NOBLEJAS VS.
TEEHANKEE
Noblejas was the commissioner of land registration. Under RA 1151, he is entitled to the
same compensation, emoluments, and privileges as those of a Judge of CFI. He approved a
subdivision plan covering certain areas that are in excess of those covered by the title
The Secretary of Justice, Teehankee, sent a letter to Noblejas, requiring him to explain.
Noblejas answered, arguing that since he has a rank equivalent to that of a Judge, he could
only be suspended and investigated in the same manner as an ordinary Judge, under the
Judiciary Act. He claims that he may be investigated only by the Supreme Court
Nevertheless, he was suspended by the Executive Secretary (ES)
Noblejas filed this case claiming the lack of jurisdiction of the ES and his abuse of discretion.
ISSUE: Whether the Commissioner of Land Registratoin may only be investigated by the Supreme
Court (in view of his having a rank equivalent to a judge)?
SC: NO.
If the law had really intended to include the general grant of rank and privileges equivalent to
Judges, the right to be investigated and be suspended or removed only by the Supreme Court,
then such grant of privileges would be unconstitutional, since it would violate the doctrine of
separation of powers because it would charge the Supreme Court with an administrative function
of supervisory control over executive officials, simultaneously reducing pro tanto, the control of the
Chief Executive over such officials.
There is no inherent power in the Executive or Legislative to charge the Judiciary with
administrative functions except when reasonable incidental to the fulfillment of judicial duties.
The judiciary cannot give decisions which are merely advisory, nor can it exercise or participate in
the exercise of functions which are essentially legislative or administrative. The Supreme Court and
its members should not and cannot be required to exercise any power or to perform any trust or to
assume any duty not pertaining to or connected with the administration of judicial functions.
As such, RA 1151 while conferring the same privileges as those of a judge, did not include and was
not intended to include, the right to demand investigation by the Supreme Court, and to be
suspended or removed only upon the Courts recommendation. Said rights would be violative of
the Constitution.
The suspension of Noblejas by the ES valid.
Also, the resolution of the consulta by a Register of Deeds is NOT a judicial function, but an
administrative process. It is conclusive and binding only upon the Register of Deeds, NOT the
parties themselves. Even if the resolution is appealable, it does not automatically mean that they
are judicial in character. Still, the resolution of the consultas are but a minimal portion of the
administrative or executive functions.
Garcia vs Macaraig Jr
Facts: Judge Macaraig took his oath as Judge of the CFI of Laguna and San Pablo City on June 29,
1970. The court, being one of the 112 newly created CFI branches, had to be organized from
scratch. From July 1, 1970 to February 28, 1971, Macaraig was not able to assume the duties and
functions of a judge due to the fact that his Court Room can not be properly established due to
problems as to location and as to appropriations to make his Court up and running. When
Macaraig realized that it would be sometime before he could actually preside over his court, he
applied for an extended leave (during the 16 years he had worked in the Department of Justice,
respondent had, due to pressure of duties, never gone on extended leave, resulting in his forfeiting
all the leave benefits he had earned beyond the maximum ten months allowed by the law). The
Secretary of Justice, however, prevailed upon respondent to forego his leave and instead to assist
him, without being extended a formal detail, whenever respondent was not busy attending to the
needs of his court. Paz Garcia on the other hand filed a complaint alleging that Macaraig is
incompetent, dishonest and has acted in violation of his oath as a judge. Garcia said that Macaraig
has not submitted the progress of his Courts as required by law. And that Macaraig has received
salaries as a judge while he is fully aware that he has not been performing the duties of a judge.
ISSUE: Whether or not Macaraig has acted with incompetence and dishonesty as Judge.
