AGAN

Facts: In August 1989, the DOTC engaged the services of Aeroport de Paris (ADP) to conduct a
comprehensive study of the Ninoy Aquino International Airport (NAIA) and determine whether the
present airport can cope with the traffic development up to the year 2010.

On March 27, 1995, then DOTC Secretary Jose Garcia endorsed the proposal of Asia's Emerging
Dragon Corp. (unsolicited proposal dated Oct. 5, 1994) to the National Economic and Development
Authority (NEDA). A revised proposal, however, was forwarded by the DOTC to NEDA on December 13,
1995. On January 5, 1996, the NEDA Investment Coordinating Council (NEDA ICC) Technical Board
favorably endorsed the project to the ICC Cabinet Committee which approved the same, subject to
certain conditions, on January 19, 1996. On February 13, 1996, the NEDA passed Board Resolution No. 2
which approved the NAIA IPT III Project.

On August 29, 1996, the Second Pre-Bid Conference was held where certain clarifications were made.
Upon the request of prospective bidder People's Air Cargo & Warehousing Co., Inc (Paircargo), the PBAC
warranted that based on Sec. 11.6, Rule 11 of the Implementing Rules and Regulations of the BOT Law,
only the proposed Annual Guaranteed Payment submitted by the challengers would be revealed to
AEDC, and that the challengers' technical and financial proposals would remain confidential. The PBAC
also clarified that the list of revenue sources contained in Annex 4.2a of the Bid Documents was merely
indicative and that other revenue sources may be included by the proponent, subject to approval by
DOTC/MIAA. Furthermore, the PBAC clarified that only those fees and charges denominated as Public
Utility Fees would be subject to regulation, and those charges which would be actually deemed Public
Utility Fees could still be revised, depending on the outcome of PBAC's query on the matter with the
Department of Justice.

On September 26, 1996, AEDC informed the PBAC in writing of its reservations as regards the
Paircargo Consortium, which include:
a. The lack of corporate approvals and financial capability of PAIRCARGO;
b. The lack of corporate approvals and financial capability of PAGS;
c. The prohibition imposed by RA 337, as amended (the General Banking Act) on the amount that
Security Bank could legally invest in the project;
d. The inclusion of Siemens as a contractor of the PAIRCARGO Joint Venture, for prequalification
purposes; and
e. The appointment of Lufthansa as the facility operator, in view of the Philippine requirement in
the operation of a public utility.

The PBAC gave its reply on October 2, 1996, informing AEDC that it had considered the issues raised
by the latter, and that based on the documents submitted by Paircargo and the established
prequalification criteria, the PBAC had found that the challenger, Paircargo, had prequalified to
undertake the project. The Secretary of the DOTC approved the finding of the PBAC.

On October 16, 1996, the PBAC opened the third envelope submitted by AEDC and the Paircargo
Consortium containing their respective financial proposals. Both proponents offered to build the NAIA
Passenger Terminal III for at least $350 million at no cost to the government and to pay the government:
5% share in gross revenues for the first five years of operation, 7.5% share in gross revenues for the next
ten years of operation, and 10% share in gross revenues for the last ten years of operation, in
accordance with the Bid Documents.

As AEDC failed to match the proposal within the 30-day period, then DOTC Secretary Amado
Lagdameo, on December 11, 1996, issued a notice to Paircargo Consortium regarding AEDC's failure to
match the proposal. AEDC subsequently protested the alleged undue preference given to PIATCO and
reiterated its objections as regards the prequalification of PIATCO.

On July 12, 1997, the Government, through then DOTC Secretary Arturo T. Enrile, and PIATCO,
through its President, Henry T. Go, signed the "Concession Agreement for the Build-Operate-and-
Transfer Arrangement of the Ninoy Aquino International Airport Passenger Terminal III" (1997
Concession Agreement). The Government granted PIATCO the franchise to operate and maintain the
said terminal during the concession period and to collect the fees, rentals and other charges in
accordance with the rates or schedules stipulated in the 1997 Concession Agreement. The Agreement
provided that the concession period shall be for twenty-five (25) years commencing from the in-service
date, and may be renewed at the option of the Government for a period not exceeding twenty-five (25)
years. At the end of the concession period, PIATCO shall transfer the development facility to MIAA.

During the pendency of the case before this Court, President Gloria Macapagal Arroyo, on November
29, 2002, in her speech at the 2002 Golden Shell Export Awards at Malacaang Palace, stated that she
will not "honor (PIATCO) contracts which the Executive Branch's legal offices have concluded (as) null
and void."

Issue: Whether the petitioners and the petitioners-in-intervention have standing;
Whether this Court has jurisdiction; and
Whether the BOT and contracts therein are unconstitutional.

Held: YES.
Ratio: Messrs. Lopez et al. are employees of the MIAA. These petitioners (Messrs. Agan et al. and
Messrs. Lopez et al.) are confronted with the prospect of being laid off from their jobs and losing their
means of livelihood when their employer-companies are forced to shut down or otherwise retrench and
cut back on manpower. Such development would result from the imminent implementation of certain
provisions in the contracts that tend toward the creation of a monopoly in favor of Piatco, its
subsidiaries and related companies.

