, 2006.
NAPOCOR and TRANSCO filed with the Court of Appeals separate Petitions for Review with
prayer for TRO and/or a writ of preliminary injunction, which were docketed as CA-G.R. SP Nos. 00854
and 00889, respectively. In a Resolution dated March 24, 2006, the Court of Appeals granted the
prayer for TRO of NAPOCOR and TRANSCO.
With the impending lapse of the effectivity of the TRO on May 23, 2006, NAPOCOR filed on May 15,
2006 with the Court of Appeals a Manifestation and Motion praying for the resolution of its application
for preliminary injunction.
On May 23, 2006, the same day the TRO lapsed, the Court of Appeals granted the motions for
extension of time to file a consolidated comment of LANDTRADE. Two days later, LANDTRADE filed an
Omnibus Motion seeking the issuance of (1) a writ of execution pending appeal, and (2) the
designation of a special sheriff in accordance with Rule 70, Section 21 of the Rules of Court.
In a Resolution[52] dated June 30, 2006, the Court of Appeals granted the Omnibus Motion of
LANDTRADE and denied the applications for the issuance of a writ of preliminary injunction of
NAPOCOR and TRANSCO. In effect, the appellate court authorized the execution pending appeal of the
judgment of the MTCC, affirmed by the RTC-Branch 1, thus:
IN LIGHT OF THE ABOVE DISQUISITIONS, this Court resolves to grant the
[LANDRADE]s omnibus motion for execution pending appeal of the decision rendered in
its favor which is being assailed in these consolidated petitions for review. Accordingly,
the [NAPOCOR and TRANSCOs] respective applications for issuance of writ of
preliminary injunction are both denied for lack of factual and legal bases. The Municipal
Trial Court in Cities, Branch 2, Iligan City, which at present has the custody of the
records of the case a quo, is hereby ordered to cause the immediate issuance of a writ
of execution relative to its decision dated 17 February 2004 in Civil Case No. 11475-AF.
[53]

On July 20, 2006, NAPOCOR filed with this Court a Petition for Certiorari and Prohibition under
Rule 65 of the Rules of Court with an urgent plea for a TRO, docketed as G.R. No. 173355-56. On
August 2, 2006, TRANSCO filed with this Court its own Petition for Certiorari, docketed as G.R. No.
173563-64.
On July 21, 2006, NAPOCOR filed an Urgent Motion for the Issuance of a TRO in G.R. No.
173355-56. In a Resolution[54] dated July 26, 2006, the Court granted the Motion of NAPOCOR and
issued a TRO,[55] effective immediately, which enjoined public and private respondents from
implementing the Resolution dated June 30, 2006 of the Court of Appeals in CA-G.R. SP Nos. 00854
and 00889 and the Decision dated February 17, 2004 of the MTCC in Civil Case No. 11475-AF.
On July 31, 2006, Vidal and AZIMUTH filed a Motion for Leave to Intervene and to Admit Attached
Comment-in-Intervention, contending therein that Vidal was the lawful owner of the parcels of land
subject of the Unlawful Detainer Case as confirmed in the Decision dated July 17, 2004 of the RTCBranch 3 in Civil Case No. 4452. In a Resolution dated September 30, 2006, the Court required the
parties to comment on the Motion of Vidal and AZIMUTH, and deferred action on the said Motion
pending the submission of such comments.
The Cancellation of Titles and Reversion Case
(G.R. No. 173401)

On October 13, 2004, the Republic filed a Complaint for the Cancellation of OCT Nos. 0-1200
(a.f.) and 0-1201 (a.f.) and Reversion against the late Doa Demetria, represented by her alleged heirs,
Vidal and/or Teofilo, together with AZIMUTH and LANDTRADE. The Complaint, docketed as Civil Case
No. 6686, was raffled to the RTC-Branch 4.
The Republic sought the cancellation of OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.) and the
reversion of the parcels of land covered thereby to the Government based on the following allegations
in its Complaint, under the heading Cause of Action:
5. On October 15, 1998, Original Certificates of Title (OCTs) Nos. 0-1200 (a.f.) and
0-1201 (a.f.) were issued in the name of Demetria Cacho, widow, now deceased
consisting of a total area of Three Hundred Seventy-Eight Thousand Seven Hundred and
Seven (378,707) square meters and Three Thousand Seven Hundred Thirty-Five (3,635)
square meters, respectively, situated in Iligan City, x x x
xxxx
6. The afore-stated titles were issued in implementation of a decision rendered in
LRC (GLRO) Record Nos. 6908 and 6909 dated December 10, 1912, as affirmed by the
Honorable Supreme Court in Cacho v. Government of the United States, 28 Phil. 616
(December 10, 1914),
7. The decision in LRC (GLRO) Record Nos. 6908 and 6909, upon which the titles
were issued, did not grant the entire area applied for therein. x x x
xxxx

9. As events turned out, the titles issued in connection with LRC (GLRO) Record
Nos. 6908 and 6909 i.e. OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.) cover property MUCH
LARGER in area than that granted by the land registration court in its corresponding
decision, supra.
10. While the LRC Decision, as affirmed by the Honorable Supreme Court,
granted only the southern part of the 37.87 hectare land subject of LRC (GLRO)
Record Case No. 6909, the ENTIRE 37.87 hectares is indicated as the property
covered by OCT 0-1200 (a.f.). Worse, OCT No. 0-1200 (a.f.) made reference to Case No.
6908 as basis thereof, yet, the decision in said case is clear:
(i)

The parcel object of Case No. 6908 is small (Cacho vs.

Government of the United States, 28 Phil. 616, p. 619)

(ii)

The parcel of land claimed by the applicant in Case No.

6909 is the bigger of two parcels and contains 37.87 hectares

11. More significantly, the technical description in Original Certificate of Title No.
0-1200 (a.f.) specifies the date of survey as August 31 to September 1, 1910, which is
EARLIER than the date the Supreme Court, in Cacho supra, resolved LRC (GLRO) Record
No. 6909 (involving 37.87 hectares). In resolving the application involving the 37.87
hectares, the Honorable Supreme Court declared that only the southern part of the
37.87 hectare property applied for is granted and that a new survey specifying the
southern part thereof should be submitted.Accordingly, any survey involving the
granted southern part should bear a date subsequent to the December 10, 1914
Supreme Court decision. x x x
xxxx
12. The Honorable Supreme Court further declared that the Decision in LRC
(GLRO) Record No. 6909 was reserved:
Final decision in these case is reserved until the presentation of the new
plan. (28 Phil. 616, p. 631; Underscoring supplied)
In other words, as of December 10, 1914, when the Honorable Supreme Court rendered
its Decision on appeal in LRC (GLRO) Record No. 6909, final decision of the case was still
reserved until the presentation of a new plan. The metes and bounds of OCT No. 01200 (a.f.) could not have been the technical description of the property granted by the
court described as the southern part of the large parcel object of expediente 6909 only
(Cacho vs. Government of the United States, 28 Phil. 617, 629). As earlier
stated, the technical description appearing in said title was the result of a survey
conducted in 1910 or before the Supreme Court decision was rendered in 1914.
13. In the same vein, Original Certificate of Title No. 0-1201 (a.f.) specifies LRC (GLRO)
Record No. 6909 as the basis thereof (see front page of OCT No. 0-1201 (a.f.)). Yet, the
technical description makes, as its reference, Lot 1, Plan II-3732, LR Case No. 047, LRC
(GLRO) Record No. 6908 (see page 2 of said title). A title issued pursuant to a
decision may only cover the property subject of the case. A title cannot properly be
issued pursuant to a decision in Case 6909, but whose technical description is based on
Case 6908.
14. The decision in LRC (GLRO) Record Nos. 6908 and 6909 has become final and
executory, and it cannot be modified, much less result in an increased area of the
property decreed therein.
xxxx

16. In sum, Original Certificates of Title Nos. 0-1200 (a.f.) and 0-1201 (a.f.), as issued,
are null and void since the technical descriptions vis--vis the areas of the parcels of land
covered therein went beyond the areas granted by the land registration court in LRC
(GLRO) Record Nos. 6908 and 6909.[56]

Vidal and AZIMUTH filed a Motion to Dismiss dated December 23, 2004 on the grounds that
(1) the Republic has no cause of action; (2) assuming arguendo that the Republic has a cause of
action, its Complaint failed to state a cause of action; (3) assuming arguendo that the Republic has
a cause of action, the same is barred by prior judgment; (4) assuming further that the Republic has
a cause of action, the same was extinguished by prescription; and (4) the Republic is guilty of
forum shopping.
Upon motion of the Republic, the RTC-Branch 4 issued an Order [57] dated October 4, 2005,
declaring LANDTRADE and Teofilo, as represented by Atty. Cabildo, in default since they failed to
submit their respective answers to the Complaint despite the proper service of summons upon
them.
LANDTRADE subsequently filed its Answer with Compulsory Counterclaim dated September
28, 2005. It also moved for the setting aside and reconsideration of the Order of Default issued
against it by the RTC-Branch 4 on October 20, 2005.
On December 13, 2005, the RTC-Branch 4 issued an Order [58] dismissing the Complaint of
the Republic in Civil Case No. 6686, completely agreeing with Vidal and AZIMUTH.
The RTC-Branch 4 reasoned that the Republic had no cause of action because there was no
showing that the late Doa Demetria committed any wrongful act or omission in violation of any
right of the Republic. Doa Demetria had sufficiently proven her ownership over the parcels of land
as borne in the ruling of the LRC in GLRO Record Nos. 6908 and 6909. On the other hand, the
Republic had no more right to the said parcels of land. The Regalian doctrine does not apply in this
case because the titles were already issued to Doa Demetria and segregated from the mass of the
public domain.
The RTC-Branch 4 likewise held that the Republic failed to state a cause of action in its
Complaint. The arguments of the Republic i.e., the absence of a new survey plan and deed, the
titles covered properties with much larger area than that granted by the LRC had been answered
squarely in the 1997 Cacho case. Also, the Complaint failed to allege that fraud had been
committed in having the titles registered and that the Director of Lands requested the reversion of
the subject parcels of land.
The RTC-Branch 4 was convinced that the Complaint was barred by res judicata because
the 1914 Cacho case already decreed the registration of the parcels of land in the late Doa

Demetrias name and the 1997 Cacho case settled that there was no merit in the argument that the
conditions imposed in the first case have not been complied with.
The RTC-Branch 4 was likewise persuaded that the cause of action or remedy of the
Republic was lost or extinguished by prescription pursuant to Article 1106 of the Civil Code and
Section 32 of Presidential Decree No. 1529, otherwise known as the Land Registration Decree,
which prescribes a one-year period within which to file an action for the review of a decree of
registration.
Finally, the RTC-Branch 4 found the Republic guilty of forum shopping because there is
between this case, on one hand, and the 1914 and 1997 Cacho cases, on the other, identity of
parties, as well as rights asserted and reliefs prayed for, as the contending parties are claiming
rights of ownership over the same parcels of land.
The Republic filed a Motion for Reconsideration of the dismissal of its Complaint but the
same was denied by the RTC-Branch 4 in its Order[59] dated May 16, 2006.
Assailing the Orders dated December 13, 2005 and May 16, 2006 of the RTC-Branch 4, the
Republic filed on August 11, 2006 a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, which was docketed as G.R. No. 173401.
III
ISSUES AND DISCUSSIONS
Expropriation Case
(G.R. No. 170375)
The Republic, in its consolidated Petitions challenging the Resolutions dated July 12, 2005 and
October 24, 2005 of the RTC-Branch 1 in Civil Case No. 106, made the following assignment of errors:
RESPONDENT JUDGE GRAVELY ERRED IN ORDERING THE DISMISSAL
EXPROPRIATION COMPLAINT IN CIVIL CASE NO. 106 CONSIDERING THAT:

OF

(a) THE NON-JOINDER OF PARTIES IS NOT A GROUND FOR THE DISMISSAL

OF AN ACTION PURSUANT TO SECTION 11, RULE 3 OF THE 1997 RULES OF
CIVIL PROCEDURE;
(b) AN EXPROPRIATION PROCEEDING IS AN ACTION QUASI IN REM
WHEREIN THE FACT THAT THE OWNER OF THE PROPERTY IS MADE A PARTY
TO THE ACTION IS NOT ESSENTIALLY INDISPENSABLE;
(c) PETITIONER DID NOT COMMIT ANY FORUM SHOPPING WITH THE FILING
OF THE REVERSION COMPLAINT DOCKETED AS CIVIL CASE NO. 6686
WHICH
IS
PENDING
BEFORE
BRANCH
4
OF
[60]
THE REGIONAL TRIAL COURT OF ILIGAN CITY.

THE

Filing of consolidated petitions under both Rules 45

and 65

At the outset, the Court notes that the Republic filed a pleading with the caption Consolidated
Petitions for Review on Certiorari (Under Rule 45) and Certiorari (Under Rule 65) of the Rules of
Court. The Republic explains that it filed the Consolidated Petitions pursuant to Metropolitan
Waterworks and Sewerage System (MWSS) v. Court of Appeals[61](MWSS case).
The reliance of the Republic on the MWSS case to justify its mode of appeal is misplaced, taking the
pronouncements of this Court in said case out of context.
The issue in the MWSS case was whether a possessor in good faith has the right to remove useful
improvements, and not whether consolidated petitions under both Rules 45 and 65 of the Rules of
Court can be filed. Therein petitioner MWSS simply filed an appeal by certiorari under Rule 45 of the
Rules of Court, but named the Court of Appeals as a respondent. The Court clarified that the only
parties in an appeal by certiorari under Rule 45 of the Rules of Court are the appellant as petitioner
and the appellee as respondent.The court which rendered the judgment appealed from is not a party
in said appeal. It is in the special civil action of certiorari under Rule 65 of the Rules of Court where
the court or judge is required to be joined as party defendant or respondent. The Court, however, also
acknowledged that there may be an instance when in an appeal by certiorariunder Rule 45,
the petitioner-appellant would also claim that the court that rendered the appealed judgment acted
without or in excess of its jurisdiction or with grave abuse of discretion, in which case, such court
should be joined as a party-defendant or respondent. While the Court may have stated that in such an
instance, the petition for review oncertiorari under Rule 45 of the Rules of Court is at the same time a
petition for certiorari under Rule 65, the Court did not hold that consolidated petitions under both
Rules 45 and 65 could or should be filed.
The Court, in more recent cases, had been stricter and clearer on the distinction between
these two modes of appeal. In Nunez v. GSIS Family Bank,[62] the Court elucidated:
In Ligon v. Court of Appeals where the therein petitioner described her petition as
an appeal under Rule 45 and at the same time as a special civil action of certiorari
under Rule 65 of the Rules of Court, this Court, in frowning over what it described as
a chimera, reiterated that the remedies of appeal and certiorari are mutually exclusive
and not alternative nor successive.
To be sure, the distinctions between Rules 45 and 65 are far and wide. However,
the most apparent is that errors of jurisdiction are best reviewed in a special civil action
for certiorari under Rule 65 while errors of judgment can only be corrected by appeal in
a petition for review under Rule 45.

But in the same case, the Court also held that:

This Court, x x x, in accordance with the liberal spirit which pervades the Rules of
Court and in the interest of justice may treat a petition for certiorari as having been
filed under Rule 45, more so if the same was filed within the reglementary period for
filing a petition for review.[63]

It is apparent in the case at bar that the Republic availed itself of the wrong mode of appeal by
filing Consolidated Petitions for Review under Rule 45 and for Certiorariunder Rule 65, when these are
two separate remedies that are mutually exclusive and neither alternative nor successive.
Nevertheless,

the

Court

shall

treat

the

Consolidated

Petitions

as

Petition

for

Review

on Certiorari under Rule 45 and the allegations therein as errors of judgment. As the records show,
the Petition was filed on time under Rules 45. Before the lapse of the 15-day reglementary period to
appeal under Rule 45, the Republic filed with the Court a motion for extension of time to file its
petition. The Court, in a Resolution[64] dated January 23, 2006, granted the Republic a 30-day
extension, which was to expire on December 29, 2005. The Republic was able to file its Petition on the
last day of the extension period.
Hierarchy of courts
The direct filing of the instant Petition with this Court did not violate the doctrine of hierarchy
of courts.
According to Rule 41, Section 2(c)[65] of the Rules of Court, a decision or order of the RTC may be
appealed to the Supreme Court by petition for review on certiorari under Rule 45, provided that such
petition raises only questions of law.[66]
A question of law exists when the doubt or controversy concerns the correct application of law
or jurisprudence to a certain set of facts; or when the issue does not call for an examination of the
probative value of the evidence presented, the truth or falsehood of facts being admitted. [67] A
question of fact exists when the doubt or difference arises as to the truth or falsehood of facts or
when the query invites calibration of the whole evidence considering mainly the credibility of the
witnesses, the existence and relevancy of specific surrounding circumstances, as well as their relation
to each other and to the whole, and the probability of the situation.[68]
Here, the Petition of the Republic raises pure questions of law, i.e., whether Civil Case No. 106
should

have

been

dismissed for

failure

to

implead indispensable

parties

and

for forum

shopping. Thus, the direct resort by the Republic to this Court is proper.
The Court shall now consider the propriety of the dismissal by the RTC-Branch 1 of the
Complaint for Expropriation of the Republic.

The proper parties in the expropriation proceedings

The right of the Republic to be substituted for ISA as plaintiff in Civil Case No. 106 had long
been affirmed by no less than this Court in the ISA case. The dispositive portion of the ISA case reads:
WHEREFORE, for all the foregoing, the Decision of the Court of Appeals dated 8
October 1991 to the extent that it affirmed the trial courts order dismissing the
expropriation proceedings, is hereby REVERSED and SET ASIDE and the case is
REMANDED to the court a quo which shall allow the substitution of the Republic of the
Philippines for petitioner Iron Steel Authority for further proceedings consistent with this
Decision. No pronouncement as to costs.[69]

The ISA case had already become final and executory, and entry of judgment was made in said
case on August 31, 1998. The RTC-Branch 1, in an Order dated November 16, 2001, effected the
substitution of the Republic for ISA.
The failure of the Republic to actually file a motion for execution does not render the
substitution void. A writ of execution requires the sheriff or other proper officer to whom it is directed
to enforce the terms of the writ.[70] The November 16, 2001 Order of the RTC-Branch 1 should be
deemed as voluntary compliance with a final and executory judgment of this Court, already rendering
a motion for and issuance of a writ of execution superfluous.
Besides, no substantive right was violated by the voluntary compliance by the RTC-Branch 1
with the directive in the ISA case even without a motion for execution having been filed. To the
contrary, the RTC-Branch 1 merely enforced the judicially determined right of the Republic to the
substitution. While it is desirable that the Rules of Court be faithfully and even meticulously observed,
courts should not be so strict about procedural lapses that do not really impair the administration of
justice. If the rules are intended to insure the orderly conduct of litigation it is because of the higher
objective they seek which is the protection of the substantive rights of the parties. [71]
The Court also observes that MCFC did not seek any remedy from the Order dated November
16, 2001 of the RTC-Branch 1. Consequently, the said Order already became final, which even the
RTC-Branch 1 itself cannot reverse and set aside on the ground of honest mistake.
The RTC-Branch 1 dismissed the Complaint in Civil Case No. 106 on another ground: that MCFC
is not a proper party to the expropriation proceedings, not being the owner of the parcels of land
sought to be expropriated. The RTC-Branch 1 ratiocinated that since the exercise of the power of
eminent domain involves the taking of private land intended for public use upon payment of just
compensation to the owner, then a complaint for expropriation must be directed against the owner of
the land sought to be expropriated.

The Republic insists, however, that MCFC is a real party-in-interest, impleaded as a defendant
in the Complaint for Expropriation because of its possessory or occupancy rights over the subject
parcels of land, and not by reason of its ownership of the said properties. In addition, the Republic
maintains that non-joinder of parties is not a ground for the dismissal of an action.
Rule 67, Section 1 of the then Rules of Court [72] described how expropriation proceedings
should be instituted:
Section 1. The complaint. The right of eminent domain shall be exercised by the
filing of a complaint which shall state with certainty the right and purpose of
condemnation, describe the real or personal property sought to be condemned, and
join as defendants all persons owning or claiming to own, or occupying, any
part thereof or interest therein, showing, so far as practicable, the interest of each
defendant separately. If the title to any property sought to be condemned
appears to be in the Republic of the Philippines, although occupied by private
individuals, or if the title is otherwise obscure or doubtful so that the plaintiff cannot
with accuracy or certainty specify who are the real owners, averment to that effect may
be made in the complaint.[73] (Emphases supplied.)
For sure, defendants in an expropriation case are not limited to the owners of the property to be
expropriated, and just compensation is not due to the property owner alone. As this Court held in De
Knecht v. Court of Appeals[74]:
The defendants in an expropriation case are not limited to the owners
of the property condemned. They include all other persons owning, occupying
or claiming to own the property. When [property] is taken by eminent domain,
the owner x x x is not necessarily the only person who is entitled to
compensation. In the American jurisdiction, the term owner when employed in
statutes relating to eminent domain to designate the persons who are to be made
parties to the proceeding, refer, as is the rule in respect of those entitled to
compensation, to all those who have lawful interest in the property to be condemned,
including a mortgagee, a lessee and a vendee in possession under an executory
contract. Every person having an estate or interest at law or in equity in the land taken
is entitled to share in the award. If a person claiming an interest in the land sought to be
condemned is not made a party, he is given the right to intervene and lay claim to the
compensation. (Emphasis supplied.)

At the time of the filing of the Complaint for Expropriation in 1983, possessory/occupancy rights of
MCFC over the parcels of land sought to be expropriated were undisputed. In fact, Letter of
Instructions No. 1277[75] dated November 16, 1982 expressly recognized that portions of the lands
reserved by Presidential Proclamation No. 2239, also dated November 16, 1982, for the use and
immediate occupation by the NSC, were then occupied by an idle fertilizer plant/factory and related
facilities of MCFC. It was ordered in the same Letter of Instruction that:
(1) NSC shall negotiate with the owners of MCFC, for and on behalf of the
Government, for the compensation of MCFC's present occupancy rights on the subject
lands at an amount of Thirty (P30.00) Pesos per square meter or equivalent to the
assessed value thereof (as determined by the City Assessor of Iligan), whichever is
higher. NSC shall give MCFC the option to either remove its aforesaid plant, structures,
equipment, machinery and other facilities from the lands or to sell or cede ownership

thereof to NSC at a price equivalent to the fair market value thereof as appraised by the
Asian Appraisal Inc. as may be mutually agreed upon by NSC and MCFC.
(2) In the event that NSC and MCFC fail to agree on the foregoing within sixty
(60) days from the date hereof, the Iron and Steel Authority (ISA) shall exercise its
authority under Presidential Decree (PD) No. 272, as amended, to initiate the
expropriation of the aforementioned occupancy rights of MCFC on the subject lands as
well as the plant, structures, equipment, machinery and related facilities, for and on
behalf of NSC, and thereafter cede the same to NSC. During the pendency of the
expropriation proceedings, NSC shall take possession of the properties, subject to
bonding and other requirements of P.D. 1533. (Emphasis supplied.)

Being the occupant of the parcel of land sought to be expropriated, MCFC could very well be named a
defendant in Civil Case No. 106. The RTC-Branch 1 evidently erred in dismissing the Complaint for
Expropriation against MCFC for not being a proper party.
Also erroneous was the dismissal by the RTC-Branch 1 of the original Complaint for Expropriation for
having been filed only against MCFC, the occupant of the subject land, but not the owner/s of the said
property.
Dismissal is not the remedy for misjoinder or non-joinder of parties. According to Rule 3, Section 11 of
the Rules of Court:
SEC. 11. Misjoinder and non-joinder of parties. Neither misjoinder nor non-joinder
of parties is ground for dismissal of an action. Parties may be dropped or added by
order of the court on motion of any party or on its own initiative at any stage of the
action and on such terms as are just. Any claim against a misjoined party may be
severed and proceeded with separately. (Emphasis supplied.)

MCFC contends that the aforequoted rule does not apply in this case where the party not joined, i.e.,
the owner of the property to be expropriated, is an indispensable party.
An indispensable party is a party-in-interest without whom no final determination can be had of an
action.[76]
Now, is the owner of the property an indispensable party in an action for expropriation? Not
necessarily. Going back to Rule 67, Section 1 of the Rules of Court, expropriation proceedings may be
instituted even when title to the property sought to be condemned appears to be in the Republic of
the Philippines, although occupied by private individuals. The same rule provides that a complaint for
expropriation shall name as defendants all persons owning or claiming to own, or occupying, any
part thereof or interest in the property sought to be condemned. Clearly, when the property already
appears to belong to the Republic, there is no sense in the Republic instituting expropriation
proceedings against itself. It can still, however, file a complaint for expropriation against the private

persons occupying the property. In such an expropriation case, the owner of the property is not an
indispensable party.
To recall, Presidential Proclamation No. 2239 explicitly states that the parcels of land reserved
to NSC are part of the public domain, hence, owned by the Republic. Letter of Instructions No. 1277
recognized only the occupancy rights of MCFC and directed NSC to institute expropriation proceedings
to determine the just compensation for said occupancy rights. Therefore, the owner of the property is
not an indispensable party in the original Complaint for Expropriation in Civil Case No. 106.
Assuming for the sake of argument that the owner of the property is an indispensable party in the
expropriation proceedings, the non-joinder of said party would still not warrant immediate dismissal
of the complaint for expropriation. In Vda. De Manguerra v. Risos,[77] the Court applied Rule 3, Section
11 of the Rules of Court even in case of non-joinder of an indispensable party, viz:
[F]ailure to implead an indispensable party is not a ground for the dismissal of an
action. In such a case, the remedy is to implead the non-party claimed to be
indispensable. Parties may be added by order of the court, on motion of the party or on
its own initiative at any stage of the action and/or such times as are just. If the
petitioner/plaintiff refuses to implead an indispensable party despite the
order of the court, the latter may dismiss the complaint/petition for the
petitioner's/plaintiff's failure to comply. (Emphasis supplied.)

In this case, the RTC-Branch 1 did not first require the Republic to implead the alleged owner/s
of the parcel of land sought to be expropriated. Despite the absence of any order from the Court, the
Republic upon becoming aware that the parcels of land involved in the 1914 Cacho case and 1997
Cacho case, claimed by Teofilo and LANDTRADE, and Vidal and AZIMUTH, encroached into and
overlapped with the parcel of land subject of Civil Case No. 106 sought leave of court to file a
Supplemental Complaint to implead these four parties. The RTC-Branch 1 did not take the
Supplemental Complaint of the Republic into consideration. Instead, it dismissed outright the original
Complaint for Expropriation against MCFC.
Forum shopping
The RTC-Branch 1 further erred in finding that the Republic committed forum shopping by (1)
simultaneously instituting the actions for expropriation (Civil Case No. 106) and reversion (Civil Case
No. 6686) for the same parcels of land; and (2) taking inconsistent positions when it conceded lack of
ownership over the parcels of land in the expropriation case but asserted ownership of the same
properties in the reversion case.
There is no dispute that the Republic instituted reversion proceedings (Civil Case No. 6686) for
the same parcels of land subject of the instant Expropriation Case (Civil Case No. 106). The Complaint

for Cancellation of Titles and Reversion[78] dated September 27, 2004 was filed by the Republic with
the RTC on October 13, 2004. The records, however, do not show when the Supplemental Complaint
for Expropriation[79] dated September 28, 2004 was filed with the RTC. Apparently, the Supplemental
Complaint for Expropriation was filed after the Complaint for Cancellation of Titles and Reversion
since the Republic mentioned in the former the fact of filing of the latter. [80] Even then, the Verification
and Certification of Non-Forum Shopping [81] attached to the Supplemental Complaint for Expropriation
did not disclose the filing of the Complaint for Cancellation of Titles and Reversion. Notwithstanding
such non-disclosure, the Court finds that the Republic did not commit forum shopping for filing both
Complaints.
In NBI-Microsoft Corporation v Hwang,[82] the Court laid down the circumstances when forum
shopping exists:
Forum-shopping takes place when a litigant files multiple suits involving the
same parties, either simultaneously or successively, to secure a favorable
judgment. Thus, it exists wherethe elements of litis pendentia are present, namely: (a)
identity of parties, or at least such parties who represent the same interests in both
actions; (b) identity of rights asserted and relief prayed for, the relief being founded on
the same facts; and (c) the identity with respect to the two preceding particulars in the
two cases is such that any judgment that may be rendered in the pending
case, regardless of which party is successful, would amount to res judicata in the other
case. Forum-shopping is an act of malpractice because it abuses court processes. x x x.

Here, the elements of litis pendencia are wanting. There is no identity of rights asserted and
reliefs prayed for in Civil Case No. 106 and Civil Case No. 6686.
Civil

Case

No.

106

was

instituted

against

MCFC

to

acquire,

for

public

purpose,

its

possessory/occupancy rights over 322,532 square meters or 32.25 hectares of land which, at the time
of the filing of the original Complaint in 1983, was not yet covered by any certificate of title. On the
other hand, Civil Case No. 6686 sought the cancellation of OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.),
which was entered into registration on December 4, 1998 in Doa Demetrias name, on the argument
that the parcels of land covered by said certificates exceeded the areas granted by the LRC to Doa
Demetria in GLRO Record Nos. 6908 and 6909, as affirmed by this Court in the 1914 Cacho case.
Expropriation vis--vis reversion
The Republic is not engaging in contradictions when it instituted both expropriation and reversion
proceedings for the same parcels of land. The expropriation and reversion proceedings are distinct
remedies that are not necessarily exclusionary of each other.
The filing of a complaint for reversion does not preclude the institution of an action for
expropriation. Even if the land is reverted back to the State, the same may still be subject to
expropriation as against the occupants thereof.

Also, Rule 67, Section 1 of the Rules of Court allows the filing of a complaint for expropriation
even when the title to any property sought to be condemned appears to be in the Republic of the
Philippines, although occupied by private individuals, or if the title is otherwise obscure or doubtful so
that the plaintiff cannot with accuracy or certainty specify who are the real owners. Rule 67, Section 9
of the Rules of Court further provides:
SEC. 9. Uncertain ownership; conflicting claims. If the ownership of the property
taken is uncertain, or there are conflicting claims to any part thereof, the court
may order any sum or sums awarded as compensation for the property to be paid to the
court for the benefit of the person adjudged in the same proceeding to be entitled
thereto. But the judgment shall require the payment of the sum or sums awarded to
either the defendant or the court before the plaintiff can enter upon the property, or
retain it for the public use or purpose if entry has already been made. (Emphasis
supplied.)

Hence, the filing by the Republic of the Supplemental Complaint for Expropriation impleading
Teofilo, Vidal, LANDTRADE, and AZIMUTH, is not necessarily an admission that the parcels of land
sought to be expropriated are privately owned. At most, the Republic merely acknowledged in its
Supplemental Complaint that there are private persons also claiming ownership of the parcels of
land. The Republic can still consistently assert, in both actions for expropriation and reversion, that
the subject parcels of land are part of the public domain.
In sum, the RTC-Branch 1 erred in dismissing the original Complaint and disallowing the
Supplemental Complaint in Civil Case No. 106. The Court reverses and sets aside the Resolutions
dated July 12, 2005 and October 24, 2005 of the RTC-Branch 1 in Civil Case 106, and reinstates the
Complaint for Reversion of the Republic.
The Quieting of Title Case
(G.R. Nos. 178779 and 178894)
Essentially, in their Petitions for Review on Certiorari under Rule 45 of the Rules of Court,
LANDTRADE and Teofilo, and/or Atty. Cabildo are calling upon this Court to determine whether the
Court of Appeals, in its Decision dated January 19, 2007 in CA-G.R. CV No. 00456, erred in (1)
upholding the jurisdiction of the RTC-Branch 3 to resolve the issues on Vidal's status, filiation, and
heirship in Civil Case No. 4452, the action for quieting of title; (2) not holding that Vidal and AZIMUTH
have neither cause of action nor legal or equitable title or interest in the parcels of land covered by
OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.); (3) finding the evidence sufficient to establish Vidals status
as Doa Demetrias granddaughter and sole surviving heir; and (4) not holding that Civil Case No. 4452
was already barred by prescription.

In their Comment, Vidal and AZIMUTH insisted on the correctness of the Court of Appeals
Decision dated January 19, 2007, and questioned the propriety of the Petition for Review filed by
LANDTRADE as it supposedly raised only factual issues.
The Court rules in favor of Vidal and AZIMUTH.
Petitions for review under Rule 45
A scrutiny of the issues raised, not just in the Petition for Review of LANDTRADE, but also those in the
Petition for Review of Teofilo and/or Atty. Cabildo, reveals that they are both factual and legal.
The Court has held in a long line of cases that in a petition for review on certiorari under Rule 45 of
the Rules of Court, only questions of law may be raised as the Supreme Court is not a trier of facts. It
is settled that as a rule, the findings of fact of the Court of Appeals especially those affirming the trial
court are final and conclusive and cannot be reviewed on appeal to the Supreme Court. The
exceptions to this rule are: (a) when the conclusion is a finding grounded entirely on speculations,
surmises or conjectures; (b) when the inference made is manifestly mistaken, absurd or impossible;
(c) when there is grave abuse of discretion; (d) when the judgment is based on a misapprehension of
facts; (e) when the findings of fact are conflicting; (f) when the Court of Appeals, in making its
findings, went beyond the issues of the case and the same is contrary to the admissions of both
appellant and appellee; (g) where the Court of Appeals manifestly overlooked certain relevant facts
not disputed by the parties and which, if properly considered, would justify a different conclusion; and
(h) where the findings of fact of the Court of Appeals are contrary to those of the trial court, or are
mere conclusions without citation of specific evidence, or where the facts set forth by the petitioner
are not disputed by the respondent, or where the findings of fact of the Court of Appeals are premised
on absence of evidence but are contradicted by the evidence on record. [83] None of these exceptions
exists in the Petitions at bar.
Be that as it may, the Court shall address in full-length all the issues tendered in the instant Petitions
for Review, even when factual, if only to bolster the conclusions reached by the RTC-Branch 3 and the
Court of Appeals, with which the Court fully concurs.
Jurisdiction vis--vis exercise of jurisdiction

LANDTRADE, Teofilo, and/or Atty. Cabildo argue that the RTC-Branch 3 had no jurisidiction to resolve
the issues of status, filiation, and heirship in an action for quieting of title as said issues should be
ventilated and adjudicated only in special proceedings under Rule 90, Section 1 of the Rules of Court,
pursuant to the ruling of this Court in Agapay v. Palang[84] (Agapay case) and Heirs of Guido
Yaptinchay and Isabel Yaptinchay v. Del Rosario [85] (Yaptinchay case). Even on the assumption that
the RTC-Branch 3 acquired jurisdiction over their persons, LANDTRADE, Teofilo, and/or Atty. Cabildo
maintain that the RTC-Branch 3 erred in the exercise of its jurisdiction by adjudicating and passing
upon the issues on Vidals status, filiation, and heirship in the Quieting of Title Case. Moreover,
LANDTRADE, Teofilo, and/or Atty. Cabildo aver that the resolution of issues regarding status, filiation,

and heirship is not merely a matter of procedure, but of jurisdiction which cannot be waived by the
parties or by the court.
The aforementioned arguments fail to persuade.
In the first place, jurisdiction is not the same as the exercise of jurisdiction. The Court distinguished
between the two, thus:
Jurisdiction is not the same as the exercise of jurisdiction. As distinguished from
the exercise of jurisdiction, jurisdiction is the authority to decide a cause, and not the
decision rendered therein. Where there is jurisdiction over the person and the
subject matter, the decision on all other questions arising in the case is but
an exercise of the jurisdiction. And the errors which the court may commit in the
exercise of jurisdiction are merely errors of judgment which are the proper subject of an
appeal.[86] (Emphasis supplied.)

Here, the RTC-Branch 3 unmistakably had jurisdiction over the subject matter and the parties
in Civil Case No. 4452.
Jurisdiction over the subject matter or nature of the action is conferred only by the Constitution
or by law. Once vested by law on a particular court or body, the jurisdiction over the subject matter or
nature of the action cannot be dislodged by anybody other than by the legislature through the
enactment of a law. The power to change the jurisdiction of the courts is a matter of legislative
enactment, which none but the legislature may do. Congress has the sole power to define, prescribe
and apportion the jurisdiction of the courts.[87]
The RTC has jurisdiction over an action for quieting of title under the circumstances described
in Section 19(2) of Batas Pambansa Blg. 129, as amended:
SEC. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive
original jurisdiction:
xxxx
(2) In all civil actions which involve the title to, or possession of, real
property, or any interest therein, where the assessed value of the property
involved exceeds Twenty thousand pesos (P20,000.00) or, for civil actions in
Metro Manila, where such value exceeds Fifty thousand pesos (P50,000.00) except
actions for forcible entry into and unlawful detainer of lands or buildings, original
jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts.

Records show that the parcels of land subject of Civil Case No. 4452 have a combined assessed
value of P35,398,920.00,[88] undisputedly falling within the jurisdiction of the RTC-Branch 3.

The RTC-Branch 3 also acquired jurisdiction over the person of Teofilo when he filed his Answer
to the Complaint of Vidal and AZIMUTH; and over the juridical personality of LANDTRADE when the
said corporation was allowed to intervene in Civil Case No. 4452.
Considering that the RTC-Branch 3 had jurisdiction over the subject matter and parties in Civil Case
No. 4452, then it can rule on all issues in the case, including those on Vidals status, filiation, and
heirship, in exercise of its jurisdiction. Any alleged erroneous finding by the RTC-Branch 3 concerning
Vidals status, filiation, and heirship in Civil Case No. 4452, is merely an error of judgment subject to
the affirmation, modification, or reversal by the appellate court when appealed.
The Agapay and Yaptinchay cases
LANDTRADE, Teofilo, and/or Atty. Cabildo cannot rely on the cases of Agapay and Yaptinchay to
support their position that declarations on Vidals status, filiation, and heirsip, should be made in
special proceedings and not in Civil Case No. 4452.
In the Agapay case, the deceased Miguel Agapay (Miguel) contracted two marriages. Miguel
married Carlina (sometimes referred to as Cornelia) in 1949, and they had a daughter named
Herminia, who was born in 1950. Miguel left for Hawaii a few months after his wedding to
Carlina. When Miguel returned to the Philippines in 1972, he did not live with Carlina and
Herminia. He married Erlinda in 1973, with whom he had a son named Kristopher, who was born in
1977. Miguel died in 1981. A few months after Miguels death, Carlina and Herminia filed a complaint
for recovery of ownership and possession with damages against Erlinda over a riceland and house
and lot in Pangasinan, which were allegedly purchased by Miguel during his cohabitation with
Erlinda. The RTC dismissed the complaint, finding little evidence that the properties pertained to the
conjugal property of Miguel and Carlina. The RTC went on to provide for the intestate shares of the
parties, particularly of Kristopher, Miguels illegitimate son. On appeal, the Court of Appeals: (1)
reversed the RTC judgment; (2) ordered Erlinda to vacate and deliver the properties to Carlina and
Herminia; and (3) ordered the Register of Deeds to cancel the Transfer Certificates of Title (TCTs) over
the subject property in the name of Erlinda and to issue new ones in the names of Carlina and
Herminia. Erlinda filed a Petition for Review with this Court.
In resolving Erlindas Petition, the Court held in the Agapay case that Article 148 of the Family
Code applied to Miguel and Erlinda. Article 148 specifically governs the property relations of a man
and a woman who are not capacitated to marry each other and live exclusively with each other as
husband and wife without the benefit of marriage or under a void marriage. Under said provision, only
the properties acquired by both parties through their actual joint contribution of money, property, or
industry shall be owned by them in common in proportion to their respective contributions. In this
case, the Court found that the money used to buy the subject properties all came from Miguel.

The Court then proceeded to address another issue in the Agapay case, more relevant to the
one at bar:
The second issue concerning Kristopher Palangs status and claim as an
illegitimate son and heir to Miguels estate is here resolved in favor of respondent courts
correct assessment that the trial court erred in making pronouncements regarding
Kristophers heirship and filiation inasmuch as questions as to who are the heirs of the
decedent, proof of filiation of illegitimate children and the determination of the estate of
the latter and claims thereto should be ventilated in the proper probate court or in a
special proceeding instituted for the purpose and cannot be adjudicated in the instant
ordinary civil action which is for recovery of ownership and possession.[89]

The Yaptinchay case involved two parcels of land in Cavite which were supposedly owned by
Guido and Isabel Yaptinchay (spouses Yaptinchay). Upon the death of the spouses Yaptinchay, their
heirs

(Yaptinchay

heirs)

executed

an

Extra-Judicial

Settlement

of

the

deceased

spouses

estate. However, the Yaptinchay heirs discovered that the properties were already covered by TCTs in
the name of Golden Bay Realty Corporation (Golden Bay), prompting the Yaptinchay heirs to file with
the RTC a complaint against Golden Bay for the annulment and/or declaration of nullity of TCT Nos.
493363 to 493367 and all their derivatives, or in the alternative, the reconveyance of realty with a
prayer for a writ of preliminary injunction and/or restraining order with damages. The Yaptinchay heirs
later filed an amended complaint to include additional defendants to whomGolden Bay sold portions
of the subject properties. The RTC initially dismissed the amended complaint, but acting on the
motion for reconsideration of the Yaptinchay heirs, eventually allowed the same. Golden Bay and its
other co-defendants presented a motion to dismiss the amended complaint, which was granted by
the RTC. The Yaptinchay heirs came before this Court via a Petition for Certiorari.
The Court first observed in the Yaptinchay case that the Yaptinchay heirs availed themselves of
the wrong remedy. An order of dismissal is the proper subject of an appeal, not a petition
for certiorari. Next, the Court affirmed the dismissal of the amended complaint, thus:
Neither did the respondent court commit grave abuse of discretion in issuing the
questioned Order dismissing the Second Amended Complaint of petitioners, x x x.
xxxx
In Litam, etc., et al. v. Rivera, this court opined that the declaration of heirship
must be made in an administration proceeding, and not in an independent civil
action. This doctrine was reiterated in Solivio v. Court of Appeals where the court held:
In Litam, et al. v. Rivera, 100 Phil. 364, where despite the pendency
of the special proceedings for the settlement of the intestate estate of the
deceased Rafael Litam, the plaintiffs-appellants filed a civil action in which
they claimed that they were the children by a previous marriage of the
deceased to a Chinese woman, hence, entitled to inherit his one-half share
of the conjugal properties acquired during his marriage to Marcosa Rivera,
the trial court in the civil case declared that the plaintiffs-appellants were
not children of the deceased, that the properties in question were

paraphernal properties of his wife, Marcosa Rivera, and that the latter was
his only heir. On appeal to this Court, we ruled that such declarations (that
Marcosa Rivera was the only heir of the decedent) is improper, in Civil
Case No. 2071, it being within the exclusive competence of the court in
Special Proceedings No. 1537, in which it is not as yet, in issue, and, will
not be, ordinarily, in issue until the presentation of the project of partition.
(p. 378).
The trial court cannot make a declaration of heirship in the civil action for the
reason that such a declaration can only be made in a special proceeding. Under Section
3, Rule 1 of the 1997 Revised Rules of Court, a civil action is defined as one by which a
party sues another for the enforcement or protection of a right, or the prevention or
redress of a wrong while a special proceeding is a remedy by which a party seeks to
establish a status, a right, or a particular fact. It is then decisively clear that the
declaration of heirship can be made only in a special proceeding inasmuch as the
petitioners here are seeking the establishment of a status or right. [90]

LANDTRADE, Teofilo, and/or Atty. Cabildo missed one vital factual distinction between the Agapay and
Yaptinchay cases, on one hand, and the present Petitions, on the other, by reason of which, the Court
shall not apply the prior two to the last.
The Agapay and Yaptinchay cases, as well as the cases of Litam v. Rivera[91] and Solivio v.
Court of Appeals,[92] cited in the Yaptinchay case, all arose from actions for reconveyance; while
the instant Petitions stemmed from an action for quieting of title. The Court may have declared in
previous cases that an action for reconveyance is in the nature of an action for quieting of title, [93] but
the two are distinct remedies.
Ordinary civil action for reconveyance
special proceeding for quieting of title

vis-a-vis

The action for reconveyance is based on Section 55 of Act No. 496, otherwise known as the
Land Registration Act, as amended, which states [t]hat in all cases of registration procured by fraud
the owner may pursue all his legal and equitable remedies against the parties to such fraud, without
prejudice, however, to the rights of any innocent holder for value of a certificate of title.
The Court, in Heirs of Eugenio Lopez, Sr. v. Enriquez,[94] described an action for reconveyance
as follows:
An action for reconveyance is an action in personam available to a person
whose property has been wrongfully registered under the Torrens system in
anothers name. Although the decree is recognized as incontrovertible and no longer
open to review, the registered owner is not necessarily held free from liens. As a
remedy, an action for reconveyance is filed as anordinary action in the ordinary courts
of justice and not with the land registration court. Reconveyance is always available as
long as the property has not passed to an innocent third person for value. x x x
(Emphases supplied.)

On the other hand, Article 476 of the Civil Code lays down the circumstances when a person
may institute an action for quieting of title:
ART. 476. Whenever there is a cloud on title to real property or any interest
therein, by reason of any instrument, record, claim, encumbrance or proceeding which
is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to remove
such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to
real property or any interest therein.

In Calacala v. Republic,[95] the Court elucidated on the nature of an action to quiet title:
Regarding the nature of the action filed before the trial court, quieting of title is
a common law remedy for the removal of any cloud upon or doubt or uncertainty with
respect to title to real property. Originating in equity jurisprudence, its purpose is to
secure x x x an adjudication that a claim of title to or an interest in property, adverse to
that of the complainant, is invalid, so that the complainant and those claiming under him
may be forever afterward free from any danger of hostile claim. In an action for quieting
of title, the competent court is tasked to determine the respective rights of the
complainant and other claimants, x x x not only to place things in their proper place,
to make the one who has no rights to said immovable respect and not disturb the other,
but also for the benefit of both, so that he who has the right would see every cloud of
doubt over the property dissipated, and he could afterwards without fear introduce the
improvements he may desire, to use, and even to abuse the property as he deems best
x x x . (Emphases supplied.)

The Court expounded further in Spouses Portic v. Cristobal[96] that:

Suits to quiet title are characterized as proceedings quasi in rem. Technically, they
are neither in rem nor in personam. In an action quasi in rem, an individual is named as
defendant. However, unlike suits in rem, a quasi in rem judgment is conclusive only
between the parties.
Generally, the registered owner of a property is the proper party to bring an
action to quiet title. However, it has been held that this remedy may also be availed of
by a person other than the registered owner because, in the Article reproduced
above, title does not necessarily refer to the original or transfer certificate of title. Thus,
lack of an actual certificate of title to a property does not necessarily bar an action to
quiet title. x x x (Emphases supplied.)

The Court pronounced in the Agapay and Yaptinchay cases that a declaration of heirship
cannot be made in an ordinary civil action such as an action for reconveyance, but must only be
made in a special proceeding, for it involves the establishment of a status or right.
The appropriate special proceeding would have been the settlement of the estate of the
decedent. Nonetheless, an action for quieting of title is also a special proceeding, specifically

governed by Rule 63 of the Rules of Court on declaratory relief and similar remedies. [97] Actions for
declaratory relief and other similar remedies are distinguished from ordinary civil actions because:
2. In declaratory relief, the subject-matter is a deed, will, contract or other
written instrument, statute, executive order or regulation, or ordinance. The issue is the
validity or construction of these documents. The relief sought is the declaration of the
petitioners rights and duties thereunder.
The concept of a cause of action in ordinary civil actions does not apply to
declaratory relief as this special civil action presupposes that there has been no breach
or violation of the instruments involved. Consequently, unlike other judgments, the
judgment in an action for declaratory relief does not essentially entail any executional
process as the only relief to be properly granted therein is a declaration of the rights
and duties of the parties under the instrument, although some exceptions have been
recognized under certain situations.[98]

Civil Case No. 4452 could not be considered an action for reconveyance as it is not based on
the allegation that the two parcels of land, Lots 1 and 2, have been wrongfully registered in another
persons name. OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.), covering the subject properties, are still in
Doa Demetrias name. Vidal and Teofilo each claims to have inherited the two parcels of land from the
late Doa Demetria as said decedents sole heir, but neither Vidal nor Teofilo has been able to transfer
registration of the said properties to her/his name as of yet.
Instead, Civil Case No. 4452 is indisputably an action for quieting of title, a special proceeding
wherein the court is precisely tasked to determine the rights of the parties as to a particular parcel of
land, so that the complainant and those claiming under him/her may be forever free from any danger
of hostile claim. Vidal asserted title to the two parcels of land as Doa Demetrias sole heir. The cloud
on Vidals title, which she sought to have removed, was Teofilos adverse claim of title to the same
properties, also as Doa Demetrias only heir. For it to determine the rights of the parties in Civil Case
No. 4452, it was therefore crucial for the RTC-Branch 3 to squarely make a finding as to the status,
filiation, and heirship of Vidal in relation to those of Teofilo. A finding that one is Doa Demetrias sole
and rightful heir would consequently exclude and extinguish the claim of the other.
Even assuming arguendo that the proscription in the Agapay and Yaptinchay cases against
making declarations of heirship in ordinary civil actions also extends to actions for quieting of title,
the same is not absolute.
In Portugal v. Portugal-Beltran[99] (Portugal case), the Court recognized that there are instances when
a declaration of heirship need not be made in a separate special proceeding:
The common doctrine in Litam, Solivio and Guilas in which the adverse parties
are putative heirs to the estate of a decedent or parties to the special proceedings for
its settlement is that if the special proceedings are pending, or if there are no special
proceedings filed but there is, under the circumstances of the case, a need to file one,
then the determination of, among other issues, heirship should be raised and settled in
said special proceedings. Where special proceedings had been instituted but had been

finally closed and terminated, however, or if a putative heir has lost the right to have
himself declared in the special proceedings as co-heir and he can no longer ask for its
re-opening, then an ordinary civil action can be filed for his declaration as heir in order
to bring about the annulment of the partition or distribution or adjudication of a
property or properties belonging to the estate of the deceased.[100]

In the Portugal case itself, the Court directed the trial court to already determine petitioners
status as heirs of the decedent even in an ordinary civil action, i.e., action for annulment of title,
because:
It appearing x x x that in the present case the only property of the intestate estate of
Portugal is the Caloocan parcel of land, to still subject it, under the circumstances of the
case, to a special proceeding which could be long, hence, not expeditious, just to
establish the status of petitioners as heirs is not only impractical; it is burdensome to
the estate with the costs and expenses of an administration proceeding. And it is
superfluous in light of the fact that the parties to the civil casesubject of the present
case, could and had already in fact presented evidence before the trial court which
assumed jurisdiction over the case upon the issues it defined during pre-trial.
In fine, under the circumstances of the present case, there being no compelling reason
to still subject Portugals estate to administration proceedings since a determination of
petitioners status as heirs could be achieved in the civil case filed by petitioners, the
trial court should proceed to evaluate the evidence presented by the parties during the
trial and render a decision thereon upon the issues it defined during pre-trial, x x x. [101]

Another case, Heirs of Teofilo Gabatan v. Court of Appeals [102] (Gabatan case), involved an
action for recovery of ownership and possession of property with the opposing parties insisting that
they are the legal heirs of the deceased. Recalling the Portugal case, the Court ruled:
Similarly, in the present case, there appears to be only one parcel of land being
claimed by the contending parties as their inheritance from Juan Gabatan. It would be
more practical to dispense with a separate special proceeding for the determination of
the status of respondent as the sole heir of Juan Gabatan, specially in light of the fact
that the parties to Civil Case No. 89-092, had voluntarily submitted the issue to the RTC
and already presented their evidence regarding the issue of heirship in these
proceeding. Also the RTC assumed jurisdiction over the same and consequently
rendered judgment thereon.

In Fidel v. Court of Appeals[103] (Fidel case), therein respondents, the heirs of the late Vicente Espineli
(Vicente) from his first marriage, instituted an action to annul the sale of Vicentes property to therein
petitioners, the spouses Fidel. The subject property was sold to petitioners by Vicentes heirs from his
second marriage. Even though ones legitimacy can only be questioned in a direct action seasonably
filed by the proper party, the Court held that it was necessary to pass upon respondents relationship
to Vicente in the action for annulment of sale so as to determine respondents legal rights to the
subject property. In fact, the issue of whether respondents are Vicentes heirs was squarely raised by
petitioners in their Pre-Trial Brief. Hence, petitioners were estopped from assailing the ruling of the
trial court on respondents status.

In Civil Case No. 4452, Teofilo and/or Atty. Cabildo themselves asked the RTC-Branch 3 to
resolve the issue of Vidal's legal or beneficial ownership of the two parcels of land. [104] During trial,
Vidal already presented before the RTC-Branch 3 evidence to establish her status, filiation, and
heirship. There is no showing that Doa Demetria left any other property that would have required
special administration proceedings. In the spirit of the Portugal, Gabatan, and Fidel cases, the Court
deems it more practical and expeditious to settle the issue on Vidals status, filiation, and heirship in
Civil Case No. 4452.
Title in quieting of title
LANDTRADE, Teofilo, and/or Atty. Cabildo further contend that Vidal and AZIMUTH have no
cause of action for quieting of title since Vidal has no title to the two parcels of land. In comparison,
Teofilos title to the same properties, as Doa Demetrias only heir, was already established and
recognized by this Court in the 1997 Cacho case.
Again, the Court cannot sustain the foregoing contention of LANDTRADE, Teofilo, and/or Atty.
Cabildo.
It must be borne in mind that the concept of a cause of action in ordinary civil actions does not
apply to quieting of title. In declaratory relief, the subject-matter is a deed, will, contract or other
written instrument, statute, executive order or regulation, or ordinance. The issue is the validity or
construction of these documents. The relief sought is the declaration of the petitioners rights and
duties thereunder. Being in the nature of declaratory relief, this special civil action presupposes that
there has yet been no breach or violation of the instruments involved.[105]
In an action for quieting of title, the subject matter is the title sought to have quieted. Title is
not limited to the certificate of registration under the Torrens System (i.e., OCT or TCT). Pursuant to
Article 477 of the Civil Code, the plaintiff must have legal or equitable title to, or interest in, the
real property subject of the action for quieting of title. The plaintiff need not even be in possession
of the property. If she is indeed Doa Demetrias sole heir, Vidal already has equitable title to or interest
in the two parcels of land by right of succession, even though she has not yet secured certificates of
title to the said properties in her name.
LANDTRADE,

Teofilo,

and/or

Atty.