HELD: Macaraigs inability to perform his judicial duties under the circumstances mentioned above
does not constitute incompetence. Respondent was, like every lawyer who gets his first
appointment to the bench, eager to assume his judicial duties and rid himself of the stigma of
being a judge without a sala, but forces and circumstances beyond his control prevented him from
discharging his judicial duties. On the other hand, none of these is to be taken as meaning that the
Court looks with favor at the practice of long standing, to be sure, of judges being detailed in the
DOJ to assist the Secretary even if it were only in connection with his work of exercising
administrative authority over the courts. The line between what a judge may do and what he may
not do in collaborating or working with other offices or officers under the other great departments
of the government must always be kept clear and jealously observed, lest the principle of
separation of powers on which our government rests by mandate of the people thru the
Constitution be gradually eroded by practices purportedly motivated by good intentions in the
interest of the public service. The fundamental advantages and the necessity of the independence
of said three departments from each other, limited only by the specific constitutional precepts on
check and balance between and among them, have long been acknowledged as more paramount
than the serving of any temporary or passing governmental conveniences or exigencies. It is thus
of grave importance to the judiciary under our present constitutional scheme of government that
no judge of even the lowest court in this Republic should place himself in a position where his
actuations on matters submitted to him for action or resolution would be subject to review and
prior approval and, worst still, reversal, before they can have legal effect, by any authority other
than the Court of Appeals or the Supreme Court, as the case may be. Needless to say, the Court
feels very strongly that it is best that this practice is discontinued.
Meralco vs. Pasay Trans Co., 57 Phil. 600 (1932)
Facts:
The case at bar relates with a petition of the Manila Electric Company (MEC, pet), requesting the
members of the SC, sitting as a board of arbitrators, to fix the terms upon which certain
transportation companies shall be permitted to use the Pasig bridge of the MEC and the
compensation to be paid to the MEC by such transportation companies.Act NO. 1446, Section
11Relates with the legal act of the members of the SC, sitting as a board of arbitrators, to act on
the petition.
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Issue: Concerns the legal right of the members of the SC, sitting as a board of arbitrators the
decision of a majority of whom shall be final, to act in that capacity.
Held & Ratio: Act 1446, Section 11 contravenes the maxims which guide the operation of a
democratic government constitutionallyestablished, and that it would be improper and illegal for
the members of the SC, sitting as a board or arbitrators, thedecision of a majority of whom shall be
final, to act on the petition of the MEC.The decisions of the Board of Arbitration shall go through
the regular court system (Trial Courts Court of Appeals SC).They will be reviewed by the lower
courts and will ultimately be reviewed by themselves. The SC cannot sit as members of the Board
of Arbitration because it is not within their jurisdiction to decided on cases on purely contractual
situations.
Puyat vs De Guzman
Political Law Appearance in Court
On 14 May 1979, Puyat and his group were elected as directors of the International Pipe Industries.
The election was subsequently questioned by Acero (Puyats rival) claiming that the votes were not
properly counted hence he filed a quo warranto proceeding before the Securities and Exchange
Commission on 25 May 1979. Prior to Aceros filing of the case, Estanislao Fernandez, then a
member of the Interim Batasang Pambansa purchased ten shares of stock of IPI from a member of
Aceros group. And during a conference held by SEC Commissioner de Guzman (from May 25-31
79) to have the parties confer with each other, Estanislao Fernandez entered his appearance as
counsel for Acero. Puyat objected arguing that it is unconstitutional for an assemblyman to appear
as counsel (to anyone) before any administrative body (such as the SEC). This being cleared,
Fernandez inhibited himself from appearing as counsel for Acero. He instead filed an Urgent
Motion for Intervention in this said SEC case for him to intervene not as a counsel but as a legal
owner of IPI shares and as a person who has a legal interest in the matter in litigation. The SEC
Commissioner granted the motion in effect granting Fernandez leave to intervene. Puyat then
moved to question the Commissioners action.
ISSUE: Whether or not Fernandez, acting as a stockholder of IPI, can appear and intervene in the
SEC case without violating the constitutional provision that an assemblyman must not appear as
counsel in such courts or bodies?