Petitioners-in-intervention are service providers in the business of furnishing airport-related services
to international airlines and passengers in the NAIA and are therefore competitors of Piatco as far as
that line of business is concerned. On account of provisions in the Piatco contracts, petitioners-in-
intervention have to enter into a written contract with Piatco so as not to be shut out of NAIA Terminal
III and barred from doing business there. Since there is no provision to ensure or safeguard free and fair
competition, they are literally at its mercy. They claim injury on account of their deprivation of property
(business) and of the liberty to contract, without due process of law.

By way of background, two monopolies were actually created by the Piatco contracts. The first and
more obvious one refers to the business of operating an international passenger terminal in Luzon, the
business end of which involves providing international airlines with parking space for their aircraft, and
airline passengers with the use of departure and arrival areas, check-in counters, information systems,
conveyor systems, security equipment and paraphernalia, immigrations and customs processing areas;
and amenities such as comfort rooms, restaurants and shops.

In furtherance of the first monopoly, the Piatco Contracts stipulate that the NAIA Terminal III will be
the only facility to be operated as an international passenger terminal; that NAIA Terminals I and II will
no longer be operated as such; and that no one (including the government) will be allowed to compete
with Piatco in the operation of an international passenger terminal in the NAIA Complex. Given that, at
this time, the government and Piatco are the only ones engaged in the business of operating an
international passenger terminal, I am not acutely concerned with this particular monopolistic situation.

There was however another monopoly within the NAIA created by the subject contracts for Piatco
in the business of providing international airlines with the following: groundhandling, in-flight catering,
cargo handling, and aircraft repair and maintenance services. These are lines of business activity in
which are engaged many service providers (including the petitioners-in-intervention), who will be
adversely affected upon full implementation of the Piatco Contracts, particularly Sections 3.01(d) and (e)
of both the ARCA and the CA.

Should government pay at all for reasonable expenses incurred in the construction of the Terminal?
Indeed it should, otherwise it will be unjustly enriching itself at the expense of Piatco and, in particular,
its funders, contractors and investors both local and foreign. After all, there is no question that the
State needs and will make use of Terminal III, it being part and parcel of the critical infrastructure and
transportation-related programs of government.

The rule on hierarchy of courts will not also prevent this Court from assuming jurisdiction over the
cases at bar. The said rule may be relaxed when the redress desired cannot be obtained in the
appropriate courts or where exceptional and compelling circumstances justify availment of a remedy
within and calling for the exercise of this Court's primary jurisdiction. Thus, considering the nature of the
controversy before the Court, procedural bars may be lowered to give way for the speedy disposition of
the instant cases.

In sum, this Court rules that in view of the absence of the requisite financial capacity of the Paircargo
Consortium, predecessor of respondent PIATCO, the award by the PBAC of the contract for the
construction, operation and maintenance of the NAIA IPT III is null and void.


Is PIATCO a qualified bidder?
Public respondents argue that the Paircargo Consortium, PIATCO's predecessor, was not a duly pre-
qualified bidder on the unsolicited proposal submitted by AEDC as the Paircargo Consortium failed to
meet the financial capability required under the BOT Law and the Bid Documents. They allege that in
computing the ability of the Paircargo Consortium to meet the minimum equity requirements for the
project, the entire net worth of Security Bank, a member of the consortium, should not be considered.
R.A. No. 337, as amended or the General Banking Act that a commercial bank cannot invest in any single
enterprise in an amount more than 15% of its net worth.

We agree with public respondents that with respect to Security Bank, the entire amount of its net
worth could not be invested in a single undertaking or enterprise, whether allied or non-allied in
accordance with the provisions of R.A. No. 337
The PBAC should not be allowed to speculate on the future financial ability of the bidder to undertake
the project on the basis of documents submitted. This would open doors to abuse and defeat the very
purpose of a public bidding.


Is the 1997 Concession Agreement valid?
Petitioners and public respondents contend that the 1997 Concession Agreement is invalid as it
contains provisions that substantially depart from the draft Concession Agreement included in the Bid
Documents. They maintain that a substantial departure from the draft Concession Agreement is a
violation of public policy and renders the 1997 Concession Agreement null and void.

If the winning bidder is allowed to later include or modify certain provisions in the contract awarded
such that the contract is altered in any material respect, then the essence of fair competition in the
public bidding is destroyed. A public bidding would indeed be a farce if after the contract is awarded;
the winning bidder may modify the contract and include provisions which are favorable to it that were
not previously made available to the other bidders.

With respect to terminal fees that may be charged by PIATCO, as shown earlier, this was included
within the category of "Public Utility Revenues" under the 1997 Concession Agreement. This
classification is significant because under the 1997 Concession Agreement, "Public Utility Revenues" are
subject to an "Interim Adjustment" of fees upon the occurrence of certain extraordinary events
specified in the agreement. However, under the draft Concession Agreement, terminal fees are not
included in the types of fees that may be subject to "Interim Adjustment."