Cabildo

mistakenly

believe

that

the 1997 Cacho case had

conclusively settled Teofilo's identity and existence as Doa Demetrias sole heir.They failed to
appreciate that the 1997 Cacho case involved Teofilos petition for reconstitution of title, treated as
a petition for the re-issuance of Decree Nos. 10364 and 18969. The grant by the RTC of
Teofilos petition, affirmed by this Court, only conclusively established the prior issuance and
existence and the subsequent loss of the two decrees, thus, entitling Teofilo to the re-issuance of
the said decrees in their original form and condition.

As the Court of Appeals pointed out in its assailed Decision dated January 19, 2007, the issue
of Teofilos heirship was not the lis mota of the 1997 Cacho case. It was addressed by the Court in
the 1997 Cacho case for the simple purpose of determining Teofilos legal interest in filing a petition
for the re-issuance of the lost decrees. The Court merely found therein that Teofilos Affidavit of
Adjudication, executed in the U.S.A. before the Philippine Consulate General, enjoyed the presumption
of regularity and, thus, sufficiently established Teofilos legal interest. The 1997 Cacho case, however,
did not conclusively settle that Teofilo is indeed Doa Demetrias only heir and the present owner, by
right of succession, of the subject properties.

Factual findings of the RTC-Branch 3 and the Court of

Appeals

LANDTRADE, Teofilo, and/or Atty. Cabildo additionally posit that the evidence presented by Vidal and
AZIMUTH

were

insufficient

to

prove

the

fact

of

Vidal's

filiation

and

heirship

to

Doa

Demetria. LANDTRADE, Teofilo, and/or Atty. Cabildo particularly challenged the reliance of the RTCBranch 3 on Vidals baptismal certificate, arguing that it has no probative value and is not conclusive
proof of filiation.
Alternative means of proving an individuals filiation have been recognized by this Court in Heirs of
Ignacio Conti v. Court of Appeals.[106] The property in litigation in said case was co-owned by Lourdes
Sampayo (Sampayo) and Ignacio Conti, married to Rosario Cuario (collectively referred to as the
spouses Conti). Sampayo died without issue. Therein respondents, claiming to be Sampayos collateral
relatives, filed a petition for partition of the subject property, plus damages. To prove that they were
collaterally related to Sampayo through the latters brothers and sisters, respondents submitted
photocopies of the birth certificates, certifications on the non-availability of records of births, and
certified true copies of the baptismal certificates of Sampayos siblings. The spouses Conti questioned
the documentary evidence of respondents filiation on the ground that these were incompetent and
inadmissible, but the Court held that:
Under Art. 172 of the Family Code, the filiation of legitimate children shall be proved by
any other means allowed by the Rules of Court and special laws, in the absence of a
record of birth or a parents admission of such legitimate filiation in a public or private
document duly signed by the parent. Such other proof of ones filiation may be a
baptismal certificate, a judicial admission, a family Bible in which his name has been
entered, common reputation respecting his pedigree, admission by silence, the
testimonies of witnesses and other kinds of proof admissible under Rule 130 of the
Rules of Court. By analogy, this method of proving filiation may also be utilized in the
instant case.
xxxx

The admissibility of baptismal certificates offered by Lydia S. Reyes, absent the

testimony of the officiating priest or the official recorder, was settled in People v. Ritter,
citing U.S. v. de Vera (28 Phil. 105 [1914]), thus x x x the entries made in the Registry Book may be considered as
entries made in the course of the business under Section 43 of Rule 130,
which is an exception to the hearsay rule. The baptisms administered by
the church are one of its transactions in the exercise of ecclesiastical
duties and recorded in the book of the church during the course of its
business.
It may be argued that baptismal certificates are evidence only of the
administration of the sacrament, but in this case, there were four (4) baptismal
certificates which, when taken together, uniformly show that Lourdes, Josefina,
Remedios and Luis had the same set of parents, as indicated therein. Corroborated by
the undisputed testimony of Adelaida Sampayo that with the demise of Lourdes and her
brothers Manuel, Luis and sister Remedios, the only sibling left was Josefina Sampayo
Reyes, such baptismal certificates have acquired evidentiary weight to prove filiation.
[107]

Thus, Vidals baptismal certificate is not totally bereft of any probative value. It may be
appreciated, together with all the other documentary and testimonial evidence submitted on Vidals
filiation, to wit:
The first issue proposed by petitioners for resolution is whether or not petitioner
Demetria C. Vidal is the sole surviving heir of the late Doa Demetria Cacho. To prove
that, indeed, she is the sole surviving heir of the late Doa Demetria Cacho, she testified
in open court and identified the following documentary evidence, to wit:
Exhibit A Birth Certificate of Demetria C. Vidal
Exhibit B Partida de Bautismo of Demetria C. Vidal
Exhibit C Certificate of Baptism Demetria C. Vidal
Exhibit D Cacho Family Tree
Exhibit D-1 Branch of Demetria Cacho
Exhibit F Death Certificate of Demetria Cacho.
Exhibit P Drivers license of Demetria C. Vidal.
Exhibit Q to Q5 The book entitled CACHO, the introductory page on March
1988 when the data were compiled, page 58 on the Vidal branch of
the Cacho family, page 62 on Demetria Cacho and her
descendants, page 69 on the family member with the then latest
birth day 26 March 1988, and page 77 with the picture of Demetria
Cacho Vidal, Dionisio Vidal and Francisco Vidal.[108]

In contrast, LANDTRADE, Teofilo, and/or Atty. Cabildo failed to present any evidence at all in
support of their claims. According to the RTC-Branch 3:
Landtrade was also declared to have waived its right to present evidence on its
defense and counterclaim in the above-entitled case in view of its failure to present
evidence on their scheduled trial date.
xxxx

Since respondents Teofilo Cacho and Atty. Godofredo Cabildo opted not to adduce
evidence in this case as they failed to appear during the scheduled trial dates, the court
shall decide on the basis of the evidence for the respondents-intervenor and petitioners.
[109]

Based on the evidence presented before it, the RTC-Branch 3 made the following factual
findings:
From the evidence adduced, both testimonial and documentary, the court is
convinced that petitioner Vidal is the granddaughter of Demetria Cacho Vidal, the
registered owner of the subject property covered by decree Nos. 10364 & 18969,
reissued as Decrees No. 19364 and No. 16869. Such being the case, she is an heir of
Demetria Cacho Vidal.
Petitioner Vidals Certificate of Birth (Exh. A) shows that she was born on June 3,
1941, with the name Demetria Vidal. [Her] father was Francisco Vidal and her mother
was Fidela Confesor, Francisco Vidal is the son of Dionisio Vidal and Demetria Cacho as
shown by [his] Partida de Bautismo (Baptismal Certificate). Moreover, it was shown in
the same document that her godmother was Demetria Cacho. By inference, this
Demetria Cacho is actually Demetria Cacho Vidal because she was married to Dionisio
Vidal, the father of Francisco Vidal.
Now then, is Demetria Cacho Vidal the same person referred to in Cacho v.
Government of the United States (28 Phil. 616 [1914])? Page 618, Vol. 28 of the
Philippine Reports would indicate that the applicant for registration was Doa Demetria
Cacho y Soriano (Exh. R-1). The Death Certificate of Demetria Cacho Vidal shows that
her mother was Candelaria Soriano (Exh. F). Necessarily, they are one and the same
person. This is further confirmed by the fact that the husband of Demetria Cacho Vidal,
Seor Dionisio Vidal, was quoted in pp. 629-630 of the aforecited decision as the husband
of Demetria Cacho (Exh. R-3).
The book CACHO (Exhs. Q to Q-5) and the Cacho Family Tree (Exhs. D to D-1)
further strengthen the aforecited findings of this Court.
It was established by petitioner Vidals own testimony that at the time of Doa
Demetria Cacho's death, she left no heir other than petitioner Vidal. Her husband, Don
Dionisio, died even before the war, while her only child, Francisco Cacho Vidal xxx Vidals
father died during the war. Petitioners only sibling Francisco Dionisio died at childbirth.
xxxx
The next factual issue proposed by petitioners is whether or not respondent
Teofilo Cacho is the son or heir of the late Doa Demetria Cacho. The following facts and
circumstances negate the impression that he is the son, as he claims to be, of Doa
Demetria Cacho. Thus:
a)

Doa Demetria Cacho was married to Don Dionisio Vidal, and thus her
full name was Doa Demetria Cacho Vidal. Her only child, expectedly,
carried the surname Vidal (Francisco Cacho Vidal). Had Teofilo Cacho
actually been a son of Demetria Cacho, he would and should have
carried the name Teofilo Cacho Vidal, but he did not.

b)

Teofilo Cacho admits to being married to one Elisa Valderrama in the

Special Power of Attorney he issued to Atty. Godofredo [Cabildo] (Exh.
O). Teofilo Cacho married Elisa Valderrama on 27 May 1953, in the
Parish of the Immaculate Conception, Bani, Pangasinan. The Certificate

of Marriage shows that Teofilo Cacho is the son of Agustin Cacho and
Estefania Cordial, not Demetria Cacho. In his Certificate of Baptism
(Exh. G), he was born to Agustin Cacho and Estefania Cordial on May
1930 (when Doa Demetria Cacho was already 50 years old).
c)

The Cacho Family Tree (Exh. D) (that is, the Cacho Family to which
Doa Demetria Cacho belonged) as well as the book on the Cacho Family
(Exh. Q) are bereft of any mention of Teofilo Cacho or his wife Elisa
Valderrama, or even his real father Agustin Cacho, or mother Estefania
Cordial. They are not known to be related to the Cacho family of Doa
Demetria Cacho.

d)

Paragraph 1.11 of the Petition charges respondent Teofilo Cacho of

having falsely and fraudulently claiming to be the son and sole heir of
the late Doa Demetria Cacho. In his answer to this particular paragraph,
he denied the same for lack of knowledge or information to form a
belief. He should know whether this allegation is true or not because it
concerns him. If true, he should admit and if false, he opted to deny the
charges for lack of knowledge or information to form a belief. The Court
considers his denial as an admission of the allegation that he is falsely
and fraudulently claiming to be the son and sole heir of the late Doa
Demetria Cacho.[110]

Considering the aforequoted factual findings, the RTC-Branch 3 arrived at the following legal
conclusions, quieting the titles of Vidal and AZIMUTH, viz:
The first proposed legal issue to be resolved had been amply discussed under the
first factual issue. Certainly, petitioner Vidal has hereditary rights, interest, or title not
only to a portion of the Subject Property but to the entire property left by the late Doa
Demetria Cacho Vidal, subject, however, to the Deed of Conditional Conveyance
executed by petitioner Vidal of a portion of the Subject Property in favor of petitioner
Azimuth International Development Corporation (Exh. J) executed pursuant to their
Memorandum of Agreement (Exh. I). Consequently, it goes without saying that petitioner
Azimuth International Development Corporation has a right, interest in, or title to a
portion of the subject property.
As discussed earlier in this decision, Teofilo Cacho, not being the son, as he
claims to be, of the late Doa Demetria Cacho Vidal, has no hereditary rights to the
Subject Property left by Doa Demetria Cacho Vidal. He failed to show any evidence that
he is the son of the late Doa Demetria Cacho Vidal as he and his co respondent, Atty.
Godofredo Cabildo, even failed to appear on the scheduled trial date.
It is, therefore, safe to conclude that respondents Teofilo Cacho and/or Atty.
Godofredo Cabildo and their transferees/assignees have no right, interest in, or title to
the subject property.
Prescinding from the finding of this Court that respondent Teofilo Cacho is not the
son of the registered owner of the Subject Property, the late Doa Demetria Cacho Vidal,
respondent Cacho committed false pretenses and fraudulent acts in representing
himself as son and sole heir of Doa Demetria Cacho (Vidal) in his petition in court, which
eventually led to the reconstitution of the titles of Doa Demetria Cacho
(Vidal). Certainly, his misrepresentation in the reconstitution case, which apparently is
the basis of his claim to the subject property, casts clouds on [respondents'] title to the
subject property.

It is only right that petitioner Vidal should seek protection of her ownership from
acts tending to cast doubt on her title. Among the legal remedies she could pursue, is
this petition for Quieting of Title under Chapter 3, Title I, Book II of the Civil Code,
Articles 476 to 481 inclusive. x x x.[111]

The Court of Appeals affirmed in toto the judgment of the RTC-Branch 3. The appellate court
even soundly trounced Teofilos attack on the factual findings of the trial court:
[T]he material facts sought to be established by the afore-mentioned documentary
evidence corroborated by the testimony of VIDAL, whose testimony or credibility
neither TEOFILO and LANDTRADE even attempted to impeach, only proves one thing,
that she is the granddaughter of DOA DEMETRIA and the sole heiress thereof.
xxxx
Hence, it is now too late for appellant TEOFILO to assail before Us the facts
proven during the trial, which he failed to refute in open court. Verily, TEOFILOs
lackadaisical attitude in the conduct of his defense only shows that he has no proof to
offer in refutation of the evidence advanced by appellee VIDAL.
Otherwise stated, appellant TEOFILO is an impostor, a pretender and bogus heir
of DOA DEMETRIA.
xxxx
Besides, it is quite unnatural and against human nature for a rightful heir, if
TEOFILO is really one, to merely stand still with folded arms, while the accusing finger of
VIDAL is right on his very nose. In all likelihood, and with all his might and resources, a
rightful heir may even be expected to cross continents and reach distant shores to
protect his interest over the subject properties, which in this case is arguably worth
more than a Kings ransom.
It stands on record that TEOFILO CACHO has all along even prior to executing his
Affidavit of Adjudication in 1985 in Chicago, United States of America, and in
simultaneously executing a Special Power of Attorney in favor of ATTY. CABILDO, had
remained in the United States, and not for a single moment appeared in court except
through his agents or representatives. To Our mind, this fact alone adversely affects his
pretension in claiming to be an heir of DOA DEMETRIA.[112]

As a rule, the findings of fact of the trial court when affirmed by the Court of Appeals are final
and conclusive, and cannot be reviewed on appeal by this Court as long as they are borne out by the
record or are based on substantial evidence. It is not the function of the Court to analyze or weigh all
over again the evidence or premises supportive of such factual determination.

The Court has

consistently held that the findings of the Court of Appeals and other lower courts are, as a rule,
accorded great weight, if not binding upon it, save for the most compelling and cogent reasons.
[113]

There is no justification for the Court to deviate from the factual findings of the RTC-Branch 3 and

the Court of Appeals which are clearly supported by the evidence on record.
Prescription

LANDTRADE finally asserts that the action for quieting of title of Vidal and AZIMUTH already
prescribed since LANDTRADE has been in possession of the two parcels of land in question. The
prescriptive period for filing said action lapsed in 1995, ten years from the time Teofilo executed his
Affidavit of Adjudication in 1985. Yet, Vidal and AZIMUTH instituted Civil Case No. 4452 only in 1998.
It is too late in the day for LANDTRADE to raise the issue of prescription of Civil Case No. 4452
for the first time before this Court. In this jurisdiction, the defense of prescription cannot be raised for
the first time on appeal.

Such defense may be waived, and if it was not raised as a defense in the

trial court, it cannot be considered on appeal, the general rule being that the Appellate Court is not
authorized to consider and resolve any question not properly raised in the lower court. [114]
But even if the Court takes cognizance of the issue of prescription, it will rule against LANDTRADE.
A real action is one where the plaintiff seeks the recovery of real property or, as indicated in
what is now Rule 4, Section 1 of the Rules of Court, a real action is an action affecting title to or
recovery of possession of real property.[115] An action for quieting of title to real property, such as
Civil Case No. 4452, is indubitably a real action.
Article 1141 of the Civil Code plainly provides that real actions over immovables
prescribe after thirty years. Doa Demetria died in 1974, transferring by succession, her title to the
two parcels of land to her only heir, Vidal. Teofilo, through Atty. Cabildo, filed a petition for
reconstitution of the certificates of title covering said properties in 1978.This is the first palpable
display of Teofilos adverse claim to the same properties, supposedly, also as Doa Demetrias only
heir. When Vidal and AZIMUTH instituted Civil Case No. 4452 in 1998, only 20 years had passed, and
the prescriptive period for filing an action for quieting of title had not yet prescribed.
Nevertheless, the Court notes that Article 1411 of the Civil Code also clearly states that the 30year prescriptive period for real actions over immovables is without prejudice to what is established
for the acquisition of ownership and other real rights by prescription. Thus, the Court must also look
into the acquisitive prescription periods of ownership and other real rights.
Acquisitive prescription of dominion and real rights may be ordinary or extraordinary. [116]
Ordinary acquisitive prescription requires possession of things in good faith and with just
title for the time fixed by law.[117] In the case of ownership and other real rights over immovable
property, they are acquired by ordinary prescription through possession of 10 years.[118]
LANDTRADE cannot insist on the application of the 10-year ordinary acquisitive prescription
period since it cannot be considered a possessor in good faith. The good faith of the possessor

consists in the reasonable belief that the person from whom he received the thing was the owner
thereof, and could transmit his ownership.[119]
LANDTRADE came to possession of the two parcels of land after purchasing the same from
Teofilo. The Court stresses, however, that Teofilo is not the registered owner of the subject
properties. The said properties are still registered in Doa Demetrias name under OCT Nos. 0-1200
(a.f.) and 0-1201 (a.f.). The Affidavit of Adjudication, by which Teofilo declared himself to be the sole
heir of Doa Demetrias estate, is not even annotated on the OCTs. Worse, LANDTRADE is not dealing
directly with Teofilo, but only with the latters attorney-in-fact, Atty. Cabildo. It is axiomatic that one
who buys from a person who is not a registered owner is not a purchaser in good faith. [120]
Furthermore, in its Complaint for Unlawful Detainer against NAPOCOR and TRANSCO, which
was docketed as Civil Case No. 11475-AF before the MTCC, LANDTRADE itself alleged that when it
bought the two parcels of land from Teofilo, portions thereof were already occupied by
the Overton Sub-station and Agus 7 Warehouse of NAPOCOR and TRANSCO. This is another
circumstance which should have prompted LANDTRADE to investigate or inspect the property being
sold to it. It is, of course, expected from the purchaser of a valued piece of land to inquire first into
the status or nature of possession of the occupants, i.e., whether or not the occupants possess the
land en concepto de dueo, in concept of owner. As is the common practice in the real estate industry,
an ocular inspection of the premises involved is a safeguard a cautious and prudent purchaser usually
takes. Should he find out that the land he intends to buy is occupied by anybody else other than the
seller who, as in this case, is not in actual possession, it would then be incumbent upon the purchaser
to verify the extent of the occupants possessory rights. The failure of a prospective buyer to take such
precautionary steps would mean negligence on his part and would thereby preclude him from
claiming or invoking the rights of a purchaser in good faith.[121]
Since the ordinary acquisitive prescription period of 10 years does not apply to LANDTRADE, then the
Court turns its attention to the extraordinary acquisitive prescription period of 30 years set by
Article 1137 of the Civil Code, which reads:
ART. 1137. Ownership and other real rights over immovables also prescribe
through uninterrupted adverse possession thereof for thirty years, without need of title
or of good faith.

LANDTRADE adversely possessed the subject properties no earlier than 1996, when it bought the
same

from

Teofilo,

and

Civil

Case

No.

4452

was

already

instituted two

yearslater

in 1998. LANDTRADE cannot tack its adverse possession of the two parcels of land to that of Teofilo
considering that there is no proof that the latter, who is already residing in the U.S.A., adversely
possessed the properties at all.

Thus, the Court of Appeals did not err when it affirmed in toto the judgment of the RTC-Branch
3 which declared, among other things, that (a) Vidal is the sole surviving heir of Doa Demetria, who
alone has rights to and interest in the subject parcels of land; (b) AZIMUTH is Vidals successor-ininterest to portions of the said properties in accordance with the 1998 Memorandum of Agreement
and 2004 Deed of Conditional Conveyance; (c) Teofilo is not the son or heir of Doa Demetria; and (d)
Teofilo, Atty. Cabildo, and their transferees/assignees, including LANDTRADE, have no valid right to or
interest in the same properties.
The Ejectment or Unlawful Detainer Case
(G.R. Nos. 170505, 173355-56, and 173563-64)

The Petitions in G.R. Nos. 170505, 173355-56, and 173563-64 all concern the execution pending
appeal of the Decision dated February 17, 2004 of the MTCC in Civil Case No. 11475-AF, which
ordered NAPOCOR and TRANSCO to vacate the two parcels of land in question, as well as to pay rent
for the time they occupied said properties.
LANDTRADE filed its Petition for Review in G.R. No. 170505 when it failed to have the MTCC
Decision dated February 17, 2004 executed while Civil Case No. 6613, the appeal of the same
judgment by NAPOCOR and TRANSCO, was still pending before the RTC-Branch 5.
NAPOCOR

and

TRANSCO

sought

recourse

from

this

Court

through

their

Petitions

for Certiorari and Prohibition in G.R. Nos. 173355-56 and 173563-64 after the RTC-Branch 1 (to
which Civil Case No. 6613 was re-raffled) already rendered a Decision dated December 12, 2005 in
Civil Case No. 6613, affirming the MTCC Decision dated February 17, 2004. Expectedly, NAPOCOR and
TRANSCO appealed the judgment of the RTC-Branch 1 to the Court of Appeals. The Court of Appeals
granted the motion for execution pending appeal of LANDTRADE, and denied the application for
preliminary injunction of NAPOCOR and TRANSCO.
The requirements of posting a supersedeas bond and
depositing rent to stay execution

The pivotal issue in G.R. No. 170505 is whether LANDTRADE is entitled to the execution of the
MTCC Decision dated February 17, 2004 even while said judgment was then pending appeal before
the RTC-Branch 5. The RTC-Branch 5 granted the motion for immediate execution pending appeal of
LANDTRADE because of the failure of NAPOCOR and TRANSCO to comply with the requirements for
staying the execution of the MTCC judgment, as provided in Rule 70, Section 19 of the Rules of
Court. The Court of Appeals subsequently found grave abuse of discretion on the part of RTC-Branch 5
in issuing the Order dated August 9, 2004 which granted execution pending appeal and the Writ of
Execution Pending Appeal dated August 10, 2004; and on the part of Sheriff Borres, in issuing the
Notices of Garnishment and Notification to vacate, all dated August 11, 2004. According to the

appellate

court,

NAPOCOR

and

TRANSCO

are

exempt

from

the

requirements

of

filing

a supersedeas bond and depositing rent in order to stay the execution of the MTCC judgment.
Rule 70, Section 19 of the Rules of Court lays down the requirements for staying the immediate
execution of the MTCC judgment against the defendant in an ejectment suit:
SEC. 19. Immediate execution of judgment; how to stay same. If judgment is
rendered against the defendant, execution shall issue immediately upon motion, unless
an appeal has been perfected and the defendant to stay execution files a sufficient
supersedeas bond, approved by the Municipal Trial Court and executed in favor of the
plaintiff to pay the rents, damages, and costs accruing down to the time of the
judgment appealed from, and unless, during the pendency of the appeal, he deposits
with the appellate court the amount of rent due from time to time under the
contract, if any, as determined by the judgment of the Municipal Trial Court. In the
absence of a contract, he shall deposit with the Regional Trial Court the reasonable
value of the use and occupation of the premises for the preceding month or period at
the rate determined by the judgment of the lower court on or before the tenth day of
each succeeding month or period. The supersedeas bond shall be transmitted by the
Municipal Trial Court, with the other papers, to the clerk of the Regional Trial Court to
which the action is appealed.
All amounts so paid to the appellate court shall be deposited with said court or
authorized government depositary bank, and shall be held there until the final
disposition of the appeal, unless the court, by agreement of the interested parties, or in
the absence of reasonable grounds of opposition to a motion to withdraw, or for
justifiable reasons, shall decree otherwise. Should the defendant fail to make the
payments above prescribed from time to time during the pendency of the appeal, the
appellate court, upon motion of the plaintiff, and upon proof of such failure, shall order
the execution of the judgment appealed from with respect to the restoration of
possession, but such execution shall not be a bar to the appeal taking its course until
the final disposition thereof on the merits.
After the case is decided by the Regional Trial Court, any money paid to the court
by the defendant for purposes of the stay of execution shall be disposed of in
accordance with the provisions of the judgment of the Regional Trial Court. In any case
wherein it appears that the defendant has been deprived of the lawful possession of
land or building pending the appeal by virtue of the execution of the judgment of the
Municipal Trial Court, damages for such deprivation of possession and restoration of
possession may be allowed the defendant in the judgment of the Regional Trial Court
disposing of the appeal. (Emphases supplied.)

The

Court

had

previously

recognized

the

exemption

of

NAPOCOR

from

filing

a supersedeas bond. The Court stated in Philippine Geothermal, Inc. v. Commissioner of Internal
Revenue[122] that a chronological review of the NAPOCOR Charter will show that it has been the
lawmakers intention that said corporation be completely exempt not only from all forms of taxes, but
also from filing fees, appeal bonds, and supersedeas bonds in any court or administrative
proceedings. The Court traced the history of the NAPOCOR Charter, thus:
Republic Act No. 6395 (10 September 1971) enumerated the details covered
by the exemptions by stating under Sec. 13 that The Corporation shall be non-profit and
shall devote all its returns from its capital investment, as well as excess revenues from

its operation, for expansionthe Corporation is hereby declared exempt from the
payment of all taxes, duties, fees, imposts, charges, costs and service fees in any court
or administrative proceedings in which it may be a party, restrictions and duties to the
Republic of the Philippines, its provinces, cities, municipalities and other government
agencies and instrumentalities . . . Subsequently, Presidential Decree No. 380 (22
January 1974), Sec. 10 made even more specific the details of the exemption of NPC to
cover, among others, both direct and indirect taxes on all petroleum products used in its
operation. Presidential Decree No. 938 (27 May 1976), Sec. 13 amended the tax
exemption by simplifying the same law in general terms. It succinctly exempts service
fees, including filing fees, appeal bonds, supersedeas bonds, in any court or
administrative proceedings.The use of the phrase all forms of taxes demonstrate the
intention of the law to give NPC all the exemption it has been enjoying before. The
rationale for this exemption is that being non-profit, the NPC shall devote all its return
from its capital investment as well as excess revenues from its operation, for expansion.
[123]
(Emphases supplied.)

As presently worded, Section 13 of Republic Act No. 6395, the NAPOCOR Charter, as amended,
reads:
SEC. 13. Non-profit Character of the Corporation; Exemption from All Taxes,
Duties, Fees, Imposts and Other Charges by the Government and Government
Instrumentalities. The Corporation shall be non-profit and shall devote all its returns from
its capital investment as well as excess revenues from its operation, for expansion. To
enable the Corporation to pay its indebtedness and obligations and in furtherance and
effective implementation of the policy enunciated in Section One of this Act, the
Corporation, including its subsidiaries, is hereby declared exempt from the payment of
all forms of taxes, duties, fees, imposts as well as costs and service fees including
filing fees, appeal bonds, supersedeas bonds, in any court or administrative
proceedings. (Emphasis supplied.)

In A.M. No. 05-10-20-SC, captioned In Re: Exemption of the National Power Corporation from
Payment of Filing/Docket Fees, the Court addressed the query of a Clerk of Court from the RTC of
Urdaneta, Pangasinan on whether NAPOCOR is exempt from the payment of filing fees and Sheriffs
Trust Fund. In its Resolution dated December 6, 2005, the Court, upon the recommendation of the
Court Administrator, declared that NAPOCOR is still exempt from the payment of filing fees, appeal
bonds, and supersedeasbonds.
Consistent with the foregoing, the Court of Appeals rendered its Decision dated November 23,
2005 in CA-G.R. SP Nos. 85714 and 85841 declaring that NAPOCOR was exempt from filing
a supersedeas bond to stay the execution of the MTCC judgment while the same was pending appeal
before the RTC-Branch 5. The appellate court also held that the exemption of NAPOCOR extended
even to the requirement for periodical deposit of rent, ratiocinating that:
On the whole, the posting of supersedeas bond and the making of the periodical
deposit are designed primarily to insure that the plaintiff would be paid the back rentals
and the compensation for the use and occupation of the premises should the municipal
trial courts decision be eventually affirmed on appeal. Elsewise stated, both the posting
of the supersedeas bond and the payment of monthly deposit are required to

accomplish one and the same purpose, namely, to secure the performance of, or to
satisfy the judgment appealed from in case it is affirmed on appeal by the appellate
court.
xxxx
Thus viewed, the inescapable conclusion is, and so We hold, that although the
term making of monthly deposit in ejectment cases is not expressly or specifically
mentioned in Section 13 of R.A. 6395, however, inasmuch as it has the same or similar
function, purpose, and essence as a supersedeas bond, it should be deemed included in
the enumeration laid down under the said provision. This accords well with the principle
of ejusdem generis which says that where a statute uses a general word followed by an
enumeration of specific words embraced within the general word merely as examples,
the enumeration does not restrict the meaning of the general word which should be
construed to include others of the same class although not enumerated therein; or
where a general word or phrase follows an enumeration of particular and specific words
of the same class or where the latter follow the former, the general word or phrase is to
be construed to include persons, things or cases akin to, resembling, or of the same
kind or class as those specifically mentioned.
In a nutshell, We hold that petitioner NAPOCOR enjoys exemption not only from
posting supersedeas bond in courts in appealed ejectment cases, but also from
periodically depositing the amount of the monthly rental or the reasonable
compensation of the use and occupancy of the property, as determined in the municipal
trial courts decision.[124]

The Court of Appeals further adjudged that the exemptions of NAPOCOR similarly applied to
TRANSCO since [i]t is all too obvious that the interests of NAPOCOR and TRANSCO over the premises
in litigation are so interwoven and dependent upon each other, such that whatever is adjudged in
regard to the former, whether favorable or adverse, would ineluctably and similarly affect the latter[;]
and [c]onsequently, x x x the stay of the execution of the appealed decision insofar as NAPOCOR is
concerned necessarily extends and inures to its co-defendant TRANSCO, not by virtue of the formers
statutory exemption privilege from filing supersedeas bond and making periodic deposits, but by the
indisputably operative fact that the rights and liabilities in litis of BOTH defendants are so intimately
interwoven, interdependent, and indivisible.[125]
Only recently, however, the Court reversed its stance on the exemption of NAPOCOR from filing
fees, appeal bonds, and supersedeas bonds. Revisiting A.M. No. 05-10-20-SC, the Court issued
Resolutions dated October 27, 2009 and March 10, 2010, wherein it denied the request of NAPOCOR
for exemption from payment of filing fees and court fees for such request appears to run counter to
Article VIII, Section 5(5)[126] of the Constitution, on the rule-making power of the Supreme Court over
the rules on pleading, practice and procedure in all courts, which includes the sole power to fix the
filing fees of cases in courts. The Court categorically pronounced that NAPOCOR can no longer invoke
its amended Charter as basis for exemption from the payment of legal fees.
Nevertheless, in this case, the RTC-Branch 1 already promulgated its Decision in Civil Case No. 6613
on December 12, 2005, denying the appeal of NAPOCOR and TRANSCO and affirming the MTCC

judgment against said corporations. NAPOCOR and TRANSCO presently have pending appeals of the
RTC-Branch 1 judgment before the Court of Appeals.
Rule 70, Section 19 of the Rules of Court applies only when the judgment of a Municipal Trial
Court (and any same level court such as the MTCC) in an ejectment case is pending appeal before the
RTC. When the RTC had already resolved the appeal and its judgment, in turn, is pending appeal
before the Court of Appeals, then Rule 70, Section 21 of the Rules of Court governs.
The Court already pointed out in Northcastle Properties and Estate Corporation v. Paas [127] that
Section 19 applies only to ejectment cases pending appeal with the RTC, and Section 21 to those
already decided by the RTC. The Court again held in Uy v. Santiago[128] that:
[I]t is only execution of the Metropolitan or Municipal Trial Courts judgment pending
appeal with the Regional Trial Court which may be stayed by a compliance with the
requisites provided in Rule 70, Section 19 of the 1997 Rules on Civil
Procedure. On the other hand, once the Regional Trial Court has rendered a decision in
its appellate jurisdiction, such decision shall, underRule 70, Section 21 of the 1997
Rules on Civil Procedure, be immediately executory, without prejudice to an appeal,
via a Petition for Review, before the Court of Appeals and/or Supreme Court. (Emphases
supplied.)

According to Rule 70, Section 21 of the Rules of Court, [t]he judgment of the Regional Trial
Court against the defendant shall be immediately executory, without prejudice to a further appeal
that may be taken therefrom. It no longer provides for the stay of execution at such stage.
Thus, subsequent events have rendered the Petition of LANDTRADE in G.R. No. 170505 moot
and academic. It will serve no more purpose for the Court to require NAPOCOR and TRANSCO to still
comply with the requirements of filing a supersedeas bond and depositing rent to stay execution
pending appeal of the MTCC judgment, as required by Rule 70, Section 19 of the Rules of Court, when
the appeal had since been resolved by the RTC.
Preliminary injunction to stay execution of RTC
judgment against defendant in an ejectment case

The issues raised by NAPOCOR and TRANSCO in their Petitions in G.R. Nos. 173355-56 and
173563-64 boil down to the sole issue of whether the Court of Appeals committed grave abuse of
discretion amounting to lack or excess of jurisdiction in refusing to enjoin the execution of the
Decision dated December 12, 2005 of the RTC-Branch 1 in Civil Case No. 6613 while the same is
pending appeal before the appellate court.
The Court of Appeals granted the issuance of a writ of execution in favor of LANDTRADE and
denied the application for writ of preliminary injunction of NAPOCOR and TRANSCO because Rule 70,

Section 21 of the Rules of Court explicitly provides that the RTC judgment in an ejectment case, which
is adverse to the defendant and pending appeal before the Court of Appeals, shall be immediately
executory and can be enforced despite further appeal. Therefore, the execution of the RTC judgment
pending appeal is the ministerial duty of the Court of Appeals, specifically enjoined by law to be done.
NAPOCOR and TRANSCO argue that neither the rules nor jurisprudence explicitly declare that
Rule 70, Section 21 of the Rules of Court bars the application of Rule 58 on preliminary
injunction. Regardless of the immediately executory character of the RTC judgment in an ejectment
case, the Court of Appeals, before which said judgment is appealed, is not deprived of power and
jurisdiction to issue a writ of preliminary injunction when circumstances so warrant.
There is merit in the present Petitions of NAPOCOR and TRANSCO.
The Court expounded on the nature of a writ of preliminary injunction in Levi Strauss & Co. v.
Clinton Apparelle, Inc. [129]:
Section 1, Rule 58 of the Rules of Court defines a preliminary injunction as an
order granted at any stage of an action prior to the judgment or final order requiring a
party or a court, agency or a person to refrain from a particular act or acts. Injunction is
accepted as the strong arm of equity or a transcendent remedy to be used cautiously as
it affects the respective rights of the parties, and only upon full conviction on the part of
the court of its extreme necessity. An extraordinary remedy, injunction is designed to
preserve or maintain the status quo of things and is generally availed of to prevent
actual or threatened acts until the merits of the case can be heard. It may be resorted
to only by a litigant for the preservation or protection of his rights or interests and for no
other purpose during the pendency of the principal action. It is resorted to only when
there is a pressing necessity to avoid injurious consequences, which cannot be
remedied under any standard compensation. The resolution of an application for a writ
of preliminary injunction rests upon the existence of an emergency or of a special
recourse before the main case can be heard in due course of proceedings.
Section 3, Rule 58, of the Rules of Court enumerates the grounds for the issuance of a
preliminary injunction:
SEC. 3. Grounds for issuance of preliminary injunction. A preliminary
injunction may be granted when it is established:
(a) That the applicant is entitled to the relief demanded, and the
whole or part of such relief consists in restraining the commission or
continuance of the act or acts complained of, or in requiring the
performance of an act or acts, either for a limited period or perpetually;
(b) That the commission, continuance, or non-performance of the
act or acts complained of during the litigation would probably work
injustice to the applicant; or
(c) That a party, court, agency or a person is doing, threatening, or
is attempting to do, or is procuring or suffering to be done, some act or
acts probably in violation of the rights of the applicant respecting the
subject of the action or proceeding, and tending to render the judgment
ineffectual.
Under the cited provision, a clear and positive right especially calling for judicial
protection must be shown. Injunction is not a remedy to protect or enforce contingent,

abstract, or future rights; it will not issue to protect a right not in esse and which may
never arise, or to restrain an act which does not give rise to a cause of action. There
must exist an actual right. There must be a patent showing by the complaint that there
exists a right to be protected and that the acts against which the writ is to be directed
are violative of said right.

Benedicto v. Court of Appeals[130] sets forth the following elucidation on the applicability of Rule
58 vis--vis Rule 70, Section 21 of the Rules of Court:
This section [Rule 70, Section 21] presupposes that the defendant in a forcible
entry or unlawful detainer case is unsatisfied with the judgment of the Regional Trial
Court and decides to appeal to a superior court. It authorizes the RTC to immediately
issue a writ of execution without prejudice to the appeal taking its due course. It is our
opinion that on appeal the appellate court may stay the said writ should circumstances
so require.
In the case of Amagan v. Marayag, we reiterated our pronouncement in Vda. de
Legaspi v. Avendao that the proceedings in an ejectment case may be suspended in
whatever stage it may be found. We further drew a fine line between forcible entry and
unlawful detainer, thus:
Where the action, therefore, is one of illegal detainer, as distinguished
from one of forcible entry, and the right of the plaintiff to recover the
premises is seriously placed in issue in a proper judicial proceeding, it is
more equitable and just and less productive of confusion and disturbance
of physical possession, with all its concomitant inconvenience and
expenses. For the Court in which the issue of legal possession, whether
involving ownership or not, is brought to restrain, should a petition for
preliminary injunction be filed with it, the effects of any order or decision
in the unlawful detainer case in order to await the final judgment in the
more substantive case involving legal possession or ownership. It is only
where there has been forcible entry that as a matter of public policy the
right to physical possession should be immediately set at rest in favor of
the prior possession regardless of the fact that the other party might
ultimately be found to have superior claim to the premises involved
thereby to discourage any attempt to recover possession thru force,
strategy or stealth and without resorting to the courts.
Patently, even if RTC judgments in unlawful detainer cases are
immediately executory, preliminary injunction may still be granted. There
need only be clear showing that there exists a right to be protected and that
the acts against which the writ is to be directed violate said right. (Emphasis
supplied.)

As in Benedicto, substantial considerations exist herein that compels the Court to issue a writ of
preliminary injunction enjoining the execution of the February 17, 2004 Decision of the MTCC, as
affirmed by the December 12, 2005 Decision of the RTC-Branch 1, until the appeal of latter judgment,
sought by NAPOCOR and TRANSCO, is finally resolved by the Court of Appeals.
First, the two parcels of land claimed by LANDTRADE are the subject of several other cases. In fact,
Vidal and AZIMUTH, who instituted the Quieting of Title Case against Teofilo and LANDTRADE (also
presently before the Court in G.R. Nos. 178779 and 178894) have filed a Motion For Leave to

Intervene in the instant case, thus, showing that there are other parties who, while strangers to the
ejectment case, might be greatly affected by its result and who want to protect their interest in the
subject properties. And although cases involving title to real property, i.e., quieting of title, accion
publiciana, etc., are not prejudicial to and do not suspend an ejectment case, [131] the existence of such
cases should have already put the Court of Appeals on guard that the title of LANDTRADE to the
subject properties on which it fundamentally based its claim of possessory right is being fiercely
contested.
Second, it is undisputed that TRANSCO and its predecessor, NAPOCOR, have been in
possession of the disputed parcels of land for more than 40 years. Upon said properties stand the
TRANSCO Overton Sub-station and Agus 7 Warehouse. The Overton Sub-station, in particular, is a
crucial facility responsible for providing the power requirements of a large portion of Iligan City, the
two Lanao Provinces, and other nearby provinces. Without doubt, having TRANSCO vacate its Overton
Sub-station, by prematurely executing the MTCC judgment of February 17, 2004, carries serious and
irreversible implications, primordial of which is the widespread disruption of the electrical power
supply in the aforementioned areas, contributing further to the electric power crisis already plaguing
much of Mindanao.
Lastly, allowing execution pending appeal would result in the payment of an astronomical
amount in rentals which, per Sheriff Borress computation, already amounted toP156,000,000.00 by
August 11, 2004, when he issued the Notices of Garnishment and Notification against NAPOCOR and
TRANSCO; plus, P500,000.0 each month thereafter.Payment of such an amount may seriously put the
operation of a public utility in peril, to the detriment of its consumers.
These circumstances altogether present a pressing necessity to avoid injurious consequences,
not just to NAPOCOR and TRANSCO, but to a substantial fraction of the consuming public as well,
which cannot be remedied under any standard compensation. The issuance by the Court of Appeals
of a writ of preliminary injunction is justified by the circumstances.
The Court must emphasize though that in so far as the Ejectment Case is concerned, it has
only settled herein issues on the propriety of enjoining the execution of the MTCC Decision dated
February 17, 2004 while it was on appeal before the RTC, and subsequently, before the Court of
Appeals. The Court of Appeals has yet to render a judgment on the appeal itself. But it may not be
amiss for the Court to also point out that in G.R. Nos. 178779 and 178894 (Quieting of Title Case), it
has already found that Vidal, not Teofilo, is the late Doa Demetrias sole heir, who alone inherits Doa
Demetrias rights to and interests in the disputed parcels of land. This conclusion of the Court in the
Quieting of Title Case will inevitably affect the Ejectment Case still pending appeal before the Court of
Appeals since LANDTRADE is basing its right to possession in the Ejectment Case on its supposed title
to the subject properties, which it derived from Teofilo.

The Cancellation of Titles and Reversion Case

(G.R. No. 173401)
The Republic is assailing in its Petition in G.R. No. 173401 the (1) Order dated December 13, 2005 of
the RTC-Branch 4 dismissing Civil Case No. 6686, the Complaint for Cancellation of Titles and
Reversion filed by the Republic against the deceased Doa Demetria, Vidal and/or Teofilo, and
AZIMUTH and/or LANDTRADE; and (2) Order dated May 16, 2006 of the same trial court denying the
Motion for Reconsideration of the Republic, averring that:
With due respect, the trial court decided a question of substance contrary to law
and jurisprudence in ruling:
(i) THAT PETITIONER HAD NO CAUSE OF ACTION IN INSTITUTING THE
SUBJECT COMPLAINT FOR CANCELLATION OF OCT NOS. 0-1200
(A.F.) AND 0-1201 (A.F.), INCLUDING ALL DERIVATIVE TITLES, AND
REVERSION.
(ii) THAT PETITIONERS COMPLAINT FOR CANCELLATION OF OCT NOS. 01200 (A.F.) AND 0-1201 (A.F.) INCLUDING ALL DERIVATIVE TITLES,
AND REVERSION IS BARRED BY THE DECISIONS IN CACHO VS
GOVERNMENT OF THE UNITED STATES (28 PHIL. 616 [1914] AND
CACHO VS COURT OF APPEALS (269 SCRA 159 [1997].
(iii) THAT PETITIONERS CAUSE OF ACTION HAS PRESCRIBED; AND
(iv) THAT PETITIONER IS GUILTY OF FORUM SHOPPING.[132]

The Court finds merit in the present Petition.

Cause of action for reversion
The Complaint in Civil Case No. 6686 seeks the cancellation of OCT Nos. 0-1200 (a.f.) and 0-1201
(a.f.), with all their derivative titles, and reversion. The Complaint was dismissed by the RTC-Branch
4 in its Order dated December 13, 2005, upon Motion of Vidal and AZIMUTH, on the ground that the
State does not have a cause of action for reversion. According to the RTC-Branch 4, there was no
showing that the late Doa Demetria committed any wrongful act or omission in violation of any right
of the Republic.Additionally, the Regalian doctrine does not apply to Civil Case No. 6686 because said
doctrine does not extend to lands beyond the public domain. By the own judicial admission of the
Republic, the two parcels of land in question are privately owned, even before the same were
registered in Doa Demetrias name.
The Court disagrees.
Rule 2, Section 2 of the Rules of Court defines a cause of action as the act or omission by which a
party violates a right of another. Its essential elements are the following: (1) a right in favor of the
plaintiff; (2) an obligation on the part of the named defendant to respect or not to violate such right;

and (3) such defendants act or omission that is violative of the right of the plaintiff or constituting a
breach of the obligation of the former to the latter.[133]
Reversion is an action where the ultimate relief sought is to revert the land back to the government
under the Regalian doctrine. Considering that the land subject of the action originated from a grant
by the government, its cancellation is a matter between the grantor and the grantee. [134] In Estate of
the Late Jesus S. Yujuico v. Republic[135] (Yujuico case), reversion was defined as an action which seeks
to restore public land fraudulently awarded and disposed of to private individuals or corporations to
the mass of public domain. It bears to point out, though, that the Court also allowed the resort by the
Government to actions for reversion to cancel titles that were void for reasons other than fraud,i.e.,
violation by the grantee of a patent of the conditions imposed by law; [136] and lack of jurisdiction of
the Director of Lands to grant a patent covering inalienable forest land [137] or portion of a river, even
when such grant was made through mere oversight. [138] In Republic v. Guerrero,[139] the Court gave a
more general statement that the remedy of reversion can be availed of only in cases of fraudulent
or unlawful inclusion of the land in patents or certificates of title.
The right of the Republic to institute an action for reversion is rooted in the Regalian
doctrine. Under the Regalian doctrine, all lands of the public domain belong to the State, and that
the State is the source of any asserted right to ownership in land and charged with the conservation
of such patrimony. This same doctrine also states that all lands not otherwise appearing to be clearly
within private ownership are presumed to belong to the State.[140] It is incorporated in the 1987
Philippine Constitution under Article XII, Section 2 which declares [a]ll lands of the public domain,
waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries,
forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. x x
x No public land can be acquired by private persons without any grant, express or implied, from the
government; it is indispensable that there be a showing of the title from the State. [141]
The reversion case of the Republic in Civil Case No. 6686 rests on the main argument that OCT
Nos. 0-1200 (a.f.) and 0-1201 (a.f.), issued in Doa Demetrias name, included parcels of lands which
were not adjudicated to her by the Court in the 1914 Cacho case. Contrary to the statement made by
the RTC-Branch 4 in its December 13, 2005 Order, the Republic does not make any admission in its
Complaint that the two parcels of land registered in Doa Demetrias name were privately owned even
prior to their registration. While the Republic does not dispute that that two parcels of land were
awarded to Doa Demetria in the 1914 Cacho case, it alleges that these were not the same as those
covered by OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.) issued in Doa Demetrias name 84 years later. If,
indeed, the parcels of land covered by said OCTs were not those granted to Doa Demetria in the 1914
Cacho case, then it can be presumed, under the Regalian doctrine, that said properties still form part
of the public domain belonging to the State.
Just because OCTs were already issued in Doa Demetrias name does not bar the Republic from
instituting an action for reversion. Indeed, the Court made it clear inFrancisco v. Rodriguez[142] that

Section 101 of the Public Land Act may be invoked only when title has already vested in the
individual, e.g., when a patent or a certificate of title has already been issued[,] for the basic premise
in an action for reversion is that the certificate of title fraudulently or unlawfully included land of the
public domain, hence, calling for the cancellation of said certificate. It is actually the issuance of such
a certificate of title which constitutes the third element of a cause of action for reversion.
The Court further finds that the Complaint of the Republic in Civil Case No. 6686 sufficiently
states a cause of action for reversion, even though it does not allege that fraud was committed in the
registration or that the Director of Lands requested the reversion.
It is a well-settled rule that the existence of a cause of action is determined by the allegations
in the complaint. In the resolution of a motion to dismiss based on failure to state a cause of action,
only the facts alleged in the complaint must be considered. The test in cases like these is whether a
court can render a valid judgment on the complaint based upon the facts alleged and pursuant to the
prayer therein. Hence, it has been held that a motion to dismiss generally partakes of the nature of a
demurrer whichhypothetically admits the truth of the factual allegations made in a complaint.
[143]

The hypothetical admission extends to the relevant and material facts well pleaded in the

complaint and inferences fairly deducible therefrom. Hence, if the allegations in the complaint furnish
sufficient basis by which the complaint can be maintained, the same should not be dismissed
regardless of the defense that may be assessed by the defendants. [144]
In Vergara v. Court of Appeals,[145] the Court additionally explained that:
In determining whether allegations of a complaint are sufficient to support a cause of
action, it must be borne in mind that the complaint does not have to establish or allege
facts proving the existence of a cause of action at the outset; this will have to be done
at the trial on the merits of the case. To sustain a motion to dismiss for lack of cause of
action, the complaint must show that the claim for relief does not exist, rather than that
a claim has been defectively stated, or is ambiguous, indefinite or uncertain.

The Republic meticulously presented in its Complaint the discrepancies between the 1914
Cacho case, on one hand, which granted Doa Demetria title to two parcels of land; and OCT Nos. 01200 (a.f.) and 0-1201 (a.f.), on the other, which were supposedly issued pursuant to the said case. In
paragraphs 9 and 16 of its Complaint, the Republic clearly alleged that OCT Nos. 0-1200 (a.f.) and 01201 (a.f.) cover properties much larger than or areas beyond those granted by the land registration
court in GLRO Record Nos. 6908 and 6909. Thus, the Republic was able to satisfactorily allege the
unlawful inclusion, for lack of an explicit grant from the Government, of parcels of public land into Doa
Demetrias OCTs, which, if true, will justify the cancellation of said certificates and the return of the
properties to the Republic.

That the Complaint in Civil Case No. 6686 does not allege that it had been filed by the Office of
the Solicitor General (OSG), at the behest of the Director of Lands, does not call for its dismissal on
the ground of failure to state a cause of action. Section 101 of Commonwealth Act No. 141, otherwise
known as the Public Land Act, as amended, simply requires that:
SEC. 101. All actions for the reversion to the Government of lands of the public
domain or improvements thereon shall be instituted by the Solicitor General or the
officer acting in his stead, in the proper courts, in the name of the Republic of
the Philippines. (Emphasis supplied.)

Clear from the aforequoted provision that the authority to institute an action for reversion, on
behalf of the Republic, is primarily conferred upon the OSG. While the OSG, for most of the time, will
file an action for reversion upon the request or recommendation of the Director of Lands, there is no
basis for saying that the former is absolutely bound or dependent on the latter.
RTC-Branch 4 cited Sherwill Development Corporation v. Sitio Nio Residents Association,
Inc.

[146]

(Sherwill case), to support its ruling that it is absolutely necessary that an investigation and a

determination of fraud should have been made by the Director of Lands prior to the filing of a case for
reversion. The Sherwill case is not in point and does not constitute a precedent for the case at bar. It
does not even involve a reversion case. The main issue therein was whether the trial court properly
dismissed the complaint of Sherwill Development Corporation for quieting of title to two parcels of
land, considering that a case for the declaration of nullity of its TCTs, instituted by the Sto. Nio
Residents Association, Inc., was already pending before the Land Management Bureau (LMB). The
Court recognized therein the primary jurisdiction of the LMB over the dispute, and affirmed the
dismissal of the quieting of title case on the grounds of litis pendentia and forum shopping.
Res judicata
Public policy and sound practice enshrine the fundamental principle upon which the doctrine
of res judicata rests that parties ought not to be permitted to litigate the same issues more than
once. It is a general rule common to all civilized system of jurisprudence, that the solemn and
deliberate sentence of the law, pronounced by its appointed organs, upon a disputed fact or a state of
facts, should be regarded as a final and conclusive determination of the question litigated, and should
forever set the controversy at rest.Indeed, it has been well said that this maxim is more than a mere
rule of law; more even than an important principle of public policy; and that it is not too much to say
that it is a fundamental concept in the organization of every jural system. Public policy and sound
practice demand that, at the risk of occasional errors, judgments of courts should become final at
some definite date fixed by law. The very object for which courts were constituted was to put an end
to controversies.[147]

The doctrine of res judicata comprehends two distinct concepts - (1) bar by former judgment,
and (2) conclusiveness of judgment. For res judicata to serve as an absolute bar to a subsequent
action, the following requisites must concur: (1) the former judgment or order must be final; (2) the
judgment or order must be on the merits; (3) it must have been rendered by a court having
jurisdiction over the subject matter and parties; and (4) there must be between the first and second
actions, identity of parties, of subject matter, and of causes of action. When there is no identity of
causes of action, but only an identity of issues, there exists res judicata in the concept of
conclusiveness of judgment.Although it does not have the same effect as res judicata in the form of
bar by former judgment which prohibits the prosecution of a second action upon the same claim,
demand, or cause of action, the rule on conclusiveness of judgment bars the relitigation of particular
facts or issues in another litigation between the same parties on a different claim or cause of action.
[148]

The 1914 Cacho case does not bar the Complaint for reversion in Civil Case No. 6686 by res
judicata in either of its two concepts.
There is no bar by prior judgment because the 1914 Cacho case and Civil Case No. 6686 do not
have the same causes of action and, even possibly, they do not involve identical subject matters.
Land registration cases, such as GLRO Record Nos. 6908 and 6909, from which the 1914 Cacho
case arose, are special proceedings where the concept of a cause of action in ordinary civil actions
does not apply. In special proceedings, the purpose is to establish a status, condition or fact; in land
registration proceedings, the ownership by a person of a parcel of land is sought to be established.
[149]

Civil Case No. 6686 is an action for reversion where the cause of action is the alleged unlawful

inclusion in OCT Nos. 0-1200 (a.f.) and 0-1201 (a.f.) of parcels of public land that were not among
those granted to Doa Demetria in the 1914 Cacho case. Thus, Civil Case No. 6686 even rests on
supposition that the parcels of land covered by the certificates of title in Doa Demetrias name, which
the Republic is seeking to have cancelled, are different from the parcels of land that were the subject
matter of the 1914 Cacho case and adjudged to Doa Demetria.
Res judicata in the concept of conclusiveness of judgment, likewise, does not apply as between
the 1914 Cacho case and Civil Case No. 6686. A careful study of the Complaint in Civil Case No. 6686
reveals that the Republic does not seek to re-litigate any of the issues resolved in the 1914 Cacho
case. The Republic no longer questions in Civil Case No. 6686 that Doa Demetria was adjudged the
owner of two parcels of land in the 1914 Cacho case. The Republic is only insisting on the strict
adherence to the judgment of the Court in the 1914 Cacho case, particularly: (1) the adjudication of a
smaller parcel of land, consisting only of the southern portion of the 37.87-hectare Lot 2 subject of
Doa Demetrias application in GLRO Record No. 6909; and (2) the submission of a new technical plan
for the adjudicated southern portion of Lot 2 in GLRO Record No. 6909, and the deed executed by

Datto Darondon, husband of Alanga, renouncing all his rights to Lot 1, in GLRO Record No. 6908, in
Doa Demetrias favor.[150]
Similarly, the 1997 Cacho case is not an obstacle to the institution by the Republic of Civil Case
No. 6686 on the ground of res judicata.
Bar by prior judgment does not apply for lack of identity of causes of action between the 1997 Cacho
case and Civil Case No. 6686. The 1997 Cacho case involves a petition for re-issuance of decrees of
registration. In the absence of principles and rules specific for such a petition, the Court refers to
those on reconstitution of certificates of title, being almost of the same nature and granting closely
similar reliefs.
Reconstitution denotes a restoration of the instrument which is supposed to have been lost or
destroyed in its original form or condition. The purpose of the reconstitution of title or any document
is to have the same reproduced, after observing the procedure prescribed by law, in the same form
they were when the loss or destruction occurred. [151]Reconstitution is another special proceeding
where the concept of cause of action in an ordinary civil action finds no application.
The Court, in the 1997 Cacho case, granted the reconstitution and re-issuance of the decrees
of registration considering that the NALTDRA, through then Acting Commissioner Santiago M.
Kapunan,[152] its Deputy Clerk of Court III, the Head Geodetic Engineer, and the Chief of Registration,
certified that according to the Record Book of Decrees for Ordinary Land Registration Case, Decree
No. 18969 was issued in GLRO Record No. 6909 and Decree No. 10364 was issued in GLRO Record No.
6908[;][153]thus, leaving no doubt that said decrees had in fact been issued.
The 1997 Cacho case only settled the issuance, existence, and subsequent loss of Decree Nos. 10364
and 18969. Consequently, said decrees could be re-issued in their original form or condition. The
Court, however, could not have passed upon in the 1997 Cacho case the issues on whether Doa
Demetria truly owned the parcels of land covered by the decrees and whether the decrees and the
OCTs subsequently issued pursuant thereto are void for unlawfully including land of the public domain
which were not awarded to Doa Demetria.
The following pronouncement of the Court in Heirs of Susana de Guzman Tuazon v. Court of
Appeals[154] is instructive:
Precisely, in both species of reconstitution under Section 109 of P.D. No. 1529 and R.A.
No. 26, the nature of the action denotes a restoration of the instrument which is
supposed to have been lost or destroyed in its original form and condition. The
purpose of the action is merely to have the same reproduced, after proper
proceedings, in the same form they were when the loss or destruction
occurred, and does not pass upon the ownership of the land covered by the
lost or destroyed title. It bears stressing at this point that ownership should not be

confused with a certificate of title. Registering land under the Torrens System does not
create or vest title because registration is not a mode of acquiring ownership. A
certificate of title is merely an evidence of ownership or title over the particular property
described therein. Corollarily, any question involving the issue of ownership must
be threshed out in a separate suit, which is exactly what the private respondents
did when they filed Civil Case No. 95-3577 before Branch 74. The trial court will then
conduct a full-blown trial wherein the parties will present their respective evidence on
the issue of ownership of the subject properties to enable the court to resolve the said
issue. x x x. (Emphases supplied.)