HELD: No, Fernandez cannot appear before the SEC body under the guise that he is not appearing
as a counsel. Even though he is a stockholder and that he has a legal interest in the matter in
litigation he is still barred from appearing. He bought the stocks before the litigation took place.
During the conference he presented himself as counsel but because it is clearly stated that he
cannot do so under the constitution he instead presented himself as a party of interest which is
clearly a work around and is clearly an act after the fact. A mere work around to get himself
involved in the litigation. What could not be done directly could not likewise be done indirectly.
In Re: Rodolfo Manzano
Facts:
Judge Manzano filed a petition allowing him to accept the appointment by Ilocos Sur Governor
Rodolfo Farinas as the member of Ilocos Norte provincial Committee on Justice created pursuant to
a Presidential Order. He petitioned that his membership in the Committee will not in any way
amount to an abandonment to his present position as Executive Judge of Branch XIX, RTC, 1st
Judicial region and as a member of judiciary.
Issue:
What is an administrative agency? Where does it draw the line insofar as administrative functions
are concerned?
Ruling:
The petition is denied. The Constitution prohibits the designation of members of the Judiciary to
any agency performing Quasi-Judicial or Administrative functions (Sec.12, Art.VIII, 1987
Constitution).
Quasi-Judicial has a fairly clear meaning and Judges can confidently refrain from participating in
the work of any Administrative Agency which adjudicates disputes & controversies involving the
rights of parties within its jurisdiction.
Administrative functions are those which involve the regulation and control over the conduct &
affairs of individuals for their own welfare and the promulgation of rules and regulations to better
carry out the policy of the Legislature or such as are devolved upon the administrative agency by
the organic law of its existence.
Administrative functions as used in Sec. 12 refers to the Governments executive machinery and
its performance of governmental acts. It refers to the management actions, determinations, and
orders of executive officials as they administer the laws and try to make government effective.
There is an element of positive action, of supervision or control.
In the dissenting opinion of Justice Gutierrez:
Administrative functions are those which involve the regulation and control over the conduct and
affairs of individuals for their own welfare and the promulgation of rules and regulations to better
carry out the policy of the legislature or such as are devolved upon the administrative agency by
the organic law of its existence we can readily see that membership in the Provincial or City
Committee on Justice would not involve any regulation or control over the conduct and affairs of
individuals. Neither will the Committee on Justice promulgate rules and regulations nor exercise
any quasi-legislative functions. Its work is purely advisory. A member of the judiciary joining any
study group which concentrates on the administration of justice as long as the group merely
deliberates on problems involving the speedy disposition of cases particularly those involving the
poor and needy litigants-or detainees, pools the expertise and experiences of the members, and
limits itself to recommendations which may be adopted or rejected by those who have the power
to legislate or administer the particular function involved in their implementation.
Macariola vs Asuncion
Respondent: Hon. Elias B. Asuncion, in his capacity as Judge of Court of First Instance (CFI) Leyte
FACTS: Respondent judge rendered a final decision in Civil Case No. 2012 for lack of an appeal. A
project of partition was submitted to him, which he later approved. Among the parties thereto was
petitioner Macariola.
One of the properties mentioned in the project of partition was Lot 1184. This lot was adjudicated
t the plaintiffs Reyes in equal shares subdividing Lot 1184 into five (5) lots denominated as Lot
1184-A to 1184-E.
The fifth lot, Lot 1184-E, was sold to a Dr. Arcadio Galapon who later sold a portion of the lot to
respondent Judge Asuncion and his wife Victoria. Spouses Asuncion and Galapon conveyed their
respective shares and interests in Lot 1184-E to Traders Manufacturing and Fishing Industries, Inc,
owned and managed by Judge Asuncion.
