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G.R. No.

L-68635 May 14, 1987


IN THE MATTER OF PROCEEDINGS FOR DISCIPLINARY ACTION AGAINST ATTY.
WENCESLAO LAURETA, AND OF CONTEMPT PROCEEDINGS AGAINST EVA
MARAVILLA-ILUSTRE in G.R. No. 68635, entitled "EVA MARAVILLA-ILUSTRE, vs. HON.
INTERMEDIATE APPELLATE COURT, ET AL."
RESOLUTION
PER CURIAM:
Before us are 1) Atty. Wenceslao Laureta's Motion for Reconsideration of the Per Curiam
Resolution of this Court promulgated on March 12, 1987, finding him guilty of grave
professional misconduct and suspending him indefinitely from the practice of law; and 2) Eva
Maravilla-Ilustre's Motion for Reconsideration of the same Resolution holding her in contempt
and ordering her to pay a fine of P1,000.00.
Essentially, Atty. Laureta maintains that the Order of suspension without hearing violated his
right to life and due process of law and by reason thereof the Order is null and void; that the
acts of misconduct imputed to him are without basis; that the charge against him that it was
he who had circulated to the press copies of the Complaint filed before the Tanodbayan is
unfounded such that, even in this Court's Resolution, his having distributed copies to the
press is not stated positively; that the banner headline which appeared In the Daily Express is
regrettable but that he was not responsible for such "misleading headline;" that he "did
nothing of the sort" being fully conscious of his responsibilities as a law practitioner and officer
of the Court; that as a former newspaperman, he would not have been satisfied with merely
circulating copies of the Complaint to the press in envelopes where his name appears; "he
himself would have written stories about the case in a manner that sells newspapers; even a
series of juicy articles perhaps, something that would have further subjected the respondent
justices to far worse publicity;" that, on the contrary, the press conference scheduled by Ilustre
was cancelled through his efforts in order to prevent any further adverse publicity resulting
from the filing of the complaint before the Tanodbayan; that, as a matter of fact, it was this
Court's Resolution that was serialized in the Bulletin Today, which newspaper also made him
the subject of a scathing editorial but that he "understands the cooperation because after all,
the Court rendered a favorable judgment in the Bulletin union case last year;" that he
considered it "below his dignity to plead for the chance to present his side" with the Editor, Mr.
Ben Rodriguez, "a long-time personal friend" since he "can afford to be the sacrificial lamb if
only to help the Honorable Court uphold its integrity;" that he was called by a reporter of
DZRH and was asked to comment on the case filed before the Tanodbayan but that his
remarks were confined to the filing of the case by Ilustre herself, and that the judgment of the
trial Court had attained its finality long ago; that he is not Ilustre's counsel before the
Tanodbayan and did not prepare the complaint filed before it, his professional services having
been terminated upon the final dismissal of Ilustre's case before this Court; that similarities in
the language and phraseology used in the Ilustre letters, in pleadings before this Court and
before the Tanodbayan do not prove his authorship since other lawyers "even of a mediocre
caliber" could very easily have reproduced them; that the discussions on the merits in the Per
Curiam Resolution are "more properly addressed to the Tanodbayan, Justice Raul M.
Gonzales being competent to deal with the case before him;" that he takes exception to the
accusation that he has manifested lack of respect for and exposed to public ridicule the two
highest Courts of the land, all he did having been to call attention to errors or injustice
committed in the promulgation of judgments or orders; that he has "not authorized or assisted
and/or abetted and could not have prevented the contemptuous statements, conduct, acts
and malicious charges of Eva Maravilla Ilustre who was no longer his client when these
alleged acts were done; that "he is grateful to this Court for the reminder on the first duty of a
lawyer which is to the Court and not to his client, a duty that he has always impressed upon
his law students;" and finally, that "for the record, he is sorry for the adverse publicity
generated by the filing of the complaint against the Justices before the Tanodbayan."
In her own Motion for Reconsideration, Eva Maravilla-Ilustre also raises as her main ground
the alleged deprivation of her constitutional right to due process. She maintains that as
contempt proceedings are commonly treated as criminal in nature, the mode of procedure
and rules of evidence in criminal prosecution should be assimilated, as far as practicable, in
this proceeding, and that she should be given every opportunity to present her side.
Additionally, she states that, with some sympathetic lawyers, they made an "investigation" and
learned that the Resolution of the First Division was arrived at without any deliberation by its
members; that Court personnel were "tight-lipped about the matter, which is shrouded
mystery" thereby prompting her to pursue a course which she thought was legal and
peaceful; that there is nothing wrong in making public the manner of voting by the Justices,
and it was for that reason that she addressed Identical letters to Associate Justices Andres

Narvasa, Ameurfina M. Herrera, Isagani Cruz and Florentino Feliciano; that "if the lawyers of
my opponents were not a Solicitor General, and member of the Supreme Court and a Division
Chairman, respectively, the resolution of May 14, 1986 would not have aroused my
suspicion;" that instead of taking the law into her own hands or joining any violent movement,
she took the legitimate step of making a peaceful investigation into how her case was
decided, and brought her grievance to the Tanodbayan "in exasperation" against those whom
she felt had committed injustice against her "in an underhanded manner."
We deny reconsideration in both instances.
The argument premised on lack of hearing and due process, is not impressed with merit.
What due process abhors is absolute lack of opportunity to be heard (Tajonera vs. Lamaroza,
et al., 110 SCRA 438 [1981]). The word "hearing" does not necessarily connote a "trial-type"
proceeding. In the show-cause Resolution of this Court, dated January 29, 1987, Atty. Laureta
was given sufficient opportunity to inform this Court of the reasons why he should not be
subjected to dispose action. His Answer, wherein he prayed that the action against him be
dismissed, contained twenty-two (22) pages, double spaced. Eva Maravilla-Ilustre was also
given a like opportunity to explain her statements, conduct, acts and charges against the
Court and/or the official actions of the Justices concerned. Her Compliance Answer, wherein
she prayed that the contempt proceeding against her be dismissed, contained nineteen (19)
pages, double spaced. Both were afforded ample latitude to explain matters fully. Atty. Laureta
denied having authored the letters written by Ilustre, his being her counsel before the
Tanodbayan, his having circularized to the press copies of the complaint filed before said
body, and his having committed acts unworthy of his profession. But the Court believed
otherwise and found that those letters and the charges levelled against the Justices
concerned, of themselves and by themselves, betray not only their malicious and
contemptuous character, but also the lack of respect for the two highest Courts of the land, a
complete obliviousness to the fundamental principle of separation of powers, and a wanton
disregard of the cardinal doctrine of independence of the Judiciary. Res ipsa loquitur. Nothing
more needed to have been said or proven. The necessity to conduct any further evidentially
hearing was obviated (See People vs. Hon. Valenzuela, G.R. Nos. 63950-60, April 19, 1985,
135 SCRA 712). Atty. Laureta and Ilustre were given ample opportunity to be heard, and
were, in fact, heard.
(1)
In his Motion for Reconsideration, Atty. Laureta reiterates his allegations in his Answer to the
show-cause Resolution that his professional services were terminated by Ilustre after the
dismissal of the main petition by this Court; that he had nothing to do with the contemptuous
letters to the individual Justices; and that he is not Ilustre's counsel before the Tanodbayan.
Significantly enough, however, copy of the Tanodbayan Resolution dismissing Ilustre's
Complaint was furnished Atty. Laureta as "counsel for the complainant" at his address of
record. Of note, too, is the fact that it was he who was following up the Complaint before the
Tanodbayan and, after its dismissal, the Motion for Reconsideration of the Order of dismissal.
Of import, as well, is the report of Lorenzo C. Bardel, a process server of this Court, that after
having failed to serve copy of the Per Curiam Resolution of March 12, 1987 of this Court on
Ilustre personally at her address of record, "101 F. Manalo St., Cubao, Quezon City," having
been informed that she is 6 not a resident of the place," he proceeded to the residence of Atty.
Laureta where the latter's wife "voluntarily received the two copies of decision for her husband
and for Ms. Maravina-Ilustre" (p. 670, Rollo, Vol. 11).
That Ilustre subsequently received copy of this Court's Resolution delivered to Mrs. Laureta is
shown by the fact that she filed, as of March 27, 1987, a "Petition for Extension of Time to file
Motion for Reconsideration" and subsequently the Motion for Reconsideration. In that Petition
Ilustre acknowledged receipt of the Resolution on March 12, 1987, the very same date Mrs.
Laureta received copy thereof. If, indeed, the lawyer-client relationship between her husband
and Ilustre had been allegedly completely severed, all Mrs. Laureta had to do was to return to
the Sheriff the copy intended for Ilustre. As it was, however, service on Atty. Laureta proved to
be service on Ilustre as well. The close tie- up between the corespondents is heightened by
the fact that three process servers of this Court failed to serve copy of this Court's Per Curiam
Resolution on Ilustre personally.
Noteworthy, as well, is that by Atty. Laureta's own admission, he was the one called by a
"reporter" of DZRH to comment on the Ilustre charges before the Tanodbayan. If, in fact, he
had nothing to do with the complaint, he would not have been pinpointed at all. And if his
disclaimer were the truth, the logical step for him to have taken was to refer the caller to the
lawyer/s allegedly assisting Ilustre, at the very least, out of elementary courtesy and propriety.
But he did nothing of the sort. " He gave his comment with alacrity.
The impudence and lack of respect of Atty. Laureta for this Court again surfaces when he
asserts in his Motion for Reconsideration that he "understands the cooperation" of the Bulletin

Today as manifested in the serialized publication of the Per Curiam Resolution of this Court
and his being subjected to a scathing editorial by the same newspaper "because after all, the
Court rendered a favorable judgment in the Bulletin union case last year." The malice lurking
in that statement is most unbecoming of an officer of the Court and is an added reason for
denying reconsideration.
Further, Atty. Laureta stubbornly contends that discussions on the merits in the Court's Per
Curiam Resolution are more properly addressed to the Tanodbayan, forgetting, however, his
own discourse on the merits in his Answer to this Court's Resolution dated January 29, 1987.
He thus incorrigibly insists on subordinating the Judiciary to the executive notwithstanding the
categorical pronouncement in the Per Curiam Resolution of March 12, 1987, that Article 204
of the Revised Penal Code has no application to the members of a collegiate Court; that a
charge of violation of the Anti-Graft and Corrupt Practices Act on the ground that a collective
decision is "unjust" cannot prosper; plus the clear and extended dissertation in the same Per
Curiam Resolution on the fundamental principle of separation of powers and of checks and
balances, pursuant to which it is this Court "entrusted exclusively with the judicial power to
adjudicate with finality all justifiable disputes, public and private. No other department or
agency may pass upon its judgments or declare them 'unjust' upon controlling and irresistible
reasons of public policy and of sound practice."
Atty. Laureta's protestations that he has done his best to protect and uphold the dignity of this
Court are belied by environmental facts and circumstances. His apologetic stance for the
"adverse publicity" generated by the filing of the charges against the Justices concerned
before the Tanodbayan rings with insincerity. The complaint was calculated precisely to serve
that very purpose. The threat to bring the case to "another forum of justice" was implemented
to the fun. Besides, he misses the heart of the matter. Exposure to the glare of publicity is an
occupational hazard. If he has been visited with disciplinary sanctions it is because by his
conduct, acts and statements, he has, overall, deliberately sought to destroy the "authenticity,
integrity, and conclusiveness of collegiate acts," to "undermine the role of the Supreme Court
as the final arbiter of all justifiable disputes," and to subvert public confidence in the integrity
of the Courts and the Justices concerned, and in the orderly administration of justice.
In fine, we discern nothing in Atty. Laureta's Motion for Reconsideration that would call for a
modification, much less a reversal, of our finding that he is guilty of grave professional
misconduct that renders him unfit to continue to be entrusted with the duties and
responsibilities pertaining to an attorney and officer of the Court.
(2)
Neither do we find merit in Ilustre's Motion for Reconsideration. She has turned deaf ears to
any reason or clarification. She and her counsel have refused to accept the untenability of
their case and the inevitability of losing in Court. They have allowed suspicion alone to blind
their actions and in so doing degraded the administration of justice. "Investigation" was utterly
uncalled for. All conclusions and judgments of the Court, be they en banc or by Division, are
arrived at only after deliberation. The fact that no dissent was indicated in the Minutes of the
proceedings held on May 14, 1986 showed that the members of the Division voted
unanimously. Court personnel are not in a position to know the voting in any case because all
deliberations are held behind closed doors without any one of them being present. No
malicious inferences should have been drawn from their inability to furnish the information
Ilustre and Atty. Laureta desired The personality of the Solicitor General never came into the
picture. It was Justice Abad Santos, and not Justice Yap, who was Chairman of the First
Division when the Resolution of May 14, 1986 denying the Petition was rendered. Thereafter
Justice Yap inhibited himself from any participation. The fact that the Court en banc upheld
the challenged Resolutions of the First Division emphasizes the irrespective of Ilustre's case
irrespective of the personalities involved.
Additionally, Ilustre has been trifling with this Court. She has given our process servers the
run-around. Three of them failed to serve on her personally her copy of this Court's Per
Curiam Resolution of March 12, 1987 at her address of record. Mrs. Laureta informed
process server Lorenzo C. Bardel that Ilustre was residing at 17-D, Quezon St., Tondo,
Manila. Romeo C. Regala, another process server, went to that address to serve copy of the
Resolution but he reported:
4. That inspite of diligent efforts to locate the address of ms.Eva Maravilla-Ilustre, said
address could not be located;
5. That I even asked the occupants (Cerdan Family) of No. 17 Quezon Street, Tondo, Manila,
and they informed that there is no such Ms. Eva Maravilla-Ilustre in the neighborhood and/or
in the vicinity; ... (p. 672, Rollo, Vol. 11).
The third process server, Nelson C. Cabesuela, was also unable to serve copy of this Court's
Resolution on Ilustre. He reported:

2. On March 17, 1987, at about 9:30 A.M., I arrived at the house in the address furnished at;
the notice of judgment (101 Felix Manalo St., Cubao, Quezon City), and was received by an
elderly woman who admitted to be the owner of the house but vehemently refused to be
Identified, and told me that she does not know the addressee Maravilla, and told me further
that she always meets different persons looking for Miss Maravilla because the latter always
gives the address of her house;
3. That, I was reminded of an incident that I also experienced in the same place trying to
serve a resolution to Miss Maravilla which was returned unserved because she is not known
in the place; ... (p. 674, Rollo, Vol. II).
And yet, in her Petition for Extension of Time and in her Motion for Reconsideration she
persists in giving that address at 101 Felix Manalo St., Cubao, Quezon City, where our
process servers were told that she was not a resident of and that she was unknown thereat. If
for her contumacious elusiveness and lack of candor alone, Ilustre deserves no further
standing before this Court.
ACCORDINGLY, the respective Motions for reconsideration of Atty. Wenceslao G. Laureta for
the setting aside of the order suspending him from the practice of law, and of Eva Maravilla
Ilustre for the lifting of the penalty for contempt are DENIED, and this denial is FINAL. Eva
Maravilla Ilustre shall pay the fine of P1,000.00 imposed on her within ten (10) days from
notice, or, suffer imprisonment for ten (10) days upon failure to pay said fine within the
stipulated period.
SO ORDERED.

G.R. No. 71977 February 27, 1987


DEMETRIO G. DEMETRIA, M.P., AUGUSTO S. SANCHEZ, M.P., ORLANDO S. MERCADO,
M.P., HONORATO Y. AQUINO, M.P., ZAFIRO L. RESPICIO, M.P., DOUGLAS R. CAGAS,

M.P., OSCAR F. SANTOS, M.P., ALBERTO G. ROMULO, M.P., CIRIACO R. ALFELOR,


M.P., ISIDORO E. REAL, M.P., EMIGDIO L. LINGAD, M.P., ROLANDO C. MARCIAL, M.P.,
PEDRO M. MARCELLANA, M.P., VICTOR S. ZIGA, M.P., and ROGELIO V. GARCIA. M.P.,
petitioners,
vs.
HON. MANUEL ALBA in his capacity as the MINISTER OF THE BUDGET and VICTOR
MACALINGCAG in his capacity as the TREASURER OF THE PHILIPPINES, respondents.
FERNAN, J.:
Assailed in this petition for prohibition with prayer for a writ of preliminary injunction is the
constitutionality of the first paragraph of Section 44 of Presidential Decree No. 1177,
otherwise known as the "Budget Reform Decree of 1977."
Petitioners, who filed the instant petition as concerned citizens of this country, as members of
the National Assembly/Batasan Pambansa representing their millions of constituents, as
parties with general interest common to all the people of the Philippines, and as taxpayers
whose vital interests may be affected by the outcome of the reliefs prayed for" 1 listed the
grounds relied upon in this petition as follows:
A. SECTION 44 OF THE 'BUDGET REFORM DECREE OF 1977' INFRINGES UPON THE
FUNDAMENTAL LAW BY AUTHORIZING THE ILLEGAL TRANSFER OF PUBLIC MONEYS.
B. SECTION 44 OF PRESIDENTIAL DECREE NO. 1177 IS REPUGNANT TO THE
CONSTITUTION AS IT FAILS TO SPECIFY THE OBJECTIVES AND PURPOSES FOR
WHICH THE PROPOSED TRANSFER OF FUNDS ARE TO BE MADE.
C. SECTION 44 OF PRESIDENTIAL DECREE NO. 1177 ALLOWS THE PRESIDENT TO
OVERRIDE THE SAFEGUARDS, FORM AND PROCEDURE PRESCRIBED BY THE
CONSTITUTION IN APPROVING APPROPRIATIONS.
D. SECTION 44 OF THE SAME DECREE AMOUNTS TO AN UNDUE DELEGATION OF
LEGISLATIVE POWERS TO THE EXECUTIVE.
E. THE THREATENED AND CONTINUING TRANSFER OF FUNDS BY THE PRESIDENT
AND THE IMPLEMENTATION THEREOF BY THE BUDGET MINISTER AND THE
TREASURER OF THE PHILIPPINES ARE WITHOUT OR IN EXCESS OF THEIR
AUTHORITY AND JURISDICTION. 2
Commenting on the petition in compliance with the Court resolution dated September 19,
1985, the Solicitor General, for the public respondents, questioned the legal standing of
petitioners, who were allegedly merely begging an advisory opinion from the Court, there
being no justiciable controversy fit for resolution or determination. He further contended that
the provision under consideration was enacted pursuant to Section 16[5], Article VIII of the
1973 Constitution; and that at any rate, prohibition will not lie from one branch of the
government to a coordinate branch to enjoin the performance of duties within the latter's
sphere of responsibility.
On February 27, 1986, the Court required the petitioners to file a Reply to the Comment. This,
they did, stating, among others, that as a result of the change in the administration, there is a
need to hold the resolution of the present case in abeyance "until developments arise to
enable the parties to concretize their respective stands." 3
Thereafter, We required public respondents to file a rejoinder. The Solicitor General filed a
rejoinder with a motion to dismiss, setting forth as grounds therefor the abrogation of Section
16[5], Article VIII of the 1973 Constitution by the Freedom Constitution of March 25, 1986,
which has allegedly rendered the instant petition moot and academic. He likewise cited the
"seven pillars" enunciated by Justice Brandeis in Ashwander v. TVA, 297 U.S. 288 (1936) 4 as
basis for the petition's dismissal.
In the case of Evelio B. Javier v. The Commission on Elections and Arturo F. Pacificador, G.R.
Nos. 68379-81, September 22, 1986, We stated that:
The abolition of the Batasang Pambansa and the disappearance of the office in dispute
between the petitioner and the private respondents both of whom have gone their separate
ways could be a convenient justification for dismissing the case. But there are larger issues
involved that must be resolved now, once and for all, not only to dispel the legal ambiguities
here raised. The more important purpose is to manifest in the clearest possible terms that this
Court will not disregard and in effect condone wrong on the simplistic and tolerant pretext that
the case has become moot and academic.
The Supreme Court is not only the highest arbiter of legal questions but also the conscience
of the government. The citizen comes to us in quest of law but we must also give him justice.
The two are not always the same. There are times when we cannot grant the latter because
the issue has been settled and decision is no longer possible according to the law. But there
are also times when although the dispute has disappeared, as in this case, it nevertheless

cries out to be resolved. Justice demands that we act then, not only for the vindication of the
outraged right, though gone, but also for the guidance of and as a restraint upon the future.
It is in the discharge of our role in society, as above-quoted, as well as to avoid great
disservice to national interest that We take cognizance of this petition and thus deny public
respondents' motion to dismiss. Likewise noteworthy is the fact that the new Constitution,
ratified by the Filipino people in the plebiscite held on February 2, 1987, carries verbatim
section 16[5], Article VIII of the 1973 Constitution under Section 24[5], Article VI. And while
Congress has not officially reconvened, We see no cogent reason for further delaying the
resolution of the case at bar.
The exception taken to petitioners' legal standing deserves scant consideration. The case of
Pascual v. Secretary of Public Works, et al., 110 Phil. 331, is authority in support of
petitioners' locus standi. Thus:
Again, it is well-settled that the validity of a statute may be contested only by one who will
sustain a direct injury in consequence of its enforcement. Yet, there are many decisions
nullifying at the instance of taxpayers, laws providing for the disbursement of public funds,
upon the theory that the expenditure of public funds by an officer of the state for the purpose
of administering an unconstitutional act constitutes a misapplication of such funds which may
be enjoined at the request of a taxpayer. Although there are some decisions to the contrary,
the prevailing view in the United States is stated in the American Jurisprudence as follows:
In the determination of the degree of interest essential to give the requisite standing to attack
the constitutionality of a statute, the general rule is that not only persons individually affected,
but also taxpayers have sufficient interest in preventing the illegal expenditures of moneys
raised by taxation and may therefore question the constitutionality of statutes requiring
expenditure of public moneys. [ 11 Am. Jur. 761, Emphasis supplied. ]
Moreover, in Tan v. Macapagal, 43 SCRA 677 and Sanidad v. Comelec, 73 SCRA 333, We
said that as regards taxpayers' suits, this Court enjoys that open discretion to entertain the
same or not.
The conflict between paragraph 1 of Section 44 of Presidential Decree No. 1177 and Section
16[5], Article VIII of the 1973 Constitution is readily perceivable from a mere cursory reading
thereof. Said paragraph 1 of Section 44 provides:
The President shall have the authority to transfer any fund, appropriated for the different
departments, bureaus, offices and agencies of the Executive Department, which are included
in the General Appropriations Act, to any program, project or activity of any department,
bureau, or office included in the General Appropriations Act or approved after its enactment.
On the other hand, the constitutional provision under consideration reads as follows:
Sec. 16[5]. No law shall be passed authorizing any transfer of appropriations, however, the
President, the Prime Minister, the Speaker, the Chief Justice of the Supreme Court, and the
heads of constitutional commis ions may by law be authorized to augment any item in the
general appropriations law for their respective offices from savings in other items of their
respective appropriations.
The prohibition to transfer an appropriation for one item to another was explicit and
categorical under the 1973 Constitution. However, to afford the heads of the different
branches of the government and those of the constitutional commissions considerable
flexibility in the use of public funds and resources, the constitution allowed the enactment of a
law authorizing the transfer of funds for the purpose of augmenting an item from savings in
another item in the appropriation of the government branch or constitutional body concerned.
The leeway granted was thus limited. The purpose and conditions for which funds may be
transferred were specified, i.e. transfer may be allowed for the purpose of augmenting an item
and such transfer may be made only if there are savings from another item in the
appropriation of the government branch or constitutional body.
Paragraph 1 of Section 44 of P.D. No. 1177 unduly over extends the privilege granted under
said Section 16[5]. It empowers the President to indiscriminately transfer funds from one
department, bureau, office or agency of the Executive Department to any program, project or
activity of any department, bureau or office included in the General Appropriations Act or
approved after its enactment, without regard as to whether or not the funds to be transferred
are actually savings in the item from which the same are to be taken, or whether or not the
transfer is for the purpose of augmenting the item to which said transfer is to be made. It does
not only completely disregard the standards set in the fundamental law, thereby amounting to
an undue delegation of legislative powers, but likewise goes beyond the tenor thereof.
Indeed, such constitutional infirmities render the provision in question null and void.
"For the love of money is the root of all evil: ..." and money belonging to no one in particular,
i.e. public funds, provide an even greater temptation for misappropriation and embezzlement.
This, evidently, was foremost in the minds of the framers of the constitution in meticulously
prescribing the rules regarding the appropriation and disposition of public funds as embodied

in Sections 16 and 18 of Article VIII of the 1973 Constitution. Hence, the conditions on the
release of money from the treasury [Sec. 18(1)]; the restrictions on the use of public funds for
public purpose [Sec. 18(2)]; the prohibition to transfer an appropriation for an item to another
[See. 16(5) and the requirement of specifications [Sec. 16(2)], among others, were all
safeguards designed to forestall abuses in the expenditure of public funds. Paragraph 1 of
Section 44 puts all these safeguards to naught. For, as correctly observed by petitioners, in
view of the unlimited authority bestowed upon the President, "... Pres. Decree No. 1177 opens
the floodgates for the enactment of unfunded appropriations, results in uncontrolled executive
expenditures, diffuses accountability for budgetary performance and entrenches the pork
barrel system as the ruling party may well expand [sic] public money not on the basis of
development priorities but on political and personal expediency." 5 The contention of public
respondents that paragraph 1 of Section 44 of P.D. 1177 was enacted pursuant to Section
16(5) of Article VIII of the 1973 Constitution must perforce fall flat on its face.
Another theory advanced by public respondents is that prohibition will not lie from one branch
of the government against a coordinate branch to enjoin the performance of duties within the
latter's sphere of responsibility.
Thomas M. Cooley in his "A Treatise on the Constitutional Limitations," Vol. 1, Eight Edition,
Little, Brown and Company, Boston, explained:
... The legislative and judicial are coordinate departments of the government, of equal dignity;
each is alike supreme in the exercise of its proper functions, and cannot directly or indirectly,
while acting within the limits of its authority, be subjected to the control or supervision of the
other, without an unwarrantable assumption by that other of power which, by the Constitution,
is not conferred upon it. The Constitution apportions the powers of government, but it does
not make any one of the three departments subordinate to another, when exercising the trust
committed to it. The courts may declare legislative enactments unconstitutional and void in
some cases, but not because the judicial power is superior in degree or dignity to the
legislative. Being required to declare what the law is in the cases which come before them,
they must enforce the Constitution, as the paramount law, whenever a legislative enactment
comes in conflict with it. But the courts sit, not to review or revise the legislative action, but to
enforce the legislative will, and it is only where they find that the legislature has failed to keep
within its constitutional limits, that they are at liberty to disregard its action; and in doing so,
they only do what every private citizen may do in respect to the mandates of the courts when
the judges assumed to act and to render judgments or decrees without jurisdiction. "In
exercising this high authority, the judges claim no judicial supremacy; they are only the
administrators of the public will. If an act of the legislature is held void, it is not because the
judges have any control over the legislative power, but because the act is forbidden by the
Constitution, and because the will of the people, which is therein declared, is paramount to
that of their representatives expressed in any law." [Lindsay v. Commissioners, & c., 2 Bay,
38, 61; People v. Rucker, 5 Col. 5; Russ v. Com., 210 Pa. St. 544; 60 Atl. 169, 1 L.R.A. [N.S.]
409, 105 Am. St. Rep. 825] (pp. 332-334).
Indeed, where the legislature or the executive branch is acting within the limits of its authority,
the judiciary cannot and ought not to interfere with the former. But where the legislature or the
executive acts beyond the scope of its constitutional powers, it becomes the duty of the
judiciary to declare what the other branches of the government had assumed to do as void.
This is the essence of judicial power conferred by the Constitution "in one Supreme Court and
in such lower courts as may be established by law" [Art. VIII, Section 1 of the 1935
Constitution; Art. X, Section 1 of the 1973 Constitution and which was adopted as part of the
Freedom Constitution, and Art. VIII, Section 1 of the 1987 Constitution] and which power this
Court has exercised in many instances. *
Public respondents are being enjoined from acting under a provision of law which We have
earlier mentioned to be constitutionally infirm. The general principle relied upon cannot
therefore accord them the protection sought as they are not acting within their "sphere of
responsibility" but without it.
The nation has not recovered from the shock, and worst, the economic destitution brought
about by the plundering of the Treasury by the deposed dictator and his cohorts. A provision
which allows even the slightest possibility of a repetition of this sad experience cannot remain

Republic of the Philippines


SUPREME COURT
Manila
EN BANC

HACIENDA LUISITA, INCORPORATED,


Petitioner,
LUISITA INDUSTRIAL PARK CORPORATION and RIZAL COMMERCIAL BANKING CORPORATION,
Petitioners-in-Intervention,
- versus PRESIDENTIAL AGRARIAN REFORM COUNCIL; SECRETARY NASSER PANGANDAMAN OF THE DEPARTMENT OF AGRARIAN
REFORM; ALYANSA NG MGA MANGGAGAWANG BUKID NG HACIENDA LUISITA, RENE GALANG, NOEL MALLARI, and JULIO
SUNIGA[if !supportFootnotes][1][endif] and his SUPERVISORY GROUP OF THE HACIENDA LUISITA, INC. and WINDSOR ANDAYA,
Respondents.
G.R. No. 171101
Present:
CORONA, C.J.,
CARPIO,
VELASCO, JR.,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
VILLARAMA, JR.,
PEREZ,
MENDOZA, and
SERENO,
REYES,
PERLAS-BERNABE, JJ.

Promulgated:
November 22, 2011
x-----------------------------------------------------------------------------------------x
RESOLUTION
VELASCO, JR., J.:

For resolution are the (1) Motion for Clarification and Partial Reconsideration dated July 21, 2011 filed by petitioner
Hacienda Luisita, Inc. (HLI); (2) Motion for Partial Reconsideration dated July 20, 2011 filed by public respondents Presidential Agrarian
Reform Council (PARC) and Department of Agrarian Reform (DAR); (3) Motion for Reconsideration dated July 19, 2011 filed by private
respondent Alyansa ng mga Manggagawang Bukid sa Hacienda Luisita (AMBALA); (4) Motion for Reconsideration dated July 21, 2011
filed by respondent-intervenor Farmworkers Agrarian Reform Movement, Inc. (FARM); (5) Motion for Reconsideration dated July 21, 2011
filed by private respondents Noel Mallari, Julio Suniga, Supervisory Group of Hacienda Luisita, Inc. (Supervisory Group) and Windsor
Andaya (collectively referred to as Mallari, et al.); and (6) Motion for Reconsideration dated July 22, 2011 filed by private respondents
Rene Galang and AMBALA.[if !supportFootnotes][2][endif]
On July 5, 2011, this Court promulgated a Decision [if !supportFootnotes][3][endif] in the above-captioned case, denying the petition filed
by HLI and affirming Presidential Agrarian Reform Council (PARC) Resolution No. 2005-32-01 dated December 22, 2005 and PARC
Resolution No. 2006-34-01 dated May 3, 2006 with the modification that the original 6,296 qualified farmworker-beneficiaries of Hacienda
Luisita (FWBs) shall have the option to remain as stockholders of HLI.
In its Motion for Clarification and Partial Reconsideration dated July 21, 2011, HLI raises the following issues for Our
consideration:
A
IT IS NOT PROPER, EITHER IN LAW OR IN EQUITY, TO DISTRIBUTE TO THE ORIGINAL FWBs OF 6,296 THE
UNSPENT OR UNUSED BALANCE OF THE PROCEEDS OF THE SALE OF THE 500 HECTARES AND 80.51 HECTARES OF THE HLI
LAND, BECAUSE:
(1) THE PROCEEDS OF THE SALE BELONG TO THE CORPORATION, HLI, AS CORPORATE CAPITAL AND ASSETS IN
SUBSTITUTION FOR THE PORTIONS OF ITS LAND ASSET WHICH WERE SOLD TO THIRD PARTY;
(2) TO DISTRIBUTE THE CASH SALES PROCEEDS OF THE PORTIONS OF THE LAND ASSET TO THE FWBs, WHO
ARE STOCKHOLDERS OF HLI, IS TO DISSOLVE THE CORPORATION AND DISTRIBUTE THE PROCEEDS AS LIQUIDATING
DIVIDENDS WITHOUT EVEN PAYING THE CREDITORS OF THE CORPORATION;
(3) THE DOING OF SAID ACTS WOULD VIOLATE THE STRINGENT PROVISIONS OF THE CORPORATION CODE AND
CORPORATE PRACTICE.
B

IT IS NOT PROPER, EITHER IN LAW OR IN EQUITY, TO RECKON THE PAYMENT OF JUST COMPENSATION FROM
NOVEMBER 21, 1989 WHEN THE PARC, THEN UNDER THE CHAIRMANSHIP OF DAR SECRETARY MIRIAM DEFENSORSANTIAGO, APPROVED THE STOCK DISTRIBUTION PLAN (SDP) PROPOSED BY TADECO/HLI, BECAUSE:
(1) THAT PARC RESOLUTION NO. 89-12-2 DATED NOVEMBER 21, 1989 WAS NOT THE ACTUAL TAKING OF THE
TADECOs/HLIs AGRICULTURAL LAND;
(2) THE RECALL OR REVOCATION UNDER RESOLUTION NO. 2005-32-01 OF THAT SDP BY THE NEW PARC UNDER
THE CHAIRMANSHIP OF DAR SECRETARY NASSER PANGANDAMAN ON DECEMBER 22, 2005 OR 16 YEARS EARLIER WHEN
THE SDP WAS APPROVED DID NOT RESULT IN ACTUAL TAKING ON NOVEMBER 21, 1989;
(3) TO PAY THE JUST COMPENSATION AS OF NOVEMBER 21, 1989 OR 22 YEARS BACK WOULD BE ARBITRARY,
UNJUST, AND OPPRESSIVE, CONSIDERING THE IMPROVEMENTS, EXPENSES IN THE MAINTENANCE AND PRESERVATION OF
THE LAND, AND RISE IN LAND PRICES OR VALUE OF THE PROPERTY.
On the other hand, PARC and DAR, through the Office of the Solicitor General (OSG), raise the following issues in their
Motion for Partial Reconsideration dated July 20, 2011:
THE DOCTRINE OF OPERATIVE FACT DOES NOT APPLY TO THIS CASE FOR THE FOLLOWING REASONS:
I
THERE IS NO LAW OR RULE WHICH HAS BEEN INVALIDATED ON THE GROUND OF UNCONSTITUTIONALITY; AND
II
THIS DOCTRINE IS A RULE OF EQUITY WHICH MAY BE APPLIED ONLY IN THE ABSENCE OF A LAW. IN THIS CASE,
THERE IS A POSITIVE LAW WHICH MANDATES THE DISTRIBUTION OF THE LAND AS A RESULT OF THE REVOCATION OF THE
STOCK DISTRIBUTION PLAN (SDP).
For its part, AMBALA poses the following issues in its Motion for Reconsideration dated July 19, 2011:
I
THE MAJORITY OF THE MEMBERS OF THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING THAT
SECTION 31 OF REPUBLIC ACT 6657 (RA 6657) IS CONSTITUTIONAL.
II
THE MAJORITY OF THE MEMBERS OF THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING THAT
ONLY THE [PARCS] APPROVAL OF HLIs PROPOSAL FOR STOCK DISTRIBUTION UNDER CARP AND THE [SDP] WERE REVOKED
AND NOT THE STOCK DISTRIBUTION OPTION AGREEMENT (SDOA).
III
THE MAJORITY OF THE MEMBERS OF THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN APPLYING THE
DOCTRINE OF OPERATIVE FACTS AND IN MAKING THE [FWBs] CHOOSE TO OPT FOR ACTUAL LAND DISTRIBUTION OR TO
REMAIN AS STOCKHOLDERS OF [HLI].
IV
THE MAJORITY OF THE MEMBERS OF THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING THAT
IMPROVING THE ECONOMIC STATUS OF FWBs IS NOT AMONG THE LEGAL OBLIGATIONS OF HLI UNDER THE SDP AND AN
IMPERATIVE IMPOSITION BY [RA 6657] AND DEPARTMENT OF AGRARIAN REFORM ADMINISTRATIVE ORDER NO. 10 (DAO 10).
V
THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING THAT THE CONVERSION OF THE
AGRICULTURAL LANDS DID NOT VIOLATE THE CONDITIONS OF RA 6657 AND DAO 10.
VI
THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING THAT PETITIONER IS ENTITLED TO PAYMENT
OF JUST COMPENSATION. SHOULD THE HONORABLE COURT AFFIRM THE ENTITLEMENT OF THE PETITIONER TO JUST
COMPENSATION, THE SAME SHOULD BE PEGGED TO FORTY THOUSAND PESOS (PhP 40,000.00) PER HECTARE.
VII
THE HONORABLE COURT, WITH DUE RESPECT, ERRED IN HOLDING THAT LUISITA INDUSTRIAL PARK CORP.
(LIPCO) AND RIZAL COMMERCIAL BANKING CORPORATION (RCBC) ARE INNOCENT PURCHASERS FOR VALUE.
In its Motion for Reconsideration dated July 21, 2011, FARM similarly puts forth the following issues:
I
THE HONORABLE SUPREME COURT SHOULD HAVE STRUCK DOWN SECTION 31 OF [RA 6657] FOR BEING
UNCONSTITUTIONAL. THE CONSTITUTIONALITY ISSUE THAT WAS RAISED BY THE RESPONDENTS-INTERVENORS IS THE LIS
MOTA OF THE CASE.
II
THE HONORABLE SUPREME COURT SHOULD NOT HAVE APPLIED THE DOCTRINE OF OPERATIVE FACT TO THE
CASE. THE OPTION GIVEN TO THE FARMERS TO REMAIN AS STOCKHOLDERS OF HACIENDA LUISITA IS EQUIVALENT TO AN
OPTION FOR HACIENDA LUISITA TO RETAIN LAND IN DIRECT VIOLATION OF THE COMPREHENSIVE AGRARIAN REFORM LAW.
THE DECEPTIVE STOCK DISTRIBUTION OPTION / STOCK DISTRIBUTION PLAN CANNOT JUSTIFY SUCH RESULT, ESPECIALLY
AFTER THE SUPREME COURT HAS AFFIRMED ITS REVOCATION.
III
THE HONORABLE SUPREME COURT SHOULD NOT HAVE CONSIDERED [LIPCO] AND [RCBC] AS INNOCENT
PURCHASERS FOR VALUE IN THE INSTANT CASE.
Mallari, et al., on the other hand, advance the following grounds in support of their Motion for Reconsideration dated July 21,
2011:
(1) THE HOMELOTS REQUIRED TO BE DISTRIBUTED HAVE ALL BEEN DISTRIBUTED PURSUANT TO THE
MEMORANDUM OF AGREEMENT. WHAT REMAINS MERELY IS THE RELEASE OF TITLE FROM THE REGISTER OF DEEDS.
(2) THERE HAS BEEN NO DILUTION OF SHARES. CORPORATE RECORDS WOULD SHOW THAT IF EVER NOT ALL
OF THE 18,804.32 SHARES WERE GIVEN TO THE ACTUAL ORIGINAL FARMWORKER BENEFICIARY, THE RECIPIENT OF THE
DIFFERENCE IS THE NEXT OF KIN OR CHILDREN OF SAID ORIGINAL [FWBs]. HENCE, WE RESPECTFULLY SUBMIT THAT
SINCE THE SHARES WERE GIVEN TO THE SAME FAMILY BENEFICIARY, THIS SHOULD BE DEEMED AS SUBSTANTIAL
COMPLIANCE WITH THE PROVISIONS OF SECTION 4 OF DAO 10.
(3) THERE HAS BEEN NO VIOLATION OF THE 3-MONTH PERIOD TO IMPLEMENT THE [SDP] AS PROVIDED FOR BY
SECTION 11 OF DAO 10 AS THIS PROVISION MUST BE READ IN LIGHT OF SECTION 10 OF EXECUTIVE ORDER NO. 229, THE
PERTINENT PORTION OF WHICH READS, THE APPROVAL BY THE PARC OF A PLAN FOR SUCH STOCK DISTRIBUTION, AND ITS
INITIAL IMPLEMENTATION, SHALL BE DEEMED COMPLIANCE WITH THE LAND DISTRIBUTION REQUIREMENT OF THE CARP.
(4) THE VALUATION OF THE LAND CANNOT BE BASED AS OF NOVEMBER 21, 1989, THE DATE OF APPROVAL OF
THE STOCK DISTRIBUTION OPTION. INSTEAD, WE RESPECTFULLY SUBMIT THAT THE TIME OF TAKING FOR VALUATION
PURPOSES IS A FACTUAL ISSUE BEST LEFT FOR THE TRIAL COURTS TO DECIDE.

(5) TO THOSE WHO WILL CHOOSE LAND, THEY MUST RETURN WHAT WAS GIVEN TO THEM UNDER THE SDP. IT
WOULD BE UNFAIR IF THEY ARE ALLOWED TO GET THE LAND AND AT THE SAME TIME HOLD ON TO THE BENEFITS THEY
RECEIVED PURSUANT TO THE SDP IN THE SAME WAY AS THOSE WHO WILL CHOOSE TO STAY WITH THE SDO.
Lastly, Rene Galang and AMBALA, through the Public Interest Law Center (PILC), submit the following grounds in support
of their Motion for Reconsideration dated July 22, 2011:
I
THE HONORABLE COURT, WITH DUE RESPECT, GRAVELY ERRED IN ORDERING THE HOLDING OF A VOTING
OPTION INSTEAD OF TOTALLY REDISTRIBUTING THE SUBJECT LANDS TO [FWBs] in [HLI].
A. THE HOLDING OF A VOTING OPTION HAS NO LEGAL BASIS. THE REVOCATION OF THE [SDP] CARRIES WITH IT
THE REVOCATION OF THE [SDOA].
B. GIVING THE [FWBs] THE OPTION TO REMAIN AS STOCKHOLDERS OF HLI WITHOUT MAKING THE NECESSARY
CHANGES IN THE CORPORATE STRUCTURE WOULD ONLY SUBJECT THEM TO FURTHER MANIPULATION AND HARDSHIP.
C. OTHER VIOLATIONS COMMITTED BY HLI UNDER THE [SDOA] AND PERTINENT LAWS JUSTIFY TOTAL LAND
REDISTRIBUTION OF HACIENDA LUISITA.
II
THE HONORABLE COURT, WITH DUE RESPECT, GRAVELY ERRED IN HOLDING THAT THE [RCBC] AND [LIPCO] ARE
INNOCENT PURCHASERS FOR VALUE OF THE 300-HECTARE PROPERTY IN HACIENDA LUISITA THAT WAS SOLD TO THEM
PRIOR TO THE INCEPTION OF THE PRESENT CONTROVERSY.
Ultimately, the issues for Our consideration are the following: (1) applicability of the operative fact doctrine; (2)
constitutionality of Sec. 31 of RA 6657 or the Comprehensive Agrarian Reform Law of 1988; (3) coverage of compulsory acquisition; (4)
just compensation; (5) sale to third parties; (6) the violations of HLI; and (7) control over agricultural lands.
We shall discuss these issues accordingly.
I. Applicability of the Operative Fact Doctrine
In their motion for partial reconsideration, DAR and PARC argue that the doctrine of operative fact does not apply to the
instant case since: (1) there is no law or rule which has been invalidated on the ground of unconstitutionality; [if !supportFootnotes][4][endif] (2) the
doctrine of operative fact is a rule of equity which may be applied only in the absence of a law, and in this case, they maintain that there is
a positive law which mandates the distribution of the land as a result of the revocation of the stock distribution plan (SDP). [if !supportFootnotes][5]
[endif]

Echoing the stance of DAR and PARC, AMBALA submits that the operative fact doctrine should only be made to apply in the
extreme case in which equity demands it, which allegedly is not in the instant case. [if !supportFootnotes][6][endif] It further argues that there would be
no undue harshness or injury to HLI in case lands are actually distributed to the farmworkers, and that the decision which orders the
farmworkers to choose whether to remain as stockholders of HLI or to opt for land distribution would result in inequity and prejudice to the
farmworkers.[if !supportFootnotes][7][endif] The foregoing views are also similarly shared by Rene Galang and AMBALA, through the PILC. [if !
supportFootnotes][8][endif]
In addition, FARM posits that the option given to the FWBs is equivalent to an option for HLI to retain land in direct
violation of RA 6657.[if !supportFootnotes][9][endif]
[if !supportLists](a) [endif]Operative Fact Doctrine Not Limited to
Invalid or Unconstitutional Laws

Contrary to the stance of respondents, the operative fact doctrine does not only apply to laws subsequently declared
unconstitutional or unlawful, as it also applies to executive acts subsequently declared as invalid. As We have discussed in Our July 5,
2011 Decision:
That the operative fact doctrine squarely applies to executive actsin this case, the approval by PARC of the HLI proposal for
stock distributionis well-settled in our jurisprudence. In Chavez v. National Housing Authority, We held:

Petitioner postulates that the operative fact doctrine is inapplicable to the present case
because it is an equitable doctrine which could not be used to countenance an inequitable result that
is contrary to its proper office.

On the other hand, the petitioner Solicitor General argues


that the existence of the various agreements implementing the SMDRP is

an operative fact that can no longer be disturbed or simply ignored, citing


Rieta v. People of the Philippines.

The argument of the Solicitor General is meritorious.

The operative fact doctrine is embodied in De Agbayani v. Court of Appeals, wherein it


is stated that a legislative or executive act, prior to its being declared as unconstitutional by the
courts, is valid and must be complied with, thus:

xxx xxx xxx

This doctrine was reiterated in the more recent case of City


of Makati v. Civil Service Commission, wherein we ruled that:

Moreover, we certainly cannot nullify the City Government's


order of suspension, as we have no reason to do so, much less
retroactively apply such nullification to deprive private respondent of a
compelling and valid reason for not filing the leave application. For as we
have held, a void act though in law a mere scrap of paper
nonetheless confers legitimacy upon past acts or omissions done in
reliance thereof. Consequently, the existence of a statute or executive
order prior to its being adjudged void is an operative fact to which legal
consequences are attached. It would indeed be ghastly unfair to prevent
private respondent from relying upon the order of suspension in lieu of a
formal leave application.

The applicability of the operative fact doctrine to executive


acts was further explicated by this Court in Rieta v. People, thus:

Petitioner contends that his arrest by virtue of Arrest Search and Seizure Order (ASSO)
No. 4754 was invalid, as the law upon which it was predicated General Order No. 60, issued by then
President Ferdinand E. Marcos was subsequently declared by the Court, in Taada v. Tuvera, 33 to
have no force and effect. Thus, he asserts, any evidence obtained pursuant thereto is inadmissible in
evidence.

We do not agree. In Taada, the Court addressed the possible


effects of its declaration of the invalidity of various presidential issuances.
Discussing therein how such a declaration might affect acts done on a
presumption of their validity, the Court said:

. . .. In similar situations in the past this Court had taken the pragmatic and realistic
course set forth in Chicot County Drainage District vs. Baxter Bank to wit:

The courts below have proceeded on the theory that the Act of Congress, having been
found to be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing
no duties, and hence affording no basis for the challenged decree. . . . It is quite clear, however, that
such broad statements as to the effect of a determination of unconstitutionality must be taken with
qualifications. The actual existence of a statute, prior to [the determination of its invalidity], is an
operative fact and may have consequences which cannot justly be ignored. The past cannot always
be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have
to be considered in various aspects with respect to particular conduct, private and official. Questions
of rights claimed to have become vested, of status, of prior determinations deemed to have finality
and acted upon accordingly, of public policy in the light of the nature both of the statute and of its
previous application, demand examination. These questions are among the most difficult of those
which have engaged the attention of courts, state and federal, and it is manifest from numerous
decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be
justified.

xxx xxx xxx

Similarly, the implementation/ enforcement of presidential decrees prior to their


publication in the Official Gazette is an operative fact which may have consequences which cannot
be justly ignored. The past cannot always be erased by a new judicial declaration . . . that an allinclusive statement of a principle of absolute retroactive invalidity cannot be justified.

The Chicot doctrine cited in Taada advocates that, prior to the nullification of a statute,
there is an imperative necessity of taking into account its actual existence as an operative fact
negating the acceptance of a principle of absolute retroactive invalidity. Whatever was done while the
legislative or the executive act was in operation should be duly recognized and presumed to be
valid in all respects. The ASSO that was issued in 1979 under General Order No. 60 long before
our Decision in Taada and the arrest of petitioner is an operative fact that can no longer be
disturbed or simply ignored. (Citations omitted; emphasis in the original.)

Bearing in mind that PARC Resolution No. 89-12-2 [if !supportFootnotes][10][endif]an executive actwas declared invalid in the instant
case, the operative fact doctrine is clearly applicable.
Nonetheless, the minority is of the persistent view that the applicability of the operative fact doctrine should be limited to
statutes and rules and regulations issued by the executive department that are accorded the same status as that of a statute or those
which are quasi-legislative in nature. Thus, the minority concludes that the phrase executive act used in the case of De Agbayani v.
Philippine National Bank[if !supportFootnotes][11][endif] refers only to acts, orders, and rules and regulations that have the force and effect of law. The
minority also made mention of the Concurring Opinion of Justice Enrique Fernando in Municipality of Malabang v. Benito,[if !supportFootnotes][12]
[endif]
where it was supposedly made explicit that the operative fact doctrine applies to executive acts, which are ultimately quasi-legislative
in nature.
We disagree. For one, neither the De Agbayani case nor the Municipality of Malabang case elaborates what executive act
mean. Moreover, while orders, rules and regulations issued by the President or the executive branch have fixed definitions and meaning
in the Administrative Code and jurisprudence, the phrase executive act does not have such specific definition under existing laws. It
should be noted that in the cases cited by the minority, nowhere can it be found that the term executive act is confined to the foregoing.
Contrarily, the term executive act is broad enough to encompass decisions of administrative bodies and agencies under the executive
department which are subsequently revoked by the agency in question or nullified by the Court.
A case in point is the concurrent appointment of Magdangal B. Elma (Elma) as Chairman of the Presidential Commission on
Good Government (PCGG) and as Chief Presidential Legal Counsel (CPLC) which was declared unconstitutional by this Court in Public
Interest Center, Inc. v. Elma.[if !supportFootnotes][13][endif] In said case, this Court ruled that the concurrent appointment of Elma to these offices is in
violation of Section 7, par. 2, Article IX-B of the 1987 Constitution, since these are incompatible offices. Notably, the appointment of Elma
as Chairman of the PCGG and as CPLC is, without a question, an executive act. Prior to the declaration of unconstitutionality of the said
executive act, certain acts or transactions were made in good faith and in reliance of the appointment of Elma which cannot just be set
aside or invalidated by its subsequent invalidation.
In Tan v. Barrios,[if !supportFootnotes][14][endif] this Court, in applying the operative fact doctrine, held that despite the invalidity of the
jurisdiction of the military courts over civilians, certain operative facts must be acknowledged to have existed so as not to trample upon
the rights of the accused therein. Relevant thereto, in Olaguer v. Military Commission No. 34,[if !supportFootnotes][15][endif] it was ruled that military
tribunals pertain to the Executive Department of the Government and are simply instrumentalities of the executive power, provided by the
legislature for the President as Commander-in-Chief to aid him in properly commanding the army and navy and enforcing discipline
therein, and utilized under his orders or those of his authorized military representatives. [if !supportFootnotes][16][endif]
Evidently, the operative fact doctrine is not confined to statutes and rules and regulations issued by the executive
department that are accorded the same status as that of a statute or those which are quasi-legislative in nature.
Even assuming that De Agbayani initially applied the operative fact doctrine only to executive issuances like orders and
rules and regulations, said principle can nonetheless be applied, by analogy, to decisions made by the President or the agencies under
the executive department. This doctrine, in the interest of justice and equity, can be applied liberally and in a broad sense to encompass
said decisions of the executive branch. In keeping with the demands of equity, the Court can apply the operative fact doctrine to acts and
consequences that resulted from the reliance not only on a law or executive act which is quasi-legislative in nature but also on decisions
or orders of the executive branch which were later nullified. This Court is not unmindful that such acts and consequences must be
recognized in the higher interest of justice, equity and fairness.
Significantly, a decision made by the President or the administrative agencies has to be complied with because it has the
force and effect of law, springing from the powers of the President under the Constitution and existing laws. Prior to the nullification or
recall of said decision, it may have produced acts and consequences in conformity to and in reliance of said decision, which must be
respected. It is on this score that the operative fact doctrine should be applied to acts and consequences that resulted from the
implementation of the PARC Resolution approving the SDP of HLI.
More importantly, respondents, and even the minority, failed to clearly explain how the option to remain in HLI granted to
individual farmers would result in inequity and prejudice. We can only surmise that respondents misinterpreted the option as a
referendum where all the FWBs will be bound by a majority vote favoring the retention of all the 6,296 FWBs as HLI stockholders.
Respondents are definitely mistaken. The fallo of Our July 5, 2011 Decision is unequivocal that only those FWBs who signified their
desire to remain as HLI stockholders are entitled to 18,804.32 shares each, while those who opted not to remain as HLI stockholders will
be given land by DAR. Thus, referendum was not required but only individual options were granted to each FWB whether or not they will
remain in HLI.
The application of the operative fact doctrine to the FWBs is not iniquitous and prejudicial to their interests but is actually
beneficial and fair to them. First, they are granted the right to remain in HLI as stockholders and they acquired said shares without paying
their value to the corporation. On the other hand, the qualified FWBs are required to pay the value of the land to the Land Bank of the
Philippines (LBP) if land is awarded to them by DAR pursuant to RA 6657. If the qualified FWBs really want agricultural land, then they
can simply say no to the option. And second, if the operative fact doctrine is not applied to them, then the FWBs will be required to return
to HLI the 3% production share, the 3% share in the proceeds of the sale of the 500-hectare converted land, and the 80.51-hectare
Subic-Clark-Tarlac Expressway (SCTEX) lot, the homelots and other benefits received by the FWBs from HLI. With the application of the
operative fact doctrine, said benefits, homelots and the 3% production share and 3% share from the sale of the 500-hectare and SCTEX

lots shall be respected with no obligation to refund or return them. The receipt of these things is an operative fact that can no longer be
disturbed or simply ignored.
(b) The Operative Fact Doctrine as Recourse in Equity
As mentioned above, respondents contend that the operative fact doctrine is a rule of equity which may be applied only in
the absence of a law, and that in the instant case, there is a positive law which mandates the distribution of the land as a result of the
revocation of the SDP.
Undeniably, the operative fact doctrine is a rule of equity. [if !supportFootnotes][17][endif] As a complement of legal jurisdiction, equity
seeks to reach and complete justice where courts of law, through the inflexibility of their rules and want of power to adapt their judgments
to the special circumstances of cases, are incompetent to do so. Equity regards the spirit and not the letter, the intent and not the form,
the substance rather than the circumstance, as it is variously expressed by different courts. [if !supportFootnotes][18][endif] Remarkably, it is applied
only in the absence of statutory law and never in contravention of said law. [if !supportFootnotes][19][endif]
In the instant case, respondents argue that the operative fact doctrine should not be applied since there is a positive law,
particularly, Sec. 31 of RA 6657, which directs the distribution of the land as a result of the revocation of the SDP. Pertinently, the last
paragraph of Sec. 31 of RA 6657 states:
If within two (2) years from the approval of this Act, the land or stock transfer envisioned above is not made or realized or
the plan for such stock distribution approved by the PARC within the same period, the agricultural land of the corporate owners or
corporation shall be subject to the compulsory coverage of this Act. (Emphasis supplied.)
Markedly, the use of the word or under the last paragraph of Sec. 31 of RA 6657 connotes that the law gives the corporate
landowner an option to avail of the stock distribution option or to have the SDP approved within two (2) years from the approval of RA
6657. This interpretation is consistent with the well-established principle in statutory construction that [t]he word or is a disjunctive term
signifying disassociation and independence of one thing from the other things enumerated; it should, as a rule, be construed in the sense
in which it ordinarily implies, as a disjunctive word. [if !supportFootnotes][20][endif] In PCI Leasing and Finance, Inc. v. Giraffe-X Creative Imaging, Inc.,
[if !supportFootnotes][21][endif]
this Court held:
Evidently, the letter did not make a demand for the payment of the P8,248,657.47 AND the return of the equipment; only
either one of the two was required. The demand letter was prepared and signed by Atty. Florecita R. Gonzales, presumably petitioners
counsel. As such, the use of or instead of and in the letter could hardly be treated as a simple typographical error, bearing in mind the
nature of the demand, the amount involved, and the fact that it was made by a lawyer. Certainly Atty. Gonzales would have known that a
world of difference exists between and and or in the manner that the word was employed in the letter.
A rule in statutory construction is that the word or is a disjunctive term signifying dissociation and independence of one thing
from other things enumerated unless the context requires a different interpretation. [if !supportFootnotes][22][endif]
In its elementary sense, or, as used in a statute, is a
disjunctive article indicating an alternative. It often connects a series
of words or propositions indicating a choice of either. When or is
used, the various members of the enumeration are to be taken
separately.[if !supportFootnotes][23][endif]

The word or is a disjunctive term signifying disassociation


and independence of one thing from each of the other things enumerated.
[if !supportFootnotes][24][endif]
(Emphasis in the original.)

Given that HLI secured approval of its SDP in November 1989, well within the two-year period reckoned from June 1988
when RA 6657 took effect, then HLI did not violate the last paragraph of Sec. 31 of RA 6657. Pertinently, said provision does not bar Us
from applying the operative fact doctrine.
Besides, it should be recognized that this Court, in its July 5, 2011 Decision, affirmed the revocation of Resolution No. 8912-2 and ruled for the compulsory coverage of the agricultural lands of Hacienda Luisita in view of HLIs violation of the SDP and DAO 10.
By applying the operative fact doctrine, this Court merely gave the qualified FWBs the option to remain as stockholders of HLI and ruled
that they will retain the homelots and other benefits which they received from HLI by virtue of the SDP.
It bears stressing that the application of the operative fact doctrine by the Court in its July 5, 2011 Decision is favorable to
the FWBs because not only were the FWBs allowed to retain the benefits and homelots they received under the stock distribution
scheme, they were also given the option to choose for themselves whether they want to remain as stockholders of HLI or not. This is in
recognition of the fact that despite the claims of certain farmer groups that they represent the qualified FWBs in Hacienda Luisita, none of
them can show that they are duly authorized to speak on their behalf. As We have mentioned, To date, such authorization document,
which would logically include a list of the names of the authorizing FWBs, has yet to be submitted to be part of the records.
II. Constitutionality of Sec. 31, RA 6657
FARM insists that the issue of constitutionality of Sec. 31 of RA 6657 is the lis mota of the case, raised at the earliest
opportunity, and not to be considered as moot and academic. [if !supportFootnotes][25][endif]
This contention is unmeritorious. As We have succinctly discussed in Our July 5, 2011 Decision:
While there is indeed an actual case or controversy, intervenor FARM, composed of a
small minority of 27 farmers, has yet to explain its failure to challenge the constitutionality of Sec. 3l
of RA 6657, since as early as November 21, l989 when PARC approved the SDP of Hacienda Luisita
or at least within a reasonable time thereafter and why its members received benefits from the SDP
without so much of a protest. It was only on December 4, 2003 or 14 years after approval of the SDP

via PARC Resolution No. 89-12-2 dated November 21, 1989 that said plan and approving resolution
were sought to be revoked, but not, to stress, by FARM or any of its members, but by petitioner
AMBALA. Furthermore, the AMBALA petition did NOT question the constitutionality of Sec. 31 of RA
6657, but concentrated on the purported flaws and gaps in the subsequent implementation of the
SDP. Even the public respondents, as represented by the Solicitor General, did not question the
constitutionality of the provision. On the other hand, FARM, whose 27 members formerly belonged to
AMBALA, raised the constitutionality of Sec. 31 only on May 3, 2007 when it filed its Supplemental
Comment with the Court. Thus, it took FARM some eighteen (18) years from November 21, 1989
before it challenged the constitutionality of Sec. 31 of RA 6657 which is quite too late in the day. The
FARM members slept on their rights and even accepted benefits from the SDP with nary a complaint
on the alleged unconstitutionality of Sec. 31 upon which the benefits were derived. The Court cannot
now be goaded into resolving a constitutional issue that FARM failed to assail after the lapse of a
long period of time and the occurrence of numerous events and activities which resulted from the
application of an alleged unconstitutional legal provision.

It has been emphasized in a number of cases that the question of constitutionality will
not be passed upon by the Court unless it is properly raised and presented in an appropriate case at
the first opportunity. FARM is, therefore, remiss in belatedly questioning the constitutionality of Sec.
31 of RA 6657. The second requirement that the constitutional question should be raised at the
earliest possible opportunity is clearly wanting.

The last but the most important requisite that the constitutional issue must be the very
lis mota of the case does not likewise obtain. The lis mota aspect is not present, the constitutional
issue tendered not being critical to the resolution of the case. The unyielding rule has been to avoid,
whenever plausible, an issue assailing the constitutionality of a statute or governmental act. If some
other grounds exist by which judgment can be made without touching the constitutionality of a law,
such recourse is favored. Garcia v. Executive Secretary explains why:

Lis Mota the fourth requirement to satisfy before this Court will undertake judicial review means that the Court will not pass upon a
question of unconstitutionality, although properly presented, if the case can be disposed of on some other ground, such as the application
of the statute or the general law. The petitioner must be able to show that the case cannot be legally resolved unless the constitutional
question raised is determined. This requirement is based on the rule that every law has in its favor the presumption of constitutionality; to
justify its nullification, there must be a clear and unequivocal breach of the Constitution, and not one that is doubtful, speculative, or
argumentative.
The lis mota in this case, proceeding from the basic positions originally taken by
AMBALA (to which the FARM members previously belonged) and the Supervisory Group, is the
alleged non-compliance by HLI with the conditions of the SDP to support a plea for its revocation.
And before the Court, the lis mota is whether or not PARC acted in grave abuse of discretion when it
ordered the recall of the SDP for such non-compliance and the fact that the SDP, as couched and
implemented, offends certain constitutional and statutory provisions. To be sure, any of these key
issues may be resolved without plunging into the constitutionality of Sec. 31 of RA 6657. Moreover,
looking deeply into the underlying petitions of AMBALA, et al., it is not the said section per se that is
invalid, but rather it is the alleged application of the said provision in the SDP that is flawed.

It may be well to note at this juncture that Sec. 5 of RA 9700, amending Sec. 7 of RA
6657, has all but superseded Sec. 31 of RA 6657 vis--vis the stock distribution component of said
Sec. 31. In its pertinent part, Sec. 5 of RA 9700 provides: [T]hat after June 30, 2009, the modes of
acquisition shall be limited to voluntary offer to sell and compulsory acquisition . Thus, for all
intents and purposes, the stock distribution scheme under Sec. 31 of RA 6657 is no longer an
available option under existing law. The question of whether or not it is unconstitutional should be a
moot issue. (Citations omitted; emphasis in the original.)

Based on the foregoing disquisitions, We maintain that this Court is NOT compelled to rule on the constitutionality of Sec. 31
of RA 6657. In this regard, We clarify that this Court, in its July 5, 2011 Decision, made no ruling in favor of the constitutionality of Sec. 31
of RA 6657. There was, however, a determination of the existence of an apparent grave violation of the Constitution that may justify the
resolution of the issue of constitutionality, to which this Court ruled in the negative. Having clarified this matter, all other points raised by
both FARM and AMBALA concerning the constitutionality of RA 6657 deserve scant consideration.

III. Coverage of Compulsory Acquisition


FARM argues that this Court ignored certain material facts when it limited the maximum area to be covered to 4,915.75
hectares, whereas the area that should, at the least, be covered is 6,443 hectares, [if !supportFootnotes][26][endif] which is the agricultural land
allegedly covered by RA 6657 and previously held by Tarlac Development Corporation (Tadeco). [if !supportFootnotes][27][endif]
We cannot subscribe to this view. Since what is put in issue before the Court is the propriety of the revocation of the SDP,
which only involves 4,915.75 has. of agricultural land and not 6,443 has., then We are constrained to rule only as regards the 4,915.75
has. of agricultural land.
Moreover, as admitted by FARM itself, this issue was raised for the first time by FARM in its Memorandum dated September
24, 2010 filed before this Court.[if !supportFootnotes][28][endif] In this regard, it should be noted that [a]s a legal recourse, the special civil action of
certiorari is a limited form of review. [if !supportFootnotes][29][endif] The certiorari jurisdiction of this Court is narrow in scope as it is restricted to
resolving errors of jurisdiction and grave abuse of discretion, and not errors of judgment. [if !supportFootnotes][30][endif] To allow additional issues at
this stage of the proceedings is violative of fair play, justice and due process. [if !supportFootnotes][31][endif]
Nonetheless, it should be taken into account that this should not prevent the DAR, under its mandate under the agrarian
reform law, from subsequently subjecting to agrarian reform other agricultural lands originally held by Tadeco that were allegedly not
transferred to HLI but were supposedly covered by RA 6657.
DAR, however, contends that the declaration of the area [if !supportFootnotes][32][endif] to be awarded to each FWB is too restrictive. It
stresses that in agricultural landholdings like Hacienda Luisita, there are roads, irrigation canals, and other portions of the land that are
considered commonly-owned by farmworkers, and this may necessarily result in the decrease of the area size that may be awarded per
FWB.[if !supportFootnotes][33][endif] DAR also argues that the July 5, 2011 Decision of this Court does not give it any leeway in adjusting the area
that may be awarded per FWB in case the number of actual qualified FWBs decreases. [if !supportFootnotes][34][endif]
The argument is meritorious. In order to ensure the proper distribution of the agricultural lands of Hacienda Luisita per
qualified FWB, and considering that matters involving strictly the administrative implementation and enforcement of agrarian reform laws
are within the jurisdiction of the DAR, [if !supportFootnotes][35][endif] it is the latter which shall determine the area with which each qualified FWB will
be awarded.
[if !supportLists](a)
[endif]Conversion of Agricultural Lands
AMBALA insists that the conversion of the agricultural lands violated the conditions of RA 6657 and DAO 10, stating that
keeping the land intact and unfragmented is one of the essential conditions of [the] SD[P], RA 6657 and DAO 10. [if !supportFootnotes][36][endif] It
asserts that this provision or conditionality is not mere decoration and is intended to ensure that the farmers can continue with the tillage
of the soil especially since it is the only occupation that majority of them knows. [if !supportFootnotes][37][endif]
We disagree. As We amply discussed in Our July 5, 2011 Decision:
Contrary to the almost parallel stance of the respondents, keeping Hacienda Luisita unfragmented is also not among the
imperative impositions by the SDP, RA 6657, and DAO 10.
The Terminal Report states that the proposed distribution plan submitted in 1989 to the PARC effectively assured the
intended stock beneficiaries that the physical integrity of the farm shall remain inviolate. Accordingly, the Terminal Report and the PARCassailed resolution would take HLI to task for securing approval of the conversion to non-agricultural uses of 500 hectares of the
hacienda. In not too many words, the Report and the resolution view the conversion as an infringement of Sec. 5(a) of DAO 10 which
reads: a. that the continued operation of the corporation with its agricultural land intact and unfragmented is viable with potential for
growth and increased profitability.
The PARC is wrong.
In the first place, Sec. 5(a)just like the succeeding Sec. 5(b) of DAO 10 on increased income and greater benefits to
qualified beneficiariesis but one of the stated criteria to guide PARC in deciding on whether or not to accept an SDP. Said Sec. 5(a) does
not exact from the corporate landowner-applicant the undertaking to keep the farm intact and unfragmented ad infinitum. And there is
logic to HLIs stated observation that the key phrase in the provision of Sec. 5(a) is viability of corporate operations: [w]hat is thus required
is not the agricultural land remaining intact x x x but the viability of the corporate operations with its agricultural land being intact and
unfragmented. Corporate operation may be viable even if the corporate agricultural land does not remain intact or [un]fragmented. [if !
supportFootnotes][38][endif]

It is, of course, anti-climactic to mention that DAR viewed the conversion as not violative of any issuance, let alone
undermining the viability of Hacienda Luisitas operation, as the DAR Secretary approved the land conversion applied for and its
disposition via his Conversion Order dated August 14, 1996 pursuant to Sec. 65 of RA 6657 which reads:
Sec. 65. Conversion of Lands.After the lapse of five years
from its award when the land ceases to be economically feasible and
sound for agricultural purposes, or the locality has become urbanized and
the land will have a greater economic value for residential, commercial or
industrial purposes, the DAR upon application of the beneficiary or
landowner with due notice to the affected parties, and subject to existing
laws, may authorize the x x x conversion of the land and its dispositions. x
xx

Moreover, it is worth noting that the application for conversion had the backing of 5,000 or so FWBs, including respondents
Rene Galang, and Jose Julio Suniga, then leaders of the AMBALA and the Supervisory Group, respectively, as evidenced by the
Manifesto of Support they signed and which was submitted to the DAR. [if !supportFootnotes][39][endif] If at all, this means that AMBALA should be
estopped from questioning the conversion of a portion of Hacienda Luisita, which its leader has fully supported.
[if !supportLists](b)
[endif]LIPCO and RCBC as Innocent Purchasers for Value
The AMBALA, Rene Galang and the FARM are in accord that Rizal Commercial Banking Corporation (RCBC) and Luisita
Industrial Park Corporation (LIPCO) are not innocent purchasers for value. The AMBALA, in particular, argues that LIPCO, being a
wholly-owned subsidiary of HLI, is conclusively presumed to have knowledge of the agrarian dispute on the subject land and could not
feign ignorance of this fact, especially since they have the same directors and stockholders. [if !supportFootnotes][40][endif] This is seconded by Rene
Galang and AMBALA, through the PILC, which intimate that a look at the General Information Sheets of the companies involved in the
transfers of the 300-hectare portion of Hacienda Luisita, specifically, Centennary Holdings, Inc. (Centennary), LIPCO and RCBC, would

readily reveal that their directors are interlocked and connected to Tadeco and HLI. [if !supportFootnotes][41][endif] Rene Galang and AMBALA,
through the PILC, also allege that with the clear-cut involvement of the leadership of all the corporations concerned, LIPCO and RCBC
cannot feign ignorance that the parcels of land they bought are under the coverage of the comprehensive agrarian reform program
[CARP] and that the conditions of the respective sales are imbued with public interest where normal property relations in the Civil Law
sense do not apply.[if !supportFootnotes][42][endif]
Avowing that the land subject of conversion still remains undeveloped, Rene Galang and AMBALA, through the PILC,
further insist that the condition that [t]he development of the land should be completed within the period of five [5] years from the issuance
of this Order was not complied with. AMBALA also argues that since RCBC and LIPCO merely stepped into the shoes of HLI, then they
must comply with the conditions imposed in the conversion order. [if !supportFootnotes][43][endif]
In addition, FARM avers that among the conditions attached to the conversion order, which RCBC and LIPCO necessarily
have knowledge of, are (a) that its approval shall in no way amend, diminish, or alter the undertaking and obligations of HLI as contained
in the [SDP] approved on November 21, 1989; and (b) that the benefits, wages and the like, received by the FWBs shall not in any way
be reduced or adversely affected, among others.[if !supportFootnotes][44][endif]
The contentions of respondents are wanting. In the first place, there is no denying that RCBC and LIPCO knew that the
converted lands they bought were under the coverage of CARP. Nevertheless, as We have mentioned in Our July 5, 2011 Decision, this
does not necessarily mean that both LIPCO and RCBC already acted in bad faith in purchasing the converted lands. As this Court
explained:
It cannot be claimed that RCBC and LIPCO acted in bad faith in acquiring the lots that were previously covered by the SDP.
Good faith consists in the possessors belief that the person from whom he received it was the owner of the same and could convey his
title. Good faith requires a well-founded belief that the person from whom title was received was himself the owner of the land, with the
right to convey it. There is good faith where there is an honest intention to abstain from taking any unconscientious advantage from
another. It is the opposite of fraud.
To be sure, intervenor RCBC and LIPCO knew that the lots they bought were
subjected to CARP coverage by means of a stock distribution plan, as the DAR conversion
order was annotated at the back of the titles of the lots they acquired. However, they are of
the honest belief that the subject lots were validly converted to commercial or industrial
purposes and for which said lots were taken out of the CARP coverage subject of PARC
Resolution No. 89-12-2 and, hence, can be legally and validly acquired by them. After all, Sec.
65 of RA 6657 explicitly allows conversion and disposition of agricultural lands previously covered by
CARP land acquisition after the lapse of five (5) years from its award when the land ceases to be
economically feasible and sound for agricultural purposes or the locality has become urbanized and
the land will have a greater economic value for residential, commercial or industrial purposes.
Moreover, DAR notified all the affected parties, more particularly the FWBs, and gave them the
opportunity to comment or oppose the proposed conversion. DAR, after going through the necessary
processes, granted the conversion of 500 hectares of Hacienda Luisita pursuant to its primary
jurisdiction under Sec. 50 of RA 6657 to determine and adjudicate agrarian reform matters and its
original exclusive jurisdiction over all matters involving the implementation of agrarian reform. The
DAR conversion order became final and executory after none of the FWBs interposed an appeal to
the CA. In this factual setting, RCBC and LIPCO purchased the lots in question on their honest and
well-founded belief that the previous registered owners could legally sell and convey the lots though
these were previously subject of CARP coverage. Ergo, RCBC and LIPCO acted in good faith in
acquiring the subject lots. (Emphasis supplied.)

In the second place, the allegation that the converted lands remain undeveloped is contradicted by the evidence on record,
particularly, Annex X of LIPCOs Memorandum dated September 23, 2010, [if !supportFootnotes][45][endif] which has photographs showing that the
land has been partly developed.[if !supportFootnotes][46][endif] Certainly, it is a general rule that the factual findings of administrative agencies are
conclusive and binding on the Court when supported by substantial evidence. [if !supportFootnotes][47][endif] However, this rule admits of certain
exceptions, one of which is when the findings of fact are premised on the supposed absence of evidence and contradicted by the
evidence on record.[if !supportFootnotes][48][endif]
In the third place, by arguing that the companies involved in the transfers of the 300-hectare portion of Hacienda Luisita
have interlocking directors and, thus, knowledge of one may already be imputed upon all the other companies, AMBALA and Rene
Galang, in effect, want this Court to pierce the veil of corporate fiction. However, piercing the veil of corporate fiction is warranted only in
cases when the separate legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime, such that in the
case of two corporations, the law will regard the corporations as merged into one. [if !supportFootnotes][49][endif] As succinctly discussed by the Court
in Velarde v. Lopez, Inc.:[if !supportFootnotes][50][endif]
Petitioner argues nevertheless that jurisdiction over the subsidiary is justified by piercing the veil of corporate fiction.
Piercing the veil of corporate fiction is warranted, however, only in cases when the separate legal entity is used to defeat public
convenience, justify wrong, protect fraud, or defend crime, such that in the case of two corporations, the law will regard the corporations
as merged into one. The rationale behind piercing a corporations identity is to remove the barrier between the corporation from the
persons comprising it to thwart the fraudulent and illegal schemes of those who use the corporate personality as a shield for undertaking
certain proscribed activities.
In applying the doctrine of piercing the veil of corporate fiction, the following requisites
must be established: (1) control, not merely majority or complete stock control; (2) such control must
have been used by the defendant to commit fraud or wrong, to perpetuate the violation of a statutory
or other positive legal duty, or dishonest acts in contravention of plaintiffs legal rights; and (3) the
aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of.
(Citations omitted.)

Nowhere, however, in the pleadings and other records of the case can it be gathered
that respondent has complete control over Sky Vision, not only of finances but of policy and business
practice in respect to the transaction attacked, so that Sky Vision had at the time of the transaction

no separate mind, will or existence of its own. The existence of interlocking directors, corporate
officers and shareholders is not enough justification to pierce the veil of corporate fiction in the
absence of fraud or other public policy considerations.

Absent any allegation or proof of fraud or other public policy considerations, the existence of interlocking directors, officers
and stockholders is not enough justification to pierce the veil of corporate fiction as in the instant case.
And in the fourth place, the fact that this Court, in its July 5, 2011 Decision, ordered the payment of the proceeds of the sale
of the converted land, and even of the 80.51-hectare land sold to the government, through the Bases Conversion Development Authority,
to the qualified FWBs, effectively fulfils the conditions in the conversion order, to wit: (1) that its approval shall in no way amend, diminish,
or alter the undertaking and obligations of HLI as contained in the SDP approved on November 21, 1989; and (2) that the benefits, wages
and the like, received by the FWBs shall not in any way be reduced or adversely affected, among others.
A view has also been advanced that the 200-hectare lot transferred to Luisita Realty Corporation (LRC) should be included
in the compulsory coverage because the corporation did not intervene.
We disagree. Since the 200-hectare lot formed part of the SDP that was nullified by PARC Resolution 2005-32-01, this
Court is constrained to make a ruling on the rights of LRC over the said lot. Moreover, the 500-hectare portion of Hacienda Luisita, of
which the 200-hectare portion sold to LRC and the 300-hectare portion subsequently acquired by LIPCO and RCBC were part of, was
already the subject of the August 14, 1996 DAR Conversion Order. By virtue of the said conversion order, the land was already
reclassified as industrial/commercial land not subject to compulsory coverage. Thus, if We place the 200-hectare lot sold to LRC under
compulsory coverage, this Court would, in effect, be disregarding the DAR Conversion Order, which has long attained its finality. And as
this Court held in Berboso v. CA,[if !supportFootnotes][51][endif] Once final and executory, the Conversion Order can no longer be questioned.
Besides, to disregard the Conversion Order through the revocation of the approval of the SDP would create undue prejudice to LRC,
which is not even a party to the proceedings below, and would be tantamount to deprivation of property without due process of law.
Nonethess, the minority is of the adamant view that since LRC failed to intervene in the instant case and was, therefore,
unable to present evidence supporting its good faith purchase of the 200-hectare converted land, then LRC should be given full
opportunity to present its case before the DAR. This minority view is a contradiction in itself. Given that LRC did not intervene and is,
therefore, not a party to the instant case, then it would be incongruous to order them to present evidence before the DAR. Such an order,
if issued by this Court, would not be binding upon the LRC.
Moreover, LRC may be considered to have waived its right to participate in the instant petition since it did not intervene in
the DAR proceedings for the nullification of the PARC Resolution No. 89-12-2 which approved the SDP.
[if !supportLists](c) [endif]Proceeds of the sale of the 500-hectare converted land
and of the 80.51-hectare land used for the SCTEX

As previously mentioned, We ruled in Our July 5, 2011 Decision that since the Court excluded the 500-hectare lot subject of
the August 14, 1996 Conversion Order and the 80.51-hectare SCTEX lot acquired by the government from compulsory coverage, then
HLI and its subsidiary, Centennary, should be liable to the FWBs for the price received for said lots. Thus:
There is a claim that, since the sale and transfer of the 500 hectares of land subject of the August 14, 1996 Conversion
Order and the 80.51-hectare SCTEX lot came after compulsory coverage has taken place, the FWBs should have their corresponding
share of the lands value. There is merit in the claim. Since the SDP approved by PARC Resolution No. 89-12-2 has been nullified, then
all the lands subject of the SDP will automatically be subject of compulsory coverage under Sec. 31 of RA 6657. Since the Court
excluded the 500-hectare lot subject of the August 14, 1996 Conversion Order and the 80.51-hectare SCTEX lot acquired by the
government from the area covered by SDP, then HLI and its subsidiary, Centennary, shall be liable to the FWBs for the price received for
said lots. HLI shall be liable for the value received for the sale of the 200-hectare land to LRC in the amount of PhP 500,000,000 and the
equivalent value of the 12,000,000 shares of its subsidiary, Centennary, for the 300-hectare lot sold to LIPCO for the consideration of PhP
750,000,000. Likewise, HLI shall be liable for PhP 80,511,500 as consideration for the sale of the 80.51-hectare SCTEX lot.
We, however, note that HLI has allegedly paid 3% of the proceeds of the sale of the 500-hectare land and 80.51-hectare
SCTEX lot to the FWBs. We also take into account the payment of taxes and expenses relating to the transfer of the land and HLIs
statement that most, if not all, of the proceeds were used for legitimate corporate purposes. In order to determine once and for all
whether or not all the proceeds were properly utilized by HLI and its subsidiary, Centennary, DAR will engage the services of a reputable
accounting firm to be approved by the parties to audit the books of HLI to determine if the proceeds of the sale of the 500-hectare land
and the 80.51-hectare SCTEX lot were actually used for legitimate corporate purposes, titling expenses and in compliance with the
August 14, 1996 Conversion Order. The cost of the audit will be shouldered by HLI. If after such audit, it is determined that there remains
a balance from the proceeds of the sale, then the balance shall be distributed to the qualified FWBs.
HLI, however, takes exception to the above-mentioned ruling and contends that it is not proper to distribute the unspent or
unused balance of the proceeds of the sale of the 500-hectare converted land and 80.51-hectare SCTEX lot to the qualified FWBs for the
following reasons: (1) the proceeds of the sale belong to the corporation, HLI, as corporate capital and assets in substitution for the
portions of its land asset which were sold to third parties; (2) to distribute the cash sales proceeds of the portions of the land asset to the
FWBs, who are stockholders of HLI, is to dissolve the corporation and distribute the proceeds as liquidating dividends without even
paying the creditors of the corporation; and (3) the doing of said acts would violate the stringent provisions of the Corporation Code and
corporate practice.[if !supportFootnotes][52][endif]
Apparently, HLI seeks recourse to the Corporation Code in order to avoid its liability to the FWBs for the price received for
the 500-hectare converted lot and the 80.51-hectare SCTEX lot. However, as We have established in Our July 5, 2011 Decision, the
rights, obligations and remedies of the parties in the instant case are primarily governed by RA 6657 and HLI cannot shield itself from the
CARP coverage merely under the convenience of being a corporate entity. In this regard, it should be underscored that the agricultural
lands held by HLI by virtue of the SDP are no ordinary assets. These are special assets, because, originally, these should have been

distributed to the FWBs were it not for the approval of the SDP by PARC. Thus, the government cannot renege on its responsibility over
these assets. Likewise, HLI is no ordinary corporation as it was formed and organized precisely to make use of these agricultural lands
actually intended for distribution to the FWBs. Thus, it cannot shield itself from the coverage of CARP by invoking the Corporation Code.
As explained by the Court:
HLI also parlays the notion that the parties to the SDOA should now look to the
Corporation Code, instead of to RA 6657, in determining their rights, obligations and remedies. The
Code, it adds, should be the applicable law on the disposition of the agricultural land of HLI.

Contrary to the view of HLI, the rights, obligations and remedies of the parties to
the SDOA embodying the SDP are primarily governed by RA 6657. It should abundantly be
made clear that HLI was precisely created in order to comply with RA 6657, which the OSG aptly
described as the mother law of the SDOA and the SDP. [if !supportFootnotes][53][endif] It is, thus, paradoxical
for HLI to shield itself from the coverage of CARP by invoking exclusive applicability of the
Corporation Code under the guise of being a corporate entity.

Without in any way minimizing the relevance of the Corporation Code since the
FWBs of HLI are also stockholders, its applicability is limited as the rights of the parties
arising from the SDP should not be made to supplant or circumvent the agrarian reform
program.

Without doubt, the Corporation Code is the general law providing for the formation,
organization and regulation of private corporations. On the other hand, RA 6657 is the special law on
agrarian reform. As between a general and special law, the latter shall prevailgeneralia specialibus
non derogant.[if !supportFootnotes][54][endif] Besides, the present impasse between HLI and the private
respondents is not an intra-corporate dispute which necessitates the application of the Corporation
Code. What private respondents questioned before the DAR is the proper implementation of the SDP
and HLIs compliance with RA 6657. Evidently, RA 6657 should be the applicable law to the instant
case. (Emphasis supplied.)

Considering that the 500-hectare converted land, as well as the 80.51-hectare SCTEX lot, should have been included in the
compulsory coverage were it not for their conversion and valid transfers, then it is only but proper that the price received for the sale of
these lots should be given to the qualified FWBs. In effect, the proceeds from the sale shall take the place of the lots.
The Court, in its July 5, 2011 Decision, however, takes into account, inter alia, the payment of taxes and expenses relating
to the transfer of the land, as well as HLIs statement that most, if not all, of the proceeds were used for legitimate corporate purposes.
Accordingly, We ordered the deduction of the taxes and expenses relating to the transfer of titles to the transferees, and the expenditures
incurred by HLI and Centennary for legitimate corporate purposes, among others.
On this note, DAR claims that the [l]egitimate corporate expenses should not be deducted as there is no basis for it,
especially since only the auditing to be conducted on the financial records of HLI will reveal the amounts to be offset between HLI and the
FWBs.[if !supportFootnotes][55][endif]
The contention is unmeritorious. The possibility of an offsetting should not prevent Us from deducting the legitimate
corporate expenses incurred by HLI and Centennary. After all, the Court has ordered for a proper auditing [i]n order to determine once
and for all whether or not all the proceeds were properly utilized by HLI and its subsidiary, Centennary. In this regard, DAR is tasked to
engage the services of a reputable accounting firm to be approved by the parties to audit the books of HLI to determine if the proceeds of
the sale of the 500-hectare land and the 80.51-hectare SCTEX lot were actually used for legitimate corporate purposes, titling expenses
and in compliance with the August 14, 1996 Conversion Order. Also, it should be noted that it is HLI which shall shoulder the cost of audit
to reduce the burden on the part of the FWBs. Concomitantly, the legitimate corporate expenses incurred by HLI and Centennary, as will
be determined by a reputable accounting firm to be engaged by DAR, shall be among the allowable deductions from the proceeds of the
sale of the 500-hectare land and the 80.51-hectare SCTEX lot.
We, however, find that the 3% production share should not be deducted from the proceeds of the sale of the 500-hectare
converted land and the 80.51-hectare SCTEX lot. The 3% production share, like the homelots, was among the benefits received by the
FWBs as farmhands in the agricultural enterprise of HLI and, thus, should not be taken away from the FWBs.
Contrarily, the minority is of the view that as a consequence of the revocation of the SDP, the parties should be restored to
their respective conditions prior to its execution and approval, subject to the application of the principle of set-off or compensation. Such
view is patently misplaced.
The law on contracts, i.e. mutual restitution, does not apply to the case at bar. To reiterate, what was actually revoked by
this Court, in its July 5, 2011 Decision, is PARC Resolution No. 89-12-2 approving the SDP. To elucidate, it was the SDP, not the SDOA,
which was presented for approval by Tadeco to DAR. [if !supportFootnotes][56][endif] The SDP explained the mechanics of the stock distribution but
did not make any reference nor correlation to the SDOA. The pertinent portions of the proposal read:
MECHANICS OF STOCK DISTRIBUTION PLAN

Under Section 31 of Republic Act No. 6657, a corporation owning agricultural land may
distribute among the qualified beneficiaries such proportion or percentage of its capital stock that the
value of the agricultural land actually devoted to agricultural activities, bears in relation to the
corporations total assets. Conformably with this legal provision, Tarlac Development
Corporation hereby submits for approval a stock distribution plan that envisions the
following:[if !supportFootnotes][57][endif] (Terms and conditions omitted; emphasis supplied)

xxxx

The above stock distribution plan is hereby submitted on the basis of all these
benefits that the farmworker-beneficiaries of Hacienda Luisita will receive under its provisions in
addition to their regular compensation as farmhands in the agricultural enterprise and the fringe
benefits granted to them by their collective bargaining agreement with management. [if !supportFootnotes][58]
[endif]

Also, PARC Resolution No. 89-12-2 reads as follows:


RESOLUTION APPROVING THE STOCK DISTRIBUTION PLAN OF TARLAC DEVELOPMENT COMPANY/HACIENDA
LUISITA INCORPORATED (TDC/HLI)
NOW THEREFORE, on motion duly seconded,
RESOLVED, as it is hereby resolved, to approve the stock distribution plan of
TDC/HLI.

UNANIMOUSLY APPROVED.[if !supportFootnotes][59][endif] (Emphasis supplied)

Clearly, what was approved by PARC is the SDP and not the SDOA. There is, therefore, no basis for this Court to apply the
law on contracts to the revocation of the said PARC Resolution.
IV. Just Compensation
In Our July 5, 2011 Decision, We stated that HLI shall be paid just compensation for the remaining agricultural land that will
be transferred to DAR for land distribution to the FWBs. We also ruled that the date of the taking is November 21, 1989, when PARC
approved HLIs SDP per PARC Resolution No. 89-12-2.
In its Motion for Clarification and Partial Reconsideration, HLI disagrees with the foregoing ruling and contends that the
taking should be reckoned from finality of the Decision of this Court, or at the very least, the reckoning period may be tacked to January
2, 2006, the date when the Notice of Coverage was issued by the DAR pursuant to PARC Resolution No. 2006-34-01 recalling/revoking
the approval of the SDP.[if !supportFootnotes][60][endif]
For their part, Mallari, et al. argue that the valuation of the land cannot be based on November 21, 1989, the date of
approval of the SDP. Instead, they aver that the date of taking for valuation purposes is a factual issue best left to the determination of the
trial courts.[if !supportFootnotes][61][endif]
At the other end of the spectrum, AMBALA alleges that HLI should no longer be paid just compensation for the agricultural
land that will be distributed to the FWBs, since the Manila Regional Trial Court (RTC) already rendered a decision ordering the
Cojuangcos to transfer the control of Hacienda Luisita to the Ministry of Agrarian Reform, which will distribute the land to small farmers
after compensating the landowners P3.988 million. [if !supportFootnotes][62][endif] In the event, however, that this Court will rule that HLI is indeed
entitled to compensation, AMBALA contends that it should be pegged at forty thousand pesos (PhP 40,000) per hectare, since this was
the same value that Tadeco declared in 1989 to make sure that the farmers will not own the majority of its stocks. [if !supportFootnotes][63][endif]
Despite the above propositions, We maintain that the date of taking is November 21, 1989, the date when PARC approved
HLIs SDP per PARC Resolution No. 89-12-2, in view of the fact that this is the time that the FWBs were considered to own and possess
the agricultural lands in Hacienda Luisita. To be precise, these lands became subject of the agrarian reform coverage through the stock
distribution scheme only upon the approval of the SDP, that is, November 21, 1989. Thus, such approval is akin to a notice of coverage
ordinarily issued under compulsory acquisition. Further, any doubt should be resolved in favor of the FWBs. As this Court held in PerezRosario v. CA:[if !supportFootnotes][64][endif]
It is an established social and economic fact that the escalation of poverty is the driving force behind the political
disturbances that have in the past compromised the peace and security of the people as well as the continuity of the national order. To
subdue these acute disturbances, the legislature over the course of the history of the nation passed a series of laws calculated to
accelerate agrarian reform, ultimately to raise the material standards of living and eliminate discontent. Agrarian reform is a perceived
solution to social instability. The edicts of social justice found in the Constitution and the public policies that underwrite them, the
extraordinary national experience, and the prevailing national consciousness, all command the great departments of
government to tilt the balance in favor of the poor and underprivileged whenever reasonable doubt arises in the interpretation
of the law. But annexed to the great and sacred charge of protecting the weak is the diametric function to put every effort to arrive at an
equitable solution for all parties concerned: the jural postulates of social justice cannot shield illegal acts, nor do they sanction false
sympathy towards a certain class, nor yet should they deny justice to the landowner whenever truth and justice happen to be on her side.
In the occupation of the legal questions in all agrarian disputes whose outcomes can significantly affect societal harmony, the

considerations of social advantage must be weighed, an inquiry into the prevailing social interests is necessary in the adjustment of
conflicting demands and expectations of the people, and the social interdependence of these interests, recognized. (Emphasis supplied.)
The minority contends that it is the date of the notice of coverage, that is, January 2, 2006, which is determinative of the just
compensation HLI is entitled to for its expropriated lands. To support its contention, it cited numerous cases where the time of the taking
was reckoned on the date of the issuance of the notice of coverage.
However, a perusal of the cases cited by the minority would reveal that none of them involved the stock distribution scheme.
Thus, said cases do not squarely apply to the instant case. Moreover, it should be noted that it is precisely because the stock distribution
option is a distinctive mechanism under RA 6657 that it cannot be treated similarly with that of compulsory land acquisition as these are
two (2) different modalities under the agrarian reform program. As We have stated in Our July 5, 2011 Decision, RA 6657 provides two (2)
alternative modalities, i.e., land or stock transfer, pursuant to either of which the corporate landowner can comply with CARP.
In this regard, it should be noted that when HLI submitted the SDP to DAR for approval, it cannot be gainsaid that the stock
distribution scheme is clearly HLIs preferred modality in order to comply with CARP. And when the SDP was approved, stocks were given
to the FWBs in lieu of land distribution. As aptly observed by the minority itself, [i]nstead of expropriating lands, what the government took
and distributed to the FWBs were shares of stock of petitioner HLI in proportion to the value of the agricultural lands that should have
been expropriated and turned over to the FWBs. It cannot, therefore, be denied that upon the approval of the SDP submitted by HLI, the
agricultural lands of Hacienda Luisita became subject of CARP coverage. Evidently, the approval of the SDP took the place of a notice of
coverage issued under compulsory acquisition.
Also, it is surprising that while the minority opines that under the stock distribution option, title to the property remains with
the corporate landowner, which should presumably be dominated by farmers with majority stockholdings in the corporation, it
still insists that the just compensation that should be given to HLI is to be reckoned on January 2, 2006, the date of the issuance of the
notice of coverage, even after it found that the FWBs did not have the majority stockholdings in HLI contrary to the supposed avowed
policy of the law. In effect, what the minority wants is to prejudice the FWBs twice. Given that the FWBs should have had majority
stockholdings in HLI but did not, the minority still wants the government to pay higher just compensation to HLI. Even if it is the
government which will pay the just compensation to HLI, this will also affect the FWBs as they will be paying higher amortizations to the
government if the taking will be considered to have taken place only on January 2, 2006.
The foregoing notwithstanding, it bears stressing that the DAR's land valuation is only preliminary and is not, by any means,
final and conclusive upon the landowner. The landowner can file an original action with the RTC acting as a special agrarian court to
determine just compensation. The court has the right to review with finality the determination in the exercise of what is admittedly a
judicial function.[if !supportFootnotes][65][endif]
A view has also been advanced that HLI should pay the qualified FWBs rental for the use and possession of the land up to
the time it surrenders possession and control over these lands. What this view fails to consider is the fact that the FWBs are also
stockholders of HLI prior to the revocation of PARC Resolution No. 89-12-2. Also, the income earned by the corporation from its
possession and use of the land ultimately redounded to the benefit of the FWBs based on its business operations in the form of salaries,
benefits voluntarily granted by HLI and other fringe benefits under their Collective Bargaining Agreement. That being so, there would be
unjust enrichment on the part of the FWBs if HLI will still be required to pay rent for the use of the land in question.
V. Sale to Third Parties
There is a view that since the agricultural lands in Hacienda Luisita were placed under CARP coverage through the SDOA
scheme on May 11, 1989, then the 10-year period prohibition on the transfer of awarded lands under RA 6657 lapsed on May 10, 1999,
and, consequently, the qualified FWBs should already be allowed to sell these lands with respect to their land interests to third parties,
including HLI, regardless of whether they have fully paid for the lands or not.
The proposition is erroneous. Sec. 27 of RA 6657 states:
SEC. 27. Transferability of Awarded Lands. - Lands acquired by beneficiaries under this Act may not be sold,
transferred or conveyed except through hereditary succession, or to the government, or to the LBP, or to other qualified
beneficiaries for a period of ten (10) years: Provided, however, That the children or the spouse of the transferor shall have a right to
repurchase the land from the government or LBP within a period of two (2) years. Due notice of the availability of the land shall be given
by the LBP to the Barangay Agrarian Reform Committee (BARC) of the barangay where the land is situated. The Provincial Agrarian
Coordinating Committee (PARCCOM), as herein provided, shall, in turn, be given due notice thereof by the BARC.

If the land has not yet been fully paid by the beneficiary, the right to the land may
be transferred or conveyed, with prior approval of the DAR, to any heir of the beneficiary or to any
other beneficiary who, as a condition for such transfer or conveyance, shall cultivate the land
himself. Failing compliance herewith, the land shall be transferred to the LBP which shall give due
notice of the availability of the land in the manner specified in the immediately preceding paragraph.

In the event of such transfer to the LBP, the latter shall compensate the beneficiary in
one lump sum for the amounts the latter has already paid, together with the value of improvements
he has made on the land. (Emphasis supplied.)

To implement the above-quoted provision, inter alia, DAR issued Administrative Order No. 1, Series of 1989 (DAO 1) entitled
Rules and Procedures Governing Land Transactions. Said Rules set forth the rules on validity of land transactions, to wit:
II. RULES ON VALIDITY OF LAND TRANSACTIONS

A. The following transactions are valid:


[if !supportLists]1.
[endif]Those executed by the original landowner in favor of the qualified beneficiary from among those
certified by DAR.
[if !supportLists]2.
[endif]Those in favor of the government, DAR or the Land Bank of the Philippines.
[if !supportLists]3.
[endif]Those covering lands retained by the landowner under Section 6 of R.A. 6657 duly certified by
the designated DAR Provincial Agrarian Reform Officer (PARO) as a retention area, executed in favor of transferees whose total
landholdings inclusive of the land to be acquired do not exceed five (5) hectares; subject, however, to the right of pre-emption and/or
redemption of tenant/lessee under Section 11 and 12 of R.A. 3844, as amended.
xxxx
[if !supportLists]4.
[endif]Those executed by beneficiaries covering lands acquired under any agrarian reform law in
favor of the government, DAR, LBP or other qualified beneficiaries certified by DAR.
[if !supportLists]5.
[endif]Those executed after ten (10) years from the issuance and registration of the
Emancipation Patent or Certificate of Land Ownership Award.
B. The following transactions are not valid:
[if !supportLists]1.
[endif]Sale, disposition, lease management contract or transfer of possession of private lands
executed by the original landowner prior to June 15, 1988, which are registered on or before September 13, 1988, or those executed
after June 15, 1988, covering an area in excess of the five-hectare retention limit in violation of R.A. 6657.
[if !supportLists]2.
[endif]Those covering lands acquired by the beneficiary under R.A. 6657 and executed within ten (10)
years from the issuance and registration of an Emancipation Patent or Certificate of Land Ownership Award.
[if !supportLists]3.
[endif]Those executed in favor of a person or persons not qualified to acquire land under R.A. 6657.
[if !supportLists]4.
[endif]Sale, transfer, conveyance or change of nature of the land outside of urban centers and city
limits either in whole or in part as of June 15, 1988, when R.A. 6657 took effect, except as provided for under DAR Administrative Order
No. 15, series of 1988.
[if !supportLists]5.
[endif]Sale, transfer or conveyance by beneficiary of the right to use or any other usufructuary right
over the land he acquired by virtue of being a beneficiary, in order to circumvent the law.
x x x x (Emphasis supplied.)
Without a doubt, under RA 6657 and DAO 1, the awarded lands may only be transferred or conveyed after ten (10) years
from the issuance and registration of the emancipation patent (EP) or certificate of land ownership award (CLOA). Considering that the
EPs or CLOAs have not yet been issued to the qualified FWBs in the instant case, the 10-year prohibitive period has not even started.
Significantly, the reckoning point is the issuance of the EP or CLOA, and not the placing of the agricultural lands under CARP
coverage.
Moreover, if We maintain the position that the qualified FWBs should be immediately allowed the option to sell or convey the
agricultural lands in Hacienda Luisita, then all efforts at agrarian reform would be rendered nugatory by this Court, since, at the end of the
day, these lands will just be transferred to persons not entitled to land distribution under CARP. As aptly noted by the late Senator Neptali
Gonzales during the Joint Congressional Conference Committee on the Comprehensive Agrarian Reform Program Bills:
SEN. GONZALES. My point is, as much as possible let the said lands be distributed under CARP remain with the
beneficiaries and their heirs because that is the lesson that we have to learn from PD No. 27. If you will talk with the Congressmen
representing Nueva Ecija, Pampanga and Central Luzon provinces, law or no law, you will find out that more than one-third of the
original, of the lands distributed under PD 27 are no longer owned, possessed or being worked by the grantees or the awardees
of the same, something which we ought to avoid under the CARP bill that we are going to enact. [if !supportFootnotes][66][endif] (Emphasis
supplied.)
Worse, by raising that the qualified beneficiaries may sell their interest back to HLI, this smacks of outright indifference to
the provision on retention limits [if !supportFootnotes][67][endif] under RA 6657, as this Court, in effect, would be allowing HLI, the previous landowner,
to own more than five (5) hectares of agricultural land, which We cannot countenance. There is a big difference between the ownership of
agricultural lands by HLI under the stock distribution scheme and its eventual acquisition of the agricultural lands from the qualified FWBs
under the proposed buy-back scheme. The rule on retention limits does not apply to the former but only to the latter in view of the fact
that the stock distribution scheme is sanctioned by Sec. 31 of RA 6657, which specifically allows corporations to divest a proportion of
their capital stock that the agricultural land, actually devoted to agricultural activities, bears in relation to the companys total assets. On
the other hand, no special rules exist under RA 6657 concerning the proposed buy-back scheme; hence, the general rules on retention
limits should apply.
Further, the position that the qualified FWBs are now free to transact with third parties concerning their land interests,
regardless of whether they have fully paid for the lands or not, also transgresses the second paragraph of Sec. 27 of RA 6657, which
plainly states that [i]f the land has not yet been fully paid by the beneficiary, the right to the land may be transferred or conveyed, with
prior approval of the DAR, to any heir of the beneficiary or to any other beneficiary who, as a condition for such transfer or conveyance,
shall cultivate the land himself. Failing compliance herewith, the land shall be transferred to the LBP x x x. When the words and phrases
in the statute are clear and unequivocal, the law is applied according to its express terms. [if !supportFootnotes][68][endif] Verba legis non est
recedendum, or from the words of a statute there should be no departure. [if !supportFootnotes][69][endif]
The minority, however, posits that [t]o insist that the FWBs rights sleep for a period of ten years is unrealistic, and may
seriously deprive them of real opportunities to capitalize and maximize the victory of direct land distribution. By insisting that We
disregard the ten-year restriction under the law in the case at bar, the minority, in effect, wants this Court to engage in judicial legislation,
which is violative of the principle of separation of powers. [if !supportFootnotes][70][endif] The discourse by Ruben E. Agpalo, in his book on statutory
construction, is enlightening:
Where the law is clear and unambiguous, it must be taken to mean exactly what it says and the court has no choice but to
see to it that its mandate is obeyed. Where the law is clear and free from doubt or ambiguity, there is no room for construction or
interpretation. Thus, where what is not clearly provided in the law is read into the law by construction because it is more logical
and wise, it would be to encroach upon legislative prerogative to define the wisdom of the law, which is judicial legislation. For
whether a statute is wise or expedient is not for the courts to determine. Courts must administer the law, not as they think it
ought to be but as they find it and without regard to consequences.[if !supportFootnotes][71][endif] (Emphasis supplied.)
And as aptly stated by Chief Justice Renato Corona in his Dissenting Opinion in Ang Ladlad LGBT Party v. COMELEC:[if !
supportFootnotes][72][endif]

Regardless of the personal beliefs and biases of its individual members, this Court can only apply and interpret the
Constitution and the laws. Its power is not to create policy but to recognize, review or reverse the policy crafted by the political
departments if and when a proper case is brought before it. Otherwise, it will tread on the dangerous grounds of judicial legislation.
Considerably, this Court is left with no other recourse but to respect and apply the law.
VI. Grounds for Revocation of the SDP

AMBALA and FARM reiterate that improving the economic status of the FWBs is among the legal obligations of HLI under
the SDP and is an imperative imposition by RA 6657 and DAO 10. [if !supportFootnotes][73][endif] FARM further asserts that [i]f that minimum
threshold is not met, why allow [stock distribution option] at all, unless the purpose is not social justice but a political accommodation to
the powerful.[if !supportFootnotes][74][endif]
Contrary to the assertions of AMBALA and FARM, nowhere in the SDP, RA 6657 and DAO 10 can it be inferred that
improving the economic status of the FWBs is among the legal obligations of HLI under the SDP or is an imperative imposition by RA
6657 and DAO 10, a violation of which would justify discarding the stock distribution option. As We have painstakingly explained in Our
July 5, 2011 Decision:

In the Terminal Report adopted by PARC, it is stated that the SDP violates the agrarian
reform policy under Sec. 2 of RA 6657, as the said plan failed to enhance the dignity and improve the
quality of lives of the FWBs through greater productivity of agricultural lands. We disagree.

Sec. 2 of RA 6657 states:

SECTION 2. Declaration of Principles and Policies.It is the policy of the State to pursue
a Comprehensive Agrarian Reform Program (CARP). The welfare of the landless farmers and farm
workers will receive the highest consideration to promote social justice and to move the nation
towards sound rural development and industrialization, and the establishment of owner cultivatorship
of economic-sized farms as the basis of Philippine agriculture.

To this end, a more equitable distribution and ownership of


land, with due regard to the rights of landowners to just compensation and
to the ecological needs of the nation, shall be undertaken to provide
farmers and farm workers with the opportunity to enhance their dignity
and improve the quality of their lives through greater productivity of
agricultural lands.

The agrarian reform program is founded on the right of


farmers and regular farm workers, who are landless, to own directly or
collectively the lands they till or, in the case of other farm workers, to
receive a share of the fruits thereof. To this end, the State shall encourage
the just distribution of all agricultural lands, subject to the priorities and
retention limits set forth in this Act, having taken into account ecological,
developmental, and equity considerations, and subject to the payment of
just compensation. The State shall respect the right of small landowners
and shall provide incentives for voluntary land-sharing.

Paragraph 2 of the above-quoted provision specifically


mentions that a more equitable distribution and ownership of land x x x
shall be undertaken to provide farmers and farm workers with the
opportunity to enhance their dignity and improve the quality of their lives
through greater productivity of agricultural lands. Of note is the term
opportunity which is defined as a favorable chance or opening offered by
circumstances. Considering this, by no stretch of imagination can said
provision be construed as a guarantee in improving the lives of the FWBs.
At best, it merely provides for a possibility or favorable chance of uplifting
the economic status of the FWBs, which may or may not be attained.

Pertinently, improving the economic status of the FWBs is


neither among the legal obligations of HLI under the SDP nor an
imperative imposition by RA 6657 and DAO 10, a violation of which would
justify discarding the stock distribution option. Nothing in that option
agreement, law or department order indicates otherwise.

Significantly, HLI draws particular attention to its having paid


its FWBs, during the regime of the SDP (1989-2005), some PhP 3 billion
by way of salaries/wages and higher benefits exclusive of free hospital
and medical benefits to their immediate family. And attached as Annex G

to HLIs Memorandum is the certified true report of the finance manager of


Jose Cojuangco & Sons Organizations-Tarlac Operations, captioned as
HACIENDA LUISITA, INC. Salaries, Benefits and Credit Privileges (in
Thousand Pesos) Since the Stock Option was Approved by PARC/CARP,
detailing what HLI gave their workers from 1989 to 2005. The sum total,
as added up by the Court, yields the following numbers: Total Direct Cash
Out (Salaries/Wages & Cash Benefits) = PhP 2,927,848; Total Non-Direct
Cash Out (Hospital/Medical Benefits) = PhP 303,040. The cash out
figures, as stated in the report, include the cost of homelots; the PhP 150
million or so representing 3% of the gross produce of the hacienda; and
the PhP 37.5 million representing 3% from the proceeds of the sale of the
500-hectare converted lands. While not included in the report, HLI
manifests having given the FWBs 3% of the PhP 80 million paid for the 80
hectares of land traversed by the SCTEX. On top of these, it is worth
remembering that the shares of stocks were given by HLI to the FWBs for
free. Verily, the FWBs have benefited from the SDP.

To address urgings that the FWBs be allowed to disengage


from the SDP as HLI has not anyway earned profits through the years, it
cannot be over-emphasized that, as a matter of common business sense,
no corporation could guarantee a profitable run all the time. As has been
suggested, one of the key features of an SDP of a corporate landowner is
the likelihood of the corporate vehicle not earning, or, worse still, losing
money.

The Court is fully aware that one of the criteria under DAO 10
for the PARC to consider the advisability of approving a stock distribution
plan is the likelihood that the plan would result in increased income and
greater benefits to [qualified beneficiaries] than if the lands were
divided and distributed to them individually. But as aptly noted during
the oral arguments, DAO 10 ought to have not, as it cannot, actually exact
assurance of success on something that is subject to the will of man, the
forces of nature or the inherent risky nature of business. [if !supportFootnotes][75][endif]
Just like in actual land distribution, an SDP cannot guarantee, as indeed
the SDOA does not guarantee, a comfortable life for the FWBs. The Court
can take judicial notice of the fact that there were many instances wherein
after a farmworker beneficiary has been awarded with an agricultural land,
he just subsequently sells it and is eventually left with nothing in the end.

In all then, the onerous condition of the FWBs economic


status, their life of hardship, if that really be the case, can hardly be
attributed to HLI and its SDP and provide a valid ground for the plans
revocation. (Citations omitted; emphasis in the original.)

This Court, despite the above holding, still affirmed the revocation by PARC of its approval of the SDP based on the
following grounds: (1) failure of HLI to fully comply with its undertaking to distribute homelots to the FWBs under the SDP; (2) distribution
of shares of stock to the FWBs based on the number of man days or number of days worked by the FWB in a years time; and (3) 30-year
timeframe for the implementation or distribution of the shares of stock to the FWBs.

Just the same, Mallari, et al. posit that the homelots required to be distributed have all been distributed pursuant to the
SDOA, and that what merely remains to be done is the release of title from the Register of Deeds. [if !supportFootnotes][76][endif] They further assert
that there has been no dilution of shares as the corporate records would show that if ever not all of the 18,804.32 shares were given to
the actual original FWB, the recipient of the difference is the next of kin or children of said original FWB. [if !supportFootnotes][77][endif] Thus, they
submit that since the shares were given to the same family beneficiary, this should be deemed as substantial compliance with the
provisions of Sec. 4 of DAO 10. [if !supportFootnotes][78][endif] Also, they argue that there has been no violation of the three-month period to
implement the SDP as mandated by Sec. 11 of DAO, since this provision must be read in light of Sec. 10 of Executive Order No. 229, the
pertinent portion of which reads, The approval by the PARC of a plan for such stock distribution, and its initial implementation, shall be
deemed compliance with the land distribution requirement of the CARP. [if !supportFootnotes][79][endif]
Again, the matters raised by Mallari, et al. have been extensively discussed by the Court in its July 5, 2011 Decision. As
stated:
On Titles to Homelots

Under RA 6657, the distribution of homelots is required only for corporations or


business associations owning or operating farms which opted for land distribution. Sec. 30 of RA
6657 states:

SEC. 30. Homelots and Farmlots for Members of Cooperatives.The individual members
of the cooperatives or corporations mentioned in the preceding section shall be provided with
homelots and small farmlots for their family use, to be taken from the land owned by the cooperative
or corporation.

The preceding section referred to in the above-quoted provision is as follows:

SEC. 29. Farms Owned or Operated by Corporations or Other Business Associations.In


the case of farms owned or operated by corporations or other business associations, the following
rules shall be observed by the PARC.

In general, lands shall be distributed directly to the individual worker-beneficiaries.

In case it is not economically feasible and sound to divide the land, then it shall be
owned collectively by the worker-beneficiaries who shall form a workers cooperative or association
which will deal with the corporation or business association. Until a new agreement is entered into by
and between the workers cooperative or association and the corporation or business association,
any agreement existing at the time this Act takes effect between the former and the previous
landowner shall be respected by both the workers cooperative or association and the corporation or
business association.

Noticeably, the foregoing provisions do not make reference to corporations which opted
for stock distribution under Sec. 31 of RA 6657. Concomitantly, said corporations are not obliged to
provide for it except by stipulation, as in this case.

Under the SDP, HLI undertook to subdivide and allocate for free and without charge
among the qualified family-beneficiaries x x x residential or homelots of not more than 240 sq. m.
each, with each family beneficiary being assured of receiving and owning a homelot in the barrio or
barangay where it actually resides, within a reasonable time.

More than sixteen (16) years have elapsed from the time the SDP was approved by
PARC, and yet, it is still the contention of the FWBs that not all was given the 240-square meter
homelots and, of those who were already given, some still do not have the corresponding titles.

During the oral arguments, HLI was afforded the chance to refute the foregoing
allegation by submitting proof that the FWBs were already given the said homelots:

Justice Velasco: x x x There is also an allegation that the farmer beneficiaries, the
qualified family beneficiaries were not given the 240 square meters each. So, can you also [prove]
that the qualified family beneficiaries were already provided the 240 square meter homelots.

Atty. Asuncion: We will, your Honor please.

Other than the financial report, however, no other substantial proof showing that all the
qualified beneficiaries have received homelots was submitted by HLI. Hence, this Court is
constrained to rule that HLI has not yet fully complied with its undertaking to distribute homelots to
the FWBs under the SDP.

On Man Days and the Mechanics of Stock Distribution

In our review and analysis of par. 3 of the SDOA on the mechanics and timelines of
stock distribution, We find that it violates two (2) provisions of DAO 10. Par. 3 of the SDOA states:

3. At the end of each fiscal year, for a period of 30 years, the SECOND PARTY [HLI]
shall arrange with the FIRST PARTY [TDC] the acquisition and distribution to the THIRD PARTY
[FWBs] on the basis of number of days worked and at no cost to them of one-thirtieth (1/30) of
118,391,976.85 shares of the capital stock of the SECOND PARTY that are presently owned and
held by the FIRST PARTY, until such time as the entire block of 118,391,976.85 shares shall have
been completely acquired and distributed to the THIRD PARTY.

Based on the above-quoted provision, the distribution of the shares of stock to the
FWBs, albeit not entailing a cash out from them, is contingent on the number of man days, that is,
the number of days that the FWBs have worked during the year. This formula deviates from Sec. 1 of
DAO 10, which decrees the distribution of equal number of shares to the FWBs as the minimum ratio
of shares of stock for purposes of compliance with Sec. 31 of RA 6657. As stated in Sec. 4 of DAO
10:

Section 4. Stock Distribution Plan.The [SDP] submitted by the corporate landownerapplicant shall provide for the distribution of an equal number of shares of the same class and
value, with the same rights and features as all other shares, to each of the qualified
beneficiaries. This distribution plan in all cases, shall be at least the minimum ratio for purposes of
compliance with Section 31 of R.A. No. 6657.

On top of the minimum ratio provided under Section 3 of


this Implementing Guideline, the corporate landowner-applicant may adopt

additional stock distribution schemes taking into account factors


such as rank, seniority, salary, position and other circumstances
which may be deemed desirable as a matter of sound company
policy.

The above proviso gives two (2) sets or categories of shares


of stock which a qualified beneficiary can acquire from the corporation
under the SDP. The first pertains, as earlier explained, to the mandatory
minimum ratio of shares of stock to be distributed to the FWBs in
compliance with Sec. 31 of RA 6657. This minimum ratio contemplates of
that proportion of the capital stock of the corporation that the
agricultural land, actually devoted to agricultural activities, bears in
relation to the companys total assets. It is this set of shares of stock
which, in line with Sec. 4 of DAO 10, is supposed to be allocated for the
distribution of an equal number of shares of stock of the same class and
value, with the same rights and features as all other shares, to each of the
qualified beneficiaries.

On the other hand, the second set or category of shares


partakes of a gratuitous extra grant, meaning that this set or category
constitutes an augmentation share/s that the corporate landowner may
give under an additional stock distribution scheme, taking into account
such variables as rank, seniority, salary, position and like factors which the
management, in the exercise of its sound discretion, may deem desirable.

Before anything else, it should be stressed that, at the time


PARC approved HLIs SDP, HLI recognized 6,296 individuals as qualified
FWBs. And under the 30-year stock distribution program envisaged under
the plan, FWBs who came in after 1989, new FWBs in fine, may be
accommodated, as they appear to have in fact been accommodated as
evidenced by their receipt of HLI shares.

Now then, by providing that the number of shares of the


original 1989 FWBs shall depend on the number of man days, HLI violated
the afore-quoted rule on stock distribution and effectively deprived the
FWBs of equal shares of stock in the corporation, for, in net effect, these
6,296 qualified FWBs, who theoretically had given up their rights to the
land that could have been distributed to them, suffered a dilution of their
due share entitlement. As has been observed during the oral arguments,
HLI has chosen to use the shares earmarked for farmworkers as reward
system chips to water down the shares of the original 6,296 FWBs.
Particularly:

Justice Abad: If the SDOA did not take place, the other thing
that would have happened is that there would be CARP?

Atty. Dela Merced: Yes, Your Honor.

Justice Abad: Thats the only point I want to know x x x. Now,


but they chose to enter SDOA instead of placing the land under CARP.
And for that reason those who would have gotten their shares of the land
actually gave up their rights to this land in place of the shares of the stock,
is that correct?

Atty. Dela Merced: It would be that way, Your Honor.

Justice Abad: Right now, also the government, in a way, gave


up its right to own the land because that way the government takes own
[sic] the land and distribute it to the farmers and pay for the land, is that
correct?

Atty. Dela Merced: Yes, Your Honor.

Justice Abad: And then you gave thirty-three percent (33%)


of the shares of HLI to the farmers at that time that numbered x x x those
who signed five thousand four hundred ninety eight (5,498) beneficiaries,
is that correct?

Atty. Dela Merced: Yes, Your Honor.

Justice Abad: But later on, after assigning them their shares,
some workers came in from 1989, 1990, 1991, 1992 and the rest of the
years that you gave additional shares who were not in the original list of
owners?

Atty. Dela Merced: Yes, Your Honor.

Justice Abad: Did those new workers give up any right that
would have belong to them in 1989 when the land was supposed to have
been placed under CARP?

Atty. Dela Merced: If you are talking or referring (interrupted)

Justice Abad: None! You tell me. None. They gave up no


rights to land?

Atty. Dela Merced: They did not do the same thing as we did
in 1989, Your Honor.

Justice Abad: No, if they were not workers in 1989 what land
did they give up? None, if they become workers later on.

Atty. Dela Merced: None, Your Honor, I was referring, Your


Honor, to the original (interrupted)

Justice Abad: So why is it that the rights of those who gave


up their lands would be diluted, because the company has chosen to use
the shares as reward system for new workers who come in? It is not that
the new workers, in effect, become just workers of the corporation whose
stockholders were already fixed. The TADECO who has shares there
about sixty six percent (66%) and the five thousand four hundred ninety
eight (5,498) farmers at the time of the SDOA? Explain to me. Why, why
will you x x x what right or where did you get that right to use this shares,
to water down the shares of those who should have been benefited, and
to use it as a reward system decided by the company?

From the above discourse, it is clear as day that the original


6,296 FWBs, who were qualified beneficiaries at the time of the approval
of the SDP, suffered from watering down of shares. As determined earlier,
each original FWB is entitled to 18,804.32 HLI shares. The original FWBs
got less than the guaranteed 18,804.32 HLI shares per beneficiary,
because the acquisition and distribution of the HLI shares were based on
man days or number of days worked by the FWB in a years time. As
explained by HLI, a beneficiary needs to work for at least 37 days in a
fiscal year before he or she becomes entitled to HLI shares. If it falls below
37 days, the FWB, unfortunately, does not get any share at year end. The
number of HLI shares distributed varies depending on the number of days
the FWBs were allowed to work in one year. Worse, HLI hired
farmworkers in addition to the original 6,296 FWBs, such that, as indicated
in the Compliance dated August 2, 2010 submitted by HLI to the Court, the
total number of farmworkers of HLI as of said date stood at 10,502. All
these farmworkers, which include the original 6,296 FWBs, were given
shares out of the 118,931,976.85 HLI shares representing the 33.296% of
the total outstanding capital stock of HLI. Clearly, the minimum individual
allocation of each original FWB of 18,804.32 shares was diluted as a
result of the use of man days and the hiring of additional farmworkers.

Going into another but related matter, par. 3 of the SDOA


expressly providing for a 30-year timeframe for HLI-to-FWBs stock
transfer is an arrangement contrary to what Sec. 11 of DAO 10 prescribes.
Said Sec. 11 provides for the implementation of the approved stock
distribution plan within three (3) months from receipt by the corporate
landowner of the approval of the plan by PARC. In fact, based on the said
provision, the transfer of the shares of stock in the names of the qualified
FWBs should be recorded in the stock and transfer books and must be
submitted to the SEC within sixty (60) days from implementation. As
stated:

Section 11. Implementation/Monitoring of Plan.The approved


stock distribution plan shall be implemented within three (3) months from
receipt by the corporate landowner-applicant of the approval thereof by
the PARC, and the transfer of the shares of stocks in the names of the
qualified beneficiaries shall be recorded in stock and transfer books and
submitted to the Securities and Exchange Commission (SEC) within sixty
(60) days from the said implementation of the stock distribution plan.

It is evident from the foregoing provision that the implementation, that is, the distribution
of the shares of stock to the FWBs, must be made within three (3) months from receipt by HLI of the
approval of the stock distribution plan by PARC. While neither of the clashing parties has made a
compelling case of the thrust of this provision, the Court is of the view and so holds that the intent is
to compel the corporate landowner to complete, not merely initiate, the transfer process of shares
within that three-month timeframe. Reinforcing this conclusion is the 60-day stock transfer recording
(with the SEC) requirement reckoned from the implementation of the SDP.

To the Court, there is a purpose, which is at once discernible as it is practical, for the
three-month threshold. Remove this timeline and the corporate landowner can veritably evade
compliance with agrarian reform by simply deferring to absurd limits the implementation of the stock
distribution scheme.

The argument is urged that the thirty (30)-year distribution program is justified by the
fact that, under Sec. 26 of RA 6657, payment by beneficiaries of land distribution under CARP shall
be made in thirty (30) annual amortizations. To HLI, said section provides a justifying dimension to its
30-year stock distribution program.

HLIs reliance on Sec. 26 of RA 6657, quoted in part below, is obviously misplaced as


the said provision clearly deals with land distribution.

SEC. 26. Payment by Beneficiaries.Lands awarded pursuant


to this Act shall be paid for by the beneficiaries to the LBP in thirty (30)
annual amortizations x x x.

Then, too, the ones obliged to pay the LBP under the said provision are the
beneficiaries. On the other hand, in the instant case, aside from the fact that what is involved is stock
distribution, it is the corporate landowner who has the obligation to distribute the shares of stock
among the FWBs.

Evidently, the land transfer beneficiaries are given thirty (30) years within which to pay
the cost of the land thus awarded them to make it less cumbersome for them to pay the government.
To be sure, the reason underpinning the 30-year accommodation does not apply to corporate
landowners in distributing shares of stock to the qualified beneficiaries, as the shares may be issued
in a much shorter period of time.

Taking into account the above discussion, the revocation of the SDP by PARC should
be upheld for violating DAO 10. It bears stressing that under Sec. 49 of RA 6657, the PARC and the
DAR have the power to issue rules and regulations, substantive or procedural. Being a product of
such rule-making power, DAO 10 has the force and effect of law and must be duly complied with.
The PARC is, therefore, correct in revoking the SDP. Consequently, the PARC Resolution No. 89-122 dated November 21, l989 approving the HLIs SDP is nullified and voided. (Citations omitted;
emphasis in the original.)

Based on the foregoing ruling, the contentions of Mallari, et al. are either not supported by the evidence on record or are
utterly misplaced. There is, therefore, no basis for the Court to reverse its ruling affirming PARC Resolution No. 2005-32-01 and PARC
Resolution No. 2006-34-01, revoking the previous approval of the SDP by PARC.

VII. Control over Agricultural Lands


After having discussed and considered the different contentions raised by the parties in their respective motions, We are
now left to contend with one crucial issue in the case at bar, that is, control over the agricultural lands by the qualified FWBs.
Upon a review of the facts and circumstances, We realize that the FWBs will never have control over these agricultural
lands for as long as they remain as stockholders of HLI. In Our July 5, 2011 Decision, this Court made the following observations:
There is, thus, nothing unconstitutional in the formula prescribed by RA 6657. The policy on agrarian reform is that
control over the agricultural land must always be in the hands of the farmers. Then it falls on the shoulders of DAR and PARC to
see to it the farmers should always own majority of the common shares entitled to elect the members of the board of directors to ensure
that the farmers will have a clear majority in the board. Before the SDP is approved, strict scrutiny of the proposed SDP must always be
undertaken by the DAR and PARC, such that the value of the agricultural land contributed to the corporation must always be more than
50% of the total assets of the corporation to ensure that the majority of the members of the board of directors are composed of the
farmers. The PARC composed of the President of the Philippines and cabinet secretaries must see to it that control over the board of
directors rests with the farmers by rejecting the inclusion of non-agricultural assets which will yield the majority in the board of directors to
non-farmers. Any deviation, however, by PARC or DAR from the correct application of the formula prescribed by the second paragraph of
Sec. 31 of RA 6675 does not make said provision constitutionally infirm. Rather, it is the application of said provision that can be
challenged. Ergo, Sec. 31 of RA 6657 does not trench on the constitutional policy of ensuring control by the farmers. (Emphasis
supplied.)

In line with Our finding that control over agricultural lands must always be in the hands of the farmers, We reconsider our
ruling that the qualified FWBs should be given an option to remain as stockholders of HLI, inasmuch as these qualified FWBs will never
gain control given the present proportion of shareholdings in HLI.
A revisit of HLIs Proposal for Stock Distribution under CARP and the Stock Distribution Option Agreement (SDOA) upon
which the proposal was based reveals that the total assets of HLI is PhP 590,554,220, while the value of the 4,915.7466 hectares is PhP
196,630,000. Consequently, the share of the farmer-beneficiaries in the HLI capital stock is 33.296% (196,630,000 divided by
590,554.220); 118,391,976.85 HLI shares represent 33.296%. Thus, even if all the holders of the 118,391,976.85 HLI shares
unanimously vote to remain as HLI stockholders, which is unlikely, control will never be placed in the hands of the farmer-beneficiaries.
Control, of course, means the majority of 50% plus at least one share of the common shares and other voting shares. Applying the
formula to the HLI stockholdings, the number of shares that will constitute the majority is 295,112,101 shares (590,554,220 divided by 2
plus one [1] HLI share). The 118,391,976.85 shares subject to the SDP approved by PARC substantially fall short of the 295,112,101
shares needed by the FWBs to acquire control over HLI. Hence, control can NEVER be attained by the FWBs. There is even no
assurance that 100% of the 118,391,976.85 shares issued to the FWBs will all be voted in favor of staying in HLI, taking into account the
previous referendum among the farmers where said shares were not voted unanimously in favor of retaining the SDP. In light of the
foregoing consideration, the option to remain in HLI granted to the individual FWBs will have to be recalled and revoked.

Moreover, bearing in mind that with the revocation of the approval of the SDP, HLI will no longer be operating under SDP
and will only be treated as an ordinary private corporation; the FWBs who remain as stockholders of HLI will be treated as ordinary
stockholders and will no longer be under the protective mantle of RA 6657.
In addition to the foregoing, in view of the operative fact doctrine, all the benefits and homelots [if !supportFootnotes][80][endif] received
by all the FWBs shall be respected with no obligation to refund or return them, since, as We have mentioned in our July 5, 2011 Decision,
the benefits x x x were received by the FWBs as farmhands in the agricultural enterprise of HLI and other fringe benefits were granted to
them pursuant to the existing collective bargaining agreement with Tadeco.
One last point, the HLI land shall be distributed only to the 6,296 original FWBs. The remaining 4,206 FWBs are not entitled
to any portion of the HLI land, because the rights to said land were vested only in the 6,296 original FWBs pursuant to Sec. 22 of RA
6657.
In this regard, DAR shall verify the identities of the 6,296 original FWBs, consistent with its administrative prerogative to
identify and select the agrarian reform beneficiaries under RA 6657. [if !supportFootnotes][81][endif]

WHEREFORE, the Motion for Partial Reconsideration dated July 20, 2011 filed by public respondents Presidential Agrarian Reform
Council and Department of Agrarian Reform, the Motion for Reconsideration dated July 19, 2011 filed by private respondent Alyansa ng
mga Manggagawang Bukid sa Hacienda Luisita, the Motion for Reconsideration dated July 21, 2011 filed by respondent-intervenor
Farmworkers Agrarian Reform Movement, Inc., and the Motion for Reconsideration dated July 22, 2011 filed by private respondents Rene
Galang and AMBALA are PARTIALLY GRANTED with respect to the option granted to the original farmworker-beneficiaries of
Hacienda Luisita to remain with Hacienda Luisita, Inc., which is hereby RECALLED and SET ASIDE. The Motion for Clarification and
Partial Reconsideration dated July 21, 2011 filed by petitioner HLI and the Motion for Reconsideration dated July 21, 2011 filed by private
respondents Noel Mallari, Julio Suniga, Supervisory Group of Hacienda Luisita, Inc. and Windsor Andaya are DENIED.
The fallo of the Courts July 5, 2011 Decision is hereby amended and shall read:
PARC Resolution No. 2005-32-01 dated December 22, 2005 and Resolution No. 2006-34-01 dated May 3, 2006, placing the
lands subject of HLIs SDP under compulsory coverage on mandated land acquisition scheme of the CARP, are hereby AFFIRMED with
the following modifications:
All salaries, benefits, the 3% of the gross sales of the production of the agricultural lands, the 3% share in the proceeds of the sale of the
500-hectare converted land and the 80.51-hectare SCTEX lot and the homelots already received by the 10,502 FWBs composed of
6,296 original FWBs and the 4,206 non-qualified FWBs shall be respected with no obligation to refund or return them. The 6,296 original
FWBs shall forfeit and relinquish their rights over the HLI shares of stock issued to them in favor of HLI. The HLI Corporate Secretary

shall cancel the shares issued to the said FWBs and transfer them to HLI in the stocks and transfer book, which transfers shall be exempt
from taxes, fees and charges. The 4,206 non-qualified FWBs shall remain as stockholders of HLI.
DAR shall segregate from the HLI agricultural land with an area of 4,915.75 hectares subject of PARCs SDP-approving
Resolution No. 89-12-2 the 500-hectare lot subject of the August 14, l996 Conversion Order and the 80.51-hectare lot sold to, or acquired
by, the government as part of the SCTEX complex. After the segregation process, as indicated, is done, the remaining area shall be
turned over to DAR for immediate land distribution to the original 6,296 FWBs or their successors-in-interest which will be identified by
the DAR. The 4,206 non-qualified FWBs are not entitled to any share in the land to be distributed by DAR.
HLI is directed to pay the original 6,296 FWBs the consideration of PhP 500,000,000 received by it from Luisita Realty, Inc.
for the sale to the latter of 200 hectares out of the 500 hectares covered by the August 14, 1996 Conversion Order, the consideration of
PhP 750,000,000 received by its owned subsidiary, Centennary Holdings, Inc., for the sale of the remaining 300 hectares of the
aforementioned 500-hectare lot to Luisita Industrial Park Corporation, and the price of PhP 80,511,500 paid by the government through
the Bases Conversion Development Authority for the sale of the 80.51-hectare lot used for the construction of the SCTEX road network.
From the total amount of PhP 1,330,511,500 (PhP 500,000,000 + PhP 750,000,000 + PhP 80,511,500 = PhP 1,330,511,500) shall be
deducted the 3% of the proceeds of said transfers that were paid to the FWBs, the taxes and expenses relating to the transfer of titles to
the transferees, and the expenditures incurred by HLI and Centennary Holdings, Inc. for legitimate corporate purposes. For this purpose,
DAR is ordered to engage the services of a reputable accounting firm approved by the parties to audit the books of HLI and Centennary
Holdings, Inc. to determine if the PhP 1,330,511,500 proceeds of the sale of the three (3) aforementioned lots were actually used or spent
for legitimate corporate purposes. Any unspent or unused balance and any disallowed expenditures as determined by the audit shall be
distributed to the 6,296 original FWBs.
HLI is entitled to just compensation for the agricultural land that will be transferred to DAR to be reckoned from November 21, 1989 which
is the date of issuance of PARC Resolution No. 89-12-2. DAR and LBP are ordered to determine the compensation due to HLI.
DAR shall submit a compliance report after six (6) months from finality of this judgment. It shall also submit, after submission of the
compliance report, quarterly reports on the execution of this judgment within the first 15 days after the end of each quarter, until fully
implemented.
The temporary restraining order is lifted.
SO ORDERED.written in our statute books.
WHEREFORE, the instant petition is granted. Paragraph 1 of Section 44 of Presidential Decree No. 1177 is hereby declared null and void
for being unconstitutional.

G.R. No. 181704


December 6, 2011
BUREAU OF CUSTOMS EMPLOYEES ASSOCIATION (BOCEA), represented by its National President (BOCEA
National Executive Council) Mr. Romulo A. Pagulayan, Petitioner,
vs.
HON. MARGARITO B. TEVES, in his capacity as Secretary of the Department of Finance, HON. NAPOLEON L.
MORALES, in his capacity as Commissioner of the Bureau of Customs, HON. LILIAN B. HEFTI, in her capacity as
Commissioner of the Bureau of Internal Revenue, Respondents.
DECISION
VILLARAMA, JR., J.:
Before this Court is a petition1 for certiorari and prohibition with prayer for injunctive relief/s under Rule 65 of the 1997 Rules
of Civil Procedure, as amended, to declare Republic Act (R.A.) No. 9335, 2 otherwise known as the Attrition Act of 2005, and
its Implementing Rules and Regulations3 (IRR) unconstitutional, and the implementation thereof be enjoined permanently.
The Facts
On January 25, 2005, former President Gloria Macapagal-Arroyo signed into law R.A. No. 9335 which took effect on
February 11, 2005.
In Abakada Guro Party List v. Purisima4 (Abakada), we said of R.A. No. 9335:
RA [No.] 9335 was enacted to optimize the revenue-generation capability and collection of the Bureau of Internal Revenue
(BIR) and the Bureau of Customs (BOC). The law intends to encourage BIR and BOC officials and employees to exceed
their revenue targets by providing a system of rewards and sanctions through the creation of a Rewards and Incentives Fund
(Fund) and a Revenue Performance Evaluation Board (Board). It covers all officials and employees of the BIR and the BOC
with at least six months of service, regardless of employment status.
The Fund is sourced from the collection of the BIR and the BOC in excess of their revenue targets for the year, as
determined by the Development Budget and Coordinating Committee (DBCC). Any incentive or reward is taken from the fund
and allocated to the BIR and the BOC in proportion to their contribution in the excess collection of the targeted amount of tax
revenue.
The Boards in the BIR and the BOC are composed of the Secretary of the Department of Finance (DOF) or his/her
Undersecretary, the Secretary of the Department of Budget and Management (DBM) or his/her Undersecretary, the Director
General of the National Economic Development Authority (NEDA) or his/her Deputy Director General, the Commissioners of
the BIR and the BOC or their Deputy Commissioners, two representatives from the rank-and-file employees and a
representative from the officials nominated by their recognized organization.
Each Board has the duty to (1) prescribe the rules and guidelines for the allocation, distribution and release of the Fund; (2)
set criteria and procedures for removing from the service officials and employees whose revenue collection falls short of the
target; (3) terminate personnel in accordance with the criteria adopted by the Board; (4) prescribe a system for performance
evaluation; (5) perform other functions, including the issuance of rules and regulations and (6) submit an annual report to
Congress.
The DOF, DBM, NEDA, BIR, BOC and the Civil Service Commission (CSC) were tasked to promulgate and issue the
implementing rules and regulations of RA [No.] 9335, to be approved by a Joint Congressional Oversight Committee created
for such purpose.5
The Joint Congressional Oversight Committee approved the assailed IRR on May 22, 2006. Subsequently, the IRR was
published on May 30, 2006 in two newspapers of general circulation, the Philippine Star and the Manila Standard, and
became effective fifteen (15) days later.6
Contending that the enactment and implementation of R.A. No. 9335 are tainted with constitutional infirmities in violation of
the fundamental rights of its members, petitioner Bureau of Customs Employees Association (BOCEA), an association of
rank-and-file employees of the Bureau of Customs (BOC), duly registered with the Department of Labor and Employment
(DOLE) and the Civil Service Commission (CSC), and represented by its National President, Mr. Romulo A. Pagulayan
(Pagulayan), directly filed the present petition before this Court against respondents Margarito B. Teves, in his capacity as

Secretary of the Department of Finance (DOF), Commissioner Napoleon L. Morales (Commissioner Morales), in his capacity
as BOC Commissioner, and Lilian B. Hefti, in her capacity as Commissioner of the Bureau of Internal Revenue (BIR). In its
petition, BOCEA made the following averments:
Sometime in 2008, high-ranking officials of the BOC pursuant to the mandate of R.A. No. 9335 and its IRR, and in order to
comply with the stringent deadlines thereof, started to disseminate Collection District Performance Contracts 7 (Performance
Contracts) for the lower ranking officials and rank-and-file employees to sign. The Performance Contract pertinently provided:
xxxx
WHEREAS, pursuant to the provisions of Sec. 25 (b) of the Implementing Rules and Regulations (IRR) of the Attrition Act of
2005, that provides for the setting of criteria and procedures for removing from the service Officials and Employees whose
revenue collection fall short of the target in accordance with Section 7 of Republic Act 9335.
xxxx
NOW, THEREFORE, for and in consideration of the foregoing premises, parties unto this Agreement hereby agree and so
agreed to perform the following:
xxxx
2. The "Section 2, PA/PE" hereby accepts the allocated Revenue Collection Target and further accepts/commits to meet the
said target under the following conditions:
a.) That he/she will meet the allocated Revenue Collection Target and thereby undertakes and binds himself/herself that in
the event the revenue collection falls short of the target with due consideration of all relevant factors affecting the level of
collection as provided in the rules and regulations promulgated under the Act and its IRR, he/she will voluntarily submit to the
provisions of Sec. 25 (b) of the IRR and Sec. 7 of the Act; and
b.) That he/she will cascade and/or allocate to respective Appraisers/Examiners or Employees under his/her section the said
Revenue Collection Target and require them to execute a Performance Contract, and direct them to accept their individual
target. The Performance Contract executed by the respective Examiners/Appraisers/Employees shall be submitted to the
Office of the Commissioner through the LAIC on or before March 31, 2008.
x x x x8
BOCEA opined that the revenue target was impossible to meet due to the Governments own policies on reduced tariff rates
and tax breaks to big businesses, the occurrence of natural calamities and because of other economic factors. BOCEA
claimed that some BOC employees were coerced and forced to sign the Performance Contract. The majority of them,
however, did not sign. In particular, officers of BOCEA were summoned and required to sign the Performance Contracts but
they also refused. To ease the brewing tension, BOCEA claimed that its officers sent letters, and sought several dialogues
with BOC officials but the latter refused to heed them.
In addition, BOCEA alleged that Commissioner Morales exerted heavy pressure on the District Collectors, Chiefs of Formal
Entry Divisions, Principal Customs Appraisers and Principal Customs Examiners of the BOC during command conferences
to make them sign their Performance Contracts. Likewise, BOC Deputy Commissioner Reynaldo Umali (Deputy
Commissioner Umali) individually spoke to said personnel to convince them to sign said contracts. Said personnel were
threatened that if they do not sign their respective Performance Contracts, they would face possible reassignment,
reshuffling, or worse, be placed on floating status. Thus, all the District Collectors, except a certain Atty. Carlos So of the
Collection District III of the Ninoy Aquino International Airport (NAIA), signed the Performance Contracts.
BOCEA further claimed that Pagulayan was constantly harassed and threatened with lawsuits. Pagulayan approached
Deputy Commissioner Umali to ask the BOC officials to stop all forms of harassment, but the latter merely said that he would
look into the matter. On February 5, 2008, BOCEA through counsel wrote the Revenue Performance Evaluation Board
(Board) to desist from implementing R.A. No. 9335 and its IRR and from requiring rank-and-file employees of the BOC and
BIR to sign Performance Contracts.9 In his letter-reply10 dated February 12, 2008, Deputy Commissioner Umali denied
having coerced any BOC employee to sign a Performance Contract. He also defended the BOC, invoking its mandate of
merely implementing the law. Finally, Pagulayan and BOCEAs counsel, on separate occasions, requested for a certified true
copy of the Performance Contract from Deputy Commissioner Umali but the latter failed to furnish them a copy.11
This petition was filed directly with this Court on March 3, 2008. BOCEA asserted that in view of the unconstitutionality of
R.A. No. 9335 and its IRR, and their adverse effects on the constitutional rights of BOC officials and employees, direct resort
to this Court is justified. BOCEA argued, among others, that its members and other BOC employees are in great danger of
losing their jobs should they fail to meet the required quota provided under the law, in clear violation of their constitutional
right to security of tenure, and at their and their respective families prejudice.
In their Comment,12 respondents, through the Office of the Solicitor General (OSG), countered that R.A. No. 9335 and its IRR
do not violate the right to due process and right to security of tenure of BIR and BOC employees. The OSG stressed that the
guarantee of security of tenure under the 1987 Constitution is not a guarantee of perpetual employment. R.A. No. 9335 and
its IRR provided a reasonable and valid ground for the dismissal of an employee which is germane to the purpose of the law.
Likewise, R.A. No. 9335 and its IRR provided that an employee may only be separated from the service upon compliance
with substantive and procedural due process. The OSG added that R.A. No. 9335 and its IRR must enjoy the presumption of
constitutionality.
In its Reply,13 BOCEA claimed that R.A. No. 9335 employs means that are unreasonable to achieve its stated objectives; that
the law is unduly oppressive of BIR and BOC employees as it shifts the extreme burden upon their shoulders when the
Government itself has adopted measures that make collection difficult such as reduced tariff rates to almost zero percent and
tax exemption of big businesses; and that the law is discriminatory of BIR and BOC employees. BOCEA manifested that only
the high-ranking officials of the BOC benefited largely from the reward system under R.A. No. 9335 despite the fact that they

were not the ones directly toiling to collect revenue. Moreover, despite the BOCEAs numerous requests,14 BOC continually
refused to provide BOCEA the Expenditure Plan on how such reward was distributed.
Since BOCEA was seeking similar reliefs as that of the petitioners in Abakada Guro Party List v. Purisima, BOCEA filed a
Motion to Consolidate15 the present case with Abakada on April 16, 2008. However, pending action on said motion, the Court
rendered its decision in Abakada on August 14, 2008. Thus, the consolidation of this case with Abakada was rendered no
longer possible.16
In Abakada, this Court, through then Associate Justice, now Chief Justice Renato C. Corona, declared Section 1217 of R.A.
No. 9335 creating a Joint Congressional Oversight Committee to approve the IRR as unconstitutional and violative of the
principle of separation of powers. However, the constitutionality of the remaining provisions of R.A. No. 9335 was upheld
pursuant to Section 1318 of R.A. No. 9335. The Court also held that until the contrary is shown, the IRR of R.A. No. 9335 is
presumed valid and effective even without the approval of the Joint Congressional Oversight Committee.19
Notwithstanding our ruling in Abakada, both parties complied with our Resolution 20 dated February 10, 2009, requiring them
to submit their respective Memoranda.
The Issues
BOCEA raises the following issues:
I.
WHETHER OR NOT THE ATTRITION LAW, REPUBLIC ACT [NO.] 9335, AND ITS IMPLEMENTING RULES AND
REGULATIONS ARE UNCONSTITUTIONAL AS THESE VIOLATE THE RIGHT TO DUE PROCESS OF THE COVERED BIR
AND BOC OFFICIALS AND EMPLOYEES[;]
II.
WHETHER OR NOT THE ATTRITION LAW, REPUBLIC ACT [NO.] 9335, AND ITS IMPLEMENTING RULES AND
REGULATIONS ARE UNCONSTITUTIONAL AS THESE VIOLATE THE RIGHT OF BIR AND BOC OFFICIALS AND
EMPLOYEES TO THE EQUAL PROTECTION OF THE LAWS[;]
III.
WHETHER OR NOT REPUBLIC ACT [NO.] 9335 AND ITS IMPLEMENTING RULES AND REGULATIONS VIOLATE THE
RIGHT TO SECURITY OF TENURE OF BIR AND BOC OFFICIALS AND EMPLOYEES AS ENSHRINED UNDER SECTION
2 (3), ARTICLE IX (B) OF THE CONSTITUTION[;]
IV.
WHETHER OR NOT REPUBLIC ACT [NO.] 9335 AND ITS IMPLEMENTING RULES AND REGULATIONS ARE
UNCONSTITUTIONAL AS THEY CONSTITUTE UNDUE DELEGATION OF LEGISLATIVE POWERS TO THE REVENUE
PERFORMANCE EVALUATION BOARD IN VIOLATION OF THE PRINCIPLE OF SEPARATION OF POWERS ENSHRINED
IN THE CONSTITUTION[; AND]
V.
WHETHER OR NOT REPUBLIC ACT [NO.] 9335 IS A BILL OF ATTAINDER AND HENCE[,] UNCONSTITUTIONAL
BECAUSE IT INFLICTS PUNISHMENT THROUGH LEGISLATIVE FIAT UPON A PARTICULAR GROUP OR CLASS OF
OFFICIALS AND EMPLOYEES WITHOUT TRIAL.21
BOCEA manifested that while waiting for the Court to give due course to its petition, events unfolded showing the patent
unconstitutionality of R.A. No. 9335. It narrated that during the first year of the implementation of R.A. No. 9335, BOC
employees exerted commendable efforts to attain their revenue target of P196 billion which they surpassed by as much as
P2 billion for that year alone. However, this was attained only because oil companies made advance tax payments to BOC.
Moreover, BOC employees were given their "reward" for surpassing said target only in 2008, the distribution of which they
described as unjust, unfair, dubious and fraudulent because only top officials of BOC got the huge sum of reward while the
employees, who did the hard task of collecting, received a mere pittance of around P8,500.00. In the same manner, the
Bonds Division of BOC-NAIA collected 400+% of its designated target but the higher management gave out to the
employees a measly sum of P8,500.00 while the top level officials partook of millions of the excess collections. BOCEA relies
on a piece of information revealed by a newspaper showing the list of BOC officials who apparently earned huge amounts of
money by way of reward.22 It claims that the recipients thereof included lawyers, support personnel and other employees,
including a dentist, who performed no collection functions at all. These alleged anomalous selection, distribution and
allocation of rewards was due to the failure of R.A. No. 9335 to set out clear guidelines.23
In addition, BOCEA avers that the Board initiated the first few cases of attrition for the Fiscal Year 2007 by subjecting five
BOC officials from the Port of Manila to attrition despite the fact that the Port of Manila substantially complied with the
provisions of R.A. No. 9335. It is thus submitted that the selection of these officials for attrition without proper investigation
was nothing less than arbitrary. Further, the legislative and executive departments promulgation of issuances and the
Governments accession to regional trade agreements have caused a significant diminution of the tariff rates, thus,
decreasing over-all collection. These unrealistic settings of revenue targets seriously affect BIR and BOC employees tasked
with the burden of collection, and worse, subjected them to attrition.24
BOCEA assails the constitutionality of R.A. No. 9335 and its IRR on the following grounds:
1. R.A. No. 9335 and its IRR violate the BIR and BOC employees right to due process because the termination of
employees who had not attained their revenue targets for the year is peremptory and done without any form of hearing to
allow said employees to ventilate their side. Moreover, R.A. No. 9335 and its IRR do not comply with the requirements under
CSC rules and regulations as the dismissal in this case is immediately executory. Such immediately executory nature of the
Boards decision negates the remedies available to an employee as provided under the CSC rules.
2. R.A. No. 9335 and its IRR violate the BIR and BOC employees right to equal protection of the law because R.A. No. 9335
and its IRR unduly discriminates against BIR and BOC employees as compared to employees of other revenue generating
government agencies like the Philippine Amusement and Gaming Corporation, Department of Transportation and

Communication, the Air Transportation Office, the Land Transportation Office, and the Philippine Charity Sweepstakes Office,
among others, which are not subject to attrition.
3. R.A. No. 9335 and its IRR violate the BIR and BOC employees right to security of tenure because R.A. No. 9335 and its
IRR effectively removed remedies provided in the ordinary course of administrative procedure afforded to government
employees. The law likewise created another ground for dismissal, i.e., non-attainment of revenue collection target, which is
not provided under CSC rules and which is, by its nature, unpredictable and therefore arbitrary and unreasonable.
4. R.A. No. 9335 and its IRR violate the 1987 Constitution because Congress granted to the Revenue Performance
Evaluation Board (Board) the unbridled discretion of formulating the criteria for termination, the manner of allocating targets,
the distribution of rewards and the determination of relevant factors affecting the targets of collection, which is tantamount to
undue delegation of legislative power.
5. R.A. No. 9335 is a bill of attainder because it inflicts punishment upon a particular group or class of officials and
employees without trial. This is evident from the fact that the law confers upon the Board the power to impose the penalty of
removal upon employees who do not meet their revenue targets; that the same is without the benefit of hearing; and that the
removal from service is immediately executory. Lastly, it disregards the presumption of regularity in the performance of the
official functions of a public officer.25
On the other hand, respondents through the OSG stress that except for Section 12 of R.A. No. 9335, R.A. No. 9335 and its
IRR are constitutional, as per our ruling in Abakada. Nevertheless, the OSG argues that the classification of BIR and BOC
employees as public officers under R.A. No. 9335 is based on a valid and substantial distinction since the revenue generated
by the BIR and BOC is essentially in the form of taxes, which is the lifeblood of the State, while the revenue produced by
other agencies is merely incidental or secondary to their governmental functions; that in view of their mandate, and for
purposes of tax collection, the BIR and BOC are sui generis; that R.A. No. 9335 complies with the "completeness" and
"sufficient standard" tests for the permissive delegation of legislative power to the Board; that the Board exercises its
delegated power consistent with the policy laid down in the law, that is, to optimize the revenue generation capability and
collection of the BIR and the BOC; that parameters were set in order that the Board may identify the officials and employees
subject to attrition, and the proper procedure for their removal in case they fail to meet the targets set in the Performance
Contract were provided; and that the rights of BIR and BOC employees to due process of law and security of tenure are duly
accorded by R.A. No. 9335. The OSG likewise maintains that there was no encroachment of judicial power in the enactment
of R.A. No. 9335 amounting to a bill of attainder since R.A. No. 9335 and its IRR merely defined the offense and provided for
the penalty that may be imposed. Finally, the OSG reiterates that the separation from the service of any BIR or BOC
employee under R.A. No. 9335 and its IRR shall be done only upon due consideration of all relevant factors affecting the
level of collection, subject to Civil Service laws, rules and regulations, and in compliance with substantive and procedural due
process. The OSG opines that the Performance Contract, far from violating the BIR and BOC employees right to due
process, actually serves as a notice of the revenue target they have to meet and the possible consequences of failing to
meet the same. More, there is nothing in the law which prevents the aggrieved party from appealing the unfavorable decision
of dismissal.26
In essence, the issues for our resolution are:
1. Whether there is undue delegation of legislative power to the Board;
2. Whether R.A. No. 9335 and its IRR violate the rights of BOCEAs members to: (a) equal protection of laws, (b) security of
tenure and (c) due process; and
3. Whether R.A. No. 9335 is a bill of attainder.
Our Ruling
Prefatorily, we note that it is clear, and in fact uncontroverted, that BOCEA has locus standi. BOCEA impugns the
constitutionality of R.A. No. 9335 and its IRR because its members, who are rank-and-file employees of the BOC, are
actually covered by the law and its IRR. BOCEAs members have a personal and substantial interest in the case, such that
they have sustained or will sustain, direct injury as a result of the enforcement of R.A. No. 9335 and its IRR.27
However, we find no merit in the petition and perforce dismiss the same.
It must be noted that this is not the first time the constitutionality of R.A. No. 9335 and its IRR are being challenged. The
Court already settled the majority of the same issues raised by BOCEA in our decision in Abakada, which attained finality on
September 17, 2008. As such, our ruling therein is worthy of reiteration in this case.
We resolve the first issue in the negative.
The principle of separation of powers ordains that each of the three great branches of government has exclusive cognizance
of and is supreme in matters falling within its own constitutionally allocated sphere. 28 Necessarily imbedded in this doctrine is
the principle of non-delegation of powers, as expressed in the Latin maxim potestas delegata non delegari potest, which
means "what has been delegated, cannot be delegated." This doctrine is based on the ethical principle that such delegated
power constitutes not only a right but a duty to be performed by the delegate through the instrumentality of his own judgment
and not through the intervening mind of another.29 However, this principle of non-delegation of powers admits of numerous
exceptions,30 one of which is the delegation of legislative power to various specialized administrative agencies like the Board
in this case.
The rationale for the aforementioned exception was clearly explained in our ruling in Gerochi v. Department of Energy, 31 to
wit:
In the face of the increasing complexity of modern life, delegation of legislative power to various specialized administrative
agencies is allowed as an exception to this principle. Given the volume and variety of interactions in todays society, it is

doubtful if the legislature can promulgate laws that will deal adequately with and respond promptly to the minutiae of
everyday life. Hence, the need to delegate to administrative bodies the principal agencies tasked to execute laws in their
specialized fields the authority to promulgate rules and regulations to implement a given statute and effectuate its
policies. All that is required for the valid exercise of this power of subordinate legislation is that the regulation be germane to
the objects and purposes of the law and that the regulation be not in contradiction to, but in conformity with, the standards
prescribed by the law. These requirements are denominated as the completeness test and the sufficient standard test.32
Thus, in Abakada, we held,
Two tests determine the validity of delegation of legislative power: (1) the completeness test and (2) the sufficient standard
test. A law is complete when it sets forth therein the policy to be executed, carried out or implemented by the delegate. It lays
down a sufficient standard when it provides adequate guidelines or limitations in the law to map out the boundaries of the
delegates authority and prevent the delegation from running riot. To be sufficient, the standard must specify the limits of the
delegates authority, announce the legislative policy and identify the conditions under which it is to be implemented.
RA [No.] 9335 adequately states the policy and standards to guide the President in fixing revenue targets and the
implementing agencies in carrying out the provisions of the law. Section 2 spells out the policy of the law:
"SEC. 2. Declaration of Policy. It is the policy of the State to optimize the revenue-generation capability and collection of
the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) by providing for a system of rewards and sanctions
through the creation of a Rewards and Incentives Fund and a Revenue Performance Evaluation Board in the above
agencies for the purpose of encouraging their officials and employees to exceed their revenue targets."
Section 4 "canalized within banks that keep it from overflowing" the delegated power to the President to fix revenue targets:
"SEC. 4. Rewards and Incentives Fund. A Rewards and Incentives Fund, hereinafter referred to as the Fund, is hereby
created, to be sourced from the collection of the BIR and the BOC in excess of their respective revenue targets of the
year, as determined by the Development Budget and Coordinating Committee (DBCC), in the following percentages:
Excess of Collection [Over] the Revenue Targets
Percent (%) of the Excess Collection to Accrue to the Fund
30% or below

15%
More than 30%

15% of the first 30% plus 20% of the remaining excess


The Fund shall be deemed automatically appropriated the year immediately following the year when the revenue collection
target was exceeded and shall be released on the same fiscal year.
Revenue targets shall refer to the original estimated revenue collection expected of the BIR and the BOC for a given fiscal
year as stated in the Budget of Expenditures and Sources of Financing (BESF) submitted by the President to Congress. The
BIR and the BOC shall submit to the DBCC the distribution of the agencies revenue targets as allocated among its revenue
districts in the case of the BIR, and the collection districts in the case of the BOC.
xxx
xxx
x x x"
Revenue targets are based on the original estimated revenue collection expected respectively of the BIR and the BOC for a
given fiscal year as approved by the DBCC and stated in the BESF submitted by the President to Congress. Thus, the
determination of revenue targets does not rest solely on the President as it also undergoes the scrutiny of the DBCC.
On the other hand, Section 7 specifies the limits of the Boards authority and identifies the conditions under which officials
and employees whose revenue collection falls short of the target by at least 7.5% may be removed from the service:
"SEC. 7. Powers and Functions of the Board. The Board in the agency shall have the following powers and functions:
xxx
xxx
xxx
(b) To set the criteria and procedures for removing from service officials and employees whose revenue collection falls short
of the target by at least seven and a half percent (7.5%), with due consideration of all relevant factors affecting the level of
collection as provided in the rules and regulations promulgated under this Act, subject to civil service laws, rules and
regulations and compliance with substantive and procedural due process: Provided, That the following exemptions shall
apply:
1. Where the district or area of responsibility is newly-created, not exceeding two years in operation, and has no historical
record of collection performance that can be used as basis for evaluation; and
2. Where the revenue or customs official or employee is a recent transferee in the middle of the period under consideration
unless the transfer was due to nonperformance of revenue targets or potential nonperformance of revenue targets: Provided,
however, That when the district or area of responsibility covered by revenue or customs officials or employees has suffered
from economic difficulties brought about by natural calamities or force majeure or economic causes as may be determined
by the Board, termination shall be considered only after careful and proper review by the Board.
(c) To terminate personnel in accordance with the criteria adopted in the preceding paragraph: Provided, That such decision
shall be immediately executory: Provided, further, That the application of the criteria for the separation of an official or
employee from service under this Act shall be without prejudice to the application of other relevant laws on accountability of
public officers and employees, such as the Code of Conduct and Ethical Standards of Public Officers and Employees and the
Anti-Graft and Corrupt Practices Act;
xxx
xxx
x x x"

At any rate, this Court has recognized the following as sufficient standards: "public interest", "justice and equity", "public
convenience and welfare" and "simplicity, economy and welfare". In this case, the declared policy of optimization of the
revenue-generation capability and collection of the BIR and the BOC is infused with public interest.33
We could not but deduce that the completeness test and the sufficient standard test were fully satisfied by R.A. No. 9335, as
evident from the aforementioned Sections 2, 4 and 7 thereof. Moreover, Section 534 of R.A. No. 9335 also provides for the
incentives due to District Collection Offices. While it is apparent that the last paragraph of Section 5 provides that "[t]he
allocation, distribution and release of the district reward shall likewise be prescribed by the rules and regulations of the
Revenue Performance and Evaluation Board," Section 7 (a)35 of R.A. No. 9335 clearly mandates and sets the parameters for
the Board by providing that such rules and guidelines for the allocation, distribution and release of the fund shall be in
accordance with Sections 4 and 5 of R.A. No. 9335. In sum, the Court finds that R.A. No. 9335, read and appreciated in its
entirety, is complete in all its essential terms and conditions, and that it contains sufficient standards as to negate BOCEAs
supposition of undue delegation of legislative power to the Board.
Similarly, we resolve the second issue in the negative.
Equal protection simply provides that all persons or things similarly situated should be treated in a similar manner, both as to
rights conferred and responsibilities imposed. The purpose of the equal protection clause is to secure every person within a
states jurisdiction against intentional and arbitrary discrimination, whether occasioned by the express terms of a statute or
by its improper execution through the states duly constituted authorities. In other words, the concept of equal justice under
the law requires the state to govern impartially, and it may not draw distinctions between individuals solely on differences that
are irrelevant to a legitimate governmental objective.361awphil
Thus, on the issue on equal protection of the laws, we held in Abakada:
The equal protection clause recognizes a valid classification, that is, a classification that has a reasonable foundation or
rational basis and not arbitrary. With respect to RA [No.] 9335, its expressed public policy is the optimization of the revenuegeneration capability and collection of the BIR and the BOC. Since the subject of the law is the revenue-generation capability
and collection of the BIR and the BOC, the incentives and/or sanctions provided in the law should logically pertain to the said
agencies. Moreover, the law concerns only the BIR and the BOC because they have the common distinct primary function of
generating revenues for the national government through the collection of taxes, customs duties, fees and charges.
The BIR performs the following functions:
"Sec. 18. The Bureau of Internal Revenue. The Bureau of Internal Revenue, which shall be headed by and subject to the
supervision and control of the Commissioner of Internal Revenue, who shall be appointed by the President upon the
recommendation of the Secretary [of the DOF], shall have the following functions:
(1) Assess and collect all taxes, fees and charges and account for all revenues collected;
(2) Exercise duly delegated police powers for the proper performance of its functions and duties;
(3) Prevent and prosecute tax evasions and all other illegal economic activities;
(4) Exercise supervision and control over its constituent and subordinate units; and
(5) Perform such other functions as may be provided by law.
xxx
xxx
x x x"
On the other hand, the BOC has the following functions:
"Sec. 23. The Bureau of Customs. The Bureau of Customs which shall be headed and subject to the management and
control of the Commissioner of Customs, who shall be appointed by the President upon the recommendation of the
Secretary [of the DOF] and hereinafter referred to as Commissioner, shall have the following functions:
(1) Collect custom duties, taxes and the corresponding fees, charges and penalties;
(2) Account for all customs revenues collected;
(3) Exercise police authority for the enforcement of tariff and customs laws;
(4) Prevent and suppress smuggling, pilferage and all other economic frauds within all ports of entry;
(5) Supervise and control exports, imports, foreign mails and the clearance of vessels and aircrafts in all ports of entry;
(6) Administer all legal requirements that are appropriate;
(7) Prevent and prosecute smuggling and other illegal activities in all ports under its jurisdiction;
(8) Exercise supervision and control over its constituent units;
(9) Perform such other functions as may be provided by law.
xxx
xxx
x x x"
Both the BIR and the BOC are bureaus under the DOF. They principally perform the special function of being the
instrumentalities through which the State exercises one of its great inherent functions taxation. Indubitably, such
substantial distinction is germane and intimately related to the purpose of the law. Hence, the classification and treatment
accorded to the BIR and the BOC under RA [No.] 9335 fully satisfy the demands of equal protection.37
As it was imperatively correlated to the issue on equal protection, the issues on the security of tenure of affected BIR and
BOC officials and employees and their entitlement to due process were also settled in Abakada:
Clearly, RA [No.] 9335 in no way violates the security of tenure of officials and employees of the BIR and the BOC. The
guarantee of security of tenure only means that an employee cannot be dismissed from the service for causes other than
those provided by law and only after due process is accorded the employee. In the case of RA [No.] 9335, it lays down a
reasonable yardstick for removal (when the revenue collection falls short of the target by at least 7.5%) with due
consideration of all relevant factors affecting the level of collection. This standard is analogous to inefficiency and
incompetence in the performance of official duties, a ground for disciplinary action under civil service laws. The action for
removal is also subject to civil service laws, rules and regulations and compliance with substantive and procedural due
process.38
In addition, the essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, a
fair and reasonable opportunity to explain ones side.39 BOCEAs apprehension of deprivation of due process finds its answer
in Section 7 (b) and (c) of R.A. No. 9335. 40 The concerned BIR or BOC official or employee is not simply given a target

revenue collection and capriciously left without any quarter. R.A. No. 9335 and its IRR clearly give due consideration to all
relevant factors41 that may affect the level of collection. In the same manner, exemptions 42 were set, contravening BOCEAs
claim that its members may be removed for unattained target collection even due to causes which are beyond their control.
Moreover, an employees right to be heard is not at all prevented and his right to appeal is not deprived of him. 43 In fine, a
BIR or BOC official or employee in this case cannot be arbitrarily removed from the service without according him his
constitutional right to due process. No less than R.A. No. 9335 in accordance with the 1987 Constitution guarantees this.
We have spoken, and these issues were finally laid to rest. Now, the Court proceeds to resolve the last, but new issue raised
by BOCEA, that is, whether R.A. No. 9335 is a bill of attainder proscribed under Section 22, 44 Article III of the 1987
Constitution.
On this score, we hold that R.A. No. 9335 is not a bill of attainder. A bill of attainder is a legislative act which inflicts
punishment on individuals or members of a particular group without a judicial trial. Essential to a bill of attainder are a
specification of certain individuals or a group of individuals, the imposition of a punishment, penal or otherwise, and the lack
of judicial trial.451avvphi1
In his Concurring Opinion in Tuason v. Register of Deeds, Caloocan City, 46 Justice Florentino P. Feliciano traces the roots of
a Bill of Attainder, to wit:
Bills of attainder are an ancient instrument of tyranny. In England a few centuries back, Parliament would at times enact bills
or statutes which declared certain persons attainted and their blood corrupted so that it lost all heritable quality (Ex Parte
Garland, 4 Wall. 333, 18 L.Ed. 366 [1867]). In more modern terms, a bill of attainder is essentially a usurpation of judicial
power by a legislative body. It envisages and effects the imposition of a penalty the deprivation of life or liberty or property
not by the ordinary processes of judicial trial, but by legislative fiat. While cast in the form of special legislation, a bill of
attainder (or bill of pains and penalties, if it prescribed a penalty other than death) is in intent and effect a penal judgment
visited upon an identified person or group of persons (and not upon the general community) without a prior charge or
demand, without notice and hearing, without an opportunity to defend, without any of the civilized forms and safeguards of
the judicial process as we know it (People v. Ferrer, 48 SCRA 382 [1972]; Cummings and Missouri, 4 Wall. 277, 18 L. Ed.
356 [1867]; U.S. v. Lovett, 328, U.S. 303, 90 L.Ed. 1252 [1945]; U.S. v. Brown, 381 U.S. 437, 14 L.Ed. 2d. 484 [1965]. Such
is the archetypal bill of attainder wielded as a means of legislative oppression. x x x47
R.A. No. 9335 does not possess the elements of a bill of attainder. It does not seek to inflict punishment without a judicial
trial. R.A. No. 9335 merely lays down the grounds for the termination of a BIR or BOC official or employee and provides for
the consequences thereof. The democratic processes are still followed and the constitutional rights of the concerned
employee are amply protected.
A final note.
We find that BOCEAs petition is replete with allegations of defects and anomalies in allocation, distribution and receipt of
rewards. While BOCEA intimates that it intends to curb graft and corruption in the BOC in particular and in the government in
general which is nothing but noble, these intentions do not actually pertain to the constitutionality of R.A. No. 9335 and its
IRR, but rather in the faithful implementation thereof. R.A. No. 9335 itself does not tolerate these pernicious acts of graft and
corruption.48 As the Court is not a trier of facts, the investigation on the veracity of, and the proper action on these anomalies
are in the hands of the Executive branch. Correlatively, the wisdom for the enactment of this law remains within the domain
of the Legislative branch. We merely interpret the law as it is. The Court has no discretion to give statutes a meaning
detached from the manifest intendment and language thereof.49 Just like any other law, R.A. No. 9335 has in its favor the
presumption of constitutionality, and to justify its nullification, there must be a clear and unequivocal breach of the
Constitution and not one that is doubtful, speculative, or argumentative. 50 We have so declared in Abakada, and we now
reiterate that R.A. No. 9335 and its IRR are constitutional.
WHEREFORE, the present petition for certiorari and prohibition with prayer for injunctive relief/s is DISMISSED.
No costs.
SO ORDERED.

G.R. No. 188635


January 29, 2013
BRENDA L. NAZARETH, REGIONAL DIRECTOR, DEPARTMENT OF SCIENCE AND TECHNOLOGY, REGIONAL
OFFICE NO. IX, ZAMBOANGA CITY, Petitioner,
vs.
THE HON. REYNALDO A. VILLAR, HON. JUANITO G. ESPINO, JR., (COMMISSIONERS OF THE COMMISSION ON
AUDIT), and DIR. KHEM M. INOK, Respondents.
DECISION
BERSAMIN, J.:
No money shall be paid out of the Treasury except in pursuance of an appropriation made by law. 1 A violation of this
constitutional edict warrants the disallowance of the payment. However, the refund of the disallowed payment of a benefit
granted by law to a covered person, agency or office of the Government may be barred by the good faith of the approving
official and of the recipient.
Being assailed by petition for certiorari on the ground of its being issued with grave abuse of discretion amounting to lack or
excess of jurisdiction is the decision rendered on June 4, 2009 by the Commission on Audit (COA) in COA Case No. 2009045 entitled Petition of Ms. Brenda L. Nazareth, Regional Director, Department of Science and Technology, Regional Office

No. IX, Zamboanga City, for review of Legal and Adjudication Office (LAO)-National Decision No. 2005-308 dated September
15, 2005 and LAO-National Resolution No. 2006-308A dated May 12, 2006 on disallowances of subsistence, laundry, hazard
and other benefits in the total amount of P3,591,130.36,2 affirming the issuance of notices of disallowance (NDs) by the Audit
Team Leader of COA Regional Office No. IX in Zamboanga City against the payment of benefits to covered officials and
employees of the Department of Science and Technology (DOST) for calendar year (CY) 2001 out of the savings of the
DOST.
The petitioner DOST Regional Director hereby seeks to declare the decision dated June 4, 2009 "null and void," and prays
for the lifting of the disallowance of the payment of the benefits for CY2001 for being within the ambit of Republic Act No.
8439 (R.A. No. 8439), otherwise known as the Magna Carta for Scientists, Engineers, Researchers, and other Science and
Technology Personnel in the Government (Magna Carta, for short), and on the strength of the Memorandum of Executive
Secretary Ronaldo B. Zamora dated April 12, 2000 authorizing the use of the savings for the purpose.
Antecedents
On December 22, 1997, Congress enacted R.A. No. 8439 to address the policy of the State to provide a program for human
resources development in science and technology in order to achieve and maintain the necessary reservoir of talent and
manpower that would sustain the drive for total science and technology mastery. 3 Section 7 of R.A. No. 8439 grants the
following additional allowances and benefits (Magna Carta benefits) to the covered officials and employees of the DOST, to
wit:
(a) Honorarium. - S & T personnel who rendered services beyond the established irregular workload of scientists,
technologists, researchers and technicians whose broad and superior knowledge, expertise or professional standing in a
specific field contributes to productivity and innovativeness shall be entitled to receive honorarium subject to rules to be set
by the Department;
(b) Share in royalties. - S & T scientists, engineers, researchers and other S & T personnel shall be entitled to receive share
in royalties subject to guidelines of the Department. The share in royalties shall be on a sixty percent-forty percent (60%40%) basis in favor of the Government and the personnel involved in the technology/ activity which has been produced or
undertaken during the regular performance of their functions. For the purpose of this Act, share in royalties shall be defined
as a share in the proceeds of royalty payments arising from patents, copyrights and other intellectual property rights;
If the researcher works with a private company and the program of activities to be undertaken has been mutually agreed
upon by the parties concerned, any royalty arising therefrom shall be divided according to the equity share in the research
project;
(c) Hazard allowance. - S & T personnel involved in hazardous undertakings or assigned in hazardous workplaces, shall be
paid hazard allowances ranging from ten (10%) to thirty (30%) percent of their monthly basic salary depending on the nature
and extent of the hazard involved. The following shall be considered hazardous workplaces:
(1) Radiation-exposed laboratories and service workshops;
(2) Remote/depressed areas;
(3) Areas declared under a state of calamity or emergency;
(4) Strife-torn or embattled areas;
(5) Laboratories and other disease-infested areas.
(d) Subsistence allowance. - S & T personnel shall be entitled to full subsistence allowance equivalent to three (3) meals a
day, which may be computed and implemented in accordance with the criteria to be provided in the implementing rules and
regulations. Those assigned out of their regular work stations shall be entitled to per diem in place of the allowance;
(e) Laundry allowance. - S & T personnel who are required to wear a prescribed uniform during office hours shall be entitled
to a laundry allowance of not less than One hundred fifty pesos (P150.00) a month;
(f) Housing and quarter allowance. - S & T personnel who are on duty in laboratories, research and development centers and
other government facilities shall be entitled to free living quarters within the government facility where they are stationed:
Provided, That the personnel have their residence outside of the fifty (50)-kilometer radius from such government facility;
(g) Longevity pay. - A monthly longevity pay equivalent to five percent (5%) of the monthly basic salary shall be paid to S & T
personnel for every five (5) years of continuous and meritorious service as determined by the Secretary of the Department;
and
(h) Medical examination. - During the tenure of their employment, S & T personnel shall be given a compulsory free medical
examination once a year and immunization as the case may warrant. The medical examination shall include:
(1) Complete physical examination;
(2) Routine laboratory, Chest X-ray and ECG;
(3) Psychometric examination;
(4) Dental examination;
(5) Other indicated examination.
Under R.A. No. 8439, the funds for the payment of the Magna Carta benefits are to be appropriated by the General
Appropriations Act (GAA) of the year following the enactment of R.A. No. 8439.4
The DOST Regional Office No. IX in Zamboanga City released the Magna Carta benefits to the covered officials and
employees commencing in CY 1998 despite the absence of specific appropriation for the purpose in the GAA. Subsequently,
following the post-audit conducted by COA State Auditor Ramon E. Vargas on April 23, 1999, October 28, 1999, June 20,
2000, February 27, 2001, June 27, 2001, October 10, 2001 and October 17, 2001, several NDs were issued disapproving
the payment of the Magna Carta benefits. The justifications for the disallowance were stated in the post-audit report, as
follows:
a) ND Nos. 99-001-101 (98) to 99-105-101 (98) Payment of Subsistence and Laundry Allowances and Hazard Pay for the
months of February-November 1998 The State Auditor claims that no funds were appropriated in the 1998 General
Appropriations Act for the said purpose notwithstanding the effectivity of the Magna Carta, providing for payment of
allowances and benefits, among others, to Science and Technology Personnel in the Government;

b) ND Nos. 2000-101-101 (99) to 2000-010-101 (99) Payment of Subsistence and Laundry Allowances and Hazard Pay for
the months of January-June 1999 The State Auditor claims that no Department of Budget and Management (DBM) and
Civil Service Commission (CSC) guidelines were issued by the said Departments on the payment thereof;
c) ND Nos. 2001-001-101 (00) to 2001-013-101 (00) Payment of Subsistence and Laundry Allowances, Hazard Pay and
Health Care Program for the month of October 1999 and January-September 2000 The State Auditor claims that there was
no basis for the payment of the said allowances because the President vetoed provisions of the General Appropriations Act
(GAA) regarding the use of savings for the payment of benefits;
d) ND Nos. 2001-014-101(00) to 2001-025-101 (00) Payment of Subsistence and Laundry Allowances, Hazard Pay and
Medical Benefits for the months of January-October 2001 The provision for the use of savings in the General
Appropriations Act (GAA) was vetoed by the
President; hence, there was no basis for the payment of the aforesaid allowances or benefits according to the State Auditor.5
The disallowance by the COA prompted then DOST Secretary Dr. Filemon Uriarte, Jr. to request the Office of the President
(OP) through his
Memorandum dated April 3, 2000 (Request for Authority to Use Savings for the Payment of Magna Carta Benefits as
provided for in R.A. 8439) for the authority to utilize the DOSTs savings to pay the Magna Carta benefits. 6 The salient
portions of the Memorandum of Secretary Uriarte, Jr. explained the request in the following manner:
x x x. However, the amount necessary for its full implementation had not been provided in the General Appropriations Act
(GAA). Since the Acts effectivity, the Department had paid the 1998 MC benefits out of its current years savings as provided
for in the Budget Issuances of the Department of Budget and Management while the 1999 MC benefits were likewise
sourced from the years savings as authorized in the 1999 GAA.
The 2000 GAA has no provision for the use of savings. The Department, therefore, cannot continue the payment of the
Magna Carta benefits from its 2000 savings. x x x. The DOST personnel are looking forward to His Excellencys favorable
consideration for the payment of said MC benefits, being part of the administrations 10-point action program to quote "I will
order immediate implementation of RA 8439 (the Magna Carta for Science and Technology Personnel in Government)" as
published in the Manila Bulletin dated May 20, 1998.
Through the Memorandum dated April 12, 2000, then Executive Secretary Ronaldo Zamora, acting by authority of the
President, approved the request of Secretary Uriarte, Jr.,7 viz:
With reference to your Memorandum dated April 03, 2000 requesting authority to use savings from the appropriations of that
Department and its agencies for the payment of Magna Carta Benefits as provided for in R.A. 8439, please be informed that
the said request is hereby approved.
On July 28, 2003, the petitioner, in her capacity as the DOST Regional Director in Region IX, lodged an appeal with COA
Regional Cluster Director Ellen Sescon, urging the lifting of the disallowance of the Magna Carta benefits for the period
covering CY 1998 to CY 2001 amounting to P4,363,997.47. She anchored her appeal on the April 12, 2000 Memorandum of
Executive Secretary Zamora, and cited the provision in the GAA of 1998,8 to wit:
Section 56. Priority in the Use of Savings. In the use of savings, priority shall be given to the augmentation of the amounts
set aside for compensation, bonus, retirement gratuity, terminal leave, old age pension of veterans and other personnel
benefits authorized by law and those expenditure items authorized in agency Special Provisions and in Sec. 16 and in other
sections of the General Provisions of this Act.9
In support of her appeal, the petitioner contended that the DOST Regional Office had "considered the subsistence and
laundry allowance as falling into the category other personnel benefits authorized by law, hence the payment of such
allowances were charged to account 100-900 for Other Benefits (Honoraria), which was declared to be the savings of our
Office."10 She argued that the April 12, 2000 Memorandum of Executive Secretary Zamora not only ratified the payment of
the Magna Carta benefits out of the savings for CY 1998 and CY 1999 and allowed the use of the savings for CY 2000, but
also operated as a continuing endorsement of the use of savings to cover the Magna Carta benefits in succeeding calendar
years.
The appeal was referred to the Regional Legal and Adjudication Director (RLAD), COA Regional Office IX in Zamboanga
City, which denied the appeal and affirmed the grounds stated in the NDs.
Not satisfied with the result, the petitioner elevated the matter to the COA Legal and Adjudication Office in Quezon City
On September 15, 2005, respondent Director Khem N. Inok of the COA Legal and Adjudication Office rendered a decision in
LAO-N-2005-308,11 denying the petitioners appeal with the modification that only the NDs covering the Magna Carta benefits
for CY 2000 were to be set aside in view of the authorization under the Memorandum of April 12, 2000 issued by Executive
Secretary Zamora as the alter ego of the President. The decision explained itself as follows:
In resolving the case, the following issues should first be resolved:
1. Whether or not the "approval" made by the Executive Secretary on April 12, 2000 on the request for authority to use
savings of the agency to pay the benefits, was valid; and
2. Whether or not the payments of the benefits made by the agency using its savings for the years 1998 and 1999 based on
Section 56 of RA 8522 (General Appropriations Act of 1998 [GAA]) were legal and valid.
Anent the first issue, the law in point is Article VI, Section 25(5) of the 1987 Constitution, which aptly provides that:
"(5) No law shall be passed authorizing any transfer of appropriations, however, the PRESIDENT, x x x may by law, be
authorized to augment any item in the general appropriations law for their respective offices from savings in other items of
their respective appropriations."
Simply put, it means that only the President has the power to augment savings from one item to another in the budget of
administrative agencies under his control and supervision. This is the very reason why the President vetoed the Special
Provisions in the 1998 GAA that would authorize the department heads to use savings to augment other items of
appropriations within the Executive Branch. Such power could well be extended to his Cabinet Secretaries as alter egos
under the "doctrine of qualified political agency" enunciated by the Supreme Court in the case of Binamira v. Garrucho, 188
SCRA 154, where it was pronounced that the official acts of a Department Secretary are deemed acts of the President

unless disapproved or reprobated by the latter. Thus, in the instant case, the authority granted to the DOST by the Executive
Secretary, being one of the alter egos of the President, was legal and valid but in so far as the use of agencys savings for
the year 2000 only. Although 2000 budget was reenacted in 2001, the authority granted on the use of savings did not
necessarily extend to the succeeding year.
On the second issue, the payments of benefits made by the agency in 1998 and 1999 were admittedly premised on the
provisions of the General Appropriations Acts (GAA) for CY 1998 and 1999 regarding the use of savings which states that:
"In the use of savings, priority shall be given to the augmentation of the amount set aside for compensation, bonus,
retirement gratuity, terminal leave, old age pensions of veterans and other personal benefits x x x." (Underscoring ours.)
It can be noted, however, that augmentation was likewise a requisite to make payments for such benefits which means that
Presidential approval was necessary in accordance with the above-cited provision of the 1987 Constitution. Therefore, the
acts of the agency in using its savings to pay the said benefits without the said presidential approval were illegal considering
that during those years there was no appropriations provided in the GAA to pay such benefits.
Further, COA Decision Nos. 2003-060 dated March 18, 2003 and 2002-022 dated January 11, 2002, where this Commission
lifted the DOST disallowance on the payments of similar benefits in 1992 to 1995, can not be applied in the instant case. The
disallowances therein dealt more on the classification of the agency as health related or not while the instant case deals
mainly on the availability of appropriated funds for the benefits under RA 8439 and the guidelines for their payments.
Likewise, the certification of the DOST Secretary declaring work areas of S and T personnel as hazardous for purposes of
entitlement to hazard allowance is not valid and may be considered as self-serving. Under RA 7305 and its Implementing
Rules and Regulation[s] (Magna Carta of Public Health Workers), the determination which agencies are considered healthrelated establishments is within the competence of the Secretary of Health which was used by this Commission in COA
Decision No. 2003-060, supra, to wit:
xxxx
"It bears emphasis to state herein that it is within the competence of the Secretary of Health as mandated by RA 7305 and its
IRR to determine which agencies are health-related establishments. Corollary thereto, the certifications dated October 10,
1994 issued by then DOH Secretary Juan M. Flavier that certain DOST personnel identified by DOST Secretary Padolina in
his letter dated September 29, 1994 to be engaged in health and health-related work and that of Secretary Hilarion J. Ramiro
dated December 12, 1996 confirming the staff and personnel of the DOST and its attached agencies to be engaged in
health-related work and further certified to be a health-related establishment were sufficient basis for reconsideration of the
disallowance on subsistence and laundry allowances paid for 1992, 1993 and 1995."
xxxx
Assuming that the situation in the DOST and its attached agencies did not change as to consider it health-related
establishment for its entitlement to magna carta benefits, still the payments of the benefits cannot be sustained in audit not
only for lack of said certification from the Secretary of Department of Health for the years 1998 and 1999 but more
importantly, for lack of funding.
WHEREFORE, premises considered, the herein Appeal is DENIED with modification. NDs Nos. 2001-001-101 (00) to 2001013-101 (00) issued for the payments of benefits for CY 2000 are hereby SET ASIDE while NDs pertaining to benefits paid
for CY 1998, 1999 and 2001 shall STAY.
On December 1, 2005, the petitioner filed her motion for reconsideration in the COA Legal and Adjudication Office-National in
Quezon City.
By resolution dated May 12, 2006,12 the COA Legal and Adjudication Office-National denied the motion for reconsideration.
Thence, the petitioner filed a petition for review in the COA Head Office, insisting that the payment of Magna Carta benefits
to qualified DOST Regional Office No. IX officials and employees had been allowed under R.A. No. 8349.
On June 4, 2009, the COA rendered the assailed decision, further modifying the decision of respondent Director Inok by also
lifting and setting aside the NDs covering the Magna Carta benefits for CY 1998 and CY 1999 for the same reason applicable
to the lifting of the NDs for CY 2000, but maintaining the disallowance of the benefits for CY 2001 on the ground that they
were not covered by the authorization granted by the Memorandum of April 12, 2000 of Executive Secretary Zamora.
The pertinent portions of the decision are quoted below, to wit:
Hence, the appellant filed the instant petition for review with the main argument that the payment of Magna Carta benefits to
qualified DOST Regional Office No. IX employees is allowed pursuant to RA No. 8439.
ISSUE
The sole issue to be resolved is whether or not the payment of Magna Carta benefits for CYs 1998, 1999 and 2001 is valid
and legal.
DISCUSSION
It is clear that the funds utilized for the payment of the Magna Carta benefits came from the savings of the agency. The
approval by the Executive Secretary of the request for authority to use the said savings for payments of the benefits was an
affirmation that the payments were authorized. The Memorandum dated April 3, 2000 of the DOST Secretary requested for
the approval of the payment out of savings of the CY 2000 benefits. Likewise, the same Memorandum mentioned the 1998
Magna Carta benefits which were paid out of its current years savings as provided for in the budget issuances of the DBM
and the 1999 Magna Carta benefits which were sourced from the years savings as authorized in the 1999 GAA. When such
memorandum request was approved by the Executive Secretary in a Memorandum dated April 12, 2000, it was clear that the
approval covered the periods stated in the request, which were the 1998, 1999 and 2000 Magna Carta benefits.
Thus, this Commission hereby affirms LAO-National Decision No. 2005-308 dated September 15, 2005 which lifted ND Nos.
2001-001-101 (00) to 2001-013-101 (00) for the payments of Magna Carta benefits for CY 2000 and which sustained the
NDs for payments in 2001. However, for the disallowances covering payments in 1998 and 1999, this Commission is inclined
to lift the same. This is in view of the approval made by the Executive Secretary for the agency to use its savings to pay the
benefits for the years covered. Thus, when the Executive Secretary granted the request of the DOST Secretary for the
payment of the Magna Carta benefits to its qualified personnel, the said payments became lawful for the periods covered in
the request, that is, CYs 1998, 1999 and 2000. Since the Magna Carta benefits paid in 2001 were not covered by the
approval, the same were correctly disallowed in audit.

In a previous COA Decision-No. 2006-015 dated January 31, 2006, the payment of hazard, subsistence and laundry
allowances given to personnel of the DOST, Regional Office No. VI, Iloilo City, was granted. The same decision also stated
that in (sic) no doubt the DOST personnel, who are qualified, are entitled to receive the Magna Carta benefits. The 1999 GAA
did not prohibit the grant of these benefits but merely emphasized the discretion of the agency head, upon authority of the
President, to use savings from the Departments appropriation, to implement the payment of benefits pursuant to the DOST
Charter.
RULING
WHEREFORE, premises considered, the instant appeal on the payment of Magna Carta benefits for CYs 1998 and 1999
which were disallowed in ND Nos. 99-001-101 (98) to 99-015-101 (98) and 2000-001-101 (99) to 2000-010-101 (99), is
hereby GRANTED. Likewise, the lifting of ND Nos. 2001-001-101 (00) to 2001-013-101 (00) as embodied in LAO-National
Decision No. 2005-308 dated September 15, 2005 is hereby CONFIRMED. While the disallowances on the payment of said
benefits for 2001 as covered by ND Nos. 2001-014-101 (01) to 2001-032-101 (01) are hereby AFFIRMED.
Issues
Hence, this special civil action for certiorari, with the petitioner insisting that the COA gravely abused its discretion amounting
to lack or excess of jurisdiction in affirming the disallowance of the Magna Carta benefits for CY 2001 despite the provisions
of R.A. No. 8439, and in ruling that the Memorandum of April 12, 2000 did not cover the payment of the Magna Carta
benefits for CY 2001.
Did the COA commit grave abuse of discretion in issuing ND No. 2001-014-101(01) to ND No. 2001-032-101(01)?
Ruling
The petition for certiorari lacks merit.
R. A. No. 8439 was enacted as a manifestation of the States recognition of science and technology as an essential
component for the attainment of national development and progress. The law offers a program of human resources
development in science and technology to help realize and maintain a sufficient pool of talent and manpower that will sustain
the initiative for total science and technology mastery. In furtherance of this objective, the law not only ensures scholarship
programs and improved science and engineering education, but also affords incentives for those pursuing careers in science
and technology. Moreover, the salary scale of science and technology personnel is differentiated by R. A. No. 8439 from the
salary scales of government employees under the existing law.
As earlier mentioned, Section 7 of R. A. No. 8439 confers the Magna Carta benefits consisting of additional allowances and
benefits to DOST officers and employees, such as honorarium, share in royalties, hazard, subsistence, laundry, and housing
and quarter allowances, longevity pay, and medical examination. But the Magna Carta benefits will remain merely paper
benefits without the corresponding allocation of funds in the GAA.
The petitioner urges the Court to treat the authority granted in the April 12, 2000 Memorandum of Executive Secretary
Zamora as a continuing authorization to use the DOSTs savings to pay the Magna Carta benefits.
We cannot agree with the petitioner.
The April 12, 2000 Memorandum was not a blanket authority from the OP to pay the benefits out of the DOSTs savings.
Although the Memorandum was silent as to the period covered by the request for authority to use the DOSTs savings, it was
clear just the same that the Memorandum encompassed only CY 1998, CY 1999 and CY 2000. The limitation of its
applicability to those calendar years was based on the tenor of the request of Secretary Uriarte, Jr. to the effect that the
DOST had previously used its savings to pay the Magna Carta benefits in CY 1998 and CY 1999; that the 2000 GAA did not
provide for the use of savings; and that the DOST personnel were looking forward to the Presidents favorable consideration.
The Memorandum could only be read as an authority covering the limited period until and inclusive of CY 2000. The text of
the Memorandum was also bereft of any indication that the authorization was to be indefinitely extended to any calendar year
beyond CY 2000.
As we see it, the COA correctly ruled on the matter at hand. Article VI Section 29 (1) of the 1987 Constitution firmly declares
that: "No money shall be paid out of the Treasury except in pursuance of an appropriation made by law." This constitutional
edict requires that the GAA be purposeful, deliberate, and precise in its provisions and stipulations. As such, the requirement
under Section 2013 of R.A. No. 8439 that the amounts needed to fund the Magna Carta benefits were to be appropriated by
the GAA only meant that such funding must be purposefully, deliberately, and precisely included in the GAA. The funding for
the Magna Carta benefits would not materialize as a matter of course simply by fiat of R.A. No. 8439, but must initially be
proposed by the officials of the DOST as the concerned agency for submission to and consideration by Congress. That
process is what complies with the constitutional edict. R.A. No. 8439 alone could not fund the payment of the benefits
because the GAA did not mirror every provision of law that referred to it as the source of funding. It is worthy to note that the
DOST itself acknowledged the absolute need for the appropriation in the GAA. Otherwise, Secretary Uriarte, Jr. would not
have needed to request the OP for the express authority to use the savings to pay the Magna Carta benefits.
In the funding of current activities, projects, and programs, the general rule should still be that the budgetary amount
contained in the appropriations bill is the extent Congress will determine as sufficient for the budgetary allocation for the
proponent agency. The only exception is found in Section 25 (5),14 Article VI of the Constitution, by which the President, the
President of the Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the
heads of Constitutional Commissions are authorized to transfer appropriations to augment any item in the GAA for their
respective offices from the savings in other items of their respective appropriations. The plain language of the constitutional
restriction leaves no room for the petitioners posture, which we should now dispose of as untenable.
It bears emphasizing that the exception in favor of the high officials named in Section 25(5), Article VI of the Constitution
limiting the authority to transfer savings only to augment another item in the GAA is strictly but reasonably construed as
exclusive. As the Court has expounded in Lokin, Jr. v. Commission on Elections:15
When the statute itself enumerates the exceptions to the application of the general rule, the exceptions are strictly but
reasonably construed. The exceptions extend only as far as their language fairly warrants, and all doubts should be resolved
in favor of the general provision rather than the exceptions. Where the general rule is established by a statute with
exceptions, none but the enacting authority can curtail the former. Not even the courts may add to the latter by implication,

and it is a rule that an express exception excludes all others, although it is always proper in determining the applicability of
the rule to inquire whether, in a particular case, it accords with reason and justice.
The appropriate and natural office of the exception is to exempt something from the scope of the general words of a statute,
which is otherwise within the scope and meaning of such general words. Consequently, the existence of an exception in a
statute clarifies the intent that the statute shall apply to all cases not excepted. Exceptions are subject to the rule of strict
construction; hence, any doubt will be resolved in favor of the general provision and against the exception. Indeed, the liberal
construction of a statute will seem to require in many circumstances that the exception, by which the operation of the statute
is limited or abridged, should receive a restricted construction.
The claim of the petitioner that the payment of the 2001 Magna Carta benefits was upon the authorization extended by the
OP through the 12 April 2000 Memorandum of Executive Secretary Zamora was outrightly bereft of legal basis. In so saying,
she inexplicably, but self-servingly, ignored the important provisions in the 2000 GAA on the use of savings, to wit:
Sec. 54. Use of Savings. The President of the Philippines, the President of the Senate, the Speaker of the House of
Representatives, the Chief Justice of the Supreme Court, the Heads of Constitutional Commissions under Article IX of the
Constitution, the Ombudsman and the Chairman of the Commission on Human Rights are hereby authorized to augment any
item in this Act for their respective offices from savings in other items of their respective appropriations.
Sec. 55. Meaning of Savings and Augmentation. Savings refer to portions or balances of any programmed appropriation in
this Act free of any obligation or encumbrance still available after the completion or final discontinuance or abandonment of
the work, activity or purpose for which the appropriation is authorized, or arising from unpaid compensation and related costs
pertaining to vacant positions and leaves of absence without pay.
Augmentation implies the existence in this Act of an item, project, activity or purpose with an appropriation which upon
implementation or subsequent evaluation of needed resources is determined to be deficient. In no case, therefore, shall a
non-existent item, project, activity, purpose or object of expenditure be funded by augmentation from savings or by the use of
appropriations authorized otherwise in this Act. (Bold emphases added)
Under these provisions, the authority granted to the President was subject to two essential requisites in order that a transfer
of appropriation from the agencys savings would be validly effected. The first required that there must be savings from the
authorized appropriation of the agency. The second demanded that there must be an existing item, project, activity, purpose
or object of expenditure with an appropriation to which the savings would be transferred for augmentation purposes only.
At any rate, the proposition of the petitioner that savings could and should be presumed from the mere transfer of funds is
plainly incompatible with the doctrine laid down in Demetria v. Alba,16 in which the petition challenged the constitutionality of
paragraph 1 of Section 4417 of Presidential Decree No. 1177 (Budget Reform Decree of 1977) in view of the express
prohibition contained in Section 16(5)18 of Article VIII of the 1973 Constitution against the transfer of appropriations except to
augment out of savings,19 with the Court declaring the questioned provision of Presidential Decree No. 1177 "null and void for
being unconstitutional" upon the following reasoning, to wit:
The prohibition to transfer an appropriation for one item to another was explicit and categorical under the 1973 Constitution.
However, to afford the heads of the different branches of the government and those of the constitutional commissions
considerable flexibility in the use of public funds and resources, the constitution allowed the enactment of a law authorizing
the transfer of funds for the purpose of augmenting an item from savings in another item in the appropriation of the
government branch or constitutional body concerned. The leeway granted was thus limited. The purpose and conditions for
which funds may be transferred were specified, i.e., transfer may be allowed for the purpose of augmenting an item and such
transfer may be made only if there are savings from another item in the appropriation of the government branch or
constitutional body.
Paragraph 1 of Section 44 of P.D. No. 1177 unduly overextends the privilege granted under said Section 16(5). It empowers
the President to indiscriminately transfer funds from one department, bureau, office or agency of the Executive Department
to any program, project, or activity of any department, bureau or office included in the General Appropriations Act or
approved after its enactment, without regard as to whether or not the funds to be transferred are actually savings in the item
from which the same are to be taken, or whether or not the transfer is for the purpose of augmenting the item to which said
transfer is to be made. It does not only completely disregard the standards set in the fundamental law, thereby amounting to
an undue delegation of legislative powers, but likewise goes beyond the tenor thereof. Indeed, such constitutional infirmities
render the provision in question null and void.
Clearly and indubitably, the prohibition against the transfer of appropriations is the general rule. Consequently, the payment
of the Magna Carta benefits for CY 2001 without a specific item or provision in the GAA and without due authority from the
President to utilize the DOSTs savings in other items for the purpose was repugnant to R.A. No. 8439, the Constitution, and
the re-enacted GAA for 2001.
The COA is endowed with sufficient latitude to determine, prevent, and disallow the irregular, unnecessary, excessive,
extravagant, or unconscionable expenditures of government funds. It has the power to ascertain whether public funds were
utilized for the purposes for which they had been intended by law. The "Constitution has made the COA the guardian of
public funds, vesting it with broad powers over all accounts pertaining to government revenue and expenditures and the uses
of public funds and property, including the exclusive authority to define the scope of its audit and examination, to establish
the techniques and methods for such review, and to promulgate accounting and auditing rules and regulations".20
Thus, the COA is generally accorded complete discretion in the exercise of its constitutional duty and responsibility to
examine and audit expenditures of public funds, particularly those which are perceptibly beyond what is sanctioned by law.
Verily, the Court has sustained the decisions of administrative authorities like the COA as a matter of general policy, not only
on the basis of the doctrine of separation of powers but also upon the recognition that such administrative authorities held
the expertise as to the laws they are entrusted to enforce.21 The Court has accorded not only respect but also finality to their
findings especially when their decisions are not tainted with unfairness or arbitrariness that would amount to grave abuse of
discretion.22
Only when the COA has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction, may the Court entertain and grant a petition for certiorari brought to assail its actions.23 Section 1 of
Rule 65,24 Rules of Court, demands that the petitioner must show that, one, the tribunal, board or officer exercising judicial or

quasi-judicial functions acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or
excess of jurisdiction, and, two, there is neither an appeal nor any plain, speedy and adequate remedy in the ordinary course
of law for the purpose of amending or nullifying the proceeding. Inasmuch as the sole office of the writ of certiorari is the
correction of errors of jurisdiction, which includes the commission of grave abuse of discretion amounting to lack of
jurisdiction, the petitioner should establish that the COA gravely abused its discretion. The abuse of discretion must be grave,
which means either that the judicial or quasi-judicial power was exercised in an arbitrary or despotic manner by reason of
passion or personal hostility, or that the respondent judge, tribunal or board evaded a positive duty, or virtually refused to
perform the duty enjoined or to act in contemplation of law, such as when such judge, tribunal or board exercising judicial or
quasi-judicial powers acted in a capricious or whimsical manner as to be equivalent to lack of jurisdiction. 25 Mere abuse of
discretion is not enough to warrant the issuance of the writ.26
The petitioner dismally failed to discharge her burden.1wphi1 We conclude and declare, therefore, that the COAs assailed
decision was issued in steadfast compliance of its duty under the Constitution and in the judicious exercise of its general
audit power conferred to it by the Constitution.
Nonetheless, the Court opines that the DOST officials who caused the payment of the Magna Carta benefits to the covered
officials and employees acted in good faith in the honest belief that there was a firm legal basis for the payment of the
benefits. Evincing their good faith even after receiving the NDs from the COA was their taking the initiative of earnestly
requesting the OP for the authorization to use the DOSTs savings to pay the Magna Carta benefits. On their part, the DOST
covered officials and employees received the benefits because they considered themselves rightfully deserving of the
benefits under the long-awaited law.
The Court declares and holds that the disallowed benefits received in good faith need not be reimbursed to the Government.
This accords with consistent pronouncements of the Court, like that issued in De Jesus v. Commission on Audit,27 to wit:
Nevertheless, our pronouncement in Blaquera v. Alcala28 supports petitioners position on the refund of the benefits they
received. In Blaquera, the officials and employees of several government departments and agencies were paid incentive
benefits which the COA disallowed on the ground that Administrative Order No. 29 dated 19 January 1993 prohibited
payment of these benefits. While the Court sustained the COA on the disallowance, it nevertheless declared that:
Considering, however, that all the parties here acted in good faith, we cannot countenance the refund of subject incentive
benefits for the year 1992, which amounts the petitioners have already received. Indeed, no indicia of bad faith can be
detected under the attendant facts and circumstances. The officials and chiefs of offices concerned disbursed such incentive
benefits in the honest belief that the amounts given were due to the recipients and the latter accepted the same with
gratitude, confident that they richly deserve such benefits.
This ruling in Blaquera applies to the instant case. Petitioners here received the additional allowances and bonuses in good
faith under the honest belief that LWUA Board Resolution No. 313 authorized such payment. At the time pet1t10ners
received the additional allowances and bonuses, the Court had not yet decided Baybay Water District v. Commission on
Audit.29 Petitioners had no knowledge that such payment was without legal basis. Thus, being in good faith, petitioners need
not refund the allowances and bonuses they received but disallowed by the COA.
Also, in Veloso v. Commission on Audit30 the Court, relying on a slew of jurisprudence31 ruled that the recipients of the
disallowed retirement and gratuity pay remuneration need not refund whatever they had received:
x x x because all the parties acted in good faith. In this case, the questioned disbursement was made pursuant to an
ordinance enacted as early as December 7, 2000 although deemed approved only on August 22, 2002. The city officials
disbursed the retirement and gratuity pay remuneration in the honest belief that the amounts given were due to the recipients
and the latter accepted the same with gratitude, confident that they richly deserve such reward.
WHEREFORE, the Court DISMISSES the petition for certiorari for lack of merit; AFFIRMS the decision issued on June 4,
2009 by the Commission Proper of the Commission on Audit in COA Case No. 2009-045; and DECLARES that the covered
officials and employees of the Department of Science and Technology who received the Magna Carta benefits for calendar
year 2001 are not required to refund the disallowed benefits received.
No pronouncement on costs of suit.
SO ORDERED.

METROPOLITAN BANK & TRUST CO. (METROBANK), represented by ROSELLA A. SANTIAGO,


Petitioner,
-versusANTONINO O. TOBIAS III,
Respondent.
G.R. No. 177780
Present:
CORONA, C.J., Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
VILLARAMA, JR., and
*
PERLAS-BERNABE, JJ.
Promulgated:
January 25, 2012
x-----------------------------------------------------------------------------------------x
DECISION
BERSAMIN, J.:
This appeal assails the adverse decision of the Court of Appeals (CA) 1 that dismissed the petition for certiorari brought by the
petitioner to nullify and set aside the resolutions issued by the Secretary of Justice on July 20, 2004 2 and November 18,
20053 directing the City Prosecutor of Malabon City to withdraw the information in Criminal Case No. 27020 entitled People
v. Antonino O. Tobias III.
We affirm the CA in keeping with the principle of non-interference with the prerogative of the Secretary of Justice to review
the resolutions of the public prosecutor in the latters determination of the existence of probable cause, absent any showing
that the Secretary of Justice thereby commits grave abuse of his discretion.
Antecedents
In 1997, Rosella A. Santiago, then the OIC-Branch Head of Metropolitan Bank & Trust Company (METROBANK) in Valero
Street, Makati City, was introduced to respondent Antonino O. Tobias III (Tobias) by one Jose Eduardo Gonzales, a valued
client of METROBANK. Subsequently, Tobias opened a savings/current account for and in the name of Adam Merchandising,
his frozen meat business. Six months later, Tobias applied for a loan from METROBANK, which in due course conducted
trade and credit verification of Tobias that resulted in negative findings. METROBANK next proceeded to appraise the
property Tobias offered as collateral by asking him for a photocopy of the title and other related documents. 4 The property
consisted of four parcels of land located in Malabon City, Metro Manila with a total area of 6,080 square meters and covered
by Transfer Certificate of Title (TCT) No. M-16751.5 Based on the financial statements submitted by Tobias, METROBANK
approved a credit line for P40,000,000.00. On August 15, 1997, Joselito Bermeo Moreno, Lead Internal Affairs Investigator of
METROBANK, proceeded to the Registry of Deeds of Malabon to cause the annotation of the deed of real estate mortgage
on TCT No. M-16751. The annotation was Entry No. 26897.6

Thereafter, Tobias initially availed himself of P20,000,000, but took out the balance within six months. 7 He paid the interest
on the loan for about a year before defaulting. His loan was restructured to 5-years upon his request. Yet, after two months,
he again defaulted. Thus, the mortgage was foreclosed, and the property was sold to METROBANK as the lone bidder. 8 On
June 11, 1999, the certificate of sale was issued in favor of METROBANK.9
When the certificate of sale was presented for registration to the Registry of Deeds of Malabon, no corresponding original
copy of TCT No. M-16751 was found in the registry vault. Atty. Sarah Principe-Bido, Deputy Register of Deeds of Malabon,
went on to verify TCT No. M-16751 and learned that Serial No. 4348590 appearing therein had been issued for TCT No. M15363 in the name of one Alberto Cruz; while TCT No. 16751 (now TCT No. 390146) appeared to have been issued in the
name of Eugenio S. Cruz and Co. for a parcel of land located in Navotas.10
Given such findings, METROBANK requested the Presidential Anti-Organized Crime Task Force (PAOCTF) to investigate. 11
In its report dated May 29, 2000,12 PAOCTF concluded that TCT No. M-16751 and the tax declarations submitted by Tobias
were fictitious. PAOCTF recommended the filing against Tobias of a criminal complaint for estafa through falsification of
public documents under paragraph 2 (a) of Article 315, in relation to Articles 172(1) and 171(7) of the Revised Penal Code.13
The Office of the City Prosecutor of Malabon ultimately charged Tobias with estafa through falsification of public documents
through the following information,14 viz:
xxx
That on or about the 15th day of August, 1997 in the Municipality of Malabon, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, by means of deceit, false pretense, fraudulent acts and misrepresentation
executed prior to or simultaneous with the commission of fraud, represented to METROBANK, as represented by MS.
ROSELLA S. SANTIAGO, that he is the registered owner of a parcel of land covered by TCT No. M-16751 which he
represented to be true and genuine when he knew the Certificate of Title No. M-16751 is fake and spurious and executed a
Real Estate Mortgage in favor of Metrobank and offered the same as collateral for a loan and Rosella S. Santiago relying on
said misrepresentation gave to accused, the amount of P20,000,000.00 and once in possession of the amount, with intent to
defraud, willfully, unlawfully and feloniously failed to deliver the land covered by spurious title and misappropriate, misapply
and converted the said amount of P20,000,000.00 to his own personal use and benefit and despite repeated demands
accused failed and refused and still fails and refuses to return the amount to complainant METROBANK, and/or delivered the
land covered in the spurious title in the aforementioned amount of P20,000,000.00.
CONTRARY TO LAW.15
Tobias filed a motion for re-investigation,16 which was granted.
In his counter-affidavit submitted during the re-investigation, 17 Tobias averred that he had bought the property from one
Leonardo Fajardo through real estate brokers Augusto Munsuyac and Carmelito Pilapil; that Natalio Bartolome, his financial
consultant from Carwin International, had convinced him to purchase the property due to its being an ideal site for his meat
processing plant and cold storage business; that the actual inspection of the property as well as the verification made in the
Registry of Deeds of Malabon City had ascertained the veracity of TCT No. 106083 under the name of Leonardo Fajardo;
that he had applied for the loan from METROBANK to pay the purchase price by offering the property as collateral; that in
order for the final application to be processed and the loan proceeds to be released, METROBANK had advised him to have
the title first transferred to his name; that he had executed a deed of absolute sale with Fajardo covering the property, and
that said instrument had been properly registered in the Registry of Deeds; that the transfer of the title, being under the
account of the seller, had been processed by seller Fajardo and his brokers Munsuyac and Pilapil; that his title and the
property had been inspected and verified by METROBANKs personnel; and that he did not have any intention to defraud
METROBANK.
Nonetheless, on December 27, 2002, the City Prosecutor of Malabon still found probable cause against Tobias, and
recommended his being charged with estafa through falsification of public document.18
Tobias appealed to the Department of Justice (DOJ).
On July 20, 2004, then Acting Secretary of Justice Ma. Merceditas N. Gutierrez issued a resolution directing the
withdrawal of the information filed against Tobias,19 to wit:
WHEREFORE, the assailed resolution is hereby REVERSED and SET ASIDE. The City Prosecutor of Malabon City is
directed to cause the withdrawal of the Information in Crim. Case No. 27020 against respondent Antonino O. Tobias III, and
report the action taken thereon within ten (10) days from receipt hereof.
SO ORDERED.
Acting Secretary of Justice Gutierrez opined that Tobias had sufficiently established his good faith in purchasing the property;
that he had even used part of the proceeds of the loan to pay the seller; that it was METROBANK that had caused the
annotation of the mortgage on the TCT, thereby creating an impression that the title had been existing in the Registry of
Deeds at that time; that, accordingly, the presumption that the possessor of a falsified document was the author of the
falsification did not apply because it was always subject to the qualification or reference as to the approximate time of the
commission of the falsification.

METROBANK moved to reconsider,20 arguing that Tobias had employed deceit or false pretense in offering the property as
collateral by using a fake title; and that the presumption that the possessor of the document was the author of the falsification
applied because no other person could have falsified the TCT and would have benefitted therefrom except Tobias himself.
On November 18, 2005, Secretary of Justice Raul M. Gonzalez denied METROBANKs motion for
reconsideration.21
Ruling of the CA
METROBANK challenged the adverse resolutions through certiorari.
On December 29, 2006, the CA promulgated its decision,22 dismissing METROBANKs petition for certiorari by holding that
the presumption of authorship might be disputed through a satisfactory explanation, viz:
We are not unaware of the established presumption and rule that when it is proved that a person has in his possession a
falsified document and makes use of the same, the presumption or inference is that such person is the forger (Serrano vs.
Court of Appeals, 404 SCRA 639, 651 [2003]), citing Koh Tieck Heng vs. People, 192 SCRA 533, 546-547 [1990]). Yet, the
Supreme Court declared that in the absence of satisfactory explanation, one who is found in possession of a forged
document and who used it is presumed to be the forger (citing People vs. Sendaydiego, 81 SCRA 120, 141 [1978]). Very
clearly then, a satisfactory explanation could render ineffective the presumption which, after all, is merely a disputable one.
It is in this score that We affirm the resolution of the Department of Justice finding no probable cause against private
respondent Tobias for estafa thru falsification of public document. The record speaks well of Tobias good faith and lack of
criminal intention and liability. Consider:
(a) Tobias has in his favor a similar presumption that good faith is always presumed. Therefore, he who claims bad faith must
prove it (Prinsipio vs. The Honorable Oscar Barrientos, G.R. 167025, December 19, 2005). No such evidence of bad faith of
Tobias appears on record;

(b) Tobias actuation in securing the loan belies any criminal intent on his part to deceive petitioner Bank. He was not in a
hurry to obtain the loan. He had to undergo the usual process of the investigative arm or machine of the Bank not only on the
location and the physical appearance of the property but likewise the veracity of its title. Out of the approved P40,000,000.00
loan he only availed of P20,000,000.00, for his frozen meat business which upon investigation of the Bank failed to give
negative results;
(c) Tobias paid the necessary interests for one (1) year on the loan and two (2) installments on the restructured loan; and
(d) More importantly, the loan was not released to him until after the mortgage was duly registered with the Registry of Deeds
of Malabon City and even paid the amount of P90,000.00 for the registration fees therefor.
These actuations, for sure, can only foretell that Tobias has the least intention to deceive the Bank in obtaining the loan. It
may not be surprising to find that Tobias could even be a victim himself by another person in purchasing the properties he
offered as security for the loan.23
The CA stressed that the determination of probable cause was an executive function within the discretion of the public
prosecutor and, ultimately, of the Secretary of Justice, and the courts of law could not interfere with such determination; 24 that
the private complainant in a criminal action was only concerned with its civil aspect; that should the State choose not to file
the criminal action, the private complainant might initiate a civil action based on Article 35 of the Civil Code, to wit:
In the eventuality that the Secretary of Justice refuses to file the criminal complaint, the complainant, whose only interest is
the civil aspect of the case and not the criminal aspect thereof, is not left without a remedy. In Vda. De Jacob vs. Puno, 131
SCRA 144, 149 [1984], the Supreme Court has this for an answer:
The remedy of complainant in a case where the Minister of Justice would not allow the filing of a criminal complaint against
an accused because it is his opinion that the evidence is not sufficient to sustain an information for the complaint with which
the respondents are charged of, is to file a civil action as indicated in Article 35 of the Civil Code, which provides:
Art. 35. When a person, claiming to be injured by a criminal offense, charges another with the same, for which no
independent civil action is granted in this Code or any special law, but the justice of the peace finds no reasonable grounds
to believe that a crime has been committed, or the prosecuting attorney refuses or fails to institute criminal proceedings, the
complainant may bring a civil action for damages against the alleged offender. Such civil action may be supported by a
preponderance of evidence. Upon the defendants motion, the court may require the plaintiff to file a bond to indemnify the
defendant in case the complainant should be found to be malicious.

If during the pendency of the civil action, an information should be presented by the prosecuting attorney, the civil action
shall be suspended until the termination of the criminal proceedings.25
METROBANK sought reconsideration, but the CA denied its motion for that purpose, emphasizing that the presumption that
METROBANK firmly relied upon was overcome by Tobias sufficiently establishing his good faith and lack of criminal intent.
The CA relevantly held:
Petitioner should be minded that the subject presumption that the possessor and user of a forged or falsified document is
presumed to be the falsifier or forger is a mere disputable presumption and not a conclusive one. Under the law on evidence,
presumptions are divided into two (2) classes: conclusive and rebuttable. Conclusive or absolute presumptions are rules
determining the quantity of evidence requisite for the support of any particular averment which is not permitted to be
overcome by any proof that the fact is otherwise, if the basis facts are established (1 Greenleaf, Ev 44; 29 Am Jur 2d,
Evidence 164; 1 Jones on Evidence 6 ed, page 132). Upon the other hand, a disputable presumption has been defined as
species of evidence that may be accepted and acted on when there is no other evidence to uphold the contention for which it
stands, or one which may be overcome by other evidence (31A C.J.S., p. 197; People v. de Guzman, G.R. No. 106025, Feb.
9, 1994; Herrera, Remedial Law, Vol. VI, 1999 Edition, pp. 40-41). In fact, Section 3 of Rule 131 provides that the disputable
presumptions therein enumerated are satisfactory if uncontradicted but may be contradicted and overcome by other
evidence. Thus, as declared in Our decision in this case, private respondent had shown evidence of good faith and lack of
criminal intention and liability that can overthrow the controversial disputable presumption.26
Issue
In this appeal, METROBANK raises the lone issue of
WHETHER OR NOT THE HONORABLE COURT OF APPEALS HAS DECIDED A QUESTION OF SUBSTANCE PROBABLY
NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THIS HONORABLE COURT AND THUS,
COMMITTED PATENT ERROR IN RENDERING THE ASSAILED DECISION DATED 29 DECEMBER 2006, DISMISSING
METROBANKS PETITION FOR CERTIORARI AND AFFIRMING THE RESOLUTIONS DATED 20 JULY 2004 AND 18
NOVEMBER 2005 OF THE HON. SECRETARY OF JUDTICE AND IN DENYING METROBANKS MOTION FOR
RECONSIDERATION.
METROBANK submits that the presumption of authorship was sufficient to establish probable cause to hold Tobias for trial;
that the presumption applies when a person is found in possession of the forged instrument, makes use of it, and benefits
from it; that contrary to the ruling of the CA, there is no requirement that the legal presumption shall only apply in the
absence of a valid explanation from the person found to have possessed, used and benefited from the forged document; that
the CA erred in declaring that Tobias was in good faith, because good faith was merely evidentiary and best raised in the trial
on the merits; and that Tobias was heavily involved in a modus operandi of using fake titles because he was also being tried
for a similar crime in the RTC, Branch 133, in Makati City.
METROBANK maintains that what the Secretary of Justice did was to determine the innocence of the accused, which should
not be done during the preliminary investigation; and that the CA disregarded such lapse.
On the other hand, Tobias posits that the core function of the Department of Justice is to prosecute the guilty in criminal
cases, not to persecute; that although the prosecutors are given latitude to determine the existence of probable cause, the
review power of the Secretary of Justice prevents overzealous prosecutors from persecuting the innocent; that in reversing
the resolution of Malabon City Assistant Prosecutor Ojer Pacis, the Secretary of Justice only acted within his authority; that,
indeed, the Secretary of Justice was correct in finding that there was lack of evidence to prove that the purported fake title
was the very cause that had induced the petitioner to grant the loan; and that the Secretary likewise appropriately found that
Tobias dealt with the petitioner in good faith because of lack of proof that he had employed fraud and deceit in securing the
loan.
Lastly, Tobias argues that the presumption of forgery could not be applied in his case because it was METROBANK, through
a representative, who had annotated the real estate mortgage with the Registry of Deeds; and that he had no access to and
contact with the Registry of Deeds, and whatever went wrong after the annotation was beyond his control.
Ruling
The appeal has no merit.
Under the doctrine of separation of powers, the courts have no right to directly decide matters over which full discretionary
authority has been delegated to the Executive Branch of the Government,27 or to substitute their own judgments for that of
the Executive Branch,28 represented in this case by the Department of Justice. The settled policy is that the courts will not
interfere with the executive determination of probable cause for the purpose of filing an information, in the absence of grave
abuse of discretion.29 That abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty or a
virtual refusal to perform a duty enjoined by law or to act at all in contemplation of law, such as where the power is exercised
in an arbitrary and despotic manner by reason of passion or hostility. 30 For instance, in Balanganan v. Court of Appeals,
Special Nineteenth Division, Cebu City,31 the Court ruled that the Secretary of Justice exceeded his jurisdiction when he

required hard facts and solid evidence in order to hold the defendant liable for criminal prosecution when such requirement
should have been left to the court after the conduct of a trial.
In this regard, we stress that a preliminary investigation for the purpose of determining the existence of probable cause is not
part of a trial.32 At a preliminary investigation, the investigating prosecutor or the Secretary of Justice only determines
whether the act or omission complained of constitutes the offense charged.33 Probable cause refers to facts and
circumstances that engender a well-founded belief that a crime has been committed and that the respondent is probably
guilty thereof.34 There is no definitive standard by which probable cause is determined except to consider the attendant
conditions; the existence of probable cause depends upon the finding of the public prosecutor conducting the examination,
who is called upon not to disregard the facts presented, and to ensure that his finding should not run counter to the clear
dictates of reason.35
Tobias was charged with estafa through falsification of public document the elements of which are: (a) the accused uses a
fictitious name, or falsely pretends to possess power, influence, qualifications, property, credit, agency, business or imaginary
transactions, or employs other similar deceits; (b) such false pretense, fraudulent act or fraudulent means must be made or
executed prior to or simultaneously with the commission of the fraud; (c) the offended party must have relied on the false
pretense, fraudulent act or fraudulent means, that is, he was induced to part with his money or property because of the false
pretense, fraudulent act or fraudulent means; and (d) as a result thereof, the offended party suffered damage.36 It is required
that the false statement or fraudulent representation constitutes the very cause or the only motive that induced the
complainant to part with the thing.37
METROBANK urges the application of the presumption of authorship against Tobias based on his having offered the
duplicate copy of the spurious title to secure the loan; and posits that there is no requirement that the presumption shall
apply only when there is absence of a valid explanation from the person found to have possessed, used and benefited from
the forged document.
We cannot sustain METROBANKs urging.
Firstly, a presumption affects the burden of proof that is normally lodged in the State. 38 The effect is to create the need of
presenting evidence to overcome the prima facie case that shall prevail in the absence of proof to the contrary. 39 As such, a
presumption of law is material during the actual trial of the criminal case where in the establishment thereof the party against
whom the inference is made should adduce evidence to rebut the presumption and demolish the prima facie case.40 This is
not so in a preliminary investigation, where the investigating prosecutor only determines the existence of a prima facie case
that warrants the prosecution of a criminal case in court.41
Secondly, the presumption of authorship, being disputable, may be accepted and acted upon where no evidence upholds the
contention for which it stands.42 It is not correct to say, consequently, that the investigating prosecutor will try to determine the
existence of the presumption during preliminary investigation, and then to disregard the evidence offered by the respondent.
The fact that the finding of probable cause during a preliminary investigation is an executive function does not excuse the
investigating prosecutor or the Secretary of Justice from discharging the duty to weigh the evidence submitted by the parties.
Towards that end, the investigating prosecutor, and, ultimately, the Secretary of Justice have ample discretion to determine
the existence of probable cause,43 a discretion that must be used to file only a criminal charge that the evidence and
inferences can properly warrant.
The presumption that whoever possesses or uses a spurious document is its forger applies only in the absence of a
satisfactory explanation.44 Accordingly, we cannot hold that the Secretary of Justice erred in dismissing the information in the
face of the controverting explanation by Tobias showing how he came to possess the spurious document. Much less can we
consider the dismissal as done with abuse of discretion, least of all grave. We concur with the erudite exposition of the CA on
the matter, to wit:
It would seem that under the above proposition of the petitioner, the moment a person has in his possession a falsified
document and has made use of it, probable cause or prima facie is already established and that no amount of satisfactory
explanation will prevent the filing of the case in court by the investigating officer, for any such good explanation or defense
can only be threshed out in the trial on the merit. We are not to be persuaded. To give meaning to such argumentation will
surely defeat the very purpose for which preliminary investigation is required in this jurisdiction.
A preliminary investigation is designed to secure the respondent involved against hasty, malicious and oppressive
prosecution. A preliminary investigation is an inquiry to determine whether (a) a crime has been committed, and (b) whether
there is probable cause to believe that the accused is guilty thereof (De Ocampo vs. Secretary of Justice, 480 SCRA 71
[2006]). It is a means of discovering the person or persons who may be reasonably charged with a crime (Preferred Home
Specialties, Inc. vs. Court of Appeals, 478 SCRA 387, 410 [2005]). Prescindingly, under Section 3 of Rule 112 of the Rules of
Criminal Procedure, the respondent must be informed of the accusation against him and shall have the right to examine the
evidence against him and submit his counter-affidavit to disprove criminal liability. By far, respondent in a criminal preliminary
investigation is legally entitled to explain his side of the accusation.
We are not unaware of the established presumption and rule that when it is proved that a person has in his possession a
falsified document and makes use of the same the presumption or inference is that such person is the forger (Serrano vs.
Court of Appeals, 404 SCRA 639, 651 [2003]), citing Koh Tieck Heng vs. People, 192 SCRA 533, 546-547 [1990]). Yet, the
Supreme Court declared that in the absence of satisfactory explanation, one who is found in possession of a forged

document and who used it is presumed to be the forger (citing People vs. Sendaydiego, 81 SCRA 120, 141 [1978]). Very
clearly then, a satisfactory explanation could render ineffective the presumption which, after all, is merely a disputable one.45
We do not lose sight of the fact that METROBANK, a commercial bank dealing in real property, had the duty to observe due
diligence to ascertain the existence and condition of the realty as well as the validity and integrity of the documents bearing
on the realty.46 Its duty included the responsibility of dispatching its competent and experience representatives to the realty to
assess its actual location and condition, and of investigating who was its real owner.47 Yet, it is evident that METROBANK did
not diligently perform a thorough check on Tobias and the circumstances surrounding the realty he had offered as collateral.
As such, it had no one to blame but itself. Verily, banks are expected to exercise greater care and prudence than others in
their dealings because their business is impressed with public interest.48 Their failure to do so constitutes negligence on its
part.49
WHEREFORE, the Court DENIES the petition for review on certiorari, and AFFIRMS the decision of the Court of Appeals
promulgated on December 29, 2006. The petitioner shall pay the costs of suit.
SO ORDERED.

G.R. No. 96859 October 15, 1991


MOHAMMAD ALI DIMAPORO, petitioner,
vs.
HON. RAMON V. MITRA, JR., Speaker, House of Representatives, and (Hon. QUIRINO D. ABAD SANTOS, JR.) HON.
CAMILO L. SABIO Secretary, House of representatives, respondent.
Rilloraza, Africa, De Ocampo & Africa and Enrique M. Fernando for petitioner.
DAVIDE, JR., J.:p
Petitioner Mohamad Ali Dimaporo was elected Representative for the Second Legislative District of Lanao del Sur during the
1987 congressional elections. He took his oath of office on 9 January 1987 and thereafter performed the duties and enjoyed
the rights and privileges pertaining thereto.
On 15 January 1990, petitioner filed with the Commission on Elections a Certificate of Candidacy for the position of Regional
Governor of the Autonomous Region in Muslim Mindanao. The election was scheduled for 17 February 1990.
Upon being informed of this development by the Commission on Elections, respondents Speaker and Secretary of the House
of Representatives excluded petitioner's name from the Roll of Members of the House of Representatives pursuant to
Section 67, Article IX of the Omnibus Election Code. As reported by the Speaker in the session of 9 February 1990:
The Order of Business today carries a communication from the Commission on Elections which states that the Honorable
Mohammad Ali Dimaporo of the Second District of Lanao del Sur filed a certificate of candidacy for the regional elections in
Muslim Mindanao on February 17, 1990. The House Secretariat, performing an administrative act, did not include the name
of the Honorable Ali Dimaporo in the Rolls pursuant to the provision of the Election Code, Article IX, Section 67, which states:

Any elective official whether national or local running for any office other than the one which he is holding in a permanent
capacity except for President and Vice-President shall be considered ipso facto resigned from his office upon the filing of his
certificate of candidacy.' The word 'ipso facto' is defined in Words and Phrases as by the very act itself by the mere act.
And therefore, by the very act of the (sic) filing his certificate of candidacy, the Honorable Ali Dimaporo removed himself from
the Rolls of the House of Representatives; and, therefore, his name has not been carried in today's Roll and will not be
carried in the future Rolls of the House. ...
Having lost in the autonomous region elections, petitioner, in a letter dated 28 June 1990 and addressed to respondent
Speaker, expressed his intention "to resume performing my duties and functions as elected Member of Congress." The
record does not indicate what action was taken on this communication, but it is apparent that petitioner failed in his bid to
regain his seat in Congress since this petition praying for such relief was subsequently filed on 31 January 1991.
In this petition, it is alleged that following the dropping of his name from the Roll, petitioner was excluded from all
proceedings of the House of Representatives; he was not paid the emoluments due his office; his staff was dismissed and
disbanded; and his office suites were occupied by other persons. In effect, he was virtually barred and excluded from
performing his duties and from exercising his rights and privileges as the duly elected and qualified congressman from his
district.
Petitioner admits that he filed a Certificate of Candidacy for the position of Regional Governor of Muslim Mindanao. He,
however, maintains that he did not thereby lose his seat as congressman because Section 67, Article IX of B.P. Blg. 881 is
not operative under the present Constitution, being contrary thereto, and therefore not applicable to the present members of
Congress.
In support of his contention, petitioner points out that the term of office of members of the House of Representatives, as well
as the grounds by which the incumbency of said members may be shortened, are provided for in the Constitution. Section 2,
Article XVIII thereof provides that "the Senators, Members of the House of Representatives and the local officials first elected
under this Constitution shall serve until noon of June 30, 1992;" while Section 7, Article VI states: "The Members of the
House of Representatives shall be elected for a term of three years which shall begin, unless otherwise provided by law, at
noon on the thirtieth day of June next following their election." On the other hand, the grounds by which such term may be
shortened may be summarized as follows:
a) Section 13, Article VI: Forfeiture of his seat by holding any other office or employment in the government or any
subdivision, agency or instrumentality thereof, including government-owned or controlled corporations or subsidiaries;
b) Section 16 (3): Expulsion as a disciplinary action for disorderly behavior;
c) Section 17: Disqualification as determined by resolution of the Electoral Tribunal in an election contest; and,
d) Section 7, par. 2: Voluntary renunciation of office.
He asserts that under the rule expressio unius est exclusio alterius, Section 67, Article IX of B.P. Blg. 881 is repugnant to
these constitutional provisions in that it provides for the shortening of a congressman's term of office on a ground not
provided for in the Constitution. For if it were the intention of the framers to include the provisions of Section 67, Article IX of
B.P. Blg. 881 as among the means by which the term of a Congressman may be shortened, it would have been a very simple
matter to incorporate it in the present Constitution. They did not do so. On the contrary, the Constitutional Commission only
reaffirmed the grounds previously found in the 1935 and 1973 Constitutions and deliberately omitted the ground provided in
Section 67, Article IX of B.P. Blg. 881.
On the premise that the provision of law relied upon by respondents in excluding him from the Roll of Members is contrary to
the present Constitution, petitioner consequently concludes that respondents acted without authority. He further maintains
that respondents' so-called "administrative act" of striking out his name is ineffective in terminating his term as Congressman.
Neither can it be justified as an interpretation of the Constitutional provision on voluntary renunciation of office as only the
courts may interpret laws. Moreover, he claims that he cannot be said to have forfeited his seat as it is only when a
congressman holds another office or employment that forfeiture is decreed. Filing a certificate of candidacy is not equivalent
to holding another office or employment.
In sum, petitioner's demand that his rights as a duly elected member of the House of Representatives be recognized, is
anchored on the negative view of the following issues raised in this petition:
A.
IS SECTION 67, ARTICLE IX, OF B.P. BLG. 881 OPERATIVE UNDER THE PRESENT CONSTITUTION?
B.
COULD THE RESPONDENT SPEAKER AND/OR THE RESPONDENT SECRETARY, 'BY ADMINISTRATIVE ACT',
EXCLUDE THE PETITIONER FROM THE ROLLS OF THE HOUSE OF REPRESENTATIVES, THEREBY PREVENTING
HIM FROM EXERCISING HIS FUNCTIONS AS CONGRESSMAN, AND DEPRIVING HIM OF HIS RIGHTS AND
PRIVILEGES AS SUCH?
On the other hand, respondents through the Office of the Solicitor General contend that Section 67, Article IX of B.P. Blg. 881
is still operative under the present Constitution, as the voluntary act of resignation contemplated in said Section 67 falls
within the term "voluntary renunciation" of office enunciated in par. 2, Section 7, Article VI of the Constitution. That the ground
provided in Section 67 is not included in the Constitution does not affect its validity as the grounds mentioned therein are not
exclusive. There are, in addition, other modes of shortening the tenure of office of Members of Congress, among which are
resignation, death and conviction of a crime which carries a penalty of disqualification to hold public office.
Respondents assert that petitioner's filing of a Certificate of Candidacy is an act of resignation which estops him from
claiming otherwise as he is presumed to be aware of existing laws. They further maintain that their questioned
"administrative act" is a mere ministerial act which did not involve any encroachment on judicial powers.
Section 67, Article IX of B.P. Blg. 881 reads:
Any elective official whether national or local running for any office other than the one which he is holding in a permanent
capacity except for President and Vice-President shall be considered ipso facto resigned from his office upon the filing of his
certificate of candidacy.
The precursor of this provision is the last paragraph of Section 2 of C.A. No. 666, which reads:
Any elective provincial, municipal, or city official running for an office, other than the one for which he has been lastly elected,
shall be considered resigned from his office from the moment of the filing of his certificate of candidacy.

Section 27 of Article II of Republic Act No. 180 reiterated this rule in this wise:
Sec. 27. Candidate holding office. Any elective provincial, municipal or city official running for an office, other than the one
which he is actually holding, shall be considered resigned from office from the moment of the filing of his certificate of
candidacy.
The 1971 Election Code imposed a similar proviso on local elective officials as follows:
Sec. 24. Candidate holding elective office. Any elective provincial, sub-provincial, city, municipal or municipal district
officer running for an office other than the one which he is holding in a permanent capacity shall be considered ipso facto
resigned from his office from the moment of the filing of his certificate of candidacy.
Every elected official shall take his oath of office on the day his term of office commences, or within ten days after his
proclamation if said proclamation takes place after such day. His failure to take his oath of office as herein provided shall be
considered forfeiture of his right to the new office to which he has been elected unless his failure is for a cause or causes
beyond his control.
The 1978 Election Code provided a different rule, thus:
Sec. 30. Candidates holding political offices. Governors, mayors, members of various sanggunians, or barangay officials,
shall, upon filing of a certificate of candidacy, be considered on forced leave of absence from office.
It must be noted that only in B.P. Blg. 881 are members of the legislature included in the enumeration of elective public
officials who are to be considered resigned from office from the moment of the filing of their certificates of candidacy for
another office, except for President and Vice-President. The advocates of Cabinet Bill No. 2 (now Section 67, Article IX of
B.P. Blg. 881) elucidated on the rationale of this inclusion, thus:
MR. PALMARES:
In the old Election Code, Your Honor, in the 1971 Election Code, the provision seems to be different I think this is in
Section 24 of Article III.
Any elective provincial, sub-provincial, city, municipal or municipal district officer running for an office other than the one
which he is holding in a permanent capacity shall be considered ipso facto resigned from his office from the moment of the
filing of his certificate of candidacy.
May I know, Your Honor, what is the reason of the Committee in departing or changing these provisions of Section 24 of the
old Election Code and just adopting it en toto? Why do we have to change it? What could possibly be the reason behind it, or
the rationale behind it?
MR. PEREZ (L.):
I have already stated the rationale for this, Mr. Speaker, but I don't mind repeating it. The purpose is that the people must be
given the right to choose any official who belongs to, let us say, to the Batasan if he wants to run for another office. However,
because of the practice in the past where members of the legislature ran for local offices, but did not assume the office,
because of that spectacle the impression is that these officials were just trifling with the mandate of the people. They have
already obtained a mandate to be a member of the legislature, and they want to run for mayor or for governor and yet when
the people give them that mandate, they do not comply with that latter mandate, but still preferred (sic) to remain in the
earlier mandate. So we believe, Mr. Speaker, that the people's latest mandate must be the one that will be given due course.
...
Assemblyman Manuel M. Garcia, in answer to the query of Assemblyman Arturo Tolentino on the constitutionality of Cabinet
Bill No. 2, said:
MR. GARCIA (M.M.):
Thank you, Mr. Speaker.
Mr. Speaker, on the part of the Committee, we made this proposal based on constitutional grounds. We did not propose this
amendment mainly on the rationale as stated by the Gentlemen from Manila that the officials running for office other than the
ones they are holding will be considered resigned not because of abuse of facilities of power or the use of office facilities but
primarily because under our Constitution, we have this new chapter on accountability of public officers. Now, this was not in
the 1935 Constitution. It states that (sic) Article XIII, Section 1 Public office is a public trust. Public officers and employees
shall serve with the highest degree of responsibility, integrity, loyalty and efficiency and shall remain accountable to the
people.
Now, what is the significance of this new provision on accountability of public officers? This only means that all elective
public officials should honor the mandate they have gotten from the people. Thus, under our Constitution, it says that:
'Members of the Batasan shall serve for the term of 6 years, in the case of local officials and 6 years in the case of barangay
officials. Now, Mr. Speaker, we have precisely included this as part of the Omnibus Election Code because a Batasan
Member who hold (sic) himself out with the people and seek (sic) their support and mandate should not be allowed to
deviate or allow himself to run for any other position unless he relinquishes or abandons his office. Because his mandate to
the people is to serve for 6 years. Now, if you allow a Batasan or a governor or a mayor who was mandated to serve for 6
years to file for an office other than the one he was elected to, then, that clearly shows that he has not (sic) intention to
service the mandate of the people which was placed upon him and therefore he should be considered ipso facto resigned. I
think more than anything that is the accountability that the Constitution requires of elective public officials. It is not because of
the use or abuse of powers or facilities of his office, but it is because of the Constitution itself which I said under the 1973
Constitution called and inserted this new chapter on accountability.
Now, argument was said that the mere filing is not the intention to run. Now, what is it for? If a Batasan Member files the
certificate of candidacy, that means that he does not want to serve, otherwise, why should he file for an office other than the
one he was elected to? The mere fact therefore of filing a certificate should be considered the overt act of abandoning or
relinquishing his mandate to the people and that he should therefore resign if he wants to seek another position which he
feels he could be of better service.
As I said, Mr. Speaker, I disagree with the statements of the Gentleman from Manila because the basis of this Section 62 is
the constitutional provision not only of the fact that Members of the Batasan and local officials should serve the entire 6-year
term for which we were elected, but because of this new chapter on the accountability of public officers not only to the
community which voted him to office, but primarily because under this commentary on accountability of public officers, the

elective public officers must serve their principal, the people, not their own personal ambition. And that is the reason, Mr.
Speaker, why we opted to propose Section 62 where candidates or elective public officers holding offices other than the one
to which they were elected, should be considered ipso facto resigned from their office upon the filing of the certificate of
candidacy."
It cannot be gainsaid that the same constitutional basis for Section 67, Article IX of B.P. Blg. 881 remains written in the 1987
Constitution. In fact, Section 1 of Article XI on "Accountability of Public Officers" is more emphatic in stating:
Sec. 1. Public office is a public trust. Public officers and employees must at all times be accountable to the people, serve
them with utmost responsibility, integrity, loyalty, and efficiency, act with patriotism and justice, and lead modest lives.
Obviously then, petitioner's assumption that the questioned statutory provision is no longer operative does not hold water. He
failed to discern that rather than cut short the term of office of elective public officials, this statutory provision seeks to ensure
that such officials serve out their entire term of office by discouraging them from running for another public office and thereby
cutting short their tenure by making it clear that should they fail in their candidacy, they cannot go back to their former
position. This is consonant with the constitutional edict that all public officials must serve the people with utmost loyalty and
not trifle with the mandate which they have received from their constituents.
In theorizing that the provision under consideration cuts short the term of office of a Member of Congress, petitioner seems
to confuse "term" with "tenure" of office. As succinctly distinguished by the Solicitor General:
The term of office prescribed by the Constitution may not be extended or shortened by the legislature (22 R.C.L.), but the
period during which an officer actually holds the office (tenure) may be affected by circumstances within or beyond the power
of said officer. Tenure may be shorter than the term or it may not exist at all. These situations will not change the duration of
the term of office (see Topacio Nueno vs. Angeles, 76 Phil 12).
Under the questioned provision, when an elective official covered thereby files a certificate of candidacy for another office, he
is deemed to have voluntarily cut short his tenure, not his term. The term remains and his successor, if any, is allowed to
serve its unexpired portion.
That the ground cited in Section 67, Article IX of B.P. Blg. 881 is not mentioned in the Constitution itself as a mode of
shortening the tenure of office of members of Congress, does not preclude its application to present members of Congress.
Section 2 of Article XI provides that "(t)he President, the Vice-President, the Members of the Supreme Court, the Members of
the Constitutional Commissions, and the Ombudsman may be removed from office, on impeachment for, and conviction of,
culpable violation of the Constitution, treason, bribery, graft and corruption, other high crimes, or betrayal of public trust. All
other public officers and employees may be removed from office as provided by law, but not by impeachment. Such
constitutional expression clearly recognizes that the four (4) grounds found in Article VI of the Constitution by which the
tenure of a Congressman may be shortened are not exclusive. As held in the case of State ex rel. Berge vs. Lansing, the
expression in the constitution of the circumstances which shall bring about a vacancy does not necessarily exclude all
others. Neither does it preclude the legislature from prescribing other grounds. Events so enumerated in the constitution or
statutes are merely conditions the occurrence of any one of which the office shall become vacant not as a penalty but simply
as the legal effect of any one of the events. And would it not be preposterous to say that a congressman cannot die and cut
his tenure because death is not one of the grounds provided for in the Constitution? The framers of our fundamental law
never intended such absurdity.
The basic principle which underlies the entire field of legal concepts pertaining to the validity of legislation is that by
enactment of legislation, a constitutional measure is presumed to be created. This Court has enunciated the presumption in
favor of constitutionality of legislative enactment. To justify the nullification of a law, there must be a clear and unequivocal
breach of the Constitution, not a doubtful and argumentative implication. A doubt, even if well-founded, does not suffice.
The maxim expressio unius est exclusio alterius is not to be applied with the same rigor in construing a constitution as a
statute and only those things expressed in such positive affirmative terms as plainly imply the negative of what is not
mentioned will be considered as inhibiting the power of legislature. The maxim is only a rule of interpretation and not a
constitutional command. This maxim expresses a rule of construction and serves only as an aid in discovering legislative
intent where such intent is not otherwise manifest.
Even then, the concept of voluntary renunciation of office under Section 7, Article VI of the Constitution is broad enough to
include the situation envisioned in Section 67, Article IX of B.P. Blg. 881. As discussed by the Constitutional Commissioners:
MR. MAAMBONG:
Could I address the clarificatory question to the Committee? The term 'voluntary renunciation' does not only appear in
Section 3; it appears in Section 6.
MR. DAVIDE:
Yes.
MR. MAAMBONG:
It is also a recurring phrase all over the constitution. Could the Committee please enlighten us exactly what 'voluntary
renunciation' means? Is this akin to abandonment?
MR. DAVIDE:
Abandonment is voluntary. In other words, he cannot circumvent the restriction by merely resigning at any given time on the
second term.
MR. MAAMBONG:
Is the Committee saying that the term voluntary renunciation is more general than abandonment and resignation?
MR. DAVIDE:
It is more general, more embracing.
That the act, contemplated in Section 67, Article IX of B.P. Blg. 881, of filing a certificate of candidacy for another office
constitutes an overt, concrete act of voluntary renunciation of the elective office presently being held is evident from this
exchange between then Members of Parliament Arturo Tolentino and Jose Rono:
MR. RONO:
My reasonable ground is this: if you will make the person ... my, shall we say, basis is that in one case the person is intending
to run for an office which is different from his own, and therefore it should be considered, at least from the legal significance,
an intention to relinquish his office.

MR. TOLENTINO:
Yes ...
MR. RONO:
And in the other, because he is running for the same position, it is otherwise.
MR. TOLENTINO:
Yes, but what I cannot see is why are you going to compel a person to quit an office which he is only intending to leave? A
relinquishment of office must be clear, must be definite.
MR. RONO:
Yes, sir. That's precisely, Mr. Speaker, what I'm saying that while I do not disagree with the conclusion that the intention
cannot be enough, but I am saying that the filing of the certificate of candidacy is an over act of such intention. It's not just an
intention; it's already there.
In Monroy vs. Court of Appeals, a case involving Section 27 of R.A. No. 180 above-quoted, this Court categorically
pronounced that "forfeiture (is) automatic and permanently effective upon the filing of the certificate of candidacy for another
office. Only the moment and act of filing are considered. Once the certificate is filed, the seat is forever forfeited and nothing
save a new election or appointment can restore the ousted official. Thus, as We had occasion to remark, through Justice
J.B.L. Reyes, in Castro vs. Gatuslao:
... The wording of the law plainly indicates that only the date of filing of the certificate of candidacy should be taken into
account. The law does not make the forfeiture dependent upon future contingencies, unforeseen and unforeseeable, since
the vacating is expressly made as of the moment of the filing of the certificate of candidacy. ...
As the mere act of filing the certificate of candidacy for another office produces automatically the permanent forfeiture of the
elective position being presently held, it is not necessary, as petitioner opines, that the other position be actually held. The
ground for forfeiture in Section 13, Article VI of the 1987 Constitution is different from the forfeiture decreed in Section 67,
Article IX of B.P. Blg. 881, which is actually a mode of voluntary renunciation of office under Section 7, par. 2 of Article VI of
the Constitution.
The legal effects of filing a certificate of candidacy for another office having been spelled out in Section 67, Article IX, B.P.
Blg. 881 itself, no statutory interpretation was indulged in by respondents Speaker and Secretary of the House of
Representatives in excluding petitioner's name from the Roll of Members. The Speaker is the administrative head of the
House of Representatives and he exercises administrative powers and functions attached to his office. As administrative
officers, both the Speaker and House Secretary-General perform ministerial functions. It was their duty to remove petitioner's
name from the Roll considering the unequivocal tenor of Section 67, Article IX, B.P. Blg. 881. When the Commission on
Elections communicated to the House of Representatives that petitioner had filed his certificate of candidacy for regional
governor of Muslim Mindanao, respondents had no choice but to abide by the clear and unmistakable legal effect of Section
67, Article IX of B.P. Blg. 881. It was their ministerial duty to do so. These officers cannot refuse to perform their duty on the
ground of an alleged invalidity of the statute imposing the duty. The reason for this is obvious. It might seriously hinder the
transaction of public business if these officers were to be permitted in all cases to question the constitutionality of statutes
and ordinances imposing duties upon them and which have not judicially been declared unconstitutional. Officers of the
government from the highest to the lowest are creatures of the law and are bound to obey it.
In conclusion, We reiterate the basic concept that a public office is a public trust. It is created for the interest and benefit of
the people. As such, the holder thereof is subject to such regulations and conditions as the law may impose and he cannot
complain of any restrictions which public policy may dictate on his office.
WHEREFORE, the instant petition is DISMISSED for lack of merit.
SO ORDERED.

RODOLFO C. FARIAS, MANUEL M. GARCIA, FRANCIS G. ESCUDERO, and AGAPITO A. AQUINO, AS MEMBERS OF
THE HOUSE OF REPRESENTATIVES AND ALSO AS TAXPAYERS, IN THEIR OWN BEHALF AND IN
REPRESENTATION OF THE MEMBERS OF THE MINORITY IN THE HOUSE OF REPRESENTATIVES, petitioners, vs.

THE EXECUTIVE SECRETARY, COMMISSION ON ELECTIONS, HON. FELICIANO R. BELMONTE, JR., SECRETARY
OF THE INTERIOR AND LOCAL GOVERNMENT, SECRETARY OF THE SENATE, AND SECRETARY GENERAL OF THE
HOUSE OF REPRESENTATIVES, respondents.
[G.R. No. 152161. December 10, 2003]
CONG. GERRY A. SALAPUDDIN, petitioner, vs. COMMISSION ON ELECTIONS, respondent.
DECISION
CALLEJO, SR., J.:
Before the Court are two Petitions under Rule 65 of the Rules of Court, as amended, seeking to declare as unconstitutional
Section 14 of Republic Act No. 9006 (The Fair Election Act), insofar as it expressly repeals Section 67 of Batas Pambansa
Blg. 881 (The Omnibus Election Code) which provides:
SEC. 67. Candidates holding elective office. Any elective official, whether national or local, running for any office other than
the one which he is holding in a permanent capacity, except for President and Vice-President, shall be considered ipso facto
resigned from his office upon the filing of his certificate of candidacy.
The petition for certiorari and prohibition in G.R. No. 147387 was filed by Rodolfo C. Farias, Manuel M. Garcia, Francis G.
Escudero and Agapito A. Aquino. At the time of filing of the petition, the petitioners were members of the minority bloc in the
House of Representatives. Impleaded as respondents are: the Executive Secretary, then Speaker of the House of
Representatives Feliciano R. Belmonte, Jr., the Commission on Elections, the Secretary of the Department of the Interior and
Local Government (DILG), the Secretary of the Senate and the Secretary General of the House of Representatives.
The petition for prohibition in G.R. No. 152161 was filed by Gerry A. Salapuddin, then also a member of the House of
Representatives. Impleaded as respondent is the COMELEC.
Legislative History of Republic Act No. 9006
Rep. Act No. 9006, entitled An Act to Enhance the Holding of Free, Orderly, Honest, Peaceful and Credible Elections through
Fair Election Practices, is a consolidation of the following bills originating from the House of Representatives and the Senate,
respectively:
House Bill (HB) No. 9000 entitled AN ACT ALLOWING THE USE OF MASS MEDIA FOR ELECTION PROPAGANDA,
AMENDING FOR THE PURPOSE BATAS PAMBANSA BILANG 881, OTHERWISE KNOWN AS THE OMNIBUS ELECTION
CODE, AS AMENDED, AND FOR OTHER PURPOSES;
Senate Bill (SB) No. 1742 entitled AN ACT TO ENHANCE THE HOLDING OF FREE, ORDERLY, HONEST, PEACEFUL,
AND CREDIBLE ELECTIONS THROUGH FAIR ELECTION PRACTICES.A Bicameral Conference Committee, composed of
eight members of the Senate and sixteen (16) members of the House of Representatives,
was formed to reconcile the conflicting provisions of the House and Senate versions of the bill.
On November 29, 2000, the Bicameral Conference Committee submitted its Report, signed by its members, recommending
the approval of the bill as reconciled and approved by the conferees.
During the plenary session of the House of Representatives on February 5, 2001, Rep. Jacinto V. Paras proposed an
amendment to the Bicameral Conference Committee Report. Rep. Didagen P. Dilangalen raised a point of order commenting
that the House could no longer submit an amendment thereto. Rep. Sergio A.F. Apostol thereupon moved that the House
return the report to the Bicameral Conference Committee in view of the proposed amendment thereto. Rep. Dilangalen
expressed his objection to the proposal. However, upon viva voce voting, the majority of the House approved the return of
the report to the Bicameral Conference Committee for proper action.
In view of the proposed amendment, the House of Representatives elected anew its conferees to the Bicameral Conference
Committee.
Then again, for unclear reasons, upon the motion of Rep. Ignacio R. Bunye, the House elected another set of conferees to
the Bicameral Conference Committee.
On February 7, 2001, during the plenary session of the House of Representatives, Rep. Bunye moved that the House
consider the Bicameral Conference Committee Report on the contrasting provisions of HB No. 9000 and SB No. 1742. Rep.
Dilangalen observed that the report had been recommitted to the Bicameral Conference Committee. The Chair responded
that the Bicameral Conference Report was a new one, and was a result of the reconvening of a new Bicameral Conference
Committee. Rep. Dilangalen then asked that he be given time to examine the new report. Upon motion of Rep. Apostol, the
House deferred the approval of the report until the other members were given a copy thereof.
After taking up other pending matters, the House proceeded to vote on the Bicameral Conference Committee Report on the
disagreeing provisions of HB No. 9000 and SB No. 1742. The House approved the report with 125 affirmative votes, 3
negative votes and no abstention. In explaining their negative votes, Reps. Farias and Garcia expressed their belief that
Section 14 thereof was a rider. Even Rep. Escudero, who voted in the affirmative, expressed his doubts on the
constitutionality of Section 14. Prior to casting his vote, Rep. Dilangalen observed that no senator signed the Bicameral
Conference Committee Report and asked if this procedure was regular.
On the same day, the Senate likewise approved the Bicameral Conference Committee Report on the contrasting provisions
of SB No. 1742 and HB No. 9000.

Thereafter, Rep. Act No. 9006 was duly signed by then Senate President Aquilino Pimentel, Jr. and then Speaker of the
House of Representatives Feliciano R. Belmonte, Jr. and was duly certified by the Secretary of the Senate Lutgardo B. Barbo
and the Secretary General of the House of Representatives Robert P. Nazareno as the consolidation of House Bill No. 9000
and Senate Bill No. 1742, and finally passed by both Houses on February 7, 2001.
President Gloria Macapagal-Arroyo signed Rep. Act No. 9006 into law on February 12, 2001.
The Petitioners Case
The petitioners now come to the Court alleging in the main that Section 14 of Rep. Act No. 9006, insofar as it repeals Section
67 of the Omnibus Election Code, is unconstitutional for being in violation of Section 26(1), Article VI of the Constitution,
requiring every law to have only one subject which should be expressed in its title.
According to the petitioners, the inclusion of Section 14 repealing Section 67 of the Omnibus Election Code in Rep. Act No.
9006 constitutes a proscribed rider. They point out the dissimilarity in the subject matter of Rep. Act No. 9006, on the one
hand, and Section 67 of the Omnibus Election Code, on the other. Rep. Act No. 9006 primarily deals with the lifting of the
ban on the use of media for election propaganda and the elimination of unfair election practices, while Section 67 of the
Omnibus Election Code imposes a limitation on elective officials who run for an office other than the one they are holding in a
permanent capacity by considering them as ipso facto resigned therefrom upon filing of the certificate of candidacy. The
repeal of Section 67 of the Omnibus Election Code is thus not embraced in the title, nor germane to the subject matter of
Rep. Act No. 9006.
The petitioners also assert that Section 14 of Rep. Act No. 9006 violates the equal protection clause of the Constitution
because it repeals Section 67 only of the Omnibus Election Code, leaving intact Section 66 thereof which imposes a similar
limitation to appointive officials, thus:
SEC. 66. Candidates holding appointive office or position. Any person holding a public appointive office or position, including
active members of the Armed Forces of the Philippines, and officers and employees in government-owned or controlled
corporations, shall be considered ipso facto resigned from his office upon the filing of his certificate of candidacy.
They contend that Section 14 of Rep. Act No. 9006 discriminates against appointive officials. By the repeal of Section 67, an
elective official who runs for office other than the one which he is holding is no longer considered ipso facto resigned
therefrom upon filing his certificate of candidacy. Elective officials continue in public office even as they campaign for
reelection or election for another elective position. On the other hand, Section 66 has been retained; thus, the limitation on
appointive officials remains - they are still considered ipso facto resigned from their offices upon the filing of their certificates
of candidacy.
The petitioners assert that Rep. Act No. 9006 is null and void in its entirety as irregularities attended its enactment into law.
The law, not only Section 14 thereof, should be declared null and void. Even Section 16 of the law which provides that [t]his
Act shall take effect upon its approval is a violation of the due process clause of the Constitution, as well as jurisprudence,
which require publication of the law before it becomes effective.
Finally, the petitioners maintain that Section 67 of the Omnibus Election Code is a good law; hence, should not have been
repealed. The petitioners cited the ruling of the Court in Dimaporo v. Mitra, Jr.,that Section 67 of the Omnibus Election Code
is based on the constitutional mandate on the Accountability of Public Officers:
Sec. 1. Public office is a public trust. Public officers and employees must at all times be accountable to the people, serve
them with utmost responsibility, integrity, loyalty and efficiency, act with patriotism and justice, and lead modest lives.
Consequently, the respondents Speaker and Secretary General of the House of Representatives acted with grave abuse of
discretion amounting to excess or lack of jurisdiction for not considering those members of the House who ran for a seat in
the Senate during the May 14, 2001 elections as ipso facto resigned therefrom, upon the filing of their respective certificates
of candidacy.
The Respondents Arguments
For their part, the respondents, through the Office of the Solicitor General, urge this Court to dismiss the petitions
contending, preliminarily, that the petitioners have no legal standing to institute the present suit. Except for the fact that their
negative votes were overruled by the majority of the members of the House of Representatives, the petitioners have not
shown that they have suffered harm as a result of the passage of Rep. Act No. 9006. Neither do petitioners have any interest
as taxpayers since the assailed statute does not involve the exercise by Congress of its taxing or spending power.
Invoking the enrolled bill doctrine, the respondents refute the petitioners allegations that irregularities attended the enactment
of Rep. Act No. 9006. The signatures of the Senate President and the Speaker of the House, appearing on the bill and the
certification signed by the respective Secretaries of both houses of Congress, constitute proof beyond cavil that the bill was
duly enacted into law.
The respondents contend that Section 14 of Rep. Act No. 9006, as it repeals Section 67 of the Omnibus Election Code, is not
a proscribed rider nor does it violate Section 26(1) of Article VI of the Constitution. The title of Rep. Act No. 9006, An Act to
Enhance the Holding of Free, Orderly, Honest, Peaceful and Credible Elections through Fair Election Practices, is so broad
that it encompasses all the processes involved in an election exercise, including the filing of certificates of candidacy by
elective officials.
They argue that the repeal of Section 67 is germane to the general subject of Rep. Act No. 9006 as expressed in its title as it
eliminates the effect of prematurely terminating the term of an elective official by his filing of a certificate of candidacy for an
office other than the one which he is permanently holding, such that he is no longer considered ipso facto resigned

therefrom. The legislature, by including the repeal of Section 67 of the Omnibus Election Code in Rep. Act No. 9006, has
deemed it fit to remove the unfairness of considering an elective official ipso facto resigned from his office upon the filing of
his certificate of candidacy for another elective office. With the repeal of Section 67, all elective officials are now placed on
equal footing as they are allowed to finish their respective terms even if they run for any office, whether the presidency, vicepresidency or other elective positions, other than the one they are holding in a permanent capacity.
The respondents assert that the repeal of Section 67 of the Omnibus Election Code need not be expressly stated in the title
of Rep. Act No. 9006 as the legislature is not required to make the title of the act a complete index of its contents. It must be
deemed sufficient that the title be comprehensive enough reasonably to include the general subject which the statute seeks
to effect without expressing each and every means necessary for its accomplishment. Section 26(1) of Article VI of the
Constitution merely calls for all the parts of an act relating to its subject to find expression in its title. Mere details need not be
set forth.
According to the respondents, Section 14 of Rep. Act No. 9006, insofar as it repeals Section 67, leaving Section 66 of the
Omnibus Election Code intact and effective, does not violate the equal protection clause of the Constitution. Section 67
pertains to elective officials while Section 66 pertains to appointive officials. A substantial distinction exists between these two
sets of officials; elective officials occupy their office by virtue of their mandate based upon the popular will, while the
appointive officials are not elected by popular will. The latter cannot, therefore, be similarly treated as the former. Equal
protection simply requires that all persons or things similarly situated are treated alike, both as to rights conferred and
responsibilities imposed.
Further, Section 16, or the Effectivity clause, of Rep. Act No. 9006 does not run afoul of the due process clause of the
Constitution as it does not entail any arbitrary deprivation of life, liberty and property. Specifically, the section providing for
penalties in cases of violations thereof presume that the formalities of the law would be observed, i.e., charges would first be
filed, and the accused would be entitled to a hearing before judgment is rendered by a court having jurisdiction. In any case,
the issue about lack of due process is premature as no one has, as yet, been charged with violation of Rep. Act No. 9006.
Finally, the respondents submit that the respondents Speaker and Secretary General of the House of Representatives did
not commit grave abuse of discretion in not excluding from the Rolls those members thereof who ran for the Senate during
the May 14, 2001 elections. These respondents merely complied with Rep. Act No. 9006, which enjoys the presumption of
validity until declared otherwise by the Court.
The Courts Ruling
Before resolving the petitions on their merits, the Court shall first rule on the procedural issue raised by the respondents, i.e.,
whether the petitioners have the legal standing or locus standi to file the petitions at bar.
The petitions were filed by the petitioners in their capacities as members of the House of Representatives, and as taxpayers
and registered voters.
Generally, a party who impugns the validity of a statute must have a personal and substantial interest in the case such that
he has sustained, or will sustain, direct injury as a result of its enforcement. The rationale for requiring a party who
challenges the constitutionality of a statute to allege such a personal stake in the outcome of the controversy is to assure that
concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of
difficult constitutional questions.
However, being merely a matter of procedure, this Court, in several cases involving issues of overarching significance to our
society,had adopted a liberal stance on standing. Thus, in Tatad v. Secretary of the Department of Energy,[this Court brushed
aside the procedural requirement of standing, took cognizance of, and subsequently granted, the petitions separately filed by
then Senator Francisco Tatad and several members of the House of Representatives assailing the constitutionality of Rep.
Act No. 8180 (An Act Deregulating the Downstream Oil Industry and For Other Purposes).
The Court likewise took cognizance of the petition filed by then members of the House of Representatives which impugned
as unconstitutional the validity of a provision of Rep. Act No. 6734 (Organic Act for the Autonomous Region in Muslim
Mindanao) in Chiongbian v. Orbos.Similarly, the Court took cognizance of the petition filed by then members of the Senate,
joined by other petitioners, which challenged the validity of Rep. Act No. 7716 (Expanded Value Added Tax Law) in Tolentino
v. Secretary of Finance.Members of Congress, such as the petitioners, were likewise allowed by this Court to challenge the
validity of acts, decisions, rulings, or orders of various government agencies or instrumentalities in Del Mar v. Philippine
Amusement and Gaming Corporation,
Kilosbayan, Inc. v. Guingona, Jr.,
Philippine Constitution Association v. Enriquez,
Albano v. Reyes,
and Bagatsing v. Committee on Privatization.
Certainly, the principal issue posed by the petitions, i.e., whether Section 67 of the Omnibus Election Code, which this Court
had declared in Dimaporo as deriving its existence from the constitutional provision on accountability of public officers, has
been validly repealed by Section 14 of Rep. Act No. 9006, is one of overarching significance that justifies this Courts
adoption of a liberal stance vis--vis the procedural matter on standing. Moreover, with the national elections barely seven
months away, it behooves the Court to confront the issue now and resolve the same forthrightly. The following
pronouncement of the Court is quite apropos:
... All await the decision of this Court on the constitutional question. Considering, therefore, the importance which the instant
case has assumed and to prevent multiplicity of suits, strong reasons of public policy demand that [its] constitutionality . . . be

now resolved. It may likewise be added that the exceptional character of the situation that confronts us, the paramount public
interest, and the undeniable necessity for a ruling, the national elections beings barely six months away, reinforce our stand.[if
Every statute is presumed valid.
The presumption is that the legislature intended to enact a valid, sensible and just law and one which operates no further
than may be necessary to effectuate the specific purpose of the law.It is equally well-established, however, that the courts, as
guardians of the Constitution, have the inherent authority to determine whether a statute enacted by the legislature
transcends the limit imposed by the fundamental law. And where the acts of the other branches of government run afoul of
the Constitution, it is the judiciarys solemn and sacred duty to nullify the same.Proceeding from these guideposts, the Court
shall now resolve the substantial issues raised by the petitions.
Section 14 of Rep. Act No. 9006 Is Not a Rider
At the core of the controversy is Section 14, the repealing clause of Rep. Act No. 9006, which provides:
Sec. 14. Sections 67 and 85 of the Omnibus Election Code (Batas Pambansa Blg. 881) and Sections 10 and 11 of Republic
Act No. 6646 are hereby repealed. As a consequence, the first proviso in the third paragraph of Section 11 of Republic Act
No. 8436 is rendered ineffective. All laws, presidential decrees, executive orders, rules and regulations, or any part thereof
inconsistent with the provisions of this Act are hereby repealed or modified or amended accordingly.
The repealed provision, Section 67 of the Omnibus Election Code, quoted earlier, reads:
SEC. 67. Candidates holding elective office. Any elective official, whether national or local, running for any office other than
the one which he is holding in a permanent capacity, except for President and Vice-President, shall be considered ipso facto
resigned from his office upon the filing of his certificate of candidacy.
Section 26(1), Article VI of the Constitution provides:
SEC. 26 (1). Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof.
The proscription is aimed against the evils of the so-called omnibus bills and log-rolling legislation as well as surreptitious
and/or unconsidered encroaches. The provision merely calls for all parts of an act relating to its subject finding expression in
its title.
To determine whether there has been compliance with the constitutional requirement that the subject of an act shall be
expressed in its title, the Court laid down the rule that
Constitutional provisions relating to the subject matter and titles of statutes should not be so narrowly construed as to cripple
or impede the power of legislation. The requirement that the subject of an act shall be expressed in its title should receive a
reasonable and not a technical construction. It is sufficient if the title be comprehensive enough reasonably to include the
general object which a statute seeks to effect, without expressing each and every end and means necessary or convenient
for the accomplishing of that object. Mere details need not be set forth. The title need not be an abstract or index of the Act.
The title of Rep. Act No. 9006 reads: An Act to Enhance the Holding of Free, Orderly, Honest, Peaceful and Credible
Elections through Fair Election Practices. Section 2 of the law provides not only the declaration of principles but also the
objectives thereof:
Sec. 2. Declaration of Principles. The State shall, during the election period, supervise or regulate the enjoyment or utilization
of all franchises or permits for the operation of media of communication or information to guarantee or ensure equal
opportunity for public service, including access to media time and space, and the equitable right to reply, for public
information campaigns and fora among candidates and assure free, orderly, honest, peaceful and credible elections.
The State shall ensure that bona fide candidates for any public office shall be free from any form of harassment and
discrimination.
The Court is convinced that the title and the objectives of Rep. Act No. 9006 are comprehensive enough to include the repeal
of Section 67 of the Omnibus Election Code within its contemplation. To require that the said repeal of Section 67 of the
Code be expressed in the title is to insist that the title be a complete index of its content
The purported dissimilarity of Section 67 of the Omnibus Election Code, which imposes a limitation on elective officials who
run for an office other than the one they are holding, to the other provisions of Rep. Act No. 9006, which deal with the lifting
of the ban on the use of media for election propaganda, does not violate the one subject-one title rule. This Court has held
that an act having a single general subject, indicated in the title, may contain any number of provisions, no matter how
diverse they may be, so long as they are not inconsistent with or foreign to the general subject, and may be considered in
furtherance of such subject by providing for the method and means of carrying out the general subject.
The deliberations of the Bicameral Conference Committee on the particular matter are particularly instructive:
SEN. LEGARDA-LEVISTE:
Yes, Mr. Chairman, I just wanted to clarify.
So all were looking for now is an appropriate title to make it broader so that it would cover this provision [referring to the
repeal of Section 67 of the Omnibus Election Code], is that correct? Thats all. Because I believe ...
THE CHAIRMAN (REP. SYJUCO):
We are looking for an appropriate coverage which will result in the nomenclature or title.
SEN. LEGARDA-LEVISTE:
Because I really do not believe that it is out of place. I think that even with the term fair election practice, it really covers it,
because as expressed by Senator Roco, those conditions inserted earlier seemed unfair and it is an election practice and,
therefore, I think, Im very comfortable with the title Fair Election Practice so that we can get over with these things so that we
dont come back again until we find the title. I mean, its one provision which I think is fair for everybody. It may seem like a
limitation but this limitation actually provides for fairness in election practices as the title implies.
THE CHAIRMAN (REP. SYJUCO):

Yes.
SEN. LEGARDA-LEVISTE:
So I would want to beg the House contingent, lets get it over with. To me, ha, its not a very touchy issue. For me, its even a
very correct provision. I feel very comfortable with it and it was voted in the Senate, at least, so I would like to appeal to
the ... para matapos na, then we come back as a Bicam just for the title Is that what youre ...?
THE CHAIRMAN (REP. SYJUCO):
Its not the title per se, its the coverage. So if you will just kindly bear with us. Im happy that there is already one comfortable
senator there among ... several of us were also comfortable with it. But it would be well that when we rise from this Bicam
that were all comfortable with it.
THE CHAIRMAN (SEN. ROCO):
Yes. Anyway, lets listen to Congressman Marcos.
REP. MARCOS:
Mr. Chairman, may I just make the observation that although it is true that the bulk of provisions deals with the area of
propaganda and political advertising, the complete title is actually one that indulge full coverage. It says An Act to enhance
the holding of free, orderly, honest ... elections through fair election practices. But as you said, we will put that aside to
discuss later one.
Secondly, I think the Declaration of Principles contained in Section 2, paragraph 2 is perfectly adequate in that it says that it
shall ensure candidates for public office that may be free from any form of harassment and discrimination.
Surely this provision in Section 67 of the old Election Code of the existing Omnibus Election Code is a form
of harassment or discrimination. And so I think that in the effort at leveling the playing field, we
can cover this and it should not be considered a rider.

SEN. LEGARDA-LEVISTE:

I agree, Mr. Chairman. I think the Congresswoman from Ilocos had very clearly put it, that it is covered in the
Declaration of Principles and in the objective of this bill. And therefore, I hope that the House
contingent would agree to this so that we can finish it now. And it expressly provides for fair
election practices because ...

THE CHAIRMAN (SEN. ROCO):

Yeah, I think what is on the table is that we are not disputing this, but we are looking for a title that is more
generic so that then we have less of an objection on constitutionality. I think thats the theory.
So, there is acceptance of this.

Maybe we should not call it na limitation on elected officials. Maybe we should say the special provision on
elected officials. So how is that? Alam mo ito ...

REP. MARCOS:

I think we just change the Section 1, the short title.

THE CHAIRMAN (SEN. ROCO):

Also, Then we say - - on the short title of the Act, we say ...

REP. MARCOS:

What if we say fair election practices? Maybe that should be changed...

THE CHAIRMAN (SEN. ROCO):

O, sige, fine, fine. Lets a brainstorm. Equal...

REP. PADILLA:

Mr. Chairman, why dont we use An Act rationalizing the holding of free, orderly, honest, peaceful and
credible elections, amending for the purpose Batasang Pambansa known as the Omnibus
Election Code?

THE CHAIRMAN (SEN. ROCO):

Why dont we remove fair and then this shall be cited as Election Practices Act?

REP. PICHAY:

Thats not an election practice. Thats a limitation.

THE CHAIRMAN (SEN. ROCO):

Ah - - - ayaw mo iyong practice. O, give me another noun.

REP. MARCOS:

The Fair Election.

THE CHAIRMAN (SEN. ROCO):

O, Fair Election Act.

REP. MACARAMBON:

Nagbi-brainstorm tayo dito, eh. How about if we change the title to enhance the holding of free, orderly,
honest, peaceful and ensure equal opportunity for public service through fair election
practices?

REP. PICHAY:

Fair election practices?

REP. MACARAMBON:

Yeah. To ensure equal opportunity for public service through fair ...

THE CHAIRMAN (SEN. ROCO):

Wala nang practices nga.

REP. PICHAY:

Wala nang practices.

THE CHAIRMAN (SEN. ROCO):

It shall be cited as Fair Election Act.

(Informal discussions)

REP. PICHAY:

Approve na iyan.

THE CHAIRMAN (SEN. ROCO):

Done. So, okay na iyon. The title will be Fair Election Act.

The rest wala nang problema ano?

VOICES:

Wala na.

REP. MACARAMBON:

Wala na iyong practices?

THE CHAIRMAN (SEN. ROCO):

Wala na, wala na. Mahina tayo sa practice, eh.

O, wala na? We will clean up.

REP. MARCOS:

Title?

THE CHAIRMAN (SEN. ROCO):

The short title, This Act ...

THE CHAIRMAN (REP. SYJUCO):

Youre back to your No. 21 already.

REP. MARCOS:

The full title, the same?

THE CHAIRMAN (SEN. ROCO):

Iyon na nga. The full title is An Act to enhance the holding ... Thats the House version, eh, dahil pareho, hindi
ba? Then the short title This Act shall be known as the Fair Election Act.

The legislators considered Section 67 of the Omnibus Election Code as a form of harassment or discrimination that had to be
done away with and repealed. The executive department found cause with Congress when the President of the Philippines
signed the measure into law. For sure, some sectors of society and in government may believe that the repeal of Section 67
is bad policy as it would encourage political adventurism. But policy matters are not the concern of the Court. Government
policy is within the exclusive dominion of the political branches of the government. It is not for this Court to look into the
wisdom or propriety of legislative determination. Indeed, whether an enactment is wise or unwise, whether it is based on
sound economic theory, whether it is the best means to achieve the desired results, whether, in short, the legislative
discretion within its prescribed limits should be exercised in a particular manner are matters for the judgment of the
legislature, and the serious conflict of opinions does not suffice to bring them within the range of judicial cognizance.
Congress is not precluded from repealing Section 67 by the ruling of the Court in Dimaporo v. Mitra upholding the validity of
the provision and by its pronouncement in the same case that the provision has a laudable purpose. Over time, Congress
may find it imperative to repeal the law on its belief that the election process is thereby enhanced and the paramount
objective of election laws the fair, honest and orderly election of truly deserving members of Congress is achieved.
Moreover, the avowed 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 not received the notice, action and study of the legislators and the public.In this case, it cannot be claimed that
the legislators were not apprised of the repeal of Section 67 of the Omnibus Election Code as the same was amply and
comprehensively deliberated upon by the members of the House. In fact, the petitioners, as members of the House of
Representatives, expressed their reservations regarding its validity prior to casting their votes. Undoubtedly, the legislators
were aware of the existence of the provision repealing Section 67 of the Omnibus Election Code.
Section 14 of Rep. Act No. 9006
Is Not Violative of the Equal
Protection Clause of the Constitution
The petitioners contention, that the repeal of Section 67 of the Omnibus Election Code pertaining to elective officials gives
undue benefit to such officials as against the appointive ones and violates the equal protection clause of the constitution, is
tenuous.
The equal protection of the law clause in the Constitution is not absolute, but is subject to reasonable classification. If the
groupings are characterized by substantial distinctions that make real differences, one class may be treated and regulated
differently from the other. The Court has explained the nature of the equal protection guarantee in this manner:
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 it 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 exist for
making a distinction between those who fall within such class and those who do not.
Substantial distinctions clearly exist between elective officials and appointive officials. The former occupy their office by virtue
of the mandate of the electorate. They are elected to an office for a definite term and may be removed therefrom only upon
stringent conditions. On the other hand, appointive officials hold their office by virtue of their designation thereto by an
appointing authority. Some appointive officials hold their office in a permanent capacity and are entitled to security of tenure
while others serve at the pleasure of the appointing authority.
Another substantial distinction between the two sets of officials is that under Section 55, Chapter 8, Title I, Subsection A. Civil
Service Commission, Book V of the Administrative Code of 1987 (Executive Order No. 292), appointive officials, as officers
and employees in the civil service, are strictly prohibited from engaging in any partisan political activity or take part in any
election except to vote. Under the same provision, elective officials, or officers or employees holding political offices, are
obviously expressly allowed to take part in political and electoral activities.
By repealing Section 67 but retaining Section 66 of the Omnibus Election Code, the legislators deemed it proper to treat
these two classes of officials differently with respect to the effect on their tenure in the office of the filing of the certificates of
candidacy for any position other than those occupied by them. Again, it is not within the power of the Court to pass upon or
look into the wisdom of this classification.
Since the classification justifying Section 14 of Rep. Act No. 9006, i.e., elected officials vis-a-vis appointive officials, is
anchored upon material and significant distinctions and all the persons belonging under the same classification are similarly
treated, the equal protection clause of the Constitution is, thus, not infringed.

The Enrolled Bill Doctrine


Is Applicable In this Case
Not content with their plea for the nullification of Section 14 of Rep. Act No. 9006, the petitioners insist that the entire law
should be nullified. They contend that irregularities attended the passage of the said law particularly in the House of
Representatives catalogued thus:
a. Creation of two (2) sets of BCC (Bicameral Conference Committee) members by the House during its session on February
5, 2001;
b. No communication from the Senate for a conference on the compromise bill submitted by the BCC on November 29,
2000;
c. The new Report submitted by the 2nd/3rd BCC was presented for approval on the floor without copies thereof being
furnished the members;
d. The 2nd/3rd BCC has no record of its proceedings, and the Report submitted by it was not signed by the Chairman (Sen.
Roco) thereof as well as its senator-members at the time it was presented to and rammed for approval by the House;
e. There was no meeting actually conducted by the 2nd/3rd BCC and that its alleged Report was instantly made and passed
around for the signature of the BCC members;
f. The Senate has no record of the creation of a 2nd BCC but only of the first one that convened on November 23, 2000;
g. The Effectivity clauses of SB No. 1741 and HB No. 9000, as well as that of the compromise bill submitted by the BCC that
convened on November 20, 2000, were couched in terms that comply with the publication required by the Civil Code and
jurisprudence, to wit:
...
However, it was surreptitiously replaced in its final form as it appears in 16, R.A. No. 9006, with the provision that This Act
shall take effect immediately upon its approval;
h. The copy of the compromise bill submitted by the 2nd/3rd BCC that was furnished the members during its consideration on
February 7, 2001, did not have the same 16 as it now appears in RA No. 9006, but 16 of the compromise bill, HB 9000 and
SB 1742, reasons for which no objection thereto was made;
i. The alleged BCC Report presented to the House on February 7, 2001, did not contain a detailed, sufficiently explicit
statement of the changes in or amendments to the subject measure; and
j. The disappearance of the Cayetano amendment, which is Section 12 of the compromise bill submitted by the BCC. In fact,
this was the subject of the purported proposed amendment to the compromise bill of Member Paras
as stated in paragraph 7 hereof. The said provision states, thusly:
Sec. 12. Limitation on Elected Officials. Any elected official who runs for president and vice-president shall be considered
ipso facto resigned from his office upon the filing of the certificate of candidacy.
The petitioners, thus, urge the Court to go behind the enrolled copy of the bill. The Court is not persuaded. Under the
enrolled bill doctrine, the signing of a bill by the Speaker of the House and the Senate President and the certification of the
Secretaries of both Houses of Congress that it was passed are conclusive of its due enactment. A review of cases reveals
the Courts consistent adherence to the rule. The Court finds no reason to deviate from the salutary rule in this case where
the irregularities alleged by the petitioners mostly involved the internal rules of Congress, e.g., creation of the 2nd or 3rd
Bicameral Conference Committee by the House. This Court is not the proper forum for the enforcement of these internal
rules of Congress, whether House or Senate. Parliamentary rules are merely procedural and with their observance the courts
have no concern. Whatever doubts there may be as to the formal validity of Rep. Act No. 9006 must be resolved in its favor.
The Court reiterates its ruling in Arroyo v. De Venecia,viz.:
But the cases, both here and abroad, in varying forms of expression, all deny to the courts the power to inquire into
allegations that, in enacting a law, a House of Congress failed to comply with its own rules, in the absence of showing that
there was a violation of a constitutional provision or the rights of private individuals. In Osmea v. Pendatun, it was held: At
any rate, courts have declared that the rules adopted by deliberative bodies are subject to revocation, modification or waiver
at the pleasure of the body adopting them. And it has been said that Parliamentary rules are merely procedural, and with
their observance, the courts have no concern. They may be waived or disregarded by the legislative body. Consequently,
mere failure to conform to parliamentary usage will not invalidate the action (taken by a deliberative body) when the requisite
number of members have agreed to a particular measure.
The Effectivity Clause
Is Defective
Finally, the Effectivity clause (Section 16) of Rep. Act No. 9006 which provides that it shall take effect immediately upon its
approval, is defective. However, the same does not render the entire law invalid. In Taada v. Tuvera, this Court laid down the
rule:
... the clause unless it is otherwise provided refers to the date of effectivity and not to the requirement of publication itself,
which cannot in any event be omitted. This clause does not mean that the legislator may make the law effective immediately
upon approval, or on any other date without its previous publication.
Publication is indispensable in every case, but the legislature may in its discretion provide that the usual fifteen-period shall
be shortened or extended.
Following Article 2 of the Civil Code and the doctrine enunciated in Taada, Rep. Act No. 9006, notwithstanding its express
statement, took effect fifteen days after its publication in the Official Gazette or a newspaper of general circulation.
In conclusion, it bears reiterating that one of the firmly entrenched principles in constitutional law is that the courts do not
involve themselves with nor delve into the policy or wisdom of a statute. That is the exclusive concern of the legislative
branch of the government. When the validity of a statute is challenged on constitutional grounds, the sole function of the
court is to determine whether it transcends constitutional limitations or the limits of legislative power. No such transgression
has been shown in this case.
WHEREFORE, the petitions are DISMISSED. No pronouncement as to costs.
SO ORDERED.

G.R. No. 189698


December 1, 2009
ELEAZAR P. QUINTO and GERINO A. TOLENTINO, JR., Petitioners,
vs.
COMMISSION ON ELECTIONS, Respondent.
DECISION
NACHURA, J.:
In our predisposition to discover the "original intent" of a statute, courts become the unfeeling pillars of the status quo. Little
do we realize that statutes or even constitutions are bundles of compromises thrown our way by their framers. Unless we
exercise vigilance, the statute may already be out of tune and irrelevant to our day. 1 It is in this light that we should address
the instant case.
Before the Court is a petition for prohibition and certiorari, with prayer for the issuance of a temporary restraining order and a
writ of preliminary injunction, assailing Section 4(a) of Resolution No. 8678 of the Commission on Elections (COMELEC). In
view of pressing contemporary events, the petition begs for immediate resolution.
The Antecedents
This controversy actually stems from the law authorizing the COMELEC to use an automated election system (AES).
On December 22, 1997, Congress enacted Republic Act (R.A.) No. 8436, entitled "AN ACT AUTHORIZING THE
COMMISSION ON ELECTIONS TO USE AN AUTOMATED ELECTION SYSTEM IN THE MAY 11, 1998 NATIONAL OR
LOCAL ELECTIONS AND IN SUBSEQUENT NATIONAL AND LOCAL ELECTORAL EXERCISES, PROVIDING FUNDS
THEREFOR AND FOR OTHER PURPOSES." Section 11 thereof reads:
SEC. 11. Official Ballot.- The Commission shall prescribe the size and form of the official ballot which shall contain the titles
of the positions to be filled and/or the propositions to be voted upon in an initiative, referendum or plebiscite. Under each
position, the names of candidates shall be arranged alphabetically by surname and uniformly printed using the same type
size. A fixed space where the chairman of the Board of Election inspectors shall affix his/her signature to authenticate the
official ballot shall be provided.
Both sides of the ballots may be used when necessary.
For this purpose, the deadline for the filing of certificate of candidacy/petition for registration/manifestation to participate in
the election shall not be later than one hundred twenty (120) days before the elections: - Provided, That, any elective official,
whether national or local, running for any office other than the one which he/she is holding in a permanent capacity, except
for president and vice president, shall be deemed resigned only upon the start of the campaign period corresponding to the
position for which he/she is running: Provided, further, That, unlawful acts or omissions applicable to a candidate shall take
effect upon the start of the aforesaid campaign period: Provided, finally, That, for purposes of the May 11, 1998 elections, the
deadline for filing of the certificate of candidacy for the positions of President, Vice President, Senators and candidates under
the Party-List System as well as petitions for registration and/or manifestation to participate in the Party-List System shall be
on February 9, 1998 while the deadline for the filing of certificate of candidacy for other positions shall be on March 27, 1998.
The official ballots shall be printed by the National Printing Office and/or the Bangko Sentral ng Pilipinas at the price
comparable with that of private printers under proper security measures which the Commission shall adopt. The Commission
may contract the services of private printers upon certification by the National Printing Office/Bangko Sentral ng Pilipinas that
it cannot meet the printing requirements. Accredited political parties and deputized citizens' arms of the Commission may
assign watchers in the printing, storage and distribution of official ballots.

To prevent the use of fake ballots, the Commission through the Committee shall ensure that the serial number on the ballot
stub shall be printed in magnetic ink that shall be easily detectable by inexpensive hardware and shall be impossible to
reproduce on a photocopying machine and that identification marks, magnetic strips, bar codes and other technical and
security markings, are provided on the ballot.
The official ballots shall be printed and distributed to each city/municipality at the rate of one (1) ballot for every registered
voter with a provision of additional four (4) ballots per precinct.2
Almost a decade thereafter, Congress amended the law on January 23, 2007 by enacting R.A. No. 9369, entitled "AN ACT
AMENDING REPUBLIC ACT NO. 8436, ENTITLED "AN ACT AUTHORIZING THE COMMISSION ON ELECTIONS TO USE
AN AUTOMATED ELECTION SYSTEM IN THE MAY 11, 1998 NATIONAL OR LOCAL ELECTIONS AND IN SUBSEQUENT
NATIONAL AND LOCAL ELECTORAL EXERCISES, TO ENCOURAGE TRANSPARENCY, CREDIBILITY, FAIRNESS AND
ACCURACY OF ELECTIONS, AMENDING FOR THE PURPOSE BATAS PAMPANSA BLG. 881, AS AMEMDED, REPUBLIC
ACT NO. 7166 AND OTHER RELATED ELECTION LAWS, PROVIDING FUNDS THEREFOR AND FOR OTHER
PURPOSES." Section 13 of the amendatory law modified Section 11 of R.A. No. 8436, thus:
SEC. 13. Section 11 of Republic Act No. 8436 is hereby amended to read as follows:
Section 15. Official Ballot.- The Commission shall prescribe the format of the electronic display and/or the size and form of
the official ballot, which shall contain the titles of the position to be filled and/or the propositions to be voted upon in an
initiative, referendum or plebiscite. Where practicable, electronic displays must be constructed to present the names of all
candidates for the same position in the same page or screen, otherwise, the electronic displays must be constructed to
present the entire ballot to the voter, in a series of sequential pages, and to ensure that the voter sees all of the ballot options
on all pages before completing his or her vote and to allow the voter to review and change all ballot choices prior to
completing and casting his or her ballot. Under each position to be filled, the names of candidates shall be arranged
alphabetically by surname and uniformly indicated using the same type size. The maiden or married name shall be listed in
the official ballot, as preferred by the female candidate. Under each proposition to be vote upon, the choices should be
uniformly indicated using the same font and size.
A fixed space where the chairman of the board of election inspectors shall affix his/her signature to authenticate the official
ballot shall be provided.
For this purpose, the Commission shall set the deadline for the filing of certificate of candidacy/petition of
registration/manifestation to participate in the election. Any person who files his certificate of candidacy within this period
shall only be considered as a candidate at the start of the campaign period for which he filed his certificate of candidacy:
Provided, That, unlawful acts or omissions applicable to a candidate shall take effect only upon the start of the aforesaid
campaign period: Provided, finally, That any person holding a public appointive office or position, including active members
of the armed forces, and officers and employees in government-owned or -controlled corporations, shall be considered ipso
facto resigned from his/her office and must vacate the same at the start of the day of the filing of his/her certificate of
candidacy.
Political parties may hold political conventions to nominate their official candidates within thirty (30) days before the start of
the period for filing a certificate of candidacy.
With respect to a paper-based election system, the official ballots shall be printed by the National Printing Office and/or the
Bangko Sentral ng Pilipinas at the price comparable with that of private printers under proper security measures which the
Commission shall adopt. The Commission may contract the services of private printers upon certification by the National
Printing Office/Bangko Sentral ng Pilipinas that it cannot meet the printing requirements. Accredited political parties and
deputized citizens' arms of the Commission shall assign watchers in the printing, storage and distribution of official ballots.
To prevent the use of fake ballots, the Commission through the Committee shall ensure that the necessary safeguards, such
as, but not limited to, bar codes, holograms, color shifting ink, microprinting, are provided on the ballot.
The official ballots shall be printed and distributed to each city/municipality at the rate of one ballot for every registered voter
with a provision of additional three ballots per precinct.3
Pursuant to its constitutional mandate to enforce and administer election laws, COMELEC issued Resolution No. 8678, 4 the
Guidelines on the Filing of Certificates of Candidacy (CoC) and Nomination of Official Candidates of Registered Political
Parties in Connection with the May 10, 2010 National and Local Elections. Sections 4 and 5 of Resolution No. 8678 provide:
SEC. 4. Effects of Filing Certificates of Candidacy.- a) Any person holding a public appointive office or position including
active members of the Armed Forces of the Philippines, and other officers and employees in government-owned or controlled
corporations, shall be considered ipso facto resigned from his office upon the filing of his certificate of candidacy.
b) Any person holding an elective office or position shall not be considered resigned upon the filing of his certificate of
candidacy for the same or any other elective office or position.
SEC. 5. Period for filing Certificate of Candidacy.- The certificate of candidacy shall be filed on regular days, from November
20 to 30, 2009, during office hours, except on the last day, which shall be until midnight.
Alarmed that they will be deemed ipso facto resigned from their offices the moment they file their CoCs, petitioners Eleazar
P. Quinto and Gerino A. Tolentino, Jr., who hold appointive positions in the government and who intend to run in the coming
elections,5 filed the instant petition for prohibition and certiorari, seeking the declaration of the afore-quoted Section 4(a) of
Resolution No. 8678 as null and void.
The Petitioners' Contention
Petitioners contend that the COMELEC gravely abused its discretion when it issued the assailed Resolution. They aver that
the advance filing of CoCs for the 2010 elections is intended merely for the purpose of early printing of the official ballots in

order to cope with time limitations. Such advance filing does not automatically make the person who filed the CoC a
candidate at the moment of filing. In fact, the law considers him a candidate only at the start of the campaign period.
Petitioners then assert that this being so, they should not be deemed ipso facto resigned from their government offices when
they file their CoCs, because at such time they are not yet treated by law as candidates. They should be considered resigned
from their respective offices only at the start of the campaign period when they are, by law, already considered as
candidates.6
Petitioners also contend that Section 13 of R.A. No. 9369, the basis of the assailed COMELEC resolution, contains two
conflicting provisions. These must be harmonized or reconciled to give effect to both and to arrive at a declaration that they
are not ipso facto resigned from their positions upon the filing of their CoCs.7
Petitioners further posit that the provision considering them as ipso facto resigned from office upon the filing of their CoCs is
discriminatory and violates the equal protection clause in the Constitution.8
The Respondent's Arguments
On the procedural aspect of the petition, the Office of the Solicitor General (OSG), representing respondent COMELEC,
argues that petitioners have no legal standing to institute the suit." Petitioners have not yet filed their CoCs, hence, they are
not yet affected by the assailed provision in the COMELEC resolution. The OSG further claims that the petition is premature
or unripe for judicial determination." Petitioners have admitted that they are merely planning to file their CoCs for the coming
2010 elections. Their interest in the present controversy is thus merely speculative and contingent upon the filing of the
same. The OSG likewise contends that petitioners availed of the wrong remedy. They are questioning an issuance of the
COMELEC made in the exercise of the latter's rule-making power. Certiorari under Rule 65 is then an improper remedy.9
On the substantive aspect, the OSG maintains that the COMELEC did not gravely abuse its discretion in phrasing Section
4(a) of Resolution No. 8678 for it merely copied what is in the law. The OSG, however, agrees with petitioners that there is a
conflict in Section 13 of R.A. No. 9369 that should be resolved. According to the OSG, there seems to be no basis to
consider appointive officials as ipso facto resigned and to require them to vacate their positions on the same day that they
file their CoCs, because they are not yet considered as candidates at that time. Further, this - deemed resigned- provision
existed in Batas Pambansa Bilang (B.P. Blg.) 881, and no longer finds a place in our present election laws with the
innovations brought about by the automated system.10
Our Ruling
I.
At first glance, the petition suffers from an incipient procedural defect. What petitioners assail in their petition is a resolution
issued by the COMELEC in the exercise of its quasi-legislative power. Certiorari under Rule 65, in relation to Rule 64, cannot
be availed of, because it is a remedy to question decisions, resolutions and issuances made in the exercise of a judicial or
quasi-judicial function.11 Prohibition is also an inappropriate remedy, because what petitioners actually seek from the Court is
a determination of the proper construction of a statute and a declaration of their rights thereunder. Obviously, their petition is
one for declaratory relief,12 over which this Court does not exercise original jurisdiction.13
However, petitioners raise a challenge on the constitutionality of the questioned provisions of both the COMELEC resolution
and the law. Given this scenario, the Court may step in and resolve the instant petition.
The transcendental nature and paramount importance of the issues raised and the compelling state interest involved in their
early resolution the period for the filing of CoCs for the 2010 elections has already started and hundreds of civil servants
intending to run for elective offices are to lose their employment, thereby causing imminent and irreparable damage to their
means of livelihood and, at the same time, crippling the government's manpowerfurther dictate that the Court must, for
propriety, if only from a sense of obligation, entertain the petition so as to expedite the adjudication of all, especially the
constitutional, issues.
In any event, the Court has ample authority to set aside errors of practice or technicalities of procedure and resolve the
merits of a case. Repeatedly stressed in our prior decisions is the principle that the Rules were promulgated to provide
guidelines for the orderly administration of justice, not to shackle the hand that dispenses it. Otherwise, the courts would be
consigned to being mere slaves to technical rules, deprived of their judicial discretion.14
II.
To put things in their proper perspective, it is imperative that we trace the brief history of the assailed provision. Section 4(a)
of COMELEC Resolution No. 8678 is a reproduction of the second proviso in the third paragraph of Section 13 of R.A. No.
9369, which for ready reference is quoted as follows:
For this purpose, the Commission shall set the deadline for the filing of certificate of candidacy/petition for
registration/manifestation to participate in the election. Any person who files his certificate of candidacy within this period
shall only be considered as a candidate at the start of the campaign period for which he filed his certificate of candidacy:
Provided, That, unlawful acts or omissions applicable to a candidate shall take effect only upon the start of the aforesaid
campaign period: Provided, finally, That any person holding a public appointive office or position, including active members
of the armed forces, and officers and employees in government-owned or -controlled corporations, shall be considered ipso
facto resigned from his/her office and must vacate the same at the start of the day of the filing of his/her certificate of
candidacy.15
Notably, this proviso is not present in Section 11 of R.A. No. 8436, the law amended by R.A. No. 9369. The proviso was lifted
from Section 66 of B.P. Blg. 881 or the Omnibus Election Code (OEC) of the Philippines, which reads:

Sec. 66. Candidates holding appointive office or position.- Any person holding a public appointive office or position, including
active members of the Armed Forces of the Philippines, and officers and employees in government-owned or controlled
corporations, shall be considered ipso facto resigned from his office upon the filing of his certificate of candidacy.
It may be recalled-in inverse chronology-that earlier, Presidential Decree No. 1296, or the 1978 Election Code, contained a
similar provision, thus'
SECTION 29. Candidates holding appointive office or position. - Every person holding a public appointive office or position,
including active members of the Armed Forces of the Philippines, and officers and employees in government-owned or
controlled corporations, shall ipso facto cease in his office or position on the date he files his certificate of candidacy.
Members of the Cabinet shall continue in the offices they presently hold notwithstanding the filing of certificate of candidacy,
subject to the pleasure of the President of the Philippines.
Much earlier, R.A. No. 6388, or the Election Code of 1971, likewise stated in its Section 23 the following:
SECTION 23. Candidates Holding Appointive Office or Position. - Every person holding a public appointive office or position,
including active members of the Armed Forces of the Philippines and every officer or employee in government-owned or
controlled corporations, shall ipso facto cease in his office or position on the date he files his certificate of candidacy:
Provided, That the filing of a certificate of candidacy shall not affect whatever civil, criminal or administrative liabilities which
he may have incurred.
Going further back in history, R.A. No. 180, or the Revised Election Code approved on June 21, 1947, also provided that
SECTION 26. Automatic cessation of appointive officers and employees who are candidates. - Every person holding a public
appointive office or position shall ipso facto cease in his office or position on the date he files his certificate of candidacy.
During the Commonwealth era, Commonwealth Act (C.A.) No. 725, entitled "AN ACT TO PROVIDE FOR THE NEXT
ELECTION FOR PRESIDENT AND VICE-PRESIDENT OF THE PHILIPPINES, SENATORS AND MEMBERS OF THE
HOUSE OF REPRESENTATIVES, AND APPROPRIATING THE NECESSARY FUNDS THEREFOR," approved on January
5, 1946, contained, in the last paragraph of its Section 2, the following:
A person occupying any civil office by appointment in the government or any of its political subdivisions or agencies or
government-owned or controlled corporations, whether such office by appointive or elective, shall be considered to have
resigned from such office from the moment of the filing of such certificate of candidacy.
Significantly, however, C.A. No. 666, entitled "AN ACT TO PROVIDE FOR THE FIRST ELECTION FOR PRESIDENT AND
VICE-PRESIDENT OF THE PHILIPPINES, SENATORS, AND MEMBERS OF THE HOUSE OF REPRESENTATIVES,
UNDER THE CONSTITUTION AND THE AMENDMENTS THEREOF," enacted without executive approval on June 22, 1941,
the precursor of C.A. No. 725, only provided for automatic resignation of elective, but not appointive, officials.
Nevertheless, C.A. No. 357, or the Election Code approved on August 22, 1938, had, in its Section 22, the same verbatim
provision as Section 26 of R.A. No. 180.
The earliest recorded Philippine law on the subject is Act No. 1582, or the Election Law enacted by the Philippine
Commission in 1907, the last paragraph of Section 29 of which reads:
Sec. 29. Penalties upon officers.- x x x.
No public officer shall offer himself as a candidate for election, nor shall he be eligible during the time that he holds said
public office to election, at any municipal, provincial or Assembly election, except for reelection to the position which he may
be holding, and no judge of the Court of First Instance, justice of the peace, provincial fiscal, or officer or employee of the
Bureau of Constabulary or of the Bureau of Education shall aid any candidate or influence in any manner or take any part in
any municipal, provincial, or Assembly election under penalty of being deprived of his office and being disqualified to hold
any public office whatever for a term of five years: Provided, however, That the foregoing provisions shall not be construed to
deprive any person otherwise qualified of the right to vote at any election.
From this brief historical excursion, it may be gleaned that the second proviso in the third paragraph of Section 13 of R.A.
No. 9369- that any person holding a public appointive office or position, including active members of the armed forces, and
officers, and employees in government-owned or controlled corporations, shall be considered ipso facto resigned from
his/her office and must vacate the same at the start of the day of the filing of his/her certificate of candidacy- traces its roots
to the period of the American occupation.
In fact, during the deliberations of Senate Bill No. 2231, the bill later to be consolidated with House Bill No. 5352 and enacted
as R.A. No. 9369, Senator Richard Gordon, the principal author of the bill, acknowledged that the said proviso in the
proposed legislative measure is an old provision which was merely copied from earlier existing legislation, thus'
Senator Osmea.- May I just opine here and perhaps obtain the opinion of the good Sponsor.- This reads like, "ANY
PERSON HOLDING [means currently] A PUBLIC APPOINTIVE POSITION" SHALL BE CONSIDERED IPSO FACTO
RESIGNED- [which means that the prohibition extends only to appointive officials] "INCLUDING ACTIVE MEMBERS OF
THE ARMED FORCES, OFFICERS AND EMPLOYEES"- This is a prohibition, Mr. President.- This means if one is chairman
of SSS or PDIC, he is deemed ipso facto resigned when he files his certificate of candidacy.- Is that the intention
Senator Gordon.- This is really an old provision, Mr. President.
Senator Osmea.- It is in bold letters, so I think it was a Committee amendment.
Senator Gordon.- No, it has always been there.
Senator Osmea.- I see.
Senator Gordon.- I guess the intention is not to give them undue advantage, especially certain people.
Senator Osmea.- All right.16

In that Senate deliberation, however, Senator Miriam Defensor-Santiago expressed her concern over the inclusion of the
said provision in the new law, given that the same would be disadvantageous and unfair to potential candidates holding
appointive positions, while it grants a consequent preferential treatment to elective officials, thus'
Senator Santiago.- On page 15, line 31, I know that this is a losing cause, so I make this point more as a matter of record
than of any feasible hope that it can possibly be either accepted or if we come to a division of the House, it will be upheld by
the majority.
I am referring to page 15, line 21.- The proviso begins: "PROVIDED FINALLY, THAT ANY PERSON HOLDING A PUBLIC
APPOINTIVE OFFICE - SHALL BE CONSIDERED IPSO FACTO RESIGNED FROM HIS/HER OFFICE."
The point that I made during the appropriate debate in the past in this Hall is that there is, for me, no valid reason for
exempting elective officials from this inhibition or disqualification imposed by the law.- If we are going to consider appointive
officers of the government, including AFP members and officers of government-owned and controlled corporations, or any
other member of the appointive sector of the civil service, why should it not apply to the elective sector for, after all, even
senators and congressmen are members of the civil service as well
Further, it is self-serving for the Senate, or for the Congress in general, to give an exception to itself which is not available to
other similarly situated officials of government. Of course, the answer is, the reason why we are special is that we are
elected. Since we are imposing a disqualification on all other government officials except ourselves, I think, it is the better
part of delicadeza to inhibit ourselves as well, so that if we want to stay as senators, we wait until our term expires. But if we
want to run for some other elective office during our term, then we have to be considered resigned just like everybody else.
That is my proposed amendment. But if it is unacceptable to the distinguished Sponsor, because of sensitivity to the
convictions of the rest of our colleagues, I will understand.
Senator Gordon. Mr. President, I think the suggestion is well-thought of.- It is a good policy.- However, this is something that
is already in the old law which was upheld by the Supreme court in a recent case that the rider was not upheld and that it
was valid.17
The obvious inequality brought about by the provision on automatic resignation of appointive civil servants must have been
the reason why Senator Recto proposed the inclusion of the following during the period of amendments: "ANY PERSON
WHO FILES HIS CERTIFICATE OF CANDIDACY WITHIN THIS PERIOD SHALL ONLY BE CONSIDERED AS A
CANDIDATE AT THE START OF THE CAMPAIGN PERIOD FOR WHICH HE FILED HIS COC." 18 The said proviso seems to
mitigate the situation of disadvantage afflicting appointive officials by considering persons who filed their CoCs as candidates
only at the start of the campaign period, thereby, conveying the tacit intent that persons holding appointive positions will only
be considered as resigned at the start of the campaign period when they are already treated by law as candidates.
Parenthetically, it may be remembered that Section 67 of the OEC and Section 11 of R.A. No. 8436 contained a similar
provision on automatic resignation of elective officials upon the filing of their CoCs for any office other than that which they
hold in a permanent capacity or for President or Vice-President. However, with the enactment of R.A. No. 9006, or the Fair
Election Act,19 in 2001, this provision was repealed by Section 1420 of the said act. There was, thus, created a situation of
obvious discrimination against appointive officials who were deemed ipso facto resigned from their offices upon the filing of
their CoCs, while elective officials were not.
This situation was incidentally addressed by the Court in Fariiv. The Executive Secretary21 when it ruled that
Section 14 of Rep. Act No. 9006Is Not Violative of the Equal Protection Clause of the Constitution
The petitioners' contention, that the repeal of Section 67 of the Omnibus Election Code pertaining to elective officials gives
undue benefit to such officials as against the appointive ones and violates the equal protection clause of the constitution, is
tenuous.
The equal protection of the law clause in the Constitution is not absolute, but is subject to reasonable classification.- If the
groupings are characterized by substantial distinctions that make real differences, one class may be treated and regulated
differently from the other. The Court has explained the nature of the equal protection guarantee in this manner:
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 it 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 exist for
making a distinction between those who fall within such class and those who do not.
Substantial distinctions clearly exist between elective officials and appointive officials. The former occupy their office by virtue
of the mandate of the electorate. They are elected to an office for a definite term and may be removed therefrom only upon
stringent conditions. On the other hand, appointive officials hold their office by virtue of their designation thereto by an
appointing authority.- Some appointive officials hold their office in a permanent capacity and are entitled to security of tenure
while others serve at the pleasure of the appointing authority.
Another substantial distinction between the two sets of officials is that under Section 55, Chapter 8, Title I, Subsection A. Civil
Service Commission, Book V of the Administrative Code of 1987 (Executive Order No. 292), appointive officials, as officers
and employees in the civil service, are strictly prohibited from engaging in any partisan political activity or take part in any

election except to vote.- Under the same provision, elective officials, or officers or employees holding political offices, are
obviously expressly allowed to take part in political and electoral activities.
By repealing Section 67 but retaining Section 66 of the Omnibus Election Code, the legislators deemed it proper to treat
these two classes of officials differently with respect to the effect on their tenure in the office of the filing of the certificates of
candidacy for any position other than those occupied by them.- Again, it is not within the power of the Court to pass upon or
look into the wisdom of this classification.
Since the classification justifying Section 14 of Rep. Act No. 9006, i.e., elected officials vis-a-vis appointive officials, is
anchored upon material and significant distinctions and all the persons belonging under the same classification are similarly
treated, the equal protection clause of the Constitution is, thus, not infringed.22
However, it must be remembered that the Court, in Fari/i>, was intently focused on the main issue of whether the repealing
clause in the Fair Election Act was a constitutionally proscribed rider, in that it unwittingly failed to ascertain with stricter
scrutiny the impact of the retention of the provision on automatic resignation of persons holding appointive positions (Section
66) in the OEC, vis- is the equal protection clause.- Moreover, the Court's vision in Fari/i> was shrouded by the fact that
petitioners therein, Fariie t al., never posed a direct challenge to the constitutionality of Section 66 of the OEC.
Fariie t al. rather merely questioned, on constitutional grounds, the repealing clause, or Section 14 of the Fair
Election Act. The Court's afore-quoted declaration in Fari/i> may then very well be considered as an obiter dictum.
III.
The instant case presents a rare opportunity for the Court, in view of the constitutional challenge advanced by petitioners,
once and for all, to settle the issue of whether the second proviso in the third paragraph of Section 13 of R.A. No. 9369, a
reproduction of Section 66 of the OEC, which, as shown above, was based on provisions dating back to the American
occupation, is violative of the equal protection clause.
But before delving into the constitutional issue, we shall first address the issues on legal standing and on the existence of an
actual controversy.
Central to the determination of locus standi is the question of whether a party has alleged such a personal stake in the
outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which
the court so largely depends for illumination of difficult constitutional questions. 23 In this case, petitioners allege that they will
be directly affected by COMELEC Resolution No. 8678 for they intend, and they all have the qualifications, to run in the 2010
elections. The OSG, for its part, contends that since petitioners have not yet filed their CoCs, they are not yet candidates;
hence, they are not yet directly affected by the assailed provision in the COMELEC resolution.
The Court, nevertheless, finds that, while petitioners are not yet candidates, they have the standing to raise the constitutional
challenge, simply because they are qualified voters. A restriction on candidacy, such as the challenged measure herein,
affects the rights of voters to choose their public officials. The rights of voters and the rights of candidates do not lend
themselves to neat separation; laws that affect candidates always have at least some theoretical, correlative effect on
voters.24 The Court believes that both candidates and voters may challenge, on grounds of equal protection, the assailed
measure because of its impact on voting rights.25
In any event, in recent cases, this Court has relaxed the stringent direct injury test and has observed a liberal policy allowing
ordinary citizens, members of Congress, and civil organizations to prosecute actions involving the constitutionality or validity
of laws, regulations and rulings.26
We have also stressed in our prior decisions that the exercise by this Court of judicial power is limited to the determination
and resolution of actual cases and controversies.27 The Court, in this case, finds that an actual case or controversy exists
between the petitioners and the COMELEC, the body charged with the enforcement and administration of all election laws.
Petitioners have alleged in a precise manner that they would engage in the very acts that would trigger the enforcement of
the provisionthey would file their CoCs and run in the 2010 elections. Given that the assailed provision provides for ipso facto
resignation upon the filing of the CoC, it cannot be said that it presents only a speculative or hypothetical obstacle to
petitioners' candidacy.28
IV.
Having hurdled what the OSG posed as obstacles to judicial review, the Court now delves into the constitutional challenge.
It is noteworthy to point out that the right to run for public office touches on two fundamental freedoms, those of expression
and of association. This premise is best explained in Mancuso v. Taft,29 viz.:
Freedom of expression guarantees to the individual the opportunity to write a letter to the local newspaper, speak out in a
public park, distribute handbills advocating radical reform, or picket an official building to seek redress of grievances. All of
these activities are protected by the First Amendment if done in a manner consistent with a narrowly defined concept of
public order and safety. The choice of means will likely depend on the amount of time and energy the individual wishes to
expend and on his perception as to the most effective method of projecting his message to the public. But interest and
commitment are evolving phenomena. What is an effective means for protest at one point in time may not seem so effective
at a later date. The dilettante who participates in a picket line may decide to devote additional time and resources to his
expressive activity. As his commitment increases, the means of effective expression changes, but the expressive quality
remains constant. He may decide to lead the picket line, or to publish the newspaper. At one point in time he may decide that
the most effective way to give expression to his views and to get the attention of an appropriate audience is to become a
candidate for public office-means generally considered among the most appropriate for those desiring to effect change in our

governmental systems. He may seek to become a candidate by filing in a general election as an independent or by seeking
the nomination of a political party. And in the latter instance, the individual's expressive activity has two dimensions: besides
urging that his views be the views of the elected public official, he is also attempting to become a spokesman for a political
party whose substantive program extends beyond the particular office in question. But Cranston has said that a certain type
of its citizenry, the public employee, may not become a candidate and may not engage in any campaign activity that
promotes himself as a candidate for public office. Thus the city has stifled what may be the most important expression an
individual can summon, namely that which he would be willing to effectuate, by means of concrete public action, were he to
be selected by the voters.
It is impossible to ignore the additional fact that the right to run for office also affects the freedom to associate. In Williams v.
Rhodes, supra, the Court used strict review to invalidate an Ohio election system that made it virtually impossible for third
parties to secure a place on the ballot. The Court found that the First Amendment protected the freedom to associate by
forming and promoting a political party and that that freedom was infringed when the state effectively denied a party access
to its electoral machinery. The Cranston charter provision before us also affects associational rights, albeit in a slightly
different way. An individual may decide to join or participate in an organization or political party that shares his beliefs. He
may even form a new group to forward his ideas. And at some juncture his supporters and fellow party members may decide
that he is the ideal person to carry the group's standard into the electoral fray. To thus restrict the options available to political
organization as the Cranston charter provision has done is to limit the effectiveness of association; and the freedom to
associate is intimately related with the concept of making expression effective. Party access to the ballot becomes less
meaningful if some of those selected by party machinery to carry the party's programs to the people are precluded from
doing so because those nominees are civil servants.
Whether the right to run for office is looked at from the point of view of individual expression or associational effectiveness,
wide opportunities exist for the individual who seeks public office. The fact of candidacy alone may open previously closed
doors of the media. The candidate may be invited to discuss his views on radio talk shows; he may be able to secure equal
time on television to elaborate his campaign program; the newspapers may cover his candidacy; he may be invited to debate
before various groups that had theretofore never heard of him or his views. In short, the fact of candidacy opens up a variety
of communicative possibilities that are not available to even the most diligent of picketers or the most loyal of party followers.
A view today, that running for public office is not an interest protected by the First Amendment, seems to us an outlook
stemming from an earlier era when public office was the preserve of the professional and the wealthy. Consequently we hold
that candidacy is both a protected First Amendment right and a fundamental interest. Hence any legislative classification that
significantly burdens that interest must be subjected to strict equal protection review.30
Here, petitioners' interest in running for public office, an interest protected by Sections 4 and 8 of Article III of the
Constitution, is breached by the proviso in Section 13 of R.A. No. 9369. It is now the opportune time for the Court to strike
down the said proviso for being violative of the equal protection clause and for being overbroad.
In considering persons holding appointive positions as ipso facto resigned from their posts upon the filing of their CoCs, but
not considering as resigned all other civil servants, specifically the elective ones, the law unduly discriminates against the
first class. The fact alone that there is substantial distinction between those who hold appointive positions and those
occupying elective posts, does not justify such differential treatment.
In order that there can be valid classification so that a discriminatory governmental act may pass the constitutional norm of
equal protection, it is necessary that the four (4) requisites of valid classification be complied with, namely:
(1) It must be based upon substantial distinctions;
(2) It must be germane to the purposes of the law;
(3) It must not be limited to existing conditions only; and
(4) It must apply equally to all members of the class.
The first requirement means that there must be real and substantial differences between the classes treated differently. As
illustrated in the fairly recent Mirasol v. Department of Public Works and Highways, 31 a real and substantial distinction exists
between a motorcycle and other motor vehicles sufficient to justify its classification among those prohibited from plying the
toll ways. Not all motorized vehicles are created equal a two-wheeled vehicle is less stable and more easily overturned than
a four-wheel vehicle.
Nevertheless, the classification would still be invalid if it does not comply with the second requirement if it is not germane to
the purpose of the law. Justice Isagani A. Cruz (Ret.), in his treatise on constitutional law, explains,
The classification, even if based on substantial distinctions, will still be invalid if it is not germane to the purpose of the law. To
illustrate, the accepted difference in physical stamina between men and women will justify the prohibition of the latter from
employment as miners or stevedores or in other heavy and strenuous work. On the basis of this same classification,
however, the law cannot provide for a lower passing average for women in the bar examinations because physical strength is
not the test for admission to the legal profession. Imported cars may be taxed at a higher rate than locally assembled
automobiles for the protection of the national economy, but their difference in origin is no justification for treating them
differently when it comes to punishing violations of traffic regulations. The source of the vehicle has no relation to the
observance of these rules.32
The third requirement means that the classification must be enforced not only for the present but as long as the problem
sought to be corrected continues to exist. And, under the last requirement, the classification would be regarded as invalid if
all the members of the class are not treated similarly, both as to rights conferred and obligations imposed.33

Applying the four requisites to the instant case, the Court finds that the differential treatment of persons holding appointive
offices as opposed to those holding elective ones is not germane to the purposes of the law.
The obvious reason for the challenged provision is to prevent the use of a governmental position to promote one's candidacy,
or even to wield a dangerous or coercive influence on the electorate. The measure is further aimed at promoting the
efficiency, integrity, and discipline of the public service by eliminating the danger that the discharge of official duty would be
motivated by political considerations rather than the welfare of the public. 34 The restriction is also justified by the proposition
that the entry of civil servants to the electoral arena, while still in office, could result in neglect or inefficiency in the
performance of duty because they would be attending to their campaign rather than to their office work.
If we accept these as the underlying objectives of the law, then the assailed provision cannot be constitutionally rescued on
the ground of valid classification. Glaringly absent is the requisite that the classification must be germane to the purposes of
the law. Indeed, whether one holds an appointive office or an elective one, the evils sought to be prevented by the measure
remain. For example, the Executive Secretary, or any Member of the Cabinet for that matter, could wield the same influence
as the Vice-President who at the same time is appointed to a Cabinet post (in the recent past, elected Vice-Presidents were
appointed to take charge of national housing, social welfare development, interior and local government, and foreign affairs).
With the fact that they both head executive offices, there is no valid justification to treat them differently when both file their
CoCs for the elections. Under the present state of our law, the Vice-President, in the example, running this time, let us say,
for President, retains his position during the entire election period and can still use the resources of his office to support his
campaign.
As to the danger of neglect, inefficiency or partisanship in the discharge of the functions of his appointive office, the inverse
could be just as true and compelling. The public officer who files his certificate of candidacy would be driven by a greater
impetus for excellent performance to show his fitness for the position aspired for.
Mancuso v. Taft,35 cited above, explains that the measure on automatic resignation, which restricts the rights of civil servants
to run for officea right inextricably linked to their freedom of expression and association, is not reasonably necessary to the
satisfaction of the state interest. Thus, in striking down a similar measure in the United States, Mancuso succinctly declares'
In proceeding to the second stage of active equal protection review, however, we do see some contemporary relevance of
the Mitchell decision. National Ass'n of Letter Carriers, supra. In order for the Cranston charter provision to withstand strict
scrutiny, the city must show that the exclusion of all government employees from candidacy is necessary to achieve a
compelling state interest. And, as stated in Mitchell and other cases dealing with similar statutes, see Wisconsin State
Employees, supra; Broadrick, supra, government at all levels has a substantial interest in protecting the integrity of its civil
service. It is obviously conceivable that the impartial character of the civil service would be seriously jeopardized if people in
positions of authority used their discretion to forward their electoral ambitions rather than the public welfare. Similarly if a
public employee pressured other fellow employees to engage in corrupt practices in return for promises of post-election
reward, or if an employee invoked the power of the office he was seeking to extract special favors from his superiors, the civil
service would be done irreparable injury. Conversely, members of the public, fellow-employees, or supervisors might
themselves request favors from the candidate or might improperly adjust their own official behavior towards him. Even if
none of these abuses actually materialize, the possibility of their occurrence might seriously erode the public's confidence in
its public employees. For the reputation of impartiality is probably as crucial as the impartiality itself; the knowledge that a
clerk in the assessor's office who is running for the local zoning board has access to confidential files which could provide
pressure points for furthering his campaign is destructive regardless of whether the clerk actually takes advantage of his
opportunities. For all of these reasons we find that the state indeed has a compelling interest in maintaining the honesty and
impartiality of its public work force.
We do not, however, consider the exclusionary measure taken by Cranston-a flat prohibition on office-seeking of all kinds by
all kinds of public employees-as even reasonably necessary to satisfaction of this state interest. As Justice Marshall pointed
out in Dunn v. Blumstein, [s]tatutes affecting constitutional rights must be drawn with precision. For three sets of reasons we
conclude that the Cranston charter provision pursues its objective in a far too heavy-handed manner and hence must fall
under the equal protection clause. First, we think the nature of the regulation-a broad prophylactic rule-may be unnecessary
to fulfillment of the city's objective. Second, even granting some sort of prophylactic rule may be required, the provision here
prohibits candidacies for all types of public office, including many which would pose none of the problems at which the law is
aimed. Third, the provision excludes the candidacies of all types of public employees, without any attempt to limit exclusion
to those employees whose positions make them vulnerable to corruption and conflicts of interest.
There is thus no valid justification to treat appointive officials differently from the elective ones. The classification simply fails
to meet the test that it should be germane to the purposes of the law. The measure encapsulated in the second proviso of
the third paragraph of Section 13 of R.A. No. 9369 and in Section 66 of the OEC violates the equal protection clause.
V.
The challenged provision also suffers from the infirmity of being overbroad.
First, the provision pertains to all civil servants holding appointive posts without distinction as to whether they occupy high
positions in government or not. Certainly, a utility worker in the government will also be considered as ipso facto resigned
once he files his CoC for the 2010 elections. This scenario is absurd for, indeed, it is unimaginable how he can use his
position in the government to wield influence in the political world.
While it may be admitted that most appointive officials who seek public elective office are those who occupy relatively high
positions in government, laws cannot be legislated for them alone, or with them alone in mind. For the right to seek public

elective office is universal, open and unrestrained, subject only to the qualification standards prescribed in the Constitution
and in the laws. These qualifications are, as we all know, general and basic so as to allow the widest participation of the
citizenry and to give free rein for the pursuit of one's highest aspirations to public office. Such is the essence of democracy.
Second, the provision is directed to the activity of seeking any and all public offices, whether they be partisan or nonpartisan
in character, whether they be in the national, municipal or barangay level. Congress has not shown a compelling state
interest to restrict the fundamental right involved on such a sweeping scale.36
Specific evils require specific treatments, not through overly broad measures that unduly restrict guaranteed freedoms of the
citizenry. After all, sovereignty resides in the people, and all governmental power emanates from them.
Mancuso v. Taft,37 on this point, instructs
As to approaches less restrictive than a prophylactic rule, there exists the device of the leave of absence. Some system of
leaves of absence would permit the public employee to take time off to pursue his candidacy while assuring him his old job
should his candidacy be unsuccessful. Moreover, a leave of absence policy would eliminate many of the opportunities for
engaging in the questionable practices that the statute is designed to prevent. While campaigning, the candidate would feel
no conflict between his desire for election and his publicly entrusted discretion, nor any conflict between his efforts to
persuade the public and his access to confidential documents. But instead of adopting a reasonable leave of absence policy,
Cranston has chosen a provision that makes the public employee cast off the security of hard-won public employment should
he desire to compete for elected office.
The city might also promote its interest in the integrity of the civil service by enforcing, through dismissal, discipline, or
criminal prosecution, rules or statutes that treat conflict of interests, bribery, or other forms of official corruption. By thus
attacking the problem directly, instead of using a broad prophylactic rule, the city could pursue its objective without unduly
burdening the First Amendment rights of its employees and the voting rights of its citizens. Last term in Dunn v. Blumstein,
the Supreme Court faced an analogous question when the State of Tennessee asserted that the interest of ballot box purity
justified its imposition of one year and three month residency requirements before a citizen could vote. Justice Marshall
stated, inter alia, that Tennessee had available a number of criminal statutes that could be used to punish voter fraud without
unnecessary infringement on the newcomer's right to vote. Similarly, it appears from the record in this case that the Cranston
charter contains some provisions that might be used against opportunistic public employees.
Even if some sort of prophylactic rule is necessary, we cannot say that Cranston has put much effort into tailoring a narrow
provision that attempts to match the prohibition with the problem. The charter forbids a Cranston public employee from
running for any office, anywhere. The prohibition is not limited to the local offices of Cranston, but rather extends to statewide
offices and even to national offices. It is difficult for us to see that a public employee running for the United States Congress
poses quite the same threat to the civil service as would the same employee if he were running for a local office where the
contacts and information provided by his job related directly to the position he was seeking, and hence where the potential
for various abuses was greater. Nor does the Cranston charter except the public employee who works in Cranston but
aspires to office in another local jurisdiction, most probably his town of residence. Here again the charter precludes
candidacies which can pose only a remote threat to the civil service. Finally, the charter does not limit its prohibition to
partisan office-seeking, but sterilizes also those public employees who would seek nonpartisan elective office. The statute
reviewed in Mitchell was limited to partisan political activity, and since that time other courts have found the partisannonpartisan distinction a material one. See Kinnear, supra; Wisconsin State Employees, supra; Gray v. Toledo, supra. While
the line between nonpartisan and partisan can often be blurred by systems whose true characters are disguised by the
names given them by their architects, it seems clear that the concerns of a truly partisan office and the temptations it fosters
are sufficiently different from those involved in an office removed from regular party politics to warrant distinctive treatment in
a charter of this sort.
The third and last area of excessive and overinclusive coverage of the Cranston charter relates not to the type of office
sought, but to the type of employee seeking the office. As Justice Douglas pointed out in his dissent in Mitchell, 330 U.S. at
120-126, 67 S.Ct. 556, restrictions on administrative employees who either participate in decision-making or at least have
some access to information concerning policy matters are much more justifiable than restrictions on industrial employees,
who, but for the fact that the government owns the plant they work in, are, for purposes of access to official information,
identically situated to all other industrial workers. Thus, a worker in the Philadelphia mint could be distinguished from a
secretary in an office of the Department of Agriculture; so also could a janitor in the public schools of Cranston be
distinguished from an assistant comptroller of the same city. A second line of distinction that focuses on the type of employee
is illustrated by the cases of Kinnear and Minielly, supra. In both of these cases a civil service deputy decided to run for the
elected office of sheriff. The courts in both cases felt that the no-candidacy laws in question were much too broad and
indicated that perhaps the only situation sensitive enough to justify a flat rule was one in which an inferior in a public office
electorally challenged his immediate superior. Given all these considerations, we think Cranston has not given adequate
attention to the problem of narrowing the terms of its charter to deal with the specific kinds of conflict-of-interest problems it
seeks to avoid.
We also do not find convincing the arguments that after-hours campaigning will drain the energy of the public employee to
the extent that he is incapable of performing his job effectively and that inevitable on-the-job campaigning and discussion of
his candidacy will disrupt the work of others. Although it is indisputable that the city has a compelling interest in the
performance of official work, the exclusion is not well-tailored to effectuate that interest. Presumably the city could fire the
individual if he clearly shirks his employment responsibilities or disrupts the work of others. Also, the efficiency rationale
common to both arguments is significantly underinclusive. It applies equally well to a number of non-political, extracurricular
activities that are not prohibited by the Cranston charter. Finally, the connection between after-hours campaigning and the
state interest seems tenuous; in many cases a public employee would be able to campaign aggressively and still continue to
do his job well.38

Incidentally, Clements v. Fashing39 sustained as constitutional a provision on the automatic resignation of District Clerks,
County Clerks, County Judges, County Treasurers, Criminal District Attorneys, County Surveyors, Inspectors of Hides and
Animals, County Commissioners, Justices of the Peace, Sheriffs, Assessors and Collectors of Taxes, District Attorneys,
County Attorneys, Public Weighers, and Constables if they announce their candidacy or if they become candidates in any
general, special or primary election.
In Clements, it may be readily observed that a provision treating differently particular officials, as distinguished from all
others, under a classification that is germane to the purposes of the law, merits the stamp of approval from American courts.
Not, however, a general and sweeping provision, and more so one violative of the second requisite for a valid classification,
which is on its face unconstitutional.
On a final note, it may not be amiss to state that the Americans, from whom we copied the provision in question, had already
stricken down a similar measure for being unconstitutional. It is high-time that we, too, should follow suit and, thus, uphold
fundamental liberties over age-old, but barren, restrictions to such freedoms.
WHEREFORE, premises considered, the petition is GRANTED. The second proviso in the third paragraph of Section 13 of
Republic Act No. 9369, Section 66 of the Omnibus Election Code and Section 4(a) of COMELEC Resolution No. 8678 are
declared as UNCONSTITUTIONAL.
SO ORDERED.

G.R. No. 179313


September 17, 2009
MAKIL U. PUNDAODAYA, Petitioner,
vs.
COMMISSION ON ELECTIONSN and ARSENIO DENSING NOBLE, Respondents.
DECISION

YNARES-SANTIAGO, J.:
This petition1 for certiorari under Rule 65 assails the August 3, 2007 Resolution 2 of the Commission on Elections
(COMELEC) En Banc in SPA No. 07-202, which declared private respondent Arsenio Densing Noble (Noble) qualified to run
for municipal mayor of Kinoguitan, Misamis Oriental, in the May 14, 2007 Synchronized National and Local Elections.
The facts are as follows:
Petitioner Makil U. Pundaodaya (Pundaodaya) is married to Judith Pundaodaya, who ran against Noble for the position of
municipal mayor of Kinoguitan, Misamis Oriental in the 2007 elections.
On March 27, 2007, Noble filed his Certificate of Candidacy, indicating therein that he has been a resident of Purok 3,
Barangay Esperanza, Kinoguitan, Misamis Oriental for 15 years.
On April 3, 2007, Pundaodaya filed a petition for disqualification3 against Noble docketed as SPA No. 07-202, alleging that
the latter lacks the residency qualification prescribed by existing laws for elective local officials; that he never resided nor had
any physical presence at a fixed place in Purok 3, Barangay Esperanza, Kinoguitan, Misamis Oriental; and that he does not
appear to have the intention of residing therein permanently. Pundaodaya claimed that Noble is in fact a resident of Lapasan,
Cagayan de Oro City, where he also maintains a business called OBERT Construction Supply.
In his Answer,4 Noble averred that he is a registered voter and resident of Barangay Esperanza, Kinoguitan, Misamis
Oriental; that on January 18, 1992, he married Bernadith Go, the daughter of then Mayor Narciso Go of Kinoguitan, Misamis
Oriental; that he has been engaged in electoral activities since his marriage; and that he voted in the said municipality in the
1998, 2001 and 2004 elections.
In a resolution dated May 13, 2007, 5 the Second Division of the COMELEC ruled in favor of Pundaodaya and disqualified
Noble from running as mayor, thus:
Respondent Nobles claim that he is a registered voter and has actually voted in the past three (3) elections in the said
municipality does not sufficiently establish that he has actually elected residency at Kinoguitan, Misamis Oriental. Neither
does campaigning in previous elections sufficiently establish residence.
Respondent Noble failed to show that he has indeed acquired domicile at Kinoguitan, Misamis Oriental. He failed to prove
not only his bodily presence in the new locality but has likewise failed to show that he intends to remain at Kinoguitan,
Misamis Oriental and abandon his residency at Lapasan, Cagayan de Oro City.
WHEREFORE, premises considered, the instant Petition to Disqualify Aresnio Densing Noble is hereby GRANTED.
SO ORDERED.6
Noble filed a motion for reconsideration of the above resolution. In the meantime, he garnered the highest number of votes
and was proclaimed the winning candidate on May 15, 2007. Pundaodaya then filed an Urgent Motion to Annul
Proclamation.7
On August 3, 2007, the COMELEC En Banc reversed the decision of the Second Division and declared Noble qualified to
run for the mayoralty position.
The COMELEC En Banc held that when Noble married Bernadith Go on January 18, 1992, the couple has since resided in
Kinoguitan, Misamis Oriental; that he was a registered voter and that he participated in the last three elections; and although
he is engaged in business in Cagayan de Oro City, the fact that he resides in Kinoguitan and is a registered voter and owns
property thereat, sufficiently meet the residency requirement.8 Thus:
WHEREFORE, premises considered, the Commission (en banc) RESOLVED, as it hereby RESOLVES, to GRANT the
instant Motion for Reconsideration and to REVERSE AND SET ASIDE the Resolution promulgated on May 13, 2007 issued
by the Commission (Second Division).
ACCORDINGLY, respondent ARSENIO DENSING NOBLE is QUALIFIED to run for the local elective position of Municipal
Mayor of the Municipality of Kinoguitan, Misamis Oriental in the May 14, 2007 Synchronized National and Local Elections.
SO ORDERED.9
Pundaodaya filed the instant petition for certiorari, alleging that the COMELEC En Banc acted with grave abuse of discretion
when it declared Noble qualified to run; when it did not annul Nobles proclamation; and when it failed to proclaim the true
winning candidate, Judith Pundaodaya.
In a resolution dated November 13, 2007,10 the Court required the respondents to comment on the petition.
Public respondent, through the Office of the Solicitor General, filed a Manifestation and Motion 11 praying that it be excused
from filing a separate comment and that the said pleading be considered sufficient compliance with the November 13, 2007
Resolution.
Meanwhile, for Nobles failure to comply, the Court issued Resolutions12 dated July 15, 2008 and December 9, 2008 requiring
him to show cause why he should not be disciplinarily dealt with or held in contempt, imposing a fine of P1,000.00, and
requiring him to file a comment. On June 2, 2009, the Court deemed Noble to have waived the filing of the comment.13

The issues for resolution are: whether the COMELEC En Banc gravely abused its discretion: 1) in declaring Noble qualified
to run for the mayoralty position; and 2) in failing to order the annulment of Nobles proclamation and refusing to proclaim
Judith Pundaodaya as the winning candidate.
Section 39 of Republic Act No. 7160, otherwise known as the Local Government Code, requires that an elective local official
must be a resident in the barangay, municipality, city or province where he intends to serve for at least one year immediately
preceding the election.14
In Japzon v. Commission on Elections,15 it was held that the term "residence" is to be understood not in its common
acceptation as referring to "dwelling" or "habitation," but rather to "domicile" or legal residence, that is, "the place where a
party actually or constructively has his permanent home, where he, no matter where he may be found at any given time,
eventually intends to return and remain (animus manendi)."
In Domino v. Commission on Elections,16 the Court explained that domicile denotes a fixed permanent residence to which,
whenever absent for business, pleasure, or some other reasons, one intends to return. It is a question of intention and
circumstances. In the consideration of circumstances, three rules must be borne in mind, namely: (1) that a man must have a
residence or domicile somewhere; (2) when once established it remains until a new one is acquired; and (3) a man can have
but one residence or domicile at a time.1avvphi1
If one wishes to successfully effect a change of domicile, he must demonstrate an actual removal or an actual change of
domicile, a bona fide intention of abandoning the former place of residence and establishing a new one, and definite acts
which correspond with the purpose.17 Without clear and positive proof of the concurrence of these three requirements, the
domicile of origin continues.18
Records show that Nobles domicile of origin was Lapasan, Cagayan de Oro City. However, he claims to have chosen
Kinoguitan, Misamis Oriental as his new domicile. To substantiate this, he presented before the COMELEC his voter
registration records;19 a Certification dated April 25, 2007 from Election Officer II Clavel Z. Tabada; 20 his Marriage
Certificate;21 and affidavits of residents of Kinoguitan22 attesting that he established residence in the municipality after his
marriage to Bernadith Go. In addition, he presented receipts23 from the Provincial Treasurer for payment of his water bills,
and Certifications from the Municipal Treasurer and Municipal Engineer that he has been a consumer of the Municipal Water
System since June 2003. To prove ownership of property, he also presented a Deed of Sale 24 over a real property dated
June 3, 1996.
The above pieces of documentary evidence, however, fail to convince us that Noble successfully effected a change of
domicile. As correctly ruled by the COMELEC Second Division, private respondents claim that he is a registered voter and
has actually voted in the past 3 elections in Kinoguitan, Misamis Oriental do not sufficiently establish that he has actually
elected residency in the said municipality. Indeed, while we have ruled in the past that voting gives rise to a strong
presumption of residence, it is not conclusive evidence thereof. 25 Thus, in Perez v. Commission on Elections, 26 we held that
a persons registration as voter in one district is not proof that he is not domiciled in another district. The registration of a
voter in a place other than his residence of origin is not sufficient to consider him to have abandoned or lost his residence.27
To establish a new domicile of choice, personal presence in the place must be coupled with conduct indicative of that
intention. It requires not only such bodily presence in that place but also a declared and probable intent to make it ones fixed
and permanent place of abode.28
In this case, Nobles marriage to Bernadith Go does not establish his actual physical presence in Kinoguitan, Misamis
Oriental. Neither does it prove an intention to make it his permanent place of residence. We are also not persuaded by his
alleged payment of water bills in the absence of evidence showing to which specific properties they pertain. And while Noble
presented a Deed of Sale for real property, the veracity of this document is belied by his own admission that he does not own
property in Kinoguitan, Misamis Oriental.29
On the contrary, we find that Noble has not abandoned his original domicile as shown by the following: a) Certification dated
April 12, 2007 of the Barangay Kagawad of Barangay Lapasan, Cagayan de Oro City stating that Noble is a resident of the
barangay;30 b) Affidavit31 of the Barangay Kagawad of Esperanza, Kinoguitan, Misamis Oriental dated April 14, 2007,
attesting that Noble has not resided in Barangay Esperanza in Kinoguitan; c) photos 32 and official receipts33 showing that
Noble and his wife maintain their residence and businesses in Lapasan; d) tax declarations 34 of real properties in Cagayan
de Oro City under the name of Noble; and e) the "Household Record of Barangay Inhabitants" 35 of Mayor Narciso Go, which
did not include Noble or his wife, Bernadith Go, which disproves Nobles claim that he resides with his father-in-law.
From the foregoing, we find that Nobles alleged change of domicile was effected solely for the purpose of qualifying as a
candidate in the 2007 elections. This we cannot allow. In Torayno, Sr. v. Commission on Elections, 36 we held that the oneyear residency requirement is aimed at excluding outsiders "from taking advantage of favorable circumstances existing in
that community for electoral gain." Establishing residence in a community merely to meet an election law requirement
defeats the purpose of representation: to elect through the assent of voters those most cognizant and sensitive to the needs
of the community.37 Thus, we find Noble disqualified from running as municipal mayor of Kinoguitan, Misamis Oriental in the
2007 elections.
Notwithstanding Nobles disqualification, we find no basis for the proclamation of Judith Pundaodaya, as mayor. The rules on
succession under the Local Government Code, explicitly provides:

SECTION 44. Permanent Vacancies in the Offices of the Governor, Vice-Governor, Mayor, and Vice-Mayor. If a permanent
vacancy occurs in the office of the xxx mayor, the xxx vice-mayor concerned shall become the xxx mayor.
xxxx
For purposes of this Chapter, a permanent vacancy arises when an elective local official fills a higher vacant office, refuses to
assume office, fails to qualify or is removed from office, voluntarily resigns, or is otherwise permanently incapacitated to
discharge the functions of his office.
x x x x (Emphasis ours)
Thus, considering the permanent vacancy in the Office of the Mayor of Kinoguitan, Misamis Oriental occasioned by Nobles
disqualification, the proclaimed Vice-Mayor shall then succeed as mayor.38
WHEREFORE, the petition is GRANTED. The August 3, 2007 Resolution of the COMELEC En Banc in SPA No. 07-202
declaring respondent Arsenio Densing Noble qualified to run as Mayor of Kinoguitan, Misamis Oriental, is REVERSED AND
SET ASIDE. In view of the permanent vacancy in the Office of the Mayor of Kinoguitan, Misamis Oriental, the proclaimed
Vice-Mayor is ORDERED to succeed as Mayor.
SO ORDERED.

G.R. No. 181097


June 25, 2008
NORLAINIE MITMUG LIMBONA, petitioner,
vs.
COMMISSION ON ELECTIONS and MALIK "BOBBY" T. ALINGAN, respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for certiorari with prayer for issuance of a temporary restraining order and/or writ of preliminary injunction seeks
to reverse and nullify the September 4, 2007 Resolution1 of the Commission on Elections (Comelec) in SPA Case No. 07-611
disqualifying petitioner to run as mayor of the municipality of Pantar, Lanao del Norte, as well as the January 9, 2008
Resolution2 denying the motion for reconsideration.
Petitioner Norlainie Mitmug Limbona (Norlainie), her husband, Mohammad G. Limbona (Mohammad), and respondent Malik
"Bobby" T. Alingan (Malik) were mayoralty candidates in Pantar, Lanao del Norte during the 2007 Synchronized National and
Local Elections. Mohammad and Norlainie filed their certificates of candidacy with Acting Election Officer, Alauya S. Tago, on
January 22, 2007 and March 29, 2007, respectively; while Malik filed his certificate of candidacy with the Office of the
Election Officer on March 26, 2007.
On April 2, 2007, Malik filed a petition to disqualify Mohammad for failure to comply with the residency requirement. The
petition was docketed as SPA No. 07-188. Subsequently, or on April 12, 2007, Malik filed another petition to disqualify
Norlainie also on the ground of lack of the one-year residency requirement. The petition was docketed as SPA No. 07-611.3
On April 21, 2007, Norlainie filed an Affidavit of Withdrawal of Certificate of Candidacy. 4 Thereafter, or on May 2, 2007, she
filed before the Office of the Provincial Election Supervisor a Motion to Dismiss5 the petition for disqualification in SPA No.
07-611 on the ground that the petition had become moot in view of the withdrawal of her certificate of candidacy.
The Comelec en banc granted the withdrawal of Norlainies certificate of candidacy in Resolution No. 7949 6 dated May 13,
2007, the dispositive portion of which provides:
The Commission RESOLVED, as it hereby RESOLVES, to approve the foregoing recommendations of the Law Department,
as concurred in by Commissioner Florentino A. Tuason, Jr., as follows:
1. To GIVE due course to the Affidavits of Withdrawal of Certificates of Candidacy of the following candidates:
xxxx
Norlaine M. Limbona Mayor Pantar, Lanao del Norte
xxxx
2. To direct the Election Officers concerned to DELETE the aforementioned names of candidates from the Certified List of
Candidates.
Let the Law Department implement this resolution with dispatch.
SO ORDERED.
Meanwhile, the First Division of Comelec issued on May 24, 2007 a Resolution 7 in SPA No. 07-188 granting the petition filed
by Malik and disqualifying Mohammad from running as municipal mayor of Pantar, Lanao del Norte for failing to satisfy the
one year residency requirement and for not being a registered voter of the said place, thus:
WHEREFORE, premises considered, the instant petition is GRANTED. Respondent Mohammad "Exchan" G. Limbona is
hereby disqualified. Accordingly, his name is ordered deleted from the official list of candidates for the position of mayor of
the municipality of Pantar, Lanao del Norte.
SO ORDERED.
The May 24, 2007 Resolution became final and executory on June 2, 2007.8
Consequently, Norlainie filed a new certificate of candidacy as substitute candidate for Mohammad which was given due
course by the Comelec en banc in its Resolution No. 82559 dated July 23, 2007, the dispositive portion of which states:
The Commission RESOLVED, as it hereby RESOLVES, to approve the foregoing recommendations of the Law Department,
as follows:
1. To GIVE due course to the Certificate of Candidacy and Certificate of Nomination and Acceptance of Norlainie "LaiExchan" Mitmug Limbona as substitute candidate for Mohammad "Exchan" G. Limbona for Mayor, Pantar, Lanao del
Norte; and
2. To direct the Election Officer of Pantar, Lanao del Norte to DELETE the name of Mohammad "Exchan" G. Limbona from
the Certified List of Candidates for Mayor, Pantar, Lanao del Norte and to INCLUDE therein the name of Norlainie "LaiExchan" Mitmug Limbona.
Let the Law Department implement this resolution with dispatch.

SO ORDERED.
Thus, Malik filed a second petition for disqualification against Norlainie docketed as SPA No. 07-621.
After the elections, Norlainie emerged as the winning candidate and accordingly took her oath and assumed office.
However, on September 4, 2007, the Second Division of Comelec in SPA No. 07-611 disqualified Norlainie on three grounds:
lack of the one-year residency requirement; not being a registered voter of the municipality; and, nullity of her certificate of
candidacy for having been filed at a place other than the Office of the Election Officer.
Norlainie filed an Omnibus Motion to declare the petition in SPA No. 07-611 moot and/or for reconsideration, arguing that the
Comelec en banc had approved the withdrawal of her first certificate of candidacy and had given due course to her new
certificate of candidacy as a substitute candidate for Mohammad. Malik opposed the omnibus motion.
Meanwhile, the Second Division of Comelec in SPA No. 07-621, promulgated on November 23, 2007 a Resolution 10
disqualifying Norlainie from running as mayor of Pantar, Lanao del Norte. It held thus:
As regards the residency requirement, We rule for petitioner.
As borne out from the record, respondents domicile of origin was in Maguing, Lanao del Norte, which is her place of birth.
When she got married, she became a resident of Marawi City, specifically, in Barangay Rapasun where her husband served
as Barangay Chairman until November 2006. This is her domicile by operation of law pursuant to the Family Code as applied
in the case of Larrazabal v. Comelec (G.R. No. 100739, September 3, 1991).
What respondent now is trying to impress upon Us is that she has changed her aforesaid domicile and resided in Pantar,
Lanao del Norte. x x x
In the present case, the evidence adduced by respondent, which consists merely of self-serving affidavits cannot persuade
Us that she has abandoned her domicile of origin or her domicile in Marawi City. It is alleged that respondent "has been
staying, sleeping and doing business in her house for more than 20 months" in Lower Kalanganan and yet, there is no
independent and competent evidence that would corroborate such statement.
Further, We find no other act that would indicate respondents intention to stay in Pantar for an indefinite period of time. The
filing of her Certificate of Candidacy in Pantar, standing alone, is not sufficient to hold that she has chosen Pantar as her new
residence. We also take notice of the fact that in SPA No. 07-611, this Commission has even found that she is not a
registered voter in the said municipality warranting her disqualification as a candidate.11
On January 9, 2008, the Comelec en banc in SPA No. 07-611 denied Norlainies motion for reconsideration.
Hence, the instant petition alleging that the Comelec gravely abused its discretion in proceeding to resolve the petition in
SPA No. 07-611 despite the approval of petitioners withdrawal of certificate of candidacy.12
On January 29, 2008, the Court resolved to issue a temporary restraining order effective immediately enjoining respondents
from enforcing and implementing the Comelec Resolutions disqualifying petitioner as a candidate for mayor in Pantar, Lanao
del Norte.13
The petition lacks merit.
The withdrawal of a certificate of candidacy does not necessarily render the certificate void ab initio. Once filed, the
permanent legal effects produced thereby remain even if the certificate itself be subsequently withdrawn. 14 Section 73 of the
Omnibus Election Code of the Philippines (B.P. Blg. 881, as amended) provides:
Sec. 73. Certificate of candidacy. No person shall be eligible for any elective public office unless he files a sworn
certificate of candidacy within the period fixed herein. A person who has filed a certificate of candidacy may, prior to the
election, withdraw the same by submitting to the office concerned a written declaration under oath. No person shall
be eligible for more than one office to be filled in the same election, and if he files his certificate of candidacy for more than
one office, he shall not be eligible for any of them. However, before the expiration of the period for the filing of certificate of
candidacy, the person who has filed more than one certificate of candidacy may declare under oath the office for which he
desires to be eligible and cancel the certificate of candidacy for the other office or offices. The filing or withdrawal of a
certificate of candidacy shall not affect whatever civil, criminal or administrative liabilities which a candidate may
have incurred. (Emphasis supplied)
Thus, when petitioner filed her certificate of candidacy on March 29, 2007, such act produced legal effects, and the
withdrawal of the same, despite the approval of the Comelec, did not bar or render nugatory the legal proceedings it had set
in motion. As such, the Comelec did not commit grave abuse of discretion when it ruled on the merits of the petition despite
the withdrawal of petitioners certificate of candidacy. The Comelec correctly held that a case only becomes moot when
"there is no more actual controversy between the parties or no useful purpose can be served in passing upon the merits."15 In
the instant case, although petitioner withdrew her first certificate of candidacy, the subsequent disqualification of her husband
required that she file a new certificate of candidacy as a substitute candidate. The second filing of a certificate of candidacy
thus once again put her qualifications in issue. Hence, a ruling upon the same is necessary.
The fact that petitioners certificate of candidacy as a substitute candidate was given due course by the Comelec did not bar
the Comelec from deciding on her qualifications to run as municipal mayor. As correctly found by the Comelec:

Said resolution (Comelec Resolution No. 8255) discloses only the following: a) movant is given the green lights to be the
substitute candidate for her husband who was disqualified; b) her certificate of candidacy was duly accomplished in form and
substance and c) the certificate of candidacy will not cause confusion among the voters. Clearly, no issue of disqualification
was passed upon by the Commission in the said resolution.
Movant may have been given the impression that the Commissions act of giving due course to her substitute certificate of
candidacy constitutes a pronouncement that she is not disqualified. It must be pointed out, however, that the bases for giving
due course to a certificate of candidacy are totally different from those for enunciating that the candidate is not disqualified. x
x x16
Moreover, the Electoral Reforms Law of 1987 (R.A. No. 6646) "authorizes the Commission (Comelec) to try and decide
petitions for disqualifications even after the elections,"17 thus:
SEC. 6. Effect of Disqualification Case. Any candidate who has been declared by final judgment to be disqualified shall not
be voted for, and the votes cast for him shall not be counted. If for any reason a candidate is not declared by final
judgment before an election to be disqualified and he is voted for and receives the winning number of votes in such
election, the Court or Commission shall continue with the trial and hearing of the action, inquiry or protest and, upon
motion of the complainant or any intervenor, may during the pendency thereof order the suspension of the proclamation of
such candidate whenever the evidence of his guilt is strong. (Emphasis ours)
As such, the Comelec did not err when it continued with the trial and hearing of the petition for disqualification.
The Comelec correctly found that petitioner failed to satisfy the one-year residency requirement. The term "residence" as
used in the election law is synonymous with "domicile," which imports not only intention to reside in a fixed place but also
personal presence in that place, coupled with conduct indicative of such intention. 18 The manifest intent of the law in fixing a
residence qualification is to exclude a stranger or newcomer, unacquainted with the conditions and needs of a community
and not identified with the latter, from an elective office to serve that community.19
For purposes of election law, the question of residence is mainly one of intention. There is no hard and fast rule by which to
determine where a person actually resides.20 Three rules are, however, well established: first, that a man must have a
residence or domicile somewhere; second, that where once established it remains until a new one is acquired; and third, a
man can have but one domicile at a time.21
In order to acquire a domicile by choice, there must concur (1) residence or bodily presence in the new locality, (2) an
intention to remain there, and (3) an intention to abandon the old domicile. 22 A persons "domicile" once established is
considered to continue and will not be deemed lost until a new one is established.23
To successfully effect a change of domicile one must demonstrate an actual removal or an actual change of domicile; a bona
fide intention of abandoning the former place of residence and establishing a new one, and definite acts which correspond
with the purpose. In other words, there must basically be animus manendi coupled with animus non revertendi. The purpose
to remain in or at the domicile of choice must be for an indefinite period of time; the change of residence must be voluntary;
and the residence at the place chosen for the new domicile must be actual.24
Petitioners claim that she has been physically present and actually residing in Pantar for almost 20 months prior to the
elections,25 is self-serving and unsubstantiated. As correctly observed by the Comelec:
In the present case, the evidence adduced by respondent, which consists merely of self-serving affidavits cannot persuade
Us that she has abandoned her domicile of origin or her domicile in Marawi City. It is alleged that respondent "has been
staying, sleeping and doing business in her house for more than 20 months" in Lower Kalanganan and yet, there is no
independent and competent evidence that would corroborate such statement.
Further, We find no other act that would indicate respondents intention to stay in Pantar for an indefinite period of time. The
filing of her Certificate of Candidacy in Pantar, standing alone, is not sufficient to hold that she has chosen Pantar as her new
residence. We also take notice of the fact that in SPA No. 07-611, this Commission has even found that she is not a
registered voter in the said municipality warranting her disqualification as a candidate.26
We note the findings of the Comelec that petitioners domicile of origin is Maguing, Lanao del Norte,27 which is also her place
of birth; and that her domicile by operation of law (by virtue of marriage) is Rapasun, Marawi City. The Comelec found that
Mohammad, petitioners husband, effected the change of his domicile in favor of Pantar, Lanao del Norte only on November
11, 2006. Since it is presumed that the husband and wife live together in one legal residence, 28 then it follows that petitioner
effected the change of her domicile also on November 11, 2006. Articles 68 and 69 of the Family Code provide:
Art. 68. The husband and wife are obliged to live together, observe mutual love, respect and fidelity, and render mutual
help and support.
Art. 69. The husband and wife shall fix the family domicile. In case of disagreement, the court shall decide. The court
may exempt one spouse from living with the other if the latter should live abroad or there are other valid and
compelling reasons for the exemption. However, such exemption shall not apply if the same is not compatible with the
solidarity of the family. (Emphasis ours)
Considering that petitioner failed to show that she maintained a separate residence from her husband, and as there is no
evidence to prove otherwise, reliance on these provisions of the Family Code is proper and is in consonance with human
experience.29

Thus, for failure to comply with the residency requirement, petitioner is disqualified to run for the office of mayor of Pantar,
Lanao del Norte. However, petitioners disqualification would not result in Maliks proclamation who came in second during
the special election.
The rules on succession under the Local Government Code shall apply, to wit:
SECTION 44. Permanent Vacancies in the Offices of the Governor, Vice-Governor, Mayor, and Vice-Mayor. If a permanent
vacancy occurs in the office of the xxx mayor, the xxx vice-mayor concerned shall become the xxx mayor.
xxxx
For purposes of this Chapter, a permanent vacancy arises when an elective local official fills a higher vacant office, refuses to
assume office, fails to qualify or is removed from office, voluntarily resigns, or is otherwise permanently incapacitated to
discharge the functions of his office.
x x x x (Emphasis ours)
Considering the disqualification of petitioner to run as mayor of Pantar, Lanao del Norte, the proclaimed Vice-Mayor shall
then succeed as mayor.
WHEREFORE, the petition for certiorari is DISMISSED. The September 4, 2007 Resolution of the Commission on Elections
in SPA Case No. 07-611 disqualifying petitioner Norlainie Mitmug Limbona from running for office of the Mayor of Pantar,
Lanao del Norte, and the January 9, 2008 Resolution denying the motion for reconsideration, are AFFIRMED. In view of the
permanent vacancy in the Office of the Mayor, the proclaimed Vice-Mayor shall SUCCEED as Mayor. The temporary
restraining order issued on January 29, 2008 is ordered LIFTED.
SO ORDERED.

RENALD F. VILANDO,Petitioner,
- versus HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL, JOCELYN SY LIMKAICHONG AND HON. SPEAKER
PROSPERO NOGRALES,
Respondents.
G.R. Nos. 192147 & 192149
Promulgated:
August 23, 2011
X -------------------------------------------------------------------------------------- X
DECISION
MENDOZA, J.:
This is a petition for certiorari under Rule 65 of the Revised Rules of Court assailing the March 24, 2010 Decision
of the House of Representatives Electoral Tribunal (HRET) dismissing the petitions for quo warranto and declaring private
respondent Jocelyn Sy Limkaichong (Limkaichong) not disqualified as Member of the House of Representatives representing
the First District of Negros Oriental and its Resolution dated May 17, 2010, denying the motion for reconsideration.

In the May 14, 2007 elections, Limkaichong filed her certificate of candidacy for the position of Representative of
the First District of Negros Oriental. She won over the other contender, Olivia Paras.
On May 25, 2007, she was proclaimed as Representative by the Provincial Board of Canvassers on the basis of
Comelec Resolution No. 8062 issued on May 18, 2007.
On July 23, 2007, she assumed office as Member of the House of Representatives.
Meanwhile, petitions involving either the disqualification or the proclamation of Limkaichong were filed before the
Commission on Elections (COMELEC) which reached the Court.

The petitions, which questioned her citizenship, were filed against Limkaichong by her detractors: Louis Biraogo
(G.R. No. 179120); Olivia Paras (G.R. Nos. 179132-33);and Renald F. Vilando (G.R. Nos. 179240-41).These three (3)
petitions were consolidated with the petition for certiorari filed by Limkaichong (G.R. Nos. 178831-32) assailing the Joint
Resolution issued by the COMELEC which resolved the disqualification cases against her.
On April 1, 2009, the Court granted the aforesaid petition of Limkaichong, reversed the Joint Resolution of the
Comelec, dismissed the three (3) other petitions, and directed the petitioners to seek relief before the HRET by way of a
petition for Quo Warranto.
On April 21, 2009 and May 27, 2009, petitioner Renald F. Vilando (Vilando), as taxpayer; and Jacinto Paras, as
registered voter of the congressional district concerned, filed separate petitions for Quo Warranto against Limkaichong
before the HRET. These petitions were consolidated by the HRET as they both challenged the eligibility of one and the same
respondent. Petitioners asserted that Limkaichong was a Chinese citizen and ineligible for the office she was elected and
proclaimed. They alleged that she was born to a father (Julio Sy), whose naturalization had not attained finality, and to a
mother who acquired the Chinese citizenship of Julio Sy from the time of her marriage to the latter. Also, they invoked the
jurisdiction of the HRET for a determination of Limkaichongs citizenship, which necessarily included an inquiry into the
validity of the naturalization certificate of Julio Sy.
For her defense, Limkaichong maintained that she is a natural-born Filipino citizen. She averred that the acquisition of
Philippine citizenship by her father was regular and in order and had already attained the status of res judicata. Further, she
claimed that the validity of such citizenship could not be assailed through a collateral attack.
On March 24, 2010, the HRET dismissed both petitions and declared Limkaichong not disqualified as Member of the House
of Representatives. Pertinent portions of the HRET decision reads:
By and large, petitioners failed to satisfy the quantum of proof to sustain their theory that respondent is
not a natural-born Filipino citizen and therefore not qualified as Representative of the First
District, Negros Oriental. This being so, their petitions must fail

WHEREFORE, the Tribunal DISMISSES the instant petition for lack of merit and declares that
respondent Jocelyn Sy Limkaichong is not disqualified as Member of the House of
Representatives representing the First District, Negros Oriental.

As soon as the Decision becomes final and executory, notice of copies thereof shall be sent to the
President of the Philippines, the House of Representatives through the Speaker, the
Commission on Audit through the Chairman, pursuant to Rule 96 of the 2004 Rules of the
House of Representatives Electoral Tribunal. Let a copy of this Decision be furnished the
Chairman, Commission on Elections, for his information and appropriate action.

SO ORDERED

The petitioners sought reconsideration of the aforesaid decision, but it was denied by the HRET in its
Resolution dated May 17, 2010.

Hence, this petition for certiorari filed by Vilando anchored on the following
GROUNDS:
THE ONE-SIDED RESOLUTION OF THE SUBJECT PETITION FOR QUO
WARRANTO AND THE UTTER FAILURE OF THE HRET TO DISQUALIFY
LIMKAICHONG AS MEMBER OF THE HOUSE OF REPRESENTATIVES DESPITE

MANIFEST EVIDENCE THAT SHE IS NOT A NATURAL-BORN FILIPINO CITIZEN IS


WHIMSICAL, CAPRICIOUS AND ARBITRARY BECAUSE:

1.
[endif]THE PETITION FOR QUO WARRANTO DOES NOT OPERATE AS A
COLLATERAL ATTACK ON THE CITIZENSHIP OF LIMKAICHONGS FATHER FOR THE
REASON THAT HER FATHERS CERTIFICATE OF NATURALIZATION IS OF NO FORCE
AND EFFECT FROM THE VERY BEGINNING, HENCE, THERE IS ACTUALLY NOTHING
BEING ATTACKED OR ASSAILED BY THE SAME.

2.
[endif]LIMKAICHONG CANNOT DERIVE PHILIPPINE CITIZENSHIP FROM HER MOTHER GIVEN THAT AT THE
TIME OF HER BIRTH, HER MOTHER IS NOT ALREADY A FILIPINO CITIZEN AS A RESULT OF HER MARRIAGE TO
HER FATHER AS PROVIDED FOR UNDER SECTION 1 (7) OF COMMONWEALTH ACT NO. 63 IN RELATION TO
ARTICLE 2 (1) CHAPTER II OF THE CHINESE REVISED NATIONALITY LAW OF FEBRUARY 5, 1959.
[if !supportLists]3.
[endif]HAVING THE PLENARY, ABSOLUTE AND EXCLUSIVE JURISDICTION TO DETERMINE,
AMONG OTHERS, THE QUALIFICATIONS OF MEMBERS OF THE HOUSE OF REPRESENTATIVES, THE HRET CAN
LOOK INTO THE ELIGIBILITY OF LIMKAICHONG EVEN IF, AS AN INCIDENT THERETO, IT WOULD MEAN LOOKING
INTO THE VALIDITY OF THE CERTIFICATE OF NATURALIZATION.[if !supportFootnotes][8][endif]
It should be noted that Limkaichongs term of office as Representative of the First District of Negros Oriental from
June 30, 2007 to June 30, 2010 already expired. As such, the issue questioning her eligibility to hold office has been
rendered moot and academic by the expiration of her term. Whatever judgment is reached, the same can no longer have any
practical legal effect or, in the nature of things, can no longer be enforced.Thus, the petition may be dismissed for being moot
and academic.
Moreover, there was the conduct of the 2010 elections, a supervening event, in a sense, has also rendered this
case moot and academic. A moot and academic case is one that ceases to present a justiciable controversy by virtue of
supervening events, so that a declaration thereon would be of no practical value. As a rule, courts decline jurisdiction over
such case, or dismiss it on ground of mootness.
Citizenship, being a continuing requirement for Members of the House of Representatives, however, may be questioned at
anytime.For this reason, the Court deems it appropriate to resolve the petition on the merits. This position finds support in the
rule that courts will decide a question, otherwise moot and academic, if it is capable of repetition, yet evading review. The
question on Limkaichongs citizenship is likely to recur if she would run again, as she did run, for public office, hence, capable
of repetition.
In any case, the Court is of the view that the HRET committed no grave abuse of discretion in finding that Limkaichong is not
disqualified to sit as Member of the House of Representatives.
Vilandos argument, that the quo warranto petition does not operate as a collateral attack on the citizenship of Limkaichongs
father as the certificate of naturalization is null and void from the beginning, is devoid of merit.
In this petition, Vilando seeks to disqualify Limkaichong on the ground that she is a Chinese citizen. To prove his
point, he makes reference to the alleged nullity of the grant of naturalization of Limkaichongs father which, however, is not
allowed as it would constitute a collateral attack on the citizenship of the father. In our jurisdiction, an attack on a person's
citizenship may only be done through a direct action for its nullity.
The proper proceeding to assail the citizenship of Limkaichongs father should be in accordance with Section 18
of Commonwealth Act No. 473. As held in Limkaichong v. Comelec,thus:
As early as the case of Queto v. Catolico, where the Court of First Instance
judge motu propio and not in the proper denaturalisation proceedings called to court various
grantees of certificates of naturalization (who had already taken their oaths of allegiance)
and cancelled their certificates of naturalization due to procedural infirmities, the Court held
that:

x x x It may be true that, as alleged by said


respondents, that the proceedings for naturalization were tainted
with certain infirmities, fatal or otherwise, but that is beside the point
in this case. The jurisdiction of the court to inquire into and rule
upon such infirmities must be properly invoked in accordance with

the procedure laid down by law. Such procedure is the cancellation


of the naturalization certificate. [Section 1(5), Commonwealth Act
No. 63], in the manner fixed in Section 18 of Commonwealth Act
No. 473, hereinbefore quoted, namely, "upon motion made in the
proper proceedings by the Solicitor General or his representatives,
or by the proper provincial fiscal." In other words, the initiative must
come from these officers, presumably after previous investigation in
each particular case.

Clearly, under law and jurisprudence, it is the State,


through its representatives designated by statute, that may
question the illegally or invalidly procured certificate of
naturalization in the appropriate denaturalization proceedings. It is
plainly not a matter that may be raised by private persons in an
election case involving the naturalized citizens descendant.

Vilando asserts that as an incident in determining the eligibility of Limkaichong, the HRET, having the plenary,
absolute and exclusive jurisdiction to determine her qualifications, can pass upon the efficacy of the certificate of
naturalization.
True, the HRET has jurisdiction over quo warranto petitions, specifically over cases challenging ineligibility on the
ground of lack of citizenship. No less than the 1987 Constitution vests the HRET the authority to be the sole judge of all
contests relating to the election, returns and qualifications of its Members. This constitutional power is likewise echoed in the
2004 Rules of the HRET. Rule 14 thereof restates this duty, thus:
Rule 14. Jurisdiction. The Tribunal is the sole judge of all contests relating to the election, returns, and qualifications of the
Members of the House of Representatives.
Time and again, this Court has acknowledged this sole and exclusive jurisdiction of the HRET.The power granted
to HRET by the Constitution is intended to be as complete and unimpaired as if it had remained originally in the
legislature.Such power is regarded as full, clear and complete and excludes the exercise of any authority on the part of this
Court that would in any wise restrict it or curtail it or even affect the same.
Such power of the HRET, no matter how complete and exclusive, does not carry with it the authority to delve into
the legality of the judgment of naturalization in the pursuit of disqualifying Limkaichong. To rule otherwise would operate as a
collateral attack on the citizenship of the father which, as already stated, is not permissible. The HRET properly resolved the
issue with the following ratiocination:
xxx We note that Jocelyn C. Limkaichong, not the father Julio Ong Sy, is the respondent in the present
case. The Tribunal may not dwell on deliberating on the validity of naturalization of the
father if only to pursue the end of declaring the daughter as disqualified to hold office.

Unfortunately, much as the Tribunal wants to resolve said issue, it cannot do so because its jurisdiction
is limited to the qualification of the proclaimed respondent Limkaichong, being a sitting
Member of the Congress.

Evidently, there is no basis to oblige the Tribunal to reopen the naturalization


proceedings for a determination of the citizenship of the ascendant of respondent. A petition
for quo warranto is not a means to achieve that purpose. To rule on this issue in this quo
warranto proceeding will not only be a clear grave abuse of discretion amounting to a lack
or excess of jurisdiction, but also a blatant violation of due process on the part of the
persons who will be affected or who are not parties in this case.

Thus, the Office of the Solicitor General (OSG) wrote that a collateral attack against a judgment is generally not
allowed, unless the judgment is void upon its face or its nullity is apparent by virtue of its own recitals.Under the present
situation, there is no evidence to show that the judgment is void on its face:
As to the Order of the CFI, Negros Oriental dated July 9, 1957 and September
21, 1959 that were offered in evidence, far from proving an invalid oath of allegiance and
certificate of naturalization, being public records, they do in fact constitute legitimate source
of authority for the conferment of status of the father of respondent as naturalized Filipino.
Absent any contrary declaration by a competent court, the Tribunal presumes the validity of
the CFI Orders of July 9, 1957 and September 21, 1959, and the resulting documentations
of Julio Sys acquisition of Filipino citizenship by naturalization as valid and of legal effect.
The oath of allegiance and certificate of naturalization are themselves proofs of the actual
conferment of naturalization.[if !supportFootnotes][21][endif]

The HRET, therefore, correctly relied on the presumption of validity of the July 9, 1957 and September 21, 1959 Orders of
the Court of First Instance (CFI) Negros Oriental, which granted the petition and declared Julio Sy a naturalized Filipino
absent any evidence to the contrary.
Records disclose that Limkaichong was born in Dumaguete City on November 9, 1959. The governing law is the
citizenship provision of the 1935 Constitution, the pertinent portion thereof, reads:
Article IV

Section 1. The following are citizens of the Philippines:

xxx

(3) Those whose fathers are citizens of the Philippines.

(4) Those whose mothers are citizens of the Philippines and, upon reaching the age of majority, elect
Philippine citizenship.

xxx

Indubitably, with Limkaichongs father having been conferred the status as a naturalized Filipino, it follows that she is a
Filipino citizen born to a Filipino father.
Even on the assumption that the naturalization proceedings and the subsequent issuance of certificate of
naturalization were invalid, Limkaichong can still be considered a natural-born Filipino citizen having been born to a Filipino
mother and having impliedly elected Filipino citizenship when she reached majority age. The HRET is, thus, correct in
declaring that Limkaichong is a natural-born Filipino citizen:
Respondent Limkaichong falls under the category of those persons whose fathers are citizens of the
Philippines. (Section 1(3), Article IV, 1935 Constitution) It matters not whether the father
acquired citizenship by birth or by naturalization. Therefore, following the line of
transmission through the father under the 1935 Constitution, the respondent has
satisfactorily complied with the requirement for candidacy and for holding office, as she is a
natural-born Filipino citizen.

Likewise, the citizenship of respondent Limkaichong finds support in paragraph


4, Section 1, Article IV of the 1935 Constitution.

Having failed to prove that Anesia Sy lost her Philippine citizenship, respondent can be considered a
natural born citizen of the Philippines, having been born to a mother who was a natural-born
Filipina at the time of marriage, and because respondent was able to elect citizenship
informally when she reached majority age. Respondent participated in the barangay
elections as a young voter in 1976, accomplished voters affidavit as of 1984, and ran as a
candidate and was elected as Mayor of La Libertad, Negros Oriental in 2004. These are
positive acts of election of Philippine citizenship. The case of In re: Florencio Mallare,
elucidates how election of citizenship is manifested in actions indubitably showing a definite
choice. We note that respondent had informally elected citizenship after January 17, 1973
during which time the 1973 Constitution considered as citizens of the Philippines all those
who elect citizenship in accordance with the 1935 Constitution. The 1987 Constitution
provisions, i.e., Section 1(3), Article [IV] and Section 2, Article [IV] were enacted to correct
the anomalous situation where one born of a Filipino father and an alien mother was
automatically accorded the status of a natural-born citizen, while one born of a Filipino
mother and an alien father would still have to elect Philippine citizenship yet if so elected,
was not conferred natural-born status. It was the intention of the framers of the 1987
Constitution to treat equally those born before the 1973 Constitution and who elected
Philippine citizenship upon reaching the age of majority either before or after the effectivity
of the 1973 Constitution. Thus, those who would elect Philippine citizenship under par. 3,
Section 1, Article [IV] of the 1987 Constitution are now, under Section 2, Article [IV] thereof
also natural-born Filipinos. The following are the pertinent provisions of the 1987
Constitution:

Article IV

Section 1. The following are citizens of the Philippines:

[if !supportLists](1) [endif]Those who are citizens of the Philippines at the time of the adoption of this Constitution;
[if !supportLists](2) [endif]Those whose fathers or mothers are citizens of the Philippines;
[if !supportLists](3) [endif]Those born before January 17, 1973, of Filipino mothers, who elect Philippine citizenship
upon reaching the age of majority; and

[if !supportLists](4) [endif]Those who are naturalized in accordance with law.

Section 2. Natural-born citizens are those who are citizens of the


Philippines from birth without having to perform any act to acquire or perfect
their Philippine citizenship. Those who elect Philippine citizenship in
accordance with paragraph (3), Section 1 hereof shall be deemed naturalborn citizens.[if !supportFootnotes][22][endif]

Vilandos assertion that Limkaichong cannot derive Philippine citizenship from her mother because the
latter became a Chinese citizen when she married Julio Sy, as provided for
under Section 1 (7) of Commonwealth Act No. 63 in relation to Article 2 (1)
Chapter II of the Chinese Revised Nationality Law of February 5, 1959, must
likewise fail.

As aptly pointed out by the HRET, Vilando was not able to offer in evidence a duly certified true copy of the alleged Chinese
Revised Law of Nationality to prove that Limkaichongs mother indeed lost her Philippine citizenship. Verily, Vilando failed to
establish his case through competent and admissible evidence to warrant a reversal of the HRET ruling.
Also, an application for an alien certificate of registration (ACR) is not an indubitable proof of forfeiture of Philippine
citizenship. It is well to quote the ruling of the HRET on this matter, to wit:
An alien certificate of registration is issued to an individual who declares that he is not a Filipino citizen.
It is obtained only when applied for. It is in a form prescribed by the agency and contains a
declaration by the applicant of his or her personal information, a photograph, and physical
details that identify the applicant. It bears no indication of basis for foreign citizenship, nor
proof of change to foreign citizenship. It certifies that a person named therein has applied
for registration and fingerprinting and that such person was issued a certificate of
registration under the Alien Registration Act of 1950 or other special law. It is only evidence
of registration.

Unlike birth certificates registered pursuant to Act 3753 (The Civil Register Law), and much less like
other public records referred to under Section 23, Rule 132, an alien certificate of
registration is not a public document that would be prima facie evidence of the truth of facts

contained therein. On its face, it only certifies that the applicant had submitted himself or
herself to registration. Therefore, there is no presumption of alienage of the declarant. This
is especially so where the declarant has in fact been a natural-born Filipino all along and
never lost his or her status as such.[if !supportFootnotes][23][endif]

Thus, obtaining an ACR by Limkaichongs mother was not tantamount to a repudiation of her original citizenship.
Neither did it result in an acquisition of alien citizenship. In a string of decisions, this Court has consistently held that an
application for, and the holding of, an alien certificate of registration is not an act constituting renunciation of Philippine
citizenship.[if !supportFootnotes][24][endif] For renunciation to effectively result in the loss of citizenship, the same must be express. [if !
supportFootnotes][25][endif]
Such express renunciation is lacking in this case.
Accordingly, Limkaichongs mother, being a Filipino citizen, can transmit her citizenship to her daughter.

Well-settled is the principle that the judgments of the HRET are beyond judicial interference. The only instance
where this Court may intervene in the exercise of its so-called extraordinary jurisdiction is upon a determination that the
decision or resolution of the HRET was rendered without or in excess of its jurisdiction, or with grave abuse of discretion or
upon a clear showing of such arbitrary and improvident use of its power to constitute a denial of due process of law, or upon
a demonstration of a very clear unmitigated error, manifestly constituting such grave abuse of discretion that there has to be
a remedy for such abuse.[if !supportFootnotes][26][endif] In this case, there is no showing of any such arbitrariness or improvidence. The
HRET acted well within the sphere of its power when it dismissed the quo warranto petition.

In fine, this Court finds sufficient basis to sustain the ruling of the HRET which resolved the issue of citizenship in
favor of Limkaichong.
WHEREFORE, the petition is DENIED. Accordingly, the Court affirms the March 24, 2010 Decision of the HRET declaring
that Limkaichong is not disqualified as Member of the House of Representatives representing the First District, Negros
Oriental.
SO ORDERED.