Whatever findings the Court made on the issue of ownership in the 1997 Cacho case are mere obiter
dictum. As the Court held in Amoroso v. Alegre, Jr.[155]:
Petitioner claims in his petition that the 3 October 1957 Decision resolved the
issue of ownership of the lots and declared in the body of the decision that he had
sufficiently proven uncontroverted facts that he had been in possession of the land in
question since 1946 x x x [and] has been in possession of the property with sufficient
title. However, such findings made by the CFI in the said decision are mere
obiter, since the ownership of the properties, titles to which were sought to
be reconstituted, was never the issue in the reconstitution case. Ownership
is not the issue in a petition for reconstitution of title. A reconstitution of title
does not pass upon the ownership of the land covered by the lost or
destroyed title.
It may perhaps be argued that ownership of the properties was put in issue when
petitioner opposed the petition for reconstitution by claiming to be the owner of the
properties. However, any ruling that the trial court may make on the matter is
irrelevant considering the courts limited authority in petitions for
reconstitution. In a petition for reconstitution of title, the only relief sought is the
issuance of a reconstituted title because the reconstituting officers power is limited to
granting or denying a reconstituted title. As stated earlier, the reconstitution of title
does not pass upon the ownership of the land covered by the lost or destroyed title, and
any change in the ownership of the property must be the subject of a separate suit.
(Emphases supplied.)

The Court concedes that the 1997 Cacho case, by reason of conclusiveness of judgment,
prevents the Republic from again raising as issues in Civil Case No. 6686 the issuance and existence
of Decree Nos. 10364 and 18969, but not the validity of said decrees, as well as the certificates of
title issued pursuant thereto.
Forum shopping
Forum shopping is the filing of multiple suits involving the same parties for the same cause of
action, either simultaneously or successively, for the purpose of obtaining a favorable judgment. A
party violates the rule against forum shopping if the elements of litis pendentia are present; or if a
final judgment in one case would amount to res judicata in the other.[156]
There is forum shopping when the following elements are present: (a) identity of parties, or at
least such parties as represent the same interests in both actions; (b) identity of rights asserted and
relief prayed for, the relief being founded on the same facts; and (c) the identity of the two preceding

particulars, is such that any judgment rendered in the other action will, regardless of which party is
successful, amount to res judicata in the action under consideration; said requisites are also
constitutive of the requisites for auter action pendant or lis pendens.[157]
Given the preceding disquisition of the Court that the 1914 and 1997 Cacho cases do not
constitute res judicata in Civil Case No. 6686, then the Court also cannot sustain the dismissal by the
RTC-Branch 4 of the Complaint of the Republic in Civil Case No. 6686 for forum shopping.
Prescription
According to the RTC-Branch 4, the cause of action for reversion of the Republic was already lost or
extinguished by prescription, citing Section 32 of the Property Registration Decree, which provides:
SEC. 32. Review of decree of registration; Innocent purchaser for value. The
decree of registration shall not be reopened or revised by reason of absence, minority,
or other disability of any person adversely affected thereby, nor by any proceeding in
any court for reversing judgment, subject, however, to the right of any person, including
the government and the branches thereof, deprived of land or of any estate or interest
therein by such adjudication or confirmation of title obtained by actual fraud, to file in
the proper Court of First Instance a petition for reopening and review of the decree of
registration not later than one year from and after the date of the entry of such decree
of registration, but in no case shall such petition be entertained by the court where an
innocent purchaser for value has acquired the land or an interest therein, whose rights
may be prejudiced. Whenever the phrase innocent purchaser of value or an equivalent
phrase occurs in this Decree, it shall be deemed to include an innocent lessee,
mortgagee, or other encumbrancer for value.
Upon the expiration of said period of one year, the decree of registration and the
certificate of title issued shall become incontrovertible. Any person aggrieved by such
decree of registration in any case may pursue his remedy by action for damages against
the applicant or any other persons responsible for the fraud.

Decree No. 10364 in GLRO Record No. 6908 was issued on May 9, 1913, while Decree No. 18969 in
GLRO Record No. 6909 was issued on July 8, 1915. In the course of eight decades, the decrees were
lost and subsequently reconstituted per order of this Court in the 1997 Cacho case. The reconstituted
decrees were issued on October 15, 1998 and transcribed on OCT Nos. 0-1200 (a.f.) and 0-1201
(a.f.). The reconstituted decrees were finally entered into the Registration Book for Iligan City on
December 4, 1998 at 10:00 a.m. Almost six years had elapsed from entry of the decrees by the time
the Republic filed its Complaint in Civil Case No. 6686 on October 13, 2004.
Nonetheless, elementary is the rule that prescription does not run against the State and its
subdivisions. When the government is the real party in interest, and it is proceeding mainly to assert
its own right to recover its own property, there can as a rule be no defense grounded on laches or
prescription. Public land fraudulently included in patents or certificates of title may be recovered or

reverted to the State in accordance with Section 101 of the Public Land Act. The right of reversion or
reconveyance to the State is not barred by prescription. [158]
The Court discussed lengthily in Republic v. Court of Appeals[159] the indefeasibility of a decree of
registration/certificate of title vis--vis the remedy of reversion available to the State:
The petitioner invokes Republic v. Animas, where this Court declared that a title
founded on fraud may be cancelled notwithstanding the lapse of one year from the
issuance thereof. Thus:
x x x The misrepresentations of the applicant that he had been
occupying and cultivating the land and residing thereon are sufficient
grounds to nullify the grant of the patent and title under Section 91 of the
Public Land Law which provides as follows:
"The statements made in the application shall be
considered as essential conditions or parts of any
concession, title or permit issued on the basis of such
application, and any false statement thereon or omission of
facts, changing, or modifying the consideration of the facts
set forth in such statement, and any subsequent
modification, alteration, or change of the material facts set
forth in the application shall ipso facto produce the
cancellation of the concession, title or permit granted. x x x"
A certificate of title that is void may be ordered cancelled. A title
will be considered void if it is procured through fraud, as when a person
applies for registration of the land under his name although the property
belongs to another. In the case of disposable public lands, failure on the
part of the grantee to comply with the conditions imposed by law is a
ground for holding such title void. The lapse of the one year period within
which a decree of title may be reopened for fraud would not prevent the
cancellation thereof, for to hold that a title may become indefeasible by
registration, even if such title had been secured through fraud or in
violation of the law, would be the height of absurdity. Registration should
not be a shield of fraud in securing title.
This doctrine was reiterated in Republic v. Mina, where Justice Relova declared for
the Court:
A certificate of title that is void may be ordered cancelled. And, a
title will be considered void if it is procured through fraud, as when a
person applies for registration of the land on the claim that he has been
occupying and cultivating it. In the case of disposable public lands, failure
on the part of the grantee to comply with the conditions imposed by law is
a ground for holding such title void. x x x The lapse of one (1) year period
within which a decree of title may be reopened for fraud would not
prevent the cancellation thereof for to hold that a title may become
indefeasible by registration, even if such title had been secured through
fraud or in violation of the law would be the height of absurdity.
Registration should not be a shield of fraud in securing title.
Justifying the above-quoted provision, the Court declared in Piero, Jr. v. Director
of Lands:

It is true that under Section 122 of the Land Registration Act, a

Torrens title issued on the basis of a free patent or a homestead patent is
as indefeasible as one judicially secured. And in repeated previous
decisions of this Court that indefeasibility has been emphasized by Our
holding that not even the Government can file an action for annulment,
but at the same time, it has been made clear that an action for reversion
may be instituted by the Solicitor General, in the name of the Republic of
the Philippines. It is to the public interest that one who succeeds in
fraudulently acquiring title to a public land should not be allowed to
benefit therefrom, and the State should, therefore, have an even existing
authority, thru its duly authorized officers, to inquire into the
circumstances surrounding the issuance of any such title, to the end that
the Republic, thru the Solicitor General or any other officer who may be
authorized by law, may file the corresponding action for the reversion of
the land involved to the public domain, subject thereafter to disposal to
other qualified persons in accordance with law. In other words, the
indefeasibility of a title over land previously public is not a bar to an
investigation by the Director of Lands as to how such title has been
acquired, if the purpose of such investigation is to determine whether or
not fraud had been committed in securing such title in order that the
appropriate action for reversion may be filed by the Government.
Private respondent PNB points out that Animas involved timberland, which is not
alienable or disposable public land, and that in Piero the issue raised was whether the
Director of Lands would be enjoined by a writ of prohibition from investigating
allegations of fraud that led to the issuance of certain free patents. Nevertheless, we
find that the doctrine above quoted is no less controlling even if there be some factual
disparities (which are not material here), especially as it has been buttressed by
subsequent jurisprudence.
In Director of Lands v. Jugado, upon which the appellate court based its ruling, the
Court declared meaningfully that:
There is, however, a section in the Public Land Law (Sec. 101 of
Commonwealth Act 141), which affords a remedy whereby lands of the
public domain fraudulently awarded may be recovered or reverted back to
its original owner, the Government. But the provision requires that all such
actions for reversion shall be instituted by the Solicitor General or the
officer acting in his stead, in the proper courts, in the name of the Republic
of the Philippines (See Director of Lands v. De Luna, supra). As the party in
interest in this case is the Director of Lands and not the Republic of the
Philippines, the action cannot prosper in favor of the appellant.
The reference was to the Public Land Law which authorizes the reversion suit
under its Sec. 101, thus:
Sec. 101. All actions for the reversion to the Government of lands of
the public domain or improvements thereon shall be instituted by the
Solicitor General or the officer acting in his stead, in the proper courts, in
the name of the Republic of the Philippines.
This remedy was recently affirmed by the Court in Heirs of Gregorio Tengco v.
Heirs of Jose and Victoria Aliwalas, thus:
x x x Title to the property having become incontrovertible, such
may no longer be collaterally attacked. If indeed there had been any fraud
or misrepresentation in obtaining the title, an action for reversion
instituted by the Solicitor General would be the proper remedy.

It is evident from the foregoing jurisprudence that despite the lapse of one year from the entry
of a decree of registration/certificate of title, the State, through the Solicitor General, may still
institute

an

action

for

reversion

when

said

decree/certificate

was

acquired

by

fraud

or

misrepresentation. Indefeasibility of a title does not attach to titles secured by fraud and
misrepresentation. Well-settled is the doctrine that the registration of a patent under the Torrens
system does not by itself vest title; it merely confirms the registrants already existing one. Verily,
registration under the Torrens system is not a mode of acquiring ownership. [160]
But then again, the Court had several times in the past recognized the right of the State to avail itself
of the remedy of reversion in other instances when the title to the land is void for reasons other than
having been secured by fraud or misrepresentation. One such case is Spouses Morandarte v. Court of
Appeals,[161] where the Bureau of Lands (BOL), by mistake and oversight, granted a patent to the
spouses Morandarte which included a portion of the Miputak River. The Republic instituted an action
for reversion 10 years after the issuance of an OCT in the name of the spouses Morandarte. The Court
ruled:
Be that as it may, the mistake or error of the officials or agents of the BOL in this
regard cannot be invoked against the government with regard to property of the public
domain. It has been said that the State cannot be estopped by the omission, mistake or
error of its officials or agents.
It is well-recognized that if a person obtains a title under the Public Land Act which
includes, by oversight, lands which cannot be registered under the Torrens system, or
when the Director of Lands did not have jurisdiction over the same because it is a public
domain, the grantee does not, by virtue of the said certificate of title alone, become the
owner of the land or property illegally included. Otherwise stated, property of the public
domain is incapable of registration and its inclusion in a title nullifies that title.

Another example is the case of Republic of the Phils. v. CFI of Lanao del Norte, Br. IV,[162] in which the
homestead patent issued by the State became null and void because of the grantees violation of the
conditions for the grant. The Court ordered the reversion even though the land subject of the patent
was already covered by an OCT and the Republic availed itself of the said remedy more than 11 years
after the cause of action accrued, because:
There is merit in this appeal considering that the statute of limitation does not lie
against the State. Civil Case No. 1382 of the lower court for reversion is a suit brought
by the petitioner Republic of the Philippines as a sovereign state and, by the express
provision of Section 118 of Commonwealth Act No. 141, any transfer or alienation of a
homestead grant within five (5) years from the issuance of the patent is null and void
and constitute a cause for reversion of the homestead to the State. In Republic vs. Ruiz,
23 SCRA 348, We held that "the Court below committed no error in ordering the
reversion to plaintiff of the land grant involved herein, notwithstanding the fact that the
original certificate of title based on the patent had been cancelled and another
certificate issued in the names of the grantee heirs. Thus, where a grantee is found not
entitled to hold and possess in fee simple the land, by reason of his having violated

Section 118 of the Public Land Law, the Court may properly order its reconveyance to
the grantor, although the property has already been brought under the operation of the
Torrens System. And, this right of the government to bring an appropriate action for
reconveyance is not barred by the lapse of time: the Statute of Limitations does not run
against the State." (Italics supplied). The above ruling was reiterated in Republic vs.
Mina, 114 SCRA 945.

If the Republic is able to establish after trial and hearing of Civil Case No. 6686 that the
decrees and OCTs in Doa Demetrias name are void for some reason, then the trial court can still order
the reversion of the parcels of land covered by the same because indefeasibility cannot attach to a
void decree or certificate of title. The RTC-Branch 4 jumped the gun when it declared that the cause of
action of the Republic for reversion in Civil Case No. 6686 was already lost or extinguished by
prescription based on the Complaint alone.
All told, the Court finds that the RTC-Branch 4 committed reversible error in dismissing the
Complaint for Cancellation of Titles and Reversion of the Republic in Civil Case No. 6686. Resultantly,
the Court orders the reinstatement of said Complaint. Yet, the Court also deems it opportune to recall
the following statements in Saad-Agro Industries, Inc. v. Republic[163]:
It has been held that a complaint for reversion involves a serious controversy,
involving a question of fraud and misrepresentation committed against the government
and it is aimed at the return of the disputed portion of the public domain. It seeks to
cancel the original certificate of registration, and nullify the original certificate of title,
including the transfer certificate of title of the successors-in-interest because the same
were all procured through fraud and misrepresentation. Thus, the State, as the party
alleging the fraud and misrepresentation that attended the application of the free
patent, bears that burden of proof. Fraud and misrepresentation, as grounds for
cancellation of patent and annulment of title, should never be presumed but must be
proved by clear and convincing evidence, mere preponderance of evidence not even
being adequate. It is but judicious to require the Government, in an action for
reversion, to show the details attending the issuance of title over the alleged
inalienable land and explain why such issuance has deprived the State of the
claimed property. (Emphasis supplied.)

It may do well for the Republic to remember that there is a prima facie presumption of
regularity in the issuance of Decree Nos. 10364 and 18969, as well as OCT Nos. 0-1200 (a.f.) and 01201 (a.f.), in Doa Demetrias name, and the burden of proof falls upon the Republic to establish by
clear and convincing evidence that said decrees and certificates of title are null and void.
IV
DISPOSITIVE PART
WHEREFORE, premises considered, the Court renders the following judgment in the Petitions at bar:

1) In G.R. No. 170375 (Expropriation Case), the Court GRANTS the Petition for Review of the
Republic of the Philippines. It REVERSES and SETS ASIDE the Resolutions dated July 12, 2005 and

October 24, 2005 of the Regional Trial Court, Branch 1 of Iligan City, Lanao del Norte. It
further ORDERS the reinstatement of the Complaint in Civil Case No. 106, the admission of the
Supplemental Complaint of the Republic, and the return of the original record of the case to the court
of origin for further proceedings. No costs.

2) In G.R. Nos. 178779 and 178894 (Quieting of Title Case), the Court DENIES the consolidated
Petitions for Review of Landtrade Realty Corporation, Teofilo Cacho, and/or Atty. Godofredo Cabildo for
lack of merit. It AFFIRMS the Decision dated January 19, 2007 and Resolution dated July 4, 2007 of
the Court of Appeals in CA-G.R. CV. No. 00456, affirming in toto the Decision dated July 17, 2004 of
the Regional Trial Court, Branch 3 of Iligan City, Lanao del Norte, in Civil Case No. 4452. Costs against
Landtrade Realty Corporation, Teofilo Cacho, and Atty. Godofredo Cabildo.

3) In G.R. No. 170505 (The Ejectment or Unlawful Detainer Case execution pending appeal
before the Regional Trial Court), the Court DENIES the Petition for Review of Landtrade Realty
Corporation for being moot and academic given that the Regional Trial Court, Branch 1 of Iligan City,
Lanao del Norte had already rendered a Decision dated December 12, 2005 in Civil Case No. 6613. No
costs.
4) In G.R. Nos. 173355-56 and 173563-64 (The Ejectment or Unlawful Detainer Case execution
pending appeal before the Court of Appeals), the Court GRANTS the consolidated Petitions
for Certiorari and

Prohibition

of

the

National

Power

Corporation

and

National

Transmission

Corporation. It SETS ASIDE the Resolution dated June 30, 2006 of the Court of Appeals in CA-G.R. SP
Nos. 00854 and 00889 for having been rendered with grave abuse of discretion amounting to lack or
excess of jurisdiction. It furtherORDERS the Court of Appeals to issue a writ of preliminary injunction
enjoining the execution of the Decision dated December 12, 2005 of the Regional Trial Court, Branch
1 of Iligan City, Lanao del Norte, in Civil Case No. 6613, while the same is pending appeal before the
Court of Appeals in CA-G.R. SP Nos. 00854 and 00889. It finallyDIRECTS the Court of Appeals to
resolve without further delay the pending appeals before it, in CA-G.R. SP Nos. 00854 and 00889, in a
manner not inconsistent with this Decision. No costs.
5) In G.R. No. 173401 (Cancellation of Titles and Reversion Case), the Court GRANTS the Petition
for Review of the Republic of the Philippines. It REVERSES and SETS ASIDE the Orders dated
December 13, 2005 and May 16, 2006 of the Regional Trial Court, Branch 4 of Iligan City in Civil Case
No. 6686. It further ORDERS the reinstatement of the Complaint in Civil Case No. 6686 and the return
of the original record of the case to the court of origin for further proceedings. No costs.
SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO

Associate Justice

SPECIAL THIRD DIVISION

FLIGHT ATTENDANTS AND G.R. No. 178083

STEWARDS ASSOCIATION OF
THE PHILIPPINES (FASAP),
Petitioner, Present:
Ynares-Santiago, J. (Chairperson),
- versus - Chico-Nazario,
Nachura,
Peralta, and
Bersamin,* JJ.
PHILIPPINE AIRLINES, INC.,
PATRIA CHIONG and COURT Promulgated:
OF APPEALS,
Respondents. October 2, 2009
x ---------------------------------------------------------------------------------------- x

RESOLUTION

YNARES-SANTIAGO, J.:

For resolution is respondent Philippine Airlines, Inc.s (PAL) Motion for Reconsideration[1] of our
Decision of July 22, 2008, the dispositive portion of which provides:

WHEREFORE, the instant petition is GRANTED. The assailed Decision of the Court
of Appeals in CA-G.R. SP No. 87956 dated August 23, 2006, which affirmed the Decision
of the NLRC setting aside the Labor Arbiters findings of illegal retrenchment and its
Resolution of May 29, 2007 denying the motion for reconsideration, are REVERSED and
SET ASIDE and a new one is rendered:

1. FINDING respondent Philippine Airlines, Inc. GUILTY of illegal

dismissal;

2. ORDERING Philippine Airlines, Inc. to reinstate the cabin crew

personnel who were covered by the retrenchment and demotion scheme
of June 15, 1998 made effective on July 15, 1998, without loss of seniority
rights and other privileges, and to pay them full backwages, inclusive of
allowances and other monetary benefits computed from the time of their
separation up to the time of their actual reinstatement, provided that with
respect to those who had received their respective separation pay, the
amounts of payments shall be deducted from their backwages. Where
reinstatement is no longer feasible because the positions previously held
no longer exist, respondent Corporation shall pay backwages plus, in lieu
of reinstatement, separation pay equal to one (1) month pay for every
year of service;

3. ORDERING Philippine Airlines, Inc. to pay attorneys

equivalent to ten percent (10%) of the total monetary award.

fees

Costs against respondent PAL.

SO ORDERED.

In its Motion for Reconsideration, PAL maintains that it was suffering from financial distress
which justified the retrenchment of more than 1,400 of its flight attendants.This, it argued, was an
established fact. Furthermore, FASAP never assailed the economic basis for the retrenchment, but
only the allegedly discriminatory and baseless manner by which it was carried out.

PAL asserts that it has presented proof of its claimed losses by attaching its petition for
suspension of payments, as well as the June 23, 1998 Order of the Securities and Exchange
Commission (SEC) approving the said petition for suspension of payments, in its Motion to Dismiss
and/or Consolidation of Case filed with the Labor Arbiter in NLRC-NCR Case No. 06-05100-98, or the
labor case subject of the herein petition. Also attached to the petition for suspension of payments
were its audited financial statements for its fiscal year ending March 1998, and interim financial
statements as of the end of the month prior to the filing of its petition for suspension of payments, as
well as:

a) A summary of its debts and other liabilities;

b) A summary of its assets and properties;

c) List of its equity security shareholders showing the name of the security holder
and the kind of interest registered in the name of each holder;

d) A schedule which contains a full and true statement of all of its debts and
liabilities, together with a list of all those to whom said debts and liabilities are due;

e) An inventory which contains an accurate description of all the real and

personal property, estate and effects of PAL, together with a statement of the value of
each item of said property, estate and effects, their respective location and a statement
of the encumbrances thereon.

In the instant Motion for Reconsideration, PAL attached a copy of its audited financial
statements for fiscal years 1996, 1997 and 1998. It justifies the submission before the Court of
Appeals of its 2002-2004, and not the 1996-1998, audited financial statements, to show that as of the
time of their submission with the Court of Appeals, PAL was still under rehabilitation, and not for the
purpose of establishing its financial problems during the retrenchment period.

PAL asserts further that the Court should have accorded the SECs findings as regards its
financial condition respect and finality, considering that said findings were based on the financial
statements and other documents submitted to it, which PAL now submits, albeit belatedly, via the
instant Motion for Reconsideration. It cites the case of Clarion Printing House Inc. v. National Labor
Relations Commission,[2] where the Court declared that the appointment of a receiver or management

committee by the SEC presupposes a finding that, inter alia, a company possesses sufficient property
to cover all its debts but foresees the impossibility of meeting them when they respectively fall due
and there is imminent danger of dissipation, loss, wastage or destruction of assets or other properties
or paralyzation of business operations. On the other hand, it claims that in Rivera v. Espiritu,[3] the
Court made a finding that as a result of the pilots three-week strike that began on June 5, 1998, PALs
financial situation went from bad to worse and it was faced with bankruptcy, requiring it to seek
rehabilitation and downsize its labor force by more than one-third; and that said pilots strike was
immediately followed by another four-day employee-wide strike on July 22, 1998, which involved
1,899 union[4] members.

PAL likewise cites previous decisions of the Court which declared a suspension of claims
against it in light of pending rehabilitation proceedings and the issuance of a stay order in the
enforcement of all claims, whether for money or otherwise, which is effective from the date of its
issuance until the dismissal of the petition or the termination of the rehabilitation proceedings.
[5]

Moreover, it claims that the infusion of $200 million in PAL in June 1999 is proof of the airlines

financial distress, and was a condition sine qua non if PALs Amended and Restated Rehabilitation Plan
were to be approved by the SEC, and if the absolute closure of PAL were to be averted.

PAL underscores that its situation in 1998 was unique, as it had to contend with

the very distinct possibility that its losses would eventually result in default on its
payments to creditors for its aircraft leases. If that happened, creditors could have
immediately seized all its leased planes and that would have spelled PALs demise. The
petition for rehabilitation and suspension of payments was precisely intended to avoid
PALs collapse and eventual liquidation.[6]

Exercising its management prerogative and sound business judgment, it decided to cut its fleet
of aircraft in order to minimize its operating losses and rescue itself from total downfall; which meant
that a corresponding company-wide reduction in manpower necessarily had to be made. As a result,
5,000 PAL employees (including the herein 1,400 cabin attendants) were retrenched.

Further, PAL argues that aside from the confluence of simultaneous unfortunate events that
occurred during the time, like successive strikes, peso depreciation and the Asian currency crisis,
there was a serious drop in passenger traffic which necessitated the closure of PALs entire European,
Australian, and Middle East operations and numerous Asian stations, as well as some of its domestic

stations. Consequently, its 27 international routes were reduced to only 7, and its 37 domestic routes
to just 17.

PAL claims that it did not act with undue haste in effecting the mass retrenchment of cabin
attendants since, as early as February 17, 1998, consultations were being held in connection with the
proposed retrenchment, and that twice-weekly meetings between the union and the airline were
being held since February 12, 1998. It claims that it took PAL four months before the retrenchment
scheme was finally implemented.

With regard to the implementation of Plan 22 instead of the original Plan 14, PAL asserts that,
in so doing, it should not be found guilty of bad faith. It sets out the chronology of events that led it to
implement Plan 22 instead of Plan 14, thus:

The initial plan was, indeed, to reduce PALs fleet from 54 planes to 14. With a
smaller fleet, PAL necessarily had to reduce manpower accordingly, and this was the
basis for the retrenchment. The retrenchment was done on the basis of the conditions
and circumstances existing at that time. However, a series of events ensued

PAL was placed under corporate rehabilitation by the SEC on June 23, 1998.

Later, on July 22, 1998, the rank-and-file employees belonging to PALEA staged a
strike.

Then, on August 28, 1998, President Joseph Ejercito Estrada issued

Administrative Order No. 16 creating Inter-Agency Task Force to aid PAL and its
employees in solving the problem.

On September 4, 1998, PAL submitted an offer to the Task Force of a plan to

transfer shares of stocks to its employees with a request to suspend existing Collective
Bargaining Agreements, which was later rejected by the employees.

On September 23, 1998, PAL ceased operations.

Then, President Estrada intervened again through the request of PAL employees.
PALEA made an offer, which was rejected by PAL. Finally, PALEA made an offer again
which was successfully ratified by the employees on October 2, 1998 and accepted by
PAL.

Subsequently, PAL partially resumed domestic operations on October 7, 1998

believing that the mutually beneficial terms of the suspension agreement could possibly
redeem PAL. Later, it partially resumed its operations internationally (Los
Angeles and San Francisco, United States).

True enough, with some degree of relief as a result of the suspension of payment
and rehabilitation proceedings in the SEC and the suspension of the CBA, PAL began to
see slow but steady improvements. Also, airline industry experts who were
commissioned by PAL to assist in drafting its Amended and Restated Rehabilitation Plan
came to a conclusion that PAL had to increase its fleet of planes to improve its financial
and operational viability. This advice was adopted by PAL in its Amended and Restated
Rehabilitation Plan, which was eventually approved by the SEC.

With these supervening events, PAL decided to implement Plan 22 upon

reevaluation and optimistic future projection for its operations. The decision to abandon
Plan 14 was not done with precipitate haste. The Honorable Court should appreciate
that the chain of unfolding events after the retrenchment encouraged PAL, in the
exercise of its sound business discretion, to implement Plan 22. This was not a
capricious decision. In fact, the SEC approved PALs Amended and Restated
Rehabilitation Plan, which includes, among others, PALs Fleet Plan composed of 22
planes.

Neither does it show that PAL was uncertain of its financial condition when it
retrenched based on Plan 14. PAL would not have even petitioned the SEC for its
rehabilitation were it not certain of its dire financial state. The decision to later abandon
Plan 14 was a business judgment that PAL made in good faith upon the advice of foreign
airline industry experts and in light of the supervening circumstances explained above.

In this regard, this Honorable Court has once held that

Questions of policy or of management are left solely to the honest decision

of the board as the business manager of the corporation, and the court is
without authority to substitute its judgment for that of the board, and as
long as it acts in good faith and in the exercise of honest judgment in the
interest of the corporation, its orders are not reviewable by the courts.

On the basis of Plan 22, PAL decided to recall/rehire

some of the retrenched employees.

With due respect, this Honorable Court is mistaken in its ruling that PAL acted in
bad faith simply because it later on decided to recall or rehire the employees it initially
retrenched. The decision to recall/rehire was a logical consequence of PALs decision to
increase its fleet from 14 to 22 planes, which as discussed earlier, was a business
judgment exercised in good faith by PAL after a series of significant events.

PAL did not even have any legal obligation to rehire the employees who have
already been paid their separation pay and who have executed valid quitclaims. PAL,
instead of being accused of bad faith for rehiring these employees, should in fact be
commended. That the retrenched employees were given priority in hiring is certainly
not bad faith. Noteworthy is the fact that PAL never hired NEW employees until
November 2000 or more than 2 years after the 1998 retrenchment.

It is respectfully submitted that the legality of the retrenchment could not be

made to depend on the fact that PAL recalled/rehired some of the employees after five
months without taking into account the supervening events. At the exact time of
retrenchment, PAL was not in a position to know with certainty that it could actually
recover from the precarious financial problem it was facing and, if so, when.

The only thing PAL knew at that exact point in time was that it was in its most
critical condition when its liabilities amounted to about Php 85,109,075,351.00, while its
assets amounted to only about Php 90,642,330,919.00 aggravated by many other
circumstances as explained earlier. At the time of the retrenchment in June 1998, PAL
was at the brink of total collapse and it could not have known that in five months, there
will be supervening events that will impel it to reassess its initial decisions.

xxxx

In the present case, PAL beseeches this Honorable Court to take a second look at
the peculiar facts and circumstances that clearly show that the recall/rehire was done in
good faith. These facts and circumstances make the case of PAL totally different from
the other cases decided by this Honorable Court where it found bad faith on the part of
the employer for immediately rehiring or hiring employees after retrenchment.

xxxx

But even then, PAL still endeavored to recall or rehire the

FASAP members that it could. Thus, out of the 1,423 FASAP
retrenched, 496 were eventually recalled or reinstated (those
separation pay and opted to resume their employment with
seniority).

maximum number of
members who were
who did not receive
PAL with no loss of

On the other hand, 321 FASAP members were rehired (those who received
separation pay and voluntarily rejoined PAL as new employees). In this regard, PAL
would like to take exception to the Honorable Courts observation that these employees
were taken in as new hires without due regard to their long years of service. The FASAP
members who were rehired as new employees were those who already received their
separation pay because of the retrenchment but voluntarily accepted PALs offer for
them to be rehired when Plan 22 was implemented. It cannot be said that they were
prejudiced by the rehire process, as they already cashed in on their tenure when they
accepted the separation pay. That they later on accepted PALs offer to rehire them as
new employees was purely voluntary on their part.

Meanwhile, around 591 FASAP members opted not to return anymore after
receiving their full separation pay. Thus, including those who voluntarily opted not to
resume their employment with PAL, only about 591 can be considered to have remained
unrecalled or unrehired.

It is significant to mention that FASAP directly and actively participated in the

recall process, and even suggested the names of its members for prospective recall.

Likewise, in the recall process, PAL followed the provisions of the CBA and as a
result, some of the recalled employees were assigned to lower positions (or demoted as
noted by this Honorable Court). However, this was only because there were not enough
positions for all of them to be restored to their previous posts. Evidently, with lesser
planes flying international routes, not all international flight attendants would be
restored to international flight posts. Some of them would be downgraded to domestic
flights. This was the natural and logical effect of the fleet downsizing that PAL adopted.
This could not be a badge of bad faith, as this Honorable Court seems to believe.

xxxx

Likewise, no bad faith should be inferred from PALs closure in September 1998.
That decision was by no means easy being the national flag carrier and the oldest
airline in Asia (having operated for 57 years at the time). The closure could not have
been a mere retaliation for rejecting the offer of PAL, as it would have aggravated
matters further and rendered rehabilitation impossible.

Hence, PALs decision to resume operations when the employees acceded to its
request to suspend the CBA should be seen in this context. This was not a coercive
posture. PAL resumed operations only because the suspension of the CBA, among
others, gave it hope that it could recover.

Furthermore, any issue on the legality of the suspension of the CBA had already
been put to rest by no less than this Honorable Court in the case of Rivera vs. Espiritu
where it held that

The assailed PAL-PALEA agreement was the result of voluntary collective

bargaining negotiations undertaken in the light of the severe financial
situation faced by the employer, with the peculiar and unique intention of
not merely promoting industrial peace at PAL, but preventing the latters
closure.[7] (Emphasis supplied)

PAL explains that the 140 probationary cabin attendants who were fired and subsequently
rehired were part of an earlier retrenchment process in February and March 1998, a component of
PALs less drastic cost cutting measures then being implemented. Eventually, these rehired
probationary cabin attendants were included in the subject retrenchment of more than 1,400. Thus, it
claims that it was inaccurate for the Court to have held that these 140 probationary cabin attendants
were retained while those with permanent status were fired.

Finally, PAL begs the Court to reconsider its finding that the retrenchment scheme in question
did not pass the test of fairness and reasonableness with respect to the criteria used in selecting
those whose services should be retained or terminated. That it merely used the criteria stipulated in
its CBA with FASAP where efficiency rating and inverse seniority are the basic considerations as
carried over from the parties previous CBAs could allegedly be seen from the manner the
retrenchment plan was carried out. The rating variables contained in the Performance Evaluation
Form of each and every cabin crew personnels Grooming and Appearance Handbook are fair and
reasonable since they are inherent requirements (necessarily intertwined, as PAL would put it) for
employment as flight attendant or steward. More significantly, it claims that the criteria used in the
implementation of the retrenchment scheme in question was based on the ratified PAL-FASAP 19962000 CBA, which should be considered as the law between the parties.

PAL believes that the Court may have misconstrued the significance of the term other reasons
which the NLRC utilized in its summary of FASAP members and causes for their retrenchment,
[8]

arguing that the use of the phrase does not necessarily mean that the employees were retrenched

for obscure reasons that are not acceptable under the law; it simply points to the NLRCs economy of
language in lumping together various reasons for retrenchment, such as excess sick leaves, previous
admonitions, suspensions, passenger complaints, poor performance, tardiness, etc. It claims that it
used seniority in conjunction with a combination of these grounds in arriving at a conclusion of
whether to retain or retrench.

PAL defends as well its use of a single year (1997) as basis for assessing the cabin attendants
fitness for retention or retrenchment, stressing that its CBA with FASAP requires as basis for reduction
in personnel only one efficiency rating, which should be construed as that obtained by each cabin
attendant for a single year, in accordance with Section 112 of the CBA which provides:

In the event of redundancy, phase-out of equipment or reduction of operations,

the following rules in the reduction of personnel shall apply:

A.

Reduction in the number of Pursers:

1.

In the event of a reduction of purser OCARs, pursers who

have not attained an efficiency rating of 85% shall be downgraded
to international Cabin Attendant in the reverse order of seniority.

2.

If the reduction of purser OCARs would involve more than the

number of pursers who have not attained an efficiency rating of
85%, then pursers who have attained an efficiency rating of 85%
shall be downgraded to international Cabin Attendant in the inverse
order of seniority.

B.

In reducing the number of international Cabin Attendants due to

reduction in international Cabin Attendant OCARs, the same process in
paragraph A shall be observed. International Cabin Attendants shall be
downgraded to domestic.

C.

In the event of reduction of domestic OCARs thereby necessitating

the retrenchment of personnel, the same process shall be observed.

In no case, however, shall a regular Cabin Attendant be separated from the

service in the event of retrenchment until all probationary or contractual Cabin
Attendant in the entire Cabin Attendants Corps, in that order, shall have been
retrenched. (Emphasis and underscoring supplied)

PAL asserts that since efficiency ratings for each cabin or flight attendant are computed on an
annual basis, it should therefore mean that when Section 112 referred to anefficiency rating of 85%,
then it should logically and practically follow that only one years worth of performance should be
used as criteria for the retrenchment of cabin attendants that is, the most recent efficiency rating
obtained by each of them. For purposes of the present case, it would necessarily be that for the year
1997, or the year immediately prior to the retrenchment, and no other.

Finally, regarding the quitclaims executed, PAL maintains that since the retrenchment scheme
it implemented was essentially valid, then it should follow that the quitclaims are regular as well, and
more so given the absence of mistake, duress, fraud or misrepresentation.

In its Comment[9] to PALs Motion for Reconsideration, FASAP asserts that the issue is not
centered on PALs financial condition but whether the retrenchment of the 1,400 cabin personnel was
warranted. It alleges that:

The issue is whether or not the nature and extent of the financial circumstances and the
methods used to resolve fiscal difficulties warranted the illegal and unceremonious
dismissal of around 1,400 flight attendants, stewards, and cabin crew. It was the
termination without considering the legal factors for retrenchment. Because of the
difficulties that the entire nation was going through, the ostensible name given was
retrenchment. But it was really an illegal dismissal and arbitrary termination. x x x

The casualties of illegal action, the ones sacrificed in the early stages of the situation
and not as a last resort, are not the employer and its officers or owner. As the Honorable
Court pointed out, the questioned action struck at the very heart of the workers
employment, the lifeblood upon which the worker and his family owe their survival. No
proof has been adduced in ten long years of litigation that retrenchment was only a
measure of last resort, (that) other less drastic means were considered and tried and
found inadequate.

xxxx

The Court has treated the instant case for what it truly is an illegal retrenchment,
one that was prematurely done and whimsically carried out. x x x

This is about a bad faith retrenchment one which neither complied with the legal
prerequisites therefor nor observed the provisions of the PAL-FASAP CBA thereon; one
which was not employed as a last resort and which did not have any fair and reasonable
criteria to serve as basis for selecting who would be retrenched; one which was
capriciously and whimsically implemented; one which was illegally made. [10]

FASAP declares that although it recognized PALs financial difficulties in 1997 and 1998, it never
conceded the same to be valid reason upon which to base the questioned retrenchment, citing that in
proceedings below, the reasonable necessity of the retrenchment and its effectiveness in preventing
losses to PAL had been squarely raised. FASAP maintains that prior negotiations with PAL (on the
possible implementation of cost-cutting measures, employee rotation plans, triple and quadruple
room sharing arrangements, allocation of vacation leaves without pay, etc.) is proof of that
recognition, but that ultimately, it was incumbent upon PAL to have shown that it undertook a
retrenchment scheme that was in proportion to and commensurate with the financial distress it was
experiencing at the time.

Essentially, FASAP merely echoed our pronouncements, focusing upon our dissertation on each
of the elements required in order to justify retrenchment, most of which were found lacking in PALs
retrenchment program or scheme. Specifically, FASAP points to the lack of prior resort to cost-cutting
measures, the rehiring of probationary employees, prior assurances by PAL that retrenchment was no
longer necessary, and lack of fair and reasonable criteria in selecting the employees to retrench.

Specifically, mention is made that there is nothing in its then existing CBA with PAL which
mandates that a single year 1997 should be used as the gauge or measure for determining the flight
attendants performance for purposes of retrenchment. Asserting that PALs justification of its use of a
single year was a very strained interpretation of the provisions in the CBA, FASAP insists that
seniority, loyalty and past efficiency are requirements of law and jurisprudence which may not be
summarily disregarded in choosing whom to retrench, demote or retain, a proposition it claims to find
support in Article III, Section 7(A) of its CBA which provides:

The Association (FASAP) hereby acknowledges that the management of the

Company (PAL) and the direction of its employees; x x x; and the lay-off and reemployment of employees in connection with increases or decreases in the work force
are the exclusive rights and functions of management provided only that the Company
act in accordance with applicable laws and the provisions of this Agreement. [11] (Words
in parentheses supplied)

FASAP goes on further to suggest that the basic criterion for effecting the retrenchment
scheme should have been seniority, as enunciated in Maya Farms Employees Organization v. National
Labor Relations Commission.[12] In said case, the employer was constrained to streamline its
manpower base owing to losses and setbacks in operations. Management sent notices of termination
(due to redundancy) to 66 of its employees. In the labor case that ensued, the union pointed to a
violation of a specific provision in its CBA which declared, thus:

Sec. 2. LIFO RULE. In all cases of lay-off or retrenchment resulting in termination

of employment in the line of work, the Last-In-First-Out (LIFO) Rule must always be
strictly observed.

Ultimately, we held therein that the employer did not violate the LIFO rule in the CBA. We explained
therein that

It is not disputed that the LIFO rule applies to termination of employment in the
line of work. Verily, what is contemplated in the LIFO rule is that when there are two or
more employees occupying the same position in the company affected by the
retrenchment program, the last one employed will necessarily be the first to go.

Moreover, the reason why there was no violation of the LIFO rule was amply
explained by public respondent in this wise:

. . . The LIFO rule under the CBA is explicit. It is ordained that in

cases of retrenchment resulting in termination of employment in line of
work, the employee who was employed on the latest date must be the
first one to go. The provision speaks of termination in the line of work. This
contemplates a situation where employees occupying the same position in
the company are to be affected by the retrenchment program. Since there
ought to be a reduction in the number of personnel in such positions, the
length of service of each employee is the determining factor, such that the
employee who has a longer period of employment will be retained.

In the case under consideration, specifically with respect to Maya

Farms, several positions were affected by the special involuntary
redundancy program. These are packers, egg sorters/stockers, drivers. In
the case of packers, prior to the involuntary redundancy program, twentyone employees occupied the position of packers. Out of this number, only
5 were retained. In this group of employees, the earliest date of
employment was October 27, 1969, and the latest packer was employed

in 1989. The most senior employees occupying the position of packers

who were retained are as follows:

Santos, Laura C. Oct. 27, 1969

Estrada, Mercedes Aug. 20, 1970
Hortaleza, Lita June 11, 1971
Jimenez, Lolita April 25, 1972
Aquino, Teresita June 25, 1975

All the other packers employed after June 2, 1975 (sic) were
separated from the service.

The same is true with respect to egg sorters. The egg sorters
employed on or before April 26, 1972 were retained. All those employed
after said date were separated.

With respect to the position of drivers, there were eight drivers prior
to the involuntary redundancy program. Thereafter only 3 positions were
retained. Accordingly, the three drivers who were most senior in terms of
period of employment, were retained.

They are: Ceferino D. Narag, Efren Macaraig and Pablito Macaraig.

The case of Roberta Cabrera and Lydia C. Bandong, Asst.

Superintendent for packing and Asst. Superintendent for meat processing
respectively was presented by the union as an instance where the LIFO
rule was not observed by management. The union pointed out that Lydia
Bandong who was retained by management was employed on a much
later date than Roberta Cabrera, and both are Assistant Superintendent.
We cannot sustain the union's argument. It is indeed true that Roberta
Cabrera was employed earlier (January 28, 1961) and (sic) Lydia Bandong
(July 9, 1966). However, it is maintained that in meat processing
department there were 3 Asst. Superintendents assigned as head of the 3
sections thereat. The reason advanced by the company in retaining
Bandong was that as Asst. Superintendent for meat processing she could
already take care of the operations of the other sections. The nature of
work of each assistant superintendent as well as experience were taken
into account by management. Such criteria was not shown to be whimsical
nor carpricious (sic).[13]

Finally, FASAP claims that PAL did not provide reasons for retrenching the more than 1,400
flight attendants; that it was only when it filed its Supplemental Memorandum before the Labor
Arbiter in March 2000 that the airline submitted in evidence the ICCD Masterank and Seniority 1997
Ratings, which allegedly took into account the subjective factors such as appearance and good
grooming, which supposedly require the written conformity of its members if they were to be
considered at all, in accordance with Section 124, Article XXVI of the CBA.

By way of reply to FASAPs Comment, PAL insists that its decision to downsize the flight fleet
was the principal reason why it had to put into effect a corresponding downsizing of cabin crew
personnel; that the reduction in fleet size was an integral part of its SEC-approved rehabilitation plan;
that the reduction in the number of its aircraft by 75% from 54 to just 14 likewise necessitated a
corresponding 75% reduction in its total cabin crew personnel; and that its subsequent decision to
increase its remaining fleet from 14 aircraft to 22 was a business judgment exercised in good faith
after a series of significant events and upon the advice of airline industry experts who were assisting
it in its rehabilitation efforts.[14] This increase from 14 to 22 aircraft was then included in its Amended
and Restated Rehabilitation Plan, which was subsequently approved by the SEC. Because of this, it
then had to increase its manpower; it recalled or rehired the services of the employees it had
previously terminated.

PAL begs the Court to recognize this downsizing of aircraft as a valid exercise of its
management prerogative to close its business operations, and not merely to reduce personnel. In
other words, PAL would have the Court believe that its retrenchment program is not merely a
reduction of personnel for the purpose of cutting on costs of operations, but as a closure of its
business, a cessation of business operations to prevent further financial drain. [15] PAL argues that costcutting measures could not have sufficed to nurse the airline back to financial health; it had to resort
to partial closure of its business. Thus:

18. Moreover, how can PAL possibly implement the cost-cutting measures
allegedly suggested by FASAP with 75% of its fleet already gone? The situation would be
different if PAL retained its 54-plane fleet, and PALs only concern was to save on salaries
and wages. In such a situation, PAL is indeed obliged to resort to less drastic costcutting measures before it can validly proceed with retrenchment. But this is not the
case here. PALs financial condition could not have improved by merely adopting costcutting measures such as work rotation and forced leaves. In fact, retrenchment alone
could not have saved PAL from financial ruin. PAL had to resort to the drastic action of
partially closing its business operations by downsizing its fleet of aircrafts. This naturally
resulted in the reduction of PALs personnel.

19. Assuming arguendo that the jurisprudence relied upon by FASAP apply, the
proven facts in this case show that retrenchment was not the only option for PAL. The
problem with FASAP is that it is taking a myopic view of what truly happened. It
stubbornly claims that the reduction of employees is a simple case of retrenchment
program that was implemented in the first instance. But it is clear from the record that
when PAL suffered serious business losses, retrenchment was not the only option,
obviously because the objective was to cut down on operating expenses as a whole, and
not merely in terms of salaries and wages, which is the only purpose of a retrenchment.

20. What PAL did was to reduce its fleet of 54 planes to only 14 planes. It was
only after PAL reduced its fleet of aircrafts that it had to terminate the employment of its
employees who were already in excess of the workforce required under the reduced
fleet set-up. In other words, retrenchment was merely a necessary and natural
consequence of PALs earlier decision to downsize its fleet of aircrafts. There is thus
simply no basis to say that PAL implemented retrenchment in the first instance.

xxxx

22. Neither is there basis to FASAPs claim that PAL made the assurance that there
will be no more need for retrenchment. How could have PAL given such assurance in
light of its huge business losses, bordering on bankruptcy? The truth is, no such
assurance was ever given by PAL. This is clear in the minutes of all of the meetings with
FASAP where the only issue discussed was how to proceed with the retrenchment. These
meetings were held in February to April 1998, or two to three months before the
decision to reduce operations was made by PAL due to various serious supervening
events the strike staged by the Airline Pilots Association of the Philippines (ALPAP) and
by the Philippine Airlines Employees Association (PALEA).[16]

On the use of efficiency ratings obtained for the year 1997 as singular basis for determining
the fitness of cabin crew personnel to continue working with it, PAL explains that
24. There is nothing unreasonable in using the year 1997 as basis for arriving at
the efficiency ratings. FASAPs insinuations that it ignored the employees alleged
exceptional performance ratings and exemplary attendance records in the past are
simply baseless, misleading and erroneous.
24.1. First, while an employee may rack up hundreds of awards and
commendations and hundreds of hours of leave credits, it does not
necessarily follow that the same employee, although admittedly of
exceptional caliber, cannot be terminated if just or authorized cause
subsequently exists. For instance, if there is redundancy, an employee
holding a superfluous position may be terminated regardless of numerous
awards and leave credits he may have earned. In this case, it cannot be

denied that PALs reduction, or partial closure, of its business operations,

i.e., downsizing its flight fleet from 54 to 14 aircrafts, in order to prevent
business losses and avoid total closure of its business, is one of the
recognized authorized causes expressly provided under Article 283 of the
Labor Code.

PAL could, therefore, retrench employees regardless of the number

of commendations, awards and accumulated leave credits the latter
obtained in the course of employment provided, of course, that the
retrenchment is valid and legal. In this case, the Labor Arbiter, the NLRC
and the Court of Appeals unanimously found that the retrenchment is
intrinsically valid and legal based on the same set of evidence. In fact, the
Labor Arbiter categorically ruled:

there is no question that the rules imposed by law and

jurisprudence to sustain retrenchment have been amply
satisfied by PAL. The only issue at hand is whether or not
the retrenchment can be upheld for complying with rules set
forth in the collective bargaining agreement.
24.2. Second, in implementing retrenchment, the law does not
require an employer to look back into far reaches of time to check every
good deed performed by every employee. This would not only be highly
impractical, but manifestly absurd as well. In evaluating job efficiency, it is
enough for an employer to fix a determinate time frame within which to
base its evaluation. It can be six months, one year, two years, three years
or ten years. It can in fact be any period of time, subject to managements
sound discretion.
But to be fair and reasonable, the application of the period must be
uniform and consistent. It cannot be one year for employee A, two years
for employee B and three years for employee C. In this case, PAL selected
a period of one year (the year 1997), which was uniformly and consistently
applied to all, without exception.
The year 1997 was chosen by PAL as it was the most logical period
being the year immediately preceding the retrenchment. All relevant
records for the year 1997, such as attendance and performance
evaluation, were complete and accurate. Certainly, the year 1997 was not
selected for the purpose of discriminating against any employee, but with
the sole objective of retaining the more efficient among the employees.

xxxx

26. FASAP then insists that the basic criterion to effect lay-off or retrenchment is
seniority. FASAP cites Article VII, Section 23 of the PAL-FASAP 1995-2000 CBA:

The term seniority whenever used in this Agreement shall be deemed to

mean a measure of a regular Cabin Attendants claim in relation to other
regular Cabin Attendants holding similar positions, to preferential
consideration whenever the Company exercises its right to promote to a
higher paying position or lay-off of any Cabin Attendant.
27. FASAP obviously misread and misinterpreted Section 23 of the PAL-FASAP
1995-2000 CBA. The provision does not even mandate seniority to be a criterion
whenever PAL implements a reduction or retrenchment, much less does it say that
seniority is the one and only criterion to be applied. Section 23 simply defines seniority
and states that seniority may be givenpreferential consideration whenever PAL
exercises its right to promote to a higher paying position or lay-off of cabin attendants.
PAL did just that in complying with Section 112 of the PAL-FASAP CBA 1995-2000 when
seniority was applied whenever all other factors were found to be equal. PAL clearly
followed Section 23 of the PAL-FASAP CBA in giving seniority preferential consideration.
This is also reflected in the tabulation made by the NLRC in its Decision. [17]
PAL argues that in its past two CBAs with FASAP prior to the one under controversy, the same
provisions and criteria for appearance, grooming, efficiency and performance were used, without
objections having been advanced by FASAP.
During oral arguments, PAL advanced an altogether new line of reasoning that has, until now,
never been advanced as the primary argument in defense of its retrenchment scheme: that
the principal and true reason why PAL had to implement the mass lay-off of cabin
personnel was not the downsizing of aircraft fleet size, but the June 5, 1998 pilots strike,
where approximately six hundred (600) of its pilots apparently abandoned their planes and
simultaneously refused to fly. Thus, counsel for PAL manifested to the Court that
ATTY. MENDOZA

As a consequence, if your Honor please, but what really brought about, shall we
say, the really perilous situation of closure was that on June 5, 1998, the
pilots went on strike, ninety (90%) per cent of the pilots went on strike,
approximately six hundred (600). These pilots strike was so devastating because the
pilots, if your Honors please, even left their place where they were at the time,
somewhere in Bangkok, somewhere in Taipei and they just left the planes. Without any
pilots no plane can fly, your Honor, that is the stark reality of the situation, andwithout
airplanes flying, there would be no place for employment of cabin attendants.
[18]
(Emphasis supplied)
As a result of this pilots strike, PAL claims to have suffered daily revenue losses equivalent to
P100 million and P50 million of lost fixed costs, which came at a time when PAL had no more money.
[19]

Owing to this pilots strike, PAL was brought to the brink of disaster and emergency that it needed

to align the number of cabin attendants with the number of airplanes that were flying. [20] After the
pilots went on strike, PAL was left with only 68 pilots who chose to remain, but with 2,039 cabin
attendants. Faced with this disproportionate ratio of pilots to cabin attendants, PAL immediately

decided to terminate the services of more than 1,400 cabin attendants via the retrenchment scheme
in question. At the same time, the reduction in fleet which until that time remained a mere proposal
had to be immediately implemented, and cost-cutting measures were simply out of the
question. Thus:

ATTY. MENDOZA

While meetings between PAL and FASAP may have occurred prior to June 1998 to
discuss measures in which to possibly avoid retrenchment with its planned reduction of
fleet, PALs financial circumstances drastically changed in June 1998 that necessitated
immediate and corresponding measures. Harsh reality was that, there simply was
no time. FASAP-suggested less drastic measures of work rotation, forced
vacation leaves, hotel sharing etc. were no longer feasible. Indeed, reduction
by about 5,000 employees, including 1,423 cabin crew, was the less drastic
measure. The alternative, harsher obviously, was closure and liquidation. [21] (Emphasis
supplied)
All throughout, it has been impressed upon us that PALs decision to downsize its fleet size is
the principal reason why it had to put into effect a corresponding downsizing of cabin crew
personnel. However, on oral arguments before us, PAL now makes a total turnaround and attributes
the retrenchment to the June 5, 1998 pilots strike. Repeatedly, counsel for PAL blamed the pilots
strike as the main culprit, thus:
ATTY. MENDOZA
As a consequence, if your Honor please, but what really brought about, shall we
say, the really perilous situation of closure was that on June 5, 1998, the
pilots went on strike, ninety (90%) per cent of the pilots went on strike,
approximately six hundred (600). These pilots strike was so devastating x x x. Without
any pilots no plane can fly, your Honor, that is the stark reality of the situation,
and without airplanes flying, there would be no place for employment of cabin
attendants.
xxxx
ATTY. MENDOZA

Well, according to the Court, Your Honor, the Court principally invalidated this
because, according to the Court it was fraudulent. And it was fraudulent because PAL
misrepresented that it was losing, but in fact it was not as the Court found. So, in other
words, if Your Honor please, as I have explained, there was no misrepresentation
because the members of FASAP could not have but known that there were less planes
that were flying. And they could not have but known that the number of cabin
attendants cannot have exceed that which were required by the number of planes that
were flying. So that was basically the reason for the redundancy and so it can never be
said that this was redundant. But as I have said, if Your Honor please, if the Court

reconsiders its finding that there was illegal dismissal there would really be no relevance
to this quitclaim because, in any event, the separation pay has been received by some,
except for those who declined it.
So therefore, if Your Honor please, if I may conclude since my time is practically
up. First, there can hardly be any question, in fact, it is considered by FASAP and found
by the National Labor Relations Commission, the Labor Arbiter, and the Court of Appeals
that circumstances existed that did not only warrant the reduction of personnel
including the members of FASAP and the cabin attendants but that these were
compelled by circumstances. If the cabin attendants were not retrenched you would
have a situation where cabin attendants would be there but were not needed but would
earn compensation.
Second, if Your Honor please, as to the second issue, cost-cutting
measures they were contemplated. But when the pilots struck, an emergency
situation arose and so there needed to be an immediate response to that
situation and the only one of the components of that response is this
retrenchment.