Macariola then filed an instant complaint in the CFI of Leyte against Judge Asuncion charging him
with "Acts Unbecoming of a Judge" invoking Art 1491, par. 5 of the New Civil Code, pars.1 and 5 of
the Code of Commerce, Sec. 3 par. H of RA No. 3019, Section 12 Rule XVIII of the Civil Service Rules
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and Canon 25 of the Canons of Judicial Ethics. A certain Judge Nepomuceno however dismissed
such complaints. Hence, the case at bar.
ISSUE: Whether or not Judge Asuncion's act does not violate the above-mentioned provisions.
HELD: The Court held that respondent Judge Asuncion's acts did not constitute an "Act
Unbecoming of a Judge" but he was reminded to be more discreet in his private and business
activities for next time.
Article 1491, par. 5 of the New Civil Code applies only to the sale or assignment of the property
which is the subject of litigation to the persons disqualified therein. Respondent judge purchased
the said lot after the decision rendered was already final because no party filed for an appeal
within the reglementary period which makes the lot in question no longer the subject to litigation.
Furthermore, Judge Asuncion did not buy the lot in question directly from plaintiffs, rather from a
Dr. Arcadio Galapon.
Petition is hereby DENIED.
CENTRAL BANK OF THE PHILIPPINES as Liquidator of the FIDELITY SAVINGS BANK, petitioner,
vs.
HONORABLE JUDGE JESUS P. MORFE, as Presiding Judge of Branch XIII
This case involves the question of whether a final judgment for the payment of a time deposit in a
savings bank which judgment was obtained after the bank was declared insolvent, is a preferred
claim against the bank. The question arises under the following facts:
On February 18,1969 the Monetary Board found the Fidelity Savings Bank to be insolvent. The
Board directed the Superintendent of Banks to take charge of its assets, forbade it to do business
and instructed the Central Bank Legal Counsel to take legal actions (Resolution No. 350).
On December 9, 1969 the Board involved to seek the court's assistant and supervision in the
liquidation of the ban The resolution implemented only on January 25, 1972, when his Central
Bank of the Philippines filed the corresponding petition for assistance and supervision in the Court
of First Instance of Manila (Civil Case No. 86005 assigned to Branch XIII).
Prior to the institution of the liquidation proceeding but after the declaration of insolvency, or,
specifically, sometime in March, 1971, the spouses Job Elizes and Marcela P. Elizes filed a complaint
in the Court of First Instance of Manila against the Fidelity Savings Bank for the recovery of the sum
of P50, 584 as the balance of their time deposits (Civil Case No. 82520 assigned to Branch I).
In the judgment rendered in that case on December 13, 1972 the Fidelity Savings Bank was
ordered to pay the Elizes spouses the sum of P50,584 plus accumulated interest.
In another case, assigned to Branch XXX of the Court of First Instance of Manila, the spouses
Augusta A. Padilla and Adelaida Padilla secured on April 14, 1972 a judgment against the Fidelity
Savings Bank for the sums of P80,000 as the balance of their time deposits, plus interests, P70,000
as moral and exemplary damages and P9,600 as attorney's fees (Civil Case No. 84200 where the
action was filed on September 6, 1971).
In its orders of August 20, 1973 and February 25, 1974, the lower court (Branch XIII having
cognizance of the liquidation proceeding), upon motions of the Elizes and Padilla spouses and over
the opposition of the Central Bank, directed the latter as liquidator, to pay their time deposits
as preferred judgments, evidenced by final judgments, within the meaning of article 2244(14)(b) of
the Civil Code, if there are enough funds in the liquidator's custody in excess of the credits more
preferred under section 30 of the Central Bank Law in relation to articles 2244 and 2251 of the Civil
Code.
From the said order, the Central Bank appealed to this Court by certiorari. It contends that the final
judgments secured by the Elizes and Padilla spouses do not enjoy any preference because (a) they
were rendered after the Fidelity Savings Bank was declared insolvent and (b) under the charter of
the Central Bank and the General Banking Law, no final judgment can be validly obtained against
an insolvent bank.
