THIRD DIVISION

[G.R. NO. 150806 - January 28, 2008]

EUFEMIA ALMEDA and ROMEL ALMEDA, Petitioners, v. BATHALA MARKETING INDUSTRIES,

INC.,Respondent.

DECISION

NACHURA, J.:

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, of the Decision1 of the
Court of Appeals (CA), dated September 3, 2001, in CA-G.R. CV No. 67784, and its Resolution2 dated
November 19, 2001. The assailed Decision affirmed with modification the Decision3 of the Regional Trial
Court (RTC), Makati City, Branch 136, dated May 9, 2000 in Civil Case No. 98-411.

Sometime in May 1997, respondent Bathala Marketing Industries, Inc., as lessee, represented by its
president Ramon H. Garcia, renewed its Contract of Lease4 with Ponciano L. Almeda (Ponciano), as
lessor, husband of petitioner Eufemia and father of petitioner Romel Almeda. Under the said contract,
Ponciano agreed to lease a portion of the Almeda Compound, located at 2208 Pasong Tamo Street,
Makati City, consisting of 7,348.25 square meters, for a monthly rental of P1,107,348.69, for a term of
four (4) years from May 1, 1997 unless sooner terminated as provided in the contract.5 The contract of
lease contained the following pertinent provisions which gave rise to the instant case:

SIXTH - It is expressly understood by the parties hereto that the rental rate stipulated is based on the
present rate of assessment on the property, and that in case the assessment should hereafter be
increased or any new tax, charge or burden be imposed by authorities on the lot and building where the
leased premises are located, LESSEE shall pay, when the rental herein provided becomes due, the
additional rental or charge corresponding to the portion hereby leased; provided, however, that in the
event that the present assessment or tax on said property should be reduced, LESSEE shall be entitled to
reduction in the stipulated rental, likewise in proportion to the portion leased by him;

SEVENTH - In case an extraordinary inflation or devaluation of Philippine Currency should supervene, the
value of Philippine peso at the time of the establishment of the obligation shall be the basis of
payment;6

During the effectivity of the contract, Ponciano died. Thereafter, respondent dealt with petitioners. In a
letter7 dated December 29, 1997, petitioners advised respondent that the former shall assess and collect
Value Added Tax (VAT) on its monthly rentals. In response, respondent contended that VAT may not be
imposed as the rentals fixed in the contract of lease were supposed to include the VAT therein,
considering that their contract was executed on May 1, 1997 when the VAT law had long been in effect.8

On January 26, 1998, respondent received another letter from petitioners informing the former that its
monthly rental should be increased by 73% pursuant to condition No. 7 of the contract and Article 1250
of the Civil Code. Respondent opposed petitioners' demand and insisted that there was no extraordinary
inflation to warrant the application of Article 1250 in light of the pronouncement of this Court in various
cases.9

Respondent refused to pay the VAT and adjusted rentals as demanded by petitioners but continued to
pay the stipulated amount set forth in their contract.

On February 18, 1998, respondent instituted an action for declaratory relief for purposes of determining
the correct interpretation of condition Nos. 6 and 7 of the lease contract to prevent damage and
prejudice.10 The case was docketed as Civil Case No. 98-411 before the RTC of Makati.

On March 10, 1998, petitioners in turn filed an action for ejectment, rescission and damages against
respondent for failure of the latter to vacate the premises after the demand made by the
former.11 Before respondent could file an answer, petitioners filed a Notice of Dismissal.12 They
subsequently refiled the complaint before the Metropolitan Trial Court of Makati; the case was raffled
to Branch 139 and was docketed as Civil Case No. 53596.

Petitioners later moved for the dismissal of the declaratory relief case for being an improper remedy
considering that respondent was already in breach of the obligation and that the case would not end the
litigation and settle the rights of the parties. The trial court, however, was not persuaded, and
consequently, denied the motion.

After trial on the merits, on May 9, 2000, the RTC ruled in favor of respondent and against petitioners.
The pertinent portion of the decision reads:

WHEREFORE, premises considered, this Court renders judgment on the case as follows:

1) declaring that plaintiff is not liable for the payment of Value-Added Tax (VAT) of 10% of the rent for
[the] use of the leased premises;

2) declaring that plaintiff is not liable for the payment of any rental adjustment, there being no
[extraordinary] inflation or devaluation, as provided in the Seventh Condition of the lease contract, to
justify the same;

3) holding defendants liable to plaintiff for the total amount of P1,119,102.19, said amount representing
payments erroneously made by plaintiff as VAT charges and rental adjustment for the months of
January, February and March, 1999; andcralawlibrary

4) holding defendants liable to plaintiff for the amount of P1,107,348.69, said amount representing the
balance of plaintiff's rental deposit still with defendants.

SO ORDERED.13

The trial court denied petitioners their right to pass on to respondent the burden of paying the VAT
since it was not a new tax that would call for the application of the sixth clause of the contract. The
court, likewise, denied their right to collect the demanded increase in rental, there being no
extraordinary inflation or devaluation as provided for in the seventh clause of the contract. Because of
the payment made by respondent of the rental adjustment demanded by petitioners, the court ordered
the restitution by the latter to the former of the amounts paid, notwithstanding the well-established
rule that in an action for declaratory relief, other than a declaration of rights and obligations, affirmative
reliefs are not sought by or awarded to the parties.

Petitioners elevated the aforesaid case to the Court of Appeals which affirmed with modification the
RTC decision. The fallo reads:

WHEREFORE, premises considered, the present appeal is DISMISSED and the appealed decision in Civil
Case No. 98-411 is hereby AFFIRMED with MODIFICATION in that the order for the return of the balance
of the rental deposits and of the amounts representing the 10% VAT and rental adjustment, is hereby
DELETED.

No pronouncement as to costs.

SO ORDERED.14

The appellate court agreed with the conclusions of law and the application of the decisional rules on the
matter made by the RTC. However, it found that the trial court exceeded its jurisdiction in granting
affirmative relief to the respondent, particularly the restitution of its excess payment.

Petitioners now come before this Court raising the following issues:

I.

WHETHER OR NOT ARTICLE 1250 OF THE NEW CIVIL CODE IS APPLICABLE TO THE CASE AT BAR.

II.

WHETHER OR NOT THE DOCTRINE ENUNCIATED IN FILIPINO PIPE AND FOUNDRY CORP. v. NAWASA
CASE, 161 SCRA 32 AND COMPANION CASES ARE (sic) APPLICABLE IN THE CASE AT BAR.

III.

WHETHER OR NOT IN NOT APPLYING THE DOCTRINE IN THE CASE OF DEL ROSARIO v. THE SHELL
COMPANY OF THE PHILIPPINES, 164 SCRA 562, THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED
ON A QUESTION OF LAW.

IV.

WHETHER OR NOT THE FINDING OF THE HONORABLE COURT OF APPEALS THAT RESPONDENT IS NOT
LIABLE TO PAY THE 10% VALUE ADDED TAX IS IN ACCORDANCE WITH THE MANDATE OF RA 7716.

V.

WHETHER OR NOT DECLARATORY RELIEF IS PROPER SINCE PLAINTIFF-APPELLEE WAS IN BREACH WHEN
THE PETITION FOR DECLARATORY RELIEF WAS FILED BEFORE THE TRIAL COURT.
In fine, the issues for our resolution are as follows: 1) whether the action for declaratory relief is proper;
2) whether respondent is liable to pay 10% VAT pursuant to Republic Act (RA) 7716; and 3) whether the
amount of rentals due the petitioners should be adjusted by reason of extraordinary inflation or
devaluation.

Declaratory relief is defined as an action by any person interested in a deed, will, contract or other
written instrument, executive order or resolution, to determine any question of construction or validity
arising from the instrument, executive order or regulation, or statute, and for a declaration of his rights
and duties thereunder. The only issue that may be raised in such a petition is the question of
construction or validity of provisions in an instrument or statute. Corollary is the general rule that such
an action must be justified, as no other adequate relief or remedy is available under the
circumstances.15

Decisional law enumerates the requisites of an action for declaratory relief, as follows: 1) the subject
matter of the controversy must be a deed, will, contract or other written instrument, statute, executive
order or regulation, or ordinance; 2) the terms of said documents and the validity thereof are doubtful
and require judicial construction; 3) there must have been no breach of the documents in question; 4)
there must be an actual justiciable controversy or the "ripening seeds" of one between persons whose
interests are adverse; 5) the issue must be ripe for judicial determination; and 6) adequate relief is not
available through other means or other forms of action or proceeding.16

It is beyond cavil that the foregoing requisites are present in the instant case, except that petitioners
insist that respondent was already in breach of the contract when the petition was filed.

We do not agree.

After petitioners demanded payment of adjusted rentals and in the months that followed, respondent
complied with the terms and conditions set forth in their contract of lease by paying the rentals
stipulated therein. Respondent religiously fulfilled its obligations to petitioners even during the
pendency of the present suit. There is no showing that respondent committed an act constituting a
breach of the subject contract of lease. Thus, respondent is not barred from instituting before the trial
court the petition for declaratory relief.

Petitioners claim that the instant petition is not proper because a separate action for rescission,
ejectment and damages had been commenced before another court; thus, the construction of the
subject contractual provisions should be ventilated in the same forum.

We are not convinced.

It is true that in Panganiban v. Pilipinas Shell Petroleum Corporation17 we held that the petition for
declaratory relief should be dismissed in view of the pendency of a separate action for unlawful
detainer. However, we cannot apply the same ruling to the instant case. In Panganiban, the unlawful
detainer case had already been resolved by the trial court before the dismissal of the declaratory relief
case; and it was petitioner in that case who insisted that the action for declaratory relief be preferred
over the action for unlawful detainer. Conversely, in the case at bench, the trial court had not yet
resolved the rescission/ejectment case during the pendency of the declaratory relief petition. In fact,
the trial court, where the rescission case was on appeal, itself initiated the suspension of the
proceedings pending the resolution of the action for declaratory relief.

We are not unmindful of the doctrine enunciated in Teodoro, Jr. v. Mirasol18 where the declaratory relief
action was dismissed because the issue therein could be threshed out in the unlawful detainer suit. Yet,
again, in that case, there was already a breach of contract at the time of the filing of the declaratory
relief petition. This dissimilar factual milieu proscribes the Court from applying Teodoro to the instant
case.

Given all these attendant circumstances, the Court is disposed to entertain the instant declaratory relief
action instead of dismissing it, notwithstanding the pendency of the ejectment/rescission case before
the trial court. The resolution of the present petition would write finis to the parties' dispute, as it would
settle once and for all the question of the proper interpretation of the two contractual stipulations
subject of this controversy.

Now, on the substantive law issues.

Petitioners repeatedly made a demand on respondent for the payment of VAT and for rental adjustment
allegedly brought about by extraordinary inflation or devaluation. Both the trial court and the appellate
court found no merit in petitioners' claim. We see no reason to depart from such findings.

As to the liability of respondent for the payment of VAT, we cite with approval the ratiocination of the
appellate court, viz.:

Clearly, the person primarily liable for the payment of VAT is the lessor who may choose to pass it on to
the lessee or absorb the same. Beginning January 1, 1996, the lease of real property in the ordinary
course of business, whether for commercial or residential use, when the gross annual receipts
exceed P500,000.00, is subject to 10% VAT. Notwithstanding the mandatory payment of the 10% VAT by
the lessor, the actual shifting of the said tax burden upon the lessee is clearly optional on the part of the
lessor, under the terms of the statute. The word "may" in the statute, generally speaking, denotes that it
is directory in nature. It is generally permissive only and operates to confer discretion. In this case,
despite the applicability of the rule under Sec. 99 of the NIRC, as amended by R.A. 7716, granting the
lessor the option to pass on to the lessee the 10% VAT, to existing contracts of lease as of January 1,
1996, the original lessor, Ponciano L. Almeda did not charge the lessee-appellee the 10% VAT nor
provided for its additional imposition when they renewed the contract of lease in May 1997. More
significantly, said lessor did not actually collect a 10% VAT on the monthly rental due from the lessee-
appellee after the execution of the May 1997 contract of lease. The inevitable implication is that the
lessor intended not to avail of the option granted him by law to shift the 10% VAT upon the lessee-
appellee. x x x.19

In short, petitioners are estopped from shifting to respondent the burden of paying the VAT.
Petitioners' reliance on the sixth condition of the contract is, likewise, unavailing. This provision clearly
states that respondent can only be held liable for new taxes imposed after the effectivity of the contract
of lease, that is, after May 1997, and only if they pertain to the lot and the building where the leased
premises are located. Considering that RA 7716 took effect in 1994, the VAT cannot be considered as a
"new tax" in May 1997, as to fall within the coverage of the sixth stipulation.

Neither can petitioners legitimately demand rental adjustment because of extraordinary inflation or
devaluation.

Petitioners contend that Article 1250 of the Civil Code does not apply to this case because the contract
stipulation speaks of extraordinary inflation or devaluation while the Code speaks of extraordinary
inflation or deflation. They insist that the doctrine pronounced in Del Rosario v. The Shell Company,
Phils. Limited20 should apply.

Essential to contract construction is the ascertainment of the intention of the contracting parties, and
such determination must take into account the contemporaneous and subsequent acts of the parties.
This intention, once ascertained, is deemed an integral part of the contract.21

While, indeed, condition No. 7 of the contract speaks of "extraordinary inflation or devaluation" as
compared to Article 1250's "extraordinary inflation or deflation," we find that when the parties used the
term "devaluation," they really did not intend to depart from Article 1250 of the Civil Code. Condition
No. 7 of the contract should, thus, be read in harmony with the Civil Code provision.

That this is the intention of the parties is evident from petitioners' letter22 dated January 26, 1998,
where, in demanding rental adjustment ostensibly based on condition No. 7, petitioners made explicit
reference to Article 1250 of the Civil Code, even quoting the law verbatim. Thus, the application of Del
Rosario is not warranted. Rather, jurisprudential rules on the application of Article 1250 should be
considered.

Article 1250 of the Civil Code states:

In case an extraordinary inflation or deflation of the currency stipulated should supervene, the value of
the currency at the time of the establishment of the obligation shall be the basis of payment, unless
there is an agreement to the contrary.

Inflation has been defined as the sharp increase of money or credit, or both, without a corresponding
increase in business transaction. There is inflation when there is an increase in the volume of money and
credit relative to available goods, resulting in a substantial and continuing rise in the general price
level.23In a number of cases, this Court had provided a discourse on what constitutes extraordinary
inflation, thus:

[E]xtraordinary inflation exists when there is a decrease or increase in the purchasing power of the
Philippine currency which is unusual or beyond the common fluctuation in the value of said currency,
and such increase or decrease could not have been reasonably foreseen or was manifestly beyond the
contemplation of the parties at the time of the establishment of the obligation.24
The factual circumstances obtaining in the present case do not make out a case of extraordinary
inflation or devaluation as would justify the application of Article 1250 of the Civil Code. We would like
to stress that the erosion of the value of the Philippine peso in the past three or four decades, starting in
the mid-sixties, is characteristic of most currencies. And while the Court may take judicial notice of the
decline in the purchasing power of the Philippine currency in that span of time, such downward trend of
the peso cannot be considered as the extraordinary phenomenon contemplated by Article 1250 of the
Civil Code. Furthermore, absent an official pronouncement or declaration by competent authorities of
the existence of extraordinary inflation during a given period, the effects of extraordinary inflation are
not to be applied.25

WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals in CA-
G.R. CV No. 67784, dated September 3, 2001, and its Resolution dated November 19, 2001,
are AFFIRMED.

SO ORDERED.

[G.R. No. 159357. April 28, 2004]

Brother MARIANO MIKE Z. VELARDE, petitioner, vs. SOCIAL JUSTICE SOCIETY, respondent.