Incidentally, if Your Honor please, a basic core of the rehabilitation of PAL was for
the creditors to agree. PAL is a different business than other businesses, Your Honor. An
airline cannot stand still and the creditors demands are not met immediately, PAL would
simply lose its airplanes. And so far as Point No. 3 is concerned, if Your Honor please,
PAL did the best it could under the circumstances. And as to number 3, as I said, if Your
Honor please, PAL acted in accordance with criteria in the Collective Bargaining
Agreement which it followed meticulously and religiously.
Whereas for the fourth, if Your Honor please, there was no fraud in the execution
of the quitclaim but I must emphasize once again that PALs case does not really rest on
the quitclaims. PALs case rests on the response that we made on the first three (3)
questions.
xxxx

ATTY. MENDOZA
Yes. As I explained, Your Honor, when the 1997 economic crisis took place and
PAL saw that it was going to create a problem, PAL started studying measures already.
But before it could implement any of these measures, even conclude the study the
pilots struck, when the pilots struck the situations changed entirely. It put PAL
in complete peril of total closurebecause no planes could fly, so that changed
the picture, there was no more time to engage in cost-cutting measures. What
needed to be done, if Your Honor please, is to do what was necessary to survive at that
point? The first thing to do to survive was to fly as many planes as possible in order to
earn some revenue. But you could only fly as many planes as there were pilots, and that
was the reason for the initial flights.
xxxx
ASSOCIATE JUSTICE NACHURA

During these conferences, did FASAP not suggest any other cost-cutting
measures in order to determine the immediate implementation of a retrenchment
program?
ATTY. MENDOZA
Well, there was an endorsed initial conversation; there were suggestions if there
is to be reduction of personnel, rotations, and so on and so forth, Your Honor. So, by the
time the pilots struck you have to retrench quickly x x x.
ASSOCIATE JUSTICE NACHURA
Because related to this is a statement in our Decision that the retrenchment was
illegal because it was not actually the last resort that PAL could have; it was not the last
resort that PAL could have attended, well used. That means, there were other options
that would probably have opened to PAL which would not be as detrimental to FASAP as
retrenchment.
ATTY. MENDOZA
If Your Honor please, may I put it this way? It was not just the last; it was
the only resort, Your Honor, because of these circumstances. There was no
other option, but to operate flghts and spend only as necessary. If you have more
cabin attendants than we required for those planes which were flying you are spending
needlessly actually, Your Honor, and that is certainly not conducive to bring about a
recovery of Philippine Airlines.
xxxx

ASSOCIATE JUSTICE DE CASTRO

You mentioned thatbefore that, that there is a need for rehabilitation because the
PAL was in dire financial condition at that time, and it was
ATTY. MENDOZA
Your Honor please, the rehabilitation came after the pilots strike. Actually, before
the pilots strike the effort of PAL is to find the way to address the Asian economic crisis.
Its just like, if Your Honor please, a factory which is to be more efficient in order to be
able to compete, let us say, with the imported goods, so you downsize or you may try to
be more efficient but the situation PAL confronted after the pilots strike was
entirely different. It was a case of survival already, Your Honor, because it meant
closure and PAL was able to operate some planes only because of what they called
management pilots. There were certain pilots who were occupying supervisory positions
but who were employed still by PAL. They were the ones who actually flew the plane
because the members of the pilots union simply stopped working. [22] (Emphasis
supplied)
On the other hand, FASAP argued and reiterated its original contentions, inter alia, that during
negotiations for the implementation of cost-cutting measures, it was assured by PAL that since there
were negotiations with possible investors who were being eyed as business partners, retrenchment

was no longer necessary;[23] that although it admitted PALs financial difficulties, it did not concede
that these losses justified the urgency, necessity and extent of the questioned retrenchment scheme;
[24]

that the ICCD Masterank Listing was an afterthought, the same having been presented only on

March 13, 2000, and was never shown to the retrenched employees during the period of
retrenchment;[25]that the criteria for retrenchment did not conform to the CBA; [26] and that no costcutting measures were implemented.[27]
PAL has all this time tried to convince the Court that its decision to downsize its flight fleet was
the principal reason why it undertook a corresponding downsizing of cabin crew personnel. This time,
however, it significantly changed stance and blamed the June 5, 1998 pilots strike as the real culprit
which drove it to undertake the massive retrenchment under scrutiny. This time, PAL characterizes
the retrenchment scheme and the downsizing of aircraft as mere necessary reactions to or
unfortunate consequences of the pilots strike, which it claims likewise necessitated a disregard of all
previous negotiations for the implementation of cost-cutting measures that could have rendered the
retrenchment scheme unnecessary, and which cost-cutting measures it no longer found necessary to
undertake.
We find this argument untenable. The strike was a temporary occurrence that did not
necessitate the immediate and sweeping retrenchment of 1,400 cabin or flight attendants. By PALs
own account, some of the striking pilots went back to work in July 1998, or less than one month after
the strike began. Moreover, PAL admitted that it remedied the situation by employing management
pilots.[28] It could have hired new pilots as well. Certainly, it could have implemented the cost-cutting
measures being discussed as a temporary measure to obviate the adverse effects of the pilots
strike. There was no reason to drastically implement a permanent retrenchment scheme in response
to a temporary strike, which could have ended at any time, or remedied promptly, if management
acted with alacrity. Juxtaposed with its failure to implement the required cost-cutting measures, the
retrenchment scheme was a knee-jerk solution to a temporary problem that beset PAL at the time.
Besides, we cannot simply allow PAL to conveniently blame the striking pilots for causing the
massive retrenchment of cabin personnel. Using them as scapegoats to validate a comprehensive
retrenchment scheme of cabin personnel without observing the requirements set by law is both unfair
and underhanded. PAL must still prove that it implemented cost-cutting measures to obviate
retrenchment, which under the law should be the last resort. By PALs own admission, however, the
cabin personnel retrenchment scheme was one of the first remedies it resorted to, even before it
could complete the proposed downsizing of its aircraft fleet. It admittedly dropped all plans of
implementing cost-cutting measures as soon as the pilots went on strike, and right away it sent
notices of termination to its cabin personnel. [29] This knee-jerk reaction would explain why it had to
eventually recall and rehire some of the cabin attendants almost immediately after it retrenched
them, because the retrenchment simply was not commensurate with the downsizing of aircraft fleet
size. This outcome only proves to show that the decision to retrench came even before a final

determination of how many aircraft were needed to be retained or discarded, or even before the
rehabilitation plan could be approved.[30]
Again, it must be emphasized that in order for a retrenchment scheme to be valid, all of the
following elements under Article 283 of the Labor Code must concur or be present, to wit:
(1) That retrenchment is reasonably necessary and likely to prevent business
losses which, if already incurred, are not merely de minimis, but substantial, serious,
actual and real, or if only expected, are reasonably imminent as perceived objectively
and in good faith by the employer;
(2) That the employer served written notice both to the employees and to the
Department of Labor and Employment at least one month prior to the intended date of
retrenchment;
(3) That the employer pays the retrenched employees separation pay equivalent
to one (1) month pay or at least one-half () month pay for every year of service,
whichever is higher;
(4) That the employer exercises its prerogative to retrench employees in good
faith for the advancement of its interest and not to defeat or circumvent the employees
right to security of tenure; and,
(5) That the employer uses fair and reasonable criteria in ascertaining who would
be dismissed and who would be retained among the employees, such as status,
efficiency, seniority, physical fitness, age, and financial hardship for certain workers.
In the absence of one element, the retrenchment scheme becomes an irregular exercise of
management prerogative. The employers obligation to exhaust all other means to avoid further losses
without retrenching its employees is a component of the first element as enumerated above. To
impart operational meaning to the constitutional policy of providing full protection to labor, the
employers prerogative to bring down labor costs by retrenching must be exercised essentially as a
measure of last resort, after less drastic means have been tried and found wanting. [31]
In the instant case, PAL admitted that since the pilots strike allegedly created a situation of
extreme urgency, it no longer implemented cost-cutting measures and proceeded directly to
retrench. This being so, it clearly did not abide by all the requirements under Article 283 of the Labor
Code. At the time it was implemented, the retrenchment scheme under scrutiny was not triggered
directly by any financial difficulty PAL was experiencing at the time, nor borne of an actual
implementation of its proposed downsizing of aircraft. It was brought about by and resorted to as an
immediate reaction to a pilots strike which, in strict point of law and as herein earlier discussed, may
not be considered as a valid reason to retrench, nor may it be used to excuse PAL for its nonobservance of the requirements of the law on retrenchment under the Labor Code.
On the basis of the foregoing disquisition, we find no further need to discuss the other
arguments advanced by the parties in their pleadings and during the oral arguments.

Therefore, this Court finds no reason to disturb its finding that the retrenchment of the flight
attendants was illegally executed. As held in the Decision sought to be reconsidered, PAL failed to
observe the procedure and requirements for a valid retrenchment. Assuming that PAL was indeed
suffering financial losses, the requisite proof therefor was not presented before the NLRC which was
the proper forum. More importantly, the manner of the retrenchment was not in accordance with the
procedure required by law. Hence, the retrenchment of the flight attendants amounted to illegal
dismissal. Consequently, the flight attendants affected are entitled to the reliefs provided by law,
which include backwages and reinstatement or separation pay, as the case may be.
PAL begs the compassion of this Court and alleges that the monetary award it stands to pay to
the affected flight attendants totals a whopping P2.3 billion, the payment of which will certainly
paralyze its operations and even lead to its untimely demise. However, a careful review of the records
of the case, as well as the respective allegations of the parties, shows that several of the crew
members do not need to be paid full backwages or separation pay. A substantial fraction of the 1,400
flight attendants have already been either recalled, reinstated or relieved from the service. Still, some
of them have reached the age of compulsory retirement or even died. Likewise, a significant portion
of these retrenched flight attendants have already received separation pay and signed quitclaim. All
of these factors, to the mind of the Court, will greatly reduce the quoted amount of the money
judgment that PAL will have to pay.
After finality of this case, the records will have to be remanded to the Labor Arbiter who
decided the case at the first instance. There, the actual amount of PALs liability to each and every
flight attendant will be computed. Both parties will have a chance to submit further proof and
argument in support of their respective proposed computations. For the guidance of the Labor Arbiter
as well as the parties, this Court lays down the following yardsticks in the computation of the final
amount of liability, in order to avoid any protracted and heated debates which can again lead to
further delays in the final resolution of this case and the full realization by the retrenched flight
attendants of the amounts necessary to compensate and indemnify them for the wrongful
retrenchment.
1. Flight attendants who have been re-employed without loss of seniority rights shall be paid
backwages but only up to the time of their actual reinstatement.
2. Flight attendants who have been re-employed as new hires shall be restored their seniority
and other preferential rights. However, their backwages shall be computed only up to the date of
actual re-hiring.
3. Flight attendants who have reached their compulsory age of retirement shall receive
backwages up to the date of their retirement only. The same is true as regards the heirs of those who
have passed away.

4. Flight attendants who have not been re-employed by PAL, including those who executed
quitclaims and received separation pay or financial assistance, shall be reinstated without loss of
seniority rights and paid full backwages. However, the amounts they already received should be
deducted from whatever amounts are finally adjudged to them individually.
Four members of the Division voted to include a fifth (5 th) criterion, namely that flight attendants who
had obtained substantially equivalent or even more lucrative employment elsewhere in 1998 or
thereafter are deemed to have severed their employment with PAL. They shall be entitled to full
backwages from the date of their retrenchment only up to the date they found employment
elsewhere.

On a final note, this Court finds that the award of attorneys fees equivalent to 10% of the total
monetary award should be tempered, considering the number of flight attendants who stand to
receive monetary awards and the totality of all amounts due to them. To be sure, attorneys fees in
labor cases are awarded specifically in actions for recovery of wages or where an employee was
forced to litigate and thus incurred expenses to protect his rights and interests. In such cases, a
maximum of 10% of the total monetary award is justifiable under Article 111 of the Labor Code,
Section 8, Rule VIII, Book III of its Implementing Rules and paragraph 7, Article 2208 of the Civil Code.
[32]

The award of attorneys fees is proper where there is a showing that the lawful wages were not paid

accordingly.[33]
x x x [T]here are two commonly accepted concepts of attorneys fees, the socalled ordinary and extraordinary. In its ordinary concept, an attorneys fee is the
reasonable compensation paid to a lawyer by his client for the legal services he has
rendered to the latter. The basis of this compensation is the fact of his employment by
and his agreement with the client. In its extraordinary concept, attorneys fees are
deemed indemnity for damages ordered by the court to be paid by the losing party in a
litigation. The instances where these may be awarded are those enumerated in Article
2208 of the Civil Code, specifically par. 7 thereof which pertains to actions for recovery
of wages, and is payable not to the lawyer but to the client, unless they have agreed
that the award shall pertain to the lawyer as additional compensation or as part
thereof. The extraordinary concept of attorneys fees is the one contemplated in Article
111 of the Labor Code, which provides:

Art. 111. Attorneys fees. (a) In cases of unlawful withholding of

wages, the culpable party may be assessed attorneys fees equivalent to
ten percent of the amount of wages recovered x x x

The afore-quoted Article 111 is an exception to the declared policy of

strict construction in the awarding of attorneys fees. Although an

express finding of facts and law is still necessary to prove the merit of the
award, there need not be any showing that the employer acted maliciously or
in bad faith when it withheld the wages. There need only be a showing that
the lawful wages were not paid accordingly, as in this case.

In carrying out and interpreting the Labor Codes provisions and its implementing
regulations, the employees welfare should be the primordial and paramount
consideration. This kind of interpretation gives meaning and substance to the liberal
and compassionate spirit of the law as provided in Article 4 of the Labor Code which
states that [a]ll doubts in the implementation and interpretation of the provisions of [the
Labor] Code including its implementing rules and regulations, shall be resolved in favor
of labor, and Article 1702 of the Civil Code which provides that [i]n case of doubt, all
labor legislation and all labor contracts shall be construed in favor of the safety and
decent living for the laborer. (Emphasis supplied)[34]
In the case of Concept Placement Resources, Inc. v. Funk,[35] this Court reduced the amount of
attorneys fees which it ruled to be iniquitous and unconscionable after finding that the lawyer did not
encounter difficulty in representing his client. It was held:

We observe, however, that respondent did not encounter difficulty in

representing petitioner. The complaint against it was dismissed with prejudice. All that
respondent did was to prepare the answer with counterclaim and possibly petitioners
position paper. Considering respondents limited legal services and the case involved is
not complicated, the award of P50,000.00 as attorneys fees is a bit excessive. In First
Metro Investment Corporation vs. Este del Sol Mountain Reserve, Inc., we ruled that
courts are empowered to reduce the amount of attorneys fees if the same is iniquitous
or unconscionable. Under the circumstances obtaining in this case, we consider the
amount of P20,000.00 reasonable.[36]
In the case at bar, we find that the flight attendants were represented by respondent union which, in
turn, engaged the services of its own counsel. The flight attendants had a common cause of
action. While the work performed by respondents counsel was by no means simple, seeing as it
spanned the whole litigation from the Labor Arbiter stage all the way to this Court, nevertheless, the
issues involved in this case are simple, and the legal strategies, theories and arguments advanced
were common for all the affected crew members. Hence, it may not be reasonable to award said
counsel an amount equivalent to 10% of all monetary awards to be received by each individual flight
attendant. Based on the length of time that this case has been litigated, however, we find that the
amount of P2,000,000.00 is reasonable as attorneys fees. This amount should include all expenses of
litigation that were incurred by respondent union.
WHEREFORE, for lack of merit, the Motion for Reconsideration is hereby DENIED with
FINALITY. The assailed Decision dated July 22, 2008 is AFFIRMED with MODIFICATION in that the
award of attorneys fees and expenses of litigation is reduced to P2,000,000.00. The case is

hereby REMANDED to the Labor Arbiter solely for the purpose of computing the exact amount of the
award pursuant to the guidelines herein stated.
No further pleadings will be entertained.
SO ORDERED.
CONSUELO YNARES-SANTIAGO

Republic of the Philippines

Supreme Court
Manila
EN BANC
In Re: Letters of Atty. Estelito P.
Mendoza re: G.R. No. 178083
Flight Attendants and Stewards
Association of the Philippines
(FASAP) v. Philippine Airlines, Inc.
(PAL), et al.

A.M. No. 11-10-1-SC

Present:
CORONA, C.J.,
CARPIO,
VELASCO, JR.,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA,
SERENO,
REYES, and
PERLAS-BERNABE, JJ.
Promulgated:

March 13, 2012

x---------------------------------------------------------------------------------------x
RESOLUTION
BRION, J.:

Before the Court is the administrative matter that originated from the letters dated September 13, 16,
20, and 22, 2011 of Atty. Estelito P. Mendoza regarding G.R. No. 178083Flight Attendants and
Stewards Association of the Philippines v. Philippine Airlines, Inc., et al.
For a full background of the matter, the antecedent developments are outlined below.

1.

The July 22, 2008 Decision

On July 22, 2008, the Courts Third Division ruled to grant [1] the petition for review

on certiorari filed by the Flight Attendants and Stewards Association of the Philippines (FASAP),
finding Philippine Airlines, Inc. (PAL) guilty of illegal dismissal. The July 22, 2008 Decision was penned
by Justice Consuelo Ynares-Santiago who was joined by the other four Members of the Third
Division. The Third Division was then composed of:
1.

Justice Ynares-Santiago,

2.

Justice Alicia Austria-Martinez,

3.

Justice Minita Chico-Nazario,

4.

Justice Antonio Eduardo Nachura, and

5.

Justice Teresita Leonardo-De Castro (replacing Justice Ruben Reyes who inhibited himself
from the case).

Justice Leonardo-De Castro was included to replace Justice Ruben Reyes who had inhibited himself
from the case because he concurred in the Court of Appeals (CA) decision assailed by FASAP before
the Court.[2] Then Associate Justice Renato Corona was originally designated to replace Justice Ruben
Reyes, but he likewise inhibited himself from participation on June July 14, 2008 due to his previous
efforts in settling the controversy when he was still in Malacaan. Under Administrative Circular (AC)
No. 84-2007, one additional Member needed be drawn from the rest of the Court to replace the
inhibiting Member.[3] In this manner, Justice Leonardo-De Castro came to participate in the July 22,
2008 Decision.
PAL subsequently filed its motion for reconsideration (MR) of the July 22, 2008 Decision. The
motion was handled by the Special Third Division composed of:
1.

Justice Ynares-Santiago,

2.

Justice Chico-Nazario,

3.

Justice Nachura,

4.

Justice Diosdado Peralta (replacing Justice Austria-Martinez who retired on April 30, 2009),
and

5.

Justice Lucas Bersamin (replacing Justice Leonardo-De Castro who inhibited at the MR
stage for personal reasons on July 28, 2009).

2.

The October 2, 2009 Resolution

Justice Ynares-Santiago, as the ponente of the July 22, 2008 Decision, continued to act as

the ponente of the case.[4]

The Special Third Division[5] denied the MR with finality on October 2, 2009.[6] The Court
further declared that [n]o further pleadings will be entertained. [7] The other Members of the Special
Third Division unanimously concurred with the denial of the motion.
To fully explain the movements in the membership of the division, the Special Third Division
missed Justice Austria-Martinez (who was among those who signed the July 22, 2008 Decision) due to
her intervening retirement on April 30, 2009. Justice Leonardo-De Castro also did not participate in
resolving the 1st MR, despite having voted on the July 22, 2008 Decision, because of her own
subsequent inhibition on July 28, 2009.[8]
3.

PALs 2nd MR
On November 3, 2009, PAL asked for leave of court to file (a) an MR of the October 2, 2009

Resolution, and (b) a 2nd MR of the July 22, 2008 Decision. Both rulings were anchored on the validity
of PALs retrenchment program.
In view of the retirement of the ponente, Justice Ynares-Santiago (who retired on October 5,
2009), the Courts Raffle Committee [9] had to resolve the question of who would be the new ponente of
the case.
Under A.M. No. 99-8-09-SC (Rules on Who Shall Resolve Motions for Reconsideration in
Cases Assigned to the Divisions of the Court, effective April 1, 2000), if theponente has retired,
he/she shall be replaced by another Justice who shall be chosen by raffle from among
the remaining Members of the Division:
2. If the ponente is no longer a member of the Court or is disqualified or has
inhibited himself from acting on the motion, he shall be replaced by another Justice
who shall be chosen by raffle from among the remaining members of the
Division who participated and concurred in the rendition of the decision or
resolution and who concurred therein. If only one member of the Court who
participated and concurred in the rendition of the decision or resolution remains, he
shall be designated as the ponente.

However, on November 11, 2009, the case was raffled, not to a Member of the Third Division
that issued the July 22, 2008 Decision or to a Member of the Special Third Division that rendered the
October 2, 2009 Resolution, but to Justice Presbitero Velasco, Jr. who was then a Member of the
newly-constituted regular Third Division.[10]
In raffling the case to Justice Velasco, the Raffle Committee considered the above-quoted rule
inapplicable because of the express excepting qualification provided under A.M. No. 99-8-09-SC that
states:

[t]hese rules shall not apply to motions for reconsideration of decisions or

resolutions already denied with finality. [underscoring ours]

Stated otherwise, when the original ponente of a case retires, motions filed after the case has
been denied with finality may be resolved by any Member of the Court to whom the case shall be
raffled, not necessarily by a Member of the same Division that decided or resolved the
case. Presumably, the logic behind the rule is that no further change can be made involving the
merits of the case, as judgment has reached finality and is thus irreversible, based on the Rules of
Court provision that [n]o second MR of a judgment or final resolution by the same party shall be
entertained.[11] (The October 2, 2009 Resolution denying PALs 1st MR further stated that [n]o further
pleadings will be entertained.) Thus, the resolution of post-decisional matters in a case already
declared final may be resolved by other Members of the Court to whom the case may be raffled after
the retirement of the original ponente.
Given the denial of PALs 1st MR and the declaration of finality of the Courts July 22, 2008
Decision through the October 2, 2009 Resolution, the Raffle Committee found it unnecessary to
create a special Third Division. Thus, it found nothing irregular in raffling the case to Justice
Velasco (who did not take part in the deliberation of the Decision and the Resolution) of
the reorganized Third Division for handling by a new regular division.
4.

The acceptance of PALs 2nd MR

On January 20, 2010 (or while A.M. No. 99-8-09-SC was still in effect), the new regular

Third Division, through Justice Velasco, granted PALs Motion for Leave to File and Admit Motion for
Reconsideration of the Resolution dated 2 October 2009 and 2 nd Motion for Reconsideration of
Decision dated 22 July 2008. The Courts Third Division further required the respective parties to
comment on PALs motion and FASAPs Urgent Appeal dated November 23, 2009. This grant, which
opened both the Decision and the Resolution penned by Justice Ynares-Santiago for review,
effectively opened the whole case for review on the merits.
The following were the Members of the Third Division that issued the January 20, 2010
Resolution:
1.

Justice Antonio Carpio (vice Justice Corona who inhibited himself as of July 14, 2008),

2.

Justice Velasco (ponente),

3.

Justice Nachura,

4.

Justice Peralta, and

5.

Justice Bersamin.

Significantly, at the time leave of court was granted (which was effectively an acceptance for
review of PALs 2nd MR), the prohibition against entertaining a 2 nd MR under Section 2, Rule 52 [12] (in
relation with Section 4, Rule 56[13]) of the Rules of Court applied. This prohibition, however, had been
subject to various existing Court decisions that entertained 2 nd MRs in the higher interest of
justice.[14] This liberalized policy was not formalized by the Court until the effectivity of the Internal
Rules of the Supreme Court (IRSC) on May 4, 2010.[15]
With the acceptance of PALs 2nd MR, the question that could have arisen (but was not
asked then) was whether the general rule under A.M. No. 99-8-09-SC (which was then still in effect)
should have applied so that the case should have been transferred to the remaining Members of the
Division that ruled on the merits of the case. In other words, with the re-opening of the case for
review on the merits, the application of the excepting qualification under A.M. No. 99-8-09-SC that the
Raffle Committee cited lost its efficacy, as the rulings of the Court were no longer final for having
been opened for further review.
A necessary implication is that either the Clerk of Court or the Raffle Committee should have
advised Justice Velasco that his Division should refer the case back to raffle for referral of the case to
the original Justices who participated in the assailed Decision and Resolution under the terms of the
general rule under A.M. No. 99-8-09-SC; the Justices who participated in the assailed Decision and
Resolution were the best ones to consider the motion and to review their own rulings. This was the
first major error that transpired in the case and one that the Clerk of Court failed to see.
Parenthetically, when PALs 2nd MR was filed and when it was subsequently accepted, Justices
Nachura, Peralta, and Bersamin were the only remaining Members of the Special Third Division that
rendered the October 2, 2009 Resolution. Of these three Justices, only Justice Nachura was a Member
of the original Third Division that issued the main decision on July 22, 2008. The case should have
gone to Justice Nachura or, at the very least, to the two other remaining Justices. The re-raffle of the
FASAP case to Justice Nachura (or to Justices Peralta and Bersamin) would have been consistent with
the constitutional rule that [c]ases or matters heard by a division shall be decided or
resolved with the concurrence of a majority of the Members who actually took part in the
deliberations on the issues in the case and voted thereon[.] [16]
5.

The Reorganization of the Court

In May 2010, three developments critical to the FASAP case transpired.
The first was the approval of the IRSC by the Court on May 4, 2010. The IRSC codified the

procedural rules of the Court, heretofore existing under various separate and scattered resolutions. Its
relevant terms took the place of A.M. No. 99-8-09-SC.

The second was the retirement of then Chief Justice Reynato Puno and the appointment as
Chief Justice of then Associate Justice Corona.
The third was the reorganization of the divisions of the Court under Special Order No. 838
dated May 17, 2010. Justice Velasco was transferred from the Third Division to the First
Division. Pursuant to the new IRSC, Justice Velasco brought with him the FASAP case so that the case
went from the Third Division to the First Division:
RULE 2. THE OPERATING STRUCTURES
Section 9. Effect of reorganization of Divisions on assigned cases. In the reorganization
of the membership of Divisions, cases already assigned to a Member-in-Charge
shall be transferred to the Division to which the Member-in-Charge moves,
subject to the rule on the resolution of motions for reconsideration under Section 7 of
this Rule. The Member-in-Charge is the Member given the responsibility of overseeing
the progress and disposition of a case assigned by raffle.

Another significant development in the case came on January 17, 2011 (or under the
new regime of the IRSC) when Justice Velasco, after acting on the FASAP case for almost one whole
year, inhibited himself from participation due to a close relationship to a party, despite his previous
action on the case. The pertinent provisions of the IRSC on the matter of inhibition state:
RULE 2.
THE OPERATING STRUCTURES
Section 7. Resolutions of motions for reconsideration or clarification of decisions
or signed resolutions and all other motions and incidents subsequently filed; creation of
a Special Division. Motions for reconsideration or clarification of a decision or of a
signed resolution and all other motions and incidents subsequently filed in the case
shall be acted upon by the ponenteand the other Members of the Division who
participated in the rendition of the decision or signed resolution.
If the ponente has retired, is no longer a Member of the Court, is disqualified,
or has inhibited himself or herself from acting on the motion for reconsideration or
clarification, he or she shall be replaced through raffle by a new ponente who
shall be chosen [from] among the new Members of the Division who
participated in the rendition of the decision or signed resolution remains, he
or she shall be designated as the new ponente.
If a Member (not the ponente) of the Division which rendered the decision or
signed resolution has retired, is no longer a Member of the Court, is disqualified, or has
inhibited himself or herself from acting on the motion for reconsideration or clarification,
he or she shall be replaced through raffle by a replacement Member who shall be
chosen from the other Divisions until a new Justice is appointed as replacement for the
retired Justice. Upon the appointment of a new Justice, he or she shall replace the
designated Justice as replacement Member of the Special Division.
Any vacancy or vacancies in the Special Division shall be filled by raffle from
among the other Members of the Court to constitute a Special Division of five (5)
Members.

If the ponente and all the Members of the Division that rendered the Decision or
signed Resolution are no longer members of the Court, the case shall be raffled to any
Member of the Court and the motion shall be acted upon by him or her with the
participation of the other Members of the Division to which he or she belongs.
If there are pleadings, motions or incidents subsequent to the denial of the
motion for reconsideration [or] clarification, the case shall be acted upon by the
ponente on record with the participation of the other Members of the Division to which
he or she belongs at the time said pleading, motion or incident is to be taken up by the
Court.
xxx
RULE 8.
INHIBITION AND SUBSTITUTION OF MEMBERS OF THE COURT
SEC. 3. Effects of Inhibition. The consequences of an inhibition of a Member of
the Court shall be governed by these rules:
(a)
Whenever a Member-in-Charge of a case in a Division
inhibits himself for a just and valid reason, the case shall be returned to the Raffle
Committee for re-raffling among the Members of the other two Divisions of the
Court. (IRSC, as amended by A.M. No. 10-4-20-SC dated August 3, 2010) [All emphasis
supplied.]

The case was then referred to the Raffle Committee pursuant to Administrative Circular (AC)
No. 84-2007, as stated in the Division Raffle Sheet. The pertinent provision of AC No. 84-2007 states:
2. Whenever the ponente, in the exercise of sound discretion, inhibits
herself or himself from the case for just and valid reasons other than those
mentioned in paragraph 1, a to f above, the case shall be returned to the Raffle
Committee for
re-raffling
among
the
other
Members
of
the same Division with one additional Member from the other two
Divisions. [underscoring and italics ours]

Reference to AC No. 84-2007, however, was erroneous. For one, the IRSC was already in effect
when Justice Velasco inhibited himself from participation, and the IRSC had already superseded AC
No. 84-2007. The prevailing IRSC, though, has an almost similar rule, with the difference that the IRSC
speaks of the inhibition of a Member-in-Charge or of a Member of the Division other than the Memberin-Charge in its rule on inhibition, and did not use the ponente as its reference point. This seemingly
trivial point carries a lot of significance, particularly in the context of the FASAP case.
Under the rule on inhibition found in Section 3, Rule 8 of the governing IRSC (as Justice Ma.
Lourdes Sereno found in her dissenting opinion), the inhibition called for the raffle to a Member of the
two other divisions of the Court. Thus, Justice Sereno found the subsequent January 26, 2011 raffle of
the case to Justice Brion to be legally correct. As discussed by the Division that issued the September
7, 2011 Resolution (the ruling Division), however, the application of the IRSC is not as simple as
Justice Sereno views it to be. This matter is discussed at length below.

On June 21, 2011 (after the retirement of Justice Nachura on June 13, 2011), Chief Justice
Corona issued Special Order No. 1025, again reorganizing the divisions of the Court. Justice Brion was
transferred from the Third Division to the Second Division. Accordingly, the Third Division composed
of Justice Velasco, Justice Peralta, Justice Bersamin, Justice Jose Mendoza, and Justice Sereno (who
was included as additional Member) referred the FASAP case to the Second Division where Justice
Brion belonged, pursuant to Section 9, Rule 2 of the IRSC.[17]
Justice Carpio (the Chair of the Second Division), after voting for the January 20, 2010
Resolution granting leave to PAL to file its 2 nd MR, inhibited himself from the case on August 15,
2011. As stated in the Division Raffle Sheet of August 15, 2011, Justice Carpio recused himself from
the case per advice of the office of the Member-in-Charge.Justice Peralta became the replacement for
Justice Carpio, pursuant to Rule 8, Section 3 of the IRSC.
6.

The September 7, 2011 Resolution and Atty. Estelito Mendozas letters

On September 7, 2011, the Court through its Second Division as then constituted

resolved to deny with finality PALs 2 nd MR through an unsigned resolution.The Second

Division, as then constituted, was composed of:
1.

Justice Brion (as Member-in-Charge and as Acting Chair, being the most senior Member),

2.

Justice Peralta (replacing Justice Carpio who inhibited),

3.

Justice Jose Perez,

4.

Justice Bersamin (replacing Justice Sereno who was on leave [18]), and

5.

Justice Mendoza (replacing Justice Bienvenido Reyes who was on leave [19]).

On September 13, 2011, the counsel for PAL, Atty. Mendoza, sent the first of a series of
letters[20] addressed to the Clerk of Court of the Supreme Court. This letter noted that, of the
Members of the Court who acted on the MR dated August 20, 2008 and who issued the Resolution of
October 2, 2009, Justices Ynares-Santiago (ponente), Chico-Nazario, and Nachura had already retired
from the Court, and the Third Division had issued a Resolution on the case dated January 20, 2010,
acted upon by Justices Carpio, Velasco, Nachura, Peralta, and Bersamin. The letter then asked
whether the Court had acted on the 2nd MR and, if so, which division whether regular or special acted
and who were the chairperson and members. It asked, too, for the identity of the current ponente or
justice-in-charge, and when and for what reason he or she was designated as ponente. It further
asked for a copy of the Resolution rendered on the 2 nd MR, if an action had already been taken
thereon.
On September 16, 2011, Atty. Mendoza sent his second letter, again addressed to the Clerk of
Court requesting that copies of any Special Orders or similar issuances transferring the case to

another division, and/or designating Members of the division which resolved its 2 nd MR, in case a
resolution had already been rendered by the Court and in the event that such resolution was issued
by a different division.
The Court received Atty. Mendozas third letter, again addressed to the Clerk of Court, on
September 20, 2011.[21] Atty. Mendoza stated that he received a copy of the September 7, 2011
Resolution issued by the Second Division, notwithstanding that all prior Court Resolutions he received
regarding the case had been issued by the Third Division. [22] He reiterated his request in his two
earlier letters to the Court, asking for the date and time when the Resolution was deliberated upon
and a vote taken thereon, as well as the names of the Members of the Court who had participated in
the deliberation and voted on the September 7, 2011 Resolution.
Atty. Mendoza sent his fourth and last letter dated September 22, 2011, also addressed to the
Clerk of Court, suggesting that if some facts subject of my inquiries are not evident from the records
of the case or are not within your knowledge, that you refer the inquiries to the Members of the Court
who appear to have participated in the issuance of the Resolution of September 7, 2011, namely:
Hon. Arturo D. Brion, Hon. Jose P. Perez, Hon. Diosdado M. Peralta, Hon. Lucas P. Bersamin, and Hon.
Jose C. Mendoza.
On September 26, 2011, the Clerk of Court issued the Vidal-Anama [23] Memorandum to the
Members of the Second Division in relation to the inquiries contained in the first and second letters of
Atty. Mendoza dated September 13 and 20, 2011. Justice Brion also furnished the Members of the
ruling Division a copy of the Vidal-Anama Memorandum.
The Vidal-Anama Memorandum explained the events that transpired and the actions taken, which
resulted in the transfer of the case from its original ponente, Justice Ynares-Santiago, to Justice
Velasco, and eventually to Justice Brion. Attached to the Memorandum were the legal and
documentary bases for all the actions of the various raffle committees. [24] These included the
decisions of the two raffle committees on the transfer of the ponencia from Justice Ynares-Santiago to
Justice Velasco and finally to Justice Brion as a regular Second Division case.
On September 28, 2011, the Letters dated September 13 and 20, 2011 of Atty. Mendoza to Atty.
Vidal (asking that his inquiry be referred to the relevant Division Members who took part on the
September 7, 2011 Resolution) were NOTED by the regular Second Division. The Members of the
ruling Division also met to consider the queries posed by Atty. Mendoza. Justice Brion met with the
Members of the ruling Division (composed of Justices Brion, Peralta, Perez, Bersamin, and
Mendoza), rather than with the regular Second Division (composed of Justices Carpio, Brion, Perez,
and Sereno[25]), as the former were the active participants in the September 7, 2011 Resolution.

In these meetings, some of the Members of the ruling Division saw the problems pointed out
above, some of which indicated that the ruling Division might have had no authority to rule on the
case. Specifically, their discussions centered on the application of A.M. No. 99-8-09-SC for the
incidents that transpired prior to the effectivity of the IRSC, and on the conflicting rules under the
IRSC Section 3, Rule 8 on the effects of inhibition and Section 7, Rule 2 on the resolution of MRs.
A.M. No. 99-8-09-SC indicated the general rule that the re-raffle shall be made among the
other Members of the same Division who participated in rendering the decision or resolution and who
concurred therein, which should now apply because the ruling on the case is no longer final after the
case had been opened for review on the merits. In other words, after acceptance by the Third
Division, through Justice Velasco, of the 2 nd MR, there should have been a referral to raffle because
the excepting qualification that the Clerk of Court cited no longer applied; what was being reviewed
were the merits of the case and the review should be by the same Justices who had originally issued
the original Decision and the subsequent Resolution, or by whoever of these Justices are still left in
the Court, pursuant to the same A.M. No. 99-8-09-SC.
On the other hand, the raffle to Justice Brion was made by applying AC No. 84-2007 that had
been superseded by Section 3, Rule 8 of the IRSC. Even the use of this IRSC provision, however,
would not solve the problem, as its use still raised the question of the provision that should really
apply in the resolution of the MR: should it be Section 3, Rule 8 on the inhibition of a Member-inCharge, or Section 7, Rule 2 of the IRSC on the inhibition of the ponente when an MR of a decision and
a signed resolution was filed.These two provisions are placed side-by-side in the table below for easier
and clearer comparison, with emphasis on the more important words:
RULE 2
THE OPERATING STRUCTURES
SEC. 7. Resolutions of motions for
reconsideration or clarification of
decisions or signed resolutions and all
other
motions
and
incidents
subsequently filed; creation of a
Special
Division. - Motions
for
reconsideration or clarification of a
decision or of a signed resolution
and
all
other
motions
and
incidents subsequently filed in the
case shall be acted upon by the
ponente and the other Members of the
Division who participated in the
rendition of the decision or signed
resolution.
If the ponente has retired, is no
longer a Member of the Court, is
disqualified, or has inhibited himself
or herself from acting on the

RULE
8
INHIBITION AND SUBSTITUTION OF
MEMBERS OF THE COURT
SEC. 3. Effects of inhibition. - The
consequences of an inhibition of a
Member of the Court shall be governed
by these rules:
(a) Whenever
a Member-inCharge of
a
case
in
a
Division inhibits himself for a
just and valid reason, the case
shall be returned to the
Raffle Committee for reraffling among the Members
of the other two (2) Divisions
of the Court.
xxx

motion for reconsideration or

clarification, he or she shall be
replaced through raffle by a new
ponente who shall be chosen
among the new Members of the
Division who participated in the
rendition of the decision or signed
resolution and who concurred
therein. If only one Member of the
Court who participated and concurred
in the rendition of the decision or
signed resolution remains, he or she
shall be designated as the new
ponente.

A comparison of these two provisions shows the semantic sources of the seeming conflict: Section 7,
Rule 2 refers to a situation where the ponente has retired, is no longer a Member of the Court, is
disqualified, or has inhibited himself from acting on the case; while Section 3, Rule 8 generally refers
to the inhibition of a Member-in-Charge who does not need to be the writer of the decision or
resolution under review.
Significantly, Section 7, Rule 2 expressly uses the word ponente (not Member-in-Charge) and
refers to a specific situation where the ponente (or the writer of the Decision or the
Resolution) is no longer with the Court or is otherwise unavailable to review the decision or
resolution he or she wrote. Section 3, Rule 8, on the other hand, expressly uses the term Member-inCharge and generally refers to his or her inhibition, without reference to the stage of the
proceeding when the inhibition is made.
Under Section 7, Rule 2, the case should have been re-raffled and assigned to anyone of
Justices Nachura (who did not retire until June 13, 2011), Peralta, or Bersamin, either (1) after the
acceptance of the 2nd MR (because the original rulings were no longer final); or (2) after Justice
Velascos inhibition because the same condition existed, i.e., the need for a review by the same
Justices who rendered the decision or resolution. As previously mentioned, Justice Nachura
participated in both the original Decision and the subsequent Resolution, and all three Justices were
the remaining Members who voted on the October 2, 2009 Resolution. On the other hand, if Section
3, Rule 8 were to be solely applied after Justice Velascos inhibition, the Clerk of Court would be correct
in her assessment and the raffle to Justice Brion, as a Member outside of Justice Velascos Division,
was correct.
These were the legal considerations that largely confronted the ruling Division in late September
2011 when it deliberated on what to do with Atty. Mendozas letters.

The propriety of and grounds for the recall of the September 7,

2011 Resolution

Most unfortunately, the above unresolved questions were even further compounded in the
course of the deliberations of the Members of the ruling Division when they were informed that the
parties received the ruling on September 19, 2011, and this ruling would lapse to finality
after the 15th day, or after October 4, 2011.
Thus, on September 30, 2011 (a Friday), the Members went to Chief Justice Corona and
recommended, as a prudent move, that the September 7, 2011 Resolution be recalled at the very
latest on October 4, 2011, and that the case be referred to the Court en banc for a ruling on the
questions Atty. Mendoza asked. The consequence, of course, of a failure to recall their ruling
was for that Resolution to lapse to finality. After finality, any recall for lack of jurisdiction
of the ruling Division might not be understood by the parties and could lead to a charge of
flip-flopping against the Court. The basis for the referral is Section 3(n), Rule 2 of the IRSC, which
provides:
RULE 2.
OPERATING STRUCTURES
Section 3. Court en banc matters and cases. The Court en banc shall act on the
following matters and cases:
xxxx
(n) cases that the Court en banc deems of sufficient importance to merit its
attention[.]

Ruling positively, the Court en banc duly issued its disputed October 4, 2011 Resolution
recalling the September 7, 2011 Resolution and ordering the re-raffle of the case to a new Member-inCharge. Later in the day, the Court received PALs Motion to Vacate (the September 7, 2011 ruling)
dated October 3, 2011. This was followed by FASAPs MR dated October 17, 2011 addressing the Court
Resolution of October 4, 2011. The FASAP MR mainly invoked the violation of its right to due process
as the recall arose from the Courts ex parte consideration of mere letters from one of the counsels of
the parties.
As the narration in this Resolution shows, the Court acted on its own pursuant to its power to
recall its own orders and resolutions before their finality. The October 4, 2011 Resolution was
issued to determine the propriety of the September 7, 2011 Resolution given the facts
that came to light after the ruling Divisions examination of the records. To point out the
obvious, the recall was not a ruling on the merits and did not constitute the reversal of
the substantive issues already decided upon by the Court in the FASAP case in its
previously issued Decision (of July 22, 2008) and Resolution (of October 2, 2009). In short,

the October 4, 2011 Resolution was not meant and was never intended to favor either party, but to
simply remove any doubt about the validity of the ruling Divisions action on the case. The case, in the
ruling Divisions view, could be brought to the Court en banc since it is one of sufficient importance; at
the very least, it involves the interpretation of conflicting provisions of the IRSC with potential
jurisdictional implications.
At the time the Members of the ruling Division went to the Chief Justice to recommend a recall, there
was no clear indication of how they would definitively settle the unresolved legal questions among
themselves. The only matter legally certain was the looming finality of the September 7, 2011
Resolution if it would not be immediately recalled by the Court en banc by October 4, 2011. No
unanimity among the Members of the ruling Division could be gathered on the unresolved legal
questions; thus, they concluded that the matter is best determined by the Court en banc as it
potentially involved questions of jurisdiction and interpretation of conflicting provisions of the IRSC. To
the extent of the recommended recall, the ruling Division was unanimous and the Members
communicated this intent to the Chief Justice in clear and unequivocal terms.
Given this background, the Clerk of Court cannot and should not be faulted for her recommended
position, as indeed there was a ruling in the 1st MR that declared the original ruling on the case
final. Perhaps, she did not fully realize that the ruling on the 1 st MR varied the terms of the original
Decision of July 22, 2008; she could not have considered, too, that a subsequent 2 nd MR would be
accepted for the Courts further consideration of the case on the merits.
Upon acceptance of the 2nd MR by the Third Division through Justice Velasco, the Clerk of Court
and the Raffle Committee, however, should have realized that Justice Velasco was not the proper
Member-in-Charge of the case and another raffle should have been held to assign the case to a
Justice who participated in the original Decision of July 22, 2008 or in the Resolution of October 2,
2009. This realization, unfortunately, did not dawn on the Clerk of Court.
For practically the same reasons, the Third (or Velasco) Division, with Justice Velasco as
Member-in-Charge, cannot and should not be faulted for accepting the 2 nd MR; the variance
introduced by the ruling on the 1st MR and the higher interest of justice (in light alone of the gigantic
amount involved) appeared to justify further consideration of the case. Recall that at that time, the
IRSC was not yet in existence and a specific rule under the IRSC on the handling of 2 nd MRs was yet to
be formulated, separately from the existing jurisprudential rulings. Justice Velasco, though, could not
have held on to the case after its merits were opened for new consideration, as he was not the writer
of the assailed Decision and Resolution, nor was he a Member of the Division that acted on the
case. Under A.M. No. 99-8-09-SC, the rightful ponente should be a remaining Member of the Division
that rendered the decision or resolution.

With Justice Velascos subsequent inhibition, a legal reason that the involved officials and Justices
should have again recognized is the rationale of the rule on replacements when an inhibition or
retirement intervenes. Since the inhibiting Justice was only the Member-in-Charge and was technically
merely a nominal ponente[26] in so far as the case is concerned (because he was not the writer of
the Decision and Resolution under consideration), the raffle should have been confined among the
Members who actually participated in ruling on the merits of the original Decision or of the
subsequent Resolution. At that point, only Justices Peralta and Bersamin were left because all the
other Members of the original ruling groups had retired. Since under the IRSC[27] and Section 4(3),
Article VIII of the Constitution, the case should have been decided by the Members who actually took
part in the deliberations, the ruling on the merits made by the ruling Division on September 7, 2011
was effectively void and should appropriately be recalled.
To summarize all the developments that brought about the present dispute expressed in a
format that can more readily be appreciated in terms of the Court en bancsruling to recall
the September 7, 2011 ruling the FASAP case, as it developed, was attended by special
and unusual circumstances that saw:
(a)

the confluence of the successive retirement of three Justices (in a Division

of five Justices) who actually participated in the assailed Decision and
Resolution;

(b)

the change in the governing rules from the A.M.s to the IRSC regime which
transpired during the pendency of the case;

(c)

the occurrence of a series of inhibitions in the course of the case (Justices

Ruben Reyes, Leonardo-De Castro, Corona, Velasco, and Carpio), and the
absences of Justices Sereno and Reyes at the critical time, requiring their
replacement; notably, Justices Corona, Carpio, Velasco and Leonardo-De
Castro are the four most senior Members of the Court;

(d)

the three re-organizations of the divisions, which all took place during the
pendency of the case, necessitating the transfer of the case from the Third
Division, to the First, then to the Second Division;

(e)

the unusual timing of Atty. Mendozas letters, made after the ruling
Division had issued its Resolution of September 7, 2011, but before the
parties received their copies of the said Resolution; and

(f)

finally, the time constraint that intervened, brought about by the parties
receipt on September 19, 2011 of the Special Divisions Resolution of

September 7, 2011, and the consequent running of the period for finality
computed from this latter date; and the Resolution would have lapsed to
finality after October 4, 2011, had it not been recalled by that date.
All these developments, in no small measure, contributed in their own peculiar way to the
confusing situations that attended the September 7, 2011 Resolution, resulting in the
recall of this Resolution by the Court en banc.
On deeper consideration, the majority now firmly holds the view that Section 7, Rule 2 of the IRSC
should have prevailed in considering the raffle and assignment of cases after the 2 nd MR was
accepted, as advocated by some Members within the ruling Division, as against the general rule on
inhibition under Section 3, Rule 8. The underlying constitutional reason, of course, is the requirement
of Section 4(3), Article VIII of the Constitution already referred to above. [28]
The general rule on statutory interpretation is that apparently conflicting provisions should be
reconciled and harmonized,[29] as a statute must be so construed as to harmonize and give effect to
all its provisions whenever possible.[30] Only after the failure at this attempt at reconciliation should
one provision be considered the applicable provision as against the other. [31]
Applying these rules by reconciling the two provisions under consideration, Section 3, Rule 8 of the
IRSC should be read as the general rule applicable to the inhibition of a Member-inCharge. This general rule should, however, yield where the inhibition occurs at the late
stage of the case when a decision or signed resolution is assailed through an MR. At that
point, when the situation calls for the review of the merits of the decision or the signed resolution
made by a ponente (or writer of the assailed ruling), Section 3, Rule 8 no longer applies and must
yield to Section 7, Rule 2 of the IRSC which contemplates a situation when the ponente is
no longer available, and calls for the referral of the case for raffle among the remaining
Members of the Division who acted on the decision or on the signed resolution. This latter
provision should rightly apply as it gives those who intimately know the facts and merits of the case,
through their previous participation and deliberations, the chance to take a look at the decision or
resolution produced with their participation.
To reiterate, Section 3, Rule 8 of the IRSC is the general rule on inhibition, but it must yield to
the more specific Section 7, Rule 2 of the IRSC where the obtaining situation is for the review on the
merits of an already issued decision or resolution and the ponente or writer is no longer available to
act on the matter. On this basis, the ponente,on the merits of the case on review, should be chosen
from the remaining participating Justices, namely, Justices Peralta and Bersamin.
A final point that needs to be fully clarified at this juncture, in light of the allegations of the Dissent
is the role of the Chief Justice in the recall of the September 7, 2011 Resolution. As can be seen
from the above narration, the Chief Justice acted only on the recommendation of the ruling Division,

since he had inhibited himself from participation in the case long before. The confusion on this matter
could have been brought about by the Chief Justices role as the Presiding Officer of the Court en
banc (particularly in itsmeeting of October 4, 2011), and the fact that the four most senior Justices of
the Court (namely, Justices Corona, Carpio, Velasco and Leonardo-De Castro) inhibited from
participating in the case. In the absence of any clear personal malicious participation, it is neither
correct nor proper to hold the Chief Justice personally accountable for the collegial ruling of the
Court en banc.
Another disturbing allegation in the Dissent is the implication of the alleged silence of, or lack of
objection from, the Members of the ruling Division during the October 4, 2011 deliberations,
citing for this purpose the internal en banc deliberations. The lack of a very active role in the
arguments can only be attributable to the Members of the ruling Divisions unanimous agreement to
recall their ruling immediately; to their desire to have the intricate issues ventilated before the
Court en banc; to the looming finality of their Divisions ruling if this ruling would not be recalled; and
to their firm resolve to avoid any occasion for future flip-flopping by the Court. To be sure, it was not
due to any conspiracy to reverse their ruling to affirm the previous Court rulings already made in
favor of FASAP; the Divisions response was simply dictated by the legal uncertainties that existed and
the deep division among them on the proper reaction to Atty. Mendozas letters.
Of the above-cited reasons, a major influencing factor, of course, was the time constraint
the Members of the ruling Division met with the Chief Justice on September 30, 2011, the Friday
before October 4, 2011 (the date of the closest Court en banc meeting, as well as the deadline
for the finality of the September 7, 2011 Resolution).They impressed upon the Chief Justice the
urgent need to recall their September 7, 2011 Resolution under the risk of being accused of a flip-flop
if the Court en banc would later decide to override its ruling.
As a final word, if no detailed reference to internal Court deliberations is made in this
Resolution, the omission is intentional in view of the prohibition against the public disclosure of
the internal proceedings of the Court during its deliberations. The present administrative matter,
despite its pendency, is being ventilated in the impeachment of Chief Justice Corona before the
Senate acting as an Impeachment Court, and any disclosure in this Resolution could mean the
disclosure of the Courts internal deliberations to outside parties, contrary to the clear terms of the
Court en banc Resolution of February 14, 2012 on the attendance of witnesses from this Court and
the production of Court records.
CONCLUSION
In sum, the recall of the September 7, 2011 Resolution of the ruling Division was a proper
and legal move to make under the applicable laws and rules, and the indisputably unusual
developments and circumstances of the case.

