CALTEX (PHILIPPINES) INC.
, petitioner- and 1983 of the Revised Administrative Code, the
appellee, vs. ENRICO PALOMAR, in his
capacity as THE POSTMASTER GENERAL,
respondent-appellant.1966 September 29En
BancG.R. No. L-19650D E C I S I O N
CASTRO, J.:
In the year 1960 the Caltex (Philippines) Inc.
(hereinafter referred to as Caltex) conceived and
laid the groundwork for a promotional scheme
calculated to drum up patronage for its oil
products. Denominated "Caltex Hooded Pump
Contest", it calls for participants therein to
estimate the actual number of liters a hooded gas
pump at each Caltex station will dispense during
a specified period. Employees of the Caltex
(Philippines) Inc., its dealers and its advertising
agency, and their immediate families excepted,
participation is to be open indiscriminately to all
"motor vehicle owners and/or licensed drivers".
For the privilege to participate, no fee or
consideration is required to be paid, no purchase
of Caltex products required to be made. Entry
forms are to be made available upon request at
each Caltex station where a sealed can will be
provided for the deposit of accomplished entry
stubs.
A three-staged winner selection system is
envisioned. At the station level, called "Dealer
Contest", the contestant whose estimate is
closest to the actual number of liters dispensed
by the hooded pump thereat is to be awarded the
first prize; the next closest, the second; and the
next, the third. Prizes at this level consist of a 3-
burner kerosene stove for first; a thermos bottle
and a Ray-O-Vac hunter lantern for second; and
an Eveready Magnet-lite flashlight with batteries
and a screwdriver set for third. The first prize
winner in each station will then be qualified to
join in the "Regional Contest" in seven different
regions. The winning stubs of the qualified
contestants in each region will be deposited in a
sealed can from which the first-prize, second
prize and third prize winners of that region will be
drawn. The regional first-prize winners will be
entitled to make a three-day all-expenses-paid
round trip to Manila, accompanied by their
respective Caltex dealers in order to take part in
the "National Contest". The regional second-prize
and third-prize winners will receive cash prizes of
P500 and P300, respectively. At the national
level, the stubs of the seven regional first-prize
winners will be placed inside a sealed can from
which the drawing for the final first-prize,
second-prize and third prize winners will be
made. Cash prizes in store for winners at this
final stage are: P3,000 for first; P2,000 for
second; P1,500 for third; and P650 as
consolation prize for each of the remaining four
participants.
Foreseeing the extensive use of the mails
not only as amongst the media for publicizing the
contest but also for the transmission of
communications relative thereto, representations
were made by Caltex with the postal authorities
for the contest to be cleared in advance for
mailing, having in view sections 1954 (a), 1982
pertinent provisions of which read as follows:
"SECTION 1954. Absolutely non-
mailable matter. — No matter belonging to any of
the following classes, whether sealed as first-
class matter or not, shall be imported into the
Philippines through the mails, or be deposited in
or carried by the mails of the Philippines, or be
delivered to its addressee by any officer or
employee of the Bureau of Posts:
(a) Written or printed matter in any form
advertising, describing, or in any manner
pertaining to, or conveying or purporting to
convey any information concerning any lottery,
gift enterprise, or similar scheme depending in
whole or in part upon lot or chance, or any
scheme, device, or enterprise for obtaining any
money or property of any kind by means of false
or fraudulent pretenses, representations, or
promises."
"SECTION 1982. Fraud orders. —
Upon satisfactory evidence that any person or
company is engaged in conducting any lottery,
gift enterprise, or scheme for the distribution of
money, or of any real or personal property by lot,
chance, or drawing of any kind, or that any
person or company is conducting any scheme,
device, or enterprise for obtaining money or
property of any kind through the mails by means
of false or fraudulent pretenses, representations,
or promises, the Director of Posts may instruct
any postmaster or other officer or employee of
the Bureau to return to the person, depositing
same in the mails, with the word 'fraudulent'
plainly written or stamped upon the outside cover
thereof, any mail matter of whatever class mailed
by or addressed to such person or company or
the representative or agent of such person or
company."
"SECTION 1983. Deprivation, of use
of money order system and telegraphic transfer
service. — The Director of Posts may, upon
evidence satisfactory to him that any person or
company is engaged in conducting any lottery,
gift enterprise, or scheme for the distribution of
money, or of any reel or personal property by lot,
chance, or drawing of any kind, or that any
person or company is conducting any scheme,
device, or enterprise for obtaining money or
property of any kind through the mails by means
of false or fraudulent pretenses, representations,
or promise, forbid the issue or payment by any
postmaster of any postal money order or
telegraphic transfer to said person or company or
to the agent of any such person or company,
whether such agent is acting as an individual or
as a firm, bank, corporation, or association of any
kind, and may provide by regulation for the
return to the remitters of the sums named in
money orders or telegraphic transfers drawn in
favor of such person or company or its agent."
The overtures were later formalized in a
letter to the Postmaster General, dated October
31, 1960, in which the Caltex, thru counsel,
enclosed a copy of the contest rules and
endeavored to justify its position that the contest
does not violate the anti-lottery provisions of the
Postal Law. Unimpressed, the then Acting
Postmaster General opined that the scheme falls
within the purview of the provisions aforesaid and
declined to grant the requested clearance. In its
counsel's letter of December 7, 1960, Caltex
sought a reconsideration of the foregoing stand,
stressing that there being involved no
consideration on the part of any contestant, the
contest was not, under controlling authorities,
condemnable as a lottery. Relying, however, on
an opinion rendered by the Secretary of Justice
on an unrelated case seven years before (Opinion
217, Series of l953), the Postmaster General
maintained his view that the contest involves
consideration, or that, if it does not, it is
nevertheless a "gift enterprise" which is equally
banned by the Postal Law, and in his letter of
December 10, 1960 not only denied the use of
the mails for purposes of the proposed contest
but as well threatened that if the contest was
conducted, "a fraud order will have to be issued
against it (Caltex) and all its representatives."
Caltex thereupon invoked judicial
intervention by filing the present petition for
declaratory relief against Postmaster General
Enrico Palomar, praying "that judgment be
rendered declaring its 'Caltex Hooded Pump
Contest' not to be violative of the Postal Law, and
ordering respondent to allow petitioner the use of
the mails to bring the contest to the attention of
the public". After issues were joined upon the
respective memoranda of the parties, the trial
court rendered judgment as follows:
"In view of the foregoing considerations,
the Court holds that the proposed 'Caltex Hooded
Pump Contest' announced to be conducted by the
petitioner under the rules marked as Annex B of
the petition do (sic) not violate the Postal Law
and the respondent has no right to bar the public
distribution of said rules by the mails."
The respondent appealed.
The parties are now before us, arrayed
against each other upon two basic issues: first,
whether the petition states a sufficient cause of
action for declaratory relief; and, second,
whether the proposed "Caltex Hooded Pump
Contest" violates the Postal Law. We shall take
these up in seriatim.
1. By express mandate of section 1 of Rule
66 of the old Rules of Court, which was the
applicable legal basis for the remedy at the time
it was invoked, declaratory relief is available to
any person "whose rights are affected by a
statute . . . to determine any question of
construction or validity arising under the . . .
statute and for a declaration of his rights or
duties thereunder" (now section 1, Rule 64,
Revised Rules of Court). In amplification, this
Court, conformably to established jurisprudence
on the matter, laid down certain conditions sine
qua non therefor to wit: (1) there must be a
justiciable controversy; (2) the controversy must
be between persons whose interests are adverse;
(3) the party seeking declaratory relief must
have a legal interest in the controversy; and (4)
the issue involved must be ripe for judicial
determination (Tolentino vs. The Board of
Accountancy, et al. 90 Phil., 83; Delumen, et al.
vs. Republic of the Philippines, 94 Phil., 287; 50
Off. Gaz., No. 2, pp. 578, 578-579; Edades vs.
Edades, et al., 99 Phil., 675). The gravamen of
the appellant's stand being that the petition
herein states no sufficient cause of action for
declaratory relief, our duty is to assay the factual
bases thereof upon the foregoing crucible.
As we look in retrospect at the incidents
that generated the present controversy, a
number of significant points stand out in bold
relief. The appellee (Caltex), as a business
enterprise of some consequence, concededly has
the unquestioned light to exploit every legitimate
means, and to avail of all appropriate media to
advertise and stimulate increased patronage for
its products. In contrast, the appellant, as the
authority charged with the enforcement of the
Postal Law, admittedly has the power and the
duty to suppress transgressions thereof —
particularly thru the issuance of fraud orders,
under sections 1982 and 1983 of the Revised
Administrative Code, against legally non-mailable
schemes. Obviously pursuing its right aforesaid,
the appellee laid out plans for the sales
promotion scheme hereinbefore detailed. To
forestall possible difficulties in the dissemination
of information thereon thru the mails, amongst
other media, it was found expedient to request
the appellant for an advance clearance therefor.
However, likewise by virtue of his jurisdiction in
the premises and construing the pertinent
provisions of the Postal Law, the appellant saw a
violation thereof in the proposed scheme and
accordingly declined the request. A point of
difference as to the correct construction to be
given to the applicable statute was thus reached.
Communications in which the parties expounded
on their respective theories were exchanged. The
confidence with which the appellee insisted upon
its position was matched only by the obstinacy
with which the appellant stood his ground. And
this impasse was climaxed by the appellant's
open warning to the appellee that if the proposed
contest was "conducted, a fraud order will have
to be issued against it and all its
representatives."
Against this backdrop, the stage was
indeed set for the remedy prayed for. The
appellee's insistent assertion of its claim to the
use of the mails for its proposed contest, and the
challenge thereto and consequent denial by the
appellant of the privilege demanded, undoubtedly
spawned a live controversy. The justiciability of
the dispute cannot be gainsaid. There is an active
antagonistic assertion of a legal right on one side
and a denial thereof on the other, concerning a
real — not a mere theoretical — question or
issue. The contenders are as real as their interest
are substantial. To the appellee, the uncertainty
occasioned by the divergence of views on the
issue of construction hampers or disturbs its
freedom to enhance its business. To the
appellant, the suppression of the appellee's
proposed contest believed to transgress a law he
has sworn to uphold and enforce is an
unavoidable duty. With the appellee's bent to
hold the contest and the appellant's threat to
issue a fraud order therefor if carried out, the
contenders are confronted by the ominous
shadow of an imminent and inevitable litigation
unless their differences are settled and stabilized
by a tranquilizing declaration (Pablo y Sen, et al.
vs. Republic of the Philippines, G. R. No. L-6868,
April 30, 1955). And, contrary to the insinuation
of the appellant, the time is long past when it can
rightly be said that merely the appellee's "desires
are thwarted by its own doubts, or by the fears of
others" — which admittedly does not confer a
cause of action. Doubt, if any there was, has
ripened into a justiciable controversy when, as in
the case at bar, it was translated into a positive
claim of right which is actually contested (III
Moran, Comments on the Rules of Court, 1963
ed., pp. 132-133, citing: Woodward vs. Fox West
Coast Theaters, 36 Ariz., 251, 284 Pac. 350).
We cannot hospitably entertain the appellant's
pretense that there is here no question of
construction because the said appellant "simply
applied the clear provisions of the law to a given
set of facts as embodied in the rules of the
contest", hence, there is no room for declaratory
relief. The infirmity of this pose lies in the fact
that it proceeds from the assumption that, in the
circumstances here presented, the construction
of the legal provisions can be divorced from the
matter of their application to the appellee's
contest. This is not feasible. Construction, verily,
is the art or process of discovering and
expounding the meaning and intention of the
authors of the law with respect to its application
to a given case, where that intention is rendered
doubtful, amongst others, by reason of the fact
that the given case is not explicitly provided for
in the law (Black, Interpretation of Laws, p. 1).
This is precisely the case here. Whether or not
the scheme proposed by the appellee is within
the coverage of the prohibitive provisions of the
Postal Law inescapably requires an inquiry into
the intended meaning of the words used therein.
To our mind, this is as much a question of
construction or interpretation as any other.
Nor it is accurate to say, as the appellant
intimates, that a pronouncement on the matter
at hand can amount to nothing more than an
advisory opinion the handing down of which is
anathema to a declaratory relief action. Of
course, no breach of the Postal Law has as yet
been committed. Yet, the disagreement over the
construction thereof is no longer nebulous or
contingent. It has taken a fixed and final shape,
presenting clearly defined legal issues susceptible
of immediate resolution. With the battle lines
drawn, in a manner of speaking, the propriety —
nay, the necessity — of setting the dispute at
rest before it accumulates the asperity,
distemper, animosity, passion and violence of a
full-blown battle which looms ahead (III Moran,
Comments on the Rules of Court, 1963 ed., p.
132 and cases cited), cannot but be conceded.
Paraphrasing the language in Zeitlin vs.
Arnebergh, 59 Cal., 2d., 901, 31 Cal. Rptr., 800,
383 P. 2d., 152, cited in 22 Am. Jur., 2d., p. 869,
to deny declaratory relief to the appellee in the
situation into which it has been cast, would be to
force it to choose between undesirable
alternatives. If it cannot obtain a final and
definitive pronouncement as to whether the anti-
lottery provisions of the Postal Law apply to its
proposed contest, it would be faced with these
choices: If it launches the contest and uses the
mails for purposes thereof, it not only incurs the
risk, but is also actually threatened with the
certain imposition, of a fraud order with its
concomitant stigma which may attach even if the
appellee will eventually be vindicated; if it
abandons the contest, it becomes a self-
appointed censor, or permits the appellant to put
into effect a virtual fiat of previous censorship
which is constitutionally unwarranted. As we
weigh these considerations in one equation and
in the spirit of liberality with which the Rules of
Court are to be interpreted in order to promote
their object (Section 1, Rule 1, Revised Rules of
Court) — which, in the instant case, is to settle,
and afford relief from uncertainty and insecurity
with respect to, rights and duties under a law —
we cannot see in the present case any imposition
upon our jurisdiction or any futility or prematurity
in our intervention.
The appellant, we apprehend, underrates the
force and binding effect of the ruling we hand
down in this case if he believes that it will not
have the final and pacifying function that a
declaratory judgment is calculated to subserve.
At the very least, the appellant will be bound. But
more than this, he obviously overlooks that in
this jurisdiction, "Judicial decisions applying or
interpreting the law shall form a part of the legal
system" (article 8, Civil Code of the Philippines).
In effect, judicial decision assume the same
authority as the statute itself and, until
authoritatively abandoned, necessarily become,
to the extent that they are applicable, the criteria
which must control the actuations not only of
those called upon to abide thereby but also of
those in duty bound to enforce obedience
thereto. Accordingly, we entertain no misgivings
that our resolution of this case will terminate the
controversy at hand.
It is not amiss to point out at this juncture
that the conclusion we have herein just reached
is not without precedent. In Liberty Calendar Co.
vs. Cohen, 19 N. J., 399, 117 A. 2d., 487, where
a corporation engaged in promotional advertising
was advised by the county prosecutor that its
proposed sales promotion plan had the
characteristics of a lottery, and that if such sales
promotion were conducted, the corporation would
be subject to criminal prosecution, it was held
that the corporation was entitled to maintain a
declaratory relief action against the county
prosecutor to determine the legality of its sales
promotion plan. In pari materia, see also: Bunis
vs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S.
2d., 435; Zeitlin vs. Arnebergh, supra.; Thrillo,
Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d.,
903.
In fine, we hold that the appellee has
made out a case for declaratory relief.
2. The Postal Law, chapter 52 of the Revised
Administrative Code, using almost identical
terminology in sections 1954(a), 1982 and 1983
thereof, supra, condemns as absolutely non-
mailable, and empowers the Postmaster General
to issue fraud orders against, or otherwise deny
the use of the facilities of the postal service to,
any information concerning "any lottery, gift
enterprise, or scheme for the distribution of
money, or of any real or personal property by lot,
chance, or drawing of any kind". Upon these
words hinges the resolution of the second issue
posed in this appeal.
Happily, this is not an altogether untrodden
judicial path. As early as in 1922, in "El Debate",
Inc. vs. Topacio, 44 Phil., 278, 283-284, which
significantly dwelt on the power of the postal
authorities under the above-mentioned provisions
of the Postal Law, this Court declared that —
"While countless definitions of lottery have
been attempted, the authoritative one for this
jurisdiction is that of the United States Supreme
Court, in analogous cases having, to do with the
power of the United States Postmaster General,
viz: The term 'lottery' extends to all schemes for
the distribution of prizes by chance, such as
policy playing, gift exhibitions, prize concerts,
raffles at fairs,-etc., and various forms of
gambling. The three essential elements of a
lottery are: First, consideration; second, prize;
and third, chance. (Horner vs. United States
[1892], 147 U.S. 449; Public Clearing House vs.
Coyne [1903], 194 U.S., 497; U.S. vs. Filart and
Singson [1915], 30 Phil., 80; U.S. vs. Olsen and
Marker [1917], 36 Phil., 395; U.S. vs. Baguio
[1919], 39 Phil, 962; Valhalla Hotel Construction
Company vs. Carmona, p. 233, ante.)"
Unanimity there is in all quarters, and we
agree, that the elements of prize and chance are
too obvious in the disputed scheme to be the
subject of contention. Consequently, as the
appellant himself concedes, the field of inquiry is
narrowed down to the existence of the element of
consideration therein. Respecting this matter, our
tasks is considerably lightened inasmuch as in
the same case just cited, this Court has laid down
a definitive yardstick in the following terms —
"In respect to the last element of
consideration, the law does not condemn the
gratuitous distribution of property by chance, if
no consideration is derived directly or indirectly
from the party receiving the chance, but does
condemn as criminal schemes in which a valuable
consideration of some kind is paid directly or
indirectly for the chance to draw a prize."
Reverting to the rules of the proposed
contest, we are struck by the clarity of the
language in which the invitation to participate
therein is couched. Thus —
"No puzzles. no rhymes? You don't need
wrappers, labels or boxtops? You don't have to
buy anything? Simply estimate the actual number
of liters the Caltex gas pump with the hood at
your favorite Caltex dealer will dispense from . . .
to . . ., and win valuable prizes . . ."
Nowhere in the said rules is any
requirement that any fee be paid, any
merchandise be bought, any service be rendered,
or any value whatsoever be given for the
privilege to participate. A prospective contestant
has but to go to a Caltex station, request for the
entry form which is available on demand, and
accomplish and submit the same for the drawing
of the winner. Viewed from all angles or turned
inside out, the contest fails to exhibit any
discernible consideration which would brand it as
a lottery. Indeed, even as we heed the stern
injunction, "look beyond the fair exterior, to the
substance, in order to unmask the real element
and pernicious tendencies which the law is
seeking to prevent" ("El Debate", Inc. vs.
Topacio, supra, p. 291), we find none. In our
appraisal, the scheme does not only appear to
be, but actually is, a gratuitous distribution of
property by chance.
There is no point to the appellant's insistence
that non-Caltex customers who may buy Caltex
products simply to win a prize would actually be
indirectly paying a consideration for the privilege
to join the contest. Perhaps this would be tenable
if the purchase of any Caltex product or the use
of any Caltex service were a pre-requisite to
participation. But it is not. A contestant, it hardly
needs reiterating, does not have to buy anything
or to give anything of value.
Off-tangent, too, is the suggestion that
the scheme, being admittedly for sales
promotion, would naturally benefit the sponsor in
the way of increased patronage by those who will
be encouraged to prefer Caltex products "if only
to get the chance to draw a prize by securing
entry blanks". The required element of
consideration does not consist of the benefit
derived by the proponent of the contest. The true
test, as laid down in People vs. Cardas, 28 P. 2d.
99, 137 Cal. App. (Supp). 788, is whether the
participant pays a valuable consideration for the
chance, and not whether those conducting the
enterprise receive something of value in return
for the distribution of the prize. Perspective
properly oriented, the standpoint of the
contestant is all that matters, not that of the
sponsor. The following, culled from Corpus Juris
Secundum, should set the matter at rest:
"The fact that the holder of the drawing
expects thereby to receive, or in fact does
receive, some benefit in the way of patronage or
otherwise, as a result of the drawing, does not
supply the element of consideration. Griffith
Amusement Co. vs. Morgan, Tex. Civ. App., 98
S.W. 2d., 844." (54 C.J.S., p. 849).
Thus enlightened, we join the trial court in
declaring that the "Caltex Hooded Pump Contest"
proposed by the appellee is not a lottery that
may be administratively and adversely dealt with
under the Postal Law.
Put it may be asked: Is it not at least a
"gift enterprise, or scheme for the distribution of
money, or of any real or personal property by lot,
chance, or drawing of any kind", which is equally
proscribed? Incidentally, while the appellant's
brief appears to have concentrated on the issue
of consideration, this aspect of the case cannot
be avoided if the remedy here invoked is to
achieve its tranquilizing effect as an instrument
of both curative and preventive justice. Recalling
that the appellant's action was predicted,
amongst other bases, upon Opinion 217, Series
1953, of the Secretary of Justice, which opined in
effect that a scheme, though not a lottery for
want of consideration, may nevertheless be a gift
enterprise in which that element is not essential,
the determination of whether or not the proposed
contest — wanting in consideration as we have
found it to be — is a prohibited gift enterprise,
cannot be passed over sub silencio.
While an all-embracing concept of the
term "gift enterprise" is yet to be spelled out in
explicit words, there appears to be a consensus
among lexicographers and standard authorities
that the term is commonly applied to a sporting
artifice under which goods are sold for their
market value but by way of inducement each
purchaser is given a chance to win a prize (54
C.J.S., 850; 34 Am. Jur., 654; Black, Law
Dictionary, 4th ed., p. 817; Ballantine, Law
Dictionary with Pronunciations, 2nd ed., p. 55;
Retail Section of Chamber of Commerce of
Plattsmouth vs. Kieck, 257 N.W., 493, 128 Neb.
13; Barker vs. State, 193 S.E., 605, 56 Ga. App.,
705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed,
507, 509). As thus conceived, the term clearly
cannot embrace the scheme at bar. As already
noted, there is no sale of anything to which the
chance offered is attached as an inducement to
the purchaser. The contest is open to all qualified
contestants irrespective of whether or not they
buy the appellee's products.
Going a step farther, however, and
assuming that the appellee's contest can be
encompassed within the broadest sweep that the
term "gift enterprise" is capable of being
extended, we think that the appellant's pose will
gain no added comfort. As stated in the opinion
relied upon, rulings there are indeed holding that
a gift enterprise involving an award by chance,
even in default of the element of consideration
necessary to constitute a lottery, is prohibited
(E.g.: Crimes vs. State, 235 Ala. 192, 178 So.
73; Russell vs. Equitable Loan & Sec. Co., 129
Ga., 154, 58 S.E, 88; State ex. rel. Stafford vs.
Fox- Great Falls Theater Corporation, 132 P. 2d.,
689, 694, 698, 114 Mont. 52). But this is only
one side of the coin. Equally impressive
authorities declare that, like a lottery, a gift
enterprise comes within the prohibitive statutes
only if it exhibits the tripartite elements of prize,
chance and consideration (E.g.: Bills vs. People,
157 P. 2d., 139, 142, 113 Colo., 326; D'Orio vs.
Jacobs, 275 P. 563, 565, 151 Wash., 297; People
vs. Psallis, 12 N.Y.S., 2d., 796; City and County
of Denver vs. Frueauff, 88 P., 389, 394, 39 Colo.
20, 7 L.R.A., N. S. 1131, 12 Ann. Cas., 521; 54
C.J.S., 851, citing: Barker vs. State, 193 S.E.,
605, 607, 56 Ga. App., 705; 18 Words and
Phrases, perm. ed., pp. 590-594). The apparent
conflict of opinions is explained by the fact that
the specific statutory provisions relied upon are
not identical. In some cases, as pointed out in 54
C.J.S., 851, the terms "lottery" and "gift
enterprise" are used interchangeably (Bills vs.
People, supra,); in others, the necessity for the
element of consideration or chance has been
specifically eliminated by statute (54 C.J.S., 351-
352, citing Barker vs. State, supra; State ex rel.
Stafford vs. Fox-Great Falls Theater Corporation,
supra). The lesson that we derive from this state
of the pertinent jurisprudence is, therefore, that
every case must be resolved upon the particular
phraseology of the applicable statutory provision.
Taking this cue, we note that in the Postal
Law, the term in question is used in association
with the word "lottery". With the meaning of
lottery settled, and consonant to the well-known
principle of legal hermeneutics noscitur a sociis —
which Opinion 217 aforesaid also relied upon
although only in so far as the element of chance
is concerned — it is only logical that the term
under construction should be accorded no other
meaning than that which is consistent with the
nature of the word associated therewith. Hence,
if lottery is prohibited only if it involves a
consideration, so also must the term "gift
enterprise" be so construed. Significantly, there
is not in the law the slightest indicium of any
intent to eliminate that element of consideration
from the "gift enterprise" therein included.
This conclusion firms up in the light of the
mischief sought to be remedied by the law, resort
to the determination thereof being an accepted
extrinsic aid in statutory construction. Mail fraud
orders, it is axiomatic, are designed to prevent
the use of the mails as a medium for
disseminating printed matters which on grounds
of public policy are declared non-mailable. As
applied to lotteries, gift enterprises and similar
schemes, justification lies in the recognized
necessity to suppress their tendency to inflame
the gambling spirit and to corrupt public morals
(Com. vs. Lund, 15 A. 2d., 839, 143 Pa. Super.
208). Since in gambling it is inherent that
something of value be hazarded for a chance to
gain a larger amount, it follows ineluctably that
where no consideration is paid by the contestant
to participate, the reason behind the law can
hardly be said to obtain. If, as it has been held —
"Gratuitous distribution of property by lot or
chance does not constitute 'lottery', if it is not
resorted to as a device to evade the law and no
consideration is derived, directly or indirectly,
from the party receiving the chance, gambling
spirit not being cultivated or stimulated thereby.
City of Roswell vs. Jones, 67 P. 2d., 286, 41
N.M., 258." (25 Words and Phrases, perm. ed., p.
695, mphasis supplied).
we find no obstacle in saying the same
respecting a gift enterprise. In the end, we are
persuaded to hold that, under the prohibitive
provisions of the Postal Law which we have
heretofore examined, gift enterprises and similar
schemes therein contemplated are condemnable
only if, like lotteries, they involve the element of
consideration. Finding none in the contest here in
question, we rule that the appellee may not be
denied the use of the mails for purposes thereof.
Recapitulating, we hold that the petition
herein states a sufficient cause of action for
declaratory relief, and that the "Caltex Hooded
Pump Contest" as described in the rules
submitted by the appellee does not transgress
the provisions of the Postal Law.
ACCORDINGLY, the judgment appealed from is
affirmed. No costs.
Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon,
Regala Makalintal, Bengzon, J.P., Zaldivar and
Sanchez, JJ., concur.
RIZAL COMMERCIAL BANKING
CORPORATION, petitioner, vs.
INTERMEDIATE APPELLATE COURT AND BF
HOMES INCORPORATED, respondents.1992
Sep 14En BancG.R. No. 74851D E C I S I O N
MEDIALDEA, J.:
This is a petition for the review of the decision of
the then Intermediate Appellate Court (IAC),
dated April 8, 1986 in AC-G.R. No. SP-06313,
entitled "BF Homes, Inc. v. Judge Ansberto P.
Paredes, etc., et al.," annulling the decision of
the trial court and directing the Register of Deeds
to suspend issuance of the owners' copies of the
land titles to the Rizal Commercial Banking
Corporation ("RCBC"), purchaser of the
foreclosed properties of private respondent BF
Homes, Inc. ("BF Homes") until the matter shall
have been resolved by the Securities and
Exchange Commission (SEC) in SEC Case No.
002693 and its Resolution on May 28, 1986
denying RCBC's motion for reconsideration.
The facts of the case are narrated in the Court of
Appeals' decision.
On September 28, 1984, B.F. Homes filed a
"Petition for Rehabilitation and for Declaration or
Suspension of Payment" (SEC Case No. 002693)
with the Securities and Exchange Commission
(SEC).
One of the creditors listed in its inventory of
creditors and liabilities was RCBC.
On October 26, 1984, RCBC requested the
Provincial Sheriff of Rizal to extra-judicially
foreclose its real estate mortgage on some
properties of B.F. Homes. A notice of extra-
judicial foreclosure sale was issued by the Sheriff
on October 29, 1984, scheduled on November
29, 1984, copies furnished both B.F. Homes
(mortgagor) and RCBC (mortgagee).
On motion of B.F. Homes, the SEC issued on
November 28, 1984 in SEC Case No. 002693 a
temporary restraining order (TRO), effective for
20 days, enjoining RCBC and the sheriff from
proceeding with the public auction sale.
The sale was rescheduled to January 29, 1985.
On January 25, 1985, the SEC ordered the
issuance of a writ of preliminary injunction upon
petitioner's filing of a bond. However, petitioner
did not file a bond until January 29, 1985, the
very day of the auction sale, so no writ of
preliminary injunction was issued by the SEC.
Presumably, unaware of the filing of the bond,
the sheriffs proceeded with the public auction
sale on January 29, 1985, in which RCBC was the
highest bidder for the properties auctioned.
On February 5, 1985, B.F. Homes filed in the SEC
a consolidated motion to annul the auction sale
and to cite RCBC end the sheriff for contempt.
RCBC opposed the motion.
Because of the proceedings in the SEC, the
sheriff withheld the delivery to RCBC of a
certificate of sale covering the auctioned
properties.
On February 13, 1985, the SEC in Case No.
002693 belatedly issued a writ of preliminary
injunction stopping the auction sale which had
been conducted by the sheriff two weeks earlier.
On March 13, 1985, despite SEC Case No.
002693, RCBC filed with the Regional Trial Court,
Br. 140. Rizal (CC 10042) an action for
mandamus against the provincial sheriff of Rizal
and his deputy to compel them to execute in its
favor a certificate of sale of the auctioned
properties.
In answer, the sheriffs alleged that they
proceeded with the auction sale on January 29,
1985 because no writ of preliminary injunction
had been issued by SEC as of that date, but they
informed the SEC that they would suspend the
issuance of a certificate of sale to RCBC.
On March 18, 1985, the SEC appointed a
Management Committee for B.F.
Homes.
On RCBC's motion in the mandamus case, the
trial court issued on May 8, 1985 a judgment on
the pleadings, the dispositive portion of which
states:
"WHEREFORE, petitioner's 'Motion for Judgment
on the pleadings' is granted and judgment is
hereby rendered ordering respondents to execute
and deliver to petitioner the Certificate of the
Auction Sale of January 29, 1985, involving the
properties sold therein, more particularly those
described in Annex 'C' of their Answer." (p. 87,
Rollo)
On June 4, 1985, B.F. Homes filed an original
complaint with the IAC pursuant to Sec. 9 of B.P.
129 praying for annulment of the judgment,
premised on the following:
". . .: (1) even before RCBC asked the sheriff to
extrajudicially foreclose its mortgage on
petitioner's properties, the SEC had already
assumed exclusive jurisdiction over those assets,
and (2) that there was extrinsic fraud in
procuring the judgment because the petitioner
was not impleaded as a party in the mandamus
case, respondent court did not acquire
jurisdiction over it, and it was deprived of its
right to be heard." (CA Decision, p. 88, Rollo)
On April 8, 1986, the IAC rendered a decision,
setting aside the decision of the trial court,
dismissing the mandamus case and suspending
issuance to RCBC of new land titles, "until the
resolution of case by SEC in Case No. 002693,"
disposing as follows:
"WHEREFORE, the judgment dated May 8, 1985
in Civil Case No. 10042 is hereby annulled and
set aside and the case is hereby dismissed. In
view of the admission of respondent Rizal
Commercial Banking Corporation that the
sheriffs' certificate of sale has been registered on
B.F. Homes' TCT's Nos. 51001, 51002, 51003,
51005, 51006, 51007, 51011, 51013, 51014,
51015, 51017, 51018, 51019, 51020, 51021,
51022, 51022 (sic), 51286, 51287, 51283,
51290, 51292, 51297, 51309, 51319, 51321,
51331, 51332, 51333, 51334, 51335, 51336,
51337, 51338, 51339, 51340, 51342, 51343,
51344, 51345, 51346 (sic), 51347, 48151,
48165 (sic), 48128, 48194, 68603, 71273,
71275, and 71276, the Register of Deeds for
Pasay City is hereby ordered to suspend the
issuance to the mortgagee-purchaser, Rizal
Commercial Banking Corporation, of the owner's
copies of the new land titles replacing them until
the matter shall have been resolved by the
Securities and Exchange Commission in SEC Case
No. 002693." (p. 91, Rollo) (emphasis ours).
On June 18, 1986, RCBC filed its present petition
on the following assigned errors:
1. Petitioner did not commit extrinsic fraud in
excluding private respondent as party defendant
in Special Civil Case No. 10042 as private
respondent was not indispensable party thereto,
its participation not being necessary for the full
resolution of the issues raised in said case.
2. SEC. Case No. 2693 cannot be invoked to
suspend Special Civil Case No. 10042, and for
that matter, the extrajudicial foreclosure of the
real estate mortgage in petitioner's favor, as
these do not constitute actions against private
respondent contemplated under section 6(c) of
Presidential Decree No. 902-A.
3. Even assuming arguendo that the extra-
judicial sale constitutes an action that may be
suspended under section 6(c) of Presidential
Decree No. 902-A, the basis for the suspension
thereof did not exist so as to adversely affect the
validity and regularity thereof.
4. The Regional Trial Court had jurisdiction to
take cognizance of Special Civil Case No. 10042.
5. The Regional Trial Court had jurisdiction over
Special Civil Case No. 10042." (p. 5, Rollo)
On November 12, 1986, We gave due course to
the petition.
On November 24, 1986, RCBC filed a
"Manifestation" informing Us that on October 16,
1986, the SEC in Case No. 002693 had issued an
Order denying the consolidated Motion to Annul
the Auction Sale and to cite RCBC and the sheriff
for contempt, disposing as follows:
"WHEREFORE, the petitioner's 'Consolidated
Motion to Cite Sheriff and Rizal Commercial
Banking Corporation for Contempt and to Annul
Proceedings and Sale', dated February 5, 1985,
should be, as it is, hereby DENIED.
"While we cannot direct the Register of Deeds to
allow the consolidation of the titles subject of the
'Omnibus Motion' dated September 18, 1986 filed
by the Rizal Commercial Banking Corporation,
and therefore, denied said Motion, neither can
this Commission restrain the said bank and the
Register of Deeds from effecting said
consolidation.
"SO ORDERED." (p. 138, Rollo, emphasis ours)
as a consequence of which, "the Register of
Deeds of Pasay City effected the transfer of title
over the subject properties to petitioner and
caused the issuance of new titles in its name,"
and therefore "the interest of petitioner to
continue prosecuting the instant petition has
become moot and the issues raised therein have
become academic." Petitioner RCBC further
prayed that ". . . the (instant) petition be
deemed as mooted by the events that transpired,
. . . and that "this petition be thereby dismissed."
We note the precipitate manner in which the
transfers of title in RCBC's name
had been effected.
Aggrieved by the appellate court's decision, RCBC
had invoked this Court's jurisdiction. We gave
due course to its petition on November 27, 1986.
It now manifests its loss of interest to pursue the
case because it had "effectively achieved" what
had been nullified by the appellate court, without
awaiting Our final ruling on its petition.
Based on its manifestation, it would seem that
the Pasay City Register of Deeds had taken the
SEC Resolution dated October 16, 1986 as its cue
for proceeding with the transfers of title, despite
an explicit directive in the Court of Appeals'
decision "to suspend issuance . . . until the
matter shall have been resolved by the Securities
and Exchange Commission in SEC Case No.
002693."
SEC Case No. 002693 is BF Homes' rehabilitation.
On the other hand, SEC Resolution dated October
16, 1986 is a denial of BF Homes' Consolidated
Motion to Annul the auction sale and to cite RCBC
and sheriff for contempt.
By specifically mentioning the case number
(002693) the appellate court could only have
meant the BF Homes' rehabilitation and not any
indiscriminate action taken by the SEC. Hence,
until final rehabilitation, both RCBC and the
Pasay City Register of Deeds had to abide by the
explicit directive of the appellate court to
suspend, in the meantime, issuance of new land
titles, or effect registration in RCBC's name.
Against this background, We do not see any
merit in considering the case closed or
terminated, for being moot and academic, since
there is basis for nullifying and setting aside the
TCTs in RCBC's name.
We now discuss the merits of the case.
The appellate court had ruled on the illegality of
the mandamus case and thus set aside the
decision of the lower court, directing the delivery
of the certificates of auction sale. This ruling
effectively upholds the exclusive jurisdiction of
the SEC (under Sec. 5(d) of PD 902-A as
amended) over the assets and properties of a
distressed firm under PD 902-A. as amended. In
the cases of BF Homes, Inc. v. CA, et al., G.R.
No. 76879 and Roa v. CA, G.R. No. 77143,
October 3, 1990, We clarified that when a
corporation threatened by bankruptcy is taken
over by a receiver, all the creditors should stand
on an equal footing, not anyone should be given
preference by paying one or some of them ahead
of the others.
RCBC and the Pasay City Register of Deeds must
have premised their action on SEC's refusal in the
resolution dated October 16, 1986 to exercise
jurisdiction on the contempt case, thus:
"xxx xxx xxx
"While we cannot direct the Register of Deeds to
allow the consolidation of the titles subject of the
'Omnibus Motion' dated September 18, 1986 filed
by the Rizal Commercial Banking Corporation
and, therefore, denies said Motion, neither can
this Commission restrain the said bank and the
Register of Deeds from effecting said
consolidation.
"SO ORDERED."
as their go-signal to disregard the appellate
court's directive and proceed with the registration
of titles. Their action of course, is clearly
contumacious and both are equally guilty of
contempt.
Since the properties, subject of the motion for
contempt (in the SEC) involved assets of a
distressed firm, SEC would have been fully
justified in issuing the corresponding restraining
order against the consolidation of title in RCBC,
pursuant to Sec. 6(a), PD 902-A, as amended.
However, We do not know if the SEC Resolution
dated October 16, 1986 was ever questioned by
BF Homes. At any rate, since this was not raised
is an issue here, We shall refrain from discussing
this.
The fact remains that by ordering the suspension
of registration of titles, the appellate court clearly
intended to have BF Homes' assets/properties
remain untouched during the period of
rehabilitation so as not to render the SEC
Management Committee irrelevant and inutile
and to give it unhampered "rescue efforts" over
the distressed firm.
We also agree with BF Homes that has owner, it
should have been impleaded in CC 10042 to
allow it to protect its rights.
Nevertheless, since RCBC had gone ahead with
the registration of title in complete defiance of
the Court of Appeals' directive, We have no
recourse except to set aside such transfer and
nullify the TCTs issued in RCBC's name.
While it is recognized that RCBC is a preferred
creditor and likewise the highest bidder at the
auction sale, We have however stated that
whenever a distressed corporation asks the SEC
for rehabilitation and suspension of payments,
preferred creditors may no longer assert such
preference, but as earlier stated, stand on equal
footing with other creditors. Foreclosure shall be
disallowed so as not to prejudice other creditors,
or cause discrimination among them. If
foreclosure is undertaken despite the fact that a
petition for rehabilitation has been filed, the
certificate of sale shall not be delivered pending
rehabilitation. Likewise, if this has also been
done, no transfer of title shall be effected also,
within the period of rehabilitation. The rationale
behind PD 902-A, as amended, is to effect a
feasible and viable rehabilitation. This cannot be
achieved if one creditor is preferred over the
others.
In this connection, the prohibition against
foreclosure attaches as soon as a petition for
rehabilitation is filed. Were it otherwise, what is
to prevent the petitioner from delaying the
creation of the Management Committee and in
the meantime dissipate all its assets. The sooner
the SEC takes over and imposes a freeze on all
the assets, the better for all concerned.
ACCORDINGLY, the petition is DISMISSED, the
decision of the Court of Appeals is AFFIRMED with
the modification that RCBC and Vicente A. Garcia,
Pasay City Register of Deeds, are hereby found
guilty of CONTEMPT and FINED One Thousand
Pesos (P1,000.00) each. The new torrens titles
issued in RCBC's name are hereby NULLIFIED
and SET ASIDE and BF Homes TCT's Nos. 51001,
51002, 51003, 51005, 51006, 51007, 51011,
51013, 51014, 51015, 51017, 51018, 51019,
51020, 51021, 51022, 51286, 51287, 51288,
51290, 5129Z, 51297, 51309, 51319, 51321,
51331, 51332, 51333, 51334, 51335, 51336,
51337, 51338, 51339, 51340, 51342, 51343,
51344, 51345, 51347, 48151, 48128, 48194,
68603, 71273, 71275, and 71276 are reinstated.
Costs against petitioner.
SO ORDERED.
Gutierrez, Jr., Nocon and Melo, JJ., concur.
Narvasa (C.J.) Bidin, Regalado and Bellosillo, JJ.,
concur in the result.
Cruz, Griño-Aquino and Campos, Jr., J., took no
part.
Padilla, Davide, Jr. and Romero, JJ., concurs.
RODULFO C. NIERE, petitioner, vs. HON.
COURT OF FIRST INSTANCE OF NEGROS
OCCIDENTAL, BRANCH II, JOSE K.
QUIAMBAO, and JAIME PARROCO, CITY
Treasurer of La Carlota City,
respondents.1973-11-291st Division1973
November 29D E C I S I O N
MAKASIAR, J:
Petitioner Rodulfo C. Niere filed this petition for
review on certiorari seeking the reversal of the
decision dated December 28, 1968 of the
respondent Court.
It is undisputed that La Carlota City was created
by Republic Act No. 4585 enacted on June 19,
1965. Petitioner Rodulfo C. Niere is a Civil
Service eligible, having passed the Board
Examinations for Civil Engineers in August, 1960
with a rating of 71.98%. He entered the
government service on October 3, 1960 as a civil
engineer aide in the District Engineer's Office at
Bacolod City at P4.00 a day until he was given a
permanent appointment as such on December 1,
1961 at P2544.00 per annum. He was promoted
on November 16, 1962 as junior civil engineer;
on September 9, 1963, as associate civil
engineer; and on October 28, 1964 as civil
engineer. On January 3, 1966, he was appointed
city engineer of La Carlota City by then City
Mayor Jaime Marino pursuant to the provisions of
Section 21 of Republic Act No. 4585, which
appointment was endorsed to the Commissioner
of Civil Service, who approved the same on
January 10, 1966. Petitioner thereafter assumed
office as such city engineer of La Carlota City.
After the enactment on July 17, 1967 of the
Decentralization Act, otherwise known as
Republic Act No. 5185, private respondent Jose
K. Quiambao was appointed on May 14, 1968 by
the President of the Philippines as city engineer
of La Carlota City, upon recommendation of the
Commissioner of Public Highways, who, on June
17, 1968, officially informed herein petitioner of
said appointment of private respondent
Quiambao, which appointment was duly
confirmed by the Commission on Appointments,
and directed petitioner to turn over the office to
respondent Quiambao, who likewise on the same
day June 17, 1908, advised petitioner that he
was assuming as city engineer of La Carlota City.
In reply to petitioner's motion for reconsideration
of the confirmation of respondent Quiambao, the
Secretary of the Commission on Appointments, in
a letter dated June 21, 1968, informed the
petitioner that his said motion was filed beyond
the reglementary period and that his sole remedy
is to file quo warranto proceedings in court.
Private respondent Quiambao graduated cum
laude from the Silliman University in 1957 with a
degree of Bachelor of Science in Civil Engineering
and passed the Board Examinations the same
year with a rating of 82.4%. He entered the
government service in 1957 while he was not yet
a registered engineer in the City Engineer's Office
of Dumaguete City, then as associate engineer in
1965 in the same office, from which he was
promoted, upon recommendation of the
Commissioner of Public Highways as heretofore
intimated, to the position of City Engineer of La
Carlota City effective May 14, 1968.
Petitioner claims that he was legally appointed by
the City Mayor of La Carlota City under Section
21 of Republic Act No. 4585.
On the other hand, respondents maintain that
the position of city engineer, created in the
Charter of La Carlota City (Secs. 19 & 29, R.A.
No. 4585) which was enacted on June 19, 1965
and therefore already existing at the time of the
appointment of petitioner on January 3, 1966,
can be filled up only by appointment of the
President of the Philippines with the confirmation
of the Commission on Appointments under
Section 4 of Republic Act No. 5185, which
expressly excepts the city engineer from the
appointing authority of the city mayor.
Section 21 of Republic Act No. 4585 provides
thus:
"Appointment and removal of officials and
employees. — The mayor shall appoint the city
treasurer, the city health officer, the chief of
police and fire department, and other heads and
other employees of such city department as may
be created. Said officers shall not be suspended
nor removed except in the manner and for
causes provided by law: Provided, That
appointments of heads and other employees of
the city shall be limited to civil service eligibles as
may from time to time be certified as such by the
Commissioner of Civil Service."
Section 4 of Republic Act No. 5185 reads thus:
"The City Assessor, City Agriculturist, City Chief
of Police and City Chief of Fire Department and
other heads of offices entirely paid out of city
funds and their respective assistants or deputies
shall, subject to civil service law, rules and
regulations, be appointed by the City Mayor;
Provided, however, that this section shall not
apply to Judges, Auditors, Fiscals, City
Superintendents of Schools, Supervisors,
Principals, City Treasurers, City Health officers
and City Engineers."
Section 10(3) of Article VII of the 1935
Constitution states:
"The President shall nominate and with the
consent of the Commission on Appointments,
shall appoint the heads of the executive
departments and bureaus, officers of the Army
from the rank of colonel, of the Navy and Air
Forces from the rank of captain or commander,
and all other officers of the Government whose
appointments are not herein otherwise provided
for, and those whom he may be authorized by
law to appoint; but the Congress may by law vest
the appointment of inferior officers, in the
President alone in the courts, or in the heads of
departments."
The petition should be dismissed and the decision
of the court a quo must be affirmed.
I
House Bill No. 9711, which became Republic Act
No. 4585, originally expressly included the city
engineer as one of those whom the city mayor
can appoint under Section 21 of Republic Act No.
4585, but during the period of amendment in the
Senate, the position of said engineer was deleted
in the final draft of Section 21. This fact clearly
indicates that the intention of the Legislature was
to exclude from the appointing power of the
mayor the position of the city engineer. This is
not an amendment purely on a matter of form;
because nothing could be more substantial than
the vesting of a power to appoint such an
important city official as the city engineer.
Petitioner's assertion that Senator Tolentino
stated that this amendment is merely one of
form is not accurate; because the records of the
Senate session during the period of amendments,
as quoted by petitioner himself, show that:
"THE PRESIDENT PRO TEMPORE. We are in the
period of amendments.
"SENATOR TOLENTINO. There are committed
amendments, Mr. President, embodied in the
committee Report. Some of them are matters of
form. The other refers to the allotment of
collection of taxes. I move that these committee
amendments be approved.
"THE PRESIDENT PRO TEMPORE. Is there any
objection? (Silence) The Chair hears none. The
motion is approved." (P. 20 of Petition; p. 30,
rec.; p. 42, petitioner's brief).
The Committee amendments included:
"3. Page 33, line 6
"Delete the following:
'the city engineer,
the city attorney.'"
(P. 21 of Petition; p. 31, rec.; p. 43, petitioner's
brief).
As aforequoted, Senator Tolentino was careful or
deliberate in stating that some, not all, of the
amendments were matters of form. Neither did
be refer expressly to the deletion of the words
city engineer from Section 21 of the Charter of La
Carlota City as purely a formal amendment. If
Congress wanted to authorize the city mayor to
appoint all heads and employees of city
department, it could have easily re-phrased
Section 21 of the City Charter to that effect. That
this is a material modification is underscored by
the fact that the City Charters of Toledo,
Cotabato, Kanlaon, Dapitan, San Carlos,
Gingoog, Davao, Tacloban, Silahis, Bago,
Bacolod, Cebu, Legaspi and Roxas or Republic
Acts Nos. 2688, 2364, 3445, 3811, 2643, 2668,
3028, 3068, 4382, 3857, 2234 and 603 expressly
vest the power to appoint the city department
heads, including the city engineer, in the
President of the Philippines, who is the repository
of the appointing power by express constitutional
conferment (Sec. 10(3), Art. VII, 1935
Constitution; see also Sec. 13, Art. IX, 1973
Constitution).
II
The clear legislative intendment in excepting the
engineer from the appointing authority of the city
mayor under Section 21 of the Charter of La
Carlota City is evident from the phraseology of
the same. Said section expressly limits the
appointing authority of the mayor to "the city
treasurer, the city health officer, the chief of
police and fire department, . . ." among the
heads of the then duly created and existing
departments, like the city engineer, of the city
government of La Carlota City. The following
phrase in said Section 21 "and other heads and
other employees of the city departments as may
be created," whom the mayor can appoint, refers
to heads of city departments that may be created
after the enactment of Republic Act No. 4585.
Otherwise, as emphasized by respondents, the
first conjunction "and" before "fire department" in
the preceding clause of that same sentence of
Section 21 would be a superfluity, and would
have no meaning at all. As evident from the
construction of the first sentence in said Section
21, the terminal phrase "as may be created"
modifies the last clause "and other heads and
other employees of such department," by all the
principles of logic and syntax.
III
Since the city mayor under Section 21 is without
authority to appoint the city engineer, this
prerogative can only be exercised by the
President of the Philippines, who, under Section
10(3) of Article VII of the 1935 Constitution, shall
nominate with the consent of the Commission on
Appointments "all other officers of the
government whose appointments are not herein
otherwise provided for"; because We ruled in
Ramos vs. Alvarez (97 Phil. 844, 849) that when
a statute does not specify how an officer is to be
appointed, the appointment must be made by the
President with the consent of the Commission on
Appointments.
The appointing power is essentially the exclusive
prerogative of the President. Consequently, any
diminution in its scope must be clear and
unequivocal. This test is not met by Section 21 of
Republic Act No. 4585 so as to remove the power
to appoint the city engineer of La Carlota City
from the residual power of appointment vested in
the President by Section 10(3) of Article VII of
the 1935 Constitution.
Hence, the appointment of petitioner as city
engineer by then city mayor of La Carlota City is
illegal and therefore null and void. However, as
conceded by respondents, petitioner was a de
facto city engineer during the period of time that
he performed the functions of the position until
he was displaced by respondent Quiambao who
was validly nominated by the President of the
Philippines and confirmed by the Commission on
Appointments (Cordilla vs. Martinez, 110 Phil. 24,
25; Rodriguez vs. Tan, 91 Phil. 724, 728; Luna
vs. Rodriguez, 37 Phil. 866).
WHEREFORE, THE APPEALED DECISION IS
HEREBY AFFIRMED, WITH COSTS AGAINST
PETITIONER.
Makalintal, C.J., Castro, Teehankee, Esguerra
and Muñoz Palma, JJ., concur.
JMM PROMOTIONS & MANAGEMENT, INC.,
petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and ULPIANO L. DE LOS
SANTOS, respondents.1993 Nov 221st
DivisionG.R. No. 109835D E C I S I O N
CRUZ, J.:
The sole issue submitted in this case is the
validity of the order of respondent National Labor
Relations Commission dated October 30, 1992,
dismissing the petitioner's appeal from a decision
of the Philippine Overseas Employment
Administration on the ground of failure to post
the required appeal bond. 1
The respondent cited the second paragraph of
Article 223 of the Labor Code, as amended,
providing that:
In case of a judgment involving a monetary
award, an appeal by the employer may be
perfected only upon the posting of a cash or
surety bond issued by a reputable bonding
company duly accredited by the Commission in
the amount equivalent to the monetary award in
the judgment appealed from.
and Rule VI, Section 6 of the new Rules of
Procedure of the NLRC, as amended, reading as
follows:
Section 6. Bond. -- In case the decision of a
Labor Arbiter involves a monetary award, an
appeal by the employer shall be perfected only
upon the posting of a cash or surety bond issued
by a reputable bonding company duly accredited
by the Commission or the Supreme Court in an
amount equivalent to the monetary award.
The petitioner contends that the NLRC committed
grave abuse of discretion in applying these rules
to decisions rendered by the POEA. It insists that
the appeal bond is not necessary in the case of
licensed recruiters for overseas employment
because they are already required under Section
4, Rule II, Book II of the POEA Rules not only to
pay a license fee of P30,000.00 but also to post a
cash bond of P100,000.00 and a surety bond of
P50,000.00, thus:
Upon approval of the application, the applicant
shall pay a license fee of P30,000.00. It shall also
post a cash bond of P100,000.00 and surety
bond of P50,000.00 from a bonding company
acceptable to the Administration and duly
accredited by the Insurance Commission. The
bonds shall answer for all valid and legal claims
arising from violations of the conditions for the
grant and use of the license, and/or accreditation
and contracts of employment. The bonds shall
likewise guarantee compliance with the
provisions of the Code and its implementing rules
and regulations relating to recruitment and
placement, the Rules of the Administration and
relevant issuances of the Department and all
liabilities which the Administration may impose.
The surety bonds shall include the condition that
the notice to the principal is notice to the surety
and that any judgment against the principal in
connection with matters falling under POEA's
jurisdiction shall be binding and conclusive on the
surety. The surety bonds shall be co-terminus
with the validity period of license. mphasis
supplied).
In addition, the petitioner claims it has placed in
escrow the sum of P200,000.00 with the
Philippine National Bank in compliance with
Section 17, Rule II, Book II of the same Rule, "to
primarily answer for valid and legal claims of
recruited workers as a result of recruitment
violations or money claims."
Required to comment, the Solicitor General
sustains the appeal bond requirement but
suggests that the rules cited by the NLRC are
applicable only to decisions of the Labor Arbiters
and not of the POEA. Appeals from decisions of
the POEA, he says, are governed by the following
provisions of Rule V, Book VII of the POEA Rules:
Section 5. Requisites for Perfection of Appeal.
-- The appeal shall be filed within the
reglementary period as provided in Section 1 of
this Rule; shall be under oath with proof of
payment of the required appeal fee and the
posting of a cash or surety bond as provided in
Section 6 of this Rule; shall be accompanied by a
memorandum of appeal which shall state the
grounds relied upon and the arguments in
support thereof; the relief prayed for; and a
statement of the date when the appellant
received the appealed decision and/or award and
proof of service on the other party of such
appeal.
A mere notice of appeal without complying with
the other requisites aforestated shall not stop the
running of the period for perfecting an appeal.
Section 6. Bond. In case the decision of the
Administration involves a monetary award, an
appeal by the employer shall be perfected only
upon the posting of a cash or surety bond issued
by a reputable bonding company duly accredited
by the Commission in an amount equivalent to
the monetary award. mphasis supplied).
The question is, having posted the total bond of
P150,000.00 and placed in escrow the amount of
P200,000.00 as required by the POEA Rules, was
the petitioner still required to post an appeal
bond to perfect its appeal from a decision of the
POEA to the NLRC?
It was.
The POEA Rules are clear. A reading thereof
readily shows that in addition to the cash and
surety bonds and the escrow money, an appeal
bond in an amount equivalent to the monetary
award is required to perfect an appeal from a
decision of the POEA. Obviously, the appeal bond
is intended to further insure the payment of the
monetary award in favor of the employee if it is
eventually affirmed on appeal to the NLRC.
It is true that the cash and surety bonds and the
money placed in escrow are supposed to
guarantee the payment of all valid and legal
claims against the employer, but these claims are
not limited to monetary awards to employees
whose contracts of employment have been
violated. The POEA can go against these bonds
also for violations by the recruiter of the
conditions of its license, the provisions of the
Labor Code and its implementing rules, E.O. 247
(reorganizing the POEA) and the POEA Rules, as
well as the settlement of other liabilities the
recruiter may incur.
As for the escrow agreement, it was presumably
intended to provide for a standing fund, as it
were, to be used only as a last resort and not to
be reduced with the enforcement against it of
every claim of recruited workers that may be
adjudged against the employer. This amount may
not even be enough to cover such claims and, affirms once again its commitment to the
even if it could initially, may eventually be interests of labor.
exhausted after satisfying other subsequent
claims. WHEREFORE, the petition is DISMISSED, with
costs against the petitioner. It is so ordered.
As it happens, the decision sought to be appealed
grants a monetary award of about P170,000.00 Davide, Jr. and Quiason, JJ., concur.
to the dismissed employee, the herein private
respondent. The standby guarantees required by Bellosillo, J., On leave.
the POEA Rules would be depleted if this award
---------------
were to be enforced not against the appeal bond
but against the bonds and the escrow money, Footnotes
making them inadequate for the satisfaction of
the other obligations the recruiter may incur. 1. Order issued by NLRC Commissioner Domingo
H. Zapanta, Second Division, dated October 30,
Indeed, it is possible for the monetary award in 1992.
favor of the employee to exceed the amount of
P350,000.00, which is the sum of the bonds and 2. "That the thing may rather have effect than
escrow money required of the recruiter. be destroyed." Simonds v. Walker, 100 Mass.
113; National Pemberton Bank v. Lougee, 108
It is true that these standby guarantees are not Mass. 373, 11 Am. Rep. 367. Charitable bequests
imposed on local employers, as the petitioner are also governed by this maxim. King v.
observes, but there is a simple explanation for Richardson, C.C.A. N.C., B6 F.2d 849, 858.
this distinction. Overseas recruiters are subject to
more stringent requirements because of the
special risks to which our workers abroad are
subjected by their foreign employers, against Republic of the Philippines
whom there is usually no direct or effective SUPREME COURT
recourse. The overseas recruiter is solidarily Manila
liable with the foreign employer. The bonds and
the escrow money are intended to insure more
EN BANC
care on the part of the local agent in its choice of
the foreign principal to whom our overseas
G.R. No. L-6225 January 10, 1953
workers are to be sent.

It is a principle of legal hermeneutics that in ARSENIO H. LACSON, petitioner,

interpreting a statute (or a set of rules as in this
case), care should be taken that every part
thereof be given effect, on the theory that it was
enacted as an integrated measure and not as a
hodge-podge of conflicting provisions. Ut res
magis valeat quam pereat. 2 Under the
petitioner's interpretation, the appeal bond
required by Section 6 of the aforementioned
POEA Rule should be disregarded because of the
earlier bonds and escrow money it has posted.
The petitioner would in effect nullify Section 6 as
a superfluity but we do not see any such
redundancy; on the contrary, we find that
Section 6 complements Section 4 and Section 17.
The rule is that a construction that would render
a provision inoperative should be avoided;
instead, apparently inconsistent provisions should
be reconciled whenever possible as parts of a
coordinated and harmonious whole.
Accordingly, we hold that in addition to the
monetary obligations of the overseas recruiter
prescribed in Section 4, Rule II, Book II of the
POEA Rules and the escrow agreement under
Section 17 of the same Rule, it is necessary to
post the appeal bond required under Section 6,
Rule V, Book VII of the POEA Rules, as a
condition for perfecting an appeal from a decision
of the POEA.
vs.
MARIANO ROQUE, as Acting Executive
Secretary, BARTOLOME GATMAITAN, as
Vice-Mayor of Manila and DIONISIO OJEDA,
as Acting Chief of Police of
Manila,respondents.
Arsenio H. Lacson, Jose P. Laurel, Ramon Diokno
and Jose W. Diokno for petitioner.
City Fiscal Eugenio Angeles for respondents
Bartolome Gatmaitan and Dionisio Ojeda.
Office of the Solicitor General Juan R. Liwag and
Solicitor Felix V. Makasiar for respondents.
Jesus G. Barrera and Enrique M. Fernando as
amici curiae.
TUASON, J.:
The petitioner, Arsenio H. Lacson, Mayor of the
City of Manila, has been suspended from the
office by the President and has brought this
original action for prohibition contesting the
legality of the suspension. Mariano Roque, Acting
Executive Secretary, and Dionisio Ojeda, Chief of
Police of Manila, who are said to have threatened
to carry out the President's order, and Bartolome
Gatmaitan, the Vice-Mayor who is performing the
duties of mayor, are made defendants.