Finally, under the 1997 Concession Agreement, "Public Utility Revenues," except terminal fees, are
denominated in US Dollars while payments to the Government are in Philippine Pesos. In the draft
Concession Agreement, no such stipulation was included. By stipulating that "Public Utility Revenues"
will be paid to PIATCO in US Dollars while payments by PIATCO to the Government are in Philippine
currency under the 1997 Concession Agreement, PIATCO is able to enjoy the benefits of depreciations of
the Philippine Peso, while being effectively insulated from the detrimental effects of exchange rate
fluctuations.

Under the draft Concession Agreement, default by PIATCO of any of its obligations to creditors who
have provided, loaned or advanced funds for the NAIA IPT III project does not result in the assumption
by the Government of these liabilities. In fact, nowhere in the said contract does default of PIATCO's
loans figure in the agreement. Such default does not directly result in any concomitant right or
obligation in favor of the Government.

It is clear from the above-quoted provisions that Government, in the event that PIATCO defaults in its
loan obligations, is obligated to pay "all amounts recorded and from time to time outstanding from the
books" of PIATCO which the latter owes to its creditors. These amounts include "all interests, penalties,
associated fees, charges, surcharges, indemnities, reimbursements and other related expenses." This
obligation of the Government to pay PIATCO's creditors upon PIATCO's default would arise if the
Government opts to take over NAIA IPT III. It should be noted, however, that even if the Government
chooses the second option, which is to allow PIATCO's unpaid creditors operate NAIA IPT III, the
Government is still at a risk of being liable to PIATCO's creditors should the latter be unable to designate
a qualified operator within the prescribed period. In effect, whatever option the Government chooses
to take in the event of PIATCO's failure to fulfill its loan obligations, the Government is still at a risk of
assuming PIATCO's outstanding loans.

As such the Government is virtually at the mercy of PIATCO (that it would not default on its loan
obligations to its Senior Lenders), the Senior Lenders (that they would appoint a qualified nominee or
transferee or agree to some other arrangement with the Government) and the existence of a qualified
nominee or transferee who is able and willing to take the place of PIATCO in NAIA IPT III.


In view of regulation of monopolies
The operation of an international passenger airport terminal is no doubt an undertaking imbued with
public interest. In entering into a Build-Operate-and-Transfer contract for the construction, operation
and maintenance of NAIA IPT III, the government has determined that public interest would be served
better if private sector resources were used in its construction and an exclusive right to operate be
granted to the private entity undertaking the said project, in this case PIATCO. Nonetheless, the privilege
given to PIATCO is subject to reasonable regulation and supervision by the Government through the
MIAA, which is the government agency authorized to operate the NAIA complex, as well as DOTC, the
department to which MIAA is attached.

While it is the declared policy of the BOT Law to encourage private sector participation by "providing
a climate of minimum government regulations," the same does not mean that Government must
completely surrender its sovereign power to protect public interest in the operation of a public utility as
a monopoly. The operation of said public utility cannot be done in an arbitrary manner to the detriment
of the public which it seeks to serve.

In contrast to the arrastre and stevedoring service providers in the case of Anglo-Fil Trading
Corporation v. Lazaro whose contracts consist of temporary hold-over permits, the affected service
providers in the cases at bar, have a valid and binding contract with the Government, through MIAA,
whose period of effectivity, as well as the other terms and conditions thereof cannot be violated.


Should the dispute be referred to arbitration prior to judicial recourse?
Respondent Piatco claims that Section 10.02 of the Amended and Restated Concession Agreement
(ARCA) provides for arbitration under the auspices of the International Chamber of Commerce to settle
any dispute or controversy or claim arising in connection with the Concession Agreement, its
amendments and supplements. The government disagrees; however, insisting that there can be no
arbitration based on Section 10.02 of the ARCA, since all the Piatco contracts are void ab initio.
















Commission on Human Rights Employees' Association (CHREA) vs. Commission on Human Rights
[GR 155336, 25 November 2004]
Second Division, Chico-Nazario (J): 4 concur