Republic Act No. 265 provides:t.hqw
SEC. 29. Proceeding upon insolvency.Whenever upon examination by the
Superintendent or his examiners or agents into the condition of any banking
institution, it shall be disclosed that the condition of the same is one of
insolvency, or that its continuance in business would involve probable loss to
its depositors or creditors, it shall be the duty of the Superintendent
forthwith, in writing to inform the Monetary Board of the facts, and the
Board, upon finding the statements of the Superintendent to be true, shall
forthwith forbid the institution to do business in the Philippines and shall take
charge of its assets and proceeds according to law.
The Monetary Board shall thereupon determine within thirty days whether
the institution may be reorganized or otherwise placed in such a condition so
that it may be permitted to resume business with safety to its creditors and
shall prescribe the conditions under which such resumption of business shall
take place. In such case the expenses and fees in the administration of the
institution shall be determined by the Board and shall be paid to the Central
Bank out of the assets of such banking institution.
At any time within ten days after the Monetary Board has taken charge of the
assets of any banking institution, such institution may apply to the Court of
First Instance for an order requiring the Monetary Board to show cause why it
should not be enjoined from continuing such charge of its assets, and the
court may direct the Board to refrain from further proceedings and to
surrender charge of its assets.
If the Monetary Board shall determine that the banking institution cannot
resume business with safety to its creditors, it shall, by the Office of the
Solicitor General, file a petition in the Court of First Instance reciting the
proceedings which have been taken and praying the assistance and
supervision of the court in the liquidation of the affairs of the same. The
Superintendent shall thereafter, upon order of the Monetary Board and under
the supervision of the court and with all convenient speed, convert the assets
of the banking institution to money.
SEC. 30. Distribution of assets.In case of liquidation of a banking institution,
after payment of the costs of the proceedings, including reasonable expenses
and fees of the Central Bank to be allowed by the court, the Central Bank shall
pay the debts of such institution, under the order of the court, in accordance
with their legal priority.
The General Banking Act, Republic Act No. 337, provides:t.hqw
SEC. 85. Any director or officer of any banking institution who receives or
permits or causes to be received in said bank any deposit, or who pays out or
permits or causes to be paid out any funds of said bank, or who transfers or
permits or causes to be transferred any securities or property of said bank,
after said bank becomes insolvent, shall be punished by fine of not less than
one thousand nor more than ten thousand pesos and by imprisonment for
not less than two nor more than ten years.
The Civil Code provides:t.hqw
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 ART. 2237. Insolvency shall be governed by special laws insofar as they are not
inconsistent with this Code. (n)
ART. 2244. With reference to other property, real and personal, of the debtor,
the following claims or credits shall be preferred in the order named:
xxx xxx xxx
(14) Credits which, without special privilege, appear in (a) a public instrument;
or (b) in a final judgment, if they have been the subject of litigation. These
credits shall have preference among themselves in the order of priority of the
dates of the instruments and of the judgments, respectively. (1924a)
ART. 2251. Those credits which do not enjoy any preference with respect to
specific property, and those which enjoy preference, as to the amount not
paid, shall be satisfied according to the following rules:
(1) In the order established in article 2244;
(2) Common credits referred to in article 2245 shall be paid pro
rata regardless of dates. (1929a)
The trial court or, to be exact, the liquidation court noted that there is no provision in the charter
of the Central Bank in the General Banking Law (Republic Acts Nos. 265 and 337, respectively)
which suspends or abates civil actions against an insolvent bank pending in courts other than the
liquidation court. It reasoned out that, because such actions are not suspended, judgments against
insolvent banks could be considered as preferred credits under article 2244(14)(b) of the Civil
Code. It further noted that, in contrast with the Central Act, section 18 of the Insolvency Law
provides that upon the issuance by the court of an order declaring a person insolvent "all civil
proceedings against the said insolvent shall be stayed."