Every intendment of the law must be interpreted
in favor of the working class, conformably to the
mandate of the Constitution. By sustaining rather
than annulling the appeal bond as a further
protection to the claimant employee, this Court
The salient facts alleged in the application, not
denied by the respondents, are as follows:
On October 20, 1952, following the acquittal of
Celestino C. Juan, Deputy Chief of Police, in a
criminal prosecution for malversation of public
property instituted at the instance of Mayor
Lacson, the petitioner made a radio broadcast in
which he criticized the court's decision stating, it
is alleged: "I have nothing but contempt for
certain courts of justice. . . . I tell you one thing
(answering an interrogator), if I have the power
to fire Judge Montesa (the trial judge) I will fire
him for being incompetent, for being an
arrogant . . . an ignoramus."
Thereafter, Judge Montesa, at a public meeting of
the Judges of the Courts of First Instance of
Manila submitted to the consideration of his
colleagues the question of whether Mayor
Lacson's remarks were contempt of court. A
committee of judges, which was appointed to
study the question, reported that it was not free
to state whether contempt proceedings if
instituted would prosper. The Committee believed
that Judge Montesa was the one most competent
to decide upon the action that should be taken.
In the meanwhile, On October 23, Judge Montesa
wrote the Secretary of Justice requesting that a
special prosecutor be designated to handle the
case for criminal libel which he intended to file
against the mayor. He gave as reasons for his
request that "whatever blunders the mayor had
committed, the same was due to an advice given
him by his legal adviser, the city fiscal, "and that
it would be "difficult to expect that he would be
willing to move against him or act in a manner
that would put him in a bad light with the
mayor."
On October 24, in Special Administrative Order
No. 235, marked RUSH, the Secretary of Justice
designated Solicitor Martiniano P. Vivo of the
Solicitor's Office "to assist the City Fiscal of
Manila in the investigation of the complaint of
Judge Agustin P. Montesa against Mayor Arsenio
H. Lacson, to file whatever criminal action the
evidence may warrant and to prosecute the same
in court."
On the following day, Judge Montesa filed his
projected complaint for "libel and contempt" with
the City Fiscal which was numbered 27909. This
complaint in the ordinary routine of distribution
of cases in the City Fiscal's Office should have
corresponded to Assistant Fiscal Jose B. Jimenez.
Consequently upon Solicitor Vivo's designation,
City Fiscal Angeles designated Assistant Fiscals
Jimenez and also Hermogenes Concepcion, Jr. to
represent him and to collaborate with the
Solicitor from the Bureau of Justice.
Solicitor Vivo conducted a preliminary
investigation in the office of the Solicitor General
without the presence of either of the Assistant
Fiscals assigned to this case, and sent out
subpoenas in his name and upon his signature.
And having completed the preliminary
examination, on October 30 he docketed in the
Court of First Instance a complaint for libel
against Mayor Lacson, signed and sworn to by
Judge Montesa as complainant. At the foot of the
complaint both Assistant Fiscal Hermogenes
Concepcion, Jr. and Solicitor Vivo certified that
"we have conducted the preliminary investigation
in this case in accordance with law" although
Fiscal Concepcion had taken no part in the
proceedings.
On October 31, the day following the filing of the
above complaint, the President wrote the Mayor a
letter of the following tenor:
In view of the pendency before the Court
of First Instance of Manila of criminal case
No. 20707 against you, for libel, and
pursuant to the present policy of the
administration, requiring the suspension
of any local elective official which is being
charged before the courts with any
offense involving moral turpitude, you are
hereby suspended from office effective
upon receipt hereof, your suspension to
continue until the final disposition of the
said criminal case.
And notified of the suspension, Vice-Mayor
Bartolome Gatmaitan entered upon the duties of
the office in place of the suspended city
executive.
Allegations have been made vigorously attacking
the form and legality of Solicitor Vivo's
designation and of the procedure pursued in the
conduct of the preliminary investigation. The
objections are at best inconclusive of the
fundamental issues and will be brushed aside in
this decision. It will be assumed for the purpose
of our decisions that the assailed designation and
investigation were regular and legal, and we will
proceed at once to the consideration of the
validity of the disputed suspension.
By section 9 of the Revised Charter of the City of
Manila (Republic Act No. 409), "the Mayor shall
hold office for four years unless sooner
removed." But the Chartter does not contain any
provision for this officer's removal or suspension.
This silence is in striking contrast to the
explicitness with which Republic Act No. 409
stipulates for the removal and suspension of
board members and other city officials. Section
14 specifies the causes for which members of the
Municipal Board may be suspended and removed,
to wit: the same causes for removal of provincial
elective officers, and section 22 expressly
authorizes the removal — for cause — of
appointive city officials and employees by the
President or the Mayor depending on who made
the appointments.
Nevertheless, the rights, duties and privileges of
municipal officers do not have to be embodied in
the charter, but may be regulated by provisions
of general application specially if these are
incorporated in the same code of which the city
organic law forms a part.
Such is the case here. If the Manila City Charter
itself is silent regarding the suspension or
removal of the mayor, section 64 (b) of the
Revised Administrative Code does confer upon
the President the power to remove any person
from any position of trust or authority under the
Government of the Philippines for disloyalty to
the Republic of the Philippines. There is no
denying that the position of mayor is under the
Government of the Philippines and one trust and
authority, and comes within the purview of the
provision before cited.
The intent of the phrase "unless sooner removed"
in section 9 of the Manila Charter has been a
topic of much speculation and debate in the
course of the oral argument and in the briefs.
This phrase is not uncommon in statutes relating
to public offices, and has received construction
from the courts. It has been declared that "Power
in the appointing authority to remove a public
officer may be implied where to statutory
specification of the term of office are added the
words 'unless sooner removed.'" (43 Am. Jur.,
30.)
It is obvious from the plain language of this
statement that the respondents can hardly derive
comfort from the phrase in question as repository
of a hidden or veiled authority of the President.
Implying power of the appointing agency to
remove, the natural inference is that the words
have exclusive application to cases affecting
appointive officers; so that, where the officers
involved are elective, like that of mayor of the
City of Manila, they have no other meaning than
that the officer is not immune to removal, and
the whole clauses is to be interpreted to read,
"The mayor shall hold his position for the
prescribed term unless sooner ousted as provided
by other laws," or something to the effect. The
Congress is presumed to have been aware of
section 64 (b) of the Revised Administrative Code
and to have in mind this section and other
removal statutes that may be enacted in the
future, in employing the phrase "unless sooner
removed." Another conclusion, we are impelled to
say, is that under existing legislation, the Manila
City Mayor is removable only for disloyalty to the
Republic. For, as will be shown, the express
mention of one cause or several causes for
removal or suspension excludes other causes.
Four justices who join in this decision do not
share the view that the only ground which the
Mayor may be expelled is disloyalty. The Chief
Justice, Mr. Justice Padilla and Mr. Justice Jugo,
three of the Justices referred to, reason that, as
the office of provincial executive is at least as
important as the office of mayor of the city of
Manila, the latter officer, by analogy, ought to be
amenable to removal and suspension for the
same causes as provincial executives, who, under
section 2078 of the Revised Administrative Code,
may be discharged for dishonesty, oppression, or
misconduct in office, besides disloyalty. Even so,
these members of the Court opine that the
alleged offense for which Mayor Lacson has been
suspended is not one of the grounds just
enumerated, and are in complete agreement with
others of the majority that the suspension is
unwarranted and illegal. Mr. Justice Pablo also
believes that the suspension was illegal but
wants to have it understood that he bases his
concurrence mainly on the strength of the ruling
in the case ofCornejo vs. Naval (54 Phil., 809), of
which will speak more later.
The contention that the President has inherent
power to remove or suspend municipal officers is
without doubt not well taken. Removal and
suspension of Public officers are always controlled
by the particular law applicable and its proper
construction subject to constitutional limitations.
(2 McQuillen's Municipal Corporations [Revised],
section 574.) So it has been declared that the
governor of a state, (who is the state what the
President is to the Republic of the Philippines),
can only remove where the power is expressly
given or arises by necessary implication under
the Constitution or statutes. (43 Am. Jur., 34.)
There is neither statutory nor constitutional
provision granting the President sweeping
authority to remove municipal officials. By Article
VII, Section 10, paragraph (1) of the Constitution
the President "shall . . . exercise general
supervision over all local governments," but
supervision does not contemplate control.
(People vs. Brophy, 120 P., 2nd., 946; Cal. App.,
2nd., 15.) Far from implying control or power to
remove, the President's supervisory authority
over municipal affairs disqualified by the proviso
" as may be provided by law," a clear indication
of constitutional intention that the provision was
not to be self-executing but requires legislative
implementation. And the limitation does not stop
here. It is significant to note that section 64 (b)
of the Revised Administrative Code in conferring
on the Chief Executive power to remove
specifically enjoins that the said power should be
exercised conformably to law, which we assume
to mean that removals must be accomplished
only for any of the causes and in the fashion
prescribed by law and the procedure.
Then again, strict construction of law relating to
suspension and removal, is the universal rule.
The rule is expressed in different forms which
convey the same idea: Removal is to be confined
within the limits prescribed for it; The causes,
manner and conditions fixed must be pursued
with strictness; Where the cause for removal is
specified, the specification amounts to a
prohibition to remove for a different cause; etc.,
etc. (Mechem on the Law of Offices and Officers,
p 286; 2 McQuillen's Municipal Corporations
[Revised], section 575; 43 Am. Jur., 39.) The last
statement is a paraphrase of the well known
maxim Expressio unius est exclusio alterius.
The reason for the stringent rule is said to be
that the remedy by removal is a drastic one (43
Am. Jur., 39) and, according to some courts,
including ours (Cornejo vs. Naval,supra), penal in
nature. When dealing with elective posts, the
necessity for restricted construction is greater.
Manifesting jealous regard for the integrity of
positions filled by popular election, some courts
have refused to bring officers holding elective
offices within constitutional provision which gives
the state governor power to remove at pleasure.
Not even in the face of such provision, it has
been emphasized, may elective officers be
dismissed except for cause. (62 C.J.S., 947.)
It may be true, as suggested, that the public
interest and the proper administration of official
functions would be best served by an
enlargement of the causes for removal of the
mayor, and vice versa. The answer to this
observation is that the shortcoming is for the
legislative branch alone to correct by appropriate
enactment. It is trite to say that we are not to
pass upon the folly or wisdom of the law. As has
been said in Cornejo vs. Naval, supra, anent
identical criticisms, "if the law is too narrow in
scope, it is for the Legislature rather than the
courts to expand it." It is only when all other
means of determining the legislative intention fail
that a court may look into the effect of the law;
otherwise the interpretation becomes judicial
legislation . (Kansas ex rel. Little Atty., Gen. vs.
Mitchell, 70 L.R.A., 306; Dudly vs. Reynolds, 1
Kan., 285.)
Yet, the abridgment of the power to remove or
suspend an elective mayor is not without it own
justification, and was, we think, deliberately
intended by the lawmakers. The evils resulting
from a restricted authority to suspend or remove
must have been weighed against the injustices
and harms to the Republic interest which would
be likely to emerge from an unrestrained
discretionary power to suspend and remove.
In consonance with the principles before stated,
we are constrained to conclude that the power of
the President to remove or suspend the Mayor of
the City of Manila is confined to disloyalty to the
Republic or, at the most, following the opinion of
three of the subscribing Justices, for the other
causes stipulated in section 2078 of the Revised
Administrative Code, and that the suspension of
the petitioner for libel is outside the bounds of
express or unwritten law. It needs no argument
to show that the offense of libel or oral
defamation for which Mayor Lacson is being
prosecuted is not disloyalty, dishonesty, or
oppression within the legal or popular meaning of
these words. Misconduct in office is the nearest
approach to the offense of libel, and misconduct
Mayor Lacson's offense is, in the opinion of
counsel and of some members of the court.
Admitting, as we understand the respondents'
position, that the petitioner was not guilty of
disloyalty, dishonesty or oppression, yet counsel
do contend that the petitioner's "outburst"
against Judge Montesa constituted misconduct in
office.
Misconduct in office has a definite and well-
understood legal meaning. By uniform legal
definition, it is a misconduct such as affects his
performance of his duties as an officer and not
such only as affects his character as a private
individual. In such cases, it has been said all
times, it is necessary to separate the character of
the man from the character of the officer.
(Mechem, supra, section 457.) "It is settled that
misconduct, misfeasance, or malfeasance
warranting removal from office of an officer,
must have direct relation to and be connected
with the performance of official duties amounting
either to maladministration or willful, intentional
neglect and failure to discharge the duties of the
office . . . " (43, Am. Jur., 39, 40.) To this effect
is the principle laid down in
Cornejo vs. Naval, supra.
In that case, Cornejo, Municipal President of
Pasay, Rizal, had been found guilty of the crime
of falsification of a private document and
sentenced therefore to one year, eight months,
and twenty-one days' imprisonment, etc. On the
basis of his conviction, the Municipal President
had been suspended and administrative charges
preferred against him with the Provincial Board,
by the Governor.
The suspended officer assailed the legality of the
suspension before this court, and this court in a
unanimous decision ruled that the suspension
was illegal and without effect. The court prefaced
its opinion with the statement that the charge
against the municipal officer to be valid cause for
suspension or removal "must be one affecting the
official integrity of the officer in question."
Making this premise the basis of its investigation,
the court concluded that the crime of falsification
of a private document is not misconduct in office,
pointing out that this crime "does not imply that
one takes advantage of his official position,
inasmuch as corruption signifies in office, and
inasmuch of the charge must be one affecting the
official integrity of the officer in question."
Judged by the foregoing standard definition of
misconduct in office, the alleged libel imputed to
the suspended mayor was not such misconduct
even if the term "misconduct in office" be taken
in its broadest sense. The radio broadcast in
which the objectionable utterances were made
had nothing or very little to do with petitioner's
official functions and duties as mayor. It is was
not done by virtue or under color of authority. It
was not any wrongful official act, or omission to
perform a duty of public concern, tacitly or
expressly annexed to his position Neither can it
be said that Mayor Lacson committed an abuse or
took advantage of his office. One does not have
to be a mayor to make those remarks or to talk
on the radio. The use of the radio is a privilege
open to anyone who would pay for the time
consumed, or whom the owner would allow for
reasons of his own. The mere circumstance that
the broadcast was transmitted from the City Hall
instead of the radio station did not alter the
situation. It is the character of the remarks and
their immediate relation to the office that are of
paramount consideration. It is our considered
opinion that the petitioner acted as a private
individual and should be made to answer in his
private capacity if he committed any breach of
propriety or law.
The most liberal view that can be taken of the
power of the President to remove the Mayor of
the City of Manila is that it must be for cause.
Even those who would uphold the legality of the
Mayor's suspension do not go so far as to claim
power in the Chief Executive to remove or
suspend the Mayor at pleasure. Untramelled
discretionary power to remove does not apply to
appointed officers whose term of office is
definite, much less elective officers. has been
pointedly stated, "Fixity of tenure destroys the
power of removal at pleasure otherwise incident
to the appointing power . . . The reason of this
rule is the evident repugnance between the fixed
term and the power of arbitrary removal . . ."
"An inferential authority to remove at pleasure
can not be deduced, since the existence of a
defined term, ipso facto, negatives such an
inference, and implies a contrary
presumption, i.e., that the incumbent shall hold
office to the end of his term subject to removal
for cause." (State ex rel. Gallaghar vs. Brown, 57
Mo Ap., 203, expressly adopted by the Supreme
Court in State ex rel. vs. Maroney, 191, Mo.,
548; 90 S.W., 141; State vs. Crandell, 269 Mo.,
44; 190 S.W., 889; State vs. Salval, 450, 2d,
995; 62 C.J.S., 947.)
Granting now, for the sake of argument, that the
President may remove the Mayor for cause, was
the Mayor's alleged crime sufficient legal
justification for his suspension?
In a limited sense the words "for cause" and
"misconduct in office" are synonymous. "For
cause," like "misconduct in office." has been
universally accepted to mean for reasons which
the law and sound public policy recognize as
sufficient ground for removal, that is, legal cuase,
and not merely cause which the appointing power
in the exercise of discretion may deem sufficient.
It is implied that officers may not be removed at
the mere will of those vested with the power of
removal, or without any cause. Moreover, the
cause must relate to and effect the
administration of the office and must be
restricted to something to a substantial nature
directly affecting the rights and interest of the
public. (43 Am. Jur., 48.) One court went to the
extent of saying that "The eccentric manner of an
officer, his having exaggerated notion of his own
importance, indulgence in coarse language, or
talking loudly on the streets, however offensive,
would not warrant any interference with his
incumbency. Rudeness of an officer not
amounting to illegality of conduct or oppression is
not such misconduct as will give cause for
removing him from office."
Much discussion, which we consider of title or no
importance, has been devoted to the question of
whether the power to remove carries with it the
power to suspend. The two powers, as has been
indicated, are identical and governed by the
same principles in their important aspects that
have any bearing on the case at bar. Whether
decreed as a punishment in itself, or as auxiliary
in the proceedings for removal so as to tie the
defendant's hand pending his investigation,
suspension ought to be based on the same
ground upon which removal may be effected or is
sought. (43 Am. Jur., 65.) When exercised as a
mere incident to the power to remove, the power
to suspend cannot be broader than the power to
which it is anciliary. A stream cannot rise higher
than its source, as the saying goes.
In their effects, the difference between the power
to remove and the power to suspend is only one
of degree. Suspension is a qualified expulsion,
and whether termed suspension or expulsion, it
constitutes either temporary or permanent
disfranchisement. It is an ad interim stoppage or
arrest of an official power and pay. (2 McQuillen's
Municipal Corporations [Revised], section 585).
In fact, when the "suspension is to continue until
the final disposition" of a criminal prosecution,
like the petitioner's suspension, it might become
a virtual removal, considering that in the event of
conviction by the trial court the case might drag
as long as the remainder of the suspended
officer's term of office, or longer.
We believe also that in the field of procedure no
less than in that of substantive law the
suspension under review is fatally defective. No
administrative charges have been preferred
against the petitioner and none seem to be
contemplated. The sole grounds for the
suspension, as recited in the President's order,
are "the pendency of criminal case No. 20707 for
libel," and "the present policy of the
administration, requiring the suspension of any
elective official who is being charged before the
courts of any offense involving moral turpitude."
It seems self-evident that if, as must be
conceded, temporary suspension is allowed
merely so as to prevent the accused from
hampering the normal course of the investigation
with his influence and authority over possible
witnesses, the rule presupposes the existence of
administrative charges and investigation being
conducted or to be conducted. We are certain
that no authority or good reason can be found in
support of a proposition that the Chief Executive
can suspend an officer facing criminal charges for
the sole purpose of aiding the court in the
administration of justice. Independent of the
other branches of the Government, the courts
can well take care of their own administration of
the law.
An administrative policy or practice not
predicated on constitutional or statutory authority
can have no binding force and effect in matters
not purely political or governmental. Where
individual rights, honor and reputation are in
jeopardy, it is only law or the Constitution which
can give legality to executive actions. It has been
shown that nothing in the Constitution, law or
decision warrants the petitioner's suspension.
If policy is to be a guiding factor, and we think if
should be, such policy must emanate from the
legislative branch, which, under our form of
government, is the legitimate policy-making
department. The legislative policy, as such policy
may be gathered from section 2188 of the
Revised Administrative Code, frowns upon
prolonged or indefinite suspension of local
elective officials. By this section "the provincial
governor shall receive and investigate complaints
against municipal officers for neglect of duty,
oppression, corruption or other form of
maladministration of office.' It provides that in
case suspension has been effected, the hearing
shall occur as soon as practicable, in no case
later than ten days from the date the accused is
furnished a copy of the charges, unless the
suspended official on sufficient grounds asks for
an extension of time to prepare his defense. The
section further warns that "the preventive
suspension shall not be for more than thirty
days," and ordains that at the end of that period
the officer should be reinstated in office without
prejudice to the continuation of the proceedings
against him until their completion, unless the
delay in the decision of the case is due to the
defendant's fault, neglect or request, and unless
in case of conviction the Secretary of the Interior
shall otherwise direct.
Section 2188 is of relatively recent vintage, and
is designed to protect elective municipal officials
against abuses of the power of suspension,
abuses of which past experience and observation
had presented abundant examples. The point we
wish to drive home is that, evincing grave
concerns for ordinary municipal officials including
municipal councilors, as a matter of public policy,
it is unreasonable to suppose that the Legislature
intended to withhold the same safeguards from
the post of mayor of the metropolis and seat of
the National Government. On the contrary, in
converting the office from appointive to elective,
one of the legislative purposes, we venture to
say, was to afford the position greater stability as
well as to clothe it with greater dignity and
prestige. What could be the practical use of
having the people choose the city executive to
manage the city's affairs if by the simple
expedient of a criminal accusation he could be
laid off for the long duration of a criminal
prosecution, prosecution which, at long last
might, as is not infrequently the case, turn out to
be false, malicious, unsubstantial, or founded on
a mistaken notion of law or evidence? Let it not
be overlooked that criminal accusations are easy
to make and take months or years to try and
finally decide, and that the filing of such
accusations and the time within which they are to
be finished are matters over which the accused
has no effective control. It is not difficult to see
that the tenure of office and the incumbent's
rights could easily be overthrown and defeated if
power rested in any authority to suspend the
officer on the mere filing or pendency of a
criminal accusation, the suspension to continue
until the final termination of the trial. The idea
seems repugnant to the principles of due
process, speedy trial, and simple justice —
"principles that are fundamental and eternal."
It will also be noted from section 2188 that it
does not only limit the period of preventive
suspension, but requires the filing of charges and
prompt investigation. Without such express
provision, however, it is established by the great
weight of authority that the power of removal or
suspension for cause can not, except by clear
statutory authority, be exercised without notice
and hearing. Mere silence of the statute with
respect to notice and hearing will not justify the
removal of such an officer without knowledge of
the charges and an opportunity to be heard.
(Mechem, p. 287; 43 Am. Jur., 50-52; 93 C.J.,
65; 62 C.J.S., 924; 43 C.J., 666, footnote 83 [e]
and cases cited.) It is only in those cases in
which the office is held at the pleasure of the
appointing power, and where the power of
removal is exercisable at its mere discretion, that
the officer may be removed without such notice
or hearing. (Id.) Not even final conviction of a
crime involving moral turpitude, as distinguished
from conviction pending appeal, dispenses with
the requisites notice and hearing. Final conviction
is mentioned in section 2188 of the Revised
Administrative Code as ground for proceeding
administratively against the convicted officer but
does not operate as automatic removal doing
away with the formalities of an administrative
hearing.
The policy manifested by section 2188 of the
Revised Administrative Code, which is a
consecrated policy in other jurisdictions whose
republican institutions this country has copied,
requires speedy termination of a case in which
suspension of the accused has been decreed, not
only in the interest of the immediate party but of
the public in general. The electorate is vitality
interested, and the public good demands, that
the man it has elevated to office be, within the
shortest time possible, separated from the
service if proven unfit and unfaithful to its trust,
and restored if found innocent. Special
proceedings alone, unicumbered by nice
technicalities of pleading, practice and procedure,
and the right of appeal, are best calculated to
guarantee quick result.
The petition must be, and the same is granted,
without costs.
Feria, Pablo, and Jugo, JJ., concur.
Separate Opinions
PARAS, C.J., concurring:
The Executive power is vested in the President.
(Section 1, Article VIII, Constitution.) The
President exercises general supervision over all
local governments as may be provided by law.
(Section 10, [1], Article VII, Constitution.)
Among the particular power of the President is
the power "to remove all officials from office
conformably to law." (Section 64(b), Revised
Administrative Code.) Upon the other hand, the
Revised Charter of the City of Manila, Republic
Act No. 409, section 9, provides that the city
mayor "shall hold office for four years, unless
sooner removed."
Counsel for the petitioner admits that the weight
of authority in the United States is to the effect
that the power to remove includes the power to
suspend. We are of the opinion that the President
has the power to remove and consequently to
suspend the petitioner conformably to law. It is
noteworthy that the power of removal conferred
on the President by section 64(b) of the Revised
Administrative Code refers to "all officials"; and
there being no statutory distinction, the term,
"officials" should include both appointive and
elective officials.
It is hard and illogical to believe that, while there
are express legal provisions for the suspension
and removal of provincial governors and
municipal mayors, it could have been intended
that the mayor of Manila should enjoy an over all
immunity or sacrosanct position, considering that
a provincial governor or municipal mayor may
fairly be considered in parity with the city mayor
insofar as they are all executive heads of political
subdivisions. Counsel for petitioner calls attention
to the fact that the peculiarly elevated standard
of the City of Manila and its populace might have
prompted the lawmakers to exempt the city
mayor from removal or suspension. Much can be
said about the desirability of making the
executive head of Manila as strong and
independent as possible, but there should not be
any doubt that awareness of the existence of
some sort of disciplinary measures has a
neutralizing and deterring influence against any
tendency towards official's misfeasance, excesses
or omission.
It is contended for the petitioner that the terms
"unless sooner removed" in section 9 of Republic
Act No. 409 is merely a part of the provision
fixing the tenure of office, and refers to such
removal as may arise from causes enumerated in
section 29 of the Revised Election Code, Articles
13 to 32 of the Revised Penal Code, and Article
VI, section 10, paragraph (3), and Article IX of
the Constitution. This contention is untenable,
because under petitioner's theory the clause
"unless sooner removed" would be superfluous.
It is also argued for the petitioner that under the
constitution, Article VII, section 10, paragraph
(1), the President is granted the power to
exercise only generally supervision over local
governments, in contrast to the power granted to
him to have control over the executive
departments, bureaus or offices, thereby
intimating that the words "general supervision"
were so intended as to deprive the President of
any authority over local governments, including
that of removal. This contention is likewise
without merit, since the consitutional provision
confers such general supervision as may be
provided by law, so that said supervision will
include any power vested in the President by law.
As Already stated, 64(b) of the Revised
Administrative Code has conferred on the
President the special power to remove all officials
conformably to law. Moreover, the removal of
provincial officers is expressly provided for in
section 2078 of the Revised Administrative Code,
and it is not pretended that said provision is
inconsistent with the power of general
supervision conferred on the President by section
10, Article VII, paragraph (1) of the Constitution.
The question that arises calls for the specification
of the causes or grounds warranting the
suspension or removal of the city mayor by the
President. As already seen, section 64(b) of the
Revised Administrative Code provides that the
President may remove all officials conformably to
law. While there are statutory causes regarding a
provincial officer (Section 2078, Revised
Administrative Code) or municipal officer (section
2188, id.), there is no legal provision
enumerating the causes for the removal or
suspension of the city mayor. In such case,
removal conformably to law, as provided for in
section 64(b) of the Revised Administrative Code,
necessarily means removal for cause. This follows
from the constitutional provision that no officer or
employee in the civil service shall be removed or
suspended except for cause as provided for by
law, and from the circumstance (Admitted by
counsel for petitioner) that the mayor of Manila,
as an elective official is included in the
unclassified civil service (section 671, paragraph
[c], Revised Administrative Code.) The phrase
"for cause" means, "for reasons which the law
and sound public policy recognized as sufficient
warrant for removal, that is legal cause, and not
merely causes which the appointing power in the
exercise of discretion may deem sufficient. It is
implied that officers may not be removed at the
mere will of those vested with the power of
removal, or without any cause. Moreover, the
cause must relate to and affect the
administration of office, and must be restricted to
something of a substantial nature directly
affecting the rights and interests of the public."
(43 Am. Jur., 47, 48.) (See also De los Santos
vs. Mallare,* 48 Off. Ga., 1787.)
We believe that the grounds for the suspension
and removal of a provincial governor, namely,
disloyalty, dishonesty, oppression, or misconduct
in office, may by analogy be applied to the city
mayor. But even extending the similarity further,
and applying the grounds as to a municipal
mayor, namely, neglect of duty, oppression,
corruption, or other from of maladministration of
office, and conviction by final judgment of any
crime involving moral turpitude, — certainly the
city mayor is entitled to at least the same, if not
more, protection enjoyed by a municipal officer,
— the question is whether the petitioner's
suspension may be based on the mere filing
against him of a complaint for libel. The offense
of libel is clearly not disloyalty, dishonesty,
oppression, misconduct in office, neglect of duty,
oppression, corruption or other form of
maladministration of office. Indeed, petitioner's
suspension is not premised on any of these
grounds. The petitioner has neither been
convicted by final judgment of the offense of
libel, so that even assuming that said offense
involves moral turpitude, his suspension was not
yet in order.
Upon the other hand, the offense of libel cannot
be loosely considered as a misconduct in office,
because the misconduct in office "which shall
warrant a removal of the officer must be such as
affects his performance of his duties as an officer
and not such only as affects his character as a
private individual. In such cases it is necessary
`to separate the character of the man from the
character of the officer'." (Mechem, Officers, p.
290, see also Cornejo vs. Naval, 54 Phil., 809.)
In this connection, the rule of strict construction
should be observed. (Cornejo vs. Naval, 54 Phil.,
809.)
The law, in requiring final conviction,
undoubtedly is intended to forestall any
fabricated criminal prosecution as a political
maneuver or revenge, not to mention the
constitutional presumption of innocence. It
cannot be argued that, if final conviction is
always necessary, the power to suspend is
rendered nugatory. In the first place, suspension
lies on other grounds. In the second place, even
with respect to a criminal conviction,
administrative investigation has to be conducted
with a view to determining whether the crime
involves moral turpitude, and of course during
the period of said investigation the officer
concerned may be suspended. At any rate, if the
power to suspend or removed has to be
stretched, it is for the lawmakers to make the
necessary statutory changes.
The libel which the petitioner is prosecuted
cannot in turn be said as having been committed
in connection with or during the performance by
the petitioner of his official duties and functions
as mayor of Manila. He participated in the radio
broadcast which gave rise to the allegedly
libelous imputations, not in the exercise of his
office as city mayor but as any other private
citizen, since there is no law imposing upon the
petitioner the duty of speaking before the radio
on the occasion in question.
Wherefore, I vote to grant the petition.
PADILLA, J., concurring:
The office of mayor of the City of Manila
therefore appointive was made elective by the
new charter of the City, Republic Act No. 409.
Under the charter the choice of the person to
hold the office of mayor in the City of Manila
devolves exclusively upon the qualified electors
of the City. The tenure of office is for a fixed term
of four years "unless sooner removed" (section
9). This provision of the charter contemplates the
possibility of removal. As a rule the power to
remove encompasses the power to suspend.
There is no doubt in my mind that the city mayor
may be removed and, therefore, suspended. But
such removal an suspension must be for cause.
In the case of the members of the municipal
board the charter provides that "they may be
suspended or removed from office under the
same circumstances, in the same manner, and
with the same effect, as elective provincial
officers" (section 14). In the case of the mayor
there is no such provision except the bare
feasibility of his removal. That power to remove
must, of course, be lodged somewhere in the
framework of the Government. It could be in a
competent court if the mayor should be found
guilty of a crime or misdemeanor for which the
penalty provided and imposed upon him be
temporary or perpetual disqualification or
suspension from holding public office. If he
should be found to have committed malfeasance
or irregularities in the exercise of his powers and
performance of his duties as such mayor not
amounting to a crime or misdeameanor, the
President could remove him. Pursuant to section
64(b) of the Revised Administrative Code the
President is empowered "to remove officials from
office conformably to law and to declare vacant
the offices held by such removed officials." And
"For disloyalty, . . . the President of the
Philippines may at any time remove a person
from any position of trust or authority under the
Government of the Philippines." Does that
provision specifying disloyalty as the cause for
removal and, therefore, suspension exclude other
causes which would render the City Mayor unfit
and unworthy to act as such? I believe that the
mention of disloyalty as a cause for removal from
office was not intended by Congress as a
limitation, for the clause where disloyalty is
mentioned as a cause for removals from office is
preceded by another granting to the President
the power "to remove officials from office
conformably to law," and because if construed as
a limitation, it would defeat its very aim and
purpose — an honest government dedicated to
the promotion of the general well-being of all the
inhabitants of the city. Section 2078 of the
Revised Administrative Code provides that
provincial officers may be suspended and
removed not only for disloyalty but also for
dishonesty, oppression or misconduct in office. I
do not believe the City Mayor of Manila should be
placed over and above the elective provincial
governors in rank and importance; and for the
that reason the causes for removal of elective
provincial governors may as well be applied to
the City Mayor of Manila. I am, therefore, of the
opinion that the City Mayor of Manila, if found
guilty after investigation or trial, could be
removed and also suspended pending an
administrative or judicial investigation of charges
preferred against him involving disloyalty,
dishonesty, oppression or misconduct in office.
This brings me to the consideration of whether
the information for libel filed against the
petitioner in the Court of First Instance of Manila
warrants his suspension from office by the
President of the Philippines. When an information
is filed in the city courts charging a person with
the commission of a crime, it is done only after
an investigation has been made by the
prosecuting officer who finds sufficient or prima
facie evidence of his guilt. To find out whether he
should suspend and then after an investigation
remove an officer charged with irregularities or
malfeasance in office, the President in the
exercise of his supervisory power could either
order such administrative investigation to be
conducted or rely upon the investigation made by
a prosecuting officer, and if he believes that the
facts found by the prosecuting officer warrant
suspension the President, undoubtedly, could
suspend him and thereafter if the officer charged
with a crime should be found by a competent
court guilty thereof, he could remove him form
office. The President may choose between
instituting an administrative inquiry or rely upon
the trial and judgment made by a competent
court of justice. Nevertheless, conviction of a
crime by a competent court does not necessarily
grant the President under his authority of
supervision the power to remove unless for cause
provided by law, to wit: disloyalty, dishonesty,
oppression or misconduct in office. Disloyalty
may be committed independently of the exercise
of the powers and performance of the duties by
the City Mayor. Once that is proved the President
may and must remove him. Dishonesty may be
committed not only in connection with the
exercise of the powers and performance of the
functions and duties by the mayor but also
independently of the exercise of such powers and
performance of such duties. For instance,
independently of the exercise of his powers and
the performance of his duties as mayor of the
City of Manila he may be charged with and found
guilty of smuggling contraband goods into a
province or other city outside his city's
jurisdictional limits or he may be charged with
and found guilty of robbery, burglary, forgery or
seduction unconnected with the exercise of his
powers and the performance of his duties. Such
conviction involves dishonesty and certainly the
mayor cannot continue in office but must be
removed. A man of such a character should not
be allowed to continue in office. He should
forthwith be removed. Acts of oppression must
be committed in connection with the exercise of
the powers and the performance of the duties as
mayor, unless they involve dishonesty. Not all
acts of oppression involve dishonesty. They vary
in degree and some may seem oppressive but do
not involve dishonesty. For that reason in order
that the mayor may be removed from office, if
found guilty of oppression, it must be in
connection with the exercise of his powers and
performance of his duties as such mayor. It is
clear that misconduct in office must be
committed in connection with the exercise of his
powers and performance of his duties as such
mayor.
Again this brings me to another point. Whether
an information for libel which is neither
disloyalty, disloyalty, dishonesty, or oppression
may be considered as misconducting office. It
should be borne in mind that the filing of the
information for libel against the petitioner is the
offshoot or aftermath of the steps taken by him
to purge the Manila Police Department. As a
result of such steps he filed a complaint against
the Deputy Chief of Police, Lt. Colonel Celestino
C. Juan. All the steps taken by him, such as
investigating the police officers involved in the
irregularities committed in the Manila Police
Department, filing the complaint in the city
fiscal's office and presenting or submitting
evidence against the deputy chief of police, were
all in connection with the performance of his
duties as mayor. So that if for such acts he could
be held liable in an administrative investigation
they would fall under misconduct in office
provided for by law. But there is no question that
such steps cannot be deemed to constitute
misconduct in office. On the contrary, they are
praiseworthy acts. However, the performance of
his duties in connection with the prosecution and
eventual they are praise worthy acts. However,
the performance of his duties in connection with
the prosecution and eventual removal of the
deputy chief of police of Manila stopped or ceased
to be a function of his office after the
presentation of the complaint and of the
complaint and of the evidence in support thereof
to the city fiscal's office. Thereafter, anything
done by him, anything uttered by him, anything
uttered by him, if it should constitute a crime
would not be in connection with the performance
of the duties of his office and, therefore, it would
not constitute a misconduct in office. If it is a
crime, his is the responsibility and he must be
made to answer for it before a court a competent
jurisdiction.
Much as it is wished and desired to see and have
a mayor as becoming an officer of such high rank
possessed of composure in his behavior,
prudence in his acts and self-restraint in his
utterances, yet I cannot bring myself to believe
that a libel allegedly committed by him which is
unrelated to the performance of the duties of his
office would warrant his suspension from office.
It is unnecessary to pass judgment on whether
he may be removed after conviction. His
utterances may be biting, cutting, sharp, caustic
and sarcastic; and, granting for the sake
argument, that the utterance upon which the
information for libel is grounded to contemptuous
— a point I do not pass upon pending
determination and judgement on the merits of
the case for libel file against the petitioner in the
Court of First Instance of Manila — still I do not
believe that the alleged libelous utterance which
gave rise to the filing of the information,
unrelated to the performance of his duties as
mayor, would be sufficient cause for his
suspension from office. The offended party must
resort to court for redress of his grievance and to
have it right the wrong. And if it be
contemptuous the court against which it was
committed has ample power to make him answer
for his misdeed.
The foregoing reasons lead me to hold the
opinion and conclude that the suspension of the
petitioner is illegal, invalid and of no legal effect.
The petition for a writ of quo warranto should be
granted, as the respondent acting mayor is
unlawfully holding an office from which the
petitioner who is entitled thereto is excluded.
BAUTISTA ANGELO, J., dissenting:
The power of the President to remove the officials
in the government service may be found in
section 64(b) of the Revised Administrative Code.
This section provides , among others, that the
President can "remove officials from office
conformably to law." In addition, he may also
remove for disloyalty any person from any
position of trust or authority under the
government.
The term "officials" includes all officials of the
government, whether elective of appointive,
because when the law does not distinguish there
is no justification to make any distinction. Ubi
Lex Non Distinguit, Nec Nos Distinguere
Debemus. Said term, therefore, includes the
Mayor of the City of Manila.
But is there any law which expressly authorizes
the President to remove the Mayor of the City of
Manila? The answer to this question would bring
us to a scrutiny of the Charter of the City of
Manila (Republic Act No. 409). A careful perusal
of this charter would disclose no express
provision concerning the removal of the Mayor
other than the following phrase; "He shall hold
office for four years, unless sooner removed",
unlike the members of the Municipal Board
wherein it is clearly postulated that they can be
removed in the same manner and on the same
grounds as any provincial official. And because of
this scanty provision, counsel for petitioner now
contends that there is a void in the law which can
only be remedied by legislation. The
phrase unless sooner removed, counsel claims,
does not necessarily allude to the President as
the removing power, but rather it is expressive of
acts which may render the Mayor disqualified to
continue in office as found at random in different
penal provisions of the land. But an insight into
the origin and historical background of the phrase
under consideration would at once reveal that
such a claim has no merit.
Note that the phrase unless sooner removed is
an old provision contained in the Revised
Administrative Code (section 2434) and which
was merely transplanted to the Charter of the
City of Manila (Republic Act No. 409, section 9).
Said phrase was at the same time taken from
statutes of American origin. This phrase has a
well-defined meaning in American statutes. In
the case of State ex rel. Nagle vs. Sullivan, (99
A.L.R., 321, 329), the phrase was defined as
implying "power in the appointing authority to
remove," which ruling found support in two other
cases. (Townsend vs. Kurtz, 83 Md., 350; 34 A.,
1123, 1126; State ex rel. vs. Mitchell, 50 Kan.,
295; 33 P., 104, 105; 20 L. R. a., 306.) Or, as
quoted in the majority opinion, "Power in the
appointing authority to remove a public officer
may be implied where to statutory specification
of the term of office are added the words "unless
sooner removed." (43 Am. Jur., 30.) These
authorities suffice to dispel any doubt that when
said phrase was carried into the charter of the
City of Manila it was so carried with the
implication that the President would continue
wielding his power of removal as heretofore
followed under the old set-up. The is nothing in
said Charter that would indicate any intention to
the contrary. To hold otherwise would be to
devoid the word removed of its substance and
meaning. This word presupposes the existence of
power somewhere, and this power can only be
the Chief Executive. This is essentially an
executive function. He cannot be deprived of this
power unless the law lodges it elsewhere.
This case presents the questions whether
under the Constitution the President has
the exclusive power of removing executive
officers of the United States whom he has
appointed by and with advice and consent
of the Senate . . . .
It is very clear from this history that the
exact question which the House voted
upon was whether it should recognize and
declare the power of the President under
the Constitution to remove the Secretary
of foreign Affairs without the advice and
consent of the Senate. That was what the
vote was taken for. Some effort has been
made to question whether the decision
carries the result claimed for it, but there
is not the slightest doubt, after an
examination of the record, that the vote
was, and was intended to be, a legislative
declaration that the power to remove
officers oppointed by the President and
the Senate vested in the President alone,
and until the Johnson impeachment trial in
1868, its meaning was not doubted even
by those who questioned its soundness. . .
.
After the bill as amended has passed the
House, it was sent to the Senate, where it
was discussed in secret session, without
report. The critical vote there was upon
the striking out of the clause recognizing
and affirming the unrestricted power of
the President to remove. The Senate
divided by ten to ten, requiring the
deciding vote of the Vice-President, John
Adams, who voted against striking out,
and in favor of the passage of the bill as it
had left the House. Ten of the Senators
had been in the Constitutional convention,
and of them six voted that the power of
removal was in the President alone. The
bill having passed as it came from the
House was signed by President
Washington and became a law. Ac of July
27, 1789, 1 Stat. at L. 28, Chap. 4. . . .
Assuming then the power of Congress to
regulate removals as incidental to the
exercise of its constitutional power to vest
appointments of inferior officers in the
heads of departments, certainly as long as
Congress does not exercise that power,
the power of removal must remain where
the Constitution place it, with the
President, as part of the executive
power, in accordance with the legislative
decision of 1789 which we have been
considering. (Myers vs. United States, 71
law. ed. pp. 160, 162, 165, 184.)
(Emphasis supplied.)
Now, the law says that the Mayor shall hold office
for four years unless sooner removed. It does not
say that he shall hold office at the pleasure of the
President unlike similar provisions appearing in
other city charters. The idea is to give the Mayor
a definite tenure of office not dependent upon the
pleasure of the President. If this were the case he
could be separated from the service regardless of
the cause or motive. But when he was given a
definite tenure the implication is that he can only
be removed for "cause".
An inferential authority to remove at
pleasure can not be deduced, since the
existence of a defined term, ipso facto,
negatives such an inference, and implies a
 contrary presumption, i.e., that the
incumbent shall hold office to the end of
his term subject to removal for cause."
(State ex rel. Gallaghar vs. Brown, 57 Mo.
Ap., 203 expressly adopted by the
Supreme Court in States ex rel. vs.
Maroney, 191 Mo., 548; 90 s.w., 141;
State vs. Crandell, 269 Mo., 44; 190 S.W.,
889; State vs. Salval, 450, 2d, 995; 62
C.J. S., 947.)
There is a divergence of opinion among the
members of the court as to the cause that may
serve as basis for the removal of the Mayor of
the City of Manila in view of the silence of the
law. Some are of the opinion that the cause must
be one which specifically relates to, and affects
the administration of, the office of the official to
be removed. And in that the advocacy they are
guided by the ruling laid down in the case of
Cornejo vs. Naval, (54 Phil., 809). But I am of
the opinion that cause should not be given a
restrictive meaning in dealing with the office of
the Mayor of the City of Manila considering its
importance and stature. The City of Manila is a
class by itself. It is the show window of the
Orient so to speak. Peoples of different
nationalities and from all walks of life have their
abode in that city and because of their peculiar
situation are entitled to be accorded such
treatment, courtesy and consideration which are
not expected in other cities. In dealing with these
different groups of people the Mayor is
confronted not only with domestic problems but
international as well. His approach to these
problems but international as well. His approach
to these problems should be characterized with
utmost tact, ability and circumspection. His office
is on a par with other high officials of our national
government and at times he is called upon to
meet issues and situations just as important and
far-reaching as those confronted by the President
himself. Such a situation could not have passed
unnoticed to Congress when it deemed it wise to
place within the sound discretion of the President
his continuance in office. And so it is my
considered opinion that when the Chapter of the
City of Manila has impliedly provided that the
Mayor can only be removed for cause it must
have meant one which the law an bound public
policy recognize as sufficient warrant for removal
regardless of whether it relates to his office or
otherwise. There are many authorities which
follow this line of reasoning.
Discharge of a civil service employee for
"good of the service" or "for cause"
implied some personal misconduct, or
fact, rendering incumbent's further tenure
harmful to the public interest (State ex
rel. Eckles vs. Kansas City, Mo., 257 s.W.,
197, 200).
The phrase "for cause" when used in
reference to removal of officers means not
the arbitrary will of the appointing power,
but some cause affecting or concerning
the ability of fitness of the officer to
perform his duties. (Farish vs. Young, 158
P., 845, 847, 18 Ariz., 298)
"Cause" as effect removal of a public
employee means some substantial
shortcoming which renders continuance in
his office or employment in some way
detrimental to the discipline and efficiency
of the service and something which the
law and sound public opinion recognize as
a good cause for his no longer occupying
the place" (Murphy vs. Houston, 259 Ill.,
pp. 385)
"Cause" for removal of officer stated in
resolution of address if Legislature must
be legal and relate to maters of
substantial nature directly affecting public
interest, and the qualifications of officer or
performance of this duties, showing he is
not fit person to hold office (Moulton vs.
Scully, 89 A., 944, 947, 111 me. 428.
A "cause" within statute providing that no
person in the classified civil service can be
removed except for the cause on written
charges means some substantial
shortcoming which renders continuance in
his office or employment in some way
detrimental to the discipline and efficiency
of the service and something which the
law and a a sound public opinion will
recognize as a good cause for his no
longer occupying the place (City of
Chicago vs. Gillen, 124 Ill. app., 210)
Rejecting our theory that the phrase "shall hold
office for four years unless sooner removed"
comprises the Mayor of the City of Manila even if
he is an elective official, the majority opinion
holds the view that as the law now stands the
Mayor is removable only for disloyalty to the
Republic. The opinion also expresses the view the
"strict construction of law relating to suspension
and removal is the universal rule... Removal it to
be confined with the limits prescribed for it; the
causes, manner and conditions fixed must be
pursued with strictness; where the cause for
removal is specified, the specification amounts to
a prohibition to remove for a different cause."
But in the same breath the opinion acquiesces in
the view of three members of the court to the
effect that "as the office of provincial executive is
at least as important as the office of the Mayor of
the City of Manila, the latter officer, by analogy,
ought to be amenable to removal and suspension
for the same causes as provincial executives,
who, under section 2078 of the Revised
Administrative Code, may be discharged from
office for dishonesty, oppression or misconduct in
office, besides disloyalty." I cannot see how the
above expressed views can be reconciled. If the
law, as contended, only provides for the removal
of the Mayor of the City of Manila on the ground
of disloyalty, and this provision should be
construed strictissimi juris, simple logic dictates
that he is not amenable to other causes of
removal. This line of reasoning can only give rise
to the implication that the Mayor of the City of
Manila can be removed not only for disloyalty but
also for other causes which the Revised
Administrative Code specifically provides for
provincial and municipal officers if the Chief
Executive in his sound discretion believes them to
be sufficient (Section 2078, 2188). All of these
grounds fit in to the realm of wide discretion that
is conferred by law upon the Chief Executive
under his power to remove for "casue".
But I will follow the line of reasoning and the
majority in its discussion of the causes of
removal by the Chief Executive of the City Mayor
of Manila, and I will admit that one of them is
misconduct in office. At this juncture, I wish to
ask; cannot the behavior observed by petitioner
in disparaging against a Judge of First Instance, a
high and respectable official in our Government
set-up, in a radio broadcast held exclusively for
the expression of his views as Mayor of the City
of Manila be considered misconduct in office? The
majority opinion holds that such a behavior
should be characterized as one entirely divorced
from the official position of petitioner and should
be appreciated merely in the light of a personal
actuation which has no bearing on his office. I
cannot subscribe to this view. The Circumstances
under which the petitioner made the utterances
imputed to him as libelous point to a different
conclusion. It should be borne in mind that those
utterances were made on the occasion of a radio
broadcast exclusively held to give petitioner an
opportunity to express his view on public
questions in his capacity as Mayor of the City of
Manila. It was a broadcast given by him not as
Lacson, the individual, but as Lacson the Mayor.
The public listened to him not because he was
Arsenio Lacson but because he was the Mayor of
the City. Such is the general impression when the
broad case was made, and that is the reason why
the broadcast was made right in the City Hall in
order to give to the whole show a color of official
authority. And in that broadcast he made the
following utterances: "I have nothing but
contempt for certain courts of justice. . . . I tell
you one thing (answering an interrogator), if I
have the power to fire Judge Montesa (the trial
judge) I will fire him for being incompetent, for
being an ignorant . . . an ingnoramus". The
majority believes that such as behavior does not
constitute a misconduct in office, but the Chief
Executive holds a different opinion. On maters
which involve differences of opinion between this
court and the Chief Executive, a becoming regard
for a co-equal power demands that the opinion of
the latter should be respected in the absence of
abuse of discretion.
Much stress is laid by the majority opinion on
the ratio decidendi in the case of Cornejo vs.
Naval, 54 Phil., 809, in its effort to show that the
cause of removal must have direct relation to,
and be connected, with the performance of
official duties of petitioner. But this case cannot
be invoked as a precedent here because it
involves the interpretation of a law which governs
the removal of municipal officials (section 2188,
Rev. Adm. code). In that case, the phrase "other
form of malaadministration in office" was
interpreted in connection with the word
"currpution". On one hand, the petitioner
contended that phrase only limits the disciplinary
action to misconduct relating to the office and
doe not extend to personal misbehavior. The
respondents, on the other hand, claimed that the
word corruption should be interpreted
independently of the office of petitioner. It was
then that the court made the following
pronouncement: "It is a well recognized rule of
statutory construction and of the law of public
officers that a statute prescribing the grounds for
which an officer may be suspended is penal in
nature, and should be strictly construed. Making
this principle the basis of our investigation, it is
not possible to reach any other conclusion than
that the prepositional phrase 'in office' qualifies
the various grounds for legal suspension. The law
says 'or other form maladministration in office'.
By the maxim Ejusdem generis, the scope of the
word `other' is limited to that which is of the
same kind as its antecedent. Corruption,
therefore, refers to corruption in office." The
citation, therefore, of the Naval case as a
precedent in the present case has no legal basis.
Having established that the President has the
power to remove the Mayor of the City of Manila
under the Charter provided that sufficient legal
cause exists for doing so, the next inquiry is, can
he also suspend him? The answer is in the
affirmative under the well-known rule that the
power to remove embraces the authority to
suspend. One authority says, "the suspension of
an officer pending his trial for misconduct, so as
to tie his hands for the time being, seems to be
universally accepted as fair and often necessary.
The power of suspend is generally considered as
included in the power of removal for cause, since
a suspension is merely a less severe disciplinary
measure" (43 Am. Jur., 65, section 242). It has
also been held that "where the power of removal
is limited to cause, the power to suspend, made
use of as a disciplinary power pending charges,
has been regarded as included within the power
of removal, and it has been announced that the
power to suspend is an incident to the power to
remove for cause, and according to some
authorities, the power to remove necessarily
includes the minor power to suspend" (67 C.J. S.
233-234). A similar ruling was laid down in this
jurisdiction in a case involving a municipal
official. Said this Court:
. . . Indeed, if the President could, in the
manner prescribed by law, remove a
municipal official, it would be a legal
incongruity if he were to be devoid for the
lesser power of suspension. And the
incongruity would be more potent if,
possessed the power both to suspend and
to remove a provincial official (sec. 2078,
Administrative Code), the President were
to be without the power to suspend a
municipal official. Here is, parenthetically,
an instance where, as counsel for
petitioner admitted, the power to suspend
a municipal official is not exclusive. Upon
the other hand, it may be argued with
some degree of plausibility that, if the
Secretary of the interior is, as we have
hereinabove concluded, empowered to
investigate the charges against the
petitioner and to appoint a special
investigator for that purpose, preventive
 suspension may be a means by which to
carry into effect a fair and impartial
investigation. (Villena vs. Secretary of the
Interior, 67 Phil., 451, 460-461.)
(Emphasis supplied.)
It is true that the suspension of petitioner by the
Chief Executive has been predicated merely upon
the pendency of a criminial case No. 20707 for
libel and not as a result of an administrative
charges preferred against him in connection with
the performance of his official duties. And
because the suspension has been brought about
without any previous administrative charge, the
majority opinion opines that such suspension is
unwarranted, as it finds no support in law of
jurisprudence. I again disagree with this opinion.
As well stated by the majority, "temporary
suspension is allowed merely so as to prevent the
accused from hampering the normal course of
the investigation with his influence and authority
of possible witnesses". To this I agree. This is the
philosophy of a temporary suspension. But where
we disagree is in its application, for I entertain
the view that it also applies to a case where the
officer is indicted in court for a criminal charge. I
believe that the same evil or danger exists when
an officer is charged administratively, as well as
when he is indicated in court. Unless removed
from power and authority he is apt to make use
of his influence to his advantages by suppressing
or tampering with the witnesses. And he is apt to
d to this with more reason when he is indicted in
court for then not only his position is at stake but
his liberty as well.
. . . No right to suspend is given in
express terms. If such power exists, it
must be implied; . . . This court in the
Peterson case quoted therefrom with
respect language of such importance to
the question here involved that we take
the liberty of reproducing it on account of
its practical suggestive force on this
inquiry. Promising that in the Missouri
case the right to suspend the official
depended upon a power conferred solely
by a statute, that court said: "The
suspension of an officer, pending his trial,
for misconduct, so as to tie his hands for
the time being, seems to be universally
accepted as a fair, salutary, and often
necessary incident of the situation. His
retention, at such time of all the
advantage and opportunities afforded by
official position may enable and
encourage him not only to persist in the
rebellious practice complained of, but also
to seriously embarrass his triers in their
approaches to the ends of justice. In the
absence of any express limitation to the
contrary, —and none has been shown,—
we are of the opinion that in cases where
guiltiness of the offenses charged will
involve a dismissal form office there is, on
general principles, no arbitrary or
improper exercise of a supervisory
authority in a suspension of the accused
pending his trial in due and proper form.'
The reasons stated in the above quotation
for holding that the right of suspension
during proceedings for removal seems to
be essential to a complete and thorough
investigation of an official charged with
misconduct as to furnish an unanswerable
argument to the claim of respondent that
the minor right to suspend is not included
in the major authority to remove. A better
illustration of the necessity of holding that
such incidental right exists cannot be
made than in the case of an investigated
sheriff, who as executive officer of the
country enjoys great influence, which
might extend to the control of papers
absolutely necessary to determine the
matters under investigation. He might, if
so disposed, prevent the use of evidence
necessary to a full and fair hearing of the
charges against him. If the alleged acts of
misconduct against such sheriff were, as
they might supposedly be, made the
grounds of inquest by the grand jury upon
which further proceedings might
depend, it is each to see how he would
have a deep interest in withholding use of
means that would result in prosecution;
and, it he might hold the office until
removed by the governor, a trial of an
indictment against him might be made
ineffectual in various ways by the exercise
of his power and influence in the court, as
well as in the investigation by the
commissioners. It may be said that it is a
great hardship to an accused official to be
deprived of his fees and emouments
before actual removal; but the answer to
this suggestion is that he takes the office
and retains it cum onere, and must accept
its burden with its benefits. It ought not,
therefore, to be held that the
unquestionable power to remove should
be so handicapped by an interpretation of
the statute as to defeat the very object is
seeks to attain. Presumably, the chief
executive of the state will act upon an
exalted sense of justice and high
consideration of duty, and only in cases
where strong reasons exist for exercising
the power of suspension will impose
unnecessary burdnes upon the accused
official after a sufficient review of the
reasons upon which that power is to be
exercised. (State vs. Megaarden, 88 N.W.,
pp. 414-415.) (Emphasis supplied.)
The remaining question to be determined is
whether the President is justified in suspending
petitioner from office. The record shows that
petitioner has been suspended from office as a
result of the charge for libel field against him by
Judge Agustin P. Montesa. The Libelous
statements imputed to petitioner are not only
contrary to justice, honesty or good morals or in
derogation of the elementary duty of respect and
consideration he owes to a judge and to his
judiciary in general but call for the application of
a penalty which involves suspension from public
office (Article 355, in connection with article 43,
Revised Penal code). considering the nature of
the charges as reflected in the information, and
without in any way disputing or giving any
opinion on the merits of the case, they at once
give the impression that they are of a serious
nature which involve moral turpitude. This is the
only consideration which guided the President to
suspend him following the policy he has
consistently pursued in dealing with public
officers, whether appointive or elective, who are
charged in court or otherwise with an offense
which involves moral turpitude (Exhibit A-1). The
soundness and validity of this policy cannot be
seriously disputed. The authority of the President
to enunciate and adopt such a policy flows
necessarily from his constitutional power of
supervision over local governments and his
equally consitutional duty to faithfully execute
the laws (sec. 10, par. 1, Article VII,
constitution), and this policy should apply with
greater force to the City Mayor who is the right
arm of the President in the execution and
enforecement of the law n the city.
The action of the President in suspending
petitioner because of the charges preferred
against him by Judge MOntesa cannot be
branded as unwarranted or arbitrary. It is to be
presumed that, before taking such action, he has
carefully weighed the nature and seriousness of
the charges not only as affecting the offended
party but the judiciary as well. It should be noted
that petitioner, in his radio broadcast, and as
quoted in the information, made disparaging
remarks not only against the judge but against
some courts of justice. These remarks, affecting
as they do the judiciary, must have impressed
the president as tending to undermine the faith
and confidence of the people in the
administration of justice. While there are
authorities who favor criticism of court decisions
after they have become final, which Judges
should not begrudge, the criticisms should be
made in the proper spirit and must be kept within
proper bounds. It should not be contemptuous
nor cast unsavory reflection against the judge.
Undoubtedly, the remarks of petitioner,
considering the circumstances under which they
were made, were considered by the President not
only derogatory to the judiciary but one which
involves moral turpitude, and this opinion must
be respected unless the courts opine otherwise.
Jurisprudence sustains this action of the
President.
This is a proceeding to disbar an attorney,
instituted by the state upon the relation of
the members of the grievance committee
of the Oregon State Bar Association. The
fact are that O.P. Mason, a licensed
attorney, was indicted, tried,
and convicted of the crime of libel, upon
proof of the publication of defamatory
matter in a newspaper published at
Portland, Or., known as the Sunday
Mercury, while he was its editor.
Whereupon the relators filed an
information against him in this court,
alleging such conviction, and that the
offense of which he was so convicted is a
`misdemeanor involving moral turpitude,'
and prayed a judgment of removal against
the accused. The defendant, upon being
cited to appear, filed his answer to the
information, in which he denies that the
misdemeanor of which he was convicted
involved moral turpitude, and alleges that
he was found guilty thereof by
construction of law only, which renders
the manager, editor, or owner of a
newspaper criminally liable for the
publication of a libel, whether he wrote
the article or not, or had any knowledge of
its publication; that he did not write the
alleged libelous article, nor see it or know
of its publication until after the
newspapers was in circulation . . .
. . . But inability to properly define the
term, however, does not preclude us from
saying that it is, and of necessity must be,
involved in the willful publication of a libel.
The case of Andres vs.
Koppenheafer, supra, was an action for
slander, founded upon the following
language: `What is a woman that makes
a libel? She is a dirty creature, and that is
you. You have made a libel, and I will
prove it with my whole estate.' It was held
that the crime of libel, imputed to the
plaintiff, involved moral turpitude;
Tilghaman, CJ., saying : "The man who
wantonly, maliciously, and falsely
traduces the character of his neighbor is
no better than a felon. He endeavors to
rob him of that, in comparison with which,
gold and diamonds are but dress." We
think there can be no doubt that the
willful publication of a malicious libel by
the manager of a newspaper, when made
either to vent his spleen upon the object
of his wrath, or to cater to the perverted
taste of a small portion of the public,
clearly involves moral turpitude, and
manifests, on the part of the libeler, a
depraved disposition and a malignant
purpose." (State ex rel., Mays et al., vs.
Mason, 29 Or., 18; Feb. 3, 1896; 43 PAC.,
651, 652.) (Emphasis supplied.)
There may be differences of opinion with regard
to the determination of the nature or seriousness
of the offense charged or the question whether
such charged warrants disciplinary action, but
there are authorities which hold that the officer
invested with the power of removal is the sole
judge of the existence of the sufficiency of the
cause (17 R.C.L., section 233; Attorney General
vs. Doherty, 13 Am. Rep., 132), and unless a
flagrant abuse of the exercise of that power is
shown, public policy and a becoming regard for
the principle of separation of powers demand that
his action should be left undisturbed. Here there
is no such showing nor the slightest intimation
that power has been abused. And so it is my
opinion that this court should do well in leaving
the matter to the sole responsibility of the
President until the criminal case which is now
pending in the courts has been finally terminated.
For these reasons, I dissent from the opinion of
the majority.
Bengzon, Montemayor and Labrador, JJ., concur.
Footnotes
PARAS, C.J., concurring:
*
87 Phil., 289
[2003V1057E] [1/5] ERNESTO B.
FRANCISCO, JR., petitioner,
NAGMAMALASAKIT NA MGA MANANANGGOL
NG MGA MANGGAGAWANG PILIPINO, INC.,
ITS OFFICERS AND MEMBERS, petitioner-in-
intervention, WORLD WAR II VETERANS
LEGIONARIES OF THE PHILIPPINES, INC.,
petitioner-in-intervention, vs. THE HOUSE
OF REPRESENTATIVES, REPRESENTED BY
SPEAKER JOSE G. DE VENECIA, THE SENATE,
REPRESENTED BY SENATE PRESIDENT
FRANKLIN M. DRILON, REPRESENTATIVE
GILBERTO C. TEODORO, JR. AND
REPRESENTATIVE FELIX WILLIAM B.
FUENTEBELLA, respondents, JAIME N.
SORIANO, respondent-in-Intervention,
SENATOR AQUILINO Q. PIMENTEL,
respondent-in-intervention.2003 Nov 10En
BancG.R. No. 160261D E C I S I O N
CARPIO MORALES, J.:
There can be no constitutional crisis arising from
a conflict, no matter how passionate and
seemingly irreconcilable it may appear to be,
over the determination by the independent
branches of government of the nature, scope and
extent of their respective constitutional powers
where the Constitution itself provides for the
means and bases for its resolution.
Our nation’s history is replete with vivid
illustrations of the often frictional, at times
turbulent, dynamics of the relationship among
these co-equal branches. This Court is
confronted with one such today involving the
legislature and the judiciary which has drawn
legal luminaries to chart antipodal courses and
not a few of our countrymen to vent cacophonous
sentiments thereon.
There may indeed be some legitimacy to the
characterization that the present controversy
subject of the instant petitions – whether the
filing of the second impeachment complaint
against Chief Justice Hilario G. Davide, Jr. with
the House of Representatives falls within the one
year bar provided in the Constitution, and
whether the resolution thereof is a political
question – has resulted in a political crisis.
Perhaps even more truth to the view that it was
brought upon by a political crisis of conscience.
In any event, it is with the absolute certainty that
our Constitution is sufficient to address all the
issues which this controversy spawns that this
Court unequivocally pronounces, at the first
instance, that the feared resort to extra-
constitutional methods of resolving it is neither
necessary nor legally permissible. Both its
resolution and protection of the public interest lie
in adherence to, not departure from, the
Constitution.
In passing over the complex issues arising from
the controversy, this Court is ever mindful of the
essential truth that the inviolate doctrine of
separation of powers among the legislative,
executive or judicial branches of government by
no means prescribes for absolute autonomy in
the discharge by each of that part of the
governmental power assigned to it by the
sovereign people.
At the same time, the corollary doctrine of checks
and balances which has been carefully calibrated
by the Constitution to temper the official acts of
each of these three branches must be given
effect without destroying their indispensable co-
equality.
Taken together, these two fundamental doctrines
of republican government, intended as they are
to insure that governmental power is wielded
only for the good of the people, mandate a
relationship of interdependence and coordination
among these branches where the delicate
functions of enacting, interpreting and enforcing
laws are harmonized to achieve a unity of
governance, guided only by what is in the greater
interest and well-being of the people. Verily,
salus populi est suprema lex.
Article XI of our present 1987 Constitution
provides:
ARTICLE XI
Accountability of Public Officers
SECTION 1. Public office is a public trust. Public
officers and employees must at all times be
accountable to the people, serve them with
utmost responsibility, integrity, loyalty, and
efficiency, act with patriotism and justice, and
lead modest lives.
SECTION 2. The President, the Vice-President,
the Members of the Supreme Court, the Members
of the Constitutional Commissions, and the
Ombudsman may be removed from office, on
impeachment for, and conviction of, culpable
violation of the Constitution, treason, bribery,
graft and corruption, other high crimes, or
betrayal of public trust. All other public officers
and employees may be removed from office as
provided by law, but not by impeachment.
SECTION 3. (1) The House of Representatives
shall have the exclusive power to initiate all cases
of impeachment.
(2) A verified complaint for impeachment may
be filed by any Member of the House of
Representatives or by any citizen upon a
resolution of endorsement by any Member
thereof, which shall be included in the Order of
Business within ten session days, and referred to
the proper Committee within three session days
thereafter. The Committee, after hearing, and by
a majority vote of all its Members, shall submit
its report to the House within sixty session days
from such referral, together with the
corresponding resolution. The resolution shall be
calendared for consideration by the House within
ten session days from receipt thereof.
(3) A vote of at least one-third of all the
Members of the House shall be necessary either
to affirm a favorable resolution with the Articles
of Impeachment of the Committee, or override its
contrary resolution. The vote of each Member
shall be recorded.
(4) In case the verified complaint or resolution
of impeachment is filed by at least one-third of all
the Members of the House, the same shall
constitute the Articles of Impeachment, and trial
by the Senate shall forthwith proceed.
(5) No impeachment proceedings shall be
initiated against the same official more than once
within a period of one year.
(6) The Senate shall have the sole power to
try and decide all cases of impeachment. When
sitting for that purpose, the Senators shall be on
oath or affirmation. When the President of the
Philippines is on trial, the Chief Justice of the
Supreme Court shall preside, but shall not vote.
No person shall be convicted without the
concurrence of two-thirds of all the Members of
the Senate.
(7) Judgment in cases of impeachment shall
not extend further than removal from office and
disqualification to hold any office under the
Republic of the Philippines, but the party
convicted shall nevertheless be liable and subject
to prosecution, trial, and punishment according
to law.
(8) The Congress shall promulgate its rules on
impeachment to effectively carry out the purpose
of this section. (Emphasis and underscoring
supplied)
Following the above-quoted Section 8 of Article
XI of the Constitution, the 12th Congress of the
House of Representatives adopted and approved
the Rules of Procedure in Impeachment
Proceedings (House Impeachment Rules) on
November 28, 2001, superseding the previous
House Impeachment Rules[1] approved by the
11th Congress. The relevant distinctions between
these two Congresses’ House Impeachment Rules
are shown in the following tabulation:
11TH CONGRESS RULES
12TH CONGRESS NEW RULES
RULE II
INITIATING IMPEACHMENT
Section 2. Mode of Initiating Impeachment. –
Impeachment shall be initiated only by a verified
complaint for impeachment filed by any Member
of the House of Representatives or by any citizen
upon a resolution of endorsement by any Member
thereof or by a verified complaint or resolution of
impeachment filed by at least one-third (1/3) of
all the Members of the House.
RULE V
BAR AGAINST INITIATION OF IMPEACHMENT
PROCEEDINGS AGAINST THE SAME OFFICIAL
Section 16. – Impeachment Proceedings Deemed
Initiated. – In cases where a Member of the
House files a verified complaint of impeachment
or a citizen files a verified complaint that is
endorsed by a Member of the House through a
resolution of endorsement against an
impeachable officer, impeachment proceedings
against such official are deemed initiated on the
day the Committee on Justice finds that the
verified complaint and/or resolution against such
official, as the case may be, is sufficient in
substance, or on the date the House votes to
overturn or affirm the finding of the said
Committee that the verified complaint and/or
resolution, as the case may be, is not sufficient in
substance.
In cases where a verified complaint or a
resolution of impeachment is filed or endorsed,
as the case may be, by at least one-third (1/3) of
the Members of the House, impeachment
proceedings are deemed initiated at the time of
the filing of such verified complaint or resolution
of impeachment with the Secretary General.
RULE V
BAR AGAINST IMPEACHMENT
Section 14. Scope of Bar. – No impeachment
proceedings shall be initiated against the same
official more than once within the period of one
(1) year.
Section 17. Bar Against Initiation Of
Impeachment Proceedings. – Within a period of
one (1) year from the date impeachment
proceedings are deemed initiated as provided in
Section 16 hereof, no impeachment proceedings,
as such, can be initiated against the same
official. (Italics in the original; emphasis and
underscoring supplied)
On July 22, 2002, the House of Representatives
adopted a Resolution,[2] sponsored by
Representative Felix William D. Fuentebella,
which directed the Committee on Justice “to
conduct an investigation, in aid of legislation, on
the manner of disbursements and expenditures
by the Chief Justice of the Supreme Court of the
Judiciary Development Fund (JDF).”[3]
On June 2, 2003, former President Joseph E.
Estrada filed an impeachment complaint[4] (first
impeachment complaint) against Chief Justice
Hilario G. Davide Jr. and seven Associate
Justices[5] of this Court for “culpable violation of
the Constitution, betrayal of the public trust and
other high crimes.”[6] The complaint was
endorsed by Representatives Rolex T. Suplico,
Ronaldo B. Zamora and Didagen Piang
Dilangalen,[7] and was referred to the House
Committee on Justice on August 5, 2003[8] in
accordance with Section 3(2) of Article XI of the
Constitution which reads:
Section 3(2) A verified complaint for
impeachment may be filed by any Member of the
House of Representatives or by any citizen upon
a resolution of endorsement by any Member
thereof, which shall be included in the Order of
Business within ten session days, and referred to
the proper Committee within three session days
thereafter. The Committee, after hearing, and by
a majority vote of all its Members, shall submit
its report to the House within sixty session days
from such referral, together with the
corresponding resolution. The resolution shall be
calendared for consideration by the House within
ten session days from receipt thereof.
The House Committee on Justice ruled on
October 13, 2003 that the first impeachment
complaint was “sufficient in form,”[9] but voted
to dismiss the same on October 22, 2003 for
being insufficient in substance.[10] To date, the
Committee Report to this effect has not yet been
sent to the House in plenary in accordance with
the said Section 3(2) of Article XI of the
Constitution.
Four months and three weeks since the filing on
June 2, 2003 of the first complaint or on October
23, 2003, a day after the House Committee on
Justice voted to dismiss it, the second
impeachment complaint[11] was filed with the
Secretary General of the House[12] by
Representatives Gilberto C. Teodoro, Jr. (First
District, Tarlac) and Felix William B. Fuentebella
(Third District, Camarines Sur) against Chief
Justice Hilario G. Davide, Jr., founded on the
alleged results of the legislative inquiry initiated
by above-mentioned House Resolution. This
second impeachment complaint was accompanied
by a “Resolution of Endorsement/Impeachment”
signed by at least one-third (1/3) of all the
Members of the House of Representatives.[13]
Thus arose the instant petitions against the
House of Representatives, et. al., most of which
petitions contend that the filing of the second
impeachment complaint is unconstitutional as it
violates the provision of Section 5 of Article XI of
the Constitution that “[n]o impeachment
proceedings shall be initiated against the same
official more than once within a period of one
year.”
In G.R. No. 160261, petitioner Atty. Ernesto B.
Francisco, Jr., alleging that he has a duty as a
member of the Integrated Bar of the Philippines
to use all available legal remedies to stop an
unconstitutional impeachment, that the issues
raised in his petition for Certiorari, Prohibition
and Mandamus are of transcendental importance,
and that he “himself was a victim of the
capricious and arbitrary changes in the Rules of
Procedure in Impeachment Proceedings
introduced by the 12th Congress,”[14] posits that
his right to bring an impeachment complaint
against then Ombudsman Aniano Desierto had
been violated due to the capricious and arbitrary
changes in the House Impeachment Rules
adopted and approved on November 28, 2001 by
the House of Representatives and prays that (1)
Rule V, Sections 16 and 17 and Rule III, Sections
5, 6, 7, 8, and 9 thereof be declared
unconstitutional; (2) this Court issue a writ of
mandamus directing respondents House of
Representatives et. al. to comply with Article IX,
Section 3 (2), (3) and (5) of the Constitution, to
return the second impeachment complaint and/or
strike it off the records of the House of
Representatives, and to promulgate rules which
are consistent with the Constitution; and (3) this
Court permanently enjoin respondent House of
Representatives from proceeding with the second
impeachment complaint.
In G.R. No. 160262, petitioners Sedfrey M.
Candelaria, et. al., as citizens and taxpayers,
alleging that the issues of the case are of
transcendental importance, pray, in their petition
for Certiorari/Prohibition, the issuance of a writ
“perpetually” prohibiting respondent House of
Representatives from filing any Articles of
Impeachment against the Chief Justice with the
Senate; and for the issuance of a writ
“perpetually” prohibiting respondents Senate and
Senate President Franklin Drilon from accepting
any Articles of Impeachment against the Chief
Justice or, in the event that the Senate has
accepted the same, from proceeding with the
impeachment trial.
In G.R. No. 160263, petitioners Arturo M. de
Castro and Soledad Cagampang, as citizens,
taxpayers, lawyers and members of the
Integrated Bar of the Philippines, alleging that
their petition for Prohibition involves public
interest as it involves the use of public funds
necessary to conduct the impeachment trial on
the second impeachment complaint, pray for the
issuance of a writ of prohibition enjoining
Congress from conducting further proceedings on
said second impeachment complaint.
In G.R. No. 160277, petitioner Francisco I.
Chavez, alleging that this Court has recognized
that he has locus standi to bring petitions of this
nature in the cases of Chavez v. PCGG[15] and
Chavez v. PEA-Amari Coastal Bay Development
Corporation,[16] prays in his petition for
Injunction that the second impeachment
complaint be declared unconstitutional.
In G.R. No. 160292, petitioners Atty. Harry L.
Roque, et. al., as taxpayers and members of the
legal profession, pray in their petition for
Prohibition for an order prohibiting respondent
House of Representatives from drafting,
adopting, approving and transmitting to the
Senate the second impeachment complaint, and
respondents De Venecia and Nazareno from
transmitting the Articles of Impeachment to the
Senate.
In G.R. No. 160295, petitioners Representatives
Salacnib F. Baterina and Deputy Speaker Raul M.
Gonzalez, alleging that, as members of the House
of Representatives, they have a legal interest in
ensuring that only constitutional impeachment
proceedings are initiated, pray in their petition
for Certiorari/Prohibition that the second
impeachment complaint and any act proceeding
therefrom be declared null and void.
In G.R. No. 160310, petitioners Leonilo R.
Alfonso et al., claiming that they have a right to
be protected against all forms of senseless
spending of taxpayers’ money and that they have
an obligation to protect the Supreme Court, the
Chief Justice, and the integrity of the Judiciary,
allege in their petition for Certiorari and
Prohibition that it is instituted as “a class suit”
and pray that (1) the House Resolution endorsing
the second impeachment complaint as well as all
issuances emanating therefrom be declared null
and void; and (2) this Court enjoin the Senate
and the Senate President from taking cognizance
of, hearing, trying and deciding the second
impeachment complaint, and issue a writ of
prohibition commanding the Senate, its
prosecutors and agents to desist from conducting
any proceedings or to act on the impeachment
complaint.
In G.R. No. 160318, petitioner Public Interest
Center, Inc., whose members are citizens and
taxpayers, and its co-petitioner Crispin T. Reyes,
a citizen, taxpayer and a member of the
Philippine Bar, both allege in their petition, which
does not state what its nature is, that the filing of
the second impeachment complaint involves
paramount public interest and pray that Sections
16 and 17 of the House Impeachment Rules and
the second impeachment complaint/Articles of
Impeachment be declared null and void.
In G.R. No. 160342, petitioner Atty. Fernando P.
R. Perito, as a citizen and a member of the
Philippine Bar Association and of the Integrated
Bar of the Philippines, and petitioner Engr.
Maximo N. Menez, Jr., as a taxpayer, pray in
their petition for the issuance of a Temporary
Restraining Order and Permanent Injunction to
enjoin the House of Representatives from
proceeding with the second impeachment
complaint.
In G.R. No. 160343, petitioner Integrated Bar of
the Philippines, alleging that it is mandated by
the Code of Professional Responsibility to uphold
the Constitution, prays in its petition for
Certiorari and Prohibition that Sections 16 and 17
of Rule V and Sections 5, 6, 7, 8, 9 of Rule III of
the House Impeachment Rules be declared
unconstitutional and that the House of
Representatives be permanently enjoined from
proceeding with the second impeachment
complaint.
In G.R. No. 160360, petitioner-taxpayer Atty.
Claro Flores prays in his petition for Certiorari
and Prohibition that the House Impeachment
Rules be declared unconstitutional.
In G.R. No. 160365, petitioners U.P. Law Alumni
Cebu Foundation Inc., et. al., in their petition for
Prohibition and Injunction which they claim is a
class suit filed in behalf of all citizens, citing
Oposa v. Factoran[17] which was filed in behalf
of succeeding generations of Filipinos, pray for
the issuance of a writ prohibiting respondents
House of Representatives and the Senate from
conducting further proceedings on the second
impeachment complaint and that this Court
declare as unconstitutional the second
impeachment complaint and the acts of
respondent House of Representatives in
interfering with the fiscal matters of the
Judiciary.
In G.R. No. 160370, petitioner-taxpayer Father
Ranhilio Callangan Aquino, alleging that the
issues in his petition for Prohibition are of
national and transcendental significance and that
as an official of the Philippine Judicial Academy,
he has a direct and substantial interest in the
unhampered operation of the Supreme Court and
its officials in discharging their duties in
accordance with the Constitution, prays for the
issuance of a writ prohibiting the House of
Representatives from transmitting the Articles of
Impeachment to the Senate and the Senate from
receiving the same or giving the impeachment
complaint due course.
In G.R. No. 160376, petitioner Nilo A. Malanyaon,
as a taxpayer, alleges in his petition for
Prohibition that respondents Fuentebella and
Teodoro at the time they filed the second
impeachment complaint, were “absolutely
without any legal power to do so, as they acted
without jurisdiction as far as the Articles of
Impeachment assail the alleged abuse of powers
of the Chief Justice to disburse the (JDF).”
In G.R. No. 160392, petitioners Attorneys Venicio
S. Flores and Hector L. Hofileña, alleging that as
professors of law they have an abiding interest in
the subject matter of their petition for Certiorari
and Prohibition as it pertains to a constitutional
issue “which they are trying to inculcate in the
minds of their students,” pray that the House of
Representatives be enjoined from endorsing and
the Senate from trying the Articles of
Impeachment and that the second impeachment
complaint be declared null and void.
In G.R. No. 160397, petitioner Atty. Dioscoro
Vallejos, Jr., without alleging his locus standi, but
alleging that the second impeachment complaint
is founded on the issue of whether or not the
Judicial Development Fund (JDF) was spent in
accordance with law and that the House of
Representatives does not have exclusive
jurisdiction in the examination and audit thereof,
prays in his petition “To Declare Complaint Null
and Void for Lack of Cause of Action and
Jurisdiction” that the second impeachment
complaint be declared null and void.
In G.R. No. 160403, petitioner Philippine Bar
Association, alleging that the issues raised in the
filing of the second impeachment complaint
involve matters of transcendental importance,
prays in its petition for Certiorari/Prohibition that
(1) the second impeachment complaint and all
proceedings arising therefrom be declared null
and void; (2) respondent House of
Representatives be prohibited from transmitting
the Articles of Impeachment to the Senate; and
(3) respondent Senate be prohibited from
accepting the Articles of Impeachment and from
conducting any proceedings thereon.
In G.R. No. 160405, petitioners Democrit C.
Barcenas et. al., as citizens and taxpayers, pray
in their petition for Certiorari/Prohibition that (1)
the second impeachment complaint as well as the
resolution of endorsement and impeachment by
the respondent House of Representatives be
declared null and void and (2) respondents
Senate and Senate President Franklin Drilon be
prohibited from accepting any Articles of
Impeachment against the Chief Justice or, in the
event that they have accepted the same, that
they be prohibited from proceeding with the
impeachment trial.
Petitions bearing docket numbers G.R. Nos.
160261, 160262 and 160263, the first three of
the eighteen which were filed before this Court,
[18] prayed for the issuance of a Temporary
Restraining Order and/or preliminary injunction
to prevent the House of Representatives from
transmitting the Articles of Impeachment arising
from the second impeachment complaint to the
Senate. Petition bearing docket number G.R. No.
160261 likewise prayed for the declaration of the
November 28, 2001 House Impeachment Rules
as null and void for being unconstitutional.
Petitions bearing docket numbers G.R. Nos.
160277, 160292 and 160295, which were filed on
October 28, 2003, sought similar relief. In
addition, petition bearing docket number G.R.
No. 160292 alleged that House Resolution No.
260 (calling for a legislative inquiry into the
administration by the Chief Justice of the JDF)
infringes on the constitutional doctrine of
separation of powers and is a direct violation of
the constitutional principle of fiscal autonomy of
the judiciary.
On October 28, 2003, during the plenary session
of the House of Representatives, a motion was
put forth that the second impeachment complaint
be formally transmitted to the Senate, but it was
not carried because the House of Representatives
adjourned for lack of quorum,[19] and as
reflected above, to date, the Articles of
Impeachment have yet to be forwarded to the
Senate.
Before acting on the petitions with prayers for
temporary restraining order and/or writ of
preliminary injunction which were filed on or
before October 28, 2003, Justices Puno and Vitug
offered to recuse themselves, but the Court
rejected their offer. Justice Panganiban inhibited
himself, but the Court directed him to participate.
Without necessarily giving the petitions due
course, this Court in its Resolution of October 28,
2003, resolved to (a) consolidate the petitions;
(b) require respondent House of Representatives
and the Senate, as well as the Solicitor General,
to comment on the petitions not later than 4:30
p.m. of November 3, 2003; (c) set the petitions
for oral arguments on November 5, 2003, at
10:00 a.m.; and (d) appointed distinguished
legal experts as amici curiae.[20] In addition,
this Court called on petitioners and respondents
to maintain the status quo, enjoining all the
parties and others acting for and in their behalf
to refrain from committing acts that would render
the petitions moot.
Also on October 28, 2003, when respondent
House of Representatives through Speaker Jose
C. De Venecia, Jr. and/or its co-respondents, by
way of special appearance, submitted a
Manifestation asserting that this Court has no
jurisdiction to hear, much less prohibit or enjoin
the House of Representatives, which is an
independent and co-equal branch of government
under the Constitution, from the performance of
its constitutionally mandated duty to initiate
impeachment cases. On even date, Senator
Aquilino Q. Pimentel, Jr., in his own behalf, filed a
Motion to Intervene (Ex Abudante Cautela)[21]
and Comment, praying that “the consolidated
petitions be dismissed for lack of jurisdiction of
the Court over the issues affecting the
impeachment proceedings and that the sole
power, authority and jurisdiction of the Senate as
the impeachment court to try and decide
impeachment cases, including the one where the
Chief Justice is the respondent, be recognized
and upheld pursuant to the provisions of Article
XI of the Constitution.”[22]
Acting on the other petitions which were
subsequently filed, this Court resolved to (a)
consolidate them with the earlier consolidated
petitions; (b) require respondents to file their
comment not later than 4:30 p.m. of November
3, 2003; and (c) include them for oral arguments
on November 5, 2003.
On October 29, 2003, the Senate of the
Philippines, through Senate President Franklin M.
Drilon, filed a Manifestation stating that insofar
as it is concerned, the petitions are plainly
premature and have no basis in law or in fact,
adding that as of the time of the filing of the
petitions, no justiciable issue was presented
before it since (1) its constitutional duty to
constitute itself as an impeachment court
commences only upon its receipt of the Articles
of Impeachment, which it had not, and (2) the
principal issues raised by the petitions pertain
exclusively to the proceedings in the House of
Representatives.
On October 30, 2003, Atty. Jaime Soriano filed a
“Petition for Leave to Intervene” in G.R. Nos.
160261, 160262, 160263, 160277, 160292, and
160295, questioning the status quo Resolution
issued by this Court on October 28, 2003 on the
ground that it would unnecessarily put Congress
and this Court in a “constitutional deadlock” and
praying for the dismissal of all the petitions as
the matter in question is not yet ripe for judicial
determination.
On November 3, 2003, Attorneys Romulo B.
Macalintal and Pete Quirino Quadra filed in G.R.
No. 160262 a “Motion for Leave of Court to
Intervene and to Admit the Herein Incorporated
Petition in Intervention.”
On November 4, 2003, Nagmamalasakit na mga
Manananggol ng mga Manggagawang Pilipino,
Inc. filed a Motion for Intervention in G.R. No.
160261. On November 5, 2003, World War II
Veterans Legionnaires of the Philippines, Inc. also
filed a “Petition-in-Intervention with Leave to
Intervene” in G.R. Nos. 160261, 160262,
160263, 160277, 160292, 160295, and 160310.
The motions for intervention were granted and
both Senator Pimentel’s Comment and Attorneys
Macalintal and Quadra’s Petition in Intervention
were admitted.
On November 5-6, 2003, this Court heard the
views of the amici curiae and the arguments of
petitioners, intervenors Senator Pimentel and
Attorney Makalintal, and Solicitor General Alfredo
Benipayo on the principal issues outlined in an
Advisory issued by this Court on November 3,
2003, to wit:

Whether the certiorari jurisdiction of the Supreme
Court may be invoked; who can invoke it; on
what issues and at what time; and whether it
should be exercised by this Court at this time.
In discussing these issues, the following may be
taken up:
a) locus standi of petitioners;
b) ripeness(prematurity; mootness);
c) political question/justiciability;
d) House’s “exclusive” power to initiate all
cases of impeachment;
e) Senate’s “sole” power to try and decide
all cases of impeachment;
f) constitutionality of the House
Rules on Impeachment vis-a-vis Section 3(5) of
Article XI of the Constitution; and
g) judicial restraint (Italics in the original)
In resolving the intricate conflux of preliminary
and substantive issues arising from the instant
petitions as well as the myriad arguments and
opinions presented for and against the grant of
the reliefs prayed for, this Court has sifted and
determined them to be as follows: (1) the
threshold and novel issue of whether or not the
power of judicial review extends to those arising
from impeachment proceedings; (2) whether or
not the essential pre-requisites for the exercise of
the power of judicial review have been fulfilled;
and (3) the substantive issues yet remaining.
These matters shall now be discussed in seriatim.
Judicial Review
As reflected above, petitioners plead for this
Court to exercise the power of judicial review to
determine the validity of the second
impeachment complaint.
This Court’s power of judicial review is conferred
on the judicial branch of the government in
Section 1, Article VIII of our present 1987
Constitution:
SECTION 1. The judicial power shall be vested in
one Supreme Court and in such lower courts as
may be established by law.
Judicial power includes the duty of the courts of
justice to settle actual controversies involving
rights which are legally demandable and
enforceable, and to determine whether or not
there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the
part of any branch or instrumentality of the
government. Emphasis supplied)
Such power of judicial review was early on
exhaustively expounded upon by Justice Jose P.
Laurel in the definitive 1936 case of Angara v.
Electoral Commission[23] after the effectivity of
the 1935 Constitution whose provisions, unlike
the present Constitution, did not contain the
present provision in Article VIII, Section 1, par. 2
on what judicial power includes. Thus, Justice
Laurel discoursed:
x x x In times of social disquietude or political
excitement, the great landmarks of the
Constitution are apt to be forgotten or marred, if
not entirely obliterated. In cases of conflict, the
judicial department is the only constitutional
organ which can be called upon to determine the
proper allocation of powers between the several
departments and among the integral or
constituent units thereof.
As any human production, our Constitution is of
course lacking perfection and perfectibility, but as
much as it was within the power of our people,
acting through their delegates to so provide, that
instrument which is the expression of their
sovereignty however limited, has established a
republican government intended to operate and
function as a harmonious whole, under a system
of checks and balances, and subject to specific
limitations and restrictions provided in the said
instrument. The Constitution sets forth in no
uncertain language the restrictions and
limitations upon governmental powers and
agencies. If these restrictions and limitations are
transcended it would be inconceivable if the
Constitution had not provided for a mechanism
by which to direct the course of government
along constitutional channels, for then the
distribution of powers would be mere verbiage,
the bill of rights mere expressions of sentiment,
and the principles of good government mere
political apothegms. Certainly, the limitations and
restrictions embodied in our Constitution are real
as they should be in any living constitution. In
the United States where no express constitutional
grant is found in their constitution, the
possession of this moderating power of the
courts, not to speak of its historical origin and
development there, has been set at rest by
popular acquiescence for a period of more than
one and a half centuries. In our case, this
moderating power is granted, if not expressly, by
clear implication from section 2 of article VIII of
our Constitution.
The Constitution is a definition of the powers of
government. Who is to determine the nature,
scope and extent of such powers? The
Constitution itself has provided for the
instrumentality of the judiciary as the rational
way. And when the judiciary mediates to allocate
constitutional boundaries, it does not assert any
superiority over the other departments; it does
not in reality nullify or invalidate an act of the
legislature, but only asserts the solemn and
sacred obligation assigned to it by the
Constitution to determine conflicting claims of
authority under the Constitution and to establish
for the parties in an actual controversy the rights
which that instrument secures and guarantees to
them. This is in truth all that is involved in what
is termed "judicial supremacy" which properly is
the power of judicial review under the
Constitution. Even then, this power of judicial
review is limited to actual cases and
controversies to be exercised after full
opportunity of argument by the parties, and
limited further to the constitutional question
raised or the very lis mota presented. Any
attempt at abstraction could only lead to
dialectics and barren legal questions and to
sterile conclusions unrelated to actualities.
Narrowed as its function is in this manner, the
judiciary does not pass upon questions of
wisdom, justice or expediency of legislation. More
than that, courts accord the presumption of
constitutionality to legislative enactments, not
only because the legislature is presumed to abide
by the Constitution but also because the judiciary
in the determination of actual cases and
controversies must reflect the wisdom and justice
of the people as expressed through their
representatives in the executive and legislative
departments of the government.[24] (Italics in
the original; emphasis and underscoring
supplied)
As pointed out by Justice Laurel, this “moderating
power” to “determine the proper allocation of
powers” of the different branches of government
and “to direct the course of government along
constitutional channels” is inherent in all
courts[25] as a necessary consequence of the
judicial power itself, which is “the power of the
court to settle actual controversies involving
rights which are legally demandable and
enforceable.”[26]
Thus, even in the United States where the power
of judicial review is not explicitly conferred upon
the courts by its Constitution, such power has
“been set at rest by popular acquiescence for a
period of more than one and a half centuries.”
To be sure, it was in the 1803 leading case of
Marbury v. Madison[27] that the power of judicial
review was first articulated by Chief Justice
Marshall, to wit:
It is also not entirely unworthy of observation,
that in declaring what shall be the supreme law
of the land, the constitution itself is first
mentioned; and not the laws of the United States
generally, but those only which shall be made in
pursuance of the constitution, have that rank.
Thus, the particular phraseology of the
constitution of the United States confirms and
strengthens the principle, supposed to be
essential to all written constitutions, that a law
repugnant to the constitution is void; and that
courts, as well as other departments, are bound
by that instrument.[28] (Italics in the original;
mphasis supplied)
In our own jurisdiction, as early as 1902, decades
before its express grant in the 1935 Constitution,
the power of judicial review was exercised by our
courts to invalidate constitutionally infirm acts.
[29] And as pointed out by noted political law
professor and former Supreme Court Justice
Vicente V. Mendoza,[30] the executive and
legislative branches of our government in fact
effectively acknowledged this power of judicial
review in Article 7 of the Civil Code, to wit:
Article 7. Laws are repealed only by
subsequent ones, and their violation or non-
observance shall not be excused by disuse, or
custom or practice to the contrary.
When the courts declare a law to be inconsistent
with the Constitution, the former shall be void
and the latter shall govern.
Administrative or executive acts, orders and
regulations shall be valid only when they are not
contrary to the laws or the Constitution.
Emphasis supplied)
As indicated in Angara v. Electoral Commission,
[31] judicial review is indeed an integral
component of the delicate system of checks and
balances which, together with the corollary
principle of separation of powers, forms the
bedrock of our republican form of government
and insures that its vast powers are utilized only
for the benefit of the people for which it serves.
The separation of powers is a fundamental
principle in our system of government. It obtains
not through express provision but by actual
division in our Constitution. Each department of
the government has exclusive cognizance of
matters within its jurisdiction, and is supreme
within its own sphere. But it does not follow from
the fact that the three powers are to be kept
separate and distinct that the Constitution
intended them to be absolutely unrestrained and
independent of each other. The Constitution has
provided for an elaborate system of checks and
balances to secure coordination in the workings
of the various departments of the government. x
x x And the judiciary in turn, with the Supreme
Court as the final arbiter, effectively checks the
other departments in the exercise of its power to
determine the law, and hence to declare
executive and legislative acts void if violative of
the Constitution.[32] (Emphasis and
underscoring supplied)
In the scholarly estimation of former Supreme
Court Justice Florentino Feliciano, “x x x judicial
review is essential for the maintenance and
enforcement of the separation of powers and the
balancing of powers among the three great
departments of government through the
definition and maintenance of the boundaries of
authority and control between them.”[33] To
him, “[j]udicial review is the chief, indeed the
only, medium of participation – or instrument of
intervention – of the judiciary in that balancing
operation.”[34]
To ensure the potency of the power of judicial
review to curb grave abuse of discretion by “any
branch or instrumentalities of government,” the
afore-quoted Section 1, Article VIII of the
Constitution engraves, for the first time into its
history, into block letter law the so-called
“expanded certiorari jurisdiction” of this Court,
the nature of and rationale for which are mirrored
in the following excerpt from the sponsorship
speech of its proponent, former Chief Justice
Constitutional Commissioner Roberto
Concepcion:
xxx
The first section starts with a sentence copied
from former Constitutions. It says:
The judicial power shall be vested in one
Supreme Court and in such lower courts as may
be established by law.
I suppose nobody can question it.
The next provision is new in our constitutional
law. I will read it first and explain.
Judicial power includes the duty of 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 or instrumentality of the government.
Fellow Members of this Commission, this is
actually a product of our experience during
martial law. As a matter of fact, it has some
antecedents in the past, but the role of the
judiciary during the deposed regime was marred
considerably by the circumstance that in a
number of cases against the government, which
then had no legal defense at all, the solicitor
general set up the defense of political questions
and got away with it. As a consequence, certain
principles concerning particularly the writ of
habeas corpus, that is, the authority of courts to
order the release of political detainees, and other
matters related to the operation and effect of
martial law failed because the government set up
the defense of political question. And the
Supreme Court said: “Well, since it is political,
we have no authority to pass upon it.” The
Committee on the Judiciary feels that this was
not a proper solution of the questions involved. It
did not merely request an encroachment upon
the rights of the people, but it, in effect,
encouraged further violations thereof during the
martial law regime. x x x
xxx
Briefly stated, courts of justice determine the
limits of power of the agencies and offices of the
government as well as those of its officers. In
other words, the judiciary is the final arbiter on
the question whether or not a branch of
government or any of its officials has acted
without jurisdiction or in excess of jurisdiction, or
so capriciously as to constitute an abuse of
discretion amounting to excess of jurisdiction or
lack of jurisdiction. This is not only a judicial
power but a duty to pass judgment on matters of
this nature.
This is the background of paragraph 2 of Section
1, which means that the courts cannot hereafter
evade the duty to settle matters of this nature,
by claiming that such matters constitute a
political question.[35] (Italics in the original;
emphasis and underscoring supplied)
To determine the merits of the issues raised in
the instant petitions, this Court must necessarily
turn to the Constitution itself which employs the
well-settled principles of constitutional
construction.
First, verba legis, that is, wherever possible, the
words used in the Constitution must be given
their ordinary meaning except where technical
terms are employed. Thus, in J.M. Tuason & Co.,
Inc. v. Land Tenure Administration,[36] this
Court, speaking through Chief Justice Enrique
Fernando, declared:
We look to the language of the document itself
in our search for its meaning. We do not of
course stop there, but that is where we begin. It
is to be assumed that the words in which
constitutional provisions are couched express the
objective sought to be attained. They are to be
given their ordinary meaning except where
technical terms are employed in which case the
significance thus attached to them prevails. As
the Constitution is not primarily a lawyer’s
document, it being essential for the rule of law to
obtain that it should ever be present in the
people’s consciousness, its language as much as
possible should be understood in the sense they
have in common use. What it says according to
the text of the provision to be construed compels
acceptance and negates the power of the courts
to alter it, based on the postulate that the
framers and the people mean what they say.
Thus these are the cases where the need for
construction is reduced to a minimum.[37]
(Emphasis and underscoring supplied)
Second, where there is ambiguity, ratio legis est
anima. The words of the Constitution should be
interpreted in accordance with the intent of its
framers. And so did this Court apply this
principle in Civil Liberties Union v. Executive
Secretary[38] in this wise:
A foolproof yardstick in constitutional
construction is the intention underlying the
provision under consideration. Thus, it has been
held that the Court in construing a Constitution
should bear in mind the object sought to be
accomplished by its adoption, and the evils, if
any, sought to be prevented or remedied. A
doubtful provision will be examined in the light of
the history of the times, and the condition and
circumstances under which the Constitution was
framed. The object is to ascertain the reason
which induced the framers of the Constitution to
enact the particular provision and the purpose
sought to be accomplished thereby, in order to
construe the whole as to make the words
consonant to that reason and calculated to effect
that purpose.[39] (Emphasis and underscoring
supplied supplied)
As it did in Nitafan v. Commissioner on Internal
Revenue[40] where, speaking through Madame
Justice Amuerfina A. Melencio-Herrera, it
declared:
x x x The ascertainment of that intent is but in
keeping with the fundamental principle of
constitutional construction that the intent of the
framers of the organic law and of the people
adopting it should be given effect. The primary
task in constitutional construction is to ascertain
and thereafter assure the realization of the
purpose of the framers and of the people in the
adoption of the Constitution. It may also be
safely assumed that the people in ratifying the
Constitution were guided mainly by the
explanation offered by the framers.[41]
(Emphasis and underscoring supplied)
Finally, ut magis valeat quam pereat. The
Constitution is to be interpreted as a whole.
Thus, in Chiongbian v. De Leon,[42] this Court,
through Chief Justice Manuel Moran declared:
x x x [T]he members of the Constitutional
Convention could not have dedicated a provision
of our Constitution merely for the benefit of one
person without considering that it could also
affect others. When they adopted subsection 2,
they permitted, if not willed, that said provision
should function to the full extent of its substance
and its terms, not by itself alone, but in
conjunction with all other provisions of that great
document.[43] (Emphasis and underscoring
supplied)
Likewise, still in Civil Liberties Union v. Executive
Secretary,[44] this Court affirmed that:
It is a well-established rule in constitutional
construction that no one provision of the
Constitution is to be separated from all the
others, to be considered alone, but that all the
provisions bearing upon a particular subject are
to be brought into view and to be so interpreted
as to effectuate the great purposes of the
instrument. Sections bearing on a particular
subject should be considered and interpreted
together as to effectuate the whole purpose of
the Constitution and one section is not to be
allowed to defeat another, if by any reasonable
construction, the two can be made to stand
together.
In other words, the court must harmonize them,
if practicable, and must lean in favor of a
construction which will render every word
operative, rather than one which may make the
words idle and nugatory.[45] Emphasis supplied)
If, however, the plain meaning of the word is not
found to be clear, resort to other aids is
available. In still the same case of Civil Liberties
Union v. Executive Secretary, this Court
expounded:
While it is permissible in this jurisdiction to
consult the debates and proceedings of the
constitutional convention in order to arrive at the
reason and purpose of the resulting Constitution,
resort thereto may be had only when other
guides fail as said proceedings are powerless to
vary the terms of the Constitution when the
meaning is clear. Debates in the constitutional
convention "are of value as showing the views of
the individual members, and as indicating the
reasons for their votes, but they give us no light
as to the views of the large majority who did not
talk, much less of the mass of our fellow citizens
whose votes at the polls gave that instrument the
force of fundamental law. We think it safer to
construe the constitution from what appears
upon its face." The proper interpretation
therefore depends more on how it was
understood by the people adopting it than in the
framers's understanding thereof.[46] (Emphasis
and underscoring supplied)
It is in the context of the foregoing backdrop of
constitutional refinement and jurisprudential
application of the power of judicial review that
respondents Speaker De Venecia, et. al. and
intervenor Senator Pimentel raise the novel
argument that the Constitution has excluded
impeachment proceedings from the coverage of
judicial review.
Briefly stated, it is the position of respondents
Speaker De Venecia et. al. that impeachment is a
political action which cannot assume a judicial
character. Hence, any question, issue or incident
arising at any stage of the impeachment
proceeding is beyond the reach of judicial review.
[47]
For his part, intervenor Senator Pimentel
contends that the Senate’s “sole power to try”
impeachment cases[48] (1) entirely excludes the
application of judicial review over it; and (2)
necessarily includes the Senate’s power to
determine constitutional questions relative to
impeachment proceedings.[49]
In furthering their arguments on the proposition
that impeachment proceedings are outside the
scope of judicial review, respondents Speaker De
Venecia, et. al. and intervenor Senator Pimentel
rely heavily on American authorities, principally
the majority opinion in the case of Nixon v.
United States.[50] Thus, they contend that the
exercise of judicial review over impeachment
proceedings is inappropriate since it runs counter
to the framers’ decision to allocate to different
fora the powers to try impeachments and to try
crimes; it disturbs the system of checks and
balances, under which impeachment is the only
legislative check on the judiciary; and it would
create a lack of finality and difficulty in fashioning
relief.[51] Respondents likewise point to
deliberations on the US Constitution to show the
intent to isolate judicial power of review in cases
of impeachment.
Respondents’ and intervenors’ reliance upon
American jurisprudence, the American
Constitution and American authorities cannot be
credited to support the proposition that the
Senate’s “sole power to try and decide
impeachment cases,” as provided for under Art.
XI, Sec. 3(6) of the Constitution, is a textually
demonstrable constitutional commitment of all
issues pertaining to impeachment to the
legislature, to the total exclusion of the power of
judicial review to check and restrain any grave
abuse of the impeachment process. Nor can it
reasonably support the interpretation that it
necessarily confers upon the Senate the
inherently judicial power to determine
constitutional questions incident to impeachment
proceedings.
Said American jurisprudence and authorities,
much less the American Constitution, are of
dubious application for these are no longer
controlling within our jurisdiction and have only
limited persuasive merit insofar as Philippine
constitutional law is concerned. As held in the
case of Garcia vs. COMELEC,[52] “[i]n resolving
constitutional disputes, [this Court] should not be
beguiled by foreign jurisprudence some of which
are hardly applicable because they have been
dictated by different constitutional settings and
needs.”[53] Indeed, although the Philippine
Constitution can trace its origins to that of the
United States, their paths of development have
long since diverged. In the colorful words of
Father Bernas, “[w]e have cut the umbilical
cord.”
The major difference between the judicial power
of the Philippine Supreme Court and that of the
U.S. Supreme Court is that while the power of
judicial review is only impliedly granted to the
U.S. Supreme Court and is discretionary in
nature, that granted to the Philippine Supreme
Court and lower courts, as expressly provided for
in the Constitution, is not just a power but also a
duty, and it was given an expanded definition to
include the power to correct any grave abuse of
discretion on the part of any government branch
or instrumentality.
There are also glaring distinctions between the
U.S. Constitution and the Philippine Constitution
with respect to the power of the House of
Representatives over impeachment proceedings.
While the U.S. Constitution bestows sole power of
impeachment to the House of Representatives
without limitation,[54] our Constitution, though
vesting in the House of Representatives the
exclusive power to initiate impeachment cases,
[55] provides for several limitations to the
exercise of such power as embodied in Section
3(2), (3), (4) and (5), Article XI thereof. These
limitations include the manner of filing, required
vote to impeach, and the one year bar on the
impeachment of one and the same official.
Respondents are also of the view that judicial
review of impeachments undermines their finality
and may also lead to conflicts between Congress
and the judiciary. Thus, they call upon this Court
to exercise judicial statesmanship on the principle
that “whenever possible, the Court should defer
to the judgment of the people expressed
legislatively, recognizing full well the perils of
judicial willfulness and pride.”[56]
But did not the people also express their will
when they instituted the above-mentioned
safeguards in the Constitution? This shows that
the Constitution did not intend to leave the
matter of impeachment to the sole discretion of
Congress. Instead, it provided for certain well-
defined limits, or in the language of Baker v.
Carr,[57] “judicially discoverable standards” for
determining the validity of the exercise of such
discretion, through the power of judicial review.
The cases of Romulo v. Yniguez[58] and
Alejandrino v. Quezon,[59] cited by respondents
in support of the argument that the impeachment
power is beyond the scope of judicial review, are
not in point. These cases concern the denial of
petitions for writs of mandamus to compel the
legislature to perform non-ministerial acts, and
do not concern the exercise of the power of
judicial review.
There is indeed a plethora of cases in which this
Court exercised the power of judicial review over
congressional action. Thus, in Santiago v.
Guingona, Jr.,[60] this Court ruled that it is well
within the power and jurisdiction of the Court to
inquire whether the Senate or its officials
committed a violation of the Constitution or grave
abuse of discretion in the exercise of their
functions and prerogatives. In Tanada v. Angara,
[61] in seeking to nullify an act of the Philippine
Senate on the ground that it contravened the
Constitution, it held that the petition raises a
justiciable controversy and that when an action
of the legislative branch is seriously alleged to
have infringed the Constitution, it becomes not
only the right but in fact the duty of the judiciary
to settle the dispute. In Bondoc v. Pineda,[62]
this Court declared null and void a resolution of
the House of Representatives withdrawing the
nomination, and rescinding the election, of a
congressman as a member of the House Electoral
Tribunal for being violative of Section 17, Article
VI of the Constitution. In Coseteng v. Mitra,[63]
it held that the resolution of whether the House
representation in the Commission on
Appointments was based on proportional
representation of the political parties as provided
in Section 18, Article VI of the Constitution is
subject to judicial review. In Daza v. Singson,
[64] it held that the act of the House of
Representatives in removing the petitioner from
the Commission on Appointments is subject to
judicial review. In Tanada v. Cuenco,[65] it held
that although under the Constitution, the
legislative power is vested exclusively in
Congress, this does not detract from the power of
the courts to pass upon the constitutionality of
acts of Congress. In Angara v. Electoral
Commission,[66] it ruled that confirmation by the
National Assembly of the election of any member,
irrespective of whether his election is contested,
is not essential before such member-elect may
discharge the duties and enjoy the privileges of a
member of the National Assembly.
Finally, there exists no constitutional basis for the
contention that the exercise of judicial review
over impeachment proceedings would upset the
system of checks and balances. Verily, the
Constitution is to be interpreted as a whole and
“one section is not to be allowed to defeat
another.”[67] Both are integral components of
the calibrated system of independence and
interdependence that insures that no branch of
government act beyond the powers assigned to it
by the Constitution.
Essential Requisites for Judicial Review
As clearly stated in Angara v. Electoral
Commission, the courts’ power of judicial review,
like almost all powers conferred by the
Constitution, is subject to several limitations,
namely: (1) an actual case or controversy calling
for the exercise of judicial power; (2) the person
challenging the act must have “standing” to
challenge; he must have a personal and
substantial interest in the case such that he has
sustained, or will sustain, direct injury as a result
of its enforcement; (3) the question of
constitutionality must be raised at the earliest
possible opportunity; and (4) the issue of
constitutionality must be the very lis mota of the
case.
x x x Even then, this power of judicial review is
limited to actual cases and controversies to be
exercised after full opportunity of argument by
the parties, and limited further to the
constitutional question raised or the very lis mota
presented. Any attempt at abstraction could only
lead to dialectics and barren legal questions and
to sterile conclusions unrelated to actualities.
Narrowed as its function is in this manner, the
judiciary does not pass upon questions of
wisdom, justice or expediency of legislation. More
than that, courts accord the presumption of
constitutionality to legislative enactments, not
only because the legislature is presumed to abide
by the Constitution but also because the judiciary
in the determination of actual cases and
controversies must reflect the wisdom and justice
of the people as expressed through their
representatives in the executive and legislative
departments of the government.[68] (Italics in
the original)
Standing
Locus standi or legal standing or 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
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.
[69]
Intervenor Soriano, in praying for the dismissal
of the petitions, contends that petitioners do not
have standing since only the Chief Justice has
sustained and will sustain direct personal injury.
Amicus curiae former Justice Minister and
Solicitor General Estelito Mendoza similarly
contends.
Upon the other hand, the Solicitor General
asserts that petitioners have standing since this
Court had, in the past, accorded standing to
taxpayers, voters, concerned citizens, legislators
in cases involving paramount public interest[70]
and transcendental importance,[71] and that
procedural matters are subordinate to the need
to determine whether or not the other branches
of the government have kept themselves within
the limits of the Constitution and the laws and
that they have not abused the discretion given to
them.[72] Amicus curiae Dean Raul Pangalangan
of the U.P. College of Law is of the same opinion,
citing transcendental importance and the well-
entrenched rule exception that, when the real
party in interest is unable to vindicate his rights
by seeking the same remedies, as in the case of
the Chief Justice who, for ethical reasons, cannot
himself invoke the jurisdiction of this Court, the
courts will grant petitioners standing.
There is, however, a difference between the rule
on real-party-in-interest and the rule on
standing, for the former is a concept of civil
procedure[73] while the latter has constitutional
underpinnings.[74] In view of the arguments set
forth regarding standing, it behooves the Court to
reiterate the ruling in Kilosbayan, Inc. v.
Morato[75] to clarify what is meant by locus
standi and to distinguish it from real party-in-
interest.
The difference between the rule on standing and
real party in interest has been noted by
authorities thus: “It is important to note . . . that
standing because of its constitutional and public
policy underpinnings, is very different from
questions relating to whether a particular plaintiff
is the real party in interest or has capacity to
sue. Although all three requirements are directed
towards ensuring that only certain parties can
maintain an action, standing restrictions require a
partial consideration of the merits, as well as
broader policy concerns relating to the proper
role of the judiciary in certain areas.
Standing is a special concern in constitutional law
because in some cases suits are brought not by
parties who have been personally injured by the
operation of a law or by official action taken, but
by concerned citizens, taxpayers or voters who
actually sue in the public interest. Hence the
question in 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.”
xxx
On the other hand, the question as to "real party
in interest" is whether he is “the party who would
be benefited or injured by the judgment, or the
'party entitled to the avails of the suit.’”[76]
(Citations omitted)
While rights personal to the Chief Justice may
have been injured by the alleged unconstitutional
acts of the House of Representatives, none of the
petitioners before us asserts a violation of the
personal rights of the Chief Justice. On the
contrary, they invariably invoke the vindication of
their own rights – as taxpayers; members of
Congress; citizens, individually or in a class suit;
and members of the bar and of the legal
profession – which were supposedly violated by
the alleged unconstitutional acts of the House of
Representatives.
In a long line of cases, however, concerned
citizens, taxpayers and legislators when specific
requirements have been met have been given
standing by this Court.
When suing as a citizen, the interest of the
petitioner 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.[77] In fine, when
the proceeding involves the assertion of a public
right,[78] the mere fact that he is a citizen
satisfies the requirement of personal interest.
In the case of a taxpayer, he is 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 there
is a wastage of public funds through the
enforcement of an invalid or unconstitutional law.
[79] Before he can invoke the power of judicial
review, however, he must specifically prove that
he has sufficient interest in preventing the illegal
expenditure of money raised by taxation and that
he would sustain a direct injury as a result of the
enforcement of the questioned statute or
contract. It is not sufficient that he has merely a
general interest common to all members of the
public.[80]
At all events, courts are vested with discretion as
to whether or not a taxpayer's suit should be
entertained.[81] This Court opts to grant
standing to most of the petitioners, given their
allegation that any impending transmittal to the
Senate of the Articles of Impeachment and the
ensuing trial of the Chief Justice will necessarily
involve the expenditure of public funds.
As for a legislator, he is allowed to sue to
question the validity of any official action which
he claims infringes his prerogatives as a
legislator.[82] Indeed, a member of the House of
Representatives has standing to maintain
inviolate the prerogatives, powers and privileges
vested by the Constitution in his office.[83]
While an association has legal personality to
represent its members,[84] especially when it is
composed of substantial taxpayers and the
outcome will affect their vital interests,[85] the
mere invocation by the Integrated Bar of the
Philippines or any member of the legal profession
of the duty to preserve the rule of law and
nothing more, although undoubtedly true, does
not suffice to clothe it with standing. Its interest
is too general. It is shared by other groups and
the whole citizenry. However, a reading of the
petitions shows that it has advanced
constitutional issues which deserve the attention
of this Court in view of their seriousness, novelty
and weight as precedents.[86] It, therefore,
behooves this Court to relax the rules on
standing and to resolve the issues presented by
it.
In the same vein, when dealing with class suits
filed in behalf of all citizens, persons intervening
must be sufficiently numerous to fully protect the
interests of all concerned[87] to enable the court
to deal properly with all interests involved in the
suit,[88] for a judgment in a class suit, whether
favorable or unfavorable to the class, is, under
the res judicata principle, binding on all members
of the class whether or not they were before the
court.[89] Where it clearly appears that not all
interests can be sufficiently represented as
shown by the divergent issues raised in the
numerous petitions before this Court, G.R. No.
160365 as a class suit ought to fail. Since
petitioners additionally allege standing as citizens
and taxpayers, however, their petition will stand.
The Philippine Bar Association, in G.R. No.
160403, invokes the sole ground of
transcendental importance, while Atty. Dioscoro
U. Vallejos, in G.R. No. 160397, is mum on his
standing.
There being no doctrinal definition of
transcendental importance, the following
instructive determinants formulated by former
Supreme Court Justice Florentino P. Feliciano are
instructive: (1) the character of the funds or
other assets involved in the case; (2) the
presence of a clear case of disregard of a
constitutional or statutory prohibition by the
public respondent agency or instrumentality of
the government; and (3) the lack of any other
party with a more direct and specific interest in
raising the questions being raised.[90] Applying
these determinants, this Court is satisfied that
the issues raised herein are indeed of
transcendental importance.
In not a few cases, this Court has in fact adopted
a liberal attitude on the locus standi of a
petitioner where the petitioner is able to craft an
issue of transcendental significance to the people,
as when the issues raised are of paramount
importance to the public.[91] Such liberality does
not, however, mean that the requirement that a
party should have an interest in the matter is
totally eliminated. A party must, at the very
least, still plead the existence of such interest, it
not being one of which courts can take judicial
notice. In petitioner Vallejos’ case, he failed to
allege any interest in the case. He does not thus
have standing.
With respect to the motions for intervention, Rule
19, Section 2 of the Rules of Court requires an
intervenor to possess a legal interest in the
matter in litigation, or in the success of either of
the parties, or an interest against both, or is so
situated as to be adversely affected by a
distribution or other disposition of property in the
custody of the court or of an officer thereof.
While intervention is not a matter of right, it may
be permitted by the courts when the applicant
shows facts which satisfy the requirements of the
law authorizing intervention.[92]
In Intervenors Attorneys Romulo Macalintal and
Pete Quirino Quadra’s case, they seek to join
petitioners Candelaria, et. al. in G.R. No. 160262.
Since, save for one additional issue, they raise
the same issues and the same standing, and no
objection on the part of petitioners Candelaria,
et. al. has been interposed, this Court as earlier
stated, granted the Motion for Leave of Court to
Intervene and Petition-in-Intervention.
Nagmamalasakit na mga Manananggol ng mga
Manggagawang Pilipino, Inc., et. al. sought to
join petitioner Francisco in G.R. No. 160261.
Invoking their right as citizens to intervene,
alleging that “they will suffer if this insidious
scheme of the minority members of the House of
Representatives is successful,” this Court found
the requisites for intervention had been complied
with.
Alleging that the issues raised in the petitions in
G.R. Nos. 160261, 160262, 160263, 160277,
160292, 160295, and 160310 were of
transcendental importance, World War II
Veterans Legionnaires of the Philippines, Inc.
filed a “Petition-in-Intervention with Leave to
Intervene” to raise the additional issue of
whether or not the second impeachment
complaint against the Chief Justice is valid and
based on any of the grounds prescribed by the
Constitution.
Finding that Nagmamalasakit na mga
Manananggol ng mga Manggagawang Pilipino,
Inc., et al. and World War II Veterans
Legionnaires of the Philippines, Inc. possess a
legal interest in the matter in litigation the
respective motions to intervene were hereby
granted.
Senator Aquilino Pimentel, on the other hand,
sought to intervene for the limited purpose of
making of record and arguing a point of view that
differs with Senate President Drilon’s. He alleges
that submitting to this Court’s jurisdiction as the
Senate President does will undermine the
independence of the Senate which will sit as an
impeachment court once the Articles of
Impeachment are transmitted to it from the
House of Representatives. Clearly, Senator
Pimentel possesses a legal interest in the matter
in litigation, he being a member of Congress
against which the herein petitions are directed.
For this reason, and to fully ventilate all
substantial issues relating to the matter at hand,
his Motion to Intervene was granted and he was,
as earlier stated, allowed to argue.
Lastly, as to Jaime N. Soriano’s motion to
intervene, the same must be denied for, while he
asserts an interest as a taxpayer, he failed to
meet the standing requirement for bringing
taxpayer’s suits as set forth in Dumlao v.
Comelec,[93] to wit:
x x x While, concededly, the elections to be held
involve the expenditure of public moneys,
nowhere in their Petition do said petitioners
allege that their tax money is “being extracted
and spent in violation of specific constitutional
protection against abuses of legislative power,”
or that there is a misapplication of such funds by
respondent COMELEC, or that public money is
being deflected to any improper purpose. Neither
do petitioners seek to restrain respondent from
wasting public funds through the enforcement of
an invalid or unconstitutional law.[94] (Citations
omitted)
In praying for the dismissal of the petitions,
Soriano failed even to allege that the act of
petitioners will result in illegal disbursement of
public funds or in public money being deflected to
any improper purpose. Additionally, his mere
interest as a member of the Bar does not suffice
to clothe him with standing.
Ripeness and Prematurity
In Tan v. Macapagal,[95] this Court, through
Chief Justice Fernando, held that for a case to be
considered ripe for adjudication, “it is a
prerequisite that something had by then been
accomplished or performed by either branch
before a court may come into the picture.”[96]
Only then may the courts pass on the validity of
what was done, if and when the latter is
challenged in an appropriate legal proceeding.
The instant petitions raise in the main the issue
of the validity of the filing of the second
impeachment complaint against the Chief Justice
in accordance with the House Impeachment Rules
adopted by the 12th Congress, the
constitutionality of which is questioned. The
questioned acts having been carried out, i.e., the
second impeachment complaint had been filed
with the House of Representatives and the 2001
Rules have already been already promulgated
and enforced, the prerequisite that the alleged
unconstitutional act should be accomplished and
performed before suit, as Tan v. Macapagal
holds, has been complied with.
Related to the issue of ripeness is the question of
whether the instant petitions are premature.
Amicus curiae former Senate President Jovito R.
Salonga opines that there may be no urgent need
for this Court to render a decision at this time, it
being the final arbiter on questions of
constitutionality anyway. He thus recommends
that all remedies in the House and Senate should
first be exhausted.
Taking a similar stand is Dean Raul Pangalangan
of the U.P. College of Law who suggests to this
Court to take judicial notice of on-going attempts
to encourage signatories to the second
impeachment complaint to withdraw their
signatures and opines that the House
Impeachment Rules provide for an opportunity
for members to raise constitutional questions
themselves when the Articles of Impeachment
are presented on a motion to transmit to the
same to the Senate. The dean maintains that
even assuming that the Articles are transmitted
to the Senate, the Chief Justice can raise the
issue of their constitutional infirmity by way of a
motion to dismiss.
The dean’s position does not persuade. First, the
withdrawal by the Representatives of their
signatures would not, by itself, cure the House
Impeachment Rules of their constitutional
infirmity. Neither would such a withdrawal, by
itself, obliterate the questioned second
impeachment complaint since it would only place
it under the ambit of Sections 3(2) and (3) of
Article XI of the Constitution[97] and, therefore,
petitioners would continue to suffer their injuries.
Second and most importantly, the futility of
seeking remedies from either or both Houses of
Congress before coming to this Court is shown by
the fact that, as previously discussed, neither the
House of Representatives nor the Senate is
clothed with the power to rule with definitiveness
on the issue of constitutionality, whether
concerning impeachment proceedings or
otherwise, as said power is exclusively vested in
the judiciary by the earlier quoted Section I,
Article VIII of the Constitution. Remedy cannot
be sought from a body which is bereft of power
to grant it.
Justiciability
In the leading case of Tanada v. Cuenco,[98]
Chief Justice Roberto Concepcion defined the
term “political question,” viz:
[T]he term “political question” connotes, in legal
parlance, what it means in ordinary parlance,
namely, a question of policy. In other words, in
the language of Corpus Juris Secundum, it 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.[99] (Italics in the original)
Prior to the 1973 Constitution, without
consistency and seemingly without any rhyme or
reason, this Court vacillated on its stance of
taking cognizance of cases which involved
political questions. In some cases, this Court hid
behind the cover of the political question doctrine
and refused to exercise its power of judicial
review.[100] In other cases, however, despite
the seeming political nature of the therein issues
involved, this Court assumed jurisdiction
whenever it found constitutionally imposed limits
on powers or functions conferred upon political
bodies.[101] Even in the landmark 1988 case of
Javellana v. Executive Secretary[102] which
raised the issue of whether the 1973 Constitution
was ratified, hence, in force, this Court shunted
the political question doctrine and took
cognizance thereof. Ratification by the people of
a Constitution is a political question, it being a
question decided by the people in their sovereign
capacity.
The frequency with which this Court invoked the
political question doctrine to refuse to take
jurisdiction over certain cases during the Marcos
regime motivated Chief Justice Concepcion, when
he became a Constitutional Commissioner, to
clarify this Court’s power of judicial review and its
application on issues involving political
questions, viz:
MR. CONCEPCION. Thank you, Mr. Presiding
Officer.
I will speak on the judiciary. Practically,
everybody has made, I suppose, the usual
comment that the judiciary is the weakest among
the three major branches of the service. Since
the legislature holds the purse and the executive
the sword, the judiciary has nothing with which
to enforce its decisions or commands except the
power of reason and appeal to conscience which,
after all, reflects the will of God, and is the most
powerful of all other powers without exception. x
x x And so, with the body’s indulgence, I will
proceed to read the provisions drafted by the
Committee on the Judiciary.
The first section starts with a sentence copied
from former Constitutions. It says:
The judicial power shall be vested in one
Supreme Court and in such lower courts as may
be established by law.
I suppose nobody can question it.
The next provision is new in our constitutional
law. I will read it first and explain.
Judicial power includes the duty of 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 or instrumentality of the government.
Fellow Members of this Commission, this is
actually a product of our experience during
martial law. As a matter of fact, it has some
antecedents in the past, but the role of the
judiciary during the deposed regime was marred
considerably by the circumstance that in a
number of cases against the government, which
then had no legal defense at all, the solicitor
general set up the defense of political questions
and got away with it. As a consequence, certain
principles concerning particularly the writ of
habeas corpus, that is, the authority of courts to
order the release of political detainees, and other
matters related to the operation and effect of
martial law failed because the government set up
the defense of political question. And the
Supreme Court said: “Well, since it is political,
we have no authority to pass upon it.” The
Committee on the Judiciary feels that this was
not a proper solution of the questions involved. It
did not merely request an encroachment upon
the rights of the people, but it, in effect,
encouraged further violations thereof during the
martial law regime. I am sure the members of
the Bar are familiar with this situation. But for
the benefit of the Members of the Commission
who are not lawyers, allow me to explain. I will
start with a decision of the Supreme Court in
1973 on the case of Javellana vs. the Secretary
of Justice, if I am not mistaken. Martial law was
announced on September 22, although the
proclamation was dated September 21. The
obvious reason for the delay in its publication
was that the administration had apprehended
and detained prominent newsmen on September
21. So that when martial law was announced on
September 22, the media hardly published
anything about it. In fact, the media could not
publish any story not only because our main
writers were already incarcerated, but also
because those who succeeded them in their jobs
were under mortal threat of being the object of
wrath of the ruling party. The 1971
Constitutional Convention had begun on June 1,
1971 and by September 21 or 22 had not
finished the Constitution; it had barely agreed in
the fundamentals of the Constitution. I forgot to
say that upon the proclamation of martial law,
some delegates to that 1971 Constitutional
Convention, dozens of them, were picked up.
One of them was our very own colleague,
Commissioner Calderon. So, the unfinished draft
of the Constitution was taken over by
representatives of Malacañang. In 17 days, they
finished what the delegates to the 1971
Constitutional Convention had been unable to
accomplish for about 14 months. The draft of the
1973 Constitution was presented to the President
around December 1, 1972, whereupon the
President issued a decree calling a plebiscite
which suspended the operation of some
provisions in the martial law decree which
prohibited discussions, much less public
discussions of certain matters of public concern.
The purpose was presumably to allow a free
discussion on the draft of the Constitution on
which a plebiscite was to be held sometime in
January 1973. If I may use a word famous by
our colleague, Commissioner Ople, during the
interregnum, however, the draft of the
Constitution was analyzed and criticized with
such a telling effect that Malacañang felt the
danger of its approval. So, the President
suspended indefinitely the holding of the
plebiscite and announced that he would consult
the people in a referendum to be held from
January 10 to January 15. But the questions to
be submitted in the referendum were not
announced until the eve of its scheduled
beginning, under the supposed supervision not of
the Commission on Elections, but of what was
then designated as “citizens assemblies or
barangays.” Thus the barangays came into
existence. The questions to be propounded were
released with proposed answers thereto,
suggesting that it was unnecessary to hold a
plebiscite because the answers given in the
referendum should be regarded as the votes cast
in the plebiscite. Thereupon, a motion was filed
with the Supreme Court praying that the holding
of the referendum be suspended. When the
motion was being heard before the Supreme
Court, the Minister of Justice delivered to the
Court a proclamation of the President declaring
that the new Constitution was already in force
because the overwhelming majority of the votes
cast in the referendum favored the Constitution.
Immediately after the departure of the Minister of
Justice, I proceeded to the session room where
the case was being heard. I then informed the
Court and the parties the presidential
proclamation declaring that the 1973 Constitution
had been ratified by the people and is now in
force.
A number of other cases were filed to declare the
presidential proclamation null and void. The
main defense put up by the government was that
the issue was a political question and that the
court had no jurisdiction to entertain the case.
xxx
The government said that in a referendum held
from January 10 to January 15, the vast majority
ratified the draft of the Constitution. Note that
all members of the Supreme Court were
residents of Manila, but none of them had been
notified of any referendum in their respective
places of residence, much less did they
participate in the alleged referendum. None of
them saw any referendum proceeding.
In the Philippines, even local gossips spread like
wild fire. So, a majority of the members of the
Court felt that there had been no referendum.
Second, a referendum cannot substitute for a
plebiscite. There is a big difference between a
referendum and a plebiscite. But another group
of justices upheld the defense that the issue was
a political question. Whereupon, they dismissed
the case. This is not the only major case in
which the plea of “political question” was set up.
There have been a number of other cases in the
past.
x x x The defense of the political question was
rejected because the issue was clearly justiciable.
xxx
x x x When your Committee on the Judiciary
began to perform its functions, it faced the
following questions: What is judicial power?
What is a political question?
The Supreme Court, like all other courts, has one
main function: to settle actual controversies
involving conflicts of rights which are demandable
and enforceable. There are rights which are
guaranteed by law but cannot be enforced by a
judiciary party. In a decided case, a husband
complained that his wife was unwilling to perform
her duties as a wife. The Court said: “We can
tell your wife what her duties as such are and
that she is bound to comply with them, but we
cannot force her physically to discharge her main
marital duty to her husband. There are some
rights guaranteed by law, but they are so
personal that to enforce them by actual
compulsion would be highly derogatory to human
dignity.”
This is why the first part of the second paragraph
of Section I provides that:
Judicial power includes the duty of courts to
settle actual controversies involving rights which
are legally demandable or enforceable . . .
The courts, therefore, cannot entertain, much
less decide, hypothetical questions. In a
presidential system of government, the Supreme
Court has, also another important function. The
powers of government are generally considered
divided into three branches: the Legislative, the
Executive and the Judiciary. Each one is
supreme within its own sphere and independent
of the others. Because of that supremacy power
to determine whether a given law is valid or not
is vested in courts of justice.
Briefly stated, courts of justice determine the
limits of power of the agencies and offices of the
government as well as those of its officers. In
other words, the judiciary is the final arbiter on
the question whether or not a branch of
government or any of its officials has acted
without jurisdiction or in excess of jurisdiction, or
so capriciously as to constitute an abuse of
discretion amounting to excess of jurisdiction or
lack of jurisdiction. This is not only a judicial
power but a duty to pass judgment on matters of
this nature.
This is the background of paragraph 2 of Section
1, which means that the courts cannot hereafter
evade the duty to settle matters of this nature,
by claiming that such matters constitute a
political question.
I have made these extended remarks to the end
that the Commissioners may have an initial food
for thought on the subject of the judiciary.[103]
(Italics in the original; emphasis supplied)
During the deliberations of the Constitutional
Commission, Chief Justice Concepcion further
clarified the concept of judicial power, thus:
MR. NOLLEDO. The Gentleman used the term
“judicial power” but judicial power is not vested
in the Supreme Court alone but also in other
lower courts as may be created by law.
MR. CONCEPCION. Yes.
MR. NOLLEDO. And so, is this only an example?
MR. CONCEPCION. No, I know this is not. The
Gentleman seems to identify political questions
with jurisdictional questions. But there is a
difference.
MR. NOLLEDO. Because of the expression
“judicial power”?
MR. CONCEPCION. No. Judicial power, as I said,
refers to ordinary cases but where there is a
question as to whether the government had
authority or had abused its authority to the
extent of lacking jurisdiction or excess of
jurisdiction, that is not a political question.
Therefore, the court has the duty to decide.
xxx
FR. BERNAS. Ultimately, therefore, it will always
have to be decided by the Supreme Court
according to the new numerical need for votes.
On another point, is it the intention of Section 1
to do away with the political question doctrine?
MR. CONCEPCION. No.
FR. BERNAS. It is not.
MR. CONCEPCION. No, because whenever there
is an abuse of discretion, amounting to a lack of
jurisdiction. . .
FR. BERNAS. So, I am satisfied with the answer
that it is not intended to do away with the
political question doctrine.
MR. CONCEPCION. No, certainly not.
When this provision was originally drafted, it
sought to define what is judicial power. But the
Gentleman will notice it says, “judicial power
includes” and the reason being that the definition
that we might make may not cover all possible
areas.
FR. BERNAS. So, this is not an attempt to solve
the problems arising from the political question
doctrine.
MR. CONCEPCION. It definitely does not
eliminate the fact that truly political questions are
beyond the pale of judicial power.[104]
mphasis supplied)
From the foregoing record of the proceedings of
the 1986 Constitutional Commission, it is clear
that judicial power is not only a power; it is also
a duty, a duty which cannot be abdicated by the
mere specter of this creature called the political
question doctrine. Chief Justice Concepcion
hastened to clarify, however, that Section 1,
Article VIII was not intended to do away with
“truly political questions.” From this clarification
it is gathered that there are two species of
political questions: (1) “truly political questions”
and (2) those which “are not truly political
questions.”
Truly political questions are thus beyond judicial
review, the reason for respect of the doctrine of
separation of powers to be maintained. On the
other hand, by virtue of Section 1, Article VIII of
the Constitution, courts can review questions
which are not truly political in nature.
As pointed out by amicus curiae former dean
Pacifico Agabin of the UP College of Law, this
Court has in fact in a number of cases taken
jurisdiction over questions which are not truly
political following the effectivity of the present
Constitution.
In Marcos v. Manglapus,[105] this Court,
speaking through Madame Justice Irene Cortes,
held:
The present Constitution limits resort to the
political question doctrine and broadens the
scope of judicial inquiry into areas which the
Court, under previous constitutions, would have
normally left to the political departments to
decide.[106] x x x
In Bengzon v. Senate Blue Ribbon Committee,
[107] through Justice Teodoro Padilla, this Court
declared:
The "allocation of constitutional boundaries" is a
task that this Court must perform under the
Constitution. Moreover, as held in a recent case,
“(t)he political question doctrine neither
interposes an obstacle to judicial determination of
the rival claims. The jurisdiction to delimit
constitutional boundaries has been given to this
Court. It cannot abdicate that obligation
mandated by the 1987 Constitution, although
said provision by no means does away with the
applicability of the principle in appropriate
cases.”[108] (Emphasis and underscoring
supplied)
And in Daza v. Singson,[109] speaking through
Justice Isagani Cruz, this Court ruled:
In the case now before us, the jurisdictional
objection becomes even less tenable and
decisive. The reason is that, even if we were to
assume that the issue presented before us was
political in nature, we would still not be precluded
from resolving it under the expanded jurisdiction
conferred upon us that now covers, in proper
cases, even the political question.[110] x x x
(Emphasis and underscoring supplied.)
Section 1, Article VIII, of the Court does not
define what are justiciable political questions and
non-justiciable political questions, however.
Identification of these two species of political
questions may be problematic. There has been
no clear standard. The American case of Baker
v. Carr[111] attempts to provide some:
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 non-judicial 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 questioning adherence to a
political decision already made; or the
potentiality of embarrassment from multifarious
pronouncements by various departments on one
question.[112] nderscoring supplied)
Of these standards, the more reliable have been
the first three: (1) a textually demonstrable
constitutional commitment of the issue to a
coordinate political department; (2) the lack of
judicially discoverable and manageable standards
for resolving it; and (3) the impossibility of
deciding without an initial policy determination of
a kind clearly for non-judicial discretion. These
standards are not separate and distinct concepts
but are interrelated to each in that the presence
of one strengthens the conclusion that the others
are also present.
The problem in applying the foregoing standards
is that the American concept of judicial review is
radically different from our current concept, for
Section 1, Article VIII of the Constitution provides
our courts with far less discretion in determining
whether they should pass upon a constitutional
issue.
In our jurisdiction, the determination of a truly
political question from a non-justiciable political
question lies in the answer to the question of
whether there are constitutionally imposed limits
on powers or functions conferred upon political
bodies. If there are, then our courts are duty-
bound to examine whether the branch or
instrumentality of the government properly acted
within such limits. This Court shall thus now
apply this standard to the present controversy.
These petitions raise five substantial issues:
I. Whether the offenses alleged in the Second
impeachment complaint constitute valid
impeachable offenses under the Constitution.
II. Whether the second impeachment complaint
was filed in accordance with Section 3(4), Article
XI of the Constitution.
III. Whether the legislative inquiry by the House
Committee on Justice into the Judicial
Development Fund is an unconstitutional
infringement of the constitutionally mandated
fiscal autonomy of the judiciary.
IV. Whether Sections 15 and 16 of Rule V of the
Rules on Impeachment adopted by the 12th
Congress are unconstitutional for violating the
provisions of Section 3, Article XI of the
Constitution.
V. Whether the second impeachment complaint
is barred under Section 3(5) of Article XI of the
Constitution.
The first issue goes into the merits of the second
impeachment complaint over which this Court
has no jurisdiction. More importantly, any
discussion of this issue would require this Court
to make a determination of what constitutes an
impeachable offense. Such a determination is a
purely political question which the Constitution
has left to the sound discretion of the legislation.
Such an intent is clear from the deliberations of
the Constitutional Commission.[113]
Although Section 2 of Article XI of the
Constitution enumerates six grounds for
impeachment, two of these, namely, other high
crimes and betrayal of public trust, elude a
precise definition. In fact, an examination of the
records of the 1986 Constitutional Commission
shows that the framers could find no better way
to approximate the boundaries of betrayal of
public trust and other high crimes than by
alluding to both positive and negative examples
of both, without arriving at their clear cut
definition or even a standard therefor.[114]
Clearly, the issue calls upon this court to decide a
non-justiciable political question which is beyond
the scope of its judicial power under Section 1,
Article VIII.
Lis Mota
It is a well-settled maxim of adjudication that an
issue assailing the constitutionality of a
governmental act should be avoided whenever
possible. Thus, in the case of Sotto v.
Commission on Elections,[115] this Court held:
x x x It is a well-established rule that a court
should not pass upon a constitutional question
and decide a law to be unconstitutional or invalid,
unless such question is raised by the parties and
that when it is raised, if the record also presents
some other ground upon which the court may
rest its judgment, that course will be adopted
and the constitutional question will be left for
consideration until a case arises in which a
decision upon such question will be unavoidable.
[116] [Emphasis and underscoring supplied]
The same principle was applied in Luz Farms v.
Secretary of Agrarian Reform,[117] where this
Court invalidated Sections 13 and 32 of Republic
Act No. 6657 for being confiscatory and violative
of due process, to wit:
It has been established that this Court will
assume jurisdiction over a constitutional question
only if it is shown that the essential requisites of
a judicial inquiry into such a question are first
satisfied. Thus, there must be an actual case or
controversy involving a conflict of legal rights
susceptible of judicial determination, the
constitutional question must have been
opportunely raised by the proper party, and the
resolution of the question is unavoidably
necessary to the decision of the case itself.[118]
[ mphasis supplied]
Succinctly put, courts will not touch the issue of
constitutionality unless it is truly unavoidable and
is the very lis mota or crux of the controversy.
As noted earlier, the instant consolidated
petitions, while all seeking the invalidity of the
second impeachment complaint, collectively raise
several constitutional issues upon which the
outcome of this controversy could possibly be
made to rest. In determining whether one, some
or all of the remaining substantial issues should
be passed upon, this Court is guided by the
related cannon of adjudication that “the court
should not form a rule of constitutional law
broader than is required by the precise facts to
which it is applied.”[119]
In G.R. No. 160310, petitioners Leonilo R.
Alfonso, et al. argue that, among other reasons,
the second impeachment complaint is invalid
since it directly resulted from a Resolution[120]
calling for a legislative inquiry into the JDF, which
Resolution and legislative inquiry petitioners
claim to likewise be unconstitutional for being:
(a) a violation of the rules and jurisprudence on
investigations in aid of legislation; (b) an open
breach of the doctrine of separation of powers;
(c) a violation of the constitutionally mandated
fiscal autonomy of the judiciary; and (d) an
assault on the independence of the judiciary.
[121]
Without going into the merits of petitioners
Alfonso, et. al.’s claims, it is the studied opinion
of this Court that the issue of the constitutionality
of the said Resolution and resulting legislative
inquiry is too far removed from the issue of the
validity of the second impeachment complaint.
Moreover, the resolution of said issue would, in
the Court’s opinion, require it to form a rule of
constitutional law touching on the separate and
distinct matter of legislative inquiries in general,
which would thus be broader than is required by
the facts of these consolidated cases. This
opinion is further strengthened by the fact that
said petitioners have raised other grounds in
support of their petition which would not be
adversely affected by the Court’s ruling.
En passant, this Court notes that a standard for
the conduct of legislative inquiries has already
been enunciated by this Court in Bengzon, Jr. v.
Senate Blue Ribbon Commttee,[122] viz:
The 1987 Constitution expressly recognizes the
power of both houses of Congress to conduct
inquiries in aid of legislation. Thus, Section 21,
Article VI thereof provides:
The Senate or the House of Representatives or
any of its respective committees may conduct
inquiries in aid of legislation in accordance with
its duly published rules of procedure. The rights
of persons appearing in or affected by such
inquiries shall be respected.
The power of both houses of Congress to conduct
inquiries in aid of legislation is not, therefore
absolute or unlimited. Its exercise is
circumscribed by the afore-quoted provision of
the Constitution. Thus, as provided therein, the
investigation must be “in aid of legislation in
accordance with its duly published rules of
procedure” and that “the rights of persons
appearing in or affected by such inquiries shall be
respected.” It follows then that the right rights
of persons under the Bill of Rights must be
respected, including the right to due process and
the right not be compelled to testify against one’s
self.[123]
In G.R. No. 160262, intervenors Romulo B.
Macalintal and Pete Quirino Quadra, while joining
the original petition of petitioners Candelaria, et.
al., introduce the new argument that since the
second impeachment complaint was verified and
filed only by Representatives Gilberto Teodoro,
Jr. and Felix William Fuentebella, the same does
not fall under the provisions of Section 3 (4),
Article XI of the Constitution which reads:
Section 3(4) In case the verified complaint or
resolution of impeachment is filed by at least
one-third of all the Members of the House, the
same shall constitute the Articles of
Impeachment, and trial by the Senate shall
forthwith proceed.
They assert that while at least 81 members of
the House of Representatives signed a Resolution
of Endorsement/Impeachment, the same did not
satisfy the requisites for the application of the
afore-mentioned section in that the “verified
complaint or resolution of impeachment” was not
filed “by at least one-third of all the Members of
the House.” With the exception of
Representatives Teodoro and Fuentebella, the
signatories to said Resolution are alleged to have
verified the same merely as a “Resolution of
Endorsement.” Intervenors point to the
“Verification” of the Resolution of Endorsement
which states that:
“We are the proponents/sponsors of the
Resolution of Endorsement of the
abovementioned Complaint of Representatives
Gilberto Teodoro and Felix William B. Fuentebella
x x x”[124]
Intervenors Macalintal and Quadra further claim
that what the Constitution requires in order for
said second impeachment complaint to
automatically become the Articles of
Impeachment and for trial in the Senate to begin
“forthwith,” is that the verified complaint be
“filed,” not merely endorsed, by at least one-third
of the Members of the House of Representatives.
Not having complied with this requirement, they
concede that the second impeachment complaint
should have been calendared and referred to the
House Committee on Justice under Section 3(2),
Article XI of the Constitution, viz:
Section 3(2) A verified complaint for
impeachment may be filed by any Member of the
House of Representatives or by any citizen upon
a resolution of endorsement by any Member
thereof, which shall be included in the Order of
Business within ten session days, and referred to
the proper Committee within three session days
thereafter. The Committee, after hearing, and by
a majority vote of all its Members, shall submit
its report to the House within sixty session days
from such referral, together with the
corresponding resolution. The resolution shall be
calendared for consideration by the House within
ten session days from receipt thereof.
Intervenors’ foregoing position is echoed by
Justice Maambong who opined that for Section 3
(4), Article XI of the Constitution to apply, there
should be 76 or more representatives who signed
and verified the second impeachment complaint
as complainants, signed and verified the
signatories to a resolution of impeachment.
Justice Maambong likewise asserted that the
Resolution of Endorsement/Impeachment signed
by at least one-third of the members of the
House of Representatives as endorsers is not the
resolution of impeachment contemplated by the
Constitution, such resolution of endorsement
being necessary only from at least one Member
whenever a citizen files a verified impeachment
complaint.
While the foregoing issue, as argued by
intervenors Macalintal and Quadra, does indeed
limit the scope of the constitutional issues to the
provisions on impeachment, more compelling
considerations militate against its adoption as the
lis mota or crux of the present controversy.
Chief among this is the fact that only Attorneys
Macalintal and Quadra, intervenors in G.R. No.
160262, have raised this issue as a ground for
invalidating the second impeachment complaint.
Thus, to adopt this additional ground as the basis
for deciding the instant consolidated petitions
would not only render for naught the efforts of
the original petitioners in G.R. No. 160262, but
the efforts presented by the other petitioners as
well.
Again, the decision to discard the resolution of
this issue as unnecessary for the determination
of the instant cases is made easier by the fact
that said intervenors Macalintal and Quadra have
joined in the petition of Candelaria, et. al.,
adopting the latter’s arguments and issues as
their own. Consequently, they are not unduly
prejudiced by this Court’s decision.
In sum, this Court holds that the two remaining
issues, inextricably linked as they are, constitute
the very lis mota of the instant controversy: (1)
whether Sections 15 and 16 of Rule V of the
House Impeachment Rules adopted by the 12th
Congress are unconstitutional for violating the
provisions of Section 3, Article XI of the
Constitution; and (2) whether, as a result
thereof, the second impeachment complaint is
barred under Section 3(5) of Article XI of the
Constitution.
Judicial Restraint
Senator Pimentel urges this Court to exercise
judicial restraint on the ground that the Senate,
sitting as an impeachment court, has the sole
power to try and decide all cases of
impeachment. Again, this Court reiterates that
the power of judicial review includes the power of
review over justiciable issues in impeachment
proceedings.
On the other hand, respondents Speaker De
Venecia et. al. argue that “[t]here is a moral
compulsion for the Court to not assume
jurisdiction over the impeachment because all the
Members thereof are subject to
impeachment.”[125] But this argument is very
much like saying the Legislature has a moral
compulsion not to pass laws with penalty clauses
because Members of the House of
Representatives are subject to them.
The exercise of judicial restraint over justiciable
issues is not an option before this Court.
Adjudication may not be declined, because this
Court is not legally disqualified. Nor can
jurisdiction be renounced as there is no other
tribunal to which the controversy may be
referred.”[126] Otherwise, this Court would be
shirking from its duty vested under Art. VIII, Sec.
1(2) of the Constitution. More than being clothed
with authority thus, this Court is duty-bound to
take cognizance of the instant petitions.[127] In
the august words of amicus curiae Father Bernas,
“jurisdiction is not just a power; it is a solemn
duty which may not be renounced. To renounce
it, even if it is vexatious, would be a dereliction of
duty.”
Even in cases where it is an interested party, the
Court under our system of government cannot
inhibit itself and must rule upon the challenge
because no other office has the authority to do
so.[128] On the occasion that this Court had
been an interested party to the controversy
before it, it has acted upon the matter “not with
officiousness but in the discharge of an
unavoidable duty and, as always, with
detachment and fairness.”[129] After all, “by
[his] appointment to the office, the public has
laid on [a member of the judiciary] their
confidence that [he] is mentally and morally fit to
pass upon the merits of their varied contentions.
For this reason, they expect [him] to be fearless
in [his] pursuit to render justice, to be unafraid
to displease any person, interest or power and to
be equipped with a moral fiber strong enough to
resist the temptations lurking in [his]
office.”[130]
The duty to exercise the power of adjudication
regardless of interest had already been settled in
the case of Abbas v. Senate Electoral Tribunal.
[131] In that case, the petitioners filed with the
respondent Senate Electoral Tribunal a Motion for
Disqualification or Inhibition of the Senators-
Members thereof from the hearing and resolution
of SET Case No. 002-87 on the ground that all of
them were interested parties to said case as
respondents therein. This would have reduced
the Tribunal’s membership to only its three
Justices-Members whose disqualification was not
sought, leaving them to decide the matter. This
Court held:
Where, as here, a situation is created which
precludes the substitution of any Senator sitting
in the Tribunal by any of his other colleagues in
the Senate without inviting the same objections
to the substitute's competence, the proposed
mass disqualification, if sanctioned and ordered,
would leave the Tribunal no alternative but to
abandon a duty that no other court or body can
perform, but which it cannot lawfully discharge if
shorn of the participation of its entire
membership of Senators.
To our mind, this is the overriding consideration
— that the Tribunal be not prevented from
discharging a duty which it alone has the power
to perform, the performance of which is in the
highest public interest as evidenced by its being
expressly imposed by no less than the
fundamental law.
It is aptly noted in the first of the questioned
Resolutions that the framers of the Constitution
could not have been unaware of the possibility of
an election contest that would involve all
Senators—elect, six of whom would inevitably
have to sit in judgment thereon. Indeed, such
possibility might surface again in the wake of the
1992 elections when once more, but for the last
time, all 24 seats in the Senate will be at stake.
Yet the Constitution provides no scheme or mode
for settling such unusual situations or for the
substitution of Senators designated to the
Tribunal whose disqualification may be sought.
Litigants in such situations must simply place
their trust and hopes of vindication in the fairness
and sense of justice of the Members of the
Tribunal. Justices and Senators, singly and
collectively.
Let us not be misunderstood as saying that no
Senator-Member of the Senate Electoral Tribunal
may inhibit or disqualify himself from sitting in
judgment on any case before said Tribunal. Every
Member of the Tribunal may, as his conscience
dictates, refrain from participating in the
resolution of a case where he sincerely feels that
his personal interests or biases would stand in
the way of an objective and impartial judgment.
What we are merely saying is that in the light of
the Constitution, the Senate Electoral Tribunal
cannot legally function as such, absent its entire
membership of Senators and that no amendment
of its Rules can confer on the three Justices-
Members alone the power of valid adjudication of
a senatorial election contest.
More recently in the case of Estrada v. Desierto,
[132] it was held that:
Moreover, to disqualify any of the members of
the Court, particularly a majority of them, is
nothing short of pro tanto depriving the Court
itself of its jurisdiction as established by the
fundamental law. Disqualification of a judge is a
deprivation of his judicial power. And if that
judge is the one designated by the Constitution
to exercise the jurisdiction of his court, as is the
case with the Justices of this Court, the
deprivation of his or their judicial power is
equivalent to the deprivation of the judicial power
of the court itself. It affects the very heart of
judicial independence. The proposed mass
disqualification, if sanctioned and ordered, would
leave the Court no alternative but to abandon a
duty which it cannot lawfully discharge if shorn of
the participation of its entire membership of
Justices.[133] (Italics in the original)
Besides, there are specific safeguards already
laid down by the Court when it exercises its
power of judicial review.
In Demetria v. Alba,[134] this Court, through
Justice Marcelo Fernan cited the “seven pillars” of
limitations of the power of judicial review,
enunciated by US Supreme Court Justice
Brandeis in Ashwander v. TVA[135] as follows:
1. The Court will not pass upon the
constitutionality of legislation in a friendly, non-
adversary proceeding, declining because to
decide such questions ‘is legitimate only in the
last resort, and as a necessity in the
determination of real, earnest and vital
controversy between individuals. It never was the
thought that, by means of a friendly suit, a party
beaten in the legislature could transfer to the
courts an inquiry as to the constitutionality of the
legislative act.’
2. The Court will not ‘anticipate a question of
constitutional law in advance of the necessity of
deciding it.’ . . . ‘It is not the habit of the Court to
decide questions of a constitutional nature unless
absolutely necessary to a decision of the case.’
3. The Court will not ‘formulate a rule of
constitutional law broader than is required by the
precise facts to which it is to be applied.’
4. The Court will not pass upon a
constitutional question although properly
presented by the record, if there is also present
some other ground upon which the case may be
disposed of. This rule has found most varied
application. Thus, if a case can be decided on
either of two grounds, one involving a
constitutional question, the other a question of
statutory construction or general law, the Court
will decide only the latter. Appeals from the
highest court of a state challenging its decision of
a question under the Federal Constitution are
frequently dismissed because the judgment can
be sustained on an independent state ground.
5. The Court will not pass upon the validity of
a statute upon complaint of one who fails to show
that he is injured by its operation. Among the
many applications of this rule, none is more
striking than the denial of the right of challenge
to one who lacks a personal or property right.
Thus, the challenge by a public official interested
only in the performance of his official duty will
not be entertained . . . In Fairchild v. Hughes, the
Court affirmed the dismissal of a suit brought by
a citizen who sought to have the Nineteenth
Amendment declared unconstitutional. In
Massachusetts v. Mellon, the challenge of the
federal Maternity Act was not entertained
although made by the Commonwealth on behalf
of all its citizens.
6. The Court will not pass upon the
constitutionality of a statute at the instance of
one who has availed himself of its benefits.
7. When the validity of an act of the
Congress is drawn in question, and even if a
serious doubt of constitutionality is raised, it is a
cardinal principle that this Court will first
ascertain whether a construction of the statute is
fairly possible by which the question may be
avoided (citations omitted).
The foregoing “pillars” of limitation of judicial
review, summarized in Ashwander v. TVA from
different decisions of the United States Supreme
Court, can be encapsulated into the following
categories:
1. that there be absolute necessity of deciding a
case

2. that rules of constitutional law shall be
formulated only as required by the facts of the
case
3. that judgment may not be sustained on some
other ground
4. that there be actual injury sustained by the
party by reason of the operation of the statute
5. that the parties are not in estoppel
6. that the Court upholds the presumption of
constitutionality.
As stated previously, parallel guidelines have
been adopted by this Court in the exercise of
judicial review:
1. actual case or controversy calling for the
exercise of judicial power
2. the person challenging the act must have
“standing” to challenge; he must have a personal
and substantial interest in the case such that he
has sustained, or will sustain, direct injury as a
result of its enforcement
3. the question of constitutionality must be
raised at the earliest possible opportunity
4. the issue of constitutionality must be the very
lis mota of the case.[136]
Respondents Speaker de Venecia, et. al. raise
another argument for judicial restraint the
possibility that “judicial review of impeachments
might also lead to embarrassing conflicts
between the Congress and the [J]udiciary.” They
stress the need to avoid the appearance of
impropriety or conflicts of interest in judicial
hearings, and the scenario that it would be
confusing and humiliating and risk serious
political instability at home and abroad if the
judiciary countermanded the vote of Congress to
remove an impeachable official.[137] Intervenor
Soriano echoes this argument by alleging that
failure of this Court to enforce its Resolution
against Congress would result in the diminution
of its judicial authority and erode public
confidence and faith in the judiciary.
Such an argument, however, is specious, to say
the least. As correctly stated by the Solicitor
General, the possibility of the occurrence of a
constitutional crisis is not a reason for this Court
to refrain from upholding the Constitution in all
impeachment cases. Justices cannot abandon
their constitutional duties just because their
action may start, if not precipitate, a crisis.
Justice Feliciano warned against the dangers
when this Court refuses to act.
x x x Frequently, the fight over a controversial
legislative or executive act is not regarded as
settled until the Supreme Court has passed upon
the constitutionality of the act involved, the
judgment has not only juridical effects but also
political consequences. Those political
consequences may follow even where the Court
fails to grant the petitioner’s prayer to nullify an
act for lack of the necessary number of votes.
Frequently, failure to act explicitly, one way or
the other, itself constitutes a decision for the
respondent and validation, or at least quasi-
validation, follows.” [138]
Thus, in Javellana v. Executive Secretary[139]
where this Court was split and “in the end there
were not enough votes either to grant the
petitions, or to sustain respondent’s
claims,”[140] the pre-existing constitutional
order was disrupted which paved the way for the
establishment of the martial law regime.
Such an argument by respondents and intervenor
also presumes that the coordinate branches of
the government would behave in a lawless
manner and not do their duty under the law to
uphold the Constitution and obey the laws of the
land. Yet there is no reason to believe that any
of the branches of government will behave in a
precipitate manner and risk social upheaval,
violence, chaos and anarchy by encouraging
disrespect for the fundamental law of the land.
Substituting the word public officers for judges,
this Court is well guided by the doctrine in People
v. Veneracion, to wit:[141]
Obedience to the rule of law forms the bedrock of
our system of justice. If [public officers], under
the guise of religious or political beliefs were
allowed to roam unrestricted beyond boundaries
within which they are required by law to exercise
the duties of their office, then law becomes
meaningless. A government of laws, not of men
excludes the exercise of broad discretionary
powers by those acting under its authority.
Under this system, [public officers] are guided by
the Rule of Law, and ought “to protect and
enforce it without fear or favor,” resist
encroachments by governments, political parties,
or even the interference of their own personal
beliefs.[142]
Constitutionality of the Rules of Procedure
for Impeachment Proceedings
adopted by the 12th Congress
Respondent House of Representatives, through
Speaker De Venecia, argues that Sections 16 and
17 of Rule V of the House Impeachment Rules do
not violate Section 3 (5) of Article XI of our
present Constitution, contending that the term
“initiate” does not mean “to file;” that Section 3
(1) is clear in that it is the House of
Representatives, as a collective body, which has
the exclusive power to initiate all cases of
impeachment; that initiate could not possibly
mean “to file” because filing can, as Section 3
(2), Article XI of the Constitution provides, only
be accomplished in 3 ways, to wit: (1) by a
verified complaint for impeachment by any
member of the House of Representatives; or (2)
by any citizen upon a resolution of endorsement
by any member; or (3) by at least 1/3 of all the
members of the House. Respondent House of
Representatives concludes that the one year bar
prohibiting the initiation of impeachment
proceedings against the same officials could not
have been violated as the impeachment
complaint against Chief Justice Davide and seven
Associate Justices had not been initiated as the
House of Representatives, acting as the collective
body, has yet to act on it.
The resolution of this issue thus hinges on the
interpretation of the term “initiate.” Resort to
statutory construction is, therefore, in order.
That the sponsor of the provision of Section 3(5)
of the Constitution, Commissioner Florenz
Regalado, who eventually became an Associate
Justice of this Court, agreed on the meaning of
“initiate” as “to file,” as proffered and explained
by Constitutional Commissioner Maambong
during the Constitutional Commission
proceedings, which he (Commissioner Regalado)
as amicus curiae affirmed during the oral
arguments on the instant petitions held on
November 5, 2003 at which he added that the act
of “initiating” included the act of taking initial
action on the complaint, dissipates any doubt
that indeed the word “initiate” as it twice appears
in Article XI (3) and (5) of the Constitution
means to file the complaint and take initial action
on it.
“Initiate” of course is understood by ordinary
men to mean, as dictionaries do, to begin, to
commence, or set going. As Webster’s Third New
International Dictionary of the English Language
concisely puts it, it means “to perform or
facilitate the first action,” which jibes with Justice
Regalado’s position, and that of Father Bernas,
who elucidated during the oral arguments of the
instant petitions on November 5, 2003 in this
wise:
Briefly then, an impeachment proceeding is not a
single act. It is a comlexus of acts consisting of a
beginning, a middle and an end. The end is the
transmittal of the articles of impeachment to the
Senate. The middle consists of those deliberative
moments leading to the formulation of the
articles of impeachment. The beginning or the
initiation is the filing of the complaint and its
referral to the Committee on Justice.
Finally, it should be noted that the House Rule
relied upon by Representatives Cojuangco and
Fuentebella says that impeachment is “deemed
initiated” when the Justice Committee votes in
favor of impeachment or when the House
reverses a contrary vote of the Committee. Note
that the Rule does not say “impeachment
proceedings” are initiated but rather are “deemed
initiated.” The language is recognition that
initiation happened earlier, but by legal fiction
there is an attempt to postpone it to a time after
actual initiation. (Emphasis and underscoring
supplied)
As stated earlier, one of the means of
interpreting the Constitution is looking into the
intent of the law. Fortunately, the intent of the
framers of the 1987 Constitution can be pried
from its records:
MR. MAAMBONG. With reference to Section 3,
regarding the procedure and the substantive
provisions on impeachment, I understand there
have been many proposals and, I think, these
would need some time for Committee action.
However, I would just like to indicate that I
submitted to the Committee a resolution on
impeachment proceedings, copies of which have
been furnished the Members of this body. This is
borne out of my experience as a member of the
Committee on Justice, Human Rights and Good
Government which took charge of the last
impeachment resolution filed before the First
Batasang Pambansa. For the information of the
Committee, the resolution covers several steps in
the impeachment proceedings starting with
initiation, action of the Speaker committee
action, calendaring of report, voting on the
report, transmittal referral to the Senate, trial
and judgment by the Senate.

xxx
MR. MAAMBONG. Mr. Presiding Officer, I am not
moving for a reconsideration of the approval of
the amendment submitted by Commissioner
Regalado, but I will just make of record my
thinking that we do not really initiate the filing of
the Articles of Impeachment on the floor. The
procedure, as I have pointed out earlier, was that
the initiation starts with the filing of the
complaint. And what is actually done on the floor
is that the committee resolution containing the
Articles of Impeachment is the one approved by
the body.
As the phraseology now runs, which may be
corrected by the Committee on Style, it appears
that the initiation starts on the floor. If we only
have time, I could cite examples in the case of
the impeachment proceedings of President
Richard Nixon wherein the Committee on the
Judiciary submitted the recommendation, the
resolution, and the Articles of Impeachment to
the body, and it was the body who approved the
resolution. It is not the body which initiates it. It
only approves or disapproves the resolution. So,
on that score, probably the Committee on Style
could help in rearranging these words because
we have to be very technical about this. I have
been bringing with me The Rules of the House of
Representatives of the U.S. Congress. The
Senate Rules are with me. The proceedings on
the case of Richard Nixon are with me. I have
submitted my proposal, but the Committee has
already decided. Nevertheless, I just want to
indicate this on record.
xxx
MR. MAAMBONG. I would just like to move for a
reconsideration of the approval of Section 3 (3).
My reconsideration will not at all affect the
substance, but it is only in keeping with the exact
formulation of the Rules of the House of
Representatives of the United States regarding
impeachment.
I am proposing, Madam President, without doing
damage to any of this provision, that on page 2,
Section 3 (3), from lines 17 to 18, we delete the
words which read: “to initiate impeachment
proceedings” and the comma (,) and insert on
line 19 after the word “resolution” the phrase
WITH THE ARTICLES, and then capitalize the
letter “i” in “impeachment” and replace the word
“by” with OF, so that the whole section will now
read: “A vote of at least one-third of all the
Members of the House shall be necessary either
to affirm a resolution WITH THE ARTICLES of
Impeachment OF the Committee or to override
its contrary resolution. The vote of each Member
shall be recorded.”
I already mentioned earlier yesterday that the
initiation, as far as the House of Representatives
of the United States is concerned, really starts
from the filing of the verified complaint and every
resolution to impeach always carries with it the
Articles of Impeachment. As a matter of fact, the
words “Articles of Impeachment” are mentioned
on line 25 in the case of the direct filing of a
verified compliant of one-third of all the Members
of the House. I will mention again, Madam
President, that my amendment will not vary the
substance in any way. It is only in keeping with
the uniform procedure of the House of
Representatives of the United States Congress.
Thank you, Madam President.[143] (Italics in the
original; emphasis and udnerscoring supplied)
This amendment proposed by Commissioner
Maambong was clarified and accepted by the
Committee on the Accountability of Public
Officers.[144]
It is thus clear that the framers intended
“initiation” to start with the filing of the
complaint. In his amicus curiae brief,
Commissioner Maambong explained that “the
obvious reason in deleting the phrase “to initiate
impeachment proceedings” as contained in the
text of the provision of Section 3 (3) was to settle
and make it understood once and for all that the
initiation of impeachment proceedings starts with
the filing of the complaint, and the vote of one-
third of the House in a resolution of impeachment
does not initiate the impeachment proceedings
which was already initiated by the filing of a
verified complaint under Section 3, paragraph
(2), Article XI of the Constitution.”[145]
Amicus curiae Constitutional Commissioner
Regalado is of the same view as is Father Bernas,
who was also a member of the 1986
Constitutional Commission, that the word
“initiate” as used in Article XI, Section 3(5)
means to file, both adding, however, that the
filing must be accompanied by an action to set
the complaint moving.
During the oral arguments before this Court,
Father Bernas clarified that the word “initiate,”
appearing in the constitutional provision on
impeachment, viz:
Section 3 (1) The House of Representatives shall
have the exclusive power to initiate all cases of
impeachment.
xxx
(5) No impeachment proceedings shall be
initiated against the same official more than once
within a period of one year, mphasis supplied)
refers to two objects, “impeachment case” and
“impeachment proceeding.”
Father Bernas explains that in these two
provisions, the common verb is “to initiate.” The
object in the first sentence is “impeachment
case.” The object in the second sentence is
“impeachment proceeding.” Following the
principle of reddendo singuala sinuilis, the term
“cases” must be distinguished from the term
“proceedings.” An impeachment case is the legal
controversy that must be decided by the Senate.
Above-quoted first provision provides that the
House, by a vote of one-third of all its members,
can bring a case to the Senate. It is in that
sense that the House has “exclusive power” to
initiate all cases of impeachment. No other body
can do it. However, before a decision is made to
initiate a case in the Senate, a “proceeding” must
be followed to arrive at a conclusion. A By his explanation, this interpretation is founded
proceeding must be “initiated.” To initiate, which
comes from the Latin word initium, means to
begin. On the other hand, proceeding is a
progressive noun. It has a beginning, a middle,
and an end. It takes place not in the Senate but
in the House and consists of several steps: (1)
there is the filing of a verified complaint either by
a Member of the House of Representatives or by
a private citizen endorsed by a Member of the
House of the Representatives; (2) there is the
processing of this complaint by the proper
Committee which may either reject the complaint
or uphold it; (3) whether the resolution of the
Committee rejects or upholds the complaint, the
resolution must be forwarded to the House for
further processing; and (4) there is the
processing of the same complaint by the House
of Representatives which either affirms a
favorable resolution of the Committee or
overrides a contrary resolution by a vote of one-
third of all the members. If at least one third of
all the Members upholds the complaint, Articles
of Impeachment are prepared and transmitted to
the Senate. It is at this point that the House
“initiates an impeachment case.” It is at this
point that an impeachable public official is
successfully impeached. That is, he or she is
successfully charged with an impeachment “case”
before the Senate as impeachment court.
Father Bernas further explains: The
“impeachment proceeding” is not initiated when
the complaint is transmitted to the Senate for
trial because that is the end of the House
proceeding and the beginning of another
proceeding, namely the trial. Neither is the
“impeachment proceeding” initiated when the
House deliberates on the resolution passed on to
it by the Committee, because something prior to
that has already been done. The action of the
House is already a further step in the proceeding,
not its initiation or beginning. Rather, the
proceeding is initiated or begins, when a verified
complaint is filed and referred to the Committee
on Justice for action. This is the initiating step
which triggers the series of steps that follow.
The framers of the Constitution also understood
initiation in its ordinary meaning. Thus when a
proposal reached the floor proposing that “A vote
of at least one-third of all the Members of the
House shall be necessary… to initiate
impeachment proceedings,” this was met by a
proposal to delete the line on the ground that the
vote of the House does not initiate impeachment
proceeding but rather the filing of a complaint
does.[146] Thus the line was deleted and is not
found in the present Constitution.
Father Bernas concludes that when Section 3 (5)
says, “No impeachment proceeding shall be
initiated against the same official more than once
within a period of one year,” it means that no
second verified complaint may be accepted and
referred to the Committee on Justice for action.
on the common understanding of the meaning of
“to initiate” which means to begin. He reminds
that the Constitution is ratified by the people,
both ordinary and sophisticated, as they
understand it; and that ordinary people read
ordinary meaning into ordinary words and not
abstruse meaning, they ratify words as they
understand it and not as sophisticated lawyers
confuse it.
To the argument that only the House of
Representatives as a body can initiate
impeachment proceedings because Section 3 (1)
says “The House of Representatives shall have
the exclusive power to initiate all cases of
impeachment,” This is a misreading of said
provision and is contrary to the principle of
reddendo singula singulis by equating
“impeachment cases” with “impeachment
proceeding.”
From the records of the Constitutional
Commission, to the amicus curiae briefs of two
former Constitutional Commissioners, it is
without a doubt that the term “to initiate” refers
to the filing of the impeachment complaint
coupled with Congress’ taking initial action of said
complaint.
Having concluded that the initiation takes place
by the act of filing and referral or endorsement of
the impeachment complaint to the House
Committee on Justice or, by the filing by at least
one-third of the members of the House of
Representatives with the Secretary General of
the House, the meaning of Section 3 (5) of Article
XI becomes clear. Once an impeachment Section 3 (8) of Article XI provides that “The
complaint has been initiated, another Congress shall promulgate its rules on
impeachment complaint may not be filed against impeachment to effectively carry out the purpose
the same official within a one year period. of this section.” Clearly, its power to promulgate
its rules on impeachment is limited by the phrase
“to effectively carry out the purpose of this
section.” Hence, these rules cannot contravene
Under Sections 16 and 17 of Rule V of the House the very purpose of the Constitution which said
Impeachment Rules, impeachment proceedings rules were intended to effectively carry out.
are deemed initiated (1) if there is a finding by Moreover, Section 3 of Article XI clearly provides
the House Committee on Justice that the verified for other specific limitations on its power to make
complaint and/or resolution is sufficient in rules, viz:
substance, or (2) once the House itself affirms or
overturns the finding of the Committee on Justice
that the verified complaint and/or resolution is
not sufficient in substance or (3) by the filing or Section 3. (1) x x x
endorsement before the Secretary-General of the
House of Representatives of a verified complaint
or a resolution of impeachment by at least 1/3 of
(2) A verified complaint for impeachment may be
the members of the House. These rules clearly
filed by any Member of the House of
contravene Section 3 (5) of Article XI since the
Representatives or by any citizen upon a
rules give the term “initiate” a meaning different
resolution of endorsement by any Member
meaning from filing and referral.
thereof, which shall be included in the Order of
Business within ten session days, and referred to
the proper Committee within three session days
In his amicus curiae brief, Justice Hugo Gutierrez thereafter. The Committee, after hearing, and by
posits that this Court could not use a majority vote of all its Members, shall submit
contemporaneous construction as an aid in the its report to the House within sixty session days
interpretation of Sec.3 (5) of Article XI, citing from such referral, together with the
Vera v. Avelino[147] wherein this Court stated corresponding resolution. The resolution shall be
that “their personal opinions (referring to Justices calendared for consideration by the House within
who were delegates to the Constitution ten session days from receipt thereof.
Convention) on the matter at issue expressed
during this Court’s our deliberations stand on a
different footing from the properly recorded
(3) A vote of at least one-third of all the
utterances of debates and proceedings.” Further
Members of the House shall be necessary to
citing said case, he states that this Court likened
either affirm a favorable resolution with the
the former members of the Constitutional
Articles of Impeachment of the Committee, or
Convention to actors who are so absorbed in
override its contrary resolution. The vote of each
their emotional roles that intelligent spectators
Member shall be recorded.
may know more about the real meaning because
of the latter’s balanced perspectives and
disinterestedness. [148]
(4) In case the verified complaint or resolution
of impeachment is filed by at least one-third of all
the Members of the House, the same shall
Justice Gutierrez’s statements have no
constitute the Articles of Impeachment, and trial
application in the present petitions. There are at
by the Senate shall forthwith proceed.
present only two members of this Court who
participated in the 1986 Constitutional
Commission – Chief Justice Davide and Justice
Adolf Azcuna. Chief Justice Davide has not taken (5) No impeachment proceedings shall be
part in these proceedings for obvious reasons. initiated against the same official more than once
Moreover, this Court has not simply relied on the within a period of one year.
personal opinions now given by members of the
Constitutional Commission, but has examined the
records of the deliberations and proceedings
thereof. It is basic that all rules must not contravene the
Constitution which is the fundamental law. If as
alleged Congress had absolute rule making
power, then it would by necessary implication
Respondent House of Representatives counters have the power to alter or amend the meaning of
that under Section 3 (8) of Article XI, it is clear the Constitution without need of referendum.
and unequivocal that it and only it has the power
to make and interpret its rules governing
impeachment. Its argument is premised on the
assumption that Congress has absolute power to In Osmeña v. Pendatun,[149] this Court held
promulgate its rules. This assumption, however, that it is within the province of either House of
is misplaced. Congress to interpret its rules and that it was the
best judge of what constituted “disorderly
behavior” of its members. However, in Paceta v.
Secretary of the Commission on Appointments,
[150] Justice (later Chief Justice) Enrique
Fernando, speaking for this Court and quoting
Justice Brandeis in United States v. Smith,[151]
declared that where the construction to be given
to a rule affects persons other than members of
the Legislature, the question becomes judicial in
nature. In Arroyo v. De Venecia,[152] quoting
United States v. Ballin, Joseph & Co.,[153]
Justice Vicente Mendoza, speaking for this Court,
held that while the Constitution empowers each
house to determine its rules of proceedings, it
may not by its rules ignore constitutional
restraints or violate fundamental rights, and
further that there should be a reasonable relation
between the mode or method of proceeding
established by the rule and the result which is
sought to be attained. It is only within these
limitations that all matters of method are open to
the determination of the Legislature. In the
same case of Arroyo v. De Venecia, Justice
Reynato S. Puno, in his Concurring and
Dissenting Opinion, was even more emphatic as
he stressed that in the Philippine setting there is
even more reason for courts to inquire into the
validity of the Rules of Congress, viz:
With due respect, I do not agree that the issues
posed by the petitioner are non-justiciable. Nor
do I agree that we will trivialize the principle of
separation of power if we assume jurisdiction
over he case at bar. Even in the United States,
the principle of separation of power is no longer
an impregnable impediment against the
interposition of judicial power on cases involving
breach of rules of procedure by legislators.
Rightly, the ponencia uses the 1891 case of US v
Ballin (144 US 1) as a window to view the issues
before the Court. It is in Ballin where the US
Supreme Court first defined the boundaries of the
power of the judiciary to review congressional
rules. It held:
“x x x
“The Constitution, in the same section, provides,
that each house may determine the rules of its
proceedings.” It appears that in pursuance of
this authority the House had, prior to that day,
passed this as one of its rules:
Rule XV
3. On the demand of any member, or at the
suggestion of the Speaker, the names of
members sufficient to make a quorum in the hall
of the House who do not vote shall be noted by
the clerk and recorded in the journal, and
reported to the Speaker with the names of the
members voting, and be counted and announced
in determining the presence of a quorum to do
business. (House Journal, 230, Feb. 14, 1890)
The action taken was in direct compliance with
this rule. The question, therefore, is as to the
validity of this rule, and not what methods the
Speaker may of his own motion resort to for
determining the presence of a quorum, nor what
matters the Speaker or clerk may of their own
volition place upon the journal. Neither do the
advantages or disadvantages, the wisdom or
folly, of such a rule present any matters for
judicial consideration. With the courts the
question is only one of power. The Constitution
empowers each house to determine its rules of
proceedings. It may not by its rules ignore
constitutional restraints or violate fundamental
rights, and there should be a reasonable relation
between the mode or method of proceedings
established by the rule and the result which is
sought to be attained. But within these
limitations all matters of method are open to the
determination of the House, and it is no
impeachment of the rule to say that some other
way would be better, more accurate, or even
more just. It is no objection to the validity of a
rule that a different one has been prescribed and
in force for a length of time. The power to make
rules is not one which once exercised is
exhausted. It is a continuous power, always
subject to be exercised by the House, and within
the limitations suggested, absolute and beyond
the challenge of any other body or tribunal.”
Ballin, clearly confirmed the jurisdiction of courts
to pass upon the validity of congressional rules,
i.e, whether they are constitutional. Rule XV was
examined by the Court and it was found to
satisfy the test: (1) that it did not ignore any
constitutional restraint; (2) it did not violate any
fundamental right; and (3) its method had a
reasonable relationship with the result sought to
be attained. By examining Rule XV, the Court did
not allow its jurisdiction to be defeated by the
mere invocation of the principle of separation of
powers.[154]
xxx
In the Philippine setting, there is a more
compelling reason for courts to categorically
reject the political question defense when its
interposition will cover up abuse of power. For
section 1, Article VIII of our Constitution was
intentionally cobbled to empower courts “x x x 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.” This power
is new and was not granted to our courts in the
1935 and 1972 Constitutions. It was not also
xeroxed from the US Constitution or any foreign
state constitution. The CONCOM granted this
enormous power to our courts in view of our
experience under martial law where abusive
exercises of state power were shielded from
judicial scrutiny by the misuse of the political
question doctrine. Led by the eminent former
Chief Justice Roberto Concepcion, the CONCOM
expanded and sharpened the checking powers of
the judiciary vis-à-vis the Executive and the
Legislative departments of government.[155]
xxx
The Constitution cannot be any clearer. What it
granted to this Court is not a mere power which
it can decline to exercise. Precisely to deter this
disinclination, the Constitution imposed it as a
duty of this Court to strike down any act of a
branch or instrumentality of government or any
of its officials done with grave abuse of discretion
amounting to lack or excess of jurisdiction.
Rightly or wrongly, the Constitution has
elongated the checking powers of this Court
against the other branches of government
despite their more democratic character, the
President and the legislators being elected by the
people.[156]
xxx
The provision defining judicial power as including
the ‘duty of the courts of justice. . . 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’ constitutes
the capstone of the efforts of the Constitutional
Commission to upgrade the powers of this court
vis-à-vis the other branches of government. This
provision was dictated by our experience under
martial law which taught us that a stronger and
more independent judiciary is needed to abort
abuses in government. x x x
xxx
In sum, I submit that in imposing to this Court
the duty to annul acts of government committed
with grave abuse of discretion, the new
Constitution transformed this Court from
passivity to activism. This transformation,
dictated by our distinct experience as nation, is
not merely evolutionary but revolutionary. Under
the 1935 and the 1973 Constitutions, this Court
approached constitutional violations by initially
determining what it cannot do; under the 1987
Constitution, there is a shift in stress – this Court
is mandated to approach constitutional violations
not by finding out what it should not do but what
it must do. The Court must discharge this
solemn duty by not resuscitating a past that
petrifies the present.
I urge my brethren in the Court to give due and
serious consideration to this new constitutional
provision as the case at bar once more calls us to
define the parameters of our power to review
violations of the rules of the House. We will not
be true to our trust as the last bulwark against
government abuses if we refuse to exercise this
new power or if we wield it with timidity. To be
sure, it is this exceeding timidity to unsheathe
the judicial sword that has increasingly
emboldened other branches of government to
denigrate, if not defy, orders of our courts. In
Tolentino, I endorsed the view of former Senator
Salonga that this novel provision stretching the
latitude of judicial power is distinctly Filipino and
its interpretation should not be depreciated by
undue reliance on inapplicable foreign
jurisprudence. In resolving the case at bar, the
lessons of our own history should provide us the
light and not the experience of foreigners.[157]
(Italics in the original emphasis and underscoring
supplied)
Thus, the ruling in Osmena v. Pendatun is not
applicable to the instant petitions. Here, the
third parties alleging the violation of private
rights and the Constitution are involved.
Neither may respondent House of
Representatives’ rely on Nixon v. US[158] as
basis for arguing that this Court may not decide
on the constitutionality of Sections 16 and 17 of
the House Impeachment Rules. As already
observed, the U.S. Federal Constitution simply
provides that “the House of Representatives shall
have the sole power of impeachment.” It adds
nothing more. It gives no clue whatsoever as to
how this “sole power” is to be exercised. No
limitation whatsoever is given. Thus, the US
Supreme Court concluded that there was a
textually demonstrable constitutional
commitment of a constitutional power to the
House of Representatives. This reasoning does
not hold with regard to impeachment power of
the Philippine House of Representatives since our
Constitution, as earlier enumerated, furnishes
several provisions articulating how that
“exclusive power” is to be exercised.
The provisions of Sections 16 and 17 of Rule V of
the House Impeachment Rules which state that
impeachment proceedings are deemed initiated
(1) if there is a finding by the House Committee
on Justice that the verified complaint and/or
resolution is sufficient in substance, or (2) once
the House itself affirms or overturns the finding
of the Committee on Justice that the verified
complaint and/or resolution is not sufficient in
substance or (3) by the filing or endorsement
before the Secretary-General of the House of
Representatives of a verified complaint or a
resolution of impeachment by at least 1/3 of the
members of the House thus clearly contravene
Section 3 (5) of Article XI as they give the term
“initiate” a meaning different from “filing.”
Validity of the Second Impeachment Complaint
Having concluded that the initiation takes place
by the act of filing of the impeachment complaint
and referral to the House Committee on Justice,
the initial action taken thereon, the meaning of
Section 3 (5) of Article XI becomes clear. Once
an impeachment complaint has been initiated in
the foregoing manner, another may not be filed
against the same official within a one year period
following Article XI, Section 3(5) of the
Constitution.
In fine, considering that the first impeachment
complaint, was filed by former President Estrada
against Chief Justice Hilario G. Davide, Jr., along
with seven associate justices of this Court, on
June 2, 2003 and referred to the House
Committee on Justice on August 5, 2003, the
second impeachment complaint filed by
Representatives Gilberto C. Teodoro, Jr. and Felix
William Fuentebella against the Chief Justice on
October 23, 2003 violates the constitutional
prohibition against the initiation of impeachment
proceedings against the same impeachable
officer within a one-year period.
Conclusion
If there is anything constant about this country,
it is that there is always a phenomenon that
takes the center stage of our individual and
collective consciousness as a people with our
characteristic flair for human drama, conflict or
tragedy. Of course this is not to demean the
seriousness of the controversy over the Davide
impeachment. For many of us, the past two
weeks have proven to be an exasperating,
mentally and emotionally exhausting experience.
Both sides have fought bitterly a dialectical
struggle to articulate what they respectively
believe to be the correct position or view on the
issues involved. Passions had ran high as
demonstrators, whether for or against the
impeachment of the Chief Justice, took to the
streets armed with their familiar slogans and
chants to air their voice on the matter. Various
sectors of society - from the business, retired
military, to the academe and denominations of
faith – offered suggestions for a return to a state
of normalcy in the official relations of the
governmental branches affected to obviate any
perceived resulting instability upon areas of
national life.
Through all these and as early as the time when
the Articles of Impeachment had been
constituted, this Court was specifically asked,
told, urged and argued to take no action of any
kind and form with respect to the prosecution by
the House of Representatives of the
impeachment complaint against the subject
respondent public official. When the present
petitions were knocking so to speak at the
doorsteps of this Court, the same clamor for non-
interference was made through what are now the
arguments of “lack of jurisdiction,” “non-
justiciability,” and “judicial self-restraint” aimed
at halting the Court from any move that may
have a bearing on the impeachment proceedings.
This Court did not heed the call to adopt a hands-
off stance as far as the question of the
constitutionality of initiating the impeachment
complaint against Chief Justice Davide is
concerned. To reiterate what has been already
explained, the Court found the existence in full of
all the requisite conditions for its exercise of its
constitutionally vested power and duty of judicial
review over an issue whose resolution precisely
called for the construction or interpretation of a
provision of the fundamental law of the land.
What lies in here is an issue of a genuine
constitutional material which only this Court can
properly and competently address and adjudicate
in accordance with the clear-cut allocation of
powers under our system of government. Face-
to-face thus with a matter or problem that
squarely falls under the Court’s jurisdiction, no
other course of action can be had but for it to
pass upon that problem head on.
The claim, therefore, that this Court by judicially
entangling itself with the process of impeachment
has effectively set up a regime of judicial
supremacy, is patently without basis in fact and
in law.
This Court in the present petitions subjected to
judicial scrutiny and resolved on the merits only
the main issue of whether the impeachment
proceedings initiated against the Chief Justice
transgressed the constitutionally imposed one-
year time bar rule. Beyond this, it did not go
about assuming jurisdiction where it had none,
nor indiscriminately turn justiciable issues out of
decidedly political questions. Because it is not at
all the business of this Court to assert judicial
dominance over the other two great branches of
the government. Rather, the raison d’etre of the
judiciary is to complement the discharge by the
executive and legislative of their own powers to
bring about ultimately the beneficent effects of
having founded and ordered our society upon the
rule of law.
It is suggested that by our taking cognizance of
the issue of constitutionality of the impeachment
proceedings against the Chief Justice, the
members of this Court have actually closed ranks WHEREFORE, Sections 16 and 17 of Rule V of the
to protect a brethren. That the members’ Rules of Procedure in Impeachment Proceedings
interests in ruling on said issue is as much at which were approved by the House of
stake as is that of the Chief Justice. Nothing Representatives on November 28, 2001 are
could be farther from the truth. unconstitutional. Consequently, the second
impeachment complaint against Chief Justice
Hilario G. Davide, Jr. which was filed by
Representatives Gilberto C. Teodoro, Jr. and Felix
The institution that is the Supreme Court William B. Fuentebella with the Office of the
together with all other courts has long held and Secretary General of the House of
been entrusted with the judicial power to resolve Representatives on October 23, 2003 is barred
conflicting legal rights regardless of the under paragraph 5, section 3 of Article XI of the
personalities involved in the suits or actions. Constitution.
This Court has dispensed justice over the course
of time, unaffected by whomsoever stood to
benefit or suffer therefrom, unfraid by whatever
imputations or speculations could be made to it, SO ORDERED.
so long as it rendered judgment according to the
law and the facts. Why can it not now be trusted
to wield judicial power in these petitions just
because it is the highest ranking magistrate who Bellosillo and Tinga, JJ., see separate opinion.
is involved when it is an incontrovertible fact that
the fundamental issue is not him but the validity
of a government branch’s official act as tested by Puno, and Ynares-Santiago, J., see concurring
the limits set by the Constitution? Of course, and dissenting opinion.
there are rules on the inhibition of any member
of the judiciary from taking part in a case in
specified instances. But to disqualify this entire
institution now from the suit at bar is to regard Vitug, Panganiban, Sandoval-Gutierrez and
the Supreme Court as likely incapable of Callejo, Sr., JJ., see separate concurring opinion.
impartiality when one of its members is a party
to a case, which is simply a non sequitur.
Quisumbing, J., concurring separate opinion
received.
No one is above the law or the Constitution. This
is a basic precept in any legal system which
recognizes equality of all men before the law as
Carpio, J., concur.
essential to the law’s moral authority and that of
its agents to secure respect for and obedience to
its commands. Perhaps, there is no other
government branch or instrumentality that is Austria-Martinez, J., concur in the majority
most zealous in protecting that principle of legal opinion and in the separate opinion of J. Vitug.
equality other than the Supreme Court which has
discerned its real meaning and ramifications
through its application to numerous cases
especially of the high-profile kind in the annals of Corona, J., will write a separate concurring
jurisprudence. The Chief Justice is not above the opinion.
law and neither is any other member of this
Court. But just because he is the Chief Justice
does not imply that he gets to have less in law
Azcuna, J., concur in the separate opinion.
than anybody else. The law is solicitous of every
individual’s rights irrespective of his station in
life.
[1] Rollo, G.R. No. 160261 at 180-182; Annex
“H.”
The Filipino nation and its democratic institutions
have no doubt been put to test once again by this
impeachment case against Chief Justice Hilario [2] Per Special Appearance with Manifestation of
Davide. Accordingly, this Court has resorted to House Speaker Jose C. De Venecia, Jr. (Rollo,
no other than the Constitution in search for a G.R. No. 160261 at 325-363) the pertinent
solution to what many feared would ripen to a House Resolution is HR No. 260, but no copy of
crisis in government. But though it is indeed the same was submitted before this Court.
immensely a blessing for this Court to have found
answers in our bedrock of legal principles, it is
equally important that it went through this
crucible of a democratic process, if only to [3] Id. at 329. Created through PD No. 1949
discover that it can resolve differences without (July 18, 1984), the JDF was established “to help
the use of force and aggression upon each other. ensure and guarantee the independence of the
Judiciary as mandated by the Constitution and
public policy and required by the impartial
administration of justice” by creating a special
fund to augment the allowances of the members
and personnel of the Judiciary and to finance the
acquisition, maintenance and repair of office
equipment and facilities.”
[4] Rollo, G.R. No. 160261 at 120-139; Annex
“E.”
[5] The initial complaint impleaded only Justices
Artemio V. Panganiban, Josue N. Bellosillo,
Reynato S. Puno, Antonio T. Carpio and Renato
C. Corona, and was later amended to include
Justices Jose C. Vitug, and Leonardo A.
Quisumbing.
[6] Supra note 4 at 123-124.
[7] Rollo, G.R. No. 160403 at 48-53; Annex “A.”
[8]
http://www.congress.gov.ph/search/bills/hist_sh
ow.php?bill_no=RPT9999
[9] Rollo, G.R. No. 160262 at 8.
[10] Rollo, G.R. No. 160295 at 11.
[11] Rollo, G.R. No. 160262 at 43-84; Annex “B.”
[12] Supra note 2.
[13] A perusal of the attachments submitted by
the various petitioners reveals the following
signatories to the second impeachment complaint
and the accompanying Resolution/Endorsement.
1. Gilbert Teodoro, Jr., NPC, Tarlac (principal
complainant) 2. Felix Fuentebella, NPC,
Camarines Sur (second principal complainant) 3.
Julio Ledesma, IV, NPC, Negros Occidental 4.
Henry Lanot, NPC, Lone District of Pasig City 5.
Kim Bernardo-Lokin, Party List-CIBAC 6.
Marcelino Libanan, NPC, Lone District of Eastern
Samar, (Chairman, House Committee on Justice)
7. Emmylou Talino-Santos, Independent, 1st
District, North Cotobato 8. Douglas RA. Cagas,
NPC, 1st District, Davao del Sur 9. Sherwin
Gatchalian, NPC, 1st District, Valenzuela City 10.
Luis Bersamin, Jr., PDSP-PPC, Lone District of
Abra 11. Nerissa Soon-Ruiz Alayon, 6th District,
Cebu 12. Ernesto Nieva, Lakas, 1st District,
Manila 13. Edgar R. Erice, Lakas, 2nd District,
Kalookan City 14. Ismael Mathay III,
Independent, 2nd District, Quezon City 15.
Samuel Dangwa, Reporma, Lone District of
Benguet 16. Alfredo Marañon, Jr., NPC, 2nd
District, Negros Occidental 17. Cecilia Jalosjos-
Carreon, Reporma, 1st District, Zamboanga del
Norte 18. Agapito A. Aquino, LDP, 2nd District,
Makati City 19. Fausto L. Seachon, Jr., NPC, 3rd
District, Masbate 20. Georgilu Yumul-Hermida,
Pwersa ng Masa, 4th District, Quezon 21. Jose
Carlos Lacson, Lakas, 3rd District, Negros
Occidental 22. Manuel C. Ortega, NPC, 1st
District, La Union 23. Uliran Joaquin, NPC, 1st
District, Laguna 24. Soraya C. Jaafar, Lakas,
Lone District of Tawi-Tawi 25. Wilhelmino Sy-
Alvarado, Lakas, 1st District, Bulacan 26. Claude
P. Bautista, NPC, 2nd District, Davao Del Sur 27.
Del De Guzman, Lakas, Lone District of Marikina
City 28. Zeneida Cruz-Ducut, NPC, 2nd District,
Pampanga 29. Augusto Baculio, Independent-
LDP, 2nd District, Misamis Oriental 30. Faustino
Dy III, NPC-Lakas, 3rd District, Isabela 31.
Agusto Boboy Syjuco, Lakas, 2nd District, Iloilo
32. Rozzano Rufino B. Biazon, LDP, Lone District
of Muntinlupa City 33. Leovigildo B. Banaag,
NPC-Lakas, 1st District, Agusan del Norte 34.
Eric Singson, LP, 2nd District, Ilocos Sur 35.
Jacinto Paras, Lakas, 1st District, Negros Oriental
36. Jose Solis, Independent, 2nd District,
Sorsogon 37. Renato B. Magtubo, Party List-
Partido ng Manggagawa 38. Herminio G. Teves,
Lakas, 3rd District, Negros Oriental 39. Amado
T. Espino, Jr., Lakas, 2nd District, Pangasinan
40. Emilio Macias, NPC, 2nd District, Negros
Oriental 41. Arthur Y. Pingoy, Jr., NPC, 2nd
District, South Cotobato 42. Francis
Nepomuceno, NPC, 1st District, Pampanga 43.
Conrado M. Estrella III, NPC, 6th District,
Pangasinan 44. Elias Bulut, Jr., NPC, Lone
District of Apayao 45. Jurdin Jesus M. Romualdo,
NPC, Lone District of Camiguin 46. Juan Pablo
Bondoc, NPC, 4th District, Pampanga 47.
Generoso DC. Tulagan, NPC, 3rd District,
Pangasinan 48. Perpetuo Ylagan, Lakas, Lone
District of Romblon 49. Michael Duavit, NPC, 1st
District, Rizal 50. Joseph Ace H. Durano, NPC,
5th District, Cebu 51. Jesli Lapus, NPC, 3rd
District, Tarlac 52. Carlos Q. Cojuangco, NPC,
4th District, Negros Occidental 53. Georgidi B.
Aggabao, NPC, 4th District, Santiago, Isabela
54. Francis Escudero, NPC, 1st District, Sorsogon
55. Rene M. Velarde, Party List-Buhay 56. Celso
L. Lobregat, LDP, Lone District of Zamboanga
City 57. Alipio Cirilo V. Badelles, NPC, 1st
District, Lanao del Norte 58. Didagen P.
Dilangalen, Pwersa ng Masa, Lone District of
Maguindanao 59. Abraham B. Mitra, LDP, 2nd
District, Palawan 60. Joseph Santiago, NPC, Lone
District of Catanduanes 61. Darlene Antonino-
Custodio, NPC, 1st District of South Cotobato &
General Santos City 62. Aleta C. Suarez, LP, 3rd
District, Quezon 63. Rodolfo G. Plaza, NPC, Lone
District of Agusan del Sur 64. JV Bautista, Party
List-Sanlakas 65. Gregorio Ipong, NPC, 2nd
District, North Cotabato 66. Gilbert C. Remulla,
LDP, 2nd District, Cavite 67. Rolex T. Suplico,
LDP, 5th District, Iloilo 68. Celia Layus, NPC,
Cagayan 69. Juan Miguel Zubiri, Lakas, 3rd
District, Bukidnon 70. Benasing Macarambon Jr,.
NPC, 2nd District, Lanao del Sur 71. Josefina
Joson, NPC, Lone District of Nueva Ecija 72.
Mark Cojuangco, NPC, 5th District, Pangasinan
73. Mauricio Domogan, Lakas, Lone District of
Baguio City 74. Ronaldo B. Zamora, Pwersa ng
Masa, Lone District of San Juan 75. Angelo O.
Montilla, NPC, Lone District of Sultan Kudarat
76. Roseller L. Barinaga, NPC, 2nd District,
Zamboanga del Norte 77. Jesnar R. Falcon, NPC,
2nd District, Surigao del Sur 78. Ruy Elias
Lopez, NPC, 3rd District, Davao City.
[14] Rollo, G.R. No. 160261 at 5. Petitioner had
previously filed two separate impeachment
complaints before the House of Representatives
against Ombudsman Aniano Desierto.
[15] 299 SCRA 744 (1998). In Chavez v. PCGG,
petitioner Chavez argued that as a taxpayer and
a citizen, he had the legal personality to file a
petition demanding that the PCGG make public
any and all negotiations and agreements
pertaining to the PCGG’s task of recovering the
Marcoses’ ill-gotten wealth. Petitioner Chavez
further argued that the matter of recovering the
ill-gotten wealth of the Marcoses is an issue of
transcendental importance to the public. The
Supreme Court, citing Tañada v. Tuvera, 136
SCRA 27 (1985), Legaspi v. Civil Service
Commission, 150 SCRA 530 (1987) and Albano v.
Reyes, 175 SCRA 264 (1989) ruled that
petitioner had standing. The Court, however,
went on to elaborate that in any event, the
question on the standing of petitioner Chavez
was rendered moot by the intervention of the
Jopsons who are among the legitimate claimants
to the Marcos wealth.
[16] 384 SCRA 152 (2002). In Chavez v. PEA-
Amari Coastal Bay Development Corporation,
wherein the petition sought to compel the Public
Estates Authority (PEA) to disclose all facts on its
then on-going negotiations with Amari Coastal
Development Corporation to reclaim portions of
Manila Bay, the Supreme Court said that
petitioner Chavez had the standing to bring a
taxpayer’s suit because the petition sought to
compel PEA to comply with its constitutional
duties.
[17] 224 SCRA 792 (1993).
[18] Subsequent petitions were filed before this
Court seeking similar relief. Other than the
petitions, this Court also received Motions for
Intervention from among others, Sen. Aquilino
Pimentel, Jr., and Special Appearances by House
Speaker Jose C. de Venecia, Jr., and Senate
President Franklin Drilon.
[19] Supra note 2 at 10.
[20] Justice Florenz D. Regalado, Former
Constitutional Commissioners Justice Regalado E.
Maambong and Father Joaquin G. Bernas, SJ,
Justice Hugo E. Gutierrez, Jr., Former Minister of
Justice and Solicitor General Estelito P. Mendoza,
Deans Pacifico Agabin and Raul C. Pangalangan,
and Former Senate President Jovito R. Salonga,.
[21] Rollo, G.R. No. 160261 at 275-292.
[22] Id. at 292.
[23] 63 Phil 139 (1936).
[24] Id. at 157-159.
[25] Vide Alejandrino v. Quezon, 46 Phil 83
(1924); Tañada v. Cuenco, 103 Phil 1051 (1957);
Ynot v. Intermediate Appellate Court, 148 SCRA
659, 665 (1987).
[26] Const., art. VIII, sec. 1.
[27] 5 US 137 (1803).
[28] Id. at 180.
[29] In In re Prautch, 1 Phil 132 (1902), this
Court held that a statute allowing for
imprisonment for non-payment of a debt was
invalid. In Casanovas v. Hord, 8 Phil 125 (1907),
this Court invalidated a statute imposing a tax on
mining claims on the ground that a government
grant stipulating that the payment of certain
taxes by the grantee would be in lieu of other
taxes was a contractual obligation which could
not be impaired by subsequent legislation. In
Concepcion v. Paredes, 42 Phil 599 (1921),
Section 148 (2) of the Administrative Code, as
amended, which provided that judges of the first
instance with the same salaries would, by lot,
exchange judicial districts every five years, was
declared invalid for being a usurpation of the
power of appointment vested in the Governor
General. In McDaniel v. Apacible, 42 Phil 749
(1922), Act No. 2932, in so far as it declares
open to lease lands containing petroleum which
have been validly located and held, was declared
invalid for being a depravation of property
without due process of law. In U.S. v. Ang Tang
Ho, 43 Phil 1 (1922), Act No. 2868, in so far as it
authorized the Governor-General to fix the price
of rice by proclamation and to make the sale of
rice in violation of such a proclamation a crime,
was declared an invalid delegation of legislative
power.

[30] Vicente V. Mendoza, Sharing The Passion
and Action of our Time 62-53 (2003).
[31] Supra note 23.
[32] Id. at 156-157.
[33] Florentino P. Feliciano, The Application of
Law: Some Recurring Aspects Of The Process Of
Judicial Review And Decision Making, 37 AMJJUR
17, 24 (1992).
[34] Ibid.
[35] I Record of the Constitutional Commission
434-436 (1986).
[36] 31 SCRA 413 (1970)
[37] Id. at 422-423; Vide Baranda v. Gustilo, 165
SCRA 757, 770 (1988); Luz Farms v. Secretary
of the Department of Agrarian Reform, 192 SCRA
51 (1990); Ordillo v. Commission on Elections,
192 SCRA 100 (1990).
[38] 194 SCRA 317 (1991).
[39] Id. at 325 citing Maxwell v. Dow, 176 US
581.
[40] 152 SCRA 284 (1987).
[41] Id. at 291 citing Gold Creek Mining v.
Rodriguez, 66 Phil 259 (1938), J.M. Tuason &
Co., Inc v. Land Tenure Administration, supra
note 36, and I Tañada and Fernando,
Constitution of the Philippines 21 ( Fourth Ed. ).
[42] 82 Phil 771 (1949).
[43] Id. at 775.
[44] Supra note 38.
[45] Id. at 330-331.
[46] Id. at 337-338 citing 16 CJS 2.31;
Commonwealth v. Ralph, 111 Pa. 365, 3 Atl. 220
and Household Finance Corporation v. Shaffner,
203, SW 2d, 734, 356 Mo. 808.
[47] Supra note 2.
[48] Citing Section 3 (6), Article VIII of the
Constitution provides:
(6) The Senate shall have the
sole power to try and decide all cases of
impeachment. When sitting for that purpose, the
Senators shall be on oath or affirmation. When
the President of the Philippines is on trial, the
Chief Justice of the Supreme Court shall preside,
but shall not vote. No person shall be convicted
without the concurrence of two-thirds of all the
Members of the Senate.
[49] Supra note 21.
[50] 506 U.S. 224 (1993).
[51] Supra note 2 at 349-350 citing Gerhardt,
Michael J. The Federal Impeachment Process: A
Constitutional and Historical Analysis, 1996, p.
119.
[52] 227 SCRA 100 (1993).
[53] Id. at 112.
[54] US Constititon. Section 2. x x x The House
of Representatives shall have the sole Power of
Impeachment.
[55] 1987 Constitution, Article XI, Section 3 (1).
The House of Representatives shall have the
exclusive power to initiate all cases of
impeachment.
[56] Supra note 2 at 355 citing Agresto, The
Supreme Court and Constitutional Democracy,
1984, pp. 112-113.
[57] 369 U.S. 186 (1962).

[58] 141 SCRA 263 (1986).
[59] Supra note 25.
[60] 298 SCRA 756 (1998).
[61] 272 SCRA 18 (1997).
[62] 201 SCRA 792 (1991).
[63] 187 SCRA 377 (1990).
[64] 180 SCRA 496 (1989).
[65] Supra note 25.
[66] Supra note 23.
[67] Civil Liberties Union v. Executive Secretary,
supra note 38 at 330-331.
[68] Id. at 158-159.
[69] IBP v. Zamora, 338 SCRA 81 (2000) citing
Joya v. PCGG, 225 SCRA 568 (1993); House
International Building Tenants Association, Inc. v.
Intermediate Appellate Court, 151 SCRA 703
(1987); Baker v. Carr, supra note 57.
[70] Citing Kilosbayan, Inc. v. Morato, 250 SCRA
130 (1995).
[71] Citing Tatad v. Secretary of the Department
of Energy, 281 SCRA 330 (1997).
[72] Citing Kapatiran ng mga Naglilingkod sa
Pamahalaan ng Pilipinas, 163 SCRA 371, 378
(1988).
[73] Rule 3, Section 2. Parties in interest. — A
real party in interest is the party who stands to
be benefited or injured by the judgment in the
suit, or the party entitled to the avails of the suit.
Unless otherwise authorized by law or these
Rules, every action must be prosecuted or
defended in the name of the real party in
interest.
[74] JG Summit Holdings, Inc. v. Court of
Appeals, 345 SCRA 143, 152 (2000).
[75] 246 SCRA 540 (1995).
[76] Id. at 562-564.
[77] Agan v. PIATCO, G.R. No. 155001, May 5,
2003 citing BAYAN v. Zamora, 342 SCRA 449,
562-563 (2000) and Baker v. Carr, supra note
57; Vide Gonzales v. Narvasa,, 337 SCRA 733
(2000); TELEBAP v. COMELEC, 289 SCRA 337
(1998).
[78] Chavez v. PCGG, supra note 15.
[79] Del Mar v. PAGCOR 346 SCRA 485, 501
(2000) citing Kilosbayan, Inc., et.al. v. Morato,
supra note 70; Dumlao v. COMELEC, 95 SCRA
392 (1980); Sanidad v. Comelec, 73 SCRA 333
(1976); Philconsa v. Mathay, 18 SCRA 300
(1966); Pascual v. Secretary of Public Works,
110 Phil 331 (1960); Vide Gonzales v. Narvasa,
supra note 77; Pelaez v. Auditor General, 15
SCRA 569 (1965); Philconsa v. Gimenez, 15
SCRA 479 (1965); Iloilo Palay & Corn Planters
Association v. Feliciano, 13 SCRA 377 (1965).
[80] BAYAN v. Zamora, supra note 77 citing
Bugnay v. Laron, 176 SCRA 240, 251-252
(1989); Vide Del Mar v. PAGCOR, supra note 79;
Gonzales v. Narvasa, supra note 77; TELEBAP v.
COMELEC, supra note 77; Kilosbayan, Inc. v.
Morato, supra note 70; Joya v. PCGG, supra note
69; Dumlao v. COMELEC, supra note 79;
Sanidad v. COMELEC, supra note 79; Philconsa v.
Mathay, supra note 79; Pelaez v. Auditor
General, supra note 79; Philconsa v. Gimenez,
supra note 79; Iloilo Palay & Corn Planters
Association v. Feliciano, supra note 79; Pascual
v. Sec. of Public Works, supra note 79.
[81] Gonzales v. Narvasa, supra note 77 citing
Dumlao v. COMELEC, supra note 79; Sanidad v.
COMELEC, supra note 79; Tan v. Macapagal, 43
SCRA 677 (1972).
[82] Tatad v. Garcia, Jr., 243 SCRA 436 (1995);
Kilosbayan, Inc. v. Morato, supra note 70 at 140-
141 citing Philconsa v. Enriquez, 235 SCRA 506
(1994); Guingona v. PCGG, 207 SCRA 659
(1992); Gonzales v. Macaraig, 191 SCRA 452
(1990); Tolentino v. COMELEC, 41 SCRA 702
(1971).
[83] Del Mar v. PAGCOR, supra note 79 at 502-
503 citing Philconsa v. Mathay, supra note 79.
[84] Chinese Flour Importers Association v. Price
Stabilization Board, 89 Phil 439, 461 (1951)
citing Gallego et al. vs. Kapisanan Timbulan ng
mga Manggagawa, 46 Off. Gaz, 4245.
[85] Philippine Constitution Association v.
Gimenez, supra note 79 citing Gonzales v.
Hechanova, 118 Phil. 1065 (1963); Pascual v.
Secretary, supra note 79.
[86] Integrated Bar of the Philippines v. Zamora,
338 SCRA 81 (2000).
[87] MVRS Publications, Inc. v. Islamic Da’wah
Council of the Philippines, G.R. No. 135306,
January 28, 2003, citing Industrial Generating
Co. v. Jenkins 410 SW 2d 658; Los Angeles
County Winans, 109 P 640; Weberpals v. Jenny,
133 NE 62.
[88] Mathay v. Consolidated Bank and Trust
Company, 58 SCRA 559, 570-571 (1974), citing
Moore's Federal Practice 2d ed., Vol. III, pages
3423-3424; 4 Federal Rules Service, pages 454-
455; Johnson, et al., vs. Riverland Levee Dist., et
al., 117 2d 711, 715; Borlasa v. Polistico, 47 Phil.
345, 348 (1925).
[89] MVRS Publications, Inc. v. Islamic Da’wah
Council of the Philippines, supra note 87,
dissenting opinion of Justice Carpio; Bulig-bulig
Kita Kamag-Anak Assoc. v. Sulpicio Lines, 173
SCRA 514, 514-515 (1989); Re: Request of the
Heirs of the Passengers of Doña Paz, 159 SCRA
623, 627 (1988) citing Moore, Federal Practice,
2d ed., Vol. 3B, 23-257, 23-258; Board of
Optometry v. Colet, 260 SCRA 88 (1996), citing
Section 12, Rule 3, Rules of Court; Mathay v.
Consolidated Bank and Trust Co., supra note 88;
Oposa v. Factoran, supra note 17.
[90] Kilosbayan v. Guingona, 232 SCRA 110
(1994).
[91] Kilosbayan, Inc. v. Morato, supra note 70
citing Civil Liberties Union v. Executive Secretary,
supra note 38; Philconsa v. Giménez, supra note
79; Iloilo Palay and Corn Planters Association v.
Feliciano, supra note 79; Araneta v. Dinglasan,
84 Phil. 368 (1949); vide Tatad v. Secretary of
the Department of Energy, 281 SCRA 330
(1997); Santiago v. COMELEC, 270 SCRA 106
(1997); KMU v. Garcia, Jr., 239 SCRA 386
(1994); Joya v. PCGG, 225 SCRA 368 (1993);
Carpio v. Executive Secretary, 206 SCRA 290
(1992); Osmeña v. COMELEC, 199 SCRA 750
(1991); Basco v. PAGCOR, 197 SCRA 52 (1991);
Guingona v. Carague, 196 SCRA 221 (1991);
Daza v. Singson, supra note 64; Dumlao v.
COMELEC, supra note 79.
[92] Firestone Ceramics, Inc. v. Court of Appeals,
313 SCRA 522, 531 (1999) citing Gibson vs.
Revilla, 92 SCRA 219; Magsaysay-Labrador v.
Court of Appeals, 180 SCRA 266, 271 (1989).
[93] Supra note 79.
[94] Id. at 403.
[95] Supra note 81.
[96] Id. at 681.
[97] SECTION 3. xxx
(2) A verified complaint for impeachment
may be filed by any Member of the House of
Representatives or by any citizen upon a
resolution of endorsement by any Member
thereof, which shall be included in the Order of
Business within ten session days, and referred to
the proper Committee within three session days
thereafter. The Committee, after hearing, and by
a majority vote of all its Members, shall submit
its report to the House within sixty session days
from such referral, together with the
corresponding resolution. The resolution shall be
calendared for consideration by the House within
ten session days from receipt thereof.
(3) A vote of at least one-third of all the
Members of the House shall be necessary either
to affirm a favorable resolution with the Articles
of Impeachment of the Committee, or override its
contrary resolution. The vote of each Member
shall be recorded.
[98] Supra note 25.
[99] Id. at 1067.
[100] Vide Barcelon v. Baker, 5 Phil. 87 (1905);
Montenegro v. Castañeda, 91 Phil. 882 (1952);
De la Llana v. COMELEC, 80 SCRA 525 (1977).
[101] Vide Avelino v. Cuenco, 83 Phil. 17 (1949);
Macias v. COMELEC, 3 SCRA 1 (1961); Cunanan
v. Tan, Jr., 5 SCRA 1 (1962); Gonzales v.
COMELEC, 21 SCRA 774 (1967); Lansang v.
Garcia, 42 SCRA 448 (1971); Tolentino v.
COMELEC, supra note 82.
[102] 50 SCRA 30 (1973).
[103] Record of the Constitution Commission,
Vol. 1, July 10, 1986 at 434-436.
[104] Id. at 439-443.
[105] 177 SCRA 668 (1989).
[106] Id. at 695.
[107] 203 SCRA 767 (1991).
[108] Id. at 776 citing Gonzales v. Macaraig,
191 SCRA 452, 463 (1990).
[109] Supra note 64.
[110] Id. at 501.
[111] Supra note 57.
[112] Id at 217.
[113] 2 Record of the Constitutional Commission
at 286.
[114] Id. at 278, 316, 272, 283-284, 286.
[115] 76 Phil 516 (1946).
[116] Id. at 522.
[117] Supra note 37.
[118] Id. at 58 citing Association of Small
Landowners in the Philippines, Inc. v. Secretary
of Agrarian Reform, 175 SCRA 343 (1989).
[119] Vide concurring opinion of Justice Vicente
Mendoza in Estrada v.Desierto, 353 SCRA 452,
550 (2001); Demetria v. Alba, 148 SCRA 208,
210-211 (1987) citing Ashwander v. TVA, 297
U.S. 288 (1936).
[120] As adverted to earlier, neither a copy the
Resolution nor a record of the hearings conducted
by the House Committee on Justice pursuant to
said Resolution was submitted to the Court by
any of the parties.
[121] Rollo, G.R. No. 160310 at 38.
[122] Supra note 107.
[123] Id. at 777 (citations omitted).
[124] Rollo, G.R. No. 160262 at 73.
[125] Supra note 2 at 342.
[126] Perfecto v. Meer, 85 Phil 552, 553 (1950).
[127] Estrada v. Desierto, 356 SCRA 108, 155-
156 (2001); Vide Abbas v. Senate Electoral
Tribunal, 166 SCRA 651 (1988); Vargas v.
Rilloraza, et al., 80 Phil. 297, 315-316 (1948);
Planas v. COMELEC, 49 SCRA 105 (1973),
concurring opinion of J. Concepcion.
[128] Philippine Judges Association v. Prado, 227
SCRA 703, 705 (1993).
[129] Ibid.
[130] Ramirez v. Corpuz-Macandog, 144 SCRA
462, 477 (1986).
[131] Supra note 127.
[132] Estrada v. Desierto, supra note 127.
[133] Id. at 155-156 citing Abbas, et al. v.
Senate Electoral Tribunal, supra note 127;
Vargas v. Rilloraza, et al., supra note 127.
[134] Supra note 119 at 210-211.
[135] Supra note 119.
[136] Board of Optometry v. Colet, 260 SCRA 88,
103 (1996); Joya v. PCGG, supra note 69 at 575;
Macasiano v. National Housing Authority, 224
SCRA 236, 242 (1993); Santos III v.
Northwestern Airlines, 210 SCRA 256, 261-262
(1992), National Economic Protectionism
Association v. Ongpin, 171 SCRA 657, 665
(1989).
[137] Supra note 2 at 353.
[138] Supra note 33 at 32.
[139] Supra note 102.
[140] Supra note 33.
[141] 249 SCRA 244, 251 (1995).
[142] Id. at 251.
[143] 2 Records of the Constitutional Commission
at 342-416.
[144] Id. at 416.
[145] Commissioner Maambong’s Amicus Curiae
Brief at 15.
[146] 2 Record of the Constitutional Commission
at 375-376, 416
[147] 77 Phil. 192 (1946).
[148] Justice Hugo Guiterrez’s Amicus Curiae
Brief at 7.
[149] 109 Phil. 863 (1960).
[150] 40 SCRA 58, 68 (1971).
[151] 286 U.S. 6, 33 (1932).
[152] 277 SCRA 268, 286 (1997).
[153] 144 U.S. 1 (1862).
[154] Supra note 152 at 304-306.
[155] Id at 311.
[156] Id. at 313.
[157] Supra note 152 at 314-315.
[158] Supra note 50.
CHINA BANKING CORPORATION and TAN
KIM LIONG, petitioners-appellants, vs. HON.
WENCESLAO ORTEGA, as Presiding Judge of
the Court of First Instance of Manila, Branch
VIII, and VICENTE G. ACABAN, respondents-
appellees.1973-01-312nd Division1973
January 31D E C I S I O N
MAKALINTAL, J:
The only issue in this petition for certiorari to
review the orders dated March 4, 1972 and
March 27, 1972, respectively, of the Court of
First Instance of Manila in its Civil Case No.
75138, is whether or not a banking institution
may validly refuse to comply with a court process
garnishing the bank deposit of a judgment
debtor, by invoking the provisions of Republic Act
No. 1405. *
On December 17, 1968 Vicente Acaban filed a
complaint in the court a quo against Bautista
Logging Co., Inc., B & B Forest Development
Corporation and Marino Bautista for the collection
of a sum of money. Upon motion of the plaintiff
the trial court declared the defendants in default
for failure to answer within the reglementary
period, and authorized the Branch Clerk of Court
and/or Deputy Clerk to receive the plaintiff's
evidence. On January 20, 1970 a judgment by
default was rendered against the defendants.
To satisfy the judgment, the plaintiff sought the
garnishment of the bank deposit of the defendant
B & B Forest Development Corporation with the
China Banking Corporation. Accordingly, a notice
of garnishment was issued by the Deputy Sheriff
of the trial court and served on said bank through
its cashier, Tan Kim Liong. In reply, the bank's
cashier invited the attention of the Deputy Sheriff
to the provisions of Republic Act No. 1405 which,
it was alleged, prohibit the disclosure of any
information relative to bank deposits. Thereupon
the plaintiff filed a motion to cite Tan Kim Liong
for contempt of court.
In an order dated March 4, 1972 the trial court
denied the plaintiff's motion. However, Tan Kim
Lion was ordered "to inform the Court within five
days from receipt of this order whether or not
there is a deposit in the China Banking
Corporation of defendant B & B Forest
Development Corporation, and if there is any
deposit, to hold the same intact and not allow
any withdrawal until further order from this
Court." Tan Kim Liong moved to reconsider but
was turned down by order of March 27, 1972. In
the same order he was directed "to comply with
the order of this Court dated March 4, 1972
within ten (10) days from the receipt of copy of
this order, otherwise his arrest and confinement
will be ordered by the Court." Resisting the two
orders, the China Banking Corporation and Tan
Kim Liong instituted the instant petition.
The pertinent provisions of Republic Act No. 1405
relied upon by the petitioners reads:
"Sec. 2. All deposits of whatever nature with
banks or banking institutions in the Philippines
including investments in bonds issued by the
Government of the Philippines, its political
subdivisions ,and its instrumentalities, are hereby
considered as of absolutely confidential nature
and may not be examined, inquired or looked
into by any person, government official, bureau
or office, except upon written permission of the
depositor, or in cases of impeachment, or upon
order of a competent court in cases of bribery or
dereliction of duty of public officials, or in cases
where the money deposited or invested is the
subject matter of the litigation.
"Sec. 3. It shall be unlawful for any official or
employee of a banking institution to disclose to
any person other than those mentioned in
Section two hereof any information concerning
said deposits.
"Sec. 5. Any violation of this law will subject
offender upon conviction, to an imprisonment of
not more than five years or a fine of not more
than twenty thousand pesos or both, in the
discretion of the court."
The petitioners argue that the disclosure of the
information required by the court does not fall
within any of the four 1(4) exceptions
enumerated in Section 2, and that if the
questioned orders are complied with Tan Kim
Liong may be criminally liable under Section 5
and the bank exposed to a possible damage suit
by B & B Forest Development Corporation.
Specifically referring to this case, the position of
the petitioners is that the bank deposit of
judgment debtor B & B Forest Development
Corporation cannot be subject to garnishment to
satisfy a final judgment against it in view of the
aforequoted provisions of law.
We do not view the situation in that light. The
lower court did not order an examination of or
inquiry into the deposit of B & B Forest
Development Corporation, as contemplated in the
law. It merely required Tan Kim Liong to inform
the court whether or not the defendant B & B
Forest Development Corporation had a deposit in
the China Banking Corporation only for purposes
of the garnishment issued by it, so that the bank
would hold the same intact and not allow any
withdrawal until further order, It will be noted
from the discussion of the conference committee
report on Senate Bill No. 351 and House Bill No.
3977, which later became Republic Act No, 1405,
that it was not the intention of the lawmakers to
place bank deposits beyond the reach of
execution to satisfy a final judgment. Thus:
"Mr. MARCOS.
Now, for purposes of the record, I should like the
Chairman of the Committee on Ways and Means
to clarify this further. Suppose an individual has a
tax case. He is being held liable by the Bureau of
Internal Revenue for, say, P1,000.00 worth of tax
liability, and because of this the deposit of this
individual is attached by the Bureau of Internal
Revenue.
"Mr. RAMOS.
The attachment will only apply after the court has
pronounced sentence declaring the liability of
such person. But where the primary aim is to
determine whether he has a bank deposit in
order to bring about a proper assessment by the
Bureau of Internal Revenue, such inquiry is not
authorized by this proposed law.
So I come to my original question. Therefore,
preliminary garnishment or attachment of the
deposit is not allowed?

"Mr. MARCOS.
"Mr. RAMOS.

But under our rules of procedure and under the

Civil Code, the attachment or garnishment of No, without judicial authorization.
money deposited is allowed.

"Mr. MARCOS.
Let us assume, for instance, that there is a
preliminary attachment which is for garnishment
or for holding liable all moneys deposited
I am glad that is clarified. So that the established
belonging to a certain individual, but such
rule of procedure as well as the substantive law
attachment or garnishment will bring out into the
on the matter is amended?
open the value of such deposit. Is that prohibited
by this amendment or by this law?

"Mr. RAMOS.
"Mr. RAMOS.

Yes. That is the effect.

It is only prohibited to the extent that the inquiry
is limited, or rather, the inquiry is made only for
the purpose of satisfying a tax liability already
declared for the protection of the right in favor of
the government; but when the object is merely
to inquire whether he has a deposit or not for
purposes of taxation, then this is fully covered by
the law.
"Mr. MARCOS.
And it protects the depositor, does it not?
"Mr. MARCOS.
I see. Suppose there has been a decision,
definitely establishing the liability of an individual
for taxation purposes and this judgment is sought
to be executed.. in the execution of that
judgment, does this bill, or this proposed law, if
approved, allow the investigation or scrutiny of
the bank deposit in order to execute the
judgment?

"Mr. RAMOS.
"Mr. RAMOS. To satisfy a judgment which has become
executory.

Yes, it protects the depositor.

"Mr. MARCOS.

Yes, but, as I said before, suppose the tax

"Mr. MARCOS.
liability is P1,000,000 and the deposit is half a
million, will this bill allow scrutiny into the deposit
in order that the judgment may be executed?
The law prohibits a mere investigation into the
existence and the amount of the deposit.
"Mr. RAMOS.

"Mr. RAMOS. Merely to determine the amount of such money

to satisfy that obligation to the Government, but
not to determine whether a deposit has been
made in evasion of taxes."
into the very nature of such deposit.

xxx xxx xxx

"Mr. MARCOS.

"Mr. MACAPAGAL.
But let us suppose that in an ordinary civil action
for the recovery of a sum of money the plaintiff
wishes to attach the properties of the defendant
to insure the satisfaction of the judgment. Once
the judgment is rendered, does the gentleman
mean that the plaintiff cannot attach the bank
deposit of the defendant?
"Mr. RAMOS.
That was the question raised by the gentleman
from Pangasinan to which I replied that outside
the very purpose of this law it could be reached
by attachment.
"Mr. MACAPAGAL.
Therefore, in such ordinary civil cases it can be
attached?
"Mr. RAMOS.
That is so.
(Vol. II, Congressional Record, House of
Representatives, No. 12, pp. 3839-3840, July 27,
1955)
It is sufficiently clear from the foregoing
discussion of the conference committee report of
the two houses of Congress that the prohibition
against examination of or inquiry into a bank
deposit under Republic Act 1405 does not
preclude its being garnished to insure satisfaction
of a judgment. Indeed there is no real inquiry in
such a case, and if the existence of the deposit is
disclosed the disclosure is purely incidental to the
execution process. It is hard to conceive that it
was ever within the intention of Congress to
enable debtors to evade payment of their just
debts, even if ordered by the Court, through the
expedient of converting their assets into cash and
depositing the same in a bank.
WHEREFORE, the orders of the lower court dated
March 4 and 27, 1972, respectively, are hereby
affirmed, with costs against the petitioners-
appellants.
Zaldivar, Castro, Fernando, Barredo, Makasiar,
Antonio and Esguerra., JJ., concur.
Concepcion, C.J. and Teehankee, J., did not take
part.
Footnotes
An Act Prohibiting Disclosure of or Inquiry into,
posits with any Banking Institution and Providing
Penalty Therefor.
[2000V1455ESD] [1/5] RAOUL B. DEL MAR,
petitioner, vs. PHILIPPINE AMUSEMENT
AND GAMING CORPORATION, BELIE JAI-
ALAI CORPORATION, FILIPINAS GAMING
ENTERTAINEMENT TOTALIZATOR
CORPORATION, respondents.2000 Nov 29En
BancG.R. No. 138298PUNO, J.:
These two consolidated petitions concern the
issue of whether the franchise granted to the
Philippine Amusement and Gaming Corporation
(PAGCOR) includes the right to manage and
operate jai-alai.
First, we scour the significant facts. The
Philippine Amusement and Gaming Corporation is
a government-owned and controlled corporation
organized and existing under Presidential Decree
No. 1869 which was enacted on July 11, 1983.
Pursuant to Sections 1 and 10 of P.D. No. 1869,
respondent PAGCOR requested for legal advice
from the Secretary of Justice as to whether or
not it is authorized by its Charter to operate and
manage jai-alai frontons in the country. In its
Opinion No. 67, Serious of 1996 dated July 15,
1996, the Secretary of Justice opined that “the
authority of PAGCOR to operate and maintain
games of chance or gambling extends to jai-alai
which is a form of sport or game played for bets
and that purpose.” Similar favorable opinions
were received by PAGCOR 1996 and the Office of
the Solicitor General per its letter dated June 3,
1996 and the Office of the Government
Corporation Counsel under its Opinion No. 150
dated June 14, 1996. Thus, PAGCOR started the
operation of jai-alai frontons.
On May 6, 1999, petitioner Raoul B. del Mar
initially filed in G.R. No. 138298 a Petitioner for
Prohibition to prevent respondent PAGCOR from
managing and/or operating the jai-alai or Basque
pelota games, by itself or in agreement with Belle
Corporation, on the ground that the controverted
act is patently illegal and devoid of any basis
either from the Constitution or PAGCOR’s own
Charter.
However, on June 17, 1999, respondent PAGCOR
entered into an Agreement with private
respondents Belle Jai Alai Corporation (BELLE)
and Filipinas Gaming Entertainment Totalizator
Corporation (FILGAME) wherein it was agreed
that BELLE will make available to PAGCOR the
required infrastructure facilities including the
main fronton, as well as provide the needed
funding for jai-alai operations with no financial
outlay from PAGCOR, while PAGCOR handles the
actual management and operation of jai-alai.
Thus, on August 10, 1999, petitioner Del Mar
filed a Supplemental Petition for Certiorari
questioning the validity of said Agreement on the
ground that PAGCOR is without jurisdiction,
legislative opening, establishment, operation,
control and management of jai-alai games.
A little earlier, or on July 1, 1999, petitioners
Federico S. Sandoval and Michael T. Defensor
filed a Petition for Injunction, docketed as G.R.
No. 138982,which seeks to enjoin respondent
PAGCOR from operation or otherwise managing
the jai-alai or Basque pelota games by itself or in
joint venture with Belle Corporation, for being
patently illegal, having no basis in the law or the
Constitution, and in usurpation of the authority
that properly pertains to the legislative branch of
the government. In this case, a Petition in
Intervention was filed by Juan Miguel Zubiri
alleging that the operation by PAGCOR of jai-alai
is illegal because it is not included in the scope of
PAGCOR’s franchise which covers only games of
chance.
Petitioners Raoul B. del Mar, Federico S.
Sandoval II, Michael T. Defensor, and intervenor
Juan Miguel Zubiri, are suing as taxpayers and in
their capacity as members of the House of
Representatives representing the First District of
Cebu City, the Lone Congressional District of
Malabon-Navotas, the Third Congressional
District of Quezon City, and the Third
Congressional District of Bukidnon, respectively.
The bedrock issues spawned by the petitions at
bar are:
G.R. No. 138298
Petitioner Del Mar raises the following issues:
I. The respondent PAGCOR has no jurisdiction or
legislative franchise or acted with grave abuse of
discretion, tantamount to lack or excess of
jurisdiction, in arrogating unto itself the authority
or power to open, pursue, conduct, operate,
control and manage jai-alai game operations in
the country.
II. x x x Respondent PAGCOR has equally no
jurisdiction or authority x x x in executing its
agreement with co-respondents Belle and
Filgame for the conduce and management of jai-
alai game operations, upon undue reliance on an
opinion of the Secretary of Justice.
III. x x x Respondent PAGCOR has equally no
jurisdiction or authority x x x in entering into a
partnership, joint venture or business
arrangement with its co-respondents Belle and
Filgame, through their agreement x x x. The
Agreement was entered into through manifest
partiality and evident bad faith (Sec. 3 [e], RA
3019), thus manifestly and grossly
disadvantageous to the government [Anti-Graft
and Corrupt Practices Act, RA 3019, Sec. 3(g)].
IV. x x x Respondent PAGCOR has equally no
jurisdiction or authority x x x to award to its co-
respondents Belle and Filgame the right to avail
of the tax benefits which, by law, inures solely
and exclusively to PAGCOR itself.
V. x x x Respondent PAGCOR has equally no
jurisdiction or authority x x x to cause the
disbursement of funds of the illegal
establishment, management and operation of jai-
alai game operations.
VI. x x x Respondent PAGCOR has equally no
jurisdiction or authority x x x award or grant
authority for the establishment, management and
operation of off-fronton betting stations or
bookies.
VII. The respondent PAGCOR has no jurisdiction
or authority x x x in awarding unto its co-
respondents Belle and Filgame, without public
bidding, subject agreement.
In defense, private respondents BELLE and
FILGAME assert:
1. The petition states no cause of action and
must be dismissed outright;
2. The petitioner has no cause of action against
the respondents, he not being a real party in
interest.
3. The instant petition cannot be maintained as a
taxpayer suit, there being no illegal disbursement
of public funds involved;
4. The instant petition is essentially an action for
quo warranto and may only be commenced by
the Solicitor General;
5. The operation of jai-alai is well within
PAGCOR’s authority to operate and maintain.
PAGCOR’s franchise is intended to be wide in its
coverage, the underlying considerations being,
that: (1) the franchise must be used to integrate
all gambling operations is one corporate entity
(i.e. PAGCOR); and (2) it must be used to
generate funds for the government to support its
social impact projects;
6. The agreement executed by, between and
among PAGCOR, BJAC and FILGAME is outside
the coverage of existing laws requiring public
bidding.
Substantially the same defense were raised by
respondent PAGCOR in its Comment.
G.R. No. 138982
Petitioners contend that:
I. The operation of jai-alai games by PAGCOR is
illegal in that:
1) the franchise of PAGCOR does not include the
operation of jai-alai since jai-alai is a prohibited
activity under the Revised Penal Code, as
amended by P.D. No. 1602 which is otherwise
known as the Anti-Gambling Law;
2) Jai-alai is not a game of chance and therefore
cannot be the subject of a PAGCOR franchise.
II. A franchise is a special privilege that should
be construed strictly against the grantee.
III. To allow PAGCOR to operate jai-alai under its
charter is tantamount to a license to PAGCOR to
legalize and operate any gambling activity.
In its Comment, respondent PAGCOR avers that:
1. An action for injunction is not among the cases
or proceedings originally cognizable by the
Honorable Supreme Court, pursuant to Section 1,
Rule 56 of the 1997 Rules of Civil Procedure.
2. Assuming, arguendo, the Honorable Supreme
Court has jurisdiction over the petition, the
petition should be dismissed for failure of
petitioners to observe the doctrine on hierarchy
of courts.
3. x x x Petitioners have no legal standing to file
a taxpayer’s suit based on their cause of action
nor are they the real parties-in-interest entitled
to the avails of the suit.
4. Respondent’s franchise definitely includes the
operation of jai-alai.
5. Petitioners have no right in esse to be entitled
to a temporary restraining order and/or to be
protected by a writ of preliminary injunction.
The solicitor General claims that the petition,
which is actually an action for quo warranto
under Rules of Court, against an alleged
usurpation by PAGCOR of a franchise to operate
jai alai, should be dismissed outright because
only the Solicitor General or public prosecutor
can file the same; that P.D. No. 1869, the
Charter of PAGCOR, authorizes PAGCOR to
regulate and operate games of chance and skill
which include jai-alai; and that P.D. No. 1602 did
not outlaw jai-alai but merely provided for stiffer
penalties to illegal or unauthorized activities
related to jai-alai and other forms of gambling.
We shall first rule on the important procedural
issued raised by the respondents.
Respondents in G.R. No. 138982 contend that the
Court has no jurisdiction to take original
cognizance of a petition for injunction because it
is not one of those actions specifically mentioned
in Section 1 of Rule 56 of the 1997 Rules of Civil
Procedure. Moreover, they urge that the petition
should be dismissed for failure of petitioners to
observe the doctrine on hierarchy of courts.
It is axiomatic that what determines the nature
of an action and hence, the jurisdiction of the
court, are the allegations of the pleading and the
character of the relief sought. A cursory perusal
of the petition filed in G.R. No. 138982 will show
that it is actually one for Prohibition under
Section 2 Rule 65 for it seeks to prevent PAGCOR
from managing, maintaining and operating jai-
alai games. Even assuming, arguendo, that it is
an action for injunction, this Court has the
discretionary power to take cognizance of the
petition at bar if compelling reasons, or the
nature and importance of the issues raised,
warrant the immediate exercise of its jurisdiction.
It cannot be gainsaid that the issues raised in the
present petitioners have generated an oasis of
concern, even days of disquiet in view of the
public interest at stake. In Tano, et al. Vs.
Socrates, et al., this Court did not hesitate to
treat a petition as a special civil action for
certiorari and prohibition to resolve an issue of
far-reaching impact to our people. This is in
consonance with our case law now accorded near
religious reverence that rules of procedure are
but tools designed to facilitate the attainment of
justice such that when its rigid application tends
to frustrate rather than promote substantial
justice, this Court has the duty to suspend their
operation.
Respondents also assail the locus standi or the
standing of petitioners to file the petitions at bar
as taxpayer’s suit because the operation of jai-
alai does not involve the disbursement of public
funds.
Respondent’s stance is not without oven ready
legal support. A party suing as a taxpayer must
specifically prove that he has sufficient interest in
preventing the illegal expenditure of money
raised by taxation. In essence, taxpayers are
allowed to sue where there is a claim of illegal
disbursement of public funds, or that public
money is being deflected to any improper
purpose, or where petitioners seek to restrain
respondent of an invalid or unconstitutional law.
In the petitions at bar, the Agreement entered
into between PAGCOR and private respondents
BELLE and FILGAME will show that all financial
outlay or capital expenditure for the operation of
jai-alai games shall be provided for by the later.
Thus, the Agreement provides, among other,
that: PAGCOR shall manage, operate and control
the jai-alai operation at no cost or financial risk
to it (Sec. 1 [A][1]; BELLE shall provide funds, at
no cost to PAGCOR, for all capital expenditures
(Sec. 1 [B][1]; BELLE shall make available to
PAGCOR, at no cost to PAGCOR, the use of the
integrated nationwide network of on-line
computerized systems (Sec. 1 [B][2]; FILGAME
shall make available for use of PAGCOR on a
rent-free basis the jai-alai fronton facilities (Sec.
1 [C][1]; BELLE &FILGAME jointly undertake to
provide funds, at no cost to PAGCOR, for pre-
operating expenses and working capital (Sec. 1
[D][1]; and that BELLE & FILGAME will provide
PAGCOR with goodwill money in the amount of
P200 million (Sec. 1 [D][2]. In fine, the record is
barren of evidence that the operation and
management of jai-alai by the PAGCOR involves
expenditure of public money.
Be that as it may, in line with the liberal policy of
this Court on locus standi when a case involves
an issue of overarching significance to our
society, we find and so hold that as members of
the House of Representatives, petitioners have
legal standing to file the petitions at bar. In the
instant cases, petitioners complain that the
operation of jai-alai constitutes an infringement
by PAGCOR of the legislature’s exclusive power to
grant franchise. To the extent the powers of
Congress are impaired, so is the power of each
member thereof, since his office confers a right
to participate in the exercise of the powers of
that institution, so petitioners contend. The
contention commands our concurrence for it is
now settled that a member of the House of
Representative has standing to maintain inviolate
the prerogatives, powers and privileges vested by
the Constitution in his office. As presciently
stressed in the case of Kilosbayan, Inc., vis.:
“We find the instant petition to be of
transcendental importance to the public. The
issue it raised are of paramount public interest
and of a category even higher than these
involved I many of the aforecited cases. The
ramifications of such issues immeasurably affect
the social, economic, and moral well-being of the
people even in the remotest barangays of the
country and the counter-productive and
retrogressive effects off the envisioned online
lottery system are as staggering as the billion in
pesos it is expected to raise.t he legal standing
then of the petitioners deserves recognation.
After hurdling the threshold procedural issues, we
now come to the decisive substantive issue of
whether PAGCOR’s legislative franchise includes
the right to manage and operate jai-alai. The
issue is of supreme significance for its incorrect
resolution can dangerously diminish the penalty
legislative power to Congress, more especially its
exercise of police power to protect the morality
positions of the parties, we hold that the charter
of PAGCOR does not give it any franchise to
operate and manage jai-alai.
FIRST. A “franchise” is a special privilege
conferred upon a corporation or individual by a
government duly empowered legally to_____
Philconsa vs. Mathay, supra.
The games was introduced to the country during
the Spanish colonial. He first games were played
at a fronton in Numacia Street, Binondo, Manila.
in 1917, the games were moved to a larger
fronton at the corner of Taft Avenue and Luis
Street in Ermita where it gained popularity. From
a plain sports, jai-alai became a form of gambling
when the Philippines Legislature issued a
franchise legalizing betting in June 1939. The
fronton was then operated by the Madrigals, a
family close to Commonwealth President Manuel
Quezon Devastated by the World War II, the
froton was rebuilt in 1948. During the term of
President Marcos, the jai-alai franchise was
granted to the Romualdez family. After the EDSA
revolution, the Aquino administration closed
down jai-alai. Then, in 1994, during the term of
President Ramos, the location in Harrison Plaza,
Manila. however, after only a few months of
operation, this Court ruled that a congressional
franchise was required for the games.
Grant it. It is a privilege of public concern which
cannot be exercised at will and pleasure, but
should be reserved for the public control and
administration, either by the government
directly, or by public agents, under such
conditions and regulations as the government
may impose on them in the interest of the public.
A franchise thus enamates from a sovereign
power and the grant is inherently a legislative
power. It may, however, be derived indirectly
from the state through an agency to which the
power has been clearly and validly delegated. In
such cases, Congress prescribes the conditioned
on which the grant of a franchise may be
granted, the mode of conducting the business,
the character and quality of the service to be
rendered and the duty of the grantee to the
public in exercising the franchise are almost
always defined in clear and unequivocal
language. In the absence of these defining terms,
any claim to a legislative franchise to operate a
game played for bets and denounced as a
menace to morality ought to be rejected.
Second. A historical study of the creation, growth
and development of PAGCOR will readily show
that it was never given a legislative franchise to
operate jai-alai.
(2.a) Before the creation of PAGCOR, a 25-year
right to operate jai-alai in Manila was given by
the President Marcos to the Philippine Jai-Alai and
Amusement of Corporation than controlled by his
in laws, the Romualdez family. The franchise was
granted on October 16, 1975 thru P.D. No. 810
issued by the President Marcos in the exercise of
his martial law powers. On that every date, the
25-year franchise of the prior grantee expired
and was not removed. A few months before,
President Marcos had was not renewed. A few
months before, President Marcos had issued P.D.
No. 771 dated August 20, 1975, revoking the
authority of local government units to issue jai-
alai franchise. By these acts, the former
President exercised complete control of the
sovereign power to grant franchises.
(2.b) Almost one year and half after granting the
Philippines Jai-Alai and Amusement Corporation a
25-year franchise to operate jai-alai in Manila.
President Marcos created PAGCOR on January 1,
1997 by issuing P.D. No. 1067-A. the decree is
entitled “Creating the Philippine Amusement and
Gaming Corporation, Defining Its Power and
Function, Providing Funds therefore and for Other
Purposes.” Its Declaration of Policy trumpeted
the intent that PAGCOR was created to
implement “the policy of the State to centralize
and integrate all games of chance not herefore
authorized by existing franchises or permitted by
law. One of its whereas clauses referred to the
need to prevent “ proliferation of illegal casino or
clubs conducting games of chance. To activate
this objective, PAGCOR was empowered “to
establish and maintain clubs, casinos, branches,
agencies or subsidiaries, or other units anywhere
in the Philippines.
(2.c) On the same day after creating PAGCOR
Marcos issued P.D. No. 1067-B granting PAGCOR
“a franchise to Establish, Operate, and Maintain
Gambling Casinos on Land or Water Within the
Territorial Jurisdiction of the Republic of the
Philippines. Obviously, P.D. No. 1067-A which
created the PAGCOR is not a grant of franchise to
operate the game of jai-alai. On the other hand,
Section 1 of P.D. No. 1067-B provides the nature
and term of PAGCOR’s franchise to maintain
gambling casinos (not a franchise to operate jai-
alai), vis,:
“Section 1. NATURE AND TERM OD FRANCHISE.-
Subject to the terms and conditions established
in this Decree, the Philippine Amusement and
Gaming Corporation is hereby granted for a
period of twenty-five (25) years, renewable for
another 25 years, the right, privilege, and
authority to operate and maintain gambling
casinos, clubs and other recreation or
amusement places, sports, gaming polls, i.e.
basketball, football, etc., whether on land or
sea,, within the territorial jurisdiction of the
Republic of the Philippines.
Section 2 of the same decree spells out the scope
of the PAGCOR franchise to maintain gambling
casinos (not a franchise to operate jai-alai), vis.:
“Sec. 2. SCOPE O FRANCHISE.- In addition to the
right and privileges granted it under Sec. 1,
Franchise shall entitle the franchise holder to do
and undertaken the following:
(1) Enter into operator’s and/or management
contracts with duly registered and accredited
company possessing the knowledge, skill,
expertise and facilities to insure the efficient
operation of gambling casinos; Provided, That the
service may bee retained by the franchise holder
of this Franchise shall not in the aggregate
exceed ten (10%) percent of the gross income.
(2) Purchase foreign exchange that may be
required for the importation of equipment,
facilities and other gambling paraphernalia
indispensably needed or useful to insure the
successful operation of gambling casinos.
(3) Acquire the right of way, access to or thru
public lands, public waters or harbors, including
the Manila Bay Area; such right to include, but
not limited to, the right to lease and/or purchase
public lands, government reclaimed lands, as well
as land of private ownership of those leased from
the government. This right shall carry with it the
privilege of the franchise holder to utilize piers,
quays, boat landings, and such other pertinent
and related facilities within these specified areas
for use as landing, anchoring, or berthing sites in
connection with its authorized casino operations.
(4) Build or construct structures, buildings,
coastways, piers, docks, as well as any other
from of land and berthing of chance in
accordance with existing laws and decrees.
(2.d) Still on the day after creating PAGCOR,
President Marcos issued P.D. No. 1067-C
amending P.D. Nos. 1067-A and B. the
amendment provides that PAGCOR’s franchise to
maintain gambling casinos “shall become
exclusive in character, subject only to the
exception of existing franchises and games of
chance therefore permitted by law, upon the
generation by the franchise holder of gross
revenues amounting to P 1.2 billion and its
contribution therefrom of the amount of P 720
million as the government’s share.”
(2.e) On June 2, 1978, President Marcos issued
P.D. No. 1399 amending P.D. Nos. 1067-A and
1067-B. The amendments did not change the
nature and scope of the PAGCOR franchise to
maintain gambling casinos. Rather, they referred
to the Composition of the Board of Directors,
Special Condition of Franchise, Exemption, and
Other Conditions.
(2.f) On August 13, 1979, President Marcos
issued P.D. No. 1632. Again, the amendments
did not charge a comma on the nature and scope
of PAGCOR franchise to maintain gambling
casinos. They related to the allocation of the 60%
share of the government where the host area is
a city or municipality other than Metro Manila,
and the manner of payment of franchise tax of
PAGCOR.
(2.g) On July 11, 1983, President Marcos issued
P.D. No. 1869 entitled “Consolidating and
Amending P.D. Nos. 1067-A, 1067-B, 1067-C,
1399 and 1632 Relative to the Franchise and
Power of the PAGCOR,” As consolidated decree, it
reiterated the nature and scope of PAGCOR’s
existing franchise to maintain gambling casinos
(mot a franchise to operate jai-alai), thus:
“SEC. 10. Nature and term of franchise.- Subject
to the terms and conditions established in this
Decree, the Corporation is hereby granted for a
period of twenty-five (25) years, renewable for
another twenty-five (25) years, the rights,
privilege and authority to operate and maintain
gambling casinos, clubs, and other recreation or
amusement places, sports, gaming pools, i.e.
basketball, football, lotteries, etc. whether on
land or sea, within the territorial jurisdiction of
the Republic of the Philippines.
SEC. 11. Scope of Franchise.- In addition to the
right and privileges granted it under the
preceding Section, this Franchise shall entitle the
corporation to and undertake the following:
(1) Enter into operating and/or management
contracts with any registered and accredited
possessing the knowledge, skill, expertise and
facilities to insure the efficient operation of
gambling casinos; provided, that the service fees
of such management and/or operators companies
whose services may be retained by the
Corporation shall not in the aggregate exceed ten
(10%) percent of the gross income;
(2) Purchase foreign exchange that may be
required for the importation of equipment,
facilities and other gambling paraphernalia
indispensably needed or useful operation of
gambling casinos;
(3) Acquire the right of way or access to or thru
public land, public waters or harbors, including
the Manila Bay Area; such right shall include, but
not be limited to, the right to lease and/or
purchase public lands, government reclaimed
lands, as well as lands of private ownership or
those leased from the Government. This right
shall carry with it the privilege of the Corporation
utilize piers, quays, boat landings, and such other
pertinent and related facilities within these
specified areas for use as landing, anchoring or
berthing sites in connection with its authorized
casino operations;
(4) Build or construct structure, buildings,
castways, piers, decks, as well as any other form
landing and boarding facilities for its floating
casinos; and
(5) To do and perform such other acts directly
related to the efficient and successful operation
and conduct of games of chance in accordance
with existing laws and decrees.
(2.h) Then Came the 1996 EDSA revolution and
the end of the Marcos regime. On May 8, 1987,
President Corazon Aquino issued Executive Order
No. 169 repeating P.D. Nos. 810, 1124 and
Amusement Corporation Controlled by the
Romualdezes to operate jai-alai in Manila.
PAGCOR’s franchise to operate gambling casinos
was not revoked. Neither was it given a franchise
to operate jai-alai.
THIRD. In light of its legal history, we hold that
PAGCOR cannot maintain that Section 10 of P.D.
No. 1869 grants it a franchise to operate jai-alai.
Section 10 provides:
“SEC. 10. Nature and terms of purchase.-
Subjects to the terms and conditions established
in this Decree, the Corporation is hereby granted
for a period of twenty-five (25) years, renewable
for another twenty-five (25) years, the rights,
privilege and authority to operate and maintain
gambling casinos, clubs, and other recreation or
amusement places, sports, gaming pools, i.e.,
basketball, football, lotteries, etc., whether on
land or areas sea, within the territorial
jurisdiction of the Republic of the Philippines.
(3.a) P.D. No. 1869 is a mere consolidation of
previous decrees dealing with PAGCOR. PAGCOR
cannot seek comfort in Section 10 as it is not a
new provision in P.D. NO. 1869 and, from the
beginning of its history, was never meant to
confer it with a franchise to operate jai-alai. It is
a reiteration 1 of P.D. No. 1067-B which
provides:
“SECTION 1. Nature and Term of Franchise.-
Subject to the terms and conditions established
in this Decree, the Philippines Amusements and
Gaming Corporation is hereby granted for a
period of twenty-five (25) years, renewable for
another 25 years, the right, privilege, and
authority to operate and maintain gambling
casinos, clubs and other recreation
amusement places, sports gaming pools, i.e.,
basketball, football, etc., whether on land or sea,
within the territorial jurisdiction of the Republic of
the Philippines.
(3.b) Plainly, Section 1 of P.D. No. 1067-B which
was reenacted as Section 10 of P.D. No. 1869 is
not a grant of legislative franchise to operate jai-
alai P.D. No. 1067 –B is a franchise to maintain
gambling casinos alone. The two franchises are
as different as day and night and no alchemy of
logic will efface their difference.
(3.c) PAGCOR’s stance becomes more sterile
when we consider the law’s intent. It cannot be
the intent of President Marcos to grant PAGCOR a
franchise to operate jai-alai because a year and a
half before it was chartered, he issued P.D. No.
810 granting Philippine Jai-Alai and Amusement
Corporation a 25-year franchise to operate jai-
alai in Manila. This corporation is controlled by
his in-law, the Romualdezes. To assure that this
Romualdes corporation would have no
competition, President Marcos earlier revoked the
power of local governments to grant jai-alai
franchises. Thus, PAGCOR’s stance that P.D. No.
1067-B is its franchise to operate jai-alai, which
would have completed with the Romualdezes,
franchise, extends credulity to limit. Indeed, P.D.
No. 1067-A which created PAGCOR made it
crystal clear that it was to Implement “the policy
of the State to centralize and integrate all games
of chance not herefore authorized by existing
franchises or permitted by law, which included
the Philippine Jai-Alai and Amusement
Corporation.
(3.d) There can be no sliver o doubt that under
P.D. No. 1869, PAGCOR’s franchise is only to
operate gambling casinos and not jai-alai. This
conclusion is compelled by a plain reading of its
various provisions, vis.:
“SECTION 1. Declaration of policy.- It is hereby
declared to be the policy of the State to
centralize and integrate all games of chance not
heretofore authorized by existing franchises or
permitted by law in order to attain the following
objectives:
(b) To establish and operate clubs and casinos,
for amusement and recreation, including sports,
gaming pools (basketball, football, lotteries, etc.)
and such other forms if amusement and
recreation including games of chance, which may
be allowed by law within the territorial
jurisdiction of the Philippines and which will (3)
minimize, if not totally prevalent in the conduct
and operation of gambling clubs and casinos
without direct government involvement.
or
TITLE IV- GRANT OF FRANCHISE
SEC. 10. Nature and terms of franchise.- Subject
to the terms conditions established in this
Decree, the Corporation is hereby granted for a
period of twenty-five (25) years, renewable for
another twenty-five (25) years the rights,
privileges and authority to operate and maintain
gambling casinos, club, and other recreation or
amusement places, sports, gaming pools, i.e.,
basketball, football, lotteries, etc. whether on
land or sea, within the territorial jurisdiction of
the Republic of the Philippines.
SEC. 11. Scope of Franchise.- In addition to the
rights and privileges granted it under preceding
Section, this Franchise shall entitle the
Corporation to do and undertake the following:
(1) Enter into operating and/or management
contracts with any registered and accredited
company possessing the knowledge, skill,
expertise and facilities to insure the efficient
operation of gambling casinos; provided, that the
service fees of such management and/or
operator companies whose services may be
retained by the Corporation shall not in the
aggregate exceed ten (10%) percent of the gross
income;
(2) Purchase foreign exchange that may be
required for the importation of equipment,
facilities and other gambling paraphernalia
indispensably needed or useful to insure the
successful operation of gambling casinos;
(3) Acquire the right of away or access to or thru
public land, public waters or harbors. This right
shall carry with ot the privilege of the Corporation
to utilize such other pertinent and related
facilities within these specifies areas in
connection with its authorized casino operations;
(4) Build or construct structures, building
castways, piers, decks, as well as any other form
of landing and boarding facilities for its floating
casinos;
SEC. 13. Exemptions.-
(1) Customs duties, taxes and other imposts on
importations.- All importation of equipment,
vehicles, automobiles, boats, ships, barges,
aircraft and such other gambling paraphernalia,
including accessories or related facilities, for the
sole and exclusive use of the casinos, the proper
and efficient management and administration
thereof, and such other clubs. Recreation or
amusement places to be established under and
by virtue of this Franchise shall be exempt from
the payment of all kinds of customs duties, taxes
and other imposts, including all kinds of fees,
levies, or charges of any kind or nature, whether
National or Local.
Vessels and/or accessory ferry boats imported or
to be imported by any corporation having
existing contractual arrangements with the
Corporation, for the sole and exclusive use of the
casino or to be used to service the operations
and requirements of the casino, shall likewise be
totally exempt from the payment of all customs
duties,
(2) Income and other taxes. – (a)
(b) Others: The exemption herein granted for
earnings derived from the operations conducted
under the franchise shall inure to the benefit of
and extend to corporation(s) with whom the
Corporation or operator has any contractual
relationship in connection with the operations of
the casino(s) authorized to be conducted under
this Franchise.
(3) Dividend Income. – The dividend income shall
not in such case be considered as part of
beneficiaries’ taxable income; provided, however,
that such dividend income shall be totally
exempted from income or other forms of taxes if
invested within six (6) months from date the
dividend income is received, in the following:
(4) Utilization of Foreign Currencies. – The
Corporation shall have the right and authority,
solely and exclusively in connection with the
operations of the casino(s), to purchase, receive,
exchange and disburse foreign exchange, subject
to the following terms and conditions:
(a) A specific area in the casino(s) or gaming pit
shall be put up solely and exclusively for players
and patrons utilizing foreign currencies;
(b) The Corporation shall appoint and designate a
duly accredited commercial bank agent of the
Central Bank, to handle, administer and mange
the use of foreign currencies in the casino(s);
(c) The Corporation shall provide an office at
casino(s) for the employees of the designated
bank, agent of the Central Bank, where the
Corporation will maintain a dollar account which
will be utilized exclusively for the above purpose
and the casino dollar treasury employees;
(f) The disbursement, administration,
management and recording of foreign exchange
regulations.
SEC. 14. Other Conditions.-
(1) Place.- The Corporation shall conduct the
gambling activities or games of chance on land or
water within the territorial jurisdiction of the
Republic of the Philippines. When conducted on
water, the Corporation shall have the right to
dock the floating casino(s) in any part of the
Philippines where vessels/boats are authorized to
dock under the Customs and Maritime Laws.
(2) Time.- Gambling activities may be held and
conducted at anytime of the day or night;
provided, however , that in places where curfew
hours are observed, all players and personnel of
gambling casinos shall remain within the
premises of the casinos.
(3) Persons allowed to play.
(4) Persons not allowed to play.