Facts: On 14 February 1998, Congress passed Republic Act 8522, otherwise known as the General
Appropriations Act of 1998. It provided for Special Provisions Applicable to All Constitutional Offices
Enjoying Fiscal Autonomy. The last portion of Article XXXIII covers the appropriations of the Commission
on Human Rights (CHR). These special provisions tackles Organizational Structure and the Use of
Savings. On the strength of these special provisions, the CHR, through its then Chairperson Aurora P.
Navarette-Recia and Commissioners Nasser A. Marohomsalic, Mercedes V. Contreras, Vicente P.
Sibulo, and Jorge R. Coquia, promulgated Resolution A98-047 n 04 September 1998, adopting an
upgrading and reclassification scheme among selected positions in the Commission. Annexed to said
resolution is the proposed creation of ten additional plantilla positions, namely: one Director IV position,
with Salary Grade 28 for the Caraga Regional Office, four Security Officer II with Salary Grade 15, and
five Process Servers, with Salary Grade 5 under the Office of the Commissioners. On 19 October 1998,
CHR issued Resolution No. A98-055 providing for the upgrading or raising of salary grades of certain
positions in the Commission. It, likewise, provided for the creation and upgrading of other positions. To
support the implementation of such scheme, the CHR, in the same resolution, authorized the
augmentation of a commensurate amount generated from savings under Personnel Services. By virtue
of Resolution A98-062 dated 17 November 1998, the CHR collapsed the vacant positions in the body
to provide additional source of funding for said staffing modification. Among the positions collapsed
were: one Attorney III, four Attorney IV, one Chemist III, three Special Investigator I, one Clerk III, and
one Accounting Clerk II. The CHR forwarded said staffing modification and upgrading scheme to the
Department of Budget and Management (DBM) with a request for its approval, but the then DBM
secretary Benjamin Diokno denied the request. In light of the DBMs disapproval of the proposed
personnel modification scheme, the Civil Service Commission (CSC)-National Capital Region Office,
through a memorandum dated 29 March 1999, recommended to the CSC-Central Office that the subject
appointments be rejected owing to the DBMs disapproval of the plantilla reclassification. Meanwhile,
the officers of the Commission on Human Rights Employees Association (CHREA), in representation of
the rank and file employees of the CHR, requested the CSC-Central Office to affirm the recommendation
of the CSC-Regional Office. CHREA stood its ground in saying that the DBM is the only agency with
appropriate authority mandated by law to evaluate and approve matters of reclassification and
upgrading, as well as creation of positions. The CSC-Central Office denied CHREAs request in a
Resolution dated 16 December 1999, and reversed the recommendation of the CSC-Regional Office that
the upgrading scheme be censured. CHREA filed a motion for reconsideration, but the CSC-Central Office
denied the same on 9 June 2000. Given the cacophony of judgments between the DBM and the CSC,
CHREA elevated the matter to the Court of Appeals. The Court of Appeals affirmed the pronouncement
of the CSC-Central Office and upheld the validity of the upgrading, retitling, and reclassification scheme
in the CHR on the justification that such action is within the ambit of CHRs fiscal autonomy. The CHREA
filed the petition for review.

Issue: Whether CHREA is a proper party to bring the suit in Court.

Held: It has been held in a multitude of cases that a proper party is one who has sustained or is in
immediate danger of sustaining an injury as a result of the act complained of. Here, CHREA, which
consists of rank and file employees of CHR, protests that the upgrading and collapsing of positions
benefited only a select few in the upper level positions in the Commission resulting to the
demoralization of the rank and file employees. This sufficiently meets the injury test. Indeed, the CHRs
upgrading scheme, if found to be valid, potentially entails eating up the Commissions savings or that
portion of its budgetary pie otherwise allocated for Personnel Services, from which the benefits of the
employees, including those in the rank and file, are derived. Further, the personality of the CHREA to file
this case was recognized by the CSC when it took cognizance of the CHREAs request to affirm the
recommendation of the CSC-National Capital Region Office. CHREAs personality to bring the suit was a
non-issue in the Court of Appeals when it passed upon the merits of this case. Thus, neither should our
hands be tied by this technical concern. Indeed, it is settled jurisprudence that an issue that was neither
raised in the complaint nor in the court below cannot be raised for the first time on appeal, as to do so
would be offensive to the basic rules of fair play, justice, and due process.



aiwa vs romulo
Facts: Automotive Industry Workers Alliance (AIWA) and its affiliated unions call upon the Supreme
Court to exercise its power of judicial review to declare as unconstitutional an executive order assailed
to be in derogation of the constitutional doctrine of separation of powers. In an original action for
certiorari, they invoke their status as labor unions and as taxpayers whose rights and interests are
allegedly violated and prejudiced by Executive Order 185 dated 10 March 2003 whereby administrative
supervision over the National Labor Relations Commission (NLRC), its regional branches and all its
personnel including the executive labor arbiters and labor arbiters was transferred from the NLRC
Chairperson to the Secretary of Labor and Employment. In support of their position, the Unions argue
that the NLRC -- created by Presidential Decree 442, otherwise known as the Labor Code, during Martial
Law was an integral part of the Department (then Ministry) of Labor and Employment (DOLE) under
the administrative supervision of the Secretary of Justice. During the time of President Corazon C.
Aquino, and while she was endowed with legislative functions after EDSA I, Executive Order 292 was
issued whereby the NLRC became an agency attached to the DOLE for policy and program coordination
and for administrative supervision. On 2 March 1989, Article 213 of the Labor Code was expressly
amended by Republic Act 6715 declaring that the NLRC was to be attached to the DOLE for program and
policy coordination only while the administrative supervision over the NLRC, its regional branches and
personnel, was turned over to the NLRC Chairman. The subject EO 185, in authorizing the Secretary of
Labor to exercise administrative supervision over the NLRC, its regional branches and personnel,
allegedly reverted to the pre-RA 6715 set-up, amending the latter law which only Congress can do.
Alberto Romulo (in his capacity as Executive Secretary) and Patricia Sto. Tomas (in her capacity as
Secretary of Labor and Employment), as represented by the Office of the Solicitor General, opposed the
petition on procedural and substantive grounds.

Issue: Whether the Unions -- which contend that they are suing for and in behalf of their members
(more or less 50,000 workers) -- has the requisite standing.