The liquidation court directed the Central Bank to honor the writs of execution issued by Branches I
and XXX for the enforcement of the judgments obtained by the Elizes and Padilla spouses. It
suggested that, after satisfaction of the judgment the Central Bank, as liquidator, should include
said judgments in the list of preferred credits contained in the "Project of Distribution" "with the
notation "already paid" "
On the other hand, the Central Bank argues that after the Monetary Board has declared that a
bank is insolvent and has ordered it to cease operations, the Board becomes the trustee of its
assets "for the equal benefit of all the creditors, including the depositors". The Central Bank cites
the ruling that "the assets of an insolvent banking institution are held in trust for the equal benefit
of all creditors, and after its insolvency, one cannot obtain an advantage or a preference over
another by an attachment, execution or otherwise" (Rohr vs. Stanton Trust & Savings Bank, 76
Mont. 248, 245 Pac. 947).
The stand of the Central Bank is that all depositors and creditors of the insolvent bank should file
their actions with the liquidation court. In support of that view it cites the provision that the
Insolvency Law does not apply to banks (last sentence, sec. 52 of Act No. 1956).
It also invokes the provision penalizing a director officer of a bank who disburses, or allows
disbursement, of the funds of the bank after it becomes insolvent (Sec. 85, General Banking Act,
Republic Act No. 337). It cites the ruling that "a creditor of an insolvent state bank in the hands of a
liquidator who recovered a judgment against it is not entitled to a preference for (by) the mere fact
that he is a judgment creditor" (Thomas H. Briggs & Sons, Inc. vs. Allen, 207 N. Carolina 10, 175 S.
E. 838, Braver Liquidation of Financial Institutions, p. 922).
It should be noted that fixed, savings, and current deposits of money in banks and similar
institutions are not true deposits. They are considered simple loans and, as such, are not preferred
credits (Art. 1980, Civil Code; In re Liquidation of Mercantile Bank of China: Tan Tiong Tick vs.
American Apothecaries Co., 65 Phil. 414; Pacific Coast Biscuit Co. vs. Chinese Grocers Association,
65 Phil. 375; Fletcher American National Bank vs. Ang Cheng Lian, 65 Phil. 385; Pacific Commercial
Co. vs. American Apothecaries Co., 65 Phil. 429; Gopoco Grocery vs. Pacific Coast Biscuit Co., 65
Phil. 443).
The aforequoted section 29 of the Central Bank's charter explicitly provides that when a bank is
found to be insolvent, the Monetary Board shall forbid it to do business and shall take charge of its
assets. The Board in its Resolution No. 350 dated February 18,1969 banned the Fidelity Savings
Bank from doing business. It took charge of the bank's assets. Evidently, one purpose in prohibiting
the insolvent bank from doing business is to prevent some depositors from having an undue or
fraudulent preference over other creditors and depositors.
That purpose would be nullified if, as in this case, after the bank is declared insolvent, suits by
some depositors could be maintained and judgments would be rendered for the payment of their
deposits and then such judgments would be considered preferred credits under article 2244 (14)
(b) of the Civil Code.
We are of the opinion that such judgments cannot be considered preferred and that article
2244(14)(b) does not apply to judgments for the payment of the deposits in an insolvent savings
bank which were obtained after the declaration of insolvency.
A contrary rule or practice would be productive of injustice, mischief and confusion. To recognize
such judgments as entitled to priority would mean that depositors in insolvent banks, after
learning that the bank is insolvent as shown by the fact that it can no longer pay withdrawals or
that it has closed its doors or has been enjoined by the Monetary Board from doing business,
would rush to the courts to secure judgments for the payment of their deposits.
In such an eventuality, the courts would be swamped with suits of that character. Some of the
judgments would be default judgments. Depositors armed with such judgments would pester the
liquidation court with claims for preference on the basis of article 2244(14)(b). Less alert
depositors would be prejudiced. That inequitable situation could not have been contemplated by
the framers of section 29.
