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G.R. No.

139465

January 18, 2000

SECRETARY
OF
JUSTICE, petitioner,
vs.
HON. RALPH C. LANTION, Presiding Judge, Regional Trial Court of
Manila, Branch 25, and MARK B. JIMENEZ, respondents.
MELO, J.:
The individual citizen is but a speck of particle or molecule vis--vis the vast
and overwhelming powers of government. His only guarantee against
oppression and tyranny are his fundamental liberties under the Bill of Rights
which shield him in times of need. The Court is now called to decide whether
to uphold a citizen's basic due process rights, or the government's ironclad
duties under a treaty. The bugle sounds and this Court must once again act
as the faithful guardian of the fundamental writ.
The petition at our doorstep is cast against the following factual backdrop:
On January 13, 1977, then President Ferdinand E. Marcos issued
Presidential Decree No. 1069 "Prescribing the Procedure for the Extradition
of Persons Who Have Committed Crimes in a Foreign Country". The Decree
is founded on: the doctrine of incorporation under the Constitution; the
mutual concern for the suppression of crime both in the state where it was
committed and the state where the criminal may have escaped; the
extradition treaty with the Republic of Indonesia and the intention of the
Philippines to enter into similar treaties with other interested countries; and
the need for rules to guide the executive department and the courts in the
proper implementation of said treaties.
On November 13, 1994, then Secretary of Justice Franklin M. Drilon,
representing the Government of the Republic of the Philippines, signed in
Manila the "Extradition Treaty Between the Government of the Republic of
the Philippines and the Government of the United States of America"
(hereinafter referred to as the RP-US Extradition Treaty). The Senate, by
way of Resolution No. 11, expressed its concurrence in the ratification of said
treaty. It also expressed its concurrence in the Diplomatic Notes correcting
Paragraph (5)(a), Article 7 thereof (on the admissibility of the documents
accompanying an extradition request upon certification by the principal
diplomatic or consular officer of the requested state resident in the
Requesting State).
On June 18, 1999, the Department of Justice received from the Department
of Foreign Affairs U.S. Note Verbale No. 0522 containing a request for the
extradition of private respondent Mark Jimenez to the United States.

Attached to the Note Verbale were the Grand Jury Indictment, the warrant of
arrest issued by the U.S. District Court, Southern District of Florida, and other
supporting documents for said extradition. Based on the papers submitted,
private respondent appears to be charged in the United States with violation
of the following provisions of the United States Code (USC):
A) 18 USC 371 (Conspiracy to commit offense or to defraud the
United States; two [2] counts; Maximum Penalty 5 years on each
count);
B) 26 USC 7201 (Attempt to evade or defeat tax; four [4] counts;
Maximum Penalty 5 years on each count);
C) 18 USC 1343 (Fraud by wire, radio, or television; two [2] counts;
Maximum Penalty 5 years on each count);
D) 18 USC 1001 (False statement or entries; six [6] counts;
Maximum Penalty 5 years on each count);
E) 2 USC 441f (Election contributions in name of another; thirty-three
[33] counts; Maximum Penalty less than one year).
(p. 14, Rollo.)
On the same day, petitioner issued Department Order No. 249 designating
and authorizing a panel of attorneys to take charge of and to handle the case
pursuant to Section 5(1) of Presidential Decree No. 1069. Accordingly, the
panel began with the "technical evaluation and assessment" of the
extradition request and the documents in support thereof. The panel found
that the "official English translation of some documents in Spanish were not
attached to the request and that there are some other matters that needed to
be addressed" (p. 15, Rollo).
Pending evaluation of the aforestated extradition documents, private
respondent, through counsel, wrote a letter dated July 1, 1999 addressed to
petitioner requesting copies of the official extradition request from the U.S.
Government, as well as all documents and papers submitted therewith; and
that he be given ample time to comment on the request after he shall have
received copies of the requested papers. Private respondent also requested
that the proceedings on the matter be held in abeyance in the meantime.
Later, private respondent requested that preliminary, he be given at least a
copy of, or access to, the request of the United States Government, and after
receiving a copy of the Diplomatic Note, a period of time to amplify on his
request.

In response to private respondent's July 1, 1999 letter, petitioner, in a replyletter dated July 13, 1999 (but received by private respondent only on August
4, 1999), denied the foregoing requests for the following reasons:
1. We find it premature to furnish you with copies of the extradition
request and supporting documents from the United States
Government, pending evaluation by this Department of the
sufficiency of the extradition documents submitted in accordance
with the provisions of the extradition treaty and our extradition law.
Article 7 of the Extradition Treaty between the Philippines and the
United States enumerates the documentary requirements and
establishes the procedures under which the documents submitted
shall be received and admitted as evidence. Evidentiary
requirements under our domestic law are also set forth in Section 4
of P.D. No. 1069.
Evaluation by this Department of the aforementioned documents is
not a preliminary investigation nor akin to preliminary investigation of
criminal cases. We merely determine whether the procedures and
requirements under the relevant law and treaty have been complied
with by the Requesting Government. The constitutionally guaranteed
rights of the accused in all criminal prosecutions are therefore not
available.
It is only after the filing of the petition for extradition when the person
sought to be extradited will be furnished by the court with copies of
the petition, request and extradition documents and this Department
will not pose any objection to a request for ample time to evaluate
said documents.
2. The formal request for extradition of the United States contains
grand jury information and documents obtained through grand jury
process covered by strict secrecy rules under United States law. The
United States had to secure orders from the concerned District
Courts authorizing the United States to disclose certain grand jury
information to Philippine government and law enforcement personnel
for the purpose of extradition of Mr. Jimenez. Any further disclosure
of the said information is not authorized by the United States District
Courts. In this particular extradition request the United States
Government requested the Philippine Government to prevent
unauthorized disclosure of the subject information. This
Department's denial of your request is consistent with Article 7 of the
RP-US Extradition Treaty which provides that the Philippine
Government must represent the interests of the United States in any
proceedings arising out of a request for extradition. The Department

of Justice under P.D. No. 1069 is the counsel of the foreign


governments in all extradition requests.
3. This Department is not in a position to hold in abeyance
proceedings in connection with an extradition request. Article 26 of
the Vienna Convention on the Law of Treaties, to which we are a
party provides that "[E]very treaty in force is binding upon the parties
to it and must be performed by them in good faith". Extradition is a
tool of criminal law enforcement and to be effective, requests for
extradition or surrender of accused or convicted persons must be
processed expeditiously.
(pp. 77-78, Rollo.)
Such was the state of affairs when, on August 6, 1999, private respondent
filed with the Regional Trial Court of the National Capital Judicial Region a
petition against the Secretary of Justice, the Secretary of Foreign Affairs, and
the Director of the National Bureau of Investigation, for mandamus (to
compel herein petitioner to furnish private respondent the extradition
documents, to give him access thereto, and to afford him an opportunity to
comment on, or oppose, the extradition request, and thereafter to evaluate
the request impartially, fairly and objectively);certiorari (to set aside herein
petitioner's letter dated July 13, 1999); and prohibition (to restrain petitioner
from considering the extradition request and from filing an extradition petition
in court; and to enjoin the Secretary of Foreign Affairs and the Director of the
NBI from performing any act directed to the extradition of private respondent
to the United States), with an application for the issuance of a temporary
restraining order and a writ of preliminary injunction (pp. 104-105, Rollo).
The aforementioned petition was docketed as Civil Case No. 99-94684 and
thereafter raffled to Branch 25 of said regional trial court stationed in Manila
which is presided over by the Honorable Ralph C. Lantion.
After due notice to the parties, the case was heard on August 9, 1999.
Petitioner, who appeared in his own behalf, moved that he be given ample
time to file a memorandum, but the same was denied.
On August 10, 1999, respondent judge issued an order dated the previous
day, disposing:
WHEREFORE, this Court hereby Orders the respondents, namely:
the Secretary of Justice, the Secretary of Foreign Affairs and the
Director of the National Bureau of Investigation, their agents and/or
representatives to maintain the status quo by refraining from
committing the acts complained of; from conducting further

proceedings in connection with the request of the United States


Government for the extradition of the petitioner; from filing the
corresponding Petition with a Regional Trial court; and from
performing any act directed to the extradition of the petitioner to the
United States, for a period of twenty (20) days from service on
respondents of this Order, pursuant to Section 5, Rule 58 of the 1997
Rules of Court.

III.

The hearing as to whether or not this Court shall issue the


preliminary injunction, as agreed upon by the counsels for the parties
herein, is set on August 17, 1999 at 9:00 o'clock in the morning. The
respondents are, likewise, ordered to file their written comment
and/or opposition to the issuance of a Preliminary Injunction on or
before said date.

PRIVATE RESPONDENT HAS NO RIGHT IN ESSE THAT NEEDS


PROTECTION AND ENFORCEMENT, AND WILL NOT SUFFER
ANY IRREPARABLE INJURY.

SO ORDERED.
(pp. 110-111, Rollo.)
Forthwith, petitioner initiated the instant proceedings, arguing that:
PUBLIC RESPONDENT ACTED WITHOUT OR IN EXCESS OF
JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN
ISSUING THE TEMPORARY RESTRAINING ORDER BECAUSE:
I.
BY ORDERING HEREIN PETITIONER TO REFRAIN FROM
COMMITTING THE ACTS COMPLAINED OF, I.E., TO DESIST
FROM REFUSING PRIVATE RESPONDENT ACCESS TO THE
OFFICIAL EXTRADITION REQUEST AND DOCUMENTS AND
FROM DENYING PRIVATE RESPONDENT AN OPPORTUNITY TO
FILE A COMMENT ON, OR OPPOSITION TO, THE REQUEST,
THE MAIN PRAYER FOR A WRIT OF MANDAMUSIN THE
PETITION FOR MANDAMUS, CERTIORARI AND PROHIBITION
WAS, IN EFFECT, GRANTED SO AS TO CONSTITUTE AN
ADJUDICATION ON THE MERITS OF THE MANDAMUS ISSUES;
II.
PETITIONER WAS UNQUALIFIEDLY PREVENTED FROM
PERFORMING LEGAL DUTIES UNDER THE EXTRADITION
TREATY AND THE PHILIPPINE EXTRADITION LAW;

THE
PETITION
FOR (MANDAMUS),
PROHIBITION
IS,
ON
ITS
FACE,
SUBSTANTIALLY DEFICIENT; AND

CERTIORARI AND
FORMALLY
AND

IV.

(pp. 19-20, Rollo.)


On August 17, 1999, the Court required private respondent to file his
comment. Also issued, as prayed for, was a temporary restraining order
(TRO) providing:
NOW, THEREFORE, effective immediately and continuing until
further orders from this Court, You, Respondent Judge Ralph C.
Lantion, your agents, representatives or any person or persons
acting in your place or stead are hereby ORDERED to CEASE and
DESIST from enforcing the assailed order dated August 9, 1999
issued by public respondent in Civil Case No. 99-94684.
GIVEN by the Honorable HILARIO G. DAVIDE, JR., Chief Justice,
Supreme Court of the Philippines, this 17th day of August 1999.
(pp. 120-121, Rollo.)
The case was heard on oral argument on August 31, 1999, after which the
parties, as directed, filed their respective memoranda.
From the pleadings of the opposing parties, both procedural and substantive
issues are patent. However, a review of these issues as well as the extensive
arguments of both parties, compel us to delineate the focal point raised by
the pleadings: During the evaluation stage of the extradition proceedings, is
private respondent entitled to the two basic due process rights of notice and
hearing? An affirmative answer would necessarily render the proceedings at
the trial court, moot and academic (the issues of which are substantially the
same as those before us now), while a negative resolution would call for the
immediate lifting of the TRO issued by this Court dated August 24, 1999,
thus allowing petitioner to fast-track the process leading to the filing of the
extradition petition with the proper regional trial court. Corollarily, in the event

that private respondent is adjudged entitled to basic due process rights at the
evaluation stage of the extradition proceedings, would this entitlement
constitute a breach of the legal commitments and obligations of the
Philippine Government under the RP-US Extradition Treaty? And assuming
that the result would indeed be a breach, is there any conflict between
private respondent's basic due process rights and the provisions of the RPUS Extradition Treaty?
The issues having transcendental importance, the Court has elected to go
directly into the substantive merits of the case, brushing aside peripheral
procedural matters which concern the proceedings in Civil Case No. 9994684, particularly the propriety of the filing of the petition therein, and of the
issuance of the TRO of August 17, 1999 by the trial court.
To be sure, the issues call for a review of the extradition procedure. The RPUS Extradition Treaty which was executed only on November 13, 1994,
ushered into force the implementing provisions of Presidential Decree No.
1069, also called as the Philippine Extradition Law. Section 2(a) thereof
defines extradition as "the removal of an accused from the Philippines with
the object of placing him at the disposal of foreign authorities to enable the
requesting state or government to hold him in connection with any criminal
investigation directed against him or the execution of a penalty imposed on
him under the penal or criminal law of the requesting state or government."
The portions of the Decree relevant to the instant case which involves a
charged and not convicted individual, are abstracted as follows:

4. Such other documents or information in support of the request.


(Sec. 4. Presidential Decree No. 1069.)
Sec. 5 of the Presidential Decree, which sets forth the duty of the Secretary
of Foreign Affairs, pertinently provides
. . . (1) Unless it appears to the Secretary of Foreign Affairs that the
request fails to meet the requirements of this law and the relevant
treaty or convention, he shall forward the request together with the
related documents to the Secretary of Justice, who shall immediately
designate and authorize an attorney in his office to take charge of
the case.
The above provision shows only too clearly that the executive authority given
the task of evaluating the sufficiency of the request and the supporting
documents is the Secretary of Foreign Affairs. What then is the coverage of
this task?
In accordance with Paragraphs 2 and 3, Article 7 of the RP-US Extradition
Treaty, the executive authority must ascertain whether or not the request is
supported by:
1. Documents, statements, or other types of information which
describe the identity and probable location of the person sought;

The Extradition Request


The request is made by the Foreign Diplomat of the Requesting State,
addressed to the Secretary of Foreign Affairs, and shall be accompanied by:
1. The original or an authentic copy of the criminal charge and the
warrant of arrest issued by the authority of the Requesting State
having jurisdiction over the matter, or some other instruments having
equivalent legal force;
2. A recital of the acts for which extradition is requested, with the
fullest particulars as to the name and identity of the accused, his
whereabouts in the Philippines, if known, the acts or omissions
complained of, and the time and place of the commission of these
acts;
3. The text of the applicable law or a statement of the contents of
said law, and the designation or description of the offense by the law,
sufficient for evaluation of the request; and

2. A statement of the facts of the offense and the procedural history


of the case;
3. A statement of the provisions of the law describing the essential
elements of the offense for which extradition is requested;
4. A statement of the provisions of law describing the punishment for
the offense;
5. A statement of the provisions of the law describing any time limit
on the prosecution or the execution of punishment for the offense;
6. Documents, statements, or other types of information specified in
paragraph 3 or paragraph 4 of said Article, as applicable.
(Paragraph 2, Article 7, Presidential Decree No. 1069.)

7. Such evidence as, according to the law of the Requested State,


would provide probable cause for his arrest and committal for trial if
the offense had been committed there;
8. A copy of the warrant or order of arrest issued by a judge or other
competent authority; and
9. A copy of the charging document.
(Paragraph 3, ibid.)
The executive authority (Secretary of Foreign Affairs) must also see to it that
the accompanying documents received in support of the request had been
certified by the principal diplomatic or consular officer of the Requested State
resident in the Requesting State (Embassy Note No. 052 from U. S.
Embassy; Embassy Note No. 951309 from the Department of Foreign
Affairs).
In this light, Paragraph 3, Article 3 of the Treaty provides that "[e]xtradition
shall not be granted if the executive authority of the Requested State
determines that the request is politically motivated, or that the offense is a
military offense which is not punishable under non-military penal legislation."

The Extradition Law does not specifically indicate whether the extradition
proceeding is criminal, civil, or a special proceeding. Nevertheless,
Paragraph [1], Section 9 thereof provides that in the hearing of the extradition
petition, the provisions of the Rules of Court, insofar as practicable and not
inconsistent with the summary nature of the proceedings, shall apply. During
the hearing, Section 8 of the Decree provides that the attorney having charge
of the case may, upon application by the Requesting State, represent the
latter throughout the proceedings.
Upon conclusion of the hearing, the court shall render a decision granting the
extradition and giving the reasons therefor upon a showing of the existence
of a prima facie case, or dismiss the petition (Section 10, ibid.). Said decision
is appealable to the Court of Appeals, whose decision shall be final and
immediately executory (Section 12, ibid.). The provisions of the Rules of
Court governing appeal in criminal cases in the Court of Appeals shall apply
in the aforementioned appeal, except for the required 15-day period to file
brief (Section 13, ibid.).
The trial court determines whether or not the offense mentioned in the
petition is extraditable based on the application of the dual criminality rule
and other conditions mentioned in Article 2 of the RP-US Extradition Treaty.
The trial court also determines whether or not the offense for which
extradition is requested is a political one (Paragraph [1], Article 3, RP-US
Extradition Treaty).1wphi1.nt

The Extradition Petition


Upon a finding made by the Secretary of Foreign Affairs that the extradition
request and its supporting documents are sufficient and complete in form and
substance, he shall deliver the same to the Secretary of Justice, who shall
immediately designate and authorize an attorney in his office to take charge
of the case (Paragraph [1], Section 5, P.D. No. 1069). The lawyer designated
shall then file a written petition with the proper regional trial court of the
province or city, with a prayer that the court take the extradition request
under consideration (Paragraph [2], ibid.).
The presiding judge of the regional trial court, upon receipt of the petition for
extradition, shall, as soon as practicable, issue an order summoning the
prospective extraditee to appear and to answer the petition on the day and
hour fixed in the order. The judge may issue a warrant of arrest if it appears
that the immediate arrest and temporary detention of the accused will best
serve the ends of justice (Paragraph [1], Section 6, ibid.), particularly to
prevent the flight of the prospective extraditee.
The Extradition Hearing

With the foregoing abstract of the extradition proceedings as backdrop, the


following query presents itself: What is the nature of the role of the
Department of Justice at the evaluation stage of the extradition proceedings?
A strict observance of the Extradition Law indicates that the only duty of the
Secretary of Justice is to file the extradition petition after the request and all
the supporting papers are forwarded to him by the Secretary of Foreign
Affairs. It is the latter official who is authorized to evaluate the extradition
papers, to assure their sufficiency, and under Paragraph [3], Article 3 of the
Treaty, to determine whether or not the request is politically motivated, or
that the offense is a military offense which is not punishable under nonmilitary penal legislation. Ipso facto, as expressly provided in Paragraph [1],
Section 5 of the Extradition Law, the Secretary of Justice has the ministerial
duty of filing the extradition papers.
However, looking at the factual milieu of the case before us, it would appear
that there was failure to abide by the provisions of Presidential Decree No.
1069. For while it is true that the extradition request was delivered to the
Department of Foreign Affairs on June 17, 1999, the following day or less
than 24 hours later, the Department of Justice received the request,

apparently without the Department of Foreign Affairs discharging its duty of


thoroughly evaluating the same and its accompanying documents. The
statement of an assistant secretary at the Department of Foreign Affairs that
his Department, in this regard, is merely acting as a post office, for which
reason he simply forwarded the request to the Department of Justice,
indicates the magnitude of the error of the Department of Foreign Affairs in
taking lightly its responsibilities. Thereafter, the Department of Justice took it
upon itself to determine the completeness of the documents and to evaluate
the same to find out whether they comply with the requirements laid down in
the Extradition Law and the RP-US Extradition Treaty. Petitioner ratiocinates
in this connection that although the Department of Justice had no obligation
to evaluate the extradition documents, the Department also had to go over
them so as to be able to prepare an extradition petition (tsn, August 31,
1999, pp. 24-25). Notably, it was also at this stage where private respondent
insisted on the following; (1) the right to be furnished the request and the
supporting papers; (2) the right to be heard which consists in having a
reasonable period of time to oppose the request, and to present evidence in
support of the opposition; and (3) that the evaluation proceedings be held in
abeyance pending the filing of private respondent's opposition to the request.

penal legislation (tsn, August 31, 1999, pp. 28-29; Article 2 & and Paragraph
[3], Article 3, RP-US Extradition Treaty). Hence, said process may be
characterized as an investigative or inquisitorial process in contrast to a
proceeding conducted in the exercise of an administrative body's quasijudicial power.

The two Departments seem to have misread the scope of their duties and
authority, one abdicating its powers and the other enlarging its commission.
The Department of Foreign Affairs, moreover, has, through the Solicitor
General, filed a manifestation that it is adopting the instant petition as its
own, indirectly conveying the message that if it were to evaluate the
extradition request, it would not allow private respondent to participate in the
process of evaluation.

The power of investigation consists in gathering, organizing, and analyzing


evidence, which is a useful aid or tool in an administrative agency's
performance of its rule-making or quasi-judicial functions. Notably,
investigation is indispensable to prosecution.

Plainly then, the record cannot support the presumption of regularity that the
Department of Foreign Affairs thoroughly reviewed the extradition request
and supporting documents and that it arrived at a well-founded judgment that
the request and its annexed documents satisfy the requirements of law. The
Secretary of Justice, eminent as he is in the field of law, could not privately
review the papers all by himself. He had to officially constitute a panel of
attorneys. How then could the DFA Secretary or his undersecretary, in less
than one day, make the more authoritative determination?
The evaluation process, just like the extradition proceedings proper, belongs
to a class by itself. It is sui generis. It is not a criminal investigation, but it is
also erroneous to say that it is purely an exercise of ministerial functions. At
such stage, the executive authority has the power: (a) to make a technical
assessment of the completeness and sufficiency of the extradition papers;
(b) to outrightly deny the request if on its face and on the face of the
supporting documents the crimes indicated are not extraditable; and (c) to
make a determination whether or not the request is politically motivated, or
that the offense is a military one which is not punishable under non-military

In administrative law, a quasi-judicial proceeding involves: (a) taking and


evaluation of evidence; (b) determining facts based upon the evidence
presented; and (c) rendering an order or decision supported by the facts
proved (De Leon, Administrative Law: Text and Cases, 1993 ed., p. 198,
citing Morgan vs. United States, 304 U.S. 1). Inquisitorial power, which is
also known as examining or investigatory power, is one or the determinative
powers of an administrative body which better enables it to exercise its
quasi-judicial authority (Cruz, Phil. Administrative Law, 1996 ed., p. 26). This
power allows the administrative body to inspect the records and premises,
and investigate the activities, of persons or entities coming under its
jurisdiction (Ibid., p. 27), or to require disclosure of information by means or
accounts, records, reports, testimony of witnesses, production of documents,
or otherwise (De Leon, op. cit., p. 64).

In Ruperto v. Torres (100 Phil. 1098 [1957], unreported), the Court had
occasion to rule on the functions of an investigatory body with the sole power
of investigation. It does not exercise judicial functions and its power is limited
to investigating the facts and making findings in respect thereto. The Court
laid down the test of determining whether an administrative body is
exercising judicial functions or merely investigatory functions: Adjudication
signifies the exercise of power and authority to adjudicate upon the rights
and obligations of the parties before it. Hence, if the only purpose for
investigation is to evaluate evidence submitted before it based on the facts
and circumstances presented to it, and if the agency is not authorized to
make a final pronouncement affecting the parties, then there is an absence
of judicial discretion and judgment.
The above description in Ruperto applies to an administrative body
authorized to evaluate extradition documents. The body has no power to
adjudicate in regard to the rights and obligations of both the Requesting
State and the prospective extraditee. Its only power is to determine whether
the papers comply with the requirements of the law and the treaty and,
therefore, sufficient to be the basis of an extradition petition. Such finding is
thus merely initial and not final. The body has no power to determine whether
or not the extradition should be effected. That is the role of the court. The

body's power is limited to an initial finding of whether or not the extradition


petition can be filed in court.
It is to be noted, however, that in contrast to ordinary investigations, the
evaluation procedure is characterized by certain peculiarities. Primarily, it
sets into motion the wheels of the extradition process. Ultimately, it may
result in the deprivation of liberty of the prospective extraditee. This
deprivation can be effected at two stages: First, the provisional arrest of the
prospective extraditee pending the submission of the request. This is so
because the Treaty provides that in case of urgency, a contracting party may
request the provisional arrest of the person sought pending presentation of
the request (Paragraph [1], Article 9, RP-US Extradition Treaty), but he shall
be automatically discharged after 60 days if no request is submitted
(Paragraph 4). Presidential Decree No. 1069 provides for a shorter period of
20 days after which the arrested person could be discharged (Section 20[d]).
Logically, although the Extradition Law is silent on this respect, the provisions
only mean that once a request is forwarded to the Requested State, the
prospective extraditee may be continuously detained, or if not, subsequently
rearrested (Paragraph [5], Article 9, RP-US Extradition Treaty), for he will
only be discharged if no request is submitted. Practically, the purpose of this
detention is to prevent his possible flight from the Requested State. Second,
the temporary arrest of the prospective extraditee during the pendency of the
extradition petition in court (Section 6, Presidential Decree No. 1069).
Clearly, there is an impending threat to a prospective extraditee's liberty as
early as during the evaluation stage. It is not only an imagined threat to his
liberty, but a very imminent one.
Because of these possible consequences, we conclude that the evaluation
process is akin to an administrative agency conducting an investigative
proceeding, the consequences of which are essentially criminal since such
technical assessment sets off or commences the procedure for, and
ultimately, the deprivation of liberty of a prospective extraditee. As described
by petitioner himself, this is a "tool" for criminal law enforcement (p.
78,Rollo). In essence, therefore, the evaluation process partakes of the
nature of a criminal investigation. In a number of cases, we had occasion to
make available to a respondent in an administrative case or investigation
certain constitutional rights that are ordinarily available only in criminal
prosecutions. Further, as pointed out by Mr. Justice Mendoza during the oral
arguments, there are rights formerly available only at the trial stage that had
been advanced to an earlier stage in the proceedings, such as the right to
counsel and the right against self-incrimination (tsn, August 31, 1999, p. 135;
Escobedo vs. Illinois, 378 U.S. 478; Gideon vs. Wainwright, 372 U.S. 335;
Miranda vs. Arizona, 384 U.S. 436).