DECISION

PANGANIBAN, J.:

A decision that does not conform to the form and substance required by the Constitution and the law is
void and deemed legally inexistent. To be valid, decisions should comply with the form, the procedure
and the substantive requirements laid out in the Constitution, the Rules of Court and relevant
circulars/orders of the Supreme Court. For the guidance of the bench and the bar, the Court hereby
discusses these forms, procedures and requirements.

The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the June 12, 2003
Decision[2] and July 29, 2003 Order[3] of the Regional Trial Court (RTC) of Manila (Branch 49).[4]

The challenged Decision was the offshoot of a Petition for Declaratory Relief[5] filed before the RTC-
Manila by herein Respondent Social Justice Society (SJS) against herein Petitioner Mariano Mike Z.
Velarde, together with His Eminence, Jaime Cardinal Sin, Executive Minister Erao Manalo, Brother Eddie
Villanueva and Brother Eliseo F. Soriano as co-respondents. The Petition prayed for the resolution of the
question whether or not the act of a religious leader like any of herein respondents, in endorsing the
candidacy of a candidate for elective office or in urging or requiring the members of his flock to vote for
a specified candidate, is violative of the letter or spirit of the constitutional provisions x x x.[6]

Alleging that the questioned Decision did not contain a statement of facts and a dispositive portion,
herein petitioner filed a Clarificatory Motion and Motion for Reconsideration before the trial
court. Soriano, his co-respondent, similarly filed a separate Motion for Reconsideration. In response, the
trial court issued the assailed Order, which held as follows:

x x x [T]his Court cannot reconsider, because what it was asked to do, was only to clarify a Constitutional
provision and to declare whether acts are violative thereof. The Decision did not make a dispositive
portion because a dispositive portion is required only in coercive reliefs, where a redress from wrong
suffered and the benefit that the prevailing party wronged should get. The step that these movants have
to take, is direct appeal under Rule 45 of the Rules of Court, for a conclusive interpretation of the
Constitutional provision to the Supreme Court.[7]

The Antecedent Proceedings

On January 28, 2003, SJS filed a Petition for Declaratory Relief (SJS Petition) before the RTC-Manila
against Velarde and his aforesaid co-respondents. SJS, a registered political party, sought the
interpretation of several constitutional provisions,[8] specifically on the separation of church and state;
and a declaratory judgment on the constitutionality of the acts of religious leaders endorsing a
candidate for an elective office, or urging or requiring the members of their flock to vote for a specified
candidate.

The subsequent proceedings were recounted in the challenged Decision in these words:

x x x. Bro. Eddie Villanueva submitted, within the original period [to file an Answer], a Motion to Dismiss.
Subsequently, Executive Minister Erao Manalo and Bro. Mike Velarde, filed their Motions to Dismiss.
While His Eminence Jaime Cardinal L. Sin, filed a Comment and Bro. Eli Soriano, filed an Answer within
the extended period and similarly prayed for the dismissal of the Petition. All sought the dismissal of the
Petition on the common grounds that it does not state a cause of action and that there is no justiciable
controversy. They were ordered to submit a pleading by way of advisement, which was closely followed
by another Order denying all the Motions to Dismiss. Bro. Mike Velarde, Bro. Eddie Villanueva and
Executive Minister Erao Manalo moved to reconsider the denial. His Eminence Jaime Cardinal L. Sin,
asked for extension to file memorandum. Only Bro. Eli Soriano complied with the first Order by
submitting his Memorandum. x x x.

x x x the Court denied the Motions to Dismiss, and the Motions for Reconsideration filed by Bro. Mike
Velarde, Bro. Eddie Villanueva and Executive Minister Erao Manalo, which raised no new arguments
other than those already considered in the motions to dismiss x x x.[9]

After narrating the above incidents, the trial court said that it had jurisdiction over the Petition, because
in praying for a determination as to whether the actions imputed to the respondents are violative of
Article II, Section 6 of the Fundamental Law, [the Petition] has raised only a question of law.[10] It then
proceeded to a lengthy discussion of the issue raised in the Petition the separation of church and state
even tracing, to some extent, the historical background of the principle. Through its discourse, the
court a quo opined at some point that the [e]ndorsement of specific candidates in an election to any
public office is a clear violation of the separation clause.[11]
After its essay on the legal issue, however, the trial court failed to include a dispositive portion in its
assailed Decision. Thus, Velarde and Soriano filed separate Motions for Reconsideration which, as
mentioned earlier, were denied by the lower court.

Hence, this Petition for Review.[12]

This Court, in a Resolution[13] dated September 2, 2003, required SJS and the Office of the Solicitor
General (OSG) to submit their respective comments. In the same Resolution, the Court gave the other
parties -- impleaded as respondents in the original case below --the opportunity to comment, if they so
desired.

On April 13, 2004, the Court en banc conducted an Oral Argument.[14]

The Issues

In his Petition, Brother Mike Velarde submits the following issues for this Courts resolution:

1. Whether or not the Decision dated 12 June 2003 rendered by the court a quo was proper and valid;

2. Whether or not there exists justiceable controversy in herein respondents Petition for declaratory
relief;

3. Whether or not herein respondent has legal interest in filing the Petition for declaratory relief;

4. Whether or not the constitutional question sought to be resolved by herein respondent is ripe for
judicial determination;

5. Whether or not there is adequate remedy other than the declaratory relief; and,

6. Whether or not the court a quo has jurisdiction over the Petition for declaratory relief of herein
respondent.[15]

During the Oral Argument, the issues were narrowed down and classified as follows:

A. Procedural Issues

Did the Petition for Declaratory Relief raise a justiciable controversy? Did it state a cause of action? Did
respondent have any legal standing to file the Petition for Declaratory Relief?

B. Substantive Issues

1. Did the RTC Decision conform to the form and substance required by the Constitution, the law and
the Rules of Court?

2. May religious leaders like herein petitioner, Bro. Mike Velarde, be prohibited from endorsing
candidates for public office? Corollarily, may they be banned from campaigning against said candidates?

The Courts Ruling

The Petition of Brother Mike Velarde is meritorious.

Procedural Issues:

Requisites of Petitions

for Declaratory Relief

Section 1 of Rule 63 of the Rules of Court, which deals with petitions for declaratory relief, provides in
part:

Section 1. Who may file petition.- Any person interested under a deed, will, contract or other written
instrument, whose rights are affected by a statute, executive order or regulation, ordinance, or any
other governmental regulation may, before breach or violation thereof, bring an action in the
appropriate Regional Trial Court to determine any question of construction or validity arising, and for a
declaration of his rights or duties thereunder.

Based on the foregoing, an action for declaratory relief should be filed by a person interested under a
deed, a will, a contract or other written instrument, and whose rights are affected by a statute, an
executive order, a regulation or an ordinance. The purpose of the remedy is to interpret or to determine
the validity of the written instrument and to seek a judicial declaration of the parties rights or duties
thereunder.[16] The essential requisites of the action are as follows: (1) there is a justiciable controversy;
(2) the controversy is between persons whose interests are adverse; (3) the party seeking the relief has
a legal interest in the controversy; and (4) the issue is ripe for judicial determination.[17]

Justiciable Controversy

Brother Mike Velarde contends that the SJS Petition failed to allege, much less establish before the trial
court, that there existed a justiciable controversy or an adverse legal interest between them; and that
SJS had a legal right that was being violated or threatened to be violated by petitioner. On the contrary,
Velarde alleges that SJS premised its action on mere speculations, contingent events, and hypothetical
issues that had not yet ripened into an actual controversy. Thus, its Petition for Declaratory Relief must
fail.

A justiciable controversy refers to an existing case or controversy that is appropriate or ripe for judicial
determination, not one that is conjectural or merely anticipatory.[18] The SJS Petition for Declaratory
Relief fell short of this test. It miserably failed to allege an existing controversy or dispute between the
petitioner and the named respondents therein. Further, the Petition did not sufficiently state what
specific legal right of the petitioner was violated by the respondents therein; and what particular act or
acts of the latter were in breach of its rights, the law or the Constitution.

As pointed out by Brother Eliseo F. Soriano in his Comment,[19] what exactly has he done that merited
the attention of SJS? He confesses that he does not know the answer, because the SJS Petition (as well
as the assailed Decision of the RTC) yields nothing in this respect. His Eminence, Jaime Cardinal Sin, adds
that, at the time SJS filed its Petition on January 28, 2003, the election season had not even started yet;
and that, in any event, he has not been actively involved in partisan politics.

An initiatory complaint or petition filed with the trial court should contain a plain, concise and direct
statement of the ultimate facts on which the party pleading relies for his claim x x x.[20]Yet, the SJS
Petition stated no ultimate facts.

Indeed, SJS merely speculated or anticipated without factual moorings that, as religious leaders, the
petitioner and his co-respondents below had endorsed or threatened to endorse a candidate or
candidates for elective offices; and that such actual or threatened endorsement will enable [them] to
elect men to public office who [would] in turn be forever beholden to their leaders, enabling them to
control the government[;][21] and pos[ing] a clear and present danger of serious erosion of the peoples
faith in the electoral process[;] and reinforc[ing] their belief that religious leaders determine the
ultimate result of elections,[22] which would then be violative of the separation clause.

Such premise is highly speculative and merely theoretical, to say the least. Clearly, it does not suffice to
constitute a justiciable controversy. The Petition does not even allege any indication or manifest intent
on the part of any of the respondents below to champion an electoral candidate, or to urge their so-
called flock to vote for, or not to vote for, a particular candidate. It is a time-honored rule that sheer
speculation does not give rise to an actionable right.

Obviously, there is no factual allegation that SJS rights are being subjected to any threatened, imminent
and inevitable violation that should be prevented by the declaratory relief sought. The judicial power
and duty of the courts to settle actual controversies involving rights that are legally demandable and
enforceable[23] cannot be exercised when there is no actual or threatened violation of a legal right.

All that the 5-page SJS Petition prayed for was that the question raised in paragraph 9 hereof be
resolved.[24] In other words, it merely sought an opinion of the trial court on whether the speculated acts
of religious leaders endorsing elective candidates for political offices violated the constitutional principle
on the separation of church and state. SJS did not ask for a declaration of its rights and duties; neither
did it pray for the stoppage of any threatened violation of its declared rights. Courts, however, are
proscribed from rendering an advisory opinion.[25]

Cause of Action

Respondent SJS asserts that in order to maintain a petition for declaratory relief, a cause of action need
not be alleged or proven. Supposedly, for such petition to prosper, there need not be any violation of a
right, breach of duty or actual wrong committed by one party against the other.

Petitioner, on the other hand, argues that the subject matter of an action for declaratory relief should
be a deed, a will, a contract (or other written instrument), a statute, an executive order, a regulation or
an ordinance. But the subject matter of the SJS Petition is the constitutionality of an act of a religious
leader to endorse the candidacy of a candidate for elective office or to urge or require the members of
the flock to vote for a specified candidate.[26] According to petitioner, this subject matter is beyond the
realm of an action for declaratory relief.[27]Petitioner avers that in the absence of a valid subject matter,
the Petition fails to state a cause of action and, hence, should have been dismissed outright by the
court a quo.

A cause of action is an act or an omission of one party in violation of the legal right or rights of another,
causing injury to the latter.[28] Its essential elements are the following: (1) a right in favor of the plaintiff;
(2) an obligation on the part of the named defendant to respect or not to violate such right; and (3) such
defendants act or omission that is violative of the right of the plaintiff or constituting a breach of the
obligation of the former to the latter.[29]

The failure of a complaint to state a cause of action is a ground for its outright dismissal.[30] However, in
special civil actions for declaratory relief, the concept of a cause of action under ordinary civil actions
does not strictly apply. The reason for this exception is that an action for declaratory relief presupposes
that there has been no actual breach of the instruments involved or of rights arising
thereunder.[31] Nevertheless, a breach or violation should be impending, imminent or at least
threatened.

A perusal of the Petition filed by SJS before the RTC discloses no explicit allegation that the former had
any legal right in its favor that it sought to protect. We can only infer the interest, supposedly in its
favor, from its bare allegation that it has thousands of members who are citizens-taxpayers-registered
voters and who are keenly interested in a judicial clarification of the constitutionality of the partisan
participation of religious leaders in Philippine politics and in the process to insure adherence to the
Constitution by everyone x x x.[32]

Such general averment does not, however, suffice to constitute a legal right or interest. Not only is the
presumed interest not personal in character; it is likewise too vague, highly speculative and
uncertain.[33] The Rules require that the interest must be material to the issue and affected by the
questioned act or instrument, as distinguished from simple curiosity or incidental interest in the
question raised.[34]

To bolster its stance, SJS cites the Corpus Juris Secundum and submits that the [p]laintiff in a declaratory
judgment action does not seek to enforce a claim against [the] defendant, but seeks a judicial
declaration of [the] rights of the parties for the purpose of guiding [their] future conduct, and the
essential distinction between a declaratory judgment action and the usual action is that no actual wrong
need have been committed or loss have occurred in order to sustain the declaratory judgment action,
although there must be no uncertainty that the loss will occur or that the asserted rights will be
invaded.[35]

SJS has, however, ignored the crucial point of its own reference that there must be no uncertainty that
the loss will occur or that the asserted rights will be invaded. Precisely, as discussed earlier, it merely
conjectures that herein petitioner (and his co-respondents below) might actively participate in partisan
politics, use the awesome voting strength of its faithful flock [to] enable it to elect men to public office x
x x, enabling [it] to control the government.[36]
During the Oral Argument, though, Petitioner Velarde and his co-respondents below all strongly
asserted that they had not in any way engaged or intended to participate in partisan politics. They all
firmly assured this Court that they had not done anything to trigger the issue raised and to entitle SJS to
the relief sought.

Indeed, the Court finds in the Petition for Declaratory Relief no single allegation of fact upon which SJS
could base a right of relief from the named respondents. In any event, even granting that it sufficiently
asserted a legal right it sought to protect, there was nevertheless no certainty that such right would be
invaded by the said respondents. Not even the alleged proximity of the elections to the time the Petition
was filed below (January 28, 2003) would have provided the certainty that it had a legal right that would
be jeopardized or violated by any of those respondents.

Legal Standing

Legal standing or locus standi has been defined as a personal and substantial interest in the case, such
that the party has sustained or will sustain direct injury as a result of the challenged
act.[37] Interest means a material interest in issue that is affected by the questioned act or instrument, as
distinguished from a mere incidental interest in the question involved.[38]

Petitioner alleges that [i]n seeking declaratory relief as to the constitutionality of an act of a religious
leader to endorse, or require the members of the religious flock to vote for a specific candidate, herein
Respondent SJS has no legal interest in the controversy;[39] it has failed to establish how the resolution of
the proffered question would benefit or injure it.

Parties bringing suits challenging the constitutionality of a law, an act or a statute must show not only
that the law [or act] is invalid, but also that [they have] sustained or [are] in immediate or imminent
danger of sustaining some direct injury as a result of its enforcement, and not merely that [they] suffer
thereby in some indefinite way.[40] They must demonstrate that they have been, or are about to be,
denied some right or privilege to which they are lawfully entitled, or that they are about to be subjected
to some burdens or penalties by reason of the statute or act complained of.[41]

First, parties suing as taxpayers must specifically prove that they have sufficient interest in preventing
the illegal expenditure of money raised by taxation.[42] A taxpayers action may be properly brought only
when there is an exercise by Congress of its taxing or spending power.[43] In the present case, there is no
allegation, whether express or implied, that taxpayers money is being illegally disbursed.

Second, there was no showing in the Petition for Declaratory Relief that SJS as a political party or its
members as registered voters would be adversely affected by the alleged acts of the respondents below,
if the question at issue was not resolved. There was no allegation that SJS had suffered or would be
deprived of votes due to the acts imputed to the said respondents. Neither did it allege that any of its
members would be denied the right of suffrage or the privilege to be voted for a public office they are
seeking.
Finally, the allegedly keen interest of its thousands of members who are citizens-taxpayers-registered
voters is too general[44] and beyond the contemplation of the standards set by our jurisprudence. Not
only is the presumed interest impersonal in character; it is likewise too vague, highly speculative and
uncertain to satisfy the requirement of standing.[45]

Transcendental Importance

In any event, SJS urges the Court to take cognizance of the Petition, even sans legal standing,
considering that the issues raised are of paramount public interest.