Between Section 3, Article 8 and Section 7, Rule 2, both of the IRSC, the former is
the general provision on a Member-in-Charges inhibition, but it should yield to the more
specific Section 7, Rule 2 in a situation where the review of an issued decision or signed
resolution is called for and the ponente or writer of these rulings is no longer available to
act. Section 7, Rule 2 exactly contemplates this situation.
WHEREFORE, premises considered, we hereby confirm that the Court en banc has
assumed jurisdiction over the resolution of the merits of the motions for reconsideration
of Philippine Airlines, Inc., addressing our July 22, 2008 Decision and October 2, 2009
Resolution; and that the September 7, 2011 ruling of the Second Division has been
effectively recalled. This case should now be raffled either to Justice Lucas P. Bersamin or
Justice Diosdado M. Peralta (the remaining Members of the Special Third Division that
originally ruled on the merits of the case) as Member-in-Charge in resolving the merits of
these motions.
The Philippine Airlines, Inc.s Motion to Vacate dated October 3, 2011, but received
by this Court after a recall had been made, has thereby been rendered moot and
academic.
The Flight Attendants and Stewards Association of the Philippines Motion for
Reconsideration of October 17, 2011 is hereby denied; the recall of the September 7, 2011
Resolution was made by the Court on its own before the rulings finality pursuant to the
Courts power of control over its orders and resolutions. Thus, no due process issue ever
arose.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:

RENATO C. CORONA
Chief Justice

G.R. Nos. 176951, 177499, and 178056: LEAGUE OF CITIES OF THE PHILIPPINES, et al. v.
COMMISSION ON ELECTIONS, et al.

x-----------------------------------------------------------------------------------------x
DISSENTING OPINION

CARPIO, J.:
This Court has made history with its repeated flip-flopping1 in this case.
On 18 November 2008, the Court rendered a decision declaring unconstitutional the 16 Cityhood
Laws. The decision became final after the denial of two motions for reconsideration filed by the 16
municipalities. An Entry of Judgment was made on 21 May 2009. The decision was executed (1)
when the Department of Budget and Management issued LBM (Local Budget Memorandum) No. 61 on
30 June 2009, providing for the final Internal Revenue Allotment for 2009 due to the reversion of 16
newly created cities to municipalities; and (2) when the Commission on Elections issued Resolution
No. 8670 on 22 September 2009, directing that voters in the 16 municipalities shall vote not as cities
but as municipalities in the 10 May 2010 elections. In addition, fourteen Congressmen, having
jurisdiction over the 16 respondent municipalities, filed House Bill 6303 seeking to amend Section 450
of the Local Government Code, as amended by Republic Act No. 9009. The proposed amendment was
intended to correct the infirmities in the Cityhood Laws as cited by this Court in its 18 November 2008
Decision.2
Subsequently, the Court rendered three more decisions: (1) 21 December 2009, declaring the
Cityhood Laws constitutional; (2) 24 August 2010, declaring the Cityhood Lawsunconstitutional;
and (3) 15 February 2011 declaring the Cityhood Laws constitutional. Clearly, there were three
reversals or flip-flops in this case.
In the Resolution of 15 February 2011, the majority upheld the constitutionality of the 16 Cityhood
Laws, declaring that (1) the Cityhood Laws do not violate Section 10, Article X of the Constitution; and
(2) the Cityhood Laws do not violate Section 6, Article X and the equal protection clause of the
Constitution.
I reiterate my unwavering position from the start that the 16 Cityhood Laws are unconstitutional.
I.
The Cityhood Laws are laws other than the Local Government Code.
In sustaining the constitutionality of the 16 Cityhood Laws, the majority ruled in the Resolution of 15
February 2011 that in effect, the Cityhood Laws amended RA No. 9009 through the exemption clauses
found therein. Since the Cityhood Laws explicitly exempted the concerned municipalities from the
amendatory RA No. 9009, such Cityhood Laws are, therefore, also amendments to the LGC
itself. In the Resolution denying petitioner's motion for reconsideration, the majority stated that RA

9009, and, by necessity, the LGC, were amended, x x x by way of the express exemptions embodied
in the exemption clauses.
This is egregious error.

Nowhere in the plain language of the Cityhood Laws can this interpretation be discerned. Neither the
title nor the body of the Cityhood Laws sustains such conclusion. Simply put, there is absolutely
nothing in the Cityhood Laws to support the majority decision that the Cityhood Laws further
amended the Local Government Code, which exclusively embodies the essential requirements for
the creation of cities, including the conversion of a municipality into a city.
An amendment refers to a change or modification to a previously adopted law. 3 An amendatory law
merely modifies a specific provision or provisions of a previously adopted law. 4Indisputably, an
amendatory law becomes an integral part of the law it seeks to amend.
On the contrary, each Cityhood Law contains a uniformly worded Separability Clause which
expressly states:
Separability Clause. - If, for any reason or reasons, any part or provision of this
Charter shall be held unconstitutional, invalid or inconsistent with the Local
Government Code of 1991, the other parts or provisions hereof which are not
affected thereby shall continue to be in full force and effect. Moreover, in cases where
this Charter is silent or unclear, the pertinent provisions of the Local Government Code
shall govern, if so provided therein.5 (Emphasis supplied)

Each Cityhood Law states that if any of its provisions is inconsistent with the Local Government
Code, the other consistent provisions shall continue to be in full force and effect.The clear and
inescapable implication is that any provision in each Cityhood Law that is inconsistent
with

the

Local

Government

Code

has

no

force

and

effect

in

short,

void

and

ineffective. Each Cityhood Law expressly and unequivocally acknowledges the superiority of the
Local Government Code, and that in case of conflict, the Local Government Code shall prevail
over the Cityhood Law. Clearly, the Cityhood Laws do not amend the Local Government Code, and
the Legislature never intended the Cityhood Laws to amend the Local Government Code. The clear
intent and express language of the Cityhood Laws is for these laws to conform to the Local
Government Code and not the other way around.
To repeat, every Cityhood Law unmistakably provides that any provision in the Cityhood Law that is
inconsistent with the Local Government Code is void. It follows that the Cityhood Laws cannot be

construed to authorize the creation of cities that have not met the prevailing P100 million income
requirement prescribed without exception in the Local Government Code.
Moreover, Congress, in providing in the Separability Clause that the Local Government Code shall
prevail over the Cityhood Laws, treats the Cityhood Laws as separate and distinct from the Local
Government Code. In other words, the Cityhood Laws do not form integral parts of the Local
Government Code but are separate and distinct laws. There is therefore no question that the
Cityhood Laws are laws other than the Local Government Code. As such, the Cityhood Laws cannot
stipulate an exception from the requirements for the creation of cities, prescribed in the Local
Government Code, without running afoul of the explicit mandate of Section 10, Article X of the 1987
Constitution.
This constitutional provision reads:

No province, city, municipality, or barangay shall be created, divided, merged, abolished

or its boundary substantially altered, except in accordance with the criteria
established in the local government code and subject to approval by a majority of
the votes cast in a plebiscite in the political units directly affected. (Emphasis supplied)

The Constitution is clear. The creation of local government units must follow the criteria
established in the Local Government Code itself and not in any other law. There is only one
Local Government Code.6 To avoid discrimination and ensure uniformity and equality, the Constitution
expressly requires Congress to stipulate in the Local Government Code itself all the criteria necessary
for the creation of a city, including the conversion of a municipality into a city. Congress cannot write
such criteria in any other law, like the Cityhood Laws.
II.
The increased income requirement of P100 million
is neither arbitrary nor difficult to comply.
The majority resolution of 15 February 2011 states that the imposition of the P100 million average
annual income requirement for the creation of component cities was arbitrarilymade. The majority
resolution further declares: x x x there was no evidence or empirical data, such as inflation rates,
to support the choice of this amount. The imposition of a very high income requirement of P100

million, increased from P20 million, was simply to make it extremely difficult for municipalities
to become component cities.
This is glaring error.
In stating that there is no evidence to support the increased income requirement, the majority is
requiring the Legislature, the sole law-making body under the Constitution, to provide evidence
justifying the economic rationale, like inflation rates, for the increase in income requirement. The
Legislature, in enacting RA No. 9009, is not required by the Constitution to show the courts data like
inflation figures to support the increased income requirement. Besides, even assuming the inflation
rate is zero, this Court cannot invalidate the increase in income requirement on such ground. A zero
inflation rate does not bar the Legislature from increasing the income requirement to
convert a municipality into a city, or increasing taxes or tax rates, or increasing capital
requirements for businesses. This Court should not venture into areas of analyses obviously
beyond its competence.
As long as the increased income requirement is not impossible to comply, such increase is a policy
determination involving the wisdom of the law, which exclusively lies within the province of the
Legislature. When the Legislature enacts laws increasing taxes, tax rates, or capital requirements for
businesses, the Court cannot refuse to apply such laws on the ground that there is no economic
justification for such increases. Economic, political or social justifications for the enactment of laws go
into the wisdom of the law, outside the purview of judicial review. This Court cannot refuse to apply
the law unless the law violates a specific provision of the Constitution. There is plainly nothing
unconstitutional in increasing the income requirement from P20 million to P100 million because such
increase does not violate any express or implied provision of the Constitution.
The majority declares that the P100 million income requirement under RA No. 9009 was
imposed simply to make it extremely difficult for the municipalities to become component
cities. In short, the majority is saying that the Legislature, out of sheer whim or spite at
municipalities, increased the income requirement from P20 million to P100 million. Thus, the majority
applied the P20 million income requirement under the repealed law, not the P100 million income
requirement under the prevailing law. Yet, the majority does not state that theP100 million income
requirement is unconstitutional. The majority simply refuses to apply the prevailing law, choosing
instead to apply a repealed law. There is neither law nor logic in the majority decision.

The majority's conclusion that the Legislature increased the income requirement from P20 million
to P100 million simply to make it difficult for the municipalities to become component
cities is not only unfair to the Legislature, it is also grossly erroneous. Contrary to the majority's
baseless conclusion, the increased income requirement of P100 million is not at all difficult to comply.

As pointed out by petitioner, the cities of San Juan 7 and Navotas,8 which met the P100 million income
requirement, were created at the same time as the enactment of the Cityhood Laws by the same
13th Congress.9 Prior to this, the City of Sta. Rosa, which also met the P100 million income
requirement, was created through Republic Act No. 9264. 10 Subsequently, the cities of Dasmarias in
Cavite11 and Bian in Laguna12 were created in full compliance with the P100 million income criterion.
Further disproving the majority's erroneous conclusion, an additional twenty-one (21) municipalities
have satisfied the P100 million income requirement for the creation of cities. 13Accordingly, petitioner
League of Cities has endorsed the cityhood application of these 21 municipalities. 14 These
municipalities are:
Cabuyao and San Pedro (Laguna)
Cainta, Taytay, and Binangonan (Rizal)
Bacoor, Gen. Trias, Imus, Carmona, and Silang (Cavite)
San Pedro (Laguna)
Pantabangan (Nueva Ecija)
Calaca, Sto. Tomas, Bauan and Nasugbu ( Batangas)
Mauban in (Quezon)
Marilao, Sta. Maria and Norzagaray (Bulacan)
Limay (Bataan)
Compliance by these municipalities with the P100 million income requirement underscores the fact
that the P100 million income requirement is not difficult to comply at all, contrary to the baseless and
speculative conclusion in the majority decision. In short, the majority decision is based on patently
and undeniably false and erroneous premises.
Indisputably, right after the enactment of RA No. 9009, Congress passed laws converting
municipalities into cities using the new P100 million income requirement. Subsequently, Congress
enacted the 16 Cityhood Laws using the old P20 million income requirement. Thereafter, Congress
again passed laws converting additional municipalities into cities using theP100 million income
requirement. The 16 Cityhood Laws stick out like a sore thumb, starkly showing an obvious violation
of the equal protection clause. The Cityhood Laws create distinctly privileged cities with only P20
million annual income, discriminating against cities with P100 million annual income created before
and after the enactment of the Cityhood Laws. This kind of discrimination is precisely what Section
10, Article X of the Constitution seeks to prohibit when it commands that no x x x city x x x shall be
created x x x except in accordance with the criteria established in the local government code.

The majority harp on the fact that 59 existing cities had failed as of 2006 to post an average annual
income of P100 million.
Suffice it to state that there is no Constitutional or statutory requirement for the 59 existing cities to
comply with the P100 million income requirement. Obviously, these cities were already cities
prior to the amendment of the Local Government Code providing for the increased income
requirement of P100 million. In other words, at the time of their creation, these cities have
complied with the criteria prescribed under the old Local Government Code for the creation of cities,
and thus are not required to comply with the P100 million income requirement of the prevailing Local
Government Code. It is utterly misplaced and grossly erroneous to cite the non-compliance by the 59
existing cities with the increased income requirement of P100 million to conclude that the P100
million income requirement is arbitrary and difficult to comply.
Moreover, as stated, the majority do not find the increased income requirement of P100 million
unconstitutional or unlawful. Unless the P100 million income requirement violates a provision of the
Constitution or a law, such requirement for the creation of a city must be strictly complied with. Any
local government unit applying for cityhood, whether located in or outside the metropolis and
whether within the National Capital Region or not, must meet the P100 million income requirement
prescribed by the prevailing Local Government Code. There is absolutely nothing unconstitutional or
unlawful if the P100 million income requirement is easily complied with by local government units
within or near the National Capital Region. The majority's groundless and unfair discrimination against
these metropolis-located local government units must necessarily fail.
Further, that San Juan and Navotas had not allegedly been classified by the President as highly
urbanized cities, pursuant to Section 453 of the Local Government Code, does not signify that these
cities do not meet the P100 million income requirement. In fact, the majority concedes that it is
presumed that San Juan and Navotas cities have complied with the P100 million income requirement.
Besides, it is totally pointless to fault the cities of San Juan and Navotas for an unperformed duty of
the President.
III.
The reduction of the share in the Internal Revenue Allotment
will adversely affect the cities' economic situation.

In the Resolution of 15 February 2011, the majority declared that petitioner's protest against the
reduction of their just share in the Internal Revenue Allotment all boils down to money, criticizing
petitioners for overlooking the alleged need of respondent municipalities to become channels of
economic growth in the countryside.

The majority gravely loses sight of the fact that the members of petitioner League of Cities are also
in need of the same resources, and are responsible for development imperatives that need to be done
for almost 40 million Filipinos, as compared to only 1.3 million Filipinos in the respondent
municipalities. As pointed out by petitioner, this is just about equal to the population of Davao City,
whose residents, on a per capita basis, receive less than half of what respondent municipalities'
residents would receive if they become cities. Stated otherwise, for every peso that each
Davaoeo receives, his counterpart in the respondent municipality will receive more than
two pesos.
In addition, the majority conveniently forgets that members of the LCP have more projects, more
contractual obligations, and more employees than respondent municipalities. If their share in the
Internal Revenue Allotment is unreasonably reduced, it is possible, even expected, that these cities
may have to lay-off workers and abandon projects, greatly hampering, or worse paralyzing, the
delivery of much needed public services in their respective territorial jurisdictions.
Obviously, petitioner's protest does not boil down to money. It boils down to equity and fairness,
rational allocation of scarce resources, and above all, faithful compliance with an express
mandatory provision of the Constitution. No one should put a monetary value to compliance
with an express command of the Constitution. Neither should any one, least of all this Court,
disregard a patent violation of the Constitution just because the issue also involves monetary
recovery. To do so would expose the stability of the Constitution to the corrosive vagaries of the
marketplace.
IV.
Not substantial compliance,
but outright violation of the Constitution.

In his Concurring Opinion to the Resolution of 15 February 2011, Justice Roberto A. Abad stated,
These new cities have not altogether been exempted from the operation of the Local Government
Code covering income requirement. They have been expressly made subject to the lower
income requirement of the old code. There remains, therefore, substantial compliance
with the provision of Section 10, Article X of the Constitution.
This is gross error.
There is a wide disparity an P80 million difference in the income requirement of P20 million under the
old Local Government Code and the P100 million requirement under the prevailing Local Government
Code. By any reasonable yardstick known to man since the dawn of civilization, compliance with the
old income requirement, which is only 20% compliance with the new income requirement under the

prevailing law, cannot be deemed substantial compliance. It is like saying that those who obtain a
general average of 20% in the Bar Examinations are in substantial compliance with the requirement
for admission to the Bar where the highest possible score is 100%.
RA No. 9009 amended the Local Government Code precisely because the criteria in the old Local
Government Code were no longer sufficient. In short, RA No. 9009 repealed the old income
requirement of P20 million, a requirement that no longer exists in our statute books. Compliance with
the old income requirement is compliance with a repealed, dead, and non-existent law a totally
useless, futile, and empty act. Worse, compliance with the old requirement is an outright
violation of the Constitution which expressly commands that no x x x city x x x shall be created
x x x except in accordance with the criteria established in the local government code . To
repeat, applying what Justice Abad calls the lower income requirement of the old code is applying a
repealed, dead, and non-existent law, which is exactly what the majority decision has done.
The invocation here of substantial compliance of the Constitution reminds us of what Justice Calixto
Zaldivar wrote in his dissenting opinion in Javellana v. Executive Secretary:15 It would be indulging in
sophistry to maintain that the voting in the citizens assemblies amounted to a substantial compliance
with the requirements prescribed in Section 1 of Article XV of the 1935 Constitution. The same can be
said in this case.
A final point. There must be strict compliance with the express command of the Constitution that no
city x x x shall be created x x x except in accordance with the criteria established in the
local government code. Substantial compliance is insufficient because it will discriminate against
all other cities that were created before and after the enactmentof the Cityhood Laws in strict
compliance with the criteria in the Local Government Code, as amended by RA No. 9009. The
conversion of municipalities into new cities means an increase in the Internal Revenue Allotment of
the former municipalities and a corresponding decrease in the Internal Revenue Allotment of all
other existing cities. There must be strict, not only substantial, compliance with the constitutional
requirement because the economic lifeline of existing cities may be seriously affected. Thus, the
invocation of substantial compliance with constitutional requirements is clearly misplaced in this
case.
V.
Conclusion
To repeat, the Constitution expressly requires Congress to stipulate in the Local Government Code
itself all the criteria necessary for the creation of a city, including the conversion of a municipality into
a city. To avoid discrimination and ensure uniformity and equality, such criteria cannot be embodied in
any other law except the Local Government Code. In this case, the Cityhood Laws, which are
unmistakably laws other than the Local Government Code, provide an exemption from the increased
income requirement for the creation of cities under Section 450 of the Local Government Code, as

amended by RA No. 9009. Clearly, the Cityhood Laws contravene the letter and intent of Section 10,
Article X of the Constitution.
Moreover, by express provision in the Separability Clause of each Cityhood Law, in case of
inconsistency between the Cityhood Law and the Local Government Code, the latter shall prevail.
Thus, the P100 million income requirement in the Local Government Code prevails over the P20
million income requirement under the Cityhood Laws.
Finally, this Court must be true to its sworn duty to uphold, defend, and protect the Constitution fully
and faithfully, without indulging in sophistry or seeking refuge behind a patently dubious invocation
of substantial compliance with the Constitution.
Accordingly, I vote to GRANT the motion for reconsideration of the League of Cities of the
Philippines.
ANTONIO T. CARPIO
Associate Justice
1Flip-flop is defined as an abrupt reversal of policy: the candidate flip-flopped on a number of issues
(The New Oxford Dictionary of English, 1998); a sudden reversal (as of policy or strategy)
(Merriam-Webster Unabridged Dictionary Version 3.0, 2003); A reversal, as of a stand or
position; a foreign policy flip-flop (American Heritage Talking Dictionary, 1997); A decision to
reverse an earlier decision (WordWeb Pro Version 6.4, 2011); an abrupt reversal of policy
(Oxford Dictionaries Online, accessed 4 April 2011).

Republic of the Philippines

Supreme Court
Manila
SECOND DIVISION

SPOUSES ATTY. ERLANDO A.

ABRENICA and JOENA B. ABRENICA
Petitioners,

G.R. No. 180572

Present:

CARPIO, Chairperson,
- versus -

BRION,
PEREZ,
SERENO, and

LAW FIRM OF ABRENICA, TUNGOL

and TIBAYAN, ATTYS. ABELARDO M.
TIBAYAN and DANILO N. TUNGOL,
Respondents.

REYES, JJ.

Promulgated:

June 18, 2012

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
SERENO, J.:
The present case is a continuation of G.R. No. 169420 [1] decided by this Court on 22 September
2006. For brevity, we quote the relevant facts narrated in that case:
Petitioner Atty. Erlando A. Abrenica was a partner of individual respondents,
Attys. Danilo N. Tungol and Abelardo M. Tibayan, in the Law Firm of Abrenica, Tungol and
Tibayan (the firm).
In 1998, respondents filed with the Securities and Exchange Commission (SEC)
two cases against petitioner. The first was SEC Case No. 05-98-5959, for Accounting and
Return and Transfer of Partnership Funds With Damages and Application for Issuance of
Preliminary Attachment, where they alleged that petitioner refused to return partnership
funds representing profits from the sale of a parcel of land in Lemery, Batangas. The
second
was
SEC
Case
No.
10-98-6123,
also
for
Accounting and Return and Transfer of Partnership Funds where respondents sought to
recover from petitioner retainer fees that he received from two clients of the firm and
the balance of the cash advance that he obtained in 1997.
The SEC initially heard the cases but they were later transferred to the Regional
Trial Court of Quezon City pursuant to Republic Act No. 8799, which transferred
jurisdiction over intra-corporate controversies from the SEC to the courts. In a
Consolidated Decision dated November 23, 2004, the Regional Trial Court of Quezon
City, Branch 226, held that:

WHEREFORE, in view of all the foregoing, judgment is hereby rendered as

follows:
CIVIL CASE NO. Q01-42948
1. Ordering the respondent Atty. Erlando Abrenica to render full accounting
of the amounts he received as profits from the sale and resale of the Lemery
property in the amount of 4,524,000.00;
2. Ordering the respondent Atty. Erlando Abrenica to remit to the law firm
the said amount of 4,524,000.00 plus interest of 12% per annum from the time
he received the same and converted the same to his own personal use or from
September 1997 until fully paid; and
3. To pay the costs of suit.
CIVIL CASE NO. Q01-42959
1. Ordering Atty. Erlando Abrenica to render a full accounting of the
amounts he received under the retainer agreement between the law firm and
Atlanta Industries Inc. and Atlanta Land Corporation in the amount of
320,000.00.
2. Ordering Atty. Erlando Abrenica to remit to the law firm the amount
received by him under the Retainer Agreement with Atlanta Industries, Inc. and
Atlanta Land Corporation in the amount of 320,000.00 plus interests of 12% per
annum from June 1998 until fully paid;
3. Ordering Atty. Erlando Abrenica to pay the law firm his balance on his
cash advance in the amount of 25,000.00 with interest of 12% per annum from
the date this decision becomes final; and
4. To pay the costs of suit.
SO ORDERED.
Petitioner received a copy of the decision on December 17, 2004. On December
21, 2004, he filed a notice of appeal under Rule 41 and paid the required appeal fees.
Two days later, respondents filed a Motion for Issuance of Writ of
Execution pursuant to A.M. 01-2-04-SC, which provides that decisions in intra-corporate
disputes are immediately executory and not subject to appeal unless stayed by an
appellate court.
On January 7, 2005, respondents filed an Opposition (To Defendant's Notice of
Appeal) on the ground that it violated A.M. No. 04-9-07-SC [2] prescribing appeal
by certiorari under Rule 43 as the correct mode of appeal from the trial courts decisions
on intra-corporate disputes.
Petitioner thereafter filed a Reply with Manifestation (To the Opposition to
Defendant's Notice of Appeal) and an Opposition to respondents motion for execution.

On May 11, 2005, the trial court issued an Order requiring petitioner to show
cause why it should take cognizance of the notice of appeal in view of A.M. No. 04-9-07SC. Petitioner did not comply with the said Order. Instead, on June 10, 2005, he filed
with the Court of Appeals a Motion for Leave of Court to Admit Attached Petition for
Review under Rule 43 of the Revised Rules of Court. Respondents opposed the motion.
The Court of Appeals denied petitioner's motion in its assailed Resolution dated
June 29, 2005 x x x.
xxxxxxxxx
The Court of Appeals also denied petitioner's motion for reconsideration in its
August 23, 2005 Resolution.

Given the foregoing facts, we dismissed the Petition in G.R. No. 169420 on the ground that the
appeal filed by petitioner was the wrong remedy. For that reason, we held as follows:[3]
Time and again, this Court has upheld dismissals of incorrect appeals, even if
these were timely filed. In Lanzaderas v. Amethyst Security and General Services, Inc.,
this Court affirmed the dismissal by the Court of Appeals of a petition for review under
Rule 43 to question a decision because the proper mode of appeal should have been a
petition for certiorari under Rule 65. x x x.
xxxxxxxxx
Indeed, litigations should, and do, come to an end. Public interest demands an
end to every litigation and a belated effort to reopen a case that has already attained
finality will serve no purpose other than to delay the administration of justice. In the
instant case, the trial court's decision became final and executory on January 3, 2005.
Respondents had already acquired a vested right in the effects of the finality of the
decision, which should not be disturbed any longer.
WHEREFORE, the petition is DENIED. The Court of Appeals Resolutions dated
June 29, 2005 and August 23, 2005 in CA-G.R. SP No. 90076 denying admission of
petitioners Petition for Review are AFFIRMED.

Thus, respondents sought the execution of the judgment. On 11 April 2007, G.R. No. 169420
became final and executory.[4]
Apparently not wanting to be bound by this Courts Decision in G.R. No. 169420, petitioners
Erlando and Joena subsequently filed with the Court of Appeals (CA) a Petition for Annulment of
Judgment with prayer for the issuance of a writ of preliminary injunction and/or temporary restraining
order, docketed as CA-G.R. SP No. 98679. The Petition for Annulment of Judgment assailed the merits
of the RTCs Decision in Civil Case Nos. Q-01-42948 and Q-01-42959, subject of G.R. No. 169420. In
that Petition for Annulment, Petitioners raised the following grounds:

I.

The lower court erred in concluding that both petitioners and respondents
did not present direct documentary evidence to substantiate [their] respective
claims.

II.

The lower court erred in concluding that both petitioners and respondents
relied mainly on testimonial evidence to prove their respective position[s].

III.

The lower court erred in not ruling that the real estate transaction entered
into by said petitioners and spouses Roman and Amalia Aguzar was a personal
transaction and not a law partnership transaction.

IV.

The lower court erred in ruling that the testimonies of the respondents are
credible.

V.

The lower court erred in ruling that the purchase price for the lot involved
was 3 million and not 8 million.

VI.

The lower court erred in ruling that petitioners retainer agreement with
Atlanta Industries, Inc. was a law partnership transaction.

VII.

The lower court erred when it failed to rule on said petitioners permissive
counterclaim relative to the various personal loans secured by respondents.

VIII.

The lower court not only erred in the exercise of its jurisdiction but more
importantly it acted without jurisdiction or with lack of jurisdiction. [5]

We note that petitioners were married on 28 May 1998. The cases filed with the Securities and
Exchange Commission (SEC) on 6 May 1998 and 15 October 1998 were filed against petitioner
Erlando only. It was with the filing of CA-G.R. SP No. 98679 on 24 April 2007 that Joena joined Erlando
as a co-petitioner.
On 26 April 2007, the CA issued a Resolution [6] dismissing the Petition. First, it reasoned that
the remedy of annulment of judgment under Rule 47 of the Rules of Court is available only when the
ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no longer
available through no fault of petitioners.[7]Considering that the dismissal of the appeal was directly
attributable to them, the remedy under Rule 47 was no longer available.
Second, the CA stated that the grounds alleged in the Petition delved on the merits of the case
and the appreciation by the trial court of the evidence presented to the latter. Under Rule 47, the
grounds for annulment are limited only to extrinsic fraud and lack of jurisdiction.
Lastly, the CA held that the fact that the trial court was not designated as a special commercial
court did not mean that the latter had no jurisdiction over the case. The appellate court stated that, in
any event, petitioners could have raised this matter on appeal or through a petition for certiorari
under Rule 65, but they did not do so.

Petitioners filed an Amended Petition for Annulment of Judgment dated 2 May 2007, but the CA
had by then already issued the 26 April 2007 Resolution dismissing the Petition.
On 24 May 2007, the 26 April 2007 Resolution in CA-G.R. SP No. 98679 became final and
executory.[8]
Petitioners did not give up. They once again filed a 105-page Petition for Annulment of
Judgment with the CA dated 25 May 2007 [9] docketed as CA-G.R. SP No. 99719. This time, they
injected the ground of extrinsic fraud into what appeared to be substantially the same issues raised in
CA-G.R. SP No. 98679. The following were the grounds raised in CA-G.R. SP No. 99719:
A.

Extrinsic fraud and/or collusion attended the rendition of the Consolidated Decision
x x x based on the following badges of fraud and/or glaring errors deliberately
committed, to wit:
I.

The lower court deliberately erred in concluding that both petitioners and
respondents did not present direct documentary evidence to substantiate
their respective claims, as it relied purely on the gist of what its personnel did
as regards the transcript of stenographic notes the latter [sic] in collusion with
the respondents.

II.

The lower court deliberately erred in concluding that both petitioners and
respondents relied mainly on testimonial evidence to prove their respective
positions by relying totally on what was presented to it by its personnel who
drafted the Consolidated Decision in collusion with the respondents.

III. The lower court deliberately erred in not ruling that the real estate transaction
entered into by said petitioners and spouses Roman and Amalia Aguzar was a
personal transaction and not a law partnership transaction for the same
reasons as stated in Nos. 1 and II above.
IV. The lower court deliberately erred in ruling that the testimonies of the
respondents are credible as against the petitioner Erlando Abrenica and his
witnesses for the same reasons as stated in Nos. I and II above.
V.

The lower court deliberately erred in ruling that the purchase price for the lot
involved was 3 million and not 8 million for the same reasons as stated in
Nos. 1 and II above.

VI. The lower court deliberately erred in ruling that petitioners retainer
agreement with Atlanta Industries, Inc. was a law partnership transaction for
the same reasons as stated in Nos. 1 and II above.
VII. The lower court deliberately erred when it failed to rule on said petitioners
permissive counterclaim relative to the various personal loans secured by
respondents also for the same reasons as the above.

B.

As an incident of the extrinsic fraud[,] the lower court[,] despite full knowledge of
its incapacity[,] rendered/promulgated the assailed Consolidated Decision x x x
without jurisdiction or with lack of jurisdiction.[10] (Underscoring in the original.)

On 2 August 2007, the CA issued the first assailed Resolution [11] dismissing the Petition in CAG.R. SP No. 99719, which held the Petition to be insufficient in form and substance. It noted the
following:
x x x. Readily noticeable is that CA-G.R. SP No. 90076 practically contained
the prayer for the annulment of the subject consolidated Decision premised
on the very same allegations, grounds or issues as the present annulment of
judgment case.
xxxxxxxxx
Annulment of judgment is a recourse equitable in character, allowed only in
exceptional cases as where there is no available or other adequate remedy (Espinosa
vs. Court of Appeals, 430 SCRA 96[2004]). Under Section 2 of Rule 47 of the Revised
Rules of Court, the only grounds for an annulment of judgment are extrinsic fraud and
lack of jurisdiction (Cerezo vs. Tuazon, 426 SCRA 167 [2004]). Extrinsic fraud shall not
be a valid ground if it was availed of, or could have been availed of, in a motion for new
trial or petition for relief.
xxxxxxxxx
x x x. In the case at bar, not only has the court a quo jurisdiction over the subject
matter and over the persons of the parties, what petitioner is truly complaining [of] here
is only a possible error in the exercise of jurisdiction, not on the issue of jurisdiction
itself. Where there is jurisdiction over the person and the subject matter (as in this
case), the decision on all other questions arising in the case is but an exercise of the
jurisdiction. And the errors which the court may commit in the exercise of jurisdiction
are
merely
errors
of
judgment
which
are
the
proper
subject
of
an appeal (Republic vs. G Holdings, supra, citing Tolentino vs. Leviste, supra). (Emphasis
supplied.)

Subsequently, petitioners filed a Humble Motion for Reconsideration [12] on 28 August 2007.
While the 28 August 2007 motion was pending, on 13 September 2007, petitioner Erlando filed
an Urgent Omnibus Motion[13] with Branch 226, alleging that the sheriff had levied on properties
belonging to his children and petitioner Joena. In addition, Erlando alleged that the trial court still had
to determine the manner of distribution of the firms assets and the value of the levied properties.
Lastly, he insisted that the RTC still had to determine the issue of whether the Rule 41 appeal was the
correct remedy.

On the same day, Joena filed an Affidavit of Third Party Claim [14] also with Branch 226 of the
RTC of Quezon City, alleging that she [15] and her stepchildren[16] owned a number of the personal
properties sought to be levied. She also insisted that she owned half of the two (2) motor vehicles as
well as the house and lot covered by Transfer Certificate of Title (TCT) No. 216818, which formed part
of the absolute community of property. She likewise alleged that the real property, being a family
home, and the furniture and the utensils necessary for housekeeping having a depreciated combined
value of one hundred thousand pesos (100,000) were exempt from execution pursuant to Rule 39,
Section 13 of the Rules of Court. Thus, she sought their discharge and release and likewise the
immediate remittance to her of half of the proceeds, if any.
Accordingly, the RTC scheduled[17] a hearing on the motion. On 17 October 2007, however,
petitioner Erlando moved to withdraw his motion on account of ongoing negotiations with
respondents.[18]
Thereafter, petitioner Erlando and respondent Abelardo Tibayan, witnessed by Sheriff Nardo de
Guzman, Jr. of Branch 226 of the RTC of Quezon City, executed an agreement to postpone the auction
sale of the property covered by TCT No. 216818 in anticipation of an amicable settlement of the
money judgment.[19]
Finally, on 30 October 2007, the CA in CA-G.R. SP No. 99719 issued the second assailed
Resolution[20] denying petitioners Motion for Reconsideration for having been filed out of time, as the
last day for filing was on 27 August 2007. Moreover, the CA found that the grounds stated in the
motion were merely recycled and rehashed propositions, which had already been dispensed with.
Petitioners are now assailing the CA Resolutions dated 2 August 2007 and 30 October 2007,
respectively, in CA-G.R. SP No. 99719. They insist that there is still a pending issue that has not been
resolved by the RTC. That issue arose from the Order [21] given by the trial court to petitioner Erlando
to explain why it should take cognizance of the Notice of Appeal when the proper remedy was a
petition for review under Rule 43 of the Rules of Court.
Further, petitioners blame the trial and the appellate courts for the dismissal of their appeal
despite this Courts explanation in G.R. No. 169420 that the appeal was the wrong remedy and was
thus correctly dismissed by the CA. Instead of complying with the show-cause Order issued by the
RTC, petitioners went directly to the CA and insisted that the remedy they had undertaken was
correct.
Petitioners also contend that there was extrinsic fraud in the appreciation of the merits of the
case. They raise in the present Petition the grounds they cited in the three (3) Petitions for Annulment
of Judgment (including the Amended Petition) quoted above.
Next, they assert that petitioner Joenas right to due process was also violated when she was
not made a party-in-interest to the proceedings in the lower courts, even if her half of the absolute

community of property was included in the execution of the judgment rendered by Branch 226 of the
RTC of Quezon City.
Finally, they insist that their Humble Motion for Reconsideration was filed on time, since 27
August 2007 was a holiday. Therefore, they had until 28 August 2007 to file their motion.
Since then, it appears that a Sheriffs Certificate of Sale was issued on 3 January 2008 in favor
of the law firm for the sum of 5 million for the property covered by TCT No. 216818.
On 18 March 2009, while the case was pending with this Court, petitioners filed a
Complaint[22] with a prayer for the issuance of a writ of preliminary injunction before the RTC of
Marikina City against herein respondents and Sheriff Nardo I. de Guzman, Jr. of Branch 226 of the RTC
of Quezon City. The case was docketed as Civil Case No. 09-1323-MK and was raffled to Branch 273 of
the RTC of Marikina City. [23] Petitioners sought the nullification of the sheriffs sale on execution of the
Decision in the consolidated cases rendered by Branch 226, as well as the payment of damages. They
alleged that the process of the execution sale was conducted irregularly, unlawfully, and in violation
of their right to due process.
On 2 July 2009, Branch 273 of the RTC of Marikina City issued a Writ of Preliminary Injunction
enjoining respondents and/or their agents, and the Register of Deeds of Marikina City from
consolidating TCT No. 216818.[24]
The filing of the Complaint with the RTC of Marikina City prompted respondents to file a
Motion

[25]

before us to cite for contempt petitioner spouses and their counsel, Atty. Antonio R.

Bautista. This Motion was on the ground that petitioners committed forum shopping when they filed
the Complaint pending with Branch 273 of the RTC of Marikina City, while the present case was also
still pending.
Meanwhile, on 22 September 2009, respondents filed before Branch 226 an Ex Parte Motion for
Issuance

of

Resolution
Certiorari

[27]

[28]

Writ

of

Possession.[26] That

Motion

was

granted

by

Branch

226

through

issued on 10 November 2011. This Resolution then became the subject of a Petition for

under Rule 65 filed by petitioners before the CA docketed as CA-G.R. SP No. 123164.

Soon after, on 6 March 2012, petitioners filed with the CA an Urgent Motion for Issuance of
Temporary Restraining Order (T.R.O.)[29] after Sheriff De Guzman, Jr. served on them a Notice to Vacate
within five days from receipt or until 11 March 2012. As of the writing of this Decision, the CA has not
resolved the issue raised in the Petition in CA-G.R. SP No. 123164.
Our Ruling

Petitioners elevated this case to this Court, because they were allegedly denied due process
when the CA rejected their second attempt at the annulment of the Decision of the RTC and their
Humble Motion for Reconsideration.

We DENY petitioners claims.

The rules of procedure were formulated to achieve the ends of justice, not to thwart them.
Petitioners may not defy the pronouncement of this Court in G.R. No. 169420 by pursuing remedies
that are no longer available to them. Twice, the CA correctly ruled that the remedy of annulment of
judgment was no longer available to them, because they had already filed an appeal under Rule 41.
Due to their own actions, that appeal was dismissed.

It must be emphasized that the RTC Decision became final and executory through the fault of
petitioners themselves when petitioner Erlando (1) filed an appeal under Rule 41 instead of Rule 43;
and (2) filed a Petition for Review directly with the CA, without waiting for the resolution by the RTC of
the issues still pending before the trial court.

In Enriquez v. Court of Appeals,[30] we said:

It is true that the Rules should be interpreted so as to give litigants ample
opportunity to prove their respective claims and that a possible denial of substantial
justice due to legal technicalities should be avoided. But it is equally true that an
appeal being a purely statutory right, an appealing party must strictly comply
with the requisites laid down in the Rules of Court. In other words, he who
seeks to avail of the right to appeal must play by the rules. x x x. (Emphasis
supplied.)

With regard to the allegation of petitioner Joena that her right to due process was violated, it
must be recalled that after she filed her Affidavit of Third Party Claim on 13 September 2007 and
petitioner Erlando filed his Urgent Omnibus Motion raising the same issues contained in that thirdparty claim, he subsequently filed two Motions withdrawing his Urgent Omnibus Motion. Petitioner
Joena, meanwhile, no longer pursued her third-party claim or any other remedy available to her. Her
failure to act gives this Court the impression that she was no longer interested in her case. Thus, it
was through her own fault that she was not able to ventilate her claim.

Furthermore, it appears from the records that petitioner Erlando was first married to a certain
Ma. Aline Lovejoy Padua on 13 October 1983. They had three children: Patrik Erlando (born on 14 April
1985), Maria Monica Erline (born on 9 September 1986), and Patrik Randel (born on 12 April 1990).

After the dissolution of the first marriage of Erlando, he and Joena got married on 28 May 1998.
[31]

In her Affidavit, Joena alleged that she represented her stepchildren; that the levied personal

properties in particular, a piano with a chair, computer equipment and a computer table were owned
by the latter. We note that two of these stepchildren were already of legal age when Joena filed her
Affidavit. As to Patrik Randel, parental authority over him belongs to his parents. Absent any special
power of attorney authorizing Joena to represent Erlandos children, her claim cannot be sustained.

Petitioner Joena also asserted that the two (2) motor vehicles purchased in 1992 and 1997, as
well as the house and lot covered by TCT No. 216818 formed part of the absolute community regime.
However, Art. 92, par. (3) of the Family Code excludes from the community property the property
acquired before the marriage of a spouse who has legitimate descendants by a former marriage; and
the fruits and the income, if any, of that property. Neither these two vehicles nor the house and lot
belong to the second marriage.

We now proceed to discuss the Motion for contempt filed by respondents.

Respondents claim that petitioners and their present counsel, Atty. Antonio R. Bautista, were
guilty of forum shopping when the latter filed Civil Case No. 09-1323-MK with the RTC of Marikina City
while the case was still pending before us. In Executive Secretary v. Gordon,[32] we explained forum
shopping in this wise:
Forum-shopping consists of filing multiple suits involving the same parties for the
same cause of action, either simultaneously or successively, for the purpose of
obtaining a favorable judgment. Thus, it has been held that there is forum-shopping
(1) whenever as a result of an adverse decision in one forum, a party seeks a
favorable decision (other than by appeal or certiorari) in another, or
(2) if, after he has filed a petition before the Supreme Court, a party files another
before the Court of Appeals since in such case he deliberately splits appeals in the hope
that even as one case in which a particular remedy is sought is dismissed, another case
(offering a similar remedy) would still be open, or
(3) where a party attempts to obtain a preliminary injunction in another court
after failing to obtain the same from the original court.

Civil Case No. 09-1323-MK was filed to question the proceedings undertaken by the sheriff in
executing the judgment in Civil Case Nos. Q01-42948 and Q01-42959. On the other hand, the present
case questions the merits of the Decision itself in Civil Case Nos. Q01-42948 and Q01-42959. These
cases have different causes of action. Thus, it cannot be said that petitioners were clearly guilty of
forum shopping when they filed the Complaint before the RTC of Marikina City.

WHEREFORE, in view of the foregoing, the Petition is hereby DENIED. The Resolutions dated
2 August 2007 and 30 October 2007 issued by the Court of Appeals in CA-G.R. SP No. 99719
are AFFIRMED.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 296,
The Judiciary Act of 1948, as amended)
Republic of the Philippines
Supreme Court
Manila
EN BANC
ISABELITA C. VINUYA, VICTORIA
C. DELA PEA, HERMINIHILDA
MANIMBO, LEONOR H. SUMAWANG,
CANDELARIA L. SOLIMAN, MARIA
L. QUILANTANG, MARIA L. MAGISA,
NATALIA M. ALONZO, LOURDES M.
NAVARO, FRANCISCA M. ATENCIO,
ERLINDA MANALASTAS, TARCILA
M. SAMPANG, ESTER M. PALACIO,
MAXIMA R. DELA CRUZ, BELEN A.
SAGUM, FELICIDAD TURLA,
FLORENCIA M. DELA PEA,
EUGENIA M. LALU, JULIANA G.
MAGAT, CECILIA SANGUYO, ANA
ALONZO, RUFINA P. MALLARI,
ROSARIO M. ALARCON, RUFINA C.
GULAPA, ZOILA B. MANALUS,
CORAZON C. CALMA, MARTA A.
GULAPA, TEODORA M. HERNANDEZ,
FERMIN B. DELA PEA, MARIA DELA
PAZ B. CULALA, ESPERANZA
MANAPOL, JUANITA M. BRIONES,
VERGINIA M. GUEVARRA, MAXIMA
ANGULO, EMILIA SANGIL, TEOFILA
R. PUNZALAN, JANUARIA G. GARCIA,
PERLA B. BALINGIT, BELEN A.
CULALA, PILAR Q. GALANG,
ROSARIO C. BUCO, GAUDENCIA C.
DELA PEA, RUFINA Q. CATACUTAN,
FRANCIA A. BUCO, PASTORA C.
GUEVARRA, VICTORIA M. DELA
CRUZ, PETRONILA O. DELA CRUZ,
ZENAIDA P. DELA CRUZ, CORAZON

G.R. No. 162230

Present:
PUNO, C. J.,
CARPIO,
CORONA,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ, and
MENDOZA, JJ.

M. SUBA, EMERINCIANA A. VINUYA,

LYDIA A. SANCHEZ, ROSALINA M.
BUCO, PATRICIA A. BERNARDO,
LUCILA H. PAYAWAL, MAGDALENA
LIWAG, ESTER C. BALINGIT, JOVITA
A. DAVID, EMILIA C. MANGILIT,
VERGINIA M. BANGIT, GUILLERMA
S. BALINGIT, TERECITA PANGILINAN,
MAMERTA C. PUNO, CRISENCIANA
C. GULAPA, SEFERINA S. TURLA,
MAXIMA B. TURLA, LEONICIA G.
GUEVARRA, ROSALINA M. CULALA,
CATALINA Y. MANIO, MAMERTA T.
SAGUM, CARIDAD L. TURLA, et al.
In their capacity and as members of the
Malaya Lolas Organization,
Petitioners,

Promulgated:
April 28, 2010

- versus THE HONORABLE EXECUTIVE

SECRETARY ALBERTO G.
ROMULO, THE HONORABLE
SECRETARY OF FOREIGN
AFFAIRS DELIA DOMINGOALBERT, THE HONORABLE
SECRETARY OF JUSTICE
MERCEDITAS N. GUTIERREZ,
and THE HONORABLE SOLICITOR
GENERAL ALFREDO L. BENIPAYO,
Respondents.
x--------------------------------------------------------x
DECISION
DEL CASTILLO, J.:
The Treaty of Peace with Japan, insofar as it barred future claims such as those asserted by
plaintiffs in these actions, exchanged full compensation of plaintiffs for a future peace. History
has vindicated the wisdom of that bargain. And while full compensation for plaintiffs' hardships,
in the purely economic sense, has been denied these former prisoners and countless other
survivors of the war, the immeasurable bounty of life for themselves and their posterity in a
free society and in a more peaceful world services the debt.[1]

There is a broad range of vitally important areas that must be regularly decided by the Executive Department
without either challenge or interference by the Judiciary. One such area involves the delicate arena of foreign
relations. It would be strange indeed if the courts and the executive spoke with different voices in the realm of
foreign policy. Precisely because of the nature of the questions presented, and the lapse of more than 60
years since the conduct complained of, we make no attempt to lay down general guidelines covering other
situations not involved here, and confine the opinion only to the very questions necessary to reach a decision
on this matter.
Factual Antecedents

This is an original Petition for Certiorari under Rule 65 of the Rules of Court with an application for the
issuance of a writ of preliminary mandatory injunction against the Office of the Executive Secretary, the
Secretary of the Department of Foreign Affairs (DFA), the Secretary of the Department of Justice (DOJ), and the
Office of the Solicitor General (OSG).
Petitioners are all members of the MALAYA LOLAS, a non-stock, non-profit organization
registered with the Securities and Exchange Commission, established for the purpose of providing aid
to the victims of rape by Japanese military forces in the Philippines during the Second World War.
Petitioners narrate that during the Second World War, the Japanese army attacked villages and
systematically raped the women as part of the destruction of the village. Their communities were bombed,
houses were looted and burned, and civilians were publicly tortured, mutilated, and slaughtered. Japanese
soldiers forcibly seized the women and held them in houses or cells, where they were repeatedly raped,
beaten, and abused by Japanese soldiers. As a result of the actions of their Japanese tormentors, the
petitioners have spent their lives in misery, having endured physical injuries, pain and disability, and mental
and emotional suffering.[2]
Petitioners claim that since 1998, they have approached the Executive Department through the DOJ,
DFA, and OSG, requesting assistance in filing a claim against the Japanese officials and military officers who
ordered the establishment of the comfort women stations in the Philippines. However, officials of the
Executive Department declined to assist the petitioners, and took the position that the individual claims of the
comfort women for compensation had already been fully satisfied by Japans compliance with the Peace Treaty
between the Philippines andJapan.
Issues
Hence, this petition where petitioners pray for this court to (a) declare that respondents committed
grave abuse of discretion amounting to lack or excess of discretion in refusing to espouse their claims for the
crimes against humanity and war crimes committed against them; and (b) compel the respondents to
espouse their claims for official apology and other forms of reparations against Japan before the International
Court of Justice (ICJ) and other international tribunals.
Petitioners arguments
Petitioners argue that the general waiver of claims made by the Philippine government in the Treaty of
Peace with Japan is void. They claim that the comfort women system established by Japan, and the brutal
rape and enslavement of petitioners constituted a crime against humanity, [3] sexual slavery,[4] and torture.
[5]

They allege that the prohibition against these international crimes is jus cogens norms from which no

derogation is possible; as such, in waiving the claims of Filipina comfort women and failing to espouse their
complaints against Japan, the Philippine government is in breach of its legal obligation not to afford impunity

for crimes against humanity. Finally, petitioners assert that the Philippine governments acceptance of the
apologies made by Japan as well as funds from the Asian Womens Fund (AWF) were contrary to international
law.
Respondents Arguments
Respondents maintain that all claims of the Philippines and its nationals relative to the war were dealt with in
the San Francisco Peace Treaty of 1951 and the bilateral Reparations Agreement of 1956.[6]
Article 14 of the Treaty of Peace[7] provides:
Article 14. Claims and Property
a) It is recognized that Japan should pay reparations to the Allied Powers for the damage and
suffering caused by it during the war. Nevertheless it is also recognized that the
resources of Japan are not presently sufficient, if it is to maintain a viable economy,
to make complete reparation for all such damage and suffering and at the present
time meet its other obligations.
b)

Except as otherwise provided in the present Treaty, the Allied Powers waive
all reparations claims of the Allied Powers, other claims of the Allied Powers and
their nationals arising out of any actions taken by Japan and its nationals in the
course of the prosecution of the war, and claims of the Allied Powers for direct
military costs of occupation.

In addition, respondents argue that the apologies made by Japan[8] have been satisfactory, and
that Japan had addressed the individual claims of the women through the atonement money paid by the
Asian Womens Fund.
Historical Background
The comfort women system was the tragic legacy of the Rape of Nanking. In December 1937, Japanese
military forces captured the city of Nanking in China and began a barbaric campaign of terror known as the
Rape of Nanking, which included the rapes and murders of an estimated 20,000 to 80,000 Chinese women,
including young girls, pregnant mothers, and elderly women.[9]
In reaction to international outcry over the incident, the Japanese government sought ways to end
international condemnation[10] by establishing the comfort women system. Under this system, the military
could simultaneously appease soldiers' sexual appetites and contain soldiers' activities within a regulated
environment.[11] Comfort stations would also prevent the spread of venereal disease among soldiers and
discourage soldiers from raping inhabitants of occupied territories.[12]
Daily life as a comfort woman was unmitigated misery.[13] The military forced victims into barracks-style
stations divided into tiny cubicles where they were forced to live, sleep, and have sex with as many 30
soldiers per day.[14] The 30 minutes allotted for sexual relations with each soldier were 30-minute increments

of unimaginable horror for the women.[15] Disease was rampant.[16] Military doctors regularly examined the
women, but these checks were carried out to prevent the spread of venereal diseases; little notice was taken
of the frequent cigarette burns, bruises, bayonet stabs and even broken bones inflicted on the women by
soldiers.
Fewer than 30% of the women survived the war.[17] Their agony continued in having to suffer with the residual
physical, psychological, and emotional scars from their former lives. Some returned home and were
ostracized by their families. Some committed suicide. Others, out of shame, never returned home.[18]
Efforts to Secure Reparation
The most prominent attempts to compel the Japanese government to accept legal responsibility and
pay compensatory damages for the comfort women system were through a series of lawsuits, discussion at
the United Nations (UN), resolutions by various nations, and the Womens International Criminal Tribunal. The
Japanese government, in turn, responded through a series of public apologies and the creation of the AWF.[19]
Lawsuits
In December 1991, Kim Hak-Sun and two other survivors filed the first lawsuit in Japan by former
comfort women against the Japanese government. The Tokyo District Court however dismissed their case.
[20]

Other suits followed,[21] but the Japanese government has, thus far, successfully caused the dismissal of

every case.[22]
Undoubtedly frustrated by the failure of litigation before Japanese courts, victims of the comfort
women system brought their claims before the United States (US). On September 18, 2000, 15 comfort
women filed a class action lawsuit in the US District Court for the District of Columbia [23] "seeking money
damages for [allegedly] having been subjected to sexual slavery and torture before and during World War II,"
in violation of "both positive and customary international law." The case was filed pursuant to the Alien Tort
Claims Act (ATCA),[24] which allowed the plaintiffs to sue the Japanese government in a US federal district
court.[25] On October 4, 2001, the district court dismissed the lawsuit due to lack of jurisdiction over Japan,
stating that [t]here is no question that this court is not the appropriate forum in which plaintiffs may seek to
reopen x x x discussions nearly half a century later x x x [E]ven if Japan did not enjoy sovereign immunity,
plaintiffs' claims are non-justiciable and must be dismissed.
The District of Columbia Court of Appeals affirmed the lower court's dismissal of the case. [26] On
appeal, the US Supreme Court granted the womens petition for writ of certiorari, vacated the judgment of the
District of Columbia Court of Appeals, and remanded the case.[27] On remand, the Court of Appeals affirmed its
prior decision, noting that much as we may feel for the plight of the appellants, the courts of the US simply
are not authorized to hear their case.[28] The women again brought their case to the US Supreme Court which
denied their petition for writ of certiorari on February 21, 2006.

Efforts at the United Nations

In 1992, the Korean Council for the Women Drafted for Military Sexual Slavery by Japan (KCWS),
submitted a petition to the UN Human Rights Commission (UNHRC), asking for assistance in investigating
crimes committed by Japan against Korean women and seeking reparations for former comfort women.
[29]

The UNHRC placed the issue on its agenda and appointed Radhika Coomaraswamy as the issue's special

investigator. In 1996, Coomaraswamy issued a Report reaffirming Japan's responsibility in forcing Korean
women to act as sex slaves for the imperial army, and made the following recommendations:
A. At the national level
137. The Government of Japan should:
(a) Acknowledge that the system of comfort stations set up by the Japanese Imperial Army
during the Second World War was a violation of its obligations under international law
and accept legal responsibility for that violation;
(b) Pay compensation to individual victims of Japanese military sexual slavery according to
principles outlined by the Special Rapporteur of the Sub-Commission on Prevention of
Discrimination and Protection of Minorities on the right to restitution, compensation and
rehabilitation for victims of grave violations of human rights and fundamental freedoms.
A special administrative tribunal for this purpose should be set up with a limited timeframe since many of the victims are of a very advanced age;
(c) Make a full disclosure of documents and materials in its possession with regard to comfort
stations and other related activities of the Japanese Imperial Army during the Second
World War;
(d) Make a public apology in writing to individual women who have come forward and can be
substantiated as women victims of Japanese military sexual slavery;
(e) Raise awareness of these issues by amending educational curricula to reflect historical
realities;
(f) Identify and punish, as far as possible, perpetrators involved in the recruitment and
institutionalization of comfort stations during the Second World War.