In Pascual v. Board of Medical Examiners (28 SCRA 344 [1969]), we held


that the right against self-incrimination under Section 17, Article III of the
1987 Constitution which is ordinarily available only in criminal prosecutions,
extends to administrative proceedings which possess a criminal or penal
aspect, such as an administrative investigation of a licensed physician who is
charged with immorality, which could result in his loss of the privilege to
practice medicine if found guilty. The Court, citing the earlier case of Cabal
vs. Kapunan (6 SCRA 1059 [1962]), pointed out that the revocation of one's
license as a medical practitioner, is an even greater deprivation than
forfeiture of property.
Cabal vs. Kapunan (supra) involved an administrative charge of unexplained
wealth against a respondent which was filed under Republic Act No. 1379, or
the Anti-Graft Law. Again, we therein ruled that since the investigation may
result in forfeiture of property, the administrative proceedings are deemed
criminal or penal, and such forfeiture partakes the nature of a penalty. There
is also the earlier case of Almeda, Sr. vs. Perez (5 SCRA 970 [1962]), where
the Court, citing American jurisprudence, laid down the test to determine
whether a proceeding is civil or criminal: If the proceeding is under a statute
such that if an indictment is presented the forfeiture can be included in the
criminal case, such proceeding is criminal in nature, although it may be civil
in form; and where it must be gathered from the statute that the action is
meant to be criminal in its nature, it cannot be considered as civil. If,
however, the proceeding does not involve the conviction of the wrongdoer for
the offense charged, the proceeding is civil in nature.
The cases mentioned above refer to an impending threat of deprivation of
one's property or property right. No less is this true, but even more so in the
case before us, involving as it does the possible deprivation of liberty, which,
based on the hierarchy of constitutionally protected rights, is placed second
only to life itself and enjoys precedence over property, for while forfeited
property can be returned or replaced, the time spent in incarceration is
irretrievable and beyond recompense.
By comparison, a favorable action in an extradition request exposes a person
to eventual extradition to a foreign country, thus saliently exhibiting the
criminal or penal aspect of the process. In this sense, the evaluation
procedure is akin to a preliminary investigation since both procedures may
have the same result the arrest and imprisonment of the respondent or the
person charged. Similar to the evaluation stage of extradition proceedings, a
preliminary investigation, which may result in the filing of an information
against the respondent, can possibly lead to his arrest, and to the deprivation
of his liberty.
Petitioner's reliance on Wright vs. Court of Appeals (235 SCRA 241 [1992])
(p. 8, petitioner's Memorandum) that the extradition treaty is neither a piece

of criminal legislation nor a criminal procedural statute is not welltaken.Wright is not authority for petitioner's conclusion that his preliminary
processing is not akin to a preliminary investigation. The characterization of a
treaty in Wright was in reference to the applicability of the prohibition against
an ex post facto law. It had nothing to do with the denial of the right to notice,
information, and hearing.
As early as 1884, the United States Supreme Court ruled that "any legal
proceeding enforced by public authority, whether sanctioned by age or
custom, or newly devised in the discretion of the legislative power, in
furtherance of the general public good, which regards and preserved these
principles of liberty and justice, must be held to be due process of law"
(Hurtado vs. California, 110 U.S. 516). Compliance with due process
requirements cannot be deemed non-compliance with treaty commitments.
The United States and the Philippines share a mutual concern about the
suppression and punishment of crime in their respective jurisdictions. At the
same time, both States accord common due process protection to their
respective citizens.
The due process clauses in the American and Philippine Constitutions are
not only worded in exactly identical language and terminology, but more
importantly, they are alike in what their respective Supreme Courts have
expounded as the spirit with which the provisions are informed and
impressed, the elasticity in their interpretation, their dynamic and resilient
character which make them capable of meeting every modern problem, and
their having been designed from earliest time to the present to meet the
exigencies of an undefined and expanding future. The requirements of due
process are interpreted in both the United States and the Philippines as not
denying to the law the capacity for progress and improvement. Toward this
effect and in order to avoid the confines of a legal straitjacket, the courts
instead prefer to have the meaning of the due process clause "gradually
ascertained by the process of inclusion and exclusion in the course of the
decisions of cases as they arise" (Twining vs. New Jersey, 211 U.S. 78).
Capsulized, it refers to "the embodiment of the sporting idea of fair play"
(Ermita-Malate Hotel and Motel Owner's Association vs. City Mayor of
Manila, 20 SCRA 849 [1967]). It relates to certain immutable principles of
justice which inhere in the very idea of free government (Holden vs. Hardy,
169 U.S. 366).
Due process is comprised of two components substantive due process
which requires the intrinsic validity of the law in interfering with the rights of
the person to his life, liberty, or property, and procedural due process which
consists of the two basic rights of notice and hearing, as well as the
guarantee of being heard by an impartial and competent tribunal (Cruz,
Constitutional Law, 1993 Ed., pp. 102-106).

True to the mandate of the due process clause, the basic rights of notice and
hearing pervade not only in criminal and civil proceedings, but in
administrative proceedings as well. Non-observance of these rights will
invalidate the proceedings. Individuals are entitled to be notified of any
pending case affecting their interests, and upon notice, they may claim the
right to appear therein and present their side and to refute the position of the
opposing parties (Cruz, Phil. Administrative Law, 1996 ed., p. 64).
In a preliminary investigation which is an administrative investigatory
proceeding, Section 3, Rule 112 of the Rules of Court guarantees the
respondent's basic due process rights, granting him the right to be furnished
a copy of the complaint, the affidavits, and other supporting documents, and
the right to submit counter-affidavits and other supporting documents within
ten days from receipt thereof. Moreover, the respondent shall have the right
to examine all other evidence submitted by the complainant.
These twin rights may, however, be considered dispensable in certain
instances, such as:
1. In proceeding where there is an urgent need for immediate action,
like the summary abatement of a nuisance per se (Article 704, Civil
Code), the preventive suspension of a public servant facing
administrative charges (Section 63, Local Government Code, B.P.
Blg. 337), the padlocking of filthy restaurants or theaters showing
obscene movies or like establishments which are immediate threats
to public health and decency, and the cancellation of a passport of a
person sought for criminal prosecution;
2. Where there is tentativeness of administrative action, that is,
where the respondent is not precluded from enjoying the right to
notice and hearing at a later time without prejudice to the person
affected, such as the summary distraint and levy of the property of a
delinquent taxpayer, and the replacement of a temporary appointee;
and
3. Where the twin rights have previously been offered but the right to
exercise them had not been claimed.
Applying the above principles to the case at bar, the query may be asked:
Does the evaluation stage of the extradition proceedings fall under any of the
described situations mentioned above?
Let us take a brief look at the nature of American extradition proceedings
which are quite noteworthy considering that the subject treaty involves the
U.S. Government.

American jurisprudence distinguishes between interstate rendition or


extradition which is based on the Extradition Clause in the U.S. Constitution
(Art. IV, 2 cl 2), and international extradition proceedings. In interstate
rendition or extradition, the governor of the asylum state has the duty to
deliver the fugitive to the demanding state. The Extradition Clause and the
implementing statute are given a liberal construction to carry out their
manifest purpose, which is to effect the return as swiftly as possible of
persons for trial to the state in which they have been charged with crime
(31A Am Jur 2d 754-755). In order to achieve extradition of an alleged
fugitive, the requisition papers or the demand must be in proper form, and all
the elements or jurisdictional facts essential to the extradition must appear on
the face of the papers, such as the allegation that the person demanded was
in the demanding state at the time the offense charged was committed, and
that the person demanded is charged with the commission of the crime or
that prosecution has been begun in the demanding state before some court
or magistrate (35 C.J.S. 406-407). The extradition documents are then filed
with the governor of the asylum state, and must contain such papers and
documents prescribed by statute, which essentially include a copy of the
instrument charging the person demanded with a crime, such as an
indictment or an affidavit made before a magistrate. Statutory requirements
with respect to said charging instrument or papers are mandatory since said
papers are necessary in order to confer jurisdiction on the government of the
asylum state to effect extradition (35 C.J.S. 408-410). A statutory provision
requiring duplicate copies of the indictment, information, affidavit, or
judgment of conviction or sentence and other instruments accompanying the
demand or requisitions be furnished and delivered to the fugitive or his
attorney is directory. However, the right being such a basic one has been
held to be a right mandatory on demand (Ibid., p. 410, citing Ex parte Moore,
256 S.W. 2d 103, 158 Tex. Cr. 407 andEx parte Tucker, Cr., 324, S.W.2d
853).
In international proceedings, extradition treaties generally provide for the
presentation to the executive authority of the Requested State of a requisition
or demand for the return of the alleged offender, and the designation of the
particular officer having authority to act in behalf of the demanding nation
(31A Am Jur 2d 815).
In petitioner's memorandum filed on September 15, 1999, he attached
thereto a letter dated September 13, 1999 from the Criminal Division of the
U.S. Department of Justice, summarizing the U.S. extradition procedures and
principles, which are basically governed by a combination of treaties (with
special reference to the RP-US Extradition Treaty), federal statutes, and
judicial decisions, to wit:
1. All requests for extradition are transmitted through the diplomatic
channel. In urgent cases, requests for the provincial arrest of an

individual may be made directly by the Philippine Department of


Justice to the U.S. Department of Justice, and vice-versa. In the
event of a provisional arrest, a formal request for extradition is
transmitted subsequently through the diplomatic channel.
2. The Department of State forwards the incoming Philippine
extradition request to the Department of Justice. Before doing so, the
Department of State prepares a declaration confirming that a formal
request has been made, that the treaty is in full force and effect, that
under Article 17 thereof the parties provide reciprocal legal
representation in extradition proceedings, that the offenses are
covered as extraditable offenses under Article 2 thereof, and that the
documents have been authenticated in accordance with the federal
statute that ensures admissibility at any subsequent extradition
hearing.
3. A judge or magistrate judge is authorized to issue a warrant for the
arrest of the prospective extraditee (18 U.S.C. 3184). Said judge or
magistrate is authorized to hold a hearing to consider the evidence
offered in support of the extradition request (Ibid.)
4. At the hearing, the court must determine whether the person
arrested is extraditable to the foreign country. The court must also
determine that (a) it has jurisdiction over the defendant and
jurisdiction to conduct the hearing; (b) the defendant is being sought
for offenses for which the applicable treaty permits extradition; and
(c) there is probable cause to believe that the defendant is the
person sought and that he committed the offenses charged (Ibid.)
5. The judge or magistrate judge is vested with jurisdiction to certify
extraditability after having received a "complaint made under oath,
charging any person found within his jurisdiction" with having
committed any of the crimes provided for by the governing treaty in
the country requesting extradition (Ibid.) [In this regard, it is noted
that a long line of American decisions pronounce that international
extradition proceedings partake of the character of a preliminary
examination before a committing magistrate, rather than a trial of the
guilt or innocence of the alleged fugitive (31A Am Jur 2d 826).]
6. If the court decides that the elements necessary for extradition are
present, it incorporates its determinations in factual findings and
conclusions of law and certifies the person's extraditability. The court
then forwards this certification of extraditability to the Department of
State for disposition by the Secretary of State. The ultimate decision

whether to surrender an individual rests with the Secretary of State


(18 U.S.C. 3186).
7. The subject of an extradition request may not litigate questions
concerning the motives of the requesting government in seeking his
extradition. However, a person facing extradition may present
whatever information he deems relevant to the Secretary of State,
who makes the final determination whether to surrender an individual
to the foreign government concerned.
From the foregoing, it may be observed that in the United States, extradition
begins and ends with one entity the Department of State which has the
power to evaluate the request and the extradition documents in the
beginning, and, in the person of the Secretary of State, the power to act or
not to act on the court's determination of extraditability. In the Philippine
setting, it is the Department of Foreign Affairs which should make the initial
evaluation of the request, and having satisfied itself on the points earlier
mentioned (see pp. 10-12), then forwards the request to the Department of
Justice for the preparation and filing of the petition for extradition. Sadly,
however, the Department of Foreign Affairs, in the instant case, perfunctorily
turned over the request to the Department of Justice which has taken over
the task of evaluating the request as well as thereafter, if so warranted,
preparing, filing, and prosecuting the petition for extradition.
Private respondent asks what prejudice will be caused to the U.S.
Government should the person sought to be extradited be given due process
rights by the Philippines in the evaluation stage. He emphasizes that
petitioner's primary concern is the possible delay in the evaluation process.
We agree with private respondent's citation of an American Supreme Court
ruling:
The establishment of prompt efficacious procedures to achieve
legitimate state ends is a proper state interest worthy of cognizance
in constitutional adjudication. But the Constitution recognizes higher
values than speed and efficiency. Indeed, one might fairly say of the
Bill of Rights in general, and the Due Process Clause, in particular,
that they were designed to protect the fragile values of a vulnerable
citizenry from the overbearing concern for efficiency and efficacy that
may characterize praiseworthy government officials no less, and
perhaps more, than mediocre ones.
(Stanley vs. Illinois, 404 U.S. 645, 656)

The United States, no doubt, shares the same interest as the Philippine
Government that no right that of liberty secured not only by the Bills of
Rights of the Philippines Constitution but of the United States as well, is
sacrificed at the altar of expediency.
(pp. 40-41, Private Respondent's Memorandum.)
In the Philippine context, this Court's ruling is invoked:
One of the basic principles of the democratic system is that where
the rights of the individual are concerned, the end does not justify the
means. It is not enough that there be a valid objective; it is also
necessary that the means employed to pursue it be in keeping with
the Constitution. Mere expediency will not excuse constitutional
shortcuts. There is no question that not even the strongest moral
conviction or the most urgent public need, subject only to a few
notable exceptions, will excuse the bypassing of an individual's
rights. It is no exaggeration to say that a person invoking a right
guaranteed under Article III of the Constitution is a majority of one
even as against the rest of the nation who would deny him that right
(Association of Small Landowners in the Philippines, Inc. vs.
Secretary of Agrarian Reform, 175 SCRA 343, 375-376 [1989]).
There can be no dispute over petitioner's argument that extradition is a tool
of criminal law enforcement. To be effective, requests for extradition or the
surrender of accused or convicted persons must be processed expeditiously.
Nevertheless, accelerated or fast-tracked proceedings and adherence to fair
procedures are, however, not always incompatible. They do not always clash
in discord. Summary does not mean precipitous haste. It does not carry a
disregard of the basic principles inherent in "ordered liberty."
Is there really an urgent need for immediate action at the evaluation stage?
At that point, there is no extraditee yet in the strict sense of the word.
Extradition may or may not occur. In interstate extradition, the governor of
the asylum state may not, in the absence of mandatory statute, be compelled
to act favorably (37 C.J.S. 387) since after a close evaluation of the
extradition papers, he may hold that federal and statutory requirements,
which are significantly jurisdictional, have not been met (31 Am Jur 2d 819).
Similarly, under an extradition treaty, the executive authority of the requested
state has the power to deny the behest from the requesting state.
Accordingly, if after a careful examination of the extradition documents the
Secretary of Foreign Affairs finds that the request fails to meet the
requirements of the law and the treaty, he shall not forward the request to the
Department of Justice for the filing of the extradition petition since non-

compliance with the aforesaid requirements will not vest our government with
jurisdiction to effect the extradition.
In this light, it should be observed that the Department of Justice exerted
notable efforts in assuring compliance with the requirements of the law and
the treaty since it even informed the U.S. Government of certain problems in
the extradition papers (such as those that are in Spanish and without the
official English translation, and those that are not properly authenticated). In
fact, petitioner even admits that consultation meetings are still supposed to
take place between the lawyers in his Department and those from the U.S.
Justice Department. With the meticulous nature of the evaluation, which
cannot just be completed in an abbreviated period of time due to its
intricacies, how then can we say that it is a proceeding that urgently
necessitates immediate and prompt action where notice and hearing can be
dispensed with?
Worthy of inquiry is the issue of whether or not there is tentativeness of
administrative action. Is private respondent precluded from enjoying the right
to notice and hearing at a later time without prejudice to him? Here lies the
peculiarity and deviant characteristic of the evaluation procedure. On one
hand there is yet no extraditee, but ironically on the other, it results in an
administrative if adverse to the person involved, may cause his immediate
incarceration. The grant of the request shall lead to the filing of the
extradition petition in court. The "accused" (as Section 2[c] of Presidential
Decree No. 1069 calls him), faces the threat of arrest, not only after the
extradition petition is filed in court, but even during the evaluation proceeding
itself by virtue of the provisional arrest allowed under the treaty and the
implementing law. The prejudice to the "accused" is thus blatant and
manifest.
Plainly, the notice and hearing requirements of administrative due process
cannot be dispensed with and shelved aside.
Apart from the due process clause of the Constitution, private respondent
likewise invokes Section 7 of Article III which reads:

concern, and (2) the corollary right of access to official records documents.
The general right guaranteed by said provision is the right to information on
matters of public concern. In its implementation, the right of access to official
records is likewise conferred. These cognate or related rights are "subject to
limitations as may be provided by law" (Bernas, The 1987 Phil. Constitution
A Reviewer-Primer, 1997 ed., p. 104) and rely on the premise that ultimately
it is an informed and critical public opinion which alone can protect the values
of democratic government (Ibid.).
Petitioner argues that the matters covered by private respondent's letterrequest dated July 1, 1999 do not fall under the guarantee of the foregoing
provision since the matters contained in the documents requested are not of
public concern. On the other hand, private respondent argues that the
distinction between matters vested with public interest and matters which are
of purely private interest only becomes material when a third person, who is
not directly affected by the matters requested, invokes the right to
information. However, if the person invoking the right is the one directly
affected thereby, his right to information becomes absolute.
The concept of matters of public concerns escapes exact definition. Strictly
speaking, every act of a public officer in the conduct of the governmental
process is a matter of public concern (Bernas, The 1987 Constitution of the
Republic of the Philippines, 1996 ed., p. 336). This concept embraces a
broad spectrum of subjects which the public may want to know, either
because these directly affect their lives or simply because such matters
arouse the interest of an ordinary citizen (Legaspi v. Civil Service
Commission, 150 SCRA 530 [1987]). Hence, the real party in interest is the
people and any citizen has "standing".
When the individual himself is involved in official government action because
said action has a direct bearing on his life, and may either cause him some
kind of deprivation or injury, he actually invokes the basic right to be notified
under Section 1 of the Bill of Rights and not exactly the right to information
on matters of public concern. As to an accused in a criminal proceeding, he
invokes Section 14, particularly the right to be informed of the nature and
cause of the accusation against him.

Sec. 7. The right of the people to information on matters of public


concern shall be recognized. Access to official records, and to
documents and papers pertaining to official acts, transactions, or
decisions, as well as to government research data used as basis for
policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law.

The right to information is implemented by the right of access to information


within the control of the government (Bernas, The 1987 Constitution of the
Republic of the Philippines, 1996 ed., p. 337). Such information may be
contained in official records, and in documents and papers pertaining to
official acts, transactions, or decisions.

The above provision guarantees political rights which are available to citizens
of the Philippines, namely: (1) the right to information on matters of public

In the case at bar, the papers requested by private respondent pertain to


official government action from the U.S. Government. No official action from

our country has yet been taken. Moreover, the papers have some relation to
matters of foreign relations with the U.S. Government. Consequently, if a
third party invokes this constitutional provision, stating that the extradition
papers are matters of public concern since they may result in the extradition
of a Filipino, we are afraid that the balance must be tilted, at such particular
time, in favor of the interests necessary for the proper functioning of the
government. During the evaluation procedure, no official governmental action
of our own government has as yet been done; hence the invocation of the
right is premature. Later, and in contrast, records of the extradition hearing
would already fall under matters of public concern, because our government
by then shall have already made an official decision to grant the extradition
request. The extradition of a fellow Filipino would be forthcoming.
We now pass upon the final issue pertinent to the subject matter of the
instant controversy: Would private respondent's entitlement to notice and
hearing during the evaluation stage of the proceedings constitute a breach of
the legal duties of the Philippine Government under the RP-Extradition
Treaty? Assuming the answer is in the affirmative, is there really a conflict
between the treaty and the due process clause in the Constitution?
First and foremost, let us categorically say that this is not the proper time to
pass upon the constitutionality of the provisions of the RP-US Extradition
Treaty nor the Extradition Law implementing the same. We limit ourselves
only to the effect of the grant of the basic rights of notice and hearing to
private respondent on foreign relations.
The rule of pacta sunt servanda, one of the oldest and most fundamental
maxims of international law, requires the parties to a treaty to keep their
agreement therein in good faith. The observance of our country's legal duties
under a treaty is also compelled by Section 2, Article II of the Constitution
which provides that "[t]he Philippines renounces war as an instrument of
national policy, adopts the generally accepted principles of international law
as part of the law of the land, and adheres to the policy of peace, equality,
justice, freedom, cooperation and amity with nations." Under the doctrine of
incorporation, rules of international law form part of the law of the and land
no further legislative action is needed to make such rules applicable in the
domestic sphere (Salonga & Yap, Public International Law, 1992 ed., p. 12).
The doctrine of incorporation is applied whenever municipal tribunals (or
local courts) are confronted with situations in which there appears to be a
conflict between a rule of international law and the provisions of the
constitution or statute of the local state. Efforts should first be exerted to
harmonize them, so as to give effect to both since it is to be presumed that
municipal law was enacted with proper regard for the generally accepted
principles of international law in observance of the observance of the
Incorporation Clause in the above-cited constitutional provision (Cruz,

Philippine Political Law, 1996 ed., p. 55). In a situation, however, where the
conflict is irreconcilable and a choice has to be made between a rule of
international law and municipal law, jurisprudence dictates that municipal law
should be upheld by the municipal courts (Ichong vs. Hernandez, 101 Phil.
1155 [1957]; Gonzales vs. Hechanova, 9 SCRA 230 [1963]; In re: Garcia, 2
SCRA 984 [1961]) for the reason that such courts are organs of municipal
law and are accordingly bound by it in all circumstances (Salonga &
Yap, op. cit., p. 13). The fact that international law has been made part of the
law of the land does not pertain to or imply the primacy of international law
over national or municipal law in the municipal sphere. The doctrine of
incorporation, as applied in most countries, decrees that rules of international
law are given equal standing with, but are not superior to, national legislative
enactments. Accordingly, the principle lex posterior derogat priori takes effect
a treaty may repeal a statute and a statute may repeal a treaty. In states
where the constitution is the highest law of the land, such as the Republic of
the Philippines, both statutes and treaties may be invalidated if they are in
conflict with the constitution (Ibid.).
In the case at bar, is there really a conflict between international law and
municipal or national law? En contrario, these two components of the law of
the land are not pined against each other. There is no occasion to choose
which of the two should be upheld. Instead, we see a void in the provisions of
the RP-US Extradition Treaty, as implemented by Presidential Decree No.
1069, as regards the basic due process rights of a prospective extraditee at
the evaluation stage of extradition proceedings. From the procedures earlier
abstracted, after the filing of the extradition petition and during the judicial
determination of the propriety of extradition, the rights of notice and hearing
are clearly granted to the prospective extraditee. However, prior thereto, the
law is silent as to these rights. Reference to the U.S. extradition procedures
also manifests this silence.
Petitioner interprets this silence as unavailability of these rights.
Consequently, he describes the evaluation procedure as an "ex
parte technical assessment" of the sufficiency of the extradition request and
the supporting documents.
We disagree.
In the absence of a law or principle of law, we must apply the rules of fair
play. An application of the basic twin due process rights of notice and hearing
will not go against the treaty or the implementing law. Neither the Treaty nor
the Extradition Law precludes these rights from a prospective extraditee.
Similarly, American jurisprudence and procedures on extradition pose no
proscription. In fact, in interstate extradition proceedings as explained above,
the prospective extraditee may even request for copies of the extradition

documents from the governor of the asylum state, and if he does, his right to
be supplied the same becomes a demandable right (35 C.J.S. 410).
Petitioner contends that the United States requested the Philippine
Government to prevent unauthorized disclosure of confidential information.
Hence, the secrecy surrounding the action of the Department of Justice
Panel of Attorneys. The confidentiality argument is, however, overturned by
petitioner's revelation that everything it refuses to make available at this
stage would be obtainable during trial. The Department of Justice states that
the U.S. District Court concerned has authorized the disclosure of certain
grand jury information. If the information is truly confidential, the veil of
secrecy cannot be lifted at any stage of the extradition proceedings. Not even
during trial.
A libertarian approach is thus called for under the premises.
One will search in vain the RP-US Extradition Treaty, the Extradition Law, as
well as American jurisprudence and procedures on extradition, for any
prohibition against the conferment of the two basic due process rights of
notice and hearing during the evaluation stage of the extradition proceedings.
We have to consider similar situations in jurisprudence for an application by
analogy.
Earlier, we stated that there are similarities between the evaluation process
and a preliminary investigation since both procedures may result in the arrest
of the respondent or the prospective extraditee. In the evaluation process, a
provisional arrest is even allowed by the Treaty and the Extradition Law
(Article 9, RP-US Extradition Treaty; Sec. 20, Presidential Decree No. 1069).
Following petitioner's theory, because there is no provision of its availability,
does this imply that for a period of time, the privilege of the writ of habeas
corpus is suspended, despite Section 15, Article III of the Constitution which
states that "[t]he privilege of the writ or habeas corpus shall not be
suspended except in cases of invasion or rebellion when the public safety
requires it"? Petitioner's theory would also infer that bail is not available
during the arrest of the prospective extraditee when the extradition petition
has already been filed in court since Presidential Decree No. 1069 does not
provide therefor, notwithstanding Section 13, Article III of the Constitution
which provides that "[a]ll persons, except those charged with offenses
punishable by reclusion perpetua when evidence of guilt is strong, shall,
before conviction, be bailable by sufficient sureties, or be released on
recognizance as may be provided by law. The right to bail shall not be
impaired even when the privilege of the writ of habeas corpus is suspended. .
." Can petitioner validly argue that since these contraventions are by virtue of
a treaty and hence affecting foreign relations, the aforestated guarantees in
the Bill of Rights could thus be subservient thereto?