In not a few cases, the Court has liberalized the locus standi requirement when a petition raises an issue
of transcendental significance or paramount importance to the people.[46]Recently, after holding that
the IBP had no locus standi to bring the suit, the Court in IBP v. Zamora[47] nevertheless entertained the
Petition therein. It noted that the IBP has advanced constitutional issues which deserve the attention of
this Court in view of their seriousness, novelty and weight as precedents.[48]

Similarly in the instant case, the Court deemed the constitutional issue raised in the SJS Petition to be of
paramount interest to the Filipino people. The issue did not simply concern a delineation of the
separation between church and state, but ran smack into the governance of our country. The issue was
both transcendental in importance and novel in nature, since it had never been decided before.

The Court, thus, called for Oral Argument to determine with certainty whether it could resolve the
constitutional issue despite the barren allegations in the SJS Petition as well as the abbreviated
proceedings in the court below. Much to its chagrin, however, counsels for the parties -- particularly for
Respondent SJS -- made no satisfactory allegations or clarifications that would supply the deficiencies
hereinabove discussed. Hence, even if the Court would exempt this case from the stringent locus
standi requirement, such heroic effort would be futile because the transcendental issue cannot be
resolved anyway.

Proper Proceedings Before

the Trial Court

To prevent a repetition of this waste of precious judicial time and effort, and for the guidance of the
bench and the bar, the Court reiterates the elementary procedure[49] that must be followed by trial
courts in the conduct of civil cases.[50]

Prefatorily, the trial court may -- motu proprio or upon motion of the defendant -- dismiss a
complaint[51] (or petition, in a special civil action) that does not allege the plaintiffs (or petitioners) cause
or causes of action.[52] A complaint or petition should contain a plain, concise and direct statement of
the ultimate facts on which the party pleading relies for his claim or defense.[53] It should likewise clearly
specify the relief sought.[54]

Upon the filing of the complaint/petition and the payment of the requisite legal fees, the clerk of court
shall forthwith issue the corresponding summons to the defendants or the respondents, with a directive
that the defendant answer[55] within 15 days, unless a different period is fixed by the court.[56] The
summons shall also contain a notice that if such answer is not filed, the plaintiffs/petitioners shall take a
judgment by default and may be granted the relief applied for.[57] The court, however, may -- upon such
terms as may be just -- allow an answer to be filed after the time fixed by the Rules.[58]

If the answer sets forth a counterclaim or cross-claim, it must be answered within ten (10) days from
service.[59] A reply may be filed within ten (10) days from service of the pleading responded to.[60]

When an answer fails to tender an issue or admits the material allegations of the adverse partys
pleading, the court may, on motion of that party, direct judgment on such pleading (except in actions for
declaration of nullity or annulment of marriage or for legal separation).[61] Meanwhile, a party seeking to
recover upon a claim, a counterclaim or crossclaim -- or to obtain a declaratory relief -- may, at any time
after the answer thereto has been served, move for a summary judgment in its favor.[62] Similarly, a
party against whom a claim, a counterclaim or crossclaim is asserted -- or a declaratory relief sought --
may, at any time, move for a summary judgment in its favor.[63] After the motion is heard, the judgment
sought shall be rendered forthwith if there is a showing that, except as to the amount of damages, there
is no genuine issue as to any material fact; and that the moving party is entitled to a judgment as a
matter of law.[64]

Within the time for -- but before -- filing the answer to the complaint or petition, the defendant may file
a motion to dismiss based on any of the grounds stated in Section 1 of Rule 16 of the Rules of
Court. During the hearing of the motion, the parties shall submit their arguments on the questions of
law, and their evidence on the questions of fact.[65] After the hearing, the court may dismiss the action
or claim, deny the motion, or order the amendment of the pleadings. It shall not defer the resolution of
the motion for the reason that the ground relied upon is not indubitable. In every case, the resolution
shall state clearly and distinctly the reasons therefor.[66]

If the motion is denied, the movant may file an answer within the balance of the period originally
prescribed to file an answer, but not less than five (5) days in any event, computed from the receipt of
the notice of the denial. If the pleading is ordered to be amended, the defendant shall file an answer
within fifteen (15) days, counted from the service of the amended pleading, unless the court provides a
longer period.[67]

After the last pleading has been served and filed, the case shall be set for pretrial,[68] which is a
mandatory proceeding.[69] A plaintiffs/ petitioners (or its duly authorized representatives) non-
appearance at the pretrial, if without valid cause, shall result in the dismissal of the action with
prejudice, unless the court orders otherwise. A similar failure on the part of the defendant shall be a
cause for allowing the plaintiff/petitioner to present evidence ex parte, and the court to render
judgment on the basis thereof.[70]

The parties are required to file their pretrial briefs; failure to do so shall have the same effect as failure
to appear at the pretrial.[71] Upon the termination thereof, the court shall issue an order reciting in detail
the matters taken up at the conference; the action taken on them, the amendments allowed to the
pleadings; and the agreements or admissions, if any, made by the parties regarding any of the matters
considered.[72] The parties may further avail themselves of any of the modes of discovery,[73] if they so
wish.

Thereafter, the case shall be set for trial,[74] in which the parties shall adduce their respective evidence in
support of their claims and/or defenses. By their written consent or upon the application of either party,
or on its own motion, the court may also order any or all of the issues to be referred to a commissioner,
who is to be appointed by it or to be agreed upon by the parties.[75] The trial or hearing before the
commissioner shall proceed in all respects as it would if held before the court.[76]

Upon the completion of such proceedings, the commissioner shall file with the court a written report on
the matters referred by the parties.[77] The report shall be set for hearing, after which the court shall
issue an order adopting, modifying or rejecting it in whole or in part; or recommitting it with
instructions; or requiring the parties to present further evidence before the commissioner or the
court.[78]

Finally, a judgment or final order determining the merits of the case shall be rendered. The decision shall
be in writing, personally and directly prepared by the judge, stating clearly and distinctly the facts and
the law on which it is based, signed by the issuing magistrate, and filed with the clerk of court.[79]

Based on these elementary guidelines, let us examine the proceedings before the trial court in the
instant case.

First, with respect to the initiatory pleading of the SJS. Even a cursory perusal of the Petition
immediately reveals its gross inadequacy. It contained no statement of ultimate facts upon which the
petitioner relied for its claim. Furthermore, it did not specify the relief it sought from the court, but
merely asked it to answer a hypothetical question.

Relief, as contemplated in a legal action, refers to a specific coercive measure prayed for as a result of a
violation of the rights of a plaintiff or a petitioner.[80] As already discussed earlier, the Petition before the
trial court had no allegations of fact[81] or of any specific violation of the petitioners rights, which the
respondents had a duty to respect. Such deficiency amounted to a failure to state a cause of action;
hence, no coercive relief could be sought and adjudicated. The Petition evidently lacked substantive
requirements and, we repeat, should have been dismissed at the outset.

Second, with respect to the trial court proceedings. Within the period set to file their respective answers
to the SJS Petition, Velarde, Villanueva and Manalo filed Motions to Dismiss; Cardinal Sin, a Comment;
and Soriano, within a priorly granted extended period, an Answer in which he likewise prayed for the
dismissal of the Petition.[82] SJS filed a Rejoinder to the Motion of Velarde, who subsequently filed a Sur-
Rejoinder. Supposedly, there were several scheduled settings, in which the [c]ourt was apprised of the
respective positions of the parties.[83]The nature of such settings -- whether pretrial or trial hearings --
was not disclosed in the records. Before ruling on the Motions to Dismiss, the trial court issued an
Order[84] dated May 8, 2003, directing the parties to submit their memoranda. Issued shortly thereafter
was another Order[85] dated May 14, 2003, denying all the Motions to Dismiss.
In the latter Order, the trial court perfunctorily ruled:

The Court now resolves to deny the Motions to Dismiss, and after all the memoranda are submitted,
then, the case shall be deemed as submitted for resolution.[86]

Apparently, contrary to the requirement of Section 2 of Rule 16 of the Rules of Court, the Motions were
not heard. Worse, the Order purportedly resolving the Motions to Dismiss did not state any reason at all
for their denial, in contravention of Section 3 of the said Rule 16. There was not even any statement of
the grounds relied upon by the Motions; much less, of the legal findings and conclusions of the trial
court.

Thus, Velarde, Villanueva and Manalo moved for reconsideration. Pending the resolution of these
Motions for Reconsideration, Villanueva filed a Motion to suspend the filing of the parties
memoranda. But instead of separately resolving the pending Motions fairly and squarely, the trial court
again transgressed the Rules of Court when it immediately proceeded to issue its Decision, even before
tackling the issues raised in those Motions.

Furthermore, the RTC issued its Decision without allowing the parties to file their answers. For this
reason, there was no joinder of the issues. If only it had allowed the filing of those answers, the trial
court would have known, as the Oral Argument revealed, that the petitioner and his co-respondents
below had not committed or threatened to commit the act attributed to them (endorsing candidates) --
the act that was supposedly the factual basis of the suit.

Parenthetically, the court a quo further failed to give a notice of the Petition to the OSG, which was
entitled to be heard upon questions involving the constitutionality or validity of statutes and other
measures.[87]

Moreover, as will be discussed in more detail, the questioned Decision of the trial court was utterly
wanting in the requirements prescribed by the Constitution and the Rules of Court.

All in all, during the loosely abbreviated proceedings of the case, the trial court indeed acted with
inexplicable haste, with total ignorance of the law -- or, worse, in cavalier disregard of the rules of
procedure -- and with grave abuse of discretion.

Contrary to the contentions of the trial judge and of SJS, proceedings for declaratory relief must still
follow the process described above -- the petition must state a cause of action; the proceedings must
undergo the procedure outlined in the Rules of Court; and the decision must adhere to constitutional
and legal requirements.

First Substantive Issue:

Fundamental Requirements

of a Decision
The Constitution commands that [n]o decision shall be rendered by any court without expressing
therein clearly and distinctly the facts and the law on which it is based. No petition for review or motion
for reconsideration of a decision of the court shall be refused due course or denied without stating the
basis therefor.[88]

Consistent with this constitutional mandate, Section 1 of Rule 36 of the Rules on Civil Procedure
similarly provides:

Sec. 1. Rendition of judgments and final orders. A judgment or final order determining the merits of the
case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the
facts and the law on which it is based, signed by him and filed with the clerk of court.

In the same vein, Section 2 of Rule 120 of the Rules of Court on Criminal Procedure reads as follows:

Sec. 2. Form and contents of judgments. -- The judgment must be written in the official language,
personally and directly prepared by the judge and signed by him and shall contain clearly and distinctly a
statement of the facts proved or admitted by the accused and the law upon which the judgment is
based.

x x x x x x x x x.

Pursuant to the Constitution, this Court also issued on January 28, 1988, Administrative Circular No. 1,
prompting all judges to make complete findings of facts in their decisions, and scrutinize closely the legal
aspects of the case in the light of the evidence presented. They should avoid the tendency to generalize
and form conclusions without detailing the facts from which such conclusions are deduced.

In many cases,[89] this Court has time and time again reminded magistrates to heed the demand of
Section 14, Article VIII of the Constitution. The Court, through Chief Justice Hilario G. Davide Jr. in Yao v.
Court of Appeals,[90] discussed at length the implications of this provision and strongly exhorted thus:

Faithful adherence to the requirements of Section 14, Article VIII of the Constitution is indisputably a
paramount component of due process and fair play. It is likewise demanded by the due process clause
of the Constitution. The parties to a litigation should be informed of how it was decided, with an
explanation of the factual and legal reasons that led to the conclusions of the court. The court cannot
simply say that judgment is rendered in favor of X and against Y and just leave it at that without any
justification whatsoever for its action. The losing party is entitled to know why he lost, so he may appeal
to the higher court, if permitted, should he believe that the decision should be reversed. A decision that
does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the
dark as to how it was reached and is precisely prejudicial to the losing party, who is unable to pinpoint
the possible errors of the court for review by a higher tribunal. More than that, the requirement is an
assurance to the parties that, in reaching judgment, the judge did so through the processes of legal
reasoning. It is, thus, a safeguard against the impetuosity of the judge, preventing him from
deciding ipse dixit. Vouchsafed neither the sword nor the purse by the Constitution but nonetheless
vested with the sovereign prerogative of passing judgment on the life, liberty or property of his
fellowmen, the judge must ultimately depend on the power of reason for sustained public confidence in
the justness of his decision.

In People v. Bugarin,[91] the Court also explained:

The requirement that the decisions of courts must be in writing and that they must set forth clearly and
distinctly the facts and the law on which they are based serves many functions. It is intended, among
other things, to inform the parties of the reason or reasons for the decision so that if any of them
appeals, he can point out to the appellate court the finding of facts or the rulings on points of law with
which he disagrees. More than that, the requirement is an assurance to the parties that, in reaching
judgment, the judge did so through the processes of legal reasoning. x x x.

Indeed, elementary due process demands that the parties to a litigation be given information on how
the case was decided, as well as an explanation of the factual and legal reasons that led to the
conclusions of the court.[92]

In Madrid v. Court of Appeals,[93] this Court had instructed magistrates to exert effort to ensure that
their decisions would present a comprehensive analysis or account of the factual and legal findings that
would substantially address the issues raised by the parties.

In the present case, it is starkly obvious that the assailed Decision contains no statement of facts -- much
less an assessment or analysis thereof -- or of the courts findings as to the probable facts. The assailed
Decision begins with a statement of the nature of the action and the question or issue presented. Then
follows a brief explanation of the constitutional provisions involved, and what the Petition sought to
achieve. Thereafter, the ensuing procedural incidents before the trial court are tracked. The Decision
proceeds to a full-length opinion on the nature and the extent of the separation of church and
state. Without expressly stating the final conclusion she has reached or specifying the relief granted or
denied, the trial judge ends her Decision with the clause SO ORDERED.

What were the antecedents that necessitated the filing of the Petition? What exactly were the distinct
facts that gave rise to the question sought to be resolved by SJS? More important, what were the factual
findings and analysis on which the trial court based its legal findings and conclusions? None were stated
or implied. Indeed, the RTCs Decision cannot be upheld for its failure to express clearly and distinctly the
facts on which it was based. Thus, the trial court clearly transgressed the constitutional directive.

The significance of factual findings lies in the value of the decision as a precedent. How can it be so if
one cannot apply the ruling to similar circumstances, simply because such circumstances are
unknown? Otherwise stated, how will the ruling be applied in the future, if there is no point of factual
comparison?

Moreover, the court a quo did not include a resolutory or dispositive portion in its so-called
Decision. The importance of such portion was explained in the early case Manalang v. Tuason de
Rickards,[94] from which we quote:
The resolution of the Court on a given issue as embodied in the dispositive part of the decision or order
is the investitive or controlling factor that determines and settles the rights of the parties and the
questions presented therein, notwithstanding the existence of statements or declaration in the body of
said order that may be confusing.

The assailed Decision in the present case leaves us in the dark as to its final resolution of the Petition. To
recall, the original Petition was for declaratory relief. So, what relief did the trial court grant or
deny? What rights of the parties did it conclusively declare? Its final statement says, SO ORDERED. But
what exactly did the court order? It had the temerity to label its issuance a Decision, when nothing was
in fact decided.

Respondent SJS insists that the dispositive portion can be found in the body of the assailed Decision. It
claims that the issue is disposed of and the Petition finally resolved by the statement of the trial court
found on page 10 of its 14-page Decision, which reads: Endorsement of specific candidates in an election
to any public office is a clear violation of the separation clause.[95]

We cannot agree.

In Magdalena Estate, Inc. v. Caluag,[96] the obligation of the party imposed by the Court was allegedly
contained in the text of the original Decision. The Court, however, held:

x x x The quoted finding of the lower court cannot supply deficiencies in the dispositive portion. It is a
mere opinion of the court and the rule is settled that where there is a conflict between the dispositive
part and the opinion, the former must prevail over the latter on the theory that the dispositive portion is
the final order while the opinion is merely a statement ordering nothing. (Italics in the original)

Thus, the dispositive portion cannot be deemed to be the statement quoted by SJS and embedded in the
last paragraph of page 10 of the assailed 14-page Decision. If at all, that statement is merely an answer
to a hypothetical legal question and just a part of the opinion of the trial court. It does not conclusively
declare the rights (or obligations) of the parties to the Petition. Neither does it grant any -- much less,
the proper -- relief under the circumstances, as required of a dispositive portion.

Failure to comply with the constitutional injunction is a grave abuse of discretion amounting to lack or
excess of jurisdiction. Decisions or orders issued in careless disregard of the constitutional mandate are
a patent nullity and must be struck down as void.[97]

Parts of a Decision

In general, the essential parts of a good decision consist of the following: (1) statement of the case; (2)
statement of facts; (3) issues or assignment of errors; (4) court ruling, in which each issue is, as a rule,
separately considered and resolved; and, finally, (5) dispositive portion. The ponente may also opt to
include an introduction or a prologue as well as an epilogue, especially in cases in which controversial or
novel issues are involved.[98]
An introduction may consist of a concise but comprehensive statement of the principal factual or legal
issue/s of the case. In some cases -- particularly those concerning public interest; or involving
complicated commercial, scientific, technical or otherwise rare subject matters -- a longer introduction
or prologue may serve to acquaint readers with the specific nature of the controversy and the issues
involved. An epilogue may be a summation of the important principles applied to the resolution of the
issues of paramount public interest or significance. It may also lay down an enduring philosophy of law
or guiding principle.

Let us now, again for the guidance of the bench and the bar, discuss the essential parts of a good
decision.

1. Statement of the Case

The Statement of the Case consists of a legal definition of the nature of the action. At the first instance,
this part states whether the action is a civil case for collection, ejectment, quieting of title, foreclosure of
mortgage, and so on; or, if it is a criminal case, this part describes the specific charge -- quoted usually
from the accusatory portion of the information -- and the plea of the accused. Also mentioned here are
whether the case is being decided on appeal or on a petition for certiorari, the court of origin, the case
number in the trial court, and the dispositive portion of the assailed decision.

In a criminal case, the verbatim reproduction of the criminal information serves as a guide in
determining the nature and the gravity of the offense for which the accused may be found culpable. As a
rule, the accused cannot be convicted of a crime different from or graver than that charged.

Also, quoting verbatim the text of the information is especially important when there is a question on
the sufficiency of the charge, or on whether qualifying and modifying circumstances have been
adequately alleged therein.

To ensure that due process is accorded, it is important to give a short description of the proceedings
regarding the plea of the accused. Absence of an arraignment, or a serious irregularity therein, may
render the judgment void, and further consideration by the appellate court would be futile. In some
instances, especially in appealed cases, it would also be useful to mention the fact of the appellants
detention, in order to dispose of the preliminary query -- whether or not they have abandoned their
appeal by absconding or jumping bail.

Mentioning the court of origin and the case number originally assigned helps in facilitating the
consolidation of the records of the case in both the trial and the appellate courts, after entry of final
judgment.

Finally, the reproduction of the decretal portion of the assailed decision informs the reader of how the
appealed case was decided by the court a quo.

2. Statement of Facts
There are different ways of relating the facts of the case. First, under the objective or reportorial
method, the judge summarizes -- without comment -- the testimony of each witness and the contents of
each exhibit. Second, under the synthesis method, the factual theory of the plaintiff or prosecution and
then that of the defendant or defense is summarized according to the judges best light. Third, in the
subjective method, the version of the facts accepted by the judge is simply narrated without explaining
what the parties versions are. Finally, through a combination of objective and subjective means, the
testimony of each witness is reported and the judge then formulates his or her own version of the facts.

In criminal cases, it is better to present both the version of the prosecution and that of the defense, in
the interest of fairness and due process. A detailed evaluation of the contentions of the parties must
follow. The resolution of most criminal cases, unlike civil and other cases, depends to a large extent on
the factual issues and the appreciation of the evidence. The plausibility or the implausibility of each
version can sometimes be initially drawn from a reading of the facts. Thereafter, the bases of the court
in arriving at its findings and conclusions should be explained.

On appeal, the fact that the assailed decision of the lower court fully, intelligently and correctly resolved
all factual and legal issues involved may partly explain why the reviewing court finds no reason to
reverse the findings and conclusions of the former. Conversely, the lower courts patent misappreciation
of the facts or misapplication of the law would aid in a better understanding of why its ruling is reversed
or modified.

In appealed civil cases, the opposing sets of facts no longer need to be presented. Issues for resolution
usually involve questions of law, grave abuse of discretion, or want of jurisdiction; hence, the facts of
the case are often undisputed by the parties. With few exceptions, factual issues are not entertained in
non-criminal cases. Consequently, the narration of facts by the lower court, if exhaustive and clear, may
be reproduced; otherwise, the material factual antecedents should be restated in the words of the
reviewing magistrate.

In addition, the reasoning of the lower court or body whose decision is under review should be laid out,
in order that the parties may clearly understand why the lower court ruled in a certain way, and why the
reviewing court either finds no reason to reverse it or concludes otherwise.

3. Issues or Assignment of Errors

Both factual and legal issues should be stated. On appeal, the assignment of errors, as mentioned in the
appellants brief, may be reproduced in toto and tackled seriatim, so as to avoid motions for
reconsideration of the final decision on the ground that the court failed to consider all assigned errors
that could affect the outcome of the case. But when the appellant presents repetitive issues or when
the assigned errors do not strike at the main issue, these may be restated in clearer and more coherent
terms.

Though not specifically questioned by the parties, additional issues may also be included, if deemed
important for substantial justice to be rendered. Note that appealed criminal cases are given de
novo review, in contrast to noncriminal cases in which the reviewing court is generally limited to issues
specifically raised in the appeal. The few exceptions are errors of jurisdiction; questions not raised but
necessary in arriving at a just decision on the case; or unassigned errors that are closely related to those
properly assigned, or upon which depends the determination of the question properly raised.

4. The Courts Ruling

This part contains a full discussion of the specific errors or issues raised in the complaint, petition or
appeal, as the case may be; as well as of other issues the court deems essential to a just disposition of
the case. Where there are several issues, each one of them should be separately addressed, as much as
practicable. The respective contentions of the parties should also be mentioned here. When procedural
questions are raised in addition to substantive ones, it is better to resolve the former preliminarily.

5. The Disposition or Dispositive Portion

In a criminal case, the disposition should include a finding of innocence or guilt, the specific crime
committed, the penalty imposed, the participation of the accused, the modifying circumstances if any,
and the civil liability and costs. In case an acquittal is decreed, the court must order the immediate
release of the accused, if detained, (unless they are being held for another cause) and order the director
of the Bureau of Corrections (or wherever the accused is detained) to report, within a maximum of ten
(10) days from notice, the exact date when the accused were set free.

In a civil case as well as in a special civil action, the disposition should state whether the complaint or
petition is granted or denied, the specific relief granted, and the costs. The following test of
completeness may be applied. First, the parties should know their rights and obligations. Second, they
should know how to execute the decision under alternative contingencies. Third, there should be no
need for further proceedings to dispose of the issues. Fourth, the case should be terminated by
according the proper relief. The proper relief usually depends upon what the parties seek in their
pleadings. It may declare their rights and duties, command the performance of positive prestations, or
order them to abstain from specific acts.The disposition must also adjudicate costs.

The foregoing parts need not always be discussed in sequence. But they should all be present and
plainly identifiable in the decision. Depending on the writers character, genre and style, the language
should be fresh and free-flowing, not necessarily stereotyped or in a fixed form; much less highfalutin,
hackneyed and pretentious. At all times, however, the decision must be clear, concise,
complete and correct.

Second Substantive Issue:

Religious Leaders Endorsement

of Candidates for Public Office

The basic question posed in the SJS Petition -- WHETHER ENDORSEMENTS OF CANDIDACIES BY
RELIGIOUS LEADERS IS UNCONSTITUTIONAL -- undoubtedly deserves serious consideration. As stated
earlier, the Court deems this constitutional issue to be of paramount interest to the Filipino citizenry, for
it concerns the governance of our country and its people. Thus, despite the obvious procedural
transgressions by both SJS and the trial court, this Court still called for Oral Argument, so as not to leave
any doubt that there might be room to entertain and dispose of the SJS Petition on the merits.

Counsel for SJS has utterly failed, however, to convince the Court that there are enough factual and legal
bases to resolve the paramount issue. On the other hand, the Office of the Solicitor General has sided
with petitioner insofar as there are no facts supporting the SJS Petition and the assailed Decision.

We reiterate that the said Petition failed to state directly the ultimate facts that it relied upon for its
claim. During the Oral Argument, counsel for SJS candidly admitted that there were no factual
allegations in its Petition for Declaratory Relief. Neither were there factual findings in the assailed
Decision. At best, SJS merely asked the trial court to answer a hypothetical question. In effect, it merely
sought an advisory opinion, the rendition of which was beyond the courts constitutional mandate and
jurisdiction.[99]

Indeed, the assailed Decision was rendered in clear violation of the Constitution, because it made no
findings of facts and final disposition. Hence, it is void and deemed legally inexistent. Consequently,
there is nothing for this Court to review, affirm, reverse or even just modify.

Regrettably, it is not legally possible for the Court to take up, on the merits, the paramount question
involving a constitutional principle. It is a time-honored rule that the constitutionality of a statute [or
act] will be passed upon only if, and to the extent that, it is directly and necessarily involved in a
justiciable controversy and is essential to the protection of the rights of the parties concerned.[100]

WHEREFORE, the Petition for Review of Brother Mike Velarde is GRANTED. The assailed June 12, 2003
Decision and July 29, 2003 Order of the Regional Trial Court of Manila (Branch 49) are hereby DECLARED
NULL AND VOID and thus SET ASIDE. The SJS Petition for Declaratory Relief is DISMISSED for failure to
state a cause of action.

Let a copy of this Decision be furnished the Office of the Court Administrator to evaluate and
recommend whether the trial judge may, after observing due process, be held administratively liable for
rendering a decision violative of the Constitution, the Rules of Court and relevant circulars of this
Court. No costs.

SO ORDERED.

Davide, Jr., C.J., Puno, Quisumbing, Sandoval-Gutierrez, Carpio, Austria-Martinez, Carpio-Morales,

Callejo, Sr., Azcuna, and Tinga, JJ., concur.

Vitug, J., in the result.

Ynares-Santiago, J., no part.

Corona, J., on leave.

THIRD DIVISION
[G.R. No. 126911. April 30, 2003]

PHILIPPINE DEPOSIT INSURANCE CORPORATION, petitioner, vs. THE HONORABLE COURT OF

APPEALS and JOSE ABAD, LEONOR ABAD, SABINA ABAD, JOSEPHINE JOSIE BEATA ABAD-ORLINA,
CECILIA ABAD, PIO ABAD, DOMINIC ABAD, TEODORA ABAD, respondents.

DECISION

CARPIO-MORALES, J.:

The present petition for review assails the decision of the Court of Appeals affirming that of the Regional
Trial Court of Iloilo City, Branch 30, finding petitioner Philippine Deposit Insurance Corporation (PDIC)
liable, as statutory insurer, for the value of 20 Golden Time Deposits belonging to respondents Jose
Abad, Leonor Abad, Sabina Abad, Josephine Josie Beata Abad-Orlina, Cecilia Abad, Pio Abad, Dominic
Abad, and Teodora Abad at the Manila Banking Corporation (MBC), Iloilo Branch.

Prior to May 22, 1997, respondents had, individually or jointly with each other, 71 certificates of time
deposits denominated as Golden Time Deposits (GTD) with an aggregate face value of P1,115,889.96.[1]

On May 22, 1987, a Friday, the Monetary Board (MB) of the Central Bank of the Philippines, now Bangko
Sentral ng Pilipinas, issued Resolution 505[2] prohibiting MBC to do business in the Philippines, and
placing its assets and affairs under receivership. The Resolution, however, was not served on MBC until
Tuesday the following week, or on May 26, 1987, when the designated Receiver took over.[3]

On May 25, 1987, the next banking day following the issuance of the MB Resolution, respondent Jose
Abad was at the MBC at 9:00 a.m. for the purpose of pre-terminating the 71 aforementioned GTDs and
re-depositing the fund represented thereby into 28 new GTDs in denominations of P40,000.00 or less
under the names of herein respondents individually or jointly with each other.[4] Of the 28 new GTDs,
Jose Abad pre-terminated 8 and withdrew the value thereof in the total amount of P320,000.00.[5]

Respondents thereafter filed their claims with the PDIC for the payment of the remaining 20 insured
GTDs.[6]

On February 11, 1988, PDIC paid respondents the value of 3 claims in the total amount
of P120,000.00. PDIC, however, withheld payment of the 17 remaining claims after Washington Solidum,
Deputy Receiver of MBC-Iloilo, submitted a report to the PDIC[7] that there was massive conversion and
substitution of trust and deposit accounts on May 25, 1987 at MBC-Iloilo.[8]The pertinent portions of the
report stated:

xxx

On May 25, 1987 (Monday) or a day prior to the official announcement and take-over by CB of the
assets and liabilities of The Manila Banking Corporation, the Iloilo Branch was found to have recorded an
unusually heavy movements in terms of volume and amount for all types of deposits and trust accounts.
It appears that the impending receivership of TMBC was somehow already known to many depositors
on account of the massive withdrawals paid on this day which practically wiped out the branchs entire
cash position. . . .

xxx

. . . The intention was to maximize the availment of PDIC coverage limited to P40,000 by spreading out
big accounts to as many certificates under various nominees. . . .[9]

xxx

Because of the report, PDIC entertained serious reservation in recognizing respondents GTDs as deposit
liabilities of MBC-Iloilo. Thus, on August 30, 1991, it filed a petition for declaratory relief against
respondents with the Regional Trial Court (RTC) of Iloilo City, for a judicial declaration determination of
the insurability of respondents GTDs at MBC-Iloilo.[10]

In their Answer filed on October 24, 1991 and Amended Answer[11] filed on January 9, 1992, respondents
set up a counterclaim against PDIC whereby they asked for payment of their insured deposits.[12]

In its Decision of February 22, 1994,[13] Branch 30 of the Iloilo RTC declared the 20 GTDs of respondents
to be deposit liabilities of MBC, hence, are liabilities of PDIC as statutory insurer. It accordingly disposed
as follows:

WHEREFORE, premises considered, judgment is hereby rendered:

1. Declaring the 28 GTDs of the Abads which were issued by the TMBC-Iloilo on May 25, 1987 as
deposits or deposit liabilities of the bank as the term is defined under Section 3 (f) of R.A. No. 3591, as
amended;

2. Declaring PDIC, being the statutory insurer of bank deposits, liable to the Abads for the value of the
remaining 20 GTDs, the other 8 having been paid already by TMBC-Iloilo on May 25, 1987;

3. Ordering PDIC to pay the Abads the value of said 20 GTDs less the value of 3 GTDs it paid on February
11, 1988, and the amounts it may have paid the Abads pursuant to the Order of this Court dated
September 8, 1992;

4. Ordering PDIC to pay immediately the Abads the balance of its admitted liability as contained in the
aforesaid Order of September 8, 1992, should there be any, subject to liquidation when this case shall
have been finally decide; and

5. Ordering PDIC to pay legal interest on the remaining insured deposits of the Abads from February 11,
1988 until they are fully paid.

SO ORDERED.

On appeal, the Court of Appeals, by the assailed Decision of October 21, 1996,[14] affirmed the trial
courts decision except as to the award of legal interest which it deleted.
Hence, PDICs present Petition for Review which sets forth this lone assignment of error:

THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE HOLDING OF THE TRIAL COURT THAT
THE AMOUNT REPRESENTED IN THE FACES OF THE SO CALLED GOLDEN TIME DEPOSITS WERE INSURED
DEPOSITS EVEN AS THEY WERE MERE DERIVATIVES OF RESPONDENTS PREVIOUS ACCOUNT BALANCES
WHICH WERE PRE-TERMINATED/TERMINATED AT THE TIME THE MANILA BANKING CORPORATION WAS
ALREADY IN SERIOUS FINANCIAL DISTRESS.

In its supplement to the petition, PDIC adds the following assignment of error:

THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE HOLDING OF THE TRIAL COURT
ORDERING PETITIONER TO PAY RESPONDENTS CLAIMS FOR PAYMENT OF INSURED DEPOSITS FOR THE
REASON THAT AN ACTION FOR DECLARATORY RELIEF DOES NOT ESSENTIALLY ENTAIL AN EXECUTORY
PROCESS AS THE ONLY RELIEF THAT SHOULD HAVE BEEN GRANTED BY THE TRIAL COURT IS A
DECLARATION OF THE RIGHTS AND DUTIES OF PETITIONER UNDER R.A. 3591, AS AMENDED,
PARTICULARLY SECTION 3(F) THEREOF AS CONSIDERED AGAINST THE SURROUNDING CIRCUMSTANCES
OF THE MATTER IN ISSUE SOUGHT TO BE CONSTRUED WITHOUT PREJUDICE TO OTHER MATTERS THAT
NEED TO BE CONSIDERED BY PETITIONER IN THE PROCESSING OF RESPONDENTS CLAIMS.

Under its charter,[15] PDIC (hereafter petitioner) is liable only for deposits received by a bank in the usual
course of business.[16] Being of the firm conviction that, as the reported May 25, 1987 bank transactions
were so massive, hence, irregular, petitioner essentially seeks a judicial declaration that such
transactions were not made in the usual course of business and, therefore, it cannot be made liable for
deposits subject thereof.[17]

Petitioner points that as MBC was prohibited from doing further business by MB Resolution 505 as of
May 22, 1987, all transactions subsequent to such date were not done in the usual course of business.

Petitioner further posits that there was no consideration for the 20 GTDs subject of respondents
claim. In support of this submission, it states that prior to March 25, 1987, when the 20 GTDs were
made, MBC had been experiencing liquidity problems, e.g., at the start of banking operations on March
25, 1987, it had only P2,841,711.90 cash on hand and at the end of the day it was left with P27,805.81
consisting mostly of mutilated bills and coins.[18] Hence, even if respondents had wanted to convert the
face amounts of the GTDs to cash, MBC could not have complied with it.

Petitioner theorizes that after MBC had exhausted its cash and could no longer sustain further
withdrawal transactions, it instead issued new GTDs as payment for the pre-terminated GTDs of
respondents to make sure that all the newly-issued GTDs have face amounts which are within the
statutory coverage of deposit insurance.

Petitioner concludes that since no cash was given by respondents and none was received by MBC when
the new GTDs were transacted, there was no consideration therefor and, thus, they were not validly
transacted in the usual course of business and no liability for deposit insurance was created.[19]

Petitioners position does not persuade.

While the MB issued Resolution 505 on May 22, 1987, a copy thereof was served on MBC only on May
26, 1987. MBC and its clients could be given the benefit of the doubt that they were not aware that the
MB resolution had been passed, given the necessity of confidentiality of placing a banking institution
under receivership.[20]

The evident implication of the law, therefore, is that the appointment of a receiver may be made by the
Monetary Board without notice and hearing but its action is subject to judicial inquiry to insure the
protection of the banking institution. Stated otherwise, due process does not necessarily require a prior
hearing; a hearing or an opportunity to be heard may be subsequent to the closure. One can just
imagine the dire consequences of a prior hearing: bank runs would be the order of the day, resulting in
panic and hysteria. In the process, fortunes may be wiped out, and disillusionment will run the gamut of
the entire banking community. (Underlining supplied). [21]

Mere conjectures that MBC had actual knowledge of its impending closure do not suffice. The MB
resolution could not thus have nullified respondents transactions which occurred prior to May 26, 1987.

That no actual money in bills and/or coins was handed by respondents to MBC does not mean that the
transactions on the new GTDs did not involve money and that there was no consideration therefor. For
the outstanding balance of respondents 71 GTDs in MBC prior to May 26, 1987[22] in the amount
of P1,115,889.15 as earlier mentioned was re-deposited by respondents under 28 new
GTDs. Admittedly, MBC had P2,841,711.90 cash on hand more than double the outstanding balance of
respondents 71 GTDs at the start of the banking day on May 25, 1987. Since respondent Jose Abad was
at MBC soon after it opened at 9:00 a.m. of that day, petitioner should not presume that MBC had no
cash to cover the new GTDs of respondents and conclude that there was no consideration for said GTDs.

Petitioner having failed to overcome the presumption that the ordinary course of business was
followed,[23]this Court finds that the 28 new GTDs were deposited in the usual course of business of
MBC.

In its second assignment of error, petitioner posits that the trial court erred in ordering it to pay the
balance of the deposit insurance to respondents, maintaining that the instant petition stemmed from a
petition for declaratory relief which does not essentially entail an executory process, and the only relief
that should have been granted by the trial court is a declaration of the parties rights and duties. As such,
petitioner continues, no order of payment may arise from the case as this is beyond the office of
declaratory relief proceedings.[24]

Without doubt, a petition for declaratory relief does not essentially entail an executory process. There is
nothing in its nature, however, that prohibits a counterclaim from being set-up in the same action.[25]

Now, there is nothing in thee nature of a special civil action for declaratory relief that proscribes the
filing of a counterclaim based on the same transaction, deed or contract subject of the complaint. A
special civil action is after all not essentially different from an ordinary civil action, which is generally
governed by Rules 1 to 56 of the Rules of Court, except that the former deals with a special subject
matter which makes necessary some special regulation. But the identity between their fundamental
nature is such that the same rules governing ordinary civil suits may and do apply to special civil actions
if not inconsistent with or if they may serve to supplement the provisions of the peculiar rules governing
special civil actions.[26]

Petitioner additionally submits that the issue of determining the amount of deposit insurance due
respondents was never tried on the merits since the trial dwelt only on the determination of the viability
or validity of the deposits and no evidence on record sustains the holding that the amount of deposit
due respondents had been finally determined.[27] This issue was not raised in the court a quo, however,
hence, it cannot be raised for the first time in the petition at bar.[28]

Finally, petitioner faults respondents for availing of the statutory limits of the PDIC law, presupposing
that, based on the conduct of respondent Jose Abad on March 25, 1987, he and his co-respondents
somehow knew of the impending closure of MBC. Petitioner ascribes bad faith to respondent Jose Abad
in transacting the questioned deposits, and seeks to disqualify him from availing the benefits under the
law.[29]

Good faith is presumed. This, petitioner failed to overcome since it offered mere presumptions as
evidence of bad faith.

WHEREFORE, the assailed decision of the Court of Appeals is hereby AFFIRMED.

SO ORDERED.

Puno, (Chairman), Panganiban, Sandoval-Gutierrez, and Corona, JJ., concur.

EN BANC

DEPARTMENT OF BUDGET AND G.R. No. 169466

MANAGEMENT, represented by SECRETARY
ROMULO L. NERI, PHILIPPINE NATIONAL
POLICE, represented by POLICE DIRECTOR Present:
GENERAL ARTURO L. LOMIBAO, NATIONAL
POLICE COMMISSION, represented by PUNO, C.J.,
CHAIRMAN ANGELO T. REYES, AND CIVIL
QUISUMBING,
SERVICE COMMISSION, represented by
CHAIRPERSON KARINA C. DAVID, YNARES-SANTIAGO,
Petitioners, SANDOVAL-GUTIERREZ,

CARPIO,
 *
- versus - AUSTRIA-MARTINEZ,
*
CORONA,

MANILAS FINEST RETIREES ASSOCIATION, CARPIO MORALES,

INC., represented by P/COL. FELICISIMO G.
LAZARO (RET.), AND ALL THE OTHER INP AZCUNA,
RETIREES, TINGA,
Respondents. CHICO-NAZARIO,

GARCIA,

VELASCO, JR., and

NACHURA, JJ.

Promulgated:

May 9, 2007

x-----------------------------------------------------------------------------------------x

DECISION

GARCIA, J.:

Assailed and sought to be set aside in this petition for review on certiorari under Rule 45 of the Rules of
Court are the following issuances of the Court of Appeals (CA) in CA-G.R. CV No. 78203, to wit:
1. Decision[1] dated July 7, 2005 which affirmed in toto the decision of the Regional Trial Court
of Manila, Branch 32, in Civil Case No. 02-103702, a suit for declaratory relief, declaring the herein
respondents entitled to the same retirement benefits accorded upon retirees of the Philippine National
Police (PNP) under Republic Act (R.A.) No. 6975, as amended by R.A. No. 8551, and ordering the herein
petitioners to implement the proper adjustments on respondents retirement benefits; and

2. Resolution[2] dated August 24, 2005 which denied the petitioners motion for
reconsideration.

The antecedent facts:

In 1975, Presidential Decree (P.D.) No. 765 was issued constituting the Integrated National Police (INP)
to be composed of the Philippine Constabulary (PC) as the nucleus and the integrated police forces as
components thereof. Complementing P.D. No. 765 was P.D. No. 1184[3] dated August 26, 1977 (INP
Law, hereinafter) issued to professionalize the INP and promote career development therein.

On December 13, 1990, Republic Act (R.A.) No. 6975, entitled AN ACT ESTABLISHING THE PHILIPPINE
NATIONAL POLICE UNDER A REORGANIZED DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT,
AND FOR OTHER PURPOSES, hereinafter referred to as PNP Law, was enacted. Under Section 23 of said
law, the Philippine National Police (PNP) would initially consist of the members of the INP, created
under P.D. No. 765, as well as the officers and enlisted personnel of the PC. In part, Section 23 reads:

SEC. 23. Composition. Subject to the limitation provided for in this Act, the Philippine National Police,
hereinafter referred to as the PNP, is hereby established, initially consisting of the members of the
police forces who were integrated into the Integrated National Police (INP) pursuant to Presidential
Decree No. 765, and the officers and enlisted personnel of the Philippine Constabulary (PC).

A little less than eight (8) years later, or on February 25, 1998, R.A. No. 6975 was amended by R.A. No.
8551, otherwise known as the PHILIPPINE NATIONAL POLICE REFORM AND REORGANIZATION ACT OF
1998. Among other things, the amendatory law reengineered the retirement scheme in the police
organization. Relevantly, PNP personnel, under the new law, stood to collect more retirement benefits
than what INP members of equivalent rank, who had retired under the INP Law, received.
The INP retirees illustrated the resulting disparity in the retirement benefits between them and the PNP
retirees as follows:[4]

Retirement Rank Monthly Pension Difference

INP PNP INP PNP

Corporal SPO3 P 3,225.00 P 11,310.00 P 8,095.00

Captain P. Sr. Insp. P 5,248.00 P 15,976.00 P10,628.00

Brig. Gen. P. Chief Supt. P 10,054.24 P 18,088.00 P 8,033.76

Hence, on June 3, 2002, in the Regional Trial Court (RTC) of Manila, all INP retirees, spearheaded by the
Manilas Finest Retirees Association, Inc., or the MFRAI (hereinafter collectively referred to as the INP
Retirees), filed a petition for declaratory relief,[5] thereunder impleading, as respondents, the
Department of Budget and Management (DBM), the PNP, the National Police Commission (NAPOLCOM),
the Civil Service Commission (CSC) and the Government Service Insurance System (GSIS). Docketed in
the RTC as Civil Case No. 02-103702, which was raffled to Branch 22 thereof, the petition alleged in gist
that INP retirees were equally situated as the PNP retirees but whose retirement benefits prior to the
enactment of R.A. No. 6975, as amended by R.A. No. 8551, were unconscionably and arbitrarily
excepted from the higher rates and adjusted benefits accorded to the PNP retirees. Accordingly, in their
petition, the petitioning INP retirees pray that a

DECLARATORY JUDGMENT be rendered in their favor, DECLARING with certainty that they, as INP-
retirees, are truly absorbed and equally considered as PNP-retirees and thus, entitled to enjoy the SAME
or IDENTICAL retirement benefits being bestowed to PNP-retirees by virtue of said PNP Law or Republic
Act No. 6975, as amended by Republic Act 8551, with the corollary mandate for the respondents-
government agencies to effect the immediate adjustment on their previously received disparate
retirement benefits, retroactive to its effectivity, and with due payment thereof.

The GSIS moved to dismiss the petition on grounds of lack of jurisdiction and cause of action. On the
other hand, the CSC, DBM, NAPOLCOM and PNP, in their respective answers, asserted that the
petitioners could not claim the more generous retirement benefits under R.A. No. 6975 because at no
time did they become PNP members, having retired prior to the enactment of said law. DBM,
NAPOLCOM and PNP afterwards filed their respective pre-trial briefs.

The ensuing legal skirmish is not relevant to the disposition of the instant case. The bottom line is that,
on March 21, 2003, the RTC came out with its decision[6] holding that R.A. No. 6975, as amended, did not
abolish the INP but merely provided for the absorption of its police functions by the PNP, and
accordingly rendered judgment for the INP retirees, to wit:

WHEREFORE, this Court hereby renders JUDGMENT DECLARING the INP Retirees entitled to the same or
identical retirement benefits and such other benefits being granted, accorded and bestowed upon the
PNP Retirees under the PNP Law (RA No. 6975, as amended).

The respondents Government Departments and Agencies shall IMMEDIATELY EFFECT and IMPLEMENT
the proper adjustments on the INP Retirees retirement and such other benefits, RETROACTIVE to its
date of effectivity, and RELEASE and PAY to the INP Retirees the due payments of the amounts.

SO ORDERED.

On April 2, 2003, the trial court issued what it denominated as Supplement to the
Decision whereunder it granted the GSIS motion to dismiss and thus considered the basic petition as
withdrawn with respect to the latter.

From the adverse decision of the trial court, the remaining respondents, namely, DBM, PNP, NAPOLCOM
and CSC, interposed an appeal to the CA whereat their appellate recourse was docketed as CA-G.R. CV
No. 78203.

As stated at the threshold hereof, the CA, in its decision of July 7, 2005,[7] affirmed that of the trial court
upholding the entitlement of the INP retirees to the same or identical retirement benefits accorded
upon PNP retirees under R.A. No. 6975, as amended.
Their motion for reconsideration having been denied by the CA in` its equally assailed resolution
of August 24, 2005,[8] herein petitioners are now with this Court via the instant recourse on their
singular submission that -

THE COURT OF APPEALS COMMITTED A SERIOUS ERROR IN LAW IN AFFIRMING THE DECISION OF THE
TRIAL COURT NOTWITHSTANDING THAT IT IS CONTRARY TO LAW AND ESTABLISHED JURISPRUDENCE.

We DENY.

In the main, it is petitioners posture that R.A. No. 6975 clearly abolished the INP and created in its stead
a new police force, the PNP. Prescinding therefrom, petitioners contend that since the PNP is an
organization entirely different from the INP, it follows that INP retirees never became PNP
members. Ergo, they cannot avail themselves of the retirement benefits accorded to PNP members
under R.A. No. 6975 and its amendatory law, R.A. No. 8551.

A flashback at history is proper.

As may be recalled, R.A. No. 6975 was enacted into law on December 13, 1990, or just about four (4)
years after the 1986 Edsa Revolution toppled down the dictatorship regime. Egged on by the current
sentiment of the times generated by the long period of martial rule during which the police force, the
PC-INP, had a military character, being then a major service of the Armed Forces of the Philippines, and
invariably moved by a fresh constitutional mandate for the establishment of one police force which
should be national in scope and, most importantly, purely civilian in character,[9] Congress enacted R.A.
No. 6975 establishing the PNP and placing it under the Department of Interior and Local Government.
To underscore the civilian character of the PNP, R.A. No. 6975 made it emphatically clear in its
declaration of policy the following:

Section 2. Declaration of policy - It is hereby declared to be the policy of the State to promote peace and
order, ensure public safety and further strengthen local government capability aimed towards the
effective delivery of the basic services to the citizenry through the establishment of a highly efficient and
competent police force that is national in scope and civilian in character. xxx.
The police force shall be organized, trained and equipped primarily for the performance of police
functions. Its national scope and civilian character shall be paramount. No element of the police force
shall be military nor shall any position thereof be occupied by active members of the [AFP]. (Emphasis
and word in bracket supplied.)

Pursuant to Section 23, supra, of R.A. No. 6975, the PNP initially consisted of the members of the police
forces who were integrated into the INP by virtue of P.D. No. 765, while Section 86[10] of the same law
provides for the assumption by the PNP of the police functions of the INP and its absorption by the
former, including its appropriations, funds, records, equipment, etc., as well as its personnel.[11] And to
govern the statutes implementation, Section 85 of the Act spelled out the following absorption phases:

Phase I Exercise of option by the uniformed members of the [PC], the PC elements assigned with the
Narcotics Command, CIS, and the personnel of the technical services of the AFP assigned with the PC to
include the regular CIS investigating agents and the operatives and agents of the NAPOLCOM Inspection.
Investigation and Intelligence Branch, and the personnel of the absorbed National Action Committee on
Anti-Hijacking (NACAH) of the Department of National Defense to be completed within six (6) months
from the date of the effectivity of this Act. At the end of this phase, all personnel from the INP, PC, AFP
Technical Services, NACAH, and NAPOLCOM Inspection, Investigation and Intelligence Branch shall
have been covered by official orders assigning them to the PNP, Fire and Jail Forces by their respective
units.

Phase II Approval of the table of organization and equipment of all bureaus and offices created under
this Act, preparation and filling up of their staffing pattern, transfer of assets to the [DILG] and
organization of the Commission, to be completed within twelve (12) months from the effectivity date
hereof. At the end of this phase, all personnel to be absorbed by the [DILG] shall have been issued
appointment papers, and the organized Commission and the PNP shall be fully operational.

The PC officers and enlisted personnel who have not opted to join the PNP shall be reassigned to the
Army, Navy or Air Force, or shall be allowed to retire under existing AFP rules and regulations. Any PC-
INP officer or enlisted personnel may, within the twelve-month period from the effectivity of this Act,
retire and be paid retirement benefits corresponding to a position two (2) ranks higher than his
present grade, subject to the conditions that at the time he applies for retirement, he has rendered at
least twenty (20) years of service and still has, at most, twenty-four (24) months of service remaining
before the compulsory retirement age as provided by existing law for his office.
Phase III Adjustment of ranks and establishment of one (1) lineal roster of officers and another for non-
officers, and the rationalization of compensation and retirement systems; taking into consideration the
existing compensation schemes and retirement and separation benefit systems of the different
components of the PNP, to ensure that no member of the PNP shall suffer any diminution in basic
longevity and incentive pays, allowances and retirement benefits due them before the creations of the
PNP, to be completed within eighteen (18) months from the effectivity of this Act. xxx.

Upon the effectivity of this Act, the [DILG] Secretary shall exercise administrative supervision as well
as operational control over the transferred, merged and/or absorbed AFP and INP units. The
incumbent Director General of the PC-INP shall continue to act as Director General of the PNP until
replaced . (Emphasis and words in brackets supplied.)

From the foregoing, it appears clear to us that the INP was never, as posited by the
petitioners, abolished or terminated out of existence by R.A. No. 6975. For sure, nowhere in R.A. No.
6975 does the words abolish or terminate appear in reference to the INP. Instead, what the law provides
is for the absorption, transfer, and/or merger of the INP, as well as the other offices comprising the PC-
INP, with the PNP. To abolish is to do away with, to annul, abrogate or destroy completely;[12] to absorb
is to assimilate, incorporate or to take in.[13] Merge means to cause to combine or unite to become
legally absorbed or extinguished by merger[14] while transfer denotes movement from one position to
another. Clearly, abolition cannot be equated with absorption.

True it is that Section 90[15] of R.A. No. 6975 speaks of the INP [ceasing] to exist upon the effectivity of
the law. It ought to be stressed, however, that such cessation is but the logical consequence of the INP
being absorbed by the PNP.

Far from being abolished then, the INP, at the most, was merely transformed to become the PNP, minus
of course its military character and complexion.

Even the petitioners effort at disclosing the legislative intent behind the enactment of R.A. No. 6975
cannot support their theory of abolition. Rather, the Senate and House deliberations on the bill that
eventually became R.A. No. 6975 reveal what has correctly been held by the CA in its assailed decision:
that the PNP was precisely created to erase the stigma spawned by the militarization of the police force
under the PC-INP structure. The rationale behind the passage of R.A. No. 6975 was adequately
articulated by no less than the sponsor[16] of the corresponding House bill in his sponsorship
speech, thus:
By removing the police force from under the control and supervision of military officers, the bill seeks to
restore and underscore the civilian character of police work - an otherwise universal concept that was
muddled up by the martial law years.

Indeed, were the legislative intent was for the INPs abolition such that nothing would be left of it, the
word abolish or what passes for it could have easily found its way into the very text of the law itself,
what with the abundant use of the word during the legislative deliberations. But as can be gleaned from
said deliberations, the lawmakers concern centered on the fact that if the entire PC-INP corps join the
PNP, then the PC-INP will necessarily be abolished, for who then would be its members? Of more
consequence, the lawmakers were one in saying that there should never be two national police agencies
at the same time.

With the conclusion herein reached that the INP was not in fact abolished but was merely transformed
to become the PNP, members of the INP which include the herein respondents are, therefore, not
excluded from availing themselves of the retirement benefits accorded to PNP retirees under Sections
74[17] and 75[18] of R.A. No. 6975, as amended by R.A. No. 8551. It may be that respondents were no
longer in the government service at the time of the enactment of R.A. No. 6975. This fact, however,
without more, would not pose as an impediment to the respondents entitlement to the new retirement
scheme set forth under the aforecited sections. As correctly ratiocinated by the CA to which we are in
full accord:

For sure, R.A. No. 6975 was not a retroactive statute since it did not impose a new obligation to pay the
INP retirees the difference between what they received when they retired and what would now be due
to them after R.A. No. 6975 was enacted. Even so, that did not render the RTCs interpretation of R.A.
No. 6975 any less valid. The [respondents] retirement prior to the passage of R.A. No. 6975 did not
exclude them from the benefits provided by R.A. No. 6975, as amended by R.A. No. 8551, since their
membership in the INP was an antecedent fact that nonetheless allowed them to avail themselves of
the benefits of the subsequent laws. R.A. No. 6975 considered them as PNP members, always referring
to their membership and service in the INP in providing for their retirement benefits. [19]
Petitioners maintain, however, that NAPOLCOM Resolution No. 8,[20] particularly Section 11[21] thereof,
bars the payment of any differential in retirement pay to officers and non-officers who are already
retired prior to the effectivity of R.A. No. 6975.

The contention does not commend itself for concurrence.

Under the amendatory law (R.A. No. 8551), the application of rationalized retirement benefits to
PNP members who have meanwhile retired before its (R.A. No. 8551) enactment was not prohibited. In
fact, its Section 38[22] explicitly states that the rationalized retirement benefits schedule and
program shall have retroactive effect in favor of PNP members and officers retired or separated from the
time specified in the law. To us, the aforesaid provision should be made applicable to INP members who
had retired prior to the effectivity of R.A. No. 6975. For, as afore-held, the INP was, in effect, merely
absorbed by the PNP and not abolished.

Indeed, to bar payment of retirement pay differential to INP members who were already retired before
R.A. No. 6975 became effective would even run counter to the purpose of NAPOLCOM Resolution No. 8
itself, as expressed in its preambulatory clause, which is to rationalize the retirement system of the PNP
taking into consideration existing retirement and benefit systems (including R.A. No. 6975 and P.D. No.
1184) of the different components thereof to ensure that no member of the PNP shall suffer any
diminution in the retirement benefits due them before the creation of the PNP.[23]

Most importantly, the perceived restriction could not plausibly preclude the respondents from asserting
their entitlement to retirement benefits adjusted to the level when R.A. No. 6975 took effect. Such
adjustment hews with the constitutional warrant that the State shall, from time to time, review to
upgrade the pensions and other benefits due to retirees of both the government and private
sectors,[24] and the implementing mandate under the Senior Citizens Law[25] that to the extent
practicable and feasible, retirement benefits xxx shall be upgraded to be at par with the current scale
enjoyed by those in actual service.

Certainly going for the respondents in their bid to enjoy the same retirement benefits granted to PNP
retirees, either under R.A. No. 6975 or R.A. No. 8551, is Section 34 of the latter law which amended
Section 75 of R.A. No. 6975 by adding thereto the following proviso:
Section 75. Retirement benefits. x x x: Provided, finally, That retirement pay of the officers/non-officers
of the PNP shall be subject to adjustments based on the prevailing scale of base pay of police personnel
in the active service.

Then, too, is the all familiar rule that:

Retirement laws should be liberally construed in favor of the retiree because their intention is to provide
for his sustenance and hopefully, even comfort, when he no longer has the stamina to continue earning
his livelihood. The liberal approach aims to achieve the humanitarian purposes of the law in order that
efficiency, security and well-being of government employees may be enhanced.[26]

The petitioners parlay the notion of prospective application of statutes, noting in this regard that R.A.
No. 6975, as amended, cannot be applied retroactively, there being no provision to that effect.

We are not persuaded.

As correctly found by the appellate court, R.A. No. 6975 itself contextually provides for its retroactive
application to cover those who had retired prior to its effectivity. In this regard, we invite attention to
the three (3) phases of implementation under Section 85 for the absorption and continuation in the
service of, among others, the INP members under the newly-established PNP.

In a further bid to scuttle respondents entitlement to the desired retirement benefits, the petitioners
fault the trial court for ordering the immediate adjustments of the respondents retirement benefits
when the basic petition filed before it was one for declaratory relief. To the petitioners, such petition
does not essentially entail an executoryprocess, the only relief proper under that setting being a
declaration of the parties rights and duties.

Petitioners above posture is valid to a point. However, the execution of judgments in a petition for
declaratory relief is not necessarily indefensible. In Philippine Deposit Insurance Corporation[PDIC] v.
Court of Appeals,[27] wherein the Court affirmed the order for the petitioners therein to pay the balance
of the deposit insurance to the therein respondents, we categorically ruled:
Now, there is nothing in the nature of a special civil action for declaratory relief that proscribes the filing
of a counterclaim based on the same transaction, deed or contract subject of the complaint. A special
civil action is after all not essentially different from an ordinary civil action, which is generally governed
by Rules 1 to 56 of the Rules of Court, except that the former deals with a special subject matter which
makes necessary some special regulation. But the identity between their fundamental nature is such
that the same rules governing ordinary civil suits may and do apply to special civil actions if not
inconsistent with or if they may serve to supplement the provisions of the peculiar rules governing
special civil actions.[28]

Similarly, in Matalin Coconut Co., Inc. v. Municipal Council of Malabang, Lanao del Sur:[29] the Court
upheld the lower courts order for a party to refund the amounts paid by the adverse party under the
municipal ordinance therein questioned, stating:

x x x Under Sec. 6 of Rule 64, the action for declaratory relief may be converted into an ordinary action
and the parties allowed to file such pleadings as may be necessary or proper, if before the final
termination of the case "a breach or violation of an ordinance, should take place." In the present case,
no breach or violation of the ordinance occurred. The petitioner decided to pay "under protest" the fees
imposed by the ordinance. Such payment did not affect the case; the declaratory relief action was still
proper because the applicability of the ordinance to future transactions still remained to be resolved,
although the matter could also be threshed out in an ordinary suit for the recovery of taxes paid . In its
petition for declaratory relief, petitioner-appellee alleged that by reason of the enforcement of the
municipal ordinance by respondents it was forced to pay under protest the fees imposed pursuant to
the said ordinance, and accordingly, one of the reliefs prayed for by the petitioner was that the
respondents be ordered to refund all the amounts it paid to respondent Municipal Treasurer during
the pendency of the case. The inclusion of said allegation and prayer in the petition was not objected to
by the respondents in their answer. During the trial, evidence of the

payments made by the petitioner was introduced. Respondents were thus fully aware of the petitioner's
claim for refund and of what would happen if the ordinance were to be declared invalid by the court.

The Court sees no reason for treating this case differently from PDIC and Matalin. This disposition
becomes all the more appropriate considering that the respondents, as petitioners in the RTC, pleaded
for the immediate adjustment of their retirement benefits which, significantly, the herein petitioners, as
respondents in the same court, did not object to. Being aware of said prayer, the petitioners then
already knew the logical consequence if, as it turned out, a declaratory judgment is rendered in the
respondents favor.

At bottom then, the trial courts judgment forestalled multiplicity of suits which, needless to stress,
would only entail a long and arduous process. Considering their obvious advanced years, the
respondents can hardly afford another protracted proceedings. It is thus for this Court to already
write finis to this case.

WHEREFORE, the instant petition is DENIED and the assailed decision and resolution of the CA,
respectively dated July 7, 2005 and August 24, 2005, are AFFIRMED.

No costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. Nos. L-8895 and L-9191 April 30, 1957

SALVADOR A. ARANETA, ETC., ET AL., petitioners,

vs.
THE HON. MAGNO S. GATMAITAN, ETC., ET AL., respondents.

EXEQUIEL SORIANO, ET AL., petitioners-appellees,

vs.
SALVADOR ARANETA, ETC., ET AL., respondents-appellants.

Office of the Solicitor General Ambrosio Padilla, Assistant Solicitor General Jose G. Bautista and Solicitor
Troadio T. Quiazon for petitioners.
San Juan, Africa and Benedicto for respondents.
FELIX, J.:

San Miguel Bay, located between the provinces of Camarines Norte and Camarines Sur, a part of the
National waters of the Philippines with an extension of about 250 square miles and an average depth of
approximately 6 fathoms (Otter trawl explorations in Philippine waters p. 21, Exh. B), is considered as
the most important fishing area in the Pacific side of the Bicol region. Sometime in 1950,
trawl1 operators from Malabon, Navotas and other places migrated to this region most of them settling
at Sabang, Calabanga, Camarines Sur, for the purpose of using this particular method of fishing in said
bay. On account of the belief of sustenance fishermen that the operation of this kind of gear caused the
depletion of the marine resources of that area, there arose a general clamor among the majority of the
inhabitants of coastal towns to prohibit the operation of trawls in San Miguel Bay. This move was
manifested in the resolution of December 18, 1953 (Exh. F), passed by the Municipal Mayors' League
condemning the operation of trawls as the cause of the wanton destruction of the shrimp specie and
resolving to petition the President of the Philippines to regulate fishing in San Miguel Bay by declaring it
closed for trawl fishing at a certain period of the year. In another resolution dated March 27, 1954, the
same League of Municipal Mayor, prayed the President to protect them and the fish resources of San
Miguel Bay by banning the operation of trawls therein (Exh. 4). The Provincial Governor also made
proper presentations to this effect and petitions in behalf of the non-trawl fishermen were likewise
presented to the President by social and civic organizations as the NAMFREL (National Movement for
Free Elections) and the COMPADRE (Committee for Philippine Action in Development, Reconstruction
and Education), recommending the cancellation of the licenses of trawl operators after investigation, if
such inquiry would substantiate the charges that the operation of said fishing method was detrimental
to the welfare of the majority of the inhabitants (Exh. 2).

In response to these pleas, the President issued on April 5, 1954, Executive Order No. 22 (50 Off. Gaz.,
1421) prohibiting the use of trawls in San Miguel Bay, but said executive order was amended by
Executive Order No. 66, issued on September 23, 1954 (50 Off. Gaz., 4037), apparently in answer to a
resolution of the Provincial Board of Camarines Sur recommending the allowance of trawl fishing during
the typhoon season only. On November 2, 1954, however, Executive Order No. 80 (50 Off. Gaz., 5198)
was issued reviving Executive Order No. 22, to take effect after December 31, 1954.

A group of Otter trawl operators took the matter to the court by filing a complaint for injunction and/or
declaratory relief with preliminary injunction with the Court of First Instance of Manila, docketed as Civil
Case No. 24867, praying that a writ of preliminary injunction be issued to restrain the Secretary of
Agriculture and Natural Resources and the Director of Fisheries from enforcing said executive order; to
declare the same null and void, and for such other relief as may be just and equitable in the premises.

The Secretary of Agriculture and Natural Resources and the Director of Fisheries, represented by the
Legal Adviser of said Department and a Special Attorney of the Office of the Solicitor General, answered
the complaint alleging, among other things, that of the 18 plaintiff (Exequiel Soriano, Teodora Donato,
Felipe Concepcion, Venancio Correa, Santo Gaviana, Alfredo General, Constancio Gutierrez, Arsenio de
Guzman, Pedro Lazaro, Porfirio Lazaro, Deljie de Leon, Jose Nepomuceno, Bayani Pingol, Claudio
Salgado, Porfirio, San Juan, Luis Sioco, Casimiro Villar and Enrique Voluntad), only 11 were issued license
to operate fishing boats for the year 1954 (Annex B, petition — L-8895); that the executive orders in
question were issued accordance with law; that the encouragement by the Bureau of Fisheries of the
use of Otter trawls should not be construed to mean that the general welfare of the public could be
disregarded, and set up the defenses that since plaintiffs question the validity of the executive orders
issued by the President, then the Secretary of Agriculture and Natural Resources and the Director of
Fisheries were not the real parties in interest; that said executive orders do not constitute a deprivation
of property without due process of law, and therefore prayed that the complaint be dismissed (Exh. B,
petition, L-8895).

During the trial of the case, the Governor of Camarines Sur appearing for the municipalities of Siruma,
Tinambac, Calabanga, Cabusao and Sipocot, in said province, called the attention of the Court that the
Solicitor General had not been notified of the proceeding. To this manifestation, the Court ruled that in
view of the circumstances of the case, and as the Solicitor General would only be interested in
maintaining the legality of the executive orders sought to be impugned, section 4 of Rule 66 could be
interpreted to mean that the trial could go on and the Solicitor General could be notified before
judgement is entered.

After the evidence for both parties was submitted and the Solicitor General was allowed to file his
memorandum, the Court rendered decision on February 2, 1955, the last part of which reads as follows:

The power to close any definite area of the Philippine waters, from the fact that Congress has seen fit to
define under what conditions it may be done by the enactment of the sections cited, in the mind of
Congress must be of transcendental significance. It is primarily within the fields of legislation not of
execution: for it goes far and says who can and who can not fish in definite territorial waters. The court
can not accept that Congress had intended to abdicate its inherent right to legislate on this matter of
national importance. To accept respondents' view would be to sanction the exercise of legislative power
by executive decrees. If it is San Miguel Bay now, it may be Davao Gulf tomorrow, and so on. That may
be done only by Congress. This being the conclusion, there is hardly need to go any further. Until the
trawler is outlawed by legislative enactment, it cannot be banned from San Miguel Bay by executive
proclamation. The remedy for respondents and population of the coastal towns of Camarines Sur is to
go to the Legislature. The result will be to issue the writ prayed for, even though this be to strike at
public clamor and to annul the orders of the President issued in response therefor. This is a task
unwelcome and unpleasant; unfortunately, courts of justice use only one measure for both the rich and
poor, and are not bound by the more popular cause when they give judgments.

IN VIEW WHEREOF, granted; Executive Order Nos. 22, 66 and 80 are declared invalid; the injunction
prayed for is ordered to issue; no pronouncement as to costs.

Petitioners immediately filed an ex-parte motion for the issuance of a writ of injunction which was
opposed by the Solicitor General and after the parties had filed their respective memoranda, the Court
issued an order dated February 19, 1955, denying respondents' motion to set aside judgement and
ordering them to file a bond in the sum of P30,000 on or before March 1, 1955, as a condition for the
non-issuance of the injunction prayed for by petitioners pending appeal. The Solicitor General filed a
motion for reconsideration which was denied for lack of merit, and the Court, acting upon the motion
for new trial filed by respondents, issued another order on March 3, 1965, denying said motion and
granting the injunction prayed for by petitioners upon the latter's filing a bond for P30,000 unless
respondents could secure a writ of preliminary injunction from the Supreme Court on or before March
15, 1955. Respondents, therefore, brought the matter to this Court in a petition for prohibition
and certiorariwith preliminary injunction, docketed as G.R. No. L-8895, and on the same day filed a
notice to appeal from the order of the lower court dated February 2, 1955, which appeal was docketed
in this Court as G.R. No. L-9191.

In the petition for prohibition and certiorari, petitioners (respondents therein) contended among other
things, that the order of, the respondent Judge requiring petitioners Secretary of Agriculture and
Natural Resources and the Director of Fisheries to post a bond in the sum of P30,000 on or before March
1, 1955, had been issued without jurisdiction or in excess thereof, or at the very least with grave abuse
of discretion, because by requiring the bond, the Republic of the Philippines was in effect made a party
defendant and therefore transformed the suit into one against the Government which is beyond the
jurisdiction of the respondent Judge to entertain; that the failure to give the Solicitor General the
opportunity to defend the validity of the challenged executive orders resulted in the receipt of
objectionable matters at the hearing; that Rule 66 of the Rules of Court does not empower a court of
law to pass upon the validity of an executive order in a declaratory relief proceeding; that the
respondent Judge did not have the power to grant the injunction as Section 4 of Rule 39 does not apply
to declaratory relief proceedings but only to injunction, receivership and patent accounting proceedings;
and prayed that a writ of preliminary injunction be issued to enjoin the respondent Judge from
enforcing its order of March 3, 1955, and for such other relief as may be deem just and equitable in the
premises. This petition was given due course and the hearing on the merits was set by this Court for
April 12, 1955, but no writ of preliminary injunction was issued.

Meanwhile, the appeal (G.R. No. L-9191) was heard on October 3, 1956, wherein respondents-
appellants ascribed to the lower court the commission of the following errors:

1. In ruling that the President has no authority to issue Executive Orders Nos. 22, 66 and 80 banning the
operation of trawls in San Miguel Bay;

2. In holding that the power to declare a closed area for fishing purposes has not been delegated to the
President of the Philippines under the Fisheries Act;

3. In not considering Executive Orders Nos. 22, 66 and 80 as declaring a closed season pursuant to
Section 7, Act 4003, as amended, otherwise known as the Fisheries Act;

4. In holding that to uphold the validity of Executive Orders Nos. 22 and 80 would be to sanction the
exercise of legislative power by executive decrees;

5. In its suggestion that the only remedy for respondents and the people of the coastal towns of
Camarines Sur and Camarines Norte is to go to the Legislature; and
6. In declaring Executive Orders Nos. 22, 66 and 80 invalid and in ordering the injunction prayed for to
issue.

As Our decision in the prohibition and certiorari case (G.R. No. L-8895) would depend, in the last
analysis, on Our ruling in the appeal of the respondents in case G.R. No. L-9191, We shall first proceed to
dispose of the latter case.

It is indisputable that the President issued Executive Orders Nos. 22, 66 and 80 in response to the clamor
of the inhabitants of the municipalities along the coastline of San Miguel Bay. They read as follows:

EXECUTIVE ORDER No. 22

PROHIBITING THE USE OF TRAWLS IN SAN MIGUEL BAY

In order to effectively protect the municipal fisheries of San Miguel Bay, Camarines Norte and Camarines
Sur, and to conserve fish and other aquatic resources of the area, I, RAMON MAGSAYSAY, President of
the Philippines, by virtue of the powers vested in me by law, do hereby order that:

1. Fishing by means of trawls (utase, otter and/or perenzella) of any kind, in the waters comprised
within San Miguel Bay, is hereby prohibited.

2. Trawl shall mean, for the purpose of this Order, a fishing net made in the form of a bag with the
mouth kept open by a device, the whole affair being towed, dragged, trailed or trawled on the bottom
of the sea to capture demersal, ground or bottom species.

3. Violation of the provisions of this Order shall subject the offender to the penalty provided under
Section 83 of Act 4993, or more than six months, or both, in the discretion of the Court.

Done in the City of Manila, this 5th day of April, nineteen hundred and fifty-four and of the
Independence of the Philippines, the eighth. (50 Off. Gaz. 1421)

EXECUTIVE ORDER No. 66

AMENDING EXECUTIVE ORDER No. 22, DATED APRIL 5, 1954, ENTITLED "PROHIBITING THE USE OF
TRAWLS IN SAN MIGUEL BAY"

By virtue of the powers voted in me by law, I, RAMON MAGSAYSAY, President of the Philippines, do
hereby amend Executive Order No. 22, dated April 5, 1954, so as to allow fishing by means of trawls, as
defined in said Executive Order, within that portion of San Miguel Bay north of a straight line drawn
from Tacubtacuban Hill in the Municipality of Tinambac, Province of Camarines Sur. Fishing by means of
trawls south of said line shall still be absolutely prohibited.

Done in the City of Manila, this 23rd day of September, in the year of our Lord, nineteen hundred and
fifty-four, and of the Independence of the Philippines, the ninth." (50 Off. Gaz. 4037).

EXECUTIVE ORDER No. 80.

FURTHER AMENDING EXECUTIVE ORDER No. 22, DATED APRIL 5, 1954, AS AMENDED BY EXECUTIVE
ORDER No. 66, DATED SEPTEMBER 23, 1954.

By virtue of the powers vested in me by law, I, RAMON MAGSAYSAY, President of the Philippines, do
hereby amend Executive Order No. 66 dated September 23, 1954, so as to allow fishing by means of
trawls, as defined in Executive Order No. 22, dated April 5, 1954, within the portion of San Miguel Bay
North of a straight line drawn from Tacubtacuban Hill in the Municipality of Mercedes, Province of
Camarines Norte to Balocbaloc Point in the Municipality of Tinambac, Province of Camarines Sur, until
December 31, 1954, only.

Thereafter, the provisions of said Executive Order No. 22 absolutely prohibiting fishing by means of
trawls in all the waters comprised within the San Miguel Bay shall be revived and given full force and
effect as originally provided therein.

Done in the City of Manila, this 2nd day of November, in the year of Our Lord, nineteen hundred and
fifty-four and of the Independence of the Philippines, the ninth. (50 Off. Gaz. 5198)

It is likewise admitted that petitioners assailed the validity of said executive orders in their petition for a
writ of injunction and/or declaratory relief filed with the Court of First Instance of Manila, and that the
lower court, upon declaring Executive Orders Nos. 22, 66 and 80 invalid, issued an order requiring the
Secretary of Agriculture and Natural Resources and the Director of Fisheries to post a bond for P30,000
if the writ of injunction restraining them from enforcing the executive orders in question must be
stayed.

The Solicitor General avers that the constitutionality of an executive order cannot be ventilated in a
declaratory relief proceeding. We find this untenable, for this Court taking cognizance of an appeal from
the decision of the lower court in the case of Hilado vs. De la Costa, et al., 83 Phil., 471, which involves
the constitutionality of another executive order presented in an action for declaratory relief, in effect
accepted the propriety of such action.

This question being eliminated, the main issues left for Our determination with respect to defendants'
appeal (G.R. No. L-9191), are:

(1) Whether the Secretary of an Executive Department and the Director of a Bureau, acting in their
capacities as such Government officials, could lawfully be required to post a bond in an action against
them;

(2) Whether the President of the Philippines has authority to issue Executive Orders Nos. 22, 66 and 80,
banning the operation of trawls in San Miguel Bay, or, said in other words, whether said Executive
Orders Nos. 22, 66 and 80 were issued in accordance with law; and.

(3) Whether Executive Orders Nos. 22, 66 and 80 were valid, for the issuance thereof was not in the
exercise of legislative powers unduly delegated to the President.
Counsel for both parties presented commendable exhaustive defenses in support of their respective
stands. Certainly, these cases deserve such efforts, not only because the constitutionality of an act of a
coordinate branch in our tripartite system of Government is in issue, but also because of the number of
inhabitants, admittedly classified as "subsistence fishermen", that may be affected by any ruling that We
may promulgate herein.

I. As to the first proposition, it is an elementary rule of procedure that an appeal stays the execution of a
judgment. An exception is offered by section 4 of Rule 39 of the Rules of Court which provides that:

SEC. 4. INJUNCTION, RECEIVERSHIP AND PATENT ACCOUNTING, NOT STAYED. — Unless otherwise
ordered by the court, a judgment in an action for injunction or in a receivership action, or a judgment or
order directing an accounting in an action for infringement of letter patent, shall not be stayed after its
rendition and before an appeal is taken or during the pendency of an appeal. The trial court, however, in
its discretion, when an appeal is taken from a judgement granting, dissolving or denying an injunction,
may make an order suspending, modifying, restoring, or granting such injunction during the pendency of
an appeal, upon such terms as to bond or otherwise as it may consider proper for the security of the
rights of the adverse party.

This provision was the basis of the order of the lower court dated February 19, 1955, requiring the filing
by the respondents of a bond for P30,000 as a condition for the non-issuance of the injunction prayed
for by plaintiffs therein, and which the Solicitor General charged to have been issued in excess of
jurisdiction. The State's counsel, however, alleges that while judgment could be stayed in injunction,
receivership and patent accounting cases and although the complaint was styled "Injunction, and/or
Declaratory Relief with Preliminary Injunction", the case is necessarily one for declaratory relief, there
being no allegation sufficient to convince the Court that the plaintiffs intended it to be one for
injunction. But aside from the title of the complaint, We find that plaintiffs pray for the declaration of
the nullity of Executive Order Nos. 22, 66 and 80; the issuance of a writ of preliminary injunction, and for
such other relief as may be deemed just and equitable. This Court has already held that there are only
two requisites to be satisfied if an injunction is to issue, namely, the existence of the right sought to be
protected, and that the acts against which the injunction is to be directed are violative of said right
(North Negros Sugar Co., Inc. vs.Serafin Hidalgo, 63 Phil., 664). There is no question that at least 11 of
the complaining trawl operators were duly licensed to operate in any of the national waters of the
Philippines, and it is undeniable that the executive enactment's sought to be annulled are detrimental to
their interests. And considering further that the granting or refusal of an injunction, whether temporary
or permanent, rests in the sound discretion of the Court, taking into account the circumstances and the
facts of the particular case (Rodulfa vs. Alfonso, 76 Phil,, 225, 42 Off. Gaz., 2439), We find no abuse of
discretion when the trial Court treated the complaint as one for injunction and declaratory relief and
executed the judgment pursuant to the provisions of section 4 of Rule 39 of the Rules of Court.

On the other hand, it shall be remembered that the party defendants in Civil Case No. 24867 of the
Court of First Instance of Manila are Salvador Araneta, as Secretary of Agriculture and Natural
Resources, and, Deogracias Villadolid, as Director of Fisheries, and were sued in such capacities because
they were the officers charged with duty of carrying out the statutes, orders and regulations on fishing
and fisheries. In its order of February 19, 1955, the trial court denied defendants' motion to set aside
judgment and they were required to file a bond for P30,000 to answer for damages that plaintiffs were
allegedly suffering at that time, as otherwise the injunction prayed for by the latter would be issued.

Because of these facts, We agree with the Solicitor General when he says that the action, being one
against herein petitioners as such Government officials, is essentially one against the Government, and
to require these officials to file a bond would be indirectly a requirement against the Government for as
regards bonds or damages that may be proved, if any, the real party in interest would be the Republic of
the Philippines (L. S. Moon and Co. vs. Harrison, 43 Phi., 39; Salgado vs. Ramos, 64 Phil., 724-727, and
others). The reason for this pronouncement is understandable; the State undoubtedly is always solvent
(Tolentino vs. Carlos 66 Phil., 140; Government of the P. I. vs. Judge of the Court of First Instance of
Iloilo, 34 Phil., 167, cited in Joaquin Gutierrez et al. vs. Camus et al. * G.R. No. L-6725, promulgated
October 30, 1954). However, as the records show that herein petitioners failed to put up the bond
required by the lower court, allegedly due to difficulties encountered with the Auditor General's Office
(giving the impression that they were willing to put up said bond but failed to do so for reasons beyond
their control), and that the orders subjects of the prohibition and certiorari proceedings in G.R. No. L-
8895, were enforced, if at all,2 in accordance with section 4 of Rule 39, which We hold to be applicable
to the case at bar, the issue as to the regularity or adequacy of requiring herein petitioners to post a
bond, becomes moot and academic.

II. Passing upon the question involved in the second proposition, the trial judge extending the
controversy to the determination of which between the Legislative, and Executive Departments of the
Government had "the power to close any definite area of the Philippine waters" instead of limiting the
same to the real issue raised by the enactment of Executive Orders No. 22, 26 and 80, especially the first
and the last "absolutely prohibiting fishing by means trawls in all the waters comprised within the San
Miguel Bay", ruled in favor of Congress had not intended to abdicate its power to legislate on the
matter, he maintained as stated before, that "until the trawler is outlawed by legislative enactment, it
cannot be banned from San Miguel Bay by executive proclamation", and that "the remedy for
respondents and population of the coastal towns of Camarines Sur is to go to Legislature," and thus
declared said Executive Orders Nos. 22, 66 and 80 invalid".

The Solicitor General, on the contrary, asserts that the President is empowered by law to issue the
executive enactment's in question.

Sections 6, 13 and 75 of Act No. 4003, known as the Fisheries Law, the latter two sections as amended
by section 1 of Commonwealth Act No. 471, read as follows:

SEC. 6. WORDS AND PHRASES DEFINED. —Words and terms used in this Act shall be construed as
follows:

xxx xxx xxx

TAKE or TAKING includes pursuing, shooting, killing, capturing, trapping, snaring, and netting fish and
other aquatic animals, and all lesser acts, such as disturbing, wounding, stupefying; or placing, setting,
drawing, or using any net or other device commonly used to take or collect fish and other aquatic
animals, whether they result in taking or not, and includes every attempt to take and every act of
assistance to every other person in taking or attempting to take or collect fish and other aquatic
animals: PROVIDED, That whenever taking is allowed by law, reference is had to taking by lawful means
and in lawful manner.

xxx xxx xxx

SEC. 13. PROTECTION OF FRY OR FISH EGGS. — Except for scientific or educational purpose or for
propagation, it shall be unlawful to take or catch fry or fish eggs and the small fish, not more than three
(3) centimeters long, known as siliniasi, in the territorial waters of the Philippines. Towards this end, the
Secretary of Agriculture and Commerce shall be authorized to provide by regulations such restrictions as
may be deemed necessary to be imposed on THE USE OF ANY FISHING NET OR FISHING DEVICE FOR THE
PROTECTION OF FRY OR FISH EGGS; Provided, however, That the Secretary of Agriculture and Commerce
shall permit the taking of young of certain species of fish known as hipon under such restrictions as may
be deemed necessary.

SEC. 75. FISH REFUGEES AND SANCTUARIES. — Upon the recommendation of the officer or chief of the
bureau, office or service concerned, the Secretary of Agriculture and Commerce may set aside and
establish fishery reservation or fish refuges and sanctuaries to be administered in the manner to be
prescribed by him. All streams, ponds and waters within the game refuge, birds, sanctuaries, national
parks, botanical gardens, communal forest and communal pastures are hereby declared fishing refuges
and sanctuaries. It shall be unlawful for any person, to take, destroy or kill in any of the places
aforementioned, or in any manner disturb or drive away or take therefrom, any fish fry or fish eggs.

Act No. 4003 further provides as follows:

SEC. 83. OTHER VIOLATIONS. — Any other violation of the provisions of this Act or any rules and
regulations promulgated thereunder shall subject the offender to a fine of not more than two hundred
pesos, or imprisonment for not more than six months, or both, in the discretion of the Court.

As may be seen from the just quoted provisions, the law declares unlawful and fixes the penalty for the
taking (except for scientific or educational purposes or for propagation), destroying or killing of any fish
fry or fish eggs, and the Secretary of Agriculture and Commerce (now the Secretary of Agriculture and
Natural Resources) is authorized to promulgate regulations restricting the use of any fish net or fishing
device (which includes the net used by trawl fishermen) for the protection of fry or fish eggs, as well as
to set aside and establish fishery reservations or fish refuges and sanctuaries to be administered in the
manner prescribed by him, from which no person could lawfully take, destroy or kill in any of the places
aforementioned, or in any manner disturb or drive away or take therefrom any small or immature fish,
fry or fish eggs. It is true that said section 75 mentions certain streams, ponds and waters within the
game refuges, . . . communal forest, etc., which the law itself declares fish refuges and sanctuaries, but
this enumeration of places does not curtail the general and unlimited power of the Secretary of
Agriculture and Natural Resources in the first part of section 75, to set aside and establish fishery
reservations or fish refuges and sanctuaries, which naturally include seas or bays, like the San Miguel
Bay in Camarines.

From the resolution passed at the Conference of Municipal Mayors held at Tinambac, Camarines Sur, on
December 18, 1953 (Exh. F), the following manifestation is made:

WHEREAS, the continuous operation of said trawls even during the close season as specified in said
Executive Order No. 20 caused the wanton destruction of the mother shrimps laying their eggs and the
millions of eggs laid and the inevitable extermination of the shrimps specie; in order to save the shrimps
specie from eventual extermination and in order to conserve the shrimps specie for posterity;

In the brief submitted by the NAMFREL and addressed to the President of the Philippines (Exh. 2), in
support of the petition of San Miguel Bay fishermen (allegedly 6, 175 in number), praying that trawlers
be banned from operating in San Miguel Bay, it is stated that:

The trawls ram and destroy the fish corrals. The heavy trawl nets dig deep into the ocean bed. They
destroy the fish foods which lies below the ocean floor. Their daytime catches net millions of shrimps
scooped up from the mud. In their nets they bring up the life of the sea: algea, shell fish and star fish . . .

The absence of some species or the apparent decline in the catch of some fishermen operating in the
bay may be due to several factors, namely: the indiscriminate catching of fry and immature sizes of
fishes, the wide-spread use of explosives inside as well as at the mouth and approaches of the bay, and
the extensive operation of the trawls. (p.9, Report of Santos B. Rasalan, Exh. A)

Extensive Operation of Trawls: — The strenuous effect of the operations of the 17 TRAWLS of the
demersal fisheries of San Miguel Bay is better appreciated when we consider the fact that out of its
about 850 square kilometers area, only about 350 square kilometers of 5 fathoms up could be trawled.
With their continuous operation, is greatly strained. This is shown by the fact that in view of the non-
observance of the close season from May to October, each year, majority of their catch are immature. If
their operation would continue unrestricted, the supply would be greatly depleted. (p. 11), Report of
Santos B. Rasalan, Exh. A)

San Miguel Bay — can sustain 3 to 4 small trawlers (Otter Trawl Explorations in Philippine Waters,
Research Report 25 of the Fish and Wildlife Service, United States Department of the Interior, p. 9
Exhibit B).

According to Annex A of the complaint filed in the lower court in Civil Case No. 24867 — G.R. No. L-9191
(Exh. D, p. 53 of the folder of Exhibits), the 18 plaintiffs-appellees operate 29 trawling boats, and their
operation must be in a big scale considering the investments plaintiffs have made therefore, amounting
to P387,000 (Record on Appeal, p. 16-17).

In virtue of the aforementioned provisions of law and the manifestation just copied, We are of the
opinion that with or without said Executive Orders, the restriction and banning of trawl fishing from all
Philippine waters come, under the law, within the powers of the Secretary of Agriculture and Natural
Resources, who in compliance with his duties may even cause the criminal prosecution of those who in
violation of his instructions, regulations or orders are caught fishing with trawls in the Philippine waters.

Now, if under the law the Secretary of Agriculture and Natural Resources has authority to regulate or
ban the fishing by trawl which, it is claimed, obnoxious for it carries away fish eggs and fry's which
should be preserved, can the President of the Philippines exercise that same power and authority?
Section 10(1), Article VII of the Constitution of the Philippines prescribes:

SEC. 10 (1). The President shall have control of all the executive departments, bureaus or offices,
exercises general supervision over all local governments as may be provided by law, and take care that
the laws be faithfully executed.

Section 63 of the Revised Administrative Code reads as follows:

SEC. 63. EXECUTIVE ORDERS AND EXECUTIVE PROCLAMATION. — Administrative acts and commands of
the President of the Philippines touching the organization or mode of operation of the Government or
rearranging or readjusting any of the district, divisions, parts or ports of the Philippines, and all acts and
commands governing the general performance of duties by public employees or disposing of issues of
general concern shall be made in executive orders.

xxx xxx xxx

Regarding department organization Section 74 of the Revised Administrative Code also provides that:

All executive functions of the government of the Republic of the Philippines shall be directly under the
Executive Departments subject to the supervision and control of the President of the Philippines in
matters of general policy. The Departments are established for the proper distribution of the work of
the Executive, for the performance of the functions expressly assigned to them by law, and in order that
each branch of the administration may have a chief responsible for its direction and policy. Each
Department Secretary shall assume the burden of, and responsibility for, all activities of the
Government under his control and supervision.

For administrative purposes the President of the Philippines shall be considered the Department Head
of the Executive Office.

One of the executive departments is that of Agriculture and Natural Resources which by law is placed
under the direction and control of the Secretary, who exercises its functions subject to the general
supervision and control of the President of the Philippines (Sec. 75, R. A. C.). Moreover, "executive
orders, regulations, decrees and proclamations relative to matters under the supervision or jurisdiction
of a Department, the promulgation whereof is expressly assigned by law to the President of the
Philippines, shall as a general rule, be issued upon proposition and recommendation of the respective
Department" (Sec. 79-A, R.A.C.), and there can be no doubt that the promulgation of the questioned
Executive Orders was upon the proposition and recommendation of the Secretary of Agriculture and
Natural Resources and that is why said Secretary, who was and is called upon to enforce said executive
Orders, was made a party defendant in one of the cases at bar (G.R. No. L-9191).
For the foregoing reasons We do hesitate to declare that Executive Orders Nos. 22, 66 and 80, series of
1954, of the President, are valid and issued by authority of law.

III. But does the exercise of such authority by the President constitute and undue delegation of the
powers of Congress?

As already held by this Court, the true distinction between delegation of the power to legislate and the
conferring of authority or discretion as to the execution of law consists in that the former necessary
involves a discretion as to what the law shall be, wile in the latter the authority or discretion as to its
execution has to be exercised under and in pursuance of the law. The first cannot be done; to the latter
no valid objection can be made (Cruz vs. Youngberg, 56 Phil., 234, 239. See also Rubi, et al. vs. The
Provincial Board of Mindoro, 39 Phil., 660).

In the case of U. S. vs. Ang Tang Ho, 43 Phil. 1, We also held:

THE POWER TO DELEGATE. — The Legislature cannot delegate legislative power to enact any law. If Act
No. 2868 is a law unto itself, and it does nothing more than to authorize the Governor-General to make
rules and regulations to carry it into effect, then the Legislature created the law. There is no delegation
of power and it is valid. On the other hand, if the act within itself does not define a crime and is not
complete, and some legislative act remains to be done to make it a law or a crime, the doing of which is
vested in the Governor-General, the act is delegation of legislative power, is unconstitutional and void.

From the provisions of Act No. 4003 of the Legislature, as amended by Commonwealth Act No. 471,
which have been aforequoted, We find that Congress (a) declared it unlawful "to take or catch fry or fish
eggs in the territorial waters of the Philippines; (b) towards this end, it authorized the Secretary of
Agriculture and Natural Resources to provide by the regulations such restrictions as may be deemed
necessary to be imposed on the use of any fishing net or fishing device for the protection of fish fry or
fish eggs (Sec. 13); (c) it authorized the Secretary of Agriculture and Natural Resources to set aside and
establish fishery reservations or fish refuges and sanctuaries to be administered in the manner to be
prescribed by him and declared it unlawful for any person to take, destroy or kill in any of said places, or,
in any manner disturb or drive away or take therefrom, any fish fry or fish eggs (See. 75); and (d) it
penalizes the execution of such acts declared unlawful and in violation of this Act (No. 4003) or of any
rules and regulations promulgated thereunder, making the offender subject to a fine of not more than
P200, or imprisonment for not more than 6 months, or both, in the discretion of the court (Sec. 83).

From the foregoing it may be seen that in so far as the protection of fish fry or fish egg is concerned, the
Fisheries Act is complete in itself, leaving to the Secretary of Agriculture and Natural Resources the
promulgation of rules and regulations to carry into effect the legislative intent. It also appears from the
exhibits on record in these cases that fishing with trawls causes "a wanton destruction of the mother
shrimps laying their eggs and the millions of eggs laid and the inevitable extermination of the shrimps
specie" (Exh. F), and that, "the trawls ram and destroy the fish corrals. The heavy trawl nets dig deep
into the ocean bed. They destroy the fish food which lies below the ocean floor. Their daytime catches
net millions of shrimps scooped up from the mud. In their nets they bring up the life of the sea" (Exh- 2).
In the light of these facts it is clear to Our mind that for the protection of fry or fish eggs and small and
immature fishes, Congress intended with the promulgation of Act No. 4003, to prohibit the use of any
fish net or fishing device like trawl nets that could endanger and deplete our supply of sea food, and to
that end authorized the Secretary of Agriculture and Natural Resources to provide by regulations such
restrictions as he deemed necessary in order to preserve the aquatic resources of the land.
Consequently, when the President, in response to the clamor of the people and authorities of Camarines
Sur issued Executive Order No. 80 absolutely prohibiting fishing by means of trawls in all waters
comprised within the San Miguel Bay, he did nothing but show an anxious regard for the welfare of the
inhabitants of said coastal province and dispose of issues of general concern (Sec. 63, R.A.C.) which were
in consonance and strict conformity with the law.

Wherefore, and on the strength of the foregoing considerations We render judgement, as follows:

(a) Declaring that the issues involved in case G.R. No. L-8895 have become moot, as no writ of
preliminary injunction has been issued by this Court the respondent Judge of the Court of First Instance
of Manila Branch XIV, from enforcing his order of March 3, 1955; and

(b) Reversing the decision appealed from in case G. R. No. L-9191; dissolving the writ of injunction
prayed for in the lower court by plaintiffs, if any has been actually issued by the court a quo; and
declaring Executive Orders Nos. 22, 66 and 80, series of 1954, valid for having been issued by authority
of the Constitution, the Revised Administrative Code and the Fisheries Act.

Without pronouncement as to costs. It is so ordered.