The Rohr case (supra) supplies some illumination on the disposition of the instant case. It appears
in that case that the Stanton Trust & Savings Bank of Great Falls closed its doors to business on July
9, 1923. On November 7,1924 the bank (then already under liquidation) issued to William Rohr a
certificate stating that he was entitled to claim from the bank $1,191.72 and that he was entitled to
dividends thereon. Later, Rohr sued the bank for the payment of his claim. The bank demurred to
the complaint. The trial court sustained the demurrer. Rohr appealed. In affirming the order
sustaining the demurrer, the Supreme Court of Montana said:t.hqw
The general principle of equity that the assets of an insolvent are to he
distributed ratably among general creditors applies with full force to the
distribution of the assets of a bank. A general depositor of a bank is merely a
general creditor, and, as such, is not entitled to any preference or priority over
other general creditors.
The assets of a bank in process of liquidation are held in trust for the equal
benefit of all creditors, and one cannot be permitted to obtain an advantage
or preference over another by an attachment, execution or otherwise. A
disputed claim of a creditor may be adjudicated, but those whose claims are
recognized and admitted may not successfully maintain action thereon. So to
permit would defeat the very purpose of the liquidation of a bank whether
being voluntarily accomplished or through the intervention of a receiver.
xxx xxx xxx
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 The available assets of such a bank are held in trust, and so conserved that
each depositor or other creditor shall receive payment or dividend according
to the amount of his debt, and that none of equal class shall receive any
advantage or preference over another.
And with respect to a national bank under voluntary liquidation, the court noted in the Rohr case
that the assets of such a bank "become a trust fund, to be administered for the benefit of all
creditors pro rata and, while the bank retains its corporate existence, and may be sued, the effect
of a judgment obtained against it by a creditor is only to fix the amount of debt. He can acquire no
lien which will give him any preference or advantage over other general creditors. (245 Pac. 249). *
Considering that the deposits in question, in their inception, were not preferred credits, it does not
seem logical and just that they should be raised to the category of preferred credits simply because
the depositors, taking advantage of the long interval between the declaration of insolvency and the
filing of the petition for judicial assistance and supervision, were able to secure judgments for the
payment of their time deposits.
The judicial declaration that the said deposits were payable to the depositors, as indisputably they
were due, could not have given the Elizes and Padilla spouses a priority over the other depositors
whose deposits were likewise indisputably due and owing from the insolvent bank but who did not
want to incur litigation expenses in securing a judgment for the payment of the deposits.
The circumstance that the Fidelity Savings Bank, having stopped operations since February 19,
1969, was forbidden to do business (and that ban would include the payment of time deposits)
implies that suits for the payment of such deposits were prohibited. What was directly prohibited
should not be encompassed indirectly. (See Maurello vs. Broadway Bank & Trust Co. of Paterson
176 Atl. 391, 114 N.J.L. 167).
It is noteworthy that in the trial court's order of October 3, 1972, which contains the Bank
Liquidation Rules and Regulations, it indicated in step III the procedure for processing the claims
against the insolvent bank. In Step IV, the court directed the Central Bank, as liquidator, to submit a
Project of Distribution which should include "a list of the preferred credits to be paid in full in the
order of priorities established in Articles 2241, 2242, 2243, 2246 and 2247" of the Civil Code (note
that article 2244 was not mentioned). There is no cogent reason why the Elizes and Padilla spouses
should not adhere to the procedure outlined in the said rules and regulations.
WHEREFORE, the lower court's orders of August 20, 1973 and February 25, 1974 are reversed and
set aside. No costs.
SO ORDERED.