Held: NO. Legal standing or locus standi is 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. For a citizen to have standing, he must establish that he has suffered some actual or
threatened injury as a result of the allegedly illegal conduct of the government; the injury is fairly
traceable to the challenged action; and the injury is likely to be redressed by a favorable action. Herein,
the Unions have not shown that they have sustained or are in danger of sustaining any personal injury
attributable to the enactment of EO 185. As labor unions representing their members, it cannot be said
that EO 185 will prejudice their rights and interests considering that the scope of the authority conferred
upon the Secretary of Labor does not extend to the power to review, reverse, revise or modify the
decisions of the NLRC in the exercise of its quasi-judicial functions. Thus, only NLRC personnel who may
find themselves the subject of the Secretary of Labors disciplinary authority, conferred by Section 1(d)
of the subject executive order, may be said to have a direct and specific interest in raising the
substantive issue herein. Moreover, and if at all, only Congress, and not the Unions herein, can claim any
injury from the alleged executive encroachment of the legislative function to amend, modify and/or
repeal laws. Neither can standing be conferred on the Unions as taxpayers since they have not
established disbursement of public funds in contravention of law or the Constitution. A taxpayers suit is
properly brought only when there is an exercise of the spending or taxing power of Congress. EO 185
does not even require for its implementation additional appropriation. All told, if the Court was to
follow the strict rule on locus standi, the petition should be forthwith dismissed on that score. The rule
on standing, however, is a matter of procedure, hence, can be relaxed for nontraditional plaintiffs like
ordinary citizens, taxpayers and legislators when the public interest so requires, such as when the
matter is of transcendental importance, of overarching significance to society, or of paramount public
interest. However, the issue posed in the present petition did not meet the exacting standard required
for the Court to take the liberal approach and recognize the standing of the Unions. The subject matter
of EO 185 is the grant of authority by the President to the Secretary of Labor to exercise administrative
supervision over the NLRC, its regional branches and all its personnel, including the Executive Labor
Arbiters and Labor Arbiters. Its impact, sans the challenge to its constitutionality, is thereby limited to
the departments to which it is addressed. Considering that the governmental act being questioned has a
limited reach, its impact confined to corridors of the executive department, this is not one of those
exceptional occasions where the Court is justified in sweeping aside a critical procedural requirement,
rooted as it is in the constitutionally enshrined principle of separation of powers

KMU
FACTS:


Department of Transportation and Communication (DOTC) Secretary Oscar M. Orbos issued
Memorandum Circular No. 90-395 to Land Transportation Franchising and Regulatory Board (LTFRB)
Chairman, Remedios A.S. Fernando that will allow provincial bus operators to charge passengers rates
within a range of 15% above and 15% below the LTFRB official rate for a period of one (1) year to be
implemented on August 6, 1990. The Memo read as is the liberalization of regulations in the transport
sector and to move away gradually from regulatory policies and make progress towards greater reliance
to market forces: Chairman Fernando informed Sec. Orbos that the Memo is not legally feasible and
recommended for further studies because (1) under Public Service Act rates should be approved by
public service operators; there should be publication and notice especially to affected sectors; and a
public hearing be held; (2) it was untimely due to an earthquake happened on July 16; (3) it will trigger
upward adjustment in bus fares especially in trips bound for Northern Luzon; and (4) DOTC should
consider reforms that will be uplifting after the earthquake. On December 5, 1990 the Provincial Bus
Operators Association of the Philippines, Inc. (PBOAP) filed an application for fare rate increase. On
December 14, 1990 LTFRB released a fare schedule based on a straight computation. On March 30, 1992
DOTC Sec. Pete Nicomedes Prado issued Department Order No 92-587 defining the framework on the
regulation of transport services. Then on October 8, 1992 DOTC Sec. Jose B. Garcia issued a
memorandum to LTFRB for the swift action on the adoption of the rules and procedures to implement
Department Order No. 92-587 that laid down the deregulation and other liberalization policies for the
transport sector. LTFRB issued on February 17, 1993

On March 16, 1994. Kilusang Mayo Uno anchors its claim on two (2) grounds. First, the authority given
by respondent LTFRB to provincial bus operators to set a fare range of plus or minus fifteen (15%)
percent, later increased to plus twenty (20%) and minus twenty-five (-25%) percent, over and above the
existing authorized fare without having to file a petition for the purpose, is unconstitutional, invalid and
illegal. Second, the establishment of a presumption of public need in favor of an applicant for a
proposed transport service without having to prove public necessity is illegal for being violative of the
Public Service Act and the Rules of Court and petitions before the LTFRB.

LTFRB dismissed because of lack of merit.

The Court, on June 20, 1994, issued a temporary restraining order enjoining, prohibiting and preventing
respondents from implementing the bus fare rate increase as well as the questioned orders and
memorandum circulars. This meant that provincial bus fares were rolled back to the levels duly
authorized by the LTFRB prior to March 16, 1994. A moratorium was likewise enforced on the issuance
of franchises for the operation of buses, jeepneys, and taxicabs.

DOTC Secretary Jesus B. Garcia, Jr. and the LTFRB asseverate that the petitioner does not have the
standing to maintain the instant suit. They further claim that it is within DOTC and LTFRBs authority to
set a fare range scheme and establish a presumption of public need in applications for certificates of
public convenience.