Gay J. McDougal, the Special Rapporteur for the UN Sub-Commission on Prevention of Discrimination and
Protection

of

Minorities,

also

presented

report

to

the

Sub-Committee

on June

22,

1998 entitled Contemporary Forms of Slavery: Systematic Rape, Sexual Slavery and Slavery-like Practices
During Armed Conflict. The report included an appendix entitled An Analysis of the Legal Liability of the
Government of Japan for 'Comfort Women Stations' established during the Second World War,[30] which
contained the following findings:
68. The present report concludes that the Japanese Government remains liable for grave
violations of human rights and humanitarian law, violations that amount in their totality to
crimes against humanity. The Japanese Governments arguments to the contrary, including
arguments that seek to attack the underlying humanitarian law prohibition of enslavement and
rape, remain as unpersuasive today as they were when they were first raised before

the Nuremberg war crimes tribunal more than 50 years ago. In addition, the Japanese
Governments argument that Japan has already settled all claims from the Second World War
through peace treaties and reparations agreements following the war remains equally
unpersuasive. This is due, in large part, to the failure until very recently of the Japanese
Government to admit the extent of the Japanese militarys direct involvement in the
establishment and maintenance of these rape centres. The Japanese Governments silence on
this point during the period in which peace and reparations agreements between Japan and
other Asian Governments were being negotiated following the end of the war must, as a matter
of law and justice, preclude Japan from relying today on these peace treaties to extinguish
liability in these cases.
69. The failure to settle these claims more than half a century after the cessation of hostilities
is a testament to the degree to which the lives of women continue to be undervalued. Sadly,
this failure to address crimes of a sexual nature committed on a massive scale during the
Second World War has added to the level of impunity with which similar crimes are committed
today. The Government of Japan has taken some steps to apologize and atone for the rape and
enslavement of over 200,000 women and girls who were brutalized in comfort stations during
the Second World War. However, anything less than full and unqualified acceptance by the
Government of Japan of legal liability and the consequences that flow from such liability is
wholly inadequate. It must now fall to the Government of Japan to take the necessary final
steps to provide adequate redress.

The UN, since then, has not taken any official action directing Japan to provide the reparations sought.
Women's International War Crimes

Tribunal
The Women's International War Crimes Tribunal (WIWCT) was a people's tribunal established by a number of
Asian women and human rights organizations, supported by an international coalition of non-governmental
organizations.[31] First proposed in 1998, the WIWCT convened in Tokyo in 2000 in order to adjudicate Japan's
military sexual violence, in particular the enslavement of comfort women, to bring those responsible for it to
justice, and to end the ongoing cycle of impunity for wartime sexual violence against women.
After examining the evidence for more than a year, the tribunal issued its verdict on December 4,
2001, finding the former Emperor Hirohito and the State of Japan guilty of crimes against humanity for the
rape and sexual slavery of women.[32] It bears stressing, however, that although the tribunal included
prosecutors, witnesses, and judges, its judgment was not legally binding since the tribunal itself was
organized by private citizens.
Action by Individual Governments
On January

31,

2007, US Representative

Michael

Honda

of California,

along

with

six

co-sponsor

representatives, introduced House Resolution 121 which called for Japanese action in light of the ongoing
struggle for closure by former comfort women. The Resolution was formally passed on July 30, 2007,[33] and
made four distinct demands:

[I]t is the sense of the House of Representatives that the Government of Japan (1) should
formally acknowledge, apologize, and accept historical responsibility in a clear and unequivocal
manner for its Imperial Armed Forces' coercion of young women into sexual slavery, known to
the world as comfort women, during its colonial and wartime occupation of Asia and the Pacific
Islands from the 1930s through the duration of World War II; (2) would help to resolve recurring
questions about the sincerity and status of prior statements if the Prime Minister of Japan were
to make such an apology as a public statement in his official capacity; (3) should clearly and
publicly refute any claims that the sexual enslavement and trafficking of the comfort women
for the Japanese Imperial Army never occurred; and (4) should educate current and future
generations about this horrible crime while following the recommendations of the international
community with respect to the comfort women.[34]
In December 2007, the European Parliament, the governing body of the European Union, drafted a
resolution similar to House Resolution 121.[35] Entitled, Justice for Comfort Women, the resolution demanded:
(1) a formal acknowledgment of responsibility by the Japanese government; (2) a removal of the legal
obstacles preventing compensation; and (3) unabridged education of the past. The resolution also stressed
the urgency with which Japan should act on these issues, stating: the right of individuals to claim reparations
against the government should be expressly recognized in national law, and cases for reparations for the
survivors of sexual slavery, as a crime under international law, should be prioritized, taking into account the
age of the survivors.
The

Canadian

and

Dutch

parliaments

have

each

followed

suit

in

drafting

resolutions

against Japan. Canada's resolution demands the Japanese government to issue a formal apology, to admit
that its Imperial Military coerced or forced hundreds of thousands of women into sexual slavery, and to restore
references in Japanese textbooks to its war crimes.[36] The Dutch parliament's resolution calls for the Japanese
government to uphold the 1993 declaration of remorse made by Chief Cabinet Secretary Yohei Kono.
The Foreign Affairs Committee of the United Kingdoms Parliament also produced a report in
November, 2008 entitled, "Global Security: Japan and Korea" which concluded thatJapan should acknowledge
the pain caused by the issue of comfort women in order to ensure cooperation between Japan and Korea.
Statements of Remorse made by representatives of the
Japanese government

Various officials of the Government of Japan have issued the following public statements concerning
the comfort system:
a) Statement by the Chief Cabinet Secretary Yohei Kono in 1993:
The Government of Japan has been conducting a study on the issue of wartime "comfort
women" since December 1991. I wish to announce the findings as a result of that study.
As a result of the study which indicates that comfort stations were operated in extensive areas
for long periods, it is apparent that there existed a great number of comfort women. Comfort
stations were operated in response to the request of the military authorities of the day. The
then Japanese military was, directly or indirectly, involved in the establishment and

management of the comfort stations and the transfer of comfort women. The recruitment of
the comfort women was conducted mainly by private recruiters who acted in response to the
request of the military. The Government study has revealed that in many cases they were
recruited against their own will, through coaxing coercion, etc., and that, at times,
administrative/military personnel directly took part in the recruitments. They lived in misery at
comfort stations under a coercive atmosphere.
As to the origin of those comfort women who were transferred to the war areas, excluding
those from Japan, those from the Korean Peninsula accounted for a large part.
The Korean Peninsula was under Japanese rule in those days, and their recruitment, transfer,
control, etc., were conducted generally against their will, through coaxing, coercion, etc.
Undeniably, this was an act, with the involvement of the military authorities of the day, that
severely injured the honor and dignity of many women. The Government of Japan would like to
take this opportunity once again to extend its sincere apologies and remorse to all those,
irrespective of place of origin, who suffered immeasurable pain and incurable physical and
psychological wounds as comfort women.
It is incumbent upon us, the Government of Japan, to continue to consider seriously, while
listening to the views of learned circles, how best we can express this sentiment.
We shall face squarely the historical facts as described above instead of evading them, and
take them to heart as lessons of history. We hereby reiterated our firm determination never to
repeat the same mistake by forever engraving such issues in our memories through the study
and teaching of history.
As actions have been brought to court in Japan and interests have been shown in this issue
outside Japan, the Government of Japan shall continue to pay full attention to this matter,
including private researched related thereto.

b)

Prime Minister Tomiichi Murayamas Statement in 1994

On the issue of wartime comfort women, which seriously stained the honor and dignity of
many women, I would like to take this opportunity once again to express my profound and
sincere remorse and apologies

c) Letters from the Prime Minister of Japan to Individual Comfort Women

The issue of comfort women, with the involvement of the Japanese military authorities at that
time, was a grave affront to the honor and dignity of a large number of women.
As Prime Minister of Japan, I thus extend anew my most sincere apologies and remorse to all
the women who endured immeasurable and painful experiences and suffered incurable
physical and psychological wounds as comfort women.
I believe that our country, painfully aware of its moral responsibilities, with feelings of apology
and remorse, should face up squarely to its past history and accurately convey it to future
generations.

d) The Diet (Japanese Parliament) passed resolutions in 1995 and 2005

Solemnly reflecting upon the many instances of colonial rule and acts of aggression that
occurred in modern world history, and recognizing that Japan carried out such acts in the past
and inflicted suffering on the people of other countries, especially in Asia, the Members of this

House hereby express deep remorse. (Resolution of the House of Representatives adopted on
June 9, 1995)

e) Various Public Statements by Japanese Prime Minister Shinzo Abe

I have talked about this matter in the Diet sessions last year, and recently as well, and to the
press. I have been consistent. I will stand by the Kono Statement. This is our consistent
position. Further, we have been apologizing sincerely to those who suffered immeasurable pain
and incurable psychological wounds as comfort women. Former Prime Ministers, including
Prime Ministers Koizumi and Hashimoto, have issued letters to the comfort women. I would like
to be clear that I carry the same feeling. This has not changed even slightly. (Excerpt from
Remarks by Prime Minister Abe at an Interview by NHK, March 11, 2007).
I am apologizing here and now. I am apologizing as the Prime Minister and it is as stated in the
statement by the Chief Cabinet Secretary Kono. (Excerpt from Remarks by Prime Minister Abe
at the Budget Committee, the House of Councilors, the Diet of Japan, March 26, 2007).
I am deeply sympathetic to the former comfort women who suffered hardships, and I have
expressed my apologies for the extremely agonizing circumstances into which they were
placed. (Excerpt from Telephone Conference by Prime Minister Abe to President George W.
Bush, April 3, 2007).
I have to express sympathy from the bottom of my heart to those people who were taken as
wartime comfort women. As a human being, I would like to express my sympathies, and also
as prime minister ofJapan I need to apologize to them. My administration has been saying all
along that we continue to stand by the Kono Statement. We feel responsible for having forced
these women to go through that hardship and pain as comfort women under the
circumstances at the time. (Excerpt from an interview article "A Conversation with Shinzo Abe"
by the Washington Post, April 22, 2007).
x x x both personally and as Prime Minister of Japan, my heart goes out in sympathy to all
those who suffered extreme hardships as comfort women; and I expressed my apologies for
the fact that they were forced to endure such extreme and harsh conditions. Human rights are
violated in many parts of the world during the 20th Century; therefore we must work to make
the 21st Century a wonderful century in which no human rights are violated. And the
Government of Japan and I wish to make significant contributions to that end. (Excerpt from
Prime Minister Abe's remarks at the Joint Press Availability after the summit meeting at Camp
David between Prime Minister Abe and President Bush, April 27, 2007).

The Asian Women's Fund

Established by the Japanese government in 1995, the AWF represented the government's concrete
attempt to address its moral responsibility by offering monetary compensation to victims of the comfort
women system.[37] The purpose of the AWF was to show atonement of the Japanese people through
expressions of apology and remorse to the former wartime comfort women, to restore their honor, and to
demonstrate Japans strong respect for women.[38]
The AWF announced three programs for former comfort women who applied for assistance: (1) an atonement
fund paying 2 million (approximately $20,000) to each woman; (2) medical and welfare support programs,
paying 2.5-3 million ($25,000-$30,000) for each woman; and (3) a letter of apology from the Japanese Prime
Minister to each woman. Funding for the program came from the Japanese government and private donations

from the Japanese people. As of March 2006, the AWF provided 700 million (approximately $7 million) for
these programs inSouth Korea, Taiwan, and the Philippines; 380 million (approximately $3.8 million)
in Indonesia; and 242 million (approximately $2.4 million) in the Netherlands.
On January 15, 1997, the AWF and the Philippine government signed a Memorandum of Understanding for
medical and welfare support programs for former comfort women. Over the next five years, these were
implemented by the Department of Social Welfare and Development.
Our Ruling
Stripped down to its essentials, the issue in this case is whether the Executive Department committed
grave abuse of discretion in not espousing petitioners claims for official apology and other forms of
reparations against Japan.
The petition lacks merit.
From a Domestic Law Perspective, the Executive
Department has the exclusive prerogative to determine
whether to espouse petitioners claims against Japan.

Baker v. Carr[39] remains the starting point for analysis under the political question doctrine. There the
US Supreme Court explained that:
x x x Prominent on the surface of any case held to involve a political question is found a
textually demonstrable constitutional commitment of the issue to a coordinate political
department or a lack of judicially discoverable and manageable standards for resolving it, or
the impossibility of deciding without an initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a court's undertaking independent resolution without
expressing lack of the respect due coordinate branches of government; or an unusual need for
unquestioning adherence to a political decision already made; or the potentiality of
embarrassment from multifarious pronouncements by various departments on question.

In Taada v. Cuenco,[40] we held that political questions refer "to those questions which, under the Constitution,
are to be decided by the people in their sovereign capacity, or in regard to which full discretionary
authority has been delegated to the legislative or executive branch of the government. It is concerned with
issues dependent upon the wisdom, not legality of a particular measure."
Certain types of cases often have been found to present political questions. [41] One such category involves
questions of foreign relations. It is well-established that "[t]he conduct of the foreign relations of our
government is committed by the Constitution to the executive and legislative--'the political'--departments of
the government, and the propriety of what may be done in the exercise of this political power is not subject to

judicial inquiry or decision."[42] The US Supreme Court has further cautioned that decisions relating to foreign
policy
are delicate, complex, and involve large elements of prophecy. They are and should be
undertaken only by those directly responsible to the people whose welfare they advance or
imperil. They are decisions of a kind for which the Judiciary has neither aptitude, facilities nor
responsibility.[43]

To be sure, not all cases implicating foreign relations present political questions, and courts certainly possess
the authority to construe or invalidate treaties and executive agreements. [44]However, the question whether
the Philippine government should espouse claims of its nationals against a foreign government is a foreign
relations matter, the authority for which is demonstrably committed by our Constitution not to the courts but
to the political branches. In this case, the Executive Department has already decided that it is to the best
interest of the country to waive all claims of its nationals for reparations against Japan in the Treaty of Peace
of 1951. The wisdom of such decision is not for the courts to question. Neither could petitioners herein assail
the said determination by the Executive Department via the instant petition for certiorari.
In the seminal case of US v. Curtiss-Wright Export Corp.,[45] the US Supreme Court held that [t]he President is
the sole organ of the nation in its external relations, and its sole representative with foreign relations.
It is quite apparent that if, in the maintenance of our international relations, embarrassment -perhaps serious embarrassment -- is to be avoided and success for our aims achieved,
congressional legislation which is to be made effective through negotiation and inquiry within
the international field must often accord to the President a degree of discretion and freedom
from statutory restriction which would not be admissible where domestic affairs alone involved.
Moreover, he, not Congress, has the better opportunity of knowing the conditions which prevail
in foreign countries, and especially is this true in time of war. He has his confidential sources of
information. He has his agents in the form of diplomatic, consular and other officials. x x x

This ruling has been incorporated in our jurisprudence through Bayan v.

Executive Secretary[46] and Pimentel v. Executive Secretary;[47] its overreaching principle was, perhaps, best
articulated in (now Chief) Justice Punos dissent in Secretary of Justice v. Lantion:[48]
x x x The conduct of foreign relations is full of complexities and consequences, sometimes with
life and death significance to the nation especially in times of war. It can only be entrusted to
that department of government which can act on the basis of the best available information
and can decide with decisiveness. x x x It is also the President who possesses the most
comprehensive and the most confidential information about foreign countries for our
diplomatic and consular officials regularly brief him on meaningful events all over the world. He
has also unlimited access to ultra-sensitive military intelligence data.In fine, the presidential
role in foreign affairs is dominant and the President is traditionally accorded a wider degree of
discretion in the conduct of foreign affairs. The regularity, nay, validity of his actions are
adjudged under less stringent standards, lest their judicial repudiation lead to breach of an
international obligation, rupture of state relations, forfeiture of confidence, national
embarrassment and a plethora of other problems with equally undesirable consequences.

The Executive Department has determined that taking up petitioners cause would be inimical to our countrys
foreign policy interests, and could disrupt our relations with Japan, thereby creating serious implications for
stability in this region. For us to overturn the Executive Departments determination would mean an
assessment of the foreign policy judgments by a coordinate political branch to which authority to make that
judgment has been constitutionally committed.
In any event, it cannot reasonably be maintained that the Philippine government was without authority to
negotiate the Treaty of Peace with Japan. And it is equally true that, since time immemorial, when negotiating
peace accords and settling international claims:
x x x [g]overnments have dealt with x x x private claims as their own, treating them as national
assets, and as counters, `chips', in international bargaining. Settlement agreements have
lumped, or linked, claims deriving from private debts with others that were intergovernmental
in origin, and concessions in regard to one category of claims might be set off against
concessions in the other, or against larger political considerations unrelated to debts.[49]

Indeed, except as an agreement might otherwise provide, international settlements generally wipe out the
underlying private claims, thereby terminating any recourse under domestic law. InWare v. Hylton,[50] a case
brought by a British subject to recover a debt confiscated by the Commonwealth of Virginia during the war,
Justice Chase wrote:
I apprehend that the treaty of peace abolishes the subject of the war, and that after peace is
concluded, neither the matter in dispute, nor the conduct of either party, during the war, can
ever be revived, or brought into contest again. All violences, injuries, or damages sustained by
the government, or people of either, during the war, are buried in oblivion; and all those things
are implied by the very treaty of peace; and therefore not necessary to be expressed. Hence it
follows, that the restitution of, or compensation for, British property confiscated, or
extinguished, during the war, by any of the United States, could only be provided for by the
treaty of peace; and if there had been no provision, respecting these subjects, in the
treaty, they could not be agitated after the treaty, by the British government, much less by her
subjects in courts of justice. (Emphasis supplied).

This practice of settling claims by means of a peace treaty is certainly

nothing new. For instance, in Dames & Moore v. Regan,[51] the US Supreme Court held:
Not infrequently in affairs between nations, outstanding claims by nationals of one country
against the government of another country are sources of friction between the two
sovereigns. United States v. Pink, 315 U.S. 203, 225, 62 S.Ct. 552, 563, 86 L.Ed. 796 (1942). To
resolve these difficulties, nations have often entered into agreements settling the claims of
their respective nationals. As one treatise writer puts it, international agreements settling
claims by nationals of one state against the government of another are established
international practice reflecting traditional international theory. L. Henkin, Foreign Affairs and
the Constitution 262 (1972). Consistent with that principle, the United States has repeatedly
exercised its sovereign authority to settle the claims of its nationals against foreign countries. x
x x Under such agreements, the President has agreed to renounce or extinguish claims of
United States nationals against foreign governments in return for lump-sum payments or the
establishment of arbitration procedures. To be sure, many of these settlements
were encouraged by the United States claimants themselves, since a claimant's only hope of

obtaining any payment at all might lie in having his Government negotiate a diplomatic
settlement on his behalf. But it is also undisputed that the United States has sometimes
disposed of the claims of its citizens without their consent, or even without consultation with
them, usually without exclusive regard for their interests, as distinguished from those of the
nation as a whole. Henkin, supra, at 262-263. Accord, Restatement (Second) of Foreign
Relations Law of the United States 213 (1965) (President may waive or settle a claim against a
foreign state x x x [even] without the consent of the [injured] national). It is clear that the
practice of settling claims continues today.

Respondents explain that the Allied Powers concluded the Peace Treaty with Japan not necessarily for the
complete atonement of the suffering caused by Japanese aggression during the war, not for the payment of
adequate reparations, but for security purposes. The treaty sought to prevent the spread of communism
in Japan, which occupied a strategic position in the Far East. Thus, the Peace Treaty compromised individual
claims in the collective interest of the free world.
This was also the finding in a similar case involving American victims of Japanese slave labor during the war.
[52]

In a consolidated case in the Northern District of California, [53] the court dismissed the lawsuits filed, relying

on the 1951 peace treaty with Japan,[54] because of the following policy considerations:
The official record of treaty negotiations establishes that a fundamental goal of the agreement
was to settle the reparations issue once and for all. As the statement of the chief United
States negotiator, John Foster Dulles, makes clear, it was well understood that leaving open
the possibility of future claims would be an unacceptable impediment to a lasting
peace:
Reparation is usually the most controversial aspect of peacemaking. The present
peace is no exception.
On the one hand, there are claims both vast and just. Japan's aggression caused
tremendous cost, losses and suffering.
On the other hand, to meet these claims, there stands a Japan presently
reduced to four home islands which are unable to produce the food its people
need to live, or the raw materials they need to work. x x x
The policy of the United States that Japanese liability for reparations should be sharply limited
was informed by the experience of six years of United States-led occupation of Japan. During
the occupation the Supreme Commander of the Allied Powers (SCAP) for the region, General
Douglas MacArthur, confiscated Japanese assets in conjunction with the task of managing the
economic affairs of the vanquished nation and with a view to reparations payments. It soon
became clear that Japan's financial condition would render any aggressive
reparations plan an exercise in futility. Meanwhile, the importance of a stable,
democratic Japan as a bulwark to communism in the region increased. At the end of
1948, MacArthur expressed the view that [t]he use of reparations as a weapon to retard the
reconstruction of a viable economy in Japan should be combated with all possible means and
recommended that the reparations issue be settled finally and without delay.
That this policy was embodied in the treaty is clear not only from the negotiations history but
also from the Senate Foreign Relations Committee report recommending approval of the treaty
by the Senate. The committee noted, for example:
Obviously insistence upon the payment of reparations in any proportion
commensurate with the claims of the injured countries and their nationals would

wreck Japan's economy, dissipate any credit that it may possess at present,
destroy the initiative of its people, and create misery and chaos in which the
seeds of discontent and communism would flourish. In short, [it] would be
contrary to the basic purposes and policy of x x x the United States x x x.
We thus hold that, from a municipal law perspective, that certiorari will not lie. As a general principle and
particularly here, where such an extraordinary length of time has lapsed between the treatys conclusion and
our consideration the Executive must be given ample discretion to assess the foreign policy considerations of
espousing a claim against Japan, from the standpoint of both the interests of the petitioners and those of the
Republic, and decide on that basis if apologies are sufficient, and whether further steps are appropriate or
necessary.
The Philippines is not under any international obligation
to espouse petitioners claims.

In the international sphere, traditionally, the only means available for individuals to bring a claim within the
international legal system has been when the individual is able to persuade a government to bring a claim on
the individuals behalf.[55] Even then, it is not the individuals rights that are being asserted, but rather, the
states own rights. Nowhere is this position more clearly reflected than in the dictum of the Permanent Court of
International Justice (PCIJ) in the 1924 Mavrommatis Palestine Concessions Case:
By taking up the case of one of its subjects and by resorting to diplomatic action or
international judicial proceedings on his behalf, a State is in reality asserting its own right to
ensure, in the person of its subjects, respect for the rules of international law. The question,
therefore, whether the present dispute originates in an injury to a private interest, which in
point of fact is the case in many international disputes, is irrelevant from this standpoint. Once
a State has taken up a case on behalf of one of its subjects before an international tribunal, in
the eyes of the latter the State is sole claimant.[56]
Since the exercise of diplomatic protection is the right of the State, reliance on the right is within the
absolute discretion of states, and the decision whether to exercise the discretion may invariably be influenced
by political considerations other than the legal merits of the particular claim.[57] As clearly stated by the ICJ in
Barcelona Traction:
The Court would here observe that, within the limits prescribed by international law, a State
may exercise diplomatic protection by whatever means and to whatever extent it thinks
fit, for it is its own right that the State is asserting. Should the natural or legal
person on whose behalf it is acting consider that their rights are not adequately
protected, they have no remedy in international law. All they can do is resort to national
law, if means are available, with a view to furthering their cause or obtaining redress. The
municipal legislator may lay upon the State an obligation to protect its citizens abroad, and
may also confer upon the national a right to demand the performance of that obligation, and
clothe the right with corresponding sanctions. However, all these questions remain within the
province of municipal law and do not affect the position internationally.[58] (Emphasis supplied)

The State, therefore, is the sole judge to decide whether its protection will be granted, to what extent it
is granted, and when will it cease. It retains, in this respect, a discretionary power the exercise of which may
be determined by considerations of a political or other nature, unrelated to the particular case.
The International Law Commissions (ILCs) Draft Articles on Diplomatic Protection fully support this
traditional view. They (i) state that "the right of diplomatic protection belongs to or vests in the State, [59] (ii)
affirm its discretionary nature by clarifying that diplomatic protection is a "sovereign prerogative" of the State;
[60]

and (iii) stress that the state "has the right to exercise diplomatic protection

on behalf of a national. It is under no duty or obligation to do so."[61]

It has been argued, as petitioners argue now, that the State has a duty to protect its nationals and act
on his/her behalf when rights are injured.[62] However, at present, there is no sufficient evidence to establish a
general international obligation for States to exercise diplomatic protection of their own nationals abroad.
[63]

Though, perhaps desirable, neither state practice nor opinio juris has evolved in such a direction. If it is a

duty internationally, it is only a moral and not a legal duty, and there is no means of enforcing its fulfillment.[64]
We fully agree that rape, sexual slavery, torture, and sexual violence are morally reprehensible as well as
legally prohibited under contemporary international law. [65] However, petitioners take quite a theoretical leap
in claiming that these proscriptions automatically imply that that the Philippines is under a non-derogable
obligation to prosecute international crimes, particularly since petitioners do not demand the imputation of
individual criminal liability, but seek to recover monetary reparations from the state of Japan. Absent the
consent of states, an applicable treaty regime, or a directive by the Security Council, there is no nonderogable duty to institute proceedings against Japan. Indeed, precisely because of states reluctance to
directly prosecute claims against another state, recent developments support the modern trend to
empower individuals to directly participate in suits against perpetrators of international crimes.
[66]

Nonetheless, notwithstanding an array of General Assembly resolutions calling for the prosecution of

crimes against humanity and the strong policy arguments warranting such a rule, the practice of states does
not yet support the present existence of an obligation to prosecute international crimes. [67] Of course a
customary duty of prosecution is ideal, but we cannot find enough evidence to reasonably assert its
existence. To the extent that any state practice in this area is widespread, it is in the practice of granting
amnesties, immunity, selective prosecution, or de facto impunity to those who commit crimes against
humanity.[68]
Even the invocation of jus cogens norms and erga omnes obligations will not alter this analysis. Even if we
sidestep the question of whether jus cogens norms existed in 1951, petitioners have not deigned to show that
the crimes committed by the Japanese army violated jus cogens prohibitions at the time the Treaty of Peace
was signed, or that the duty to prosecute perpetrators of international crimes is an erga omnes obligation or
has attained the status of jus cogens.

The term erga omnes (Latin: in relation to everyone) in international law has been used as a legal term
describing obligations owed by States towards the community of states as a whole. The concept was
recognized by the ICJ in Barcelona Traction:
x x x an essential distinction should be drawn between the obligations of a State towards the
international community as a whole, and those arising vis--vis another State in the field of
diplomatic protection. By their very nature, the former are the concern of all States. In view of
the importance of the rights involved, all States can be held to have a legal interest in their
protection; they are obligations erga omnes.
Such obligations derive, for example, in contemporary international law, from the outlawing of
acts of aggression, and of genocide, as also from the principles and rules concerning the basic
rights of the human person, including protection from slavery and racial discrimination. Some
of the corresponding rights of protection have entered into the body of general international
law others are conferred by international instruments of a universal or quasi-universal
character.

The Latin phrase, erga omnes, has since become one of the rallying cries of those sharing a belief in the
emergence of a value-based international public order. However, as is so often the case, the reality is neither
so clear nor so bright. Whatever the relevance of obligations erga omnes as a legal concept, its full potential
remains to be realized in practice.[69]
The term is closely connected with the international law concept of jus cogens. In international law, the
term jus cogens (literally, compelling law) refers to norms that command peremptory authority, superseding
conflicting treaties and custom. Jus cogens norms are considered peremptory in the sense that they are
mandatory, do not admit derogation, and can be modified only by general international norms of equivalent
authority.[70]
Early strains of the jus cogens doctrine have existed since the 1700s,[71] but peremptory norms began to
attract greater scholarly attention with the publication of Alfred von Verdross's influential 1937 article,
Forbidden Treaties in International Law.[72] The recognition of jus cogens gained even more force in the 1950s
and 1960s with the ILCs preparation of the Vienna Convention on the Law of Treaties (VCLT). [73] Though there
was a consensus that certain international norms had attained the status of jus cogens,[74] the ILC was unable
to reach a consensus on the proper criteria for identifying peremptory norms.
After an extended debate over these and other theories of jus cogens, the ILC concluded ruefully in 1963 that
there is not as yet any generally accepted criterion by which to identify a general rule of international law as
having the character of jus cogens.[75] In a commentary accompanying the draft convention, the ILC indicated
that the prudent course seems to be to x x x leave the full content of this rule to be worked out in State
practice and in the jurisprudence of international tribunals. [76] Thus, while the existence of jus cogens in
international law is undisputed, no consensus exists on its substance,[77] beyond a tiny core of principles and
rules.[78]
Of course, we greatly sympathize with the cause of petitioners, and we cannot begin to comprehend
the unimaginable horror they underwent at the hands of the Japanese soldiers. We are also deeply concerned

that, in apparent contravention of fundamental principles of law, the petitioners appear to be without a
remedy to challenge those that have offended them before appropriate fora. Needless to say, our
government should take the lead in protecting its citizens against violation of their fundamental human
rights. Regrettably, it is not within our power toorder the Executive Department to take up the petitioners
cause. Ours is only the power to urge and exhort the Executive Department to take up petitioners cause.
WHEREFORE, the Petition is hereby DISMISSED.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice

Republic of the Philippines

Supreme Court
Baguio City

EN BANC

G.R. No. 166620

ATTY. SYLVIA BANDA, CONSORICIA
O. PENSON, RADITO V. PADRIGANO,
JEAN R. DE MESA, LEAH P. DELA
CRUZ, ANDY V. MACASAQUIT, SENEN
B. CORDOBA, ALBERT BRILLANTES,
GLORIA
BISDA,
JOVITA
V.
CONCEPCION,
TERESITA
G.
CARVAJAL,
ROSANNA
T.
MALIWANAG,
RICHARD
ODERON,
CECILIA
ESTERNON,
BENEDICTO
CABRAL, MA. VICTORIA E. LAROCO,
CESAR ANDRA, FELICISIMO GALACIO,
ELSA R. CALMA, FILOMENA A.
GALANG, JEAN PAUL MELEGRITO,
CLARO G. SANTIAGO, JR., EDUARDO
FRIAS,
REYNALDO
O.
ANDAL,
NEPHTALIE
IMPERIO,
RUEL
BALAGTAS,
VICTOR
R.
ORTIZ,

FRANCISCO P. REYES, JR., ELISEO M.

BALAGOT, JR., JOSE C. MONSALVE,
JR.,
ARTURO
ADSUARA,
F.C.
LADRERO,
JR.,
NELSON
PADUA,
MARCELA
C.
SAYAO,
ANGELITO
MALAKAS,
GLORIA
RAMENTO,
JULIANA
SUPLEO,
MANUEL
MENDRIQUE, E. TAYLAN, CARMELA
BOBIS, DANILO VARGAS, ROY-LEO C.
PABLO,
ALLAN
VILLANUEVA,
VICENTE R. VELASCO, JR., IMELDA
ERENO, FLORIZA M. CATIIS, RANIEL
R. BASCO, E. JALIJALI, MARIO C.
CARAAN, DOLORES M. AVIADO,
MICHAEL P. LAPLANA, GUILLERMO G.
SORIANO, ALICE E. SOJO, ARTHUR G.
NARNE, LETICIA SORIANO, FEDERICO
RAMOS, JR., PETERSON CAAMPUED,
RODELIO L. GOMEZ, ANTONIO D.
GARCIA, JR., ANTONIO GALO, A.
SANCHEZ,
SOL
E.
TAMAYO,
JOSEPHINE A.M. COCJIN, DAMIAN
QUINTO, JR., EDLYN MARIANO, M.A.
MALANUM, ALFREDO S. ESTRELLA,
and JESUS MEL SAYO,
Petitioners,
- versus EDUARDO R. ERMITA, in his
capacity
as
Executive
Secretary,THE DIRECTOR GENERAL
OF THE PHILIPPINE INFORMATION
AGENCY andTHE
NATIONAL
TREASURER,
Respondents.

LEONARDO-DE CASTRO, J.:

The present controversy arose from a Petition for Certiorari and prohibition challenging the
constitutionality of Executive Order No. 378 dated October 25, 2004, issued by President Gloria
Macapagal Arroyo (President Arroyo). Petitioners characterize their action as a class suit filed on their
own behalf and on behalf of all their co-employees at the National Printing Office (NPO).

The NPO was formed on July 25, 1987, during the term of former President Corazon C. Aquino
(President Aquino), by virtue of Executive Order No. 285 [1] which provided, among others, the creation
of the NPO from the merger of the Government Printing Office and the relevant printing units of the
Philippine Information Agency (PIA).Section 6 of Executive Order No. 285 reads:
SECTION 6. Creation of the National Printing Office. There is hereby
created a National Printing Office out of the merger of the Government Printing Office
and the relevant printing units of the Philippine Information Agency. The Office shall
have exclusive printing jurisdiction over the following:

a. Printing, binding and distribution of all standard and accountable forms of

national, provincial, city and municipal governments, including government
corporations;

b.

Printing of officials ballots;

c.
Printing of public documents such as the Official Gazette, General
Appropriations Act, Philippine Reports, and development information materials of the
Philippine Information Agency.

The
Office
may
also
accept
other
government
printing
jobs,
including government publications, aside from those enumerated above, but not in an
exclusive basis.
The details of the organization, powers, functions, authorities, and related
management aspects of the Office shall be provided in the implementing details which
shall be prepared and promulgated in accordance with Section II of this Executive
Order.
The Office shall be attached to the Philippine Information Agency.
On October 25, 2004, President Arroyo issued the herein assailed Executive Order No. 378,
amending Section 6 of Executive Order No. 285 by, inter alia, removing the exclusive jurisdiction of
the NPO over the printing services requirements of government agencies and instrumentalities. The
pertinent portions of Executive Order No. 378, in turn, provide:
SECTION 1. The NPO shall continue to provide printing services to
government agencies and instrumentalities as mandated by law. However, it
shall no longer enjoy exclusive jurisdiction over the printing services
requirements of the government over standard and accountable forms. It
shall have to compete with the private sector, except in the printing of
election paraphernalia which could be shared with the Bangko Sentral ng Pilipinas,
upon the discretion of the Commission on Elections consistent with the provisions of the
Election Code of 1987.

SECTION 2. Government agencies/instrumentalities

services outside NPO provided that:

may

source

printing

2.1 The printing services to be provided by the private sector is superior in

quality and at a lower cost than what is offered by the NPO; and
2.2 The private printing provider is flexible in terms of meeting the target
completion time of the government agency.
SECTION 3. In the exercise of its functions, the amount to be
appropriated for the programs, projects and activities of the NPO in the
General Appropriations Act (GAA) shall be limited to its income without
additional financial support from the government. (Emphases and underscoring
supplied.)

Pursuant to Executive Order No. 378, government agencies and instrumentalities are allowed
to source their printing services from the private sector through competitive bidding, subject to the
condition that the services offered by the private supplier be of superior quality and lower in cost
compared to what was offered by the NPO. Executive Order No. 378 also limited NPOs appropriation
in the General Appropriations Act to its income.

Perceiving Executive Order No. 378 as a threat to their security of tenure as employees of the
NPO, petitioners now challenge its constitutionality, contending that: (1) it is beyond the executive
powers of President Arroyo to amend or repeal Executive Order No. 285 issued by former President
Aquino when the latter still exercised legislative powers; and (2) Executive Order No. 378 violates
petitioners security of tenure, because it paves the way for the gradual abolition of the NPO.
We dismiss the petition.
Before proceeding to resolve the substantive issues, the Court must first delve into a
procedural matter. Since petitioners instituted this case as a class suit, the Court, thus, must first
determine if the petition indeed qualifies as one. In Board of Optometry v. Colet,[2] we held that
[c]ourts must exercise utmost caution before allowing a class suit, which is the exception to the
requirement of joinder of all indispensable parties. For while no difficulty may arise if the decision
secured is favorable to the plaintiffs, a quandary would result if the decision were otherwise as those
who were deemed impleaded by their self-appointed representatives would certainly claim denial of
due process.
Section 12, Rule 3 of the Rules of Court defines a class suit, as follows:

Sec. 12. Class suit. When the subject matter of the controversy is one of
common or general interest to many persons so numerous that it is impracticable to
join all as parties, a number of them which the court finds to be sufficiently numerous
and representative as to fully protect the interests of all concerned may sue or defend
for the benefit of all. Any party in interest shall have the right to intervene to protect
his individual interest.
From the foregoing definition, the requisites of a class suit are: 1) the subject matter of
controversy is one of common or general interest to many persons; 2) the parties affected are so
numerous that it is impracticable to bring them all to court; and 3) the parties bringing the class suit
are sufficiently numerous or representative of the class and can fully protect the interests of all
concerned.
In Mathay v. The Consolidated Bank and Trust Company,[3] the Court held that:
An action does not become a class suit merely because it is designated as such in the
pleadings. Whether the suit is or is not a class suit depends upon the attending facts,
and the complaint, or other pleading initiating the class action should
allege the existence of the necessary facts, to wit, the existence of a subject matter of
common interest, and the existence of a class and the number of persons in the
alleged class, in order that the court might be enabled to determine whether
the members of the class are so numerous as to make it impracticable to
bring them all before the court, to contrast the number appearing on the
record with the number in the class and to determine whether claimants on
record adequately represent the class and the subject matter of general or
common interest. (Emphases ours.)
Here, the petition failed to state the number of NPO employees who would be affected by the
assailed Executive Order and who were allegedly represented by petitioners.It was the Solicitor
General, as counsel for respondents, who pointed out that there were about 549 employees in the
NPO.[4] The 67 petitioners undeniably comprised a small fraction of the NPO employees whom they
claimed to represent. Subsequently, 32 of the original petitioners executed an Affidavit of Desistance,
while one signed a letter denying ever signing the petition, [5] ostensibly reducing the number of
petitioners to 34. We note that counsel for the petitioners challenged the validity of the desistance or
withdrawal of some of the petitioners and insinuated that such desistance was due to pressure from
people close to the seat of power.[6] Still, even if we were to disregard the affidavit of desistance filed
by some of the petitioners, it is highly doubtful that a sufficient, representative number of NPO
employees have instituted this purported class suit. A perusal of the petition itself would show that of
the 67 petitioners who signed the Verification/Certification of Non-Forum Shopping, only 20
petitioners were in fact mentioned in the jurat as having duly subscribed the petition before the
notary public. In other words, only 20 petitioners effectively instituted the present case.

Indeed, in MVRS Publications, Inc. v. Islamic Dawah Council of the Philippines, Inc.,[7] we
observed

that

an

element

of

class

suit

or

representative

suit

is

the adequacy

of

representation. In determining the question of fair and adequate representation of members of a

class, the court must consider (a) whether the interest of the named party is coextensive with the
interest of the other members of the class; (b) the proportion of those made a party, as it so bears, to
the total membership of the class; and (c) any other factor bearing on the ability of the named party
to speak for the rest of the class.
Previously, we held in Ibaes v. Roman Catholic Church[8] that where the interests of the
plaintiffs and the other members of the class they seek to represent are diametrically opposed, the
class suit will not prosper.
It is worth mentioning that a Manifestation of Desistance, [9] to which the previously mentioned
Affidavit of Desistance[10] was attached, was filed by the President of the National Printing Office
Workers Association (NAPOWA). The said manifestation expressed NAPOWAs opposition to the filing
of the instant petition in any court. Even if we take into account the contention of petitioners counsel
that the NAPOWA President had no legal standing to file such manifestation, the said pleading is a
clear indication that there is a divergence of opinions and views among the members of the class
sought to be represented, and not all are in favor of filing the present suit. There is here an apparent
conflict between petitioners interests and those of the persons whom they claim to represent. Since it
cannot be said that petitioners sufficiently represent the interests of the entire class, the instant case
cannot be properly treated as a class suit.
As to the merits of the case, the petition raises two main grounds to assail the constitutionality
of Executive Order No. 378:

First, it is contended that President Arroyo cannot amend or repeal Executive Order No. 285
by the mere issuance of another executive order (Executive Order No. 378).Petitioners maintain that
former President Aquinos Executive Order No. 285 is a legislative enactment, as the same was issued
while President Aquino still had legislative powers under the Freedom Constitution; [11] thus, only
Congress through legislation can validly amend Executive Order No. 285.
Second, petitioners maintain that the issuance of Executive Order No. 378 would lead to the
eventual abolition of the NPO and would violate the security of tenure of NPO employees.
Anent the first ground raised in the petition, we find the same patently without merit.
It is a well-settled principle in jurisprudence that the President has the power to reorganize the
offices and agencies in the executive department in line with the Presidents constitutionally granted
power of control over executive offices and by virtue of previous delegation of the legislative power
to reorganize executive offices under existing statutes.

In Buklod ng Kawaning EIIB v. Zamora,[12] the Court pointed out that Executive Order No. 292
or the Administrative Code of 1987 gives the President continuing authority to reorganize and
redefine the functions of the Office of the President. Section 31, Chapter 10, Title III, Book III of the
said Code, is explicit:

Sec. 31. Continuing Authority of the President to Reorganize his Office. The
President, subject to the policy in the Executive Office and in order to achieve
simplicity, economy and efficiency, shall have continuing authority to
reorganize the administrative structure of the Office of the President. For this
purpose, he may take any of the following actions:

(1) Restructure the internal organization of the Office of the

President Proper, including the immediate Offices, the President
Special Assistants/Advisers System and the Common Staff Support
System, by abolishing, consolidating or merging units thereof or
transferring functions from one unit to another;

(2) Transfer any function under the Office of the President

to any other Department or Agency as well as transfer functions
to the Office of the President from other Departments and Agencies;
and

(3) Transfer any agency under the Office of the President to

any other department or agency as well as transfer agencies to
the Office of the President from other Departments or agencies.
(Emphases ours.)

Interpreting the foregoing provision, we held in Buklod ng Kawaning EIIB, thus:

But of course, the list of legal basis authorizing the President to reorganize any
department or agency in the executive branch does not have to end here. We must not
lose sight of the very source of the power that which constitutes an express grant of
power. Under Section 31, Book III of Executive Order No. 292 (otherwise known as the
Administrative Code of 1987), the President, subject to the policy in the Executive
Office and in order to achieve simplicity, economy and efficiency, shall have the
continuing authority to reorganize the administrative structure of the Office of the
President. For this purpose, he may transfer the functions of other Departments or
Agencies to the Office of the President. In Canonizado v. Aguirre [323 SCRA 312
(2000)], we ruled that reorganization involves the reduction of personnel,

consolidation of offices, or abolition thereof by reason of economy or

redundancy of functions. It takes place when there is an alteration of the
existing structure of government offices or units therein, including the lines
of control, authority and responsibility between them. The EIIB is a bureau
attached to the Department of Finance. It falls under the Office of the President. Hence,
it is subject to the Presidents continuing authority to reorganize. [13] (Emphasis ours.)
It is undisputed that the NPO, as an agency that is part of the Office of the Press Secretary
(which in various times has been an agency directly attached to the Office of the Press Secretary or
as an agency under the Philippine Information Agency), is part of the Office of the President. [14]
Pertinent to the case at bar, Section 31 of the Administrative Code of 1987 quoted above
authorizes the President (a) to restructure the internal organization of the Office of the President
Proper, including the immediate Offices, the President Special Assistants/Advisers System and the
Common Staff Support System, by abolishing, consolidating or merging units thereof or transferring
functions from one unit to another, and (b) to transfer functions or offices from the Office of the
President to any other Department or Agency in the Executive Branch, and vice versa.
Concomitant to such power to abolish, merge or consolidate offices in the Office of the
President Proper and to transfer functions/offices not only among the offices in the Office of President
Proper but also the rest of the Office of the President and the Executive Branch, the President
implicitly has the power to effect less radical or less substantive changes to the functional and
internal structure of the Office of the President, including the modification of functions of such
executive agencies as the exigencies of the service may require.
In the case at bar, there was neither an abolition of the NPO nor a removal of any of its
functions to be transferred to another agency. Under the assailed Executive Order No. 378, the NPO
remains the main printing arm of the government for all kinds of government forms and publications
but in the interest of greater economy and encouraging efficiency and profitability, it must now
compete with the private sector for certain government printing jobs, with the exception of election
paraphernalia which remains the exclusive responsibility of the NPO, together with the Bangko Sentral
ng Pilipinas, as the Commission on Elections may determine. At most, there was a mere alteration of
the main function of the NPO by limiting the exclusivity of its printing responsibility to election forms.
[15]

There is a view that the reorganization actions that the President may take with respect to
agencies in the Office of the President are strictly limited to transfer of functions and offices as
seemingly provided in Section 31 of the Administrative Code of 1987.
However, Section 20, Chapter 7, Title I, Book III of the same Code significantly provides:
Sec. 20. Residual Powers. Unless Congress provides otherwise, the President shall
exercise such other powers and functions vested in the President which are

provided for under the laws and which are not specifically enumerated above, or
which are not delegated by the President in accordance with law. (Emphasis ours.)
Pursuant to Section 20, the power of the President to reorganize the Executive Branch under
Section 31 includes such powers and functions that may be provided for under other laws. To be sure,
an inclusive and broad interpretation of the Presidents power to reorganize executive offices has been
consistently supported by specific provisions ingeneral appropriations laws.
In the oft-cited Larin v. Executive Secretary,[16] the Court likewise adverted to certain
provisions of Republic Act No. 7645, the general appropriations law for 1993, as among the statutory
bases for the Presidents power to reorganize executive agencies, to wit:
Section 48 of R.A. 7645 provides that:
Sec. 48. Scaling Down and Phase Out of Activities of Agencies
Within the Executive Branch. The heads of departments, bureaus and
offices and agencies are hereby directed to identify their respective
activities which are no longer essential in the delivery of public services
and which may be scaled down, phased out or abolished, subject to civil
[service] rules and regulations. x x x. Actual scaling down, phasing out or
abolition of the activities shall be effected pursuant to Circulars or Orders
issued for the purpose by the Office of the President.
Said provision clearly mentions the acts of "scaling down, phasing out and
abolition" of offices only and does not cover the creation of offices or transfer
of functions. Nevertheless, the act of creating and decentralizing is included
in the subsequent provision of Section 62, which provides that:
Sec. 62. Unauthorized organizational changes. Unless otherwise
created by law or directed by the President of the Philippines, no
organizational unit or changes in key positions in any department or
agency shall be authorized in their respective organization structures and
be funded from appropriations by this Act.
The foregoing provision evidently shows that the President is authorized to
effect organizational changes including the creation of offices in the department or
agency concerned.
The contention of petitioner that the two provisions are riders deserves scant
consideration. Well settled is the rule that every law has in its favor the presumption of
constitutionality. Unless and until a specific provision of the law is declared invalid and
unconstitutional, the same is valid and binding for all intents and purposes.
[17]
(Emphases ours)

Buklod ng Kawaning EIIB v. Zamora,[18] where the Court upheld as valid then President Joseph
Estradas Executive Order No. 191 deactivating the Economic Intelligence and Investigation Bureau
(EIIB) of the Department of Finance, hewed closely to the reasoning in Larin. The Court, among

others, also traced from the General Appropriations Act [19] the Presidents authority to effect
organizational changes in the department or agency under the executive structure, thus:
We adhere to the precedent or ruling in Larin that this provision recognizes the authority
of the President to effect organizational changes in the department or agency under the
executive structure. Such a ruling further finds support in Section 78 of Republic Act No.
8760. Under this law, the heads of departments, bureaus, offices and agencies and other
entities in the Executive Branch are directed (a) to conduct a comprehensive review of
their respective mandates, missions, objectives, functions, programs, projects, activities
and systems and procedures; (b) identify activities which are no longer essential in the
delivery of public services and which may be scaled down, phased-out or abolished; and
(c) adopt measures that will result in the streamlined organization and
improved overall performance of their respective agencies. Section 78 ends up
with the mandate that the actual streamlining and productivity improvement in agency
organization and operation shall be effected pursuant to Circulars or Orders issued for
the purpose by the Office of the President. x x x. [20] (Emphasis ours)
Notably, in the present case, the 2003 General Appropriations Act, which was reenacted in
2004 (the year of the issuance of Executive Order No. 378), likewise gave the President the authority
to effect a wide variety of organizational changes in any department or agency in the Executive
Branch. Sections 77 and 78 of said Act provides:

Section 77. Organized Changes. Unless otherwise provided by law or

directed by the President of the Philippines, no changes in key positions or
organizational units in any department or agency shall be authorized in their respective
organizational structures and funded from appropriations provided by this Act.
Section 78. Institutional Strengthening and Productivity Improvement in Agency
Organization and Operations and Implementation of Organization/Reorganization
Mandated by Law.The Government shall adopt institutional strengthening and
productivity improvement measures to improve service delivery and enhance
productivity in the government, as directed by the President of the Philippines. The
heads of departments, bureaus, offices, agencies, and other entities of the Executive
Branch shall accordingly conduct a comprehensive review of their respective
mandates, missions, objectives, functions, programs, projects, activities and systems
and procedures; identify areas where improvements are necessary; and implement
corresponding structural, functional and operational adjustments that will
result in streamlined organization and operations and improved performance
and productivity: PROVIDED, That actual streamlining and productivity improvements
in agency organization and operations, as authorized by the President of the Philippines
for the purpose, including the utilization of savings generated from such activities, shall
be in accordance with the rules and regulations to be issued by the DBM, upon
consultation with the Presidential Committee on Effective Governance: PROVIDED,
FURTHER, That in the implementation of organizations/reorganizations, or
specific changes in agency structure, functions and operations as a result of
institutional strengthening or as mandated by law, the appropriation,
including the functions, projects, purposes and activities of agencies
concerned may be realigned as may be necessary: PROVIDED, FINALLY, That any

unexpended balances or savings in appropriations may be made available for payment

of retirement gratuities and separation benefits to affected personnel, as authorized
under existing laws. (Emphases and underscoring ours.)
Implicitly, the aforequoted provisions in the appropriations law recognize the power of the
President to reorganize even executive offices already funded by the said appropriations act,
including the power to implement structural, functional, and operational adjustments in the
executive bureaucracy and, in so doing, modify or realign appropriations of funds as may be
necessary under such reorganization. Thus, insofar as petitioners protest the limitation of the NPOs
appropriations to its own income under Executive Order No. 378, the same is statutorily authorized by
the above provisions.
In the 2003 case of Bagaoisan v. National Tobacco Administration,[21] we upheld the
streamlining of the National Tobacco Administration through a reduction of its personnel and deemed
the same as included in the power of the President to reorganize executive offices granted under the
laws, notwithstanding that such streamlining neither involved an abolition nor a transfer of functions
of an office. To quote the relevant portion of that decision:
In the recent case of Rosa Ligaya C. Domingo, et al. vs. Hon. Ronaldo D. Zamora, in his
capacity as the Executive Secretary, et al., this Court has had occasion to also delve on
the Presidents power to reorganize the Office of the President under Section 31(2) and
(3) of Executive Order No. 292 and the power to reorganize the Office of the
President Proper. x x x
xxxx
The first sentence of the law is an express grant to the President of a continuing
authority to reorganize the administrative structure of the Office of the President. The
succeeding numbered paragraphs are not in the nature of provisos that
unduly limit the aim and scope of the grant to the President of the power to
reorganize but are to be viewed in consonance therewith. Section 31(1) of
Executive Order No. 292 specifically refers to the Presidents power to restructure the
internal organization of the Office of the President Proper, by abolishing, consolidating
or merging units hereof or transferring functions from one unit to another, while Section
31(2)
and
(3)
concern
executive
offices
outside
the
Office
of
the
President Properallowing the President to transfer any function under the Office of the
President to any other Department or Agency and vice-versa, and the transfer of any
agency under the Office of the President to any other department or agency and viceversa.
In the present instance, involving neither an abolition nor transfer of
offices, the assailed action is a mere reorganization under the general
provisions of the law consisting mainly of streamlining the NTA in the interest
of simplicity, economy and efficiency. It is an act well within the authority of
the President motivated and carried out, according to the findings of the appellate
court, in good faith, a factual assessment that this Court could only but accept.
[22]
(Emphases and underscoring supplied.)