The basic principles of administrative law instruct us that "the essence of due
process in administrative proceeding is an opportunity to explain one's side
or an opportunity to seek reconsideration of the actions or ruling complained
of (Mirano vs. NLRC, 270 SCRA 96 [1997]; Padilla vs. NLRC, 273 SCRA 457
[1997]; PLDT vs. NLRC, 276 SCRA 1 [1997]; Helpmate, Inc. vs. NLRC, 276
SCRA 315 [1997]; Aquinas School vs. Magnaye, 278 SCRA 602 [1997];
Jamer vs. NLRC, 278 SCRA 632 [1997]). In essence, procedural due
process refers to the method or manner by which the law is enforced
(Corona vs. United Harbor Pilots Association of the Phils., 283 SCRA 31
[1997]). This Court will not tolerate the least disregard of constitutional
guarantees in the enforcement of a law or treaty. Petitioner's fears that the
Requesting State may have valid objections to the Requested State's nonperformance of its commitments under the Extradition Treaty are
insubstantial and should not be given paramount consideration.
How then do we implement the RP-US Extradition Treaty? Do we limit
ourselves to the four corners of Presidential Decree No. 1069?
Of analogous application are the rulings in Government Service Insurance
System vs. Court of Appeals (201 SCRA 661 [1991]) and Go vs. National
Police Commission (271 SCRA 447 [1997]) where we ruled that in summary
proceedings under Presidential Decree No. 807 (Providing for the
Organization of the Civil Service Commission in Accordance with Provisions
of the Constitution, Prescribing its Powers and Functions and for Other
Purposes), and Presidential Decree No. 971 (Providing Legal Assistance for
Members of the Integrated National Police who may be charged for ServiceConnected Offenses and Improving the Disciplinary System in the Integrated
National Police, Appropriating Funds Therefor and for other purposes), as
amended by Presidential Decree No. 1707, although summary dismissals
may be effected without the necessity of a formal investigation, the minimum
requirements of due process still operate. As held in GSIS vs. Court of
Appeals:
. . . [I]t is clear to us that what the opening sentence of Section 40 is
saying is that an employee may be removed or dismissed even
without formal investigation, in certain instances. It is equally clear to
us that an employee must be informed of the charges preferred
against him, and that the normal way by which the employee is so
informed is by furnishing him with a copy of the charges against him.
This is a basic procedural requirement that a statute cannot dispense
with and still remain consistent with the constitutional provision on
due process. The second minimum requirement is that the employee
charged with some misfeasance or malfeasance must have a
reasonable opportunity to present his side of the matter, that is to
say, his defenses against the charges levelled against him and to
present evidence in support of his defenses. . . .

(at p. 671)
Said summary dismissal proceedings are also non-litigious in nature, yet we
upheld the due process rights of the respondent.
In the case at bar, private respondent does not only face a clear and present
danger of loss of property or employment, but of liberty itself, which may
eventually lead to his forcible banishment to a foreign land. The convergence
of petitioner's favorable action on the extradition request and the deprivation
of private respondent's liberty is easily comprehensible.
We have ruled time and again that this Court's equity jurisdiction, which is
aptly described as "justice outside legality," may be availed of only in the
absence of, and never against, statutory law or judicial pronouncements
(Smith Bell & Co., Inc. vs. Court of Appeals, 267 SCRA 530 [1997]; DavidChan vs. Court of Appeals, 268 SCRA 677 [1997]). The constitutional issue
in the case at bar does not even call for "justice outside legality," since
private respondent's due process rights, although not guaranteed by statute
or by treaty, are protected by constitutional guarantees. We would not be true
to the organic law of the land if we choose strict construction over guarantees
against the deprivation of liberty. That would not be in keeping with the
principles of democracy on which our Constitution is premised.
Verily, as one traverses treacherous waters of conflicting and opposing
currents of liberty and government authority, he must ever hold the oar of
freedom in the stronger arm, lest an errant and wayward course be laid.
WHEREFORE, in view of the foregoing premises, the instant petition is
hereby DISMISSED for lack of merit. Petitioner is ordered to furnish private
respondent copies of the extradition request and its supporting papers, and
to grant him a reasonable period within which to file his comment with
supporting evidence. The incidents in Civil Case No. 99-94684 having been
rendered moot and academic by this decision, the same is hereby ordered
dismissed.
G.R. No. 118295 May 2, 1997
WIGBERTO E. TAADA and ANNA DOMINIQUE COSETENG, as
members of the Philippine Senate and as taxpayers; GREGORIO
ANDOLANA and JOKER ARROYO as members of the House of
Representatives and as taxpayers; NICANOR P. PERLAS and HORACIO
R. MORALES, both as taxpayers; CIVIL LIBERTIES UNION, NATIONAL
ECONOMIC
PROTECTIONISM
ASSOCIATION,
CENTER
FOR
ALTERNATIVE
DEVELOPMENT
INITIATIVES,
LIKAS-KAYANG
KAUNLARAN
FOUNDATION,
INC.,
PHILIPPINE
RURAL

RECONSTRUCTION MOVEMENT, DEMOKRATIKONG KILUSAN NG


MAGBUBUKID NG PILIPINAS, INC., and PHILIPPINE PEASANT
INSTITUTE, in representation of various taxpayers and as nongovernmental
organizations, petitioners,
vs.
EDGARDO ANGARA, ALBERTO ROMULO, LETICIA RAMOS-SHAHANI,
HEHERSON ALVAREZ, AGAPITO AQUINO, RODOLFO BIAZON,
NEPTALI GONZALES, ERNESTO HERRERA, JOSE LINA, GLORIA.
MACAPAGAL-ARROYO, ORLANDO MERCADO, BLAS OPLE, JOHN
OSMEA, SANTANINA RASUL, RAMON REVILLA, RAUL ROCO,
FRANCISCO TATAD and FREDDIE WEBB, in their respective capacities
as members of the Philippine Senate who concurred in the ratification
by the President of the Philippines of the Agreement Establishing the
World Trade Organization; SALVADOR ENRIQUEZ, in his capacity as
Secretary of Budget and Management; CARIDAD VALDEHUESA, in her
capacity as National Treasurer; RIZALINO NAVARRO, in his capacity as
Secretary of Trade and Industry; ROBERTO SEBASTIAN, in his capacity
as Secretary of Agriculture; ROBERTO DE OCAMPO, in his capacity as
Secretary of Finance; ROBERTO ROMULO, in his capacity as Secretary
of Foreign Affairs; and TEOFISTO T. GUINGONA, in his capacity as
Executive Secretary, respondents.

PANGANIBAN, J.:
The emergence on January 1, 1995 of the World Trade Organization,
abetted by the membership thereto of the vast majority of countries has
revolutionized international business and economic relations amongst states.
It has irreversibly propelled the world towards trade liberalization and
economic globalization. Liberalization, globalization, deregulation and
privatization, the third-millennium buzz words, are ushering in a new
borderless world of business by sweeping away as mere historical relics the
heretofore traditional modes of promoting and protecting national economies
like tariffs, export subsidies, import quotas, quantitative restrictions, tax
exemptions and currency controls. Finding market niches and becoming the
best in specific industries in a market-driven and export-oriented global
scenario are replacing age-old "beggar-thy-neighbor" policies that unilaterally
protect weak and inefficient domestic producers of goods and services. In the
words of Peter Drucker, the well-known management guru, "Increased
participation in the world economy has become the key to domestic
economic growth and prosperity."
Brief Historical Background

To hasten worldwide recovery from the devastation wrought by the Second


World War, plans for the establishment of three multilateral institutions
inspired by that grand political body, the United Nations were discussed at
Dumbarton Oaks and Bretton Woods. The first was the World Bank (WB)
which was to address the rehabilitation and reconstruction of war-ravaged
and later developing countries; the second, the International Monetary Fund
(IMF) which was to deal with currency problems; and the third, the
International Trade Organization (ITO), which was to foster order and
predictability in world trade and to minimize unilateral protectionist policies
that invite challenge, even retaliation, from other states. However, for a
variety of reasons, including its non-ratification by the United States, the ITO,
unlike the IMF and WB, never took off. What remained was only GATT the
General Agreement on Tariffs and Trade. GATT was a collection of treaties
governing access to the economies of treaty adherents with no
institutionalized body administering the agreements or dependable system of
dispute settlement.
After half a century and several dizzying rounds of negotiations, principally
the Kennedy Round, the Tokyo Round and the Uruguay Round, the world
finally gave birth to that administering body the World Trade Organization
with the signing of the "Final Act" in Marrakesh, Morocco and the
1
ratification of the WTO Agreement by its members.

petition before this Court assails the WTO Agreement for violating the
mandate of the 1987 Constitution to "develop a self-reliant and independent
national economy effectively controlled by Filipinos . . . (to) give preference to
qualified Filipinos (and to) promote the preferential use of Filipino labor,
domestic materials and locally produced goods."
Simply stated, does the Philippine Constitution prohibit Philippine
participation in worldwide trade liberalization and economic globalization?
Does it proscribe Philippine integration into a global economy that is
liberalized, deregulated and privatized? These are the main questions raised
in this petition for certiorari, prohibition andmandamus under Rule 65 of the
Rules of Court praying (1) for the nullification, on constitutional grounds, of
the concurrence of the Philippine Senate in the ratification by the President of
the Philippines of the Agreement Establishing the World Trade Organization
(WTO Agreement, for brevity) and (2) for the prohibition of its implementation
and enforcement through the release and utilization of public funds, the
assignment of public officials and employees, as well as the use of
government properties and resources by respondent-heads of various
executive offices concerned therewith. This concurrence is embodied in
Senate Resolution No. 97, dated December 14, 1994.
The Facts

Like many other developing countries, the Philippines joined WTO as a


founding member with the goal, as articulated by President Fidel V. Ramos in
two letters to the Senate (infra), of improving "Philippine access to foreign
markets, especially its major trading partners, through the reduction of tariffs
on its exports, particularly agricultural and industrial products." The President
also saw in the WTO the opening of "new opportunities for the services
sector . . . , (the reduction of) costs and uncertainty associated with exporting
. . . , and (the attraction of) more investments into the country." Although the
Chief Executive did not expressly mention it in his letter, the Philippines
and this is of special interest to the legal profession will benefit from the
WTO system of dispute settlement by judicial adjudication through the
independent WTO settlement bodies called (1) Dispute Settlement Panels
and (2) Appellate Tribunal. Heretofore, trade disputes were settled mainly
through negotiations where solutions were arrived at frequently on the basis
of relative bargaining strengths, and where naturally, weak and
underdeveloped countries were at a disadvantage.

On April 15, 1994, Respondent Rizalino Navarro, then Secretary of The


Department of Trade and Industry (Secretary Navarro, for brevity),
representing the Government of the Republic of the Philippines, signed in
Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay
Round of Multilateral Negotiations (Final Act, for brevity).

The Petition in Brief

On August 12, 1994, the members of the Philippine Senate received a letter
3
dated August 11, 1994 from the President of the Philippines, stating among
others that "the Uruguay Round Final Act is hereby submitted to the Senate
for its concurrence pursuant to Section 21, Article VII of the Constitution."

Arguing mainly (1) that the WTO requires the Philippines "to place nationals
and products of member-countries on the same footing as Filipinos and local
products" and (2) that the WTO "intrudes, limits and/or impairs" the
constitutional powers of both Congress and the Supreme Court, the instant

By signing the Final Act, Secretary Navarro on behalf of the Republic of the
Philippines, agreed:
(a) to submit, as appropriate, the WTO Agreement for the
consideration of their respective competent authorities, with
a view to seeking approval of the Agreement in accordance
with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.

On August 13, 1994, the members of the Philippine Senate received another
4
letter from the President of the Philippines likewise dated August 11, 1994,
which stated among others that "the Uruguay Round Final Act, the
Agreement Establishing the World Trade Organization, the Ministerial
Declarations and Decisions, and the Understanding on Commitments in
Financial Services are hereby submitted to the Senate for its concurrence
pursuant to Section 21, Article VII of the Constitution."
On December 9, 1994, the President of the Philippines certified the necessity
of the immediate adoption of P.S. 1083, a resolution entitled "Concurring in
the Ratification of the Agreement Establishing the World Trade
5
Organization."
On December 14, 1994, the Philippine Senate adopted Resolution No. 97
which "Resolved, as it is hereby resolved, that the Senate concur, as it
hereby concurs, in the ratification by the President of the Philippines of the
6
Agreement Establishing the World Trade Organization." The text of the
WTO Agreement is written on pages 137et seq. of Volume I of the 36volume Uruguay Round of Multilateral Trade Negotiations and includes
various agreements and associated legal instruments (identified in the said
Agreement as Annexes 1, 2 and 3 thereto and collectively referred to as
Multilateral Trade Agreements, for brevity) as follows:
ANNEX 1
Annex 1A: Multilateral Agreement on Trade in Goods
General Agreement on Tariffs and Trade 1994
Agreement
on
Agriculture
Agreement on the Application of Sanitary and
Phytosanitary
Measures
Agreement
on
Textiles
and
Clothing
Agreement
on
Technical
Barriers
to
Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of he
General
Agreement
on
Tariffs
and
Trade
1994
Agreement on Implementation of Article VII of the
General
on
Tariffs
and
Trade
1994
Agreement
on
Pre-Shipment
Inspection
Agreement
on
Rules
of
Origin
Agreement
on
Imports
Licensing
Procedures
Agreement
on
Subsidies
and
Coordinating
Measures
Agreement on Safeguards

Annex 1B: General Agreement on Trade in Services and


Annexes
Annex 1C: Agreement on Trade-Related Aspects of
Intellectual
Property Rights
ANNEX 2
Understanding on Rules and Procedures
Governing
the Settlement of Disputes
ANNEX 3
Trade Policy Review Mechanism
7

On December 16, 1994, the President of the Philippines signed the


Instrument of Ratification, declaring:
NOW THEREFORE, be it known that I, FIDEL V. RAMOS,
President of the Republic of the Philippines, after having
seen and considered the aforementioned Agreement
Establishing the World Trade Organization and the
agreements and associated legal instruments included in
Annexes one (1), two (2) and three (3) of that Agreement
which are integral parts thereof, signed at Marrakesh,
Morocco on 15 April 1994, do hereby ratify and confirm the
same and every Article and Clause thereof.
To emphasize, the WTO Agreement ratified by the President of the
Philippines is composed of the Agreement Proper and "the associated legal
instruments included in Annexes one (1), two (2) and three (3) of that
Agreement which are integral parts thereof."
On the other hand, the Final Act signed by Secretary Navarro embodies not
only the WTO Agreement (and its integral annexes aforementioned) but also
(1) the Ministerial Declarations and Decisions and (2) the Understanding on
Commitments in Financial Services. In his Memorandum dated May 13,
8
1996, the Solicitor General describes these two latter documents as follows:
The Ministerial Decisions and Declarations are twenty-five
declarations and decisions on a wide range of matters, such
as measures in favor of least developed countries,

notification procedures, relationship of WTO with the


International Monetary Fund (IMF), and agreements on
technical barriers to trade and on dispute settlement.
The Understanding on Commitments in Financial Services
dwell on, among other things, standstill or limitations and
qualifications of commitments to existing non-conforming
measures, market access, national treatment, and definitions
of non-resident supplier of financial services, commercial
presence and new financial service.
On December 29, 1994, the present petition was filed. After careful
deliberation on respondents' comment and petitioners' reply thereto, the
Court resolved on December 12, 1995, to give due course to the petition, and
the parties thereafter filed their respective memoranda. The court also
requested the Honorable Lilia R. Bautista, the Philippine Ambassador to the
United Nations stationed in Geneva, Switzerland, to submit a paper,
9
hereafter referred to as "Bautista Paper," for brevity, (1) providing a
historical background of and (2) summarizing the said agreements.
During the Oral Argument held on August 27, 1996, the Court directed:
(a) the petitioners to submit the (1) Senate Committee
Report on the matter in controversy and (2) the transcript of
proceedings/hearings in the Senate; and
(b) the Solicitor General, as counsel for respondents, to file
(1) a list of Philippine treaties signed prior to the Philippine
adherence to the WTO Agreement, which derogate from
Philippine sovereignty and (2) copies of the multi-volume
WTO Agreement and other documents mentioned in the
Final Act, as soon as possible.
After receipt of the foregoing documents, the Court said it would consider the
case submitted for resolution. In a Compliance dated September 16, 1996,
the Solicitor General submitted a printed copy of the 36-volume Uruguay
Round of Multilateral Trade Negotiations, and in another Compliance dated
October 24, 1996, he listed the various "bilateral or multilateral treaties or
international instruments involving derogation of Philippine sovereignty."
Petitioners, on the other hand, submitted their Compliance dated January 28,
1997, on January 30, 1997.
The Issues

In their Memorandum dated March 11, 1996, petitioners summarized the


issues as follows:
A. Whether the petition presents a political question or is
otherwise not justiciable.
B. Whether the petitioner members of the Senate who
participated in the deliberations and voting leading to the
concurrence are estopped from impugning the validity of the
Agreement Establishing the World Trade Organization or of
the validity of the concurrence.
C. Whether the provisions of the Agreement Establishing the
World Trade Organization contravene the provisions of Sec.
19, Article II, and Secs. 10 and 12, Article XII, all of the 1987
Philippine Constitution.
D. Whether provisions of the Agreement Establishing the
World Trade Organization unduly limit, restrict and impair
Philippine sovereignty specifically the legislative power
which, under Sec. 2, Article VI, 1987 Philippine Constitution
is "vested in the Congress of the Philippines";
E. Whether provisions of the Agreement Establishing the
World Trade Organization interfere with the exercise of
judicial power.
F. Whether the respondent members of the Senate acted in
grave abuse of discretion amounting to lack or excess of
jurisdiction when they voted for concurrence in the
ratification
of
the
constitutionally-infirm
Agreement
Establishing the World Trade Organization.
G. Whether the respondent members of the Senate acted in
grave abuse of discretion amounting to lack or excess of
jurisdiction when they concurred only in the ratification of the
Agreement Establishing the World Trade Organization, and
not with the Presidential submission which included the Final
Act, Ministerial Declaration and Decisions, and the
Understanding on Commitments in Financial Services.
On the other hand, the Solicitor General as counsel for respondents
10
"synthesized the several issues raised by petitioners into the following":

1. Whether or not the provisions of the "Agreement


Establishing the World Trade Organization and the
Agreements and Associated Legal Instruments included in
Annexes one (1), two (2) and three (3) of that agreement"
cited by petitioners directly contravene or undermine the
letter, spirit and intent of Section 19, Article II and Sections
10 and 12, Article XII of the 1987 Constitution.
2. Whether or not certain provisions of the Agreement unduly
limit, restrict or impair the exercise of legislative power by
Congress.
3. Whether or not certain provisions of the Agreement impair
the exercise of judicial power by this Honorable Court in
promulgating the rules of evidence.
4. Whether or not the concurrence of the Senate "in the
ratification by the President of the Philippines of the
Agreement establishing the World Trade Organization"
implied rejection of the treaty embodied in the Final Act.
By raising and arguing only four issues against the seven presented by
petitioners, the Solicitor General has effectively ignored three, namely: (1)
whether the petition presents a political question or is otherwise not
justiciable; (2) whether petitioner-members of the Senate (Wigberto E.
Taada and Anna Dominique Coseteng) are estopped from joining this suit;
and (3) whether the respondent-members of the Senate acted in grave
abuse of discretion when they voted for concurrence in the ratification of the
WTO Agreement. The foregoing notwithstanding, this Court resolved to deal
with these three issues thus:
(1) The "political question" issue being very fundamental and vital, and
being a matter that probes into the very jurisdiction of this Court to hear and
decide this case was deliberated upon by the Court and will thus be ruled
upon as the first issue;
(2) The matter of estoppel will not be taken up because this defense is
waivable and the respondents have effectively waived it by not pursuing it in
any of their pleadings; in any event, this issue, even if ruled in respondents'
favor, will not cause the petition's dismissal as there are petitioners other
than the two senators, who are not vulnerable to the defense of estoppel;
and

(3) The issue of alleged grave abuse of discretion on the part of the
respondent senators will be taken up as an integral part of the disposition of
the four issues raised by the Solicitor General.
During its deliberations on the case, the Court noted that the respondents did
not question the locus standi of petitioners. Hence, they are also deemed to
have waived the benefit of such issue. They probably realized that grave
constitutional issues, expenditures of public funds and serious international
commitments of the nation are involved here, and that transcendental public
interest requires that the substantive issues be met head on and decided on
11
the merits, rather than skirted or deflected by procedural matters.
To recapitulate, the issues that will be ruled upon shortly are:
(1) DOES THE PETITION PRESENT A JUSTICIABLE
CONTROVERSY? OTHERWISE STATED, DOES THE
PETITION INVOLVE A POLITICAL QUESTION OVER
WHICH THIS COURT HAS NO JURISDICTION?
(2) DO THE PROVISIONS OF THE WTO AGREEMENT
AND ITS THREE ANNEXES CONTRAVENE SEC. 19,
ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF THE
PHILIPPINE CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS
ANNEXES LIMIT, RESTRICT, OR IMPAIR THE EXERCISE
OF LEGISLATIVE POWER BY CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR
INTERFERE WITH THE EXERCISE OF JUDICIAL POWER
BY THIS COURT IN PROMULGATING RULES ON
EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE
WTO AGREEMENT AND ITS ANNEXES SUFFICIENT
AND/OR VALID, CONSIDERING THAT IT DID NOT
INCLUDE THE FINAL ACT, MINISTERIAL DECLARATIONS
AND DECISIONS, AND THE UNDERSTANDING ON
COMMITMENTS IN FINANCIAL SERVICES?
The
First
Issue:
Have Jurisdiction Over the Controversy?

Does

the

Court

In seeking to nullify an act of the Philippine Senate on the ground that it


contravenes the Constitution, the petition no doubt raises a justiciable

controversy. Where 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. "The question thus posed is judicial
rather than political. The duty (to adjudicate) remains to assure that the
12
supremacy of the Constitution is upheld." Once a "controversy as to the
application or interpretation of a constitutional provision is raised before this
Court (as in the instant case), it becomes a legal issue which the Court is
13
bound by constitutional mandate to decide."
14

The jurisdiction of this Court to adjudicate the matters raised in the petition
15
is clearly set out in the 1987 Constitution, as follows:
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.
The foregoing text emphasizes the judicial department's duty and power to
strike down grave abuse of discretion on the part of any branch or
instrumentality of government including Congress. It is an innovation in our
16
political law. As explained by former Chief Justice Roberto
17
Concepcion, "the judiciary is the final arbiter on the question of 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. This is not only a
judicial power but a duty to pass judgment on matters of this nature."

We should stress that, in deciding to take jurisdiction over this petition, this
Court will not review the wisdom of the decision of the President and the
Senate in enlisting the country into the WTO, or pass upon the merits of
trade liberalization as a policy espoused by said international body. Neither
will it rule on the propriety of the government's economic policy of
reducing/removing tariffs, taxes, subsidies, quantitative restrictions, and other
import/trade barriers. Rather, it will only exercise its constitutional duty "to
determine whether or not there had been a grave abuse of discretion
amounting to lack or excess of jurisdiction" on the part of the Senate in
ratifying the WTO Agreement and its three annexes.
Second
Issue:
and Economic Nationalism

The

WTO

Agreement

This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the "letter, spirit and intent" of the
Constitution mandating "economic nationalism" are violated by the so-called
"parity provisions" and "national treatment" clauses scattered in various parts
not only of the WTO Agreement and its annexes but also in the Ministerial
Decisions and Declarations and in the Understanding on Commitments in
Financial Services.
Specifically, the "flagship" constitutional provisions referred to are Sec 19,
Article II, and Secs. 10 and 12, Article XII, of the Constitution, which are
worded as follows:
Article II

18

As this Court has repeatedly and firmly emphasized in many cases, it will
not shirk, digress from or abandon its sacred duty and authority to uphold the
Constitution in matters that involve grave abuse of discretion brought before
it in appropriate cases, committed by any officer, agency, instrumentality or
department of the government.
As the petition alleges grave abuse of discretion and as there is no other
plain, speedy or adequate remedy in the ordinary course of law, we have no
hesitation at all in holding that this petition should be given due course and
the vital questions raised therein ruled upon under Rule 65 of the Rules of
Court. Indeed, certiorari, prohibition andmandamus are appropriate remedies
to raise constitutional issues and to review and/or prohibit/nullify, when
proper, acts of legislative and executive officials. On this, we have no
equivocation.

DECLARATION
AND STATE POLICIES

OF

PRINCIPLES

xxx xxx xxx


Sec. 19. The State shall develop a self-reliant and
independent national economy effectively controlled by
Filipinos.
xxx xxx xxx
Article XII
NATIONAL ECONOMY AND PATRIMONY

xxx xxx xxx

ANNEX

Sec. 10. . . . The Congress shall enact measures that will


encourage the formation and operation of enterprises whose
capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering
the national economy and patrimony, the State shall give
preference to qualified Filipinos.