ISSUE:

Are the petitioners have the right to petition of this case?



Whether or not the fare adjustment is constitutional?

HELD:

(1) YES. KMU has a locus standi (or ability of a party to demonstrate to the court sufficient connection
to and harm from the law or action challenged to support that partys participation in the case) which is
inherent in the Section 1 of Article VIII of the Constitution provides: 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.



NO. WHEREFORE, in view of the foregoing, the instant petition is hereby GRANTED and the challenged
administrative issuances and orders, namely: DOTC Department Order No. 92-587, LTFRB Memorandum
Circular
No. 92-009, and the order dated March 24, 1994 issued by respondent LTFRB are hereby DECLARED
contrary to law and invalid insofar as they affect provisions therein (a) delegating to provincial bus and
jeepney operators the authority to increase or decrease the duly prescribed transportation fares; and
(b) creating a presumption of public need for a service in favor of the applicant for a certificate of public
convenience and placing the burden of proving that there is no need for the proposed service to the
oppositor. The Temporary Restraining Order issued on June 20, 1994 is hereby MADE PERMANENT
insofar as it enjoined the bus fare rate increase granted under the provisions of the aforementioned
administrative circulars, memoranda and/or orders declared invalid.


Executive secretary vs. CA

Facts: The Omnibus Rules and Regulations Implementing the Migrant Workers and Overseas Filipino Act
of 1995 RA 8042 was, thereafter, published in the April 7, 1996 issue of the Manila Bulletin. However,
even before the law took effect, the Asian Recruitment Council Philippine Chapter, Inc. (ARCO-Phil.)
filed, on July 17, 1995, a petition for declaratory relief under Rule 63 of the Rules of Court with the
Regional Trial Court of Quezon City to declare as unconstitutional Section 2, paragraph (g), Section 6,
paragraphs (a) to (j), (l) and (m), Section 7, paragraphs (a) and (b), and Sections 9 and 10 of the law, with
a plea for the issuance of a temporary restraining order and/or writ of preliminary injunction enjoining
the respondents therein from enforcing the assailed provisions of the law.

Peitioner claims that great majority of the duly licensed recruitment agencies have stopped or
suspended their operations for fear of being prosecuted under the provisions of a law that are unjust
and unconstitutional.

On August 1, 1995, the trial court issued a temporary restraining order effective for a period of only
twenty (20) days therefrom. After the petitioners filed their comment on the petition, the ARCO-Phil.
filed an amended petition, the amendments consisting in the inclusion in the caption thereof eleven (11)
other corporations which it alleged were its members and which it represented in the suit, and a plea for
a temporary restraining order enjoining the respondents from enforcing Section 6 subsection (i), Section
6 subsection (k) and paragraphs 15 and 16 thereof, Section 8, Section 10, paragraphs 1 and 2, and
Sections 11 and 40 of Rep. Act No. 8042.

The respondent averred that the aforequoted provisions of Rep. Act No. 8042 violate Section 1,
Article III of the Constitution. 5 According to the respondent, Section 6(g) and (i) discriminated against
unskilled workers and their families and, as such, violated the equal protection clause, as well as Article
II, Section 12 6 and Article XV, Sections 1 7 and 3(3) of the Constitution. 8 As the law encouraged the
deployment of skilled Filipino workers, only overseas skilled workers are granted rights. The respondent
stressed that unskilled workers also have the right to seek employment abroad.

According to the respondent, the right of unskilled workers to due process is violated because they
are prevented from finding employment and earning a living abroad. It cannot be argued that skilled
workers are immune from abuses by employers, while unskilled workers are merely prone to such
abuses. It was pointed out that both skilled and unskilled workers are subjected to abuses by foreign
employers. Furthermore, the prohibition of the deployment of unskilled workers abroad would only
encourage fly-by-night illegal recruiters.

According to the respondent, the grant of incentives to service contractors and manning agencies to
the exclusion of all other licensed and authorized recruiters is an invalid classification. Licensed and
authorized recruiters are thus deprived of their right to property and due process and to the "equality of
the person." It is understandable for the law to prohibit illegal recruiters, but to discriminate against
licensed and registered recruiters is unconstitutional.

The respondent, likewise, alleged that Section 6, subsections (a) to (m) is unconstitutional because
licensed and authorized recruitment agencies are placed on equal footing with illegal recruiters. It
contended that while the Labor Code distinguished between recruiters who are holders of licenses and
non-holders thereof in the imposition of penalties, Rep. Act No. 8042 does not make any distinction. The
penalties in Section 7(a) and (b) being based on an invalid classification are, therefore, repugnant to the
equal protection clause, besides being excessive; hence, such penalties are violative of Section 19(1),
Article III of the Constitution. 9 It was also pointed out that the penalty for officers/officials/employees
of recruitment agencies who are found guilty of economic sabotage or large-scale illegal recruitment
under Rep. Act No. 8042 is life imprisonment.