Chiongbian v Orbos (
This suit challenges the validity of:-Sec. 13, Art. 29 of RA No. 6734 (the Organic Act for the
Autonomous Region in MuslimMindanao)-Executive Order No. 429 (Providing for the
Reorganization of Administrative Regions inMindanao
Facts:
1.Pursuant to Sec. 18, Art X of the Constitution, Congress passed RA No. 6734
2. RA No. 6734 called for a plebiscite to be held in the following provinces: Basilan,Cotabato, Davao
del Sur, Lanao del Norte, Lanao del Sur, Maguindanao, Palawan, SouthCotabato, Sultan Kudarat,
Sulu, Tawi-Tawi, Zamboanga del Norte, and Zamboanga delSur; and the following cities: Cotabato,
Dapitan, Dipolog, General Santos, Iligan,Marawi, Pagadian, Puerto Prinsesa, and Zamboanga3.Four
provinces voted in favor of creating an autonomous region: Lanao del Sur,Maguindanao, Sulu,
Tawi-tawi4.The cities and provinces not voting in favor of the Autonomous Region were under
ArtXIX, Sec. 13 of the RA 6734:
That only provinces and cities voting favorably in plebiscites shall be included in the ARMM. The
provinces and cities which in the plebiscite do not vote for inclusion in the Autonomous Region
shall remain in the existing administrative regions. Provided,however, that the President may, by
administrative determination, merge the existingregions
With this provision, President Aquino issued Executive Order No. 429, Providing
fortheReorganization of the Administrative Regions in Mindanao.
Petitioners, members of the Congress, wrote to Corazon Aquino, contending that theres:
No law authorizing the President to pick certain provinces and cities to berestructured to new
administrative regions
Some of the provinces and cities in the regions did not even take part in theplebiscite
The transfer of provinces is an alteration of existing governmental units orreorganization. The
authority to merge doesnt include the authority toreorganize.7.The inauguration of the New
Administrative Region IX went ahead.8.Congress brought the suit for prohibition and certiorari;
petitioner Jaldon brough a suitas resident of Zamboanga City, taxpayer and citizen of the Republic.
Petitioners:
1.Section 29 of RA 6734 is unconstitutional because it unduly delegates legislative powerto the
President by authorizing him to merge existing region and provides no standardfor the exercise of
the power delegated; and,
2.The power granted is not expressed in the title of the law.
Facts: In 1990, President Aquino issued E. O. No. 439 wherein she picked certain provinces and
cities, some of which did not participate in the inclusion to the ARMM, to the reorganized to new
regions (e.g. Misamis Occidental, whichdid not participate in the ARMM plebiscite, was transferred
from Region X to Region XI). Aquino issued said E. O.pursuant ant R. A. 6734, which says: That
only the provinces and cities voting favorably in suitable plebiscites shall beincluded in the ARMM.
The provinces and cities which plebiscite no vote for inclusion in the Autonomous Region
shallremain in the existing administrative regions. Provided however, that the President may, by
administrative determination,merge existing regions. James Chiongbian, a Sultan Kudarat
congressman, filed a certiorari prohibition to protest the E.O., claiming that President Aquino had
no power to reorganize administrative regions because said provision in R. A. 67341) also states
that provinces, cities which in the plebiscite do not vote for inclusion in the Autonomous Region
shall remainthe existing administrative regions 2) the Constitution does not expressly provide the
President the power to mergeadministrative regions; in fact Art. 10, Sec. 10 of the Constitution
(see II of your outline) prohibits this and 3) even grantingthat the President is allowed to merge
administrative regions, there is law setting standard on how it is to be done.
Held: Chiongbian is wrong. Reasons:1)The sentence shall remain in the existing administrative
regions, is further qualify by the phrase, Providedhowever that the President may, by
administration determination merge the existing regions.2)Past legislation, particularly R. A. 5345
issued in 1968, authorized the President the help of a Commission onReorganization, to reorganize
the different example departments including administrative regions. This showsthat traditional
power to reorganize administrative regions has always been lodged in the President
The standard is found in R. A. 5345 which states to promote simplicity, economic efficiency in
thegovernment to enable it to pursue programs consistent with no goals for accelerated social and
economicdevelopment and to improve service transaction of the public business.