Illustrative List
1. TRIMS that are inconsistent with the obligation of national
treatment provided for in paragraph 4 of Article III of GATT
1994 include those which are mandatory or enforceable
under domestic law or under administrative rulings, or
compliance with which is necessary to obtain an advantage,
and which require:

xxx xxx xxx


Sec. 12. The State shall promote the preferential use of
Filipino labor, domestic materials and locally produced
goods, and adopt measures that help make them
competitive.
Petitioners aver that these sacred constitutional principles are desecrated by
19
the following WTO provisions quoted in their memorandum:
a) In the area of investment measures related to trade in
goods (TRIMS, for brevity):
Article 2
National Treatment and Quantitative Restrictions.
1. Without prejudice to other rights and
obligations under GATT 1994, no Member
shall apply any TRIM that is inconsistent
with the provisions of Article II or Article XI of
GATT 1994.
2. An illustrative list of TRIMS that are
inconsistent with the obligations of general
elimination of quantitative restrictions
provided for in paragraph I of Article XI of
GATT 1994 is contained in the Annex to this
Agreement." (Agreement on Trade-Related
Investment Measures, Vol. 27, Uruguay
Round, Legal Instruments, p. 22121,
emphasis supplied).
The Annex referred to reads as follows:

(a) the purchase or use by an enterprise of


products of domestic origin or from any
domestic source, whether specified in terms
of particular products, in terms of volume or
value of products, or in terms of proportion
of volume or value of its local production; or
(b) that an enterprise's purchases or use of
imported products be limited to an amount
related to the volume or value of local
products that it exports.
2. TRIMS that are inconsistent with the obligations of general
elimination of quantitative restrictions provided for in
paragraph 1 of Article XI of GATT 1994 include those which
are mandatory or enforceable under domestic laws or under
administrative rulings, or compliance with which is necessary
to obtain an advantage, and which restrict:
(a) the importation by an enterprise of
products used in or related to the local
production that it exports;
(b) the importation by an enterprise of
products used in or related to its local
production by restricting its access to foreign
exchange inflows attributable to the
enterprise; or
(c) the exportation or sale for export
specified in terms of particular products, in
terms of volume or value of products, or in
terms of a preparation of volume or value of
its local production. (Annex to the

Agreement on Trade-Related Investment


Measures, Vol. 27, Uruguay Round Legal
Documents, p. 22125, emphasis supplied).
The paragraph 4 of Article III of GATT 1994 referred to is
quoted as follows:
The products of the territory of any
contracting party imported into the territory
of any other contracting party shall be
accorded treatment no less favorable than
that accorded to like products of national
origin in respect of laws, regulations and
requirements affecting their internal sale,
offering for sale, purchase, transportation,
distribution or use, the provisions of this
paragraph shall not prevent the application
of differential internal transportation charges
which are based exclusively on the
economic operation of the means of
transport and not on the nationality of the
product." (Article III, GATT 1947, as
amended by the Protocol Modifying Part II,
and Article XXVI of GATT, 14 September
1948, 62 UMTS 82-84 in relation to
paragraph 1(a) of the General Agreement on
Tariffs and Trade 1994, Vol. 1, Uruguay
Round, Legal Instruments p. 177, emphasis
supplied).
(b) In the area of trade related aspects of intellectual
property rights (TRIPS, for brevity):
Each Member shall accord to the nationals
of other Members treatment no less
favourable than that it accords to its own
nationals with regard to the protection of
intellectual property. . . (par. 1 Article 3,
Agreement on Trade-Related Aspect of
Intellectual Property rights, Vol. 31, Uruguay
Round, Legal Instruments, p. 25432
(emphasis supplied)
(c) In the area of the General Agreement on Trade in
Services:

National Treatment
1. In the sectors inscribed in its schedule,
and subject to any conditions and
qualifications set out therein, each Member
shall accord to services and service
suppliers of any other Member, in respect of
all measures affecting the supply of
services, treatment no less favourable than
it accords to its own like services and
service suppliers.
2. A Member may meet the requirement of
paragraph I by according to services and
service suppliers of any other Member,
either formally suppliers of any other
Member, either formally identical treatment
or formally different treatment to that it
accords to its own like services and service
suppliers.
3. Formally identical or formally different
treatment shall be considered to be less
favourable if it modifies the conditions of
completion in favour of services or service
suppliers of the Member compared to like
services or service suppliers of any other
Member. (Article XVII, General Agreement
on Trade in Services, Vol. 28, Uruguay
Round Legal Instruments, p. 22610
emphasis supplied).
It is petitioners' position that the foregoing "national treatment" and "parity
provisions" of the WTO Agreement "place nationals and products of member
countries on the same footing as Filipinos and local products," in
contravention of the "Filipino First" policy of the Constitution. They allegedly
render meaningless the phrase "effectively controlled by Filipinos." The
constitutional conflict becomes more manifest when viewed in the context of
the clear duty imposed on the Philippines as a WTO member to ensure the
conformity of its laws, regulations and administrative procedures with its
20
obligations as provided in the annexed agreements. Petitioners further
argue that these provisions contravene constitutional limitations on the role
exports play in national development and negate the preferential treatment
accorded to Filipino labor, domestic materials and locally produced goods.

On the other hand, respondents through the Solicitor General counter (1) that
such Charter provisions are not self-executing and merely set out general
policies; (2) that these nationalistic portions of the Constitution invoked by
petitioners should not be read in isolation but should be related to other
relevant provisions of Art. XII, particularly Secs. 1 and 13 thereof; (3) that
read properly, the cited WTO clauses do not conflict with Constitution; and
(4) that the WTO Agreement contains sufficient provisions to protect
developing countries like the Philippines from the harshness of sudden trade
liberalization.
We shall now discuss and rule on these arguments.
Declaration
Not Self-Executing

of

Principles

By its very title, Article II of the Constitution is a "declaration of principles and


21
state policies." The counterpart of this article in the 1935 Constitution is
called the "basic political creed of the nation" by Dean Vicente
22
Sinco. These principles in Article II are not intended to be self-executing
23
principles ready for enforcement through the courts. They are used by the
judiciary as aids or as guides in the exercise of its power of judicial review,
and by the legislature in its enactment of laws. As held in the leading case
24
of Kilosbayan, Incorporated vs. Morato, the principles and state policies
enumerated in Article II and some sections of Article XII are not "selfexecuting provisions, the disregard of which can give rise to a cause of
action in the courts. They do not embody judicially enforceable constitutional
rights but guidelines for legislation."

addressed to the executive and to the


legislature. If the executive and the
legislature failed to heed the directives of the
article, the available remedy was not judicial
but political. The electorate could express
their displeasure with the failure of the
executive and the legislature through the
language of the ballot. (Bernas, Vol. II, p. 2).
The reasons for denying a cause of action to an alleged infringement of
board constitutional principles are sourced from basic considerations of due
process and the lack of judicial authority to wade "into the uncharted ocean
of social and economic policy making." Mr. Justice Florentino P. Feliciano in
26
his concurring opinion inOposa vs. Factoran, Jr., explained these reasons
as follows:

In the same light, we held in Basco vs. Pagcor that broad constitutional
principles need legislative enactments to implement the, thus:

My suggestion is simply that petitioners must, before the trial


court, show a more specific legal right a right cast in
language of a significantly lower order of generality than
Article II (15) of the Constitution that is or may be violated
by the actions, or failures to act, imputed to the public
respondent by petitioners so that the trial court can validly
render judgment grating all or part of the relief prayed for. To
my mind, the court should be understood as simply saying
that such a more specific legal right or rights may well exist
in our corpus of law, considering the general policy principles
found in the Constitution and the existence of the Philippine
Environment Code, and that the trial court should have given
petitioners an effective opportunity so to demonstrate,
instead of aborting the proceedings on a motion to dismiss.

On petitioners' allegation that P.D. 1869 violates Sections 11


(Personal Dignity) 12 (Family) and 13 (Role of Youth) of
Article II; Section 13 (Social Justice) of Article XIII and
Section 2 (Educational Values) of Article XIV of the 1987
Constitution, suffice it to state also that these are merely
statements of principles and policies. As such, they are
basically not self-executing, meaning a law should be
passed by Congress to clearly define and effectuate such
principles.

It seems to me important that the legal right which is an


essential component of a cause of action be a specific,
operable legal right, rather than a constitutional or statutory
policy, for at least two (2) reasons. One is that unless the
legal right claimed to have been violated or disregarded is
given specification in operational terms, defendants may well
be unable to defend themselves intelligently and effectively;
in other words, there are due process dimensions to this
matter.

In general, therefore, the 1935 provisions


were not intended to be self-executing
principles ready for enforcement through the
courts. They were rather directives

The second is a broader-gauge consideration where a


specific violation of law or applicable regulation is not alleged
or proved, petitioners can be expected to fall back on the
expanded conception of judicial power in the second

25

paragraph of Section 1 of Article VIII of the Constitution


which reads:
Sec. 1. . . .
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)
When substantive standards as general as "the right to a
balanced and healthy ecology" and "the right to health" are
combined with remedial standards as broad ranging as "a
grave abuse of discretion amounting to lack or excess of
jurisdiction," the result will be, it is respectfully submitted, to
propel courts into the uncharted ocean of social and
economic policy making. At least in respect of the vast area
of environmental protection and management, our courts
have no claim to special technical competence and
experience and professional qualification. Where no specific,
operable norms and standards are shown to exist, then the
policy making departments the legislative and executive
departments must be given a real and effective
opportunity to fashion and promulgate those norms and
standards, and to implement them before the courts should
intervene.
Economic
Nationalism
Should
Be
Other
Constitutional
Mandates
Balanced Development of Economy

Read
to

with
Attain

On the other hand, Secs. 10 and 12 of Article XII, apart from merely laying
down general principles relating to the national economy and patrimony,
should be read and understood in relation to the other sections in said article,
especially Secs. 1 and 13 thereof which read:
Sec. 1. The goals of the national economy are a more
equitable distribution of opportunities, income, and wealth; a
sustained increase in the amount of goods and services
produced by the nation for the benefit of the people; and an

expanding productivity as the key to raising the quality of life


for all especially the underprivileged.
The State shall promote industrialization and full
employment based on sound agricultural development and
agrarian reform, through industries that make full and
efficient use of human and natural resources, and which are
competitive in both domestic and foreign markets. However,
the State shall protect Filipino enterprises against unfair
foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and
all regions of the country shall be given optimum opportunity
to develop. . . .
xxx xxx xxx
Sec. 13. The State shall pursue a trade policy that serves
the general welfare and utilizes all forms and arrangements
of exchange on the basis of equality and reciprocity.
As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of
national economic development, as follows:
1. A more equitable distribution of opportunities, income and wealth;
2. A sustained increase in the amount of goods and services provided by the
nation for the benefit of the people; and
3. An expanding productivity as the key to raising the quality of life for all
especially the underprivileged.
With these goals in context, the Constitution then ordains the ideals of
economic nationalism (1) by expressing preference in favor of qualified
Filipinos "in the grant of rights, privileges and concessions covering the
27
national economy and patrimony" and in the use of "Filipino labor,
domestic materials and locally-produced goods"; (2) by mandating the State
28
to "adopt measures that help make them competitive; and (3) by requiring
the State to "develop a self-reliant and independent national economy
29
effectively controlled by Filipinos." In similar language, the Constitution
takes into account the realities of the outside world as it requires the pursuit
of "a trade policy that serves the general welfare and utilizes all forms and
30
arrangements of exchange on the basis of equality ad reciprocity"; and
speaks of industries "which are competitive in both domestic

and foreign markets" as well as of the protection of "Filipino enterprises


against unfair foreign competition and trade practices."
It is true that in the recent case of Manila Prince Hotel vs. Government
31
Service Insurance System, et al., this Court held that "Sec. 10, second
par., Art. XII of the 1987 Constitution is a mandatory, positive command
which is complete in itself and which needs no further guidelines or
implementing laws or rule for its enforcement. From its very words the
provision does not require any legislation to put it in operation. It is per
se judicially enforceable." However, as the constitutional provision itself
states, it is enforceable only in regard to "the grants of rights, privileges and
concessions covering national economy and patrimony" and not to every
aspect of trade and commerce. It refers to exceptions rather than the rule.
The issue here is not whether this paragraph of Sec. 10 of Art. XII is selfexecuting or not. Rather, the issue is whether, as a rule, there are enough
balancing provisions in the Constitution to allow the Senate to ratify the
Philippine concurrence in the WTO Agreement. And we hold that there are.
All told, while the Constitution indeed mandates a bias in favor of Filipino
goods, services, labor and enterprises, at the same time, it recognizes the
need for business exchange with the rest of the world on the bases of
equality and reciprocity and limits protection of Filipino enterprises only
32
against foreign competition and trade practices that are unfair. In other
words, the Constitution did not intend to pursue an isolationist policy. It did
not shut out foreign investments, goods and services in the development of
the Philippine economy. While the Constitution does not encourage the
unlimited entry of foreign goods, services and investments into the country, it
does not prohibit them either. In fact, it allows an exchange on the basis of
equality and reciprocity, frowning only on foreign competition that is unfair.
WTO
Recognizes
Protect Weak Economies

Need

to

Upon the other hand, respondents maintain that the WTO itself has some
built-in advantages to protect weak and developing economies, which
comprise the vast majority of its members. Unlike in the UN where major
states have permanent seats and veto powers in the Security Council, in the
WTO, decisions are made on the basis of sovereign equality, with each
member's vote equal in weight to that of any other. There is no WTO
equivalent of the UN Security Council.
WTO decides by consensus whenever possible, otherwise,
decisions of the Ministerial Conference and the General
Council shall be taken by the majority of the votes cast,
except in cases of interpretation of the Agreement or waiver

of the obligation of a member which would require three


fourths vote. Amendments would require two thirds vote in
general. Amendments to MFN provisions and the
Amendments provision will require assent of all members.
Any member may withdraw from the Agreement upon the
expiration of six months from the date of notice of
33
withdrawals.
Hence, poor countries can protect their common interests more effectively
through the WTO than through one-on-one negotiations with developed
countries. Within the WTO, developing countries can form powerful blocs to
push their economic agenda more decisively than outside the Organization.
This is not merely a matter of practical alliances but a negotiating strategy
rooted in law. Thus, the basic principles underlying the WTO Agreement
recognize the need of developing countries like the Philippines to "share in
the growth in international tradecommensurate with the needs of their
economic development." These basic principles are found in the
34
preamble of the WTO Agreement as follows:
The Parties to this Agreement,
Recognizing that their relations in the field of trade and
economic endeavour should be conducted with a view to
raising standards of living, ensuring full employment and a
large and steadily growing volume of real income and
effective demand, and expanding the production of and trade
in goods and services, while allowing for the optimal use of
the world's resources in accordance with the objective of
sustainable development, seeking both to protect and
preserve the environment and to enhance the means for
doing so in a manner consistent with their respective needs
and concerns at different levels of economic development,
Recognizing further that there is need for positive efforts
designed to ensure that developing countries, and especially
the least developed among them, secure a share in the
growth in international trade commensurate with the needs
of their economic development,
Being desirous of contributing to these objectives by entering
into reciprocal and mutually advantageous arrangements
directed to the substantial reduction of tariffs and other
barriers to trade and to the elimination of discriminatory
treatment in international trade relations,

Resolved, therefore, to develop an integrated, more viable


and durable multilateral trading system encompassing the
General Agreement on Tariffs and Trade, the results of past
trade liberalization efforts, and all of the results of the
Uruguay Round of Multilateral Trade Negotiations,
Determined to preserve the basic principles and to further
the objectives underlying this multilateral trading system, . . .
(emphasis supplied.)
Specific
WTO
Protect Developing Countries

Provisos

So too, the Solicitor General points out that pursuant to and consistent with
the foregoing basic principles, the WTO Agreement grants developing
countries a more lenient treatment, giving their domestic industries some
protection from the rush of foreign competition. Thus, with respect to tariffs in
general, preferential treatment is given to developing countries in terms of
the amount of tariff reduction and the period within which the reduction is to
be spread out. Specifically, GATT requires an average tariff reduction rate of
36% for developed countries to be effected within a period of six (6)
years while developing countries including the Philippines are required
to effect an average tariff reduction of only 24% within ten (10) years.
In respect to domestic subsidy, GATT requires developed countries to
reduce domestic support to agricultural products by 20% over six (6) years,
as compared to only 13% for developing countries to be effected within ten
(10) years.
In regard to export subsidy for agricultural products, GATT requires
developed countries to reduce their budgetary outlays for export subsidy by
36% and export volumes receiving export subsidy by 21% within a period of
six (6) years. For developing countries, however, the reduction rate is
only two-thirds of that prescribed for developed countries and a longer period
of ten (10) years within which to effect such reduction.
Moreover, GATT itself has provided built-in protection from unfair foreign
competition and trade practices including anti-dumping measures,
countervailing measures and safeguards against import surges. Where local
businesses are jeopardized by unfair foreign competition, the Philippines can
avail of these measures. There is hardly therefore any basis for the
statement that under the WTO, local industries and enterprises will all be
wiped out and that Filipinos will be deprived of control of the economy. Quite
the contrary, the weaker situations of developing nations like the Philippines
have been taken into account; thus, there would be no basis to say that in

joining the WTO, the respondents have gravely abused their discretion. True,
they have made a bold decision to steer the ship of state into the yet
uncharted sea of economic liberalization. But such decision cannot be set
aside on the ground of grave abuse of discretion, simply because we
disagree with it or simply because we believe only in other economic policies.
As earlier stated, the Court in taking jurisdiction of this case will not pass
upon the advantages and disadvantages of trade liberalization as an
economic policy. It will only perform its constitutional duty of determining
whether the Senate committed grave abuse of discretion.
Constitution
Rule Out Foreign Competition

Does

Not

Furthermore, the constitutional policy of a "self-reliant and independent


35
national economy" does not necessarily rule out the entry of foreign
investments, goods and services. It contemplates neither "economic
seclusion" nor "mendicancy in the international community." As explained by
Constitutional Commissioner Bernardo Villegas, sponsor of this constitutional
policy:
Economic self-reliance is a primary objective of a developing
country that is keenly aware of overdependence on external
assistance for even its most basic needs. It does not mean
autarky or economic seclusion; rather, it means avoiding
mendicancy in the international community. Independence
refers to the freedom from undue foreign control of the
national economy, especially in such strategic industries as
in the development of natural resources and public
36
utilities.
The WTO reliance on "most favored nation," "national treatment," and "trade
without discrimination" cannot be struck down as unconstitutional as in fact
they are rules of equality and reciprocity that apply to all WTO members.
Aside from envisioning a trade policy based on "equality and
37
reciprocity," the fundamental law encourages industries that are
"competitive in both domestic and foreign markets," thereby demonstrating a
clear policy against a sheltered domestic trade environment, but one in favor
of the gradual development of robust industries that can compete with the
best in the foreign markets. Indeed, Filipino managers and Filipino
enterprises have shown capability and tenacity to compete internationally.
And given a free trade environment, Filipino entrepreneurs and managers in
Hongkong have demonstrated the Filipino capacity to grow and to prosper
against the best offered under a policy of laissez faire.

Constitution
Not Industries or Enterprises

Favors

Consumers,

The Constitution has not really shown any unbalanced bias in favor of any
business or enterprise, nor does it contain any specific pronouncement that
Filipino companies should be pampered with a total proscription of foreign
competition. On the other hand, respondents claim that WTO/GATT aims to
make available to the Filipino consumer the best goods and services
obtainable anywhere in the world at the most reasonable prices.
Consequently, the question boils down to whether WTO/GATT will favor the
general welfare of the public at large.
Will adherence to the WTO treaty bring this ideal (of favoring the general
welfare) to reality?
Will WTO/GATT succeed in promoting the Filipinos' general welfare because
it will as promised by its promoters expand the country's exports and
generate more employment?
Will it bring more prosperity, employment, purchasing power and quality
products at the most reasonable rates to the Filipino public?
The responses to these questions involve "judgment calls" by our policy
makers, for which they are answerable to our people during appropriate
electoral exercises. Such questions and the answers thereto are not subject
to judicial pronouncements based on grave abuse of discretion.
Constitution
Designed
Future Events and Contingencies

to

Meet

No doubt, the WTO Agreement was not yet in existence when the
Constitution was drafted and ratified in 1987. That does not mean however
that the Charter is necessarily flawed in the sense that its framers might not
have anticipated the advent of a borderless world of business. By the same
token, the United Nations was not yet in existence when the 1935
Constitution became effective. Did that necessarily mean that the then
Constitution might not have contemplated a diminution of the absoluteness of
sovereignty when the Philippines signed the UN Charter, thereby effectively
surrendering part of its control over its foreign relations to the decisions of
various UN organs like the Security Council?
It is not difficult to answer this question. Constitutions are designed to meet
not only the vagaries of contemporary events. They should be interpreted to
cover even future and unknown circumstances. It is to the credit of its
drafters that a Constitution can withstand the assaults of bigots and infidels

but at the same time bend with the refreshing winds of change necessitated
by unfolding events. As one eminent political law writer and respected
38
jurist explains:
The Constitution must be quintessential rather than
superficial, the root and not the blossom, the base and
frame-work only of the edifice that is yet to rise. It is but the
core of the dream that must take shape, not in a twinkling by
mandate of our delegates, but slowly "in the crucible of
Filipino minds and hearts," where it will in time develop its
sinews and gradually gather its strength and finally achieve
its substance. In fine, the Constitution cannot, like the
goddess Athena, rise full-grown from the brow of the
Constitutional Convention, nor can it conjure by mere fiat an
instant Utopia. It must grow with the society it seeks to restructure and march apace with the progress of the race,
drawing from the vicissitudes of history the dynamism and
vitality that will keep it, far from becoming a petrified rule, a
pulsing, living law attuned to the heartbeat of the nation.
Third Issue: The WTO Agreement and Legislative Power
The WTO Agreement provides that "(e)ach Member shall ensure the
conformity of its laws, regulations and administrative procedures with its
39
obligations as provided in the annexed Agreements." Petitioners maintain
that this undertaking "unduly limits, restricts and impairs Philippine
sovereignty, specifically the legislative power which under Sec. 2, Article VI
of the 1987 Philippine Constitution is vested in the Congress of the
Philippines. It is an assault on the sovereign powers of the Philippines
because this means that Congress could not pass legislation that will be
good for our national interest and general welfare if such legislation will not
conform with the WTO Agreement, which not only relates to the trade in
goods . . . but also to the flow of investments and money . . . as well as to a
40
whole slew of agreements on socio-cultural matters . . .
More specifically, petitioners claim that said WTO proviso derogates from the
41
power to tax, which is lodged in the Congress. And while the Constitution
allows Congress to authorize the President to fix tariff rates, import and
export quotas, tonnage and wharfage dues, and other duties or imposts,
such authority is subject to "specified limits and . . . such limitations and
42
restrictions" as Congress may provide, as in fact it did under Sec. 401 of
the Tariff and Customs Code.
Sovereignty
International Law and Treaties

Limited

by

This Court notes and appreciates the ferocity and passion by which
petitioners stressed their arguments on this issue. However, while
sovereignty has traditionally been deemed absolute and all-encompassing on
the domestic level, it is however subject to restrictions and limitations
voluntarily agreed to by the Philippines, expressly or impliedly, as a member
of the family of nations. Unquestionably, the Constitution did not envision a
hermit-type isolation of the country from the rest of the world. In its
Declaration of Principles and State Policies, the Constitution "adopts the
generally accepted principles of international law as part of the law of the
land, and adheres to the policy of peace, equality, justice, freedom,
43
cooperation and amity, with all nations." By the doctrine of incorporation,
the country is bound by generally accepted principles of international law,
44
which are considered to be automatically part of our own laws. One of the
oldest and most fundamental rules in international law is pacta sunt
servanda international agreements must be performed in good faith. "A
treaty engagement is not a mere moral obligation but creates a legally
binding obligation on the parties . . . A state which has contracted valid
international obligations is bound to make in its legislations such
modifications as may be necessary to ensure the fulfillment of the obligations
45
undertaken."
By their inherent nature, treaties really limit or restrict the absoluteness of
sovereignty. By their voluntary act, nations may surrender some aspects of
their state power in exchange for greater benefits granted by or derived from
a convention or pact. After all, states, like individuals, live with coequals, and
in pursuit of mutually covenanted objectives and benefits, they also
commonly agree to limit the exercise of their otherwise absolute rights. Thus,
treaties have been used to record agreements between States concerning
such widely diverse matters as, for example, the lease of naval bases, the
sale or cession of territory, the termination of war, the regulation of conduct
of hostilities, the formation of alliances, the regulation of commercial
relations, the settling of claims, the laying down of rules governing conduct in
46
peace and the establishment of international organizations. The
sovereignty of a state therefore cannot in fact and in reality be considered
absolute. Certain restrictions enter into the picture: (1) limitations imposed by
the very nature of membership in the family of nations and (2) limitations
imposed by treaty stipulations. As aptly put by John F. Kennedy, "Today, no
nation can build its destiny alone. The age of self-sufficient nationalism is
47
over. The age of interdependence is here."
UN
Charter
Limit Sovereignty

and

Other

Treaties

Thus, when the Philippines joined the United Nations as one of its 51 charter
members, it consented to restrict its sovereign rights under the "concept of
47
sovereignty as auto-limitation." -A Under Article 2 of the UN Charter, "(a)ll

members shall give the United Nations every assistance in any action it takes
in accordance with the present Charter, and shall refrain from giving
assistance to any state against which the United Nations is taking preventive
or enforcement action." Such assistance includes payment of its
corresponding share not merely in administrative expenses but also in
expenditures for the peace-keeping operations of the organization. In its
advisory opinion of July 20, 1961, the International Court of Justice held that
money used by the United Nations Emergency Force in the Middle East and
in the Congo were "expenses of the United Nations" under Article 17,
paragraph 2, of the UN Charter. Hence, all its members must bear their
corresponding share in such expenses. In this sense, the Philippine
Congress is restricted in its power to appropriate. It is compelled to
appropriate funds whether it agrees with such peace-keeping expenses or
not. So too, under Article 105 of the said Charter, the UN and its
representatives enjoy diplomatic privileges and immunities, thereby limiting
again the exercise of sovereignty of members within their own territory.
Another example: although "sovereign equality" and "domestic jurisdiction" of
all members are set forth as underlying principles in the UN Charter, such
provisos are however subject to enforcement measures decided by the
Security Council for the maintenance of international peace and security
under Chapter VII of the Charter. A final example: under Article 103, "(i)n the
event of a conflict between the obligations of the Members of the United
Nations under the present Charter and their obligations under any other
international agreement, their obligation under the present charter shall
prevail," thus unquestionably denying the Philippines as a member the
sovereign power to make a choice as to which of conflicting obligations, if
any, to honor.
Apart from the UN Treaty, the Philippines has entered into many other
international pacts both bilateral and multilateral that involve limitations
on Philippine sovereignty. These are enumerated by the Solicitor General in
his Compliance dated October 24, 1996, as follows:
(a) Bilateral convention with the United States regarding
taxes on income, where the Philippines agreed, among
others, to exempt from tax, income received in the
Philippines by, among others, the Federal Reserve Bank of
the United States, the Export/Import Bank of the United
States, the Overseas Private Investment Corporation of the
United States. Likewise, in said convention, wages, salaries
and similar remunerations paid by the United States to its
citizens for labor and personal services performed by them
as employees or officials of the United States are exempt
from income tax by the Philippines.

(b) Bilateral agreement with Belgium, providing, among


others, for the avoidance of double taxation with respect to
taxes on income.

(k) Multilateral convention on the Law of Treaties. In this


convention, the Philippines agreed to be governed by the
Vienna Convention on the Law of Treaties.

(c) Bilateral convention with the Kingdom of Sweden for the


avoidance of double taxation.

(l) Declaration of the President of the Philippines accepting


compulsory jurisdiction of the International Court of Justice.
The International Court of Justice has jurisdiction in all legal
disputes concerning the interpretation of a treaty, any
question of international law, the existence of any fact which,
if established, would constitute a breach "of international
obligation."

(d) Bilateral convention with the French Republic for the


avoidance of double taxation.
(e) Bilateral air transport agreement with Korea where the
Philippines agreed to exempt from all customs duties,
inspection fees and other duties or taxes aircrafts of South
Korea and the regular equipment, spare parts and supplies
arriving with said aircrafts.
(f) Bilateral air service agreement with Japan, where the
Philippines agreed to exempt from customs duties, excise
taxes, inspection fees and other similar duties, taxes or
charges fuel, lubricating oils, spare parts, regular equipment,
stores on board Japanese aircrafts while on Philippine soil.
(g) Bilateral air service agreement with Belgium where the
Philippines granted Belgian air carriers the same privileges
as those granted to Japanese and Korean air carriers under
separate air service agreements.
(h) Bilateral notes with Israel for the abolition of transit and
visitor visas where the Philippines exempted Israeli nationals
from the requirement of obtaining transit or visitor visas for a
sojourn in the Philippines not exceeding 59 days.
(i) Bilateral agreement with France exempting French
nationals from the requirement of obtaining transit and visitor
visa for a sojourn not exceeding 59 days.
(j) Multilateral Convention on Special Missions, where the
Philippines agreed that premises of Special Missions in the
Philippines are inviolable and its agents can not enter said
premises without consent of the Head of Mission concerned.
Special Missions are also exempted from customs duties,
taxes and related charges.

In the foregoing treaties, the Philippines has effectively agreed to limit the
exercise of its sovereign powers of taxation, eminent domain and police
power. The underlying consideration in this partial surrender of sovereignty is
the reciprocal commitment of the other contracting states in granting the
same privilege and immunities to the Philippines, its officials and its citizens.
The same reciprocity characterizes the Philippine commitments under WTOGATT.
International treaties, whether relating to nuclear
disarmament, human rights, the environment, the law of the
sea, or trade, constrain domestic political sovereignty
through the assumption of external obligations. But unless
anarchy in international relations is preferred as an
alternative, in most cases we accept that the benefits of the
reciprocal obligations involved outweigh the costs associated
with any loss of political sovereignty. (T)rade treaties that
structure relations by reference to durable, well-defined
substantive norms and objective dispute resolution
procedures reduce the risks of larger countries exploiting
raw economic power to bully smaller countries, by subjecting
power relations to some form of legal ordering. In addition,
smaller countries typically stand to gain disproportionately
from trade liberalization. This is due to the simple fact that
liberalization will provide access to a larger set of potential
new trading relationship than in case of the larger country
48
gaining enhanced success to the smaller country's market.
The point is that, as shown by the foregoing treaties, a portion of sovereignty
may be waived without violating the Constitution, based on the rationale that
the Philippines "adopts the generally accepted principles of international law
as part of the law of the land and adheres to the policy of . . . cooperation
and amity with all nations."

Fourth Issue: The WTO Agreement and Judicial Power


Petitioners aver that paragraph 1, Article 34 of the General Provisions and
Basic Principles of the Agreement on Trade-Related Aspects of Intellectual
49
Property Rights (TRIPS) intrudes on the power of the Supreme Court to
50
promulgate rules concerning pleading, practice and procedures.
To understand the scope and meaning of Article 34, TRIPS,
fruitful to restate its full text as follows:

51

it will be

Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings in respect of the
infringement of the rights of the owner referred to in
paragraph 1 (b) of Article 28, if the subject matter of a patent
is a process for obtaining a product, the judicial authorities
shall have the authority to order the defendant to prove that
the process to obtain an identical product is different from
the patented process. Therefore, Members shall provide, in
at least one of the following circumstances, that any identical
product when produced without the consent of the patent
owner shall, in the absence of proof to the contrary, be
deemed to have been obtained by the patented process:
(a) if the product obtained by the patented
process is new;
(b) if there is a substantial likelihood that the
identical product was made by the process
and the owner of the patent has been
unable through reasonable efforts to
determine the process actually used.
2. Any Member shall be free to provide that the burden of
proof indicated in paragraph 1 shall be on the alleged
infringer only if the condition referred to in subparagraph (a)
is fulfilled or only if the condition referred to in subparagraph
(b) is fulfilled.
3. In the adduction of proof to the contrary, the legitimate
interests of defendants in protecting their manufacturing and
business secrets shall be taken into account.

From the above, a WTO Member is required to provide a rule of disputable


(not the words "in the absence of proof to the contrary") presumption that a
product shown to be identical to one produced with the use of a patented
process shall be deemed to have been obtained by the (illegal) use of the
said patented process, (1) where such product obtained by the patented
product is new, or (2) where there is "substantial likelihood" that the identical
product was made with the use of the said patented process but the owner of
the patent could not determine the exact process used in obtaining such
identical product. Hence, the "burden of proof" contemplated by Article 34
should actually be understood as the duty of the alleged patent infringer to
overthrow such presumption. Such burden, properly understood, actually
refers to the "burden of evidence" (burden of going forward) placed on the
producer of the identical (or fake) product to show that his product was
produced without the use of the patented process.
The foregoing notwithstanding, the patent owner still has the "burden of
proof" since, regardless of the presumption provided under paragraph 1 of
Article 34, such owner still has to introduce evidence of the existence of the
alleged identical product, the fact that it is "identical" to the genuine one
produced by the patented process and the fact of "newness" of the genuine
product or the fact of "substantial likelihood" that the identical product was
made by the patented process.
The foregoing should really present no problem in changing the rules of
evidence as the present law on the subject, Republic Act No. 165, as
amended, otherwise known as the Patent Law, provides a similar
presumption in cases of infringement of patented design or utility model,
thus:
Sec. 60. Infringement. Infringement of a design patent or
of a patent for utility model shall consist in unauthorized
copying of the patented design or utility model for the
purpose of trade or industry in the article or product and in
the making, using or selling of the article or product copying
the patented design or utility model. Identity or substantial
identity with the patented design or utility model shall
constitute evidence of copying. (emphasis supplied)
Moreover, it should be noted that the requirement of Article 34 to provide a
disputable presumption applies only if (1) the product obtained by the
patented process in NEW or (2) there is a substantial likelihood that the
identical product was made by the process and the process owner has not
been able through reasonable effort to determine the process used. Where
either of these two provisos does not obtain, members shall be free to
determine the appropriate method of implementing the provisions of TRIPS
within their own internal systems and processes.

By and large, the arguments adduced in connection with our disposition of


the third issue derogation of legislative power will apply to this fourth
issue also. Suffice it to say that the reciprocity clause more than justifies such
intrusion, if any actually exists. Besides, Article 34 does not contain an
unreasonable burden, consistent as it is with due process and the concept of
adversarial dispute settlement inherent in our judicial system.
So too, since the Philippine is a signatory to most international conventions
on patents, trademarks and copyrights, the adjustment in legislation and
52
rules of procedure will not be substantial.
Fifth Issue: Concurrence Only in the WTO
Not in Other Documents Contained in the Final Act

Agreement

and

Petitioners allege that the Senate concurrence in the WTO Agreement and
its annexes but not in the other documents referred to in the Final Act,
namely the Ministerial Declaration and Decisions and the Understanding on
Commitments in Financial Services is defective and insufficient and thus
constitutes abuse of discretion. They submit that such concurrence in the
WTO Agreement alone is flawed because it is in effect a rejection of the Final
Act, which in turn was the document signed by Secretary Navarro, in
representation of the Republic upon authority of the President. They contend
53
that the second letter of the President to the Senate which enumerated
what constitutes the Final Act should have been the subject of concurrence
of the Senate.
"A final act, sometimes called protocol de cloture, is an instrument which
records the winding up of the proceedings of a diplomatic conference and
usually includes a reproduction of the texts of treaties, conventions,
recommendations and other acts agreed upon and signed by the
54
plenipotentiaries attending the conference." It is not the treaty itself. It is
rather a summary of the proceedings of a protracted conference which may
have taken place over several years. The text of the "Final Act Embodying
the Results of the Uruguay Round of Multilateral Trade Negotiations" is
55
contained in just one page in Vol. I of the 36-volume Uruguay Round of
Multilateral Trade Negotiations. By signing said Final Act, Secretary Navarro
as representative of the Republic of the Philippines undertook:
(a) to submit, as appropriate, the WTO Agreement for the
consideration of their respective competent authorities with a
view to seeking approval of the Agreement in accordance
with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.

The assailed Senate Resolution No. 97 expressed concurrence in exactly


what the Final Act required from its signatories, namely, concurrence of the
Senate in the WTO Agreement.
The Ministerial Declarations and Decisions were deemed adopted without
need for ratification. They were approved by the ministers by virtue of Article
XXV: 1 of GATT which provides that representatives of the members can
meet "to give effect to those provisions of this Agreement which invoke joint
action, and generally with a view to facilitating the operation and furthering
56
the objectives of this Agreement."
The Understanding on Commitments in Financial Services also approved in
Marrakesh does not apply to the Philippines. It applies only to those 27
Members which "have indicated in their respective schedules of
commitments on standstill, elimination of monopoly, expansion of operation
of existing financial service suppliers, temporary entry of personnel, free
transfer and processing of information, and national treatment with respect to
access to payment, clearing systems and refinancing available in the normal
57
course of business."
On the other hand, the WTO Agreement itself expresses what multilateral
58
agreements are deemed included as its integral parts, as follows:
Article II
Scope of the WTO
1. The WTO shall provide the common institutional framework for the conduct of trade relations among its Members in
matters to the agreements and associated legal instruments
included in the Annexes to this Agreement.
2. The Agreements and associated legal instruments
included in Annexes 1, 2, and 3, (hereinafter referred to as
"Multilateral Agreements") are integral parts of this
Agreement, binding on all Members.
3. The Agreements and associated legal instruments
included in Annex 4 (hereinafter referred to as "Plurilateral
Trade Agreements") are also part of this Agreement for
those Members that have accepted them, and are binding on
those Members. The Plurilateral Trade Agreements do not
create either obligation or rights for Members that have not
accepted them.

4. The General Agreement on Tariffs and Trade 1994 as


specified in annex 1A (hereinafter referred to as "GATT
1994") is legally distinct from the General Agreement on
Tariffs and Trade, dated 30 October 1947, annexed to the
Final Act adopted at the conclusion of the Second Session of
the Preparatory Committee of the United Nations
Conference on Trade and Employment, as subsequently
rectified, amended or modified (hereinafter referred to as
"GATT 1947").
It should be added that the Senate was well-aware of what it was concurring
in as shown by the members' deliberation on August 25, 1994. After reading
59
the letter of President Ramos dated August 11, 1994, the senators
of the Republic minutely dissected what the Senate was concurring in, as
60
follows:
THE CHAIRMAN: Yes. Now, the question of the validity of
the submission came up in the first day hearing of this
Committee yesterday. Was the observation made by
Senator Taada that what was submitted to the Senate was
not the agreement on establishing the World Trade
Organization by the final act of the Uruguay Round which is
not the same as the agreement establishing the World Trade
Organization? And on that basis, Senator Tolentino raised a
point of order which, however, he agreed to withdraw upon
understanding that his suggestion for an alternative solution
at that time was acceptable. That suggestion was to treat the
proceedings of the Committee as being in the nature of
briefings for Senators until the question of the submission
could be clarified.

Senator Taada, please.


SEN. TAADA: Thank you, Mr. Chairman.
Based on what Secretary Romulo has read, it would now
clearly appear that what is being submitted to the Senate for
ratification is not the Final Act of the Uruguay Round, but
rather the Agreement on the World Trade Organization as
well as the Ministerial Declarations and Decisions, and the
Understanding and Commitments in Financial Services.
I am now satisfied with the wording of the new submission of
President Ramos.
SEN. TAADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Taada. Can we hear
from Senator Tolentino? And after him Senator Neptali
Gonzales and Senator Lina.
SEN. TOLENTINO, Mr. Chairman, I have not seen the new
submission actually transmitted to us but I saw the draft of
his earlier, and I think it now complies with the provisions of
the Constitution, and with the Final Act itself . The
Constitution does not require us to ratify the Final Act. It
requires us to ratify the Agreement which is now being
submitted. The Final Act itself specifies what is going to be
submitted to with the governments of the participants.
In paragraph 2 of the Final Act, we read and I quote:

And so, Secretary Romulo, in effect, is the President


submitting a new . . . is he making a new submission which
improves on the clarity of the first submission?
MR. ROMULO: Mr. Chairman, to make sure that it is clear
cut and there should be no misunderstanding, it was his
intention to clarify all matters by giving this letter.
THE CHAIRMAN: Thank you.
Can this Committee hear from Senator Taada and later on
Senator Tolentino since they were the ones that raised this
question yesterday?

By signing the present Final Act, the representatives


agree: (a) to submit as appropriate the WTO Agreement for
the consideration of the respective competent authorities
with a view to seeking approval of the Agreement in
accordance with their procedures.
In other words, it is not the Final Act that was agreed to be
submitted to the governments for ratification or acceptance
as whatever their constitutional procedures may provide but
it is the World Trade Organization Agreement. And if that is
the one that is being submitted now, I think it satisfies both
the Constitution and the Final Act itself .

Thank you, Mr. Chairman.


THE CHAIRMAN. Thank you, Senator Tolentino, May I call
on Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter
are already a matter of record. And they had been
adequately reflected in the journal of yesterday's session
and I don't see any need for repeating the same.
Now, I would consider the new submission as an act ex
abudante cautela.
THE CHAIRMAN. Thank you, Senator Gonzales. Senator
Lina, do you want to make any comment on this?
SEN. LINA. Mr. President, I agree with the observation just
made by Senator Gonzales out of the abundance of
question. Then the new submission is, I believe, stating the
obvious and therefore I have no further comment to make.
Epilogue
In praying for the nullification of the Philippine ratification of the WTO
Agreement, petitioners are invoking this Court's constitutionally imposed duty
"to determine whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction" on the part of the Senate in giving
its concurrence therein via Senate Resolution No. 97. Procedurally, a writ
of certiorari grounded on grave abuse of discretion may be issued by the
Court under Rule 65 of the Rules of Court when it is amply shown that
petitioners have no other plain, speedy and adequate remedy in the ordinary
course of law.
By grave abuse of discretion is meant such capricious and whimsical
61
exercise of judgment as is equivalent to lack of jurisdiction. Mere abuse of
discretion is not enough. It must be grave abuse of discretion as when the
power is exercised in an arbitrary or despotic manner by reason of passion or
personal hostility, and must be so patent and so gross as to amount to an
evasion of a positive duty or to a virtual refusal to perform the duty enjoined
62
or to act at all in contemplation of law. Failure on the part of the petitioner
63
to show grave abuse of discretion will result in the dismissal of the petition.
In rendering this Decision, this Court never forgets that the Senate, whose
act is under review, is one of two sovereign houses of Congress and is thus
entitled to great respect in its actions. It is itself a constitutional body

independent and coordinate, and thus its actions are presumed regular and
done in good faith. Unless convincing proof and persuasive arguments are
presented to overthrow such presumptions, this Court will resolve every
doubt in its favor. Using the foregoing well-accepted definition of grave abuse
of discretion and the presumption of regularity in the Senate's processes, this
Court cannot find any cogent reason to impute grave abuse of discretion to
the Senate's exercise of its power of concurrence in the WTO Agreement
64
granted it by Sec. 21 of Article VII of the Constitution.
It is true, as alleged by petitioners, that broad constitutional principles require
the State to develop an independent national economy effectively controlled
by Filipinos; and to protect and/or prefer Filipino labor, products, domestic
materials and locally produced goods. But it is equally true that such
principles while serving as judicial and legislative guides are not in
themselves sources of causes of action. Moreover, there are other equally
fundamental constitutional principles relied upon by the Senate which
mandate the pursuit of a "trade policy that serves the general welfare and
utilizes all forms and arrangements of exchange on the basis of equality and
reciprocity" and the promotion of industries "which are competitive in both
domestic and foreign markets," thereby justifying its acceptance of said
treaty. So too, the alleged impairment of sovereignty in the exercise of
legislative and judicial powers is balanced by the adoption of the generally
accepted principles of international law as part of the law of the land and the
adherence of the Constitution to the policy of cooperation and amity with all
nations.
That the Senate, after deliberation and voting, voluntarily and overwhelmingly
gave its consent to the WTO Agreement thereby making it "a part of the law
of the land" is a legitimate exercise of its sovereign duty and power. We find
no "patent and gross" arbitrariness or despotism "by reason of passion or
personal hostility" in such exercise. It is not impossible to surmise that this
Court, or at least some of its members, may even agree with petitioners that
it is more advantageous to the national interest to strike down Senate
Resolution No. 97. But that is not a legal reason to attribute grave abuse of
discretion to the Senate and to nullify its decision. To do so would constitute
grave abuse in the exercise of our own judicial power and duty. Ineludably,
what the Senate did was a valid exercise of its authority. As to whether such
exercise was wise, beneficial or viable is outside the realm of judicial inquiry
and review. That is a matter between the elected policy makers and the
people. As to whether the nation should join the worldwide march toward
trade liberalization and economic globalization is a matter that our people
should determine in electing their policy makers. After all, the WTO
Agreement allows withdrawal of membership, should this be the political
desire of a member.

The eminent futurist John Naisbitt, author of the best seller Megatrends,
65
predicts an Asian Renaissance where "the East will become the dominant
region of the world economically, politically and culturally in the next century."
He refers to the "free market" espoused by WTO as the "catalyst" in this
coming Asian ascendancy. There are at present about 31 countries including
China, Russia and Saudi Arabia negotiating for membership in the WTO.
Notwithstanding objections against possible limitations on national
sovereignty, the WTO remains as the only viable structure for multilateral
trading and the veritable forum for the development of international trade law.
The alternative to WTO is isolation, stagnation, if not economic selfdestruction. Duly enriched with original membership, keenly aware of the
advantages and disadvantages of globalization with its on-line experience,
and endowed with a vision of the future, the Philippines now straddles the
crossroads of an international strategy for economic prosperity and stability
in the new millennium. Let the people, through their duly authorized elected
officers, make their free choice.
WHEREFORE, the petition is DISMISSED for lack of merit.
G.R. No. L-2662

March 26, 1949

SHIGENORI
KURODA, petitioner,
vs.
Major General RAFAEL JALANDONI, Brigadier General CALIXTO
DUQUE,
Colonel
MARGARITO
TORALBA,
Colonel
IRENEO
BUENCONSEJO, Colonel PEDRO TABUENA, Major FEDERICO
ARANAS, MELVILLE S. HUSSEY and ROBERT PORT, respondents.
Pedro Serran, Jose G. Lukban, and Liberato B. Cinco for petitioner.
Fred Ruiz Castro Federico Arenas Mariano Yengco, Jr., Ricardo A. Arcilla
and S. Melville Hussey for respondents.
MORAN, C.J.:
Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial
Army and Commanding General of the Japanese Imperial Forces in The
Philippines during a period covering 19433 and 19444 who is now charged
before a military Commission convened by the Chief of Staff of the Armed
forces of the Philippines with having unlawfully disregarded and failed "to
discharge his duties as such command, permitting them to commit brutal
atrocities and other high crimes against noncombatant civilians and prisoners
of the Imperial Japanese Forces in violation of the laws and customs of war"
comes before this Court seeking to establish the illegality of Executive
Order No. 68 of the President of the Philippines: to enjoin and prohibit
respondents Melville S. Hussey and Robert Port from participating in the

prosecution of petitioner's case before the Military Commission and to


permanently prohibit respondents from proceeding with the case of
petitioners.
In support of his case petitioner tenders the following principal arguments.
First. "That Executive Order No. 68 is illegal on the ground that it violates
not only the provision of our constitutional law but also our local laws to say
nothing of the fact (that) the Philippines is not a signatory nor an adherent to
the Hague Convention on Rules and Regulations covering Land Warfare and
therefore petitioners is charged of 'crimes' not based on law, national and
international." Hence petitioner argues "That in view off the fact that this
commission has been empanelled by virtue of an unconstitutional law an
illegal order this commission is without jurisdiction to try herein petitioner."
Second. That the participation in the prosecution of the case against
petitioner before the Commission in behalf of the United State of America of
attorneys Melville Hussey and Robert Port who are not attorneys authorized
by the Supreme Court to practice law in the Philippines is a diminution of our
personality as an independent state and their appointment as prosecutor are
a violation of our Constitution for the reason that they are not qualified to
practice law in the Philippines.
Third. That Attorneys Hussey and Port have no personality as prosecution
the United State not being a party in interest in the case.
Executive Order No. 68, establishing a National War Crimes Office
prescribing rule and regulation governing the trial of accused war criminals,
was issued by the President of the Philippines on the 29th days of July, 1947
This Court holds that this order is valid and constitutional. Article 2 of our
Constitution provides in its section 3, that
The Philippines renounces war as an instrument of national policy
and adopts the generally accepted principles of international law as
part of the of the nation.
In accordance with the generally accepted principle of international law of the
present day including the Hague Convention the Geneva Convention and
significant precedents of international jurisprudence established by the
United Nation all those person military or civilian who have been guilty of
planning preparing or waging a war of aggression and of the commission of
crimes and offenses consequential and incidental thereto in violation of the
laws and customs of war, of humanity and civilization are held accountable
therefor. Consequently in the promulgation and enforcement of Execution
Order No. 68 the President of the Philippines has acted in conformity with the

generally accepted and policies of international law which are part of the our
Constitution.
The promulgation of said executive order is an exercise by the President of
his power as Commander in chief of all our armed forces as upheld by this
Court in the case of Yamashita vs. Styer (L-129, 42 Off. Gaz., 664) 1 when
we said
War is not ended simply because hostilities have ceased. After
cessation of armed hostilities incident of war may remain pending
which should be disposed of as in time of war. An importance
incident to a conduct of war is the adoption of measure by the
military command not only to repel and defeat the enemies but to
seize and subject to disciplinary measure those enemies who in their
attempt to thwart or impede our military effort have violated the law
of war. (Ex parte Quirin 317 U.S., 1; 63 Sup. Ct., 2.) Indeed the
power to create a military commission for the trial and punishment of
war criminals is an aspect of waging war. And in the language of a
writer a military commission has jurisdiction so long as a technical
state of war continues. This includes the period of an armistice or
military occupation up to the effective of a treaty of peace and may
extend beyond by treaty agreement. (Cowles Trial of War Criminals
by Military Tribunals, America Bar Association Journal June, 1944.)
Consequently, the President as Commander in Chief is fully empowered to
consummate this unfinished aspect of war namely the trial and punishment of
war criminal through the issuance and enforcement of Executive Order No.
68.
Petitioner argues that respondent Military Commission has no Jurisdiction to
try petitioner for acts committed in violation of the Hague Convention and the
Geneva Convention because the Philippines is not a signatory to the first and
signed the second only in 1947. It cannot be denied that the rules and
regulation of the Hague and Geneva conventions form, part of and are wholly
based on the generally accepted principals of international law. In facts these
rules and principles were accepted by the two belligerent nation the United
State and Japan who were signatories to the two Convention, Such rule and
principles therefore form part of the law of our nation even if the Philippines
was not a signatory to the conventions embodying them for our Constitution
has been deliberately general and extensive in its scope and is not confined
to the recognition of rule and principle of international law as continued inn
treaties to which our government may have been or shall be a signatory.
Furthermore when the crimes charged against petitioner were allegedly
committed the Philippines was under the sovereignty of United States and

thus we were equally bound together with the United States and with Japan
to the right and obligation contained in the treaties between the belligerent
countries. These rights and obligation were not erased by our assumption of
full sovereignty. If at all our emergency as a free state entitles us to enforce
the right on our own of trying and punishing those who committed crimes
against crimes against our people. In this connection it is well to remember
what we have said in the case of Laurel vs. Misa (76 Phil., 372):
. . . The change of our form government from Commonwealth to
Republic does not affect the prosecution of those charged with the
crime of treason committed during then Commonwealth because it is
an offense against the same sovereign people. . . .
By the same token war crimes committed against our people and our
government while we were a Commonwealth are triable and punishable by
our present Republic.
Petitioner challenges the participation of two American attorneys namely
Melville S. Hussey and Robert Port in the prosecution of his case on the
ground that said attorney's are not qualified to practice law in Philippines in
accordance with our Rules of court and the appointment of said attorneys as
prosecutors is violative of our national sovereignty.
In the first place respondent Military Commission is a special military tribunal
governed by a special law and not by the Rules of court which govern
ordinary civil court. It has already been shown that Executive Order No. 68
which provides for the organization of such military commission is a valid and
constitutional law. There is nothing in said executive order which requires
that counsel appearing before said commission must be attorneys qualified
to practice law in the Philippines in accordance with the Rules of Court. In
facts it is common in military tribunals that counsel for the parties are usually
military personnel who are neither attorneys nor even possessed of legal
training.
Secondly the appointment of the two American attorneys is not violative of
our nation sovereignty. It is only fair and proper that United States, which has
submitted the vindication of crimes against her government and her people to
a tribunal of our nation should be allowed representation in the trial of those
very crimes. If there has been any relinquishment of sovereignty it has not
been by our government but by the United State Government which has
yielded to us the trial and punishment of her enemies. The least that we
could do in the spirit of comity is to allow them representation in said trials.
Alleging that the United State is not a party in interest in the case petitioner
challenges the personality of attorneys Hussey and Port as prosecutors. It is

of common knowledge that the United State and its people have been
equally if not more greatly aggrieved by the crimes with which petitioner
stands charged before the Military Commission. It can be considered a
privilege for our Republic that a leader nation should submit the vindication of
the honor of its citizens and its government to a military tribunal of our
country.

survival and welfare, into a concrete and tangible measures designed to free
the national retailer from the competing dominance of the alien, so that the
country and the nation may be free from a supposed economic dependence
and bondage. Do the facts and circumstances justify the enactment?

The Military Commission having been convened by virtue of a valid law with
jurisdiction over the crimes charged which fall under the provisions of
Executive Order No. 68, and having said petitioner in its custody, this Court
will not interfere with the due process of such Military commission.

Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In
effect it nationalizes the retail trade business. The main provisions of the Act
are: (1) a prohibition against persons, not citizens of the Philippines, and
against associations, partnerships, or corporations the capital of which are
not wholly owned by citizens of the Philippines, from engaging directly or
indirectly in the retail trade; (2) an exception from the above prohibition in
favor of aliens actually engaged in said business on May 15, 1954, who are
allowed to continue to engaged therein, unless their licenses are forfeited in
accordance with the law, until their death or voluntary retirement in case of
natural persons, and for ten years after the approval of the Act or until the
expiration of term in case of juridical persons; (3) an exception therefrom in
favor of citizens and juridical entities of the United States; (4) a provision for
the forfeiture of licenses (to engage in the retail business) for violation of the
laws on nationalization, control weights and measures and labor and other
laws relating to trade, commerce and industry; (5) a prohibition against the
establishment or opening by aliens actually engaged in the retail business of
additional stores or branches of retail business, (6) a provision requiring
aliens actually engaged in the retail business to present for registration with
the proper authorities a verified statement concerning their businesses,
giving, among other matters, the nature of the business, their assets and
liabilities and their offices and principal offices of judicial entities; and (7) a
provision allowing the heirs of aliens now engaged in the retail business who
die, to continue such business for a period of six months for purposes of
liquidation.

G.R. No. L-7995

May 31, 1957

LAO H. ICHONG, in his own behalf and in behalf of other alien


residents, corporations and partnerships adversely affected. by
Republic
Act
No.
1180, petitioner,
vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO
SARMIENTO, City Treasurer of Manila,respondents.
Ozaeta, Lichauco and Picazo and Sycip, Quisumbing, Salazar and
Associates
for
petitioner.
Office of the Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de
Castro
for
respondent
Secretary
of
Finance.
City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S. Serrano for
respondent
City
Treasurer.
Dionisio
Reyes
as
Amicus
Curiae.
Marcial
G.
Mendiola
as
Amicus
Curiae.
Emiliano R. Navarro as Amicus Curiae.
LABRADOR, J.:
I. The case and issue, in general
This Court has before it the delicate task of passing upon the validity and
constitutionality of a legislative enactment, fundamental and far-reaching in
significance. The enactment poses questions of due process, police power
and equal protection of the laws. It also poses an important issue of fact, that
is whether the conditions which the disputed law purports to remedy really or
actually exist. Admittedly springing from a deep, militant, and positive
nationalistic impulse, the law purports to protect citizen and country from the
alien retailer. Through it, and within the field of economy it regulates,
Congress attempts to translate national aspirations for economic
independence and national security, rooted in the drive and urge for national

II. Pertinent provisions of Republic Act No. 1180

III. Grounds upon which petition is based-Answer thereto


Petitioner, for and in his own behalf and on behalf of other alien residents
corporations and partnerships adversely affected by the provisions of
Republic Act. No. 1180, brought this action to obtain a judicial declaration
that said Act is unconstitutional, and to enjoin the Secretary of Finance and
all other persons acting under him, particularly city and municipal treasurers,
from enforcing its provisions. Petitioner attacks the constitutionality of the
Act, contending that: (1) it denies to alien residents the equal protection of
the laws and deprives of their liberty and property without due process of law
; (2) the subject of the Act is not expressed or comprehended in the title
thereof; (3) the Act violates international and treaty obligations of the
Republic of the Philippines; (4) the provisions of the Act against the
transmission by aliens of their retail business thru hereditary succession, and

those requiring 100% Filipino capitalization for a corporation or entity to


entitle it to engage in the retail business, violate the spirit of Sections 1 and 5,
Article XIII and Section 8 of Article XIV of the Constitution.

the scope or extent of the police power of the State; what they do is to set
forth the limitations thereof. The most important of these are the due process
clause and the equal protection clause.

In answer, the Solicitor-General and the Fiscal of the City of Manila contend
that: (1) the Act was passed in the valid exercise of the police power of the
State, which exercise is authorized in the Constitution in the interest of
national economic survival; (2) the Act has only one subject embraced in the
title; (3) no treaty or international obligations are infringed; (4) as regards
hereditary succession, only the form is affected but the value of the property
is not impaired, and the institution of inheritance is only of statutory origin.

b. Limitations on police power.

IV. Preliminary consideration of legal principles involved


a. The police power.
There is no question that the Act was approved in the exercise of the police
power, but petitioner claims that its exercise in this instance is attended by a
violation of the constitutional requirements of due process and equal
protection of the laws. But before proceeding to the consideration and
resolution of the ultimate issue involved, it would be well to bear in mind
certain basic and fundamental, albeit preliminary, considerations in the
determination of the ever recurrent conflict between police power and the
guarantees of due process and equal protection of the laws. What is the
scope of police power, and how are the due process and equal protection
clauses related to it? What is the province and power of the legislature, and
what is the function and duty of the courts? These consideration must be
clearly and correctly understood that their application to the facts of the case
may be brought forth with clarity and the issue accordingly resolved.
It has been said the police power is so far - reaching in scope, that it has
become almost impossible to limit its sweep. As it derives its existence from
the very existence of the State itself, it does not need to be expressed or
defined in its scope; it is said to be co-extensive with self-protection and
survival, and as such it is the most positive and active of all governmental
processes, the most essential, insistent and illimitable. Especially is it so
under a modern democratic framework where the demands of society and of
nations have multiplied to almost unimaginable proportions; the field and
scope of police power has become almost boundless, just as the fields of
public interest and public welfare have become almost all-embracing and
have transcended human foresight. Otherwise stated, as we cannot foresee
the needs and demands of public interest and welfare in this constantly
changing and progressive world, so we cannot delimit beforehand the extent
or scope of police power by which and through which the State seeks to
attain or achieve interest or welfare. So it is that Constitutions do not define

The basic limitations of due process and equal protection are found in the
following provisions of our Constitution:
SECTION 1.(1) No person shall be deprived of life, liberty or property
without due process of law, nor any person be denied the equal
protection of the laws. (Article III, Phil. Constitution)
These constitutional guarantees which embody the essence of individual
liberty and freedom in democracies, are not limited to citizens alone but are
admittedly universal in their application, without regard to any differences of
race, of color, or of nationality. (Yick Wo vs. Hopkins, 30, L. ed. 220, 226.)
c. The, equal protection clause.
The equal protection of the law clause is against undue favor and individual
or class privilege, as well as hostile discrimination or the oppression of
inequality. It is not intended to prohibit legislation, which is limited either in
the object to which it is directed or by territory within which is to operate. It
does not demand absolute equality among residents; it merely requires that
all persons shall be treated alike, under like circumstances and
conditions both as to privileges conferred and liabilities enforced. The equal
protection clause is not infringed by legislation which applies only to those
persons falling within a specified class, if it applies alike to all persons within
such class, and reasonable grounds exists for making a distinction between
those who fall within such class and those who do not. (2 Cooley,
Constitutional Limitations, 824-825.)
d. The due process clause.
The due process clause has to do with the reasonableness of legislation
enacted in pursuance of the police power. Is there public interest, a public
purpose; is public welfare involved? Is the Act reasonably necessary for the
accomplishment of the legislature's purpose; is it not unreasonable, arbitrary
or oppressive? Is there sufficient foundation or reason in connection with the
matter involved; or has there not been a capricious use of the legislative
power? Can the aims conceived be achieved by the means used, or is it not
merely an unjustified interference with private interest? These are the
questions that we ask when the due process test is applied.

The conflict, therefore, between police power and the guarantees of due
process and equal protection of the laws is more apparent than real. Properly
related, the power and the guarantees are supposed to coexist. The
balancing is the essence or, shall it be said, the indispensable means for the
attainment of legitimate aspirations of any democratic society. There can be
no absolute power, whoever exercise it, for that would be tyranny. Yet there
can neither be absolute liberty, for that would mean license and anarchy. So
the State can deprive persons of life, liberty and property, provided there is
due process of law; and persons may be classified into classes and groups,
provided everyone is given the equal protection of the law. The test or
standard, as always, is reason. The police power legislation must be firmly
grounded on public interest and welfare, and a reasonable relation must exist
between purposes and means. And if distinction and classification has been
made, there must be a reasonable basis for said distinction.
e. Legislative discretion not subject to judicial review.
Now, in this matter of equitable balancing, what is the proper place and role
of the courts? It must not be overlooked, in the first place, that the legislature,
which is the constitutional repository of police power and exercises the
prerogative of determining the policy of the State, is by force of
circumstances primarily the judge of necessity, adequacy or reasonableness
and wisdom, of any law promulgated in the exercise of the police power, or of
the measures adopted to implement the public policy or to achieve public
interest. On the other hand, courts, although zealous guardians of individual
liberty and right, have nevertheless evinced a reluctance to interfere with the
exercise of the legislative prerogative. They have done so early where there
has been a clear, patent or palpable arbitrary and unreasonable abuse of the
legislative prerogative. Moreover, courts are not supposed to override
legitimate policy, and courts never inquire into the wisdom of the law.
V. Economic problems sought to be remedied
With the above considerations in mind, we will now proceed to delve directly
into the issue involved. If the disputed legislation were merely a regulation,
as its title indicates, there would be no question that it falls within the
legitimate scope of legislative power. But it goes further and prohibits a group
of residents, the aliens, from engaging therein. The problem becomes more
complex because its subject is a common, trade or occupation, as old as
society itself, which from the immemorial has always been open to residents,
irrespective of race, color or citizenship.
a. Importance of retail trade in the economy of the nation.

In a primitive economy where families produce all that they consume and
consume all that they produce, the dealer, of course, is unknown. But as
group life develops and families begin to live in communities producing more
than what they consume and needing an infinite number of things they do not
produce, the dealer comes into existence. As villages develop into big
communities and specialization in production begins, the dealer's importance
is enhanced. Under modern conditions and standards of living, in which
man's needs have multiplied and diversified to unlimited extents and
proportions, the retailer comes as essential as the producer, because thru
him the infinite variety of articles, goods and needed for daily life are placed
within the easy reach of consumers. Retail dealers perform the functions of
capillaries in the human body, thru which all the needed food and supplies
are ministered to members of the communities comprising the nation.
There cannot be any question about the importance of the retailer in the life
of the community. He ministers to the resident's daily needs, food in all its
increasing forms, and the various little gadgets and things needed for home
and daily life. He provides his customers around his store with the rice or
corn, the fish, the salt, the vinegar, the spices needed for the daily cooking.
He has cloths to sell, even the needle and the thread to sew them or darn the
clothes that wear out. The retailer, therefore, from the lowly peddler, the
owner of a small sari-sari store, to the operator of a department store or, a
supermarket is so much a part of day-to-day existence.
b. The alien retailer's trait.
The alien retailer must have started plying his trades in this country in the
bigger centers of population (Time there was when he was unknown in
provincial towns and villages). Slowly but gradually be invaded towns and
villages; now he predominates in the cities and big centers of population. He
even pioneers, in far away nooks where the beginnings of community life
appear, ministering to the daily needs of the residents and purchasing their
agricultural produce for sale in the towns. It is an undeniable fact that in
many communities the alien has replaced the native retailer. He has shown
in this trade, industry without limit, and the patience and forbearance of a
slave.
Derogatory epithets are hurled at him, but he laughs these off without
murmur; insults of ill-bred and insolent neighbors and customers are made in
his face, but he heeds them not, and he forgets and forgives. The community
takes note of him, as he appears to be harmless and extremely useful.
c. Alleged alien control and dominance.

There is a general feeling on the part of the public, which appears to be true
to fact, about the controlling and dominant position that the alien retailer
holds in the nation's economy. Food and other essentials, clothing, almost all
articles of daily life reach the residents mostly through him. In big cities and
centers of population he has acquired not only predominance, but apparent
control over distribution of almost all kinds of goods, such as lumber,
hardware, textiles, groceries, drugs, sugar, flour, garlic, and scores of other
goods and articles. And were it not for some national corporations like the
Naric, the Namarco, the Facomas and the Acefa, his control over principal
foods and products would easily become full and complete.

Others
...........

354

8,761,260

4,927,168

Filipino
..........

113,631

213,342,264 67.30

467,161,667 6

Chinese
..........

12,087

93,155,459

29.38

294,894,227 3

Others
..........

422

10,514,675

3.32

9,995,402

Filipino
..........

113,659

213,451,602 60.89

462,532,901 5

Chinese
..........

16,248

125,223,336 35.72

392,414,875 4

Others
..........

486

12,056,365

10,078,364

Filipino
.........

119,352

224,053,620 61.09

466,058,052 5

Chinese
..........

17,429

134,325,303 36.60

404,481,384 4

Others
..........

347

8,614,025

7,645,327

.49

3.39

2.31

Per
cent
Distribution

1941:
Filipino
..........

106,671

200,323,138 55.82

174,181,924 51.74

Chinese
...........

15,356

118,348,692 32.98

148,813,239 44.21

Others
............

1,646

40,187,090

13,630,239

Filipino
..........

111,107

11.20

205,701,134 4

AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT
Year
Nationality

Item
Assets
(Pesos)

Gross
Sales
(Pesos)

Filipino .............................................

1,878

1,633

Chinese ..............................................

7,707

9,691

and

Retailer's

4.05
1941:

1947:
208,658,946 65.05

1951:

Gross Sales
Per
cent
Pesos
Distribution

106,156,218 33.56

1949:

The best evidence are the statistics on the retail trade, which put down the
figures in black and white. Between the constitutional convention year
(1935), when the fear of alien domination and control of the retail trade
already filled the minds of our leaders with fears and misgivings, and the year
of the enactment of the nationalization of the retail trade act (1954), official
statistics unmistakably point out to the ever-increasing dominance and
control by the alien of the retail trade, as witness the following tables:

Year and Retailers No.Pesos


Nationality
Establishments

13,774

1948: (Census)

Petitioner denies that there is alien predominance and control in the retail
trade. In one breath it is said that the fear is unfounded and the threat is
imagined; in another, it is charged that the law is merely the result of
radicalism and pure and unabashed nationalism. Alienage, it is said, is not an
element of control; also so many unmanageable factors in the retail business
make control virtually impossible. The first argument which brings up an
issue of fact merits serious consideration. The others are matters of opinion
within the exclusive competence of the legislature and beyond our
prerogative to pass upon and decide.

Assets

Chinese
...........

279,583,333 57.03

Others ...............................................

24,415

8,281

Filipino .............................................

1,878

2,516

Chinese ...........................................

7,707

14,934

Others ..............................................

24,749

13,919

1947:

1948:

(Census)
Filipino .............................................

1,878

4,111

Chinese .............................................

7,707

24,398

Others ..............................................

24,916

23,686

Filipino .............................................

1,878

4,069

Chinese ..............................................

7,707

24,152

Others ..............................................

24,807

20,737

Filipino .............................................

1,877

3,905

Chinese .............................................

7,707

33,207

Others ...............................................

24,824

22,033

1949:

1951:

(Estimated Assets and Gross Sales of Retail Establishments, By


Year and Nationality of Owners, Benchmark: 1948 Census, issued
by the Bureau of Census and Statistics, Department of Commerce
and Industry; pp. 18-19 of Answer.)
The above statistics do not include corporations and partnerships, while the
figures on Filipino establishments already include mere market vendors,
whose capital is necessarily small..
The above figures reveal that in percentage distribution of assests and gross
sales, alien participation has steadily increased during the years. It is true, of
course, that Filipinos have the edge in the number of retailers, but aliens

more than make up for the numerical gap through their assests and gross
sales which average between six and seven times those of the very many
Filipino retailers. Numbers in retailers, here, do not imply superiority; the
alien invests more capital, buys and sells six to seven times more, and gains
much more. The same official report, pointing out to the known
predominance of foreign elements in the retail trade, remarks that the Filipino
retailers were largely engaged in minor retailer enterprises. As observed by
respondents, the native investment is thinly spread, and the Filipino retailer is
practically helpless in matters of capital, credit, price and supply.
d. Alien control and threat, subject of apprehension in Constitutional
convention.
It is this domination and control, which we believe has been sufficiently
shown to exist, that is the legislature's target in the enactment of the disputed
nationalization would never have been adopted. The framers of our
Constitution also believed in the existence of this alien dominance and
control when they approved a resolution categorically declaring among other
things, that "it is the sense of the Convention that the public interest requires
the nationalization of the retail trade; . . . ." (II Aruego, The Framing of the
Philippine Constitution, 662-663, quoted on page 67 of Petitioner.) That was
twenty-two years ago; and the events since then have not been either
pleasant or comforting. Dean Sinco of the University of the Philippines
College of Law, commenting on the patrimony clause of the Preamble opines
that the fathers of our Constitution were merely translating the general
preoccupation of Filipinos "of the dangers from alien interests that had
already brought under their control the commercial and other economic
activities of the country" (Sinco, Phil. Political Law, 10th ed., p. 114); and
analyzing the concern of the members of the constitutional convention for the
economic life of the citizens, in connection with the nationalistic provisions of
the Constitution, he says:
But there has been a general feeling that alien dominance over the
economic life of the country is not desirable and that if such a
situation should remain, political independence alone is no
guarantee to national stability and strength. Filipino private capital is
not big enough to wrest from alien hands the control of the national
economy. Moreover, it is but of recent formation and hence, largely
inexperienced, timid and hesitant. Under such conditions, the
government as the instrumentality of the national will, has to step in
and assume the initiative, if not the leadership, in the struggle for the
economic freedom of the nation in somewhat the same way that it
did in the crusade for political freedom. Thus . . . it (the Constitution)
envisages an organized movement for the protection of the nation
not only against the possibilities of armed invasion but also against

its economic subjugation by alien interests in the economic field.


(Phil. Political Law by Sinco, 10th ed., p. 476.)
Belief in the existence of alien control and predominance is felt in other
quarters. Filipino businessmen, manufacturers and producers believe so;
they fear the dangers coming from alien control, and they express sentiments
of economic independence. Witness thereto is Resolution No. 1, approved
on July 18, 1953, of the Fifth National convention of Filipino Businessmen,
and a similar resolution, approved on March 20, 1954, of the Second
National Convention of Manufacturers and Producers. The man in the street
also believes, and fears, alien predominance and control; so our
newspapers, which have editorially pointed out not only to control but to alien
stranglehold. We, therefore, find alien domination and control to be a fact, a
reality proved by official statistics, and felt by all the sections and groups that
compose the Filipino community.
e. Dangers of alien control and dominance in retail.
But the dangers arising from alien participation in the retail trade does not
seem to lie in the predominance alone; there is a prevailing feeling that such
predominance may truly endanger the national interest. With ample capital,
unity of purpose and action and thorough organization, alien retailers and
merchants can act in such complete unison and concert on such vital matters
as the fixing of prices, the determination of the amount of goods or articles to
be made available in the market, and even the choice of the goods or articles
they would or would not patronize or distribute, that fears of dislocation of the
national economy and of the complete subservience of national economy
and of the consuming public are not entirely unfounded. Nationals, producers
and consumers alike can be placed completely at their mercy. This is easily
illustrated. Suppose an article of daily use is desired to be prescribed by the
aliens, because the producer or importer does not offer them sufficient
profits, or because a new competing article offers bigger profits for its
introduction. All that aliens would do is to agree to refuse to sell the first
article, eliminating it from their stocks, offering the new one as a substitute.
Hence, the producers or importers of the prescribed article, or its consumers,
find the article suddenly out of the prescribed article, or its consumers, find
the article suddenly out of circulation. Freedom of trade is thus curtailed and
free enterprise correspondingly suppressed.
We can even go farther than theoretical illustrations to show the pernicious
influences of alien domination. Grave abuses have characterized the
exercise of the retail trade by aliens. It is a fact within judicial notice, which
courts of justice may not properly overlook or ignore in the interests of truth
and justice, that there exists a general feeling on the part of the public that
alien participation in the retail trade has been attended by a pernicious and
intolerable practices, the mention of a few of which would suffice for our

purposes; that at some time or other they have cornered the market of
essential commodities, like corn and rice, creating artificial scarcities to justify
and enhance profits to unreasonable proportions; that they have hoarded
essential foods to the inconvenience and prejudice of the consuming public,
so much so that the Government has had to establish the National Rice and
Corn Corporation to save the public from their continuous hoarding practices
and tendencies; that they have violated price control laws, especially on
foods and essential commodities, such that the legislature had to enact a law
(Sec. 9, Republic Act No. 1168), authorizing their immediate and automatic
deportation for price control convictions; that they have secret combinations
among themselves to control prices, cheating the operation of the law of
supply and demand; that they have connived to boycott honest merchants
and traders who would not cater or yield to their demands, in unlawful
restraint of freedom of trade and enterprise. They are believed by the public
to have evaded tax laws, smuggled goods and money into and out of the
land, violated import and export prohibitions, control laws and the like, in
derision and contempt of lawful authority. It is also believed that they have
engaged in corrupting public officials with fabulous bribes, indirectly causing
the prevalence of graft and corruption in the Government. As a matter of fact
appeals to unscrupulous aliens have been made both by the Government
and by their own lawful diplomatic representatives, action which impliedly
admits a prevailing feeling about the existence of many of the above
practices.
The circumstances above set forth create well founded fears that worse
things may come in the future. The present dominance of the alien retailer,
especially in the big centers of population, therefore, becomes a potential
source of danger on occasions of war or other calamity. We do not have here
in this country isolated groups of harmless aliens retailing goods among
nationals; what we have are well organized and powerful groups that
dominate the distribution of goods and commodities in the communities and
big centers of population. They owe no allegiance or loyalty to the State, and
the State cannot rely upon them in times of crisis or emergency. While the
national holds his life, his person and his property subject to the needs of his
country, the alien may even become the potential enemy of the State.
f. Law enacted in interest of national economic survival and security.
We are fully satisfied upon a consideration of all the facts and circumstances
that the disputed law is not the product of racial hostility, prejudice or
discrimination, but the expression of the legitimate desire and determination
of the people, thru their authorized representatives, to free the nation from
the economic situation that has unfortunately been saddled upon it rightly or
wrongly, to its disadvantage. The law is clearly in the interest of the public,
nay of the national security itself, and indisputably falls within the scope of

police power, thru which and by which the State insures its existence and
security and the supreme welfare of its citizens.
VI. The Equal Protection Limitation
a. Objections to alien participation in retail trade. The next question that
now poses solution is, Does the law deny the equal protection of the laws?
As pointed out above, the mere fact of alienage is the root and cause of the
distinction between the alien and the national as a trader. The alien resident
owes allegiance to the country of his birth or his adopted country; his stay
here is for personal convenience; he is attracted by the lure of gain and
profit. His aim or purpose of stay, we admit, is neither illegitimate nor
immoral, but he is naturally lacking in that spirit of loyalty and enthusiasm for
this country where he temporarily stays and makes his living, or of that spirit
of regard, sympathy and consideration for his Filipino customers as would
prevent him from taking advantage of their weakness and exploiting them.
The faster he makes his pile, the earlier can the alien go back to his beloved
country and his beloved kin and countrymen. The experience of the country
is that the alien retailer has shown such utter disregard for his customers and
the people on whom he makes his profit, that it has been found necessary to
adopt the legislation, radical as it may seem.
Another objection to the alien retailer in this country is that he never really
makes a genuine contribution to national income and wealth. He undoubtedly
contributes to general distribution, but the gains and profits he makes are not
invested in industries that would help the country's economy and increase
national wealth. The alien's interest in this country being merely transient and
temporary, it would indeed be ill-advised to continue entrusting the very
important function of retail distribution to his hands.
The practices resorted to by aliens in the control of distribution, as already
pointed out above, their secret manipulations of stocks of commodities and
prices, their utter disregard of the welfare of their customers and of the
ultimate happiness of the people of the nation of which they are mere guests,
which practices, manipulations and disregard do not attend the exercise of
the trade by the nationals, show the existence of real and actual, positive and
fundamental differences between an alien and a national which fully justify
the legislative classification adopted in the retail trade measure. These
differences are certainly a valid reason for the State to prefer the national
over the alien in the retail trade. We would be doing violence to fact and
reality were we to hold that no reason or ground for a legitimate distinction
can be found between one and the other.
b. Difference in alien aims and purposes sufficient basis for distinction.

The above objectionable characteristics of the exercise of the retail trade by


the aliens, which are actual and real, furnish sufficient grounds for legislative
classification of retail traders into nationals and aliens. Some may disagree
with the wisdom of the legislature's classification. To this we answer, that this
is the prerogative of the law-making power. Since the Court finds that the
classification is actual, real and reasonable, and all persons of one class are
treated alike, and as it cannot be said that the classification is patently
unreasonable and unfounded, it is in duty bound to declare that the
legislature acted within its legitimate prerogative and it can not declare that
the act transcends the limit of equal protection established by the
Constitution.
Broadly speaking, the power of the legislature to make distinctions and
classifications among persons is not curtailed or denied by the equal
protection of the laws clause. The legislative power admits of a wide scope of
discretion, and a law can be violative of the constitutional limitation only when
the classification is without reasonable basis. In addition to the authorities we
have earlier cited, we can also refer to the case of Linsey vs. Natural
Carbonic Fas Co. (1911), 55 L. ed., 369, which clearly and succinctly defined
the application of equal protection clause to a law sought to be voided as
contrary thereto:
. . . . "1. The equal protection clause of the Fourteenth Amendment
does not take from the state the power to classify in the adoption of
police laws, but admits of the exercise of the wide scope of discretion
in that regard, and avoids what is done only when it is without any
reasonable basis, and therefore is purely arbitrary. 2. A classification
having some reasonable basis does not offend against that clause
merely because it is not made with mathematical nicety, or because
in practice it results in some inequality. 3. When the classification in
such a law is called in question, if any state of facts reasonably can
be conceived that would sustain it, the existence of that state of facts
at the time the law was enacted must be assumed. 4. One who
assails the classification in such a law must carry the burden of
showing that it does not rest upon any reasonable basis but is
essentially arbitrary."
c. Authorities recognizing citizenship as basis for classification.
The question as to whether or not citizenship is a legal and valid ground for
classification has already been affirmatively decided in this jurisdiction as
well as in various courts in the United States. In the case of Smith Bell & Co.
vs. Natividad, 40 Phil. 136, where the validity of Act No. 2761 of the
Philippine Legislature was in issue, because of a condition therein limiting the
ownership of vessels engaged in coastwise trade to corporations formed by
citizens of the Philippine Islands or the United States, thus denying the right

to aliens, it was held that the Philippine Legislature did not violate the equal
protection clause of the Philippine Bill of Rights. The legislature in enacting
the law had as ultimate purpose the encouragement of Philippine
shipbuilding and the safety for these Islands from foreign interlopers. We
held that this was a valid exercise of the police power, and all presumptions
are in favor of its constitutionality. In substance, we held that the limitation of
domestic ownership of vessels engaged in coastwise trade to citizens of the
Philippines does not violate the equal protection of the law and due process
or law clauses of the Philippine Bill of Rights. In rendering said decision we
quoted with approval the concurring opinion of Justice Johnson in the case
of Gibbons vs. Ogden, 9 Wheat., I, as follows:
"Licensing acts, in fact, in legislation, are universally restraining acts;
as, for example, acts licensing gaming houses, retailers of spirituous
liquors, etc. The act, in this instance, is distinctly of that character,
and forms part of an extensive system, the object of which is to
encourage American shipping, and place them on an equal footing
with the shipping of other nations. Almost every commercial nation
reserves to its own subjects a monopoly of its coasting trade; and a
countervailing privilege in favor of American shipping is
contemplated, in the whole legislation of the United States on this
subject. It is not to give the vessel an American character, that the
license is granted; that effect has been correctly attributed to the act
of her enrollment. But it is to confer on her American privileges, as
contra distinguished from foreign; and to preserve the Government
from fraud by foreigners; in surreptitiously intruding themselves into
the American commercial marine, as well as frauds upon the
revenue in the trade coastwise, that this whole system is projected."
The rule in general is as follows:
Aliens are under no special constitutional protection which forbids a
classification otherwise justified simply because the limitation of the
class falls along the lines of nationality. That would be requiring a
higher degree of protection for aliens as a class than for similar
classes than for similar classes of American citizens. Broadly
speaking, the difference in status between citizens and aliens
constitutes a basis for reasonable classification in the exercise of
police power. (2 Am., Jur. 468-469.)
In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute
on the licensing of hawkers and peddlers, which provided that no one can
obtain a license unless he is, or has declared his intention, to become a
citizen of the United States, was held valid, for the following reason: It may
seem wise to the legislature to limit the business of those who are supposed
to have regard for the welfare, good order and happiness of the community,

and the court cannot question this judgment and conclusion. In Bloomfield
vs. State, 99 N. E. 309 (Ohio, 1912), a statute which prevented certain
persons, among them aliens, from engaging in the traffic of liquors, was
found not to be the result of race hatred, or in hospitality, or a deliberate
purpose to discriminate, but was based on the belief that an alien cannot be
sufficiently acquainted with "our institutions and our life as to enable him to
appreciate the relation of this particular business to our entire social fabric",
and was not, therefore, invalid. In Ohio ex rel. Clarke vs. Deckebach, 274 U.
S. 392, 71 L. ed. 115 (1926), the U.S. Supreme Court had under
consideration an ordinance of the city of Cincinnati prohibiting the issuance
of licenses (pools and billiard rooms) to aliens. It held that plainly irrational
discrimination against aliens is prohibited, but it does not follow that alien
race and allegiance may not bear in some instances such a relation to a
legitimate object of legislation as to be made the basis of permitted
classification, and that it could not state that the legislation is clearly wrong;
and that latitude must be allowed for the legislative appraisement of local
conditions and for the legislative choice of methods for controlling an
apprehended evil. The case of State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is
a parallel case to the one at bar. In Asakura vs. City of Seattle, 210 P. 30
(Washington, 1922), the business of pawn brooking was considered as
having tendencies injuring public interest, and limiting it to citizens is within
the scope of police power. A similar statute denying aliens the right to
engage in auctioneering was also sustained in Wright vs. May, L.R.A., 1915
P. 151 (Minnesota, 1914). So also in Anton vs. Van Winkle, 297 F. 340
(Oregon, 1924), the court said that aliens are judicially known to have
different interests, knowledge, attitude, psychology and loyalty, hence the
prohibitions of issuance of licenses to them for the business of pawnbroker,
pool, billiard, card room, dance hall, is not an infringement of constitutional
rights. In Templar vs. Michigan State Board of Examiners, 90 N.W. 1058
(Michigan, 1902), a law prohibiting the licensing of aliens as barbers was
held void, but the reason for the decision was the court's findings that the
exercise of the business by the aliens does not in any way affect the morals,
the health, or even the convenience of the community. In Takahashi vs. Fish
and Game Commission, 92 L. ed. 1479 (1947), a California statute banning
the issuance of commercial fishing licenses to person ineligible to citizenship
was held void, because the law conflicts with Federal power over
immigration, and because there is no public interest in the mere claim of
ownership of the waters and the fish in them, so there was no adequate
justification for the discrimination. It further added that the law was the
outgrowth of antagonism toward the persons of Japanese ancestry.
However, two Justices dissented on the theory that fishing rights have been
treated traditionally as natural resources. In Fraser vs. McConway & Tarley
Co., 82 Fed. 257 (Pennsylvania, 1897), a state law which imposed a tax on
every employer of foreign-born unnaturalized male persons over 21 years of
age, was declared void because the court found that there was no reason for

the classification and the tax was an arbitrary deduction from the daily wage
of an employee.
d. Authorities contra explained.
It is true that some decisions of the Federal court and of the State courts in
the United States hold that the distinction between aliens and citizens is not a
valid ground for classification. But in this decision the laws declared invalid
were found to be either arbitrary, unreasonable or capricious, or were the
result or product of racial antagonism and hostility, and there was no
question of public interest involved or pursued. In Yu Cong Eng vs. Trinidad,
70 L. ed. 1059 (1925), the United States Supreme Court declared invalid a
Philippine law making unlawful the keeping of books of account in any
language other than English, Spanish or any other local dialect, but the main
reasons for the decisions are: (1) that if Chinese were driven out of business
there would be no other system of distribution, and (2) that the Chinese
would fall prey to all kinds of fraud, because they would be deprived of their
right to be advised of their business and to direct its conduct. The real reason
for the decision, therefore, is the court's belief that no public benefit would be
derived from the operations of the law and on the other hand it would deprive
Chinese of something indispensable for carrying on their business. In Yick
Wo vs. Hopkins, 30 L. ed 220 (1885) an ordinance conferring powers on
officials to withhold consent in the operation of laundries both as to persons
and place, was declared invalid, but the court said that the power granted
was arbitrary, that there was no reason for the discrimination which attended
the administration and implementation of the law, and that the motive thereof
was mere racial hostility. In State vs. Montgomery, 47 A. 165 (Maine, 1900),
a law prohibiting aliens to engage as hawkers and peddlers was declared
void, because the discrimination bore no reasonable and just relation to the
act in respect to which the classification was proposed.
The case at bar is radically different, and the facts make them so. As we
already have said, aliens do not naturally possess the sympathetic
consideration and regard for the customers with whom they come in daily
contact, nor the patriotic desire to help bolster the nation's economy, except
in so far as it enhances their profit, nor the loyalty and allegiance which the
national owes to the land. These limitations on the qualifications of the aliens
have been shown on many occasions and instances, especially in times of
crisis and emergency. We can do no better than borrow the language
of Anton vs. Van Winkle, 297 F. 340, 342, to drive home the reality and
significance of the distinction between the alien and the national, thus:

countrymen. Furthermore, it is natural and reasonable to suppose


that the foreign born, whose allegiance is first to their own country,
and whose ideals of governmental environment and control have
been engendered and formed under entirely different regimes and
political systems, have not the same inspiration for the public weal,
nor are they as well disposed toward the United States, as those
who by citizenship, are a part of the government itself. Further
enlargement, is unnecessary. I have said enough so that obviously it
cannot be affirmed with absolute confidence that the Legislature was
without plausible reason for making the classification, and therefore
appropriate discriminations against aliens as it relates to the subject
of legislation. . . . .
VII. The Due Process of Law Limitation.
a. Reasonability, the test of the limitation; determination by legislature
decisive.
We now come to due process as a limitation on the exercise of the police
power. It has been stated by the highest authority in the United States that:
. . . . And the guaranty of due process, as has often been held,
demands only that the law shall not be unreasonable, arbitrary or
capricious, and that the means selected shall have a real and
substantial relation to the subject sought to be attained. . . . .
xxx

xxx

xxx

So far as the requirement of due process is concerned and in the


absence of other constitutional restriction a state is free to adopt
whatever economic policy may reasonably be deemed to promote
public welfare, and to enforce that policy by legislation adapted to its
purpose. The courts are without authority either to declare such
policy, or, when it is declared by the legislature, to override it. If the
laws passed are seen to have a reasonable relation to a proper
legislative purpose, and are neither arbitrary nor discriminatory, the
requirements of due process are satisfied, and judicial determination
to that effect renders a court functus officio. . . . (Nebbia vs. New
York, 78 L. ed. 940, 950, 957.)
Another authority states the principle thus:

. . . . It may be judicially known, however, that alien coming into this


country are without the intimate knowledge of our laws, customs, and
usages that our own people have. So it is likewise known that certain
classes of aliens are of different psychology from our fellow

. . . . Too much significance cannot be given to the word


"reasonable" in considering the scope of the police power in a
constitutional sense, for the test used to determine the

constitutionality of the means employed by the legislature is to


inquire whether the restriction it imposes on rights secured to
individuals by the Bill of Rights are unreasonable, and not whether it
imposes any restrictions on such rights. . . .
xxx

xxx

that the privilege has been so grossly abused by the alien, thru the
illegitimate use of pernicious designs and practices, that he now enjoys a
monopolistic control of the occupation and threatens a deadly stranglehold
on the nation's economy endangering the national security in times of crisis
and emergency.

xxx

. . . . A statute to be within this power must also be reasonable in its


operation upon the persons whom it affects, must not be for the
annoyance of a particular class, and must not be unduly oppressive.
(11 Am. Jur. Sec. 302., 1:1)- 1074-1075.)
In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:
. . . . To justify the state in thus interposing its authority in behalf of
the public, it must appear, first, that the interests of the public
generally, as distinguished from those of a particular class, require
such interference; and second, that the means are reasonably
necessary for the accomplishment of the purpose, and not unduly
oppressive upon individuals. . . .
Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395,
fixes this test of constitutionality:
In determining whether a given act of the Legislature, passed in the
exercise of the police power to regulate the operation of a business,
is or is not constitutional, one of the first questions to be considered
by the court is whether the power as exercised has a sufficient
foundation in reason in connection with the matter involved, or is an
arbitrary, oppressive, and capricious use of that power, without
substantial relation to the health, safety, morals, comfort, and
general welfare of the public.
b. Petitioner's argument considered.
Petitioner's main argument is that retail is a common, ordinary occupation,
one of those privileges long ago recognized as essential to the orderly
pursuant of happiness by free men; that it is a gainful and honest occupation
and therefore beyond the power of the legislature to prohibit and penalized.
This arguments overlooks fact and reality and rests on an incorrect
assumption and premise, i.e., that in this country where the occupation is
engaged in by petitioner, it has been so engaged by him, by the alien in an
honest creditable and unimpeachable manner, without harm or injury to the
citizens and without ultimate danger to their economic peace, tranquility and
welfare. But the Legislature has found, as we have also found and indicated,

The real question at issue, therefore, is not that posed by petitioner, which
overlooks and ignores the facts and circumstances, but this, Is the exclusion
in the future of aliens from the retail trade unreasonable. Arbitrary capricious,
taking into account the illegitimate and pernicious form and manner in which
the aliens have heretofore engaged therein? As thus correctly stated the
answer is clear. The law in question is deemed absolutely necessary to bring
about the desired legislative objective, i.e., to free national economy from
alien control and dominance. It is not necessarily unreasonable because it
affects private rights and privileges (11 Am. Jur. pp. 1080-1081.) The test of
reasonableness of a law is the appropriateness or adequacy under all
circumstances of the means adopted to carry out its purpose into effect (Id.)
Judged by this test, disputed legislation, which is not merely reasonable but
actually necessary, must be considered not to have infringed the
constitutional limitation of reasonableness.
The necessity of the law in question is explained in the explanatory note that
accompanied the bill, which later was enacted into law:
This bill proposes to regulate the retail business. Its purpose is to
prevent persons who are not citizens of the Philippines from having a
strangle hold upon our economic life. If the persons who control this
vital artery of our economic life are the ones who owe no allegiance
to this Republic, who have no profound devotion to our free
institutions, and who have no permanent stake in our people's
welfare, we are not really the masters of our destiny. All aspects of
our life, even our national security, will be at the mercy of other
people.
In seeking to accomplish the foregoing purpose, we do not propose
to deprive persons who are not citizens of the Philippines of their
means of livelihood. While this bill seeks to take away from the
hands of persons who are not citizens of the Philippines a power that
can be wielded to paralyze all aspects of our national life and
endanger our national security it respects existing rights.
The approval of this bill is necessary for our national survival.
If political independence is a legitimate aspiration of a people, then economic
independence is none the less legitimate. Freedom and liberty are not real

and positive if the people are subject to the economic control and domination
of others, especially if not of their own race or country. The removal and
eradication of the shackles of foreign economic control and domination, is
one of the noblest motives that a national legislature may pursue. It is
impossible to conceive that legislation that seeks to bring it about can infringe
the constitutional limitation of due process. The attainment of a legitimate
aspiration of a people can never be beyond the limits of legislative authority.

justified. It would have been recreant to its duties towards the country and its
people would it view the sorry plight of the nationals with the complacency
and refuse or neglect to adopt a remedy commensurate with the demands of
public interest and national survival. As the repository of the sovereign power
of legislation, the Legislature was in duty bound to face the problem and
meet, through adequate measures, the danger and threat that alien
domination of retail trade poses to national economy.

c. Law expressly held by Constitutional Convention to be within the sphere of


legislative action.

d. Provisions of law not unreasonable.

The framers of the Constitution could not have intended to impose the
constitutional restrictions of due process on the attainment of such a noble
motive as freedom from economic control and domination, thru the exercise
of the police power. The fathers of the Constitution must have given to the
legislature full authority and power to enact legislation that would promote the
supreme happiness of the people, their freedom and liberty. On the precise
issue now before us, they expressly made their voice clear; they adopted a
resolution expressing their belief that the legislation in question is within the
scope of the legislative power. Thus they declared the their Resolution:
That it is the sense of the Convention that the public interest requires
the nationalization of retail trade; but it abstain from approving the
amendment introduced by the Delegate for Manila, Mr. Araneta, and
others on this matter because it is convinced that the National
Assembly is authorized to promulgate a law which limits to Filipino
and American citizens the privilege to engage in the retail trade. (11
Aruego, The Framing of the Philippine Constitution, quoted on pages
66 and 67 of the Memorandum for the Petitioner.)
It would do well to refer to the nationalistic tendency manifested in various
provisions of the Constitution. Thus in the preamble, a principle objective is
the conservation of the patrimony of the nation and as corollary the provision
limiting to citizens of the Philippines the exploitation, development and
utilization of its natural resources. And in Section 8 of Article XIV, it is
provided that "no franchise, certificate, or any other form of authorization for
the operation of the public utility shall be granted except to citizens of the
Philippines." The nationalization of the retail trade is only a continuance of
the nationalistic protective policy laid down as a primary objective of the
Constitution. Can it be said that a law imbued with the same purpose and
spirit underlying many of the provisions of the Constitution is unreasonable,
invalid and unconstitutional?
The seriousness of the Legislature's concern for the plight of the nationals as
manifested in the approval of the radical measures is, therefore, fully

A cursory study of the provisions of the law immediately reveals how tolerant,
how reasonable the Legislature has been. The law is made prospective and
recognizes the right and privilege of those already engaged in the occupation
to continue therein during the rest of their lives; and similar recognition of the
right to continue is accorded associations of aliens. The right or privilege is
denied to those only upon conviction of certain offenses. In the deliberations
of the Court on this case, attention was called to the fact that the privilege
should not have been denied to children and heirs of aliens now engaged in
the retail trade. Such provision would defeat the law itself, its aims and
purposes. Beside, the exercise of legislative discretion is not subject to
judicial review. It is well settled that the Court will not inquire into the motives
of the Legislature, nor pass upon general matters of legislative judgment.
The Legislature is primarily the judge of the necessity of an enactment or of
any of its provisions, and every presumption is in favor of its validity, and
though the Court may hold views inconsistent with the wisdom of the law, it
may not annul the legislation if not palpably in excess of the legislative
power. Furthermore, the test of the validity of a law attacked as a violation of
due process, is not its reasonableness, but its unreasonableness, and we
find the provisions are not unreasonable. These principles also answer
various other arguments raised against the law, some of which are: that the
law does not promote general welfare; that thousands of aliens would be
thrown out of employment; that prices will increase because of the
elimination of competition; that there is no need for the legislation; that
adequate replacement is problematical; that there may be general
breakdown; that there would be repercussions from foreigners; etc. Many of
these arguments are directed against the supposed wisdom of the law which
lies solely within the legislative prerogative; they do not import invalidity.
VIII. Alleged defect in the title of the law
A subordinate ground or reason for the alleged invalidity of the law is the
claim that the title thereof is misleading or deceptive, as it conceals the real
purpose of the bill which is to nationalize the retail business and prohibit
aliens from engaging therein. The constitutional provision which is claimed to
be violated in Section 21 (1) of Article VI, which reads:

No bill which may be enacted in the law shall embrace more than
one subject which shall be expressed in the title of the bill.
What the above provision prohibits is duplicity, that is, if its title completely
fails to appraise the legislators or the public of the nature, scope and
consequences of the law or its operation (I Sutherland, Statutory
Construction, Sec. 1707, p. 297.) A cursory consideration of the title and the
provisions of the bill fails to show the presence of duplicity. It is true that the
term "regulate" does not and may not readily and at first glance convey the
idea of "nationalization" and "prohibition", which terms express the two main
purposes and objectives of the law. But "regulate" is a broader term than
either prohibition or nationalization. Both of these have always been included
within the term regulation.
Under the title of an act to "regulate", the sale of intoxicating liquors,
the Legislature may prohibit the sale of intoxicating liquors. (Sweet
vs. City of Wabash, 41 Ind., 7; quoted in page 41 of Answer.)
Within the meaning of the Constitution requiring that the subject of
every act of the Legislature shall be stated in the tale, the title to
regulate the sale of intoxicating liquors, etc." sufficiently expresses
the subject of an act prohibiting the sale of such liquors to minors
and to persons in the habit of getting intoxicated; such matters being
properly included within the subject of regulating the sale. (Williams
vs. State, 48 Ind. 306, 308, quoted in p. 42 of Answer.)
The word "regulate" is of broad import, and necessarily implies some
degree of restraint and prohibition of acts usually done in connection
with the thing to be regulated. While word regulate does not
ordinarily convey meaning of prohibit, there is no absolute reason
why it should not have such meaning when used in delegating police
power in connection with a thing the best or only efficacious
regulation of which involves suppression. (State vs. Morton, 162 So.
718, 182 La. 887, quoted in p. 42 of Answer.)
The general rule is for the use of general terms in the title of a bill; it has also
been said that the title need not be an index to the entire contents of the law
(I Sutherland, Statutory Construction, See. 4803, p. 345.) The above rule
was followed the title of the Act in question adopted the more general term
"regulate" instead of "nationalize" or "prohibit". Furthermore, the law also
contains other rules for the regulation of the retail trade which may not be
included in the terms "nationalization" or "prohibition"; so were the title
changed from "regulate" to "nationalize" or "prohibit", there would have been
many provisions not falling within the scope of the title which would have
made the Act invalid. The use of the term "regulate", therefore, is in accord

with the principle governing the drafting of statutes, under which a simple or
general term should be adopted in the title, which would include all other
provisions found in the body of the Act.
One purpose of the constitutional directive that the subject of a bill should be
embraced in its title is to apprise the legislators of the purposes, the nature
and scope of its provisions, and prevent the enactment into law of matters
which have received the notice, action and study of the legislators or of the
public. In the case at bar it cannot be claimed that the legislators have been
appraised of the nature of the law, especially the nationalization and the
prohibition provisions. The legislators took active interest in the discussion of
the law, and a great many of the persons affected by the prohibitions in the
law conducted a campaign against its approval. It cannot be claimed,
therefore, that the reasons for declaring the law invalid ever existed. The
objection must therefore, be overruled.
IX. Alleged violation of international treaties and obligations
Another subordinate argument against the validity of the law is the supposed
violation thereby of the Charter of the United Nations and of the Declaration
of the Human Rights adopted by the United Nations General Assembly. We
find no merit in the Nations Charter imposes no strict or legal obligations
regarding the rights and freedom of their subjects (Hans Kelsen, The Law of
the United Nations, 1951 ed. pp. 29-32), and the Declaration of Human
Rights contains nothing more than a mere recommendation or a common
standard of achievement for all peoples and all nations (Id. p. 39.) That such
is the import of the United Nations Charter aid of the Declaration of Human
Rights can be inferred the fact that members of the United Nations
Organizations, such as Norway and Denmark, prohibit foreigners from
engaging in retail trade, and in most nations of the world laws against
foreigners engaged in domestic trade are adopted.
The Treaty of Amity between the Republic of the Philippines and the
Republic of China of April 18, 1947 is also claimed to be violated by the law
in question. All that the treaty guarantees is equality of treatment to the
Chinese nationals "upon the same terms as the nationals of any other
country." But the nationals of China are not discriminating against because
nationals of all other countries, except those of the United States, who are
granted special rights by the Constitution, are all prohibited from engaging in
the retail trade. But even supposing that the law infringes upon the said
treaty, the treaty is always subject to qualification or amendment by a
subsequent law (U. S. vs. Thompson, 258, Fed. 257, 260), and the same
may never curtail or restrict the scope of the police power of the State
(plaston vs. Pennsylvania, 58 L. ed. 539.)

X. Conclusion
Resuming what we have set forth above we hold that the disputed law was
enacted to remedy a real actual threat and danger to national economy
posed by alien dominance and control of the retail business and free citizens
and country from dominance and control; that the enactment clearly falls
within the scope of the police power of the State, thru which and by which it
protects its own personality and insures its security and future; that the law
does not violate the equal protection clause of the Constitution because
sufficient grounds exist for the distinction between alien and citizen in the
exercise of the occupation regulated, nor the due process of law clause,
because the law is prospective in operation and recognizes the privilege of
aliens already engaged in the occupation and reasonably protects their
privilege; that the wisdom and efficacy of the law to carry out its objectives
appear to us to be plainly evident as a matter of fact it seems not only
appropriate but actually necessary and that in any case such matter falls
within the prerogative of the Legislature, with whose power and discretion the
Judicial department of the Government may not interfere; that the provisions
of the law are clearly embraced in the title, and this suffers from no duplicity
and has not misled the legislators or the segment of the population affected;
and that it cannot be said to be void for supposed conflict with treaty
obligations because no treaty has actually been entered into on the subject
and the police power may not be curtailed or surrendered by any treaty or
any other conventional agreement.
Some members of the Court are of the opinion that the radical effects of the
law could have been made less harsh in its impact on the aliens. Thus it is
stated that the more time should have been given in the law for the
liquidation of existing businesses when the time comes for them to close. Our
legal duty, however, is merely to determine if the law falls within the scope of
legislative authority and does not transcend the limitations of due process
and equal protection guaranteed in the Constitution. Remedies against the
harshness of the law should be addressed to the Legislature; they are
beyond our power and jurisdiction.
G.R. No. 125865

January 28, 2000

JEFFREY
LIANG
vs.
PEOPLE OF THE PHILIPPINES, respondent.

(HUEFENG), petitioner,

YNARES-SANTIAGO, J.:
Petitioner is an economist working with the Asian Development Bank (ADB).
Sometime in 1994, for allegedly uttering defamatory words against fellow

ADB worker Joyce Cabal, he was charged before the Metropolitan Trial
Court (MeTC) of Mandaluyong City with two counts of grave oral defamation
docketed as Criminal Cases Nos. 53170 and 53171. Petitioner was arrested
by virtue of a warrant issued by the MeTC. After fixing petitioner's bail at
P2,400.00 per criminal charge, the MeTC released him to the custody of the
Security Officer of ADB. The next day, the MeTC judge received an "office of
protocol" from the Department of Foreign Affairs (DFA) stating that petitioner
is covered by immunity from legal process under Section 45 of the
Agreement between the ADB and the Philippine Government regarding the
Headquarters of the ADB (hereinafter Agreement) in the country. Based on
the said protocol communication that petitioner is immune from suit, the
MeTC judge without notice to the prosecution dismissed the two criminal
cases. The latter filed a motion for reconsideration which was opposed by the
DFA. When its motion was denied, the prosecution filed a petition
for certiorari and mandamus with the Regional Trial Court (RTC) of Pasig
City which set aside the MeTC rulings and ordered the latter court to enforce
the warrant of arrest it earlier issued. After the motion for reconsideration was
denied, petitioner elevated the case to this Court via a petition for review
arguing that he is covered by immunity under the Agreement and that no
preliminary investigation was held before the criminal cases were filed in
court.1wphi1.nt
The petition is not impressed with merit.
First, courts cannot blindly adhere and take on its face the communication
from the DFA that petitioner is covered by any immunity. The DFA's
determination that a certain person is covered by immunity is only preliminary
which has no binding effect in courts. In receiving ex-parte the DFA's advice
and in motu propio dismissing the two criminal cases without notice to the
prosecution, the latter's right to due process was violated. It should be noted
that due process is a right of the accused as much as it is of the prosecution.
The needed inquiry in what capacity petitioner was acting at the time of the
alleged utterances requires for its resolution evidentiary basis that has yet to
1
be presented at the proper time. At any rate, it has been ruled that the mere
invocation of the immunity clause does not ipso facto result in the dropping of
2
the charges.
Second, under Section 45 of the Agreement which provides:
Officers and staff of the Bank including for the purpose of this Article
experts and consultants performing missions for the Bank shall enjoy
the following privileges and immunities:

a.) immunity from legal process with respect to acts


performed by them in their official capacity except when the
Bank waives the immunity.

Regional Trial Court of Makati, Branch 61 and STARBRIGHT SALES


ENTERPRISES, INC., respondents.
Padilla Law Office for petitioner.

the immunity mentioned therein is not absolute, but subject to the exception
that the acts was done in "official capacity." It is therefore necessary to
determine if petitioner's case falls within the ambit of Section 45(a). Thus, the
prosecution should have been given the chance to rebut the DFA protocol
and it must be accorded the opportunity to present its controverting evidence,
should it so desire.
Third, slandering a person could not possibly be covered by the immunity
agreement because our laws do not allow the commission of a crime, such
3
as defamation, in the name of official duty. The imputation of theft is ultra
vires and cannot be part of official functions. It is well-settled principle of law
that a public official may be liable in his personal private capacity for
whatever damage he may have caused by his act done with malice or in bad
4
faith or beyond the scope of his authority or jurisdiction. It appears that even
the government's chief legal counsel, the Solicitor General, does not support
the stand taken by petitioner and that of the DFA.
Fourth, under the Vienna Convention on Diplomatic Relations, a diplomatic
agent, assuming petitioner is such, enjoys immunity from criminal jurisdiction
of the receiving state except in the case of an action relating to any
professional or commercial activity exercised by the diplomatic agent in the
5
receiving state outside his official functions. As already mentioned above,
the commission of a crime is not part of official duty.
Finally, on the contention that there was no preliminary investigation
conducted, suffice it to say that preliminary investigation is not a matter of
6
right in cases cognizable by the MeTC such as the one at bar. Being purely
a statutory right, preliminary investigation may be invoked only when
7
specifically granted by law. The rule on the criminal procedure is clear that
no preliminary investigation is required in cases falling within the jurisdiction
8
of the MeTC. Besides the absence of preliminary investigation does not
affect the court's jurisdiction nor does it impair the validity of the information
9
or otherwise render it defective.
WHEREFORE, the petition is DENIED.
G.R. No. 101949 December 1, 1994
THE
HOLY
SEE, petitioner,
vs.
THE HON. ERIBERTO U. ROSARIO, JR., as Presiding Judge of the

Siguion Reyna, Montecillo & Ongsiako for private respondent.

QUIASON, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court to
reverse and set aside the Orders dated June 20, 1991 and September 19,
1991 of the Regional Trial Court, Branch 61, Makati, Metro Manila in Civil
Case No. 90-183.
The Order dated June 20, 1991 denied the motion of petitioner to dismiss the
complaint in Civil Case No. 90-183, while the Order dated September 19,
1991 denied the motion for reconsideration of the June 20,1991 Order.
Petitioner is the Holy See who exercises sovereignty over the Vatican City in
Rome, Italy, and is represented in the Philippines by the Papal Nuncio.
Private respondent, Starbright Sales Enterprises, Inc., is a domestic
corporation engaged in the real estate business.
This petition arose from a controversy over a parcel of land consisting of
6,000 square meters (Lot 5-A, Transfer Certificate of Title No. 390440)
located in the Municipality of Paraaque, Metro Manila and registered in the
name of petitioner.
Said Lot 5-A is contiguous to Lots 5-B and 5-D which are covered by
Transfer Certificates of Title Nos. 271108 and 265388 respectively and
registered in the name of the Philippine Realty Corporation (PRC).
The three lots were sold to Ramon Licup, through Msgr. Domingo A. Cirilos,
Jr., acting as agent to the sellers. Later, Licup assigned his rights to the sale
to private respondent.
In view of the refusal of the squatters to vacate the lots sold to private
respondent, a dispute arose as to who of the parties has the responsibility of
evicting and clearing the land of squatters. Complicating the relations of the
parties was the sale by petitioner of Lot 5-A to Tropicana Properties and
Development Corporation (Tropicana).

I
On January 23, 1990, private respondent filed a complaint with the Regional
Trial Court, Branch 61, Makati, Metro Manila for annulment of the sale of the
three parcels of land, and specific performance and damages against
petitioner, represented by the Papal Nuncio, and three other defendants:
namely, Msgr. Domingo A. Cirilos, Jr., the PRC and Tropicana (Civil Case
No.
90-183).
The complaint alleged that: (1) on April 17, 1988, Msgr. Cirilos, Jr., on behalf
of petitioner and the PRC, agreed to sell to Ramon Licup Lots 5-A, 5-B and
5-D at the price of P1,240.00 per square meters; (2) the agreement to sell
was made on the condition that earnest money of P100,000.00 be paid by
Licup to the sellers, and that the sellers clear the said lots of squatters who
were then occupying the same; (3) Licup paid the earnest money to Msgr.
Cirilos; (4) in the same month, Licup assigned his rights over the property to
private respondent and informed the sellers of the said assignment; (5)
thereafter, private respondent demanded from Msgr. Cirilos that the sellers
fulfill their undertaking and clear the property of squatters; however, Msgr.
Cirilos informed private respondent of the squatters' refusal to vacate the
lots, proposing instead either that private respondent undertake the eviction
or that the earnest money be returned to the latter; (6) private respondent
counterproposed that if it would undertake the eviction of the squatters, the
purchase price of the lots should be reduced from P1,240.00 to P1,150.00
per square meter; (7) Msgr. Cirilos returned the earnest money of
P100,000.00 and wrote private respondent giving it seven days from receipt
of the letter to pay the original purchase price in cash; (8) private respondent
sent the earnest money back to the sellers, but later discovered that on
March 30, 1989, petitioner and the PRC, without notice to private
respondent, sold the lots to Tropicana, as evidenced by two separate Deeds
of Sale, one over Lot 5-A, and another over Lots 5-B and 5-D; and that the
sellers' transfer certificate of title over the lots were cancelled, transferred
and registered in the name of Tropicana; (9) Tropicana induced petitioner
and the PRC to sell the lots to it and thus enriched itself at the expense of
private respondent; (10) private respondent demanded the rescission of the
sale to Tropicana and the reconveyance of the lots, to no avail; and (11)
private respondent is willing and able to comply with the terms of the contract
to sell and has actually made plans to develop the lots into a townhouse
project, but in view of the sellers' breach, it lost profits of not less than
P30,000.000.00.

of the agreement to sell between it and the owners of the lots; and (4)
damages.
On June 8, 1990, petitioner and Msgr. Cirilos separately moved to dismiss
the complaint petitioner for lack of jurisdiction based on sovereign
immunity from suit, and Msgr. Cirilos for being an improper party. An
opposition to the motion was filed by private respondent.
On June 20, 1991, the trial court issued an order denying, among others,
petitioner's motion to dismiss after finding that petitioner "shed off [its]
sovereign immunity by entering into the business contract in question" (Rollo,
pp. 20-21).
On July 12, 1991, petitioner moved for reconsideration of the order. On
August 30, 1991, petitioner filed a "Motion for a Hearing for the Sole Purpose
of Establishing Factual Allegation for claim of Immunity as a Jurisdictional
Defense." So as to facilitate the determination of its defense of sovereign
immunity, petitioner prayed that a hearing be conducted to allow it to
establish certain facts upon which the said defense is based. Private
respondent opposed this motion as well as the motion for reconsideration.
On October 1, 1991, the trial court issued an order deferring the resolution on
the motion for reconsideration until after trial on the merits and directing
petitioner to file its answer (Rollo, p. 22).
Petitioner forthwith elevated the matter to us. In its petition, petitioner invokes
the privilege of sovereign immunity only on its own behalf and on behalf of its
official representative, the Papal Nuncio.
On December 9, 1991, a Motion for Intervention was filed before us by the
Department of Foreign Affairs, claiming that it has a legal interest in the
outcome of the case as regards the diplomatic immunity of petitioner, and
that it "adopts by reference, the allegations contained in the petition of the
Holy See insofar as they refer to arguments relative to its claim of sovereign
immunity from suit" (Rollo, p. 87).
Private respondent opposed the intervention of the Department of Foreign
Affairs. In compliance with the resolution of this Court, both parties and the
Department of Foreign Affairs submitted their respective memoranda.
II

Private respondent thus prayed for: (1) the annulment of the Deeds of Sale
between petitioner and the PRC on the one hand, and Tropicana on the
other; (2) the reconveyance of the lots in question; (3) specific performance

A preliminary matter to be threshed out is the procedural issue of whether the


petition for certiorari under Rule 65 of the Revised Rules of Court can be
availed of to question the order denying petitioner's motion to dismiss. The

general rule is that an order denying a motion to dismiss is not reviewable by


the appellate courts, the remedy of the movant being to file his answer and to
proceed with the hearing before the trial court. But the general rule admits of
exceptions, and one of these is when it is very clear in the records that the
trial court has no alternative but to dismiss the complaint (Philippine National
Bank v. Florendo, 206 SCRA 582 [1992]; Zagada v. Civil Service
Commission, 216 SCRA 114 [1992]. In such a case, it would be a sheer
waste of time and energy to require the parties to undergo the rigors of a
trial.
The other procedural question raised by private respondent is the personality
or legal interest of the Department of Foreign Affairs to intervene in the case
in behalf of the Holy See (Rollo, pp. 186-190).

In the case at bench, the Department of Foreign Affairs, through the Office of
Legal Affairs moved with this Court to be allowed to intervene on the side of
petitioner. The Court allowed the said Department to file its memorandum in
support of petitioner's claim of sovereign immunity.
In some cases, the defense of sovereign immunity was submitted directly to
the local courts by the respondents through their private counsels (Raquiza
v. Bradford, 75 Phil. 50 [1945]; Miquiabas v. Philippine-Ryukyus Command,
80 Phil. 262 [1948]; United States of America v. Guinto, 182 SCRA 644
[1990] and companion cases). In cases where the foreign states bypass the
Foreign Office, the courts can inquire into the facts and make their own
determination as to the nature of the acts and transactions involved.
III

In Public International Law, when a state or international agency wishes to


plead sovereign or diplomatic immunity in a foreign court, it requests the
Foreign Office of the state where it is sued to convey to the court that said
defendant is entitled to immunity.
In the United States, the procedure followed is the process of "suggestion,"
where the foreign state or the international organization sued in an American
court requests the Secretary of State to make a determination as to whether
it is entitled to immunity. If the Secretary of State finds that the defendant is
immune from suit, he, in turn, asks the Attorney General to submit to the
court a "suggestion" that the defendant is entitled to immunity. In England, a
similar procedure is followed, only the Foreign Office issues a certification to
that effect instead of submitting a "suggestion" (O'Connell, I International Law
130 [1965]; Note: Immunity from Suit of Foreign Sovereign Instrumentalities
and Obligations, 50 Yale Law Journal 1088 [1941]).
In the Philippines, the practice is for the foreign government or the
international organization to first secure an executive endorsement of its
claim of sovereign or diplomatic immunity. But how the Philippine Foreign
Office conveys its endorsement to the courts varies. In International Catholic
Migration Commission v. Calleja, 190 SCRA 130 (1990), the Secretary of
Foreign Affairs just sent a letter directly to the Secretary of Labor and
Employment, informing the latter that the respondent-employer could not be
sued because it enjoyed diplomatic immunity. InWorld Health Organization v.
Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the trial
court a telegram to that effect. In Baer v. Tizon, 57 SCRA 1 (1974), the U.S.
Embassy asked the Secretary of Foreign Affairs to request the Solicitor
General to make, in behalf of the Commander of the United States Naval
Base at Olongapo City, Zambales, a "suggestion" to respondent Judge. The
Solicitor General embodied the "suggestion" in a Manifestation and
Memorandum as amicus curiae.

The burden of the petition is that respondent trial court has no jurisdiction
over petitioner, being a foreign state enjoying sovereign immunity. On the
other hand, private respondent insists that the doctrine of non-suability is not
anymore absolute and that petitioner has divested itself of such a cloak
when, of its own free will, it entered into a commercial transaction for the sale
of a parcel of land located in the Philippines.
A. The Holy See
Before we determine the issue of petitioner's non-suability, a brief look into
its status as a sovereign state is in order.
Before the annexation of the Papal States by Italy in 1870, the Pope was the
monarch and he, as the Holy See, was considered a subject of International
Law. With the loss of the Papal States and the limitation of the territory under
the Holy See to an area of 108.7 acres, the position of the Holy See in
International Law became controversial (Salonga and Yap, Public
International Law 36-37 [1992]).
In 1929, Italy and the Holy See entered into the Lateran Treaty, where Italy
recognized the exclusive dominion and sovereign jurisdiction of the Holy See
over the Vatican City. It also recognized the right of the Holy See to receive
foreign diplomats, to send its own diplomats to foreign countries, and to enter
into treaties according to International Law (Garcia, Questions and Problems
In International Law, Public and Private 81 [1948]).
The Lateran Treaty established the statehood of the Vatican City "for the
purpose of assuring to the Holy See absolute and visible independence and
of guaranteeing to it indisputable sovereignty also in the field of international
relations" (O'Connell, I International Law 311 [1965]).

In view of the wordings of the Lateran Treaty, it is difficult to determine


whether the statehood is vested in the Holy See or in the Vatican City. Some
writers even suggested that the treaty created two international persons
the Holy See and Vatican City (Salonga and Yap, supra, 37).
The Vatican City fits into none of the established categories of states, and
the attribution to it of "sovereignty" must be made in a sense different from
that in which it is applied to other states (Fenwick, International Law 124-125
[1948]; Cruz, International Law 37 [1991]). In a community of national states,
the Vatican City represents an entity organized not for political but for
ecclesiastical purposes and international objects. Despite its size and object,
the Vatican City has an independent government of its own, with the Pope,
who is also head of the Roman Catholic Church, as the Holy See or Head of
State, in conformity with its traditions, and the demands of its mission in the
world. Indeed, the world-wide interests and activities of the Vatican City are
such as to make it in a sense an "international state" (Fenwick, supra., 125;
Kelsen, Principles of International Law 160 [1956]).
One authority wrote that the recognition of the Vatican City as a state has
significant implication that it is possible for any entity pursuing objects
essentially different from those pursued by states to be invested with
international personality (Kunz, The Status of the Holy See in International
Law, 46 The American Journal of International Law 308 [1952]).

There are two conflicting concepts of sovereign immunity, each widely held
and firmly established. According to the classical or absolute theory, a
sovereign cannot, without its consent, be made a respondent in the courts of
another sovereign. According to the newer or restrictive theory, the immunity
of the sovereign is recognized only with regard to public acts or acts jure
imperii of a state, but not with regard to private acts or acts jure gestionis
(United States of America v. Ruiz, 136 SCRA 487 [1987]; Coquia and
Defensor-Santiago, Public International Law 194 [1984]).
Some states passed legislation to serve as guidelines for the executive or
judicial determination when an act may be considered as jure gestionis. The
United States passed the Foreign Sovereign Immunities Act of 1976, which
defines a commercial activity as "either a regular course of commercial
conduct or a particular commercial transaction or act." Furthermore, the law
declared that the "commercial character of the activity shall be determined by
reference to the nature of the course of conduct or particular transaction or
act, rather than by reference to its purpose." The Canadian Parliament
enacted in 1982 an Act to Provide For State Immunity in Canadian Courts.
The Act defines a "commercial activity" as any particular transaction, act or
conduct or any regular course of conduct that by reason of its nature, is of a
"commercial character."

Inasmuch as the Pope prefers to conduct foreign relations and enter into
transactions as the Holy See and not in the name of the Vatican City, one
can conclude that in the Pope's own view, it is the Holy See that is the
international person.

The restrictive theory, which is intended to be a solution to the host of


problems involving the issue of sovereign immunity, has created problems of
its own. Legal treatises and the decisions in countries which follow the
restrictive theory have difficulty in characterizing whether a contract of a
sovereign state with a private party is an act jure gestionis or an act jure
imperii.

The Republic of the Philippines has accorded the Holy See the status of a
foreign sovereign. The Holy See, through its Ambassador, the Papal Nuncio,
has had diplomatic representations with the Philippine government since
1957 (Rollo, p. 87). This appears to be the universal practice in international
relations.

The restrictive theory came about because of the entry of sovereign states
into purely commercial activities remotely connected with the discharge of
governmental functions. This is particularly true with respect to the
Communist states which took control of nationalized business activities and
international trading.

B. Sovereign Immunity

This Court has considered the following transactions by a foreign state with
private parties as acts jure imperii: (1) the lease by a foreign government of
apartment buildings for use of its military officers (Syquia v. Lopez, 84 Phil.
312 [1949]; (2) the conduct of public bidding for the repair of a wharf at a
United States Naval Station (United States of America v. Ruiz, supra.); and
(3) the change of employment status of base employees (Sanders v.
Veridiano, 162 SCRA 88 [1988]).

As expressed in Section 2 of Article II of the 1987 Constitution, we have


adopted the generally accepted principles of International Law. Even without
this affirmation, such principles of International Law are deemed incorporated
as part of the law of the land as a condition and consequence of our
admission in the society of nations (United States of America v. Guinto, 182
SCRA 644 [1990]).

On the other hand, this Court has considered the following transactions by a
foreign state with private parties as acts jure gestionis: (1) the hiring of a

cook in the recreation center, consisting of three restaurants, a cafeteria, a


bakery, a store, and a coffee and pastry shop at the John Hay Air Station in
Baguio City, to cater to American servicemen and the general public (United
States of America v. Rodrigo, 182 SCRA 644 [1990]); and (2) the bidding for
the operation of barber shops in Clark Air Base in Angeles City (United
States of America v. Guinto, 182 SCRA 644 [1990]). The operation of the
restaurants and other facilities open to the general public is undoubtedly for
profit as a commercial and not a governmental activity. By entering into the
employment contract with the cook in the discharge of its proprietary
function, the United States government impliedly divested itself of its
sovereign immunity from suit.
In the absence of legislation defining what activities and transactions shall be
considered "commercial" and as constituting acts jure gestionis, we have to
come out with our own guidelines, tentative they may be.
Certainly, the mere entering into a contract by a foreign state with a private
party cannot be the ultimate test. Such an act can only be the start of the
inquiry. The logical question is whether the foreign state is engaged in the
activity in the regular course of business. If the foreign state is not engaged
regularly in a business or trade, the particular act or transaction must then be
tested by its nature. If the act is in pursuit of a sovereign activity, or an
incident thereof, then it is an act jure imperii, especially when it is not
undertaken for gain or profit.
As held in United States of America v. Guinto, (supra):
There is no question that the United States of America, like
any other state, will be deemed to have impliedly waived its
non-suability if it has entered into a contract in its proprietary
or private capacity. It is only when the contract involves its
sovereign or governmental capacity that no such waiver may
be implied.
In the case at bench, if petitioner has bought and sold lands in the ordinary
course of a real estate business, surely the said transaction can be
categorized as an act jure gestionis. However, petitioner has denied that the
acquisition and subsequent disposal of Lot 5-A were made for profit but
claimed that it acquired said property for the site of its mission or the
Apostolic Nunciature in the Philippines. Private respondent failed to dispute
said claim.
Lot 5-A was acquired by petitioner as a donation from the Archdiocese of
Manila. The donation was made not for commercial purpose, but for the use
of petitioner to construct thereon the official place of residence of the Papal

Nuncio. The right of a foreign sovereign to acquire property, real or personal,


in a receiving state, necessary for the creation and maintenance of its
diplomatic mission, is recognized in the 1961 Vienna Convention on
Diplomatic Relations (Arts. 20-22). This treaty was concurred in by the
Philippine Senate and entered into force in the Philippines on November 15,
1965.
In Article 31(a) of the Convention, a diplomatic envoy is granted immunity
from the civil and administrative jurisdiction of the receiving state over any
real action relating to private immovable property situated in the territory of
the receiving state which the envoy holds on behalf of the sending state for
the purposes of the mission. If this immunity is provided for a diplomatic
envoy, with all the more reason should immunity be recognized as regards
the sovereign itself, which in this case is the Holy See.
The decision to transfer the property and the subsequent disposal thereof are
likewise clothed with a governmental character. Petitioner did not sell Lot
5-A for profit or gain. It merely wanted to dispose off the same because the
squatters living thereon made it almost impossible for petitioner to use it for
the purpose of the donation. The fact that squatters have occupied and are
still occupying the lot, and that they stubbornly refuse to leave the premises,
has been admitted by private respondent in its complaint (Rollo, pp. 26, 27).
The issue of petitioner's non-suability can be determined by the trial court
without going to trial in the light of the pleadings, particularly the admission of
private respondent. Besides, the privilege of sovereign immunity in this case
was sufficiently established by the Memorandum and Certification of the
Department of Foreign Affairs. As the department tasked with the conduct of
the Philippines' foreign relations (Administrative Code of 1987, Book IV, Title
I, Sec. 3), the Department of Foreign Affairs has formally intervened in this
case and officially certified that the Embassy of the Holy See is a duly
accredited diplomatic mission to the Republic of the Philippines exempt from
local jurisdiction and entitled to all the rights, privileges and immunities of a
diplomatic mission or embassy in this country (Rollo, pp. 156-157). The
determination of the executive arm of government that a state or
instrumentality is entitled to sovereign or diplomatic immunity is a political
question that is conclusive upon the courts (International Catholic Migration
Commission v. Calleja, 190 SCRA 130 [1990]). Where the plea of immunity
is recognized and affirmed by the executive branch, it is the duty of the
courts to accept this claim so as not to embarrass the executive arm of the
government in conducting the country's foreign relations (World Health
Organization v. Aquino, 48 SCRA 242 [1972]). As in International Catholic
Migration Commission and in World Health Organization, we abide by the
certification of the Department of Foreign Affairs.

Ordinarily, the procedure would be to remand the case and order the trial
court to conduct a hearing to establish the facts alleged by petitioner in its
motion. In view of said certification, such procedure would however be
pointless and unduly circuitous (Ortigas & Co. Ltd. Partnership v. Judge Tirso
Velasco, G.R. No. 109645, July 25, 1994).
IV
Private respondent is not left without any legal remedy for the redress of its
grievances. Under both Public International Law and Transnational Law, a
person who feels aggrieved by the acts of a foreign sovereign can ask his
own government to espouse his cause through diplomatic channels.
Private respondent can ask the Philippine government, through the Foreign
Office, to espouse its claims against the Holy See. Its first task is to persuade
the Philippine government to take up with the Holy See the validity of its
claims. Of course, the Foreign Office shall first make a determination of the
impact of its espousal on the relations between the Philippine government
and the Holy See (Young, Remedies of Private Claimants Against Foreign
States, Selected Readings on Protection by Law of Private Foreign
Investments 905, 919 [1964]). Once the Philippine government decides to
espouse the claim, the latter ceases to be a private cause.
According to the Permanent Court of International Justice, the forerunner of
the International Court of Justice:
By taking up the case of one of its subjects and by reporting
to diplomatic action or international judicial proceedings on
his behalf, a State is in reality asserting its own rights its
right to ensure, in the person of its subjects, respect for the
rules of international law (The Mavrommatis Palestine
Concessions, 1 Hudson, World Court Reports 293, 302
[1924]).
WHEREFORE, the petition for certiorari is GRANTED and the complaint in
Civil Case No. 90-183 against petitioner is DISMISSED.

RESOLUTION
BARRERA, J.:
Arturo E. Garcia has applied for admission to the practice of law in the
Philippines without submitting to the required bar examinations. In his verified
petition, he avers, among others, that he is a Filipino citizen born in Bacolor
City, Province of Negros Occidental, of Filipino parentage; that he had taken
and finished in Spain, the course of "Bachillerato Superior"; that he was
approved, selected and qualified by the "Instituto de Cervantes" for
admission to the Central University of Madrid where he studied and finished
the law course graduating there as "Licenciado En Derecho"; that thereafter
he was allowed to practice the law profession in Spain; and that under the
provision of the Treaty of Academic Degrees and the Exercise of Professions
between the Republic of the Philippines and the Spanish state, he is entitled
to practice the law profession in the Philippines without submitting to the
required bar examinations.
After due consideration, the Court resolved to deny the petition on the
following grounds:
(1) the provisions of the Treaty on Academic Degrees and the Exercise of
Professions between the Republic of the Philippines and the Spanish State
can not be invoked by applicant. Under Article 11 thereof;
The Nationals of each of the two countries who shall have obtained
recognition of the validity of their academic degrees by virtue of the
stipulations of this Treaty, can practice their professions within the
territory of the Other, . . .. (Emphasis supplied).
from which it could clearly be discerned that said Treaty was intended to
govern Filipino citizens desiring to practice their profession in Spain, and the
citizens of Spain desiring to practice their professions in the Philippines.
Applicant is a Filipino citizen desiring to practice the legal profession in the
Philippines. He is therefore subject to the laws of his own country and is not
entitled to the privileges extended to Spanish nationals desiring to practice in
the Philippines.

SO ORDERED.
(2) Article I of the Treaty, in its pertinent part, provides .
August 15, 1961
IN RE: PETITION OF ARTURO EFREN GARCIA for admission to the
Philippine Bar without taking the examination. ARTURO EFREN
GARCIA, petitioner.

The nationals of both countries who shall have obtained degree or


diplomas to practice the liberal professions in either of the
Contracting States, issued by competent national authorities, shall
be deemed competent to exercise said professions in the territory of
the Other, subject to the laws and regulations of the latter. . . ..

It is clear, therefore, that the privileges provided in the Treaty invoked by the
applicant are made expressly subject to the laws and regulations of the
contracting State in whose territory it is desired to exercise the legal
profession; and Section 1 of Rule 127, in connection with Sections 2,9, and
16 thereof, which have the force of law, require that before anyone can
practice the legal profession in the Philippine he must first successfully pass
the required bar examinations; and
(3) The aforementioned Treaty, concluded between the Republic of the
Philippines and the Spanish State could not have been intended to modify
the laws and regulations governing admission to the practice of law in the
Philippines, for the reason that the Executive Department may not encroach
upon the constitutional prerogative of the Supreme Court to promulgate rules
for admission to the practice of law in the Philippines, the lower to repeal,
alter or supplement such rules being reserved only to the Congress of the
Philippines. (See Sec. 13, Art VIII, Phil. Constitution).