In the more recent case of Tondo Medical Center Employees Association v. Court of Appeals,
[23]

which involved a structural and functional reorganization of the Department of Health

under an executive order, we reiterated the principle that the power of the President to reorganize
agencies under the executive department by executive or administrative order is constitutionally and
statutorily recognized. We held in that case:

This Court has already ruled in a number of cases that the President
may, by executive or administrative order, direct the reorganization of
government entities under the Executive Department. This is also sanctioned
under the Constitution, as well as other statutes.
Section 17, Article VII of the 1987 Constitution, clearly states: [T]he
president shall have control of all executive departments, bureaus and offices.
Section 31, Book III, Chapter 10 of Executive Order No. 292, also known as the
Administrative Code of 1987 reads:

SEC. 31. Continuing Authority of the President to Reorganize his

Office - The President, subject to the policy in the Executive Office and in
order to achieve simplicity, economy and efficiency, shall have continuing
authority to reorganize the administrative structure of the Office of the
President. For this purpose, he may take any of the following actions:

xxxx
In Domingo v. Zamora [445 Phil. 7 (2003)], this Court explained the rationale
behind the Presidents continuing authority under the Administrative Code to reorganize
the administrative structure of the Office of the President. The law grants the
President the power to reorganize the Office of the President in recognition of
the recurring need of every President to reorganize his or her office to
achieve simplicity, economy and efficiency. To remain effective and efficient, it
must be capable of being shaped and reshaped by the President in the manner the
Chief Executive deems fit to carry out presidential directives and policies.
The Administrative Code provides that the Office of the President consists of the Office
of the President Proper and the agencies under it. The agencies under the Office of the
President are identified in Section 23, Chapter 8, Title II of the Administrative Code:

Sec. 23. The Agencies under the Office of the President.The

agencies under the Office of the President refer to those offices placed
under the chairmanship of the President, those under the supervision
and control of the President, those under the administrative
supervision of the Office of the President, those attached to it for policy
and program coordination, and those that are not placed by law or order
creating them under any specific department.

xxxx
The power of the President to reorganize the executive department is likewise
recognized in general appropriations laws. x x x.

xxxx

Clearly, Executive Order No. 102 is well within the constitutional power of the President
to issue. The President did not usurp any legislative prerogative in issuing
Executive Order No. 102. It is an exercise of the Presidents constitutional power
of control over the executive department, supported by the provisions of the
Administrative Code, recognized by other statutes, and consistently affirmed
by this Court.[24] (Emphases supplied.)
Subsequently, we ruled in Anak Mindanao Party-List Group v. Executive Secretary[25] that:
The Constitutions express grant of the power of control in the President justifies an
executive action to carry out reorganization measures under a broad authority of law.
In enacting a statute, the legislature is presumed to have deliberated with full
knowledge of all existing laws and jurisprudence on the subject. It is thus reasonable to
conclude that in passing a statute which places an agency under the Office of the
President, it was in accordance with existing laws and jurisprudence on the Presidents
power to reorganize.
In establishing an executive department, bureau or office, the legislature
necessarily ordains an executive agencys position in the scheme of administrative
structure. Such determination is primary, but subject to the Presidents continuing
authority to reorganize the administrative structure. As far as bureaus, agencies or
offices in the executive department are concerned, the power of control may justify the
President to deactivate the functions of a particular office. Or a law may expressly grant
the President the broad authority to carry out reorganization measures. The
Administrative Code of 1987 is one such law.[26]

The issuance of Executive Order No. 378 by President Arroyo is an exercise of a delegated
legislative power granted by the aforementioned Section 31, Chapter 10, Title III, Book III of the
Administrative Code of 1987, which provides for the continuing authority of the President to
reorganize the Office of the President, in order to achieve simplicity, economy and efficiency. This is a
matter already well-entrenched in jurisprudence. The reorganization of such an office through

executive or administrative order is also recognized in the Administrative Code of 1987. Sections 2
and 3, Chapter 2, Title I, Book III of the said Code provide:

Sec. 2. Executive Orders. - Acts of the President providing for rules of a general or
permanent character in implementation or execution of constitutional or
statutory powers shall be promulgated in executive orders.

Sec. 3. Administrative Orders. - Acts of the President which relate to particular

aspects of governmental operations in pursuance of his duties as administrative
head shall be promulgated inadministrative orders. (Emphases supplied.)

To reiterate, we find nothing objectionable in the provision in Executive Order No. 378 limiting
the appropriation of the NPO to its own income. Beginning with Larin and in subsequent cases, the
Court has noted certain provisions in the general appropriations laws as likewise reflecting the
power of the President to reorganize executive offices or agencies even to the extent of modifying
and realigning appropriations for that purpose.
Petitioners contention that the issuance of Executive Order No. 378 is an invalid exercise of
legislative power on the part of the President has no legal leg to stand on.
In all, Executive Order No. 378, which purports to institute necessary reforms in government in
order to improve and upgrade efficiency in the delivery of public services by redefining the functions
of the NPO and limiting its funding to its own income and to transform it into a self-reliant agency
able to compete with the private sector, is well within the prerogative of President Arroyo under her
continuing delegated legislative power to reorganize her own office. As pointed out in the separate
concurring opinion of our learned colleague, Associate Justice Antonio T. Carpio, the objective behind
Executive Order No. 378 is wholly consistent with the state policy contained in Republic Act No. 9184
or the Government Procurement Reform Act to encourage competitiveness by extending equal
opportunity to private contracting parties who are eligible and qualified. [27]
To be very clear, this delegated legislative power to reorganize pertains only to the Office of
the President and the departments, offices and agencies of the executive branch and does not
include the Judiciary, the Legislature or the constitutionally-created or mandated bodies. Moreover, it
must be stressed that the exercise by the President of the power to reorganize the executive
department must be in accordance with the Constitution, relevant laws and prevailing jurisprudence.
In this regard, we are mindful of the previous pronouncement of this Court in Dario v.
Mison

[28]

that:

Reorganizations in this jurisdiction have been regarded as valid

provided they are pursued in good faith. As a general rule, a reorganization is
carried out in good faith if it is for the purpose of economy or to make bureaucracy more
efficient. In that event, no dismissal (in case of a dismissal) or separation actually
occurs because the position itself ceases to exist. And in that case, security of tenure
would not be a Chinese wall. Be that as it may, if the abolition, which is nothing else but
a separation or removal, is done for political reasons or purposely to defeat security of
tenure, or otherwise not in good faith, no valid abolition takes place and whatever
abolition is done, is void ab initio. There is an invalid abolition as where there is merely
a change of nomenclature of positions, or where claims of economy are belied by the
existence of ample funds. (Emphasis ours.)
Stated

alternatively,

the

presidential

power

to

reorganize

agencies

and

offices

in

the executive branch of government is subject to the condition that such reorganization is carried out
in good faith.
If the reorganization is done in good faith, the abolition of positions, which results in loss of
security of tenure of affected government employees, would be valid. InBuklod ng Kawaning EIIB
v. Zamora,[29] we even observed that there was no such thing as an absolute right to hold
office. Except those who hold constitutional offices, which provide for special immunity as regards
salary and tenure, no one can be said to have any vested right to an office or salary. [30]
This brings us to the second ground raised in the petition that Executive Order No. 378, in
allowing government agencies to secure their printing requirements from the private sector and in
limiting the budget of the NPO to its income, will purportedly lead to the gradual abolition of the NPO
and the loss of security of tenure of its present employees. In other words, petitioners avow that the
reorganization of the NPO under Executive Order No. 378 is tainted with bad faith. The basic
evidentiary rule is that he who asserts a fact or the affirmative of an issue has the burden of proving
it.[31]
A careful review of the records will show that petitioners utterly failed to substantiate their
claim. They failed to allege, much less prove, sufficient facts to show that the limitation of the NPOs
budget to its own income would indeed lead to the abolition of the position, or removal from office, of
any employee. Neither did petitioners present any shred of proof of their assertion that the changes
in the functions of the NPO were for political considerations that had nothing to do with improving the
efficiency of, or encouraging operational economy in, the said agency
In sum, the Court finds that the petition failed to show any constitutional infirmity or grave
abuse of discretion amounting to lack or excess of jurisdiction in President Arroyos issuance of
Executive Order No. 378.
WHEREFORE, the petition is hereby DISMISSED and the prayer for a Temporary Restraining
Order and/or a Writ of Preliminary Injunction is hereby DENIED. No costs.
SO ORDERED.

TERESITA J. LEONARDO-DE CASTRO

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 125509

January 31, 2007

PUBLIC INTEREST CENTER, INC., LAUREANO T. ANGELES, and JOCELYN P.

CELESTINO Petitioners
vs.
HONORABLE VICENTE Q. ROXAS, in his capacity as Presiding Judge, Regional Trial Court of
Quezon City, Branch 227, REPUBLIC OF THE PHILIPPINES, NATIONAL POWER
CORPORATION, WESTINGHOUSE ELECTRIC CORPORATION, WESTINGHOUSE ELECTRIC S.A.,
WESTINGHOUSE INTERNATIONAL PROJECTS COMPANY, Respondents.
DECISION
CARPIO MORALES, J.:
Challenged via petition for certiorari is the Quezon City Regional Trial Courts Resolution dated April
17, 1996 dismissing the Complaint of Public Interest Center, Inc., Laureano T. Angeles and Jocelyn P.
Celestino (petitioners) in Civil Case No. Q-95-25597, and Order dated June 18, 1996, denying
petitioners motion for reconsideration.
The antecedent facts, as culled from the records of the case, are as follows:
On February 9, 1976, respondent National Power Corporation (NPC) entered into a contract (the
Contract) with respondent Westinghouse Electric S.A. (WESA), an affiliate or subsidiary of respondent
Westinghouse Electric Corporation (WESTINGHOUSE), whereby WESA undertook to construct in favor
of the NPC a 620-megawatt nuclear power plant at Morong, Bataan and to supply equipment,
machineries and services therefor.1
WESA subsequently executed a deed of assignment transferring all its rights and responsibilities in
the Contract to its construction arm-agent, respondent Westinghouse International Projects Company
(WIPCO).2
In 1986, President Corazon Aquino issued Executive Order (E.O.) No. 55, which was later amended by
E.O. No. 98, transferring ownership of the already constructed power plant, which had become known

as the Bataan Nuclear Power Plant (BNPP), its equipment, materials and facilities, records and
uranium fuel, to the National Government or its duly constituted agency. 3 Pursuant to E.O. No. 55, as
amended, the National Government assumed all remaining foreign and local obligations incurred by
the NPC in financing the construction of the BNPP. 4
In 1988, the Aquino administration instituted a complaint against WESTINGHOUSE in New Jersey,
U.S.A. Westinghouse later filed an arbitration case in Geneva, Switzerland.5
On September 27, 1995, President Fidel Ramos authorized the following government officials as
members of a Government Panel to conduct exploratory discussions with WESTINGHOUSE for the
possible settlement of pending legal proceedings: Chief Presidential Legal Counsel Antonio T.
Carpio,6 Solicitor General Raul T. Goco, Assistant Secretary Cyril Del Callar, General Counsel Alberto L.
Pangcog, and Counsel Mark Augenblick.7
Subsequently or on October 4, 1995, President Ramos issued E.O. No. 265, which amended E.O. No.
315 dated January 1, 1988, creating the Presidential Committee on the Bataan Nuclear Power Plant
(PC-BNPP Committee).
E.O. No. 265 provided that the PC-BNPP Committee8 "shall be the coordinating and policy-making
body on the BNPP, including policies arising from negotiations for a fair commercial settlement of all
pending legal claims that will provide a substantial net benefit to the country," which "shall submit its
recommendations on BNPP-related policies to the President for approval." 9
On October 11, 1995, the PC-BNPP Committee issued a "Resolution Adopting The Essential Terms And
Conditions Arrived At By The Government Panel And Westinghouse Representatives During The
Exploratory Discussions From September 29, 1995 To October 9, 1995 For A Compromise Settlement
Of The BNPP Controversy And Favorably Recommending Approval Thereof To His Excellency, The
President," the salient points of which Resolution follow:
xxxx
NOTING that after a series of talks which started on September 29, 1995, the government panel and
Westinghouse representatives (Mr. Briskman and Mr. Robert Gross) on October 9,1995,
eventually agreed in principle on a settlement involving a package of more than $100 MILLION,
consisting of the following:
(1) $40 Million in cash (transferable by wire to a bank account specified by the Republic)
(2) Two (2) newly manufactured 501-F Econopac combustion turbines, FOB Houston, at 160
MW each or a total of 320 MW valued at $30 Million each, or a total of $60 Million
(3) Relinquishment by Westinghouse of the right to recover more than $200,000 in attorneys
fees previously awarded by the New Jersey court.
NOTING that in exchange for the foregoing cash and utilities, the parties would secure a dismissal
with prejudice of the pending lawsuits, appeals and arbitration between the Republic and National
Power Corporation, on one hand, and Westinghouse, its affiliates and Burns & Roe, on the other hand,
involving the BNPP controversy and that the Republic would direct National Power Corporation and
other government agencies to lift the ban against Westinghouse equipment and technology;
xxxx

OBSERVING that the present offer of Westinghouse of $40 Million in cash plus two (2) 501-Fs worth
$60 Million represents the highest cash offer (since its $10 Million cash offer in 1992) and the most
advantageous in kind offer (no discount/rebate component or any corresponding obligation on the
side of the Republic);
HAVING IN MIND the uncertainty of the results of the arbitration, the possibility that some of
Westinghouses counterclaims may partly offset any recovery, the prospect that even a favorable
arbitration award could be limited to the $40 million cap under the original BNPP contract and that
even if the government eventually wins the appeal of the New Jersey verdict, substantial costs would
have to be incurred to pursue a new trial, which result is also uncertain;
RECOGNIZING that the present offer of Westinghouse will result in greater net economic benefits to
the Republic than any previous settlement offer;
xxxx
NOW THEREFORE, BE IT RESOLVED AS IT IS HEREBY RESOLVED that PC-BNPP, with the endorsement
of the Republics lawyers and negotiating panel, adopts the foregoing essential terms of the
settlement agreement and respectfully recommends to His Excellency, President Fidel V. Ramos, the
acceptance and approval thereof.10(Underscoring supplied)
On October 13, 1995, the Settlement Agreement reflected in the above-questioned Resolution of the
PC-BNPP was forged by the Republic and NPC on one hand, and respondent Westinghouse
corporations on the other.11
On November 14, 1995, petitioners, as taxpayers, filed with the Regional Trial Court (RTC) of Quezon
City a Complaint against herein private respondents, for declaration of nullity of the BNPP contract
with application for the issuance of a temporary restraining order and preliminary injunction. 12
Herein public respondent, Branch 227 of the Quezon City RTC, set the hearing of petitioners
application for the issuance of a temporary restraining order on November 28, 1995 on which date
only petitioners and respondents Republic and NPC appeared. No representative of the Westinghouse
corporations having showed up, public respondent directed petitioners to secure a certification from
the Securities and Exchange Commission (SEC) on who the resident agent, if any, of said
corporations13 was.
On the same scheduled date of hearing, the Solicitor General, on behalf of respondents Republic and
NPC, moved for the dismissal of the Complaint on the ground that petitioners were engaged in forumshopping, their counsel Atty. Crispin T. Reyes having previously filed cases 14 with causes of action
identical thereto.
While Atty. Reyes did not deny having previously filed, in Manila, a complaint, he argued that he was
not among the plaintiffs in the complaint filed in Quezon City. Nevertheless, he withdrew as counsel
for the plaintiffs herein petitioners.15
On December 4, 1995, petitioners filed an Amended Complaint16 praying for the following reliefs:
WHEREFORE, it is most respectfully prayed [that]:
xxxx

(2) after due hearing, a preliminary mandatory injunction issue upon a bond executed to the
party enjoined in an amount to be fixed by the court ordering defendants National Power
Corporation and the Republic of the Philippines to stop and/or not to perform further
implementation/execution of their obligation/undertaking under the null and void [B]NPP
Nuclear Plant Contract between the National Power Corporation and Westinghouse executed on
February 9, 1976 in Manila, Philippines; likewise, from further continuing the payments for the
contracted loans/interest based thereon unless otherwise securitized; and also from further
implementing/executing
their
undertaking/obligations
under
the
Settlement
Agreementbetween Republic of the Philippines-National Power Corporation and Westinghouse
negotiated on October 9, 1995 and allegedly executed on October 13, 1995;
(3) after hearing on the merits, judgment be rendered declaring the [B]NPP Nuclear Plant
Contractexecuted on February 9, 1976 in Manila and all amendments thereto, together with
the loan contractsbased thereon, as well as the Settlement Agreement executed on October
13, 1995 by defendant Republic of the Philippines/NAPOCOR with Westinghouse, as inexistent
and void ab initio;
(4) ordering defendants NAPOCOR and the REPUBLIC OF THE PHILIPPINES to reconvey/turn
over the [B]NPP Nuclear Plant equipment and machineries to defendant WESTINGHOUSE
ELECTRIC CORPORATION and/or its corporate agents and to restitute or refund to the former all
payments paid for the [B]NPP Nuclear Plant to said Westinghouse, with legal interest from the
filing of this complaint;
(5) making the preliminary mandatory injunction permanent, and ordering defendant jointly
and severally to pay plaintiffs reasonable attorneys fees pursuant to Article 2208 (2) and (11),
Civil Code of the Philippines, with costs against defendants; . . . (Underscoring supplied)
In essence, the Amended Complaint assailed the validity of and sought to nullify the following
contracts:
(a) The BNPP Contract;
(b) The loan contracts entered into by the Republic and NPC to finance the construction of the
BNPP; and
(c) The Settlement Agreement entered into by the Republic and NPC with Westinghouse on
October 13, 1995 in settlement of the claims arising from the Contract.
The Republic filed a Motion to Dismiss (With Opposition to the Application for Preliminary Mandatory
Injunction)17to petitioners Amended Complaint on the following grounds: (a) lis pendens and/or
forum-shopping; (b) lack of legal capacity of petitioners to sue; and (c) lack of cause of action. 18
For its part, the NPC filed its Comment/Motion To Dismiss Plaintiffs Amended Complaint, 19 alleging
that the Amended Complaint failed to state a cause of action against it.
By Order of January 25, 1996, public respondent directed, among other things, petitioners and the
Republic and NPC to file their respective memoranda.20
On February 26, 1996, petitioners, in compliance with public respondents order, filed a manifestation
that per certification of the SEC, the new resident agent of WIPCO was ACCRA Agents, Inc. Summons
was thereupon served upon ACCRA Agents, Inc.

WIPCO soon filed a Motion to Dismiss21 petitioners Amended Complaint on the following grounds: (a)
petitioners have no legal capacity to sue; (b) the Amended Complaint states no cause of action; and
(c) assuming the existence of a cause of action, the same is nonetheless barred by the statute of
limitations.
By the assailed Resolution of April 17, 1996, public respondent DISMISSED petitioners complaint,
holding as follows:
xxxx
I. that, with respect to the first cause of action
(i) plaintiffs have violated Supreme Court Administrative Circular 04-94, otherwise
known as the Anti-Forum Shopping Rule, which carries with it, among others, the
penalty of dismissal of the action;
II. that, with respect to the second cause of action,
(i) this Court has no territorial jurisdiction over foreign and international bodies situated
abroad, more so, if such bodies are foreign and international courts;
(ii) this Court has no original and exclusive jurisdiction over the issue of invalidating
compromiseagreements entered into in foreign and international courts to settle foreign
lawsuits pending before such foreign and international courts;
(iii) this Court has no jurisdiction to enjoin court proceedings relative to the compromise
agreement entered into in foreign and international courts to settle pending foreign
lawsuits;
(iv) the application for preliminary mandatory injunction of plaintiffs is denied for lack of
merit . . .
(v) the second cause of action did not allege constitutional, public interest, and judicial
policy issues so as to qualify plaintiffs under the relaxed rule, as having standing, . . .
(vi) this Court has not acquired jurisdiction over the persons of foreign defendants
WELCO and WESA. . . (Underscoring supplied)
Petitioners Motion for Reconsideration of public respondents Resolution dismissing their complaint
having been denied by the other assailed Order of June 18, 1996, they filed the present Petition for
Certiorari and Mandamus With Application for A Writ Of Preliminary Injunction And Prayer For A
Temporary Restraining Order directly with this Court in view of the "transcendental importance" of the
issues involved.
Petitioners contend that in dismissing their Amended Complaint, public respondent abdicated its
constitutional duty to exercise judicial review over the validity of the BNPP Contract, the loan
contracts, and the 1995 Settlement Agreement.
Petitioners further contend that, contrary to the finding of public respondent, petitioners did not
commit forum-shopping since there is no identity of parties and causes of action in the instant case
and in the complaint filed before the Manila RTC.

Finally, petitioners contend that they have sufficiently established that the injury caused to them by
the contracts are "actual, direct and immediate" to thus clothe them with standing.
The Solicitor General and WIPCO, opposing the petition, argue that no grave abuse of discretion
attended the issuance by public respondent of the assailed resolutions considering that, among other
things, petitioners are guilty of forum-shopping; petitioners have no legal standing; and the propriety
of entering into a settlement agreement involves a political question and is not subject to judicial
review.
The issues then are:
(1) Whether petitioners have legal standing;
(2) Whether petitioners are engaged in forum-shopping;
(3) Whether the validity of the Contract and the contracts of loan entered into by the Republic
and NPC with foreign banks to finance the construction of the BNPP, and the propriety of
entering into a Settlement Agreement are subject to judicial review; and
(4) Whether courts may set aside a final judgment rendered by a foreign court.
Legal Standing
In Integrated Bar of the Philippines v. Zamora,22 this Court defined legal standing as follows:
"Legal standing" or locus standi has been defined as a personal and substantial interest in the case
such that the party has sustained or will sustain direct injury as a result of the governmental act that
is being challenged. The term "interest" means a material interest, an interest in issue affected by the
decree, as distinguished from mere interest in the question involved, or a mere incidental interest.
The gist of the question of standing is whether a party alleges "such personal stake in the outcome of
the controversy as to assure that concrete adverseness which sharpens the presentation of issues
upon which the court depends for illumination of difficult constitutional questions." (Citations omitted;
emphasis supplied)
In public suits, the plaintiff, representing the general public, asserts a "public right" in assailing an
allegedly illegal official action. The plaintiff may be a person who is affected no differently from any
other person, and could be suing as a "stranger," or as a "citizen" or "taxpayer." To invest him with
locus standi, the plaintiff has to adequately show that he is entitled to judicial protection and has a
sufficient interest in the vindication of the asserted public right. 23
In the case of taxpayers suits, the party suing as a taxpayer must prove that he has sufficient
interest in preventing the illegal expenditure of money raised by taxation. Thus, taxpayers have been
allowed to sue where there is a claim that public funds are illegally disbursed or that public money is
being deflected to any improper purpose, or that public funds are wasted through the enforcement of
an invalid or unconstitutional law.24
More particularly, the taxpayer must establish that he has a personal and substantial interest in the
case and that he has sustained or will sustain direct injury as a result of its enforcement 25 or that he
stands to be benefited or injured by the judgment in the case, or is entitled to the avails of the suit. 26

Petitioners allegations in their Amended Complaint that the loan contracts entered into by the
Republic and NPC are serviced or paid through a disbursement of public funds are not disputed by
respondents, hence, they are invested with personality to institute the same.
Forum-Shopping
Forum shopping exists when, as a result of an adverse opinion in one forum, a party seeks a favorable
opinion (other than by appeal or certiorari) in another, or when he institutes two or more actions or
proceedings grounded on the same cause, on the gamble that one or the other court would make a
favorable disposition.27
As explained by this Court in First Philippine International Bank v. Court of Appeals, forum-shopping
exists where the elements of litis pendentia are present, and where a final judgment in one case will
amount to res judicata in the other. Thus, there is forum-shopping when, between an action pending
before this Court and another one, there exist: "a) identity of parties, or at least such parties as
represent the same interests in both actions, b) identity of rights asserted and relief prayed for, the
relief being founded on the same facts, and c) the identity of the two preceding particulars is such
that any judgment rendered in the other action, will, regardless of which party is successful amount
to res judicata in the action under consideration; said requisites also constitutive of the requisites for
auter action pendant or lis pendens." . . . [W]here a litigant sues the same party against whom
another action or actions for the alleged violation of the same right and the enforcement of the same
relief is/are still pending, the defense of litis pendentia in one case is a bar to the others; and, a final
judgment in one would constitute res judicata and thus would cause the dismissal of the rest." 28
In determining whether forum shopping exists, it is important to consider the vexation caused the
courts and parties-litigants by a party who asks different courts and/or administrative agencies to rule
on the same or related causes and/or grant the same or substantially the same reliefs, in the process
creating the possibility of conflicting decisions being rendered by the different fora upon the same
issues.29
In the present case, it is evident that, vis a vis the above-mentioned complaint filed in Manila, there
exists identity of parties or interests represented, as well as identity of rights or causes of action and
reliefs sought.
Thus, the first complaint which was instituted before the Manila RTC by the Anti-Graft League of the
Philippines, et al. as taxpayers suit,30 "Anti-Graft League of the Philippines, Inc., et al. v.
Westinghouse Electric Corp., et al.," docketed as Civil Case No. 93-66916, sought to declare null and
void the Contract, as well as the same loan contracts entered into by herein respondents Republic
and NPC with foreign banks, and to restrain said respondents from making further payments in
compliance with the loan contracts.31
It appears that the first complaint was dismissed by the Manila RTC upon a motion to dismiss. 32 It
further appears that instead of filing an appeal, the therein petitioners Anti-Graft League of the
Philippines, Inc. et al. filed a petition for certiorari with this Court, which was dismissed by Resolution
dated March 1, 1995,33 and that thereafter or on July 12, 1995, they filed a petition for
mandamus34 with the Court of Appeals praying for the following reliefs:
. . . that a temporary restraining order be ISSUED ex-parte enjoining respondent NATIONAL
POWER CORPORATION and the REPUBLIC OF THE PHILIPPINES from paying the loans in
question they contracted with respondent banks and insurance companies for a period of
TWENTY (20) DAYS from date of issuance; that after notice to respondents and within said period, said

temporary restraining order be CONVERTED into a preliminary injunction with bond as may be fixed
by the Court; that after hearing, judgment be RENDERED making the preliminary injunction
permanent and ordering respondent court to reinstate Civil Case No. 93-66916 and to declare
respondents WESTINGHOUSE ELECTRIC CORP. (WELCO) and WESTINGHOUSE INTERNATIONAL
PROJECTS CO. (WIPCO), respondents foreign banks and insurances companies IN DEFAULT . . .
(Emphasis supplied)
The above-said petition for mandamus was still pending before the appellate court when herein
petitioners filed their complaint, later amended, before the Quezon City RTC.
Petitioners do not deny that the first complaint and the petition for mandamus ("first set of cases")
and their complaint subject of the present petition involve the same causes of action, are founded
upon the same set of facts, and are taxpayers suits. Nevertheless, they argue that the first set of
cases and the present case do not have identity of parties since they were not among the petitioners
in the former.
Furthermore, petitioners assert that a taxpayers suit is not a class suit, hence, judgment in one case
does not amount to res judicata in the other.
At all events, petitioners contend that there is no absolute identity of causes of action since their
Amended Complaint includes the nullification of the Settlement Agreement, which was not raised in
the first set of cases.
Petitioners position does not impress.
A taxpayers action has been defined as follows:
A taxpayer's bill is essentially a class bill and can be filed only in the common interest of
all the taxpayers of the municipality, to prevent the wrongful expenditure of the money of the
municipality or the wasting of its assets. Schlanger v. West Berwick Borough, 261 Pa. 605, 608, 104
A. 764. A class bill, as its name implies, is a bill by several members of a class, on behalf
of themselves and all others in the class, and no relief can be granted upon it, except upon a
ground which is common to all the members of the class. [Citing cases]. Ashcom v. Westmont
Borough, 298 Pa. 203, 208, 148 A. 112, 114.35 (Emphasis supplied)
As to plaintiffs, both suits are brought by the plaintiff as a citizen and taxpayer, besides as an
individual, and therefore they are taxpayer class actions. x x x,
In Holman v. Bridges, 165 Ga. 296(2), 140 S.E. 886, this court held: "Where a taxpayer or property
owner brings an action against a county or its officers upon a matter of public or general interest to
all other taxpayers of such political subdivision, and the action either expressly or by necessary
implication is on their behalf, they are equally bound by the adjudication , and a judgment is a bar
to any subsequent proceeding by them or any of them seeking similar relief upon the
same facts. x x x"36 (Emphasis supplied)
The general principle of class actions that a judgment in favor of or against the parties representing
the general class is, under the doctrine of res judicata, in favor of or against all who are thus
represented applies to litigations instituted by taxpayers.

Accordingly, in a suit brought by citizens and taxpayers to determine a public right or a matter of
public interest, all citizens and taxpayers are regarded as parties to the proceedings by
representation and are bound by the judgment rendered therein. 37
The plaintiff there was another taxpayer of the city, suing in the status of citizen and taxpayer, and
the city itself was a co-defendant. The action was instituted September 3, 1958. The first count of the
complaint, Inter alia,charged the affiliation agreement here in question to be void, illegal and of no
effect because the City ignored the requirements of the local budget law, N.J.S. 40:2-1 et seq.,
particularly 40:2-29 and the law pertaining to municipal contracts, particularly 40:50-6, as to the
necessity for either budgeting the contract or passing an appropriation ordinance * * *.' Subsequently
the plaintiff in that action made a motion for summary judgment on the first count alone, and
defendants moved for summary judgment on all counts. We have examined the briefs and affidavits
submitted to the trial court on those motions, and it appears therefrom that the matter of the alleged
invalidity of the affiliation agreement for alleged noncompliance with N.J.S.A. 40:2-29 and 40:506 was argued to the court. The judgment of the court denied plaintiff's motion and granted those of
defendants. No appeal therefrom was taken.
xxxx
Petitioner first seeks to avoid the effect of the prior judgment on the ground that the subject matter of
the two respective proceedings differs. However, this is not, properly speaking, a case of different
subject matter, but of different causes of action. Such a difference is immaterial if a postulate of law
essential to the success of the party in the later proceeding has been distinctly put in issue and
adjudicated Contra in the earlier, particularly where, as here, the subject matter in both proceedings
arises out of the same transaction. See 30A Am.Jur., Judgments, s 360, p. 401; Restatement,
Judgments, ss 68, 70, comment pp. 319, 320; N.J. Highway Authority v. Renner, 18 N.J. 485, 493, 494,
114 A.2d 555 (1955); Mazzilli v. Accident, etc., Casualty Ins. Co., etc., 26 N.J. 307, 314, 139 A.2d 741
(1958) (quotation from City of Paterson v. Baker, 51 N.J.Eq. 49, 26 A. 324 (Ch.1893)).
Nor will it avail petitioner that the taxpayer in the earlier action was one other than
herself. A taxpayer attacking governmental action in which he has no peculiar personal or
special interest is taken to be suing as a representative of all taxpayers as a class. The
general rule is that in the absence of fraud or collusion a judgment for or against a
governmental body in such an action is binding and conclusive on all residents, citizens
and taxpayers with respect to matters adjudicated which are of general and public
interest. 50 C.J.S. Judgments s 796, p. 337; cf. Edelstein v. Asbury Park, 51 N.J.Super. 368, 389, 143
A.2d 860 (App.Div.1958); see also 18 McQuillin, Municipal Corporations (3d ed. 1950), s 52.50, pp.
124, 125; 52 Am.Jur., Taxpayers' Actions, s 38, p. 26.38 (Emphasis and underscoring supplied)
Hence, it is to no avail that petitioners invoke lack of identity of parties. For petitioners in the first set
of cases and in the instant case are suing under a common or general interest on a subject matter in
a representative capacity, for the benefit of all taxpayers as a class. As this Court has repeatedly
ruled, identity of parties needed to satisfy the requirement in lis pendens or res judicata requires only
an identity of interest, not a literal identity of parties.39
As regards identity of causes of action, petitioners do not deny that the first set of cases the
complaint filed in Manila and the petition for mandamus filed before the Court of Appeals involves
the same causes of action grounded on the same set of facts as that of the Amended Complaint filed
by them. Indeed, the petition for mandamus essentially sought to review the Manila RTC order
dismissing the first complaint. Petitioners incorporation of an additional cause of action in their

Amended Complaint filed before the Quezon City RTC, occasioned merely by subsequent events, does
not absolve petitioners from forum shopping.
Additionally, petitioners violated the requirement to report to the courts the fact that a similar action
had been filed or is already pending before the courts, regardless of who initiated such similar action.
For Section 5, Rule 7 of the Rules of Court requires:
SEC. 5. Certification against forum shopping. The plaintiff or principal party shall certify under oath
in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification
annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any
action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and,
to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such
pending action or claim, a complete statement of the present status thereof; and (c) if he
should thereafter learn that the same or similar action or claim has been filed or is
pending, he shall report that fact within five (5) days therefrom to the court wherein his
aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for the
dismissal of the case without prejudice, unless otherwise provided upon motion and after
hearing. The submission of a false certification or non-compliance with any of the undertakings
therein shall constitute indirect contempt of court, without prejudice to the corresponding
administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and
deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall
constitute direct contempt, as well as a cause for administrative sanctions. (Emphasis and
underscoring supplied)
Granted that petitioners were initially unaware of the existence of the first set of cases, albeit their
counsel was one of the petitioners therein, such fact was already brought to their attention during the
hearing of their application for a temporary restraining order 40 conducted after the filing of their
Complaint. When petitioners subsequently filed their Amended Complaint, however, they failed to
report the pendency of the petition for mandamus before the appellate court bearing on the dismissal
by the Manila RTC of the complaint filed by the Anti-Graft League of the Philippines, Inc. Public
respondents dismissal of the Amended Complaint on the ground of forum shopping is thus in order.
This leaves it unnecessary to pass on the rest of the issues.
WHEREFORE, the petition is DENIED.
Costs against petitioners.
SO ORDERED.
CONCHITA
Associate Justice

ARTURO M. DE CASTRO,
Petitioner,

CARPIO

G. R. No. 191002

MORALES

- versus JUDICIAL AND BAR COUNCIL (JBC)

and
PRESIDENT
GLORIA
MACAPAGAL ARROYO,
Respondents.
x-----------------------x
JAIME N. SORIANO,
Petitioner,

G.R. No. 191032

- versus JUDICIAL AND BAR COUNCIL (JBC),

Respondent.
x-----------------------x
PHILIPPINE
CONSTITUTION
ASSOCIATION (PHILCONSA),
Petitioner,

G.R. No. 191057

- versus JUDICIAL AND BAR COUNCIL (JBC),

Respondent.
x-----------------------x
IN RE APPLICABILITY OF SECTION
15,
ARTICLE
VII
OF
THE
CONSTITUTION TO APPOINTMENTS
TO THE JUDICIARY,
ESTELITO P. MENDOZA,
Petitioner,
x-----------------------x
JOHN G. PERALTA,
Petitioner,
- versus JUDICIAL AND BAR COUNCIL (JBC).
Respondent.
x - - - - - - - - - - - - - - - - - - - - - - - -x
PETER IRVING CORVERA;
CHRISTIAN ROBERT S. LIM;
ALFONSO V. TAN, JR.;
NATIONAL UNION OF
LAWYERS;

PEOPLES

MARLOU B. UBANO;
INTEGRATED
BAR
OF
THE
PHILIPPINES-DAVAO
DEL
SUR
CHAPTER,
represented
by
its
Immediate Past President, ATTY.
ISRAELITO P. TORREON, and the
latter in his own personal capacity
as a MEMBER of the PHILIPPINE
BAR;

A.M. No. 10-2-5-SC

G.R. No. 191149

MITCHELL JOHN L. BOISER;

BAGONG
ALYANSANG
BAYAN
(BAYAN) CHAIRMAN DR. CAROLINA
P. ARAULLO; BAYAN SECRETARY
GENERAL RENATO M. REYES, JR.;
CONFEDERATION
FOR
UNITY,
RECOGNITION AND ADVANCE-MENT
OF
GOVERNMENT
EMPLOYEES
(COURAGE) CHAIRMAN FERDINAND
GAITE; KALIPUNAN NG DAMAYANG
MAHIHIRAP (KADAMAY) SECRETARY
GENERAL
GLORIA
ARELLANO;
ALYANSA
NG
NAGKAKAISANG
KABATAAN NG SAMBAYANAN PARA
SA
KAUNLARAN
(ANAKBAYAN)
CHAIRMAN KEN LEONARD RAMOS;
TAYO ANG PAG-ASA CONVENOR
ALVIN PETERS; LEAGUE OF FILIPINO
STUDENTS (LFS) CHAIRMAN JAMES
MARK TERRY LACUANAN RIDON;
NATIONAL UNION OF STUDENTS OF
THE PHILIPPINES (NUSP) CHAIRMAN
EINSTEIN
RECEDES;
COLLEGE
EDITORS
GUILD
OF
THE
PHILIPPINES
(CEGP)
CHAIRMAN
VIJAE ALQUISOLA; and STUDENT
CHRISTIAN MOVEMENT OF THE
PHILIPPINES (SCMP) CHAIRMAN MA.
CRISTINA ANGELA GUEVARRA;
WALDEN F. BELLO
ANN P. ROSALES;

and

LORETTA

WOMEN
TRIAL
LAWYERS
ORGANIZATION
OF
THE
PHILIPPINES,
represented
by
YOLANDA QUISUMBINGJAVELLANA;
BELLEZA
ALOJADO
DEMAISIP; TERESITA GANDIONCOOLEDAN; MA. VERENA KASILAGVILLANUEVA;
MARILYN
STA.
ROMANA; LEONILA DE JESUS; and
GUINEVERE DE LEON.
Intervenors.
x - - - - - - - - - - - - - - - - - - - - - - - -x
ATTY. AMADOR Z. TOLENTINO, JR.,
(IBP
GovernorSouthern Luzon),
and
ATTY. ROLAND B. INTING
(IBP GovernorEastern Visayas),
Petitioners,
- versus JUDICIAL AND BAR COUNCIL (JBC),
Respondent.

G.R. No. 191342

x-----------------------x
PHILIPPINE BAR ASSOCIATION, INC.,
Petitioner,

- versus G.R. No. 191420

Present:
JUDICIAL AND BAR COUNCIL and
HER
EXCELLENCY
GLORIA
MACAPAGAL-ARROYO,
Respondents.

PUNO, C.J.,
CARPIO,
CORONA,
CARPIO MORALES,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ, and
MENDOZA, JJ.

Promulgated:
March 17, 2010
x-----------------------------------------------------------------------------------------x
DECISION
BERSAMIN, J.:
The compulsory retirement of Chief Justice Reynato S. Puno by May 17, 2010 occurs just days after
the coming presidential elections on May 10, 2010. Even before the event actually happens, it is
giving rise to many legal dilemmas. May the incumbent President appoint his successor, considering
that Section 15, Article VII (Executive Department) of the Constitution prohibits the President or
Acting President from making appointments within two months immediately before the next
presidential elections and up to the end of his term, except temporary appointments to executive
positions when continued vacancies therein will prejudice public service or endanger public safety?
What is the relevance of Section 4 (1), Article VIII (Judicial Department) of the Constitution, which
provides that any vacancy in the Supreme Court shall be filled within 90 days from the occurrence
thereof, to the matter of the appointment of his successor? May the Judicial and Bar Council (JBC)
resume the process of screening the candidates nominated or being considered to succeed Chief
Justice Puno, and submit the list of nominees to the incumbent President even during the period of

the prohibition under Section 15, Article VII? Doesmandamus lie to compel the submission of the
shortlist of nominees by the JBC?
Precs of the Consolidated Cases
Petitioners Arturo M. De Castro and John G. Peralta respectively commenced G.R. No.
191002[1] and G.R. No. 191149[2] as special civil actions for certiorari andmandamus, praying that the
JBC be compelled to submit to the incumbent President the list of at least three nominees for the
position of the next Chief Justice.
In G.R. No. 191032, [3] Jaime N. Soriano, via his petition for prohibition, proposes to prevent the
JBC from conducting its search, selection and nomination proceedings for the position of Chief Justice.
In G.R. No. 191057, a special civil action for mandamus,[4] the Philippine Constitution
Association (PHILCONSA) wants the JBC to submit its list of nominees for the position of Chief Justice
to be vacated by Chief Justice Puno upon his retirement on May 17, 2010, because the incumbent
President is not covered by the prohibition that applies only to appointments in the Executive
Department.
In Administrative Matter No. 10-2-5-SC, [5] petitioner Estelito M. Mendoza, a former Solicitor General,
seeks a ruling from the Court for the guidance of the JBC on whether Section 15, Article VII applies to
appointments to the Judiciary.
In G.R. No. 191342,[6] which the Court consolidated on March 9, 2010 with the petitions earlier filed,
petitioners Amador Z. Tolentino, Jr. and Roland B. Inting, Integrated Bar of the Philippines (IBP)
Governors for Southern Luzon and Eastern Visayas, respectively, want to enjoin and restrain the JBC
from submitting a list of nominees for the position of Chief Justice to the President for appointment
during the period provided for in Section 15, Article VII.
All the petitions now before the Court pose as the principal legal question whether the incumbent
President can appoint the successor of Chief Justice Puno upon his retirement. That question is
undoubtedly impressed with transcendental importance to the Nation, because the appointment of
the Chief Justice is any Presidents most important appointment.
A precedent frequently cited is In Re Appointments Dated March 30, 1998 of Hon. Mateo A.
Valenzuela and Hon. Placido B. Vallarta as Judges of the Regional Trial Court of Branch 62, Bago City
and of Branch 24, Cabanatuan City, respectively (Valenzuela),[7] by which the Court held that Section
15, Article VII prohibited the exercise by the President of the power to appoint to judicial positions
during the period therein fixed.

In G.R. No. 191002, De Castro submits that the conflicting opinions on the issue expressed by
legal luminaries one side holds that the incumbent President is prohibited from making appointments
within two months immediately before the coming presidential elections and until the end of her term
of office as President on June 30, 2010, while the other insists that the prohibition applies only to
appointments to executive positions that may influence the election and, anyway, paramount
national interest justifies the appointment of a Chief Justice during the election ban has impelled the
JBC to defer the decision to whom to send its list of at least three nominees, whether to the
incumbent President or to her successor. [8] He opines that the JBC is thereby arrogating unto itself the
judicial function that is not conferred upon it by the Constitution, which has limited it to the task of
recommending appointees to the Judiciary, but has not empowered it to finally resolve constitutional
questions, which is the power vested only in the Supreme Court under the Constitution. As such, he
contends that the JBC acted with grave abuse of discretion in deferring the submission of the list of
nominees to the President; and that a final and definitive resolution of the constitutional questions
raised above would diffuse (sic) the tension in the legal community that would go a long way to keep
and maintain stability in the judiciary and the political system. [9]
In G.R. No. 191032, Soriano offers the view that the JBC committed a grave abuse of discretion
amounting to lack or excess of its jurisdiction when it resolved unanimously on January 18, 2010 to
open the search, nomination, and selection process for the position of Chief Justice to succeed Chief
Justice Puno, because the appointing authority for the position of Chief Justice is the Supreme Court
itself, the Presidents authority being limited to the appointment of the Members of the Supreme
Court. Hence, the JBC should not intervene in the process, unless a nominee is not yet a Member of
the Supreme Court.[10]

For its part, PHILCONSA observes in its petition in G.R. No. 191057 that unorthodox and
exceptional circumstances spawned by the discordant interpretations, due perhaps to a perfunctory
understanding, of Sec. 15, Art. VII in relation to Secs. 4(1), 8(5) and 9, Art. VIII of the Constitution
have bred a frenzied inflammatory legal debate on the constitutional provisions mentioned that has
divided the bench and the bar and the general public as well, because of its dimensional impact to
the nation and the people, thereby fashioning transcendental questions or issues affecting the JBCs
proper exercise of its principal function of recommending appointees to the Judiciary by submitting
only to the President (not to the next President) a list of at least three nominees prepared by the
Judicial and Bar Council for every vacancy from which the members of the Supreme Court and judges
of the lower courts may be appointed.[11] PHILCONSA further believes and submits that now is the
time to revisit and review Valenzuela, the strange and exotic Decision of the Court en banc.[12]
Peralta states in his petition in G.R. No. 191149 that mandamus can compel the JBC to
immediately transmit to the President, within a reasonable time, its nomination list for the position of
chief justice upon the mandatory retirement of Chief Justice Reynato S. Puno, in compliance with its

mandated duty under the Constitution in the event that the Court resolves that the President can
appoint a Chief Justice even during the election ban under Section 15, Article VII of the Constitution.
[13]

The petitioners in G.R. No. 191342 insist that there is an actual controversy, considering that
the JBC has initiated the process of receiving applications for the position of Chief Justice and has in
fact begun the evaluation process for the applications to the position, and is perilously near
completing the nomination process and coming up with a list of nominees for submission to the
President, entering into the period of the ban on midnight appointments on March 10, 2010, which
only highlights the pressing and compelling need for a writ of prohibition to enjoin such alleged
ministerial function of submitting the list, especially if it will be cone within the period of the ban on
midnight appointments.[14]
Antecedents
These cases trace their genesis to the controversy that has arisen from the forthcoming
compulsory retirement of Chief Justice Puno on May 17, 2010, or seven days after the presidential
election. Under Section 4(1), in relation to Section 9, Article VIII, that vacancy shall be filled within
ninety days from the occurrence thereof from a list of at least three nominees prepared by the Judicial
and Bar Council for every vacancy.
On December 22, 2009, Congressman Matias V. Defensor, an ex officio member of the JBC,
addressed a letter to the JBC, requesting that the process for nominations to the office of the Chief
Justice be commenced immediately.
In its January 18, 2010 meeting en banc, therefore, the JBC passed a resolution,[15] which reads:
The JBC, in its en banc meeting of January 18, 2010, unanimously agreed to start
the process of filling up the position of Chief Justice to be vacated on May 17, 2010 upon
the retirement of the incumbent Chief Justice Honorable Reynato S. Puno.
It will publish the opening of the position for applications or recommendations;
deliberate on the list of candidates; publish the names of candidates; accept comments
on or opposition to the applications; conduct public interviews of candidates; and
prepare the shortlist of candidates.
As to the time to submit this shortlist to the proper appointing authority, in the
light of the Constitution, existing laws and jurisprudence, the JBC welcomes and will
consider all views on the matter.
18 January 2010.

(sgd.)
MA. LUISA D. VILLARAMA
Clerk of Court &

Ex-Officio Secretary
Judicial and Bar Council

As a result, the JBC opened the position of Chief Justice for application or recommendation, and
published for that purpose its announcement dated January 20, 2010,[16] viz:
The Judicial and Bar Council (JBC) announces the opening for application or
recommendation, of the position of CHIEF JUSTICE OF THE SUPREME COURT, which will
be vacated on 17 May 2010 upon the retirement of the incumbent Chief Justice, HON.
REYNATO S. PUNO.
Applications or recommendations for this position must be submitted not later
than 4 February 2010 (Thursday) to the JBC Secretariat xxx:
The announcement was published on January 20, 2010 in the Philippine Daily Inquirer and The
Philippine Star.[17]
Conformably with its existing practice, the JBC automatically considered for the position of Chief
Justice the five most senior of the Associate Justices of the Court, namely: Associate Justice Antonio T.
Carpio; Associate Justice Renato C. Corona; Associate Justice Conchita Carpio Morales; Associate
Justice Presbitero J. Velasco, Jr.; and Associate Justice Antonio Eduardo B. Nachura. However, the last
two declined their nomination through letters dated January 18, 2010 and January 25, 2010,
respectively.[18]
Others either applied or were nominated. Victor Fernandez, the retired Deputy Ombudsman for Luzon,
applied, but later formally withdrew his name from consideration through his letter dated February 8,
2010. Candidates who accepted their nominations without conditions were Associate Justice Renato
C. Corona; Associate Justice Teresita J. Leonardo-De Castro; Associate Justice Arturo D. Brion; and
Associate

Justice

Edilberto

G.

Sandoval

(Sandiganbayan).

Candidates

who

accepted

their

nominations with conditions were Associate Justice Antonio T. Carpio and Associate Justice Conchita
Carpio Morales.[19] Declining their nominations were Atty. Henry Villarica (via telephone conversation
with the Executive Officer of the JBC on February 5, 2010) and Atty. Gregorio M. Batiller, Jr.
(via telephone conversation with the Executive Officer of the JBC onFebruary 8, 2010). [20]
The JBC excluded from consideration former RTC Judge Florentino Floro (for failure to meet the
standards set by the JBC rules); and Special Prosecutor Dennis Villa-Ignacio of the Office of the
Ombudsman (due to cases pending in the Office of the Ombudsman). [21]
In its meeting of February 8, 2010, the JBC resolved to proceed to the next step of announcing the
names of the following candidates to invite the public to file their sworn complaint, written report, or
opposition, if any, not later than February 22, 2010, to wit: Associate Justice Carpio, Associate Justice
Corona, Associate Justice Carpio Morales, Associate Justice Leonardo-De Castro, Associate Justice

Brion, and Associate Justice Sandoval. The announcement came out in the Philippine Daily
Inquirer and The Philippine Star issues of February 13, 2010.[22]
Issues
Although it has already begun the process for the filling of the position of Chief Justice Puno in
accordance with its rules, the JBC is not yet decided on when to submit to the President its list of
nominees for the position due to the controversy now before us being yet unresolved. In the
meanwhile, time is marching in quick step towards May 17, 2010 when the vacancy occurs upon the
retirement of Chief Justice Puno.
The actions of the JBC have sparked a vigorous debate not only among legal luminaries, but
also among non-legal quarters, and brought out highly disparate opinions on whether the incumbent
President can appoint the next Chief Justice or not. Petitioner Mendoza notes that in Valenzuela, which
involved the appointments of two judges of the Regional Trial Court, the Court addressed this issue
now before us as an administrative matter to avoid any possible polemics concerning the matter, but
he opines that the polemics leading to Valenzuela would be miniscule [sic] compared to the polemics
that have now erupted in regard to the current controversy, and that unless put to a halt, and this
may only be achieved by a ruling from the Court, the integrity of the process and the credibility of
whoever is appointed to the position of Chief Justice, may irreparably be impaired. [23]
Accordingly, we reframe the issues as submitted by each petitioner in the order of the chronological
filing of their petitions.

G.R. No. 191002

a. Does the JBC have the power and authority to resolve the constitutional question of
whether the incumbent President can appoint a Chief Justice during the election ban
period?
b. Does the incumbent President have the power and authority to appoint during the
election ban the successor of Chief Justice Puno when he vacates the position of
Chief Justice on his retirement on May 17, 2010?
G.R. No. 191032
a. Is the power to appoint the Chief Justice vested in the Supreme Court en banc?
G.R. No. 191057
a. Is the constitutional prohibition against appointment under Section 15, Article VII of
the Constitution applicable only to positions in the Executive Department?

b. Assuming that the prohibition under Section 15, Article VII of the Constitution also
applies to members of the Judiciary, may such appointments be excepted because
they are impressed with public interest or are demanded by the exigencies of public
service, thereby justifying these appointments during the period of prohibition?
c. Does the JBC have the authority to decide whether or not to include and submit the
names of nominees who manifested interest to be nominated for the position of
Chief Justice on the understanding that his/her nomination will be submitted to
the next President in view of the prohibition against presidential appointments from
March 11, 2010 until June 30, 2010?
A. M. No. 10-2-5-SC
a. Does Section 15, Article VII of the Constitution apply to appointments to positions in
the Judiciary under Section 9, Article VIII of the Constitution?
b. May President Gloria Macapagal-Arroyo make appointments to the Judiciary
after March 10, 2010, including that for the position of Chief Justice after Chief
Justice Puno retires on May 17, 2010?
G.R. No. 191149
a. Does the JBC have the discretion to withhold the submission of the short list to
President Gloria Macapagal-Arroyo?
G.R. No. 191342
a.

Does the JBC have the authority to submit the list of nominees to the incumbent
President without committing a grave violation of the Constitution and jurisprudence
prohibiting the incumbent President from making midnight appointments two
months immediately preceding the next presidential elections until the end of her
term?

b.

Is any act performed by the JBC, including the vetting of the candidates for the
position of Chief Justice, constitutionally invalid in view of the JBCs illegal
composition allowing each member from the Senate and the House of
Representatives to have one vote each?

On February 16, 2010, the Court directed the JBC and the Office of the Solicitor General (OSG)
to comment on the consolidated petitions, except that filed in G.R. No. 191342.
On February 26, 2010, the JBC submitted its comment, reporting therein that the next stage of
the process for the selection of the nominees for the position of Chief Justice would be the public
interview of the candidates and the preparation of the short list of candidates, including the interview
of the constitutional experts, as may be needed.[24] It stated:[25]
Likewise, the JBC has yet to take a position on when to submit the shortlist
to the proper appointing authority, in light of Section 4 (1), Article VIII of
the Constitution, which provides that vacancy in the Supreme Court shall
be filled within ninety (90) days from the occurrence thereof, Section 15,
Article VII of the Constitution concerning the ban on Presidential
appointments two (2) months immediately before the next presidential

elections and up to the end of his term and Section 261 (g), Article XXII of
the Omnibus Election Code of the Philippines.
12. Since the Honorable Supreme Court is the final interpreter of the Constitution, the
JBC will be guided by its decision in these consolidated Petitions and Administrative
Matter.