From these are excepted personnel employed by
the occasions, special guests, or those who at the
discretion of the management may be allowed to
stay in the premises.
TITLE VI-EXEMPTION FROM CIVIL SERVICE LAW
SEC. 17. Transitory Provisions.
SEC 18. Exemption from Labor Laws.- No union
or any form of association shall be formed by all
those working as employees of the casino or
related services whether directly or indirectly. For
such purpose, all employees of the casinos or
related services shall be classified as
“confidential” appointees and their employment
thereof, whether by the franchise holder, or the
operators, or the managers, shall be exempt
from the provisions of the Labor Code or any
implementing rules and regulations thereof.”
From its creation in 1977 and until 1999,
PAGCOR never alleged that it has a franchise to
operate jai-alai. Twenty-two years is a long
stretch of silence. It is inexplicable why it never
claimed its alleged franchise for so long a time
which could have allowed it to earn billions of
pesos as additional income.
(3.e) To be sure, we need not resort to
intellectual jujitsu to determine whether PAGCOR
has a franchise to operate jai-alai. It is easy to
tell whether there is a legislative grant or not.
Known as the game of a thousand thrills, jai-alai
is a different game, hence, the terms and
conditions imposed on a franchise are spelled out
in standard form. A review of some laws and
executive orders granting a franchise to operate
jai-alai will demonstrate these standard term and
conditions, vis.:
(3.e1) Commonwealth Act No. 485 (An Act to
Permit Bets in the Game of Basque Pelota)-June
18, 1939
“Be it enacted by the National Assembly of the
Philippines:
SECTION 1. Any provision of existing law to the
contrary notwithstanding, it shall be permissible
in the game of Basque pelota, a game of skill
(including the games of pala, raqueta,
cestapunta, remonte and mano), in which
professional players participate, to make either
direct bets or bets by means of a totalizer,
Provided, That no operator or maintainer of a
Basque pelota court shall collect as commission a
fee in excess of twelve per centum on such bets,
or twelve per centum if the receipts of the
totalizer, and of such per centum three shall be
paid to the Government of the Philippines, for
distribution in equal shares between the General
Hospital and the Philippine Anti-tuberculosis
Society.
SEC. 2. Any person, company or corporation,
that skill build a court for Basque pelota games
with bets within eighteen months from the date
of the approval of this Act, shall thereunder have
the privilege to maintain and operate the said
court for a term of twenty-five years from the
date in which the first game with bets shall have
taken places. At the expiration of the said term of
twenty-five years, the building and the land on
which the court and the stadium shall be
established, shall become the property of the
government of the Philippines, without payment.
SEC. 3. The locations and design of the buildings
that shall be used for the same games of Basque
pelota, shall have prior approval of the Bureau of
Public Works and the operator shall pay a license
fee of five hundred pesos a year to the city of
municipality in which the establishment shall be
situated, in addition to the real-estate tax due on
such real property.
SEC. 4. This Act shall take effect upon its
approval.
ENACTED, without Executive approval, June 18,
1999.
(3.e.2) Executive Order No. 135 (Regulating the
Establishment, Maintenance and Operation of
Frontons and Basque Pelota Games [Jai-Alai])-
May 4, 1948
“By virtue of the powers vested in me by
Commonwealth Act No. 601, entitled An Act to
regulate the establishment, maintenance and
operation of places of amusements in chartered
cities, municipalities and municipal districts, the
following rules and regulations governing
frontons and basque pelota games are hereby
promulgated:
SECTION 1. Definitions.-Whenever used in this
Order and unless the context indicates a different
meaning, the following terms shall bear the
meaning indicated herein:
(a) ‘Basque pelota game’ shall include the pelota
game with the use of pala, raqueta, cesta punta,
remonte and mano, in which professional players
participate.
(b) ‘Fronton’ comprises the court where basque
pelota games are played, including the adjoining
structures used in connection with such games,
such as the betting booths and galleries,
totalizator equipment, and the grandstands
where the public is admitted in connection with
such games.
(c) ‘Pelota’ is a professional player engaged in
playing basque pelota.
(d) ‘Professional player’ is one who plays for
compensation.
SEC. 2. Supervision over the establishment and
operation of frontons and basque pelota games.-
Subject to the administrative control and
supervision of the Secretary of the Interior, city
or municipal mayors shall exercise supervision
over the establishment, maintenance and
operation of frontons and basque pelota games
within their respective territorial jurisdiction, as
well as over the officials and employees of such
frontons and shall see to it that all laws, orders
and regulations relating to such establishments
are duly enforced. Subject to similar approval,
they shall see to it that all laws, orders and
regulations relating to such establishments are
duly enforced. Subject to similar approval, they
shall appoint such personnel as may be needed in
the discharge of their duties half per centum
(1/2%) out of the total bets or wager funds set
aside and made available for the purpose in
accordance with Section 19 hereof. The Secretary
of the Interior shall have the power to prohibit or
allow the operation of such frontons on any day
or days, or modify their hour of operation and to
prescribe additional rules and regulations
governing the same.
SEC. 3. Particular duties of city or municipal
mayors regarding operation of basque pelota
games and frontons.-In connection with their
duty to enforce the laws, orders, rules and
regulations relating to frontons and basque
pelota games, the city or municipal mayors shall
require that such frontons shall be properly
constructed and maintained in accordance with
the provisions of Commonwealth Act No. 485;
shall see that the proper sanitary
accommodations are provided in the grandstands
and other structures comprising such frontons;
and shall require that such frontons be provided
with a properly equipped clinic for the treatment
of injuries to the pelotaris.
SEC. 4. Permits.-In the absence of a legislative
franchise, it shall be unlawful for any person or
entity to establish and/or operate frontons and
conduct basque pelota games without a permit
issued by the corresponding city or municipal
mayor, with the approval of the provincial
governor in the latter case. any permit issued
hereunder shall be reported by the provincial
governor or city mayor, as the case may be, to
the Secretary of the Interior.
SEC. 5. License fees.-The following fees shall be
paid:
(a) For each basque pelota fronton, five hundred
pesos (P500P annually, or one hundred and
twenty-five pesos (P125) quarterly.
(b) For pelotaris, judges or referees and
superintendents (intendentes) of basque pelota
games, eighteen pesos (P18) each annually.
The above license fees shall accrue to the funds
of the city or municipality where the fronton is
operated.
SEC. 6. Location.-Except in the case of any
basque pelota fronton licensed as of December 8,
1941, no basque pelota fronton shall be
maintained or operated within a radius of 200
lineal meters from any city hall or municipal
building, provincial capitol building, national
capitol building, public playa or park, public
school, church, hospital, athletic stadium, or any
institution of learning or charity.
SEC. 7. Buildings, sanitary and parking
requirements.-No permit or license for the
construction or operation of a basque pelota
fronton shall be issued without proper certificate
of the provincial or city engineer and architect
certifying to the suitability and safety of the
building and of the district or city health officer
certifying to the sanitary condition of said
building. The city or municipal mayor may, in his
discretion and as circumstances may warrant,
require that the fronton be provided with
sufficient space for parking so that the public
roads and highways be not used for such
purposes.
SEC. 8. Protest and complaint.-Any person who
believes that any basque pelota fronton is located
or established in any place not authorized herein
or is being operated in violation of any provision
of this order may file a protest or complaint with
the city or municipal mayor concerned, and after
proper investigation of such complaint the city or
municipal mayor may take such action as he may
consider necessary in accordance with the
provisions of section 10 hereof. Any decision
rendered on the matter by the city or municipal
mayor shall be appealable to the Secretary of the
Interior.
SEC. 9. Persons prohibited admission.-Persons
under 16 years of age, persons carrying officials
actually performing their official duties therein,
intoxicated persons, and persons of disorderly
nature and conduct who are apt to disturb peace
and order, shall not be admitted or allowed in
any basque pelota fronton: Provide, That persons
under 16 years of age may, when accompanied
by their parents or guardians, be admitted
therein but in no case shall such minors be
allowed to bet.
SEC. 10. Gambling prohibited.-No card games or
any of the prohibited games shall be permitted
within the premises of any basque pelota
fronton; and upon satisfactory evidence that the
operator or entity conducting the game has
tolerated the existence of any prohibited game
within its premises, the city or municipal mayor
may take the necessary action in accordance with
the provisions of section 11 hereof.
SEC. 11. Revocation or suspension of permits
and licenses.-The city or municipal mayor,
subject to the approval of the Secretary of the
Interior, may suspend or revoke any license
granted under this Order to any basque pelota
fronton or to any official or employee thereof, for
violation of any of the rules and regulations
provided in this Order or those which said city or
municipal mayor may prescribe, or for any just
cause. Such suspension or revocation shall
operate to forfeit to the city or municipality
concerned all sums paid therefor.
SEC. 12. Appeals.-Any action taken by the city
or municipal mayor under the provisions of this
Order shall stand, unless modified or revoked by
the Secretary of the Interior.
SEC. 13. Books, records and accounts.-The city
or municipal mayor, or his duly authorized
representative, shall have the power to inspect at
all times the books, records, and accounts of any
basque pelota fronton. He may, in his discretion
and as the circumstances may warrant, require
that the books and financial or other statements
of the person or entity operating the game be
kept in such manner as he may prescribe.
SEC. 14. Days and hours of operation.-Except as
may otherwise be provided herein, basque pelota
games with betting shall be allowed every day,
excepting Sundays, from 2 o’clock p.m. to not
later than 11 o’clock p.m.
SEC. 15. Pelotaris, judges, referees, etc. shall be
licensed.-No person or entity operating a basque
pelota fronton, wherein games are played with
betting, shall employ any pelotari, judge or
referee, superintendent of games (intendente),
or any other official whose duties are connected
with the operation or supervision of the games,
unless such person has been duly licensed by the
city or municipal mayor concerned. Such license
shall be granted upon satisfactory proof that the
applicant is in good health, know the rules and
usages of the game, and is a person of good
moral character and of undoubted honesty. In
the case of pelotaris, such license shall be
granted only upon the further condition that they
are able to play the game with reasonable skill
and with safety to themselves and to their
opponents. The city or municipal mayor may
further require other reasonable qualifications for
applications for applicants to a license, not
otherwise provided herein. Such license shall be
obtained yearly.
SEC. 16. Installation of automatic electric
totalizator.-Any person or entity operating a
fronton wherein betting in any for is allowed shall
install in its premises within the period of one
year from the date this Order takes effect, an
automatic electrically operated indicator system
clearly record each ticket purchased on every
player in any game, the total number of tickets
sold on each event, as well as the dividends that
correspond to holders of winning numbers. This
requirement shall, however, not apply to double
events or forecast pools or to any betting made
on the basis of a combination or grouping of
players until a totalizator that can register such
bets has been invented and placed on the
market.
SEC. 17. Supervision over sale of betting tickets
and payment of dividends.-For the purpose of
verifying the accuracy of reports in connection
with the sale of betting tickets and the
computation of dividends awarded to winners on
each event, as well as other statements with
reference to the betting in the games played, the
city or municipal mayor shall assign such number
of auditing officers and checkers as may be
necessary for the purpose. These auditing officers
checkers shall be placed in the ticket selling
booths, dividend computation booths and such
other parts of the fronton, where betting tickets
are sold and dividends computed. It shall be their
duty to check up and correct any irregularity or
any erroneous report or computation that may be
made by officials of the fronton, in connection
with the sale of tickets and payment of dividends.
SEC. 18. Wager tickets and dividends.-The face
value of the wager tickets for any event shall not
exceed P5 whether for “win” of “place”, or for any
combination or grouping of winning numbers. The
face value of the dividends and such dividends
shall be paid after eliminating fractions of ten
centavos (P0.10); for example: if the resulting
dividend is P10.43, the dividend that shall be
paid will be only P10.40.
SEC. 19. Distribution of wager funds.-The total
wager funds or gross receipts from the sale of
the betting tickets shall be apportioned as
follows: a commission not exceeding ten and
one-half per centum (10 ½%) on the total bets
on each game or event shall be set aside for the
person or entity operating the fronton and four
and one-half per centum (4 ½%) of such bets
shall be covered into the National Treasury for
disposition as may be authorized by law or
executive order; and the balance or eighty-five
per centum (85%) of the total bets shall be
distributed in the form of dividends among
holders of “win” or “place” numbers or holders of
the winning combination or grouping of numbers,
as the case may be: Provided, however, That of
the ten and one-half per centum (10 ½%)
representing the commission of the person or
entity operating the fronton, an amount
equivalent to one-half centum (½%) of the total
bets or wager funds shall be set aside and made
available to cover the expenses of the personnel
assigned to supervise the operation of basque
pelota games and frontons, including payment of
salaries of such personnel, purchase of necessary
equipment and other sundry expenses as may be
authorized by competent authority.
SEC. 20. Supervision over the conduct of games;
enforcement of rules and regulations.-The city or
municipal mayor is authorized to place within the
premises of the fronton such number of
inspectors and agents as may be deemed
necessary to supervise the conduct of the games
to see that the rules of the games are strictly
enforced, and to carry out the provisions of this
Order as well as such other regulations as may
hereafter be prescribed.
SEC. 21. Rules governing the games and
personnel of the fronton.-The rules and
regulations that have been adopted by any
fronton to govern the operation of its games and
the behavior, duties and performance of the
officials and personnel connected therewith, such
as pelotaris, judges, referees or superintendents
of games (intendentes) and others, shall be the
recognized rules and regulations of such fronton
until the same are altered or repealed by the
Secretary of the Interior; and any fronton may
introduce any type or form of games or events,
provided they are not contrary to the provisions
of this Order or any rule or regulation hereafter
issued by the Secretary of the Interior.
SEC. 22. Regulations governing pelotaris.-Any
rule or regulation adopted by any established
fronton governing the conduct or performance of
pelotaris to the contrary notwithstanding, the
following regulations shall be observed:
(a) The pelotaris who are participating in the
games shall not be allowed to communicate, talk
or make signs with any one in the public or with
any official or employee of the fronton during the
games, except with the judges or referees or the
superintendent (intendente) in charge of the
games;
(b) The program of games or events, as well as
the line-up or order of playing of the pelotaris in
each event shall be determined by the
superintendent of the games (intendente),
subject to the approval of the city or municipal
mayor, or his authorized representatives;
(c) Pelotaris shall be in good physical condition
before participating in any game and shall be laid
off from playing at least two days in a week.
Every pelotari shall once a month secure a
medical certificate from a government physician
to be designated by the city or municipal mayor
concerned certifying to his physical fitness to
engage in the games; and
(d) The amount of dividends computed for any
event shall not be posted within the view of the
pelotaris participating in the event until after the
termination of said event.”
(3.e.3) Presidential Decree No. 810 (An Act
Granting the Philippine Jai-Alai and Amusement
Corporation a Franchise to Operate, Construct
and Maintain a Fronton for Basque Pelota and
Similar Games of Skill in the Greater Manila
Area)-October 16, 1975
“WHEREAS, by virtue of the provisions of
Commonwealth Act Numbered 485 the franchise
to operate and maintain a fronton for the Basque
pelota and similar games of skill in the City of
Manila, shall expire on October, 1975 whereupon
the ownership of the land, buildings and
improvements used in the same game will be
transferred without payment to the government
by operation of law;
WHEREAS, there is a pressing need not only to
further develop the game as a sport and
amusement for the government’s objectives and
development programs;
WHEREAS, Basque pelota is a game of
international renown, the maintenance and
promotion of which will surely assist the tourism
industry of the country;

WHEREAS, the tourism appeal of the game will
be enhanced only with the government’s support
and inducement in developing the sport to a level
at par with international standards;
WHEREAS, once such tourism appeal is
developed, the same will serve as a stable and
expanding base for revenue generation for the
government’s development projects.
NOW, THEREFORE, I FERDINAND E. MARCOS,
President of the Philippines, by virtue of the
powers vested in me by the Constitution, hereby
decree as follows:
SECTION 1. Any provision of law to the contrary
notwithstanding, there is hereby granted to the
Philippine Jai-Alai and Amusement Corporation, a
corporation duly organized and registered under
the laws of the Philippines, hereinafter called the
grantee or its successors, for a period of twenty-
five years from the approval of this Act,
extendable for another privilege and authority to
construct, operate and maintain a court for
Basque Pelota (including the games of pala,
raqueta, cestapunta, remonte and mano) within
the Greater Manila Area, establish branches
thereof for booking purposes and hold or conduct
Basque pelota games therein with bettings either
directly or by means of electric and/or
computerized totalizator.
The games to be conducted the grantee shall be
under the supervision of the Games and
Amusements Board, thereinafter referred to as
the Board, which shall enforce the laws, rules and
regulations governing Basque pelota as provided
in Commonwealth Act numbered four hundred
and eighty-five, as amended, and all the officials
of the game and pelotaris therein shall be duly
licensed as such by the Board.
SEC. 2. The grantee or its duly authorized agent
may offer, take or arrange bets within or outside
the place, enclosure or court where the Basque
pelota games are held: Provided, That bets
offered, taken or arranged outside the place,
enclosure or court where the games are held,
shall be offered, taken or arranged only in places
duly licensed by the corporation; Provided,
however, That the same shall be subject to the
supervision of the Board. No person other than
the grantee or its duly authorized agents shall
take or arrange bets on any pelotari or on the
game, or maintain or use a totalizator or other
device, method or system to bet on any pelotari
or on the game within or without the place,
enclosure or court where the games are held by
the grantee. Any violation of this section shall be
punished by a fine of not more than two
thousand pesos of by imprisonment of not more
than six months, or both in the discretion of the
Court. if the offender is a partnership,
corporation, or association, the criminal liability
shall devolve upon its president, directors or any
other officials responsible for the violation.
SEC. 3. The grantee shall provide mechanical
and/or computerized devices, namely: a) electric
totalizator; b) machine directly connected to a
computer in a display board, for the sale of
tickets, including those sold from the off-court
stations; v) modern sound system and loud
speakers; d) facilities that bring safety, security,
comfort and convenience to the public; e)
modern intercommunication devices; and f) such
other facilities, devices and instruments for clean,
honest and orderly Basque pelota games, within
three years from the approval of this Act.
The Board shall assign its auditors and/or
inspectors to supervise and regulate the placing
of bets, proper computation of dividends and the
distribution of wager funds.
SEC.4. The total wager fund or gross receipts
from the sale of betting tickets will be
apportioned as follows: eighty-five per centum
(85%) shall be distributed in the form of
dividends among the holders of “win” or “place”
numbers or holders of the winning combination
or grouping of numbers as the case may be. The
remaining balance of fifteen per centum (15%)
shall be distributed as follows: eleven and one-
half per centum (11 ½%) shall be set aside as
the commission fee of the grantee, and three and
one-half per centum (3 ½%) thereof shall be set
aside and allotted to any special health,
educational, civic, cultural, charitable, social
welfare, sports, and other similar projects as may
directed by the President. The receipts from
betting corresponding to the fraction of ten
centavos eliminated from the dividends paid to
the winning tickets, commonly known as
breakage, shall also set aside for the above-
named special projects.
SEC. 5. The provision of any existing law to the
contrary notwithstanding, the grantee is hereby
authorized to hold Basque pelota games
(including the games of pala, raqueta,
cestapunta, remonte and mano) on all days of
the week except Sundays and official holidays.
SEC. 6. The provisions of Commonwealth Act
numbered four hundred and eighty-five as
amended, shall be deemed incorporated herein,
provided that the provisions of this Act shall take
precedence over the provisions thereof and all
other laws, executive orders and regulations
which are inconsistent herewith.
SEC. 7. The grantee shall not lease, transfer,
grant the usufruct of, sell or assign this franchise
permit, or the rights or privileges acquired or
legal entity, nor merge with any other person,
company or corporation organized for the same
purpose, without the previous approval of the
President of the Philippines.
SEC. 8. For purposes of this franchise, the
grantee is herein authorized to make use of the
existing fronton, stadium and facilities located
along Taft Avenue, City of Manila, belonging to
the government by virtue of the provisions of
Commonwealth Act numbered four hundred and
eighty-five.”
It is abundantly clear from the aforequoted laws,
executive orders and decrees that the legislative
practice is that a franchise to operate jai-alai is
granted solely for that purpose and the terms
and conditions of the grant are unequivocally
defined by the grantor. Such express grant and
its conditionalities protective of the public interest
are evidently wanting in P.D. No. 1869, the
present Charter of PAGCOR. Thus, while E.O. 135
and P.D. No. 810 provided for the apportionment
of the wager funds or gross receipts from the
sale of betting tickets, as well as the distribution
of dividends among holders of “win” or “place”
numbers or holders of the winning combination
or grouping of numbers, no such provisions can
be found in P.D. No. 1869. Likewise, while P.D.
No. 810 describes where and how the games are
to be conducted and bettings to be made, and
imposes a penalty in case of a violation thereof,
such provisions are absent in P.D. No. 1869.
In fine, P.D. No. 1869 does not have the
standard marks of a law granting a franchise to
operate jai-alai as those found under P.D. No.
810 or E.O. 135. We cannot blink away from the
stubborn reality that P.D. No. 1869 deals with
details pertinent alone to the operation of
gambling casinos. It prescribes the rules and
regulations concerning the operation of gambling
casinos such as the place, time, persons who are
not entitled to play, tax exemptions, use of
foreign exchange, and the exemption of casino
employees from the coverage of the Civil Service
Law and the Labor Code. The short point is that
P.D. No. 1869 does not have the usual provisions
with regards to jai-alai frontons. There is no
reason to resist the beguiling rule that acts of
incorporation, and statutes granting other
franchises or special benefits or privileges to
corporations, are to be construed strictly against
the corporations; and whatever is not given in
unequivocal terms is understood to be withheld.
FOURTH. The tax treatment between jai-alai
operations and gambling casinos are distinct from
each other. Letters of Instruction No. 1439 issued
on November 2, 1984 directed the suspension of
the imposition of the increased tax on winnings in
horse races and jai-alai under the old revenue
code, to wit:
‘WHEREAS, the increased tax on winnings on
horse races and jai-alai under Presidential Decree
1959 has already affected the holding of horse
races and jai-alai games, resulting in government
revenue loss and affecting the livelihood of those
dependent thereon;
NOW, THEREFORE, I, FERDINAND E. MARCOS,
President of the Philippines, by virtue of the
powers vested in me by the Constitution, do
hereby order and instruct the Minister of Finance,
the Commissioner of the Bureau of Internal
Revenue, and the Chairman, Games &
Amusements Board, to suspend the
implementation of the increased rate of tax
winnings in horse races and jai-alai games and
collect instead the rate applicable prior to the
effectivity of PD 1959.”
Similarly, under Republic Act No. 8424, or the
Tax Reform Act of 1997, here is an amusement
tax imposed on operators of jai-alai (Section
125) and a stamp tax on jai-alai tickets (Section
190). There is no corresponding imposition on
gambling casinos. Well to note, Section 13 of
P.D. No. 1869 grants to the franchise holder and
casino operators tax exemptions from the
payment of customs duties and income tax,
except a franchise tax of five (5%) percent which
shall be in lieu of all kinds of taxes, levies, fees or
assessments of any kind, nature or description,
levied, established or collected by any municipal,
provincial, or national government authority. No
similar exemptions have been extended to
operators of jai-alai frontons.
FIFTH. P.D. No. 1869, the present Charter of
PAGCOR, is a consolidation of P.D. Nos. 1067-A,
1067-B and 1067-C all issued on January 1,
1977. P.D. No. 1067-A created the PAGCOR and
defined its powers and functions; P.D. No. 1067-
B granted to PAGCOR a franchise to establish,
operate, and maintain gambling casinos on land
or water within the territorial jurisdiction of the
Republic of the Philippines; and P.D. No. 1067-C
granted PAGCOR the exclusive right, privilege
and authority to operate and maintain gambling
casinos, subject only to the exception of existing
franchises and games of chance permitted by
law.
Beyond debate, P.D. No. 1869 adopted
substantially the provisions of said prior decrees,
with some additions which, however, have no
bearing on the franchise granted to PAGCOR to
operate gambling casinos alone, such as the
Affiliation Provisions under Title III and Transitory
Provisions under Title VII. It also added the term
“lotteries” under Section 1 (b) on Declaration of
Policy and Section 10 on the Nature and Term of
Franchise. It ought to follow that P.D. Nos. 1067-
A, 1067-B and 1067-C. To be sure, both P.D. No.
1067-A and P.D. No. 1869 seek to enforce the
same avowed policy of the State to “minimize, if
not totally eradicate, the evils, malpractices and
corruptions that normally are found prevalent in
the conduct and operation of gambling clubs and
casinos without direct government involvement.”
It did not address the moral malevolence of jai-
alai games and the need to contain it thru
PAGCOR. We cannot deface this legislative intend
by holding that the grant to PAGCOR under P.D.
Nos. 1067-A and 1067-B to establish, operate,
and maintain gambling casinos, has been
enlarged, broadened or expanded by P. d. No.
1869 so as to include a grant to operate jai-alai
frontons. Then and now, the intention was
merely to grant PAGCOR a franchise to operate
gambling casinos, no more, no less.
SIXTH. Lest the idea gets lost in the shoals of our
subconsiousness, let us not forget that PAGCOR
is engaged in business affected with public
interest. The phrase “affected with public
interest” means that an industry is subject to
control for the public good, it has been
considered as the equivalent of “subject to the
police power .” Perforce, a legislative franchise to
operate jai-alai is imbued with public interest and
involves an exercise of police power. The familiar
rule is that laws which grant the right to exercise
a part of the police power of the state are to be
construed strictly and any doubt must be
resolved against the grant. The legislature is
regarded as the guardian of society, and
therefore is not presumed to disable itself or
abandon the discharge of its duty. Thus, courts
do not assume that the legislature intended to
part away with its power to regulate public
morals. The presumption is influenced by
constitutional considerations. Constitutions are
widely understood to withhold from legislatures
any authority to bargain away their police power
for the power to protect the public interest is
beyond abnegation.
It is stressed that the case at bar does not
involve a franchise to operate a public utility
(such as water, transportation, communication or
electricity)-the operation of which undoubtedly
redounds to the benefit of the general public.
What is claimed is an alleged legislative grant of
a gambling franchise-a franchise to operate jai-
alai. A statute which legalizes a gambling activity
or business should be strictly construed and
every reasonable doubt must be resolved to limit
the powers and rights claimed under its
authority.
The dissent would like to make capital of the fact
the cases of Stone vs. Mississippi and Aicardi vs.
Alabama are not on all fours to the cases at bar
and, hence, the rulings therein do not apply. The
perceived incongruity is more apparent than real.
Stone involve a contract entered into by the
State of Mississippi with the plaintiffs which
allowed the latter to sell and dispose of
certificates of subscription which would entitle
the holders thereof to such prizes as may be
awarded to them, by the casting of lots or by lot,
chance or otherwise. The contract was entered
into by plaintiffs pursuant to their charter entitled
“An Act Incorporating the Mississippi Agricultural,
Educational and Manufacturing Aid Society” which
purportedly granted them the franchise to issue
and sell lottery tickets. However, the state
constitution expressly prohibits and legislature
from authorizing any lottery of allowing the sale
of lottery tickers. Mississippi law makes it
unlawful to conduct a lottery.
The question raised in Stone concerned the
authority of the plaintiffs to exercise the franchise
or privilege of issuing and selling lottery tickets.
This is essentially the issue involved in the cases
at bar, that is, whether PAGCOR’s charter
includes the franchise to operate jai-alai frontons.
Moreover, even assuming arguendo that the facts
in the cases at bar are not identical, the
principles of law laid down in Stone are
illuminating. For one, it was held in Stone that:
“Experience has shown that the common forms of
gambling are comparatively innocuous when
placed in contrast with the wide-spread
pestilence of lotteries. The former are confined to
a few persons and places, but the latter infests
the whole community; it enters every dwelling; it
reaches every class; it preys upon the hard
earnings of the poor; and it plunders the ignorant
and simple. x x x”
the verity that all species of gambling are
pernicious prompted the Mississippi Court to rule
that the legislature cannot bargain away public
health or public morals. We can take judicial
notice of the fact that jai-alai frontons have
mushroomed in every nook and corner of the
country. They are accessible to everyone and
they specially mangle the morals of the
marginalized sector of society. It cannot be
gainsaid that there is but a minuscule of a
difference between jai-alai and lottery with
respect to the evils sought to be prevented.
In the case of Aicardi vs. Alabama, Moses & Co.
was granted a legislative franchise to carry on
gaming in the form specified therein, and its
agent, Antonio Aicardi, was indicted for keeping a
gaming table. In ascertaining whether the scope
of the company’s franchise included the right to
keep a gaming table, the Court there held that
“such an Act should be construed strictly. Every
reasonable doubt should be so resolved as to
limit the powers and rights claimed under its
authority. Implications and intendments should
have no place except as they are inevitable from
the language or the context.”
Similarly, the contention in the dissent that:

The view expressed in the dissent that the

aforequoted ruling was taken out of context is
perched on the premises that PAGCOR’s franchise
is couched in a language that is broad enough to
cover the operations of jai-alai. This view begs
the question for as shown in our disquisition,
PAGCOR’s franchise is restricted only to the
operation of gambling casinos. Aicardi supports
the thesis only to the operation of gambling
franchise should be strictly construed due to its
ill-effects on public order and morals.
SEVENTH. The dissent also insists that the
legislative intent must be sought first of all in the
language of the statute itself. in applying a literal
interpretation of the provision under Section 11
of P.D. 1869 that “x x x the corporation is hereby
granted x x x the rights, privileges, and authority
to operate and maintain gambling casinos, clubs,
and other recreation or amusement places,
sports, gaming pools, i.e., basketball, football,
lotteries, etc. x x x ,” it contends that the extent
and nature of PAGCOR’s franchise is so broad
that literally all kinds of sports and gaming pools,
including jai-alai, are covered therein. It
concluded that since under Section 11 P.D. No.
1869, games of skill like basketball and football
have been lumped together with the word
“lotteries” just before the word “etc.” and after
the words “gaming pools,” it may be deduced
from the wording of the law that when bets or
stakes are made in connection with the games of
skill, they may be classified as games of chance
under the coverage of PAGCOR’s franchise.
“x x x Even if the Court is fully persuaded that
the legislature really meant and intended
something different from what it enacted, and
that the failure to convey the real meaning was
due to inadvertence or mistake in the use of the
language, yet, if the words chosen by the
legislature are not obscure or ambiguous, but
convey a precise and sensible meaning
(excluding the case of obvious clerical errors or
elliptical forms of expression), then the Court
must take the law as it finds, it and give it its
literal interpretation, without being influenced by
the probable legislative meaning lying at the back
of the words. In that event, the presumption that
the legislature meant what it said, though it be
contrary to the fact, is conclusive.”
cannot apply in the cases at bar considering that
it has not been shown that the failure to convey
the true intention of the legislature is attributable
to inadvertence or a mistake in the language
used.
EIGHTH. Finally, there is another reason why
PAGCOR’s claim to a legislative grant of a
franchise to operate jai-alai should be subjected
to stricter scrutiny. The so-called legislative grant
to PAGCOR did not come from a real Congress. It
came from President Marcos who assumed
legislative powers under martial law. The grant is
not the result of deliberations of the duly elected
representatives of our people.

We reject this simplistic reading of the law

This is not to assail President Marcos’ legislative
considering the social, moral and public policy
powers granted by Amendment No. 6 of the 1973
implications embedded in the cases at bar. The
Constitution, as the dissent would put it. It is
plain meaning rule used in the dissent rests on
given that in the exercise of his legislative power,
the assumption that there is no ambiguity or
President Marcos legally granted PAGCOR’s
obscurity in the language of the law. The fact,
franchise to operate gambling casinos. The
however, that the stature admits of different
validity of this franchise to operate gambling is
interpretations is the best evidence that the
whether this franchise to operate gambling
statute is vague and ambiguous. It is widely
casinos includes the privilege to operate jai-alai.
acknowledged that a statute is ambiguous when
PAGCOR says it does. We hold that it does not.
it is capable of being understood by reasonably
PAGCOR’s overarching claim should be given the
well-informed persons in either of two or more
strictest scrutiny because it was granted by one
senses. In the cases at bar, it is difficult to see
man who governed when the country was under
how a literal reading of the statutory text would
martial law and whose governance was
unerringly reveal the legislative intent. To be
repudiated by our people in EDSA 1986. The
sure, the term “jai-alai” was never used and is
reason for this submission is rooted in the truth
nowhere to be found in the law. The conclusion
that PAGCOR’s franchise was not granted by a
that it is included in the franchise granted to
real Congress where the passage of a law
PAGCOR cannot be based on a mere cursory
requires a more rigorous process in terms of floor
perusal of and a blind reliance on the ordinary
deliberations and voting by members of both
and plain meaning of the statutory terms used
House and the Senate. It is self-evident that
such as ‘gaming pools” and “lotteries.”
there is a need to be extra cautions in treating
Sutherland tells us that a stature is ‘ambiguous”,
this by the representatives of our people, for
and so open to explanation by extrinsic aids, not
plainly it is not. We now considering its policy
only when its abstract meaning or the
ramifications on public order and morals.
connotation of its terms is uncertain, but also
when it is uncertain in its application to, or effect
upon, the fact-situation of the case at bar.
In view of this ruling, we need not resolve the
other issues raised by petitioners.
WHEREFORE, the petitions are GRANTED.
Respondents PAGCOR, Belle Jai Alai Corporation
and Filipinas Gaming Entertainment Totalizator
Corporation are ENJOINED from managing,
maintaining and operating jai-alai games, and
from enforcing the agreement entered into by
them for that purpose.
SO ORDERED.
Melo, Panganiban, Pardo, Buena, Gonzaga-Reyes
and Ynares-Santiago, Jr., JJ., concur.
Davide, Jr. (C.J.), Please see Separate Opinion.
Bellosillo, Kapunan and Quisumbing, JJ., We join
the opinion of J. De Leon, Jr.
Vitug, J., Please see Separate Opinion.
Mendoza, J., I join in the Separate Opinion of
Vitug, J.
De Leon, Jr., J., Please see Dissenting Opinion.
SEPARATE OPINION
DAVIDE, JR., C.J.:
In any Separate Opinion in G.R. No. 115044
(Alfredo Lim vs. Hon. Felipe Pacquing) and G.R.
NO. 117263 (Teofisto Guingona vs. Hon Vetno
Reyes Reyes), 240 SCRA 649, 685, I reiterated
my prior view in a supplemental concurring
opinion I submitted in the earlier case, G. R. No.
115044 that jai alai is not a game a chance, but
a sport based on skill. Betting on the results
thereof can only be allowed by Congress, and I
am not aware of any new law authorizing such
betting.
I said herein, thus:
It follows then that the Mayor’s Permit ordered
by the trial court to be issued to the private
respondent is not a license or authority to allow
betting or wagering on the results of the jai-alai
games. Jai-alai is a sport based on skill. under
Article 197 of the Revised Penal Code, before it
was amended by P.D. No. 1602, betting upon the
result or a fine not exceeding P200.00, or both.
Article 2019 of the Civil Code provides that
“[b]etting on the results of sports, athletic
competitions, or games of skill may be prohibited
by local ordinances.”
P.D. No. 483, enacted on 13 June 1974,
penalizes betting, game fixing or point shaving
and machinations in sports contests, including
jai-alai. Section 2 thereof expressly provides:
SECTION. 2. Betting, game fixing, point shaving
or game machinations unlawful.-Game fixing,
point shaving, machination, as defined in the
preceding Section, in connection with the games
of basketball, volleyball, softball, baseball, chess,
boxing bouts, “jai-alai,” ‘sipa,” “pelota” and all
other sports contests, games or races; as well as
betting therein except as may be authorized by
law, is hereby declared unlawful.
The succeeding Section 3 provides for the
penalties.
On 11 June 1978, P.D. No. 1602 (75 O.G. No. 15,
3270), Prescribing Stiffer Penalties on Illegal
Gambling, was enacted to increase the penalties
provided in various “Philippine Gambling Laws
such as Articles 195199 of the Revised Penal
Code (Forms of Gambling and Betting), R.A. No.
3063 (Horse Racing Bookies), P.D. No. 449
(Cock-fighting), P.D. No. 483 (Game Fixing), P.D.
No. 510 (Slot Machines) in relation to Opinion
Nos. 33 and 97 of the Ministry of Justice, P.D.
No. 1306 (Jai-alai Bookies), and other City and
Municipal Ordinances on gambling all over the
country, Section 1 thereof reads:
xxx
Both P.D. No. 483 and P.D. No. 1602 were
promulgated in the exercise of the police power
of the State.
Pursuant to Section 2 of P.D. No. 483, which was
not repealed by P.D. No. 1602 since the former is
not inconsistent with the latter in that respect,
betting in jai-alai is illegal unless allowed by law.
There was such a law, P.D. No. 810, which
authorized the Philippine Jai-Alai and Amusement
Corporation as follows:
SECTION 2. The grantee or its duly authorized
agent may offer, take or arrange bets within or
outside the place, enclosure or court where the
Basque pelota games are held: Provided, That
bets offered, taken or arranged outside the place,
enclosure or court where the games are held,
shall be offered, taken or arranged only in places
duly licensed authorized agents shall take or
arrange bets on any pelotari or on the game, or
maintain or use a totalizator or other device,
method or system to bet on any pelotari or the
games are held by the grantee. Any violation of
this section shall be punished by a fine or not
more that two thousand pesos or by
imprisonment of not more than two thousand
pesos of by imprisonment of not more than six
months, or both in the discretion of the Court. if
the offender is a partnership, corporation or
association, the criminal liability shall devolve
upon its president, directions or any officials
responsible for the violation.
However, as stated in the ponencia, P.D. No. 810
was repeated by E.O. No. 169 issued by then
President Corazon C. Aquino, I am not aware of
any other law which authorizes betting in jai alai.
It follows then that while the private respondent
may operate the jai-alai fronton and conduct jai-
alai games, it can do so solely as a sports
contest. Betting on the results thereof, whether
within or off-fronton, is illegal and the City of
Manila cannot, under the prese4nt sate of the
law, license such betting. The dismissal of the
petition in this case sustaining the challenged
ordered of the trial court does not legalize
betting, for this Court is not the legislature under
our system of government.
My reading of the charter of he PAGCOR fails to
disclose a grant of a congressional authority to
allow betting on the results of jai-alai.
Accordingly, all that the PAGCOR may do is
operate and conduct the jai-alai, but in case can
it allow betting on the results thereof without
obtaining a statutory authority for the purpose.
SEPARATE OPINION
VITUG, J.:
Gambling, universally regarded to be a threat to
the moral fiber of any society, is aptly a
prohibited activity in the Philipp9ines. The
Revised Penal Code, as well as succeeding
amendatory laws, makes “betting, game fixing,
point-shaving or game machination” on games of
chance or skill unlawful. The Civil Code
additionally states that “betting on the result of
sports, athletic competitions, or games of skill
may be prohibited by local ordinances.”
An exception to the rule was introduced by the
former President Ferdinand E. Marcos when he, in
the exercise of his legislative powers under the
1973 Constitution, created the Philippine
Amusement Games Corp. (“PAGCOR”) and
granted it franchise to “operate and maintain
gambling casinos, clubs, and other recreation or
amusement places, sports, gaming pools, x x x.”
PAGCOR was authorized to implement, among
other things, an objective “to establish and
operate clubs and casinos for amusement and
recreation, including games of chance, which
(might) be allowed by law within the territorial
jurisdiction of the Philippines.”
The ponencia views the law to be broad enough
to authorize PAGCOR to operate all kinds of
sports and gaming pools, inclusive of jai-alai, in
the country. Such does appear to be the e, and a
statute which is sufficiently clear and free from
serious ambiguity can only be given its literal
meaning and simply be applied. Quite a different
matter, however, submits itself with regard to
PAGCOR’s power to enter into joint venture
agreements in the operation and management of
such games.
PAGCOR has entered into a joint venture
agreement with Belle Jai Alai Corporation
(“BELLE”) and Filipinas Gaming Entertainment
Totalizator Corporation (“FILGAME”) in the
operation and management of jai-alai games.
The two firms, under the agreement, also furnish
the jai alai fronton facilities. I see in the joint
venture agreement a situation that places BELLE
and FILGAME in active endeavor with PAGCOR in
conducting jai alai games. Without a
congressional franchise of its own, neither BELLE
nor FILGAME can lawfully engage into the
activity. Thus in Lim vs. Pacquing, this Court held
that Associated Development Corporation, having
had no franchise from the Congress to operate
the jai alai, could not do so even if it had a
license or permit from the city of mayor to
operate that game in the City if Manila. While
PAGCOR is allowed under its charter to enter into
agreement in its authorized operations, that
power, upon the other hand, cannot so
constructed as to permit it to likewise grant a
veritable franchise to any other person, individual
or firm.
Indeed, the grant of a franchise is a purely
legislative act that cannot be delegated to
PAGCOR without violating the Constitution. The
thesis rests on the maxim potestas delegata non
delegari potest. Any constitutionally delegated
sovereign power constitutes not only a right but a
duty to be performed by the delegate, the
legislature in this case, through the
instrumentality of its own judgement. A further
delegation of such power to PAGCOR would
constitute a negation of this duty in violation of
the trust reposed in the delegate mandated to
discharge it directly. Parenthetically, under the
1987 Constitution, the only instances when the
inherent powers, i.e., police power, eminent
domain and taxation, that may be delegated but
solely to local legislative units.
The broad authority then of PAGCOR under its
charter to enter into agreements could not have
been mean to empower PAGCOR to pass on to
share its own franchise to others. Had its charter
intended otherwise, PAGCOR would have been
itself virtually capable of extending franchise
rights and thereby be a recipient of an unlawful
delegation of legislative power.
For the foregoing considerations, I vote to grant
the petitions in these case insofar as they seek to
enjoin respondent Philippine Amusement and
Gaming Corporation (“PAGCOR”) from operating
jai-alai or Basque Pelota games through
respondents Belle Jai Alai Corporation (“BELLE”)
and/or Filipinas Gaming Entertainment Totalizator
Corporation (“FILGAME”) or through any other
agency, but I vote to deny the same insofar as
they likewise seek to prohibit PAGCOR from itself
managing or operating the game.
DISSENTING OPINION
DE LEON, JR., J.:
I respectfully dissent from the majority opinion
of Mr. Justice Reynato S. Puno granting the
consolidated petition in these two cases.
An exposition of these two cases would be
helpful.
Here are two consolidated cases filed against
respondent Philippine Amusement and Gaming
Corporation (hereinafter referred to as PAGCOR)
to desist from managing and/or operating jai alai
or Basque pelota games, by itself or with the
“infrastructure facilities” of co-respondents Belle
Jai Alai Corporation (hereinafter called FILGAME).
In G.R. No. 138298, Raoul B del Mar, in his
capacity as member of the House of
Representatives representing the First District of
Cebu and as a taxpayer, filed a petition for
prohibition, with prayer for temporary retraining
order, against PAGCOR for conducting jai alai or
Basque pelota games. In the said petition filed
with this Court on May 6, 1999, del Mar alleged
that the operation of jai alai the power to open,
pursue, conduct, operate, control and manage jai
alai game operations in the country.
Under Section 10 of Presidential Decree No.
1869, PAGCOR’s nature and term of franchise
which is therein contained, is as follows:
SEC. 10. Nature and term of franchise.-
Subject to the terms and conditions established
in this Decree, the corporation in hereby granted
for a period of twenty-five (25) years, renewable
for another twenty-five (25) years, the right s
privilege and authority to operate and maintain
gambling casinos, clubs, and other recreations or
amusement place, sports gaming pools, i.e.
basketball, football, lotteries, etc. whether on
land or sea within the territorial jurisdiction of the
Republic of the Philippines.
PAGCOR, in conducting Basque pelota games
otherwise known as jai alai, relied on the Opinion
of the Secretary of Justice dated as July 16, 1996
that “the authority of PAGCOR under its charter
to operate and maintain games of chance or
gambling extends to jai alai which is a form of
sport or game played for bets and that the
charter of PAGCOR (P.D. No. 1869) amounts to a
legislative franchise for the purpose.”
On June 17, 1999, PAGCOR entered into a joint
venture agreement with BELLE and FILGAME
relating to the opening, operation, control and
management of jai alai games operations in the
country. Under the said agreement which is
coterminous with the franchise of PAGCOR,
BELLE and FILGAME will provide technical
assistance to PAGCOR with respect to various
aspects of jai alai operations including the
operation of computerized nationwide network of
on-line betting systems. The jai alai fronton
facilities will be provided by BELLE and FILGAME,
on a free-rent basis, to PAGCOR. PAGCOR, on the
other hand, shall consult BELLE and PAGCOR and
FILGAME as regards the formulation of the terms
of appointment of their personnel.
On July 1, 1999, Federico S. Sandoval II and
Michael T. Defensor, in their capacity as
members of the House of Representatives
representing the lone district of Malabon-Navotas
and the 3rd District of Quezon City respectively,
and as taxpayers, filed a Petition for Injunctive
Relief with Prayer for Issuance of Temporary
Restraining Order, with this Court to compel
PAGCOR to refrain from operating and managing
jai alai games. The petition was docketed as G.R.
No. 13892. Petitioners Sandoval and Defensor
alleged that the franchise of PAGCOR does not
include the operation of jai alai being one of the
activities prohibited under the Revised Penal
Code, as amended by P.D. No. 1602 otherwise
known as the Anti-Gambling Law. Petitioners
further averred that jai alai is not a game of
chance and cannot be the subject of PAGCOR
franchise.
On August 17, 1999, petitioner del Mar filed a
motion for leave to file a supplemental petition in
G.R. No. 138298, impleading BELLE and FILGAME
as additional respondents. The said motion for
leave was granted. In his supplemental petition
denominated as “Petition for Certiorari,
Prohibition with prayer for Temporary Restraining
Order and Injunctive Writ” petitioner questioned
the authority of PAGCOR to enter into an
agreement with BELLE and FILGAME for the
opening, establishment of jai alai operations.
Petitioner alleged that in entering into the said
agreement with BELLE and FILGAME, PAGCOR
has virtually relinquished its management of jai
alai operations to the said corporations. Petitioner
further alleged that assuming that PAGCOR has
the requisite franchise to operate jai alai, it is still
under obligation to conduct an open and fair
public bidding to determine the capability of the
parties concerned who may be interested to
provide funds for capital expenditures, including
an integrated computer network system for
fronton and off fronton betting stations and the
infrastructure or facilities of the fronton at
Manila. petitioner alleged that contracts that
require competitive public bidding relate to
infrastructure projects of public works and the
procurement of equipment, supplies and
materials.
On September 24, 1999, Juan Miguel Zubiri, as a
taxpayer and member of the House of
Representatives representing the Third District of
Bukidnon, filed a petition for intervention in G.R.
No. 138982. Zubiri alleged that the legislative
power to grant franchises for the operation of jai
alai has not been delegated by Congress to
anyone. By operating jai alai without the required
legislative franchise, PAGCOR has effectively
usurped the authority of Congress to grant
franchise in violation of the Constitution.
Considering that BELLE and FILGAME were
impleaded as additional respondents in G.R. No.
138298, the Court required BELLE and FILGAME
on March 21, 2000, we granted the said motion
for consolidation.
In both G.R. Nos. 138982 and 138298, no
temporary restraining order was issued by this
Court.
PAGCOR’s comments, through the Office of the
Government Corporate Counsel and the Office of
the Solicitor General, to these consolidated
petitions or cases may be essentially summarized
as follows:
I. Petitioners have no legal standing to file a
taxpayer’s suit based on their alleged cause of
action nor are they a real party in interest
entitled to the avails of the suit.
II. An action for injunction is not among the
cases or proceedings originally cognizable by the
Honorable Supreme Court.
III. The franchise of PAGCOR includes its
authority and power to open, pursue, conduct,
operate, control and manage jai alai operations in
the country.
In its comment in G.R. No. 138298, PAGCOR
further alleged that:
IV. Per its charter, the corporate authority and
power of PAGCOR to operate and conduct jai alai
games include the express power to enter into
joint venture agreements.
V. The joint venture Agreement dated June 17,
1999 entered into by and among PAGCOR, Belle
Jai alai Corporation (BELLE) and Filipinas Gaming
Entertainment Totalizator Corporation (FILGAME)
does not require any public bidding for its
validity.
Respondent PAGCOR maintains that petitioners
have no standing to file a taxpayer’s suit since
there is not showing that these cases involve
expenditure of public funds.
In Kilosbayan, Incorporated vs. Morato we have
categorically stated that taxpayers voters,
concerned citizens and legislators, as such, may
bring suit only (1) in cases involving
constitutional issues and (2) under certain
conditions. Taxpayers are allowed to sue, for
example, where there is a claim of illegal
disbursement of public funds or where a tax
measure is assailed as unconstitutional.
Concerned citizens can bring suits if the
constitutional question they raise is of
transcendental importance which must be settled
early. While herein petitioners and intervenor
claim illegal disbursement of public funds by
PAGCOR in the resumption of the operations of
jai alai games, there is nothing on record to show
involvement of any expenditure of public money
on the part of PAGCOR. In fact, what is
essentially raised as an issue is whether PAGCOR
has the requisite franchise to operate jai alai
games and whether it is authorized under its
charter to enter into joint venture agreements
with private corporations. More specifically, under
the joint venture Agreement dated June 17, 1999
it is private respondent corporations BELLE and
FILGAME which will provide infrastructure
facilities to PAGCOR on a rent free basis. I cannot
see how the court treat the subject petitions as
taxpayers suits when there is nothing, apart from
petitioners’ bare allegations, to prove that the
operations of jai alai would involve expenditure of
public funds. Neither does the pivotal issue raised
relate to a constitutional question inasmuch as
only the scope of PAGCOR’s franchise, and not its
validity, is assailed.
This Court is faced, however, with the issue as to
the standing of the petitioners who filed their
petitions, in their capacity as taxpayers and
members of the House of Representatives,
alleging infringement by PAGCOR on the
legislature’s sole prerogative in the granting of a
jai alai franchise. Respondents PAGCOR, BELLE
and FILGAME contend, however, that the pivotal
issue raised by petitioners is whether or not
PAGCOR has committed acts beyond the scope of
its franchise when it entered into the said
Agreement with BELLE and FILGAME for the
resumption of jai alai operations. Respondents, in
consequence, raised an issue which may be
commenced and prosecuted only by the Solicitor
General through a quo warranto action.
In support of their position, respondent cite
Section 2, Rule 66 of the old Rules of Civil
Procedure governing quo warranto proceedings
against legally incorporated entities which reads:
Sec. 2. Like actions against corporation.-A like
action may be brought against a corporation:
A) When it has offended against a provision of an
act for its creation.
xxx
D) When it has misused a right, privilege, or
franchise conferred upon it by law, or when it has
exercised a right, privilege or franchise, or
franchise in contravention of law.
Respondents maintain that although Section 2 of
Rule 66 was not reproduced in the 1997 Rules of
Civil Procedure, an action for quo warranto may
still be commenced by the Solicitor General
before the aforesaid section.
Quo warranto literally means: “By what
authority.” It is an extraordinary legal remedy
whereby the State challenges a person or an
entity to show by what authority he holds a
public office or exercises a public franchise. It is
commenced by the Solicitor General in the name
of the Republic of the Philippines, or when upon a
complaint or otherwise, he has good reason to
believe that any of the cases specified under the
law exists to warrant the institution of a quo
warranto proceedings. Quo warranto proceedings
against corporations are instituted to demand the
forfeiture of their franchise or charter.
It is clear that Section 2 Rule 66 of the old Rules
of Court governing quo warranto proceedings
against legally incorporated entities, is not
reproduced in the 1997 Rules of Civil Procedure.
Proceedings against legally incorporated entities,
alleging misuse of its subject petitions before this
Court were filed in May and July 1999,
respectively, up to the time the last pleading was
filed on July 7, 2000, were governed by Section 5
(b) of P.D. 902-A which vested the Securities and
Exchange Commission (SEC) with full jurisdiction
over the same. However, P.D. 902-A was
superseded by R.A. 8799, which took effect on
August 8, 2000.
The difficulty of the issue posed by petitioners is
that, in the cases at bar, the Solicitor General
together with the Office of the Government
Corporate Counsel is the counsel for respondent
PAGCOR.
This is not to say, however, that this Court
cannot take cognizance of the instant cases
before us. While petitioners allege unlawful
operation of jai alai games by PAGCOR, what is
ultimately and mainly at issue in these cases is
the interpretation of PAGCOR’s franchise which
defines the scope of PAGCOR’s rights, privileges
and authority. While the Executive branch of the
government, through the Secretary of Justice and
Office of the Government Corporate Counsel have
interpreted respondent PAGCOR’s franchise to
include the operation of jai alai, the petitioners,
in their capacity as members of the House of
Representatives, allege a different interpretation.
Whether or not PAGCOR has in fact committed
acts beyond the scope of its franchise hinges
upon the interpretation of PAGCOR’s franchise.
Considering that said pivotal issue involves the
interpretation of the law defining the scope of
PAGCOR’s rights, privileges and authority, this
Court may rightfully take, as in fact it has taken,
jurisdiction over the subject petitions. It is well-
settled that the duty and power to interpret a
statute belongs to the Judiciary. While the
legislative and/or executive departments, be
enacting and enforcing a law, respectively, may
construe or interpret the law, it is the Supreme
Court that has the final word as to what the law
means.
Having ruled that this Court can take cognizance
of the subject petitions, I come back to the
question as to whether petitioners, in the
requisite standing to file these two related suits.
Respondent PAGCOR contends that petitioners
who instituted these suits in their capacity as
lawmakers cannot validly claim that they are the
issue as to whether or not it has the authority to
operate and manage jai alai games does not
violate petitioners’ rights as members of congress
nor can it be deemed as impermissibly intruding
into the domain of the legislature.
The issue as to whether a member of Congress
may bring suit in his capacity as a lawmaker,
alleging impairment of any of the powers, rights
and privileges belonging to Congress, is not
novel. Citing the American cases of Coleman vs.
Miller and Holtzman vs Schlesinger we declared
in Philconsa vs. Enriquez that “to the extent that
the powers of Congress are impaired, so is the
power of each member thereof, since his office
confers a right to participate in the exercise of
the powers of that institution.”
A more careful scrutiny is warranted, therefore,
with regard to the issue as to whether the powers
and rights of petitioners, as member of Congress,
are in any way impaired by respondent PAGCOR’s
act of operating and maintaining jai alai games.
There is no dispute that the power to grant
franchises rests within the legislative branch of
government. In a legal or narrower sense, the
term “franchise” is more often used to designate
a right or privilege conferred by law. The view
taken in a number of cases is that to be a
franchise, the right possessed must be such as
cannot be exercised without the express
permission of a sovereign power, that is, a
privilege or immunity of a public nature which
cannot be legally exercised without legislative
grant. Having the prerogative to grant franchises,
Congress also has the power to revoke or repeal
or alter franchises. Considering that whatever
judgment may be rendered in the interpretation
of the law defining the scope of PAGCOR’s
franchise would have a bearing on petitioners;
amend, alter, or repeal, through legislation,
PAGCOR’s requisite standing to bring these suits
at bar.
Respondent PAGCOR, nevertheless, insists that
an action for injunction is not among the cases or
proceedings originally cognizable by the Supreme
Court. In support of its contention, PAGCOR cites
the cases of Diokno vs. Reyes and Garcia Gavires
vs. Robinson where it was held an application for
preliminary injunction will not be entertained by
this Court unless the same is prayed for in
connection with some other remedy or in any
action actually pending before Us.
Injunction is a judicial writ, process or proceeding
whereby a party is ordered to do or refrain from
doing a particular act. It may be an action in
itself brought specifically to restrain or command
the performance of an act or it may be just a
provisional remedy for and as an incident in the
main action which may be for other relief. The
action for injunction should not be confused with
the ancillary and provisional remedy of
preliminary injunction which cannot exist except
only as an incident of an independent action or
proceeding. In a main action for permanent
injunction, a party may ask for preliminary
injunction pending the final judgment.
Section 1, Rule 56 of the 1997 Rules of Civil
Procedure provides:
Section 1. Original cases cognizable.-Only
petitions for certiorari, prohibition, quo warranto,
habeas corpus, disciplinary proceedings against
members of the judiciary and attorneys, and
cases affecting ambassadors, public ministers
and consultants may be filed originally in the
Supreme Court.
It is clear that no mention was made in the
above-cited rule as to the jurisdiction of this
Court to entertain original actions for injunction.
In the 1917 case of Madarang vs. Santamaria,
we have ruled that the Supreme Court does not
have original jurisdiction, in an action brought for
that purpose, to grant the remedy by injunction
pursuant to Section 17 of Act No. 136 which
provided that the Supreme Court shall have
original jurisdiction to issue writs of mandamus,
certiorari, prohibition, habeas corpus and quo
warranto. As in Section 17 of Act 136, Section 1
of Rule 56 of the 1997 Rules of Civil Procedure.
Notwithstanding procedural lapses as to the
appropriateness of the remedies prayed for in the
petitions filed before Us, however, this Court can
take primary jurisdiction over the said petitions in
view of the importance of the issues raised. In
some instances, this Court has even suspended it
own rules and excepted a case from their
operation whenever the higher interests of justice
so demanded.
It is helpful, in the discussion of the merits of
these consolidated cases, to review the history of
the law creating PAGCOR.
On January 1, 1977, the then President
Ferdinand E. Marcos, in the exercise of his
legislative powers under Amendment No. 6 of the
1973 Constitution, issued Presidential Decree
(P.D.) No. 1067-A creating the Philippine
Amusement Games Corporation (PAGCOR).
PAGCOR was created and mandated to
implement the following state policy:
Section 1. DECLARATION OF POLICY.-It is
hereby declared to be the policy of the state to
centralize and integrate all games of chance not
heretofore authorized by existing franchise or
permitted by law to obtain the following
objectives:
1. To centralize and integrate the right and
authority to operate and conduct games of
chance into one corporate entity to be controlled,
administered and supervised by the government;

2. To establish and operate clubs and casinos,
sports gaming pools (basketball, football, etc.)
and such other for amusement and recreation,
including games of chance, which may be allowed
by law within the territorial jurisdiction of the
Philippines which will (1) generate source of
additional revenue infrastructure and socio-
economic projects, such as flood control,
Tulungan ng Bayan Centers/Nutritional Programs,
Population Control and such other essential public
services; (2) create recreation and integrate
facilities which will expand and improve the
country’s existing tourist attractions; (3)
minimize, if not totally eradicate the evils conduct
and operation of gambling clubs and casinos
without direct government involvement.
On the same day, PAGCOR was granted by the
then President Marcos under P.D. No. 1067-B the
“franchise to establish, operate and maintain
gambling casinos on land and water within the
territorial jurisdiction of the Republic of the
Philippines.” PAGCOR’s franchise was further
amended under P.D. No. 1067-C for the purpose
of specifying that “The franchise shall become
exclusive in character, subject only to the
exception of existing franchises and games of
chance heretofore permitted by law.” P.D. No.
1067-A and relative to the provisions on board of
Directors, exemptions and allocation of fund,
among others.
On July 11, 1983, President Marcos issued P.D.
No. 1869 for the purpose of consolidating and
amending P.D. Nos. 1067-A, 1067-B, 1067-C,
1399 and 1632, relative to the franchise and
powers of PAGCOR. Under P.D. No. 1869,
PAGCOR is mandated to implement the following
state policy-
xxx
(b) to establish and operate clubs and casinos,
for amusement and recreation, including sports
gaming pools (basketball, football, lotteries, etc.)
and such other forms of amusement and
recreation including games of chance which may
be allowed by law within the territorial
jurisdiction of the Philippines and which will (1)
generate sources of additional revenue to
infrastructure and socio-civic projects, such as
flood control programs, beautification, sewerage
and sewage projects, Tulungan ng Bayan centers,
Nutritional Programs, population control and such
other essential expand and improve the country’s
existing tourist attractions; and (3) minimize, if
not totally eradicate, the evils, malpractices and
corruptions that are normally in the conduct and
operation of gambling clubs and casinos without
direct government involvement.”
It is the petitioners’ contention that PAGCOR’s
franchise is limited to the management and
operation of games of chance. They point out
that P.D. No. 810 and Executive Order No. 169
have characterized jai alai as a game of skill and
consequently, the operation and management of
jai alai or Basque pelota games cannot be said to
have been included in PAGCOR’s franchise. Jai
alai as defined in Webster’s dictionary is a game
of Basque origin resembling handball and played
(as in Spain and Latin America) on a large walled
court by usually two (2) or four (4) players who
use a long curved wicker basket strapped to the
right wrist to catch and hurl the ball against the
front wall to make it rebound in such a way that
the opponent cannot return it before it has
bounced more than once.
Respondent PAGCOR, on the other hand, citing
the cases of Lim vs. Pacquing and Guingona vs.
Reyes, et al., claims that while jai alai in itself is
not a game of chance, it may be characterized as
a game of chance when bets are accepted as a
form of gambling.
The object of all interpretation and construction
of statutes is to ascertain the meaning and
intention of the legislature, to the end that the
same may be enforced. This meaning and
intention must be sought first of all in the
language of the statute itself. for it must be
presumed that the means employed by the
legislature to express its will are adequate for the
purpose and do express that will correctly. If the
language is plain and free from obscurity, it must
be taken as meaning exactly what it says,
whatever may be the consequences.
Section 11 of P.D. No. 1869 defining the extent
and nature of PAGCOR’s franchise reads:
x x x the Corporation is hereby granted x x x the
rights, privilege, and authority to operate and
maintain gambling casinos, clubs, and other
recreation or amusement places, sports, gaming
pools, i.e., basketball, football, lotteries, etc. x x
x [ talics supplied]
Contrary to the majority opinion that PAGCOR’s
franchise is limited only to the management and
operation of casinos, a cursory reading of the
abovequoted legal provision would readily show
that the extent and nature of PAGCOR’s franchise
is so broad that literally all kinds of sports and
gaming pools, including jai alai, are covered
therein.
A sport is defined as “a game or contest
especially when involving individual skill or
prowess on which money is staked.” Gaming, on
the other hand, is defined as “the act or practice
of playing games for stakes.” P.D. No. 1869 has
made express mention of basketball and football
as example of gaming pools. Basketball and
football, however, like jai alai are games of
chance and games of skill was treated in this
wise:
This distinction between games of chance and
games of skill, making betting upon the former
illegal is quite well treated in State vs. Gupton
(30 N.C. 271) where a game of tenpins was held
not to be a players, and betting thereon
consequently not prohibited by a statute
prohibiting bets or wagers upon games of
chances.
Considering that under Section 11 of P.D. No.
1869, games of skill like basketball and football
have been lumped together with the word
“lotteries” just before the word “etc.” and after
the words “gaming pools,” it may be deduced
from the wording of the law that when bets or
stakes are made in connection with games of
skill, they may be classified as games of chance
under the coverage of PAGCOR’s franchise. The
meaning of the phrase “et cetera” or its
abbreviation “etc.” depends largely on the
context of the instrument, description and
enumeration of the matter preceding the term
and subject matter to which it is applied, and
when used in a stature, the words, should be
given their usual and natural construction that
when words and phrases of a statute are clear
and unequivocal, their meaning must be
determined from the language employed and
statute must be taken to mean exactly what it
says. Even if the Court is fully persuaded that the
failure to convey the real meaning was due to
inadvertence or mistake in the use of language,
yet, if the words chosen by the legislature are not
obscure or ambiguous, but convey a precise and
sensible meaning (excluding the case of obvious
clerical errors or elliptical forms of expression),
then the Court must take the law as it finds it,
and give it its literal interpretation, without being
influenced by the probable legislative meaning
lying at the back of the words. In that event, the
presumption that the legislature meant what it
said, though it be contrary to the fact, is
conclusive.
Notably, even the literal application of the word
“etc.” does not run counter to the reason for the
enactment of the statute and the purpose to be
gained by it. P.D. No. 1869, the law amending
and consolidating P.D. Nos. 1067-A, 1067-B,
1067-C, 1399 and 1632, Relative to the
Franchise and Powers of PAGCOR, was issued by
the then President Marcos, pursuant to the
observation that PAGCOR’s operation has enable
the government to identify potential sources of
additional revenue for the government provided
all games of chance are managed and made
subject to the close scrutiny, regulation,
supervision and control by the government. The
operation and management of jai alai can and
will undoubtedly generate more funds for
PAGCOR as a source of additional and much
needed revenue for the government.
It is alleged that there is no specific mention of
jai alai among the games which PAGCOR can
operate under its franchise. Hence, pursuant to
the principle that a franchise is a special privilege
that should be construed strictly against the
grantee, PAGCOR cannot claim that it is
authorized to conduct the operation of jai alai
games.
While there is no specific mention of jai alai as
among the games of chances which PAGCOR can
operate under its franchise, the language of the
law defining the scope of PAGCOR’s franchise is
broad enough to include the operations of jai alai
as a game of chance. Where the franchise
contains no words either defining or limiting the
powers which the holder may exercise, such
holder has, by implication, all such powers as are
reasonably necessary to enable it to accomplish
the purposes and object of its creation. It is well
recognized that the principle of strict construction
does not preclude a fair and reasonable
interpretation of such charter and franchises, nor
does it justify withholding that which
satisfactorily appears to have been intended to
be conveyed to the grantee.
It is claimed that jai alai operations is beyond the
scope of PAGCOR’s franchise inasmuch as jai alai
is not allowed by law within the territorial
jurisdiction of the Philippines; and that at the
time of the passage of P.D. No. 1869, the
operations of jai alai was already the subject of a
grant to the Philippines Jai alai and Amusement
Corporation (PJAC) by virtue of P.D. Nos. 810
and 124; and that the subsequent repeal of P.D.
Nos. 810 and 1124 in 1986 allegedly reverted
betting on the results of jai alai games to the
status of a criminal act under P.D. No. 1602.
The mere granting of a franchise does not
amount to an implied contract on the part of the
grantor that it will not grant a rival franchise to a
competing corporation or enter into a competition
itself in reference to the subject of the franchise.
Monopoly is not an essential feature of a
franchise is not always confined to exclusive
rights. An examination of the provisions of P.D.
No. 810 does not give us any indication that the
franchise granted to PJAC to operate jai alai is
exclusive in character. Given the broad language
of P.D. No. 1869 defining the scope of PAGCOR’s
franchise, I find no reason why the operations of
jai alai is cannot be deemed as included in its
franchise. Besides, the subsequent repeal of P.D.
Nos. 810 and 1124 in 1986 by E.O. No. 610 only
meant that PJAC was no longer entitled to
exercise its rights under its former franchise. E.O.
No. 610, otherwise known as Repealing
Presidential Decree No. 810, entitled “An Act
Granting the Philippine Jai Alai and Amusement
Corporation a Franchise to Operate, Construct
and Maintain a Fronton for Basque Pelota and
Similar Games of Skill in the Greater Manila
Area,” as amended, and Accordingly Revoking
and Canceling the Right, Privilege and Authority
granted therein in itself did not delimit the scope
of the franchise of PAGCOR especially since E.O.
No. 610 was specific enough to identify the
repeal of the law (P.D. No. 810) granting a
certain franchise, i.e. PJAC’s franchise. As
regards PJAC’s franchise. As regards P.D. No
1602, it should be stressed that it did not outlaw
the operations of jai alai. It merely provided for
stiffer penalties for illegal or unauthorized
activities related to jai alai and other forms of
gambling.
The majority opinion makes much issue of the
fact that the franchise of PAGCOR under P.D.
1869 came from President Marcos who assumed
legislative powers under martial law. He stresses
that “the so-called legislative grant to PAGCOR
did not come from a real Congress.” I would like
to point out, however, the fact that the validity of
PAGCOR’s franchise has already been upheld in
the Basco vs. PAGCOR. As earlier stated, the
main issue before this Court is the scope of the
aforesaid franchise of the PAGCOR and not its
validity. The majority opinion does not dispute
that PAGCOR under P.D. No. 1869 has the
requisite franchise to operate gambling casinos.
In the same vein, however, it is agreed that P.D.
No. 1869 cannot be held as a valid legislative
grant of franchise for the operation of jai alai
games. President Marcos had legislative power,
under Amendment No. 6 during the martial law
years, has been upheld in a number of case by
this Court, notably that of Legaspi vs, Minister of
Finance. Moreover, Section 3, Article XVIII of the
Transitory Provisions of the 1987 Constitution
clearly provides that: “ All existing laws, decrees,
executive issuances not inconsistent with this
Constitution shall remain operative until
amended, repealed or revoked.” Hence, unless
and until P.D. No. 1869 which is the character
and franchise of PAGCOR, is amended or
repealed by Congress, it remains valid and
effective.
If courts believe that a particular statute is
unwise, a recognition of their own limited sphere
forbids them from amending or rewriting the law
in the guise of strict interpretation to suit their
own predilections or prejudices. The case Stone
vs. Mississippi cited in the majority opinion
saying that the courts do not assume that the
legislature intended to part away with its power
to regulate public morals, is misplaced. In the
said case, an Act was passed by the legislature of
Mississippi on January 16, 1867 entitled, “An Act
Incorporating the Mississippi Agricultural,
Educational and Manufacturing Aid Society” which
conceded to the defendants the franchise of
issuing and vending lottery tickets. From 1822 to
1867, without any constitutional requirement,
lotteries were prohibited by law in Mississippi and
those who conducted them were punished as a
kind of gamblers. In 1868, the people of the
State of Mississippi adopted a new Constitution
which contained a provision stating that “the
Legislature shall never authorize any lottery; nor
shall the sale of lottery tickets be allowed; nor
shall any lottery herefore authorized be permitted
to be drawn, or tickets therein to be sold. The
defendants therein insisted that they had
complied with all the conditions imposed by the
charter, and were conducting business in
accordance with its provisions; that the terms of
the state Constitution and the Legislative Act,
above set forth, interfered with their vested
rights and violate the Constitution of the United
States, in attempting to impair the obligation of
contracts. The question then posed was whether
in the view of the facts presented, the legislature
of a state can, by the charter of a lottery
company, defeat the will of the people
authoritatively expressed in relation to the
further continuance of such business in their
midst. The United Stated Supreme Court ruled
that no legislature can bargain away public health
or public morals.
Clearly, the issue in the said case is materially
different from the issue in the scope and not the
validity of respondent PAGCOR’s franchide to
operate jai alai as a legalized game of chance. It
is not amiss to note that PAGCOR in the light of
Section 1 of P.D. No. 1869 was created,
precisely, to “centralize and integrate all games
of chance not herefore authorized by existing
franchises or minimize the evils, malpractices and
corruptions that normally are found pervalent in
the conduct and operation of gambling clubs and
casinos without direct government involvement.”
PAGCOR’s right to operate jai alai games as
legalized games of chance under its franchise of
police power. In Basco vs. PAGCOR this Court
have so declared that “Public welfare lies at the
bottom of the enactment of P.D. No. 1869.”
Reliance in the majority opinion on the case of
Aicardi vs. Alabama that a statute which legalizes
a gambling activity or business should be strictly
constructed and every reasonable doubt must be
resolved to limit the powers and rights claimed
under its authority is likewise misplaced. The
aforesaid statement was apparently taken out of
context inasmuch as in the same case, the court
declared “Every reasonable doubt should be so
resolved as to limit the powers and rights claimed
under its authority. Implications and intendments
should have no place except as they are
inevitable from the language or the context.” As
earlier stated, in the case at bar the scope of
PAGCOR’s franchise is couched in a language that
is broad enough to cover the operation of jai alai.
As regards the issue that it could have been the
intent of then President Marcos to grant PAGCOR
a franchise to operate jai alai considering that he
had already issued to another corporation which
is controlled by his in-laws a franchise to operate
jai alai suffice it to say that in the interpretation
of statutes, it is not proper or permissible to
inquire into the motives which influenced the
legislative body, except insofar as such motives
are disclosed by the statute itself. it should be
stressed that the magnitude of the consideration,
political or financial, which may operate upon the
legislative mind as an inducement for grants and
franchises conferred by statute, do not change
the charter of the legislation, or vary the rule of
construction by which the rights of the grantees
must be measured.
Considering that PAGCOR’s franchise is broad
enough to cover the operation and management
of jai alai games as well as supervised betting
activities in connection therewith, let us come to
the question as to whether PAGCOR may enter
into a joint venture agreement with the private
corporations, BELLE and FILGAME, to operate,
manage and conduct jai alai games as well as
supervised betting activities both at the fronton
site and selected off-fronton betting stations.
PAGCOR’s right to enter into management
contracts is not limited to those relating to the
efficient operation of gambling casinos under
Section 11 of P.D. No. 1869 which reads:
Sec. 11. Scope of Franchise.- in addition to the
rights and privileges granted it under the
preceding section, this Franchise shall entitle the
corporation to do and undertake the following:
(1) enter into operating and/or managing
contracts with any registered and accredited
company possessing the knowledge, skill and
ecxpertise and facilities to insure the efficient
operation of gambling casinos
A joint venture is an association of persons or
companies jointly undertaking some commercial
enterprise- generally, all contribute assets and
share risked. It requires a community of interests
in the performance of the subject matter, a
right, and governs the policy connected
therewith,and duty, which may be altered by
agreement to share in both of partnership and is
thus governed by the law on partnerships.
Section 3 of P.D. No. 1869 enumerates the
following powers and functions o PAGCOR:
h) to enter into, make, perform, and carry out
contracts of every kind and for any purpose
pertaining to the business of the corporation, or
in any manner incident thereto, as principal,
agent or otherwise, with any person, firm,
association or corporation;
i) to do anything and everything necessary,
proper, desirable, convenient or suitable for the
accomplishment of any of the purpose or the
attainment of any of the objects or the
furtherance of any of the powers herein stated,
either alone or in association with other
corporations, firms or individuals, and to do
every other act or thing incidental, pertaining to,
growing out of , or connected with, the aforesaid
purposes, objects or powers, or anyy part
thereof.
Clearly, in Section 11 of P.D. No. 1869, the
powers granted to PAGCOR is broad enough to
include the power to enter into a joint venture
agreement with private corporations like BELLE
and FILGAME relating to the operation,
management and conduct not only of gambling
casinos but also of those relating to jai lai as
legalized gambling.
Where the language of the statute is clear, it is
the duty of the court to enforce it according to
the plain meaning of the word. There is no
occasion to resort to other means of
interpretation. It is not allowable to interpret
what has no need of interpretation, and, when
the words have a definite and precise meaning,
to go elsewhere in search of conjecture in order
to restrict or extend the meaning. When an act is
expressed in clear and concise terms and the
sense is manifest and leads to nothing absurd,
there can be no reason not to adopt the sense
which it naturally presents. To go elsewhere in
search of conjectures in order to fins a different
meaning is not so much to interpret the law as to
elude it.
Under the rule potestas delegata non delegari
potest as delegated power cannot be delegated
power constitutes not only a right but a duty to
be performed by the delegate through the
instrumentality of his own judgement acting
immediately upon the matter of legislation and
not through the interviewing mind of another.
However, the said rule is inapplicable in the case
at bar. The legislative grant of franchise to
PAGCOR has not accorded unto the latter
legislative powers nor quasi-legislative powers.
The joint venture Agreement was entered by
PAGCOR with FILGAME and BELLE pursuant to
the power granted under P.D. No. 1869 to
PAGCOR to “enter into, make perform, and carry
out contracts of every kind and for any purpose
pertaining to the business of the corporation with
any person, firm or corporation.” Under the joint
venture Agreement, BELLE and FILGAME will
provide financial requirements and technical
assistance to PAGCOR in connection with the use
of their operational facilities. PAGCOR however
shall still manage, regulate and control all
aspects of jai alai operations. The subject joint
venture Agreement is in consonance with the
powers granted to PAGCOR that it may ‘do
anything and everything necessary, proper,
desirable, convenient or suitable for the
accomplishment of any of the purposed or
attainment of any of the objects or the
furtherance of any of the powers herein stated,
either alone or in association with other
corporations, firms or individuals.”
It should be noted that the joint venture
Agreement entered into by and among PAGCOR,
BELLE and FILGAME, does not involve any
infrastructure contract or project which is
governed by P.D. No. 1594. Neither does it
involve the sale and furnishing of supplies,
materials and equipment to the government
under E.O. 301. In Kilosbayan, Incorporated vs.
Morato, this Court ruled that Section1 of E.O. 301
denominated as “Decentralizing Actions on
Government Negotiated Contracts, Lease
Contracts and Records Disposal,” applies only to
contracts for the purchase of supplies, materials
and equipment. In the joint venture Agreement
in question, it is BELLE and FILGAME which will,
in fact, provide the financial requirements and
technical assistance to PAGCOR in connection
with the use of their operational facilities. Hence,
there is no necessity for PAGCOR to conduct a
public bidding before entering into the said joint
venture Agreement with BELLE and FILGAME
especially since there is nothing in the provisions
of P.D. No. 1869 which would require that
contracts like the Joint Venture Agreement in
questioned for public bidding.
Finally, while on one hand, jai alai, as a form of
legalized gambling under the control and
supervision of PAGCOR, does not promote good
morals, on the other hand it is expected to
provide entertainment to the public and much
needed revenues to the government. In
balancing those two apparently conflicting
interests, it must be stressed that courts are not
supposed to pass upon and do not pass upon
questions of wisdom or expediency of legislation,
for it is not within their province to supervise and
keep legislation within the bounds of propriety.
That is primarily and exclusively a legislative
concern. Any shortcoming of a statute is for the
legislature alone to correct by appropriate
enactment.
In view of all the foregoing, I vote to dismiss the
consolidated petitions in G.R. No. 138298 and
G.R. 138982.
Petitions granted, respondents enjoined from
managing , maintaining and operating jai-alai
games.
[1997V712] CECILLEVILLE REALTY and
SERVICE CORPORATION, petitioner vs. THE
COURT OF APPEALS and HERMINIGILDO
PASCUAL, respondents.1997 Sep 53rd
DivisionG.R. No. 120363D E C I S I O N
FRANCISCO, J.:
In synthesis, these are the antecedent facts:
Petitioner Cecilleville Realty and Service
Corporation is the owner of a parcel of land in
Catmon, Sta. Maria, Bulacan. covered by T.C.T.
No. 86.494 (M). Private respondent Herminigildo
Pascual occupies a portion thereof. Despite
repeated demands, private respondent refused to
vacate and insisted that he is entitled to occupy
the land since he is helping his mother Ana
Pascual, petitioner's tenant, to cultivate the land
in question. Thenceforth, petitioner instituted an
ejectment suit against private respondent before
the Municipal Trial Court of Sta. Maria, Bulacan.
Finding no tenancy relationship between
petitioner and private respondent, the Municipal
Trial Court on September 17, 1992, ordered
private respondent to vacate the land and to pay
"the sum of P10,000.00 as attorney's fees" and
"another sum of P500.00 monthly from the filing
of [the] complaint." 1 Private respondent
appealed to the Regional Trial Court which, on
April 4, 1994, set aside the Municipal Trial Court's
decision and remanded the case to the DARAB for
further adjudication. Thus:
There is no question that Ana Pascual may seek
the assistance of her immediate farm household
in the cultivation of the land. The law protects
her in this regard. If the tenant Ana Pascual will
be deprived of such right by ejecting her son
Herminigildo Pascual from the land, it is
tantamount to circumventing the law as Ana
Pascual will be deprived of the helping hands of
her son. What could not be done directly cannot
be done indirectly. The issue of tenancy
relationship between the plaintiff corporation and
Ana Pascual cannot be avoided in this ejectment
case.
WHEREFORE, in the light of the foregoing, this
Court hereby orders that the instant case be
REMANDED to the DARAB for further adjudication
and the decision of the Court a quo is hereby SET
ASIDE . . . 2
Petitioner moved for reconsideration but to no
avail; hence, it appealed to respondent Court of
Appeals. In its assailed decision 3, respondent
court 4 dismissed petitioner's appeal. The entire
ruling of respondent court in point states:
We find this petition devoid of merit.
There is a clear tenancy relationship between the
plaintiff and the defendant, such that the
defendant cannot be ejected from the premises
like a common squatter.
The tenancy relationship dated back to 1976
when the defendant's father, Sotero Pascual,
became the tenant of Jose A. Resurreccion, the
President of the Cecilleville Realty and Service
Corporation. This tenancy continued until 1991
when Sotero Pascual died and was succeeded by
his wife Ann Pascual by operation of law. That
Ana Pascual is entitled to the security of tenure
was upheld by the DARAB in its Decision of
November 8, 1993 which ordered the plaintiff to
respect and maintain the peaceful possession and
cultivation of the property by the defendant Ana
Pascual and ordered the execution of a
agricultural leasehold contract between the
parties.
The defendant Herminigildo Pascual is occupying
and working on the land holding to help his
mother, a bona-fide tenant. He is an immediate
member of the family and is entitled to work on
the land. As the lower court held.
Under Republic Act No. 1199, as amended by RA
2263, entitled An Act to Govern the Relations
Between Landholders and Tenants of Agricultural
Lands (Leasehold and Share Tenancy), Section
5(a) defines the term tenant, to wit:
Sec. 5.
(a) A tenant shall mean a person who, himself
and with the aid available from within his
immediate farm household, cultivates the land
belonging to, or possessed by, another, with the
latter's consent for purposes of production,
sharing the produce with the landholder under
the share tenancy system, or paying to the
landholder a price certain or ascertainable in
produce or in money or both, under the leasehold
tenancy system.
Similarly, the term "immediate farm household"
is defined in the same section as follows:
(o) Immediate farm household includes the
members of the family of the tenant, and such
other persons, whether related to the tenant or
not, who are dependent upon him for support
and who usually help him operate the farm
enterprise.
The defendant, although not the tenant himself,
is afforded the protection provided by law as his
mother is already old and infirm and is allowed to
avail of the labor of her immediate household.
He is entitled to the security of tenure accorded
his mother. His having a house of his own on the
property is merely incidental to the tenancy.
WHEREFORE, the Decision appealed from is
AFFIRMED with costs against the petitioner. 5
( mphasis supplied.)
Dissatisfied, petitioner filed the instant petition
for review on certiorari anchored on a lone
assignment of error, to wit:
Petitioner respectfully contends that the
Honorable Court of Appeals erred in not finding
that while the private respondent is entitled to
work on the agricultural land of petitioner in his
capacity as member of the family of tenant Ana
Pascual, nonetheless he can not occupy a
substantial portion thereof and utilize the same
for residential purposes. 6
On August 19, 1996, the Court gave due course
to the petition and required the parties to submit
their respective memoranda. Thereafter, the
Court deliberated on the arguments set out in
their pleadings.
The petition is impressed with merit.
At the outset, the Court notes that petitioner
does not dispute respondent court's finding that
Ana Pascual, private respondent's mother, is its
bona-fide tenant. Neither does petitioner
question "the right of Ana Pascual, the tenant, to
be assisted by a member of her household, who
in this case is respondent Herminigildo Pascual."
7 What petitioner impugns as erroneous is
respondent court's gratuitous pronouncement
which effectively granted private respondent not
only a home lot, but also the right to maintain his
own house in petitioner's small parcel of land 8
despite the fact that Ana Pascual, the adjudged
bona-fide tenant, has previously been given a
home lot and has an existing house thereon.
Private respondent Herminigildo Pascual, for his
part, insists that he is entitled by law, "(Section
22, (3) of Rep. Act No. l199, as amended by Rep.
Act No. 2263)," 9 to a home lot and the right to
maintain another house different from that of his
mother. To bolster his contention, private
respondent adopts respondent court's ruling
finding him as a member of Ana Pascual's
immediate farm household. Private respondent
holds, quoting extensively from the assailed
decision, that "although not the tenant himself,
[he] is afforded the protection provided by law as
his mother is already old and infirm and is
allowed to avail of the labor of her immediate
household. . . . [And] [h]is having a house of his
own on the property is merely incidental to the
tenancy." 10
As the Court sees it, the issue lies on the
interpretation of Section 22, paragraph 3, of Rep.
Act No. 1199, as amended by Rep. Act No. 2263.
This section provides in full as follows:
Sec. 22
xxx
xxx xxx
(3) The tenant shall have the right to demand
for a home lot suitable for dwelling with an area
of not more than 3 per cent of the area of his
landholding provided that it does not exceed one
thousand square meters and that it shall be
located at a convenient and suitable place within
the land of the landholder to be designated by
the latter where the tenant shall construct his
dwelling and may raise vegetables, poultry, pigs
and other animals and engage in minor
industries, the products of which shall accrue to
the tenant exclusively. The tenant's dwelling shall
not be removed from the lot already assigned to
him by the landholder, except as provided in
section twenty-six unless there is a severance of
the tenancy relationship between them as
provided under section nine, or unless the tenant
is ejected for cause, and only after the expiration
of forty-five days following such severance of
relationship or dismissal for cause.
The law is unambiguous and clear. Consequently,
it must be applied according to its plain and
obvious meaning, according to its express terms.
Verba legis non est recedendum, or from the
words of a statute there should be no departure.
11 As clearly provided, only a tenant is granted
the right to have a home lot and the right to
construct or maintain a house thereon. And here,
private respondent does not dispute that he is
not petitioner's tenant. In fact, he admits that he
is a mere member of Ana Pascual's immediate
farm household. Under the law, therefore, we
find private respondent not entitled to a home
lot. Neither is he entitled to construct a house of
his own or to continue maintaining the same
within the very small landholding of petitioner. To
rule otherwise is to make a mockery of the
purpose of the tenancy relations between a bona-
fide tenant and the landholder as envisioned by
the very law, i.e., Rep. Act No. 1199, as
amended, upon which private respondent relies,
to wit:
Sec. 2. Purpose. It is the purpose of this Act to
establish agricultural tenancy relations between
landholders and tenants upon the principle of
social justice; to afford adequate protection to
the rights of both tenants and landholders; to
insure the equitable division of the produce and
income derived from the land; to provide tenant-
farmers with incentives to greater and more
efficient agricultural production; to bolster their
economic position and to encourage their
participation in the development of peaceful,
vigorous and democratic rural communities.
Thus, if the Court were to follow private
respondent's argument and allow all the
members of the tenant's immediate farm
household to construct and maintain their houses
and to be entitled to not more than one thousand
(1,000) square meters each of home lot, as what
private respondent wanted this Court to dole-out,
then farms will be virtually converted into rows, if
not colonies, of houses. How then can there be
"equitable division of the produce and income
derived from the land" and "more efficient
agricultural production" if the land's productivity
and use for growing crops is lessened or, more
appropriately, obliterated by its unceremonious
conversion into residential use? It is a
fundamental principle that once the policy or
purpose of the law has been ascertained, effect
should be given to it by the judiciary. 12 This
Court should not deviate therefrom.
Further, it is undisputed that Ana Pascual, the
tenant and private respondent's mother, has an
existing home lot and a house on the subject
property in which private respondent may take
refuge while attending to his work. Curiously,
despite its availability private respondent chose
to construct, without petitioner's permission, a
concrete house of his own thereby saving him the
trouble of paying appropriate rents. If the Court
were to abide by the respondent court's
inordinate pronouncement that private
respondent is entitled to maintain his own house
then we will be condoning the deprivation of a
landholder's property without even a fraction of
compensation. It taxes the credulity of the Court,
therefore, to insist that private respondent's
"having a house of his own on the property is
merely incidental to the tenancy" and to afford
him the convenience of attending to the
cultivation of the land for, in the first place, he is
not the tenant as he himself admits. Besides, the
"incidental" use of his own house can very well
be provided by the existing house of his mother,
who with her "old and infirm" condition, surely
needs the attention and care of her children, one
of whom is herein private respondent. Be it
emphasized that like the tenant the landholder is
also entitled to the protection of the law as one of
the purposes of the "Act" is "to afford adequate
protection to the rights of BOTH tenants and
landholders". 13 The policy of social justice, we
reiterate, is not intended to countenance
wrongdoing simply because it is committed by
the underprivileged. "Compassion for the poor",
as we said in Galay, et. al. v. Court of Appeals,
et. al. 14 "is an imperative of every humane
society but only when the recipient is not a rascal
claiming an undeserved privilege."
WHEREFORE, the petition is GRANTED. The part
of the decision appealed from which is
inconsistent herewith is REVERSED and SET
ASIDE. The decision of the Municipal Trial Court
directing the private respondent Herminigildo
Pascual to vacate the portion of the landholding
he occupies and to pay the petitioner attorney's
fees in the amount of P10,000.00 and another
sum of P500.00 monthly from the filing of
complaint is hereby REINSTATED.
Costs against private respondent.
SO ORDERED.
Narvasa, C.J., Davide, Jr., Melo and Panganiban,
JJ., concur.
[1994V673E] FELICITO BASBACIO,
petitioner, vs. OFFICE OF THE SECRETARY
DEPARTMENT OF JUSTICE, FRANKLIN
DRILON in his capacity as Secretary of
Justice, respondent.1994 Nov 7En BancG.R.
No. 109445D E C I S I O N
MENDOZA, J.:
This case presents for determination the scope of
the State's liability under Rep. Act No. 7309,
which among other things provides compensation
for persons who are unjustly accused, convicted
and imprisoned but on appeal are acquitted and
ordered released.
Petitioner Felicito Basbacio and his son-in-law,
Wilfredo Balderrama, were convicted of frustrated
murder and of two counts of frustrated murder
for the killing of Federico Boyon and the
wounding of the latter's wife Florida and his son
Tirso, at Palo, Calanuga, Rapu-Rapu, Albay, on
the night of June 26, 1988. The motive for the
killing was apparently a land dispute between the
Boyons and petitioner. Petitioner and his son-in-
law were sentenced to imprisonment and ordered
immediately detained after their bonds had been
cancelled.
Petitioner and his son-in-law appealed. Only
petitioner's appeal proceeded to judgment,
however, as the appeal of the other accused was
dismissed for failure to file his brief.
On June 22, 1992 the Court of Appeals rendered
a decision acquitting petitioner on the ground
that the prosecution failed to prove conspiracy
between him and his son-in-law. He had been
pointed to by a daughter of Federico Boyon as
the companion of Balderrama when the latter
barged into their hut and without warning started
shooting, but the appellate court ruled that
because petitioner did nothing more, petitioner's
presence at the scene of the crime was
insufficient to show conspiracy.
Based on his acquittal, petitioner filed a claim
under Rep. Act No. 7309, sec. 3(a), which
provides for the payment of compensation to
"any person who was unjustly accused,
convicted, imprisoned but subsequently released
by virtue of a judgment of acquittal." 1 The
claim was filed with the Board of Claims of the
Department of Justice, but the claim was denied
on the ground that while petitioner's presence at
the scene of the killing was not sufficient to find
him guilty beyond reasonable doubt, yet,
considering that there was bad blood between
him and the deceased as a result of a land
dispute and the fact that the convicted murderer
is his son-in-law, there was basis for finding that
he was "probably guilty."
On appeal, respondent Secretary of Justice
affirmed the Board's ruling. Said the Secretary of
Justice in his resolution dated March 11, 1993:
It is believed therefore that the phrase "any
person . . . unjustly accused, convicted and
imprisoned" in Section 3(a) of R.A. No. 7309
refers to an individual who was wrongly accused
and imprisoned for a crime he did not commit,
thereby making him "a victim of unjust
imprisonment." In the instant case, however,
Claimant/Appellant cannot be deemed such a
victim since a reading of the decision of his
acquittal shows that his exculpation is not based
on his innocence, but upon, in effect, a finding of
reasonable doubt.
Petitioner brought this petition for review on
certiorari. Neither Rule 45 nor Rep. Act No. 7309,
however, provides for review by certiorari of the
decisions of the Secretary of Justice.
Nonetheless, in view of the importance of the
question tendered, the Court resolved to treat
the petition as a special civil action for certiorari
under Rule 65.
Petitioner questions the basis of the respondent's
ruling that to be able to recover under sec. 3(a)
of the law the claimant must on appeal be found
to be innocent of the crimes of which he was
convicted in the trial court. Through counsel he
contends that the language of sec. 3(a) is clear
and does not call for interpretation. The "mere
fact that the claimant was imprisoned for a crime
which he was subsequently acquitted of is
already unjust in itself," he contends. To deny his
claim because he was not declared innocent
would be to say that his imprisonment for two
years while his appeal was pending was justified.
Petitioner argues that there is only one
requirement for conviction in criminal cases and
that is proof beyond reasonable doubt. If the
prosecution fails to present such proof, the
presumption that the accused is innocent stands
and, therefore, there is no reason for requiring
that he be declared innocent of the crime before
he can recover compensation for his
imprisonment.
Petitioner's contention has no merit. It would
require that every time an accused is acquitted
on appeal he must be given compensation on the
theory that he was "unjustly convicted" by the
trial court. Such a reading of sec. 3(a) is contrary
to petitioner's professed canon of construction
that when the language of the statute is clear it
should be given its natural meaning. It leaves out
of the provision in question the qualifying word
"unjustly" so that the provision would simply
read: "The following may file claims for
compensation before the Board: (a) any person
who was accused, convicted, imprisoned but
subsequently released by virtue of a judgment of
acquittal."
But sec. 3(a) requires that the claimant be
"unjustly accused, convicted [and] imprisoned."
The fact that his conviction is reversed and the
accused is acquitted is not itself proof that the
previous conviction was "unjust." An accused
may be acquitted for a number of reasons and
his conviction by the trial court may, for any of
these reasons, be set aside. For example, he may
be acquitted not because he is innocent of the
crime charged but because of reasonable doubt,
in which case he may be found civilly liable to the
complainant, because while the evidence against
him does not satisfy the quantum of proof
required for conviction, it may nonetheless be
sufficient to sustain a civil action for damages. 2
In one case the accused, an alien, was acquitted
of statutory rape with homicide because of doubt
as to the ages of the offended parties who
consented to have sex with him. Nonetheless the
accused was ordered to pay moral and exemplary
damages and ordered deported. 3 In such a case
to pay the accused compensation for having been
"unjustly convicted" by the trial court would be
utterly inconsistent with his liability to the
complainant. Yet to follow petitioner's theory
such an accused would be entitled to
compensation under sec. 3(a).
The truth is that the presumption of innocence
has never been intended as evidence of
innocence of the accused but only to shift the
burden of proof that he is guilty to the
prosecution. If "accusation is not synonymous
with guilt," 4 so is the presumption of innocence
not a proof thereof. It is one thing to say that the
accused is presumed to be innocent in order to
place on the prosecution the burden of proving
beyond reasonable doubt that the accused is
guilty. It is quite another thing to say that he is
innocent and if he is convicted that he has been
"unjustly convicted." As this Court held in a case:
Though we are acquitting the appellant for the
crime of rape with homicide, we emphasize that
we are not ruling that he is innocent or
blameless. It is only the constitutional
presumption of innocence and the failure of the
prosecution to build an airtight case for
conviction which saved him, not that the facts of
unlawful conduct do not exist. 5
To say then that an accused has been "unjustly
convicted" has to do with the manner of his
conviction rather than with his innocence. An
accused may on appeal be acquitted because he
did not commit the crime, but that does not
necessarily mean that he is entitled to
compensation for having been the victim of an
"unjust conviction." If his conviction was due to
an error in the appreciation of the evidence the
conviction while erroneous is not unjust. That is
why it is not, on the other hand, correct to say as
does respondent, that under the law liability for
compensation depends entirely on the innocence
of the accused.
The phrase "unjust convicted" has the same
meaning as "knowingly rendering an unjust
judgment" in art. 204 of the Revised Penal Code.
What this Court held in In re Rafael C. Climaco 6
applies:
In order that a judge may be held liable for
knowingly rendering an unjust judgment, it must
be shown beyond doubt that the judgment is
unjust as it is contrary to law or is not supported
by the evidence, and the same was made with
conscious and deliberate intent to do an
unjustice. . . .
To hold a judge liable for the rendition of
manifestly unjust judgment by reason of
inexcusable negligence or ignorance, it must be
shown, according to Groizard, that although he
has acted without malice, he failed to observe in
the performance of his duty, that diligence,
prudence and care which the law is entitled to
exact in the rendering of any public service.
Negligence and ignorance are inexcusable if they
imply a manifest injustice which cannot be
explained by a reasonable interpretation.
Inexcusable mistake only exists in the legal
concept when it implies a manifest injustice, that
is to say, such injustice which cannot be
explained by a reasonable interpretation, even
though there is a misunderstanding or error of
the law applied, yet in the contrary it results,
logically and reasonably, and in a very clear and
indisputable manner, in the notorious violation of
the legal precept.
Indeed, sec. 3(a) does not refer solely to an
unjust conviction as a result of which the accused
is unjustly imprisoned, but, in addition, to an
unjust accusation. The accused must have been
"unjustly accused, in consequence of which he is
unjustly convicted and then imprisoned. It is
important to note this because if from its
inception the prosecution of the accused has
been wrongful, his conviction by the court is, in
all probability, also wrongful. Conversely, if the
prosecution is not malicious any conviction even
though based on less than the required quantum
of proof in criminal cases may be erroneous but
not necessarily unjust.
The reason is that under Rule 112, sec. 4, the
question for the prosecutor in filing a case in
court is not whether the accused is guilty beyond
reasonable doubt but only whether "there is
reasonable ground to believe that a crime has
been committed and the accused is probably
guilty thereof." Hence, an accusation which is
based on "probable guilt" is not an unjust
accusation and a conviction based on such
degree of proof is not necessarily an unjust
judgment but only an erroneous one. The remedy
for such error is appeal.
In the case at bar there is absolutely no evidence
to show that petitioner's conviction by the trial
court was wrongful or that it was the product of
malice or gross ignorance or gross negligence. To
the contrary, the court had reason to believe that
petitioner and his coaccused were in league,
because petitioner is the father-in-law of Wilfredo
Balderrama and it was petitioner who bore the
victim a grudge because of a land dispute. Not
only that. Petitioner and his coaccused arrived
together in the hut of the victims and forced their
way into it.
The Court of Appeals ruled there was no
conspiracy only because there was no proof that
he did or say anything on the occasion. Said the
appellate court.
Both eyewitness testimonies fail to show the
appellant Felicito Basbacio to have committed
any act at all. Both fail to show Felicito Basbacio
as having said anything at all. Both fail to show
Felicito Basbacio as having committed anything in
furtherance of a conspiracy to commit the crimes
charged against the defendants. It seems to be a
frail and flimsy basis on which to conclude that
conspiracy existed between actual killer Wilfredo
Balderrama and Felicito Basbacio to commit
murder and two frustrated murders on that night
of June 26, 1988. It may be asked: where was
the coming together of the two defendants to an
agreement to commit the crimes of murder and
frustrated murder on two counts? Where was
Basbacio's contribution to the commission of the
said crimes? Basbacio was -- as the record shows
-- nothing but part of the dark shadows of that
night. . . .
One may take issue with this ruling because
precisely conspiracy may be shown by concert of
action and other circumstances. Why was
petitioner with his son-in-law? Why did they
apparently flee together? And what about the fact
that there was bad blood between petitioner and
the victim Federico Boyon? These questions may
no longer be passed upon in view of the acquittal
of petitioner but they are relevant in evaluating
his claim that he had been unjustly accused,
convicted and imprisoned before he was released
because of his acquittal on appeal. We hold that
in view of these circumstances respondent
Secretary of Justice and the Board of Claims did
not commit a grave abuse of its discretion in
disallowing petitioner's claim for compensation
under Rep. Act No. 7309.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.
Narvasa, C.J., Padilla, Bidin, Regalado, Davide,
Jr., Romero, Bellosillo, Melo, Quiason, Puno,
Vitug and Kapunan, JJ., concur.
Feliciano, J., is on leave.
---------------
Footnotes
1. The statute in pertinent parts provide:
Sec. 3. Who may File Claims. -- The
following may file claims for compensation before
the Board:
a) any person who was unjustly
accused, convicted, imprisoned but subsequently
released by virtue of a judgment of acquittal;
b) any person who was unjustly
detained and released without being charged;
 c) any victim of arbitrary or illegal
detention by the authorities as defined in the
Revised Penal Code under a final judgment of the
court; and
d) any person who is a victim of violent
crimes. For purposes of this Act, violent crimes
shall include rape and shall likewise refer to
offenses committed with malice which resulted in
death or serious physical and/or psychological
injuries, permanent incapacity or disability,
insanity, abortion, serious trauma, or committed
with torture, cruelty or barbarity.
Sec. 4. Award Ceiling. -- For victims
of unjust imprisonment or detention, the
compensation shall be based on the number of
months of imprisonment or detention and every
fraction thereof shall be considered one month:
Provided, however, That in no case shall such
compensation exceed One thousand pesos
(P1,000.00) per month.
In all other cases, the maximum amount
for which the Board may approve a claim shall
not exceed Ten thousand pesos (P10,000.00) or
the amount necessary to reimburse the claimant
the expenses incurred for hospitalization, medical
treatment, loss of wage, loss of support or other
expenses directly related to the injury, whichever
is lower. This is without prejudice to the right of
the claimant to seek other remedies under
existing laws.
2. The Civil Code provides in art. 29: "When
the accused in a criminal prosecution is acquitted
on the ground that his guilt has not been proved
beyond reasonable doubt, a civil action for
damages for the same act or omission may be
instituted. Such action requires only a Perez and told him that he was reluctant to
preponderance of evidence. Upon motion of the
defendant, the court may require the plaintiff to
file a bond to answer for damages in case the
complaint should be found to be malicious.
"If in a criminal case the judgment of
acquittal is based upon reasonable doubt, the
court shall so declare. In the absence of any
declaration to that effect, it may be inferred from
the text of the decision whether or not the
acquittal is due to that ground."
3. People v. Ritter, 194 SCRA 690 (1991).
4. People v. Dramayo, 42 SCRA 59, 64 (1971).
5. Supra note 3 at 722.
6. 55 SCRA 107, 119 (1974).
[1996V256] CESARIO URSUA,
petitioner,vs.COURT OF APPEALS AND
PEOPLE OF THE PHILIPPINES,
respondents.1996 Apr 101st DivisionG.R.
No. 112170BELLOSILLO, J.:
This is a petition for review of the decision of the
Court of Appeals which affirmed the conviction of
petitioner by the Regional Trial Court of Davao
City for violation of Sec. 1 of C.A. No. 142, as
amended by R.A. No. 6085, otherwise known as
"An Act to Regulate the Use of Aliases". 1
Petitioner Cesario Ursua was a Community
Environment and Natural Resources Officer
assigned in Kidapawan, Cotabato. On 9 May 1989
the Provincial Governor of Cotabato requested
the Office of the Ombudsman in Manila to
conduct an investigation on a complaint for
bribery, dishonesty, abuse of authority and giving
of unwarranted benefits by petitioner and other
officials of the Department of Environment and
Natural Resources. The complaint was initiated
by the Sangguniang Panlalawigan of Cotabato
through a resolution advising the Governor to
report the involvement of petitioner and others in
the illegal cutting of mahogany trees and hauling
of illegally-cut logs in the area. 2
On 1 August 1989 Atty. Francis Palmones,
counsel for petitioner, wrote the Office of the
Ombudsman in Davao City requesting that he be
furnished copy of the complaint against
petitioner. Atty. Palmones then asked his client
Ursua to take his letter-request to the Office of
the Ombudsman because his law firm's
messenger, Oscar Perez, had to attend to some
personal matters. Before proceeding to the Office
of the Ombudsman petitioner talked to Oscar
personally ask for the document since he was
one of the respondents before the Ombudsman.
However, Perez advised him not to worry as he
could just sign his (Perez) name if ever he would
be required to acknowledge receipt of the
complaint. 3
When petitioner arrived at the Office of the
Ombudsman in Davao City he was instructed by
the security officer to register in the visitors'
logbook. Instead of writing down his name
petitioner wrote the name "Oscar Perez" after
which he was told to proceed to the
Administrative Division for the copy of the
complaint he needed. He handed the letter of
Atty. Palmones to the Chief of the Administrative
Division, Ms. Loida Kahulugan, who then gave
him a copy of the complaint, receipt of which he
acknowledged by writing the name "Oscar Perez."
4

Before petitioner could leave the premises he was
greeted by an acquaintance, Josefa Amparo, who
also worked in the same office. They conversed
for a while then he left. When Loida learned that
the person who introduced himself as "Oscar
Perez" was actually petitioner Cesario Ursua, a
customer of Josefa Amparo in her gasoline
station, Loida reported the matter to the Deputy
Ombudsman who recommended that petitioner
be accordingly charged.
On 18 December 1990, after the prosecution had
completed the presentation of its evidence,
petitioner without leave of court filed a demurrer
to evidence alleging that the failure of the
prosecution to prove that his supposed alias was
different from his registered name in the local
civil registry was fatal to its cause. Petitioner
argued that no document from the local civil
registry was presented to show the registered
name of accused which according to him was a
condition sine qua non for the validity of his
conviction.
The trial court rejected his contentions and found
him guilty of violating Sec. 1 of C.A. No. 142 as
amended by R.A. No. 6085. He was sentenced to
suffer a prison term of one (1) year and one (1)
day of prision correccional minimum as minimum,
to four (4) years of prision correccional medium
as maximum, with all the accessory penalties
provided for by law, and to pay a fine of
P4,000.00 plus costs.
Petitioner appealed to the Court of Appeals.
On 31 May 1993 the Court of Appeals affirmed
the conviction of petitioner but modified the
penalty by imposing an indeterminate term of
one (1) year as minimum to three (3) years as
maximum and a fine of P5,000.00.
Petitioner now comes to us for review of his
conviction as he reasserts his innocence. He
contends that he has not violated C.A. No. 142 as
amended by R.A. No. 6085 as he never used any
alias name; neither is "Oscar Perez" his alias. An
alias, according to him, is a term which connotes
the habitual use of another name by which a
person is also known. He claims that he has
never been known as "Oscar Perez" and that he
only used such name on one occasion and it was
with the express consent of Oscar Perez himself.
It is his position that an essential requirement for
a conviction under C.A. No. 142 as amended by
R.A. No. 6085 has not been complied with when
the prosecution failed to prove that his supposed
alias was different from his registered name in
the Registry of Births. He further argues that the
Court of Appeals erred in not considering the
defense theory that he was charged under the
wrong law. 5
Time and again we have decreed that statutes
are to be construed in the light of the purposes to
be achieved and the evils sought to be remedied.
Thus in construing a statute the reason for its
enactment should be kept in mind and the
statute should be construed with reference to the
intended scope and purpose. 6 The court may
consider the spirit and reason of the statute,
where a literal meaning would lead to absurdity,
contradiction, injustice, or would defeat the clear
purpose of the lawmakers. 7
For a clear understanding of the purpose of C.A.
No. 142 as amended, which was allegedly
violated by petitioner, and the surrounding
circumstances under which the law was enacted,
the pertinent provisions thereof, its amendments
and related statutes are herein cited. C.A. No.
142, which was approved on 7 November 1936,
and before its amendment by R.A. No. 6085, is
entitled An Act to Regulate the Use of Aliases. It
provides as follows:
Sec. 1. Except as a pseudonym for literary
purposes, no person shall use any name different
from the one with which he was christened or by
which he has been known since his childhood, or
such substitute name as may have been
authorized by a competent court. The name shall
comprise the patronymic name and one or two
surnames.
Sec. 2. Any person desiring to use an alias or
aliases shall apply for authority therefor in
proceedings like those legally provided to obtain
judicial authority for a change of name. Separate
proceedings shall be had for each alias, and each
new petition shall set forth the original name and
the alias or aliases for the use of which judicial
authority has been, obtained, specifying the
proceedings and the date on which such authority
was granted. Judicial authorities for the use of
aliases shall be recorded in the proper civil
register . . . .
The above law was subsequently amended by
R.A. No. 6085, approved on 4 August 1969. As
amended, C.A. No. 142 now reads:
Sec. 1. Except as a pseudonym solely for
literary, cinema, television, radio or other
entertainment purposes and in athletic events
where the use of pseudonym is a normally
accepted practice, no person shall use any name
different from the one with which he was
registered at birth in the office of the local civil
registry or with which he was baptized for the
first time, or in case of all alien, with which he
was registered in the bureau of immigration upon
entry; or such substitute name as may have been
authorized by a competent court: Provided, That
persons whose births have not been registered in
any local civil registry and who have not been
baptized, have one year from the approval of this
act within which to register their names in the
civil registry of their residence. The name shall
comprise the patronymic name and one or two
surnames.
Sec. 2. Any person desiring to use an alias shall
apply for authority therefor in proceedings like
those legally provided to obtain judicial authority
for a change of name and no person shall be
allowed to secure such judicial authority for more
than one alias. The petition for an alias shall set
forth the person's baptismal and family name and
the name recorded in the civil registry, if
different, his immigrant's name, if an alien, and
his pseudonym, if he has such names other than
his original or real name, specifying the reason or
reasons for the desired alias. The judicial
authority for the use of alias, the Christian name
and the alien immigrant's name shall be recorded
in the proper local civil registry, and no person
shall use any name or names other than his
original or real name unless the same is or are
duly recorded in the proper local civil registry.
The objective and purpose of C.A. No. 142 have
their origin and basis in Act No. 3883, An Act to
Regulate the Use in Business Transactions of
Names other than True Names, Prescribing the
Duties of the Director of the Bureau of Commerce
and Industry in its Enforcement, Providing
Penalties for Violations thereof, and for other
purposes, which was approved on 14 November
1931 and amended by Act No. 4147, approved
on 28 November 1934. 8 The pertinent provisions
of Act No. 3883 as amended follow
Sec. 1. It shall be unlawful for any person to
use or sign, on any written or printed receipt
including receipt for tax or business or any
written or printed contract not verified by a
notary public or on any written or printed
evidence of any agreement or business
transactions, any name used in connection with
his business other than his true name, or keep
conspicuously exhibited in plain view in or at the
place where his business is conducted, if he is
engaged in a business, any sign announcing a
firm name or business name or style without first
registering such other name, or such firm name,
or business name or style in the Bureau of
Commerce together with his true name and that
of any other person having a joint or common
interest with him in such contract, agreement,
business transaction, or business . . . .
For a bit of history, the enactment of C.A. No.
142 as amended was made primarily to curb the
common practice among the Chinese of adopting
scores of different names and aliases which
created tremendous confusion in the field of
trade. Such a practice almost bordered on the
crime of using fictitious names which for obvious
reasons could not be successfully maintained
against the Chinese who, rightly or wrongly,
claimed they possessed a thousand and one
names. C.A. No. 142 thus penalized the act of
using an alias name, unless such alias was duly
authorized by proper judicial proceedings and
recorded in the civil register. 9
In Yu Kheng Chiau v. Republic 10 the Court had
occasion to explain the meaning, concept and ill
effects of the use of an alias within the purview
of C.A. No. 142 when we ruled
There can hardly be any doubt that petitioner's
use of alias "Kheng Chiau Young" in addition to
his real name "Yu Cheng Chiau" would add to
more confusion. That he is known in his business,
as manager of the Robert Reid, Inc., by the
former name, is not sufficient reason to allow him
its use. After all, petitioner admitted that he is
known to his associates by both names. In fact,
the Anselmo Trinidad, Inc., of which he is a
customer, knows him by his real name. Neither
would the fact that he had encountered certain
difficulties in his transactions with government
offices which required him to explain why he bore
two names, justify the grant of his petition, for
petitioner could easily avoid said difficulties by
simply using and sticking only to his real name
"Yu Kheng Chiau."
The fact that petitioner intends to reside
permanently in the Philippines, as shown by his
having filed a petition for naturalization in Branch
V of the above-mentioned court, argues the more
against the grant of his petition, because if
naturalized as a Filipino citizen, there would then
be no necessity for his further using said alias, as
it would be contrary to the usual Filipino way and
practice of using only one name in ordinary as
well as business transactions. And, as the lower
court correctly observed, if he believes (after he
is naturalized) that it would be better for him to
write his name following the Occidental method,
"he can easily file a petition for change of name,
so that in lieu of the name "Yu Kheng Chian," he
can, abandoning the same, ask for authority to
adopt the name Kheng Chiau Young."
All things considered, we are of the opinion and
so hold, that petitioner has not shown
satisfactory proper and reasonable grounds under
the aforequoted provisions of Commonwealth Act
No. 142 and the Rules of Court, to warrant the
grant of his petition for the use of an alias name.
Clearly therefore an alias is a name or names
used by a person or intended to be used by him
publicly and habitually usually in business
transactions in addition to his real name by which
he is registered at birth or baptized the first time
or substitute name authorized by a competent
authority. A man's name is simply the sound or
sounds by which he is commonly designated by
his fellows and by which they distinguish him but
sometimes a man is known by several different
names and these are known as aliases. 11
Hence, the use of a fictitious name or a different
name belonging to another person in a single
instance without any sign or indication that the
user intends to be known by this name in
addition to his real name from that day forth
does not fall within the prohibition contained in
C.A. No. 142 as amended. This is so in the case
at bench.
It is not disputed that petitioner introduced
himself in the Office of the Ombudsman as
"Oscar Perez," which was the name of the
messenger of his lawyer who should have
brought the letter to that office in the first place
instead of petitioner. He did so while merely
serving the request of his lawyer to obtain a copy
of the complaint in which petitioner was a
respondent. There is no question then that
"Oscar Perez" is not an alias name of petitioner.
There is no evidence showing that he had used or
was intending to use that name as his second
name in addition to his real name. The use of the
name "Oscar Perez" was made by petitioner in an
isolated transaction where he was not even
legally required to expose his real identity. For,
even if he had identified himself properly at the
Office of the Ombudsman, petitioner would still
be able to get a copy of the complaint as a
matter of right, and the Office of the Ombudsman
could not refuse him because the complaint was
part of public records hence open to inspection
and examination by anyone under the proper
circumstances.
While the act of petitioner may be covered by
other provisions of law, such does not constitute
an offense within the concept of C.A. No. 142 as
amended under which he is prosecuted. The
confusion and fraud in business transactions
which the anti-alias law and its related statutes
seek to prevent are not present here as the
circumstances are peculiar and distinct from
those contemplated by the legislature in enacting
C.A. No. 142 as amended. There exists a valid
presumption that undesirable consequences were
never intended by a legislative measure and that
a construction of which the statute is fairly
susceptible is favored, which will avoid all
objectionable, mischievous, indefensible,
wrongful, evil and injurious consequences. 12
Moreover, as C.A. No. 142 is a penal statute, it
should be construed strictly against the State and
in favor of the accused. 13 The reason for this
principle is the tenderness of the law for the
rights of individuals and the object is to establish
a certain rule by conformity to which mankind
would be safe, and the discretion of the court
limited. 14 Indeed, our mind cannot rest easy on
the proposition that petitioner should be
convicted on a law that does not clearly penalize
the act done by him.
WHEREFORE, the questioned decision of the
Court of Appeals affirming that of the Regional
Trial Court of Davao City is REVERSED and SET
ASIDE and petitioner CESARIO URSUA is
ACQUITTED of the crime charged.
SO ORDERED.
Padilla, Vitug, Kapunan and Hermosisima, Jr., JJ.,
concur.
CORNELIA MATABUENA, plaintiff-appellant,
vs. PETRONILA CERVANTES, defendant-
appellee.1971 March 31En BancG.R. No. L-
28771D E C I S I O N
FERNANDO, J:
A question of first impression is before this Court
in this litigation. We are called upon to decide
whether the ban on a donation between the
spouses during a marriage applies to a common-
law relationship. 1 The plaintiff, now appellant
Cornelia Matabuena, a sister to the deceased
Felix Matabuena, maintains that a donation made
while he was living maritally without benefit of
marriage to defendant, now appellee Petronila
Cervantes, was void. Defendant would uphold its
validity. The lower court, after noting that it was
made at a time before defendant was married to
the donor, sustained the latter's stand. Hence
this appeal. The question, as noted, is novel in
character, this Court not having had as yet the
opportunity of ruling on it. A 1954 decision of the
Court of Appeals, Buenaventura v. Bautista, 2 by
the then Justice J. B. L. Reyes, who was
appointed to this Court later that year, is
indicative of the appropriate response that should
be given. The conclusion reached therein is that a
donation between common-law spouses falls
within the prohibition and is "null and void as
contrary to public policy." 3 Such a view merits
fully the acceptance of this Court. The decision
must be reversed.
In the decision of November 23, 1965, the lower
court, after stating that in plaintiff's complaint
alleging absolute ownership of the parcel of land
in question, she specifically raised the question
that the donation made by Felix Matabuena to
defendant Petronila Cervantes was null and void
under the aforesaid article of the Civil Code and
that defendant on the other hand did assert
ownership precisely because such a donation was
made in 1956 and her marriage to the deceased
did not take place until 1962, noted that when
the case was called for trial on November 19,
1965, there was stipulation of facts which it
quoted. 4 Thus: "The plaintiff and the defendant
assisted by their respective counsels, jointly
agree and stipulate: (1) That the deceased Felix
Matabuena owned the property in question; (2)
That said Felix Matabuena executed a Deed of
Donation inter vivos in favor of Defendant,
Petronila Cervantes over the parcel of land in
question on February 20, 1956, which same
donation was accepted by defendant; (3) That
the donation of the land to the defendant which
took effect immediately was made during the
common law relationship as husband and wife
between the defendant-done and the now
deceased donor and later said donor and done
were married on March 28, 1962; (4) That the
deceased Felix Matabuena died intestate on
September 13, 1962; (5) That the plaintiff claims
the property by reason of being the only sister
and nearest collateral relative of the deceased by
virtue of an affidavit of self-adjudication executed
by her in 1962 and had the land declared in her
name and paid the estate and inheritance taxes
thereon'" 5
The judgment of the lower court on the above
facts was adverse to plaintiff. It reasoned out
thus: "A donation under the terms of Article 133
of the Civil Code is void if made between the
spouses during the marriage. When the donation
was made by Felix Matabuena in favor of the
defendant on February 20, 1956, Petronila
Cervantes and Felix Matabuena were not yet
married. At that time they were not spouses.
They became spouses only when they married on
March 28, 1962, six years after the deed of
donation had been executed." 6
We reach a different conclusion. While Art. 133 of
the Civil Code considers as void a "donation
between the spouses during the marriage," policy
considerations of the most exigent character as
well as the dictates of morality require that the
same prohibition should apply to a common-law
relationship. We reverse.
1. As announced at the outset of this opinion, a
1954 Court of Appeals decision, Buenaventura v.
Bautista, 7 interpreting a similar provision of the
old Civil Code 8 speaks unequivocally. If the
policy of the law is, in the language of the opinion
of the then Justice J.B.L. Reyes of that Court, "to
prohibit donations in favor of the other consort
and his descendants because of fear of undue
and improper pressure and influence upon the
donor, a prejudice deeply rooted in our ancient
law; 'porque no se engañen despojandose el uno
al otro por amor que han de consuno [according
to] the Partidas (Part IV, Tit. XI, LAW IV),
reiterating the rationale 'Ne mutuato amore
invicem spoliarentur' of the Pandects (Bk. 24, Tit.
1, De donat, inter virum et uxorem); then there
is every reason to apply the same prohibitive
policy to persons living together as husband and
wife without the benefit of nuptials. For it is not
to be doubted that assent to such irregular
connection for thirty years bespeaks greater
influence of one party over the other, so that the
danger that the law seeks to avoid is
correspondingly increased. Moreover, as already
pointed out by Ulpian (in his lib. 32 ad Sabinum,
fr. 1), 'it would not be just that such donations
should subsist, lest the condition of those who
incurred guilt should turn out to be better.' So
long as marriage remains the cornerstone of our
family law, reason and morality alike demand
that the disabilities attached to marriage should
likewise attach to concubinage." 9
2. It is hardly necessary to add that even in the
absence of the above pronouncement, any other
conclusion cannot stand the test of scrutiny. It
would be to indict the framers of the Civil Code
for a failure to apply a laudable rule to a situation
which in its essentials cannot be distinguished.
Moreover, if it is at all to be differentiated, the
policy of the law which embodies a deeply-rooted
notion of what is just and what is right would be
nullified if such irregular relationship instead of
being visited with disabilities would be attended
with benefits. Certainly a legal norm should not
be susceptible to such a reproach. If there is ever
any occasion where the principle of statutory
construction that what is within the spirit of the
law is as much a part of it as what is written, this
is it. Otherwise the basic purpose discernible in
such codal provision would not be attained.
Whatever omission may be apparent in an
interpretation purely literal of the language used
must be remedied by an adherence to its avowed
objective. In the language of Justice Pablo: "El
espiritu que informa la ley debe ser la luz que ha
de guiar a los tribunales en la aplicación de sus
disposiciones.'' 10
3. The lack of validity of the donation made by
the deceased to defendant Petronila Cervantes
does not necessarily result in plaintiff having
exclusive right to the disputed property. Prior to
the death of Felix Matabuena, the relationship
between him and the defendant was legitimated
by their marriage on March 28, 1962. She is
therefore his widow. As provided for in the Civil
Code, she is entitled to one-half of the
inheritance and the plaintiff, as the surviving
sister, to the other half. 11
WHEREFORE, the lower court decision of
November 23, 1965 dismissing the complaint
with costs is reversed. The questioned donation is
declared void, with the rights of plaintiff and
defendant as pro indiviso heirs to the property in
question recognized. The case is remanded to the
lower court for its appropriate disposition in
accordance with the above opinion. Without
pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Dizon,
Makalintal, Zaldivar, Castro, Barredo, Villamor
and Makasiar, JJ., concur.
Teehankee, J, took no part.
Footnotes
1. Art 133 of the Civil Code provides: "Every
donation between the spouses during the
marriage shall be void. This prohibition does not
apply when the donation takes effect after the
death of the donor. Neither does this prohibition
apply to moderate gifts which the spouses may
give each other on the occasion of any family
rejoicing."
2. 50 O.G. 3679 (1954).
3. Ibid., p. 3686.
4. Decision, Record on Appeal, pp. 17-19.
5. Ibid, pp. 19-20.
6. Ibid, p. 21.
7. 50 O.G. 3679.
8. Art. 1334 of the former Civil Code was
similarly worded: "All donations between the
spouses made during the marriage shall be void."
9. Buenaventura v. Bautista, 50 O.G. 3679,
3686 (1954).
10. The excerpt from Yellow Taxi and Pasay
Trans. Workers Union v. Manila Yellow Taxicab
Co., 80 Phil. 833, 838 (1948) reads in full: "Esta
interpretación de la ley es insostenible. El espiritu
que informa la ley debe ser la luz que ha de guiar
a los tribunales en la aplicación de sus
dispociones. No deben atenerse a la letra de la
ley cuando la interpretación literal se separa de la
intención de la legislatura especialmente cuando
lleva a conclusiones incompatibles con objeto
manifesto de la ley. Cuando hay conflicto entre la
interpretación literal y la interpretación fundada
en el proposito de la ley, la última debe
prevalecer." Cf. Tañada v. Cuenco, 103 Phil,
1051 (1957); Hidalgo v. Hidalgo, L-25326-27,
May 29, 1970, 33 SCRA 105; Casela v. Court of
Appeals, L-26754, Oct. 16, 1970, 35 SCRA 279.
11. According to Art. 1001 of the Civil Code:
"Should brothers and sisters or their children
survive with the widow or widower, the latter
shall be entitled to one-half of the inheritance
and the brothers and sisters or their children the
other half. (953, 837a)."
CAGAYAN VALLEY ENTERPRISES, INC.,
Represented by its President, Rogelio Q.
Lim, petitioner, vs. THE HON. COURT OF
APPEALS and LA TONDEÑA, INC.,
respondents.1989 November 082nd
DivisionG.R. No. 78413D E C I S I O N
REGALADO, J.:
This petition for review on certiorari seeks the
nullification of the decision of the Court of
Appeals of December 5, 1986 in CA-G.R. CV No.
06685 which reversed the decision of the trial
court, and its resolution dated May 5, 1987
denying petitioner's motion for reconsideration.
The following antecedent facts generative of the
present controversy are not in dispute.
Sometime in 1953, La Tondeña, Inc. (hereafter,
LTI for short) registered with the Philippine
Patent Office pursuant to Republic Act No. 623 1
the 350 c.c. white flint bottles it has been using
for its gin popularly known as "Ginebra San
Miguel". This registration was subsequently
renewed on December 4, 1974. 2
On November 10, 1981, LTI filed Civil Case No
2668 for injunction and damages in the then
Branch I, Court of First Instance of Isabela
against Cagayan Valley Enterprises, Inc.
(Cagayan, for brevity) for using the 350 c.c.,
white flint bottles with the mark "La Tondeña,
Inc." and "Ginebra San Miguel" stamped or
blown-in therein by filling the same with
Cagayan's liquor product bearing the label
"Sonny Boy" for commercial sale and distribution,
without LTI's written consent and in violation of
Section 2 of Republic Act No. 623, as amended
by Republic Act No. 5700. On the same date, LTI
further filed an ex parte petition for the issuance
of a writ of preliminary injunction against the
defendant therein. 3 On November 16, 1981, the
court a quo issued a temporary restraining order
against Cagayan and its officers and employees
from using the 350 c.c. bottles with the marks
"La Tondeña" and "Ginebra San Miguel." 4
Cagayan, in its answer, 5 alleged the following
defenses:
1. LTI has no cause of action due to its failure to
comply with Section 21 of Republic Act No. 166
which requires the giving of notice that its
aforesaid marks are registered by displaying and
printing the words "Registered in the Phil. Patent
Office" or "Reg. Phil. Pat. Off.," hence no suit,
civil or criminal, can be filed against Cagayan;
2. LTI is not entitled to any protection under
Republic Act No. 623, as amended by Republic
Act No. 5700, because its products, consisting of
hard liquor, are not among those contemplated
therein. What is protected under said law are
beverages like Coca-cola, Royal Tru-Orange,
Lem-O-Lime and similar beverages the bottles
whereof bear the words "Reg. Phil. Pat. Off.;"
3. No reservation of ownership on its bottles was
made by LTI in its sales invoices nor does it
require any deposit for the retention of said
bottles; and
4. There was no infringement of the goods or
products of LTI since Cagayan uses its own labels
and trade-mark on its product.
In its subsequent pleadings, Cagayan contended
that the bottles they are using are not the
registered bottles of LTI since the former was
using the bottles marked with "La Tondeña, Inc."
and "Ginebra San Miguel" but without the words
"property of" indicated in said bottles as stated in
the sworn statement attached to the certificate of
registration of LTI for said bottles.
On December 18, 1981, the lower court issued a
writ of preliminary injunction, upon the filing of a
bond by LTI in the sum of P50,000.00, enjoining
Cagayan, its officers and agents from using the
aforesaid registered bottles of LTI. 6
After a protracted trial, which entailed five (5)
motions for contempt filed by LTI against
Cagayan, the trial court rendered judgment 7 in
favor of Cagayan, ruling that the complaint does
not state a cause of action and that Cagayan was
not guilty of contempt. Furthermore, it awarded
damages in favor of Cagayan.
LTI appealed to the Court of Appeals which, on
December 5, 1986 rendered a decision in favor of
said appellant, the dispositive portion whereof
reads:
"WHEREFORE, the decision appealed from is
hereby SET ASIDE and judgment is rendered
permanently enjoining the defendant, its officers
and agents from using the 350 c.c. white flint
bottles with the marks of ownership 'La Tondeña,
Inc.' and 'Ginebra San Miguel', blown-in or
stamped on said bottles as containers for
defendant's products.
"The writ of preliminary injunction issued by the
trial court is therefore made permanent.
"Defendant is ordered to pay the amounts of:
(1) P15,000.00 as nominal or temperate
damages;
(2) P50,000.00 as exemplary damages;
(3) P10,000.00 as attorney's fees; and
(4) Costs of suit." 8
On December 23, 1986, Cagayan filed a motion
for reconsideration which was denied by the
respondent court in its resolution dated May 5,
1987, hence the present petition, with the
following assignment of errors:
"I. The Court of Appeals gravely erred in the
decision granting that 'there is, therefore, no
need for plaintiff to display the words "Reg. Phil.
Pat. Off." in order for it to succeed in bringing
any injunction suit against defendant for the
illegal use of its bottles. Rep. Act No. 623, as
amended by Rep. Act No. 5700 simply provides
and requires that the marks or names shall be
stamped or marked on the containers.'
"II. The Court of Appeals gravely erred in
deciding that 'neither is there a reason to
distinguish between the two (2) sets of marked
bottles ---- those which contain the marks
'Property of La Tondeña, Inc., Ginebra San
Miguel,' and those simply marked 'La Tondeña,
Inc., Ginebra San Miguel'. By omitting the words
"property of", plaintiff did not open itself to
violation of Republic Act No. 623, as amended, as
having registered its marks or names it is
protected under the law.'
"III. The Honorable Court of Appeals gravely
erred in deciding that the words 'La Tondeña,
Inc. and Ginebra San Miguel' are sufficient notice
to the defendant which should have inquired from
the plaintiff or the Philippine Patent Office, if it
was lawful for it to re-use the empty bottles of
the plaintiff.
"IV. The Honorable Court of Appeals gravely
erred in deciding that defendant-appellee cannot
claim good faith from using the bottles of plaintiff
with marks 'La Tondeña, Inc.' alone, short for the
description contained in the sworn statement of
Mr. Carlos Palanca, Jr., which was a requisite of
its original and renewal registrations.
"V. The Honorable Court of Appeals gravely
erred in accommodating the appeal on the
dismissals of the five (5) contempt charges.

"VI. The Honorable Court of Appeals gravely
erred in deciding that the award of damages in
favor of the defendant-appellee, petitioner
herein, is not in order. Instead it awarded
nominal or temperate exemplary damages and
attorney's fees without proof of bad faith. 9
The pertinent provisions of Republic Act No. 623,
as amended by Republic Act No. 5700, provides:
"SECTION 1. Persons engaged or licensed to
engage in the manufacture, bottling, or selling of
soda water, mineral or aerated waters, cider,
milk, cream or other lawful beverages in bottles,
boxes, casks, kegs, or barrels, and other similar
containers, or in the manufacturing, compressing
or selling of gases such as oxygen, acytelene,
nitrogen, carbon dioxide ammonia, hydrogen,
chloride, helium, sulphur, dioxide, butane,
propane, freon, melthyl chloride or similar gases
contained in steel cylinders, tanks, flasks,
accumulators or similar containers, with the
name or the names of their principals or
products, or other marks of ownership stamped
or marked thereon, may register with the
Philippine Patent Office a description of the
names or marks, and the purpose for which the
containers so marked and used by them, under
the same conditions, rules, and regulations,
made applicable by law or regulation to the
issuance of trademarks.
"SEC. 2. It shall be unlawful for any person,
without the written consent of the manufacturer,
bottler, or seller, who has successfully registered
the marks of ownership in accordance with the
provisions of the next preceding section, to fill
such bottles, boxes, kegs, barrels, steel
cylinders, tanks, flasks, accumulators or other
similar containers so marked or stamped, for the
purpose of sale, or to sell, disposed of, buy or
traffic in, or wantonly destroy the same, whether
filled or not, to use the same, for drinking vessels
or glasses or drain pipes, foundation pipes, for
any other purposes than that registered by the
manufacturer, bottler or seller. Any violation of
this section shall be punished by a fine of not
more than one thousand pesos or imprisonment
of not more than one year or both.
"SEC. 3. The use by any person other than the
registered manufacturer, bottler or seller, without
written permission of the latter of any such
bottle, cask, barrel, keg, box, steel cylinders,
tanks, flask, accumulators, or other similar
containers, or the possession thereof without
written permission of the manufacturer, by any
junk dealer or dealer in casks, barrels, kegs,
boxes, steel cylinders, tanks, flasks,
accumulators or other similar containers, the
same being duly marked or stamped and
registered as herein provided, shall give rise to a
prima facie presumption that such use or
possession is unlawful."
The above-quoted provisions grant protection to
a qualified manufacturer who successfully
registered with the Philippine Patent Office its
duly stamped or marked bottles, boxes, casks
and other similar containers. The mere use of
registered bottles or containers without the
written consent of the manufacturer is prohibited,
the only exceptions being when they are used as
containers for "sisi," "bagoong," "patis" and
similar native products. 10
It is an admitted fact that herein petitioner
Cagayan buys from junk dealers and retailers
bottles which bear the marks or names "La
Tondeña, Inc." and "Ginebra San Miguel" and
uses them as containers for its own liquor
products. The contention of Cagayan that the
aforementioned bottles without the words
"property of" indicated thereon are not the
registered bottles of LTI, since they do not
conform with the statement or description in the
supporting affidavits attached to the original
registration certificate and renewal, is untenable.
Republic Act No. 623 which governs the
registration of marked bottles and containers
merely requires that the bottles, in order to be
eligible for registration, must be stamped or
marked with the names of the manufacturers or
the names of their principals or products, or
other marks of ownership. No drawings or labels
are required but, instead, two photographs of the
container, duly signed by the applicant, showing
clearly and legibly the names and other marks of
ownership sought to be registered and a bottle
showing the name or other mark or ownership,
irremovably stamped or marked, shall be
submitted. 11
The term "Name or Other Mark of Ownership" 12
means the name of the applicant or the name of
his principal, or of the product, or other mark of
ownership. The second set of bottles of LTI
without the words "property of" substantially
complied with the requirements of Republic Act
No. 623, as amended, since they bear the name
of the principal, La Tondeña, Inc., and of its
product, Ginebra San Miguel. The omitted words
"property of" are not of such vital indispensability
such that the omission thereof will remove the
bottles from the protection of the law. The owner
of a trade-mark or trade-name, and in this case
the marked containers, does not abandon it by
making minor modifications in the mark or name
itself. 13 With much more reason will this be true
where what is involved is the mere omission of
the words "property of" since even without said
words the ownership of the bottles is easily
identifiable. The words "La Tondeña. Inc." and
"Ginebra San Miguel" stamped on the bottles,
even without the words "property of," are
sufficient notice to the public that those bottles
so marked are owned by LTI.
The claim of petitioner that hard liquor is not
included under the term "other lawful beverages"
as provided in Section 1 of Republic Act No. 623,
as amended by Republic Act No. 5700, is without
merit. The title of the law itself, which reads "An
Act to Regulate the Use of Duly Stamped or
Marked Bottles, Boxes, Casks, Kegs, Barrels and
Other Similar Containers" clearly shows the
legislative intent to give protection to all marked
bottles and containers of all lawful beverages
regardless of the nature of their contents. The
words "other lawful beverages" is used in its
general sense, referring to all beverages not
prohibited by law. Beverage is defined as a liquor
or liquid for drinking. 14 Hard liquor, although
regulated, is not prohibited by law, hence it is
within the purview and coverage of Republic Act
No, 623, as amended.
Republic Act No. 623, as amended, has for its
purpose the protection of the health of the
general public and the prevention of the spread
of contagious diseases. It further seeks to
safeguard the property rights of an important
sector of Philippine industry. 15 As held by this
Court in Destileria Ayala, Inc. vs. Tan Tay & Co.,
16 the purpose of then Act 3070, was to afford a
person a means of identifying the containers he
uses in the manufacture, preservation, packing or
sale of his products so that he may secure their
registration with the Bureau of Commerce and
Industry and thus prevent other persons from
using them. Said Act 3070 was substantially
reenacted as Republic Act No. 623. 17
The proposition that Republic Act No. 623, as
amended, protects only the containers of the soft
drinks enumerated by petitioner and those
similar thereto, is unwarranted and specious. The
rule of ejusdem generis cannot be applied in this
case. To limit the coverage of the law only to
those enumerated or of the same kind or class as
those specifically mentioned will defeat the very
purpose of the law. Such rule of ejusdem generis
is to be resorted to only for the purpose of
determining what the intent of the legislature
was in enacting the law. If that intent clearly
appears from other parts of the law, and such
intent thus clearly manifested is contrary to the
result which would be reached by the
appreciation of the rule of ejusdem generis, the
latter must give way. 18
Moreover, the above conclusions are supported
by the fact that the Philippine Patent Office,
which is the proper and competent government
agency vested with the authority to enforce and
implement Republic Act No. 623, registered the
bottles of respondent LTI as containers for gin
and issued in its name a certificate of registration
with the following findings:
"It appearing, upon due examination that the
applicant is entitled to have the said MARKS OR
NAMES registered under R.A. No. 623, the said
marks or names have been duly registered this
day in the PATENT OFFICE under the said Act, for
gin, Ginebra San Miguel. 19
While executive construction is not necessarily
binding upon the courts, it is entitled to great
weight and consideration. The reason for this is
that such construction comes from the particular
branch of government called upon to implement
the particular law involved. 20
Just as impuissant is petitioner's contention that
respondent court erred in holding that there is no
need for LTI to display the words "Reg. Phil. Pat.
Off." in order to succeed in its injunction suit
against Cagayan for the illegal use of the bottles.
To repeat, Republic Act No. 623 governs the
registration of marked bottles and containers and
merely requires that the bottles and or containers
be marked or stamped by the names of the
manufacturer or the names of their principals or
products or other marks of ownership. The
owner, upon registration of its marked bottles, is
vested by law with an exclusive right to use the
same to the exclusion of others, except as a
container for native products. A violation of said
light gives rise to a cause of action against the
violator or infringer.
While Republic Act No. 623, as amended,
provides for a criminal action in case of violation,
a civil action for damages is proper under Article
20 of the Civil Code which provides that every
person who, contrary to law, wilfully or
negligently causes damage to another, shall
indemnify the latter for the same. This particular
provision of the Civil Case was clearly meant to
complement all legal provisions which may have
inadvertently failed to provide for indemnification
or reparation of damages when proper or called
for. In the language of the Code Commission
"(t)he foregoing rule pervades the entire legal
system, and renders it impossible that a person
who suffers damage because another has
violated some legal provisions, should find
himself without relief." 21 Moreover, under
Section 23 of Republic Act No. 166, as amended,
a person entitled to the exclusive use of a
registered mark or trade-name may recover
damages in a civil action from any person who
infringes his rights. He may also, upon proper
showing, be granted injunction.
It is true that the aforesaid law on trade-marks
provides:
"SEC. 21. Requirements of notice of registration
of trademark. The registrant of a trade-mark,
heretofore registered or registered under the
provisions of this Act, shall give notice that his
mark is registered by displaying with the same as
used the words 'Registered in the Philippines
Patent Office' or 'Reg. Phil. Pat. Off.'; and in any
suit for infringement under this Act by a
registrant failing so to mark the goods bearing
the registered trade-mark, no damages shall be
recovered under the provisions of this Act, unless
the defendant has actual notice of the
registration."
Even assuming that said provision is applicable in
this case, the failure of LTI to make said marking
will not bar civil action against petitioner
Cagayan. The aforesaid requirement is not a
condition sine qua non for filing of a civil action
against the infringer for other reliefs to which the
plaintiff may be entitled. The failure to give
notice of registration will not deprive the
aggrieved party of a cause of action against the
infringer but, at the most, such failure may bar
recovery of damages but only under the
provisions of Republic Act No. 166.
However, in this case an award of damages to
LTI is ineluctably called for. Petitioner cannot
claim good faith. The record shows that it had
actual knowledge that the bottles with the blown-
in marks "La Tondeña, Inc." and "Ginebra San
Miguel" are duly registered. In Civil Case No.
102859 of the Court of First Instance of Manila,
entitled "La Tondeña, Inc. versus Diego Lim,
doing business under the name and style
'Cagayan Valley Distillery,'" a decision was
rendered in favor of plaintiff therein on the basis
of the admission and or acknowledgment made
by the defendant that the bottles marked only
with the words "La Tondeña, Inc." and "Ginebra
San Miguel" are registered bottles of LTI. 22
Petitioner cannot avoid the effect of the
admission and/or acknowledgment made by
Diego Lim in the said case. While a corporation is
an entity separate and distinct from its
stockholders and from other corporations with
which it may be connected, where the
discreteness of its personality is used to defeat
public convenience, justify wrong, protect fraud,
or defend crime, the law will regard the
corporation as an association of persons, or in
the case of two corporations, merge them into
one. When the corporation is the mere alter ego
or business conduit of a person, it may be
disregarded. 23
Petitioner's claim that it is separate and distinct
from the former Cagayan Valley Distillery is
belied by the evidence on record. The following
facts warrant the conclusion that petitioner, as a
corporate entity, and Cagayan Valley Distillery
are one and the same, to wit: (1) petitioner is
being managed by Rogelio Lim, the son of Diego
Lim, the owner and manager of Cagayan Valley
Distillery; (2) it is a family corporation; 24 (3)
it :s an admitted fact that before petitioner was
incorporated it was under a single proprietorship;
25 (4) petitioner is engaged in the same business
as Cagayan Valley Distillery, the manufacture of
wines and liquors; and (5) the factory of
petitioner is located in the same place as the
factory of the former Cagayan Valley Distillery.
It is thus clear that herein petitioner is a mere
continuation and successor of Cagayan Valley
Distillery. It is likewise indubitable that the
admission made in the former case, as earlier
explained, is binding on it as cogent proof that
even before the filing of this case it had actual
knowledge that the bottles in dispute were
registered containers of LTI. As held in La
Campana Coffee Factory, Inc., et al. vs. Kaisahan
Ng Mga Manggagawa sa La Campana (KKM), et
al., 26 where the main purpose in forming the
corporation was to evade one's subsidiary liability
for damages in a criminal case, the corporation
may not be heard to say that it has a personality
separate and distinct from its members, because
to allow it to do so would be to sanction the use
of the fiction of corporate entity as a shield to
further an end subversive of justice.
Anent the several motions of private respondent
LTI to have petitioner cited for contempt, we
reject the argument of petitioner that an appeal
from a verdict of acquittal in a contempt
proceeding constitutes double jeopardy. A failure
to do something ordered by the court for the
benefit of a party constitutes civil contempt. 27
As we held in Converse Rubber Corporation vs.
Jacinto Rubber & Plastics Co., Inc.:
". . . True it is that generally, contempt
proceedings are characterized as criminal in
nature, but the more accurate juridical concept is
that contempt proceedings may actually be either
civil or criminal, even if the distinction between
one and the other may be so thin as to be almost
imperceptible. But it does exist in law. It is
criminal when the purpose is to vindicate the
authority of the court and protect its outraged
dignity. It is civil when there is failure to do
something ordered by a court to be done for the
benefit of a party. (3 Moran Rules of Court, pp.
343-344, 1970 ed.; see also Perkins vs. Director
of Prisons, 58 Phil. 272; Harden vs. Director of
Prisons, 81 Phil. 741.) And with this distinction in
mind, the fact that the injunction in the instant
case is manifestly for the benefit of plaintiffs
makes of the contempt herein involved civil, not
criminal. Accordingly, the conclusion is inevitable
that appellees have been virtually found by the
trial court guilty of civil contempt, not criminal
contempt, hence, the rule on double jeopardy
may not be invoked." 28
The contempt involved in this case is civil and
constructive in nature, it having arisen from the
act of Cagayan in violating the writ of preliminary
injunction of the lower court which clearly defined
the forbidden act, to wit:
"NOW THEREFORE, pending the resolution of this
case by the court, you are enjoined from using
the 350 c.c. white flint bottles with the marks 'La
Tondeña Inc.,' and 'Ginebra San Miguel' blown-in
or stamped into the bottles as containers for the
defendant's products." 29
On this incident, two considerations must be
borne in mind. Firstly, an injunction duly issued
must be obeyed, however erroneous the action of
the court may be, until its decision is overruled
by itself or by a higher court. 30 Secondly, the
American rule that the power to judge a
contempt rests exclusively with the court
contemned does not apply in this jurisdiction. The
provision of the present Section 4, Rule 71 of the
Rules of Court as to where the charge may be
filed is permissive in nature and is merely
declaratory of the inherent power of courts to
punish contumacious conduct. Said rules do not
extend to the determination of the jurisdiction of
Philippine courts. 31 In appropriate cases,
therefore, this Court may, in the interest of
expedient justice, impose sanctions on
contemners of the lower courts.
Section 3 of Republic Act No. 623, as amended,
creates a prima facie presumption against
Cagayan for its unlawful use of the bottles
registered in the name of LTI. Corollarily, the writ
of injunction directing petitioner to desist from
using the subject bottles was properly issued by
the trial court. Hence, said writ could not be
simply disregarded by Cagayan without adducing
proof sufficient to overcome the aforesaid
presumption. Also, based on the findings of
respondent court, and the records before us
being sufficient for arbitrament, without
remanding the incident to the court a quo
petitioner can be adjudged guilty of contempt
and imposed a sanction in this appeal since it is a
cherished rule of procedure for this Court to
always strive to settle the entire controversy in a
single proceeding. 32 We so impose such penalty
concordant with the preservative principle and as
demanded by the respect due the orders, writs
and processes of the courts of justice.
WHEREFORE, judgment is hereby rendered
DENYING the petition in this case and AFFIRMING
the decision of respondent Court of Appeals.
Petitioner is hereby declared in contempt of court
and ORDERED to pay a fine of One Thousand
Pesos (P1,000.00). with costs.
SO ORDERED.
Paras, Padilla and Sarmiento, JJ., concur.
Melencio-Herrera (Chairman), J., is on leave.
----------------
Footnotes
1. An Act to Regulate the Use of Duly Stamped
or Marked Bottles, Boxes, Casks, Kegs, Barrels
and Other Similar Containers.
2. Original Record, Civil Case No. 2668, 6-12.
3. Ibid., id., 1-14.
4. Ibid., id., 44.
5. Ibid., id., 45-53.
6. Ibid., id., 71-73.
7. Penned by Judge Efren N. Ambrosio.
8. Rollo, 45; Justice Jose C. Campos Jr.,
ponente, with Justice Venancio D. Aldecoa, Jr.
concurring and Justice Reynato S. Puno
concurring in the result.
9. Rollo, 7-8, 13-14, 16, 18.
10. Sec. 6, Republic Act No. 623, as amended.
11. Rules 128 and 129, Revised Rules of Practice
Before the Philippine Patent Office in Trademark
Cases.
12. Rule 33, id., citing Sec. 1, Republic Act No.
623.
13. Drexel, Enterprises, Inc. vs. Richardson,
(CA10 Kan) 312 F2d 525, Beech-Nut Packing Co.
vs. P. Lorillard Co. (DC NJ) 299 F 834, affd (CA3
NJ) 7 F2d 967, affd 273 US 629, 71 L. Ed 810, 47
S CT 481, as cited in 74 Am. Jur. 2d, 726.
14. Burnstein vs. U.S., CC. A. Cal., 55 F2d 599,
603; Black's Law Dictionary, Fourth Edition, 204.
15. Congressional Record, Vol. II, No. 69, 942;
Exh. 6. Civil Case No. 2668, Folio of Exhibits, 3.
16. 74 Phil. 301 (1943).
17. Explanatory Note, House Bill No. 1112,
Congressional Record, 2733-2734, Second
Congress of the Republic, First Session, Vol. I,
No. 80, Session of May 18, 1950.
18. U.S. vs. Sto. Nino, 13 Phil. 141 (1909).
19. Exh. B, Original Record, Civil Case No. 2668,
6.
20. Ramos vs. Court of Industrial Relations, 21
SCRA 1282 (1967).
21. Report of the Code Commission on the
Proposed Civil Code of the Philippines (1948), 39.
22. Exh. F, F-2, Original Record, Civil Case No.
2668, 270-275.
23. Yutivo & Sons Hardware Company vs. Court
of Tax Appeals, 1 SCRA 161 (1961).
24. Original Record, Civil Case No. 2668, TSN,
Sept. 19, 1984. 3.
25. Ibid., id., TSN, Nov. 13, 1984, 120-121.
26. 93 Phil. 160 (1953).
27. Mabale, et al. vs. Apalisok, et al., 88 SCRA
234 (1979).
28. 97 SCRA 158 (1980).
29. Original Record, Civil Case No. 2668, 109.
30. Harden vs. Peña, et al., 87 Phil. 620 (1950).
31. People vs. De Luna, et al., 102 Phil. 968
(1958).
32. Alger Electric Inc. vs. Court of Appeals, et
al., 135 SCRA 37 (1985); Lianga Bay Logging
Co., Inc., et al. vs. Court of Appeals, et al., 157
SCRA 357 (1988).
[1999R1103ES] [1/2] RIZAL COMMERCIAL
BANKING CORPORATION, petitioner, vs.
INTERMEDIATE APPELLATE COURT AND BF
HOMES, INC., respondents.1999 Dec 9En
BancG.R. No. 74851R E S O L U T I O N
MELO, J.:
On September 14, 1992, the Court passed upon
the case at bar and rendered its decision,
dismissing the petition of Rizal Commercial
Banking Corporation (RCBC), thereby affirming
the decision of the Court of Appeals which
canceled the transfer certificate of title issued in
favor of RCBC, and reinstating that of respondent
BF Homes.
This will now resolve petitioner’s motion for
reconsideration which, although filed in 1992 was
not deemed submitted for resolution until in late
1998. The delay was occasioned by exchange of
pleadings, the submission of supplemental
papers, withdrawal and change of lawyers, not to
speak of the case having been passed from one
departing to another retiring justice. It was not
until May 3, 1999, when the case was re-raffled
to herein ponente, but the record was given to
him only sometime in the late October 1999.
By way of review, the pertinent facts as stated in
our decision are reproduced herein, to wit:
On September 28, 1984, BF Homes filed a
"Petition for Rehabilitation and for Declaration of
Suspension of Payments" (SEC Case No. 002693)
with the Securities and Exchange Commission
(SEC).
One of the creditors listed in its inventory of
creditors and liabilities was RCBC.
On October 26, 1984, RCBC requested the
Provincial Sheriff of Rizal to extra-judicially
foreclose its real estate mortgage on some
properties of BF Homes. A notice of extra-judicial
foreclosure sale was issued by the Sheriff on
October 29, 1984, scheduled on November 29,
1984, copies furnished both BF Homes
(mortgagor) and RCBC (mortgagee).
On motion of BF Homes, the SEC issued on
November 28, 1984 in SEC Case No. 002693 a
temporary restraining order (TRO), effective for
20 days, enjoining RCBC and the sheriff from
proceeding with the public auction sale. The sale
was rescheduled to January 29, 1985.
On January 25, 1985, the SEC ordered the
issuance of a writ of preliminary injunction upon
petitioner’s filing of a bond. However, petitioner
did not file a bond until January 29, 1985, the
very day of the auction sale, so no writ of
preliminary injunction was issued by the SEC.
Presumably, unaware of the filing of the bond,
the sheriffs proceeded with the public auction
sale on January 29, 1985, in which RCBC was the
highest bidder for the properties auctioned.
On February 5, 1985, BF Homes filed in the SEC
a consolidated motion to annul the auction sale
and to cite RCBC and the sheriff for contempt.
RCBC opposed the motion.
Because of the proceedings in the SEC, the
sheriff withheld the delivery to RCBC of a
certificate of sale covering the auctioned
properties.
On February 13, 1985, the SEC in Case No.
002693 belatedly issued a writ of preliminary
injunction stopping the auction sale which had
been conducted by the sheriff two weeks earlier.
On March 13, 1985, despite SEC Case No.
002693, RCBC filed with the Regional Trial Court,
Br. 140, Rizal (CC 10042) an action for
mandamus against the provincial sheriff of Rizal
and his deputy to compel them to execute in its
favor a certificate of sale of the auctioned
properties.
In answer, the sheriffs alleged that they
proceeded with the auction sale on January 29,
1985 because no writ of preliminary injunction
had been issued by SEC as of that date, but they
informed the SEC that they would suspend the
issuance of a certificate of sale to RCBC.
On March 18, 1985, the SEC appointed a Emphasis in the original.)
Management Committee for BF Homes.
On RCBC’s motion in the mandamus case, the
trial court issued on May 8, 1985 a judgment on
the pleadings, the dispositive portion of which
states:
"WHEREFORE, petitioner’s ‘Motion for Judgment
on the pleadings is granted and judgement is
hereby rendered ordering respondents to execute
and deliver to petitioner the Certificate of the
Auction Sale of January 29, 1985, involving the
properties sold therein, more particularly those
described in Annex ‘C’ of their Answer." (p. 87,
Rollo.)
On June 4, 1985, B.F. Homes filed an original
complaint with the IAC pursuant to Section 9 of
B.P. 129 praying for the annulment of the
judgment, premised on the following:
"x x x: (1) even before RCBC asked the sheriff to
extra-judicially foreclose its mortgage on
petitioner’s properties, the SEC had already
assumed exclusive jurisdiction over those assets,
and (2) that there was extrinsic fraud in
procuring the judgment because the petitioner
was not impleaded as a party in the mandamus
case, respondent court did not acquire
jurisdiction over it, and it was deprived of its
right to be heard." (CA Decision, p. 88, Rollo).
On April 8, 1986, the IAC rendered a decision,
setting aside the decision of the trial court,
dismissing the mandamus case and suspending
issuance to RCBC of new land titles, "until the
resolution of case by SEC in Case No. 002693,"
disposing as follows:
WHEREFORE, the judgment dated May 8, 1985 in
Civil Case No. 10042 is hereby annulled and set
aside and the case is hereby dismissed. In view
of the admission of respondent Rizal Commercial
Banking Corporation that the sheriff’s certificate
of sale has been registered on BF Homes’
TCT’s . . . (here the TCTs were enumerated) the
Register of Deeds for Pasay City is hereby
ordered to suspend the issuance to the
mortgagee-purchaser, Rizal Commercial Banking
Corporation, of the owner’s copies of the new
land titles replacing them until the matter shall
have been resolved by the Securities and
Exchange Commission in SEC Case No. 002693."
(p. 257-260, Rollo; also pp. 832-
834, 213 SCRA 830[1992];
On June 18, 1986, RCBC appealed the decision of
the then Intermediate Appellate Court (now, back
to its old revered name, the Court of Appeals) to
this Court, arguing that:
1.......Petitioner did not commit extrinsic fraud in
excluding private respondent as party defendant
in Special Civil Case No. 10042 as private
respondent was not indispensable party thereto,
its participation not being necessary for the full
resolution of the issues raised in said case.
2.......SEC Case No. 2693 cannot be invoked to
suspend Special Civil Case No. 10042, and for
that matter, the extra-judicial foreclosure of the
real estate mortgage in petitioner’s favor, as
these do not constitute actions against private
respondent contemplated under Section 6(c) of
Presidential Decree No. 902-A.
3.......Even assuming arguendo that the extra-
judicial sale constitute an action that may be
suspended under Section 6(c) of Presidential
Decree No. 902-A, the basis for the suspension
thereof did not exist so as to adversely affect the
validity and regularity thereof.
4.......The Regional Trial court had jurisdiction to
take cognizance of Special Civil Case No. 10042.
5.......The Regional Trial court had jurisdiction
over Special Civil Case No. 10042."
(p. 5, Rollo.)
On November 12, 1986, the Court gave due
course to the petition. During the pendency of
the case, RCBC brought to the attention of the
Court an order issued by the SEC on October 16,
1986 in Case No.002693, denying the
consolidated Motion to Annul the Auction Sale
and to cite RCBC and the Sheriff for Contempt,
and ruling as follows:
WHEREFORE, the petitioner’s "Consolidated
Motion to Cite Sheriff and Rizal Commercial
Banking Corporation for Contempt and to Annul
Proceedings and Sale," dated February 5, 1985,
should be as is, hereby DENIED.
While we cannot direct the Register of Deeds to
allow the consolidation of the titles subject of the
Omnibus Motion dated September 18, 1986 filed
by the Rizal Commercial banking Corporation,
and therefore, denies said Motion, neither can
this Commission restrain the said bank and the
Register of Deeds from effecting the said
consolidation.
SO ORDERED.
(p. 143, Rollo.)
By virtue of the aforesaid order, the Register of
Deeds of Pasay City effected the transfer of title
over subject pieces of property to petitioner
RCBC, and the issuance of new titles in its name.
Thereafter, RCBC presented a motion for the
dismissal of the petition, theorizing that the
issuance of said new transfer certificates of title
in its name rendered the petition moot and
academic. barth
In the decision sought to be reconsidered, a
greatly divided Court (Justices Gutierrez, Nocon,
and Melo concurred with the ponente, Justice
Medialdea; Chief Justice Narvasa, Justices Bidin,
Regalado, and Bellosillo concurred only in the
result; while Justice Feliciano dissented and was
joined by Justice Padilla, then Justice, now Chief
Justice Davide, and Justice Romero; Justices
Griño-Aquino and Campos took no part) denied
petitioner’s motion to dismiss, finding basis for
nullifying and setting aside the TCTs in the name
of RCBC. Ruling on the merits, the Court upheld
the decision of the Intermediate Appellate Court
which dismissed the mandamus case filed by
RCBC and suspended the issuance of new titles to
RCBC. Setting aside RCBC’s acquisition of title
and nullifying the TCTs issued to it, the Court
held that:
. . . whenever a distressed corporation asks the
SEC for rehabilitation and suspension of
payments, preferred creditors may no longer
assert such preference, but . . . stand on equal
footing with other creditors. Foreclosure shall be
disallowed so as not to prejudice other creditors,
or cause discrimination among them. If
foreclosure is undertaken despite the fact that a
petition for rehabilitation has been filed, the
certificate of sale shall not be delivered pending
rehabilitation. Likewise, if this has also been
done, no transfer of title shall be effected also,
within the period of rehabilitation. The rationale
behind PD 902-A, as amended, is to effect a
feasible and viable rehabilitation. This cannot be
achieved if one creditor is preferred over the
others.
In this connection, the prohibition against
foreclosure attaches as soon as a petition for
rehabilitation is filed. Were it otherwise, what is
to prevent the petitioner from delaying the
creation of a Management Committee and in the
meantime dissipate all its assets. The sooner the
SEC takes over and imposes a freeze on all the
assets, the better for all concerned.
(pp. 265-266, Rollo; also p. 838, 213 SCRA
830[1992].)
Then Justice Feliciano (joined by three other
Justices), dissented and voted to grant the
petition. He opined that the SEC acted
prematurely and without jurisdiction or legal
authority in enjoining RCBC and the sheriff from
proceeding with the public auction sale. The
dissent maintain that Section 6 (c) of Presidential
Decree 902-A is clear and unequivocal that,
claims against the corporations, partnerships, or
associations shall be suspended only upon the
appointment of a management committee,
rehabilitation receiver, board or body. Thus, in
the case under consideration, only upon the
appointment of the Management Committee for
BF Homes on March 18, 1985, should the
suspension of actions for claims against BF
Homes have taken effect and not earlier.
In support of its motion for reconsideration,
RCBC contends:
The restraining order and the writ of preliminary
injunction issued by the Securities and Exchange
Commission enjoining the foreclosure sale of the
properties of respondent BF Homes were issued
without or in excess of its jurisdiction because it
was violative of the clear provision of Presidential
Decree No. 902-A, and are therefore null and
void; and
Petitioner, being a mortgage creditor, is entitled
to rely solely on its security and to refrain from
joining the unsecured creditors in SEC Case No.
002693, the petition for rehabilitation filed by
private respondent.
We find the motion for reconsideration
meritorious.
The issue of whether or not preferred creditors of
distressed corporations stand on equal footing
with all other creditors gains relevance and
materiality only upon the appointment of a
management committee, rehabilitation receiver,
board, or body. Insofar as petitioner RCBC is
concerned, the provisions of Presidential Decree
No. 902-A are not yet applicable and it may still
be allowed to assert its preferred status because
it foreclosed on the mortgage prior to the
appointment of the management committee on
March 18, 1985. The Court, therefore, grants the
motion for reconsideration on this score.
The law on the matter, Paragraph (c), Section 6
of Presidential Decree 902-A, provides:
Sec. 6. In order to effectively exercise such
jurisdiction, the Commission shall possess the
following powers:
c) To appoint one or more receivers of the
property, real and personal, which is the subject
of the action pending before the Commission in
accordance with the pertinent provisions of the
Rules of Court in such other cases whenever
necessary to preserve the rights of the parties-
litigants to and/or protect the interest of the
investing public and creditors; Provided,
however, that the Commission may, in
appropriate cases, appoint a rehabilitation
receiver of corporations, partnerships or other
associations not supervised or regulated by other
government agencies who shall have, in addition
to the powers of a regular receiver under the
provisions of the Rules of Court, such functions
and powers as are provided for in the succeeding
paragraph (d) hereof: Provided, finally, That
upon appointment of a management committee,
rehabilitation receiver, board or body, pursuant
to this Decree, all actions for claims against
corporations, partnerships or associations under
management or receivership pending before any
court, tribunal, board or body shall be suspended
accordingly. (As amended by PDs No. 1673, 1758
and by PD No. 1799. mphasis supplied.)
It is thus adequately clear that suspension of
claims against a corporation under rehabilitation
is counted or figured up only upon the
appointment of a management committee or a
rehabilitation receiver. The holding that
suspension of actions for claims against a
corporation under rehabilitation takes effect as
soon as the application or a petition for
rehabilitation is filed with the SEC – may, to
some, be more logical and wise but
unfortunately, such is incongruent with the clear
language of the law. To insist on such ruling, no
matter how practical and noble, would be to
encroach upon legislative prerogative to define
the wisdom of the law– plainly judicial legislation.
It bears stressing that the first and fundamental
duty of the Court is to apply the law. When the
law is clear and free from any doubt or
ambiguity, there is no room for construction or
interpretation. As has been our consistent ruling,
where the law speaks in clear and categorical
language, there is no occasion for interpretation;
there is only room for application (Cebu Portland
Cement Co. vs. Municipality of Naga, 24 SCRA
708 [1968]).
Where the law is clear and unambiguous, it must
be taken to mean exactly what it says and the
court has no choice but to see to it that its
mandate is obeyed (Chartered Bank Employees
Association vs. Ople, 138 SCRA 273 [1985];
Luzon Surety Co., Inc. vs. De Garcia, 30 SCRA
111 [1969]; Quijano vs. Development Bank of
the Philippines, 35 SCRA 270 [1970]).
Only when the law is ambiguous or of doubtful
meaning may the court interpret or construe its
true intent. Ambiguity is a condition of admitting
two or more meanings, of being understood in
more than one way, or of referring to two or
more things at the same time. A statute is
ambiguous if it is admissible of two or more
possible meanings, in which case, the Court is
called upon to exercise one of its judicial
functions, which is to interpret the law according
to its true intent.
Furthermore, as relevantly pointed out in the
dissenting opinion, a petition for rehabilitation
does not always result in the appointment of a
receiver or the creation of a management
committee. The SEC has to initially determine
whether such appointment is appropriate and
necessary under the circumstances. Under
Paragraph (d), Section 6 of Presidential Decree
No. 902-A, certain situations must be shown to
exist before a management committee may be
created or appointed, such as;
1.......when there is imminent danger of
dissipation, loss, wastage or destruction of assets
or other properties; or
2.......when there is paralization of business
operations of such corporations or entities which
may be prejudicial to the interest of minority
stockholders, parties-litigants or to the general
public.
On the other hand, receivers may be appointed
whenever:
1.......necessary in order to preserve the rights of
the parties-litigants; and/or
2.......protect the interest of the investing public
and creditors. (Section 6 (c), P.D. 902-A.)
These situations are rather serious in nature,
requiring the appointment of a management
committee or a receiver to preserve the existing
assets and property of the corporation in order to
protect the interests of its investors and
creditors. Thus, in such situations, suspension of
actions for claims against a corporation as
provided in Paragraph (c) of Section 6, of
Presidential Decree No. 902-A is necessary, and
here we borrow the words of the late Justice
Medialdea, "so as not to render the SEC
management Committee irrelevant and inutile
and to give it unhampered ‘rescue efforts’ over
the distressed firm" (Rollo, p. 265).
Otherwise, when such circumstances are not
obtaining or when the SEC finds no such
imminent danger of losing the corporate assets, a
management committee or rehabilitation receiver
need not be appointed and suspension of actions
for claims may not be ordered by the SEC. When
the SEC does not deem it necessary to appoint a
receiver or to create a management committee,
it may be assumed, that there are sufficient
assets to sustain the rehabilitation plan and, that
the creditors and investors are amply protected.
Petitioner additionally argues in its motion for
reconsideration that, being a mortgage creditor,
it is entitled to rely on its security and that it
need not join the unsecured creditors in filing
their claims before the SEC-appointed receiver.
To support its position, petitioner cites the
Court’s ruling in the case of Philippine
Commercial International Bank vs. Court of
Appeals, (172 SCRA436 [1989]) that an order of
suspension of payments as well as actions for
claims applies only to claims of unsecured
creditors and cannot extend to creditors holding a
mortgage, pledge, or any lien on the property.
Ordinarily, the Court would refrain from
discussing additional matters such as that
presented in RCBC’s second ground, and would
rather limit itself only to the relevant issues by
which the controversy may be settled with
finality.
In view, however, of the significance of such
issue, and the conflicting decisions of this Court
on the matter, coupled with the fact that our
decision of September 14, 1992, if not clarified,
might mislead the Bench and the Bar, the Court
resolved to discuss further.
It may be recalled that in the herein en banc
majority opinion (pp. 256-275, Rollo, also
published as RCBC vs. IAC, 213 SCRA 830
[1992]), we held that:
. . . whenever a distressed corporation asks the
SEC for rehabilitation and suspension of
payments, preferred creditors may no longer
assert such preference, but . . . stand on equal
footing with other creditors. Foreclosure shall be
disallowed so as not to prejudice other creditors,
or cause discrimination among them. If
foreclosure is undertaken despite the fact that a
petition for rehabilitation has been filed, the
certificate of sale shall not be delivered pending
rehabilitation. Likewise, if this has also been
done, no transfer of title shall be effected also,
within the period of rehabilitation. The rationale
behind PD 902-A, as amended, is to effect a
feasible and viable rehabilitation. This cannot be
achieved if one creditor is preferred over the
others.
In this connection, the prohibition against
foreclosure attaches as soon as a petition for
rehabilitation is filed. Were it otherwise, what is
to prevent the petitioner from delaying the
creation of a Management Committee and in the
meantime dissipate all its assets. The sooner the
SEC takes over and imposes a freeze on all the
assets, the better for all concerned.
(pp. 265-266, Rollo; also p. 838, 213 SCRA
830[1992]. mphasis supplied.)
The foregoing majority opinion relied upon BF
Homes, Inc. vs. Court of Appeals (190 SCRA 262
[1990] – per Cruz, J.: First Division) where it was
held that "when a corporation threatened by
bankruptcy is taken over by a receiver, all the
creditors should stand on an equal footing. Not
anyone of them should be given preference by
paying one or some of them ahead of the others.
This is precisely the reason for the suspension of
all pending claims against the corporation under
receivership. Instead of creditors vexing the
courts with suits against the distressed firm, they
are directed to file their claims with the receiver
who is a duly appointed officer of the SEC" (pp.
269-270; emphasis in the original). This ruling is
a reiteration of Alemar’s Sibal & Sons, Inc. vs.
Hon. Jesus M. Elbinias (pp. 99-100;186 SCRA 94
[1990] – per Fernan, C.J.: Third Division).
Taking the lead from Alemar’s Sibal & Sons, the
Court also applied this same ruling in Araneta vs.
Court of Appeals (211 SCRA 390 [1992] – per
Nocon, J.: Second Division).
All the foregoing cases departed from the ruling
of the Court in the much earlier case of PCIB vs.
Court of Appeals (172 SCRA 436 [1989] – per
Medialdea, J.: First Division) where the Court
categorically ruled that:
SEC’s order for suspension of payments of
Philfinance as well as for all actions of claims
against Philfinance could only be applied to
claims of unsecured creditors. Such order can not
extend to creditors holding a mortgage, pledge or
any lien on the property unless they give up the
property, security or lien in favor of all the
creditors of Philfinance. . .
(p. 440. mphasis supplied)
Thus, in BPI vs. Court of Appeals (229 SCRA 223
[1994] – per Bellosillo, J.: First Division) the
Court explicitly stated that ". . . the doctrine in
the PCIB Case has since been abrogated. In
Alemar’s Sibal & Sons v. Elbinias, BF Homes, Inc.
v. Court of Appeals, Araneta v. Court of Appeals
and RCBC v. Court of Appeals, we already ruled
that whenever a distressed corporation asks SEC
for rehabilitation and suspension of payments,
preferred creditors may no longer assert such
preference, but shall stand on equal footing with
other creditors. . ." (pp. 227-228).
It may be stressed, however, that of all the cases
cited by Justice Bellosillo in BPI, which
abandoned the Court’s ruling in PCIB, only the
present case satisfies the constitutional
requirement that "no doctrine or principle of law
laid down by the court in a decision rendered en
banc or in division may be modified or reversed
except by the court sitting en banc" (Sec 4,
Article VIII, 1987 Constitution). The rest were
division decisions. CODES
It behooves the Court, therefore, to settle the
issue in this present resolution once and for all,
and for the guidance of the Bench and the Bar,
the following rules of thumb shall are laid down:
1.......All claims against corporations,
partnerships, or associations that are pending
before any court, tribunal, or board, without
distinction as to whether or not a creditor is
secured or unsecured, shall be suspended
effective upon the appointment of a management
committee, rehabilitation receiver, board, or body
in accordance with the provisions of Presidential
Decree No. 902-A.
2.......Secured creditors retain their preference
over unsecured creditors, but enforcement of
such preference is equally suspended upon the
appointment of a management committee,
rehabilitation receiver, board, or body. In the
event that the assets of the corporation,
partnership, or association are finally liquidated,
however, secured and preferred credits under the
applicable provisions of the Civil Code will
definitely have preference over unsecured ones.
In other words, once a management committee,
rehabilitation receiver, board or body is
appointed pursuant to P.D. 902-A, all actions for
claims against a distressed corporation pending
before any court, tribunal, board or body shall be
suspended accordingly.
This suspension shall not prejudice or render
ineffective the status of a secured creditor as
compared to a totally unsecured creditor. P.D.
902-A does not state anything to this effect.
What it merely provides is that all actions for
claims against the corporation, partnership or
association shall be suspended. This should give
the receiver a chance to rehabilitate the
corporation if there should still be a possibility for
doing so. (This will be in consonance with
Alemar’s, BF Homes, Araneta, and RCBC insofar
as enforcing liens by preferred creditors are
concerned.)
However, in the event that rehabilitation is no
longer feasible and claims against the distressed
corporation would eventually have to be settled,
the secured creditors shall enjoy preference over
the unsecured creditors (still maintaining PCIB
ruling), subject only to the provisions of the Civil
Code on Concurrence and Preferences of Credit
(our ruling in State Investment House, Inc. vs.
Court of Appeals, 277 SCRA 209 [1997]).
The majority ruling in our 1992 decision that
preferred creditors of distressed corporations
shall, in a way, stand on equal footing with all
other creditors, must be read and understood in
the light of the foregoing rulings. All claims of
both a secured or unsecured creditor, without
distinction on this score, are suspended once a
management committee is appointed. Secured
creditors, in the meantime, shall not be allowed
to assert such preference before the Securities
and Exchange Commission. It may be stressed,
however, that this shall only take effect upon the
appointment of a management committee,
rehabilitation receiver, board, or body, as opined
in the dissent.
In fine, the Court grants the motion for
reconsideration for the cogent reason that
suspension of actions for claims commences only
from the time a management committee or
receiver is appointed by the SEC. Petitioner
RCBC, therefore, could have rightfully, as it did,
move for the extrajudicial foreclosure of its
mortgage on October 26, 1984 because a
management committee was not appointed by
the SEC until March 18, 1985.
WHEREFORE, petitioner’s motion for
reconsideration is hereby GRANTED. The decision
dated September 14, 1992 is vacated, the
decision of Intermediate Appellate Court in AC-
G.R. No. SP-06313 REVERSED and SET ASIDE,
and the judgment of the Regional Trial Court
National Capital Judicial Region, Branch 140, in
Civil Case No. 10042 REINSTATED.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan,
Mendoza, Quisumbing, Pardo, Buena, Gonzaga-
Reyes, Ynares-Santiago, and De Leon, Jr., JJ.,
concur.
Panganiban, J., see separate opinion.
Purisima, J., took no part.
SEPARATE OPINION
PANGANIBAN, J.:
The issue as to when suspension of payments
takes effect upon a petition of a distressed
corporation is a contentious one. The ponencia in
the case under consideration, Rizal Commercial
Banking Corporation (RCBC) v. Immediate
Appellate Court1 [213 SCRA 830, September 14,
1992. (Concurring unqualifiedly with Justice
Medialdea's ponencia were Gutierrez Jr., Nocon,
and Melo, JJ.; concurring in the result were
Narvasa, CJ, Bidin, Regalado and Bellosillo, JJ.;
dissenting were Feliciano, Padilla, Davide, Jr. and
Romero, JJ.; Cruz, Griño-Aquino and Campos,
JJ., did not take part in the voting.)], has ruled
that "the prohibition against foreclosure attaches
as soon as a petition for rehabilitation is filed.
Were it otherwise, what is to prevent the
[creditors] from delaying the creation of the
Management Committee and in the meantime
[seizing] all [the debtor's] assets. The sooner the
SEC takes over and imposes a freeze on all the
assets, the better for all concerned.2 [Ibid., p.
838.]
Suspension Takes Effect Only Upon
Constitution of Management Committee
A Dissent debunking the quoted ruling was
written by the esteemed Justice Florentino P.
Feliciano as follows:
"I understand the above quoted portion of the
ponencia to be saying that suspension of actions
for claims against the corporation which applies
for rehabilitation takes effect as soon as the
application or a petition for rehabilitation is filed
with the SEC.
I would point out with respect, that the actual
language used in Section 6 (c) and (d) of P.D.
902-A, as amended, does not support the
position taken in the ponencia. The pertinent
provision of Section 6 (c) is as follows:
'Sec. 6. In order to effectively exercise such
jurisdiction, the Commission shall possess the
following powers:
xxx......xxx......xxx
c) To appoint one or more receivers of the
property, real and personal, which is the subject
of the action pending before the Commission in
accordance with the pertinent provisions of the
Rules of Court in such cases whenever necessary
to preserve the rights of the parties-litigants to
and/or protect the interest of the investing public
and creditors; Provided, however, That the
Commission may, in appropriate cases, appoint a
rehabilitation receiver of corporations,
partnerships or other associations not supervised
or regulated by other government agencies who
shall have, in addition to the powers of a regular
receiver under the provisions of the Rules of
Court, such functions and powers as are provided
for in the succeeding paragraph (d) hereof;
Provided, further, that the Commission may
appoint a rehabilitation receiver of corporations,
partnerships or other associations supervised or
regulated by other government agencies, such as
banks and insurance companies, upon request of
the government agency concerned; Provided,
finally, that upon appointment of a management
committee, rehabilitation receiver, board or body
pursuant to this Decree, all actions for claims
against corporations, partnerships or associations
under management or receivership pending
before any court, tribunal, board or body shall be
suspended accordingly.’
It should be pointed out that the appointment of
a management committee or a rehabilitation
receiver is not ordinarily effected immediately
upon the filing of an application for suspension of
payments and for rehabilitation. The reason is
that the SEC must first determine whether the
jurisdictional requirements for the appointment of
a management committee are present. There are
at least two (2) sets of requirements: (a) the
requirements in respect of the petition for
declaration of suspension of payments; and (b)
the requirements concerning the petition for
creation and appointment of a management
committee.
xxx......xxx......xxx
As already noted, SEC took just about six (6)
months after the filing of the petition of B.F.
Homes to decide to create and appoint a
management committee. Only upon such
appointment of the management committee did
the proviso in Section 6 (c) which decrees
suspension of actions for claims against the
petitioning corporation take effect.
It is only then that the SEC determines that the
circumstances warranting, under the statute, the
appointment of a management committee do
exist, i.e., that there is ‘imminent danger of
dissipation, loss, wastage or destruction of assets
– or paralization of business operations –which
[would] be prejudicial to the interest of minority
stockholders, parties litigant or the general
public.’ Only when such circumstances have been
determined to exist is there justification for
suspending actions for claims against the
corporation so placed under SEC management.
The authority of the SEC to suspend or freeze the
judicial enforcement of claims against a
corporation is an extraordinary authority, most
especially where credits secured by specific liens
on property, like real estate mortgages, are
involved; such authority cannot lightly be
assumed to have arisen simply because the
corporation on its own initiative goes to the SEC
and there seeks shelter from its lawful
creditors."3 [Ibid., pp. 839-844.]
The foregoing Dissent found jural expression in a
later case, Barotac Sugar Mills, Inc. v. Court of
Appeals,4 [275 SCRA 497, July 15, 1997. (With
the concurrence of Narvasa, CJ; Melo, Francisco
and Panganiban, JJ., of the Court’s First
Division.] penned by then Associate, now Chief
Justice Hilario G. Davide Jr.:
"The appointment of a management committee
or rehabilitation receiver may only take place
after the filing with the SEC of an appropriate
petition for suspension of payments. This is clear
from a reading of sub-paragraph (d) of Section 5
and sub-paragraph (d) of Section 6 of P.D. No.
902-A. as amended by P.D. Nos. 1653 and 1758.
xxx
xxx......xxx......xxx
The conclusion then is inevitable that pursuant to
the underscored proviso in sub-paragraph (c) of
the aforementioned Section 6, taken together
with sub-paragraph (d) of Section 6, a court
action is ipso jure suspended only upon the
appointment of a management committee or a
rehabilitation receiver."
As a member of the then First Division which
promulgated Barotac, I concurred in the
aforequoted ruling. To repeat, Barotac and
Justice Feliciano's Dissent are clearly supported
by Section 6, paragraph (c) of Presidential
Decree 902-A. It is basic in statutory construction
that in the absence of doubt or ambiguity, there
is no necessity for construction or interpretation
of the law, as in this case. Where the law speaks
in clear and categorical language, there is no
room for interpretation. There is only room for
application."5 [Cebu Portland Cement Co. v.
Municipality of Naga, 24 SCRA 708, August 22,
1968, per Fernando, J.]
SEC Retains Power to
Issue Injunctive Relief
Left unsaid in RCBC, Barotac and even in the
present Resolution, however, is the existence of
two competing economic interests in the
determination of the issue. On the one hand,
there is the creditor; on the other, the
corporation and its stockholders. Under the RCBC
ponencia of Justice Medialdea, an unscrupulous
company can seek shelter in a petition for
suspension of payments in order to evade or at
least unfairly delay the payment of just
obligations. This course of action would clearly
prejudice its creditors, who would be barred from
judicially enforcing their rightful claims, simply
because a petition for suspension has been filed.
Indeed, to paraphrase Justice Medialdea, what is
to prevent the debtor from delaying the creation
of the management committee, in the meantime
dissipating all its assets?
On the other hand, if the bare ruling of Barotac
were to be applied strictly, a distressed company
would be exposed to grave danger that may
precipitate its untimely demise, the very evil
sought to be avoided by a suspension of
payments. Notably, the appointment of a
management committee takes place only after
several months, even years, from submission of
the petition. The appointment entails hearings
and the submission of documentary evidence to
determine whether the requisites for suspension
of payments have been met. By the time a
management committee or receiver is appointed,
creditors, upon knowledge of the application for
suspension of payments, will have feasted on the
distressed corporation.
Money lenders will demand satisfaction of their
credits by precipitately foreclosing on their
mortgages. Particularly vulnerable are liquid
assets which can be attached and rendered
useless. Payrolls will be frozen and suppliers will
lose faith in the company. Verily , the distressed
company's credit standing would be zero-rated.
Indeed, after the vultures' feast, the remaining
corporate carcass can no longer be resurrected
into a viable enterprise. When this happens,
there will be no more company left to
rehabilitate, thus rendering ineffectual the very
law which was enacted precisely to effect such
rehabilitation, In the business world, bridge
liquidity and credit are sometimes even more
important than profits.
The prudent way to avoid the disastrous
consequence of a strict application of said law is
to call attention to the power of the SEC to issue
injunctive reliefs. Herein movant (RCBC) raises
the issue of the validity of the restraining order
and the writ or preliminary injunction later issued
by the Securities and Exchange Commission
(SEC) prior to the appointment of the
management committee. It contends that the
issuance of the injunctive reliefs effectively
results in the suspension of actions against the
petitioning distressed corporation.
Movant is thus saying that the SEC has no
jurisdiction to issue injunctive reliefs in favor of
the distressed corporation petitioning for
suspension of payments prior to the appointment
of a management committee. I disagree.
Sec. 5(d) of PD 902-A clearly enumerates the
cases over which the SEC has original and
exclusive jurisdiction to hear and decide:
"SEC. 5 In addition to the regulatory and
adjudicative functions of the Securities and
Exchange Commission over corporations,
partnerships and other forms of associations
registered with it as expressly granted under
existing laws and decrees, it shall have original
and exclusive jurisdiction to hear and decide
cases involving:
xxx......xxx......xxx
d) Petitions of corporations, partnerships or
associations to be declared in the state of
suspension of payments in cases where the
corporation, partnership or association possesses
sufficient property to cover all its debts but
foresees the impossibility of meeting them when
they respectively fall due or in cases where the
corporation, partnership or association has no
sufficient assets to cover its liabilities, but is
under the management of a Rehabilitation
Receiver or Management Committee created
pursuant to this Decree."
Section 6 (a) of said Decree goes on further to
say:
"SECTION 6. In order to effectively exercise such
jurisdiction, the Commission shall possess the
following powers:
a) To issue preliminary or permanent injunctions,
whether prohibitory or mandatory, in all cases in
which it has jurisdiction, and in which cases the
pertinent provisions of the Rules of Court shall
apply;
x x x"
Thus, it is obvious from the above-quoted
provisions that the SEC acquires jurisdiction over
the distressed companies upon the submission of
a petition for suspension of payments. And when
the legal requirements are complied with, it has
the authority to issue injunctive reliefs for the
effective exercise of its jurisdiction. I would like
to emphasize that this power to issue restraining
orders or preliminary injunctions, upon the
prayer of the petitioning corporation, may be the
only buffer that could save a company from being
feasted on by any vulture-creditor, prior to the
appointment of a management committee or a
rehabilitation receiver.
WHEREFORE, I vote to GRANT the Motion for
Reconsideration, subject to the caveat that the
Securities and Exchange Commission, in
meritorious cases, may issue injunctive reliefs.
SUPREME COURT
THIRD DIVISION
JMM PROMOTIONS AND MANAGEMENT,
INC.,
Petitioner,
-versus- G.R. No. 139401
October 2, 2002
COURT OF APPEALS, EMMANUEL BALANE
AND CELSO PAGAPOLA-AN,
Respondents.
x---------------------------------------------------
x Private respondents, after arrival in the
DECISION
CORONA, J.:
In the hope of attaining a better future, many
Filipinos succumb to the lure of opportunities in
distant shores. Not all, however, are able to
realize their dreams. A number of them return
with neither money nor glory. For these unlucky
souls, they take home with them twice the
misery which they yearned to elude in the first
place. When the dream is gone, there is nothing
left but a bitter pill to swallow.
chanroblespublishingcompany
Before us is a Petition for Review under Rule 45
of the Rules of Court of the Decision[1] dated
June 25, 1999 of the Court of Appeals, which
denied the petition for certiorari of the decision
dated January 30,
1996 of the National Labor Relations Commission
filed by herein petitioner JMM Promotions and
Management, Inc. chanroblespublishingcompany
This petition is an offshoot of an illegal dismissal
case filed by private respondents Emmanuel
Balane (Balane) and Celso Pagapola-an
(Pagapola-an) in the POEA seeking justice for the
plight they suffered as overseas entertainers.
Private respondents charged petitioner with
causing injury to their rights.
chanroblespublishingcompany
The facts of this case follow.
In March 1993, Sam Jin Entertainment Co. Ltd.
(Sam Jin), through its agency, petitioner JMM
Promotions and Management, Inc., hired private
respondents and Theresa Domatican (Domatican)
as entertainers for deployment in Korea. The
three entertainers, as a musical band, assumed
the name “Fix Trio.” Balane played the keyboard
while Pagapola-an handled the guitar. Domatican
was the band’s original vocalist.
chanroblespublishingcompany
The employment contract provided that private
respondents were to receive a monthly salary of
four hundred thousand won (W400,000) plus a
round trip fare for a one-year contract.
The band was set to leave on March 26, 1993.
However, a day before the band’s departure, on
March 25, 1993, petitioner assigned Bernadette
Flores (Flores) instead of Domatican to perform
with the band in Korea.
chanroblespublishingcompany
Private respondents, together with Flores,
performed as a group for about four months in
Seoul, South Korea. Their stint, however, was
short-lived because of poor performance. Private
respondents laid the blame on Flores’ lack of
singing talent. Sam Jin thereafter advised private
respondents to return to the Philippines. Flores
stayed behind. chanroblespublishingcompany
On July 23, 1993, private respondents were
repatriated to the Philippines. Before their
departure from Korea, private respondents
signed a statement dated July 21, 1993,[2]
prepared by their employer, which expressed
their agreement to go back home due to some
difficulties in their contractual undertaking and
another statement
dated July 22, 1993,[3] which contained their
promise to refund petitioner the sum of one
hundred forty thousand won (W140,000)
representing the balance of their processing fee.
chanroblespublishingcompany
Philippines, filed with the POEA an illegal
dismissal case and money claim for the
unfinished employment contract against
petitioner and Sam Jin. They claimed that
petitioner was mainly responsible for their
aborted stint as a band in Seoul, Korea. The last-
minute replacement of Domatican with Flores, a
singer of allegedly questionable talent, resulted in
the band’s poor performance. This, in turn, led to
the premature termination of the band’s contract.
chanroblespublishingcompany
Petitioner denied any liability or responsibility for
the untimely termination of private respondents’
employment contract. It mainly anchored its
defense to the statements dated July 21, 1993
and July 22, 1993, signed by private
respondents, arguing that the latter voluntarily
expressed their desire to go back to the
Philippines. chanroblespublishingcompany
The POEA ruled in favor of private respondents,
ordering petitioner and Sam Jin to jointly and
severally pay private respondents the amount of
US$1,049.98 each, representing the
compensation for the unfinished portion of the
employment contract,[4] based on the following:
“After a judicious appraisal of the attendant facts
and evaluation of the evidence on record, we find
that what actually transpired in this case was an
unsuccessful and a losing entertainment business
venture on account of the entertainers’ failure to
put up a good show or performance before the
customers and clients of the club owners.
Complainants blamed the respondents for this
fiasco by attributing the cause thereof to the
inability of the singer to render her part of the
trio as she was not a singer nor had she
undergone testing or audition before her
engagement as such. What was originally
contracted for was the real singer/talent and
member of the contracted trio, Theresa
Domatican. These facts have not been
contradicted or explained by the respondents
except the allegation that complainants were
having difficulty in their employment, hence they
signed a rescission agreement.
chanroblespublishingcompany
“Respondents’ Annexes ‘A’ and ‘B’, the
statements executed by complainants, were
however disputed by the latter, claiming that
they were forced under the circumstances to sign
the same. They were put in a situation where
they can not (sic) longer perform effectively
because of a singer who cannot sing. If they do
not perform, they will not be paid. Thus they
were sent home by their employer and as a pre
requisite for their repatriation, they were made to
sign the aforementioned statements citing
difficulty in their employment as cause of their
discharge. Complainants were definitely pushed
against the wall and had no other recourse but to
comply with their employer’s orders in order to
be repatriated. chanroblespublishingcompany
“It is also worthy to note that one of the
complainants, Emmanuel Balane, corroborated
their stance by executing a statement in the
presence of our Consul at the Philippine Embassy
in Seoul, Korea. This statement is further
supported by the Statement dated July 22, 1993
(Annex ‘B’, Joint Affidavit of Complainants) which
was signed by Kang Ho Suck, Cho Jin Young and
Shin Bok Hu.”[5] chanroblespublishingcompany
The NLRC affirmed the decision of the POEA on
appeal, holding that the findings of the POEA
were supported by substantial evidence.
Twice thwarted but still unyielding, petitioner
filed with the Court of Appeals a petition for
certiorari under Rule 65 of the Rules of Court
seeking the reversal of the NLRC decision.
chanroblespublishingcompany
Petitioner’s hope of vindication in the Court of
Appeals failed as the latter found no reason to
disturb the findings of the NLRC. The Court of
Appeals attributed fault to the petitioner for the
band’s poor performance abroad when it replaced
the band’s original vocalist Domatican with Flores
at the “eleventh hour.” Thus, it held:
chanroblespublishingcompany
“The effect of petitioner’s fault should not be
used as the excuse to terminate its contract of
employment with private respondents.”[6]
Aggrieved by the ruling of the Court of Appeals,
petitioner now comes before us with the following
— We note that petitioner’s arguments are based on
“GROUNDS IN SUPPORT OF THE PETITION
a — The law is clear that an aggrieved party,
before the appellate body may consider such as
the findings of facts, been able to substantiate
the matter arrived at by preponderance of
evidence. chanroblespublishingcompany
b — That public respondent cannot shied (sic)
away from the mandated rule in the appreciation
of evidence; the proceedings before the inferior
quasi-judicial bodies is one of mere submission of
affidavits whereon no open testimony is taken to
cross-examine the witnesses; uprightness of the
findings is, therefore, questionable and subject to
review.”[7] chanroblespublishingcompany
Petitioner argues that the Court of Appeals
erroneously sustained the findings of fact of the
NLRC. Private respondents could not have
performed with Flores for four months in Korea if
they did not initially do well as a band. Fights
within and among themselves, therefore, caused
their misfortunes. chanroblespublishingcompany
Petitioner disputes the observation of the Court
of Appeals that private respondents were
intimidated into signing the quitclaim and request
for repatriation. They were paid their salaries and
they even committed to pay petitioner the
amount of 140,000 as reimbursement for
expenses incurred in their deployment to Seoul,
Korea. chanroblespublishingcompany
Petitioner also avers that the execution of
statements critical of petitioner before the
Philippine Consul in Seoul was not reflected in the
records. There being no evidence thereof, private
respondents’ stories were bereft of factual basis.
Furthermore, the identity of the Koreans who
allegedly signed and backed up private
respondents’ statements was neither ascertained
nor proved. chanroblespublishingcompany
Petitioner asserts that the quitclaims executed by
private respondents on July 21, 1993 and July
22, 1993 were valid and binding. The
existence of fraud, mistake or duress in their
execution has not been established. Thus,
documents attesting that a compromise
agreement has been reached between the parties
remain valid in the absence of any proof to the
contrary. chanroblespublishingcompany
On the other hand, due to alleged financial
difficulties,[8] private respondent Balane filed his
comment through a mere attorney-in-fact and
contended that the petition for review is merely a
dilatory tactic employed by petitioner.[9]
Petitioner’s arguments border on despair.
As an overture, clear and unmistakable is the
rule that the Supreme Court is not a trier of
facts. Just as well entrenched is the doctrine that
pure issues of fact may not be the proper subject
of appeal by certiorari under Rule 45 of the
Revised Rules of Court as this mode of appeal is
generally confined to questions of law.[10] We
therefore take this opportunity again to reiterate
that only questions of law, not questions of fact,
may be raised before the Supreme Court in a
petition for review under Rule 45 of the Rules of
Court. This Court cannot be tasked to go over the
proofs presented by the petitioners in the lower
courts and analyze, assess and weigh them to
ascertain if the court a quo and the appellate
court were correct in their appreciation of the
evidence.[11] chanroblespublishingcompany
factual and evidentiary matters which the
Supreme Court does not inquire into in an appeal
on certiorari.[12] The issues propounded by
petitioner involve only questions of fact
previously raised and satisfactorily ruled upon by
the courts a quo. chanroblespublishingcompany
The POEA and the NLRC were one with respect to
the finding that private respondents were illegally
dismissed. Petitioner’s obstinacy proved futile as
the Court of Appeals was likewise in agreement
with the labor courts. “Findings of fact by
administrative agencies are generally accorded
great respect, if not finality, by the courts
because of the special knowledge and expertise
over matters falling under their jurisdiction.”[13]
Moreover, it is a time-honoured rule that “the
factual findings of the Court of Appeals are
conclusive on the parties and not reviewable by
the Supreme Court — and they carry even more
weight when the Court of Appeals affirms the
factual findings of the trial court.”[14] Any
exception to these principles, as set forth in the
case of Ramos vs. Pepsi-Cola Bottling Co.[15]
must be clearly and convincingly proven.
Petitioner, however, failed to prove that this case
falls within the exception.
chanroblespublishingcompany
Nonetheless, we find it necessary to discuss the
issue of validity of the quitclaims. In the instant
case, private respondents claim that they were
merely compelled to sign the releases in favor of
their employer. Petitioner, on the other hand,
asserts that private respondents entered into the
compromise agreement freely and voluntarily and
should not, at this late stage, be permitted to
renounce their signed commitments.
chanroblespublishingcompany
No reasonable argument, however, can possibly
sustain petitioner’s position. Although quitclaims
have long been accepted in this jurisdiction,
when the voluntariness of the execution of the
quitclaim or release is squarely at issue, then the
employee’s claim may still be given due course.
[16] The law looks with disfavor on quitclaims [1] Penned by Associate Justice Hilarion L.
and releases by employees who have been Aquino and concurred in by Associate Justices
inveigled or pressured into signing them by Ramon U. Mabutas, Jr. and Wenceslao I. Agnir,
unscrupulous employers seeking to evade their Jr. in CA-G.R. SP No. 50793.
legal responsibilities.[17] chanroblespublishingcompany
chanroblespublishingcompany [2] Annex “A”; Rollo, p. 21.
We are not ready to deviate from this rule for the [3] Annex “B”; Rollo, p. 22.
reason that the courts a quo have sufficient [4] Rollo, p. 37. chanroblespublishingcompany
factual basis in ruling that private respondents [5] Ibid., pp. 35-36.
were merely pressured to sign the [6] Ibid., p. 57. chanroblespublishingcompany
quitclaims/compromise agreements. The fact that [7] Ibid., p. 14. chanroblespublishingcompany
private respondents signed the subject [8] Rollo, pp. 62, 65.
statements releasing petitioner and Sam Jin from [9] Rollo, p. 65. chanroblespublishingcompany
any liability and assenting to a refund of the [10] Valmonte vs. Court of Appeals, 303 SCRA
amount allegedly representing the expenses 278 (1999).
incurred by petitioner, without any objection, [11] Tinio vs. Manzano, 307 SCRA 460 (1999).
does not automatically mean the absence of chanroblespublishingcompany
duress, considering the pathetic circumstances [12] Villarico vs. Court of Appeals, 309 SCRA 193
private respondents were in. We find it incredible (1999).
that, after all the expense and the trouble they [13] Calvo vs. Bernardito, G.R. No. 134741,
went through in seeking greener pastures December 19, 2001.
abroad, private respondents would suddenly and [14] Borromeo vs. Sun, 317 SCRA 176 (1999).
without reason decide to return home and face, chanroblespublishingcompany
as jobless people, a staggering debt of 140,000. [15] 19 SCRA 289 (1967); see also Batingal vs.
The private respondents had no choice but to Batingal, G.R. No. 128636, February 1, 2001.
sign. They were stranded in a foreign land with chanroblespublishingcompany
no work and no income, and with their employer [16] Philippine Carpet Employees Association vs.
threatening not to give them their return tickets Philippine Carpet Manufacturing Corporation, 340
to Manila if they refused to sign. SCRA 383 (2000).
chanroblespublishingcompany [17] Veloso vs. Department of Labor and
Thus, we have time and again held that Employment, 200 SCRA 201 (1991).
quitclaims, waivers and/or complete releases [18] Cariño vs. Agricultural Credit and
executed by the employees do not stop them Cooperative Financing Administration, 18 SCRA
from pursuing their claims arising from unfair 183 (1966). chanroblespublishingcompany
labor practice — if there is a showing of undue [19] Agoy vs. National Labor Relations
pressure or duress. The basic reason for this is Commission, 252 SCRA 588 (1996); supra.
that such quitclaims, waivers and/or complete chanroblespublishingcompany
releases, being figuratively exacted through the [20] Villarico vs. Court of Appeals, supra.
barrel of a gun, are against public policy and
therefore null and void ab initio. Accordingly,
private respondents’ signatures in the subject
waivers or quitclaims never foreclosed their right
to pursue a case for illegal dismissal and money
claim. Employer and employee were not on equal
footing.[18] As aptly observed by the Court of
Appeals, private respondents’ backs were to the
wall. Had they been in a position to object,
private respondents would not have agreed to
reimburse petitioner the amount of W140,000 as
no person in his right mind, specially if he is in
dire financial straights, would agree to such an
undertaking. Private respondents went abroad
precisely to escape poverty. Obviously it was out
of desperation and helplessness that private
respondents agreed to affix their signatures on
the subject waivers. They are therefore deemed
not to have waived any of their rights.
Renuntiatio non praesumitur.”[19]
chanroblespublishingcompany
This Court sees no compelling reason to reverse
the findings of the POEA, the NLRC and
respondent Court of Appeals for lack of any
showing of error, mistake misappreciation of
facts.[20] This assailed decisions are in harmony
with the law and the evidence.
chanroblespublishingcompany
WHEREFORE, the petition is hereby DENIED.
SO ORDERED.
Puno, Panganiban and Morales, JJ., concur.
Sandoval-Gutierrez, J., on leave.
chanroblespublishingcompany