The respondent also posited that Section 6(m) and paragraphs (15) and (16), Sections 8, 9 and 10,
paragraph 2 of the law violate Section 22, Article III of the Constitution 10 prohibiting ex-post facto laws
and bills of attainder. This is because the provisions presume that a licensed and registered recruitment
agency is guilty of illegal recruitment involving economic sabotage, upon a finding that it committed any
of the prohibited acts under the law. Furthermore, officials, employees and their relatives are presumed
guilty of illegal recruitment involving economic sabotage upon such finding that they committed any of
the said prohibited acts.

The respondent further argued that the 90-day period in Section 10, paragraph (1) within which a
labor arbiter should decide a money claim is relatively short, and could deprive licensed and registered
recruiters of their right to due process. The period within which the summons and the complaint would
be served on foreign employees and, thereafter, the filing of the answer to the complaint would take
more than 90 days. This would thereby shift on local licensed and authorized recruiters the burden of
proving the defense of foreign employers.

The respondent asserted that the following provisions of the law are unconstitutional:
SEC. 9. Venue. A criminal action arising from illegal recruitment as defined herein shall be filed
with the Regional Trial Court of the province or city where the offense was committed or where the
offended party actually resides at the time of the commission of the offense: Provided, That the court
where the criminal action is first filed shall acquire jurisdiction to the exclusion of other courts: Provided,
however, That the aforestated provisions shall also apply to those criminal actions that have already
been filed in court at the time of the effectivity of this Act.

In their answer to the petition, the petitioners alleged, inter alia, that (a) the respondent has no cause
of action for a declaratory relief; (b) the petition was premature as the rules implementing Rep. Act No.
8042 not having been released as yet; (c) the assailed provisions do not violate any provisions of the
Constitution; and, (d) the law was approved by Congress in the exercise of the police power of the State.

In opposition to the respondent's plea for injunctive relief, the petitioners averred that: As earlier
shown, the amended petition for declaratory relief is devoid of merit for failure of petitioner to
demonstrate convincingly that the assailed law is unconstitutional, apart from the defect and
impropriety of the petition.

On December 5, 1997, the appellate court came out with a four-page decision dismissing the petition
and affirming the assailed order and writ of preliminary injunction issued by the trial court. The
appellate court, likewise, denied the petitioners' motion for reconsideration of the said decision.


Issue: The core issue in this case is whether or not the trial court committed grave abuse of its discretion
amounting to excess or lack of jurisdiction in issuing the assailed order and the writ of preliminary
injunction on a bond of only P50,000; and

Whether or not the appellate court erred in affirming the trial court's order and the writ of
preliminary injunction issued by it.

Held: IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed decision of the appellate
court is REVERSED AND SET ASIDE. The Order of the Regional Trial Court dated August 21, 1995 in Civil
Case No. Q-95-24401 and the Writ of Preliminary Injunction issued by it in the said case on August 24,
1995 are NULLIFIED. No costs.

SO ORDERED.

Ratio: The matter of whether to issue a writ of preliminary injunction or not is addressed to the sound
discretion of the trial court. However, if the court commits grave abuse of its discretion in issuing the
said writ amounting to excess or lack of jurisdiction, the same may be nullified via a writ of certiorari and
prohibition.

The possible unconstitutionality of a statute, on its face, does not of itself justify an injunction against
good faith attempts to enforce it, unless there is a showing of bad faith, harassment, or any other
unusual circumstance that would call for equitable relief. The "on its face" invalidation of statutes has
been described as "manifestly strong medicine," to be employed "sparingly and only as a last resort,"
and is generally disfavored.

To be entitled to a preliminary injunction to enjoin the enforcement of a law assailed to be
unconstitutional, the party must establish that it will suffer irreparable harm in the absence of injunctive
relief and must demonstrate that it is likely to succeed on the merits, or that there are sufficiently
serious questions going to the merits and the balance of hardships tips decidedly in its favor.

Just as the incidental "chilling effect" of such statutes does not automatically render them
unconstitutional, so the chilling effect that admittedly can result from the very existence of certain laws
on the statute books does not in itself justify prohibiting the State from carrying out the important and
necessary task of enforcing these laws against socially harmful conduct that the State believes in good
faith to be punishable under its laws and the Constitution.

One who attacks a statute, alleging unconstitutionality must prove its invalidity beyond reasonable
doubt (Caleon v. Agus Development Corporation, 207 SCRA 748). All reasonable doubts should be
resolved in favor of the constitutionality of a statute (People v. Vera, 65 Phil. 56). This presumption of
constitutionality is based on the doctrine of separation of powers which enjoin upon each department a
becoming respect for the acts of the other departments (Garcia vs. Executive Secretary, 204 SCRA 516
[1991]).


In view of petitioner's standing
The petitioners contend that the respondent has no locus standi. It is a non-stock, non-profit
organization; hence, not the real party-in-interest as petitioner in the action. Although the respondent
filed the petition in the Regional Trial Court in behalf of licensed and registered recruitment agencies, it
failed to adduce in evidence a certified copy of its Articles of Incorporation and the resolutions of the
said members authorizing it to represent the said agencies in the proceedings. Neither is the suit of the
respondent a class suit so as to vest in it a personality to assail Rep. Act No. 8042; the respondent is
service-oriented while the recruitment agencies it purports to represent are profit-oriented.

The petition is meritorious. The respondent has locus standi to file the petition in the RTC in
representation of the eleven licensed and registered recruitment agencies impleaded in the amended
petition. The modern view is that an association has standing to complain of injuries to its members.
This view fuses the legal identity of an association with that of its members. 16 An association has
standing to file suit for its workers despite its lack of direct interest if its members are affected by the
action. An organization has standing to assert the concerns of its constituents.

We note that, under its Articles of Incorporation, the respondent was organized for the purposes
inter alia of promoting and supporting the growth and development of the manpower recruitment
industry, both in the local and international levels; providing, creating and exploring employment
opportunities for the exclusive benefit of its general membership; enhancing and promoting the general
welfare and protection of Filipino workers; and, to act as the representative of any individual, company,
entity or association on matters related to the manpower recruitment industry, and to perform other
acts and activities necessary to accomplish the purposes embodied therein.


In view of standing in behalf of unskilled workers
However, the respondent has no locus standi to file the petition for and in behalf of unskilled
workers. We note that it even failed to implead any unskilled workers in its petition. Furthermore, in
failing to implead, as parties-petitioners, the eleven licensed and registered recruitment agencies it
claimed to represent, the respondent failed to comply with Section 2 of Rule 63 20 of the Rules of Court.
Nevertheless, since the eleven licensed and registered recruitment agencies for which the respondent
filed the suit are specifically named in the petition, the amended petition is deemed amended to avoid
multiplicity of suits.


In view of retroactivity
In People v. Diaz, 24 we held that Rep. Act No. 8042 is but an amendment of the Labor Code of the
Philippines and is not an ex-post facto law because it is not applied retroactively.


In view of equal protection clause
In any case, where the liberty curtailed affects at most the rights of property, the permissible scope of
regulatory measures is certainly much wider. To pretend that licensing or accreditation requirements
violates the due process clause is to ignore the settled practice, under the mantle of the police power, of
regulating entry to the practice of various trades or professions. Professionals leaving for abroad are
required to pass rigid written and practical exams before they are deemed fit to practice their trade.

Finally, it is a futile gesture on the part of petitioners to invoke the non-impairment clause of the
Constitution to support their argument that the government cannot enact the assailed regulatory
measures because they abridge the freedom to contract.

The equal protection clause is directed principally against undue favor and individual or class
privilege. It is not intended to prohibit legislation which is limited to the object to which it is directed or
by the territory in which it is to operate. It does not require absolute equality, but merely that all
persons be treated alike under like conditions both as to privileges conferred and liabilities imposed.


In view of the VALIDITY of Sec. 6 of RA 8042
The validity of Section 6 of R.A. No. 8042 which provides that employees of recruitment agencies may
be criminally liable for illegal recruitment has been upheld in People v. Chowdury: An employee of a
company or corporation engaged in illegal recruitment may be held liable as principal, together with his
employer, if it is shown that he actively and consciously participated in illegal recruitment.

By its rulings, the Court thereby affirmed the validity of the assailed penal and procedural provisions
of Rep. Act No. 8042, including the imposable penalties therefor. Until the Court, by final judgment,
declares that the said provisions are unconstitutional, the enforcement of the said provisions cannot be
enjoined.

Penalizing unlicensed and licensed recruitment agencies and their officers and employees and their
relatives employed in government agencies charged with the enforcement of the law for illegal
recruitment and imposing life imprisonment for those who commit large scale illegal recruitment is not
offensive to the Constitution. The accused may be convicted of illegal recruitment and large scale illegal
recruitment only if, after trial, the prosecution is able to prove all the elements of the crime charged.

The respondent merely speculated and surmised that licensed and registered recruitment agencies
would close shop and stop business operations because of the assailed penal provisions of the law. A
writ of preliminary injunction to enjoin the enforcement of penal laws cannot be based on such
conjectures or speculations. The respondent even failed to adduce any evidence to prove irreparable
injury because of the enforcement of Section 10(1)(2) of Rep. Act No. 8042. Its fear or apprehension
that, because of time constraints, its members would have to defend foreign employees in cases before
the Labor Arbiter is based on speculations. Even if true, such inconvenience or difficulty is hardly
irreparable injury.

Preliminarily, the proliferation of illegal job recruiters and syndicates preying on innocent people
anxious to obtain employment abroad is one of the primary considerations that led to the enactment of
The Migrant Workers and Overseas Filipinos Act of 1995. Aimed at affording greater protection to
overseas Filipino workers, it is a significant improvement on existing laws in the recruitment and
placement of workers for overseas employment.

By issuing the writ of preliminary injunction against the petitioners sans any evidence, the trial court
frustrated, albeit temporarily, the prosecution of illegal recruiters and allowed them to continue
victimizing hapless and innocent people desiring to obtain employment abroad as overseas workers, and
blocked the attainment of the salutary policies 52 embedded in Rep. Act No. 8042.

The trial court committed a grave abuse of its discretion amounting to excess or lack of jurisdiction in
issuing the assailed order and writ of preliminary injunction. It is for this reason that the Court issued a
temporary restraining order enjoining the enforcement of the writ of preliminary injunction issued by
the trial court.