On February 26, 2010, the OSG also submitted its comment, essentially stating that the
incumbent President can appoint the successor of Chief Justice Puno upon his retirement by May 17,
2010.
The OSG insists that: (a) a writ of prohibition cannot issue to prevent the JBC from performing
its principal function under the Constitution to recommend appointees in the Judiciary; (b) the JBCs
function to recommend is a continuing process, which does not begin with each vacancy or end with
each nomination, because the goal is to submit the list of nominees to Malacaang on the very day the
vacancy arises;[26] the JBC was thus acting within its jurisdiction when it commenced and set in motion
the process of selecting the nominees to be submitted to the President for the position of Chief Justice
to be vacated by Chief Justice Puno; [27] (c) petitioner Sorianos theory that it is the Supreme Court, not
the President, who has the power to appoint the Chief Justice, is incorrect, and proceeds from his
misinterpretation of the phrase members of the Supreme Court found in Section 9, Article VIII of the
Constitution as referring only to the Associate Justices, to the exclusion of the Chief Justice; [28] (d) a
writ of mandamus can issue to compel the JBC to submit the list of nominees to the President,
considering that its duty to prepare the list of at least three nominees is unqualified, and the
submission of the list is a ministerial act that the JBC is mandated to perform under the Constitution;
as such, the JBC, the nature of whose principal function is executive, is not vested with the power to
resolve who has the authority to appoint the next Chief Justice and, therefore, has no discretion to
withhold the list from the President; [29] and (e) a writ of mandamus cannot issue to compel the JBC to
include or exclude particular candidates as nominees, considering that there is no imperative duty on
its part to include in or exclude from the list particular individuals, but, on the contrary, the JBCs
determination of who it nominates to the President is an exercise of a discretionary duty. [30]
The OSG contends that the incumbent President may appoint the next Chief Justice, because
the prohibition under Section 15, Article VII of the Constitution does not apply to appointments in the
Supreme Court. It argues that any vacancy in the Supreme Court must be filled within 90 days from
its occurrence, pursuant to Section 4(1), Article VIII of the Constitution; [31] that in their deliberations
on the mandatory period for the appointment of Supreme Court Justices, the framers neither
mentioned nor referred to the ban against midnight appointments, or its effects on such period, or
vice versa;[32] that had the framers intended the prohibition to apply to Supreme Court appointments,
they could have easily expressly stated so in the Constitution, which explains why the prohibition
found in Article VII (Executive Department) was not written in Article VIII (Judicial Department); and
that the framers also incorporated in Article VIII ample restrictions or limitations on the Presidents

power to appoint members of the Supreme Court to ensure its independence from political
vicissitudes and its insulation from political pressures, [33] such as stringent qualifications for the
positions, the establishment of the JBC, the specified period within which the President shall appoint a
Supreme Court Justice.
The OSG posits that although Valenzuela involved the appointment of RTC Judges, the situation
now refers to the appointment of the next Chief Justice to which the prohibition does not apply; that,
at any rate, Valenzuela even recognized that there might be the imperative need for an appointment
during the period of the ban, like when the membership of the Supreme Court should be so reduced
that it will have no quorum, or should the voting on a particular important question requiring
expeditious resolution be divided;[34] and that Valenzuela also recognized that the filling of vacancies
in the Judiciary is undoubtedly in the public interest, most especially if there is any compelling reason
to justify the making of the appointments during the period of the prohibition. [35]
Lastly, the OSG urges that there are now undeniably compelling reasons for the incumbent
President to appoint the next Chief Justice, to wit: (a) a deluge of cases involving sensitive political
issues is quite expected; [36] (b) the Court acts as the Presidential Electoral Tribunal (PET), which,
sitting en banc, is the sole judge of all contests relating to the election, returns, and qualifications of
the President and Vice President and, as such, has the power to correct manifest errors on the
statement of votes (SOV) and certificates of canvass (COC); [37] (c) if history has shown that
during ordinary times the Chief Justice was appointed immediately upon the occurrence of the
vacancy, from the time of the effectivity of the Constitution, there is now even more reason to
appoint the next Chief Justice immediately upon the retirement of Chief Justice Puno; [38] and (d) should
the next Chief Justice come from among the incumbent Associate Justices of the Supreme Court,
thereby causing a vacancy, it also becomes incumbent upon the JBC to start the selection process for
the filling up of the vacancy in accordance with the constitutional mandate. [39]

On March 9, 2010, the Court admitted the following comments/oppositions-in-intervention, to

wit:

(a) The opposition-in-intervention dated February 22, 2010 of Atty. Peter Irving Corvera
(Corvera);[40]
(b) The opposition-in-intervention dated February 22, 2010 of Atty. Christian Robert S.
Lim (Lim);
(c) The opposition-in-intervention dated February 23, 2010 of Atty. Alfonso V. Tan, Jr.
(Tan);
(d) The comment/opposition-in-intervention dated March 1, 2010 of the National Union
of Peoples Lawyers (NUPL);

(e) The opposition-in-intervention dated February 25, 2010 of Atty. Marlou B. Ubano
(Ubano);
(f) The opposition-in-intervention dated February 25, 2010 of Integrated Bar of the
Philippines-Davao del Sur Chapter and its Immediate Past President, Atty. Israelito P.
Torreon (IBP- Davao del Sur);
(g) The opposition-in-intervention dated February 26, 2010 of Atty. Mitchell John L.
Boiser (Boiser);
(h)The consolidated comment/opposition-in-intervention dated February 26, 2010 of
BAYAN Chairman Dr. Carolina P. Araullo; BAYAN Secretary General Renato M. Reyes,
Jr.; Confederation for Unity, Recognition and Advancement of Government
Employees (COURAGE) Chairman Ferdinand Gaite; Kalipunan ng Damayang
Mahihirap (KADAMAY) Secretary General Gloria Arellano; Alyansa ng Nagkakaisang
Kabataan ng Samayanan Para sa Kaunlaran (ANAKBAYAN) Chairman Ken Leonard
Ramos; Tayo ang Pag-asa Convenor Alvin Peters; League of Filipino Students (LFS)
Chairman James Mark Terry Lacuanan Ridon; National Union of Students of the
Philippines (NUSP) Chairman Einstein Recedes, College Editors Guild of the
Philippines (CEGP) Chairman Vijae Alquisola; and Student Christian Movement of the
Philippines (SCMP) Chairman Ma. Cristina Angela Guevarra (BAYAN et al.);
(i)

The opposition-in-intervention dated March 3, 2010 of Walden F. Bello and Loretta

Ann P. Rosales (Bello et al.); and

(j) The consolidated comment/opposition-in-intervention dated March 4, 2010 of the

Women Trial Lawyers Organization of the Philippines (WTLOP), represented by Atty.
Yolanda Quisumbing-Javellana; Atty. Belleza Alojado Demaisip; Atty. Teresita
Gandionco-Oledan; Atty. Ma. Verena Kasilag-Villanueva; Atty. Marilyn Sta. Romana;
Atty. Leonila de Jesus; and Atty. Guinevere de Leon (WTLOP).

Intervenors Tan, WTLOP, BAYAN et al., Corvera, IBP Davao del Sur, and NUPL take the position that De
Castros petition was bereft of any basis, because under Section 15, Article VII, the outgoing President
is constitutionally banned from making any appointments from March 10, 2010 until June 30, 2010,
including the appointment of the successor of Chief Justice Puno. Hence, mandamus does not lie to
compel the JBC to submit the list of nominees to the outgoing President if the constitutional
prohibition is already in effect. Tan adds that the prohibition against midnight appointments was
applied by the Court to the appointments to the Judiciary made by then President Ramos, with the
Court holding that the duty of the President to fill the vacancies within 90 days from occurrence of the
vacancies (for the Supreme Court) or from the submission of the list (for all other courts) was not an
excuse to violate the constitutional prohibition.
Intervenors Tan, Ubano, Boiser, Corvera, NULP, BAYAN et al., and Bello et al. oppose the
insistence that Valenzuela recognizes the possibility that the President may appoint the next Chief
Justice if exigent circumstances warrant the appointment, because that recognition is obiter
dictum; and aver that the absence of a Chief Justice or even an Associate Justice does not cause epic
damage or absolute disruption or paralysis in the operations of the Judiciary. They insist that even
without the successor of Chief Justice Puno being appointed by the incumbent President, the Court is

allowed to sit and adjudge en banc or in divisions of three, five or seven members at its discretion;
that a full membership of the Court is not necessary; that petitioner De Castros fears are unfounded
and baseless, being based on a mere possibility, the occurrence of which is entirely unsure; that it is
not in the national interest to have a Chief Justice whose appointment is unconstitutional and,
therefore, void; and that such a situation will create a crisis in the judicial system and will worsen an
already vulnerable political situation.
ice is imperative for the stability of the judicial system and the political situation in the country when
the election-related questions reach the Court as false, because there is an existing law on filling the
void brought about by a vacancy in the office of Chief Justice; that the law is Section 12 of the
Judiciary Act of 1948, which has not been repealed by Batas Pambansa Blg. 129 or any other law; that
a temporaryor an acting Chief Justice is not anathema to judicial independence; that the designation
of an acting Chief Justice is not only provided for by law, but is also dictated by practical necessity;
that the practicewas intended to be enshrined in the 1987 Constitution, but the Commissioners
decided not to write it in the Constitution on account of the settled practice; that the practice
was followed under the 1987 Constitution, when, in 1992, at the end of the term of Chief Justice
Marcelo B. Fernan, Associate Justice Andres Narvasa assumed the position as Acting Chief Justice prior
to his official appointment as Chief Justice; that said filling up of a vacancy in the office of the Chief
Justice was acknowledged and even used by analogy in the case of the vacancy of the Chairman of
the Commission on Elections, perBrillantes v. Yorac, 192 SCRA 358; and that the history of the
Supreme Court has shown that this rule of succession has been repeatedly observed and has become
a part of its tradition.
Intervenors Ubano, Boiser, NUPL, Corvera, and Lim maintain that the Omnibus Election
Code penalizes as an election offense the act of any government official who appoints, promotes, or
gives any increase in salary or remuneration or privilege to any government official or employee
during the period of 45 days before a regular election; that the provision covers all appointing heads,
officials, and officers of a government office, agency or instrumentality, including the President; that
for the incumbent President to appoint the next Chief Justice upon the retirement of Chief Justice
Puno, or during the period of the ban under the Omnibus Election Code, constitutes an election
offense; that even an appointment of the next Chief Justice prior to the election ban is fundamentally
invalid and without effect because there can be no appointment until a vacancy occurs; and that the
vacancy for the position can occur only by May 17, 2010.

Intervenor Boiser adds that De Castros prayer to compel the submission of nominees by the
JBC to the incumbent President is off-tangent because the position of Chief Justice is still not vacant;
that to speak of a list, much more a submission of such list, before a vacancy occurs is glaringly
premature; that the proposed advance appointment by the incumbent President of the next Chief
Justice will be unconstitutional; and that no list of nominees can be submitted by the JBC if there is no
vacancy.
All the intervenors-oppositors submit that Section 15, Article VII makes no distinction between the
kinds of appointments made by the President; and that the Court, inValenzuela, ruled that the
appointments by the President of the two judges during the prohibition period were void.

Intervenor WTLOP posits that Section 15, Article VII of the 1987 Constitution does not apply
only to the appointments in the Executive Department, but also to judicial appointments, contrary to
the submission of PHILCONSA; that Section 15 does not distinguish; and that Valenzuela already
interpreted the prohibition as applicable to judicial appointments.
Intervenor WTLOP further posits that petitioner Sorianos contention that the power to appoint
the Chief Justice is vested, not in the President, but in the Supreme Court, is utterly baseless, because
the Chief Justice is also a Member of the Supreme Court as contemplated under Section 9, Article VIII;
and that, at any rate, the term members was interpreted in Vargas v. Rillaroza (G.R. No. L-1612,
February 26, 1948) to refer to the Chief Justice and the Associate Justices of the Supreme Court; that
PHILCONSAs prayer that the Court pass a resolution declaring that persons who manifest their
interest as nominees, but with conditions, shall not be considered nominees by the JBC is
diametrically opposed to the arguments in the body of its petition; that such glaring inconsistency
between the allegations in the body and the relief prayed for highlights the lack of merit of
PHILCONSAs petition; that the role of the JBC cannot be separated from the constitutional prohibition
on the President; and that the Court must direct the JBC to follow the rule of law, that is, to submit the
list of nominees only to the next duly elected President after the period of the constitutional ban
against midnight appointments has expired.
Oppositor IBP Davao del Sur opines that the JBC because it is neither a judicial nor a quasijudicial body has no duty under the Constitution to resolve the question of whether the incumbent
President can appoint a Chief Justice during the period of prohibition; that even if the JBC has already
come up with a short list, it still has to bow to the strict limitations under Section 15, Article VII; that
should the JBC defer submission of the list, it is not arrogating unto itself a judicial function, but
simply respecting the clear mandate of the Constitution; and that the application of the general rule
in Section 15, Article VII to the Judiciary does not violate the principle of separation of powers,
because said provision is an exception.
Oppositors NUPL, Corvera, Lim and BAYAN et al. state that the JBCs act of nominating
appointees to the Supreme Court is purely ministerial and does not involve the exercise of judgment;
that there can be no default on the part of the JBC in submitting the list of nominees to the President,
considering that the call for applications only begins from the occurrence of the vacancy in the
Supreme Court; and that the commencement of the process of screening of applicants to fill the
vacancy in the office of the Chief Justice only begins from the retirement on May 17, 2010, for, prior
to this date, there is no definite legal basis for any party to claim that the submission or nonsubmission of the list of nominees to the President by the JBC is a matter of right under law.
The main question presented in all the filings herein because it involves two seemingly
conflicting provisions of the Constitution imperatively demands the attention and resolution of this

Court, the only authority that can resolve the question definitively and finally. The imperative demand
rests on the ever-present need, first, to safeguard the independence, reputation, and integrity of the
entire Judiciary, particularly this Court, an institution that has been unnecessarily dragged into the
harsh polemics brought on by the controversy; second, to settle once and for all the doubt about an
outgoing Presidents power to appoint to the Judiciary within the long period starting two months
before the presidential elections until the end of the presidential term; and third, to set a definite
guideline for the JBC to follow in the discharge of its primary office of screening and nominating
qualified persons for appointment to the Judiciary.
Thus, we resolve.
Ruling of the Court
Locus Standi of Petitioners
The preliminary issue to be settled is whether or not the petitioners have locus standi.
Black defines locus standi as a right of appearance in a court of justice on a given question.
[41]

In public or constitutional litigations, the Court is often burdened with the determination of

the locus standi of the petitioners due to the ever-present need to regulate the invocation of the
intervention of the Court to correct any official action or policy in order to avoid obstructing the
efficient functioning of public officials and offices involved in public service. It is required, therefore,
that the petitioner must have a personal stake in the outcome of the controversy, for, as indicated
in Agan, Jr. v. Philippine International Air Terminals Co., Inc.:[42]

The question on legal standing is whether such parties have alleged such
a personal stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court
so largely depends for illumination of difficult constitutional questions.
[43]
Accordingly, it has been held that the interest of a person assailing the
constitutionality of a statute must be direct and personal. He must be able to
show, not only that the law or any government act is invalid, but also that he
sustained or is in imminent danger of sustaining some direct injury as a result
of its enforcement, and not merely that he suffers thereby in some indefinite
way. It must appear that the person complaining has been or is about to be
denied some right or privilege to which he is lawfully entitled or that he is
about to be subjected to some burdens or penalties by reason of the statute
or act complained of.[44]
It is true that as early as in 1937, in People v. Vera,[45] the Court adopted the direct injury
test for determining whether a petitioner in a public action had locus standi.There, the Court held that
the person who would assail the validity of a statute must have a personal and substantial interest in
the case such that he has sustained, or will sustain direct injury as a result. Vera was followed

in Custodio v. President of the Senate,[46] Manila Race Horse Trainers Association v. De la Fuente,
[47]

Anti-Chinese League of the Philippines v. Felix, [48] and Pascual v. Secretary of Public Works.[49]
Yet, the Court has also held that the requirement of locus standi, being a mere procedural

technicality, can be waived by the Court in the exercise of its discretion. For instance, in 1949,
in Araneta v. Dinglasan,[50] the Court liberalized the approach when the cases had transcendental
importance. Some notable controversies whose petitioners did not pass the direct injury test were
allowed to be treated in the same way as in Araneta v. Dinglasan.[51]
In the 1975 decision in Aquino v. Commission on Elections,[52] this Court decided to resolve the issues
raised by the petition due to their far-reaching implications, even if the petitioner had no personality
to file the suit. The liberal approach of Aquino v. Commission on Elections has been adopted in
several notable cases, permitting ordinary citizens,legislators, and civic
organizations to bring their suits involving the constitutionality or validity of laws, regulations, and
rulings.[53]
However, the assertion of a public right as a predicate for challenging a supposedly illegal or
unconstitutional executive or legislative action rests on the theory that the petitioner represents the
public in general. Although such petitioner may not be as adversely affected by the action
complained against as are others, it is enough that he sufficiently demonstrates in his petition that he
is entitled to protection or relief from the Court in the vindication of a public right.
Quite often, as here, the petitioner in a public action sues as a citizen or taxpayer to gain locus
standi. That is not surprising, for even if the issue may appear to concern only the public in general,
such capacities nonetheless equip the petitioner with adequate interest to sue. In David v.
Macapagal-Arroyo,[54] the Court aptly explains why:
Case law in most jurisdictions now allows both citizen and taxpayer standing in
public actions. The distinction was first laid down in Beauchamp v. Silk,[55] where it was
held that the plaintiff in a taxpayers suit is in a different category from the plaintiff in a
citizens suit. In the former, the plaintiff is affected by the expenditure of public
funds, while in the latter, he is but the mere instrument of the public
concern. As held by the New York Supreme Court in People ex rel Case v. Collins:[56] In
matter of mere public right, howeverthe people are the real partiesIt is at
least the right, if not the duty, of every citizen to interfere and see that a
public offence be properly pursued and punished, and that a public grievance
be remedied. With respect to taxpayers suits, Terr v. Jordan[57] held that the right of a
citizen and a taxpayer to maintain an action in courts to restrain the unlawful
use of public funds to his injury cannot be denied. [58]

Petitioners De Castro (G.R. No. 191002), Soriano (G.R. No. 191032) and Peralta (G.R. No.
191149) all assert their right as citizens filing their petitions on behalf of the public who are directly
affected by the issue of the appointment of the next Chief Justice. De Castro and Soriano further claim

standing as taxpayers, with Soriano averring that he is affected by the continuing proceedings in the
JBC, which involve unnecessary, if not, illegal disbursement of public funds. [59]
PHILCONSA alleges itself to be a non-stock, non-profit organization existing under the law for
the purpose of defending, protecting, and preserving the Constitution and promoting its growth and
flowering. It also alleges that the Court has recognized its legal standing to file cases on constitutional
issues in several cases.[60]
In A.M. No. 10-2-5-SC, Mendoza states that he is a citizen of the Philippines, a member of the
Philippine Bar engaged in the active practice of law, and a former Solicitor General, former Minister of
Justice, former Member of the Interim Batasang Pambansa and the Regular Batasang Pambansa, and
former member of the Faculty of the College of Law of the University of the Philippines.
The petitioners in G.R. No. 191342 are the Governors of the Integrated Bar of the Philippines
(IBP) for Southern Luzon and Eastern Visayas. They allege that they have the legal standing to enjoin
the submission of the list of nominees by the JBC to the President, for [a]n adjudication of the proper
interpretation and application of the constitutional ban on midnight appointments with regard to
respondent JBCs function in submitting the list of nominees is well within the concern of petitioners,
who are duty bound to ensure that obedience and respect for the Constitution is upheld, most
especially by government offices, such as respondent JBC, who are specifically tasked to perform
crucial functions in the whole scheme of our democratic institution. They further allege that, reposed
in them as members of the Bar, is a clear legal interest in the process of selecting the members of the
Supreme Court, and in the selection of the Chief Justice, considering that the person appointed
becomes a member of the body that has constitutional supervision and authority over them and other
members of the legal profession.[61]
The Court rules that the petitioners have each demonstrated adequate interest in the outcome
of the controversy as to vest them with the requisite locus standi. The issues before us are of
transcendental importance to the people as a whole, and to the petitioners in particular. Indeed, the
issues affect everyone (including the petitioners), regardless of ones personal interest in life, because
they concern that great doubt about the authority of the incumbent President to appoint not only the
successor of the retiring incumbent Chief Justice, but also others who may serve in the Judiciary,
which already suffers from a far too great number of vacancies in the ranks of trial judges throughout
the country.
In any event, the Court retains the broad discretion to waive the requirement of legal standing
in favor of any petitioner when the matter involved has transcendental importance, or otherwise
requires a liberalization of the requirement.[62]
Yet, if any doubt still lingers about the locus standi of any petitioner, we dispel the doubt now
in order to remove any obstacle or obstruction to the resolution of the essential issue squarely

presented herein. We are not to shirk from discharging our solemn duty by reason alone of an
obstacle more technical than otherwise. In Agan, Jr. v.Philippine International Air Terminals Co., Inc.,
[63]

we pointed out: Standing is a peculiar concept in constitutional law because in some cases, suits

are not brought by parties who have been personally injured by the operation of a law or any other
government act but by concerned citizens, taxpayers or voters who actually sue in the public interest.
But even if, strictly speaking, the petitioners are not covered by the definition, it is still within the
wide discretion of the Court to waive the requirement and so remove the impediment to its
addressing and resolving the serious constitutional questions raised. [64]
Justiciability
Intervenor NUPL maintains that there is no actual case or controversy that is appropriate or
ripe for adjudication, considering that although the selection process commenced by the JBC is going
on, there is yet no final list of nominees; hence, there is no imminent controversy as to whether such
list must be submitted to the incumbent President, or reserved for submission to the incoming
President.
Intervenor Tan raises the lack of any actual justiciable controversy that is ripe for judicial
determination, pointing out that petitioner De Castro has not even shown that the JBC has already
completed its selection process and is now ready to submit the list to the incumbent President; and
that petitioner De Castro is merely presenting a hypothetical scenario that is clearly not sufficient for
the Court to exercise its power of judicial review.
Intervenors Corvera and Lim separately opine that De Castros petition rests on an overbroad
and vague allegation of political tension, which is insufficient basis for the Court to exercise its power
of judicial review.
Intervenor BAYAN et al. contend that the petitioners are seeking a mere advisory opinion on
what the JBC and the President should do, and are not invoking any issues that are justiciable in
nature.
Intervenors Bello et al. submit that there exist no conflict of legal rights and no assertion of
opposite legal claims in any of the petitions; that PHILCONSA does not allege any action taken by the
JBC, but simply avers that the conditional manifestations of two Members of the Court, accented by
the divided opinions and interpretations of legal experts, or associations of lawyers and law students
on the issues published in the daily newspapers are matters of paramount and transcendental
importance to the bench, bar and general public; that PHILCONSA fails not only to cite any legal duty
or allege any failure to perform the duty, but also to indicate what specific action should be done by
the JBC; that Mendoza does not even attempt to portray the matter as a controversy or conflict of
rights, but, instead, prays that the Court should rule for the guidance of the JBC; that the fact that the

Court supervises the JBC does not automatically imply that the Court can rule on the issues presented
in the Mendoza petition, because supervision involves oversight, which means that the subordinate
officer or body must first act, and if such action is not in accordance with prescribed rules, then, and
only then, may the person exercising oversight order the action to be redone to conform to the
prescribed rules; that the Mendoza petition does not allege that the JBC has performed a specific act
susceptible to correction for being illegal or unconstitutional; and that the Mendoza petition asks the
Court to issue an advisory ruling, not to exercise its power of supervision to correct a wrong act by the
JBC, but to declare the state of the law in the absence of an actual case or controversy.
We hold that the petitions set forth an actual case or controversy that is ripe for judicial
determination. The reality is that the JBC already commenced the proceedings for the selection of the
nominees to be included in a short list to be submitted to the President for consideration of which of
them will succeed Chief Justice Puno as the next Chief Justice. Although the position is not yet vacant,
the fact that the JBC began the process of nomination pursuant to its rules and practices, although it
has yet to decide whether to submit the list of nominees to the incumbent outgoing President or to
the next President, makes the situation ripe for judicial determination, because the next steps are the
public interview of the candidates, the preparation of the short list of candidates, and the interview of
constitutional experts, as may be needed.
A part of the question to be reviewed by the Court is whether the JBC properly initiated the
process, there being an insistence from some of the oppositors-intervenors that the JBC could only do
so once the vacancy has occurred (that is, after May 17, 2010). Another part is, of course, whether
the JBC may resume its process until the short list is prepared, in view of the provision of Section 4(1),
Article VIII, which unqualifiedly requires the President to appoint one from the short list to fill the
vacancy in the Supreme Court (be it the Chief Justice or an Associate Justice) within 90 days from the
occurrence of the vacancy.
The ripeness of the controversy for judicial determination may not be doubted. The challenges
to the authority of the JBC to open the process of nomination and to continue the process until the
submission of the list of nominees; the insistence of some of the petitioners to compel the JBC
through mandamus to submit the short list to the incumbent President; the counter-insistence of the
intervenors to prohibit the JBC from submitting the short list to the incumbent President on the ground
that said list should be submitted instead to the next President; the strong position that the
incumbent President is already prohibited under Section 15, Article VII from making any
appointments, including those to the Judiciary, starting on May 10, 2010 until June 30, 2010; and the
contrary position that the incumbent President is not so prohibited are only some of the real issues for
determination. All such issues establish the ripeness of the controversy, considering that for some the
short list must be submitted before the vacancy actually occurs byMay 17, 2010. The outcome will
not be an abstraction, or a merely hypothetical exercise. The resolution of the controversy will surely

settle with finality the nagging questions that are preventing the JBC from moving on with the process
that it already began, or that are reasons persuading the JBC to desist from the rest of the process.
We need not await the occurrence of the vacancy by May 17, 2010 in order for the principal
issue to ripe for judicial determination by the Court. It is enough that one alleges conduct arguably
affected with a constitutional interest, but seemingly proscribed by the Constitution. A reasonable
certainty of the occurrence of the perceived threat to a constitutional interest is sufficient to afford a
basis for bringing a challenge, provided the Court has sufficient facts before it to enable it to
intelligently adjudicate the issues.[65]Herein, the facts are not in doubt, for only legal issues remain.
Substantive Merits
I
Prohibition under Section 15, Article VII does not apply
to appointments to fill a vacancy in the Supreme Court
or to other appointments to the Judiciary

Two constitutional provisions are seemingly in conflict.

The first, Section 15, Article VII (Executive Department), provides:
Section 15. Two months immediately before the next presidential elections and up
to the end of his term, a President or Acting President shall not make
appointments, except temporary appointments to executive positions when continued
vacancies therein will prejudice public service or endanger public safety.
The other, Section 4 (1), Article VIII (Judicial Department), states:
Section 4. (1). The Supreme Court shall be composed of a Chief Justice and
fourteen Associate Justices. It may sit en banc or in its discretion, in division of three,
five, or seven Members. Any vacancy shall be filled within ninety days from the
occurrence thereof.

In the consolidated petitions, the petitioners, with the exception of Soriano, Tolentino and
Inting, submit that the incumbent President can appoint the successor of Chief Justice Puno upon his
retirement on May 17, 2010, on the ground that the prohibition against presidential appointments
under Section 15, Article VII does not extend to appointments in the Judiciary.
The Court agrees with the submission.
First. The records of the deliberations of the Constitutional Commission reveal that the framers
devoted time to meticulously drafting, styling, and arranging the Constitution. Such meticulousness
indicates that the organization and arrangement of the provisions of the Constitution were not

arbitrarily or whimsically done by the framers, but purposely made to reflect their intention and
manifest their vision of what the Constitution should contain.
The Constitution consists of 18 Articles, three of which embody the allocation of the awesome
powers of government among the three great departments, the Legislative (Article VI), the Executive
(Article VII), and the Judicial Departments (Article VIII). The arrangement was a true recognition of the
principle of separation of powers that underlies the political structure, as Constitutional Commissioner
Adolfo S. Azcuna (later a worthy member of the Court) explained in his sponsorship speech:
We have in the political part of this Constitution opted for the separation of powers
in government because we believe that the only way to protect freedom and liberty is to
separate and divide the awesome powers of government. Hence, we return to the
separation of powers doctrine and the legislative, executive and judicial departments. [66]

As can be seen, Article VII is devoted to the Executive Department, and, among others, it lists
the powers vested by the Constitution in the President. The presidential power of appointment is dealt
with in Sections 14, 15 and 16 of the Article.
Article VIII is dedicated to the Judicial Department and defines the duties and qualifications of
Members of the Supreme Court, among others. Section 4(1) and Section 9 of this Article are the
provisions specifically providing for the appointment of Supreme Court Justices. In particular, Section
9 states that the appointment of Supreme Court Justices can only be made by the President upon the
submission of a list of at least three nominees by the JBC; Section 4(1) of the Article mandates the
President to fill the vacancy within 90 days from the occurrence of the vacancy.
Had the framers intended to extend the prohibition contained in Section 15, Article VII to the
appointment of Members of the Supreme Court, they could have explicitly done so. They could not
have ignored the meticulous ordering of the provisions. They would have easily and surely written the
prohibition made explicit in Section 15, Article VII as being equally applicable to the appointment of
Members of the Supreme Court in Article VIII itself, most likely in Section 4 (1), Article VIII. That such
specification was not done only reveals that the prohibition against the President or Acting President
making appointments within two months before the next presidential elections and up to the end of
the Presidents or Acting Presidents term does not refer to the Members of the Supreme Court.

Although Valenzuela[67] came to hold that the prohibition covered even judicial appointments, it
cannot be disputed that the Valenzuela dictum did not firmly rest on the deliberations of the
Constitutional Commission. Thereby, the confirmation made to the JBC by then Senior Associate

Justice Florenz D. Regalado of this Court, a former member of the Constitutional Commission, about
the prohibition not being intended to apply to the appointments to the Judiciary, which
confirmation Valenzuela even expressly mentioned, should prevail.
Relevantly, Valenzuela adverted to the intent of the framers in the genesis of Section 4 (1), Article
VIII, viz:
V . Intent of the Constitutional Commission
The journal of the Commission which drew up the present Constitution discloses
that the original proposal was to have an eleven-member Supreme Court. Commissioner
Eulogio Lerum wanted to increase the number of Justices to fifteen. He also wished to
ensure that that number would not be reduced for any appreciable length of time (even
only temporarily), and to this end proposed that any vacancy must be filled within two
months from the date that the vacancy occurs. His proposal to have a 15-member Court
was not initially adopted. Persisting however in his desire to make certain that the
size of the Court would not be decreased for any substantial period as a result of
vacancies, Lerum proposed the insertion in the provision (anent the Courts
membership) of the same mandate that IN CASE OF ANY VACANCY, THE SAME SHALL BE
FILLED WITHIN TWO MONTHS FROM OCCURRENCE THEREOF. He later agreed to
suggestions to make the period three, instead of two, months. As thus amended, the
proposal was approved. As it turned out, however, the Commission ultimately agreed on
a fifteen-member Court. Thus it was that the section fixing the composition of
the Supreme Court came to include a command to fill up any vacancy therein
within 90 days from its occurrence.
In this connection, it may be pointed out that that instruction that any
vacancy shall be filled within ninety days (in the last sentence of Section 4 (1) of Article
VIII) contrasts with the prohibition in Section 15, Article VII, which is couched in stronger
negative language - that a President or Acting President shall not make appointments
The commission later approved a proposal of Commissioner Hilario G. Davide, Jr.
(now a Member of this Court) to add to what is now Section 9 of Article VIII, the
following paragraph: WITH RESPECT TO LOWER COURTS, THE PRESIDENT SHALL ISSUE
THE APPOINTMENT WITHIN NINETY DAYS FROM THE SUBMISSION OF THE LIST (of
nominees by the Judicial and Bar Council to the President). Davide stated that his
purpose was to provide a uniform rule for lower courts. According to him, the 90-day
period should be counted from submission of the list of nominees to the President in
view of the possibility that the President might reject the list submitted to him and the
JBC thus need more time to submit a new one.
On the other hand, Section 15, Article VII - which in effect deprives the President of
his appointing power two months immediately before the next presidential elections up
to the end ofhis term - was approved without discussion.[68]
However, the reference to the records of the Constitutional Commission did not advance or support
the result in Valenzuela. Far to the contrary, the records disclosed the express intent of the framers to
enshrine in the Constitution, upon the initiative of Commissioner Eulogio Lerum, a command [to the
President]

to

fill

up

any

vacancy

therein

within

90

days

from

its

occurrence,

which

even Valenzuela conceded.[69] The exchanges during deliberations of the Constitutional Commission

on October 8, 1986 further show that the filling of a vacancy in the Supreme Court within the 90-day
period was a true mandate for the President, viz:
MR. DE CASTRO. I understand that our justices now in the Supreme Court, together
with the Chief Justice, are only 11.
MR. CONCEPCION. Yes.
MR. DE CASTRO. And the second sentence of this subsection reads: Any
vacancy shall be filled within ninety days from the occurrence thereof.
MR. CONCEPCION. That is right.
MR. DE CASTRO. Is this now a mandate to the executive to fill the vacancy?
MR. CONCEPCION. That is right. That is borne out of the fact that in the past
30 years, seldom has the Court had a complete complement.[70]
Moreover, the usage in Section 4(1), Article VIII of the word shall an imperative, operating to
impose a duty that may be enforced[71] should not be disregarded. Thereby, Sections 4(1) imposes on
the President the imperative duty to make an appointment of a Member of the Supreme Court within
90 days from the occurrence of the vacancy. The failure by the President to do so will be a clear
disobedience to the Constitution.
The 90-day limitation fixed in Section 4(1), Article VIII for the President to fill the vacancy in the
Supreme Court was undoubtedly a special provision to establish adefinite mandate for the President
as the appointing power, and cannot be defeated by mere judicial interpretation in Valenzuela to the
effect that Section 15, Article VII prevailed because it was couched in stronger negative language.
Such interpretation even turned out to be conjectural, in light of the records of the Constitutional
Commissions deliberations on Section 4 (1), Article VIII.
How Valenzuela justified its pronouncement and result is hardly warranted. According to an
authority on statutory construction:[72]
xxx the court should seek to avoid any conflict in the provisions of the statute by
endeavoring to harmonize and reconcile every part so that each shall be effective. It is
not easy to draft a statute, or any other writing for that matter, which may not in some
manner contain conflicting provisions. But what appears to the reader to be a conflict
may not have seemed so to the drafter. Undoubtedly, each provision was inserted for a
definite reason. Often by considering the enactment in its entirety, what appears to be
on its face a conflict may be cleared up and the provisions reconciled.
Consequently, that construction which will leave every word operative will be
favored over one which leaves some word or provision meaningless because of
inconsistency. But a word should not be given effect, if to do so gives the statute a
meaning contrary to the intent of the legislature. On the other hand, if full effect cannot
be given to the words of a statute, they must be made effective as far as possible. Nor
should the provisions of a statute which are inconsistent be harmonized at a sacrifice of
the legislative intention. It may be that two provisions are irreconcilable; if so, the one
which expresses the intent of the law-makers should control. And the arbitrary rule has
been frequently announced that where there is an irreconcilable conflict between the
different provisions of a statute, the provision last in order of position will prevail, since

it is the latest expression of the legislative will. Obviously, the rule is subject to
deserved criticism. It is seldom applied, and probably then only where an irreconcilable
conflict exists between different sections of the same act, and after all other means of
ascertaining the meaning of the legislature have been exhausted. Where the conflict is
between two statutes, more may be said in favor of the rules application, largely
because of the principle of implied repeal.

In this connection, PHILCONSAs urging of a revisit and a review of Valenzuela is timely and
appropriate. Valenzuela arbitrarily ignored the express intent of the Constitutional Commission to
have Section 4 (1), Article VIII stand independently of any other provision, least of all one found in
Article VII. It further ignored that the two provisions had no irreconcilable conflict, regardless of
Section 15, Article VII being couched in the negative. As judges, we are not to unduly interpret, and
should not accept an interpretation that defeats the intent of the framers.[73]
Consequently, prohibiting the incumbent President from appointing a Chief Justice on the premise
that Section 15, Article VII extends to appointments in the Judiciary cannot be sustained. A
misinterpretation like Valenzuela should not be allowed to last after its false premises have been
exposed.[74] It will not do to merely distinguish Valenzuela from these cases, for the result to be
reached

herein

is

entirely

incompatible

with

what Valenzuela decreed. Consequently,

Valenzuela now deserves to be quickly sent to the dustbin of the unworthy and forgettable.
We reverse Valenzuela.
Second. Section 15, Article VII does not apply as well to all other appointments in the Judiciary.
There is no question that one of the reasons underlying the adoption of Section 15 as part of
Article VII was to eliminate midnight appointments from being made by anoutgoing Chief Executive in
the mold of the appointments dealt with in the leading case of Aytona v. Castillo.[75] In fact,
in Valenzuela, the Court so observed, stating that:
xxx it appears that Section 15, Article VII is directed against two types of
appointments: (1) those made for buying votes and (2) those made for partisan
considerations. The first refers to those appointments made within the two months
preceding a Presidential election and are similar to those which are declared election
offenses in the Omnibus Election Code, viz.:
xxx
The second type of appointments prohibited by Section 15, Article VII consists of
the so-called midnight appointments. In Aytona v. Castillo, it was held that after the
proclamation of Diosdado Macapagal as duly elected President, President Carlos P.
Garcia, who was defeated in his bid for reelection, became no more than a caretaker
administrator whose duty was to prepare for the orderly transfer of authority to the
incoming President. Said the Court:

The filling up of vacancies in important positions, if few, and so

spaced as to afford some assurance of deliberate action and careful
consideration of the need for the appointment and appointee's
qualifications may undoubtedly be permitted. But the issuance of 350
appointments in one night and the planned induction of almost all of
them in a few hours before the inauguration of the new President may,
with some reason, be regarded by the latter as an abuse of
Presidential prerogatives, the steps taken being apparently a mere
partisan effort to fill all vacant positions irrespective of fitness and
other conditions, and thereby to deprive the new administration of an
opportunity to make the corresponding appointments.
As indicated, the Court recognized that there may well be appointments to
important positions which have to be made even after the proclamation of the new
President. Such appointments, so long as they are few and so spaced as to
afford some assurance of deliberate action and careful consideration of the
need for the appointment and the appointees qualifications, can be made by
the outgoing President. Accordingly, several appointments made by President
Garcia, which were shown to have been well considered, were upheld.
Section 15, Article VII has a broader scope than the Aytona ruling. It may
not unreasonably be deemed to contemplate not only midnight appointments
those made obviously for partisan reasons as shown by their number and the
time of their making but also appointments presumed made for the purpose
of influencing the outcome of the Presidential election.
On the other hand, the exception in the same Section 15 of Article VII allowing
appointments to be made during the period of the ban therein provided is much
narrower than that recognized in Aytona. The exception allows only the making
of temporary appointments
to executive positions
when
continued
vacancies
will prejudice public service or endanger public safety. Obviously, the article greatly
restricts the appointing power of the President during the period of the ban.
Considering the respective reasons for the time frames for filling vacancies in the
courts and the restriction on the President's power of appointment, it is this Courts view
that, as a general proposition, in case of conflict, the former should yield to the
latter. Surely, the prevention of vote-buying and similar evils outweighs the need for
avoiding delays in filling up of court vacancies or the disposition of some
cases. Temporary vacancies can abide the period of the ban which, incidentally and as
earlier pointed out, comes to exist only once in every six years.Moreover, those
occurring in the lower courts can be filled temporarily by designation. But prohibited
appointments are long-lasting and permanent in their effects. They may, as earlier
pointed out, in fact influence the results of elections and, for that reason, their making is
considered an election offense.[76]

Given the background and rationale for the prohibition in Section 15, Article VII, we have no
doubt that the Constitutional Commission confined the prohibition to appointments made in the
Executive Department. The framers did not need to extend the prohibition to appointments in the
Judiciary, because their establishment of the JBC and their subjecting the nomination and screening of
candidates for judicial positions to the unhurried and deliberate prior process of the JBC ensured that
there would no longer bemidnight appointments to the Judiciary. If midnight appointments in the mold
of Aytona were made in haste and with irregularities, or made by an outgoing Chief Executive in the
last days of his administration out of a desire to subvert the policies of the incoming President or for

partisanship,[77] the appointments to the Judiciary made after the establishment of the JBC would not
be suffering from such defects because of the JBCs prior processing of candidates. Indeed, it is
axiomatic in statutory construction that the ascertainment of the purpose of the enactment is a step
in the process of ascertaining the intent or meaning of the enactment, because the reason for the
enactment must necessarily shed considerable light on the law of the statute, i.e., the intent; hence,
the enactment should be construed with reference to its intended scope and purpose, and the court
should seek to carry out this purpose rather than to defeat it. [78]
Also, the intervention of the JBC eliminates the danger that appointments to the Judiciary can
be made for the purpose of buying votes in a coming presidential election, or of satisfying partisan
considerations. The experience from the time of the establishment of the JBC shows that even
candidates for judicial positions at any level backed by people influential with the President could not
always be assured of being recommended for the consideration of the President, because they first
had to undergo the vetting of the JBC and pass muster there. Indeed, the creation of the JBC
was precisely intended to de-politicize the Judiciary by doing away with the intervention of the
Commission

on

Appointments.

This

insulating

process

was

absent

from

the Aytona midnight appointment.

Third. As earlier stated, the non-applicability of Section 15, Article VII to appointments in the
Judiciary was confirmed by then Senior Associate Justice Regalado to the JBC itself when it met
on March 9, 1998 to discuss the question raised by some sectors about the constitutionality of xxx
appointments to the Court of Appeals in light of the forthcoming presidential elections. He assured
that on the basis of the (Constitutional) Commissions records, the election ban had no application to
appointments to the Court of Appeals.[79] This confirmation was accepted by the JBC, which then
submitted to the President for consideration the nominations for the eight vacancies in the Court of
Appeals.[80]
The fault of Valenzuela was that it accorded no weight and due consideration to the
confirmation of Justice Regalado. Valenzuela was weak, because it relied on interpretation to
determine the intent of the framers rather than on the deliberations of the Constitutional
Commission. Much of the unfounded doubt about the Presidents power to appoint during the period of
prohibition in Section 15, Article VII could have been dispelled since its promulgation on November 9,
1998, had Valenzuela properly acknowledged and relied on the confirmation of a distinguished
member of the Constitutional Commission like Justice Regalado.
Fourth. Of the 23 sections in Article VII, three (i.e., Section 14, Section15, and Section 16)
concern the appointing powers of the President.
Section 14 speaks of the power of the succeeding President to revoke appointments made by
an Acting President,[81] and evidently refers only to appointments in the Executive Department. It has

no application to appointments in the Judiciary, because temporary or acting appointments can only
undermine the independence of the Judiciary due to their being revocable at will. [82] The letter and
spirit of the Constitution safeguard that independence. Also, there is no law in the books that
authorizes the revocation of appointments in the Judiciary. Prior to their mandatory retirement or
resignation, judges of the first and second level courts and the Justices of the third level courts may
only be removed for cause, but the Members of the Supreme Court may be removed only by
impeachment.
Section 16 covers only the presidential appointments that require confirmation by the
Commission on Appointments. Thereby, the Constitutional Commission restored the requirement of
confirmation by the Commission on Appointments after the requirement was removed from the 1973
Constitution. Yet, because of Section 9 of Article VIII, the restored requirement did not include
appointments to the Judiciary.[83]
Section 14, Section 15, and Section 16 are obviously of the same character, in that they affect
the power of the President to appoint. The fact that Section 14 and Section 16 refer only to
appointments within the Executive Department renders conclusive that Section 15 also applies only
to the Executive Department. This conclusion is consistent with the rule that every part of the statute
must be interpreted with reference to the context, i.e. that every part must be considered together
with the other parts, and kept subservient to the general intent of the whole enactment. [84] It is
absurd to assume that the framers deliberately situated Section 15 between Section 14 and Section
16, if they intended Section 15 to cover all kinds of presidential appointments. If that was their
intention in respect of appointments to the Judiciary, the framers, if only to be clear, would have
easily and surely inserted a similar prohibition in Article VIII, most likely within Section 4 (1) thereof.
Fifth. To hold like the Court did in Valenzuela that Section 15 extends to appointments to the
Judiciary further undermines the intent of the Constitution of ensuring the independence of the
Judicial Department from the Executive and Legislative Departments. Such a holding will tie the
Judiciary and the Supreme Court to the fortunes or misfortunes of political leaders vying for the
Presidency in a presidential election. Consequently, the wisdom of having the new President, instead
of the current incumbent President, appoint the next Chief Justice is itself suspect, and cannot ensure
judicial independence, because the appointee can also become beholden to the appointing authority.
In contrast, the appointment by the incumbent President does not run the same risk of compromising
judicial independence, precisely because her term will end by June 30, 2010.
Sixth. The argument has been raised to the effect that there will be no need for the incumbent
President to appoint during the prohibition period the successor of Chief Justice Puno within the
context of Section 4 (1), Article VIII, because anyway there will still be about 45 days of the 90 days
mandated in Section 4(1), Article VIII remaining.

The argument is flawed, because it is focused only on the coming vacancy occurring from Chief
Justice Punos retirement by May 17, 2010. It ignores the need to apply Section 4(1) to every situation
of a vacancy in the Supreme Court.
The argument also rests on the fallacious assumption that there will still be time remaining in
the 90-day period under Section 4(1), Article VIII. The fallacy is easily demonstrable, as the OSG has
shown in its comment.
Section 4 (3), Article VII requires the regular elections to be held on the second Monday of May,
letting the elections fall on May 8, at the earliest, or May 14, at the latest. If the regular presidential
elections are held on May 8, the period of the prohibition is 115 days. If such elections are held on
May 14, the period of the prohibition is 109 days. Either period of the prohibition is longer than the
full mandatory 90-day period to fill the vacancy in the Supreme Court. The result is that there are at
least 19 occasions (i.e., the difference between the shortest possible period of the ban of 109
days and the 90-day mandatory period for appointments) in which the outgoing President would be in
no position to comply with the constitutional duty to fill up a vacancy in the Supreme Court. It is safe
to assume that the framers of the Constitution could not have intended such an absurdity. In fact, in
their deliberations on the mandatory period for the appointment of Supreme Court Justices under
Section 4 (1), Article VIII, the framers neither discussed, nor mentioned, nor referred to the ban
against midnight appointments under Section 15, Article VII, or its effects on the 90-day period,
or vice versa. They did not need to, because they never intended Section 15, Article VII to apply to a
vacancy in the Supreme Court, or in any of the lower courts.
Seventh. As a matter of fact, in an extreme case, we can even raise a doubt on whether a JBC
list is necessary at all for the President any President to appoint a Chief Justice if the appointee is to
come from the ranks of the sitting justices of the Supreme Court.
Sec. 9, Article VIII says:
xxx. The Members of the Supreme Court xxx shall be appointed by the President
from a list of at least three nominees prepared by the Judicial and Bar Council for any
vacancy. Such appointments need no confirmation.
xxx

The provision clearly refers to an appointee coming into the Supreme Court from the outside, that is,
a non-member of the Court aspiring to become one. It speaks of candidates for the Supreme Court,
not of those who are already members or sitting justices of the Court, all of whom have previously
been vetted by the JBC.
Can the President, therefore, appoint any of the incumbent Justices of the Court as Chief
Justice?

The question is not squarely before us at the moment, but it should lend itself to a deeper
analysis if and when circumstances permit. It should be a good issue for the proposed Constitutional
Convention to consider in the light of Senate President Juan Ponce Enriles statement that the
President can appoint the Chief Justice from among the sitting justices of the Court even without a JBC
list.
II
The Judiciary Act of 1948

The posture has been taken that no urgency exists for the President to appoint the successor of Chief
Justice Puno, considering that the Judiciary Act of 1948 can still address the situation of having the
next President appoint the successor.

Section 12 of the Judiciary Act of 1948 states:

Section 12. Vacancy in Office of Chief Justice. In case of a vacancy in the office of
Chief Justice of the Supreme Court or of his inability to perform the duties and powers of
his office, they shall devolve upon the Associate Justice who is first in precedence, until
such disability is removed, or another Chief Justice is appointed and duly qualified. This
provision shall apply to every Associate Justice who succeeds to the office of Chief
Justice.

The provision calls for an Acting Chief Justice in the event of a vacancy in the office of the Chief
Justice, or in the event that the Chief Justice is unable to perform his duties and powers. In either of
such circumstances, the duties and powers of the office of the Chief Justice shall devolve upon the
Associate Justice who is first in precedence until a new Chief Justice is appointed or until the disability
is removed.
Notwithstanding that there is no pressing need to dwell on this peripheral matter after the Court has
hereby resolved the question of consequence, we do not find it amiss to confront the matter now.
We cannot agree with the posture.
A review of Sections 4(1) and 9 of Article VIII shows that the Supreme Court is composed of a Chief
Justice and 14 Associate Justices, who all shall be appointed by the President from a list of at least
three nominees prepared by the JBC for every vacancy, which appointments require no confirmation
by the Commission on Appointments. With reference to the Chief Justice, he or she is appointed by
the President as Chief Justice, and the appointment is never in an acting capacity. The express
reference to a Chief Justice abhors the idea that the framers contemplated an Acting Chief Justice to
head the membership of the Supreme Court. Otherwise, they would have simply written so in the

Constitution. Consequently, to rely on Section 12 of the Judiciary Act of 1948 in order to forestall the
imperative need to appoint the next Chief Justice soonest is to defy the plain intent of the
Constitution.
For sure, the framers intended the position of Chief Justice to be permanent, not one to be
occupied in an acting or temporary capacity. In relation to the scheme of things under the present
Constitution, Section 12 of the Judiciary Act of 1948 only responds to a rare situation in which the new
Chief Justice is not yet appointed, or in which the incumbent Chief Justice is unable to perform the
duties and powers of the office. It ought to be remembered, however, that it was enacted because the
Chief Justice appointed under the 1935 Constitution was subject to the confirmation of the
Commission on Appointments, and the confirmation process might take longer than expected.
The appointment of the next Chief Justice by the incumbent President is preferable to
having the Associate Justice who is first in precedence take over. Under the Constitution, the heads of
the Legislative and Executive Departments are popularly elected, and whoever are elected and
proclaimed at once become the leaders of their respective Departments. However, the lack of any
appointed occupant of the office of Chief Justice harms the independence of the Judiciary, because
the Chief Justice is the head of the entire Judiciary. The Chief Justice performs functions absolutely
significant to the life of the nation. With the entire Supreme Court being the Presidential Electoral
Tribunal, the Chief Justice is the Chairman of the Tribunal. There being no obstacle to the appointment
of the next Chief Justice, aside from its being mandatory for the incumbent President to make within
the 90-day period from May 17, 2010, there is no justification to insist that the successor of Chief
Justice Puno be appointed by the next President.
Historically, under the present Constitution, there has been no wide gap between the
retirement and the resignation of an incumbent Chief Justice, on one hand, and the appointment to
and assumption of office of his successor, on the other hand. As summarized in the comment of the
OSG, the chronology of succession is as follows:
1.

When Chief Justice Claudio Teehankee retired on April 18, 1988, Chief Justice Pedro
Yap was appointed on the same day;

2.

When Chief Justice Yap retired on July 1, 1988, Chief Justice Marcelo Fernan was
appointed on the same day;

3.

When Chief Justice Fernan resigned on December 7, 1991, Chief Justice Andres
Narvasa was appointed the following day, December 8, 1991;

4.

When Chief Justice Narvasa retired on November 29, 1998, Chief Justice Hilario
Davide, Jr. was sworn into office the following early morning of November 30, 1998;

5.

When Chief Justice Davide retired on December 19, 2005, Chief Justice Artemio
Panganiban was appointed the next day, December 20, 2005; and

6.

When Chief Justice Panganiban retired on December 6, 2006, Chief Justice Reynato
S. Puno took his oath as Chief Justice at midnight of December 6, 2006.[85]

III
Writ of mandamus does not lie against the JBC

May the JBC be compelled to submit the list of nominees to the President?
Mandamus shall issue when any tribunal, corporation, board, officer or person unlawfully neglects the
performance of an act that the law specifically enjoins as a duty resulting from an office, trust, or
station.[86] It is proper when the act against which it is directed is one addressed to the discretion of
the tribunal or officer. Mandamus is not available to direct the exercise of a judgment or discretion in
a particular way.[87]
For mandamus to lie, the following requisites must be complied with: (a) the plaintiff has a clear legal
right to the act demanded; (b) it must be the duty of the defendant to perform the act, because it is
mandated by law; (c) the defendant unlawfully neglects the performance of the duty enjoined by law;
(d) the act to be performed is ministerial, not discretionary; and (e) there is no appeal or any other
plain, speedy and adequate remedy in the ordinary course of law.
Section 8(5) and Section 9, Article VIII, mandate the JBC to submit a list of at least three
nominees to the President for every vacancy in the Judiciary:
Section 8. xxx
(5) The Council shall have
appointees to the Judiciary. xxx

the

principal

function

of

recommending

Section 9. The Members of the Supreme Court and judges of lower courts shall be
appointed by the President from a list of at least three nominees prepared by the
Judicial and Bar Council for every vacancy. Such appointments need no
confirmation.
For the lower courts, the President shall issue the appointments within
ninety days from the submission of the list.

However, Section 4(1) and Section 9, Article VIII, mandate the President to fill the vacancy in
the Supreme Court within 90 days from the occurrence of the vacancy, and within 90 days from the
submission of the list, in the case of the lower courts. The 90-day period is directed at the President,
not at the JBC. Thus, the JBC should start the process of selecting the candidates to fill the vacancy in
the Supreme Court before the occurrence of the vacancy.
Under the Constitution, it is mandatory for the JBC to submit to the President the list of
nominees to fill a vacancy in the Supreme Court in order to enable the President to appoint one of

them within the 90-day period from the occurrence of the vacancy. The JBC has no discretion to
submit the list to the President after the vacancy occurs, because that shortens the 90-day period
allowed by the Constitution for the President to make the appointment. For the JBC to do so will be
unconscionable on its part, considering that it will thereby effectively and illegally deprive the
President of the ample time granted under the Constitution to reflect on the qualifications of the
nominees named in the list of the JBC before making the appointment.
The duty of the JBC to submit a list of nominees before the start of the Presidents mandatory
90-day period to appoint is ministerial, but its selection of the candidates whose names will be in the
list to be submitted to the President lies within the discretion of the JBC. The object of the petitions
for mandamus herein should only refer to the duty to submit to the President the list of nominees for
every vacancy in the Judiciary, because in order to constitute unlawful neglect of duty, there must be
an unjustified delay in performing that duty. [88] For mandamus to lie against the JBC, therefore, there
should be an unexplained delay on its part in recommending nominees to the Judiciary, that is, in
submitting the list to the President.
The distinction between a ministerial act and a discretionary one has been delineated in the
following manner:
The distinction between a ministerial and discretionary act is well delineated. A purely
ministerial act or duty is one which an officer or tribunal performs in a given
state of facts, in a prescribed manner, in obedience to the mandate of a legal
authority, without regard to or the exercise of his own judgment upon the
propriety or impropriety of the act done. If thelaw imposes a duty upon a
public officer and gives him the right to decide how or when the duty shall be
performed, such duty is discretionary and not ministerial. The duty is ministerial
only when the discharge of the same requires neither the exercise of official
discretion or judgment.[89]

Accordingly, we find no sufficient grounds to grant the petitions for mandamus and to issue a writ
of mandamus against the JBC. The actions for that purpose are premature, because it is clear that the
JBC still has until May 17, 2010, at the latest, within which to submit the list of nominees to the
President to fill the vacancy created by the compulsory retirement of Chief Justice Puno.

IV
Writ of prohibition does not lie against the JBC

In light of the foregoing disquisitions, the conclusion is ineluctable that only the President can
appoint the Chief Justice. Hence, Sorianos petition for prohibition in G.R. No. 191032, which proposes
to prevent the JBC from intervening in the process of nominating the successor of Chief Justice Puno,
lacks merit.

On the other hand, the petition for prohibition in G.R. No. 191342 is similarly devoid of merit.
The challenge mounted against the composition of the JBC based on the allegedly unconstitutional
allocation of a vote each to the ex officio members from the Senate and the House of
Representatives, thereby prejudicing the chances of some candidates for nomination by raising the
minimum number of votes required in accordance with the rules of the JBC, is not based on the
petitioners actual interest, because they have not alleged in their petition that they were nominated
to the JBC to fill some vacancies in the Judiciary. Thus, the petitioners lack locus standi on that issue.

WHEREFORE, the Court:

1.

Dismisses the petitions for certiorari and mandamus in G.R. No. 191002 and G.R. No.

191149, and the petition for mandamus in G.R. No. 191057 for being premature;
2.

Dismisses the petitions for prohibition in G.R. No. 191032 and G.R. No. 191342 for lack of

merit; and
3.

Grants the petition in A.M. No. 10-2-5-SC and, accordingly, directs the Judicial and Bar

Council:
(a) To resume its proceedings for the nomination of candidates to fill the vacancy to be
created by the compulsory retirement of Chief Justice Reynato S. Puno byMay 17,
2010;
(b) To prepare the short list of nominees for the position of Chief Justice;
(c) To submit to the incumbent President the short list of nominees for the position of
Chief Justice on or before May 17, 2010; and
(d) To continue its proceedings for the nomination of candidates to fill other vacancies in
the Judiciary and submit to the President the short list of nominees corresponding
thereto in accordance with this decision.
SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice
WE CONCUR: