FIRST DIVISION

[A.C. No. 8507. November 10, 2015.]

ELENA BIETE LEONES VDA. DE MILLER, complainant, vs. ATTY. ROLANDO B.

MIRANDA, respondent.

DECISION

PERLAS-BERNABE, J p:
Before the Court is an administrative Complaint 1 dated December 12, 2009 filed by
complainant Elena Biete Leones Vda. de Miller (complainant) against respondent Atty. Rolando B.
Miranda (respondent) praying for the latter's disbarment.
The Facts
Complainant alleged that she filed a complaint for ejectment (ejectment case) against a
certain Clarita Rodriguez Magbuhos 2 (Magbuhos), docketed as Civil Case No. 08-749, before the
Municipal Trial Court in Cities of Angeles City, Branch III (MTCC). 3 A certain Corazon P. Manansala
(Manansala), who claimed to be Magbuhos's attorney-in-fact, appeared in the latter's behalf
alongside with her counsel, herein respondent. To prove her authority as attorney-in-fact, she
presented a Special Power of Attorney 4(SPA) duly notarized by respondent on March 6, 2009 and
entered into his notarial register as Doc. No. 340; Page No. 68; Book No. IX, Series of 2009 (original
SPA). 5However, upon scrutiny of the original SPA, complainant's counsel pointed out that
Manansala's authority to represent Magbuhos pertained to an alleged "cash loan extended to one
Nestor Cabais" and not to the ejectment case. Insisting that she was authorized to represent
Magbuhos in the ejectment case, Manansala, thru respondent, submitted another SPA 6 (altered
SPA), which turned out to be almost identical to the original SPA earlier submitted, with the following
notable changes: (a) the phrase "the cash loan extended to one Nestor Cabais" was enclosed with a
handwritten parenthesis; and (b) the handwritten phrase "my property located at Purok 6, Aguinaldo
St., Sapang Bato, Angeles City," was inserted in its stead, with all handwritten iterations not having
any initials or counter-signatures of Magbuhos, as well as any indication as to when the aforesaid
alterations were made. 7
In an Order 8 dated November 18, 2009, the MTCC denied the admission of the altered SPA,
thus, ruling that Manansala has no authority to represent Magbuhos in the ejectment case. It held that
the handwritten insertions made on the altered SPA were made after the document's notarization and
were without any counter-signatures from Magbuhos, and as such, cannot be given any effect. The
MTCC also pointed out that the document registered as Doc. No. 340; Page No. 68; Book No. IX,
Series of 2009 in respondent's notarial register is the SPA which authorized Manansala to represent
Magbuhos regarding "the cash loan extended to one Nestor Cabais," and has no reference to the
ejectment case. 9
The foregoing incidents led to the filing of the instant administrative complaint, with
complainant arguing that respondent's act of submitting before the MTCC an altered and/or falsified
document which he himself had notarized is blatantly and patently immoral, improper, and unlawful,
and thus, he should be accordingly penalized for the same. 10
In his defense, respondent maintained that the handwritten iterations made in the SPA were
neither malicious nor intentional but were mere products of his "honest mistake or oversight."
Respondent then explained that on March 5, 2009, Magbuhos personally appeared before him and
asked him to prepare an SPA in order to authorize Manansala to appear in her behalf in the
ejectment case. Respondent then asked his secretary to print a copy of a similar document in his files
for him to insert the necessary corrections, and after which, instructed his secretary to re-type the
document and re-print the same with the corrections. Thinking that the re-printed copy already
contained his corrections, he no longer bothered to proofread the SPA, went on to have Magbuhos
sign the document, and then proceeded to notarize the same. 11Upon realizing the existence of the
erroneous phrase therein, i.e., "the cash loan extended to one Nestor Cabais," respondent asserted
that he informed Magbuhos of such error, and that the latter explicitly gave him instructions to insert
the necessary corrections. 12
The IBP's Report and Recommendation

1
 In a Report and Recommendation 13 dated March 23, 2011, the Integrated Bar of the
Philippines (IBP) Investigating Commissioner found respondent administratively liable and,
accordingly, recommended that he be meted the penalty of suspension from the practice of law for a
period of one (1) year and disqualification as notary public for a period of two (2) years. 14
The Investigating Commissioner found that since respondent already performed notarial acts
on the original SPA which already contains the acts of solemn affirmation of the parties, it was
improper, wrongful, and/or unlawful for respondent to have notarized a copy thereof with the
handwritten alterations. In this regard, the Investigating Commissioner remarked that respondent
cannot simply put the blame on his legal secretary in order to save himself from any administrative
sanctions. 15
In a Resolution 16 dated June 20, 2013, the IBP Board of Governors adopted and approved
the aforesaid Report and Recommendation, with modification decreasing the recommended penalty
to suspension from the practice of law for a period of six (6) months, immediately revoking
respondent's notarial commission, and disqualifying him from being appointed as a notary public for a
period of one (1) year. 17 Aggrieved, respondent moved for reconsideration 18 which was, however,
denied in a Resolution19 dated September 27, 2014.
The Issue Before the Court
The essential issue in this case is whether or not respondent should be held administratively
liable for the acts complained of. CAIHTE
The Court's Ruling
A notary public is empowered to perform a variety of notarial acts, most common of which are
the acknowledgement and affirmation of documents or instruments. In the performance of these
notarial acts, the notary public must be mindful of the significance of the notarial seal affixed on
documents. The notarial seal converts a document from a private to a public instrument, after which it
may be presented as evidence without need of proof of its genuineness and due execution. Thus,
notarization should not be treated as an empty, meaningless or routinary act. A notary public
exercises duties calling for carefulness and faithfulness. Notaries must inform themselves of the facts
they certify to; most importantly, they should not take part or allow themselves to be part of illegal
transactions. 20 The importance of the functions of a notary public is highlighted in De Jesus v.
Sanchez-Malit 21 as follows:
The important role a notary public performs cannot be overemphasized. The
Court has repeatedly stressed that notarization is not an empty, meaningless
routinary act, but one invested with substantive public interest. Notarization converts
a private document into a public document, making it admissible in evidence without
further proof of its authenticity. Thus, a notarized document is, by law, entitled to full
faith and credit upon its face. It is for this reason that a notary public must
observe with utmost care the basic requirements in the performance of his
notarial duties; otherwise, the public's confidence in the integrity of a notarized
document would be undermined. 22 (Emphasis and underscoring supplied)
In view of such importance, the Notarial Law and the 2004 Rules on Notarial
Practice 23 require a duly commissioned notary public to make the proper entries in his Notarial
Register and to refrain from committing any dereliction or any act which may serve as cause for the
revocation of his commission or the imposition of administrative sanctions. 24
In the instant case, records reveal that respondent prepared the original SPA to show that
Manansala was authorized by Magbuhos to appear in the latter's behalf in the ejectment case
instituted by herein complainant. However, upon the original SPA's submission before the MTCC, it
was pointed out that the authority given by Magbuhos to Manansala only pertained to "the cash loan
extended to one Nestor Cabals" and not to the ejectment case. In order to remedy the situation,
handwritten alterations were made on the said SPA, such as the enclosing of the aforesaid phrase
with a parenthesis and the insertion of the phrase "my property located at Purok 6, Aguinaldo St.,
Sapang Bato, Angeles City," and thereafter, the altered SPA was then re-submitted to the MTCC. In
this regard, respondent explained that in the preparation of the original SPA, he merely asked his
secretary to get a similar document from his files and insert his corrections. Respondent then
admitted that he did not bother checking the draft of the original SPA as he simply assumed that his
secretary did her job properly. Finally, respondent reasoned out that the error made on the original
SPA was only due to "honest mistake and oversight" and upon discovery thereof, he himself caused
the alterations on the SPA with the knowledge and verbal consent of Magbuhos.
These factual circumstances only show that respondent's failure to carefully double-check the
draft of the original SPA submitted to him by his secretary led him to notarize a document which did
not reflect the true intent of his client. His attempt to escape administrative sanctions by pinning the
blame on his secretary cannot be condoned as case law instructs that in these instances, the lawyer
himself, not merely his secretary, should be held accountable for these kinds of misdeeds. 25 Worse,
respondent himself caused the intercalation of the notarized SPA by inserting handwritten alterations

2
 therein which changed its meaning — thus, violating Rule 1.01, Canon 1 of the Code of Professional
Responsibility, which provides that "[a] lawyer shall not engage in unlawful, dishonest, immoral or
deceitful conduct." Absent any competent proof, respondent's assertion that he was verbally
authorized by Magbuhos in altering the SPA is self-serving and cannot be given any credence.
Irrefragably, respondent's acts not only caused damage to those directly affected by the
altered SPA, but also tainted the integrity of the legal profession by degrading the function of
notarization. Thus, he should be held liable therefor not only as a notary public, but also as a
lawyer. 26 In a similar case, the Court imposed upon the erring lawyer the following penalties: (a)
suspension from the practice of law for a period of one (1) year; (b) immediate revocation of the
lawyer's notarial commission, if still existing; and (c) disqualification from being appointed as a notary
public for a period of two (2) years. 27 Accordingly, the Court finds it appropriate that respondent be
meted with the same penalties.
WHEREFORE, respondent Atty. Rolando B. Miranda is found GUILTY of violating the 2004
Rules on Notarial Practice and the Code of Professional Responsibility. Accordingly, the
Court SUSPENDS him from the practice of law for one (1) year; REVOKES his incumbent notarial
commission, if any; and PROHIBITS him from being commissioned as a notary public for two (2)
years, effective immediately, with a STERN WARNING that a repetition of the same or similar acts in
the future shall be dealt with more severely.
Let a copy of this Decision be furnished the Office of the Bar Confidant, to be appended to
respondent's personal record in this Court as attorney. Further, let copies of this Decision be
furnished the Integrated Bar of the Philippines and the Office of the Court Administrator, which is
directed to circulate them to all the courts in the country for their information and guidance.
SO ORDERED.
||| (Vda. de Miller v. Miranda, A.C. No. 8507, [November 10, 2015])

[G.R. No. 202877. December 9, 2015.]

NARRA NICKEL MINING AND DEVELOPMENT CORPORATION, TESORO MINING

AND DEVELOPMENT, INC., and MCARTHUR MINING,
INC., petitioners, vs.REDMONT CONSOLIDATED MINES
CORPORATION, respondent.

DECISION

PERLAS-BERNABE, J p:
Assailed in this petition for review on certiorari 1 are the Decision 2 dated February 23, 2012
and the Resolution 3 dated July 27, 2012 of the Court of Appeals (CA) in CA-G.R. SP No. 120409,
which affirmed the Decision 4 dated April 6, 2011 and the Resolution 5 dated July 6, 2011 of the
Office of the President (OP) in O.P. Case No. 10-E-229 and, among others, ordered the cancellation
and/or revocation of the Financial or Technical Assistance Agreement 6 (FTAA) executed between

3
the Republic of the Philippines (Republic) and herein petitioners Narra Nickel Mining and
Development Corporation, Tesoro Mining and Development, Inc., and McArthur Mining, Inc.
The Facts
On November 8, 2006, respondent Redmont Consolidated Mines Corporation (Redmont)
filed an Application for an Exploration Permit 7 (EP) oven mining areas located in the Municipalities of
Rizal, Bataraza, and Narra Palawan. After an inquiry with the Department of Environment and Natural
Resources (DENR), Redmont learned that said areas were already covered by existing Mineral
Production Sharing Agreements (MPSA) and an EP, which were initially applied for by petitioners'
respective predecessors-in-interest with the Mines and Geosciences Bureau (MGB), Region IV-B,
Office of the DENR. 8
In particular, petitioner Narra Nickel Mining and Development Corporation (Narra Nickel)
acquired the application of MPSA-IV-I-12, covering an area of 3,277 hectares (ha.) in Barangays
Calategas and San Isidro, Narra, Palawan, from Alpha Resources and Development Corporation and
Patricia Louise Mining and Development Corporation. On March 30, 2006, or prior to Redmont's EP
application, Narra Nickel had converted its MPSA into an FTAA application, denominated as AFTA-
IVB-07. 9
For its part, petitioner Tesoro Mining and Development, Inc. (Tesoro) acquired the application
of MPSA-AMA-IVB-154 (formerly EPA-IVB-47), covering an area of 3,402 has. in Barangays Malinao
and Princesa Urduja, Narra, Palawan, from Sara Marie Mining, Inc. (SMMI). Similar to Narra Nickel,
Tesoro sought the conversion of its MPSA into an FTAA, but its application therefor, denominated as
AFTA-IVB-08, was filed subsequent to Redmont's EP application, or sometime in May 2007. 10
In the same vein, petitioner McArthur Mining, Inc. (McArthur) acquired the application of
MPSA-AMA-IVB-153, as well as EPA-IVB-44, covering the areas of 1,782 has. and 3,720 has. in
Barangays Sumbiling and Malatagao, Bataraza, Palawan, respectively, from Madridejos Mining
Corporation, an SMMI assignee. McArthur also filed an application for FTAA conversion in May 2007,
denominated as AFTA-IVB-09. 11
Upon the recommendation of then DENR Secretary Jose L. Atienza, Jr., through a
memorandum 12 dated November 9, 2009, petitioners' FTAA applications were all approved on April
5, 2010. Consequently, on April 12, 2010, the Republic — represented by then Executive Secretary
Leandro R. Mendoza, acting by authority of then President Gloria Macapagal-Arroyo — and
petitioners executed an FTAA 13 covering the subject areas, denominated as FTAA No. 05-2010-IVB
(MIMAROPA). 14
Prior to the grant of petitioners' applications for FTAA conversion, and the execution of the
above-stated FTAA, Redmont filed on January 2, 2007 three (3) separate petitions 15 for the denial of
petitioners' respective MPSA and/or EP applications before the Panel of Arbitrators (POA) of the
DENR-MGB, docketed as DENR Case Nos. 2007-01, 16 2007-02, 17 and 2007-03. 18 Redmont's
primary argument was that petitioners were all controlled by their common majority stockholder,
MBMI Resources, Inc. (MBMI) — a 100% Canadian-owned corporation 19 — and, thus, disqualified
from being grantees of MPSAs and/or EPs. The matter essentially concerning the propriety of
denying petitioners' MPSAs and/or EPs in view of their nationality had made it all the way to this
Court, and was docketed as G.R. No. 195580. 20 In the Court's April 21, 2014
Decision, 21 petitioners were declared to be foreign corporations under the application of the
"Grandfather Rule." Petitioners moved for the reconsideration of the said Decision, which was,
however, denied in the Court's Resolution dated January 28, 2015.
Meanwhile, Redmont separately sought the cancellation and/or revocation of the executed
FTAA through a Petition 22 dated May 7, 2010 (May 7, 2010 Petition) filed before the Office of the
President (OP), docketed as O.P. Case No. 10-E-229. Redmont asserted, among others, that the
FTAA was highly anomalous and irregular, considering that petitioners and their mother company,
MBMI, have a long history of violating and circumventing the Constitution and other laws, due to their
questionable activities in the Philippines and abroad. 23
Petitioners opposed Redmont's petition through a motion to dismiss, contending that: (a)
there is no rule or law which grants an appeal from a memorandum of a department secretary; (b) the
appeal was filed beyond the reglementary period; (c) the appeal was not perfected because copies of
the appeal were not properly served on them; and (d) Redmont is not a real party-in-interest. 24
The OP Ruling
In a Decision 25 dated April 6, 2011, the OP granted Redmont's petition. It declared that the
OP has the authority to cancel the FTAA because the grant of exclusive power to the President of the
Philippines to enter into agreements, including FTAAs under Republic Act No. (RA) 7942, 26 or the
"Philippine Mining Act of 1995," carries with it the authority to cancel the same. 27 Thus, finding, inter
alia, that petitioners misrepresented that they were Filipino corporations qualified to engage in mining
activities, 28the OP cancelled and/or revoked the said FTAA, and, in turn, gave due course to
Redmont's EP application. 29 AaCTcI

4
 Dissatisfied, petitioners appealed to the CA. 30
The CA Ruling
In a Decision 31 dated February 23, 2012, the CA affirmed the OP Ruling. It found no
procedural error in the OP's action on the FTAA, holding that it was done in accordance with the
President's power of control over the executive departments. 32 As to its merits, the CA ruled that the
Republic, as represented by the OP, had the right to cancel the FTAA, even without judicial
permission, because paragraph a (iii), Section 17.2 33 thereof provides that such agreement may be
cancelled by either party on the ground of "any intentional and materially false statement or omission
of facts by a [p]arty." 34 Accordingly, it sustained the OP's finding that petitioners committed
misrepresentations which warranted the cancellation and/or revocation of the FTAA. 35
Unperturbed, petitioners filed on March 14, 2012 a motion for reconsideration, 36 which was
denied in a Resolution 37 dated July 27, 2012; hence, this petition.
The Issue Before the Court
The main issue for the Court's resolution is whether or not the CA correctly affirmed on
appeal the OP's cancellation and/or revocation of the FTAA.
The Court's Ruling
The petition is meritorious.
I. ON JURISDICTION.
It is a fundamental rule that the question of jurisdiction may be tackled motu proprio on
appeal even if none of the parties raised the same. 38 The reason for the rule is that a court without
jurisdiction cannot render a valid judgment. 39
Cast against this light, the Court finds that the CA improperly took cognizance of the case on
appeal under Rule 43 of the Rules of Court for the reason that the OP's cancellation and/or
revocation of the FTAA was not one which could be classified as an exercise of its quasi-judicial
authority, thus negating the CA's jurisdiction over the case. The jurisdictional parameter that the
appeal be taken against a judgment, final order, resolution or award of a "quasi-judicial agency in the
exercise of its quasi-judicial functions" is explicitly stated in Section 1 of the said Rule:
Rule 43
Appeals from the Court of Tax Appeals and Quasi-Judicial Agencies to the Court of
Appeals
Section 1. Scope. — This Rule shall apply to appeals from judgments or final
orders of the Court of Tax Appeals and from awards, judgments, final orders or
resolutions of or authorized by any quasi-judicial agency in the exercise of its
quasi-judicial functions. Among these agencies are the Civil Service Commission,
Central Board of Assessment Appeals, Securities and Exchange Commission, Office
of the President, Land Registration Authority, Social Security Commission, Civil
Aeronautics Board, Bureau of Patents, Trademarks and Technology Transfer,
National Electrification Administration, Energy Regulatory Board, National
Telecommunications Commission, Department of Agrarian Reform under Republic
Act No. 6657, Government Service Insurance System, Employees Compensation
Commission, Agricultural Inventions Board, Insurance Commission, Philippine Atomic
Energy Commission, Board of Investments, Construction Industry Arbitration
Commission, and voluntary arbitrators authorized by law. (Emphases and
underscoring supplied)
Quasi-judicial or administrative adjudicatory power is the power of the administrative
agency to adjudicate the rights of persons before it. The administrative body exercises its quasi-
judicial power when it performs in a judicial manner an act which is essentially executive or
administrative in nature, where the power to act in such manner is incidental to or reasonably
necessary for the performance of the executive or administrative duty entrusted to it. 40
"'Adjudicate' as commonly or popularly understood, means to adjudge, arbitrate, judge,
decide, determine, resolve, rule on, or settle. The dictionary defines the term as 'to settle finally (the
rights and duties of parties to a court case) on the merits of issues raised: . . . to pass judgment on:
settle judicially: . . . act as judge.'" 41 "In the legal sense, 'adjudicate' means: '[t]o settle in the
exercise of judicial authority. To determine finally. Synonymous with adjudge in its strictest sense;'
and 'adjudge' means: '[t]o pass on judicially, to decide, settle, or decree, or to sentence or condemn. .
. . . Implies a judicial determination of a fact, and the entry of a judgment.'" 42
The OP's cancellation and/or revocation of the FTAA is obviously not an
"adjudication" in the sense above-described. It cannot be likened to the judicial function of a court
of justice, or even a quasi-judicial agency or office. The OP — at the instance of Redmont at that —

5
was exercising an administrative function pursuant to the President's authority 43 to invoke the
Republic's right under paragraph a (iii), Section 17.2 of the FTAA which reads:
17.2 Termination
a. Grounds. This Agreement may be terminated, after due process, for any of
the following causes:
xxx xxx xxx
iii. any intentional and materially false statement or omission of facts by
a Party; 44
To contextualize the exercise, a brief discussion on the nature and legal parameters of an
FTAA is apropos.
The basis for the State, through the President, to enter into an FTAA with another contracting
party is found in the fourth paragraph of Section 2, Article XII of the 1987 Constitution:
Section 2. . . . .
xxx xxx xxx
The President may enter into agreements with foreign-owned corporations
involving either technical or financial assistance for large-scale exploration,
development, and utilization of minerals, petroleum, and other mineral
oils according to the general terms and conditions provided by law, based on real
contributions to the economic growth and general welfare of the country. In such
agreements, the State shall promote the development and use of local scientific and
technical resources. (Emphases supplied) EcTCAD
An FTAA is explicitly characterized as a contract in Section 3 (r) of RA 7942:
Section 3. Definition of Terms. — As used in and for purposes of this Act, the
following terms, whether in singular or plural, shall mean:
xxx xxx xxx
(r) "Financial or technical assistance agreement" means a contract involving
financial or technical assistance for large-scale exploration,
development, and utilization of mineral resources. (Emphasis and
underscoring supplied)
Since an FTAA is entered into by the President on the State's behalf, and it involves a matter
of public concern in that it covers the large-scale exploration, development, and utilization of mineral
resources, it is properly classified as a government or public contract, which is, according to
jurisprudence, "generally subject to the same laws and regulations which govern the validity and
sufficiency of contracts between private individuals." 45 In Sargasso Construction & Development
Corporation v. Philippine Ports Authority: 46
A government or public contract has been defined as a contract entered into
by state officers acting on behalf of the state, and in which the entire people of the
state are directly interested. It relates wholly to matter of public concern, and affects
private rights only so far as the statute confers such rights when its provisions are
carried out by the officer to whom it is confided to perform.
A government contract is essentially similar to a private contract
contemplated under the Civil Code. The legal requisites of consent of the contracting
parties, an object certain which is the subject matter, and cause or consideration of
the obligation must likewise concur. Otherwise, there is no government contract to
speak of.
xxx xxx xxx
. . . . Contracts to which the government is a party are generally subject
to the same laws and regulations which govern the validity and sufficiency of
contracts between private individuals. A government contract, however, is
perfected only upon approval by a competent authority, where such approval is
required. 47(Emphasis and underscoring supplied)
Similar to private contracts, an FTAA involves terms, conditions, and warranties to be
followed by the contracting parties, which are expressly stated in Section 35 48 ofRA 7942. Likewise,
Section 36 of RA 7942 provides that an FTAA goes through negotiation:
Section 36. Negotiations. — A financial or technical assistance agreement
shall be negotiated by the Department and executed and approved by the President.
The President shall notify Congress of all financial or technical assistance
agreements within thirty (30) days from execution and approval thereof.

6
 In La Bugal-B'laan Tribal Association, Inc. v. Ramos 49 (La Bugal-B'laan), the Court
differentiated an FTAA from a license. It pronounced that an FTAA involves contract or property
rights, which merit protection by the due process clause of the Constitution; as such, it may not be
revoked or cancelled in a blink of an eye, in contrast, say for instance, to a timber license, else the
contractor be unduly deprived of its investments, which are ultimately intended to contribute to the
general welfare of the people:
3. Citing Oposa v. Factoran[,] Jr. [G.R. No. 101083, July 30, 1993, 224
SCRA 792], Justice Morales claims that a service contract is not a contract or
property right which merits protection by the due process clause of the Constitution,
but merely a license or privilege which may be validly revoked, rescinded or
withdrawn by executive action whenever dictated by public interest or public welfare.
Oposa cites Tan v. Director of Forestry and Ysmael v. Deputy Executive
Secretary [210 Phil. 244 (1983)] as authority. The latter cases dealt specifically
with timber licenses only. Oposa allegedly reiterated that a license is merely a
permit or privilege to do what otherwise would be unlawful, and is not a contract
between the authority, federal, state or municipal, granting it and the person to whom
it is granted; neither is it property or a property right, nor does it create a vested right;
nor is it taxation. Thus this Court held that the granting of license does not create
irrevocable rights, neither is it property or property rights.
Should Oposa be deemed applicable to the case at bar, on the argument that
natural resources are also involved in this situation? We do not think so. A grantee of
a timber license, permit or license agreement gets to cut the timber already growing
on the surface; it need not dig up tons of earth to get at the logs. In a logging
concession, the investment of the licensee is not as substantial as the investment of
a large-scale mining contractor. If a timber license were revoked, the licensee packs
up its gear and moves to a new area applied for, and starts over; what it leaves
behind are mainly the trails leading to the logging site.
In contrast, the mining contractor will have sunk a great deal of money (tens
of millions of dollars) into the ground, so to speak, for exploration activities, for
development of the mine site and infrastructure, and for the actual excavation and
extraction of minerals, including the extensive tunneling work to reach the ore
body. The cancellation of the mining contract will utterly deprive the contractor
of its investments (i.e., prevent recovery of investments), most of which cannot
be pulled out.
To say that an FTAA is just like a mere timber license or permit and
does not involve contract or property rights which merit protection by the due
process clause of the Constitution, and may therefore be revoked or cancelled
in the blink of an eye, is to adopt a well-nigh confiscatory stance; at the very
least, it is downright dismissive of the property rights of businesspersons and
corporate entities that have investments in the mining industry, whose
investments, operations and expenditures do contribute to the general welfare
of the people, the coffers of government, and the strength of the economy.
Such a pronouncement will surely discourage investments (local and foreign) which
are critically needed to fuel the engine of economic growth and move this country out
of the rut of poverty. In sum, Oposa is not applicable. 50 (Emphases and
underscoring supplied) HSAcaE
In La Bugal-B'laan, the financial interest of the contractor party to an FTAA was recognized
by the Court as follows; hence, the need for its fair protection:
[T]he foreign contractor is in the game precisely to make money. In order to
come anywhere near profitability, the contractor must first extract and sell the mineral
ore. In order to do that, it must also develop and construct the mining facilities, set up
its machineries and equipment and dig the tunnels to get to the deposit. The
contractor is thus compelled to expend funds in order to make profits. If it decides to
cut back on investments and expenditures, it will necessarily sacrifice the pace of
development and utilization; it will necessarily sacrifice the amount of profits it can
make from the mining operations. In fact, at certain less-than-optimal levels of
operation, the stream of revenues generated may not even be enough to cover
variable expenses, let alone overhead expenses; this is a dismal situation anyone
would want to avoid. In order to make money, one has to spend money. This truism
applies to the mining industry as well. 51 (Underscoring supplied)
Meanwhile, in Celestial Nickel Mining Exploration Corporation v. Macroasia
Corporation 52 (Celestial), the Court answered the question on who between the DENR Secretary, as
one of the functionaries of the President under the Executive Department, and the POA had the
authority to cancel mineral agreements. In Celestial, it was pronounced that the DENR Secretary, and

7
not the POA, has the jurisdiction to cancel existing mineral lease contracts or mineral agreements.
"The power of the DENR Secretary to cancel mineral agreements emanates from his administrative
authority, supervision, management, and control over mineral resources under [Section 2,] Chapter I,
Title XIV of Book IV of the Revised Administrative Code of 1987[:]" 53
Section 2. Mandate. — (1) The Department of Environment and Natural
Resources shall be primarily responsible for the implementation of the foregoing
policy.
(2) It shall, subject to law and higher authority, be in charge of
carrying out the State's constitutional mandate to control and
supervise the exploration, development, utilization, and
conservation of the country's natural resources. (Emphasis
supplied)
"[And] [d]erived from the broad and explicit powers of the DENR and its Secretary under
the Administrative Code of 1987 is the power to approve mineral agreements and necessarily to
cancel or cause to cancel said agreements." 54
In fact, Sections 8 and 29 of RA 7942 confer to the DENR Secretary specific authority over
mineral agreements:
Section 8. Authority of the Department. — The Department shall be the
primary government agency responsible for the conservation, management,
development, and proper use of the State's mineral resources including those in
reservations, watershed areas, and lands of the public domain. The Secretary shall
have the authority to enter into mineral agreements on behalf of the
Government upon the recommendation of the Director, promulgate such rules
and regulations as may be necessary to implement the intent and provisions of this
Act.
Section 29. Filing and approval of Mineral Agreements. — . . . .
The filing of a proposal for a mineral agreement shall give the proponent the
prior right to areas covered by the same. The proposed mineral agreement will be
approved by the Secretary and copies thereof shall be submitted to the President.
Thereafter, the President shall provide a list to Congress of every approved mineral
agreement within thirty (30) days from its approval by the Secretary. (Emphases
supplied)
In this relation, the Court, in Celestial, elaborated that a petition for the cancellation of an
existing mineral agreement covering an area applied for by an applicant based on the alleged
violation of any of the terms thereof, is not a 'dispute' involving a mineral agreement under [Section]
77 (b) of RA 7942, 55 which lists down the cases which fall within the jurisdiction of the POA:
Section 77. Panel of Arbitrators. — . . . . Within thirty (30) working days, after
the submission of the case by the parties for decision, the panel shall have exclusive
and original jurisdiction to hear and decide on the following:
(a) Disputes involving rights to mining areas;
(b) Disputes involving mineral agreements or permits;
(c) Disputes involving surface owners, occupants and
claimholders/concessionaires; and
(d) Disputes pending before the Bureau and the Department at the date of the
effectivity of this Act.
This is because such matter "does not pertain to a violation by a party of the right of another.
The applicant [who seeks cancellation] is not a real party-in-interest as he does not have a material or
substantial interest in the mineral agreement but only a prospective or expectant right or interest in
the mining area. He has no legal right to such mining claim and hence no dispute can arise between
the applicant and the parties to the mineral agreement." 56 " [R]A 7942 . . . confers exclusive and
primary jurisdiction on the DENR Secretary to approve mineral agreements, which is purely an
administrative function within the scope of his powers and authority." 57
With the legal treatment and parameters of an FTAA in mind, it becomes apparent that the
OP's cancellation and/or revocation of the FTAA is an exercise of a contractual right that is purely
administrative in nature, and thus, cannot be treated as an adjudication, again, in the sense above-
discussed. As one of the contracting parties to the FTAA, the OP could not have adjudicated on the
matter in which it is an interested party, as in a court case where rights and duties of parties are
settled before an impartial tribunal. In a very loose sense, the OP's cancellation/revocation may be
taken as a "decision" but only to the extent of considering it as its final administrative action internal to
its channels. It is not one for which we should employ the conventional import of the phrase "final and
executory," as accorded to proper judicial/quasi-judicial decisions, and its concomitant effect of

8
barring further recourse of a party. To reiterate, being a government or public contract, the FTAA is
subject to fundamental contract principles, one of which is the principle of mutuality of contracts which
would definitely be violated if one were to accept the view that the OP, a contracting party, can
adjudicate on the contract's own validity. The principle of mutuality of contracts is expressed in Article
1308 of the Civil Code,which provides: HESIcT
Article 1308. The contracts must bind both contracting parties; its validity or
compliance cannot be left to the will of one of them.
At this juncture, the Court finds it fitting to clarify that Redmont's participation in these
proceedings does not, by and of itself, make the OP's cancellation/revocation quasi-judicial. Strangely
enough, Redmont's May 7, 2010 Petition was, in fact, taken cognizance by the OP albeit having been
filed outside the existing state of procedure on FTAA conversion and cancellation. A brief run-through
of these procedures would prove instructive.
A. Conversion.
Under Section 45 of DENR Administrative Order No. 2010-21, otherwise known as the
"Revised Implementing Rules and Regulations of RA 7942, or the Philippine Mining Act of 1995"
(RIRR), mining contractor may opt to convert totally or partially his existing mineral agreement, e.g.,
an MPSA to an FTAA, by filing a Letter of Intent with the MGB, copy furnished the Regional Office
where the area covered by said mineral agreement is located. Within sixty (60) days from the filing of
the Letter of Intent, the contractor must comply with the requirements for the grant of an FTAA laid
down in Sections 49 to 69, Chapter VII of the RIRR, as well as pay the conversion fee. The
application for conversion shall be evaluated and eventually, approved upon compliance. Note that
the term of the FTAA arising from such conversion shall be equivalent to the remaining period of its
predecessor-mineral agreement.
Section 55 of the same DENR issuance requires a publication/posting/radio announcement of
an FTAA application. Any adverse claim, protest, or opposition to the said FTAA should be filed
directly to the Regional Office, Community Environment and Natural Resources Office, or Provincial
Environment and Natural Resources Office concerned, within ten (10) days from the date of
publication or from the last date of posting/radio announcement. The said adverse claim, protest, or
opposition shall then be resolved by the POA of the DENR, whose ruling may then be appealed to the
proper tribunals. 58 To this, it bears pointing out that Section 55 explicitly exempts "previously
published valid and existing mining claims or FTAA applications originating from Exploration Permits
that have undergone the [publication requirement]" from the aforesaid publication requirement.
From the foregoing, it may be inferred that the only time that third parties, i.e., an entity other
than the contractor/applicant, may pose an objection to an FTAA application is during the ten (10)-day
window period given by Section 55 of the RIRR. However, this window period is only available in
instances of "fresh" FTAA applications (meaning, that the same covers an area previously uncovered
by any existing mineral agreements and/or FTAAs). Differently, in instances of conversion, i.e., of an
existing MPSA to an FTAA, publication is not required as such would have already been undertaken
during the application of the original mineral agreement, pursuant to the exemption expressly
contained in Section 55 of the RIRR. Absent any form of protest procedure at least under the
prevailing rules, it appears that the process merely involves the concerned executive agency directly
evaluating, i.e., screening and checking, whether the contractor had complied with the pertinent
requisites necessary for it to enter into a valid FTAA with the Republic. If the requisites have been
met, the agency would then endorse the conversion application to the topmost executive levels, i.e.,
the DENR Secretary, all culminating in the President's, through his/her duly appointed
agents/representatives, i.e., the Executive Secretary, execution of the FTAA for and in behalf of the
Republic, with the contractor as counter-party. Following these premises, Redmont's opposition to
petitioner's application for FTAA conversion was actually made beyond the prescribed course of
procedure.
B. Cancellation.
Section 68 of the RIRR provides that the cancellation/revocation/termination of an FTAA may
only be done after due process. In relation, Section 77 of RA 7942, to reiterate, provides that the POA
has the exclusive and original jurisdiction to hear and decide mining disputes:
Section 77. Panel of Arbitrators. — . . . . Within thirty (30) working days, after
the submission of the case by the parties for decision, the panel shall have exclusive
and original jurisdiction to hear and decide on the following:
(a) Disputes involving rights to mining areas;
(b) Disputes involving mineral agreements or permits;
(c) Disputes involving surface owners, occupants and
claimholders/concessionaires; and
(d) Disputes pending before the Bureau and the Department at the date of the
effectivity of this Act.

9
 In Gonzales v. Climax Mining Ltd. (Gonzales), 59 it was clarified that "a mining dispute is a
dispute involving (a) rights to mining areas, (b) mineral agreements, FTAAs, or permits, and (c)
surface owners, occupants and claimholders/concessionaires." 60 Note that "the [POA's] jurisdiction
is limited only to those mining disputes which raise questions of fact or matters requiring the
application of technological knowledge and experience." 61 Thus, the Court, in Gonzales, ruled
that the POA is bereft of any jurisdiction over a complaint for declaration of nullity and/or
termination of the subject contracts on the ground of fraud, oppression and violation of the
Constitution, viz.:
We now come to the meat of the case which revolves mainly around the
question of jurisdiction by the Panel of Arbitrators: Does the Panel of Arbitrators have
jurisdiction over the complaint for declaration of nullity and/or termination of the
subject contracts on the ground of fraud, oppression and violation of the
Constitution? This issue may be distilled into the more basic question of whether
the Complaint raises a mining dispute or a judicial question.
A judicial question is a question that is proper for determination by the courts,
as opposed to a moot question or one properly decided by the executive or
legislative branch. A judicial question is raised when the determination of the
question involves the exercise of a judicial function; that is, the question involves the
determination of what the law is and what the legal rights of the parties are with
respect to the matter in controversy.
xxx xxx xxx
. . . . Whether the case involves void or voidable contracts is still a judicial
question. It may, in some instances, involve questions of fact especially with regard
to the determination of the circumstances of the execution of the contracts. But the
resolution of the validity or voidness of the contracts remains a legal or judicial
question as it requires the exercise of judicial function. It requires the ascertainment
of what laws are applicable to the dispute, the interpretation and application of those
laws, and the rendering of a judgment based thereon. Clearly, the dispute is not a
mining conflict. It is essentially judicial. The complaint was not merely for the
determination of rights under the mining contracts since the very validity of those
contracts is put in issue. 62 caITAC
The Court added that although mining rights may be raised as corollary issues, the POA still
has no jurisdiction to resolve cases which mainly involve a determination of a contract's
validity. Neither too would the mere involvement of an FTAA turn a case into a mining dispute that
would fall under the POA's jurisdiction:
The Complaint is not about a dispute involving rights to mining areas, nor is it
a dispute involving claimholders or concessionaires. The main question raised was
the validity of the Addendum Contract, the FTAA and the subsequent contracts. The
question as to the rights of petitioner or respondents to the mining area pursuant to
these contracts, as well as the question of whether or not petitioner had ceded his
mining claims in favor of respondents by way of execution of the questioned
contracts, is merely corollary to the main issue, and may not be resolved without first
determining the main issue.
The Complaint is also not what is contemplated by [RA] 7942 when it says
the dispute should involve FTAAs. The Complaint is not exclusively within the
jurisdiction of the Panel of Arbitrators just because, or for as long as, the dispute
involves an FTAA. The Complaint raised the issue of the constitutionality of the
FTAA, which is definitely a judicial question. The question of constitutionality is
exclusively within the jurisdiction of the courts to resolve as this would clearly involve
the exercise of judicial power. The Panel of Arbitrators does not have jurisdiction over
such an issue since it does not involve the application of technical knowledge and
expertise relating to mining. . . . . 63
In this case, the OP cancelled/revoked the subject FTAA based on its finding that petitioners
misrepresented, inter alia, that they were Filipino corporations qualified to engage in mining activities.
Again, this is obviously an administrative exercise of a contractual right under paragraph a (iii),
Section 17.2 of the FTAA, which finds legal basis in Section 99 of RA 7942 that states: "[a]ll
statements made in the exploration permit, mining agreement and financial or technical assistance
shall be considered as conditions and essential parts thereof . . . ." A material misrepresentation, if so
found by ordinary courts of law as enunciated in Gonzales upon a case duly instituted therefor, would
then constitute a breach of a contractual condition that would entitle the aggrieved party to
cancel/revoke the agreement. 64
The scenario at hand does not involve a complaint for cancellation/revocation commenced
before the ordinary courts of law. Hence, Redmont's recourse to the OP — that, on the assumption
that it even had the legal standing to oppose an already executed FTAA which it was not a party to —

10
 was, by and of itself, done outside the correct course procedure. Observe that RA 7942 and its RIRR
do not state that the OP has the power to take cognizance of a quasi-judicial proceeding involving a
petition for cancellation of an existing FTAA. In fact, there is even no mention of a petition for
cancellation or revocation to be taken by a third party before the OP. While it may be said that the OP
has administrative control or supervision over its subordinate agencies, such as the POA, 65 again
the jurisdiction of that body pertains only to mining disputes, and not those which involve judicial
questions cognizable by the ordinary courts of law.
Thus, at least with respect to cases affecting an FTAA's validity, the Court holds that the OP
has no quasi-judicial power to adjudicate the propriety of its cancellation/revocation. At the risk of
belaboring the point, the FTAA is a contract to which the OP itself represents a party, i.e., the
Republic. It merely exercised a contractual right by cancelling/revoking said agreement, a purely
administrative action which should not be considered quasi-judicial in nature. Thus, absent the OP's
proper exercise of a quasi-judicial function, the CA had no appellate jurisdiction over the case, and its
Decision is, perforce, null and void. With this, it is unnecessary to delve into the other ancillary issues
raised in the course of these proceedings.
WHEREFORE, the petition is GRANTED. The Decision dated February 23, 2012 and the
Resolution dated July 27, 2012 of the Court of Appeals in CA-G.R. SP No. 120409 are hereby
declared NULL and VOID due to lack of jurisdiction. This pronouncement is without prejudice to any
other appropriate remedy the parties may take against each other.
SO ORDERED.
||| (Narra Nickel Mining and Development Corp. v. Redmont Consolidated Mines Corp., G.R. No. 202877,
[December 9, 2015])

FIRST DIVISION

[G.R. No. 172352. September 16, 2015.]

LAND BANK OF THE PHILIPPINES, petitioner, vs. ALFREDO HABABAG, SR.,

substituted by his wife, CONSOLACION, and children, namely: MANUEL,

11
 SALVADOR, WILSON, JIMMY, ALFREDO, JR., and JUDITH, all surnamed
HABABAG, respondents.

[G.R. Nos. 172387-88. September 16, 2015.]

ALFREDO HABABAG, SR., substituted by his wife, CONSOLACION, and children,

namely: MANUEL, SALVADOR, WILSON, JIMMY, ALFREDO, JR., and JUDITH, all
surnamed HABABAG, petitioners, vs. LAND BANK OF THE PHILIPPINES and the
DEPARTMENT OF AGRARIAN REFORM, respondents.

DECISION

PERLAS-BERNABE, J p:
Assailed in these consolidated petitions for review on certiorari 1 are the Decision 2 dated
November 15, 2005 and the Resolution 3 dated April 19, 2006 of the Court of Appeals (CA) in CA-
G.R. SP Nos. 86066 and 86167, which set aside the Amended Decision 4 dated March 22, 2004 and
the Order 5 dated August 10, 2004 of the Regional Trial Court of Sorsogon City, Branch 52 (RTC) in
Civil Case No. 96-6217, fixing the amount of just compensation at P2,398,487.24, with interest at
12% per annum (p.a.), in view of the expropriation of certain parcels of land owned by the Heirs of
Alfredo Hababag, Sr. (Hababag Heirs).
The Facts
Alfredo Hababag, Sr. (Alfredo) was the owner of several parcels of agricultural land with an
aggregate area of 82.4927 hectares (has.) situated in Barangays Carriedo, Manapao, and Casili, in
the Municipality of Gubat, Sorsogon, and covered by Transfer Certificate of Title No. T-12107. The
aforesaid landholdings were voluntarily offered for sale (VOS) to the government under Republic Act
No. (RA) 6657, 6 otherwise known as the "Comprehensive Agrarian Reform Law of 1988," but only
69.3857 has. thereof 7(subject lands) were acquired in 1990. 8
The Land Bank of the Philippines (LBP) initially valued the subject lands at P1,237,850.00,
but Alfredo rejected the valuation. After summary administrative proceedings for the determination of
the amount of just compensation, the Office of the Provincial Agrarian Reform Adjudicator (PARAD)
of the Department of Agrarian Reform (DAR) Adjudication Board (DARAB) fixed the value of the
subject lands at P1,292,553.20. 9 Dissatisfied, Alfredo filed a Complaint 10 for the determination of
the amount of just compensation before the RTC.
As a matter of course, the RTC appointed two commissioners designated by each party to
conduct an evaluation and appraisal of the subject lands. Subsequently, the LBP-appointed
commissioner, Francisco M. Corcuera (Commissioner Corcuera), submitted his Commissioner's
Report, 11 fixing the amount of just compensation for the subject lands at P2,358,385.48 based on
(DAR) Administrative Order (AO) No. 6, series of 1992 (DAR AO 6-92), as amended by DAR AO No.
11, series of 1994 (DAR AO 11-94). On the other hand, the commissioner designated by Alfredo,
Margarito Cuba (Commissioner Cuba) of Banco Sorsogon, valued the lands at
P5,420,600.00. 12 CAIHTE
On December 20, 1999, the RTC rendered a Decision 13 (December 20, 1999 Decision)
fixing the amount of just compensation of the subject lands at P5,653,940.00 computed as follows:
Coconut land — 63.61 has @ P50,000.00/ha. P3,180,500.00
Rice land — 4.75 has. @ P60,000.00/ha. 285,000.00
––––––––––––
Total Land Appraised Value 3,465,500.00
Fruit-bearing coconut trees — 9,723 x P200.00 1,944,600.00
Timber trees 7 x P1,500.00 10,500.00
––––––––––––
Total Plants and Trees Appraised Value 1,955,100.00
Reasonable income of the coconut trees for the
next 20 years (based on the Income
Productivity Approach) 14 233,340.00
––––––––––––––
Total P5,653,940.00 15

12
 ============

In reaching the above-stated total amount, the RTC applied the Income Productivity
Approach. It also considered the Inspection and Appraisal Report submitted by Commissioner Cuba,
finding the same to be "the more realistic appraisal[,] considering the economic condition of the
country[,] as well as the acquisition of the property and the present assessed value and also the
proximity of the property to the commercial center." 16
Alfredo appealed to the CA, which was docketed as CA-G.R. CV No. 66824, averring that the
RTC committed a mathematical error in computing the amount of just compensation for the subject
lands, as well as in fixing the remaining productive life of the coconut trees to only 20 years instead of
40 to 45 years.
On January 16, 2004, the CA rendered a Decision 17 (January 16, 2004 CA Decision) in the
aforesaid case, indeed finding a mathematical error in the computation of the reasonable income from
the coconut trees, which if corrected would have been P23,335,200.00. 18 Accordingly, adding to the
same the total land appraised value of P3,465,500.00, 19 the CA came up with a total of
P26,800,700.00. 20 It, however, rejected Alfredo's claim for the adjustment of the productive life of
the coconut trees to anywhere between 40 to 45 years, as it gave credence to the Inspection and
Appraisal Report submitted by Commissioner Cuba which stated that the remaining productive life of
the coconut trees would only be 20 years. While expressing misgivings to the resultant amount which
far exceeded the computations made by the parties' commissioners, 21 it nonetheless remanded the
case for the re-computation of the accurate amount of just compensation, applying thereto the
Income Productivity Approach. In this light, it ratiocinated that the "court a quo, with the aid of its duly-
appointed commissioner, . . . is in the best position to appreciate the technical elements involved in
the formula used to determine the just compensation for [Alfredo's] property." 22 aScITE
Pursuant to the January 16, 2004 CA Decision, the RTC ordered Commissioner Cuba to re-
compute the accurate amount of just compensation applying the Income Productivity Approach.
Accordingly, the latter submitted the following re-computation:
RE-COMPUTATION OF COCONUT PRODUCTION
ALFREDO HABABAG PROPERTY
Situated at Brgy[s]. Carriedo, Manapao,[and] Casili, all at Gubat[,] Sorsogon
Date: February 24, 2004
A. Itemized re: computation of coconut production
1. Total existing coconut fruit bearing trees 9,723 . . .
2. Average nuts produce per tree per harvest 10 pcs.
3. An average of eight regular harvest of nuts/tree/year 80 pcs.
4. Total nuts produce per year from (9,723)
fruits bearing trees 777,840 pcs.

B. Re: computation of copra production

1. Total nuts produce per year 777,840 pcs.
2. Average weight of one nut to copra .30 kls.
3. Total kilos of copra produce per year 233,352 kls.
4. Gross income of copra produce per year
by average of P15.00/kilo P3,500,280.00
Less: fifty percent labor cost/transportation expense
and tenant share 1,750,140.00
––––––––––––
Total net income of copra produce per year P1,750,140.00
===========
5. Estimated income of copra for the remaining (20) years
economic life of (9,723) coconut fruit bearing trees is
more or less P35,002,800.00 23

Commissioner Cuba, however, retained the total appraised values for the subject lands and
the plants/trees at P3,465,500.00 and P1,955,100.00, respectively, as similarly indicated in the
December 20, 1999 RTC Decision.

13
 The RTC Ruling
On March 22, 2004, the RTC rendered an Amended Decision, 24 fixing the amount of the just
compensation for the subject lands at P40,423,400.00 computed as follows:
Coconut land — 63.61 has. @ P50,000.00/ha. P3,180,500.00
Rice Land — 4.75 has. @ P60,000.00/ha. 285,000.00
––––––––––––
Total Land Appraised Value 3,465,500.00
Fruit-bearing coconut trees — 9,723 x P200.00 1,944,600.00
Timber trees 7 x P1,500.00 10,500.00
––––––––––––
Total Plants and Trees Appraised Value 1,955,100.00
Recomputed Estimated Income of the Copra for
the remaining twenty (20) years economic
life of the 9,723 coconut fruit bearing trees 35,002,800.00
–––––––––––––––
Total P40,423,400.00 25
=============

With their motions for reconsideration having been denied in an Order 26 dated August 10,
2004, the LBP and the DAR filed separate petitions 27 for review with the CA, docketed as CA-G.R.
SP Nos. 86066 and 86167, respectively. For its part, the LBP averred 28 that the RTC gravely erred
in disregarding the factors under Section 17 of RA 6657 and DAR AO 6-92, as amended by DAR AO
11-94, as ordained by the Court in the case of LBP v. Banal. 29 On the other hand, the DAR
contended that the RTC erred 30 in including in its computation the estimated income of the coconut
trees for their remaining economic life (computed at 20 years) and in adjudging a just compensation
award which is higher than the offered valuation of the landowner. Pending appeal, Alfredo passed
away and was substituted by his heirs, i.e., the Hababag Heirs. HEITAD
The CA Ruling
In the assailed Decision 31 dated November 15, 2005, the CA set aside the RTC's valuation
for failure to give due consideration to the factors enumerated in Section 17 of RA 6657 and the
formula under DAR AO 6-92, as amended by DAR AO 11-94. Moreover, contrary to the limitation
imposed by DAR AO 6-92 — i.e., that the computed value using the applicable formula shall not
exceed the landowner's offer to sell — the CA found that the amount as recomputed by the RTC was
way beyond the landowner's offer of P1,750,000.00 as stated in the Claims Valuation and Processing
Form. 32 Consequently, it gave more credence to the report submitted by Commissioner Corcuera
which made use of the DAR formula derived from the factors enumerated under Section 17 of RA
6657. The just compensation for the subject lands was thus computed 33 as follows:
Land Use Area (ha.) Land Value/ha. Total

Coconut 66.9961 P35,586.24 P2,384,139.20 34

Unirrigated Riceland 1.3896 8,243.71 11,455.46 35
Cogonal 1.0000 2,892.58 2,892.58 36
––––––––––– ––––––––––––––
69.3857 has. P2,398,487.24 37

Based on the foregoing, the average value per hectare of the 69.3857 hectare lands would
therefore be P34,567.4576.
The CA likewise considered the government's obligation to pay just compensation to be in the
nature of a forbearance of money and, as such, additionally imposed interests on the just
compensation award at 12% p.a., to be reckoned from the time of the taking or the filing of the
complaint, whichever is earlier. 38
The LBP and the Hababag Heirs filed their respective motions for partial reconsideration
which were both denied in a Resolution 39 dated April 19, 2006; hence, the instant petitions for
review on certiorari.
The Issues before the Court

14
 The present controversy revolves around the CA's award of just compensation, including
interests at the rate of 12% p.a.
In G.R. No. 172352, the LBP assails the award of interests by the CA, contending that since
the Hababag Heirs were already paid the provisional compensation, no interest can legally accrue to
them. Further, it argues that unless there is a final and executory decision, it is under no obligation to
pay interests since there could be no delay as of yet in the payment of just compensation. Besides, it
maintains that RA 6657 did not provide for the payment of such interests.
In G.R. Nos. 172387-88, the Hababag Heirs contend that the CA erred in setting aside the
just compensation fixed by the RTC which was in accordance with the provisions of Section 17 of RA
6657 and the final decision of the CA in CA-G.R. CV No. 66824 directing its re-computation. aDSIHc
The Court's Ruling
The petitions lack merit.
In the landmark case of Association of Small Landowners in the Philippines, Inc. v. Hon.
Secretary of Agrarian Reform, 40 the Court defined the term "just compensation" as follows:
Just compensation is defined as the full and fair equivalent of the property
taken from its owner by the expropriator. It has been repeatedly stressed by this
Court that the measure is not the taker's gain but the owner's loss. The word "just" is
used to intensify the meaning of the word "compensation" to convey the idea that the
equivalent to be rendered for the property to be taken shall be real, substantial, full
[and] ample. 41
In this relation, the RTC, sitting as a Special Agrarian Court, has been conferred with the
original and exclusive power to determine just compensation for parcels of land acquired by the State
pursuant to the agrarian reform program. 42 To guide the RTC in this function, Section 17 43 of RA
6657 enumerates the factors which must be taken into consideration to accurately determine the
amount of just compensation to be awarded in a particular case. They are: (a) the acquisition cost of
the land; (b) the current value of like properties; (c) the nature and actual use of the property, and the
income therefrom; (d) the owner's sworn valuation; (e) the tax declarations; (f) the assessment made
by government assessors; (g) the social and economic benefits contributed by the farmers and the
farmworkers, and by the government to the property; and (h) the nonpayment of taxes or loans
secured from any government financing institution on the said land, if any. 44 Corollarily, pursuant to
its rule-making power under Section 49 45 of the same law, the DAR translated these factors into a
basic formula, 46 which courts have often referred to and applied, as the CA did in this case. It,
however, bears stressing that courts are not constrained to adopt the said formula in every case since
the determination of the amount of just compensation essentially partakes the nature of a judicial
function. In this accord, courts may either adopt the DAR formula or proceed with its own application
for as long as the factors listed in Section 17 of RA 6657 have been duly considered. 47 ATICcS
In keeping with these considerations, the Court finds the CA's valuation — which made use of
the DAR formula — as reflective of the factors set forth in Section 17 ofRA 6657. Records disclose
that the CA's computation, as adopted from the LBP's own computation, is based on: (a) actual
production data; (b) the appropriate industry selling prices of the products from the Philippine Coconut
Authority and the Bureau of Agricultural Statistics of Sorsogon; and (c) the actual uses of the
property. Likewise, the (a) income from the coconut fruit-bearing trees, as well as the unirrigated
riceland, (b) cumulative cost of the non-fruit-bearing trees; and (c) market value of the cogonal land
have been duly considered. The Court observes that the holistic data gathered therefrom adequately
consider the factors set forth in Section 17 of RA 6657, as well as the DAR formula. As such, the CA's
computation, which was derived from the same, must be sustained. Lest it be misunderstood, the
ascertainment of just compensation on the basis of the landholdings' nature, location, and market
value, as well as the volume and value of the produce is valid and accords with Section 17 of RA
6657 48 and the DAR formula, as in this case.
On the contrary, the Court finds the RTC's valuation to be improper, as it contradicts the
definition of "market value" as crafted by established jurisprudence on expropriation.
To elucidate, in determining the amount of just compensation for the subject lands, the RTC
applied the Income Productivity Approach which approximated the income for the remaining
productive life of the crops therein, without considering the fortuitous events and plant diseases, and
with the expectation that they would be compensated by developments which could be made by the
property owner. 49 The Court has repeatedly ruled that the constitutional limitation of just
compensation is considered to be the sum equivalent of the market value of the property, which is, in
turn, defined as the price fixed by the seller in open market in the usual and ordinary course of legal
action and competition, or the fair value of the property as between one who receives and one who
desires to sell it, fixed at the time of the actual taking by the government. 50 In this accord, therefore,
the Court cannot sustain the formula used by the RTC which was "based on the principle
of anticipation which implies that the value of a property is dependent on the potential net benefit
that may be derived from its ownership." 51 Clearly, this approach, which is largely characterized by

15
 the element of futurity, is inconsistent with the idea of valuing the expropriated property at the time of
the taking.
Furthermore, the Court also observes that the Income Productivity Approach, as applied by
the RTC, adopts an investor's point of view which is actually off-tangent with the governmental
purpose behind the acquisition of agricultural lands. On this score, case law states that agricultural
lands are not acquired for investment purposes but for redistribution to landless farmers in order to lift
their economic status 52 by enabling them to own directly or collectively the lands they till or to
receive a just share of the fruits thereof. 53 In this regard, farmer-beneficiaries are not given those
lands so they can live there but so that they can till them. Since they generally live on a hand-to-
mouth existence, their source of repaying the just compensation is but derived out of their income
from their cultivation of the land. Hence, in order to be just, the compensation for the land must be
what the farmer-beneficiaries can reasonably afford to pay based on what the land can produce. 54 It
would therefore be highly inequitable that in the 30-year allowable period 55 to pay the annual
amortizations for the lands, farmer-beneficiaries would be required to pay for the same income they
expect to earn therefrom on top of the computed market value of the landholdings. Such could not
have been the intent of the State's agrarian reform program. In fine, the Court cannot sustain the
RTC's application of the Income Productivity Approach used as one of its bases in arriving at its
decreed valuation. Not only is the same aversive to the jurisprudential concept of "market value," but
it also deviates from the factors laid down in Section 17 of RA 6657 and thus, remains legally
baseless and unfounded.
On the issue of interests, suffice it to state that the just compensation due to the landowners
for their expropriated property is treated as an effective forbearance on the part of the State. 56 The
rationale therefor, as enunciated in the case of Apo Fruits Corporation v. LBP, 57 is to compensate
the landowners for the income they would have made had they been properly compensated for their
properties at the time of the taking. In other words, the award of 12% interests is imposed in the
nature of damages for the delay in the payment of the full just compensation award. 58
In the present case, the LBP had already made the corresponding deposit of their offered
valuation in the amount of P1,237,850.00 in cash and in bonds prior to the DAR's possession of the
property. 59 This amount is lower than the just compensation awarded and, hence, in view of the
above-stated principle, the payment of interests remains in order insofar as the unpaid balance is
concerned.
Anent the time of accrual, the interests should be computed from the time of the taking of the
subject lands. This is based on the principle that interest "runs as a matter of law and follows from the
right of the landowner to be placed in as good position as money can accomplish, as of the date of
the taking." 60
With respect to the rate of interests, the Court observes that from the time of the taking up
until June 30, 2013, the interest must be pegged at the rate of 12% p.a. pursuant to Section
2 61 of Central Bank Circular No. 905, series of 1982, which was the prevailing rule on interest rates
during such period. From July 1, 2013 onwards and until full payment, the interest rate should then be
pegged at the rate of 6% p.a. pursuant to Bangko Sentral ng Pilipinas Circular No. 799, series of
2013, 62 which accordingly amended the old 12% p.a. interest rate.
WHEREFORE, the petitions are DENIED. Accordingly, the Decision dated November 15,
2005 and the Resolution dated April 19, 2006 of the Court of Appeals in CA-G.R. SP Nos. 86066 and
86167 are hereby AFFIRMED with the MODIFICATION imposing interests on the unpaid balance of
the just compensation due to the Heirs of Alfredo Hababag, Sr. at the rate of 12% p.a., reckoned from
the taking of the expropriated property until June 30, 2013, and thereafter, at 6% p.a. until full
payment.
SO ORDERED. TIADCc
||| (Land Bank of the Phils. v. Hababag, Sr., G.R. No. 172352, [September 16, 2015])

16
EN BANC

[G.R. No. 221697. March 8, 2016.]

MARY GRACE NATIVIDAD S. POE-LLAMANZARES, petitioner, vs. COMMISSION ON ELECTIONS

AND ESTRELLA C. ELAMPARO, respondents.

[G.R. Nos. 221698-700. March 8, 2016.]

MARY GRACE NATIVIDAD S. POE-LLAMANZARES, petitioner, vs. COMMISSION ON ELECTIONS,

FRANCISCO S. TATAD, ANTONIO P. CONTRERAS AND AMADO D. VALDEZ, respondents.

DISSENTING OPINION

PERLAS-BERNABE, J.:

I dissent.

Amid the complexity of the legal issues and political implications involved, this Court, in ruling on this
matter — as in every other similar matter before it — must always harken back to its parameters of review
over rulings of the Commission on Elections (COMELEC). It is on this basic but resolute premise that I
submit this dissent.

I.

In Mitra v. COMELEC 1 (Mitra), it was explained that "[t]he basis for the Court's review of COMELEC
rulings under the standards of Rule 65 of the Rules of Court is Section 7, Article IX-A of the [1987]
Constitution which provides that '[u]nless otherwise provided by the Constitution or by law, any decision,
order, or ruling of each Commission may be brought to the Supreme Court on certiorari by the aggrieved
party within thirty [(30)] days from receipt of a copy thereof.' For this reason, the Rules of Court provide
for a separate rule (Rule 64) specifically applicable only to decisions of the COMELEC and the
Commission on Audit. This Rule expressly refers to the application of Rule 65 in the filing of a petition for
certiorari, subject to the exception clause — 'except as hereinafter provided.'" 2

"The purpose of a petition for certiorari is to determine whether the challenged tribunal has acted without
or in excess of its jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction.
Thus, any resort to a petition for certiorari under Rule 64 in relation to Rule 65 of the 1997 Rules of Civil
Procedure is limited to the resolution of jurisdictional issues." 3

In Miranda v. Abaya, 4 this Court held that "an act of a court or tribunal may only be considered to have
been done in grave abuse of discretion when the same was performed in a capricious or whimsical

17
exercise of judgment which is equivalent to lack of jurisdiction. The abuse of discretion must be so patent
and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined or
to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner
by reason of passion or personal hostility . . . . An error of judgment committed in the exercise of its
legitimate jurisdiction is not the same as 'grave abuse of discretion.' An abuse of discretion is not
sufficient by itself to justify the issuance of a writ of certiorari. The abuse must be grave and patent, and it
must be shown that the discretion was exercised arbitrarily and despotically . . . ." 5

In this case, the COMELEC held that petitioner Mary Grace Natividad S. Poe-Llamanzares (petitioner)
made false representations in her certificate of candidacy (CoC) for President filed on October 15, 2015 6
(2015 CoC) when she declared under oath that she is a natural-born citizen of this country and would be
a resident thereof for ten (10) years and eleven (11) months on the day immediately preceding the May 9,
2016 Elections. 7 Accordingly, the COMELEC cancelled petitioner's CoC. 8

Finding the verdict to be "deadly diseased with grave abuse of discretion from root to fruits," 9 the
ponencia nullifies the COMELEC's assailed rulings, 10 and even goes to the extent of declaring petitioner
as an eligible candidate. 11

As to its first reason, the ponencia posits that the COMELEC, in ruling on a petition to deny due course to
or cancel a CoC, is restrained "from going into the issue of the qualifications of the candidate for the
position, if, as in this case, such issue is yet undecided or undetermined by the proper authority." 12
Consequently, "[t]he COMELEC cannot itself, in the same cancellation case, decide the qualification or
lack thereof of the candidate." 13

I disagree.

The COMELEC's power to deny due course to or cancel a candidate's CoC stems from Section 2, Article
IX-C of the 1987 Constitution which grants it the authority to "[e]nforce and administer all laws and
regulations relative to the conduct of an election, plebiscite, initiative, referendum, and recall" and to
"[d]ecide, except those involving the right to vote, all questions affecting elections . . . ." In Loong v.
COMELEC, 14 it was elucidated that:

Section 2(1) of Article IX(C) of the Constitution gives the COMELEC the broad power "to enforce and
administer all laws and regulations relative to the conduct of an election, plebiscite, initiative,
referendum[,] and recall." Undoubtedly, the text and intent of this provision is to give COMELEC all the
necessary and incidental powers for it to achieve the objective of holding free, orderly, honest, peaceful,
and credible elections. Congruent to this intent, this Court has not been niggardly in defining the
parameters of powers of COMELEC in the conduct of our elections. 15 (Emphasis and underscoring
supplied)

Likewise, in Bedol v. COMELEC (Bedol): 16

The quasi-judicial power of the COMELEC embraces the power to resolve controversies arising from the
enforcement of election laws, and to be the sole judge of all pre-proclamation controversies; . . . . 17
(Emphasis and underscoring supplied)

18
Based on the text of the Constitution, and bearing in mind the import of cases on the matter, there is no
perceivable restriction which qualifies the exercise of the COMELEC's adjudicatory power to declare a
candidate ineligible and thus, cancel his/her CoC with the need of a prior determination coming from a
"proper authority." ATICcS

Contrary to the ponencia's interpretation, the COMELEC, under Rule 25 of its Resolution No. 9523 18
dated September 25, 2012, may disqualify any candidate found by the Commission to be suffering from
any disqualification provided by law or the Constitution:

Rule 25 — Disqualification of Candidates

Section 1. Grounds. — Any candidate who, in an action or protest in which he is a party, is declared by
final decision of a competent court, guilty of, or found by the Commission to be suffering from any
disqualification provided by law or the Constitution.

xxx xxx xxx (Emphasis supplied)

It is confounding that the ponencia ignores the second prong of the provision and myopically zeroes-in on
the first which but procedurally reflects the COMELEC's power to disqualify a candidate already declared
by final decision of a competent court guilty of any disqualification, such as those accessory to a criminal
conviction. 19

As edified in Bedol, it is the COMELEC which is the "sole judge of all pre-proclamation controversies." 20
Thus, it would greatly emasculate the COMELEC's constitutionally-conferred powers by treating it as a
mere administrative organ relegated to the task of conducting perfunctory reviews only to spot falsities on
the face of CoCs or ministerially enforce declarations from a prior authority. ATICcS

As in this case, a "pre-proclamation controversy" may arise from a petition to deny due course to or
cancel a CoC. This remedy — which is filed before and falls under the adjudicatory jurisdiction of the
COMELEC — is governed by Section 78, Article IX of Batas Pambansa Bilang 881, otherwise known as
the "Omnibus Election Code of the Philippines" 21 (OEC):

Section 78. Petition to deny due course to or cancel a certificate of candidacy. — A verified petition
seeking to deny due course or to cancel a certificate of candidacy may be filed by the person exclusively
on the ground that any material representation contained therein as required under Section 74 22 hereof
is false. The petition may be filed at any time not later than twenty-five days from the time of the filing of
the certificate of candidacy and shall be decided, after due notice and hearing, not later than fifteen days
before the election. (Emphasis and underscoring supplied)

As worded, a Section 78 petition is based exclusively on the ground that a CoC contains a material
representation that is false. "The false representation contemplated by Section 78 of the [OEC] pertains to
[a] material fact, and is not simply an innocuous mistake. A material fact refers to a candidate's
qualification for elective office such as one's citizenship and residence." 23

19
While there are decided cases wherein this Court has stated that "a false representation under Section 78
must consist of 'a deliberate attempt to mislead, misinform, or hide a fact, which would otherwise render a
candidate ineligible'", 24 nowhere does the provision mention this requirement. In Tagolino v. House of
Representatives Electoral Tribunal (Tagolino), 25 this Court enunciated that:

[T]he deliberateness of the misrepresentation, much less one's intent to defraud, is of bare significance in
a Section 78 petition as it is enough that the person's declaration of a material qualification in the CoC be
false. In this relation, jurisprudence holds that an express finding that the person committed any
deliberate misrepresentation is of little consequence in the determination of whether one's CoC should be
deemed cancelled or not. What remains material is that the petition essentially seeks to deny due course
to and/or cancel the CoC on the basis of one's ineligibility and that the same be granted without any
qualification. 26 (Emphasis and underscoring supplied)

Albeit incorporating the intent requirement into their respective discussions, a survey of certain cases
decided after Tagolino only prove to demonstrate the "bare significance" of the said requisite.

For instance, in Villafuerte v. COMELEC, 27 this Court echoed precedent, when it stated that "a false
representation under Section 78" must be made "with an intention to deceive the electorate as to one's
qualifications for public office." 28 However, this Court never looked into the circumstances that
surrounded the candidate's representation. Instead, it equated deliberateness of representation with the
materiality of the fact being represented in the CoC. Thus, it held therein that "respondent's nickname
'LRAY JR. MIGZ' written in his COC is [not] a material misrepresentation," reasoning that the nickname
"cannot be considered a material fact which pertains to his eligibility and thus qualification to run for public
office." 29

In Hayudini v. COMELEC, 30 this Court, while dealing with a case that involved material representations
pertaining to residency and voter registration, did not discuss the circumstances which would
demonstrate the intent of the candidate behind his CoC representations. It again parroted precedent
without any devoted discussion on the matter of intent. 31

Similarly, in Jalover v. Osmeña 32 (Jalover) this Court just repeated precedent when it said that
"[s]eparate from the requirement of materiality, a false representation under Section 78 must consist of a
'deliberate attempt to mislead, misinform, or hide a fact, which would otherwise render a candidate
ineligible,'" 33 but did not apply the same. In fact, a closer scrutiny of Jalover, which cited Mitra, would
lead to the reasonable conclusion that jurisprudence has all the while presumed deliberateness of intent
from the materiality of the falsity. The quoted passage from Mitra reads: "[t]he deliberate character of the
misrepresentation necessarily follows from a consideration of the consequences of any material falsity . . .
." 34 The "separateness" of the requirement of intent from the requisite of materiality is hence, more
apparent than real. The bottom line according to Jalover, citing Mitra, is that "a candidate who falsifies a
material fact cannot run." 35 This statement therefore demonstrates that the intent requirement is but a
fictional superfluity, if not anomaly, which is actually devoid of its own conceptual relevance. As such, its
existence in jurisprudence only serves as a perplexing, if not, hazardous, mirage.

In the more recent case of Agustin v. COMELEC, 36 this Court, while again quoting the same passages
from Mitra, upheld "the declaration by the COMELEC En Banc" — which was, by the way, acting on a
Section 78 petition — "that [therein] petitioner was ineligible to run and be voted for as Mayor of the
Municipality of Marcos, Ilocos Norte" on the ground that he "effectively repudiated his oath of
renunciation" by the use of his US passport and, thus, "reverted him to his earlier status as a dual citizen."
37 Interestingly, this Court, consistent with the above-cited passage from Tagolino, stated that "[e]ven if it
made no finding that the petitioner deliberately attempted to mislead or misinform as to warrant the

20
cancellation of his CoC, the COMELEC could still declare him disqualified for not meeting the required
eligibility under the Local Government Code." 38

Again, the plain text of Section 78 reads that the remedy is based "on the ground that any material
representation contained therein as required under Section 74 hereof is false." It pertains to a material
representation that is false and not a "material misrepresentation." In my view, the latter is a semantic but
impactful misnomer which tends to obfuscate the sense of the provision as it suggests — by employing
the word "misrepresent," ordinarily understood to mean as "to give a false or misleading representation of
usually with an intent to deceive or be unfair" 39 — that intent is crucial in a Section 78 petition, when, in
fact, it is not.

Notably, the Dissenting Opinion of former Supreme Court Associate Justice Dante O. Tinga (Justice
Tinga) in Tecson v. COMELEC 40 (Tecson) explains the irrelevance of the candidate's intention or belief
in ruling on a Section 78 petition. There, he even pointed out the jurisprudential missteps in the cases of
Romualdez-Marcos v. COMELEC 41 (Romualdez-Marcos) and Salcedo II v. COMELEC 42 (Salcedo II)
wherein the phantom requirement of "deliberate intention to mislead" was first foisted:

[I]n accordance with Section 78, supra, the petitioner in a petition to deny due course [to or] cancel a
certificate of candidacy need only prove three elements. First, there is a representation contained in the
certificate of candidacy. Second, the representation is required under Section 74. Third, the
representation must be "material," which, according to jurisprudence, means that it pertains to the
eligibility of the candidate to the office. Fourth, the representation is false.

Asserting that proof of intent to conceal is also necessary for a petition under Section 78 to prosper, Mr.
Justice Kapunan wrote in Romualdez-Marcos v. [COMELEC], thus:

It is the fact of residence, not a statement in a certificate of candidacy which ought to be decisive in
determining whether or not an individual has satisfied the [C]onstitution's residency qualification
requirement. The said statement becomes material only when there is or appears to be a deliberate
attempt to mislead, misinform, or hide a fact which would otherwise render a candidate ineligible. It would
be plainly ridiculous for a candidate to deliberately and knowingly make a statement in a certificate of
candidacy which would lead to his or her disqualification. [Italics in the original]

The Court, reiterated the Kapunan pronouncement in Salcedo II v. [COMELEC]. CAacTH

Adverting to Romualdez-Marcos and Salcedo II, the COMELEC En Banc ruled that while the element of
materiality was not in question the intent to deceive was not established, not even the knowledge of
falsity, thus:

Undeniably, the question on the citizenship [of] respondent falls within the requirement of materiality
under Section 78. However, proof of misrepresentation with a deliberate attempt to mislead must still be
established. In other words, direct and substantial evidence showing that the person whose certificate of
candidacy is being sought to be cancelled or denied due course, must have known or have been aware of
the falsehood as appearing on his certificate. [Italics in the original]

21
The pronouncements in Romualdez-Marcos and Salcedo II, however, are clearly not supported by a plain
reading of the law. Nowhere in Section 78 is it stated or implied that there be an intention to deceive for a
certificate of candidacy to be denied due course or be cancelled. All the law requires is that the "material
representation contained [in the certificate of candidacy] as required under Section 74 . . . is false." Be it
noted that a hearing under Section 78 and Rule 23 is a quasi-judicial proceeding where the intent of the
respondent is irrelevant. Also drawing on the principles of criminal law for analogy, the "offense" of
material representation is malum prohibitum not malum in se. Intent is irrelevant. When the law speaks in
clear and categorical language, there is no reason for interpretation or construction, but only for
application. aScITE

The reason for the irrelevance of intent or belief is not difficult to divine. Even if a candidate believes that
he is eligible and purports to be so in his certificate of candidacy, but is subsequently proven in a Rule 23
proceeding to be, in fact or in law, not eligible, it would be utterly foolish to allow him to proceed with his
candidacy. The electorate would be merely squandering its votes for — and the COMELEC, its resources
in counting the ballots cast in favor of — a candidate who is not, in any case, qualified to hold public
office.

The Kapunan pronouncement in the Romualdez-Marcos case did not establish a doctrine. It is not
supported by law, and it smacks of judicial legislation. Moreover, such judicial legislation becomes even
more egregious[,] considering that it arises out of the pronouncement of only one Justice, or 6% of a
Supreme Court. While several other Justices joined Justice Kapunan in upholding the residence
qualification of Rep. Imelda Romualdez-Marcos, they did not share his dictum. It was his by his lonesome.
Justice Puno had a separate opinion, concurred in by Justices Bellosillo and Melo. Justice Mendoza filed
a separate opinion too, in which Chief Justice Narvasa concurred. Justices Romero and Francisco each
had separate opinions. Except for Chief Justice Narvasa and Justice Mendoza, the Justices in the
majority voted to grant Rep. [Marcos's] petition on the ground that she reestablished her domicile in Leyte
upon being widowed by the death of former President Marcos.

On the other hand, the reiteration of the Kapunan pronouncement in Salcedo is a mere obiter dictum. The
Court dismissed the disqualification case on the ground that the respondent's use of the surname
"Salcedo" in her certificate of candidacy is not a material representation since the entry does not refer to
her qualification for elective office. Being what it is, the Salcedo obiter cannot elevate the Kapunan
pronouncement to the level of a doctrine regardless of how many Justices voted for Salcedo.
Significantly, Justice Puno concurred in the result only.

Thus, in this case, it does not matter that respondent knows that he was not a natural-born Filipino citizen
and, knowing such fact, proceeded to state otherwise in his certificate of candidacy, with an intent to
deceive the electorate. A candidate's citizenship eligibility in particular is determined by law, not by his
good faith. It was, therefore, improper for the COMELEC to dismiss the petition on the ground that
petitioner failed to prove intent to mislead on the part of respondent. 43 (Emphases and underscoring
supplied)

I could not agree more with Justice Tinga's exposition. Truly, "[n]owhere in Section 78 is it stated or
implied that there be an intention to deceive for a certificate of candidacy to be denied due course or be
cancelled." 44 At the risk of belaboring the point, the candidate's intent to mislead or misinform on a
material fact stated in his/her CoC is of no consequence in ruling on a Section 78 petition. To premise a
Section 78 petition on a finding of intent or belief would create a legal vacuum wherein the COMELEC
becomes powerless under the OEC to enjoin the candidacy of ineligible presidential candidates upon a
mere showing that the material representations in his/her CoC were all made in good faith. It should be
emphasized that "[a] candidate's citizenship eligibility in particular is determined by law, not by his good
faith." 45 With this, the Romualdez-Marcos and Salcedo II rulings which "judicially legislated" this
requirement should, therefore, be abandoned as legal aberrations.

22
Neither is it acceptable to think that the matter of eligibility — particularly, that of a candidate for President
— can only be taken up before the Presidential Electoral Tribunal (PET) after a candidate has already
been voted for. The COMELEC's constitutional mandate cannot be any clearer: it is empowered to
"[e]nforce and administer all laws and regulations relative to the conduct of an election, plebiscite,
initiative, referendum, and recall" and to "[d]ecide, except those involving the right to vote, all questions
affecting elections . . . ." 46 As observed by Senior Associate Justice Antonio T. Carpio in his own opinion
in Tecson:

This broad constitutional power and function vested in the COMELEC is designed precisely to avoid any
situation where a dispute affecting elections is left without any legal remedy. If one who is obviously not a
natural-born Philippine citizen, like Arnold [Schwarzenegger], runs for President, the COMELEC is
certainly not powerless to cancel the certificate of candidacy of such candidate. There is no need to wait
until after the elections before such candidate may be disqualified. 47

Verily, we cannot tolerate an absurd situation wherein a presidential candidate, who has already been
determined by the COMELEC to have missed a particular eligibility requirement and, thus, had made a
false representation in his/her CoC by declaring that he/she is eligible, is still allowed to continue his/her
candidacy, and eventually be voted for. The proposition 48 that the matter of eligibility should be left to
the PET to decide only after the elections is a dangerous one for not only does it debase the COMELEC's
constitutional powers, it also effectively results in a mockery of the electoral process, not to mention the
disenfranchisement of the voters. Clearly, the votes of the Filipino people would be put to waste if we
imprudently take away from the COMELEC its capability to avert the fielding of ineligible candidates
whose votes therefor shall be only considered stray. The Filipino people deserve to know prior to the
elections if the person they intend to vote for is ineligible. In all reasonable likelihood, they would not have
cast their votes for a particular candidate who would just be ousted from office later on.

At any rate, the jurisdictional boundaries have already been set: the COMELEC's jurisdiction ends, and
that of the PET begins, only when a candidate therefor has already been elected, and thereafter,
proclaimed. 49 In Tecson, this Court explained that the PET's jurisdiction under Section 4, Article VII of
the 1987 Constitution is limited only to a post-election scenario:

The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the election, returns,
and qualifications of the President or Vice-President, and may promulgate its rules for the purpose.

xxx xxx xxx

Ordinary usage would characterize a "contest" in reference to a post-election scenario. Election contests
consist of either an election protest or a quo warranto which, although two distinct remedies, would have
one objective in view, i.e., to dislodge the winning candidate from office. A perusal of the phraseology in
Rule 12, Rule 13, and Rule 14 of the "Rules of the Presidential Electoral Tribunal," promulgated by the
Supreme Court en banc on 18 April 1992, would support this premise —

Rule 12. Jurisdiction. — The Tribunal shall be the sole judge of all contests relating to the election,
returns, and qualifications of the President or Vice-President of the Philippines.

23
Rule 13. How Initiated. — An election contest is initiated by the filing of an election protest or a petition for
quo warranto against the President or Vice-President. An election protest shall not include a petition for
quo warranto. A petition for quo warranto shall not include an election protest. DcHSEa

Rule 14. Election Protest. — Only the registered candidate for President or for Vice-President of the
Philippines who received the second or third highest number of votes may contest the election of the
President or the Vice-President, as the case may be, by filing a verified petition with the Clerk of the
Presidential Electoral Tribunal within thirty (30) days after the proclamation of the winner.

The rules categorically speak of the jurisdiction of the tribunal over contests relating to the election,
returns and qualifications of the "President" or "Vice-President," of the Philippines, and not of "candidates"
for President or Vice-President. A quo warranto proceeding is generally defined as being an action
against a person who usurps, intrudes into, or unlawfully holds or exercises a public office. In such
context, the election contest can only contemplate a post-election scenario. In Rule 14, only a registered
candidate who would have received either the second or third highest number of votes could file an
election protest. This rule again presupposes a post-election scenario.

It is fair to conclude that the jurisdiction of the Supreme Court, defined by Section 4, paragraph 7, [Article
VII] of the 1987 Constitution, would not include cases directly brought before it, questioning the
qualifications of a candidate for the presidency or vice-presidency before the elections are held. 50
(Emphases supplied)

Thus, I respectfully object to the ponencia's enfeebling take on the COMELEC's power to determine the
eligibility of a candidate prior to the elections.

In fact, the ponencia's view is also inconsistent with its declaration that petitioner is "QUALIFIED to be a
candidate for President in the National and Local Elections of 9 May 2016." 51 If the COMELEC had no
power to determine the eligibility of petitioner, then this Court — which is only tasked to exercise its power
of review under the parameters of a petition for certiorari and, thus, should have either nullified or affirmed
the assailed rulings — could not proceed and assume jurisdiction outside of the context of the case
before it and make this ad hoc pronouncement. The declaration not only serves to confuse the true
powers of the COMELEC, it also distorts the manner of our review.

II.

The central question in this case, to which the analysis of grave abuse of discretion is applied, is whether
or not the representations of petitioner regarding her residency — particularly, that she would be a
resident of this country for ten (10) years and eleven (11) months on the day immediately preceding the
May 9, 2016 Elections — and her citizenship — particularly, that she is a natural-born citizen of the
Philippines — in her 2015 CoC are false. Notably, a finding of falsity even as to one representation would
already be enough for the COMELEC to deny due course to or cancel her 2015 CoC. To recount, Section
74 — to which the false representation ground under Section 78 of the OEC relates to — provides that
"[t]he certificate of candidacy shall state that the person filing it is announcing his candidacy for the office
stated therein and that he is eligible for said office . . . ." A candidate is eligible to run for the post of
President for as long as he or she is a natural-born citizen of the Philippines and a resident thereof for at
least ten (10) years immediately preceding the elections, among other requirements. These citizenship
and residency requirements are delineated in Section 2, Article VII of the 1987 Constitution:

24
Section 2. No person may be elected President unless he is a natural-born citizen of the Philippines, a
registered voter, able to read and write, at least forty years of age on the day of the election, and a
resident of the Philippines for at least ten years immediately preceding such election.

All of the requirements must concur. Otherwise, the candidate is ineligible to run for President; and,
hence, a contrary declaration therefor, already amounts to a false material representation within the ambit
of Section 78 of the OEC.

On the issue of residency, the ponencia claims that the COMELEC gravely abused its discretion in
concluding that petitioner falsely represented in her 2015 CoC that she is a resident of the Philippines for
at least ten (10) years and eleven (11) months immediately preceding the May 9, 2016 Elections as, in
fact, it found her representation to be true. 52 In so finding, the ponencia gave credence to the
voluminous and undisputed evidence which petitioner presented showing that she and her family
abandoned their US domicile and relocated to the Philippines for good, which began on her arrival on
May 24, 2005. 53 It also pointed out that petitioner's entry in the Philippines visa-free as a balikbayan
should not be taken against her since, consistent with the purpose of the law, she actually reestablished
life here. 54 Finally, the ponencia disregarded petitioner's prior statement in her 2012 CoC for Senator
wherein she declared to be a resident of the Philippines for six years (6) years and six (6) months before
May 13, 2013, thus implying that she started being a Philippine resident only in November 2006. 55

I beg to differ. DHITCc

"To successfully effect a change of domicile[,] one must demonstrate an actual removal or an actual
change of domicile; a bona fide intention of abandoning the former place of residence and establishing a
new one and definite acts which correspond with the purpose. In other words, there must basically be
animus manendi coupled with animus non revertendi. The purpose to remain in or at the domicile of
choice must be for an indefinite period of time; the change of residence must be voluntary; and the
residence at the place chosen for the new domicile must be actual." 56

In ruling that petitioner failed to reestablish her domicile in the Philippines on May 24, 2005 as she
claimed, the COMELEC primarily observed that all of the evidence presented by petitioner were executed
before July 2006, which is the date of reacquisition of her Filipino citizenship. Citing the cases of Coquilla
v. COMELEC (Coquilla), 57 Japzon v. COMELEC (Japzon), 58 and Caballero v. COMELEC (Caballero),
59 the COMELEC pronounced that the earliest possible date that she could have reestablished her
residence in the Philippines was when she reacquired her Filipino citizenship in July 2006.

In Coquilla, the Court ruled that an alien, such as petitioner, may waive his/her status as a non-resident
and thus, become a resident alien by obtaining an immigrant visa under the Philippine Immigration Act of
1948 and an Immigrant Certificate of Residence. Prior to this waiver, he/she is a visitor, a non-resident
alien. 60 Hence, without this waiver, petitioner remained to be a visitor or a non-resident alien until July
2006. DACcIH

On the other hand, in Japzon, the Court declared that reacquisition under Republic Act No. (RA) 9225, 61
otherwise known as the "Citizenship Retention and Reacquisition Act of 2003," has no automatic impact
on a candidate's domicile as he/she only had the option to again establish his/her domicile. 62

25
Meanwhile, in Caballero, this Court held that a candidate must still prove that after becoming a Philippine
citizen, he/she had reestablished his new domicile of choice. 63

To my mind, the COMELEC's reliance on Coquilla is apt. As the records disclose, petitioner returned to
the Philippines on May 24, 2005 under the Balikbayan Program, 64 and therefore, only obtained the
status of a temporary resident. Specifically, Section 3 of RA 6768, 65 as amended by RA 9174, 66 merely
accorded her the benefit of visa-free entry to the Philippines for a period of one (1) year:

Section 3. Benefits and Privileges of the Balikbayan. — The balikbayan and his or her family shall be
entitled to the following benefits and privileges:

xxx xxx xxx

(c) Visa-free entry to the Philippines for a period of one (1) year for foreign passport holders, with the
exception of restricted nationals[.] (Emphasis and underscoring supplied)

As such, since she did not waive her status of being a non-resident alien, her stay here upon her return
on May 24, 2005 up until she reacquired Philippine citizenship in July 2006 should only be considered as
temporary.

While it is not entirely indispensable that one first acquires the status of a permanent resident in order to
reestablish his/her domicile in the Philippines, it is, nonetheless, highly indicative of his/her animus
manendi and animus non revertendi. While it is undisputed that petitioner resigned from her work in the
US in 2004; acquired, together with her husband, quotations and estimates from property movers
regarding the relocation of all their goods, furniture, and cars from the US to the Philippines as early as
March 2005; enrolled two (2) of her children in Philippine Schools for the school year 2005 to 2006; and
purchased a condominium unit in the Philippines in the second half of 2005, 67 petitioner never bothered
applying for permanent residency up until July 2006, 68 which is the date when she reacquired Filipino
citizenship under RA 9225, and consequently, waived her status as a non-resident alien. This means that
from her return on May 24, 2005 up until July 2006, she, despite the above-mentioned overt acts, stayed
in the Philippines only as a temporary resident. If at all, her inattention to legitimize her so-called
"permanent residence" in the Philippines in accordance with our Immigration Laws stamps a significant
question mark on her animus manendi and animus non revertendi on May 24, 2005. Thus, the
COMELEC can hardly be blamed from reaching its ruling as petitioner's intention to permanently reside in
the Philippines and to abandon the US as her domicile on May 24, 2005 were, based on reasonable
premises, shrouded in doubt. aScITE

At any rate, the overt acts on which petitioner premises her claims are insufficient to prove her animus
manendi and animus non-revertendi. In fact, same as her failure to promptly address her permanent
residency status, some of these overt acts might even exhibit her ambivalence to reestablish her domicile
in the Philippines on May 24, 2005. For instance, while she purchased a condominium unit in the
Philippines in the second half of 2005 (which period is even past May 24, 2005), records unveil that
petitioner had other real properties in the US, one of which was purchased in 1992 and another in 2008.
69 Relevantly, these dates are before and after May 24, 2005. Likewise, petitioner's correspondence with
the property movers in the US in the first half of 2005 falters, in light of the fact that she and her husband
commenced actual negotiations for their transfer only in the following year, or in January 2006, months
after May 24, 2005. 70 Similarly, after this date, it was only in March 2006 when petitioner's husband

26
informed the US Postal Service of a change of address, without even specifying their new address in the
Philippines. 71 While it is true that the visa-free entry of petitioner under the Balikbayan Program should
not automatically hinder her ability to — as the ponencia would say — "reestablish her life here," it
remains that the parameters of domicile reestablishment under the auspices of political law have not been
clearly proven. Hence, because all the overt acts prior to that time had no impact in establishing her
animus manendi and animus non-revertendi, the earliest date that petitioner could have reestablished her
residence was in July 2006. The overall conclusion of the COMELEC was therefore correct.

At this juncture, let me express my assent to the view that "[s]tronger proof is required in the
reestablishment of national domicile." 72 This is because a person who has been domiciled in another
country has already established effective legal ties with that country that are substantially distinct and
separate from ours. Such a situation hardly obtains when what is involved is the change of domicile
between localities within the same country.

I further observe that the need for stronger proof becomes more apparent when the person involved is
one who has been domiciled in another country as part of his/her naturalization as a citizen therein. As
such, while citizenship and residency are different from and independent of each other — this, being the
key premise in the Court's rulings in Japzon and Caballero — I do believe that "one may invariably affect
the other." 73 Being still a citizen of the US at the time of her return to the Philippines on May 24, 2005,
petitioner remained entitled to the rights, privileges, and the protection the US government extends to its
nationals, including the right to residence. In fact, from May 24, 2005 to October 20, 2010, petitioner
availed of this privilege when she returned to the US, on separate dates, significantly, for no less than five
times. 74 To my mind, the ability to enjoy the privileges of foreign citizenship at any time, while remaining
under that status, conjures a reasonable presumption that the latter continues to avail of these privileges,
which, among others, include the privilege to reside in that foreign country. Hence, absent compelling
evidence to show that he/she had reestablished domicile in another country, it should therefore be
presumed that he/she continues to be domiciled in the country he/she is a citizen of.

Moreover, the necessity of presenting stronger proof as herein discussed is impelled by the very reason
underlying the residency requirement. 75 The discernment of pervading realities in the place where one
seeks to be elected is objectively farther from a person who has been domiciled in a foreign country.
Thus, a higher standard of proof should be applied to a candidate previously domiciled in a foreign
country for he/she has been out of touch with the needs of the electoral constituency he/she seeks to
represent.

For another, the COMELEC cannot be faulted for relying on petitioner's admission in her 2012 CoC for
Senator that her period of residence from May 13, 2013 is "6 years and 6 months," which, hence, implies
that she started being a Philippine resident only in November 2006. While it is true that "[i]t is the fact of
residence, not a statement in a certificate of candidacy which ought to be decisive in determining whether
or not an individual has satisfied the [C]onstitution's residency qualification requirement," 76 the
COMELEC cannot be said to gravely abuse its discretion when it considered petitioner's admission
against interest as another circumstance which militates against her claim's legitimacy. It is certainly not
patent and grave error for the COMELEC to regard a CoC as a notarized document and accord it the
presumption of regularity. 77 Also, while petitioner may later impugn an admission against interest, the
COMELEC found that her residency declaration in her 2012 CoC could not be borne out of an "honest
mistake," in light of the following considerations: (a) the bulk, if not all, of the evidence she presented
were executed before she reacquired her Philippine citizenship, which cannot be done in light of Coquilla,
among others; (b) while she made statements acknowledging that there was a mistake in her 2015 CoC,
they were nonetheless delivered at a time when, at the very least, the possibility of her running for
President was already a matter of public knowledge; and (c) petitioner was a well-educated woman and a
high-ranking official with a competent staff and a band of legal advisers and is not entirely unacquainted
with Philippine politics, and thus, would know how to fill-up a pro-forma CoC in 2012. As I see it, these
reasons are not barren of any considerable merit. At the very least, they are plausible enough to negate

27
the finding that the conclusion amounted to grave abuse of discretion. Besides, I believe that the falsity of
the material representation already justifies the cancellation of petitioner's CoC. As above-intimated, a
candidate's intent is immaterial to a Section 78 analysis. HEITAD

III.

Neither did the COMELEC gravely abuse its discretion in ruling that petitioner made a false material
representation in her 2015 CoC when she declared that she was a natural-born citizen of the Philippines.

I depart from the ponencia's stand that petitioner's blood relationship with a Filipino citizen is
demonstrable on account of statistical probability, and other circumstantial evidence, namely, her
abandonment as an infant in a Roman Catholic Church in Iloilo City, as well as her typical Filipino
features. 78

A run-through of the basic tenets on citizenship is apropros.

"There are two ways of acquiring citizenship: (1) by birth, and (2) by naturalization. These ways of
acquiring citizenship correspond to the two kinds of citizens: the natural-born citizen, and the naturalized
citizen." 79

"A person who at the time of his birth is a citizen of a particular country, is a natural-born citizen thereof."
80 As defined under the present Constitution, "[n]atural-born citizens are those who are citizens of the
Philippines from birth without having to perform any act to acquire or perfect their Philippine citizenship."
81 "On the other hand, naturalized citizens are those who have become Filipino citizens through
naturalization . . . ." 82

"[I]t is the inherent right of every independent nation to determine for itself and according to its own
constitution and laws what classes of persons shall be entitled to its citizenship . . . ." 83 With respect to
citizenship by birth, a particular jurisdiction generally subscribes to either the principle of jus sanguinis or
the principle of jus soli, although it may adopt a mixed system with features of both. SCaITA

"The Philippine law on citizenship adheres to the principle of jus sanguinis. Thereunder, a child follows
the nationality or citizenship of the parents regardless of the place of his/her birth, as opposed to the
doctrine of jus soli which determines nationality or citizenship on the basis of place of birth." 84 In Valles
v. COMELEC, this Court held that "[t]he signing into law of the 1935 Philippine Constitution has
established the principle of jus sanguinis as basis for the acquisition of Philippine citizenship . . . . So also,
the principle of jus sanguinis, which confers citizenship by virtue of blood relationship, was subsequently
retained under the 1973 and 1987 Constitutions." 85 Following this principle, proof of blood relation to a
Filipino parent is therefore necessary to show that one is a Filipino citizen by birth.

In this case, petitioner has shown no evidence of blood relation to a Filipino parent to prove that she
acquired Filipino citizenship by birth under the jus sanguinis principle. While petitioner did not bear the

28
initial burden of proving that she made a false material representation on her citizenship in her 2015 CoC,
as that burden belonged to those who filed the petitions to deny due course to or cancel her CoC before
the COMELEC, 86 the burden of evidence shifted to her 87 when she voluntarily admitted her status as a
foundling. Under Section 1, Article IV of the 1935 Constitution, which governs petitioner's case, 88
foundlings are not included in the enumeration of who are considered as Filipino citizens: AHDacC

Section 1. The following are citizens of the Philippines:

(1) Those who are citizens of the Philippine Islands at the time of the adoption of this Constitution.

(2) Those born in the Philippine Islands of foreign parents who, before the adoption of this Constitution,
had been elected to public office in the Philippine Islands.

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

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

(5) Those who are naturalized in accordance with law.

A "'foundling' refers to a deserted or abandoned infant or child whose parents, guardian or relatives are
unknown; or a child committed to an orphanage or charitable or similar institution with unknown facts of
birth and parentage and registered in the Civil Register as a 'foundling.'" 89 The fact that a candidate's
parents are unknown directly puts into question his/her Filipino citizenship because the candidate has no
prima facie link to a Filipino parent from which he/she could have traced her Filipino citizenship. This is
why the burden of evidence shifted to petitioner.

Without any proof of blood relation to a Filipino parent, and without any mention in the 1935 Constitution
that foundlings are considered or are even presumed to be Filipino citizens by birth, the COMELEC's
finding that petitioner was not a natural-born citizen cannot be taken as patently unreasonable and
grossly baseless so as to amount to grave abuse of discretion. As it is apparent, the COMELEC, with
good reason, relied on the plain text of the 1935 Constitution based on the statutory construction axioms
of expressio unius est exclusio alterius 90 and verba legis non est recedendum, 91 as well as firmly
abided by the jus sanguinis principle which, as repeatedly stated, necessitates proof of blood relation, of
which petitioner presented none. Accordingly, its analysis was grounded on sound legal basis and
therefore unreflective of grave abuse of discretion.

Further, while petitioner argues that foundlings should be considered as natural-born Filipinos based on
the intent of the framers of the 1935 Constitution, 92 it should be pointed out that the 1935 Constitution,
as it was adopted in its final form, never carried over any proposed provision on foundlings being
considered or presumed to be Filipino citizens. Its final exclusion is therefore indicative of the framers'
prevailing intent. Besides, in Civil Liberties Union v. The Executive Secretary, 93 this Court remarked that:

29
Debates in the constitutional convention "are of value as showing the views of the individual members,
and as indicating the reasons for their votes, but they give us no light as to the views of the large majority
who did not talk, much less of the mass of our fellow citizens whose votes at the polls gave that
instrument the force of fundamental law. We think it [is] safer to construe the constitution from what
appears upon its face." 94 (Emphases and underscoring supplied) ATICcS

I also find no merit in petitioner's invocation of international covenants 95 which purportedly evince a
generally accepted principle in international law that foundlings are presumed to be citizens of the country
where they are found. Since the 1935 Constitution, and the 1973 and 1987 Constitutions thereafter,
consistently subscribe to the jus sanguinis principle, it is axiomatic that no international agreement or
generally-accepted principle of international law — even assuming that there is a binding one which
supports petitioner's averred presumption — could contravene the same. "Under the 1987 Constitution,
international law can become part of the sphere of domestic law either by transformation or
incorporation." 96 Thus, in our legal hierarchy, treaties and international principles belong to the same
plane as domestic laws and, hence, cannot prevail over the Constitution.

Finally, I oppose petitioner's resort to statistical probability as basis to presume natural-born citizenship in
this case. Allow me to point out that these statistics surfaced only in the proceedings before this Court
and hence, could not have been weighed and assessed by the COMELEC En Banc at the time it
rendered its ruling. Be that as it may, the constitutional requirements for office, especially for the highest
office in the land, cannot be based on mere probability. "[M]atters dealing with qualifications for public
elective office must be strictly complied with." 97 The proof to hurdle a substantial challenge against a
candidate's qualifications must therefore be solid. We cannot make a definitive pronouncement on a
candidate's citizenship when there is a looming possibility that he/she is not Filipino. Also, the
circumstances surrounding petitioner's abandonment, as well as her physical characteristics, hardly
assuage this possibility. By parity of reasoning, they do not prove that she was born to a Filipino: her
abandonment in the Philippines is just a restatement of her foundling status, while her physical features
only tend to prove that her parents likely had Filipino features and yet it remains uncertain if their
citizenship was Filipino. SaCIDT

For all of these reasons, I dissent to the majority's ruling that the COMELEC gravely abused its discretion.
In the final analysis, my conscience reminds me that the high duty demanded of me — to apply the law
according to the parameters set by our previous rulings — transcends politics or controversy, popularity
or personality. It is a public trust which values nothing higher than fidelity to the Constitution. I, therefore,
vote to DISMISS the petitions.

||| (Poe-Llamanzares v. Commission on Elections, G.R. Nos. 221697 & 221698-700 (Dissenting Opinion),
[March 8, 2016])

30
SECOND DIVISION

[G.R. No. 224319. November 20, 2017.]

DE LA SALLE ARANETA UNIVERSITY, INC., petitioner, vs. DR. ELOISA G. MAGDURULANG,

respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated November 9, 2015 and the
Resolution 3 dated April 22, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 123219, which
modified the Decision 4 dated July 15, 2011 and the Resolution 5 dated December 12, 2011 of the
National Labor Relations Commission (NLRC) in NLRC Case No. NCR-08-11300-10, and accordingly,
ordered petitioner De La Salle Araneta University, Inc. (petitioner) to pay respondent Dr. Eloisa G.
Magdurulang (respondent) backwages corresponding to her full monthly salaries for three (3) semesters,
i.e., first and second semesters of school year (SY) 2010-2011 and first semester of SY 2011-2012, as
well as pro-rated 13th month pay.

The Facts

This case stemmed from an amended complaint 6 for constructive dismissal with prayer for reinstatement
and payment of salaries and other benefits filed by respondent against petitioner. 7 Respondent alleged
that petitioner initially hired her as a part-time faculty member for the latter's College of Business for the
second semester of SY 2007-2008 (November 5, 2007-March 18, 2008), as well as the summer semester
of 2008 (March 31, 2008-May 13, 2008). 8 For the second semester of SY 2008-2009 (October 13, 2008-
May 31, 2009), she was then appointed as a full-time faculty member/BSBA Program Coordinator, 9 with
such designation being renewed for the first and second semesters of SY 2009-2010 (June 1, 2009-May
31, 2010). 10 During the pendency of respondent's contract for SY 2009-2010, the University's Acting
Assistant Dean recommended to the University President that respondent be already accorded a
permanent status, effective the second semester of SY 2009-2010. 11 While the University President
initially acceded to such recommendation, he ended up not extending a permanent appointment to
respondent, pursuant to Section 117 of the Manual of Regulations for Private Higher Education
(MORPHE) which provides that "[t]he probationary employment of academic teaching personnel shall not
be more than a period of six (6) consecutive semesters or nine (9) consecutive trimesters of satisfactory
service, as the case may be." 12 Thus, on November 4, 2009, the University President instead issued a
re-appointment to respondent as full-time faculty member/BSBA Program Coordinator for the first and
second semesters of SY 2010-2011 (June 1, 2010-May 31, 2011), with a re-classified ranking of
Assistant Professor 4 and on contractual basis. 13

As a result, respondent wrote a letter 14 dated January 18, 2010 to the University President, asking
clarification as to why: (a) her rank was changed from Associate Professor 2 to Assistant Professor 4 in
her re-appointment for SY 2010-2011, resulting in diminution of salaries and benefits; and (b) she was not
extended a permanent appointment despite the favorable recommendation from the Acting Assistant
Dean. 15 In response thereto, the University President wrote respondent a letter 16 dated February 23,

31
2010, explaining to her, among others, that she cannot be extended a regular and permanent
appointment as of the moment as she has yet to finish the probationary period of six (6) straight
semesters, as provided under Section 3.1.3 of the 2009 DLSAU Personnel Handbook, 17 which in turn,
expressly adopts Section 117 of the MORPHE. 18 On July 20, 2010, respondent wrote another letter 19
reiterating her concerns, this time addressed to the new University President. However, before the new
University President could answer, respondent filed the instant complaint, 20 claiming that despite her re-
appointment for SY 2010-2011, she was no longer given any teaching load and that her academic
administrative position as BSBA Program Coordinator was likewise discontinued. 21 Respondent also
insisted that she had already attained the status of a regular employee since she has been teaching for
about three (3) years beginning in 2007, 22 and considering too that the Acting Assistant Dean already
recommended her permanent appointment. 23

In its defense, 24 petitioner countered that it neither constructively nor actually dismissed respondent,
maintaining that it could not appoint respondent to a regular and permanent position as she has yet to
complete the probationary period of six (6) consecutive semesters, as laid down in the MORPHE, as well
as in the 2009 DLSAU Personnel Handbook. 25 In this regard, petitioner pointed out that respondent's
appointments all throughout her probationary employment were on a fixed-term basis, which she
voluntarily and freely accepted. 26 As such, it is within the university's prerogative to re-hire her or not at
the end of such contracts. 27

The Labor Arbiter's (LA) Ruling

In a Decision 28 dated February 16, 2011, the LA dismissed the complaint for lack of merit. 29 The LA
found that since petitioner is a private educational institution for higher education, respondent's
employment status therein is covered not only by the MORPHE but also the 2009 DLSAU Personnel
Handbook. 30 Since respondent has not held a full time academic teaching position for a period of six (6)
consecutive semesters or nine (9) straight trimesters, she is not eligible for permanent appointment.
Moreover, considering that respondent's employment contracts were on a fixed-term basis, her services
may be subject to termination. 31

Aggrieved, respondent appealed 32 to the NLRC.

The NLRC Ruling

In a Decision 33 dated July 15, 2011, the NLRC reversed and set aside the LA ruling, and accordingly,
declared respondent to have been constructively dismissed. 34 Consequently, it ordered petitioner to
reinstate her to the position of Associate Professor with full backwages reckoned from the first semester
of SY 2010-2011 up to her actual reinstatement, and to pay her all other monetary benefits which inure to
such position during the time she was not given any teaching load, as well as the honorarium for the
position of BSBA Program Director until the end of her term on May 31, 2011. 35

The NLRC held that while petitioner has yet to complete the probationary period of six (6) consecutive
semesters, such period was effectively shortened when the Acting Assistant Dean recommended her for
a permanent status, which was initially formally acted upon by the University President. 36 In this regard,
petitioner's act of voluntary shortening respondent's probationary period effectively accorded the latter the
status of a regular employee. Perforce, for not having been given any teaching load, as well as
discontinuing her appointment as BSBA Program Coordinator, respondent was deemed to have been
constructively dismissed. 37

32
Petitioner moved for reconsideration, 38 which was, however, denied in a Resolution 39 dated December
12, 2011. Dissatisfied, it filed a petition for certiorari 40 before the CA.

The CA Ruling

In a Decision 41 dated November 9, 2015, the CA modified the NLRC ruling, deleting respondent's
reinstatement. In lieu thereof, it ordered petitioner to pay respondent backwages corresponding to her full
monthly salaries for three (3) semesters, i.e., the first and second semester of school year (SY) 2010-
2011 and the first semester of SY 2011-2012, as well as pro-rated 13th month pay. 42

Contrary to the NLRC's ruling, the CA held that respondent has no vested right to a permanent
appointment since she had not completed the pre-requisite six (6) consecutive semesters necessary to
be eligible for the same. Nonetheless, as a probationary employee, respondent still enjoys a limited
security of tenure, and therefore, cannot be terminated except for just or authorized causes, or if she fails
to qualify in accordance with the reasonable standards set by petitioner. 43 As respondent was not given
any teaching load for SY 2010-2011 and her services as BSBA Program Coordinator were discontinued
without any justifiable reason, she was deemed to have been constructively dismissed. As such,
respondent is entitled to receive the benefits appurtenant to the remainder of her probationary period,
namely, both semesters of SY 2010-2011 and the first semester of SY 2011-2012. However, the CA
pointed out that due to the dispute of the litigating parties in this case, it may be inferred with certainty that
petitioner had already opted not to retain respondent in its employ beyond her probationary period. 44

Undaunted, petitioner moved for reconsideration, 45 but the same was denied in a Resolution 46 dated
April 22, 2016; hence, this petition. 47

The Issue Before the Court

The issue for the Court's resolution is whether or not the CA correctly ruled that respondent was: (a) a
probationary employee; and (b) constructively dismissed by petitioner, thereby entitling her to the benefits
appurtenant to the remainder of her probationary period.

The Court's Ruling

Preliminarily, the Court stresses the distinct approach in reviewing a CA's ruling in a labor case. In a Rule
45 review, the Court examines the correctness of the CA's Decision in contrast to the review of
jurisdictional errors under Rule 65. Furthermore, Rule 45 limits the review to questions of law. In ruling for
legal correctness, the Court views the CA Decision in the same context that the petition for certiorari was
presented to the CA. Hence, the Court has to examine the CA's Decision from the prism of whether the
CA correctly determined the presence or absence of grave abuse of discretion in the NLRC decision. 48

Case law states that grave abuse of discretion connotes a capricious and whimsical exercise of judgment,
done in a despotic manner by reason of passion or personal hostility, the character of which being so
patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty
enjoined by or to act at all in contemplation of law. 49

33
In labor cases, grave abuse of discretion may be ascribed to the NLRC when its findings and conclusions
are not supported by substantial evidence, which refers to that amount of relevant evidence that a
reasonable mind might accept as adequate to justify a conclusion. Thus, if the NLRC's ruling has basis in
the evidence and the applicable law and jurisprudence, then no grave abuse of discretion exists and the
CA should so declare, and accordingly, dismiss the petition. 50

Guided by the foregoing considerations and as will be explained hereunder, the Court finds that the CA
correctly ascribed grave abuse of discretion on the part of the NLRC, as the latter's finding that
respondent had attained a regular status patently deviates from the evidence on record, as well as settled
legal principles of labor law. Further, while the CA correctly ruled that petitioner constructively dismissed
respondent, it erred in holding that respondent is entitled to the benefits pertaining to the remainder of her
probationary period i.e., both semesters of SY 2010-2011 and the first semester of SY 2011-2012.

A probationary employee or probationer is one who is on trial for an employer, during which the latter
determines whether or not the former is qualified for permanent employment. During this period, the
employer, on the one hand, is given the opportunity to observe the fitness of an employee while at work in
order to ascertain the latter's efficiency and productivity; on the other hand, the employee seeks to prove
to his employer that he has the qualifications to meet the reasonable standards for permanent
employment. As used to describe such phase of employment, the word "probationary" implies the
purpose of such term or period, and not necessarily its length. 51

Indeed, the employer has the right, or is at liberty, to choose who will be hired and who will be declined.
As a component of this right to select his employees, the employer may set or fix a probationary period
within which the latter may test and observe the conduct of the former before hiring him permanently. 52
Notably, the exercise of such right is regulated by law insofar as it sets a maximum allowable period
within which the employer may subject an employee to a probationary period. As a general rule, such limit
is set under Article 296 53 of the Labor Code, 54 as amended:

Article 296. [281] Probationary Employment. — Probationary employment shall not exceed six (6) months
from the date the employee started working, unless it is covered by an apprenticeship agreement
stipulating a longer period. The services of an employee who has been engaged on a probationary basis
may be terminated for a just cause or when he fails to qualify as a regular employee in accordance with
reasonable standards made known by the employer to the employee at the time of his engagement. An
employee who is allowed to work after a probationary period shall be considered a regular employee.

As an exception, however, case law has provided that the probationary period of employment of
academic personnel such as professors, instructors, and teachers — including the determination as to
whether they have attained regular or permanent status — shall not be governed by the Labor Code but
by the standards established by the Department of Education and the Commission on Higher Education,
as the case may be. 55 In this regard, Section 92 of the 1992 Revised Manual of Regulations for Private
Schools (8th Edition) explicitly provides that: (a) for those in elementary and secondary levels, the
probationary period shall not be more than three (3) consecutive years of satisfactory service; and (b) for
those in the tertiary level, such period shall be six (6) consecutive semesters or nine (9) consecutive
trimesters, as the case may be. 56

The rule on the probationary employment of elementary and secondary academic personnel is reiterated
in Section 63 of the 2010 Manual of Regulations for Private Schools in Basic Education, which reads:

34
Section 63. Probationary Period; Regular or Permanent Status. — A probationary period of not more than
three (3) years in the case of the school teaching personnel and not more than six (6) months for non-
teaching personnel shall be required for employment in all private schools. A school personnel who has
successfully undergone the probationary period herein specified and who is fully qualified under the
existing rules and standards of the school shall be considered permanent.

The rule relative to private higher education institutions 57 is likewise reiterated in Sections 117 and 118
of the MORPHE:

Section 117. Probationary Period. — An academic teaching personnel who does not possess the
minimum academic qualifications prescribed under Sections 35 and 36 of this Manual shall be considered
as part-time employee, and therefore cannot avail of the status and privileges of a probationary
employment. A part-time employee cannot acquire regular permanent status, and hence, may be
terminated when a qualified teacher becomes available.

The probationary employment of academic teaching personnel shall not be more than a period of six (6)
consecutive semesters or nine (9) consecutive trimesters of satisfactory service, as the case may be.

Section 118. Regular or Permanent Status. — A full-time academic teaching personnel who has
satisfactorily completed his/her probationary employment, and who possesses the minimum qualifications
required by the Commission and the institution, shall acquire a regular or permanent status if she/she is
re-hired or re-appointed immediately after the end of his/her probationary employment. However, a
regular or permanent academic teaching personnel who requests a teaching load equivalent to a part-
time load, shall be considered resigned, and hence, may forfeit his/her regular or permanent status at the
discretion of the management of the higher education institution and shall thereby be covered by a term-
contract employment.

Thus, for an academic personnel to acquire a regular and permanent employment status, it is required
that: (a) he is considered a full-time employee; (b) he has completed the required probationary period;
and (c) his service must have been satisfactory. 58 However, it must be emphasized that mere
completion of the probationary period does not, ipso facto, make the employee a permanent employee of
the educational institution, as he could only qualify as such upon fulfilling the reasonable standards for
permanent employment as faculty member. This is especially true in the case of institutions of higher
education which, consistent with academic freedom and constitutional autonomy, has the prerogative to
provide standards for its academic personnel and determine whether the same have been met. Thus, at
the end of the probation period, the decision to re-hire a probationary employee, and thus, vest upon him
a regular and permanent status, belongs to the educational institution as the employer alone. 59
Otherwise stated, upon the expiration of their contract of employment, academic personnel on probation
cannot automatically claim security of tenure and compel their employers to renew their employment
contracts which would then transform them into regular and permanent employees. 60

A judicious perusal of the records in this case reveals that while the respondent complied with the first
and third requisites, as she is a full-time professor and has consistently received satisfactory ratings for
her services, the second requisite is noticeably absent. As aptly pointed out by the CA: (a) respondent's
appointments for the second semester of SY 2007-2008 and the summer semester of SY 2008 were on a
part-time basis only, and thus, cannot be counted for purposes of regularization; (b) her full-time
appointments for the second semester of SY 2008-2009 and both semesters of SY 2009-2010, where
she was actually given teaching loads and an administrative function as BSBA Program Coordinator, only
consist of three (3) consecutive semesters; and (c) even if her full-time appointment for both semesters of
SY 2010-2011 — the time when she was no longer given a teaching load and her administrative function

35
was discontinued — were to be counted in her favor, she would only have a total of five (5) consecutive
semesters as a full-time professor, and thus, would not have made her eligible for regular and permanent
appointment. Hence, the CA correctly declared that respondent failed to acquire a regular and permanent
status.

To be sure, the Court finds the NLRC's conclusion that respondent's probationary period was effectively
shortened when the Acting Assistant Dean recommended her for a permanent appointment effective the
second semester of SY 2009-2010 to be untenable. 61 Suffice it to say that while there was indeed such
recommendation and that the University President was initially inclined to approve the same, the latter
ended up not going through with such recommendation and instead renewed respondent's appointment
for both semesters of SY 2010-2011. While the period of probation may be reduced if the employer
voluntarily extends a permanent appointment even before the end of such period, it must be pointed out
that absent circumstances which unmistakeably show that an abbreviated probationary period has been
agreed upon, the default probationary term still governs, 62 as in this case.

Nonetheless, as a probationary employee, respondent still enjoys limited security of tenure during the
period of her probation — that is, she cannot be terminated except for just or authorized causes, or if she
fails to qualify in accordance with reasonable standards prescribed by petitioner for the acquisition of
permanent status of its teaching personnel. 63 Hence, the CA was also correct in ruling that petitioner's
unjustified acts of depriving her of teaching loads, as well as her functions as BSBA Program Coordinator
during the pendency of her appointment for both semesters of SY 2010-2011, constitute constructive
dismissal, 64 for which it should be made liable to respondent for the latter's benefits appurtenant thereto.

However, the CA erred in holding that respondent is entitled to complete her final three (3) semesters of
probationary employment, considering that at the time of her constructive dismissal, her existing contract
with petitioner was only fixed for both semesters of SY 2010-2011, or the fourth and fifth semesters of her
probationary employment. 65 In Magis Young Achievers' Learning Center v. Manalo, 66 the Court held
that it is an accepted practice among educational institutions that the probationary employment is split
into numerous fixed-term contracts so that the employer will be given the flexibility to no longer continue
with the employee's probationary employment should it become apparent that the latter does not meet the
former's standards; and that it is only when the probationary contract does not indicate any period that it
will be assumed that the employee was hired for the entire duration of the probationary employment, viz.:

The common practice is for the employer and the teacher to enter into a contract, effective for one school
year. At the end of the school year, the employer has the option not to renew the contract, particularly
considering the teacher's performance. If the contract is not renewed, the employment relationship
terminates. If the contract is renewed, usually for another school year, the probationary employment
continues. Again, at the end of that period, the parties may opt to renew or not to renew the contract. If
renewed, this second renewal of the contract for another school year would then be the last year — since
it would be the third school year — of probationary employment. At the end of this third year, the
employer may now decide whether to extend a permanent appointment to the employee, primarily on the
basis of the employee having met the reasonable standards of competence and efficiency set by the
employer. For the entire duration of this three-year period, the teacher remains under probation. Upon the
expiration of his contract of employment, being simply on probation, he cannot automatically claim
security of tenure and compel the employer to renew his employment contract. x x x

It is important that the contract of probationary employment specify the period or term of its effectivity. The
failure to stipulate its precise duration could lead to the inference that the contract is binding for the full
three-year probationary period. 67 (Emphasis and underscoring supplied)

36
Records show that petitioner did not hire respondent for the entire duration of the latter's probationary
period. In fact, respondent's probationary employment with petitioner lasting five (5) semesters was split
into three (3) separate fixed-term contracts, to wit: (a) Appointment 68 dated September 23, 2008 for the
second semester of SY 2008-2009; (b) Appointment 69 dated May 26, 2009 for both semesters of SY
2009-2010; and (c) Appointment 70 dated November 4, 2009 for both semesters of SY 2010-2011. Since
respondent's constructive dismissal occurred during the effectivity of her last contract, she is entitled only
to the benefits arising from such. Consequently, petitioner cannot be made to pay her benefits
corresponding to respondent's last semester of probationary employment as there is simply no contract
covering the same.

In sum, the CA correctly ruled that respondent is a probationary employee who was constructively
dismissed by petitioner during the course of her probationary employment. However, the CA erred in
awarding respondent benefits pertaining to the remainder of her probationary employment spanning three
(3) semesters as the duration of her last contract with petitioner only lasts for two (2) semesters. As such,
respondent is only entitled to the benefits sourced therefrom.

Finally, as a result of the foregoing proceedings, the CA aptly inferred that respondent's employment no
longer ripened into a regular and permanent status, and as such, petitioner is no longer bound to
reinstate her.

WHEREFORE, the petition is PARTLY GRANTED. Accordingly, the Decision dated November 9, 2015
and the Resolution dated April 22, 2016 of the Court of Appeals in CA-G.R. SP No. 123219 are
AFFIRMED with MODIFICATION, in that the order of backwages corresponding to respondent Dr. Eloisa
G. Magdurulang's supposed salaries and benefits for the first semester of school year 2011-2012 is
hereby DELETED. The rest of the ruling STANDS.

SO ORDERED.

||| (De La Salle Araneta University, Inc. v. Magdurulang, G.R. No. 224319, [November 20, 2017])

37
EN BANC

[G.R. No. 189041. July 31, 2012.]

CIVIL SERVICE COMMISSION, petitioner, vs. DR. AGNES OUIDA P. YU, respondent.

DECISION

PERLAS-BERNABE, J p:

In this Petition for Review on Certiorari under Rule 45 of the Rules of Court, the Civil Service Commission
(CSC) assails the Decision 1 dated March 30, 2009 and the Resolution 2 dated July 9, 2009 rendered by
the Court of Appeals (CA) in CA-G.R. SP No. 00327-MIN declaring Dr. Agnes Ouida P. Yu to have a
vested right in the position of Chief of Hospital II until her retirement on August 24, 2004.

The Facts

In 1992, the national government implemented a devolution program pursuant to Republic Act (R.A.) No.
7160, otherwise known as the "The Local Government Code of 1991," which affected the Department of
Health (DOH) along with other government agencies.

Prior to the devolution, Dr. Fortunata Castillo (hereinafter Dr. Castillo) held the position of Provincial
Health Officer II (PHO II) of the Department of Health (DOH) Regional Office No. IX in Zamboanga City
and was the head of both the Basilan Provincial Health Hospital and Public Health Services. Respondent
Dr. Agnes Ouida P. Yu (Dr. Yu), on the other hand, held the position of Provincial Health Officer I (PHO I).
She was assigned, however, at the Integrated Provincial Health Office in Isabela, Basilan.

Upon the implementation of the devolution program, then Basilan Governor Gerry Salapuddin (Governor
Salapuddin) refused to accept Dr. Castillo as the incumbent of the PHO II position that was to be
devolved to the local government unit of Basilan, prompting the DOH to retain Dr. Castillo at the Regional
Office No. IX in Zamboanga City where she would serve the remaining four years of her public service.
She retired in 1996.

Meanwhile, in 1994, or two years after the implementation of the devolution program, Governor
Salapuddin appointed Dr. Yu to the PHO II position.

On February 23, 1998, Republic Act No. 8543, otherwise known as "An Act Converting the Basilan
Provincial Hospital in the Municipality of Isabela, Province of Basilan, into a Tertiary Hospital Under the

38
Full Administrative and Technical Supervision of the Department of Health, Increasing the Capacity to
One Hundred Beds and Appropriating Funds Therefor," was passed into law whereby the hospital
positions previously devolved to the local government unit of Basilan were re-nationalized and reverted to
the DOH. The Basilan Provincial Health Hospital was later renamed the Basilan General Hospital, and the
position of PHO II was then re-classified to Chief of Hospital II. TaDSHC

While Dr. Yu was among the personnel reverted to the DOH with the re-nationalization of the Basilan
General Hospital, she was made to retain her original item of PHO II instead of being given the re-
classified position of Chief of Hospital II. Subsequently, on August 1, 2003, then DOH Secretary Manuel
M. Dayrit (Secretary Dayrit) appointed Dr. Domingo Remus A. Dayrit (Dr. Dayrit) to the position of Chief of
Hospital II.

Aggrieved, Dr. Yu filed a letter of protest dated September 30, 2003 3 before the CSC claiming that she
has a vested right to the position of Chief of Hospital II. The pertinent portions of said letter read:

I come before your good office protesting the appointment issued by . . . DOH Secretary Manuel M. Dayrit
in favor of Dr. Domingo Remus A. Dayrit as Chief of Hospital . . . of the Basilan General Hospital . . .

xxx xxx xxx

. . . the position of Chief of Hospital II to which Dr. Dayrit has been appointed is a mere conversion from
the item of Provincial Health Officer II previously occupied by the herein protestant.

When what used to be called the Basilan Provincial Hospital was re-nationalized, now called the Basilan
General Hospital, the position of Provincial Health Officer II, then occupied by the undersigned, was
refused re-nationalized (sic) by DOH alleging the same position to be an LGU-created position, that is,
that the Local Government of Basilan created the position. Thus, instead of the undersigned being
automatically re-appointed Provincial Health Officer II of the Hospital, later to be renamed Chief of
Hospital II, pursuant to the Re-Nationalization Law, she was instead given an appointment still as
Provincial Health Officer II but under a co-terminous status at the Center for Health and Development,
DOH . . . which position the undersigned refused to accept . . . cHTCaI

On June 7, 2004, the CSC issued Resolution 4 No. 040655 granting Dr. Yu's protest and revoking the
appointment of Dr. Dayrit as Chief of Hospital II of Basilan General Hospital. Further, Secretary Dayrit
was directed to appoint Dr. Yu to said position. Upon motion for reconsideration, however, the CSC
reversed itself and issued Resolution 5 No. 040967 dated September 1, 2004 declaring that the position
of PHO II was never devolved to the Provincial Government of Basilan but was retained by the DOH; that
the PHO II position held by Dr. Yu was a newly-created position; and that, therefore, she did not have a
vested right to the Chief of Hospital II position that was created by virtue of R.A. No. 8543.

Dr. Yu then filed a motion for reconsideration which was denied by the CSC in its Resolution 6 No.
050287 dated February 28, 2005. She then elevated her case to the CA on petition for review raising the
sole issue of whether the item of PHO II she previously occupied was a devolved position or a locally
created one.

On March 30, 2009, the CA rendered the assailed Decision in favor of Dr. Yu, disposing as follows:

39
FOR REASONS STATED, the Petition for Review is GRANTED and CSC Resolutions Nos. 040967 and
050287 are REVERSED and SET ASIDE. Petitioner is declared to have a vested right in the Chief of
Hospital II position up to her retirement in August 24, 2004 and should receive her corresponding salaries
and benefits.

SO ORDERED. 7

In ruling that the PHO II position was devolved to the Basilan Provincial Government, the appellate court
ratiocinated in this wise:

. . . The CSC's ruling that there are two PHO II positions is not implausible but contrary to the evidence on
hand. HCTaAS

A perusal of the pleadings and attachments reveal that the PHO II position was devolved to the Basilan
Provincial Government. In a letter dated May 19, 1994, Ms. Vivian L. Young, Officer-in-Charge of the
Department of Health, Local Government Assistance & Monitoring Service informed former Governor
Salapuddin that the PHO II position was devolved to the local government, viz.:

Dear Gov. Salapuddin,

This will refer to your letter relative to the item position of Dr. Fortunata C. Castillo which has been
devolved to the provincial government of BASILAN.

Please be informed that only the devolved health personnel who were not accepted by their Local Chief
Executive have been retained by DOH, the item positions per se remained in the respective LGU's. . . .
The LGU's have the option to retain the items vacated or to collapse the same for financial reasons.

xxx xxx xxx

Based on the foregoing letter, Dr. Milagros L. Fernandez, Director IV of the DOH — Regional Field Office
No. IX, Zamboanga City, wrote a letter to petitioner, to wit:

xxx xxx xxx

Madam:

The letter dated May 19, 1994 of Ms. Vivian L. Young, Office-in-Charge (sic), LGAMS, Department of
Health, clarifies the issue raised by the Provincial Governor, in his letter dated April 14, 1994, insofar as
the retention of the Provincial Health Officer II of the province, in the person of Dr. Fortunata Castillo by

40
the DOH in view of the non-acceptance by the Governor consistent with the provisions of law on
devolution. aDHCcE

1. Dr. Fortunata A. Castillo, who was holding the position of Provincial Health Officer II of the province,
and a devolved health personnel, was retained by the DOH for reason above-mentioned.

2. While she, the occupant, was retained, the item position remained as among those items in the
Plantilla of Personnel of the Integrated Provincial Health Office devolved to the Office of the Provincial
Governor.

3. The Governor, in such a case, may or may not retain her item in his Plantilla, or abolish it for reason
therein stated. The position herewith (sic) was left vacant with the retention of Dr. Castillo in this office.

4. The funds for salary and other benefits of the devolved item position of Provincial Health Officer II
remained devolved with the Office of the Governor.

In other words, with the retention of Dr. Castillo hereto, she never carried with her the item position and
the funds appropriated for salary and other benefits accruing to the position of Provincial Health Officer II.

xxx xxx xxx

In a letter dated October 26, 2001, Director Macybel Alfaro-Sashi of the Civil Service Commission
Regional Office IX informed the petitioner that: ECAaTS

At the outset, it is apparent that the position you presently occupy is one which should be included in the
list of renationalized positions notwithstanding the fact that the said position carries a position item
number different from that carried by the previous holder thereof. Hence, the contention of the DOH
Regional Office that your position is not the same as that of the previous holder simply because they bear
different position item numbers deserves very scant consideration. The position item numbers are
immaterial in case of renationalization as such a system is merely adopted for purposes of proper and
systematic coding of all positions in the government, particularly in the budgeting process. Thus, the
position you are presently holding should be considered as one belonging to the national government
prior to its devolution, regardless of the position item number attached to the position of the previous
holder thereof.

Thus, it is apparent that the PHO II position occupied by petitioner is one and the same position which
was previously occupied by Dr. Castillo before the devolution. When the latter was not accepted by Gov.
Salapuddin, Dr. Castillo was retained by the DOH but the PHO II item was devolved to the Provincial
Government of Basilan. Consequently, the position of PHO II became vacant. This is obvious by the fact
that the salaries of Dr. Castillo were taken from a special fund and not from the appropriation for the PHO
II position.

The motion for reconsideration of the foregoing Decision filed by the CSC was denied by the CA in its
Resolution 8 dated July 9, 2009. Hence, in this petition for review on certiorari, the CSC alleged that —

41
The Issue

THE COURT OF APPEALS ERRED IN HOLDING THAT THE PHO II POSITION PREVIOUSLY
OCCUPIED BY RESPONDENT YU IS A DEVOLVED POSITION. 9

The Ruling of the Court

In pursuance of the declared policy under The Local Government Code of 1991 (R.A. No. 7160) to
provide for a more responsive and accountable local government structure through a system of
decentralization, 10 national agencies or offices, including the DOH, were mandated to devolve to the
local government units the responsibility for the provision of basic services and facilities. 11

As defined, "devolution" is the act by which the national government confers power and authority upon the
various local government units to perform specific functions and responsibilities. 12 Specifically, Section
17 (i) of the same Code prescribes the manner of devolution, as follows: TCacIA

(i) The devolution contemplated in this Code shall include the transfer to local government units of the
records, equipment, and other assets and personnel of national agencies and offices corresponding to
the devolved powers, functions and responsibilities.

Personnel of said national agencies or offices shall be absorbed by the local government units to which
they belong or in whose areas they are assigned to the extent that it is administratively viable as
determined by the said oversight committee: Provided, further, That regional directors who are career
executive service officers and other officers of similar rank in the said regional offices who cannot be
absorbed by the local government unit shall be retained by the national government, without any
diminution of rank, salary or tenure.

To ensure the proper implementation of the devolution process, then President Corazon C. Aquino issued
Executive Order (E.O.) No. 503, otherwise known as the "Rules and Regulations Implementing the
Transfer of Personnel and Assets, Liabilities and Records of National Government Agencies Whose
Functions are to be Devolved to the Local Government Units and for Other Related Purposes," which laid
down the following pertinent guidelines with respect to the transfer of personnel:

Section 2. Principles and Policies Governing Transfer of Personnel. —

a. Coverage, Tenure, Compensation and Career Development. —

xxx xxx xxx

2. The absorption of the NGA personnel by the LGU shall be mandatory, in which case, the LGUs shall
create the equivalent positions of the affected personnel except when it is not administratively viable.

42
3. Absorption is not administratively viable when there is a duplication of functions unless the LGU opts to
absorb the personnel concerned.

4. The national personnel who are not absorbed by the LGUs under no. 3 above, shall be retained by the
NGA concerned, subject to civil service law, rules and regulations.

xxx xxx xxx

12.Except as herein otherwise provided, devolved permanent personnel shall be automatically

reappointed by the local chief executive concerned immediately upon their transfer which shall not go
beyond June 30, 1992. . . .

On the basis of the foregoing, it was mandatory for Governor Salapuddin to absorb the position of PHO II,
as well as its incumbent, Dr. Fortunata Castillo. Highlighting the absence of discretion is the use of the
word "shall" both in Section 17 (i) of R.A. No. 7160 and in Section 2 (a) (2) of E.O. No. 503, which
connotes a mandatory order. Its use in a statute denotes an imperative obligation and is inconsistent with
the idea of discretion. 13 The only instance that the LGU concerned may choose not to absorb the NGA
personnel is when absorption is not administratively viable, meaning, it would result to duplication of
functions, in which case, the NGA personnel shall be retained by the national government. However, in
the absence of the recognized exception, devolved permanent personnel shall be automatically
reappointed [Section 2 (a) (12)] by the local chief executive concerned immediately upon their transfer
which shall not go beyond June 30, 1992. Webster's Third New International Dictionary defines
"automatic" as "involuntary either wholly or to a major extent so that any activity of the will is largely
negligible." Being "automatic", thus, connotes something mechanical, spontaneous and perfunctory." 14
HSacEI

There is no dearth of evidence showing that the item position of PHO II was, in fact, devolved to the
Provincial Government of Basilan. Governor Salapuddin himself certified 15 that said position was
included in the 1992 OSCAS 16 received from the Department of Budget and Management (DBM) with its
corresponding budget appropriation. He further declared that during the formal turn over program in 1993
attended by Dr. Milagros Fernandez, representing the DOH Regional Office, the item position of PHO II
was among the positions turned over to the Provincial Government of Basilan. Thus, the argument 17 of
petitioner CSC that only 53 plantilla positions, not 54, were devolved to the local government of Basilan
does not hold water. It cannot be disputed that Dr. Castillo's PHO II position was devolved.

However, Governor Salapuddin refused to reappoint Dr. Castillo to her devolved position in the LGU for
no other reason than that he "wanted to accept only the item position of PHO II." 18 It was not shown, and
no attempt was ever made on the part of the LGU to show, that the absorption of Dr. Castillo was not
administratively viable. There being no valid and legal basis therefor, Governor Salapuddin's refusal to
accept Dr. Castillo was, plainly and simply, whimsical.

Be that as it may, Governor Salapuddin's refusal did not prevent the devolution of Dr. Castillo which,
together with that of the PHO II position, took effect by operation of law. In order to solve his dilemma,
Governor Salapuddin requested that Dr. Castillo be detailed instead at the DOH, which was confirmed by
then Secretary of Health Juan M. Flavier in his Department Order 19 No. 228, series of 1993, signed on
July 9, 1993, reproduced hereunder as follows:

43
This will officially confirm the detail of Dr. Fortunata A. Castillo PHO-II — Basilan at the Regional Health
Field Office No. IX, Zamboanga City per request of the Governor of Basilan, the Honorable Jerry (sic)
Salapuddin in his letter to Dr. Castillo, provided that the provincial government of Basilan will continue to
pay her salary and other benefits she's entitled thereto until further notice or order. (Emphasis added)
SEcITC

Clearly therefore, the drawing of Dr. Castillo's salary from the LGU of Basilan which Governor Salapuddin
claimed to have allowed simply "to accommodate her (Dr. Castillo)" 20 was, in fact, a necessary
consequence of her devolution to the LGU and subsequent detail to the DOH. Officials and employees on
detail with other offices shall be paid their salaries, emoluments, allowances, fringe benefits and other
personal services costs from the appropriations of their parent agencies and in no case shall such be
charged against the appropriations of the agencies where they are assigned or detailed, except when
authorized by law. 21

A detail is defined and governed by Executive Order 292, Book V, Title 1, Subtitle A, Chapter 5, Section
26 (6), thus: 22

(6) Detail. A detail is the movement of an employee from one agency to another without the issuance of
an appointment and shall be allowed, only for a limited period in the case of employees occupying
professional, technical and scientific positions. If the employee believes that there is no justification for the
detail, he may appeal his case to the Commission. Pending appeal, the decision to detail the employee
shall be executory unless otherwise ordered by the Commission. (Emphasis added)

Had Dr. Castillo felt aggrieved by her detail to the DOH Regional Office, she was not without recourse.
The law afforded her the right to appeal her case to the CSC, but she had not seen fit to question the
justification for her detail. We could only surmise that, since Dr. Castillo was looking at only three more
years from the time of her detail until her retirement in 1996, and considering that she obviously would not
suffer any diminution in salary and rank, she found it pointless to pursue the matter.

Neither did Dr. Castillo find need to raise a howl when, at the behest of Governor Salapuddin who was
determined to replace her, DOH officials categorized her as a devolution non-viable employee, along with
216 others nationwide, by the mere fact that she was not accepted by the LGU of Basilan and not
because of an actual non-viability. Hence, in 1994, when Governor Salapuddin formally manifested his
intention to stop the drawing of Dr. Castillo's salary from the LGU in anticipation of his appointment of Dr.
Yu to the PHO II position, Dr. Castillo ceased to be a detailed employee at the DOH Regional Office but
was re-absorbed by the DOH as a devolution non-viable employee and, consequently, paid salaries and
benefits from the Miscellaneous Personnel Benefits Fund that had been set aside under the Office of the
Secretary of Health precisely for such employees. aECTcA

Ms. Vivian L. Young, Officer-in-Charge of the DOH Local Government Assistance and Monitoring Service,
assured 23 Governor Salapuddin that, while Dr. Castillo was "retained" by the DOH, her item position
remained with the LGU of Basilan. Moreover, Dr. Milagros L. Fernandez, Director IV of the DOH Regional
Field Office No. IX in Zamboanga City, clarified 24 that Dr. Castillo "never carried with her the item
position and the funds appropriated for salary and other benefits accruing to the position of Provincial
Health Officer II."

Hence, the appointment of Dr. Yu to the position PHO II.

44
The next question to be answered is — may Dr. Castillo be considered to have abandoned her position
for consistently failing to assert her rights thereto?

We certainly do not believe so.

"Abandonment of an office is the voluntary relinquishment of an office by the holder with the intention of
terminating his possession and control thereof. In order to constitute abandonment of office, it must be
total and under such circumstance as clearly to indicate an absolute relinquishment. There must be a
complete abandonment of duties of such continuance that the law will infer a relinquishment.
Abandonment of duties is a voluntary act; it springs from and is accompanied by deliberation and freedom
of choice. There are, therefore, two essential elements of abandonment: first, an intention to abandon
and, second, an overt or 'external' act by which the intention is carried into effect." 25

By no stretch of the imagination can Dr. Castillo's seeming lackadaisical attitude towards protecting her
rights be construed as an abandonment of her position resulting in her having intentionally and voluntarily
vacated the same. Governor Salapuddin's tenacious refusal to accept Dr. Castillo negates any and all
voluntariness on the part of the latter to let go of her position. The risk of incurring the ire of a powerful
politician effectively tied Dr. Castillo's hands, and it was quite understandable that she could not don her
gloves and fight, even if she wanted to. Considering, however, that Governor Salapuddin's clear infraction
of the law is not in issue before us, we need not make any pronouncement on this matter. CAaDSI

We rule, therefore, under the attendant circumstances of the case, that with Dr. Castillo's re-absorption by
the DOH which appears to bear the former's approval, her devolved position with the LGU of Basilan was
left vacant. In her May 19, 1994 letter to Governor Salapuddin, Ms. Vivian L. Young informed the local
chief executive that he had the "option to retain the item vacated or to collapse the same for financial
reasons." 26 Thus, we hold that Dr. Yu was validly appointed to the position of PHO II in 1994 and,
consequently, acquired a vested right to its re-classified designation — Chief of Hospital II. As such, Dr.
Yu should have been automatically re-appointed by Secretary Dayrit in accordance with the Guidelines
for the Re-Nationalization of Personnel, Assets and Appropriations of Basilan Provincial Hospital, 27 the
pertinent portion of which provides, as follows:

Item III. Principles and Policies Governing the Transfer of Basilan Provincial Hospital

A) . . .

3) The DOH shall assure that the re-nationalized personnel of the hospital shall:

3.i) Not be involuntarily separated, terminated or laid off;

3.ii) Continue to enjoy security of tenure;

3.iii) Be automatically re-appointed by the Secretary immediately upon their transfer;

45
3.iv) Retain their pay or benefits without diminution. (Emphasis supplied)

Considering, however, that Dr. Yu had already retired on August 24, 2004, we uphold the following
findings of the appellate court, to wit: HScAEC

. . . Inasmuch as a re-appointment is no longer feasible due to her retirement, petitioner should at least
recover her salaries for the services she had rendered. However, petitioner admitted that she received
her salary as PHO II converted to Chief of Hospital for the period August to November 2001. Therefore,
she should receive her salary and benefits as Chief of Hospital from December 2001 up to her retirement
in August 24, 2004. 28

WHEREFORE, the instant petition is hereby DENIED for lack of merit. The assailed Decision dated
March 30, 2009 in CA-G.R. SP No. 00327-MIN is AFFIRMED.

SO ORDERED.

||| (Civil Service Commission v. Yu, G.R. No. 189041, [July 31, 2012], 692 PHIL 182-202)

46
FIRST DIVISION

[G.R. No. 213383. June 22, 2015.]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ERNIE INCIONG y ORENSE, accused-appellant.

RESOLUTION

PERLAS-BERNABE, J p:

Before the Court is an appeal 1 filed by accused-appellant Ernie Inciong y Orense (accused-appellant)
from the Decision 2 dated December 5, 2013 of the Court of Appeals (CA) in CA-G.R. CR.-H.C. No.
05549 affirming his conviction for the crime of Murder, defined and penalized under Article 248 of the
Revised Penal Code, as amended.

The Facts

At around 11:30 in the morning of July 18, 2008, accused-appellant was having a drinking spree with a
certain Bico 3 and Eman in a restaurant or carinderia located at Banay-Banay II, San Jose, Batangas
opposite the building of Metro Batangas Concrete Mix Corporation. 4 Sometime thereafter, victim Jumar
Lumbera (Lumbera) crossed the street going to the carinderia and, as he reached the other side, he
encountered accused-appellant who suddenly poked him with an iron pipe, which turned out to be a
homemade firearm or sumpak. Then, accused-appellant fired the sumpak, hitting Lumbera in the
stomach, causing him to slowly fall down to the ground. Apparently not satisfied, accused-appellant
approached the fallen Lumbera and hit the latter's head twice with the sumpak. Thereafter, accused-
appellant hastily left. 5

Unfortunately, while Lumbera was immediately brought to the hospital for medical treatment, he died as a
result of the gunshot wound in his abdomen, as well as traumatic head injuries. 6

Prosecution witness Elena Villa de Leon (de Leon) witnessed the incident as she happened to be near
Lumbera while crossing the street headed towards the side of the carinderia. Upon reaching the side of
the road, they met accused-appellant, whom she duly identified in open court as the person who poked
and shot Lumbera with an iron pipe. 7

Finally, Thelma Mendoza Lumbera, the victim's widow, testified that she spent P11,500.00 for hospital
bills, P2,033.00 for the wake, P1,500.00 for the flowers, P28,000.00 for funeral expenses, and P3,500.00
for autopsy services. 8

Consequently, accused-appellant was charged with Murder in an Information 9 dated September 8, 2008,
the accusatory portion of which reads:

47
That on or about the 18th day of July, 2008, at about 11:30 o'clock in the morning, at Barangay Banay-
Banay 2nd, Municipality of San Jose, Province of Batangas, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, armed with an unlicensed firearm (sumpak), with intent to
kill, with the qualifying circumstances of treachery, evident premeditation and cruelty and without any
justifiable cause, did then and there willfully, unlawfully and feloniously attack, assault, and shoot with the
said firearm one Jumar Lumbera y Ramos, suddenly and without warning and thereafter hit him twice on
his head, thereby inflicting upon the latter gunshot wound, abdomen and traumatic head injury which
directly caused his death. TIADCc

Contrary to law.

For his part, accused-appellant admitted having shot Lumbera but claimed self-defense, explaining that
he shot the latter because he lost his mind due to anger, "Nagdilim na po ang aking paningin at doon ko
po ipinutok." 10 He averred that on the date and time in question, he was at the tricycle terminal near the
Metro Batangas Concrete Mix Corporation where Lumbera worked when the latter suddenly approached,
boxed, and threatened to kill him. He was about to retaliate but someone pacified him. Thereafter,
Lumbera went inside his office. Then, someone shouted that Lumbera was making his way back and
when accused-appellant looked behind him, he saw Lumbera pointing a sumpak at him. They struggled
for the possession of the weapon and it was when accused-appellant finally took hold of it that he fired at
Lumbera. When accused-appellant saw that Lumbera had fallen to the ground, he immediately left the
place and went into hiding until he was finally arrested in Tanay, Rizal. 11

The RTC Ruling

In a Decision 12 dated February 27, 2012, the Regional Trial Court of Pallocan West, Batangas City,
Branch 3 (RTC) found accused-appellant guilty beyond reasonable doubt of the crime of Murder and
sentenced him to suffer the penalty of reclusion perpetua, as well as to pay the heirs of Lumbera the
following amounts: (1) P50,000.00 as civil indemnity; (2) P44,500.00 as actual damages; (3) P50,000.00
as moral damages; and (4) P30,000.00 as exemplary damages. 13

In convicting accused-appellant, the RTC found that he failed to satisfy the first and most important
element of self-defense, i.e., unlawful aggression. Taking into consideration the version of the facts as
narrated by accused-appellant that it was Lumbera who first boxed him and subsequently, pointed a
sumpak at him and that they grappled for the possession thereof, the RTC opined that it was not sufficient
to establish unlawful aggression. Moreover, the manner of shooting Lumbera and the injuries on his head
showed a determined effort to kill which, thus, belies self-defense. 14

Likewise, the RTC held that treachery attended the killing, as Lumbera was not given the time to flee or to
prepare a defense or at the least, offer any resistance against the sudden attack. Parenthetically, the
RTC ruled that even if the attack had been frontally made, it did not preclude the attendance of treachery,
the attack being no less unexpected and sudden. 15

The CA Ruling

In a Decision 16 dated December 5, 2013, the CA affirmed the conviction of accused-appellant upon a
finding that he failed to establish the elements of self-defense, to wit: (1) unlawful aggression on the part
of the victim; (2) reasonable necessity of the means employed to prevent or repel the attack; and (3) lack

48
of sufficient provocation on the part of the person defending himself. 17 The CA held that no unlawful
aggression emanated from Lumbera as in fact, it was accused-appellant who was the aggressor, having
shot Lumbera without any warning. Moreover, when Lumbera had already fallen to the ground, accused-
appellant even hit his head twice. Corollarily, the number, location, and severity of the wounds inflicted
upon Lumbera effectively negated accused-appellant's claim of self-defense, which, by and large, was
also uncorroborated and unsubstantiated. 18

Neither did the CA give credence to accused-appellant's insistence that the mitigating circumstance of
passion or obfuscation was present in the killing of Lumbera. To reiterate, records show that Lumbera did
not do anything that would have reasonably incited accused-appellant to attack him. Nor could accused-
appellant properly claim that he lost his mind due to anger as would have pushed him to shoot Lumbera.
19

Finally, the CA upheld the amounts of damages awarded by the RTC. 20

The Issue Before the Court

The issue to be resolved in this case is whether or not the CA erred in upholding accused-appellant's
conviction for the crime of Murder.

The Court's Ruling

The appeal is bereft of merit.

In order for self-defense to be appreciated, accused-appellant must be able to prove by clear and
convincing evidence the following elements: (a) unlawful aggression on the part of the victim; (b)
reasonable necessity of the means employed to prevent or repel it; and (c) lack of sufficient provocation
on the part of the person defending himself. 21 An accused who invokes self-defense has the burden to
prove all the aforesaid elements, the most important of which is unlawful aggression. Being the basic
requirement in a plea of self-defense, 22 unlawful aggression must be proved first in order for self-
defense to be successfully pleaded, whether complete or incomplete. 23 No self-defense can exist
without unlawful aggression since there is no attack that the accused will have to prevent or repel. 24

In this case, the requisite unlawful aggression from the victim, Lumbera, is patently absent. The evidence
failed to establish that accused-appellant's life was in danger when he encountered Lumbera. Instead,
and as aptly pointed out by the CA, it was accused-appellant who was the aggressor, having fired the
sumpak at Lumbera when they crossed paths by the side of the road, and when the latter had fallen to
the ground, hit his head twice with the said weapon. The entire incident was witnessed by de Leon,
whose testimony was correctly given probative weight and value by the RTC and the CA, being a
disinterested witness and bereft of ill motive to testify falsely against accused-appellant. 25 Accused-
appellant, having failed to discharge the burden of proving unlawful aggression, the Court therefore
affirms the finding of the RTC and the CA that he did not act in self-defense. AIDSTE

Similarly, treachery as a qualifying circumstance was correctly appreciated. Treachery is present when
the offender commits any of the crimes against persons, employing means, methods, or forms in the
execution, which tend directly and specially to insure its execution, without risk to the offender arising

49
from the defense which the offended party might make. 26 In this case, a credible eyewitness account
established that accused-appellant, upon meeting Lumbera by the roadside, suddenly fired a sumpak
against the latter, leaving him unable to defend himself or evade the attack. The assault on Lumbera
ensured that accused-appellant would be able to consummate the crime without risk to his own person,
hence, the qualifying circumstance of treachery. Finally, with regard to the use of an unlicensed firearm, a
circumstance alleged in the information, the Court shall no longer delve upon its significance in this case,
the same not having been appreciated by the courts a quo.

On this score, this Court has stated that, in the absence of any clear showing that the trial court
overlooked or misconstrued cogent facts and circumstances which would alter a conviction, it generally
defers to the trial court's evaluation of the credibility of witnesses especially if such findings are affirmed
by the CA. This must be so since the trial courts are in a better position to decide the question of
credibility, having heard the witnesses themselves and having observed first-hand their deportment and
manner of testifying under grueling examination. 27

In view of the foregoing, the RTC and the CA correctly sentenced accused-appellant to reclusion
perpetua. However, pursuant to Section 3 28 of Republic Act No. 9346, 29 accused-appellant shall not be
eligible for parole. 30

Also, the Court finds it necessary to modify the amounts of civil indemnity and moral damages awarded in
order to conform with prevailing jurisprudence. 31 Hence, there being no aggravating or mitigating
circumstances in this case, accused-appellant is ordered to pay the amount of P75,000.00 as civil
indemnity and P75,000.00 as moral damages to the heirs of Lumbera. Likewise, the total amount of
actual damages awarded, as evidenced by the receipts on record, 32 should be P44,345.50 instead of
P44,500.00. Meanwhile, the award of P30,000.00 as exemplary damages is affirmed. In addition, the
Court imposes, on all monetary awards for damages, interest at the legal rate of six percent (6%) per
annum from the date of finality of this Resolution until fully paid. 33

WHEREFORE, the appeal is DISMISSED. The Decision dated December 5, 2013 of the Court of Appeals
in CA-G.R. CR.-H.C. No. 05549 finding accused-appellant Ernie Inciong y Orense (accused-appellant)
GUILTY beyond reasonable doubt of the crime of Murder, defined and penalized under Article 248 of the
Revised Penal Code, as amended, is hereby AFFIRMED with MODIFICATION sentencing accused-
appellant to suffer the penalty of reclusion perpetua, without eligibility for parole, and ordering him to pay
the heirs of Jumar Lumbera the following amounts: (a) P75,000.00 as civil indemnity; (b) P75,000.00 as
moral damages; (c) P44,345.50 as actual damages; and (d) P30,000.00 as exemplary damages. All
damages awarded in this case shall earn interest at the legal rate of six percent (6%) per annum from the
date of finality of this Resolution until fully paid.

SO ORDERED.

Sereno, C.J., Leonardo-de Castro, Bersamin and Perez, JJ., concur.

||| (People v. Inciong y Orense, G.R. No. 213383 (Resolution), [June 22, 2015])

50
[G.R. No. 209830. June 17, 2015.]

MITSUBISHI MOTORS PHILIPPINES CORPORATION, petitioner, vs. BUREAU OF CUSTOMS,

respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Resolutions dated June 7, 2013 2 and November
4, 2013 3 of the Court of Appeals (CA) in CA-G.R. CV No. 99594, which referred the records of the
instant case to the Court of Tax Appeals (CTA) for proper disposition of the appeal taken by respondent
Bureau of Customs (respondent).

The Facts

The instant case arose from a collection suit 4 for unpaid taxes and customs duties in the aggregate
amount of P46,844,385.00 filed by respondent against petitioner Mitsubishi Motors Philippines
Corporation (petitioner) before the Regional Trial Court of Manila, Branch 17 (RTC), docketed as Civil
Case No. 02-103763 (collection case).

Respondent alleged that from 1997 to 1998, petitioner was able to secure tax credit certificates (TCCs)
from various transportation companies; after which, it made several importations and utilized said TCCs
for the payment of various customs duties and taxes in the aggregate amount of P46,844,385.00. 5
Believing the authenticity of the TCCs, respondent allowed petitioner to use the same for the settlement
of such customs duties and taxes. However, a post-audit investigation of the Department of Finance
revealed that the TCCs were fraudulently secured with the use of fake commercial and bank documents,
and thus, respondent deemed that petitioner never settled its taxes and customs duties pertaining to the
aforesaid importations. 6 Thereafter, respondent demanded that petitioner pay its unsettled tax and
customs duties, but to no avail. Hence, it was constrained to file the instant complaint. 7

In its defense, 8 petitioner maintained, inter alia, that it acquired the TCCs from their original holders in
good faith and that they were authentic, and thus, their remittance to respondent should be considered as
proper settlement of the taxes and customs duties it incurred in connection with the aforementioned
importations. 9

Initially, the RTC dismissed 10 the collection case due to the continuous absences of respondent's
counsel during trial. 11 On appeal to the CA, 12 and eventually the Court, 13 the said case was reinstated
and trial on the merits continued before the RTC. 14

After respondent's presentation of evidence, petitioner filed a Demurrer to Plaintiff's Evidence 15 on

February 10, 2012, essentially contending that respondent failed to prove by clear and convincing
evidence that the TCCs were fraudulently procured, 16 and thus, prayed for the dismissal of the

51
complaint. 17 In turn, respondent filed an Opposition 18 dated March 7, 2012 refuting petitioner's
contentions. CAIHTE

The RTC Ruling

In an Order 19 dated April 10, 2012, the RTC granted petitioner's Demurrer to Plaintiff's Evidence, and
accordingly, dismissed respondent's collection case on the ground of insufficiency of evidence. 20 It
found that respondent had not shown any proof or substantial evidence of fraud or conspiracy on the part
of petitioner in the procurement of the TCCs. 21 In this connection, the RTC opined that fraud is never
presumed and must be established by clear and convincing evidence, which petitioner failed to do, thus,
necessitating the dismissal of the complaint. 22

Respondent moved for reconsideration, 23 which was, however, denied in an Order 24 dated August 3,
2012. Dissatisfied, it appealed 25 to the CA.

The CA Ruling

In a Resolution 26 dated June 7, 2013, the CA referred the records of the collection case to the CTA for
proper disposition of the appeal taken by respondent. While the CA admitted that it had no jurisdiction to
take cognizance of respondent's appeal, as jurisdiction is properly lodged with the CTA, it nevertheless
opted to relax procedural rules in not dismissing the appeal outright. 27 Instead, the CA deemed it
appropriate to simply refer the matter to the CTA, considering that the government stands to lose the
amount of P46,844,385.00 in taxes and customs duties which can then be used for various public works
and projects. 28

Aggrieved, petitioner filed a motion for reconsideration 29 on June 23, 2013, arguing that since the CA
does not have jurisdiction over respondent's appeal, it cannot perform any action on it except to order its
dismissal. 30 The said motion was, however, denied in a Resolution 31 dated November 4, 2013, hence,
this petition.

The Issue Before the Court

The core issue for the Court's resolution is whether or not the CA correctly referred the records of the
collection case to the CTA for proper disposition of the appeal taken by respondent.

The Court's Ruling

The petition is meritorious.

Jurisdiction is defined as the power and authority of a court to hear, try, and decide a case. 32 In order for
the court or an adjudicative body to have authority to dispose of the case on the merits, it must acquire,
among others, jurisdiction over the subject matter. 33 It is axiomatic that jurisdiction over the subject
matter is the power to hear and determine the general class to which the proceedings in question belong;

52
it is conferred by law and not by the consent or acquiescence of any or all of the parties or by erroneous
belief of the court that it exists. 34 Thus, when a court has no jurisdiction over the subject matter, the only
power it has is to dismiss the action. 35

Guided by the foregoing considerations and as will be explained hereunder, the Court finds that the CA
erred in referring the records of the collection case to the CTA for proper disposition of the appeal taken
by respondent. DETACa

Section 7 of Republic Act No. (RA) 1125, 36 as amended by RA 9282, 37 reads:

Sec. 7. Jurisdiction. — The CTA shall exercise:

xxx xxx xxx

c. Jurisdiction over tax collection cases as herein provided:

xxx xxx xxx

2. Exclusive appellate jurisdiction in tax collection cases:

a. Over appeals from the judgments, resolutions or orders of the Regional Trial Courts in tax collection
cases originally decided by them in their respective territorial jurisdiction.

xxx xxx xxx

Similarly, Section 3, Rule 4 of the Revised Rules of the Court of Tax Appeals, as amended, 38 states:

Sec. 3. Cases within the jurisdiction of the Court in Divisions. — The Court in Divisions shall exercise:

xxx xxx xxx

c. Exclusive jurisdiction over tax collections cases, to wit:

xxx xxx xxx

2. Appellate jurisdiction over appeals from the judgments, resolutions or orders of the Regional Trial
Courts in tax collection cases originally decided by them within their respective territorial jurisdiction.

53
Verily, the foregoing provisions explicitly provide that the CTA has exclusive appellate jurisdiction over tax
collection cases originally decided by the RTC.

In the instant case, the CA has no jurisdiction over respondent's appeal; hence, it cannot perform any
action on the same except to order its dismissal pursuant to Section 2, Rule 50 39 of the Rules of Court.
Therefore, the act of the CA in referring respondent's wrongful appeal before it to the CTA under the
guise of furthering the interests of substantial justice is blatantly erroneous, and thus, stands to be
corrected. In Anderson v. Ho, 40 the Court held that the invocation of substantial justice is not a magic
wand that would readily dispel the application of procedural rules, 41 viz.:

. . . procedural rules are designed to facilitate the adjudication of cases. Courts and litigants alike are
enjoined to abide strictly by the rules. While in certain instances, we allow a relaxation in the application
of the rules, we never intend to forge a weapon for erring litigants to violate the rules with impunity. The
liberal interpretation and application of rules apply only in proper cases of demonstrable merit and under
justifiable causes and circumstances. While it is true that litigation is not a game of technicalities, it is
equally true that every case must be prosecuted in accordance with the prescribed procedure to ensure
an orderly and speedy administration of justice. Party litigants and their counsels are well advised to
abide by rather than flaunt, procedural rules for these rules illumine the path of the law and rationalize the
pursuit of justice. 42 (Emphasis and underscoring supplied)

Finally, in view of respondent's availment of a wrong mode of appeal via notice of appeal stating that it
was elevating the case to the CA — instead of appealing by way of a petition for review to the CTA within
thirty (30) days from receipt of a copy of the RTC's August 3, 2012 Order, as required by Section 11 of
RA 1125, as amended by Section 9 of RA 9282 43 — the Court is constrained to deem the RTC's
dismissal of respondent's collection case against petitioner final and executory. It is settled that the
perfection of an appeal in the manner and within the period set by law is not only mandatory, but
jurisdictional as well, and that failure to perfect an appeal within the period fixed by law renders the
judgment appealed from final and executory. 44 The Court's pronouncement in Team Pacific Corporation
v. Daza 45 is instructive on this matter, to wit: 46 aDSIHc

Although appeal is an essential part of our judicial process, it has been held, time and again, that the right
thereto is not a natural right or a part of due process but is merely a statutory privilege. Thus, the
perfection of an appeal in the manner and within the period prescribed by law is not only mandatory but
also jurisdictional and failure of a party to conform to the rules regarding appeal will render the judgment
final and executory. Once a decision attains finality, it becomes the law of the case irrespective of
whether the decision is erroneous or not and no court — not even the Supreme Court — has the power to
revise, review, change or alter the same. The basic rule of finality of judgment is grounded on the
fundamental principle of public policy and sound practice that, at the risk of occasional error, the judgment
of courts and the award of quasi-judicial agencies must become final at some definite date fixed by law.

WHEREFORE, the petition is GRANTED. Accordingly, the Resolutions dated June 7, 2013 and
November 4, 2013 of the Court of Appeals (CA) in CA-G.R. CV No. 99594 are hereby REVERSED and
SET ASIDE. Accordingly, a new one is entered DISMISSING the appeal of respondent Bureau of
Customs to the Court of Appeals.

SO ORDERED.

||| (Mitsubishi Motors Phils. Corp. v. Bureau of Customs, G.R. No. 209830, [June 17, 2015])

54
FIRST DIVISION

[G.R. No. 198928. December 3, 2014.]

CBK POWER COMPANY LIMITED, petitioner, vs. COMMISSIONER OF INTERNAL REVENUE,

respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated July 20, 2011 and the
Resolution 3 dated October 5, 2011 of the Court of Tax Appeals (CTA) En Banc in CTA EB Case No.
639, which reversed and set aside the Decision 4 dated February 6, 2009, the Amended Decision 5 dated
February 8, 2010, and the Resolution 6 dated May 20, 2010 of the CTA Second Division in C.T.A. Case
No. 7220 and dismissed the claim for refund of excess input value-added tax (VAT) of petitioner CBK
Power Company Limited (CBK Power) for being prematurely filed.

The Facts

CBK Power, a partnership duly organized and existing under Philippine laws, is a special purpose entity
formed for the sole purpose of engaging in all aspects of: (a) the design, financing, construction, testing,
commissioning, operation, maintenance, management, and ownership of Kalayaan II pumped-storage
hydroelectric power plant, the new Caliraya Spillway, and other assets located in the Province of Laguna;
and (b) the rehabilitation, upgrade expansion, testing, commissioning, operation, maintenance, and
management of the Caliraya, Botocan, and Kalayaan I hydroelectric power plants and their related
facilities located in the Province of Laguna. It is registered as a VAT entity since April 10, 2000 and on
January 29, 2003, its application for a VAT zero-rate status was approved pursuant to VAT Review
Committee Ruling No. 018-13. 7

On April 24, 2003, July 25, 2003, October 24, 2003, and January 26, 2004, CBK Power submitted its
quarterly VAT returns for the period covering January 1, 2003 to December 31, 2003. Subsequently, CBK
Power amended its April 24, 2003 VAT return on June 10, 2003 and March 23, 2005. Similarly, CBK
Power made amendments in its July 25, 2003, October 24, 2003, and January 26, 2004 VAT returns on
March 23, 2005. These amendments reflected unutilized/excess input VAT in the amount of
P298,430,362.42. 8

On March 29, 2005, CBK Power filed before the Bureau of Internal Revenue (BIR) District Office No. 55
of Laguna an administrative claim for the issuance of a tax credit certificate for a total amount of
P295,994,518.00, representing unutilized input VAT on its purchase of capital goods, as well as unutilized
input VAT on its local purchase of goods and services other than capital goods, all for the calendar year
2003. Thereafter, on April 18, 2005, CBK Power filed its judicial claim for tax refund/credit before the
CTA, docketed as CTA Case No. 7220. 9

55
For its part, respondent Commissioner of Internal Revenue (CIR) claimed, inter alia, that the amount
being claimed by CBK Power as alleged unutilized input VAT for the period January 1, 2003 to December
31, 2003 must be denied for not being properly documented. 10 CAIHTE

The CTA Second Division Ruling

In a Decision 11 dated February 6, 2009, the CTA Second Division ruled in favor of CBK Power and
accordingly awarded it a tax credit certificate, albeit in the reduced amount of P215,998,263.13. 12 In
disallowing certain portions of CBK Power's claim for refund/credit, the CTA Second Division found that
CBK Power failed to prove that the purchases under scrutiny pertained to its capital purchases as
reflected in its audited financial statements for the calendar year 2003. 13

On partial reconsideration from both parties, the CTA Second Division rendered an Amended Decision 14
dated February 8, 2010, increasing CBK Power's entitlement to a tax credit certificate in the amount of
P286,783,847.37. 15

The CIR again moved for reconsideration, 16 which was, however, denied in a Resolution 17 dated May
20, 2010. Dissatisfied, the CIR appealed to the CTA En Banc.

The CTA En Banc Ruling

In a Decision 18 dated July 20, 2011, the CTA En Banc reversed and set aside the CTA Second
Division's ruling and thereby denied CBK Power's claim for refund in its entirety. 19 It found that CBK
Power filed its judicial claim for refund/credit on April 18, 2005 or just 20 days after it filed its
administrative claim on March 29, 2005. As such, it failed to observe the mandatory and jurisdictional
120-day period provided under Section 112 (D) of the National Internal Revenue Code 20 (NIRC).
Consequently, it ruled that such non-observance resulted in the prematurity of CBK Power's claim,
warranting a dismissal thereof for lack of jurisdiction. 21

Aggrieved, CBK Power moved for reconsideration, 22 which was, however, denied in a Resolution 23
dated October 5, 2011, hence, this petition.

The Issue Before the Court

The primordial issue for the Court's resolution is whether or not the CTA En Banc correctly denied CBK
Power's claim for refund for being prematurely filed.

The Court's Ruling

The petition is meritorious.

56
Executive Order No. 273, Series of 1987 24 or the original VAT law first allowed the refund or credit of
unutilized excess input VAT. Thereafter, the provision on refund or credit was amended several times by
Republic Act No. (RA) 7716, 25 RA 8424, and RA 9337, 26 which took effect on November 1, 2005. 27
Since CBK Power's claims for refund covered periods before the effectivity of RA 9337, i.e., January 1,
2003 to December 31, 2003, Section 112 of the NIRC, as amended by RA 8424 should apply, to wit:

Section 112. Refunds or Tax Credits of Input Tax. —

(A) Zero-rated or Effectively Zero-rated Sales. — any VAT-registered person, whose sales are zero-rated
or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales
were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid
attributable to such sales, except transitional input tax, to the extent that such input tax has not been
applied against output tax: . . . .

xxx xxx xxx

(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. — In proper cases, the
Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one
hundred twenty (120) days from the date of submission of complete documents in support of the
application filed in accordance with Subsections (A) and (B) hereof. ECSaAc

In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the
Commissioner to act on the application within the period prescribed above, the taxpayer affected may,
within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one
hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals.

xxx xxx xxx (Emphases and underscoring supplied)

In CIR v. Aichi Forging Company of Asia, Inc.(Aichi), 28 the Court held that the observance of the 120-
day period is a mandatory and jurisdictional requisite to the filing of a judicial claim for refund before the
CTA. Consequently, its non-observance would lead to the dismissal of the judicial claim on the ground of
lack of jurisdiction. Aichi also clarified that the two (2)-year prescriptive period applies only to
administrative claims and not to judicial claims. 29 Succinctly put, once the administrative claim is filed
within the two (2)-year prescriptive period, the claimant must wait for the 120-day period to end;
thereafter, he is given a 30-day period to file his judicial claim before the CTA, even if said 120-day and
30-day periods would exceed the aforementioned two (2)-year prescriptive period. 30

However, in CIR v. San Roque Power Corporation (San Roque), 31 the Court categorically recognized an
exception to the mandatory and jurisdictional nature of the 120-day period. It ruled that BIR Ruling No.
DA-489-03 dated December 10, 2003 provided a valid claim for equitable estoppel under Section 246 32
of the NIRC. In essence,the aforesaid BIR Ruling stated that "taxpayer-claimant need not wait for the
lapse of the 120-day period before it could seek judicial relief with the CTA by way of Petition for Review."
33

Recently, in Taganito Mining Corporation v. CIR, 34 the Court reconciled the pronouncements in the Aichi
and San Roque cases in the following manner:

57
Reconciling the pronouncements in the Aichi and San Roque cases, the rule must therefore be that
during the period December 10, 2003 (when BIR Ruling No. DA-489-03 was issued) to October 6, 2010
(when the Aichi case was promulgated), taxpayers-claimants need not observe the 120-day period before
it could file a judicial claim for refund of excess input VAT before the CTA. Before and after the
aforementioned period (i.e., December 10, 2003 to October 6, 2010), the observance of the 120-day
period is mandatory and jurisdictional to the filing of such claim. 35 (Emphases and underscoring
supplied)

In this case, records disclose that CBK Power filed its administrative and judicial claims for issuance of
tax credits on March 29, 2005 and April 18, 2005, respectively or during the period when BIR Ruling No.
DA-489-03 was in place, i.e., from December 10, 2003 to October 6, 2010. As such, it need not wait for
the expiration of the 120-day period before filing its judicial claim before the CTA, which was timely filed.
In view of the foregoing, the CTA En Banc erred in dismissing CBK Power's claim on the ground of
prematurity and, thus, its ruling must be corrected accordingly.

Considering, however, that the CTA En Banc dismissed CBK Power's claim for refund solely on
procedural ground and no longer delved on its substantive merits, i.e., whether or not CBK Power was
able to substantiate its claim for issuance of a tax credit certificate, the Court deems it prudent to remand
the case to the CTA En Banc for resolution on the merits.

WHEREFORE, the petition is GRANTED. The Decision dated July 20, 2011 and the Resolution dated
October 5, 2011 of the Court of Tax Appeals (CTA) En Banc in CTA EB Case No. 639 are hereby
REVERSED and SET ASIDE. For reasons aforestated, the instant case is REMANDED to the CTA En
Banc for resolution on the merits.

SO ORDERED. cADSCT

||| (CBK Power Co. Ltd. v. Commissioner of Internal Revenue, G.R. No. 198928, [December 3, 2014])

58
SECOND DIVISION

[G.R. No. 225709. February 14, 2018.]

JASPER GONZALEZ * y DOLENDO, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

DECISION

PERLAS-BERNABE, J p:

Before the Court is a petition for review on certiorari 1 assailing the Decision 2 dated August 7, 2015 and
the Resolution 3 dated June 22, 2016 of the Court of Appeals (CA) in CA-G.R. CR No. 36523, affirming
the conviction of petitioner Jasper Gonzalez y Dolendo (Gonzalez) for violation of Section 261 (q) of the
Omnibus Election Code, as amended by Section 32 of Republic Act (RA) No. 7166.

The Facts

This case stemmed from two (2) separate Informations 4 filed before the Regional Trial Court of
Valenzuela City, Branch 269 (RTC) accusing Gonzalez of violating: (1) Section 261 (p) (q) 5 of the
Omnibus Election Code (OEC), 6 as amended by Section 32 7 of RA 7166; 8 and (2) Section 11, Article II
9 of RA 9165 or the "Comprehensive Dangerous Drugs Act of 2002," 10 to wit:

Criminal Case No. 173-V-12

That on or about February 23, 2012 in Valenzuela City and within the jurisdiction of this Honorable Court,
the above-named accused, did then and there willfully, unlawfully and feloniously have in his possession
and control one (1) Kitchen Knife, without securing an exemption from the COMELEC pursuant to Sec.
261 (p) (q) OEC as amended by Sec. 32, of R.A. 7166.

Contrary to Law. 11

Criminal Case No. 174-V-12

That on or about February 23, 2012, in Valenzuela City and within the jurisdiction of this Honorable Court,
the above-named accused, without any authority of law, did then and there willfully, unlawfully and
feloniously have in his possession and control one (1) heat-sealed transparent plastic sachet containing
zero point eight (0.80) gram, found to be methylamphetamine hydrochloride [sic] (shabu), knowing the
same to be dangerous drugs.

Contrary to Law. 12

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The prosecution alleged 13 that in the early morning of February 23, 2012, an operative of the Station
Anti-Illegal Drugs (SAID), Special Operation Task Group (SOTG), Valenzuela City, was informed of the
rampant selling of illegal drugs at a wake in Tamaraw Hills, Barangay Marulas, Valenzuela City, which
thus led to the conduct of an anti-illegal drug operation. At about 3:30 a.m., certain Police Officer (PO) 2
Lim, PO2 Recto, and PO1 Raya, together with PO1 Julius R. Congson (PO1 Congson), proceeded to
surveil the area near No. 75 Tamaraw Hills Street. While in the area, PO2 Recto and PO1 Congson saw
a person coming out of an alley about four (4) meters away, with a fan knife in his right hand. Since there
was a ban issued by the Commission on Elections 14 (COMELEC) on the carrying of deadly weapons at
that time, PO2 Recto and PO1 Congson approached the person and introduced themselves as police
officers. The person, who they later identified as Gonzalez, immediately ran away, prompting the police
officers to chase and eventually, arrest him. PO1 Congson recovered the knife from Gonzalez, frisked the
latter, and ordered him to bring out the contents of his pocket, which revealed one heat-sealed
transparent plastic sachet containing what PO1 Congson believed to be shabu. PO1 Congson further
recovered another heat-sealed transparent plastic pack, labeled "Calypso," containing several plastic
sachets. Thereafter, Gonzalez started shouting, causing several persons from the wake (including
Gonzalez' mother) to approach him. The police officers then decided to bring Gonzalez to the nearby
barangay hall, where the seized items were inventoried 15 and turned over. 16 After duly receiving the
submitted specimen, the forensic chemist examined 17 the same which tested positive for
methamphetamine hydrochloride. 18

In his defense, 19 Gonzalez denied the charges against him and instead, claimed that on February 23,
2012, at around 3:00 a.m., he was just at their house in No. 75 Tamaraw Hills Street. He was about to go
to sleep when four (4) male persons arrived and arrested him. The men then tied his hands with his wife's
brassiere, and thereafter, showed him a sachet of shabu and took the knife that was on top of the table.
They then dragged him down from their house, bringing with them his child, while he shouted for
someone to call his mother. Many of his neighbors who heard or were awakened by his shouts and the
crying of his child came out of their houses and saw his arrest. At the ground floor, he was photographed
with the knife placed on the top of a small table. Thereafter, the arresting persons boarded him on a
vehicle. They drove around Ugong for thirty (30) minutes, fetched Senior Police Officer 3 Ronald C.
Sanchez (SPO3 Sanchez) at his office at the third floor of the city hall, and then proceeded to the Marulas
Barangay Hall to wait for the barangay kagawad. When the kagawad arrived, he just signed a paper
about the seized evidence. Gonzalez was then brought to Camp Crame for drug testing, and afterwards
to the detention cell at the new city hall. 20

The RTC Ruling

In a Decision 21 dated January 6, 2014, the RTC found Gonzalez guilty beyond reasonable doubt of
violation of Section 261 (q) of the OEC, 22 holding that all the necessary elements thereof have been
proven, namely: (1) Gonzalez was found holding the fan knife with his right hand; (2) such possession
occurred during the prohibited period; and (3) he was carrying the knife while casually walking towards
Tamaraw Hills Street from an alley — a public place. 23 The RTC gave no credence to Gonzalez' version
of his arrest in light of his positive identification as the culprit, as well as the presumption of regularity
accorded to the police officers in the performance of their duties. 24 It also brushed aside the testimonies
of Gonzalez' three (3) witnesses for their failure to actually see what had transpired immediately
preceding his arrest. 25

As regard the charge of violation of Section 11 of RA 9165, the RTC found Gonzalez not guilty due to
insufficiency of evidence. 26

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Aggrieved, Gonzalez elevated his conviction to the CA. 27 Pending his appeal, Gonzalez renewed his
Surety Bond 28 posted in this case, and thereafter, applied for bail, 29 which the RTC granted in an Order
30 dated January 24, 2014.

The CA Ruling

In a Decision 31 dated August 7, 2015, the CA affirmed the RTC Decision, 32 finding that the prosecution
had established beyond reasonable doubt that Gonzalez was "found in possession of a fan knife at the
time he was apprehended by the police officers during [the ban] enforced by the COMELEC." 33 It held
that Gonzalez failed to demonstrate by clear and convincing evidence his defense that "he uses [the fan
knife] as a utensil in cooking." 34

Undaunted, Gonzalez moved for reconsideration, 35 which was denied in a Resolution 36 dated June 22,
2016; hence, this petition.

The Issue Before the Court

The issue for the Court's resolution is whether or not Gonzalez' conviction for violation of Section 261 (q)
of the OEC, as amended by Section 32 of RA 7166, should be upheld.

The Court's Ruling

The petition is meritorious.

At the outset, it must be emphasized that "[t]he constitutional right to be presumed innocent until proven
guilty can only be overthrown by proof beyond reasonable doubt, that is, that degree of proof that
produces conviction in an unprejudiced mind. Hence, where the court entertains a reasonable doubt as to
the guilt of the accused, it is not only the right of the accused to be freed; it is the court's constitutional
duty to acquit them." 37

In this light, the Court is convinced that Gonzalez' conviction must be set aside. 38

Gonzalez was charged under Section 261 (p) (q) of the OEC, as amended by Section 32 of RA 7166.
Section 261 (p) (q) of the OEC, as originally worded, provides:

Section 261. Prohibited Acts. — The following shall be guilty of an election offense:

xxx xxx xxx

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(p) Deadly weapons. — Any person who carries any deadly weapon in the polling place and within a
radius of one hundred meters thereof during the days and hours fixed by law for the registration of voters
in the polling place, voting, counting of votes, or preparation of the election returns. However, in cases of
affray, turmoil, or disorder, any peace officer or public officer authorized by the Commission to supervise
the election is entitled to carry firearms or any other weapon for the purpose of preserving order and
enforcing the law.

(q) Carrying firearms outside residence or place of business. — Any person who, although possessing a
permit to carry firearms, carries any firearms outside his residence or place of business during the
election period, unless authorized in writing by the Commission: Provided, That a motor vehicle, water or
air craft shall not be considered a residence or place of business or extension hereof.

This prohibition shall not apply to cashiers and disbursing officers while in the performance of their duties
or to persons who by nature of their official duties, profession, business or occupation habitually carry
large sums of money or valuables.

while Section 32 of RA 7166, pertinently reads:

Section 32. Who May Bear Firearms. — During the election period, no person shall bear, carry or
transport firearms or other deadly weapons in public places, including any building, street, park, private
vehicle or public conveyance, even if licensed to possess or carry the same, unless authorized in writing
by the Commission. The issuance of firearms licenses shall be suspended during the election period.

x x x (Emphasis and underscoring supplied)

COMELEC Resolution No. 9357, implementing Section 32 of RA 7166 for the conduct of a plebiscite in
Valenzuela City on March 3, 2012, defines "deadly weapon" as:

Section 2. Firearm; Deadly weapon. — x x x.

Deadly weapon includes bladed instrument, hand grenades or other explosives, except pyrotechnics.

A bladed instrument is not covered by the prohibition when possession of the bladed instrument is
necessary to the occupation of the possessor or when it is used as a tool for legitimate activity.

In order to secure a conviction of an accused based on these provisions, the prosecution must prove that:
(a) the person is bearing, carrying, or transporting firearms or other deadly weapons; (b) such possession
occurs during the election period; and (c) the weapon is carried in a public place. Notably, it is essential
that possession of the deadly weapon in a public place be established beyond reasonable doubt. In his
petition, Gonzalez prayed for his acquittal in view of the serious doubts on the prosecution's evidence.
Particularly, he claims that PO1 Congson's narration of events was uncorroborated and in fact
contradicted by the physical evidence submitted in court, as well as by the testimonies of his witnesses,
corroborating his version of the events, which thereby puts into question PO1 Congson's credibility. 39

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The Court agrees, as the prosecution failed to dispel all reasonable doubts surrounding Gonzalez' arrest.

In particular, the prosecution failed to establish its allegation that, immediately before and at the time of
his arrest, Gonzalez was holding a knife in a public place — the critical elements of the crime of violation
of Section 261 (p) (q) of the OEC, as amended by Section 32 of RA 7166. Records show that aside from
the testimony of PO1 Congson, the prosecution did not present any other evidence that would
corroborate his version leading to Gonzalez' arrest. PO1 Congson claimed that at around 4:00 a.m., he
and the other police officers saw Gonzalez holding a fan knife in his right hand as he was walking out of
an alley where they eventually arrested him after a chase. 40 Gonzalez, on the other hand, presented
three (3) witnesses 41 — neighbors who lived below and across his house where he was arrested and
who were there at the time of his arrest. All these witnesses corroborated Gonzalez' version, particularly
on five (5) critical points, namely: (a) Gonzalez and his child were brought downstairs from his house
located at the second floor by the arresting persons; (b) his hands were tied behind his back as he was
being dragged downstairs; (c) his photograph was taken soon after the arrest took place at around 3:00
a.m.; and (d) there were a total of four (4) male persons who conducted the arrest. 42 One of the
witnesses even confirmed that Gonzalez' hands were tied by a brassiere. 43 In other words, all three (3)
witnesses rendered more credible the defense's claim that Gonzalez was arrested at his home; at the
very least, their testimonies rendered doubtful the prosecution's claim that police officers arrested
Gonzalez on the street in the regular performance of their duties. Unfortunately, the RTC simply brushed
these aside, thus leading to the erroneous conclusion that "[n]o one actually saw the factual
circumstances immediately preceding his arrest." 44

Moreover, while the information and the physical evidence 45 presented before the lower court both
revealed a kitchen knife, PO1 Congson categorically testified that he saw a fan knife. 46 A fan knife,
locally known as "balisong" 47 or "Batangas," 48 is a folding pocket knife with two handles counter-
rotating around the tang so that, when the knife is closed, the blade resides concealed inside the grooved
handles. 49 In contrast, a kitchen knife has one handle that does not fold, with its blade clearly visible.
Obviously, a fan knife is far from being the same as a kitchen knife. To the Court's mind, there is doubt as
to whether PO1 Congson had actually seen Gonzalez come out of an alley holding a fan knife.

Given the difference in the prosecution and defense's versions of Gonzalez' arrest, including the variance
regarding the physical evidence presented in court, it behooved the lower court to examine and calibrate
more carefully the evidence presented by both sides. As it was, the defense's evidence weighed more
than the prosecution's evidence. At the very least, their evidence were evenly balanced such that the
appreciation of such evidence called for the tilting of the scales in favor of Gonzalez. 50 After all, the
burden is on the prosecution to overcome the presumption of innocence of the accused. 51

In fine, the Court finds that the prosecution failed to prove beyond reasonable doubt that Gonzalez
committed the crime charged.

||| (Gonzalez y Dolendo v. People, G.R. No. 225709, [February 14, 2018])

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SECOND DIVISION

[G.R. No. 233702. June 20, 2018.]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. MANUEL GAMBOA y FRANCISCO @ "KUYA",

accused-appellant.

DECISION

PERLAS-BERNABE, J p:

Before the Court is an ordinary appeal 1 filed by accused-appellant Manuel Gamboa y Francisco @
"Kuya" (Gamboa) assailing the Decision 2 dated May 31, 2017 of the Court of Appeals (CA) in CA-G.R.
CR-HC No. 07857, which affirmed the Decision 3 dated October 15, 2015 of the Regional Trial Court of
Manila, Branch 2 (RTC) in Crim. Case Nos. 14-303187 and 14-303188 finding Gamboa guilty beyond
reasonable doubt of violating Sections 5 and 11, Article II of Republic Act No. (RA) 9165, 4 otherwise
known as the "Comprehensive Dangerous Drugs Act of 2002." DETACa

The Facts

This case stemmed from two (2) Informations 5 filed before the RTC charging Gamboa of the crime of
Illegal Sale and Illegal Possession of Dangerous Drugs, respectively defined and penalized under
Sections 5 and 11, Article II of RA 9165, the accusatory portions of which state:

Criminal Case No. 14-303187

That on or about January 31, 2014, in the City of Manila, Philippines, the said accused, not having been
authorized by law to sell, trade, deliver, transport or distribute or give away to another any dangerous
drug, did then and there willfully, unlawfully and knowingly sell or offer for sale to a police officer/poseur
buyer one (1) heat-sealed transparent plastic sachet containing ZERO POINT ZERO FOUR ONE (0.041)
gram of white crystalline substance containing Methamphetamine Hydrochloride, commonly known as
Shabu a dangerous drug.

Contrary to law. 6

Criminal Case No. 14-303188

That on or about January 31, 2014, in the City of Manila, Philippines, the said accused, not having been
authorized by law to possess any dangerous drug, did then and there willfully, unlawfully and knowingly
have in his possession and under his custody and control (1) heat-sealed transparent plastic sachet

64
containing ZERO POINT ZERO TWO ONE (0.021) gram, of white crystalline substance containing
Methamphetamine Hydrochloride, commonly known as Shabu a dangerous drug.

Contrary to law. 7

The prosecution alleged that on January 30, 2014, the chief of Manila Police District (MPD) gave
instructions to organize a buy-bust operation against one alias "Kuya" who was allegedly engaged in
rampant selling of shabu at Moriones St., corner Elena St., Tondo, Manila. In response thereto, a team
was formed where PO2 Richard Nieva (PO2 Nieva) was designated as the poseur-buyer, while Senior
Police Officer 1 8 Brigido Cardiño and Police Officer 3 Noel R. Benitez (PO3 Benitez) served as back-ups.
PO2 Nieva prepared the buy-bust money 9 and after coordinating with the Philippine Drug Enforcement
Agency (PDEA), the team, together with the confidential informant, proceeded to the target area the
following day. Upon arrival thereat, the informant approached Gamboa and introduced PO2 Nieva as a
buyer of shabu. The latter asked Gamboa if he could buy P200.00 worth of shabu, handing as payment
the buy-bust money, and in turn, Gamboa gave PO2 Nieva a plastic sachet containing white crystalline
substance. Afterwhich, PO2 Nieva removed his bull cap, the pre-arranged signal, prompting the back-up
officers to rush towards the scene and arrest Gamboa. Subsequently, a preventive search was conducted
on Gamboa, where they recovered another plastic sachet and the buy-bust money. PO2 Nieva
immediately marked the two (2) plastic sachets and inventoried the items at the place of arrest in the
presence of Gamboa and a media representative named Rene Crisostomo. Photographs of the
confiscated items were also taken by PO3 Benitez during the marking and inventory. Thereafter, PO2
Nieva brought Gamboa and the seized drugs to the police station where PO3 Benitez prepared the
Request for Laboratory Examination. 10 After securing the letter-request, PO2 Nieva delivered the same
to Police Chief Inspector Erickson Calabocal (PCI Calabocal), the forensic chemist at the Philippine
National Police (PNP) Crime Laboratory, who later on confirmed after examination that the substance
inside the seized items were positive for methamphetamine hydrochloride or shabu, 11 a dangerous drug.
12

For his part, Gamboa denied the allegations against him, claiming that on said day, he was just walking
along Pavia Street 13 when three (3) unidentified men arrested him for vagrancy because of his tattoos.
He was then brought to the precinct where police officers interrogated him and told him to point to
something. When he refused, photographs were taken and he was later on imprisoned. 14

The RTC Ruling

In a Decision 15 dated October 15, 2015, the RTC found Gamboa guilty beyond reasonable doubt of
violating Sections 5 and 11, Article II of RA 9165 and, accordingly, sentenced him as follows: (a) in Crim.
Case No. 14-303187, to suffer the penalty of life imprisonment and to pay a fine of P500,000.00; and (b)
in Crim. Case No. 14-303188, to suffer the penalty of imprisonment for an indeterminate term of twelve
(12) years and one (1) day, as minimum, to seventeen (17) years and four (4) months, as maximum, and
to pay a fine of P300,000.00. 16 It held that the prosecution sufficiently established all the elements of the
crimes of Illegal Sale and Possession of Dangerous Drugs and that, there was no break in the chain of
custody of the seized drugs given that: (a) PO2 Nieva immediately marked and inventoried the seized
items at the place of arrest; (b) Gamboa, an investigator, and a media representative were present during
the said proceedings; (c) PO2 Nieva personally turned over the items for examination to PCI Calabocal;
and (d) PCI Calabocal confirmed that the substance inside the sachets tested positive for shabu. 17 In
addition, the RTC ruled that while a representative from the Department of Justice (DOJ) and a barangay
official were absent during the inventory, the failure to strictly comply with Section 21, Article II of RA 9165
was not fatal since the police officers actually sought the presence of a media man to witness the
proceedings. 18

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Aggrieved, Gamboa appealed 19 to the CA.

The CA Ruling

In a Decision 20 dated May 31, 2017, the CA affirmed the RTC's ruling, 21 finding all the elements of the
crimes charged present as Gamboa was caught in flagrante delicto selling shabu and in possession of
another sachet containing the same substance. 22 The CA ruled that the integrity and evidentiary value of
the seized drugs were duly preserved, considering that the sachets remained in PO2 Nieva's possession
from the time of its confiscation until they were transmitted to the PNP Crime Laboratory for examination.
23 aDSIHc

Hence, this appeal.

The Issue before the Court

The issue for the Court's resolution is whether or not the CA correctly upheld Gamboa's conviction for
Illegal Sale and Illegal Possession of Dangerous Drugs.

The Court's Ruling

The appeal is meritorious.

At the outset, it must be stressed that an appeal in criminal cases opens the entire case for review and,
thus, it is the duty of the reviewing tribunal to correct, cite, and appreciate errors in the appealed judgment
whether they are assigned or unassigned. 24 "The appeal confers the appellate court full jurisdiction over
the case and renders such court competent to examine records, revise the judgment appealed from,
increase the penalty, and cite the proper provision of the penal law." 25

Here, Gamboa was charged with the crimes of Illegal Sale and Illegal Possession of Dangerous Drugs,
respectively defined and penalized under Sections 5 and 11, Article II of RA 9165. Notably, in order to
properly secure the conviction of an accused charged with Illegal Sale of Dangerous Drugs, the
prosecution must prove: (a) the identity of the buyer and the seller, the object, and the consideration; and
(b) the delivery of the thing sold and the payment. 26 Meanwhile, in instances wherein an accused is
charged with Illegal Possession of Dangerous Drugs, the prosecution must establish the following
elements to warrant his conviction: (a) the accused was in possession of an item or object identified as a
prohibited drug; (b) such possession was not authorized by law; and (c) the accused freely and
consciously possessed the said drug. 27

Case law states that in both instances, it is essential that the identity of the prohibited drug be established
with moral certainty, considering that the dangerous drug itself forms an integral part of the corpus delicti
of the crime. Thus, in order to obviate any unnecessary doubt on the identity of the dangerous drugs, the
prosecution has to show an unbroken chain of custody over the same and account for each link in the
chain of custody from the moment the drugs are seized up to its presentation in court as evidence of the
crime. 28

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Section 21, Article II of RA 9165 outlines the procedure which the police officers must follow when
handling the seized drugs in order to preserve their integrity and evidentiary value. 29 Under the said
section, prior to its amendment by RA 10640, 30 the apprehending team shall, among others,
immediately after seizure and confiscation conduct a physical inventory and photograph the seized items
in the presence of the accused or the person from whom the items were seized, or his representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy of the same, and the
seized drugs must be turned over to the PNP Crime Laboratory within twenty-four (24) hours from
confiscation for examination. 31 In the case of People v. Mendoza, 32 the Court stressed that "[w]ithout
the insulating presence of the representative from the media or the Department of Justice, or any elected
public official during the seizure and marking of the [seized drugs], the evils of switching, 'planting' or
contamination of the evidence that had tainted the buy-busts conducted under the regime of RA No. 6425
(Dangerous Drugs Act of 1972) again reared their ugly heads as to negate the integrity and credibility of
the seizure and confiscation of the [said drugs] that were evidence herein of the corpus delicti, and thus
adversely affected the trustworthiness of the incrimination of the accused. Indeed, the x x x presence of
such witnesses would have preserved an unbroken chain of custody." 33

The Court, however, clarified that under varied field conditions, strict compliance with the requirements of
Section 21, Article II of RA 9165 may not always be possible. 34 In fact, the Implementing Rules and
Regulations (IRR) of RA 9165 — which is now crystallized into statutory law with the passage of RA
10640 35 — provide that the said inventory and photography may be conducted at the nearest police
station or office of the apprehending team in instances of warrantless seizure, and that non-compliance
with the requirements of Section 21, Article II of RA 9165 — under justifiable grounds — will not render
void and invalid the seizure and custody over the seized items so long as the integrity and evidentiary
value of the seized items are properly preserved by the apprehending officer or team. 36 In other words,
the failure of the apprehending team to strictly comply with the procedure laid out in Section 21, Article II
of RA 9165 and its IRR does not ipso facto render the seizure and custody over the items as void and
invalid, provided that the prosecution satisfactorily proves that: (a) there is justifiable ground for non-
compliance; and (b) the integrity and evidentiary value of the seized items are properly preserved. 37 In
People v. Almorfe, 38 the Court explained that for the above-saving clause to apply, the prosecution must
explain the reasons behind the procedural lapses, and that the integrity and evidentiary value of the
seized evidence had nonetheless been preserved. 39 Also, in People v. De Guzman, 40 it was
emphasized that the justifiable ground for non-compliance must be proven as a fact, because the Court
cannot presume what these grounds are or that they even exist. 41

In this case, the Court finds that the police officers committed unjustified deviations from the prescribed
chain of custody rule, thereby putting into question the integrity and evidentiary value of the items
purportedly seized from Gamboa.

An examination of the records reveals that while the seized items were properly marked by PO2 Nieva
immediately upon confiscation at the place of the arrest and in the presence of Gamboa and a media
representative, the same was not done in the presence of any elected public official, as well as a
representative from the DOJ. In fact, such lapse was admitted by PO2 Nieva when he stated that:
ETHIDa

[Fiscal Maria Cielo Rubie O. Galicia (Fiscal Galicia)]:

You make the marking at the place. Were there barangay officials present during the marking of the
evidence, Mr. Witness?

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[PO2 Nieva]:

My other co-policemen went to the barangay office, ma'am.

xxx xxx xxx

Fiscal Galicia:

Were there barangay officials present?

[PO2 Nieva]:

No, ma'am.

[Fiscal Galicia]:

Why, Mr. Witness?

[PO2 Nieva]:

No one arrived to witness, ma'am.

xxx xxx xxx

Fiscal Galicia:

Who called, Mr. Witness for this barangay official?

[PO2 Nieva]:

We called for the barangay official by the other operatives but no one went to the area, ma'am.

[Fiscal Galicia]:

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 When you came to the area, what else did you do if any, Mr. Witness?

[PO2 Nieva]:

The one who arrived there was the media man Mr. Rene Crisostomo, ma'am.

[Fiscal Galicia]:

And what did he do if any in the area?

[PO2 Nieva]:

He witnessed the evidences and he signed the form of the seized evidence, ma'am.

xxx xxx xxx 42 (Emphases and underscoring supplied)

The law requires the presence of an elected public official, as well as representatives from the DOJ or the
media to ensure that the chain of custody rule is observed and thus, remove any suspicion of tampering,
switching, planting, or contamination of evidence which could considerably affect a case. However, minor
deviations may be excused in situations where a justifiable reason for non-compliance is explained. In
this case, despite the non-observance of the witness requirement, no plausible explanation was given by
the prosecution. In an attempt to justify their actions, PO2 Nieva testified that:

[Fiscal Galicia]:

You mentioned earlier that no one came to the area, no one from the barangay came to the area to
witness the marking of the evidence. What barangay did you try to call, Mr. Witness?

[PO2 Nieva]:

I was not the one who called but it was my companion because I was concentrated with the subject,
ma'am.

[Fiscal Galicia]:

Why Mr. Witness just call and why not go to the barangay and there marked the evidence?

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[PO2 Nieva]:

Violating the Section 21 of the Republic Act 9165 that if I transferred the evidences to the barangay
not in the crime scene.

[Fiscal Galicia]:

But there's no witness at the crime scene to witness the markings, no one in the barangay came?

[PO2 Nieva]:

Yes, ma'am but the media man arrived.

xxx xxx xxx 43 (Underscoring supplied)

It is well to note that the absence of these representatives does not per se render the confiscated items
inadmissible. 44 However, a justifiable reason for such failure or a showing of any genuine and sufficient
effort to secure the required witnesses under Section 21, Article II of RA 9165 must be adduced. 45 In
People v. Umipang, 46 the Court held that the prosecution must show that earnest efforts were employed
in contacting the representatives enumerated under the law for "[a] sheer statement that representatives
were unavailable — without so much as an explanation on whether serious attempts were employed to
look for other representatives, given the circumstances — is to be regarded as a flimsy excuse." 47
Verily, mere statements of unavailability, absent actual serious attempts to contact the barangay
chairperson, any member of the barangay council, or other elected public official are unacceptable as
justified grounds for non-compliance. 48 These considerations arise from the fact that police officers are
ordinarily given sufficient time — beginning from the moment they have received the information about
the activities of the accused until the time of his arrest — to prepare for a buy-bust operation and
consequently, make the necessary arrangements beforehand knowing full well that they would have to
strictly comply with the set procedure prescribed in Section 21, Article II of RA 9165. As such, police
officers are compelled not only to state reasons for their non-compliance, but must in fact, also convince
the Court that they exerted earnest efforts to comply with the mandated procedure, and that under the
given circumstance, their actions were reasonable. 49 cSEDTC

Thus, for failure of the prosecution to provide justifiable grounds or show that special circumstances exist
which would excuse their transgression, the Court is constrained to conclude that the integrity and
evidentiary value of the items purportedly seized from Gamboa have been compromised. It is settled that
in a prosecution for the sale and possession of dangerous drugs under RA 9165, the State carries the
heavy burden of proving not only the elements of the offense, but also to prove the integrity of the corpus
delicti failing in which, renders the evidence for the State insufficient to prove the guilt of the accused
beyond reasonable doubt. 50 Consequently, Gamboa's acquittal is in order.

As a final note, the Court finds it fitting to echo its recurring pronouncement in recent jurisprudence on the
subject matter:

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The Court strongly supports the campaign of the government against drug addiction and commends the
efforts of our law enforcement officers against those who would inflict this malediction upon our people,
especially the susceptible youth. But as demanding as this campaign may be, it cannot be more so than
the compulsions of the Bill of Rights for the protection of liberty of every individual in the realm, including
the basest of criminals. The Constitution covers with the mantle of its protection the innocent and the
guilty alike against any manner of high-handedness from the authorities, however praiseworthy their
intentions.

Those who are supposed to enforce the law are not justified in disregarding the right of the individual in
the name of order. Order is too high a price for the loss of liberty. x x x. 51

"In this light, prosecutors are strongly reminded that they have the positive duty to prove compliance with
the procedure set forth in Section 21[, Article II] of RA 9165, as amended. As such, they must have the
initiative to not only acknowledge but also justify any perceived deviations from the said procedure during
the proceedings before the trial court. Since compliance with this procedure is determinative of the
integrity and evidentiary value of the corpus delicti and ultimately, the fate of the liberty of the accused,
the fact that any issue regarding the same was not raised, or even threshed out in the court/s below,
would not preclude the appellate court, including this Court, from fully examining the records of the case if
only to ascertain whether the procedure had been completely complied with, and if not, whether justifiable
reasons exist to excuse any deviation. If no such reasons exist, then it is the appellate court's bounden
duty to acquit the accused, and perforce, overturn a conviction." 52

WHEREFORE, the appeal is GRANTED. The Decision dated May 31, 2017 of the Court of Appeals in
CA-G.R. CR-HC No. 07857 is hereby REVERSED and SET ASIDE. Accordingly, accused-appellant
Manuel Gamboa y Francisco @ "Kuya" is ACQUITTED of the crimes charged. The Director of the Bureau
of Corrections is ordered to cause his immediate release, unless he is being lawfully held in custody for
any other reason.

SO ORDERED.

||| (People v. Gamboa y Francisco, G.R. No. 233702, [June 20, 2018])

71
"Experience is the oracle of truth." 1

- James Madison

Before the Court are consolidated petitions 2 taken under Rule 65 of the Rules of Court, all of which
assail the constitutionality of the Pork Barrel System. Due to the complexity of the subject matter, the
Court shall heretofore discuss the system's conceptual underpinnings before detailing the particulars of
the constitutional challenge.

The Facts

I. Pork Barrel: General Concept.

"Pork Barrel" is political parlance of American-English origin. 3 Historically, its usage may be traced to the
degrading ritual of rolling out a barrel stuffed with pork to a multitude of black slaves who would cast their
famished bodies into the porcine feast to assuage their hunger with morsels coming from the generosity
of their well-fed master. 4 This practice was later compared to the actions of American legislators in trying
to direct federal budgets in favor of their districts. 5 While the advent of refrigeration has made the actual
pork barrel obsolete, it persists in reference to political bills that "bring home the bacon" to a legislator's
district and constituents. 6 In a more technical sense, "Pork Barrel" refers to an appropriation of
government spending meant for localized projects and secured solely or primarily to bring money to a
representative's district. 7 Some scholars on the subject further use it to refer to legislative control of local
appropriations. 8 ACTIHa

In the Philippines, "Pork Barrel" has been commonly referred to as lump-sum, discretionary funds of
Members of the Legislature, 9 although, as will be later discussed, its usage would evolve in reference to
certain funds of the Executive.

II. History of Congressional Pork Barrel in the Philippines.

A. Pre-Martial Law Era (1922-1972).

Act 3044, 10 or the Public Works Act of 1922, is considered 11 as the earliest form of "Congressional
Pork Barrel" in the Philippines since the utilization of the funds appropriated therein were subjected to
post-enactment legislator approval. Particularly, in the area of fund release, Section 3 12 provides that the
sums appropriated for certain public works projects 13 "shall be distributed . . . subject to the approval of
a joint committee elected by the Senate and the House of Representatives." "[T]he committee from each
House may [also] authorize one of its members to approve the distribution made by the Secretary of
Commerce and Communications." 14 Also, in the area of fund realignment, the same section provides

72
that the said secretary, "with the approval of said joint committee, or of the authorized members thereof,
may, for the purposes of said distribution, transfer unexpended portions of any item of appropriation
under this Act to any other item hereunder."

In 1950, it has been documented 15 that post-enactment legislator participation broadened from the
areas of fund release and realignment to the area of project identification. During that year, the
mechanics of the public works act was modified to the extent that the discretion of choosing projects was
transferred from the Secretary of Commerce and Communications to legislators. "For the first time, the
law carried a list of projects selected by Members of Congress, they 'being the representatives of the
people, either on their own account or by consultation with local officials or civil leaders.'" 16 During this
period, the pork barrel process commenced with local government councils, civil groups, and individuals
appealing to Congressmen or Senators for projects. Petitions that were accommodated formed part of a
legislator's allocation, and the amount each legislator would eventually get is determined in a caucus
convened by the majority. The amount was then integrated into the administration bill prepared by the
Department of Public Works and Communications. Thereafter, the Senate and the House of
Representatives added their own provisions to the bill until it was signed into law by the President — the
Public Works Act. 17 In the 1960's, however, pork barrel legislation reportedly ceased in view of the
stalemate between the House of Representatives and the Senate. 18 IEHaSc

B. Martial Law Era (1972-1986).

While the previous "Congressional Pork Barrel" was apparently discontinued in 1972 after Martial Law
was declared, an era when "one man controlled the legislature," 19 the reprieve was only temporary. By
1982, the Batasang Pambansa had already introduced a new item in the General Appropriations Act
(GAA) called the "Support for Local Development Projects" (SLDP) under the article on "National Aid to
Local Government Units". Based on reports, 20 it was under the SLDP that the practice of giving lump-
sum allocations to individual legislators began, with each assemblyman receiving P500,000.00.
Thereafter, assemblymen would communicate their project preferences to the Ministry of Budget and
Management for approval. Then, the said ministry would release the allocation papers to the Ministry of
Local Governments, which would, in turn, issue the checks to the city or municipal treasurers in the
assemblyman's locality. It has been further reported that "Congressional Pork Barrel" projects under the
SLDP also began to cover not only public works projects, or so-called "hard projects", but also "soft
projects", 21 or non-public works projects such as those which would fall under the categories of, among
others, education, health and livelihood. 22

C. Post-Martial Law Era:

Corazon Cojuangco Aquino Administration (1986-1992).

After the EDSA People Power Revolution in 1986 and the restoration of Philippine democracy,
"Congressional Pork Barrel" was revived in the form of the "Mindanao Development Fund" and the
"Visayas Development Fund" which were created with lump-sum appropriations of P480 Million and P240
Million, respectively, for the funding of development projects in the Mindanao and Visayas areas in 1989.
It has been documented 23 that the clamor raised by the Senators and the Luzon legislators for a similar
funding, prompted the creation of the "Countrywide Development Fund" (CDF) which was integrated into
the 1990 GAA 24 with an initial funding of P2.3 Billion to cover "small local infrastructure and other priority
community projects." SaHIEA

Under the GAAs for the years 1991 and 1992, 25 CDF funds were, with the approval of the President, to
be released directly to the implementing agencies but "subject to the submission of the required list of
projects and activities." Although the GAAs from 1990 to 1992 were silent as to the amounts of allocations

73
of the individual legislators, as well as their participation in the identification of projects, it has been
reported 26 that by 1992, Representatives were receiving P12.5 Million each in CDF funds, while
Senators were receiving P18 Million each, without any limitation or qualification, and that they could
identify any kind of project, from hard or infrastructure projects such as roads, bridges, and buildings to
"soft projects" such as textbooks, medicines, and scholarships. 27

D. Fidel Valdez Ramos (Ramos) Administration (1992-1998).

The following year, or in 1993, 28 the GAA explicitly stated that the release of CDF funds was to be made
upon the submission of the list of projects and activities identified by, among others, individual legislators.
For the first time, the 1993 CDF Article included an allocation for the Vice-President. 29 As such,
Representatives were allocated P12.5 Million each in CDF funds, Senators, P18 Million each, and the
Vice-President, P20 Million.

In 1994, 30 1995, 31 and 1996, 32 the GAAs contained the same provisions on project identification and
fund release as found in the 1993 CDF Article. In addition, however, the Department of Budget and
Management (DBM) was directed to submit reports to the Senate Committee on Finance and the House
Committee on Appropriations on the releases made from the funds. 33

Under the 1997 34 CDF Article, Members of Congress and the Vice-President, in consultation with the
implementing agency concerned, were directed to submit to the DBM the list of 50% of projects to be
funded from their respective CDF allocations which shall be duly endorsed by (a) the Senate President
and the Chairman of the Committee on Finance, in the case of the Senate, and (b) the Speaker of the
House of Representatives and the Chairman of the Committee on Appropriations, in the case of the
House of Representatives; while the list for the remaining 50% was to be submitted within six (6) months
thereafter. The same article also stated that the project list, which would be published by the DBM, 35
"shall be the basis for the release of funds" and that "[n]o funds appropriated herein shall be disbursed for
projects not included in the list herein required." CcaASE

The following year, or in 1998, 36 the foregoing provisions regarding the required lists and endorsements
were reproduced, except that the publication of the project list was no longer required as the list itself
sufficed for the release of CDF Funds.

The CDF was not, however, the lone form of "Congressional Pork Barrel" at that time. Other forms of
"Congressional Pork Barrel" were reportedly fashioned and inserted into the GAA (called "Congressional
Insertions" or "CIs") in order to perpetuate the administration's political agenda. 37 It has been articulated
that since CIs "formed part and parcel of the budgets of executive departments, they were not easily
identifiable and were thus harder to monitor." Nonetheless, the lawmakers themselves as well as the
finance and budget officials of the implementing agencies, as well as the DBM, purportedly knew about
the insertions. 38 Examples of these CIs are the Department of Education (DepEd) School Building Fund,
the Congressional Initiative Allocations, the Public Works Fund, the El Niño Fund, and the Poverty
Alleviation Fund. 39 The allocations for the School Building Fund, particularly, "shall be made upon prior
consultation with the representative of the legislative district concerned." 40 Similarly, the legislators had
the power to direct how, where and when these appropriations were to be spent. 41

E. Joseph Ejercito Estrada (Estrada) Administration (1998-2001).

74
In 1999, 42 the CDF was removed in the GAA and replaced by three (3) separate forms of CIs, namely,
the "Food Security Program Fund," 43 the "Lingap Para Sa Mahihirap Program Fund," 44 and the
"Rural/Urban Development Infrastructure Program Fund," 45 all of which contained a special provision
requiring "prior consultation" with the Members of Congress for the release of the funds.

It was in the year 2000 46 that the "Priority Development Assistance Fund" (PDAF) appeared in the GAA.
The requirement of "prior consultation with the respective Representative of the District" before PDAF
funds were directly released to the implementing agency concerned was explicitly stated in the 2000
PDAF Article. Moreover, realignment of funds to any expense category was expressly allowed, with the
sole condition that no amount shall be used to fund personal services and other personnel benefits. 47
The succeeding PDAF provisions remained the same in view of the re-enactment 48 of the 2000 GAA for
the year 2001.

F. Gloria Macapagal-Arroyo (Arroyo) Administration (2001-2010).

The 2002 49 PDAF Article was brief and straightforward as it merely contained a single special provision
ordering the release of the funds directly to the implementing agency or local government unit concerned,
without further qualifications. The following year, 2003, 50 the same single provision was present, with
simply an expansion of purpose and express authority to realign. Nevertheless, the provisions in the 2003
budgets of the Department of Public Works and Highways 51 (DPWH) and the DepEd 52 required prior
consultation with Members of Congress on the aspects of implementation delegation and project list
submission, respectively. In 2004, the 2003 GAA was re-enacted. 53 DHcSIT

In 2005, 54 the PDAF Article provided that the PDAF shall be used "to fund priority programs and projects
under the ten point agenda of the national government and shall be released directly to the implementing
agencies." It also introduced the program menu concept, 55 which is essentially a list of general programs
and implementing agencies from which a particular PDAF project may be subsequently chosen by the
identifying authority. The 2005 GAA was re-enacted 56 in 2006 and hence, operated on the same bases.
In similar regard, the program menu concept was consistently integrated into the 2007, 57 2008, 58 2009,
59 and 2010 60 GAAs.

Textually, the PDAF Articles from 2002 to 2010 were silent with respect to the specific amounts allocated
for the individual legislators, as well as their participation in the proposal and identification of PDAF
projects to be funded. In contrast to the PDAF Articles, however, the provisions under the DepEd School
Building Program and the DPWH budget, similar to its predecessors, explicitly required prior consultation
with the concerned Member of Congress 61 anent certain aspects of project implementation.

Significantly, it was during this era that provisions which allowed formal participation of non-governmental
organizations (NGO) in the implementation of government projects were introduced. In the Supplemental
Budget for 2006, with respect to the appropriation for school buildings, NGOs were, by law, encouraged
to participate. For such purpose, the law stated that "the amount of at least P250 Million of the P500
Million allotted for the construction and completion of school buildings shall be made available to NGOs
including the Federation of Filipino-Chinese Chambers of Commerce and Industry, Inc. for its "Operation
Barrio School" program[,] with capability and proven track records in the construction of public school
buildings . . . ." 62 The same allocation was made available to NGOs in the 2007 and 2009 GAAs under
the DepEd Budget. 63 Also, it was in 2007 that the Government Procurement Policy Board 64 (GPPB)
issued Resolution No. 12-2007 dated June 29, 2007 (GPPB Resolution 12-2007), amending the
implementing rules and regulations 65 of RA 9184, 66 the Government Procurement Reform Act, to
include, as a form of negotiated procurement, 67 the procedure whereby the Procuring Entity 68 (the

75
implementing agency) may enter into a memorandum of agreement with an NGO, providedthat "an
appropriation law or ordinance earmarks an amount to be specifically contracted out to NGOs." 69
ADEacC

G. Present Administration (2010-Present).

Differing from previous PDAF Articles but similar to the CDF Articles, the 2011 70 PDAF Article included
an express statement on lump-sum amounts allocated for individual legislators and the Vice-President:
Representatives were given P70 Million each, broken down into P40 Million for "hard projects" and P30
Million for "soft projects"; while P200 Million was given to each Senator as well as the Vice-President, with
a P100 Million allocation each for "hard" and "soft projects." Likewise, a provision on realignment of funds
was included, but with the qualification that it may be allowed only once. The same provision also allowed
the Secretaries of Education, Health, Social Welfare and Development, Interior and Local Government,
Environment and Natural Resources, Energy, and Public Works and Highways to realign PDAF Funds,
with the further conditions that: (a) realignment is within the same implementing unit and same project
category as the original project, for infrastructure projects; (b) allotment released has not yet been
obligated for the original scope of work, and (c) the request for realignment is with the concurrence of the
legislator concerned. 71

In the 2012 72 and 2013 73 PDAF Articles, it is stated that the "[i]dentification of projects and/or
designation of beneficiaries shall conform to the priority list, standard or design prepared by each
implementing agency [(priority list requirement)] . . . ." However, as practiced, it would still be the
individual legislator who would choose and identify the project from the said priority list. 74

Provisions on legislator allocations 75 as well as fund realignment 76 were included in the 2012 and 2013
PDAF Articles; but the allocation for the Vice-President, which was pegged at P200 Million in the 2011
GAA, had been deleted. In addition, the 2013 PDAF Article now allowed LGUs to be identified as
implementing agencies if they have the technical capability to implement the projects. 77 Legislators were
also allowed to identify programs/projects, except for assistance to indigent patients and scholarships,
outside of his legislative district provided that he secures the written concurrence of the legislator of the
intended outside-district, endorsed by the Speaker of the House. 78 Finally, any realignment of PDAF
funds, modification and revision of project identification, as well as requests for release of funds, were all
required to be favorably endorsed by the House Committee on Appropriations and the Senate Committee
on Finance, as the case may be. 79

III. History of Presidential Pork Barrel in the Philippines.

While the term "Pork Barrel" has been typically associated with lump-sum, discretionary funds of
Members of Congress, the present cases and the recent controversies on the matter have, however,
shown that the term's usage has expanded to include certain funds of the President such as the
Malampaya Funds and the Presidential Social Fund. IDcAHT

On the one hand, the Malampaya Funds was created as a special fund under Section 8 80 of Presidential
Decree No. (PD) 910, 81 issued by then President Ferdinand E. Marcos (Marcos) on March 22, 1976. In
enacting the said law, Marcos recognized the need to set up a special fund to help intensify, strengthen,
and consolidate government efforts relating to the exploration, exploitation, and development of
indigenous energy resources vital to economic growth. 82 Due to the energy-related activities of the
government in the Malampaya natural gas field in Palawan, or the "Malampaya Deep Water Gas-to-

76
Power Project", 83 the special fund created under PD 910 has been currently labeled as Malampaya
Funds.

On the other hand the Presidential Social Fund was created under Section 12, Title IV 84 of PD 1869, 85
or the Charter of the Philippine Amusement and Gaming Corporation (PAGCOR). PD 1869 was similarly
issued by Marcos on July 11, 1983. More than two (2) years after, he amended PD 1869 and accordingly
issued PD 1993 on October 31, 1985, 86 amending Section 12 87 of the former law. As it stands, the
Presidential Social Fund has been described as a special funding facility managed and administered by
the Presidential Management Staff through which the President provides direct assistance to priority
programs and projects not funded under the regular budget. It is sourced from the share of the
government in the aggregate gross earnings of PAGCOR. 88

IV. Controversies in the Philippines.

Over the decades, "pork" funds in the Philippines have increased tremendously, 89 owing in no small part
to previous Presidents who reportedly used the "Pork Barrel" in order to gain congressional support. 90 It
was in 1996 when the first controversy surrounding the "Pork Barrel" erupted. Former Marikina City
Representative Romeo Candazo (Candazo), then an anonymous source, "blew the lid on the huge sums
of government money that regularly went into the pockets of legislators in the form of kickbacks." 91 He
said that "the kickbacks were 'SOP' (standard operating procedure) among legislators and ranged from a
low 19 percent to a high 52 percent of the cost of each project, which could be anything from dredging, rip
rapping, asphalting, concreting, and construction of school buildings." 92 "Other sources of kickbacks that
Candazo identified were public funds intended for medicines and textbooks. A few days later, the tale of
the money trail became the banner story of the [Philippine Daily] Inquirer issue of [August] 13, 1996,
accompanied by an illustration of a roasted pig." 93 "The publication of the stories, including those about
congressional initiative allocations of certain lawmakers, including P3.6 [B]illion for a [C]ongressman,
sparked public outrage." 94

Thereafter, or in 2004, several concerned citizens sought the nullification of the PDAF as enacted in the
2004 GAA for being unconstitutional. Unfortunately, for lack of "any pertinent evidentiary support that
illegal misuse of PDAF in the form of kickbacks has become a common exercise of unscrupulous
Members of Congress," the petition was dismissed. 95

Recently, or in July of the present year, the National Bureau of Investigation (NBI) began its probe into
allegations that "the government has been defrauded of some P10 Billion over the past 10 years by a
syndicate using funds from the pork barrel of lawmakers and various government agencies for scores of
ghost projects." 96 The investigation was spawned by sworn affidavits of six (6) whistle-blowers who
declared that JLN Corporation — "JLN" standing for Janet Lim Napoles (Napoles) — had swindled billions
of pesos from the public coffers for "ghost projects" using no fewer than 20 dummy NGOs for an entire
decade. While the NGOs were supposedly the ultimate recipients of PDAF funds, the whistle-blowers
declared that the money was diverted into Napoles' private accounts. 97 Thus, after its investigation on
the Napoles controversy, criminal complaints were filed before the Office of the Ombudsman, charging
five (5) lawmakers for Plunder, and three (3) other lawmakers for Malversation, Direct Bribery, and
Violation of the Anti-Graft and Corrupt Practices Act. Also recommended to be charged in the complaints
are some of the lawmakers' chiefs-of-staff or representatives, the heads and other officials of three (3)
implementing agencies, and the several presidents of the NGOs set up by Napoles. 98 cDSAEI

On August 16, 2013, the Commission on Audit (CoA) released the results of a three-year audit
investigation 99 covering the use of legislators' PDAF from 2007 to 2009, or during the last three (3) years
of the Arroyo administration. The purpose of the audit was to determine the propriety of releases of funds

77
under PDAF and the Various Infrastructures including Local Projects (VILP) 100 by the DBM, the
application of these funds and the implementation of projects by the appropriate implementing agencies
and several government-owned-and-controlled corporations (GOCCs). 101 The total releases covered by
the audit amounted to P8.374 Billion in PDAF and P32.664 Billion in VILP, representing 58% and 32%,
respectively, of the total PDAF and VILP releases that were found to have been made nationwide during
the audit period. 102 Accordingly, the CoA's findings contained in its Report No. 2012-03 (CoA Report),
entitled "Priority Development Assistance Fund (PDAF) and Various Infrastructures including Local
Projects (VILP)," were made public, the highlights of which are as follows: 103

• Amounts released for projects identified by a considerable number of legislators significantly exceeded
their respective allocations.

• Amounts were released for projects outside of legislative districts of sponsoring members of the Lower
House.

• Total VILP releases for the period exceeded the total amount appropriated under the 2007 to 2009
GAAs.

• Infrastructure projects were constructed on private lots without these having been turned over to the
government.

• Significant amounts were released to [implementing agencies] without the latter's endorsement and
without considering their mandated functions, administrative and technical capabilities to implement
projects. SAHITC

• Implementation of most livelihood projects was not undertaken by the [implementing agencies]
themselves but by [NGOs] endorsed by the proponent legislators to which the Funds were transferred.

• The funds were transferred to the NGOs in spite of the absence of any appropriation law or ordinance.

• Selection of the NGOs were not compliant with law and regulations.

• Eighty-Two (82) NGOs entrusted with implementation of seven hundred seventy two (772) projects
amount to [P]6.156 Billion were either found questionable, or submitted questionable/spurious
documents, or failed to liquidate in whole or in part their utilization of the Funds.

• Procurement by the NGOs, as well as some implementing agencies, of goods and services reportedly
used in the projects were not compliant with law.

As for the "Presidential Pork Barrel", whistle-blowers alleged that "[a]t least P900 Million from royalties in
the operation of the Malampaya gas project off Palawan province intended for agrarian reform
beneficiaries has gone into a dummy [NGO]." 104 According to incumbent CoA Chairperson Maria Gracia

78
Pulido Tan (CoA Chairperson), the CoA is, as of this writing, in the process of preparing "one
consolidated report" on the Malampaya Funds. 105

V. The Procedural Antecedents.

Spurred in large part by the findings contained in the CoA Report and the Napoles controversy, several
petitions were lodged before the Court similarly seeking that the "Pork Barrel System" be declared
unconstitutional. To recount, the relevant procedural antecedents in these cases are as follows: DHIcET

On August 28, 2013, petitioner Samson S. Alcantara (Alcantara), President of the Social Justice Society,
filed a Petition for Prohibition of even date under Rule 65 of the Rules of Court (Alcantara Petition),
seeking that the "Pork Barrel System" be declared unconstitutional, and a writ of prohibition be issued
permanently restraining respondents Franklin M. Drilon and Feliciano S. Belmonte, Jr., in their respective
capacities as the incumbent Senate President and Speaker of the House of Representatives, from further
taking any steps to enact legislation appropriating funds for the "Pork Barrel System," in whatever form
and by whatever name it may be called, and from approving further releases pursuant thereto. 106 The
Alcantara Petition was docketed as G.R. No. 208493.

On September 3, 2013, petitioners Greco Antonious Beda B. Belgica, Jose L. Gonzalez, Reuben M.
Abante, Quintin Paredes San Diego (Belgica, et al.), and Jose M. Villegas, Jr. (Villegas) filed an Urgent
Petition for Certiorari and Prohibition with Prayer for the Immediate Issuance of Temporary Restraining
Order (TRO) and/or Writ of Preliminary Injunction dated August 27, 2013 under Rule 65 of the Rules of
Court (Belgica Petition), seeking that the annual "Pork Barrel System," presently embodied in the
provisions of the GAA of 2013 which provided for the 2013 PDAF, and the Executive's lump-sum,
discretionary funds, such as the Malampaya Funds and the Presidential Social Fund, 107 be declared
unconstitutional and null and void for being acts constituting grave abuse of discretion. Also, they pray
that the Court issue a TRO against respondents Paquito N. Ochoa, Jr., Florencio B. Abad (Secretary
Abad) and Rosalia V. De Leon, in their respective capacities as the incumbent Executive Secretary,
Secretary of the Department of Budget and Management (DBM), and National Treasurer, or their agents,
for them to immediately cease any expenditure under the aforesaid funds. Further, they pray that the
Court order the foregoing respondents to release to the CoA and to the public: (a) "the complete
schedule/list of legislators who have availed of their PDAF and VILP from the years 2003 to 2013,
specifying the use of the funds, the project or activity and the recipient entities or individuals, and all
pertinent data thereto"; and (b) "the use of the Executive's [lump-sum, discretionary] funds, including the
proceeds from the . . . Malampaya Fund[s] [and] remittances from the [PAGCOR] . . . from 2003 to 2013,
specifying the . . . project or activity and the recipient entities or individuals, and all pertinent data thereto."
108 Also, they pray for the "inclusion in budgetary deliberations with the Congress of all presently off-
budget, [lump-sum], discretionary funds including, but not limited to, proceeds from the Malampaya
Fund[s] [and] remittances from the [PAGCOR]." 109 The Belgica Petition was docketed as G.R. No.
208566. 110

Lastly, on September 5, 2013, petitioner Pedrito M. Nepomuceno (Nepomuceno), filed a Petition dated
August 23, 2012 (Nepomuceno Petition), seeking that the PDAF be declared unconstitutional, and a
cease and desist order be issued restraining President Benigno Simeon S. Aquino III (President Aquino)
and Secretary Abad from releasing such funds to Members of Congress and, instead, allow their release
to fund priority projects identified and approved by the Local Development Councils in consultation with
the executive departments, such as the DPWH, the Department of Tourism, the Department of Health,
the Department of Transportation, and Communication and the National Economic Development
Authority. 111 The Nepomuceno Petition was docketed as UDK-14951. 112 acHTIC

79
On September 10, 2013, the Court issued a Resolution of even date (a) consolidating all cases; (b)
requiring public respondents to comment on the consolidated petitions; (c) issuing a TRO (September 10,
2013 TRO) enjoining the DBM, National Treasurer, the Executive Secretary, or any of the persons acting
under their authority from releasing (1) the remaining PDAF allocated to Members of Congress under the
GAA of 2013, and (2) Malampaya Funds under the phrase "for such other purposes as may be hereafter
directed by the President" pursuant to Section 8 of PD 910 but not for the purpose of "financ[ing] energy
resource development and exploitation programs and projects of the government" under the same
provision; and (d) setting the consolidated cases for Oral Arguments on October 8, 2013.

On September 23, 2013, the Office of the Solicitor General (OSG) filed a Consolidated Comment
(Comment) of even date before the Court, seeking the lifting, or in the alternative, the partial lifting with
respect to educational and medical assistance purposes, of the Court's September 10, 2013 TRO, and
that the consolidated petitions be dismissed for lack of merit. 113

On September 24, 2013, the Court issued a Resolution of even date directing petitioners to reply to the
Comment.

Petitioners, with the exception of Nepomuceno, filed their respective replies to the Comment: (a) on
September 30, 2013, Villegas filed a separate Reply dated September 27, 2013 (Villegas Reply); (b) on
October 1, 2013, Belgica, et al. filed a Reply dated September 30, 2013 (Belgica Reply); and (c) on
October 2, 2013, Alcantara filed a Reply dated October 1, 2013.

On October 1, 2013, the Court issued an Advisory providing for the guidelines to be observed by the
parties for the Oral Arguments scheduled on October 8, 2013. In view of the technicality of the issues
material to the present cases, incumbent Solicitor General Francis H. Jardeleza (Solicitor General) was
directed to bring with him during the Oral Arguments representative/s from the DBM and Congress who
would be able to competently and completely answer questions related to, among others, the budgeting
process and its implementation. Further, the CoA Chairperson was appointed as amicus curiae and
thereby requested to appear before the Court during the Oral Arguments. TAHCEc

On October 8 and 10, 2013, the Oral Arguments were conducted. Thereafter, the Court directed the
parties to submit their respective memoranda within a period of seven (7) days, or until October 17, 2013,
which the parties subsequently did.

The Issues Before the Court

Based on the pleadings, and as refined during the Oral Arguments, the following are the main issues for
the Court's resolution:

I. Procedural Issues.

Whether or not (a) the issues raised in the consolidated petitions involve an actual and justiciable
controversy; (b) the issues raised in the consolidated petitions are matters of policy not subject to judicial
review; (c) petitioners have legal standing to sue; and (d) the Court's Decision dated August 19, 1994 in
G.R. Nos. 113105, 113174, 113766, and 113888, entitled "Philippine Constitution Association v.
Enriquez" 114 (Philconsa) and Decision dated April 24, 2012 in G.R. No. 164987, entitled "Lawyers

80
Against Monopoly and Poverty v. Secretary of Budget and Management" 115 (LAMP) bar the re-litigation
of the issue of constitutionality of the "Pork Barrel System" under the principles of res judicata and stare
decisis.

II. Substantive Issues on the "Congressional Pork Barrel."

Whether or not the 2013 PDAF Article and all other Congressional Pork Barrel Laws similar thereto are
unconstitutional considering that they violate the principles of/constitutional provisions on (a) separation of
powers; (b) non-delegability of legislative power; (c) checks and balances; (d) accountability; (e) political
dynasties; and (f) local autonomy.

III. Substantive Issues on the "Presidential Pork Barrel."

Whether or not the phrases (a) "and for such other purposes as may be hereafter directed by the
President" under Section 8 of PD 910, 116 relating to the Malampaya Funds, and (b) "to finance the
priority infrastructure development projects and to finance the restoration of damaged or destroyed
facilities due to calamities, as may be directed and authorized by the Office of the President of the
Philippines" under Section 12 of PD 1869, as amended by PD 1993, relating to the Presidential Social
Fund, are unconstitutional insofar as they constitute undue delegations of legislative power.

These main issues shall be resolved in the order that they have been stated. In addition, the Court shall
also tackle certain ancillary issues as prompted by the present cases. cHaICD

The Court's Ruling

The petitions are partly granted.

I. Procedural Issues.

The prevailing rule in constitutional litigation is that no question involving the constitutionality or validity of
a law or governmental act may be heard and decided by the Court unless there is compliance with the
legal requisites for judicial inquiry, 117 namely: (a) there must be an actual case or controversy calling for
the exercise of judicial power; (b) the person challenging the act must have the standing to question the
validity of the subject act or issuance; (c) the question of constitutionality must be raised at the earliest
opportunity; and (d) the issue of constitutionality must be the very lis mota of the case. 118 Of these
requisites, case law states that the first two are the most important 119 and, therefore, shall be discussed
forthwith.

A. Existence of an Actual Case or Controversy.

By constitutional fiat, judicial power operates only when there is an actual case or controversy. 120 This is
embodied in Section 1, Article VIII of the 1987 Constitution which pertinently states that "[j]udicial power
includes the duty of the courts of justice to settle actual controversies involving rights which are legally

81
demandable and enforceable . . . ." Jurisprudence provides that an actual case or controversy is one
which "involves a conflict of legal rights, an assertion of opposite legal claims, susceptible of judicial
resolution as distinguished from a hypothetical or abstract difference or dispute." 121 In other words,
"[t]here must be a contrariety of legal rights that can be interpreted and enforced on the basis of existing
law and jurisprudence." 122 Related to the requirement of an actual case or controversy is the
requirement of "ripeness," meaning that the questions raised for constitutional scrutiny are already ripe for
adjudication. "A question is ripe for adjudication when the act being challenged has had a direct adverse
effect on the individual challenging it. It is a prerequisite that something had then been accomplished or
performed by either branch before a court may come into the picture, and the petitioner must allege the
existence of an immediate or threatened injury to itself as a result of the challenged action." 123 "Withal,
courts will decline to pass upon constitutional issues through advisory opinions, bereft as they are of
authority to resolve hypothetical or moot questions." 124

Based on these principles, the Court finds that there exists an actual and justiciable controversy in these
cases.

The requirement of contrariety of legal rights is clearly satisfied by the antagonistic positions of the parties
on the constitutionality of the "Pork Barrel System." Also, the questions in these consolidated cases are
ripe for adjudication since the challenged funds and the provisions allowing for their utilization — such as
the 2013 GAA for the PDAF, PD 910 for the Malampaya Funds and PD 1869, as amended by PD 1993,
for the Presidential Social Fund — are currently existing and operational; hence, there exists an
immediate or threatened injury to petitioners as a result of the unconstitutional use of these public funds.
cEAaIS

As for the PDAF, the Court must dispel the notion that the issues related thereto had been rendered moot
and academic by the reforms undertaken by respondents. A case becomes moot when there is no more
actual controversy between the parties or no useful purpose can be served in passing upon the merits.
125 Differing from this description, the Court observes that respondents' proposed line-item budgeting
scheme would not terminate the controversy nor diminish the useful purpose for its resolution since said
reform is geared towards the 2014 budget, and not the 2013 PDAF Article which, being a distinct subject
matter, remains legally effective and existing. Neither will the President's declaration that he had already
"abolished the PDAF" render the issues on PDAF moot precisely because the Executive branch of
government has no constitutional authority to nullify or annul its legal existence. By constitutional design,
the annulment or nullification of a law may be done either by Congress, through the passage of a
repealing law, or by the Court, through a declaration of unconstitutionality. Instructive on this point is the
following exchange between Associate Justice Antonio T. Carpio (Justice Carpio) and the Solicitor
General during the Oral Arguments: 126

Justice Carpio:

[T]he President has taken an oath to faithfully execute the law, 127 correct?

Solicitor General Jardeleza:

Yes, Your Honor.

Justice Carpio:

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And so the President cannot refuse to implement the General Appropriations Act, correct?

Solicitor General Jardeleza:

Well, that is our answer, Your Honor. In the case, for example of the PDAF, the President has a duty to
execute the laws but in the face of the outrage over PDAF, the President was saying, "I am not sure that I
will continue the release of the soft projects," and that started, Your Honor. Now, whether or not that . . .
(interrupted)

Justice Carpio:

Yeah. I will grant the President if there are anomalies in the project, he has the power to stop the releases
in the meantime, to investigate, and that is Section [38] of Chapter 5 of Book 6 of the Revised
Administrative Code 128 . . . . So at most the President can suspend, now if the President believes that
the PDAF is unconstitutional, can he just refuse to implement it?

Solicitor General Jardeleza:

No, Your Honor, as we were trying to say in the specific case of the PDAF because of the CoA Report,
because of the reported irregularities and this Court can take judicial notice, even outside, outside of the
COA Report, you have the report of the whistle-blowers, the President was just exercising precisely the
duty . . . .

xxx xxx xxx

Justice Carpio:

Yes, and that is correct. You've seen the CoA Report, there are anomalies, you stop and investigate, and
prosecute, he has done that. But, does that mean that PDAF has been repealed?

Solicitor General Jardeleza: cCSDTI

No, Your Honor . . . .

xxx xxx xxx

Justice Carpio:

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So that PDAF can be legally abolished only in two (2) cases. Congress passes a law to repeal it, or this
Court declares it unconstitutional, correct?

Solictor General Jardeleza:

Yes, Your Honor.

Justice Carpio:

The President has no power to legally abolish PDAF. (Emphases supplied)

Even on the assumption of mootness, jurisprudence, nevertheless, dictates that "the 'moot and academic'
principle is not a magical formula that can automatically dissuade the Court in resolving a case." The
Court will decide cases, otherwise moot, if: first, there is a grave violation of the Constitution; second, the
exceptional character of the situation and the paramount public interest is involved; third, when the
constitutional issue raised requires formulation of controlling principles to guide the bench, the bar, and
the public; and fourth, the case is capable of repetition yet evading review. 129

The applicability of the first exception is clear from the fundamental posture of petitioners — they
essentially allege grave violations of the Constitution with respect to, inter alia, the principles of separation
of powers, non-delegability of legislative power, checks and balances, accountability and local autonomy.

The applicability of the second exception is also apparent from the nature of the interests involved — the
constitutionality of the very system within which significant amounts of public funds have been and
continue to be utilized and expended undoubtedly presents a situation of exceptional character as well as
a matter of paramount public interest. The present petitions, in fact, have been lodged at a time when the
system's flaws have never before been magnified. To the Court's mind, the coalescence of the CoA
Report, the accounts of numerous whistle-blowers, and the government's own recognition that reforms
are needed "to address the reported abuses of the PDAF" 130 demonstrates a prima facie pattern of
abuse which only underscores the importance of the matter. It is also by this finding that the Court finds
petitioners' claims as not merely theorized, speculative or hypothetical. Of note is the weight accorded by
the Court to the findings made by the CoA which is the constitutionally-mandated audit arm of the
government. In Delos Santos v. CoA, 131 a recent case wherein the Court upheld the CoA's disallowance
of irregularly disbursed PDAF funds, it was emphasized that:

[T]he CoA is endowed with enough latitude to determine, prevent, and disallow irregular, unnecessary,
excessive, extravagant or unconscionable expenditures of government funds. It is tasked to be vigilant
and conscientious in safeguarding the proper use of the government's, and ultimately the people's,
property. The exercise of its general audit power is among the constitutional mechanisms that gives life to
the check and balance system inherent in our form of government. IAEcCT

[I]t is the general policy of the Court to sustain the decisions of administrative authorities, especially one
which is constitutionally-created, such as the CoA, not only on the basis of the doctrine of separation of
powers but also for their presumed expertise in the laws they are entrusted to enforce. Findings of

84
administrative agencies are accorded not only respect but also finality when the decision and order are
not tainted with unfairness or arbitrariness that would amount to grave abuse of discretion. It is only when
the CoA has acted without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack
or excess of jurisdiction, that this Court entertains a petition questioning its rulings. . . . . (Emphases
supplied)

Thus, if only for the purpose of validating the existence of an actual and justiciable controversy in these
cases, the Court deems the findings under the CoA Report to be sufficient.

The Court also finds the third exception to be applicable largely due to the practical need for a definitive
ruling on the system's constitutionality. As disclosed during the Oral Arguments, the CoA Chairperson
estimates that thousands of notices of disallowances will be issued by her office in connection with the
findings made in the CoA Report. In this relation, Associate Justice Marvic Mario Victor F. Leonen
(Justice Leonen) pointed out that all of these would eventually find their way to the courts. 132
Accordingly, there is a compelling need to formulate controlling principles relative to the issues raised
herein in order to guide the bench, the bar, and the public, not just for the expeditious resolution of the
anticipated disallowance cases, but more importantly, so that the government may be guided on how
public funds should be utilized in accordance with constitutional principles.

Finally, the application of the fourth exception is called for by the recognition that the preparation and
passage of the national budget is, by constitutional imprimatur, an affair of annual occurrence. 133 The
relevance of the issues before the Court does not cease with the passage of a "PDAF-free budget for
2014." 134 The evolution of the "Pork Barrel System," by its multifarious iterations throughout the course
of history, lends a semblance of truth to petitioners' claim that "the same dog will just resurface wearing a
different collar." 135 In Sanlakas v. Executive Secretary, 136 the government had already backtracked on
a previous course of action yet the Court used the "capable of repetition but evading review" exception in
order "[t]o prevent similar questions from re-emerging." 137 The situation similarly holds true to these
cases. Indeed, the myriad of issues underlying the manner in which certain public funds are spent, if not
resolved at this most opportune time, are capable of repetition and hence, must not evade judicial review.

B. Matters of Policy: the Political Question Doctrine.

The "limitation on the power of judicial review to actual cases and controversies" carries the assurance
that "the courts will not intrude into areas committed to the other branches of government." 138
Essentially, the foregoing limitation is a restatement of the political question doctrine which, under the
classic formulation of Baker v. Carr, 139 applies when there is found, among others, "a textually
demonstrable constitutional commitment of the issue to a coordinate political department," "a lack of
judicially discoverable and manageable standards for resolving it" or "the impossibility of deciding without
an initial policy determination of a kind clearly for non-judicial discretion." Cast against this light,
respondents submit that the "[t]he political branches are in the best position not only to perform budget-
related reforms but also to do them in response to the specific demands of their constituents" and, as
such, "urge [the Court] not to impose a solution at this stage." 140

The Court must deny respondents' submission. cdrep

Suffice it to state that the issues raised before the Court do not present political but legal questions which
are within its province to resolve. A political question refers to "those questions which, under the
Constitution, are to be decided by the people in their sovereign capacity, or in regard to which full
discretionary authority has been delegated to the Legislature or executive branch of the Government. It is

85
concerned with issues dependent upon the wisdom, not legality, of a particular measure." 141 The
intrinsic constitutionality of the "Pork Barrel System" is not an issue dependent upon the wisdom of the
political branches of government but rather a legal one which the Constitution itself has commanded the
Court to act upon. Scrutinizing the contours of the system along constitutional lines is a task that the
political branches of government are incapable of rendering precisely because it is an exercise of judicial
power. More importantly, the present Constitution has not only vested the Judiciary the right to exercise
judicial power but essentially makes it a duty to proceed therewith. Section 1, Article VIII of the 1987
Constitution cannot be any clearer: "The judicial power shall be vested in one Supreme Court and in such
lower courts as may be established by law. [It] includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and enforceable, and to determine whether
or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government." In Estrada v. Desierto, 142 the expanded concept of
judicial power under the 1987 Constitution and its effect on the political question doctrine was explained
as follows: 143

To a great degree, the 1987 Constitution has narrowed the reach of the political question doctrine when it
expanded the power of judicial review of this court not only to settle actual controversies involving rights
which are legally demandable and enforceable but also to determine whether or not there has been a
grave abuse of discretion amounting to lack or excess of ,jurisdiction on the part of any branch or
instrumentality of government. Heretofore, the judiciary has focused on the "thou shalt not's" of the
Constitution directed against the exercise of its jurisdiction. With the new provision, however, courts are
given a greater prerogative to determine what it can do to prevent grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of government. Clearly, the new
provision did not just grant the Court power of doing nothing. . . . (Emphases supplied)

It must also be borne in mind that "when the judiciary mediates to allocate constitutional boundaries, it
does not assert any superiority over the other departments; does not in reality nullify or invalidate an act
of the legislature [or the executive], but only asserts the solemn and sacred obligation assigned to it by
the Constitution." 144 To a great extent, the Court is laudably cognizant of the reforms undertaken by its
co-equal branches of government. But it is by constitutional force that the Court must faithfully perform its
duty. Ultimately, it is the Court's avowed intention that a resolution of these cases would not arrest or in
any manner impede the endeavors of the two other branches but, in fact, help ensure that the pillars of
change are erected on firm constitutional grounds. After all, it is in the best interest of the people that
each great branch of government, within its own sphere, contributes its share towards achieving a holistic
and genuine solution to the problems of society. For all these reasons, the Court cannot heed
respondents' plea for judicial restraint.

C. Locus Standi.

"The gist of the question of standing is whether a party alleges such personal stake in the outcome of the
controversy as to assure that concrete adverseness which sharpens the presentation of issues upon
which the court depends for illumination of difficult constitutional questions. Unless a person is injuriously
affected in any of his constitutional rights by the operation of statute or ordinance, he has no standing."
145 EHCDSI

Petitioners have come before the Court in their respective capacities as citizen-taxpayers and
accordingly, assert that they "dutifully contribute to the coffers of the National Treasury." 146 Clearly, as
taxpayers, they possess the requisite standing to question the validity of the existing "Pork Barrel System"
under which the taxes they pay have been and continue to be utilized. It is undeniable that petitioners, as
taxpayers, are bound to suffer from the unconstitutional usage of public funds, if the Court so rules.
Invariably, taxpayers have been allowed to sue where there is a claim that public funds are illegally

86
disbursed or that public money is being deflected to any improper purpose, or that public funds are
wasted through the enforcement of an invalid or unconstitutional law, 147 as in these cases.

Moreover, as citizens, petitioners have equally fulfilled the standing requirement given that the issues
they have raised may be classified as matters "of transcendental importance, of overreaching significance
to society, or of paramount public interest." 148 The CoA Chairperson's statement during the Oral
Arguments that the present controversy involves "not [merely] a systems failure" but a "complete
breakdown of controls" 149 amplifies, in addition to the matters above-discussed, the seriousness of the
issues involved herein. Indeed, of greater import than the damage caused by the illegal expenditure of
public funds is the mortal wound inflicted upon the fundamental law by the enforcement of an invalid
statute. 150 All told, petitioners have sufficient locus standi to file the instant cases.

D. Res Judicata and Stare Decisis.

Res judicata (which means a "matter adjudged") and stare decisis non quiets et movere ([or simply, stare
decisis] which means "follow past precedents and do not disturb what has been settled") are general
procedural law principles which both deal with the effects of previous but factually similar dispositions to
subsequent cases. For the cases at bar, the Court examines the applicability of these principles in
relation to its prior rulings in Philconsa and LAMP.

The focal point of res judicata is the judgment. The principle states that a judgment on the merits in a
previous case rendered by a court of competent jurisdiction would bind a subsequent case if, between the
first and second actions, there exists an identity of parties, of subject matter, and of causes of action. 151
This required identity is not, however, attendant hereto since Philconsa and LAMP, respectively involved
constitutional challenges against the 1994 CDF Article and 2004 PDAF Article, whereas the cases at bar
call for a broader constitutional scrutiny of the entire "Pork Barrel System." Also, the ruling in LAMP is
essentially a dismissal based on a procedural technicality — and, thus, hardly a judgment on the merits
— in that petitioners therein failed to present any "convincing proof . . . showing that, indeed, there were
direct releases of funds to the Members of Congress, who actually spend them according to their sole
discretion" or "pertinent evidentiary support [to demonstrate the] illegal misuse of PDAF in the form of
kickbacks [and] has become a common exercise of unscrupulous Members of Congress." As such, the
Court upheld, in view of the presumption of constitutionality accorded to every law, the 2004 PDAF
Article, and saw "no need to review or reverse the standing pronouncements in the said case." Hence, for
the foregoing reasons, the res judicata principle, insofar as the Philconsa and LAMP cases are
concerned, cannot apply.

On the other hand, the focal point of stare decisis is the doctrine created. The principle, entrenched under
Article 8 152 of the Civil Code, evokes the general rule that, for the sake of certainty, a conclusion
reached in one case should be doctrinally applied to those that follow if the facts are substantially the
same, even though the parties may be different. It proceeds from the first principle of justice that, absent
any powerful countervailing considerations, like cases ought to be decided alike. Thus, where the same
questions relating to the same event have been put forward by the parties similarly situated as in a
previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt
to re-litigate the same issue. 153 cAHIST

Philconsa was the first case where a constitutional challenge against a Pork Barrel provision, i.e., the
1994 CDF Article, was resolved by the Court. To properly understand its context, petitioners' posturing
was that "the power given to the [M]embers of Congress to propose and identify projects and activities to
be funded by the [CDF] is an encroachment by the legislature on executive power, since said power in an
appropriation act is in implementation of the law" and that "the proposal and identification of the projects

87
do not involve the making of laws or the repeal and amendment thereof, the only function given to the
Congress by the Constitution." 154 In deference to the foregoing submissions, the Court reached the
following main conclusions: one, under the Constitution, the power of appropriation, or the "power of the
purse," belongs to Congress; two, the power of appropriation carries with it the power to specify the
project or activity to be funded under the appropriation law and it can be detailed and as broad as
Congress wants it to be; and, three, the proposals and identifications made by Members of Congress are
merely recommendatory. At once, it is apparent that the Philconsa resolution was a limited response to a
separation of powers problem, specifically on the propriety of conferring post-enactment identification
authority to Members of Congress. On the contrary, the present cases call for a more holistic examination
of (a) the inter-relation between the CDF and PDAF Articles with each other, formative as they are of the
entire "Pork Barrel System" as well as (b) the inter-relation of post-enactment measures contained within
a particular CDF or PDAF Article, including not only those related to the area of project identification but
also to the areas of fund release and realignment. The complexity of the issues and the broader legal
analyses herein warranted may be, therefore, considered as a powerful countervailing reason against a
wholesale application of the stare decisis principle.

In addition, the Court observes that the Philconsa ruling was actually riddled with inherent constitutional
inconsistencies which similarly countervail against a full resort to stare decisis. As may be deduced from
the main conclusions of the case, Philconsa's fundamental premise in allowing Members of Congress to
propose and identify of projects would be that the said identification authority is but an aspect of the
power of appropriation which has been constitutionally lodged in Congress. From this premise, the
contradictions may be easily seen. If the authority to identify projects is an aspect of appropriation and the
power of appropriation is a form of legislative power thereby lodged in Congress, then it follows that: (a) it
is Congress which should exercise such authority, and not its individual Members; (b) such authority must
be exercised within the prescribed procedure of law passage and, hence, should not be exercised after
the GAA has already been passed; and (c) such authority, as embodied in the GAA, has the force of law
and, hence, cannot be merely recommendatory. Justice Vitug's Concurring Opinion in the same case
sums up the Philconsa quandary in this wise: "Neither would it be objectionable for Congress, by law, to
appropriate funds for such specific projects as it may be minded; to give that authority, however, to the
individual members of Congress in whatever guise, I am afraid, would be constitutionally impermissible."
As the Court now largely benefits from hindsight and current findings on the matter, among others, the
CoA Report, the Court must partially abandon its previous ruling in Philconsa insofar as it validated the
post-enactment identification authority of Members of Congress on the guise that the same was merely
recommendatory. This postulate raises serious constitutional inconsistencies which cannot be simply
excused on the ground that such mechanism is "imaginative as it is innovative." Moreover, it must be
pointed out that the recent case of Abakada Guro Party List v. Purisima 155 (Abakada) has effectively
overturned Philconsa's allowance of post-enactment legislator participation in view of the separation of
powers principle. These constitutional inconsistencies and the Abakada rule will be discussed in greater
detail in the ensuing section of this Decision.

As for LAMP, suffice it to restate that the said case was dismissed on a procedural technicality and,
hence, has not set any controlling doctrine susceptible of current application to the substantive issues in
these cases. In fine, stare decisis would not apply. STaCIA

II. Substantive Issues.

A. Definition of Terms.

Before the Court proceeds to resolve the substantive issues of these cases, it must first define the terms
"Pork Barrel System," "Congressional Pork Barrel," and "Presidential Pork Barrel" as they are essential to
the ensuing discourse.

88
Petitioners define the term "Pork Barrel System" as the "collusion between the Legislative and Executive
branches of government to accumulate lump-sum public funds in their offices with unchecked
discretionary powers to determine its distribution as political largesse." 156 They assert that the following
elements make up the Pork Barrel System: (a) lump-sum funds are allocated through the appropriations
process to an individual officer; (b) the officer is given sole and broad discretion in determining how the
funds will be used or expended; (c) the guidelines on how to spend or use the funds in the appropriation
are either vague, overbroad or inexistent; and (d) projects funded are intended to benefit a definite
constituency in a particular part of the country and to help the political careers of the disbursing official by
yielding rich patronage benefits. 157 They further state that the Pork Barrel System is comprised of two
(2) kinds of discretionary public funds: first, the Congressional (or Legislative) Pork Barrel, currently
known as the PDAF; 158 and, second, the Presidential (or Executive) Pork Barrel, specifically, the
Malampaya Funds under PD 910 and the Presidential Social Fund under PD 1869, as amended by PD
1993. 159

Considering petitioners' submission and in reference to its local concept and legal history, the Court
defines the Pork Barrel System as the collective body of rules and practices that govern the manner by
which lump-sum, discretionary funds, primarily intended for local projects, are utilized through the
respective participations of the Legislative and Executive branches of government, including its members.
The Pork Barrel System involves two (2) kinds of lump-sum discretionary funds:

First, there is the Congressional Pork Barrel which is herein defined as a kind of lump-sum, discretionary
fund wherein legislators, either individually or collectively organized into committees, are able to
effectively control certain aspects of the fund's utilization through various post-enactment measures
and/or practices. In particular, petitioners consider the PDAF, as it appears under the 2013 GAA, as
Congressional Pork Barrel since it is, inter alia, a post-enactment measure that allows individual
legislators to wield a collective power; 160 and

Second, there is the Presidential Pork Barrel which is herein defined as a kind of lump-sum, discretionary
fund which allows the President to determine the manner of its utilization. For reasons earlier stated, 161
the Court shall delimit the use of such term to refer only to the Malampaya Funds and the Presidential
Social Fund.

With these definitions in mind, the Court shall now proceed to discuss the substantive issues of these
cases. TAHCEc

B. Substantive Issues on the Congressional Pork Barrel.

1. Separation of Powers.

a. Statement of Principle.

The principle of separation of powers refers to the constitutional demarcation of the three fundamental
powers of government. In the celebrated words of Justice Laurel in Angara v. Electoral Commission, 162
it means that the "Constitution has blocked out with deft strokes and in bold lines, allotment of power to
the executive, the legislative and the judicial departments of the government." 163 To the legislative
branch of government, through Congress, 164 belongs the power to make laws; to the executive branch

89
of government, through the President, 165 belongs the power to enforce laws; and to the judicial branch
of government, through the Court, 166 belongs the power to interpret laws. Because the three great
powers have been, by constitutional design, ordained in this respect, "[e]ach department of the
government has exclusive cognizance of matters within its jurisdiction, and is supreme within its own
sphere." 167 Thus, "the legislature has no authority to execute or construe the law, the executive has no
authority to make or construe the law, and the judiciary has no power to make or execute the law." 168
The principle of separation of powers and its concepts of autonomy and independence stem from the
notion that the powers of government must be divided to avoid concentration of these powers in any one
branch; the division, it is hoped, would avoid any single branch from lording its power over the other
branches or the citizenry. 169 To achieve this purpose, the divided power must be wielded by co-equal
branches of government that are equally capable of independent action in exercising their respective
mandates. Lack of independence would result in the inability of one branch of government to check the
arbitrary or self-interest assertions of another or others. 170

Broadly speaking, there is a violation of the separation of powers principle when one branch of
government unduly encroaches on the domain of another. US Supreme Court decisions instruct that the
principle of separation of powers may be violated in two (2) ways: firstly, "[o]ne branch may interfere
impermissibly with the other's performance of its constitutionally assigned function"; 171 and
"[a]lternatively, the doctrine may be violated when one branch assumes a function that more properly is
entrusted to another." 172 In other words, there is a violation of the principle when there is impermissible
(a) interference with and/or (b) assumption of another department's functions.

The enforcement of the national budget, as primarily contained in the GAA, is indisputably a function both
constitutionally assigned and properly entrusted to the Executive branch of government. In Guingona, Jr.
v. Hon. Carague 173 (Guingona, Jr.), the Court explained that the phase of budget execution "covers the
various operational aspects of budgeting" and accordingly includes "the evaluation of work and financial
plans for individual activities," the "regulation and release of funds" as well as all "other related activities"
that comprise the budget execution cycle. 174 This is rooted in the principle that the allocation of power in
the three principal branches of government is a grant of all powers inherent in them. 175 Thus, unless the
Constitution provides otherwise, the Executive department should exclusively exercise all roles and
prerogatives which go into the implementation of the national budget as provided under the GAA as well
as any other appropriation law. aHcACI

In view of the foregoing, the Legislative branch of government, much more any of its members, should not
cross over the field of implementing the national budget since, as earlier stated, the same is properly the
domain of the Executive. Again, in Guingona, Jr., the Court stated that "Congress enters the picture
[when it] deliberates or acts on the budget proposals of the President. Thereafter, Congress, "in the
exercise of its own judgment and wisdom, formulates an appropriation act precisely following the process
established by the Constitution, which specifies that no money may be paid from the Treasury except in
accordance with an appropriation made by law." Upon approval and passage of the GAA, Congress' law-
making role necessarily comes to an end and from there the Executive's role of implementing the national
budget begins. So as not to blur the constitutional boundaries between them, Congress must "not
concern itself with details for implementation by the Executive." 176

The foregoing cardinal postulates were definitively enunciated in Abakada where the Court held that
"[f]rom the moment the law becomes effective, any provision of law that empowers Congress or any of its
members to play any role in the implementation or enforcement of the law violates the principle of
separation of powers and is thus unconstitutional." 177 It must be clarified, however, that since the
restriction only pertains to "any role in the implementation or enforcement of the law," Congress may still
exercise its oversight function which is a mechanism of checks and balances that the Constitution itself
allows. But it must be made clear that Congress' role must be confined to mere oversight. Any post-
enactment measure allowing legislator participation beyond oversight is bereft of any constitutional basis

90
and hence, tantamount to impermissible interference and/or assumption of executive functions. As the
Court ruled in Abakada: 178

[A]ny post-enactment congressional measure . . . should be limited to scrutiny and investigation. In

particular, congressional oversight must be confined to the following:

(1) scrutiny based primarily on Congress' power of appropriation and the budget hearings conducted in
connection with it, its power to ask heads of departments to appear before and be heard by either of its
Houses on any matter pertaining to their departments and its power of confirmation; and

(2) investigation and monitoring of the implementation of laws pursuant to the power of Congress to
conduct inquiries in aid of legislation.

Any action or step beyond that will undermine the separation of powers guaranteed by the Constitution.
(Emphases supplied)

b. Application.

In these cases, petitioners submit that the Congressional Pork Barrel — among others, the 2013 PDAF
Article — "wrecks the assignment of responsibilities between the political branches" as it is designed to
allow individual legislators to interfere "way past the time it should have ceased" or, particularly, "after the
GAA is passed." 179 They state that the findings and recommendations in the CoA Report provide "an
illustration of how absolute and definitive the power of legislators wield over project implementation in
complete violation of the constitutional [principle of separation of powers.]" 180 Further, they point out that
the Court in the Philconsa case only allowed the CDF to exist on the condition that individual legislators
limited their role to recommending projects and not if they actually dictate their implementation. 181

For their part, respondents counter that the separations of powers principle has not been violated since
the President maintains "ultimate authority to control the execution of the GAA" and that he "retains the
final discretion to reject" the legislators' proposals. 182 They maintain that the Court, in Philconsa,
"upheld the constitutionality of the power of members of Congress to propose and identify projects so
long as such proposal and identification are recommendatory." 183 As such, they claim that "[e]verything
in the Special Provisions [of the 2013 PDAF Article] follows the Philconsa framework, and hence, remains
constitutional." 184

The Court rules in favor of petitioners.

As may be observed from its legal history, the defining feature of all forms of Congressional Pork Barrel
would be the authority of legislators to participate in the post-enactment phases of project
implementation.

At its core, legislators — may it be through project lists, 185 prior consultations 186 or program menus
187 — have been consistently accorded post-enactment authority to identify the projects they desire to be
funded through various Congressional Pork Barrel allocations. Under the 2013 PDAF Article, the statutory

91
authority of legislators to identify projects post-GAA may be construed from the import of Special
Provisions 1 to 3 as well as the second paragraph of Special Provision 4. To elucidate, Special Provision
1 embodies the program menu feature which, as evinced from past PDAF Articles, allows individual
legislators to identify PDAF projects for as long as the identified project falls under a general program
listed in the said menu. Relatedly, Special Provision 2 provides that the implementing agencies shall,
within 90 days from the GAA is passed, submit to Congress a more detailed priority list, standard or
design prepared and submitted by implementing agencies from which the legislator may make his choice.
The same provision further authorizes legislators to identify PDAF projects outside his district for as long
as the representative of the district concerned concurs in writing. Meanwhile, Special Provision 3 clarifies
that PDAF projects refer to "projects to be identified by legislators" 188 and thereunder provides the
allocation limit for the total amount of projects identified by each legislator. Finally, paragraph 2 of Special
Provision 4 requires that any modification and revision of the project identification "shall be submitted to
the House Committee on Appropriations and the Senate Committee on Finance for favorable
endorsement to the DBM or the implementing agency, as the case may be." From the foregoing special
provisions, it cannot be seriously doubted that legislators have been accorded post-enactment authority
to identify PDAF projects. IaHAcT

Aside from the area of project identification, legislators have also been accorded post-enactment authority
in the areas of fund release and realignment. Under the 2013 PDAF Article, the statutory authority of
legislators to participate in the area of fund release through congressional committees is contained in
Special Provision 5 which explicitly states that "[a]ll request for release of funds shall be supported by the
documents prescribed under Special Provision No. 1 and favorably endorsed by House Committee on
Appropriations and the Senate Committee on Finance, as the case may be"; while their statutory authority
to participate in the area of fund realignment is contained in: first, paragraph 2, Special Provision 41 189
which explicitly states, among others, that "[a]ny realignment [of funds] shall be submitted to the House
Committee on Appropriations and the Senate Committee on Finance for favorable endorsement to the
DBM or the implementing agency, as the case may be"; and, second, paragraph 1, also of Special
Provision 4 which authorizes the "Secretaries of Agriculture, Education, Energy, Interior and Local
Government, Labor and Employment, Public Works and Highways, Social Welfare and Development and
Trade and Industry 190 . . . to approve realignment from one project/scope to another within the allotment
received from this Fund, subject to [among others] (iii) the request is with the concurrence of the legislator
concerned."

Clearly, these post-enactment measures which govern the areas of project identification, fund release
and fund realignment are not related to functions of congressional oversight and, hence, allow legislators
to intervene and/or assume duties that properly belong to the sphere of budget execution. Indeed, by
virtue of the foregoing, legislators have been, in one form or another, authorized to participate in — as
Guingona, Jr. puts it — "the various operational aspects of budgeting," including "the evaluation of work
and financial plans for individual activities" and the "regulation and release of funds" in violation of the
separation of powers principle. The fundamental rule, as categorically articulated in Abakada, cannot be
overstated — from the moment the law becomes effective, any provision of law that empowers Congress
or any of its members to play any role in the implementation or enforcement of the law violates the
principle of separation of powers and is thus unconstitutional. 191 That the said authority is treated as
merely recommendatory in nature does not alter its unconstitutional tenor since the prohibition, to repeat,
covers any role in the implementation or enforcement of the law. Towards this end, the Court must
therefore abandon its ruling in Philconsa which sanctioned the conduct of legislator identification on the
guise that the same is merely recommendatory and, as such, respondents' reliance on the same falters
altogether.

Besides, it must be pointed out that respondents have nonetheless failed to substantiate their position
that the identification authority of legislators is only of recommendatory import. Quite the contrary,
respondents — through the statements of the Solicitor General during the Oral Arguments — have
admitted that the identification of the legislator constitutes a mandatory requirement before his PDAF can
be tapped as a funding source, thereby highlighting the indispensability of the said act to the entire
budget execution process: 192

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Justice Bernabe:

Now, without the individual legislator's identification of the project, can the PDAF of the legislator be
utilized?

Solicitor General Jardeleza:

No, Your Honor.

Justice Bernabe:

It cannot?

Solicitor General Jardeleza:

It cannot. . . (interrupted)

Justice Bernabe:

So meaning you should have the identification of the project by the individual legislator?

Solicitor General Jardeleza:

Yes, Your Honor.

xxx xxx xxx

Justice Bernabe:

In short, the act of identification is mandatory?

Solictor General Jardeleza:

Yes, Your Honor. In the sense that if it is not done and then there is no identification.

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xxx xxx xxx

Justice Bernabe:

Now, would you know of specific instances when a project was implemented without the identification by
the individual legislator?

Solicitor General Jardeleza: CIaHDc

I do not know, Your Honor; I do not think so but I have no specific examples. I would doubt very much,
Your Honor, because to implement, there is a need [for] a SARO and the NCA. And the SARO and the
NCA are triggered by an identification from the legislator.

xxx xxx xxx

Solictor General Jardeleza:

What we mean by mandatory, Your Honor, is we were replying to a question, "How can a legislator make
sure that he is able to get PDAF Funds?" It is mandatory in the sense that he must identify, in that sense,
Your Honor. Otherwise, if he does not identify, he cannot avail of the PDAF Funds and his district would
not be able to have PDAF Funds, only in that sense, Your Honor. (Emphases supplied)

Thus, for all the foregoing reasons, the Court hereby declares the 2013 PDAF Article as well as all other
provisions of law which similarly allow legislators to wield any form of post-enactment authority in the
implementation or enforcement of the budget, unrelated to congressional oversight, as violative of the
separation of powers principle and thus unconstitutional. Corollary thereto, informal practices, through
which legislators have effectively intruded into the proper phases of budget execution, must be deemed
as acts of grave abuse of discretion amounting to lack or excess of jurisdiction and, hence, accorded the
same unconstitutional treatment. That such informal practices do exist and have, in fact, been constantly
observed throughout the years has not been substantially disputed here. As pointed out by Chief Justice
Maria Lourdes P.A. Sereno (Chief Justice Sereno) during the Oral Arguments of these cases: 193

Chief Justice Sereno:

Now, from the responses of the representative of both, the DBM and two (2) Houses of Congress, if we
enforces the initial thought that I have, after I had seen the extent of this research made by my staff, that
neither the Executive nor Congress frontally faced the question of constitutional compatibility of how they
were engineering the budget process. In fact, the words you have been using, as the three lawyers [of the
DBM, and both Houses of Congress] has also been using is surprise; surprised that all of these things are
now surfacing. In fact, I thought that what the 2013 PDAF provisions did was to codify in one section all
the past practice that [had] been done since 1991. In a certain sense, we should be thankful that they are
all now in the PDAF Special Provisions. . . . (Emphasis and underscoring supplied)

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Ultimately, legislators cannot exercise powers which they do not have, whether through formal measures
written into the law or informal practices institutionalized in government agencies, else the Executive
department be deprived of what the Constitution has vested as its own.

2. Non-delegability of Legislative Power.

a. Statement of Principle.

As an adjunct to the separation of powers principle, 194 legislative power shall be exclusively exercised
by the body to which the Constitution has conferred the same. In particular, Section 1, Article VI of the
1987 Constitution states that such power shall be vested in the Congress of the Philippines which shall
consist of a Senate and a House of Representatives, except to the extent reserved to the people by the
provision on initiative and referendum. 195 Based on this provision, it is clear that only Congress, acting
as a bicameral body, and the people, through the process of initiative and referendum, may
constitutionally wield legislative power and no other. This premise embodies the principle of non-
delegability of legislative power, and the only recognized exceptions thereto would be: (a) delegated
legislative power to local governments which, by immemorial practice, are allowed to legislate on purely
local matters; 196 and (b) constitutionally-grafted exceptions such as the authority of the President to, by
law, exercise powers necessary and proper to carry out a declared national policy in times of war or other
national emergency, 197 or fix within specified limits, and subject to such limitations and restrictions as
Congress may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other
duties or imposts within the framework of the national development program of the Government. 198
acCETD

Notably, the principle of non-delegability should not be confused as a restriction to delegate rule-making
authority to implementing agencies for the limited purpose of either filling up the details of the law for its
enforcement (supplementary rule-making) or ascertaining facts to bring the law into actual operation
(contingent rule-making). 199 The conceptual treatment and limitations of delegated rule-making were
explained in the case of People v. Maceren 200 as follows:

The grant of the rule-making power to administrative agencies is a relaxation of the principle of separation
of powers and is an exception to the nondelegation of legislative powers. Administrative regulations or
"subordinate legislation" calculated to promote the public interest are necessary because of "the growing
complexity of modern life, the multiplication of the subjects of governmental regulations, and the
increased difficulty of administering the law."

xxx xxx xxx

[Nevertheless, it must be emphasized that] [t]he rule-making power must be confined to details for
regulating the mode or proceeding to carry into effect the law as it has been enacted. The power cannot
be extended to amending or expanding the statutory requirements or to embrace matters not covered by
the statute. Rules that subvert the statute cannot be sanctioned. (Emphases supplied)

b. Application.

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In the cases at bar, the Court observes that the 2013 PDAF Article, insofar as it confers post-enactment
identification authority to individual legislators, violates the principle of non-delegability since said
legislators are effectively allowed to individually exercise the power of appropriation, which — as settled
in Philconsa — is lodged in Congress. 201 That the power to appropriate must be exercised only through
legislation is clear from Section 29 (1), Article VI of the 1987 Constitution which states that: "No money
shall be paid out of the Treasury except in pursuance of an appropriation made by law." To understand
what constitutes an act of appropriation, the Court, in Bengzon v. Secretary of Justice and Insular Auditor
202 (Bengzon), held that the power of appropriation involves (a) the setting apart by law of a certain sum
from the public revenue for (b) a specified purpose. Essentially, under the 2013 PDAF Article, individual
legislators are given a personal lump-sum fund from which they are able to dictate (a) how much from
such fund would go to (b) a specific project or beneficiary that they themselves also determine. As these
two (2) acts comprise the exercise of the power of appropriation as described in Bengzon, and given that
the 2013 PDAF Article authorizes individual legislators to perform the same, undoubtedly, said legislators
have been conferred the power to legislate which the Constitution does not, however, allow. Thus,
keeping with the principle of non-delegability of legislative power, the Court hereby declares the 2013
PDAF Article, as well as all other forms of Congressional Pork Barrel which contain the similar legislative
identification feature as herein discussed, as unconstitutional.

3. Checks and Balances.

a. Statement of Principle; Item-Veto Power.

The fact that the three great powers of government are intended to be kept separate and distinct does not
mean that they are absolutely unrestrained and independent of each other. The Constitution has also
provided for an elaborate system of checks and balances to secure coordination in the workings of the
various departments of the government. 203

A prime example of a constitutional check and balance would be the President's power to veto an item
written into an appropriation, revenue or tariff bill submitted to him by Congress for approval through a
process known as "bill presentment." The President's item-veto power is found in Section 27 (2), Article
VI of the 1987 Constitution which reads as follows:

Sec. 27.. . . .

xxx xxx xxx

(2) The President shall have the power to veto any particular item or items in an appropriation, revenue,
or tariff bill, but the veto shall not affect the item or items to which he does not object.

The presentment of appropriation, revenue or tariff bills to the President, wherein he may exercise his
power of item-veto, forms part of the "single, finely wrought and exhaustively considered, procedures" for
law-passage as specified under the Constitution. 204 As stated in Abakada, the final step in the law-
making process is the "submission [of the bill] to the President for approval. Once approved, it takes
effect as law after the required publication." 205 Elaborating on the President's item-veto power and its
relevance as a check on the legislature, the Court, in Bengzon, explained that: 206 SEHDIC

96
The former Organic Act and the present Constitution of the Philippines make the Chief Executive an
integral part of the law-making power. His disapproval of a bill, commonly known as a veto, is essentially
a legislative act. The questions presented to the mind of the Chief Executive are precisely the same as
those the legislature must determine in passing a bill, except that his will be a broader point of view.

The Constitution is a limitation upon the power of the legislative department of the government, but in this
respect it is a grant of power to the executive department. The Legislature has the affirmative power to
enact laws; the Chief Executive has the negative power by the constitutional exercise of which he may
defeat the will of the Legislature. It follows that the Chief Executive must find his authority in the
Constitution. But in exercising that authority he may not be confined to rules of strict construction or
hampered by the unwise interference of the judiciary. The courts will indulge every intendment in favor of
the constitutionality of a veto [in the same manner] as they will presume the constitutionality of an act as
originally passed by the Legislature. (Emphases supplied)

The justification for the President's item-veto power rests on a variety of policy goals such as to prevent
log-rolling legislation, 207 impose fiscal restrictions on the legislature, as well as to fortify the executive
branch's role in the budgetary process. 208 In Immigration and Naturalization Service v. Chadha, the US
Supreme Court characterized the President's item-power as "a salutary check upon the legislative body,
calculated to guard the community against the effects of factions, precipitancy, or of any impulse
unfriendly to the public good, which may happen to influence a majority of that body"; phrased differently,
it is meant to "increase the chances in favor of the community against the passing of bad laws, through
haste, inadvertence, or design." 209

For the President to exercise his item-veto power, it necessarily follows that there exists a proper "item"
which may be the object of the veto. An item, as defined in the field of appropriations, pertains to "the
particulars, the details, the distinct and severable parts of the appropriation or of the bill." In the case of
Bengzon v. Secretary of Justice of the Philippine Islands, 210 the US Supreme Court characterized an
item of appropriation as follows:

An item of an appropriation bill obviously means an item which, in itself, is a specific appropriation of
money, not some general provision of law which happens to be put into an appropriation bill. (Emphases
supplied)

On this premise, it may be concluded that an appropriation bill, to ensure that the President may be able
to exercise his power of item veto, must contain "specific appropriations of money" and not only "general
provisions" which provide for parameters of appropriation.

Further, it is significant to point out that an item of appropriation must be an item characterized by singular
correspondence — meaning an allocation of a specified singular amount for a specified singular purpose,
otherwise known as a "line-item." 211 This treatment not only allows the item to be consistent with its
definition as a "specific appropriation of money" but also ensures that the President may discernibly veto
the same. Based on the foregoing formulation, the existing Calamity Fund, Contingent Fund and the
Intelligence Fund, being appropriations which state a specified amount for a specific purpose, would then
be considered as "line-item" appropriations which are rightfully subject to item veto. Likewise, it must be
observed that an appropriation may be validly apportioned into component percentages or values;
however, it is crucial that each percentage or value must be allocated for its own corresponding purpose
for such component to be considered as a proper line-item. Moreover, as Justice Carpio correctly pointed
out, a valid appropriation may even have several related purposes that are by accounting and budgeting
practice considered as one purpose, e.g., MODE (maintenance and other operating expenses), in which
case the related purposes shall be deemed sufficiently specific for the exercise of the President's item

97
veto power. Finally, special purpose funds and discretionary funds would equally square with the
constitutional mechanism of item-veto for as long as they follow the rule on singular correspondence as
herein discussed. Anent special purpose funds, it must be added that Section 25 (4), Article VI of the
1987 Constitution requires that the "special appropriations bill shall specify the purpose for which it is
intended, and shall be supported by funds actually available as certified by the National Treasurer, or to
be raised by a corresponding revenue proposal therein." Meanwhile, with respect to discretionary funds,
Section 25 (6), Article VI of the 1987 Constitution requires that said funds "shall be disbursed only for
public purposes to be supported by appropriate vouchers and subject to such guidelines as may be
prescribed by law." DTAcIa

In contrast, what beckons constitutional infirmity are appropriations which merely provide for a singular
lump-sum amount to be tapped as a source of funding for multiple purposes. Since such appropriation
type necessitates the further determination of both the actual amount to be expended and the actual
purpose of the appropriation which must still be chosen from the multiple purposes stated in the law, it
cannot be said that the appropriation law already indicates a "specific appropriation of money" and hence,
without a proper line-item which the President may veto. As a practical result, the President would then
be faced with the predicament of either vetoing the entire appropriation if he finds some of its purposes
wasteful or undesirable, or approving the entire appropriation so as not to hinder some of its legitimate
purposes. Finally, it may not be amiss to state that such arrangement also raises non-delegability issues
considering that the implementing authority would still have to determine, again, both the actual amount
to be expended and the actual purpose of the appropriation. Since the foregoing determinations
constitute the integral aspects of the power to appropriate, the implementing authority would, in effect, be
exercising legislative prerogatives in violation of the principle of non-delegability.

b. Application.

In these cases, petitioners claim that "[i]n the current . . . system where the PDAF is a lump-sum
appropriation, the legislator's identification of the projects after the passage of the GAA denies the
President the chance to veto that item later on." 212 Accordingly, they submit that the "item veto power of
the President mandates that appropriations bills adopt line-item budgeting" and that "Congress cannot
choose a mode of budgeting [which] effectively renders the constitutionally-given power of the President
useless." 213

On the other hand, respondents maintain that the text of the Constitution envisions a process which is
intended to meet the demands of a modernizing economy and, as such, lump-sum appropriations are
essential to financially address situations which are barely foreseen when a GAA is enacted. They argue
that the decision of the Congress to create some lump-sum appropriations is constitutionally allowed and
textually-grounded. 214

The Court agrees with petitioners.

Under the 2013 PDAF Article, the amount of P24.79 Billion only appears as a collective allocation limit
since the said amount would be further divided among individual legislators who would then receive
personal lump-sum allocations and could, after the GAA is passed, effectively appropriate PDAF funds
based on their own discretion. As these intermediate appropriations are made by legislators only after the
GAA is passed and hence, outside of the law, it necessarily means that the actual items of PDAF
appropriation would not have been written into the General Appropriations Bill and thus effectuated
without veto consideration. This kind of lump-sum/post-enactment legislative identification budgeting
system fosters the creation of a "budget within a budget" which subverts the prescribed procedure of
presentment and consequently impairs the President's power of item veto. As petitioners aptly point out,

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the above-described system forces the President to decide between (a) accepting the entire P24.79
Billion PDAF allocation without knowing the specific projects of the legislators, which may or may not be
consistent with his national agenda and (b) rejecting the whole PDAF to the detriment of all other
legislators with legitimate projects. 215 IcEaST

Moreover, even without its post-enactment legislative identification feature, the 2013 PDAF Article would
remain constitutionally flawed since it would then operate as a prohibited form of lump-sum appropriation
as above-characterized. In particular, the lump-sum amount of P24.79 Billion would be treated as a mere
funding source allotted for multiple purposes of spending, i.e., scholarships, medical missions, assistance
to indigents, preservation of historical materials, construction of roads, flood control, etc. This setup
connotes that the appropriation law leaves the actual amounts and purposes of the appropriation for
further determination and, therefore, does not readily indicate a discernible item which may be subject to
the President's power of item veto.

In fact, on the accountability side, the same lump-sum budgeting scheme has, as the CoA Chairperson
relays, "limit[ed] state auditors from obtaining relevant data and information that would aid in more
stringently auditing the utilization of said Funds." 216 Accordingly, she recommends the adoption of a
"line by line budget or amount per proposed program, activity or project, and per implementing agency."
217

Hence, in view of the reasons above-stated, the Court finds the 2013 PDAF Article, as well as all
Congressional Pork Barrel Laws of similar operation, to be unconstitutional. That such budgeting system
provides for a greater degree of flexibility to account for future contingencies cannot be an excuse to
defeat what the Constitution requires. Clearly, the first and essential truth of the matter is that
unconstitutional means do not justify even commendable ends. 218

c. Accountability.

Petitioners further relate that the system under which various forms of Congressional Pork Barrel operate
defies public accountability as it renders Congress incapable of checking itself or its Members. In
particular, they point out that the Congressional Pork Barrel "gives each legislator a direct, financial
interest in the smooth, speedy passing of the yearly budget" which turns them "from fiscalizers" into
"financially-interested partners." 219 They also claim that the system has an effect on re-election as "the
PDAF excels in self-perpetuation of elective officials." Finally, they add that the "PDAF impairs the power
of impeachment" as such "funds are indeed quite useful, 'to well, accelerate the decisions of senators.'"
220

The Court agrees in part.

The aphorism forged under Section 1, Article XI of the 1987 Constitution, which states that "public office
is a public trust," is an overarching reminder that every instrumentality of government should exercise
their official functions only in accordance with the principles of the Constitution which embodies the
parameters of the people's trust. The notion of a public trust connotes accountability, 221 hence, the
various mechanisms in the Constitution which are designed to exact accountability from public officers.

Among others, an accountability mechanism with which the proper expenditure of public funds may be
checked is the power of congressional oversight. As mentioned in Abakada, 222 congressional oversight

99
may be performed either through: (a) scrutiny based primarily on Congress' power of appropriation and
the budget hearings conducted in connection with it, its power to ask heads of departments to appear
before and be heard by either of its Houses on any matter pertaining to their departments and its power of
confirmation; 223 or (b) investigation and monitoring of the implementation of laws pursuant to the power
of Congress to conduct inquiries in aid of legislation. 224 cETCID

The Court agrees with petitioners that certain features embedded in some forms of Congressional Pork
Barrel, among others the 2013 PDAF Article, has an effect on congressional oversight. The fact that
individual legislators are given post-enactment roles in the implementation of the budget makes it difficult
for them to become disinterested "observers" when scrutinizing, investigating or monitoring the
implementation of the appropriation law. To a certain extent, the conduct of oversight would be tainted as
said legislators, who are vested with post-enactment authority, would, in effect, be checking on activities
in which they themselves participate. Also, it must be pointed out that this very same concept of post-
enactment authorization runs afoul of Section 14, Article VI of the 1987 Constitution which provides that:

Sec. 14. No Senator or Member of the House of Representatives may personally appear as counsel
before any court of justice or before the Electoral Tribunals, or quasi-judicial and other administrative
bodies. Neither shall he, directly or indirectly, be interested financially in any contract with, or in any
franchise or special privilege granted by the Government, or any subdivision, agency, or instrumentality
thereof, including any government-owned or controlled corporation, or its subsidiary, during his term of
office. He shall not intervene in any matter before any office of the Government for his pecuniary benefit
or where he may be called upon to act on account of his office. (Emphasis supplied)

Clearly, allowing legislators to intervene in the various phases of project implementation — a matter
before another office of government — renders them susceptible to taking undue advantage of their own
office.

The Court, however, cannot completely agree that the same post-enactment authority and/or the
individual legislator's control of his PDAF per se would allow him to perpetuate himself in office. Indeed,
while the Congressional Pork Barrel and a legislator's use thereof may be linked to this area of interest,
the use of his PDAF for re-election purposes is a matter which must be analyzed based on particular facts
and on a case-to-case basis.

Finally, while the Court accounts for the possibility that the close operational proximity between legislators
and the Executive department, through the former's post-enactment participation, may affect the process
of impeachment, this matter largely borders on the domain of politics and does not strictly concern the
Pork Barrel System's intrinsic constitutionality. As such, it is an improper subject of judicial assessment.

In sum, insofar as its post-enactment features dilute congressional oversight and violate Section 14,
Article VI of the 1987 Constitution, thus impairing public accountability, the 2013 PDAF Article and other
forms of Congressional Pork Barrel of similar nature are deemed as unconstitutional.

4. Political Dynasties.

One of the petitioners submits that the Pork Barrel System enables politicians who are members of
political dynasties to accumulate funds to perpetuate themselves in power, in contravention of Section 26,
Article II of the 1987 Constitution 225 which states that:

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Sec. 26. The State shall guarantee equal access to opportunities for public service, and prohibit political
dynasties as may be defined by law. (Emphasis and underscoring supplied)

At the outset, suffice it to state that the foregoing provision is considered as not self-executing due to the
qualifying phrase "as may be defined by law." In this respect, said provision does not, by and of itself,
provide a judicially enforceable constitutional right but merely specifies a guideline for legislative or
executive action. 226 Therefore, since there appears to be no standing law which crystallizes the policy
on political dynasties for enforcement, the Court must defer from ruling on this issue.

In any event, the Court finds the above-stated argument on this score to be largely speculative since it
has not been properly demonstrated how the Pork Barrel System would be able to propagate political
dynasties.

5. Local Autonomy.

The State's policy on local autonomy is principally stated in Section 25, Article II and Sections 2 and 3,
Article X of the 1987 Constitution which read as follows:

ARTICLE II

Sec. 25. The State shall ensure the autonomy of local governments.

ARTICLE X

Sec. 2. The territorial and political subdivisions shall enjoy local autonomy.

Sec. 3. The Congress shall enact a local government code which shall provide for a more responsive and
accountable local government structure instituted through a system of decentralization with effective
mechanisms of recall, initiative, and referendum, allocate among the different local government units their
powers, responsibilities, and resources, and provide for the qualifications, election, appointment and
removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to
the organization and operation of the local units.

Pursuant thereto, Congress enacted RA 7160, 227 otherwise known as the "Local Government Code of
1991" (LGC), wherein the policy on local autonomy had been more specifically explicated as follows:
cHATSI

Sec. 2. Declaration of Policy. — (a) It is hereby declared the policy of the State that the territorial and
political subdivisions of the State shall enjoy genuine and meaningful local autonomy to enable them to
attain their fullest development as self-reliant communities and make them more effective partners in the
attainment of national goals. Toward this end, the State shall provide for a more responsive and

101
accountable local government structure instituted through a system of decentralization whereby local
government units shall be given more powers, authority, responsibilities, and resources. The process of
decentralization shall proceed from the National Government to the local government units.

xxx xxx xxx

(c) It is likewise the policy of the State to require all national agencies and offices to conduct periodic
consultations with appropriate local government units, nongovernmental and people's organizations, and
other concerned sectors of the community before any project or program is implemented in their
respective jurisdictions. (Emphases and underscoring supplied)

The above-quoted provisions of the Constitution and the LGC reveal the policy of the State to empower
local government units (LGUs) to develop and ultimately, become self-sustaining and effective
contributors to the national economy. As explained by the Court in Philippine Gamefowl Commission v.
Intermediate Appellate Court: 228

This is as good an occasion as any to stress the commitment of the Constitution to the policy of local
autonomy which is intended to provide the needed impetus and encouragement to the development of
our local political subdivisions as "self-reliant communities." In the words of Jefferson, "Municipal
corporations are the small republics from which the great one derives its strength." The vitalization of local
governments will enable their inhabitants to fully exploit their resources and more important, imbue them
with a deepened sense of involvement in public affairs as members of the body politic. This objective
could be blunted by undue interference by the national government in purely local affairs which are best
resolved by the officials and inhabitants of such political units. The decision we reach today conforms not
only to the letter of the pertinent laws but also to the spirit of the Constitution. 229 (Emphases and
underscoring supplied)

In the cases at bar, petitioners contend that the Congressional Pork Barrel goes against the constitutional
principles on local autonomy since it allows district representatives, who are national officers, to substitute
their judgments in utilizing public funds for local development. 230

The Court agrees with petitioners.

Philconsa described the 1994 CDF as an attempt "to make equal the unequal" and that "[i]t is also a
recognition that individual members of Congress, far more than the President and their congressional
colleagues, are likely to be knowledgeable about the needs of their respective constituents and the
priority to be given each project." 231 Drawing strength from this pronouncement, previous legislators
justified its existence by stating that "the relatively small projects implemented under [the Congressional
Pork Barrel] complement and link the national development goals to the countryside and grassroots as
well as to depressed areas which are overlooked by central agencies which are preoccupied with mega-
projects. 232 Similarly, in his August 23, 2013 speech on the "abolition" of PDAF and budgetary reforms,
President Aquino mentioned that the Congressional Pork Barrel was originally established for a worthy
goal, which is to enable the representatives to identify projects for communities that the LGU concerned
cannot afford. 233

Notwithstanding these declarations, the Court, however, finds an inherent defect in the system which
actually belies the avowed intention of "making equal the unequal." In particular, the Court observes that

102
the gauge of PDAF and CDF allocation/division is based solely on the fact of office, without taking into
account the specific interests and peculiarities of the district the legislator represents. In this regard, the
allocation/division limits are clearly not based on genuine parameters of equality, wherein economic or
geographic indicators have been taken into consideration. As a result, a district representative of a highly-
urbanized metropolis gets the same amount of funding as a district representative of a far-flung rural
province which would be relatively "underdeveloped" compared to the former. To add, what rouses graver
scrutiny is that even Senators and Party-List Representatives — and in some years, even the Vice-
President — who do not represent any locality, receive funding from the Congressional Pork Barrel as
well. These certainly are anathema to the Congressional Pork Barrel's original intent which is "to make
equal the unequal." Ultimately, the PDAF and CDF had become personal funds under the effective
control of each legislator and given unto them on the sole account of their office.

The Court also observes that this concept of legislator control underlying the CDF and PDAF conflicts
with the functions of the various Local Development Councils (LDCs) which are already legally mandated
to "assist the corresponding sanggunian in setting the direction of economic and social development, and
coordinating development efforts within its territorial jurisdiction." 234 Considering that LDCs are
instrumentalities whose functions are essentially geared towards managing local affairs, 235 their
programs, policies and resolutions should not be overridden nor duplicated by individual legislators, who
are national officers that have no law-making authority except only when acting as a body. The
undermining effect on local autonomy caused by the post-enactment authority conferred to the latter was
succinctly put by petitioners in the following wise: 236

With PDAF, a Congressman can simply bypass the local development council and initiate projects on his
own, and even take sole credit for its execution. Indeed, this type of personality-driven project
identification has not only contributed little to the overall development of the district, but has even
contributed to "further weakening infrastructure planning and coordination efforts of the government."

Thus, insofar as individual legislators are authorized to intervene in purely local matters and thereby
subvert genuine local autonomy, the 2013 PDAF Article as well as all other similar forms of Congressional
Pork Barrel is deemed unconstitutional.

With this final issue on the Congressional Pork Barrel resolved, the Court now turns to the substantive
issues involving the Presidential Pork Barrel.

C. Substantive Issues on the Presidential Pork Barrel.

1. Validity of Appropriation.

Petitioners preliminarily assail Section 8 of PD 910 and Section 12 of PD1869 (now, amended by PD
1993), which respectively provide for the Malampaya Funds and the Presidential Social Fund, as invalid
appropriations laws since they do not have the "primary and specific" purpose of authorizing the release
of public funds from the National Treasury. Petitioners submit that Section 8 of PD 910 is not an
appropriation law since the "primary and specific" purpose of PD 910 is the creation of an Energy
Development Board and Section 8 thereof only created a Special Fund incidental thereto. 237 In similar
regard, petitioners argue that Section 12 of PD 1869 is neither a valid appropriations law since the
allocation of the Presidential Social Fund is merely incidental to the "primary and specific" purpose of PD
1869 which is the amendment of the Franchise and Powers of PAGCOR. 238 In view of the foregoing,
petitioners suppose that such funds are being used without any valid law allowing for their proper

103
appropriation in violation of Section 29 (1), Article VI of the 1987 Constitution which states that: "No
money shall be paid out of the Treasury except in pursuance of an appropriation made by law." 239

The Court disagrees.

"An appropriation made by law" under the contemplation of Section 29 (1), Article VI of the 1987
Constitution exists when a provision of law (a) sets apart a determinate or determinable 240 amount of
money and (b) allocates the same for a particular public purpose. These two minimum designations of
amount and purpose stem from the very definition of the word "appropriation," which means "to allot,
assign, set apart or apply to a particular use or purpose," and hence, if written into the law, demonstrate
that the legislative intent to appropriate exists. As the Constitution "does not provide or prescribe any
particular form of words or religious recitals in which an authorization or appropriation by Congress shall
be made, except that it be 'made by law, "' an appropriation law may — according to Philconsa — be
"detailed and as broad as Congress wants it to be" for as long as the intent to appropriate may be
gleaned from the same. As held in the case of Guingona, Jr.: 241

[T]here is no provision in our Constitution that provides or prescribes any particular form of words or
religious recitals in which an authorization or appropriation by Congress shall be made, except that it be
"made by law," such as precisely the authorization or appropriation under the questioned presidential
decrees. In other words, in terms of time horizons, an appropriation may be made impliedly (as by past
but subsisting legislations) as well as expressly for the current fiscal year (as by enactment of laws by the
present Congress), just as said appropriation may be made in general as well as in specific terms. The
Congressional authorization may be embodied in annual laws, such as a general appropriations act or in
special provisions of laws of general or special application which appropriate public funds for specific
public purposes, such as the questioned decrees. An appropriation measure is sufficient if the legislative
intention clearly and certainly appears from the language employed (In re Continuing Appropriations, 32
P. 272), whether in the past or in the present. (Emphases and underscoring supplied)

Likewise, as ruled by the US Supreme Court in State of Nevada v. La Grave: 242

To constitute an appropriation there must be money placed in a fund applicable to the designated
purpose. The word appropriate means to allot, assign, set apart or apply to a particular use or purpose.
An appropriation in the sense of the constitution means the setting apart a portion of the public funds for a
public purpose. No particular form of words is necessary for the purpose, if the intention to appropriate is
plainly manifested. (Emphases supplied) aTIAES

Thus, based on the foregoing, the Court cannot sustain the argument that the appropriation must be the
"primary and specific" purpose of the law in order for a valid appropriation law to exist. To reiterate, if a
legal provision designates a determinate or determinable amount of money and allocates the same for a
particular public purpose, then the legislative intent to appropriate becomes apparent and, hence, already
sufficient to satisfy the requirement of an "appropriation made by law" under contemplation of the
Constitution.

Section 8 of PD 910 pertinently provides:

Section 8. Appropriations. . . .

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All fees, revenues and receipts of the Board from any and all sources including receipts from service
contracts and agreements such as application and processing fees, signature bonus, discovery bonus,
production bonus; all money collected from concessionaires, representing unspent work obligations, fines
and penalties under the Petroleum Act of 1949; as well as the government share representing royalties,
rentals, production share on service contracts and similar payments on the exploration, development and
exploitation of energy resources, shall form part of a Special Fund to be used to finance energy resource
development and exploitation programs and projects of the government and for such other purposes as
may be hereafter directed by the President. (Emphases supplied)

Whereas Section 12 of PD 1869, as amended by PD 1993, reads:

Sec. 12. Special Condition of Franchise. — After deducting five (5%) percent as Franchise Tax, the Fifty
(50%) percent share of the Government in the aggregate gross earnings of the Corporation from this
Franchise, or 60% if the aggregate gross earnings be less than P150,000,000.00 shall be set aside and
shall accrue to the General Fund to finance the priority infrastructure development projects and to finance
the restoration of damaged or destroyed facilities due to calamities, as may be directed and authorized by
the Office of the President of the Philippines. (Emphases supplied)

Analyzing the legal text vis-à-vis the above-mentioned principles, it may then be concluded that (a)
Section 8 of PD 910, which creates a Special Fund comprised of "all fees, revenues, and receipts of the
[Energy Development] Board from any and all sources" (a determinable amount) "to be used to finance
energy resource development and exploitation programs and projects of the government and for such
other purposes as may be hereafter directed by the President" (a specified public purpose), and (b)
Section 12 of PD 1869, as amended by PD 1993, which similarly sets aside, "[a]fter deducting five (5%)
percent as Franchise Tax, the Fifty (50%) percent share of the Government in the aggregate gross
earnings of [PAGCOR], or 60%[,] if the aggregate gross earnings be less than P150,000,000.00" (also a
determinable amount) "to finance the priority infrastructure development projects and . . . the restoration
of damaged or destroyed facilities due to calamities, as may be directed and authorized by the Office of
the President of the Philippines" (also a specified public purpose), are legal appropriations under Section
29 (1), Article VI of the 1987 Constitution.

In this relation, it is apropos to note that the 2013 PDAF Article cannot be properly deemed as a legal
appropriation under the said constitutional provision precisely because, as earlier stated, it contains post-
enactment measures which effectively create a system of intermediate appropriations. These
intermediate appropriations are the actual appropriations meant for enforcement and since they are made
by individual legislators after the GAA is passed, they occur outside the law. As such, the Court observes
that the real appropriation made under the 2013 PDAF Article is not the P24.79 Billion allocated for the
entire PDAF, but rather the post-enactment determinations made by the individual legislators which are,
to repeat, occurrences outside of the law. Irrefragably, the 2013 PDAF Article does not constitute an
"appropriation made by law" since it, in its truest sense, only authorizes individual legislators to
appropriate in violation of the non-delegability principle as afore-discussed.

2. Undue Delegation.

On a related matter, petitioners contend that Section 8 of PD 910 constitutes an undue delegation of
legislative power since the phrase "and for such other purposes as may be hereafter directed by the
President" gives the President "unbridled discretion to determine for what purpose the funds will be used."
243 Respondents, on the other hand, urged the Court to apply the principle of ejusdem generis to the
same section and thus, construe the phrase "and for such other purposes as may be hereafter directed

105
by the President" to refer only to other purposes related "to energy resource development and exploitation
programs and projects of the government." 244

The Court agrees with petitioners' submissions.

While the designation of a determinate or determinable amount for a particular public purpose is sufficient
for a legal appropriation to exist, the appropriation law must contain adequate legislative guidelines if the
same law delegates rule-making authority to the Executive 245 either for the purpose of (a) filling up the
details of the law for its enforcement, known as supplementary rule-making, or (b) ascertaining facts to
bring the law into actual operation, referred to as contingent rule-making. 246 There are two (2)
fundamental tests to ensure that the legislative guidelines for delegated rule-making are indeed adequate.
The first test is called the "completeness test." Case law states that a law is complete when it sets forth
therein the policy to be executed, carried out, or implemented by the delegate. On the other hand, the
second test is called the "sufficient standard test." Jurisprudence holds that a law lays down a sufficient
standard when it provides adequate guidelines or limitations in the law to map out the boundaries of the
delegate's authority and prevent the delegation from running riot. 247 To be sufficient, the standard must
specify the limits of the delegate's authority, announce the legislative policy, and identify the conditions
under which it is to be implemented. 248

In view of the foregoing, the Court agrees with petitioners that the phrase "and for such other purposes as
may be hereafter directed by the President" under Section 8 of PD 910 constitutes an undue delegation of
legislative power insofar as it does not lay down a sufficient standard to adequately determine the limits of
the President's authority with respect to the purpose for which the Malampaya Funds may be used. As it
reads, the said phrase gives the President wide latitude to use the Malampaya Funds for any other
purpose he may direct and, in effect, allows him to unilaterally appropriate public funds beyond the
purview of the law. That the subject phrase may be confined only to "energy resource development and
exploitation programs and projects of the government" under the principle of ejusdem generis, meaning
that the general word or phrase is to be construed to include — or be restricted to — things akin to,
resembling, or of the same kind or class as those specifically mentioned, 249 is belied by three (3)
reasons: first, the phrase "energy resource development and exploitation programs and projects of the
government" states a singular and general class and hence, cannot be treated as a statutory reference of
specific things from which the general phrase "for such other purposes" may be limited; second, the said
phrase also exhausts the class it represents, namely energy development programs of the government;
250 and, third, the Executive department has, in fact, used the Malampaya Funds for non-energy related
purposes under the subject phrase, thereby contradicting respondents' own position that it is limited only
to "energy resource development and exploitation programs and projects of the government." 251 Thus,
while Section 8 of PD 910 may have passed the completeness test since the policy of energy
development is clearly deducible from its text, the phrase "and for such other purposes as may be
hereafter directed by the President" under the same provision of law should nonetheless be stricken down
as unconstitutional as it lies independently unfettered by any sufficient standard of the delegating law.
This notwithstanding, it must be underscored that the rest of Section 8, insofar as it allows for the use of
the Malampaya Funds "to finance energy resource development and exploitation programs and projects
of the government," remains legally effective and subsisting. Truth be told, the declared unconstitutionality
of the aforementioned phrase is but an assurance that the Malampaya Funds would be used — as it
should be used — only in accordance with the avowed purpose and intention of PD 910.

As for the Presidential Social Fund, the Court takes judicial notice of the fact that Section 12 of PD 1869
has already been amended by PD 1993 which thus moots the parties' submissions on the same. 252
Nevertheless, since the amendatory provision may be readily examined under the current parameters of
discussion, the Court proceeds to resolve its constitutionality. TSCIEa

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Primarily, Section 12 of PD 1869, as amended by PD 1993, indicates that the Presidential Social Fund
may be used "to [first,] finance the priority infrastructure development projects and [second,] to finance
the restoration of damaged or destroyed facilities due to calamities, as may be directed and authorized by
the Office of the President of the Philippines." The Court finds that while the second indicated purpose
adequately curtails the authority of the President to spend the Presidential Social Fund only for
restoration purposes which arise from calamities, the first indicated purpose, however, gives him carte
blanche authority to use the same fund for any infrastructure project he may so determine as a "priority".
Verily, the law does not supply a definition of "priority infrastructure development projects" and hence,
leaves the President without any guideline to construe the same. To note, the delimitation of a project as
one of "infrastructure" is too broad of a classification since the said term could pertain to any kind of
facility. This may be deduced from its lexicographic definition as follows: "[t]he underlying framework of a
system, [especially] public services and facilities (such as highways, schools, bridges, sewers, and water-
systems) needed to support commerce as well as economic and residential development." 253 In fine,
the phrase "to finance the priority infrastructure development projects" must be stricken down as
unconstitutional since — similar to the aboveassailed provision under Section 8 of PD 910 — it lies
independently unfettered by any sufficient standard of the delegating law. As they are severable, all other
provisions of Section 12 of PD 1869, as amended by PD 1993, remains legally effective and subsisting.

D. Ancillary Prayers.

1. Petitioners' Prayer to be Furnished Lists and Detailed Reports.

Aside from seeking the Court to declare the Pork Barrel System unconstitutional — as the Court did so in
the context of its pronouncements made in this Decision — petitioners equally pray that the Executive
Secretary and/or the DBM be ordered to release to the CoA and to the public: (a) "the complete
schedule/list of legislators who have availed of their PDAF and VILP from the years 2003 to 2013,
specifying the use of the funds, the project or activity and the recipient entities or individuals, and all
pertinent data thereto" (PDAF Use Schedule/List); 254 and (b) "the use of the Executive's [lump-sum,
discretionary] funds, including the proceeds from the . . . Malampaya Funds] [and] remittances from the
[PAGCOR] . . . from 2003 to 2013, specifying the . . . project or activity and the recipient entities or
individuals, and all pertinent data thereto" 255 (Presidential Pork Use Report). Petitioners' prayer is
grounded on Section 28, Article II and Section 7, Article III of the 1987 Constitution which read as follows:

ARTICLE II

Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of
full public disclosure of all its transactions involving public interest.

ARTICLE III

Sec. 7. The right of the people to information on matters of public concern shall be recognized. Access to
official records, and to documents and papers pertaining to official acts, transactions, or decisions, as well
as to government research data used as basis for policy development, shall be afforded the citizen,
subject to such limitations as may be provided by law.

The Court denies petitioners' submission.

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Case law instructs that the proper remedy to invoke the right to information is to file a petition for
mandamus. As explained in the case of Legaspi v. Civil Service Commission: 256

[W]hile the manner of examining public records may be subject to reasonable regulation by the
government agency in custody thereof, the duty to disclose the information of public concern, and to
afford access to public records cannot be discretionary on the part of said agencies. Certainly, its
performance cannot be made contingent upon the discretion of such agencies. Otherwise, the enjoyment
of the constitutional right may be rendered nugatory by any whimsical exercise of agency discretion. The
constitutional duty, not being discretionary, its performance may be compelled by a writ of mandamus in a
proper case.

But what is a proper case for Mandamus to issue? In the case before Us, the public right to be enforced
and the concomitant duty of the State are unequivocably set forth in the Constitution. The decisive
question on the propriety of the issuance of the writ of mandamus in this case is, whether the information
sought by the petitioner is within the ambit of the constitutional guarantee. (Emphases supplied)

Corollarily, in the case of Valmonte v. Belmonte Jr. 257 (Valmonte), it has been clarified that the right to
information does not include the right to compel the preparation of "lists, abstracts, summaries and the
like." In the same case, it was stressed that it is essential that the "applicant has a well-defined, clear and
certain legal right to the thing demanded and that it is the imperative duty of defendant to perform the act
required." Hence, without the foregoing substantiations, the Court cannot grant a particular request for
information. The pertinent portions of Valmonte are hereunder quoted: 258

Although citizens are afforded the right to information and, pursuant thereto, are entitled to "access to
official records," the Constitution does not accord them a right to compel custodians of official records to
prepare lists, abstracts, summaries and the like in their desire to acquire information on matters of public
concern. cTACIa

It must be stressed that it is essential for a writ of mandamus to issue that the applicant has a well-
defined, clear and certain legal right to the thing demanded and that it is the imperative duty of defendant
to perform the act required. The corresponding duty of the respondent to perform the required act must
be clear and specific [Lemi v. Valencia, G.R. No. L-20768, November 29, 1968, 126 SCRA 203; Ocampo
v. Subido, G.R. No. L-28344, August 27, 1976, 72 SCRA 443.] The request of the petitioners fails to meet
this standard, there being no duty on the part of respondent to prepare the list requested. (Emphases
supplied)

In these cases, aside from the fact that none of the petitions are in the nature of mandamus actions, the
Court finds that petitioners have failed to establish a "a well-defined, clear and certain legal right" to be
furnished by the Executive Secretary and/or the DBM of their requested PDAF Use Schedule/List and
Presidential Pork Use Report. Neither did petitioners assert any law or administrative issuance which
would form the bases of the latter's duty to furnish them with the documents requested. While petitioners
pray that said information be equally released to the CoA, it must be pointed out that the CoA has not
been impleaded as a party to these cases nor has it filed any petition before the Court to be allowed
access to or to compel the release of any official document relevant to the conduct of its audit
investigations. While the Court recognizes that the information requested is a matter of significant public
concern, however, if only to ensure that the parameters of disclosure are properly foisted and so as not to
unduly hamper the equally important interests of the government, it is constrained to deny petitioners'
prayer on this score, without prejudice to a proper mandamus case which they, or even the CoA, may
choose to pursue through a separate petition. EHSCcT

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It bears clarification that the Court's denial herein should only cover petitioners' plea to be furnished with
such schedule/list and report and not in any way deny them, or the general public, access to official
documents which are already existing and of public record. Subject to reasonable regulation and absent
any valid statutory prohibition, access to these documents should not be proscribed. Thus, in Valmonte,
while the Court denied the application for mandamus towards the preparation of the list requested by
petitioners therein, it nonetheless allowed access to the documents sought for by the latter, subject,
however, to the custodian's reasonable regulations, viz.: 259

In fine, petitioners are entitled to access to the documents evidencing loans granted by the GSIS, subject
to reasonable regulations that the latter may promulgate relating to the manner and hours of examination,
to the end that damage to or loss of the records may be avoided, that undue interference with the duties
of the custodian of the records may be prevented and that the right of other persons entitled to inspect the
records may be insured [Legaspi v. Civil Service Commission, supra at p. 538, quoting Subido v. Ozaeta,
80 Phil. 383, 387.] The petition, as to the second and third alternative acts sought to be done by
petitioners, is meritorious.

However, the same cannot be said with regard to the first act sought by petitioners, i.e., "to furnish
petitioners the list of the names of the Batasang Pambansa members belonging to the UNIDO and PDP-
Laban who were able to secure clean loans immediately before the February 7 election thru the
intercession/marginal note of the then First Lady Imelda Marcos." caHCSD

The Court, therefore, applies the same treatment here.

2. Petitioners' Prayer to Include Matters in Congressional Deliberations.

Petitioners further seek that the Court "[order] the inclusion in budgetary deliberations with the Congress
of all presently, off-budget, lump sum, discretionary funds including but not limited to, proceeds from the .
. . Malampaya Fund, remittances from the [PAGCOR] and the [PCSO] or the Executive's Social Funds[.]"
260

Suffice it to state that the above-stated relief sought by petitioners covers a matter which is generally left
to the prerogative of the political branches of government. Hence, lest the Court itself overreach, it must
equally deny their prayer on this score.

3. Respondents' Prayer to Lift TRO; Consequential Effects of Decision.

The final issue to be resolved stems from the interpretation accorded by the DBM to the concept of
released funds. In response to the Court's September 10, 2013 TRO that enjoined the release of the
remaining PDAF allocated for the year 2013, the DBM issued Circular Letter No. 2013-8 dated
September 27, 2013 (DBM Circular 2013-8) which pertinently reads as follows:

3.0 Nonetheless, PDAF projects funded under the FY 2013 GAA, where a Special Allotment Release
Order (SARO) has been issued by the DBM and such SARO has been obligated by the implementing
agencies prior to the issuance of the TRO, may continually be implemented and disbursements thereto
effected by the agencies concerned. aSCHcA

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Based on the text of the foregoing, the DBM authorized the continued implementation and disbursement
of PDAF funds as long as they are: first, covered by a SARO; and, second, that said SARO had been
obligated by the implementing agency concerned prior to the issuance of the Court's September 10, 2013
TRO.

Petitioners take issue with the foregoing circular, arguing that "the issuance of the SARO does not yet
involve the release of funds under the PDAF, as release is only triggered by the issuance of a Notice of
Cash Allocation [(NCA)]." 261 As such, PDAF disbursements, even if covered by an obligated SARO,
should remain enjoined.

For their part, respondents espouse that the subject TRO only covers "unreleased and unobligated
allotments." They explain that once a SARO has been issued and obligated by the implementing agency
concerned, the PDAF funds covered by the same are already "beyond the reach of the TRO because
they cannot be considered as 'remaining PDAF.'" They conclude that this is a reasonable interpretation of
the TRO by the DBM. 262

The Court agrees with petitioners in part.

At the outset, it must be observed that the issue of whether or not the Court's September 10, 2013 TRO
should be lifted is a matter rendered moot by the present Decision. The unconstitutionality of the 2013
PDAF Article as declared herein has the consequential effect of converting the temporary injunction into a
permanent one. Hence, from the promulgation of this Decision, the release of the remaining PDAF funds
for 2013, among others, is now permanently enjoined. DHETIS

The propriety of the DBM's interpretation of the concept of "release" must, nevertheless, be resolved as it
has a practical impact on the execution of the current Decision. In particular, the Court must resolve the
issue of whether or not PDAF funds covered by obligated SAROs, at the time this Decision is
promulgated, may still be disbursed following the DBM's interpretation in DBM Circular 2013-8.

On this score, the Court agrees with petitioners' posturing for the fundamental reason that funds covered
by an obligated SARO are yet to be "released" under legal contemplation. A SARO, as defined by the
DBM itself in its website, is "[a] specific authority issued to identified agencies to incur obligations not
exceeding a given amount during a specified period for the purpose indicated. It shall cover expenditures
the release of which is subject to compliance with specific laws or regulations, or is subject to separate
approval or clearance by competent authority." 263 Based on this definition, it may be gleaned that a
SARO only evinces the existence of an obligation and not the directive to pay. Practically speaking, the
SARO does not have the direct and immediate effect of placing public funds beyond the control of the
disbursing authority. In fact, a SARO may even be withdrawn under certain circumstances which will
prevent the actual release of funds. On the other hand, the actual release of funds is brought about by the
issuance of the NCA, 264 which is subsequent to the issuance of a SARO. As may be determined from
the statements of the DBM representative during the Oral Arguments: 265 HIETAc

Justice Bernabe:

Is the notice of allocation issued simultaneously with the SARO?

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xxx xxx xxx

Atty. Ruiz:

It comes after. The SARO, Your Honor, is only the go signal for the agencies to obligate or to enter into
commitments. The NCA, Your Honor, is already the go signal to the treasury for us to be able to pay or to
liquidate the amounts obligated in the SARO; so it comes after. . . . The NCA, Your Honor, is the go
signal for the MDS for the authorized government-disbursing banks to, therefore, pay the payees
depending on the projects or projects covered by the SARO and the NCA.

Justice Bernabe:

Are there instances that SAROs are cancelled or revoked?

Atty. Ruiz:

Your Honor, I would like to instead submit that there are instances that the SAROs issued are withdrawn
by the DBM.

Justice Bernabe:

They are withdrawn? SEHDIC

Atty. Ruiz:

Yes, Your Honor . . . . (Emphases and underscoring supplied)

Thus, unless an NCA has been issued, public funds should not be treated as funds which have been
"released." In this respect, therefore, the disbursement of 2013 PDAF funds which are only covered by
obligated SAROs, and without any corresponding NCAs issued, must, at the time of this Decision's
promulgation, be enjoined and consequently reverted to the unappropriated surplus of the general fund.
Verily, in view of the declared unconstitutionality of the 2013 PDAF Article, the funds appropriated
pursuant thereto cannot be disbursed even though already obligated, else the Court sanctions the dealing
of funds coming from an unconstitutional source.

This same pronouncement must be equally applied to (a) the Malampaya Funds which have been
obligated but not released — meaning, those merely covered by a SARO — under the phrase "and for
such other purposes as may be hereafter directed by the President" pursuant to Section 8 of PD 910; and
(b) funds sourced from the Presidential Social Fund under the phrase "to finance the priority infrastructure
development projects" pursuant to Section 12 of PD 1869, as amended by PD 1993, which were

111
altogether declared by the Court as unconstitutional. However, these funds should not be reverted to the
general fund as afore-stated but instead, respectively remain under the Malampaya Funds and the
Presidential Social Fund to be utilized for their corresponding special purposes not otherwise declared as
unconstitutional. CaHAcT

E. Consequential Effects of Decision.

As a final point, it must be stressed that the Court's pronouncement anent the unconstitutionality of (a) the
2013 PDAF Article and its Special Provisions, (b) all other Congressional Pork Barrel provisions similar
thereto, and (c) the phrases (1) "and for such other purposes as may be hereafter directed by the
President" under Section 8 of PD 910, and (2) "to finance the priority infrastructure development projects"
under Section 12 of PD 1869, as amended by PD 1993, must only be treated as prospective in effect in
view of the operative fact doctrine.

To explain, the operative fact doctrine exhorts the recognition that until the judiciary, in an appropriate
case, declares the invalidity of a certain legislative or executive act, such act is presumed constitutional
and thus, entitled to obedience and respect and should be properly enforced and complied with. As
explained in the recent case of Commissioner of Internal Revenue v. San Roque Power Corporation, 266
the doctrine merely "reflect[s] awareness that precisely because the judiciary is the governmental organ
which has the final say on whether or not a legislative or executive measure is valid, a period of time may
have elapsed before it can exercise the power of judicial review that may lead to a declaration of nullity. It
would be to deprive the law of its quality of fairness and justice then, if there be no recognition of what
had transpired prior to such adjudication." 267 "In the language of an American Supreme Court decision:
'The actual existence of a statute, prior to such a determination [of unconstitutionality], is an operative fact
and may have consequences which cannot justly be ignored.'" 268

For these reasons, this Decision should be heretofore applied prospectively. CcAITa

Conclusion

The Court renders this Decision to rectify an error which has persisted in the chronicles of our history. In
the final analysis, the Court must strike down the Pork Barrel System as unconstitutional in view of the
inherent defects in the rules within which it operates. To recount, insofar as it has allowed legislators to
wield, in varying gradations, non-oversight, post-enactment authority in vital areas of budget execution,
the system has violated the principle of separation of powers; insofar as it has conferred unto legislators
the power of appropriation by giving them personal, discretionary funds from which they are able to fund
specific projects which they themselves determine, it has similarly violated the principle of non-delegability
of legislative power; insofar as it has created a system of budgeting wherein items are not textualized into
the appropriations bill, it has flouted the prescribed procedure of presentment and, in the process, denied
the President the power to veto items; insofar as it has diluted the effectiveness of congressional
oversight by giving legislators a stake in the affairs of budget execution, an aspect of governance which
they may be called to monitor and scrutinize, the system has equally impaired public accountability;
insofar as it has authorized legislators, who are national officers, to intervene in affairs of purely local
nature, despite the existence of capable local institutions, it has likewise subverted genuine local
autonomy; and again, insofar as it has conferred to the President the power to appropriate funds intended
by law for energy-related purposes only to other purposes he may deem fit as well as other public funds
under the broad classification of "priority infrastructure development projects," it has once more
transgressed the principle of non-delegability. SaCDTA

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For as long as this nation adheres to the rule of law, any of the multifarious unconstitutional methods and
mechanisms the Court has herein pointed out should never again be adopted in any system of
governance, by any name or form, by any semblance or similarity, by any influence or effect.
Disconcerting as it is to think that a system so constitutionally unsound has monumentally endured, the
Court urges the people and its co-stewards in government to look forward with the optimism of change
and the awareness of the past. At a time of great civic unrest and vociferous public debate, the Court
fervently hopes that its Decision today, while it may not purge all the wrongs of society nor bring back
what has been lost, guides this nation to the path forged by the Constitution so that no one may
heretofore detract from its cause nor stray from its course. After all, this is the Court's bounden duty and
no other's.

WHEREFORE, the petitions are PARTLY GRANTED. In view of the constitutional violations discussed in
this Decision, the Court hereby declares as UNCONSTITUTIONAL: (a) the entire 2013 PDAF Article; (b)
all legal provisions of past and present Congressional Pork Barrel Laws, such as the previous PDAF and
CDF Articles and the various Congressional Insertions, which authorize/d legislators — whether
individually or collectively organized into committees — to intervene, assume or participate in any of the
various post-enactment stages of the budget execution, such as but not limited to the areas of project
identification, modification and revision of project identification, fund release and/or fund realignment,
unrelated to the power of congressional oversight; (c) all legal provisions of past and present
Congressional Pork Barrel Laws, such as the previous PDAF and CDF Articles and the various
Congressional Insertions, which confer/red personal, lump-sum allocations to legislators from which they
are able to fund specific projects which they themselves determine; (d) all informal practices of similar
import and effect, which the Court similarly deems to be acts of grave abuse of discretion amounting to
lack or excess of jurisdiction; and (e) the phrases (1) "and for such other purposes as may be hereafter
directed by the President" under Section 8 of Presidential Decree No. 910 and (2) "to finance the priority
infrastructure development projects" under Section 12 of Presidential Decree No. 1869, as amended by
Presidential Decree No. 1993, for both failing the sufficient standard test in violation of the principle of
non-delegability of legislative power. HaEcAC

Accordingly, the Court's temporary injunction dated September 10, 2013 is hereby declared to be
PERMANENT. Thus, the disbursement/release of the remaining PDAF funds allocated for the year 2013,
as well as for all previous years, and the funds sourced from (1) the Malampaya Funds under the phrase
"and for such other purposes as may be hereafter directed by the President" pursuant to Section 8 of
Presidential Decree No. 910, and (2) the Presidential Social Fund under the phrase "to finance the priority
infrastructure development projects" pursuant to Section 12 of Presidential Decree No. 1869, as amended
by Presidential Decree No. 1993, which are, at the time this Decision is promulgated, not covered by
Notice of Cash Allocations (NCAs) but only by Special Allotment Release Orders (SAROs), whether
obligated or not, are hereby ENJOINED. The remaining PDAF funds covered by this permanent injunction
shall not be disbursed/released but instead reverted to the unappropriated surplus of the general fund,
while the funds under the Malampaya Funds and the Presidential Social Fund shall remain therein to be
utilized for their respective special purposes not otherwise declared as unconstitutional.

On the other hand, due to improper recourse and lack of proper substantiation, the Court hereby DENIES
petitioners' prayer seeking that the Executive Secretary and/or the Department of Budget and
Management be ordered to provide the public and the Commission on Audit complete lists/schedules or
detailed reports related to the availments and utilization of the funds subject of these cases. Petitioners'
access to official documents already available and of public record which are related to these funds must,
however, not be prohibited but merely subjected to the custodian's reasonable regulations or any valid
statutory prohibition on the same. This denial is without prejudice to a proper mandamus case which they
or the Commission on Audit may choose to pursue through a separate petition. ATCEIc

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The Court also DENIES petitioners' prayer to order the inclusion of the funds subject of these cases in the
budgetary deliberations of Congress as the same is a matter left to the prerogative of the political
branches of government.

Finally, the Court hereby DIRECTS all prosecutorial organs of the government to, within the bounds of
reasonable dispatch, investigate and accordingly prosecute all government officials and/or private
individuals for possible criminal offenses related to the irregular, improper and/or unlawful
disbursement/utilization of all funds under the Pork Barrel System.

This Decision is immediately executory but prospective in effect.

SO ORDERED.

||| (Belgica v. Ochoa, G.R. Nos. 208566, 208493, 209251 & L-20768, [November 19, 2013], 721 PHIL
416-732)

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DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated September 25, 2012 and the
Resolution 3 dated January 22, 2013 of the Court of Appeals (CA) in CA-G.R. SP No. 117355, which
reversed and set aside the Decision 4 dated October 26, 2009 and the Order 5 dated October 27, 2010 of
the Office of the Deputy Ombudsman for Luzon (OMB-Luzon) in OMB-L-A-07-0113-A finding respondents
Avelino De Zosa and Bartolome Dela Cruz (respondents), then incumbent Municipal Assessor and
Municipal Engineer, respectively, of the Municipality of Kawit, Cavite, administratively liable for Grave
Misconduct.

The Facts

On January 17, 1997, the Sangguniang Bayan of Kawit, Cavite issued Resolution No. 3-97, series of
1997, 6 authorizing the mayor to sell the municipal properties, particularly those under Tax Declaration
(TD) Nos. 9761-A, 9762-A, and 9763-A (subject lands), and to perform such other acts necessary and
related to such sales. Pursuant thereto, the Municipal Appraisal Board (MAB) of Kawit, Cavite issued
MAB-Resolution No. 3-97, 7 whereby it decreased the assessed fair market value of the subject lands
from P700.00 per square meter (sq.m.) to P500.00 per sq.m. Thereafter, the Municipality of Kawit, Cavite
auctioned Lot No. 4431, a 243,562-sq.m. parcel of land covered by TD No. 9763-A, at a minimum bid
price set at P121,781,000.00, pegged at P500.00 per sq.m. Consequently, Lot No. 4431 was awarded to
FJI Property Developers, Inc. (FJI), which gave the highest bid of P123,123,123.00, 8 or approximately
P505.51 per sq.m. 9

However, in the Appraisal Review/Evaluation Report 10 dated June 23, 2000 of the Commission on Audit
(COA Report), it was found that the proper fair market value for Lot No. 4431 should have been P878.26
per sq.m. Hence, the COA Report concluded that the Municipality of Kawit, Cavite suffered undue injury
when it was deprived of income in the amount of P378.26 per sq.m., or a total of P92,129,762.12, from
the sale of Lot No. 4431, resulting in unwarranted benefits in favor of FJI. 11 TEacSA

Resultantly, the Field Investigation Office of the Office of the Ombudsman (FIO) filed a Complaint 12
dated January 16, 2007 against the members of the MAB of Kawit, Cavite, including respondents,
criminally charging them of violating Section 3 (e) 13 of Republic Act No. (RA) 3019 14 and
administratively charging them of Grave Misconduct, for passing and approving MAB-Resolution No. 3-
97. The criminal aspect was docketed before the Office of the Ombudsman as Criminal Case No. OMB-1-
01-0304-C, while the administrative aspect subject of the instant case was docketed before OMB-Luzon
as OMB-L-A-07-0113-A. The complaint alleged that respondents' reappraisal was done sans any basis or
computation. 15

In their defense, respondents maintained that the re-appraisal and revaluation of Lot No. 4431 was based
on the MAB's aim of maintaining a uniform assessment of lots with similar attributes in the Municipality of
Kawit, i.e., lands which are around "30 meters away from [the national] road and classified as agricultural
being fishpond or marsh land with similar desirability, neighborhood and important need for the
acquisition of a real property." 16 They likewise added that none of the members of the MAB benefited

115
from such revaluation and that they were unaware of any losses incurred by the municipality in view of
the sale of Lot No. 4431 to FJI as the MAB was not the entity that executed such sale. 17

The OMB-Luzon Ruling

In a Decision 18 dated October 26, 2009, the OMB-Luzon found respondents guilty of Grave Misconduct
and accordingly, meted out the penalty of dismissal from service with cancellation of eligibility, forfeiture
of retirement benefits, and perpetual disqualification for re-employment in the government service. The
case, however, was dismissed as to the other members of the MAB either for being moot and academic
due to the expiration of their term of office or on account of their death. 19

In ruling against respondents, the OMB-Luzon cited the Office of the Ombudsman's ruling 20 in OMB-1-
01-0304-C, whereby it was found that respondents' acts had "caused undue injury to the government [in
terms of monetary loss] because lowering [Lot No. 4431's] value to P500.00 [per] sq.m. was not fitting
and suitable for a property that commanded a value of P1,100.00 [per] sq.m. as per BIR records . . . and
a fair market value of P878.27 [per] sq.m. as per COA valuation." 21 In view of such findings, the OMB-
Luzon concluded that respondents are liable for Grave Misconduct for their flagrant disregard of
established rules in arriving at the questioned valuation of the subject lands, including Lot No. 4431. 22

Respondents moved for reconsideration which was, however, denied in an Order 23 dated October 27,
2010. Aggrieved, they appealed to the CA. TAEcCS

The CA Ruling

In a Decision 24 dated September 25, 2012, the CA reversed and set aside the OMB-Luzon Ruling, and
thereby exonerated respondents from administrative liability for Grave Misconduct and restored their
entitlement to their earned benefits. 25 Contrary to the findings of the OMB-Luzon, the CA held that there
is no substantial evidence to support the finding that corruption, willful intent to violate the law, or
disregard of established procedures may be ascribed to respondents. It ratiocinated that aside from
respondents and the other members' avowed intention to maintain a standard and uniform valuation and
appraisal of properties, MAB-Resolution No. 3-97 merely reflected the valuation previously approved by
the Cavite Provincial Assessment Board in its Resolution No. 10-96. Finally, the CA noted that while the
OMB-Luzon mentioned that respondents flagrantly violated established rules, it did not mention what
exactly was the rule violated and how respondents committed such violation. 26 Hence, the CA
concluded that in approving MAB-Resolution No. 3-97, respondents did not willfully violate nor disregard
existing rules in the appraisal and revaluation of the subject lands. 27

Dissatisfied, the FIO moved for reconsideration, which was, however, denied in a Resolution 28 dated
January 22, 2013, hence, this petition.

The Issue Before the Court

The primordial issue for the Court's resolution is whether or not the CA correctly absolved respondents
from administrative liability for Grave Misconduct.

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The Court's Ruling

The petition has no merit.

At the outset, it must be stressed that in administrative cases, substantial evidence is required to support
any findings. Substantial evidence is such relevant evidence as a reasonable mind may accept as
adequate to support a conclusion. The requirement is satisfied where there is reasonable ground to
believe that one is guilty of the act or omission complained of, even if the evidence might not be
overwhelming. 29 In cases before the Office of the Ombudsman, jurisprudence instructs that "the
fundamental rule in administrative proceedings is that the complainant has the burden of proving, by
substantial evidence, the allegations in his complaint. Section 27 of the Ombudsman Act is unequivocal:
Findings of fact by the Office of the Ombudsman when supported by substantial evidence are conclusive.
Conversely, therefore, when the findings of fact by the Ombudsman are not adequately supported by
substantial evidence, they shall not be binding upon the courts." 30 Thus, the Court must make its own
factual review of the case when the Ombudsman's findings are contradictory to that of the CA, 31 as in
this case. aTEACS

After a judicial review of the records, the Court agrees with the CA that there is no substantial evidence to
hold respondents administratively liable for Grave Misconduct.

Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful
behavior or gross negligence by the public officer. To warrant dismissal from service, the misconduct
must be grave, serious, important, weighty, momentous, and not trifling. The misconduct must imply
wrongful intention and not a mere error of judgment and must also have a direct relation to and be
connected with the performance of the public officer's official duties amounting either to maladministration
or willful, intentional neglect, or failure to discharge the duties of the office. In order to differentiate gross
misconduct from simple misconduct, the elements of corruption, clear intent to violate the law, or flagrant
disregard of established rule, must be manifest in the former. 32

In this case, records are bereft of any showing that respondents wrongfully intended to transgress some
established and definite rule of action which is attended by corruption, clear intent to violate the law, or
flagrant disregard of the rules when they, along with the other members of the MAB of the Municipality of
Kawit, Cavite, approved MAB-Resolution No. 3-97 causing the re-appraisal and revaluation of the subject
lands. On the contrary and as correctly pointed out by the CA, the passage of MAB-Resolution No. 3-97
was merely done so that lands within the municipality which have the same attributes — those which are
around "30 meters away from [the national] road, and classified as agricultural being fishpond or marsh
land with similar desirability, neighborhood and important need for the acquisition of a real property" —
will be assessed uniformly, pursuant to Resolution No. 10-96 of the Cavite Provincial Assessment Board.
33 As there are ample bases for the passage of MAB-Resolution No. 3-97, the Court finds that the
evidence on record supports the conclusion that respondents did not commit Grave Misconduct, much
less Simple Misconduct. Perforce, the CA correctly exonerated them from administrative liability. cDCSTA

WHEREFORE, the petition is DENIED. Accordingly, the Decision dated September 25, 2012 and the
Resolution dated January 22, 2013 of the Court of Appeals in CA-G.R. SP No. 117355 are hereby
AFFIRMED.

SO ORDERED.

||| (Office of the Ombudsman v. De Zosa, G.R. No. 205433, [January 21, 2015])

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EN BANC

[G.R. No. 202202. March 19, 2013.]

SILVERIO R. TAGOLINO, petitioner, vs. HOUSE OF REPRESENTATIVES ELECTORAL TRIBUNAL

AND LUCY MARIE TORRES-GOMEZ, respondents.

DECISION

PERLAS-BERNABE, J p:

Assailed in this Petition for Certiorari and Prohibition under Rule 65 of the Rules of Court is the March 22,
2012 Decision 1 of the House of Representatives Electoral Tribunal (HRET) in HRET Case No. 10-031
(QW) which declared the validity of private respondent Lucy Marie Torres-Gomez's substitution as the
Liberal Party's replacement candidate for the position of Leyte Representative (Fourth Legislative District)
in lieu of Richard Gomez.

The Facts

On November 30, 2009, Richard Gomez (Richard) filed his certificate of candidacy 2 (CoC) with the
Commission on Elections (COMELEC), seeking congressional office as Representative for the Fourth
Legislative District of Leyte under the ticket of the Liberal Party. Subsequently, on December 6, 2009, one
of the opposing candidates, Buenaventura Juntilla (Juntilla), filed a Verified Petition, 3 alleging that
Richard, who was actually a resident of Colgate Street, East Greenhills, San Juan City, Metro Manila,
misrepresented in his CoC that he resided in 910 Carlota Hills, Can-adieng, Ormoc City. In this regard,
Juntilla asserted that Richard failed to meet the one (1) year residency requirement under Section 6,
Article VI 4 of the 1987 Philippine Constitution (Constitution) and thus should be declared
disqualified/ineligible to run for the said office. In addition, Juntilla prayed that Richard's CoC be denied
due course and/or cancelled. 5

On February 17, 2010, the COMELEC First Division rendered a Resolution 6 granting Juntilla's petition
without any qualification. The dispositive portion of which reads: aHESCT

WHEREFORE, premises considered, the Commission RESOLVED, as it hereby RESOLVES, to GRANT

the Petition to Disqualify Candidate for Lack of Qualification filed by BUENAVENTURA O. JUNTILLA
against RICHARD I. GOMEZ. Accordingly, RICHARD I. GOMEZ is DISQUALIFIED as a candidate for the
Office of Congressman, Fourth District of Leyte, for lack of residency requirement.

SO ORDERED.

Aggrieved, Richard moved for reconsideration but the same was denied by the COMELEC En Banc
through a Resolution dated May 4, 2010. 7 Thereafter, in a Manifestation of even date, Richard accepted

118
the said resolution with finality "in order to enable his substitute to facilitate the filing of the necessary
documents for substitution." 8

On May 5, 2010, Lucy Marie Torres-Gomez (private respondent) filed her CoC 9 together with a
Certificate of Nomination and Acceptance 10 from the Liberal Party endorsing her as the party's official
substitute candidate vice her husband, Richard, for the same congressional post. In response to various
letter-requests submitted to the COMELEC's Law Department (Law Department), the COMELEC En
Banc, in the exercise of its administrative functions, issued Resolution No. 8890 11 on May 8, 2010,
approving, among others, the recommendation of the said department to allow the substitution of private
respondent. The recommendation reads:

STUDY AND OBSERVATION

On the same date, this Department received an Opposition from Mr. Buenaventura O. Juntilla, thru his
counsel, opposing the candidacy of Ms. Lucy Marie Torres Gomez, as a substitute candidate for Mr.
Richard I. Gomez.

The crux of the opposition stemmed from the issue that there should be no substitution because there is
no candidate to substitute for.

It must be stressed that the resolution of the First Division, this Commission, in SPA No. 09-059 speaks
for disqualification of candidate Richard I. Gomez and not of cancellation of his Certificate of Candidacy:

'Wherefore, premises considered, the Commission RESOLVED, as it hereby RESOLVES, to GRANT the
Petition to Disqualify Candidate for Lack of Qualification filed . . . against RICHARD I. GOMEZ.
Accordingly, RICHARD I. GOMEZ is DISQUALIFIED as a candidate for the Office of Congressman,
Fourth District of Leyte, for lack of residency requirement.'

The said resolution was affirmed by the Commission En Banc on May 04, 2010.

The disqualification of a candidate does not automatically cancel one's certificate of candidacy, especially
when it is nominated by a political party. In effect, the political party is still allowed to substitute the
candidate whose candidacy was declared disqualified. After all, the right to substitute is a privilege given
to a political party to exercise and not dependent totally to a candidate.

Nonetheless, in case of doubt, the same must always be resolved to the qualification of a candidate to
run in the public office.

The substitution complied with the requirements provided under Section 12 in relation to Section 13 of
Comelec Resolution No. 8678 dated October 6, 2009.

xxx xxx xxx

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In view of the foregoing, the Law Department RECOMMENDS the following:

xxx xxx xxx

2. TO ALLOW CANDIDATE LUCY MARIE TORRES GOMEZ AS A SUBSTITUTE CANDIDATE FOR

RICHARD GOMEZ; (Emphasis and underscoring supplied)

xxx xxx xxx

The following day, or on May 9, 2010, Juntilla filed an Extremely Urgent Motion for Reconsideration 12
(May 9, 2010 Motion) of the above-mentioned COMELEC En Banc resolution.

Pending resolution of Juntilla's May 9, 2010 Motion, the national and local elections were conducted as
scheduled on May 10, 2010. During the elections, Richard, whose name remained on the ballots,
garnered 101,250 votes while his opponents, namely, Eufrocino Codilla, Jr. and herein petitioner Silverio
Tagolino, obtained 76,549 and 493 votes, respectively. 13 In view of the aforementioned substitution,
Richard's votes were credited in favor of private respondent and as a result, she was proclaimed the duly-
elected Representative of the Fourth District of Leyte.

On May 11, 2010, Juntilla filed an Extremely Urgent Motion to resolve the pending May 9, 2010 Motion
relative to Resolution No. 8890. 14 The said motion, however, remained unacted. AIDTSE

On May 24, 2010, petitioner filed a Petition 15 for quo warranto before the HRET in order to oust private
respondent from her congressional seat, claiming that: (1) she failed to comply with the one (1) year
residency requirement under Section 6, Article VI of the Constitution considering that the transfer of her
voter registration from San Rafael, Bulacan 16 to the Fourth District of Leyte was only applied for on July
23, 2009; (2) she did not validly substitute Richard as his CoC was void ab initio; and (3) private
respondent's CoC was void due to her non-compliance with the prescribed notarial requirements i.e., she
failed to present valid and competent proof of her identity before the notarizing officer. 17

In her Verified Answer, 18 private respondent denied petitioner's allegations and claimed that she validly
substituted her husband in the electoral process. She also averred that she was personally known to the
notary public who notarized her CoC, one Atty. Edgardo Cordeno, and thus, she was not required to have
presented any competent proof of identity during the notarization of the said document. Lastly, she
asserted that despite her marriage to Richard and exercise of profession in Metro Manila, she continued
to maintain her residency in Ormoc City which was the place where she was born and raised.

During the preliminary conference, and as shown in the Preliminary Conference Order dated September
2, 2010, the parties agreed on the following issues for resolution:

1. Whether or not the instant petition for quo warranto is meritorious;

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2. Whether or not the substitution of respondent is valid;

3. Whether or not a petition for quo warranto can be used as a substitute for failure to file the necessary
petition for disqualification with the COMELEC;

4. Whether or not respondent's COC was duly subscribed; and

5. Whether or not respondent is ineligible for the position of Representative of the Fourth District of Leyte
for lack of residency requirement. 19

Ruling of the HRET

After due proceedings, the HRET issued the assailed March 22, 2012 Decision 20 which dismissed the
quo warranto petition and declared that private respondent was a qualified candidate for the position of
Leyte Representative (Fourth Legislative District). It observed that the resolution denying Richard's
candidacy i.e., the COMELEC First Division's February 17, 2010 Resolution, spoke of disqualification and
not of CoC cancellation. Hence, it held that the substitution of private respondent in lieu of Richard was
legal and valid. 21 Also, it upheld the validity of private respondent's CoC due to petitioner's failure to
controvert her claim that she was personally known to the notary public who notarized her CoC. 22
Finally, the HRET ruled that while it had been admitted that private respondent resides in Colgate Street,
San Juan City and lived in San Rafael, Bulacan, the fact was she continued to retain her domicile in
Ormoc City given that her absence therefrom was only temporary.

Hence, the instant petition.

Issues Before the Court

The crux of the present controversy is whether or not the HRET gravely abused its discretion in finding
that Richard was validly substituted by private respondent as candidate for Leyte Representative (Fourth
Legislative District) in view of the former's failure to meet the one (1) year residency requirement provided
under Section 6, Article VI of the Constitution.

It is petitioner's submission that the HRET gravely abused its discretion when it upheld the validity of
private respondent's substitution despite contrary jurisprudence holding that substitution is impermissible
where the substituted candidate's CoC was denied due course to and/or cancelled, as in the case of
Richard. On the other hand, respondents maintain that Richard's CoC was not denied due course to
and/or cancelled by the COMELEC as he was only "disqualified" and therefore, was properly substituted
by private respondent.

Ruling of the Court

The petition is meritorious.

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A. Distinction between a petition

for disqualification and a petition to

deny due course to/cancel a

certificate of candidacy

The Omnibus Election Code 23 (OEC) provides for certain remedies to assail a candidate's bid for public
office. Among these which obtain particular significance to this case are: (1) a petition for disqualification
under Section 68; and (2) a petition to deny due course to and/or cancel a certificate of candidacy under
Section 78. The distinctions between the two are well-perceived.

Primarily, a disqualification case under Section 68 of the OEC is hinged on either: (a) a candidate's
possession of a permanent resident status in a foreign country; 24 or (b) his or her commission of certain
acts of disqualification. Anent the latter, the prohibited acts under Section 68 refer to election offenses
under the OEC, and not to violations of other penal laws. 25 In particular, these are: (1) giving money or
other material consideration to influence, induce or corrupt the voters or public officials performing
electoral functions; (2) committing acts of terrorism to enhance one's candidacy; (3) spending in one's
election campaign an amount in excess of that allowed by the OEC; (4) soliciting, receiving or making any
contribution prohibited under Sections 89, 95, 96, 97 and 104 of the OEC; and (5) violating Sections 80,
26 83, 27 85, 28 86 29 and 261, paragraphs d, 30 e, 31 k, 32 v, 33 and cc, sub-paragraph 6 34 of the
OEC. Accordingly, the same provision (Section 68) states that any candidate who, in an action or protest
in which he or she is a party, is declared by final decision of a competent court guilty of, or found by the
COMELEC to have committed any of the foregoing acts shall be disqualified from continuing as a
candidate for public office, or disallowed from holding the same, if he or she had already been elected. 35

It must be stressed that one who is disqualified under Section 68 is still technically considered to have
been a candidate, albeit proscribed to continue as such only because of supervening infractions which do
not, however, deny his or her statutory eligibility. In other words, while the candidate's compliance with
the eligibility requirements as prescribed by law, such as age, residency, and citizenship, is not in
question, he or she is, however, ordered to discontinue such candidacy as a form of penal sanction
brought about by the commission of the above-mentioned election offenses.

On the other hand, a denial of due course to and/or cancellation of a CoC proceeding under Section 78 of
the OEC 36 is premised on a person's misrepresentation of any of the material qualifications required for
the elective office aspired for. It is not enough that a person lacks the relevant qualification; he or she
must have also made a false representation of the same in the CoC. 37 The nature of a Section 78
petition was discussed in the case of Fermin v. COMELEC, 38 where the Court illumined: AcSIDE

Lest it be misunderstood, the denial of due course to or the cancellation of the CoC is not based on the
lack of qualifications but on a finding that the candidate made a material representation that is false,
which may relate to the qualifications required of the public office he/she is running for. It is noted that the
candidate states in his/her CoC that he/she is eligible for the office he/she seeks. Section 78 of the OEC,
therefore, is to be read in relation to the constitutional and statutory provisions on qualifications or
eligibility for public office. If the candidate subsequently states a material representation in the CoC that is
false, the COMELEC, following the law, is empowered to deny due course to or cancel such certificate.
Indeed, the Court has already likened a proceeding under Section 78 to a quo warranto proceeding under
Section 253 of the OEC since they both deal with the eligibility or qualification of a candidate, with the
distinction mainly in the fact that a "Section 78" petition is filed before proclamation, while a petition for
quo warranto is filed after proclamation of the winning candidate. (Emphasis supplied)

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Corollary thereto, it must be noted that the deliberateness of the misrepresentation, much less one's
intent to defraud, is of bare significance in a Section 78 petition as it is enough that the person's
declaration of a material qualification in the CoC be false. In this relation, jurisprudence holds that an
express finding that the person committed any deliberate misrepresentation is of little consequence in the
determination of whether one's CoC should be deemed cancelled or not. 39 What remains material is that
the petition essentially seeks to deny due course to and/or cancel the CoC on the basis of one's
ineligibility and that the same be granted without any qualification. 40

Pertinently, while a disqualified candidate under Section 68 is still considered to have been a candidate
for all intents and purposes, on the other hand, a person whose CoC had been denied due course to
and/or cancelled under Section 78 is deemed to have not been a candidate at all. The reason being is
that a cancelled CoC is considered void ab initio and thus, cannot give rise to a valid candidacy and
necessarily, to valid votes. 41 In Talaga v. COMELEC 42 (Talaga), the Court ruled that:

. . . While a person who is disqualified under Section 68 is merely prohibited to continue as a candidate, a
person whose certificate is cancelled or denied due course under Section 78 is not treated as a candidate
at all, as if he/she never filed a CoC.

The foregoing variance gains utmost importance to the present case considering its implications on
candidate substitution.

B. Valid CoC as a condition sine

qua non for candidate substitution

Section 77 of the OEC provides that if an official candidate of a registered or accredited political party
dies, withdraws or is disqualified for any cause, a person belonging to and certified by the same political
party may file a CoC to replace the candidate who died, withdrew or was disqualified. It states that:

Sec. 77. Candidates in case of death, disqualification or withdrawal of another. — If after the last day for
the filing of certificates of candidacy, an official candidate of a registered or accredited political party dies,
withdraws or is disqualified for any cause, only a person belonging to, and certified by, the same political
party may file a certificate of candidacy to replace the candidate who died, withdrew or was disqualified.
(Emphasis supplied)

Evidently, Section 77 requires that there be an "official candidate" before candidate substitution proceeds.
Thus, whether the ground for substitution is death, withdrawal or disqualification of a candidate, the said
section unequivocally states that only an official candidate of a registered or accredited party may be
substituted. 43

As defined under Section 79 (a) of the OEC, the term "candidate" refers to any person aspiring for or
seeking an elective public office who has filed a certificate of candidacy by himself or through an
accredited political party, aggroupment, or coalition of parties. Clearly, the law requires that one must
have validly filed a CoC in order to be considered a candidate. The requirement of having a CoC obtains
even greater importance if one considers its nature. In particular, a CoC formalizes not only a person's

123
public declaration to run for office but evidences as well his or her statutory eligibility to be elected for the
said post. In Sinaca v. Mula, 44 the Court has illumined:

A certificate of candidacy is in the nature of a formal manifestation to the whole world of the candidate's
political creed or lack of political creed. It is a statement of a person seeking to run for a public office
certifying that he announces his candidacy for the office mentioned and that he is eligible for the office,
the name of the political party to which he belongs, if he belongs to any, and his post-office address for all
election purposes being as well stated. (Emphasis and underscoring supplied.)

In this regard, the CoC is the document which formally accords upon a person the status of a candidate.
In other words, absent a valid CoC one is not considered a candidate under legal contemplation. As held
in Talaga: 45

. . . a person's declaration of his intention to run for public office and his affirmation that he possesses the
eligibility for the position he seeks to assume, followed by the timely filing of such declaration, constitute a
valid CoC that render the person making the declaration a valid or official candidate. (Emphasis supplied)

Considering that Section 77 requires that there be a candidate in order for substitution to take place, as
well as the precept that a person without a valid CoC is not considered as a candidate at all, it necessarily
follows that if a person's CoC had been denied due course to and/or cancelled, he or she cannot be
validly substituted in the electoral process. The existence of a valid CoC is therefore a condition sine qua
non for a disqualified candidate to be validly substituted. 46

C. Divergent effects of

disqualification and denial of due

course to and/or cancellation of COC

cases vis-à-vis candidate substitution

Proceeding from the foregoing discourse, it is evident that there lies a clear-cut distinction between a
disqualification case under Section 68 and denial of due course to and/or cancellation of COC case under
Section 78 vis-à-vis their respective effects on candidate substitution under Section 77.

As explained in the case of Miranda v. Abaya 47 (Miranda), a candidate who is disqualified under Section
68 can be validly substituted pursuant to Section 77 because he remains a candidate until disqualified;
but a person whose CoC has been denied due course to and/or cancelled under Section 78 cannot be
substituted because he is not considered a candidate. 48 Stated differently, since there would be no
candidate to speak of under a denial of due course to and/or cancellation of a CoC case, then there
would be no candidate to be substituted; the same does not obtain, however, in a disqualification case
since there remains to be a candidate to be substituted, although his or her candidacy is discontinued.

On this note, it is equally revelatory that Section 77 expressly enumerates the instances where
substitution is permissible, that is when an official candidate of a registered or accredited political party
"dies, withdraws or is disqualified for any cause." Noticeably, material misrepresentation cases are not
included in the said section and therefore, cannot be a valid basis to proceed with candidate substitution.

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D. Application to the case at bar

In this case, it is undisputed that Richard was disqualified to run in the May 10, 2010 elections due to his
failure to comply with the one year residency requirement. 49 The confusion, however, stemmed from the
use of the word "disqualified" in the February 17, 2010 Resolution of the COMELEC First Division, which
was adopted by the COMELEC En Banc in granting the substitution of private respondent, and even
further perpetuated by the HRET in denying the quo warranto petition. In short, a finding that Richard was
merely disqualified — and not that his CoC was denied due course to and/or cancelled — would mean
that he could have been validly substituted by private respondent, thereby legitimizing her candidacy.

Yet the fact that the COMELEC First Division's February 17, 2010 Resolution did not explicitly decree the
denial of due course to and/or cancellation of Richard's CoC should not have obviated the COMELEC En
Banc from declaring the invalidity of private respondent's substitution. It should be stressed that the clear
and unequivocal basis for Richard's "disqualification" is his failure to comply with the residency
requirement under Section 6, Article VI of the Constitution which is a ground for the denial of due course
to and/or cancellation a CoC under Section 78 of the OEC, not for disqualification. 50 As earlier
mentioned, the material misrepresentation contemplated under a Section 78 petition refers to statements
affecting one's qualifications for elective office such as age, residence and citizenship or non-possession
of natural-born Filipino status. 51 There is therefore no legal basis to support a finding of disqualification
within the ambit of election laws. Accordingly, given Richard's non-compliance with the one year
residency requirement, it cannot be mistaken that the COMELEC First Division's unqualified grant of
Juntilla's "Verified Petition to Disqualify Candidate for Lack of Qualification" 52 — which prayed that the
COMELEC declare Richard "DISQUALIFIED and INELIGIBLE from seeking the office of Member of the
House of Representatives" and ". . . that [his] Certificate of Candidacy . . . be DENIED DUE COURSE
and/or CANCELLED" 53 — carried with it the denial of due course to and/or cancellation of Richard's
CoC pursuant to Section 78.

Case law dictates that if a petition prays for the denial of due course to and/or cancellation of CoC and
the same is granted by the COMELEC without any qualification, the cancellation of the candidate's CoC is
in order. This is precisely the crux of the Miranda ruling wherein the Court, in upholding the COMELEC
En Banc's nullification of the substitution in that case, decreed that the COMELEC Division's unqualified
grant of the petition necessarily included the denial of due course to and/or cancellation of the candidate's
CoC, notwithstanding the use of the term "disqualified" in the COMELEC Division's resolution, as the
foregoing was prayed for in the said petition:

The question to settle next is whether or not aside from Joel "Pempe" Miranda being disqualified by the
COMELEC in its May 5, 1998 resolution, his certificate of candidacy had likewise been denied due course
and cancelled.

The Court rules that it was.

Private respondent's petition in SPA No. 98-019 specifically prayed for the following:

WHEREFORE, it is respectfully prayed that the Certificate of Candidacy filed by respondent for the
position of Mayor for the City of Santiago be not given due course and/or cancelled.

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Other reliefs just and equitable in the premises are likewise prayed for. CacTSI

In resolving the petition filed by private respondent specifying a very particular relief, the COMELEC ruled
favorably in the following manner:

WHEREFORE, in view of the foregoing, the Commission (FIRST DIVISION) GRANTS the Petition.
Respondent JOSE "Pempe" MIRANDA is hereby DISQUALIFIED from running for the position of mayor
of Santiago City, Isabela, in the May 11, 1998 national and local elections.

SO ORDERED.

From a plain reading of the dispositive portion of the COMELEC resolution of May 5, 1998 in SPA No. 98-
019, it is sufficiently clear that the prayer specifically and particularly sought in the petition was
GRANTED, there being no qualification on the matter whatsoever. The disqualification was simply ruled
over and above the granting of the specific prayer for denial of due course and cancellation of the
certificate of candidacy.

xxx xxx xxx

There is no dispute that the complaint or petition filed by private respondent in SPA No. 98-019 is one to
deny due course and to cancel the certificate of candidacy of Jose "Pempe" Miranda. There is likewise no
question that the said petition was GRANTED without any qualification whatsoever. It is rather clear,
therefore, that whether or not the COMELEC granted any further relief in SPA No. 98-019 by disqualifying
the candidate, the fact remains that the said petition was granted and that the certificate of candidacy of
Jose "Pempe" Miranda was denied due course and cancelled. (Emphasis and underscoring supplied)

The same rule was later discussed in the case of Talaga, viz.:

3. Granting without any qualification

of petition in SPA No. 09-029(DC)

manifested COMELEC's intention to

declare Ramon disqualified and to

cancel his CoC

xxx xxx xxx

In Miranda v. Abaya, the specific relief that the petition prayed for was that the CoC "be not given due
course and/or cancelled". The COMELEC categorically granted "the petition" and then pronounced — in
apparent contradiction — that Joel Pempe Miranda was "disqualified." The Court held that the
COMELEC, by granting the petition without any qualification, disqualified Joel Pempe Miranda and at the
same time cancelled Jose Pempe Miranda's CoC.

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xxx xxx xxx

The crucial point of Miranda v. Abaya was that the COMELEC actually granted the particular relief of
cancelling or denying due course to the CoC prayed for in the petition by not subjecting that relief to any
qualification. (Emphasis and underscoring supplied)

In view of the foregoing rulings, the COMELEC En Banc direly misconstrued the COMELEC First
Division's February 17, 2010 Resolution when it adopted the Law Department's finding that Richard was
only "disqualified" and that his CoC was not denied due course to and/or cancelled, paving the way for
the approval of private respondent's substitution. It overlooked the fact that the COMELEC First Division's
ruling encompassed the cancellation of Richard's CoC and in consequence, disallowed the substitution of
private respondent. It was therefore grave and serious error on the part of the COMELEC En Banc to
have approved private respondent's substitution.

Consequently, in perpetuating the COMELEC En Banc's error as above-discussed, the HRET committed
a grave abuse of discretion, warranting the grant of the instant petition.

Fundamental is the rule that grave abuse of discretion arises when a lower court or tribunal patently
violates the Constitution, the law or existing jurisprudence. 54 While it is well-recognized that the HRET
has been empowered by the Constitution to be the "sole judge" of all contests relating to the election,
returns, and qualifications of the members of the House, the Court maintains jurisdiction over it to check
"whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction" on
the part of the latter. 55 In other words, when the HRET utterly disregards the law and settled precedents
on the matter before it, it commits a grave abuse of discretion.

Records clearly show that: (1) Richard was held ineligible as a congressional candidate for the Fourth
District of Leyte due to his failure to comply with the one year residency requirement; (2) Juntilla's petition
prayed for the denial of due course to and/or cancellation of his CoC; and (3) the COMELEC First
Division granted the foregoing petition without any qualification. By these undisputed and essential facts
alone, the HRET should not have adopted the COMELEC En Banc's erroneous finding that the
COMELEC First Division's February 17, 2010 Resolution "speaks [only] of "disqualification and not of
cancellation of [Richard's] CoC" 56 and thereby, sanctioned the substitution of private respondent.

Lest it be misunderstood, the HRET is not bound by previous COMELEC pronouncements relative to the
qualifications of the Members of the House. Being the sole judge 57 of all contests relating to the election,
returns, and qualifications of its respective members, the HRET cannot be tied down by COMELEC
resolutions, else its constitutional mandate 58 be circumvented and rendered nugatory. Instructive on this
point is the Court's disquisition in Fernandez v. HRET, 59 to wit:

Private respondent concludes from the above that petitioner had no legal basis to claim that the HRET,
when reference to the qualification/s of Members of the House of Representatives is concerned, is "co-
equal", to the COMELEC, such that the HRET cannot disregard any ruling of COMELEC respecting the
matter of eligibility and qualification of a member of the House of Representatives. The truth is the other
way around, because the COMELEC is subservient to the HRET when the dispute or contest at issue
refers to the eligibility and/or qualification of a Member of the House of Representatives. A petition for quo
warranto is within the exclusive jurisdiction of the HRET as sole judge, and cannot be considered forum
shopping even if another body may have passed upon in administrative or quasi-judicial proceedings the

127
issue of the Member's qualification while the Member was still a candidate. There is forum-shopping only
where two cases involve the same parties and the same cause of action. The two cases here are distinct
and dissimilar in their nature and character. (Emphasis and underscoring supplied)

Notably, the phrase "election, returns, and qualifications" should be interpreted in its totality as referring to
all matters affecting the validity of the contestee's title. More particularly, the term "qualifications" refers to
matters that could be raised in a quo warranto proceeding against the proclaimed winner, such as his
disloyalty or ineligibility, or the inadequacy of his certificate of candidacy. 60 As used in Section 74 of the
OEC, the word "eligible" means having the right to run for elective public office, that is, having all the
qualifications and none of the ineligibilities to run for the public office. 61 In this relation, private
respondent's own qualification to run for public office — which was inextricably linked to her husband's
own qualifications due to her substitution — was the proper subject of quo warranto proceedings falling
within the exclusive jurisdiction of the HRET and independent from any previous proceedings before the
COMELEC, lest the jurisdictional divide between the two be blurred. cDAISC

Nonetheless, it must be pointed out that the HRET's independence is not without limitation. As earlier
mentioned, the Court retains certiorari jurisdiction over the HRET if only to check whether or not it has
gravely abused its discretion. In this regard, the Court does not endeavor to denigrate nor undermine the
HRET's independence; rather, it merely fulfills its duty to ensure that the Constitution and the laws are
upheld through the exercise of its power of judicial review.

In fine, the Court observes that the HRET wantonly disregarded the law by deliberately adopting the
COMELEC En Banc's flawed findings regarding private respondent's eligibility to run for public office
which essentially stemmed from her substitution. In this light, it cannot be gainsaid that the HRET gravely
abused its discretion.

Owing to the lack of proper substitution in this case, private respondent was therefore not a bona fide
candidate for the position of Representative for the Fourth District of Leyte when she ran for office, which
means that she could not have been elected. Considering this pronouncement, there exists no cogent
reason to further dwell on the other issues respecting private respondent's own qualification to office.

WHEREFORE, the petition is GRANTED. Accordingly, the March 22, 2012 Decision rendered by the
House of Representatives Electoral Tribunal in HRET Case No. 10-031 (QW) is hereby REVERSED and
SET ASIDE.

SO ORDERED.

||| (Tagolino v. House of Representatives Electoral Tribunal, G.R. No. 202202, [March 19, 2013], 706
PHIL 534-578)

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EN BANC

[G.R. No. 209271. July 26, 2016.]

INTERNATIONAL SERVICE FOR THE ACQUISITION OF AGRI-BIOTECH APPLICATIONS, INC.,

petitioner, vs. GREENPEACE SOUTHEAST ASIA (PHILIPPINES), MAGSASAKA AT SIYENTIPIKO SA
PAGPAPAUNLAD NG AGRIKULTURA (MASIPAG), REP. TEODORO CASIÑO, DR. BEN MALAYANG
III, DR. ANGELINA GALANG, LEONARDO AVILA III, CATHERINE UNTALAN, ATTY. MARIA PAZ
LUNA, JUANITO MODINA, DAGOHOY MAGAWAY, DR. ROMEO QUIJANO, DR. WENCESLAO KIAT,
JR., ATTY. H. HARRY ROQUE, JR., FORMER SEN. ORLANDO MERCADO, NOEL CABANGON,
MAYOR EDWARD S. HAGEDORN, and EDWIN MARTHINE LOPEZ, respondents.

CROP LIFE PHILIPPINES, INC., petitioner-in-intervention.

[G.R. No. 209276. July 26, 2016.]

ENVIRONMENTAL MANAGEMENT BUREAU OF THE DEPARTMENT OF ENVIRONMENT AND

NATURAL RESOURCES, BUREAU OF PLANT INDUSTRY AND THE FERTILIZER AND PESTICIDE
AUTHORITY OF THE DEPARTMENT OF AGRICULTURE, petitioners, vs. COURT OF APPEALS,
GREENPEACE SOUTHEAST ASIA (PHILIPPINES), MAGSASAKA AT SIYENTIPIKO SA
PAGPAPAUNLAD NG AGRICULTURA (MASIPAG), REP. TEODORO CASIÑO, DR. BEN MALAYANG
III, DR. ANGELINA GALANG, LEONARDO AVILA III, CATHERINE UNTALAN, ATTY. MARIA PAZ
LUNA, JUANITO MODINA, DAGOHOY MAGAWAY, DR. ROMEO QUIJANO, DR. WENCESLAO KIAT,
JR., ATTY. H. HARRY ROQUE, JR., FORMER SEN. ORLANDO MERCADO, NOEL CABANGON,
MAYOR EDWARD S. HAGEDORN, and EDWIN MARTHINE LOPEZ, respondents.

CROP LIFE PHILIPPINES, INC., petitioner-in-intervention.

[G.R. No. 209301. July 26, 2016.]

UNIVERSITY OF THE PHILIPPINES LOS BAÑOS FOUNDATION, INC., petitioner, vs. GREENPEACE
SOUTHEAST ASIA (PHILIPPINES), MAGSASAKA AT SIYENTIPIKO SA PAGPAPAUNLAD NG
AGRIKULTURA (MASIPAG), REP. TEODORO CASINO, DR. BEN MALAYANG III, DR. ANGELINA
GALANG, LEONARDO AVILA III, CATHERINE UNTALAN, ATTY. MARIA PAZ LUNA, JUANITO
MODINA, DAGOHOY MAGAWAY, DR. ROMEO QUIJANO, DR. WENCESLAO KIAT, JR., ATTY. H.
HARRY L. ROQUE, JR., FORMER SEN. ORLANDO MERCADO, NOEL CABANGON, MAYOR
EDWARD S. HAGEDORN, and EDWIN MARTHINE LOPEZ, respondents.

129
[G.R. No. 209430. July 26, 2016.]

UNIVERSITY OF THE PHILIPPINES LOS BAÑOS, petitioner, vs. GREENPEACE SOUTHEAST ASIA
(PHILIPPINES), MAGSASAKA AT SIYENTIPIKO SA PAGPAPAUNLAD NG AGRIKULTURA (MASIPAG),
REP. TEODORO CASIÑO, DR. BEN MALAYANG III, DR. ANGELINA GALANG, LEONARDO AVILA III,
CATHERINE UNTALAN, ATTY. MARIA PAZ LUNA, JUANITO MODINA, DAGOHOY MAGAWAY, DR.
ROMEO QUIJANO, DR. WENCESLAO KIAT, JR., ATTY. H. HARRY L. ROQUE, JR., FORMER SEN.
ORLANDO MERCADO, NOEL CABANGON, MAYOR EDWARD S. HAGEDORN, and EDWIN
MARTHINE LOPEZ, respondents.

RESOLUTION

PERLAS-BERNABE, J p:

Before the Court are nine (9) Motions for Reconsideration 1 assailing the Decision 2 dated December 8,
2015 of the Court (December 8, 2015 Decision), which upheld with modification the Decision 3 dated May
17, 2013 and the Resolution 4 dated September 20, 2013 of the Court of Appeals (CA) in CA-G.R. SP
No. 00013. ETHIDa

The Facts

The instant case arose from the conduct of field trials for "bioengineered eggplants," known as Bacillus
thuringiensis (Bt) eggplant (Bt talong), administered pursuant to the Memorandum of Undertaking 5
(MOU) entered into by herein petitioners University of the Philippines Los Baños Foundation, Inc.
(UPLBFI) and International Service for the Acquisition of Agri-Biotech Applications, Inc. (ISAAA), and the
University of the Philippines Mindanao Foundation, Inc. (UPMFI), among others. Bt talong contains the
crystal toxin genes from the soil bacterium Bt, which produces the Cry1Ac protein that is toxic to target
insect pests. The Cry1Ac protein is said to be highly specific to lepidopteran larvae such as the fruit and
shoot borer, the most destructive insect pest to eggplants. 6

From 2007 to 2009, petitioner University of the Philippines Los Baños (UPLB), the implementing
institution of the field trials, conducted a contained experiment on Bt talong under the supervision of the
National Committee on Biosafety of the Philippines (NCBP). 7 The NCBP, created under Executive Order
No. (EO) 430, 8 is the regulatory body tasked to: (a) "identify and evaluate potential hazards involved in
initiating genetic engineering experiments or the introduction of new species and genetically engineered
organisms and recommend measures to minimize risks"; and (b) "formulate and review national policies
and guidelines on biosafety, such as the safe conduct of work on genetic engineering, pests and their
genetic materials for the protection of public health, environment[,] and personnel[,] and supervise the
implementation thereof." 9 Upon the completion of the contained experiment, the NCBP issued a
Certificate 10 therefor stating that all biosafety measures were complied with, and no untoward incident
had occurred. 11

On March 16, 2010 and June 28, 2010, the Bureau of Plant Industries (BPI) issued two (2)-year Biosafety
Permits 12 for field testing of Bt talong 13 after UPLB's field test proposal satisfactorily completed
biosafety risk assessment for field testing pursuant to the Department of Agriculture's (DA) Administrative
Order No. 8, series of 2002 14 (DAO 08-2002), 15 which provides for the rules and regulations for the

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importation and release into the environment of plants and plant products derived from the use of modern
biotechnology. 16 Consequently, field testing proceeded in approved trial sites in North Cotabato,
Pangasinan, Camarines Sur, Davao City, and Laguna. 17 TIADCc

On April 26, 2012, respondents Greenpeace Southeast Asia (Philippines) (Greenpeace), Magsasaka at
Siyentipiko sa Pagpapaunlad ng Agrikultura (MASIPAG), and others (respondents) filed before the Court
a Petition for Writ of Continuing Mandamus and Writ of Kalikasan with Prayer for the Issuance of a
Temporary Environmental Protection Order (TEPO) 18 (petition for Writ of Kalikasan) against herein
petitioners the Environmental Management Bureau (EMB) of the Department of Environment and Natural
Resources (DENR), the BPI and the Fertilizer and Pesticide Authority (FPA) of the DA, UPLBFI, and
ISAAA, and UPMFI, alleging that the Bt talong field trials violated their constitutional right to health and a
balanced ecology considering, among others, that: (a) the Environmental Compliance Certificate (ECC),
as required by Presidential Decree No. (PD) 1151, 19 was not secured prior to the field trials; 20 (b) the
required public consultations under the Local Government Code (LGC) were not complied with; 21 and
(c) as a regulated article under DAO 08-2002, Bt talong is presumed harmful to human health and the
environment, and that there is no independent, peer-reviewed study showing its safety for human
consumption and the environment. 22 Further, they contended that since the scientific evidence as to the
safety of Bt talong remained insufficient or uncertain, and that preliminary scientific evaluation shows
reasonable grounds for concern, the precautionary principle should be applied and, thereby, the field
trials be enjoined. 23 cSEDTC

On May 2, 2012, the Court issued 24 a Writ of Kalikasan against petitioners (except UPLB) 25 and
UPMFI, ordering them to make a verified return within a non-extendible period of ten (10) days, as
provided for in Section 8, Rule 7 of the Rules of Procedure for Environmental Cases. 26 Thus, in
compliance therewith, ISAAA, EMB/BPI/FPA, UPLBFI, and UPMFI 27 filed their respective verified
returns, 28 and therein maintained that: (a) all environmental laws were complied with, including the
required public consultations in the affected communities; (b) an ECC was not required for the field trials
as it will not significantly affect the environment nor pose a hazard to human health; (c) there is a plethora
of scientific works and literature, peer-reviewed, on the safety of Bt talong for human consumption; (d) at
any rate, the safety of Bt talong for human consumption is irrelevant because none of the eggplants will
be consumed by humans or animals and all materials not used for analyses will be chopped, boiled, and
buried following the conditions of the Biosafety Permits; and (e) the precautionary principle could not be
applied as the field testing was only a part of a continuing study to ensure that such trials have no
significant and negative impact on the environment. 29

On July 10, 2012, the Court issued a Resolution 30 referring the case to the Court of Appeals for
acceptance of the return of the writ and for hearing, reception of evidence, and rendition of judgment. 31
In a hearing before the CA on August 14, 2012, UPLB was impleaded as a party to the case and was
furnished by respondents a copy of their petition. Consequently the CA directed UPLB to file its comment
to the petition 32 and, on August 24, 2012, UPLB filed its Answer 33 adopting the arguments and
allegations in the verified return filed by UPLBFI. On the other hand, in a Resolution 34 dated February
13, 2013, the CA discharged UPMFI as a party to the case pursuant to the Manifestation and Motion filed
by respondents in order to expedite the proceedings and resolution of the latter's petition.

The CA Ruling

In a Decision 35 dated May 17, 2013, the CA ruled in favor of respondents and directed petitioners to
permanently cease and desist from conducting the Bt talong field trials. 36 At the outset, it did not find
merit in petitioners' contention that the case should be dismissed on the ground of mootness, noting that
the issues raised by the latter were "capable of repetition yet evading review" since the Bt talong field trial
was just one of the phases or stages of an overall and bigger study that is being conducted in relation to
the said genetically-modified organism. 37 It then held that the precautionary principle set forth under

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Section 1, 38 Rule 20 of the Rules of Procedure for Environmental Cases 39 is relevant, considering the
Philippines' rich biodiversity and uncertainty surrounding the safety of Bt talong. It noted the possible
irreversible effects of the field trials and the introduction of Bt talong to the market, and found the existing
regulations issued by the DA and the Department of Science and Technology (DOST) insufficient to
guarantee the safety of the environment and the health of the people. 40 AIDSTE

Aggrieved, petitioners separately moved for reconsideration. 41 However, in a Resolution 42 dated

September 20, 2013, the CA denied the same and remarked that introducing genetically modified plant
into the ecosystem is an ecologically imbalancing act. 43 Anent UPLB's argument that the Writ of
Kalikasan violated its right to academic freedom, the CA emphasized that the writ did not stop the
research on Bt talong but only the procedure employed in conducting the field trials, and only at this time
when there is yet no law ensuring its safety when introduced to the environment. 44

Dissatisfied, petitioners filed their respective petitions for review on certiorari before this Court.

The Proceedings Before the Court

In a Decision 45 dated December 8, 2015, the Court denied the petitions and accordingly, affirmed with
modification the ruling of the CA. 46 Agreeing with the CA, the Court held that the precautionary principle
applies in this case since the risk of harm from the field trials of Bt talong remains uncertain and there
exists a possibility of serious and irreversible harm. The Court observed that eggplants are a staple
vegetable in the country that is mostly grown by small-scale farmers who are poor and marginalized; thus,
given the country's rich biodiversity, the consequences of contamination and genetic pollution would be
disastrous and irreversible. 47

The Court likewise agreed with the CA in not dismissing the case for being moot and academic despite
the completion and termination of the Bt talong field trials, on account of the following exceptions to the
mootness principle: (a) the exceptional character of the situation and the paramount public interest is
involved; and (b) the case is capable of repetition yet evading review. 48

Further, the Court noted that while the provisions of DAO 08-2002 were observed, the National Biosafety
Framework (NBF) established under EO 514, series of 2006 49 which requires public participation in all
stages of biosafety decision-making, pursuant to the Cartagena Protocol on Biosafety 50 which was
acceded to by the Philippines in 2000 and became effective locally in 2003, was not complied with. 51
Moreover, the field testing should have been subjected to Environmental Impact Assessment (EIA),
considering that it involved new technologies with uncertain results. 52 SDAaTC

Thus, the Court permanently enjoined the field testing of Bt talong. In addition, it declared DAO 08-2002
null and void for failure to consider the provisions of the NBF. The Court also temporarily enjoined any
application for contained use, field testing, propagation, commercialization, and importation of genetically
modified organisms until a new administrative order is promulgated in accordance with law. 53

The Issues Presented in the Motions for Reconsideration

Undaunted, petitioners moved for reconsideration, 54 arguing, among others, that: (a) the case should
have been dismissed for mootness in view of the completion and termination of the Bt talong field trials

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and the expiration of the Biosafety Permits; 55 (b) the Court should not have ruled on the validity of DAO
08-2002 as it was not raised as an issue; 56 and (c) the Court erred in relying on the studies cited in the
December 8, 2015 Decision which were not offered in evidence and involved Bt corn, not Bt talong. 57

In their Consolidated Comments, 58 respondents maintain, in essence, that: (a) the case is not mooted
by the completion of the field trials since field testing is part of the process of commercialization and will
eventually lead to propagation, commercialization, and consumption of Bt talong as a consumer product;
59 (b) the validity of DAO 08-2002 was raised by respondents when they argued in their petition for Writ
of Kalikasan that such administrative issuance is not enough to adequately protect the Constitutional right
of the people to a balanced and healthful ecology; 60 and (c) the Court correctly took judicial notice of the
scientific studies showing the negative effects of Bt technology and applied the precautionary principle. 61

The Court's Ruling

The Court grants the motions for reconsideration on the ground of mootness.

As a rule, the Court may only adjudicate actual, ongoing controversies. 62 The requirement of the
existence of a "case" or an "actual controversy" for the proper exercise of the power of judicial review
proceeds from Section 1, Article VIII of the 1987 Constitution:

Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality
of the Government. (Emphasis supplied)

Accordingly, the Court is not empowered to decide moot questions or abstract propositions, or to declare
principles or rules of law which cannot affect the result as to the thing in issue in the case before it. In
other words, when a case is moot, it becomes non-justiciable. 63 AaCTcI

An action is considered "moot" when it no longer presents a justiciable controversy because the issues
involved have become academic or dead or when the matter in dispute has already been resolved and
hence, one is not entitled to judicial intervention unless the issue is likely to be raised again between the
parties. There is nothing for the court to resolve as the determination thereof has been overtaken by
subsequent events. 64

Nevertheless, case law states that the Court will decide cases, otherwise moot, if: first, there is a grave
violation of the Constitution; second, the exceptional character of the situation and the paramount public
interest are involved; third, when the constitutional issue raised requires formulation of controlling
principles to guide the bench, the bar, and the public; and fourth, the case is capable of repetition yet
evading review. 65 Thus, jurisprudence recognizes these four instances as exceptions to the mootness
principle.

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In the December 8, 2015 Decision of the Court, it was held that (a) the present case is of exceptional
character and paramount public interest is involved, and (b) it is likewise capable of repetition yet evading
review. Hence, it was excepted from the mootness principle. 66 However, upon a closer scrutiny of the
parties' arguments, the Court reconsiders its ruling and now finds merit in petitioners' assertion that the
case should have been dismissed for being moot and academic, and that the aforesaid exceptions to the
said rule should not have been applied.

I. On the paramount public interest exception.

Jurisprudence in this jurisdiction has set no hard-and-fast rule in determining whether a case involves
paramount public interest in relation to the mootness principle. However, a survey of cases would show
that, as a common guidepost for application, there should be some perceivable benefit to the public which
demands the Court to proceed with the resolution of otherwise moot questions.

In Gonzales v. Commission on Elections, 67 an action for declaratory judgment assailing the validity of
Republic Act No. (RA) 4880, 68 which prohibits the early nomination of candidates for elective offices and
early election campaigns or partisan political activities became moot by reason of the holding of the 1967
elections before the case could be decided. Nonetheless, the Court treated the petition as one for
prohibition and rendered judgment in view of "the paramount public interest and the undeniable necessity
for a ruling, the national elections [of 1969] being barely six months away." 69

In De Castro v. Commission on Elections, 70 the Court proceeded to resolve the election protest subject
of that case notwithstanding the supervening death of one of the contestants. According to the Court, in
an election contest, there is a paramount need to dispel the uncertainty that beclouds the real choice of
the electorate. 71 acEHCD

In David v. Macapagal-Arroyo, 72 the Court ruled on the constitutionality of Presidential Proclamation No.
1017, s. 2006, 73 which declared a state of National Emergency, even though the same was lifted before
a decision could be rendered. The Court explained that the case was one of exceptional character and
involved paramount public interest, because the people's basic rights to expression, assembly, and of the
press were at issue. 74

In Constantino v. Sandiganbayan, 75 both of the accused were found guilty of graft and corrupt practices
under Section 3 (e) of RA 3019. 76 One of the accused appealed the conviction, while the other filed a
petition for certiorari before the Court. While the appellant died during the pendency of his appeal, the
Court still ruled on the merits thereof considering the exceptional character of the appeals in relation to
each other, i.e., the two petitions were so intertwined that the absolution of the deceased was
determinative of the absolution of the other accused. 77

More recently, in Funa v. Manila Economic and Cultural Office (MECO), 78 the petitioner prayed that the
Commission on Audit (COA) be ordered to audit the MECO which is based in Taiwan, on the premise that
it is a government-owned and controlled corporation. 79 The COA argued that the case is already moot
and should be dismissed, since it had already directed a team of auditors to proceed to Taiwan to audit
the accounts of MECO. 80 Ruling on the merits, the Court explained that the case was of paramount
public interest because it involved the COA's performance of its constitutional duty and because the case
concerns the legal status of MECO, i.e., whether it may be considered as a government agency or not,
which has a direct bearing on the country's commitment to the One China Policy of the People's Republic
of China. 81

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In contrast to the foregoing cases, no perceivable benefit to the public — whether rational or practical —
may be gained by resolving respondents' petition for Writ of Kalikasan on the merits.

To recount, these cases, which stemmed from herein respondents petition for Writ of Kalikasan, were
mooted by the undisputed expiration of the Biosafety Permits issued by the BPI and the completion and
termination of the Bt talong field trials subject of the same. 82 These incidents effectively negated the
necessity for the reliefs sought by respondents in their petition for Writ of Kalikasan as there was no
longer any field test to enjoin. Hence, at the time the CA rendered its Decision dated May 17, 2013, the
reliefs petitioner sought and granted by the CA were no longer capable of execution.

At this juncture, it is important to understand that the completion and termination of the field tests do not
mean that herein petitioners may inevitably proceed to commercially propagate Bt talong. 83 There are
three (3) stages before genetically-modified organisms (GMOs) may become commercially available
under DAO 08-2002 84 and each stage is distinct, such that "[s]ubsequent stages can only proceed if the
prior stage/s [is/]are completed and clearance is given to engage in the next regulatory stage." 85
Specifically, before a genetically modified organism is allowed to be propagated under DAO 08-2002: (a)
a permit for propagation must be secured from the BPI; (b) it can be shown that based on the field testing
conducted in the Philippines, the regulated article will not pose any significant risks to the environment;
(c) food and/or feed safety studies show that the regulated article will not pose any significant risks to
human and animal health; and (d) if the regulated article is a pest-protected plant, its transformation event
has been duly registered with the FPA. 86 EcTCAD

As the matter never went beyond the field testing phase, none of the foregoing tasks related to
propagation were pursued or the requirements therefor complied with. Thus, there are no guaranteed
after-effects to the already concluded Bt talong field trials that demand an adjudication from which the
public may perceivably benefit. Any future threat to the right of herein respondents or the public in general
to a healthful and balanced ecology is therefore more imagined than real.

In fact, it would appear to be more beneficial to the public to stay a verdict on the safeness of Bt talong —
or GMOs, for that matter — until an actual and justiciable case properly presents itself before the Court. In
his Concurring Opinion 87 on the main, Associate Justice Marivic M.V.F. Leonen (Justice Leonen) had
aptly pointed out that "the findings [resulting from the Bt talong field trials] should be the material to
provide more rigorous scientific analysis of the various claims made in relation to Bt talong." 88 True
enough, the concluded field tests — like those in these cases — would yield data that may prove useful
for future studies and analyses. If at all, resolving the petition for Writ of Kalikasan would unnecessarily
arrest the results of further research and testing on Bt talong, and even GMOs in general, and hence,
tend to hinder scientific advancement on the subject matter.

More significantly, it is clear that no benefit would be derived by the public in assessing the merits of field
trials whose parameters are not only unique to the specific type of Bt talong tested, but are now, in fact,
rendered obsolete by the supervening change in the regulatory framework applied to GMO field testing.
To be sure, DAO 08-2002 has already been superseded by Joint Department Circular No. 1, series of
2016 89 (JDC 01-2016), issued by the Department of Science and Technology (DOST), the DA, the
DENR, the Department of Health (DOH), and the Department of the Interior and Local Government
(DILG), which provides a substantially different regulatory framework from that under DAO 08-2002 as will
be detailed below. Thus, to resolve respondents' petition for Writ of Kalikasan on its merits, would be
tantamount to an unnecessary scholarly exercise for the Court to assess alleged violations of health and
environmental rights that arose from a past test case whose bearings do not find any — if not minimal —
relevance to cases operating under today's regulatory framework. SDHTEC

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Therefore, the paramount public interest exception to the mootness rule should not have been applied.

II. The case is not one capable of repetition yet evading review.

Likewise, contrary to the Court's earlier ruling, 90 these cases do not fall under the "capable of repetition
yet evading review" exception.

The Court notes that the petition for Writ of Kalikasan specifically raised issues only against the field
testing of Bt talong under the premises of DAO 08-2002, 91 i.e., that herein petitioners failed to: (a) fully
inform the people regarding the health, environment, and other hazards involved; 92 and (b) conduct any
valid risk assessment before conducting the field trial. 93 As further pointed out by Justice Leonen, the
reliefs sought did not extend for enough to enjoin the use of the results of the field trials that have been
completed. Hence, the petition's specificity prevented it from falling under the above exception to the
mootness rule. 94

More obviously, the supersession of DAO 08-2002 by JDC 01-2016 clearly prevents this case from being
one capable of repetition so as to warrant review despite its mootness. To contextualize, JDC 01-2016
states that:

Section 1. Applicability. — This Joint Department Circular shall apply to the research, development,
handling and use, transboundary movement, release into the environment, and management of
genetically modified plant and plant products derived from the use of modern technology, included under
"regulated articles."

As earlier adverted to, with the issuance of JDC 01-2016, a new regulatory framework in the conduct of
field testing now applies.

Notably, the new framework under JDC 01-2016 is substantially different from that under DAO 08-2002.
In fact, the new parameters in JDC 01-2016 pertain to provisions which prompted the Court to invalidate
DAO 08-2002. In the December 8, 2015 Decision of the Court, it was observed that: (a) DAO 08-2002
has no mechanism to mandate compliance with international biosafety protocols; 95 (b) DAO 08-2002
does not comply with the transparency and public participation requirements under the NBF; 96 and (c)
risk assessment is conducted by an informal group, called the Biosafety Advisory Team of the DA,
composed of representatives from the BPI, Bureau of Animal Industry, FPA, DENR, DOH, and DOST. 97

Under DAO 08-2002, no specific guidelines were used in the conduct of risk assessment, and the DA was
allowed to consider the expert advice of, and guidelines developed by, relevant international
organizations and regulatory authorities of countries with significant experience in the regulatory
supervision of the regulated article. 98 However, under JDC 01-2016, the CODEX Alimentarius
Guidelines was adopted to govern the risk assessment of activities involving the research, development,
handling and use, transboundary movement, release into the environment, and management of
genetically modified plant and plant products derived from the use of modern biotechnology. 99 Also,
whereas DAO 08-2002 was limited to the DA's authority in regulating the importation and release into the
environment of plants and plant products derived from the use of modern biotechnology, 100 under JDC
01-2016, various relevant government agencies such as the DOST, DOH, DENR, and the DILG now

136
participate in all stages of the biosafety decision-making process, with the DOST being the central and
lead agency. 101 HSAcaE

JDC 01-2016 also provides for a more comprehensive avenue for public participation in cases involving
field trials and requires applications for permits and permits already issued to be made public by posting
them online in the websites of the NCBP and the BPI. 102 The composition of the Institutional Biosafety
Committee (IBC) has also been modified to include an elected local official in the locality where the field
testing will be conducted as one of the community representatives. 103 Previously, under DAO 08-2002,
the only requirement for the community representatives is that they shall not be affiliated with the
applicant and shall be in a position to represent the interests of the communities where the field testing is
to be conducted. 104

JDC 01-2016 also prescribes additional qualifications for the members of the Scientific and Technical
Review Panel (STRP), the pool of scientists that evaluates the risk assessment submitted by the
applicant for field trial, commercial propagation, or direct use of regulated articles. Aside from not being
an official, staff or employee of the DA or any of its attached agencies, JDC 01-2016 requires that
members of the STRP: (a) must not be directly or indirectly employed or engaged by a company or
institution with pending applications for permits under JDC 01-2016; (b) must possess technical expertise
in food and nutrition, toxicology, ecology, crop protection, environmental science, molecular biology and
biotechnology, genetics, plant breeding, or animal nutrition; and (c) must be well-respected in the
scientific community. 105

Below is a tabular presentation of the differences between the relevant portions of DAO 08-2002 and JDC
01-2016:

DAO 08-2002

JDC 01-2016

1. As to coverage and government participation

WHEREAS, under Title IV, Chapter 4, Section 19 ARTICLE I. GENERAL PROVISIONS

of the Administrative Code of 1987, the Department

of Agriculture, through the Bureau of Plant Section 1. Applicability. This Joint Department

Industry, is responsible for the production of Circular shall apply to the research, development,

improved planting materials and protection of handling and use, transboundary movement,

agricultural crops from pests and diseases; and release into the environment, and management of

genetically-modified plant and plant products

... derived from the use of modern biotechnology,

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PART I

included under "regulated articles."

GENERAL PROVISIONS

...

...

ARTICLE III. ADMINISTRATIVE

Section 2

FRAMEWORK

Coverage

A. Scope — This Order covers the importation or Section 4. Role of National Government

release into the environment of: 1. Any plant Agencies Consistent with the NBF and the laws

which has been altered or produced through granting their powers and functions, national

the use of modern biotechnology if the donor government agencies shall have the following

organism, host organism, or vector or vector roles:

agent belongs to any of the genera or taxa A. [DA]. As the principal agency of the

classified by BPI as meeting the definition of Philippine Government responsible for

the

plant pest or is a medium for the introduction promotion of agricultural and rural
growth

of noxious weeds; or and development so as to ensure food

2. Any plant or plant product altered or security and to contribute to poverty

produced through the use of modern alleviation, the DA shall take the lead in

biotechnology which may pose significant addressing biosafety issues related to

the

risks to human health and the environment country's agricultural productivity and
food

138
 based on available scientific and technical security. . . . .

information. B. [DOST]. As the premier science and

B. Exceptions. — This Order shall not apply to the technology body in the country, the
DOST

contained use of a regulated article, which is shall take the lead in ensuring that the
best

within the regulatory supervision of NCBP. available science is utilized and applied
in

adopting biosafety policies, measures and

guidelines, and in making biosafety decision.

....

C. [DENR]. As the primary government agency

responsible for the conservation, management,

development and proper use of the country's

environment and natural resources, the DENR

shall ensure that environmental assessments are

done and impacts identified in biosafety decisions.

....

D. [DOH]. The DOH, as the principal authority on

health, shall formulate guidelines in assessing the

health impacts posed by modern biotechnology and

its applications. . . . .

E. [DILG]. The DILG shall coordinate with the DA,

DOST, DENR and DOH in overseeing the

implementation of this Circular in relation to the

activities that are to be implemented in specific LGUs,

particularly in relation to the conduct of public

consultations as required under the Local

Government Code. . . . .

2. As to guidelines in risk assessment

PART I

ARTICLE II. BIOSAFETY DECISIONS

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GENERAL PROVISIONS

Section 3. Guidelines in Making Biosafety

... Decisions

The principles under the NBF shall guide

Section 3

concerned agencies in making biosafety decisions,

Risk Assessment

including:

A. Principles of Risk Assessment — No regulated . . .

article shall be allowed to be imported or released

into the environment without the conduct of a risk B. Risk Assessment. Risk
assessment shall

assessment performed in accordance with this be mandatory and central in making

Order. The following principles shall be followed biosafety decisions, consistent with

when performing a risk assessment to determine policies and standards on risk

assessment

whether a regulated article poses significant risks to issued by the NCBP; and
guided by

human health and the environment: Annex III of the Cartagena Protocol on

Biosafety. Pursuant to the NBF, the

1. The risk assessment shall be carried out in a following principles shall be followed

scientifically sound and transparent manner when performing a risk assessment to

based on available scientific and technical determine whether a regulated article

information. The expert advice of, and poses significant risks to human health

guidelines developed by, relevant international and the environment.

organizations and regulatory authorities of 1. The risk assessment shall be

carried

countries with significant experience in the out in a scientifically sound and

regulatory supervision of the regulated article transparent manner based on

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 shall be taken into account in the conduct of available scientific and technical

risk assessment. information. The expert advice of and

guidelines developed by, relevant

... international organizations, including

intergovernmental bodies, and regulatory

authorities of countries with significant

experience in the regulatory supervision of

the regulated article shall be taken into account.

In the conduct of risk assessment, CODEX

Alimentarius Guidelines on the Food Safety

Assessment of Foods Derived from the

Recombinant-DNA Plants shall be adopted

as well as other internationally accepted

consensus documents.

. . . (Underscoring supplied)

3. As to public participation

PART III

ARTICLE V. FIELD TRIAL OF

APPROVAL PROCESS FOR

REGULATED ARTICLES

FIELD TESTING OF REGULATED

ARTICLES

Section 12. Public Participation for Field Trial

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...

A. The BPI shall make public all

applications and Biosafety Permits for

Section 8

Field Trial through posting on the NCBP

Requirements for Field Testing

and BPI websites, and in the offices of the

DA and DOST in the province, city, or

... municipality where the field trial will be

conducted.

G. Public Consultation. — The applicant, acting

through its IBC, shall notify and invite ...

comments on the field testing proposal

from the barangays and city/municipal

governments with jurisdiction over the

field test sites. The IBC shall post for three

(3) consecutive weeks copies of the Public

Information Sheet for Field Testing

approved by the BPI in at least three (3)

conspicuous places in each of the

concerned barangay and city/municipal

halls. The Public Information Sheet for

Field Testing shall, among others, invite

interested parties to send their comments

on the proposed field testing to BPI within

a period of thirty (30) days from the date of

posting. It shall be in a language understood

in the community. During the comment

period, any interested person may submit

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 to BPI written comments regarding the

application. The applicant shall submit proof

of posting in the form of certifications from

the concerned barangay captains and

city/municipal mayors or an affidavit stating

the dates and places of posting duly

executed by the responsible officer or his

duly authorized representative.

4. As to membership in the Institutional Biosafety Committee

PART I

ARTICLE III. ADMINISTRATIVE

GENERAL PROVISIONS

FRAMEWORK

Section 1

...

Definition of Terms

... Section 6. Institutional Biosafety Committee

The company or institution applying for and

L. "IBC" means the Institutional Biosafety granted permits under this Circular shall constitute

Committee established by an applicant in an IBC prior to the contained use, confined test, or

preparation for the field testing of a regulated article field trial of a regulated article. The membership
of

and whose membership has been approved by BPI. the IBC shall be approved by the DOST-BC for

The IBC shall be responsible for the initial contained use or confined test, or by the DA-BC

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evaluation of the risk assessment and risk for field trial. The IBC is responsible for the

management strategies of the applicant for field conduct of the risk assessment and preparation of

testing. It shall be composed of at least five (5) risk management strategies of the applicant for

members, three (3) of whom shall be designated as contained use, confined test, or field trial. It shall

scientist-members who shall possess scientific make sure that the environment and human health

and technological knowledge and expertise are safeguarded in the conduct of any activity

sufficient to enable them to evaluate and monitor involving regulated articles.

properly any work of the applicant relating to the The IBC shall be composed of at least five (5)

field testing of a regulated article. The other members, three (3) of whom shall be designated as

members, who shall be designated as "community scientist-members and two (2) members shall be

representatives", shall not be affiliated with the community representatives. All scientist-members

applicant apart from being members of its IBC and must possess scientific or technological
knowledge

shall be in a position to represent the interests of the and expertise sufficient to enable them to
property

communities where the field testing is to be evaluate and monitor any work involving regulated

conducted. For the avoidance of doubt, NCBP shall articles conducted by the applicant.

be responsible for approving the membership of the

IBC for contained use of a regulated article. The community representative must not be

affiliated with the applicant, and must be in a

. . . (Underscoring supplied) position to represent the interests of the

communities where the activities are to be

conducted. One of the community representatives

shall be an elected official of the LGU. The other

community representative shall be selected from

the residents who are members of the Civil Society

Organizations represented in the Local Poverty

Reduction Action Team, pursuant to DILG

Memorandum Circular No. 2015-45. For multi-

location trials, community representatives of the

IBC shall be designated per site. . . . .

(Underscoring supplied)

5. As to the composition and qualifications of the members of the Scientific and Technical Review
Panel

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PART I

ARTICLE III. ADMINISTRATIVE

GENERAL PROVISIONS

FRAMEWORK

Section 1

...

Definition of Terms

Section 7. Scientific and Technical Review

.... Panel (STRP) The DA shall create a Scientific

and Technical Review Panel composed of a pool

EE. "STRP" means the Scientific and Technical of non-DA scientists with expertise in the

Review Panel created by BPI as an advisory body, evaluation of the potential risks of regulated

composed of at least three (3) reputable and articles to the environment and health. . . .

independent scientists who shall not be employees

of the Department and who have the relevant ...

professional background necessary to evaluate the

potential risks of the proposed activity to human The DA shall select scientists/experts in the STRP,

health and the environment based on available who shall meet the following qualifications:

scientific and technical information. A. Must not be an official, staff or employee of

the DA or any of its attached agencies;

. . . (Underscoring supplied) B. Must not be directly or indirectly employed

or engaged by a company or institution with

pending applications for permits covered by

this Circular;

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 C. Possess technical expertise in at least one of

the following fields: food and nutrition;

toxicology, ecology, crop protection,

environmental science, molecular biology

and biotechnology, genetics, plant breeding,

animal nutrition; and

D. Well-respected in the scientific community as

evidenced by positions held in science-based

organizations, awards and recognitions,

publications in local and international peer-

reviewed scientific journals.

. . . (Underscoring supplied)

Based on the foregoing, it is apparent that the regulatory framework now applicable in conducting risk
assessment in matters involving the research, development, handling, movement, and release into the
environment of genetically modified plant and plant products derived from the use of modern
biotechnology is substantially different from that which was applied to the subject field trials. In this
regard, it cannot be said that the present case is one capable of repetition yet evading review. AScHCD

The essence of cases capable of repetition yet evading review was succinctly explained by the Court in
Belgica v. Ochoa, Jr., 106 where the constitutionality of the Executive Department's lump-sum,
discretionary funds under the 2013 General Appropriations Act, known as the Priority Development
Assistance Fund (PDAF), was assailed. In that case, the Court rejected the view that the issues related
thereto had been rendered moot and academic by the reforms undertaken by the Executive Department
and former President Benigno Simeon S. Aquino III's declaration that he had already "abolished the
PDAF." Citing the historical evolution of the ubiquitous Pork Barrel System, which was the source of the
PDAF, and the fact that it has always been incorporated in the national budget which is enacted annually,
the Court ruled that it is one capable of repetition yet evading review, thus:

Finally, the application of the fourth exception [to the rule on mootness] is called for by the recognition
that the preparation and passage of the national budget is, by constitutional imprimatur, an affair of
annual occurrence. The relevance of the issues before the Court does not cease with the passage of a
"PDAF-free budget for 2014." The evolution of the "Pork Barrel System," by its multifarious iterations
throughout the course of history, lends a semblance of truth to petitioners' claim that "the same dog will
just resurface wearing a different collar." In Sanlakas v. Executive Secretary, the government had already
backtracked on a previous course of action yet the Court used the "capable of repetition but evading
review" exception in order "[t]o prevent similar questions from re-emerging." The situation similarly holds
true to these cases. Indeed, the myriad of issues underlying the manner in which certain public funds are
spent, if not resolved at this most opportune time, are capable of repetition and hence, must not evade
judicial review. 107 (Emphases supplied) HESIcT

Evidently, the "frequent" and "routinary" nature of the Pork Barrel Funds and the PDAF are wanting
herein. To reiterate, the issues in these cases involve factual considerations which are peculiar only to the
controversy at hand since the petition for Writ of Kalikasan is specific to the field testing of Bt talong and
does not involve other GMOs.

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At this point, the Court discerns that there are two (2) factors to be considered before a case is deemed
one capable of repetition yet evading review: (1) the challenged action was in its duration too short to be
fully litigated prior to its cessation or expiration; and (2) there was a reasonable expectation that the same
complaining party would be subjected to the same action.

Here, respondents cannot claim that the duration of the subject field tests was too short to be fully
litigated. It must be emphasized that the Biosafety Permits for the subject field tests were issued on
March 16, 2010 and June 28, 2010, and were valid for two (2) years. However, as aptly pointed out by
Justice Leonen, respondents filed their petition for Writ of Kalikasan only on April 26, 2012 — just a few
months before the Biosafety Permits expired and when the field testing activities were already over. 108
Obviously, therefore, the cessation of the subject field tests before the case could be resolved was due to
respondents' own inaction.

Moreover, the situation respondents complain of is not susceptible to repetition. As discussed above,
DAO 08-2002 has already been superseded by JDC 01-2016. Hence, future applications for field testing
will be governed by JDC 01-2016 which, as illustrated, adopts a regulatory framework that is substantially
different from that of DAO 08-2002.

Therefore, it was improper for the Court to resolve the merits of the case which had become moot in view
of the absence of any valid exceptions to the rule on mootness, and to thereupon rule on the objections
against the validity and consequently nullify DAO 08-2002 under the premises of the precautionary
principle.

In fact, in relation to the latter, it is observed that the Court should not have even delved into the
constitutionality of DAO 08-2002 as it was merely collaterally challenged by respondents, based on the
constitutional precepts of the people's rights to information on matters of public concern, to public
participation, to a balanced and healthful ecology, and to health. 109 cursory perusal of the petition for
Writ of Kalikasan filed by respondents on April 26, 2012 before the Court shows that they essentially
assail herein petitioners' failure to: (a) fully inform the people regarding the health, environment, and other
hazards involved; 110 and (b) conduct any valid risk assessment before conducting the field trial. 111
However, while the provisions of DAO 08-2002 were averred to be inadequate to protect (a) the
constitutional right of the people to a balanced and healthful ecology since "said regulation failed, among
others, to anticipate "the public implications caused by the importation of GMOs in the Philippines'"; 112
and (b) "the people from the potential harm these genetically modified plants and genetically modified
organisms may cause human health and the environment, [and] thus, . . . fall short of Constitutional
compliance," 113 respondents merely prayed for its amendment, as well as that of the NBF, to define or
incorporate "an independent, transparent, and comprehensive scientific and socio-economic risk
assessment, public information, consultation, and participation, and providing for their effective
implementation, in accord with international safety standards[.]" 114 This attempt to assail the
constitutionality of the public information and consultation requirements under DAO 08-2002 and the NBF
constitutes a collateral attack on the said provisions of law that runs afoul of the well-settled rule that the
constitutionality of a statute cannot be collaterally attacked as constitutionality issues must be pleaded
directly and not collaterally. 115 Verily, the policy of the courts is to avoid ruling on constitutional
questions and to presume that the acts of the political departments are valid, absent a clear and
unmistakable showing to the contrary, in deference to the doctrine of separation of powers. This means
that the measure had first been carefully studied by the executive department and found to be in accord
with the Constitution before it was finally enacted and approved. 116 AcICHD

All told, with respondents' petition for Writ of Kalikasan already mooted by the expiration of the Biosafety
Permits and the completion of the field trials subject of these cases, and with none of the exceptions to
the mootness principle properly attending, the Court grants the instant motions for reconsideration and

147
hereby dismisses the aforesaid petition. With this pronouncement, no discussion on the substantive
merits of the same should be made.

WHEREFORE, the motions for reconsideration are GRANTED. The Decision dated December 8, 2015 of
the Court, which affirmed with modification the Decision dated May 17, 2013 and the Resolution dated
September 20, 2013 of the Court of Appeals in CA-G.R. SP No. 00013, is hereby SET ASIDE for the
reasons above-explained. A new one is ENTERED DISMISSING the Petition for Writ of Continuing
Mandamus and Writ of Kalikasan with Prayer for the Issuance of a Temporary Environmental Protection
Order (TEPO) filed by respondents Greenpeace Southeast Asia (Philippines), Magsasaka at Siyentipiko
sa Pagpapaunlad ng Agrikultura, and others on the ground of mootness.

SO ORDERED.

||| (International Service for the Acquisition of Agri-Biotech Applications, Inc. v. Greenpeace Southeast
Asia (Philippines), G.R. Nos. 209271, 209276, 209301 & G.R. No. 209430 (Resolution), [July 26, 2016])

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FIRST DIVISION

[G.R. No. 213216. April 20, 2015.]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. RICKY ARGUTA alias "JOEL" and WILSON
CAHIPE alias "SIWIT", accused-appellants.

DECISION

PERLAS-BERNABE, J p:

Before the Court is an ordinary appeal 1 filed by accused-appellants Ricky Arguta alias "Joel" (Arguta)
and Wilson Cahipe alias "Siwit" (Cahipe; collectively, accused-appellants) assailing the Decision 2 dated
April 24, 2014 of the Court of Appeals (CA) in CA-G.R. CEB-CR HC No. 01462, which affirmed with
modification the Decision 3 dated July 25, 2008 of the Regional Trial Court of Tacloban City, Branch 6
(RTC) in Crim. Case Nos. 97-02-76 and 97-02-77 finding accused-appellants guilty beyond reasonable
doubt of one (1) count of Rape, defined and penalized under the Revised Penal Code (RPC), as
amended.

The Facts

On January 30, 1997 two (2) criminal informations were filed before the RTC charging Cahipe with two (2)
counts of Rape, and Arguta of one (1) count of the same crime, viz.:

Crim. Case No. 97-02-76

That on or about the 5th day of December 1996 in the Municipality of Tanauan, Province of Leyte,
Philippines and within the Jurisdiction of this Honorable Court, the above-named [accused-appellants],
conspiring, confederating and mutually helping each other, motivated by lewd design, with the use of a
bladed weapon, by means of force and intimidation, did then and there willfully, unlawfully and
feloniously, have carnal knowledge of [AAA], 4 without her consent and against her will.

Contrary to Law.

Tacloban City, January 30, 1997.

Crim. Case No. 97-02-77

That on or about the 5th day of December 1996, in the Municipality of Tanauan, Province of Leyte,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused [Cahipe],

149
motivated by lewd design, by means of force and intimidation, did then and there willfully, unlawfully and
feloniously, have carnal knowledge of [AAA], without her consent and against her will.

Contrary to Law.

Tacloban City, January 30, 1997. 5

According to the prosecution, at around 8 o'clock 6 in the evening of December 5, 1996, AAA was
instructed by her father to fetch her sister in school. However, AAA failed to find her sister and decided to
go back home. On her way home, accused-appellants intercepted AAA, threatened her with a bladed
weapon, dragged her to a cottage at a nearby beach resort, and bound her hands and feet. Thereafter,
they removed her clothes and placed her on the floor. Arguta then mounted AAA and inserted his penis
into her vagina. After Arguta satisfied his lust, Cahipe took over and raped her. Thereafter, accused-
appellants left AAA at the cottage. An hour later, Cahipe returned and dragged AAA to a store owned by
a certain Lino Ostero 7 (Ostero). There Cahipe undressed her again, mounted her, and inserted his penis
into her vagina. Afterwards, AAA was returned to the cottage. The next day, AAA's father found her crying
at the cottage. 8 CAIHTE

Further, the prosecution offered the findings of the physical examination by a certain Dr. Eilleen Colaba
on AAA, stating, inter alia, that: (a) AAA's genitalia was grossly normal, which means no abnormality; (b)
AAA has complete healed hymenal lacerations at the 5 o'clock and 7 o'clock positions and a partially
healed hymenal laceration at the 12 o'clock position; and (c) AAA's genitalia is negative for the presence
of spermatozoa. 9

In their defense, accused-appellants both denied the accusations leveled against them, and offered their
respective alibis. Cahipe claimed that on the date and time of the alleged incident he was minding
Ostero's store. On the other hand, Arguta averred that he was at Ostero's house watching television
during the time that the incident supposedly occurred. They both asserted that they did not know why
AAA would accuse them of raping her. 10

The RTC Ruling

In a Decision 11 dated July 25, 2008, the RTC found accused-appellants guilty beyond reasonable doubt
of the crime of Simple Rape in Crim. Case No. 97-02-76 and, accordingly, sentenced them to suffer the
penalty of reclusion perpetua and ordered them to pay AAA, jointly and severally, the amounts of
P50,000.00 as civil indemnity and P50,000.00 as moral damages. Further, the RTC found Cahipe not
guilty of the crime of Rape in Crim. Case No. 97-02-77 and, accordingly, acquitted him due to
insufficiency of evidence. 12

In finding the guilt of accused-appellants, the RTC held that AAA's testimony, as well as the medico-legal
report, established that on December 5, 1996, accused-appellants intercepted AAA, threatened her with a
bladed weapon, dragged her to a nearby cottage, undressed her, bound her, and took turns raping her.
The RTC did not lend credence to accused-appellants' defense of denial and alibi, in light of the positive
assertions made by AAA, and considering that it was not physically impossible for them to have been at
the place of the crime on the date of the incident. 13

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However, as regards the second count of Rape against Cahipe, the RTC opined that it would be unusual
for AAA, who had just been raped and left alone in the cottage, to not attempt to escape or shout for help
when she was being transported to Ostero's store and back to the cottage, observing that AAA had to
pass Ostero's house before reaching the latter's store. According to the RTC, these pose serious doubts
as to the existence of the second rape charge, thus, necessitating its dismissal. 14

Dissatisfied, accused-appellants appealed their conviction to the CA.

The CA Ruling

In a Decision 15 dated April 24, 2014, the CA affirmed accused-appellants' conviction with modification
ordering the accused-appellants to jointly and severally pay AAA the amount of P30,000.00 as exemplary
damages, in addition to the other amounts already awarded, and imposed interest at the rate of six
percent (6%) per annum on all the monetary awards from the date of finality of its Decision until fully paid.
16

Agreeing with the RTC's findings, the CA ruled that AAA's categorical and straightforward testimony
prevailed over accused-appellants' denial and alibi. It observed that accused-appellants were in the
vicinity of the locus criminis at the time of the incident, and that the two could easily reach the cottage
where the rape occurred. 17 Thus, it concluded that accused-appellants' actions fell squarely within the
definition of Rape under Article 266-A of the RPC, noting that accused-appellants had carnal knowledge
of AAA, and such was attained through force, threat, or intimidation. 18

Aggrieved, accused-appellants filed the instant appeal. DETACa

The Issue Before the Court

The issue for the Court's resolution is whether accused-appellants' conviction for Rape should be upheld.

The Court's Ruling

The appeal is bereft of merit.

At the outset, it must be stressed that in criminal cases, an appeal throws the entire case wide open for
review and the reviewing tribunal can correct errors, though unassigned in the appealed judgment, or
even reverse the trial court's decision based on grounds other than those that the parties raised as errors.
19 The appeal confers upon the appellate court full jurisdiction over the case and renders such court
competent to examine records, revise the judgment appealed from, increase the penalty, and cite the
proper provision of the penal law. 20 Proceeding from the foregoing, the Court deems it appropriate to
modify accused-appellants' conviction from Simple Rape to Qualified Rape, as will be explained
hereunder.

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In this case, the Court notes that the rape occurred during the effectivity of the old rape provision of the
RPC, i.e., Article 335, 21 and, thus, the latter provision is controlling in this case, to wit:

Art. 335. When and how rape is committed. — Rape is committed by having carnal knowledge of a
woman under any of the following circumstances:

1. By using force or intimidation;

2. When the woman is deprived of reason or otherwise unconscious; and

3. When the woman is under twelve years of age or is demented.

The crime of rape shall be punished by reclusion perpetua.

Whenever the crime of rape is committed with the use of a deadly weapon or by two or more persons, the
penalty shall be reclusion perpetua to death.

. . . . (Emphasis and underscoring supplied)

Under this provision, the elements of Rape are: (a) the offender had carnal knowledge of the victim; and
(b) said carnal knowledge was accomplished through the use of force or intimidation; or the victim was
deprived of reason or otherwise unconscious; or when the victim was under twelve (12) years of age or
demented. 22 The provision also states that if the act is committed either with the use of a deadly weapon
or by two (2) or more persons, the crime will be Qualified Rape, necessitating the imposition of a higher
penalty. 23 In People v. Lamberte, 24 the Court clarified the legal effect of the presence of both
circumstances, as follows:

The presence of either circumstance – "use of a deadly weapon" or "by two or more persons" – qualifies
the crime. If one is present, the remaining circumstance, if also attendant, is not a generic aggravating
circumstance. That was our ruling in People vs. Garcia, [192 Phil. 311, 342] (1981) reading:

In the prosecution of the cases at bar, two circumstances are present, namely, 1. use of a deadly weapon
and 2. That two persons committed the rapes. The first was alleged in the information while the second
was proved during trial. In both cases, the Court appreciated the first as a qualifying circumstance and the
second as a generic aggravating circumstance, in accordance with settled jurisprudence according to the
trial court. aDSIHc

We do not agree. Under the law above quoted, either circumstance is qualifying. When the two
circumstances are present, there is no legal basis to consider the remaining circumstance as a generic
aggravating circumstance for either is not considered as such under Article 14 of the Revised Penal Code
enumerating what are aggravating circumstances. Hence, the correct penalty is the lesser penalty, which
is reclusion perpetua, there being no aggravating or mitigating circumstance, pursuant to Article 63,
paragraph 2, No. 2, Revised Penal Code. 25 (Emphases and underscoring supplied)

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In this case, records reveal that accused-appellants threatened AAA with a bladed instrument and tied
her up before having carnal knowledge of her without her consent. Jurisprudence holds that force or
intimidation, as an element of Rape, need not be irresistible; as long as the assailant's objective is
accomplished, any question of whether the force employed was irresistible or not becomes irrelevant.
Intimidation must be viewed from the lens of the victim's perception and judgment and it is enough that
the victim fears that something will happen to her should she resist her assailant's advances. 26 In this
regard, case law provides that the act of holding a bladed instrument, by itself, is strongly suggestive of
force or, at least, intimidation, and threatening the victim with the same is sufficient to bring her into
submission. 27

In view of the foregoing, the Court finds no reason to deviate from the findings of fact made by the courts
a quo that accused-appellants are guilty as charged, i.e., of raping AAA with the use of a deadly weapon,
as the same are supported by the records. It must be noted that the assessment and findings of the trial
court are generally accorded great weight, and are conclusive and binding to the Court if not tainted with
arbitrariness or oversight of some fact or circumstance of weight and influence, 28 as in this case.
Nevertheless, considering that the crime was committed by two (2) persons, the accused-appellants
herein, with the use of a bladed weapon, it is only appropriate to increase their conviction from Simple
Rape to Qualified Rape.

Anent the proper penalty to be imposed, Section 3 of Republic Act No. 9346 29 provides that "[p]ersons
convicted of offenses punished with reclusion perpetua, or whose sentences will be reduced to reclusion
perpetua, by reason of this Act, shall not be eligible for parole under Act No. 4103, otherwise known as
the Indeterminate Sentence Law, as amended." Pursuant thereto, accused-appellants should be
sentenced with the penalty of reclusion perpetua, without eligibility for parole. 30

Finally, to conform with prevailing jurisprudence, the Court increases the award of damages in favor of
AAA to the amounts of P75,000.00 as civil indemnity, P75,000.00 as moral damages, and P30,000.00 as
exemplary damages, with six percent (6%) legal interest per annum on all the monetary awards from the
date of finality of judgment until fully paid. 31

WHEREFORE, the appeal is DENIED. The Decision dated April 24, 2014 of the Court of Appeals in CA-
G.R. CEB-CR HC No. 01462 is hereby AFFIRMED, finding accused-appellants Ricky Arguta alias "Joel"
and Wilson Cahipe alias "Siwit" (accused-appellants) GUILTY beyond reasonable doubt of the crime of
Qualified Rape as defined and penalized under Article 335 of the Revised Penal Code with
MODIFICATION sentencing accused-appellants to suffer the penalty of reclusion perpetua, without
eligibility for parole, and ordering them to jointly and severally pay AAA the amounts of P75,000.00 as
civil indemnity, P75,000.00 as moral damages, and P30,000.00 as exemplary damages, with legal
interest at the rate of six percent (6%) per annum on all the monetary awards from the date of finality of
this Decision until fully paid. ETHIDa

SO ORDERED.

||| (People v. Arguta, G.R. No. 213216, [April 20, 2015])

153
EN BANC

[A.C. No. 12011. June 26, 2018.]

NICANOR D. TRIOL, complainant, vs. ATTY. DELFIN R. AGCAOILI, JR., respondent.

DECISION

PERLAS-BERNABE, J p:

Before the Court is an administrative complaint 1 dated November 3, 2014 filed by complainant Nicanor
D. Triol (complainant) against respondent Atty. Delfin R. Agcaoili, Jr. (respondent) praying for the latter's
disbarment. CAIHTE

The Facts

Complainant alleged that he and his sister, Grace D. Triol (Grace), are co-owners of a parcel of land with
an area of 408.80 square meters situated in Quezon City and covered by Transfer Certificate of Title No.
129010 (subject land). Sometime in January 2011, complainant decided to sell the subject land to a
certain Leonardo P. Caparas (Caparas) but was unable to do so, as he could not obtain the signature of
Grace who was already residing in the United States (U.S.) at that time. Subsequently, complainant
discovered that a Deed of Absolute Sale 2 dated March 11, 2011 (subject deed) was executed and
notarized by respondent supposedly conveying the subject land to Fajardo without the authority of
complainant and Grace; neither did they give their consent to the same, as they allegedly did not
personally appear before respondent when the subject deed was notarized. Moreover, complainant found
out that their purported community tax certificates stated in the subject deed were fake. Accordingly, he
filed a disbarment complaint against respondent. 3

In his defense, 4 respondent disavowed knowledge of the execution and notarization of the subject deed,
claiming that he did not know complainant, Grace, and Caparas. He maintained that his signature on the
subject deed was forged, since he would never notarize an instrument without the signatory parties
personally appearing before him. He likewise asserted that he could not have notarized it, as he was not
a commissioned notary public in Quezon City in 2011. 5

The IBP's Report and Recommendation

In a Report and Recommendation 6 dated August 14, 2015, the IBP Investigating Commissioner
recommended the dismissal of the complaint, there being no substantial evidence to show that
respondent is guilty of violating Section 1 (b) (7), Rule XI of the 2004 Rules on Notarial Practice (2004
Notarial Rules). 7 The Investigating Commissioner found that respondent was not aware of the execution
and notarization of the subject deed, as he was able to establish that the signature affixed on the subject
deed was not his by virtue of the specimen signature that he provided in his Answer. 8

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In a Resolution 9 dated April 29, 2016, the IBP Board of Governors reversed the recommendation of the
Investigating Commissioner, and accordingly, imposed the penalty of suspension from the practice of law
for a period of two (2) years, as well as disqualification from being commissioned as a notary public for
the same period. It likewise directed the revocation of his current notarial commission, if any, and ordered
the Commission on Bar Discipline Director Ramon S. Esguerra (CIBD Dir. Esguerra) to prepare an
extended resolution explaining its action. 10

In an undated Extended Resolution, 11 CIBD Dir. Esguerra explained the recommendation of the IBP
Board of Governors to suspend respondent from the practice of law for a period of two (2) years and to
disqualify him from being commissioned as notary public for the same period pursuant to the case of
Tenoso v. Echanez. 12 CIBD Dir. Esguerra observed that while respondent provided his specimen
signature in his Answer, he failed to substantiate its genuineness and authenticity, given that he did not
submit a copy of his signature appearing in the records of the Office of the Clerk of Court or any other
official document containing the same specimen signature. As such, the probative value of the subject
deed containing his notarization, as well as the certifications 13 from the Clerk of Court of the Regional
Trial Court (RTC) of Quezon City that he was not a commissioned notary public in 2011 and 2012,
stands. 14

Aggrieved, respondent filed a motion for reconsideration, 15 which was denied in a Resolution 16 dated
May 27, 2017.

The Issue before the Court

The issue for the Court's resolution is whether or not respondent should be held administratively liable.

The Court's Ruling

The Court concurs with the findings of the IBP.

It is settled that "notarization is not an empty, meaningless routinary act, but one invested with
substantive public interest. Notarization converts a private document into a public document, making it
admissible in evidence without further proof of its authenticity. Thus, a notarized document is, by law,
entitled to full faith and credit upon its face. It is for this reason that a notary public must observe with
utmost care the basic requirements in the performance of his notarial duties; otherwise, the public's
confidence in the integrity of a notarized document would be undermined." 17

In this light, Section 2 (b), Rule IV of the 2004 Notarial Rules requires a duly-commissioned notary public
to perform a notarial act only if the person involved as signatory to the instrument or document is: (a) in
the notary's presence personally at the time of the notarization; and (b) personally known to the notary
public or otherwise identified by the notary public through competent evidence of identity as defined by
these Rules. 18 In other words, a notary public is not allowed to notarize a document unless the persons
who signed the same are the very same persons who executed and personally appeared before him to
attest to the contents and truth of what are stated therein. The purpose of this requirement is to enable
the notary public to verify the genuineness of the signature of the acknowledging party and to ascertain
that the document is the party's free act and deed. 19 DETACa

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Parenthetically, in the realm of legal ethics, a breach of the aforesaid provision of the 2004 Notarial Rules
would also constitute a violation of the Code of Professional Responsibility (CPR), considering that an
erring lawyer who is found to be remiss in his functions as a notary public is considered to have violated
his oath as a lawyer as well. 20 He does not only fail to fulfill his solemn oath of upholding and obeying
the law and its legal processes, but he also commits an act of falsehood and engages in an unlawful,
dishonest, and deceitful conduct. 21 Thus, Rule 1.01, Canon 1 and Rule 10.01, Canon 10 of the CPR
categorically state:

CANON 1 — A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law
and legal processes.

Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

xxx xxx xxx

CANON 10 — A lawyer owes candor, fairness and good faith to the court.

Rule 10.01 — A lawyer shall not do any falsehood, nor consent to the doing of any in court; nor shall he
mislead, or allow the Court to be misled by any artifice. (Emphases and underscoring supplied)

In this case, records show that respondent indeed violated the 2004 Notarial Rules when he notarized the
subject deed without complainant and Grace personally appearing before him, much more without the
requisite notarial commission in 2011. 22 Significantly, it was established that both complainant and
Grace could not have personally appeared before respondent, since Grace was already residing at the
U.S. at the time of the supposed notarization. Furthermore, complainant presented a Certification 23
dated April 7, 2015 issued by the Clerk of Court of the RTC showing that respondent was also not a
commissioned notary public for and within Quezon City in 2012. On the other hand, respondent, apart
from his bare denials and unsubstantiated defense of forgery, failed to rebut complainant's allegations
and evidence. While respondent provided his specimen signature in his Answer to support his defense of
forgery, the same nonetheless remained insufficient. As aptly observed by CIBD Dir. Esguerra,
respondent did not even submit a copy of his signature appearing in the records of the Office of the Clerk
of Court or any other official document containing the same specimen signature to prove its genuineness
and authenticity. Case law states that where a party resorts to bare denials and allegations and fails to
submit evidence in support of his defense, the determination that he committed the violation is sustained.
24 Hence, no reasonable conclusion can be had other than the fact that respondent notarized the subject
deed in violation of the 2004 Notarial Rules.

In the same breath, respondent also violated the provisions of the CPR, particularly Rule 1.01, Canon 1
and Rule 10.01, Canon 10 thereof. By misrepresenting himself as a commissioned notary public at the
time of the alleged notarization, he did not only cause damage to those directly affected by it, but he
likewise undermined the integrity of the office of a notary public and degraded the function of notarization.
25 In so doing, his conduct falls miserably short of the high standards of morality, honesty, integrity and
fair dealing required from lawyers, and it is only but proper that he be sanctioned. 26

In a number of cases, the Court has sanctioned a number of lawyers who were remiss in their duties as
notaries public. In Dizon v. Cabucana, Jr., 27 Isenhardt v. Real, 28 Bautista v. Bernabe, 29 and Gonzales

156
v. Ramos, 30 respondent notaries were all found guilty of notarizing documents without the presence of
the parties and were thus meted with the penalty of disqualification as notaries public for a period of two
(2) years, among others. Moreover, in Japitana v. Parado (Japitana), 31 Re: Violation of Rules on Notarial
Practice, 32 and Tenoso v. Echanez (Tenoso), 33 respondent notaries repeatedly performed notarial acts
without the requisite commission and were consequently suspended from the practice of law for a period
of two (2) years. However, in Japitana and Re: Violation of Rules on Notarial Practice, respondent
notaries were permanently barred from being commissioned as notaries public, while the respondent
notary public in Tenoso was disqualified for only a period of two (2) years with a stern warning that a
repetition of the same or similar act in the future shall merit a more severe sanction.

Guided by the foregoing pronouncements, the imposition of the penalties of suspension from the practice
of law for a period of two (2) years, disqualification from being commissioned as a notary public for the
same period, and revocation of the existing commission, if any, against respondent is only just and proper
under the circumstances.

WHEREFORE, the Court finds respondent Atty. Delfin R. Agcaoili, Jr. (respondent) GUILTY of violating
the 2004 Rules on Notarial Practice and the Code of Professional Responsibility. Accordingly, the Court
hereby SUSPENDS him from the practice of law for a period of two (2) years; PROHIBITS him from being
commissioned as a notary public for a period of two (2) years; and REVOKES his incumbent commission
as a notary public, if any. He is WARNED that a repetition of the same offense or similar acts in the future
shall be dealt with more severely. aDSIHc

The suspension in the practice of law, the prohibition from being commissioned as notary public, and the
revocation of his notarial commission, if any, shall take effect immediately upon receipt of this Decision by
respondent. He is DIRECTED to immediately file a Manifestation to the Court that his suspension has
started, copy furnished all courts and quasi-judicial bodies where he has entered his appearance as
counsel.

Let copies of this Decision be furnished to the Office of the Bar Confidant to be appended to respondent's
personal record as an attorney; the Integrated Bar of the Philippines for its information and guidance; and
the Office of the Court Administrator for circulation to all courts in the country.

SO ORDERED.

||| (Triol v. Agcaoili, Jr., A.C. No. 12011, [June 26, 2018])

157
SECOND DIVISION

[G.R. No. 183014. August 7, 2013.]

THE LAW FIRM OF CHAVEZ MIRANDA AND ASEOCHE, represented by its Founding Partner,
FRANCISCO I. CHAVEZ, petitioner, vs. ATTY. JOSEJINA C. FRIA, respondent.

DECISION

PERLAS-BERNABE, J p:

This is a direct recourse to the Court from the Regional Trial Court of Muntinlupa City, Branch 276 (RTC),
through a petition for review on certiorari, 1 raising a pure question of law. In particular, petitioner The
Law Firm of Chavez Miranda and Aseoche (The Law Firm) assails the Resolution 2 dated January 8,
2008 and Order 3 dated May 16, 2008 of the RTC in S.C.A. Case No. 07-096, upholding the dismissal of
Criminal Case No. 46400 for lack of probable cause.

The Facts

On July 31, 2006, an Information 4 was filed against respondent Atty. Josejina C. Fria (Atty. Fria), Branch
Clerk of Court of the Regional Trial Court of Muntinlupa City, Branch 203 (Branch 203), charging her for
the crime of Open Disobedience under Article 231 5 of the Revised Penal Code (RPC). The accusatory
portion of the said information reads:

The undersigned 2nd Assistant City Prosecutor accuses ATTY. JOSEJINA C. FRIA of the crime of Viol. of
Article 231 of the Revised Penal Code, committed as follows: ECDaTI

That on or about the 2nd day of February, 2006, or on dates subsequent thereto, in the City of
Muntinlupa, Philippines and within the jurisdiction of this Honorable Court, the above-named accused, a
public officer she being the Branch Clerk of Court of the Regional Trial Court Branch 203, Muntinlupa
City, did then and there willfully, unlawfully and feloniously refused openly, without any legal justification
to obey the order of the said court which is of superior authority, for the issuance of a writ of execution
which is her ministerial duty to do so in Civil Case No. 03-110 entitled Charles Bernard Reyes, doing
business under the name and style CBH Reyes Architects vs. Spouses Cesar and Mely Esquig and
Rosemarie Papas, which has become final and executory since February 2, 2006, despite requests
therefor, if only to execute/enforce said decision dated July 29, 2005 rendered within the scope of its
jurisdiction and issued with all the legal formalities, to the damage and prejudice of the plaintiff thereof.

Contrary to law.

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Muntinlupa City, July 31, 2006. 6

Based on the records, the undisputed facts are as follows:

The Law Firm was engaged as counsel by the plaintiff in Civil Case No. 03-110 instituted before Branch
203. 7 On July 29, 2005, judgment was rendered in favor of the plaintiff (July 29, 2005 judgment),
prompting the defendant in the same case to appeal. However, Branch 203 disallowed the appeal and
consequently ordered that a writ of execution be issued to enforce the foregoing judgment. 8 Due to the
denial of the defendant's motion for reconsideration, the July 29, 2005 judgment became final and
executory. 9

In its Complaint-Affidavit 10 dated February 12, 2006, The Law Firm alleged that as early as April 4,
2006, it had been following up on the issuance of a writ of execution to implement the July 29, 2005
judgment. However, Atty. Fria vehemently refused to perform her ministerial duty of issuing said writ.

In her Counter-Affidavit 11 dated June 13, 2006, Atty. Fria posited that the draft writ of execution (draft
writ) was not addressed to her but to Branch Sheriff Jaime Felicen (Felicen), who was then on leave.
Neither did she know who the presiding judge would appoint as special sheriff on Felicen's behalf. 12
Nevertheless, she maintained that she need not sign the draft writ since on April 18, 2006, the presiding
judge issued an Order stating that he himself shall sign and issue the same. 13

On July 31, 2006, the prosecutor issued a Memorandum 14 recommending, inter alia, that Atty. Fria be
indicted for the crime of Open Disobedience. The corresponding Information was thereafter filed before
the Metropolitan Trial Court of Muntinlupa City, Branch 80 (MTC), docketed as Criminal Case No. 46400.

The Proceedings Before the MTC

On September 4, 2006, Atty. Fria filed a Motion for Determination of Probable Cause 15 (motion) which
The Law Firm opposed 16 on the ground that the Rules on Criminal Procedure do not empower trial
courts to review the prosecutor's finding of probable cause and that such rules only give the trial court
judge the duty to determine whether or not a warrant of arrest should be issued against the accused.

Pending resolution of her motion, Atty. Fria filed a Manifestation with Motion 17 dated November 17,
2006, stating that the Court had rendered a Decision in the case of Reyes v. Balde II (Reyes) 18 — an
offshoot of Civil Case No. 03-110 — wherein it was held that Branch 203 had no jurisdiction over the
foregoing civil case. 19 In response, The Law Firm filed its Comment/Opposition, 20 contending that Atty.
Fria already committed the crime of Open Disobedience 119 days before the Reyes ruling was rendered
and hence, she remains criminally liable for the afore-stated charge. DSHTaC

In an Omnibus Order 21 dated January 25, 2007, the MTC ordered the dismissal of Criminal Case No.
46400 for lack of probable cause. It found that aside from the fact that Atty. Fria is a judicial officer, The
Law Firm failed to prove the existence of the other elements of the crime of Open Disobedience. 22 In
particular, the second element of the crime, i.e., that there is a judgment, decision, or order of a superior
authority made within the scope of its jurisdiction and issued with all legal formalities, unlikely existed

159
since the Court already declared as null and void the entire proceedings in Civil Case No. 03-110 due to
lack of jurisdiction. In this regard, the MTC opined that such nullification worked retroactively to warrant
the dismissal of the case and/or acquittal of the accused at any stage of the proceedings. 23

Dissatisfied, The Law Firm moved for reconsideration 24 which was, however, denied in a Resolution 25
dated July 13, 2007. Accordingly, it elevated the matter on certiorari. 26

The RTC Ruling

In a Resolution 27 dated January 8, 2008, the RTC affirmed the MTC's ruling, finding no grave abuse of
discretion on the latter's part since its dismissal of Criminal Case No. 46400 for lack of probable cause
was "in full accord with the law, facts, and jurisprudence." 28

Aggrieved, The Law Firm filed a Motion for Reconsideration 29 which was equally denied by the RTC in
an Order 30 dated May 16, 2008. Hence, the instant petition.

The Issue Before the Court

The essential issue in this case is whether or not the RTC erred in sustaining the MTC's dismissal of the
case for Open Disobedience against Atty. Fria, i.e., Criminal Case No. 46400, for lack of probable cause.

The Court's Ruling

The petition is bereft of merit.

Under Section 5 (a) of the Revised Rules of Criminal Procedure, a trial court judge may immediately
dismiss a criminal case if the evidence on record clearly fails to establish probable cause, viz.:

Sec. 5. When warrant of arrest may issue. — (a) By the Regional Trial Court. — Within ten (10) days from
the filing of the complaint or information, the judge shall personally evaluate the resolution of the
prosecutor and its supporting evidence. He may immediately dismiss the case if the evidence on record
clearly fails to establish probable cause. If he finds probable cause, he shall issue a warrant of arrest, or a
commitment order if the accused has already been arrested pursuant to a warrant issued by the judge
who conducted preliminary investigation or when the complaint or information was filed pursuant to
Section 6 of this Rule. In case of doubt on the existence of probable cause, the judge may order the
prosecutor to present additional evidence within five (5) days from notice and the issue must be resolved
by the court within thirty (30) days from the filing of the complaint of information. (Emphasis and
underscoring supplied) aEHADT

It must, however, be observed that the judge's power to immediately dismiss a criminal case would only
be warranted when the lack of probable cause is clear. In De los Santos-Dio v. CA, 31 the Court illumined
that a clear-cut case of lack of probable cause exists when the records readily show uncontroverted, and

160
thus, established facts which unmistakably negate the existence of the elements of the crime charged,
viz.:

While a judge's determination of probable cause is generally confined to the limited purpose of issuing
arrest warrants, Section 5(a), Rule 112 of the Revised Rules of Criminal Procedure explicitly states that a
judge may immediately dismiss a case if the evidence on record clearly fails to establish probable cause .
...

In this regard, so as not to transgress the public prosecutor's authority, it must be stressed that the
judge's dismissal of a case must be done only in clear-cut cases when the evidence on record plainly fails
to establish probable cause — that is when the records readily show uncontroverted, and thus,
established facts which unmistakably negate the existence of the elements of the crime charged. On the
contrary, if the evidence on record shows that, more likely than not, the crime charged has been
committed and that respondent is probably guilty of the same, the judge should not dismiss the case and
thereon, order the parties to proceed to trial. In doubtful cases, however, the appropriate course of action
would be to order the presentation of additional evidence.

In other words, once the information is filed with the court and the judge proceeds with his primordial task
of evaluating the evidence on record, he may either: (a) issue a warrant of arrest, if he finds probable
cause; (b) immediately dismiss the case, if the evidence on record clearly fails to establish probable
cause; and (c) order the prosecutor to submit additional evidence, in case he doubts the existence of
probable cause. 32 (Emphasis and underscoring supplied; citations omitted)

Applying these principles to the case at bar would lead to the conclusion that the MTC did not gravely
abuse its discretion in dismissing Criminal Case No. 46400 for lack of probable cause. The dismissal
ought to be sustained since the records clearly disclose the unmistakable absence of the integral
elements of the crime of Open Disobedience. While the first element, i.e., that the offender is a judicial or
executive officer, concurs in view of Atty. Fria's position as Branch Clerk of Court, the second and third
elements of the crime evidently remain wanting.

To elucidate, the second element of the crime of Open Disobedience is that there is a judgment, decision,
or order of a superior authority made within the scope of its jurisdiction and issued with all legal
formalities. In this case, it is undisputed that all the proceedings in Civil Case No. 03-110 have been
regarded as null and void due to Branch 203's lack of jurisdiction over the said case. This fact has been
finally settled in Reyes where the Court decreed as follows:

WHEREFORE, in view of the foregoing, the instant petition is DENIED. . . . The Presiding Judge of the
Regional Trial Court of Muntinlupa City, Branch 203 is PERMANENTLY ENJOINED from proceeding with
Civil Case No. 03-110 and all the proceedings therein are DECLARED NULL AND VOID. . . . The
Presiding Judge of the Regional trial Court of Muntinlupa City, Branch 203 is further DIRECTED to
dismiss Civil Case No. 03-110 for lack of jurisdiction. 33 (Emphasis and underscoring supplied) EDcICT

Hence, since it is explicitly required that the subject issuance be made within the scope of a superior
authority's jurisdiction, it cannot therefore be doubted that the second element of the crime of Open
Disobedience does not exist. Lest it be misunderstood, a court — or any of its officers for that matter —
which has no jurisdiction over a particular case has no authority to act at all therein. In this light, it cannot
be argued that Atty. Fria had already committed the crime based on the premise that the Court's
pronouncement as to Branch 203's lack of jurisdiction came only after the fact. Verily, Branch 203's lack
of jurisdiction was not merely a product of the Court's pronouncement in Reyes. The said fact is traced to

161
the very inception of the proceedings and as such, cannot be accorded temporal legal existence in order
to indict Atty. Fria for the crime she stands to be prosecuted.

Proceeding from this discussion, the third element of the crime, i.e., that the offender, without any legal
justification, openly refuses to execute the said judgment, decision, or order, which he is duty bound to
obey, cannot equally exist. Indubitably, without any jurisdiction, there would be no legal order for Atty. Fria
to implement or, conversely, disobey. Besides, as the MTC correctly observed, there lies ample legal
justifications that prevented Atty. Fria from immediately issuing a writ of execution. 34

In fine, based on the above-stated reasons, the Court holds that no grave abuse of discretion can be
attributed to the MTC as correctly found by the RTC. It is well-settled that an act of a court or tribunal can
only be considered as with grave abuse of discretion when such act is done in a "capricious or whimsical
exercise of judgment as is equivalent to lack of jurisdiction." The abuse of discretion must be so patent
and gross as to amount to an "evasion of a positive duty or to a virtual refusal to perform a duty enjoined
by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and
despotic manner by reason of passion and hostility." 35 Consequently, the dismissal of Criminal Case No.
46400 for lack of probable cause is hereby sustained.

WHEREFORE, the petition is DENIED. The Resolution dated January 8, 2008 and Order dated May 16,
2008 of the Regional Trial Court of Muntinlupa City, Branch 276 in S.C.A. Case No. 07-096 are hereby
AFFIRMED.

SO ORDERED.

||| (The Law Firm of Chavez Miranda and Aseoche v. Fria, G.R. No. 183014, [August 7, 2013], 716 PHIL
105-114)

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[G.R. No. 196741. July 17, 2013.]

PHILIPPINE TOURISM AUTHORITY (Now known as TOURISM INFRASTRUCTURE AND

ENTERPRISE ZONE AUTHORITY), petitioner, vs. MARCOSA A. SABANDAL-HERZENSTIEL, PEDRO
TAPALES, LUIS TAPALES, and ROMEO TAPALES, respondents.

RESOLUTION

PERLAS-BERNABE, J p:

Before the Court is a petition for review on certiorari 1 assailing the January 11, 2011 Decision 2 and April
14, 2011 Resolution 3 of the Court of Appeals, Cebu City (CA) in CA-G.R. SP No. 03888 which declared
respondent Marcosa A. Sabandal-Herzenstiel (Sabandal-Herzenstiel) as the lawful possessor of Lot No.
2574, situated in Brgy. Basdiot, Moalboal, Cebu (subject property).

The Facts

Petitioner Philippine Tourism Authority (now Tourism Infrastructure and Enterprise Zone Authority)
(petitioner) is the owner of the subject property and other parcels of land located in Brgy. Basdiot,
Moalboal, Cebu since February 12, 1981 when it bought the same from Tri-Island Corporate Holdings,
Inc. (Tri-Island). 4 It had then been in actual, physical, continuous, and uninterrupted possession of the
subject property and had declared the same for taxation purposes. Sometime in 1997, however,
respondents Pedro Tapales, Luis Tapales, Romeo Tapales (Tapaleses), and Sabandal-Herzenstiel
(respondents) by force, strategy and stealth entered into the 2,940 square meter portion of the subject
property, on which they proceeded to cut down some coconut trees, introduced improvements and fenced
the area. Petitioner made demands to vacate, the last of which was through a letter 5 dated January 5,
1998, which respondents ignored, prompting the filing of a forcible entry complaint 6 against them before
the 12th Municipal Circuit Trial Court of Moalboal-Alcantara-Badian-Alegria, Cebu (MCTC), docketed as
Civil Case No. 118, on March 18, 1998. ECTHIA

In their Answer with Counterclaim, the Tapaleses acknowledged that the subject property had already
been sold by its administrator, Josefina Abrenica, to Tri-Island. 7 They, however, claimed that the sale
was tainted with force and intimidation and hence void, including the subsequent transactions covering
the same property. 8 Notwithstanding the sale, they remained in actual and physical possession of the
subject property and even introduced improvements thereon. Consequently, absent any proof of prior
possession on the part of petitioner, they claimed that the forcible entry complaint must necessarily be
dismissed. 9

The MCTC Ruling

On April 13, 2007, the MCTC rendered a Decision 10 (MCTC Decision) ordering respondents to: (a)
vacate the subject property and remove all the improvements introduced therein; (b) pay petitioner, jointly
and severally, the amount of P2,000.00 as monthly rental from the date of judicial demand, i.e., March 18,
1998, until they have effectively vacated the premises; and (c) pay the costs of suit.

163
The MCTC declared that petitioner is the lawful owner of the subject property and had been in prior
possession thereof as shown by the following: (a) the deed of sale dated February 12, 1981; (b) the tax
declarations issued in its name; and (c) its act of leasing portions of the subject property to others in the
exercise of its right of ownership and possession. 11 In contrast, respondents failed to substantiate their
claim of ownership and possession. Neither have they established any relationship with Abrenica, the
previous owner of the subject property. 12 On the other hand, Sabandal-Herzenstiel never claimed to be
the owner of the same and even acknowledged petitioner's ownership when she offered to buy back the
land. 13 HEDSIc

The RTC Ruling

On January 30, 2008, respondents' appeal to the RTC was dismissed for their failure to file a
memorandum on appeal as required under Section 7 (b), Rule 40 of the Rules of Court (Rules). 14 Their
motion for reconsideration was similarly denied in an Order dated April 23, 2008. 15

Only Sabandal-Herzenstiel elevated the matter before the CA via a petition for review under Rule 42 of
the Rules.

The CA Ruling

On January 11, 2011, the CA rendered the assailed Decision, 16 nullifying and setting aside the rulings of
both the MCTC and RTC, and declaring Sabandal-Herzenstiel as the lawful possessor of the subject
property. 17 CacEIS

It held that while the RTC correctly dismissed respondents' appeal for failure to submit their memorandum
on appeal within the prescribed period, it should have relaxed the rules on procedure in the interest of
substantial justice and for a full determination of the rights of the parties taking into account the
subsequent compliance of the respondents. 18

On the merits, the CA found petitioner to have failed to establish prior possession of the subject property
19 and rebut respondents' claim of continued physical possession in spite of the sale of the subject
property to Tri-Island during which, Sabandal-Herzenstiel leased and converted the property into a resort.
20

Petitioner moved for reconsideration 21 which was, however, denied in a Resolution 22 dated April 14,
2011.

Hence, the instant petition.

The Issue Before the Court

The sole issue for the Court's resolution is whether or not the respondents may be lawfully ejected from
the subject property.

164
The Court's Ruling

The petition is meritorious.

In an action for forcible entry, the plaintiff must prove that he was in prior possession of the disputed
property and that the defendant deprived him of his possession by any of the means provided for in
Section 1, Rule 70 of the Rules, namely: force, intimidation, threats, strategy, and stealth. 23 ASTDCH

In this case, respondents failed to establish their prior and continued possession of the subject property
after its sale in favor of petitioner in 1981. On the contrary, they even admitted in their answer to the
complaint that petitioner exercised dominion over the same by instituting caretakers and leasing portions
thereof to third persons. 24 Suffice it to state that possession in the eyes of the law does not mean that a
man has to have his feet on every square meter of the ground before he is deemed in possession. 25
Thus, finding petitioner's assertion to be well-founded, the MCTC properly adjudged petitioner to have
prior possession over the subject property as against Sabandal-Herzenstiel, who never claimed
ownership or possession thereof. 26

Petitioner's supposed failure to describe in detail the manner of respondents' entry into the subject
property is inconsequential. 27 Jurisprudence states that proving the fact of unlawful entry and the
exclusion of the lawful possessor — as petitioner had sufficiently demonstrated — would necessarily
imply the use of force. As held in Estel v. Heirs of Recaredo P. Diego, Sr.: 28

. . . Unlawfully entering the subject property and excluding therefrom the prior possessor would
necessarily imply the use of force and this is all that is necessary. In order to constitute force, the
trespasser does not have to institute a state of war. No other proof is necessary. In the instant case, it is,
thus, irrefutable that respondents sufficiently alleged that the possession of the subject property was
wrested from them through violence and force. 29

And in David v. Cordova: 30

. . . [T]he foundation of a possessory action is really the forcible exclusion of the original possessor by a
person who has entered without right. The words "by force, intimidation, threat, strategy or stealth"
include every situation or condition under which one person can wrongfully enter upon real property and
exclude another, who has had prior possession therefrom. If a trespasser enters upon land in open
daylight, under the very eyes of the person already clothed with lawful possession, but without the
consent of the latter, and there plants himself and excludes such prior possessor from the property, the
action of forcibly entry and detainer can unquestionably be maintained, even though no force is used by
the trespasser other than such as is necessarily implied from the mere acts of planting himself on the
ground and excluding the other party. 31

Similarly, in Arbizo v. Santillan, 32 it has been held that the acts of unlawfully entering the disputed
premises, erecting a structure thereon, and excluding therefrom the prior possessor would necessarily
imply the use of force, as in this case. AEIHaS

165
In fine, the Court upholds the findings and conclusions of the MCTC, adjudging petitioner to be the lawful
possessor of the subject property, square as they are with existing law and jurisprudence. Accordingly,
the CA's ruling on the merits must perforce be reversed and set aside.

WHEREFORE, the petition is GRANTED. The January 11, 2011 Decision and April 14, 2011 Resolution
of the Court of Appeals, Cebu City, in CA-G.R. SP No. 03888 are hereby REVERSED and SET ASIDE.
The April 13, 2007 Decision of the 12th Municipal Circuit Trial Court of Moalboal-Alcantara-Badian-
Alegria, Cebu in Civil Case No. 118 is REINSTATED.

SO ORDERED.

||| (Philippine Tourism Authority v. Sabandal-Herzenstiel, G.R. No. 196741, [July 17, 2013], 714 PHIL
360-367)

166
SECOND DIVISION

[G.R. No. 229826. July 30, 2018.]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. PATRICIA CABRELLOS y DELA CRUZ, accused-
appellant.

DECISION

PERLAS-BERNABE, J p:

Before the Court is an ordinary appeal 1 filed by accused-appellant Patricia Cabrellos y Dela Cruz
(Cabrellos) assailing the Decision 2 dated September 13, 2016 of the Court of Appeals (CA) in CA-G.R.
CR H.C. No. 02020, which affirmed the Joint Judgment 3 dated February 25, 2015 of the Regional Trial
Court of Bais City, Negros Oriental, Branch 45 (RTC) in Crim. Case Nos. 05-0163-A and 05-0162-A
finding Cabrellos guilty beyond reasonable doubt of the crimes of Illegal Sale of Dangerous Drugs and
Illegal Possession of Dangerous Drugs, defined and penalized under Sections 5 and 11, respectively, of
Article II of Republic Act No. (RA) 9165, 4 otherwise known as the "Comprehensive Dangerous Drugs Act
of 2002."

The Facts

This case stemmed from two (2) Informations 5 filed before the RTC charging Cabrellos with violations of
Sections 5 and 11, Article II of RA 9165, the accusatory portions of which read:

Crim. Case No. 05-0163-A

That on September 22, 2005 at about 12:45 in the afternoon at Barangay Iniban, Ayungon, Negros
Oriental, Philippines, and within the jurisdiction of this Honorable Court, the above named accused,
without lawful authority, did then and there willfully, unlawfully and feloniously SELL and DELIVER to a
poseur buyer Methamphetamine Hydrochloride locally known as Shabu, weighing 0.08 gram, a
dangerous drug.

Contrary to law. 6 aScITE

Crim. Case No. 05-0162-A

That on September 22, 2005 at 12:45 in the afternoon, more or less, at Barangay Iniban, Ayungon,
Negros Oriental, Philippines, and within the jurisdiction of this Honorable Court, the above named
accused, did then and there willfully, unlawfully and feloniously have in her possession, control and

167
custody, 0.64 gram of Methamphetamine Hydrochloride, locally known as Shabu, a dangerous drug,
without lawful authority.

Contrary to law. 7

The prosecution alleged that on September 22, 2005 and acting upon a tip from a confidential informant
regarding Cabrellos's alleged illegal drug activities in Ayungon, Negros Oriental, the Philippine Drug
Enforcement Agency and the Provincial Anti-Illegal Drugs Special Operations Group organized a buy-
bust team, with PO3 Allen June Germodo (PO3 Germodo) acting as poseur-buyer and PO2 Glenn
Corsame (PO2 Corsame) as immediate back-up. The buy-bust team, together with the informant, then
went to Cabrellos's house. Thereat, the informant introduced PO3 Germodo as a shabu buyer. After PO3
Germodo gave Cabrellos the two (2) marked P500.00 bills, Cabrellos took out two (2) plastic sachets
containing suspected shabu from her bag and handed it over to PO3 Germodo. Upon receipt of the
sachets, PO3 Germodo placed Cabrellos under arrest, with the rest of the buy-bust team rushing to the
scene. The police officers searched Cabrellos's bag and discovered seventeen (17) more sachets
containing suspected shabu therein. The police officers then brought Cabrellos and the seized items to
the Ayungon Police Station for the conduct of photography and inventory of the seized items. However,
since only a barangay kagawad was present at the Ayungon Police Station at that time, the police officers
brought Cabrellos and the seized items to the Dumaguete Police Station wherein they conducted a
second inventory, this time in the presence of a representative each from the DOJ and the media.
Thereafter, the seized sachets were brought to the crime laboratory where the contents thereof were
confirmed to be methamphetamine hydrochloride or shabu. 8

In her defense, Cabrellos testified that she was inside her house tending to her child when suddenly, two
(2) unidentified persons came into their house looking for her husband. When she told them that her
husband was not around, she was brought to the police station for selling shabu, and there, made to sign
a document already signed by a barangay official. She was detained for three (3) months at the
Dumaguete Police Station before she was transferred to Bais City Jail. 9

The RTC Ruling

In a Joint Judgment 10 dated February 25, 2015, the RTC convicted Cabrellos of the crimes charged, and
accordingly, sentenced her as follows: (a) in Criminal Case No. 05-0163-A, to suffer the penalty of life
imprisonment, and to pay a fine of P500,000.00; and (b) in Criminal Case No. 05-0162-A, to suffer the
penalty of imprisonment for an indeterminate period of twelve (12) years and one (1) day to fourteen (14)
years, and to pay a fine of P300,000.00. 11 HEITAD

The RTC found that the prosecution was able to establish Cabrellos's guilt beyond reasonable doubt,
considering that: (a) she was caught in flagrante delicto selling shabu to the poseur-buyer; and (b) in the
search incidental to her arrest, she was discovered to be in possession of seventeen (17) more sachets
of shabu. On the other hand, it did not give credence to Cabrellos' bare denial as it stood weak in the face
of the detailed and candid testimonies of the prosecution's witnesses. 12

Aggrieved, Cabrellos appealed 13 to the CA.

The CA Ruling

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In a Decision 14 dated September 13, 2016, the CA affirmed the RTC ruling. 15 It held that the
testimonies of the police officers had established the fact that Cabrellos was caught in the act of selling
illegal drugs, and that in the course of her arrest, she was found in possession of more sachets containing
illegal drugs. In this regard, the CA ruled that the police officers substantially complied with the chain of
custody requirement as the identity and evidentiary value of the seized items were duly established and
preserved. 16

Hence, this appeal.

The Issue Before the Court

The issue for the Court's resolution is whether or not Cabrellos is guilty beyond reasonable doubt of
violating Sections 5 and 11, Article II of RA 9165.

The Court's Ruling

The appeal is meritorious.

At the outset, it must be stressed that an appeal in criminal cases opens the entire case for review and,
thus, it is the duty of the reviewing tribunal to correct, cite, and appreciate errors in the appealed judgment
whether they are assigned or unassigned. 17 "The appeal confers the appellate court full jurisdiction over
the case and renders such court competent to examine records, revise the judgment appealed from,
increase the penalty, and cite the proper provision of the penal law." 18

In this case, Cabrellos was charged with Illegal Sale and Illegal Possession of Dangerous Drugs,
respectively defined and penalized under Sections 5 and 11, Article II of RA 9165. In order to properly
secure the conviction of an accused charged with Illegal Sale of Dangerous Drugs, the prosecution must
prove: (a) the identity of the buyer and the seller, the object, and the consideration; and (b) the delivery of
the thing sold and the payment. 19 Meanwhile, in instances wherein an accused is charged with Illegal
Possession of Dangerous Drugs, the prosecution must establish the following elements to warrant his
conviction: (a) the accused was in possession of an item or object identified as a prohibited drug; (b) such
possession was not authorized by law; and (c) the accused freely and consciously possessed the said
drug. 20 In both instances, case law instructs that it is essential that the identity of the prohibited drug be
established with moral certainty, considering that the dangerous drug itself forms an integral part of the
corpus delicti of the crime. Thus, in order to obviate any unnecessary doubt on the identity of the
dangerous drugs, the prosecution has to show an unbroken chain of custody over the same and account
for each link in the chain of custody from the moment the drugs are seized up to their presentation in
court as evidence of the crime. 21 ATICcS

Section 21, Article II of RA 9165 outlines the procedure which the police officers must follow when
handling the seized drugs in order to preserve their integrity and evidentiary value. 22 Under the said
section, prior to its amendment by RA 10640, 23 the apprehending team shall, among others,
immediately after seizure and confiscation conduct a physical inventory and photograph the seized items
in the presence of the accused or the person from whom the items were seized, or his representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy of the same, and the
seized drugs must be turned over to the PNP Crime Laboratory within twenty-four (24) hours from

169
confiscation for examination. 24 In the case of People v. Mendoza, 25 the Court stressed that "[w]ithout
the insulating presence of the representative from the media or the [DOJ], or any elected public official
during the seizure and marking of the [seized drugs], the evils of switching, 'planting' or contamination of
the evidence that had tainted the buy-busts conducted under the regime of [RA] 6425 (Dangerous Drugs
Act of 1972) again reared their ugly heads as to negate the integrity and credibility of the seizure and
confiscation of the [said drugs] that were evidence herein of the corpus delicti, and thus adversely
affected the trustworthiness of the incrimination of the accused. Indeed, the x x x presence of such
witnesses would have preserved an unbroken chain of custody." 26

The Court, however, clarified that under varied field conditions, strict compliance with the requirements of
Section 21, Article II of RA 9165 may not always be possible. 27 In fact, the Implementing Rules and
Regulations (IRR) of RA 9165 — which is now crystallized into statutory law with the passage of RA
10640 28 — provide that the said inventory and photography may be conducted at the nearest police
station or office of the apprehending team in instances of warrantless seizure, and that non-compliance
with the requirements of Section 21, Article II of RA 9165 — under justifiable grounds — will not render
void and invalid the seizure and custody over the seized items so long as the integrity and evidentiary
value of the seized items are properly preserved by the apprehending officer or team. 29 In other words,
the failure of the apprehending team to strictly comply with the procedure laid out in Section 21, Article II
of RA 9165 and its IRR does not ipso facto render the seizure and custody over the items as void and
invalid, provided that the prosecution satisfactorily proves that: (a) there is justifiable ground for non-
compliance; and (b) the integrity and evidentiary value of the seized items are properly preserved. 30 In
People v. Almorfe, 31 the Court explained that for the above-saving clause to apply, the prosecution must
explain the reasons behind the procedural lapses, and that the integrity and evidentiary value of the
seized evidence had nonetheless been preserved. 32 Also, in People v. De Guzman, 33 it was
emphasized that the justifiable ground for non-compliance must be proven as a fact, because the Court
cannot presume what these grounds are or that they even exist. 34

After a judicious study of the case, the Court finds that the police officers committed unjustified deviations
from the prescribed chain of custody rule, thereby putting into question the integrity and evidentiary value
of the dangerous drugs allegedly seized from Cabrellos.

Initially, it would appear that the arresting officers complied with the witness requirement during inventory,
as seen in the Receipt of Property Seized 35 dated September 22, 2005 which contains the signatures of
the required witnesses, i.e., a public elected official, a representative from the DOJ, and a representative
from the media. However, no less than PO3 Germodo admitted in open court that they actually conducted
two (2) separate inventories in different places and in the presence of different witnesses. Pertinent
portions of his direct testimony read:

[Pros. Yuseff Cesar Ybañez, Jr.]:

After you were able to make the said marking, were you able to take pictures with the accused inside
her house? TIADCc

[PO3 Germodo]:

No, sir. We only took pictures during the inventory at the police station of Ayungon.

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xxx xxx xxx

Q: Mr. Witness, after you have prepared, and signed of the properties seized and gone with the markings
of the property seized, what did you do then, if any?

A: We conducted the inventory of the confiscated items together with the witness, the [B]rgy. Kagawad
Raul Fausto and he signed the inventory.

Q: And after Raul Fausto signed the inventory, what happened then, if any?

A: Since there was no report from the media [and] the Department of Justice, we proceeded to
Dumaguete City.

Q: Where did you proceed in Dumaguete City?

A: In our office.

Q: Where is your office located?

A: It is located at PNP compound, Locsin St., Dumaguete City.

Q: After you arrived there, what happened then?

A: I called the media representative and the DOJ.

Q: And did they arrive, the media representative and the DOJ representative?

A: Yes.

Q: After they arrived, what transpired at your office?

A: We conduct (sic) again an inventory.

Q: After conducting the second inventory, what did you do then, if any?

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A: After the inventory we made a request for PNP crime laboratory. 36 (Emphases and underscoring
supplied) AIDSTE

From the foregoing testimony, it is clear that the arresting officers conducted two (2) separate inventories,
both of which are glaringly non-compliant with the required witnesses rule: (a) in the inventory conducted
at the Ayungon Police Station, only a public elected official — Brgy. Kagawad Raul Fausto — was
present thereat; and (b) on the other hand, the inventory conducted at the Dumaguete Police Station was
witnessed only by representatives from the DOJ and the media. To make matters worse, the arresting
officers attempted to cover up such fact by preparing a single inventory sheet signed by the witnesses at
different times and places. Verily, the chain of custody rule laid down by RA 9165 and its IRR
contemplates a situation where the inventory conducted on the seized items is witnessed by the required
personalities at the same time. The wordings of the law leave no room for any piecemeal compliance with
the required witnesses rule as what happened in this case. Otherwise, the avowed purpose of the
required witnesses rule — which is to prevent the evils of switching, planting, or contamination of the
corpus delicti resulting in the tainting of its integrity and evidentiary value — will be greatly diminished or
even completely negated.

At this point, it is well to note that the non-compliance with the required witnesses rule does not per se
render the confiscated items inadmissible. 37 However, a justifiable reason for such failure or a showing
of any genuine and sufficient effort to secure the required witnesses under Section 21, Article II of RA
9165 must be adduced. 38 In People v. Umipang, 39 the Court held that the prosecution must show that
earnest efforts were employed in contacting the representatives enumerated under the law for "[a] sheer
statement that representatives were unavailable — without so much as an explanation on whether
serious attempts were employed to look for other representatives, given the circumstances — is to be
regarded as a flimsy excuse." 40 Verily, mere statements of unavailability, absent actual serious attempts
to contact the required witnesses, are unacceptable as justified grounds for non-compliance. 41 These
considerations arise from the fact that police officers are ordinarily given sufficient time — beginning from
the moment they have received the information about the activities of the accused until the time of his
arrest — to prepare for a buy-bust operation and consequently, make the necessary arrangements
beforehand knowing fully well that they would have to strictly comply with the set procedure prescribed in
Section 21, Article II of RA 9165. As such, police officers are compelled not only to state the reasons for
their non-compliance, but must in fact, also convince the Court that they exerted earnest efforts to comply
with the mandated procedure, and that under the given circumstance, their actions were reasonable. 42
AaCTcI

To reiterate, PO3 Germodo admitted that they had to re-do the inventory at the Dumaguete Police Station
for it to be witnessed by the DOJ and media representatives. However, the re-conduct of the inventory at
the Dumaguete Police Station was no longer witnessed by the public elected official who was left behind
at the Ayungon Police Station. Unfortunately, no excuse was offered for such mishap; and worse, they
even tried to trivialize the matter by making the required witnesses sign a single inventory sheet despite
the fact that they witnessed the conduct of two (2) separate inventories. Thus, for failure of the
prosecution to provide justifiable grounds or show that special circumstances exist which would excuse
their transgression, the Court is constrained to conclude that the integrity and evidentiary value of the
items purportedly seized from Cabrellos have been compromised. It is settled that in a prosecution for the
Illegal Sale and Illegal Possession of Dangerous Drugs under RA 9165, the State carries the heavy
burden of proving not only the elements of the offense, but also to prove the integrity of the corpus delicti,
failing in which, renders the evidence for the State insufficient to prove the guilt of the accused beyond
reasonable doubt. 43 It is well-settled that the procedure in Section 21, Article II of RA 9165 is a matter of
substantive law, and cannot be brushed aside as a simple procedural technicality; or worse, ignored as
an impediment to the conviction of illegal drug suspects. 44 As such, since the prosecution failed to
provide justifiable grounds for non-compliance with the aforesaid provision, Cabrellos's acquittal is
perforce in order.

172
As a final note, the Court finds it fitting to echo its recurring pronouncement in recent jurisprudence on the
subject matter:

The Court strongly supports the campaign of the government against drug addiction and commends the
efforts of our law enforcement officers against those who would inflict this malediction upon our people,
especially the susceptible youth. But as demanding as this campaign may be, it cannot be more so than
the compulsions of the Bill of Rights for the protection of liberty of every individual in the realm, including
the basest of criminals. The Constitution covers with the mantle of its protection the innocent and the
guilty alike against any manner of high-handedness from the authorities, however praiseworthy their
intentions.

Those who are supposed to enforce the law are not justified in disregarding the right of the individual in
the name of order. Order is too high a price for the loss of liberty. x x x. 45

"In this light, prosecutors are strongly reminded that they have the positive duty to prove compliance with
the procedure set forth in Section 21 [, Article II] of RA 9165, as amended. As such, they must have the
initiative to not only acknowledge but also justify any perceived deviations from the said procedure during
the proceedings before the trial court. Since compliance with the procedure is determinative of the
integrity and evidentiary value of the corpus delicti and ultimately, the fate of the liberty of the accused,
the fact that any issue regarding the same was not raised, or even threshed out in the court/s below,
would not preclude the appellate court, including this Court, from fully examining the records of the case if
only to ascertain whether the procedure had been completely complied with, and if not, whether justifiable
reasons exist to excuse any deviation. If no such reasons exist, then it is the appellate court's bounden
duty to acquit the accused, and perforce, overturn a conviction." 46 EcTCAD

WHEREFORE, the appeal is GRANTED. The Decision dated September 13, 2016 of the Court of
Appeals in CA-G.R. CR H.C. No. 02020 is hereby REVERSED and SET ASIDE. Accordingly, accused-
appellant Patricia Cabrellos y Dela Cruz is ACQUITTED of the crimes charged. The Director of the
Bureau of Corrections is ordered to cause her immediate release, unless she is being lawfully held in
custody for any other reason. SDHTEC

SO ORDERED.

||| (People v. Cabrellos y Dela Cruz, G.R. No. 229826, [July 30, 2018])

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SECOND DIVISION

[G.R. No. 233572. July 30, 2018.]

ALFREDO A. RAMOS, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated March 21, 2017 and the
Resolution 3 dated August 4, 2017 of the Court of Appeals (CA) in CA-G.R. CR No. 38528, which
affirmed the Decision 4 dated August 27, 2015 of the Regional Trial Court of Binangonan, Rizal, Branch
67 (RTC) in Criminal Case No. 12-0227, finding petitioner Alfredo A. Ramos (Ramos) guilty beyond
reasonable doubt of the crime of Illegal Possession of Dangerous Drugs as defined and penalized under
Section 11, Article II of Republic Act (RA) No. 9165, 5 otherwise known as the "Comprehensive
Dangerous Drugs Act of 2002."

The Facts

On May 8, 2012 an Information was filed before the RTC charging Ramos of violation of Section 11,
Article II of RA 9165, the accusatory portion of which reads:

That on or about the 1st day of May 2012, in the Municipality of Angono, Province of Rizal, Philippines
and within the jurisdiction of this Honorable Court, the above-named accused, without having been
authorized by law to possess any dangerous drug, did then and there willfully, unlawfully and knowingly
possess and have in his custody and control 0.05 gram of white crystalline substance contained in one
(1) heat-sealed transparent plastic sachet, which was found positive to the test for Methamphetamine
Hydrochloride, also known as "shabu," a dangerous drug, in violation of the above-cited law.

CONTRARY TO LAW. 6

The prosecution alleged that on May 1, 2012, acting upon the information of a police asset that a certain
"Nonong" — later identified as Ramos — was bringing in shabu from Lupang Arienda to Barangay (Brgy.)
San Roque, Angono, Rizal, Senior Police Officer 1 (SPO1) Pablo Medina (SPO1 Medina), together with
three (3) other police officers, took their positions at Col. Guido St., Brgy. San Roque. After waiting for a
while, Ramos arrived at the location, and later, two (2) unidentified men came and talked to him. The
three (3) men then started fighting, which prompted the police officers to approach and pacify them.
However, the men escaped, except for Ramos who was caught by SPO1 Medina. Ramos then took
something from his pocket and tried to throw away a pack of cigarettes containing a plastic sachet, which
SPO1 Medina was able to intercept. Thereafter, the latter proceeded to the Angono Police Station where
he turned over Ramos and the seized items to police investigator SPO1 Ian Voluntad (SPO1 Voluntad)
for marking and taking of photographs. Thereat, SPO1 Voluntad marked the plastic sachet with "AAR-1"
and the cigarette pack as "AAA-2" and then delivered the items to the crime laboratory where it was

174
confirmed 7 that the seized items contained 0.05 gram of methamphetamine hydrochloride or shabu, an
illegal drug. 8 CAIHTE

In his defense, Ramos pleaded not guilty and denied the charge against him. He then narrated that on the
date he was arrested, he received a call from his friend Brandon Balais (Balais) who invited him to go to
Angono, Rizal for Balais's birthday. At around 4:00 o'clock in the afternoon, he arrived at the Angono
Caltex gas station, lit a cigarette, and while waiting, a man in civilian clothes started to frisk him.
Thereafter, the man showed him a cigarette case with shabu inside and claimed that he owned it. When
he denied, he was brought inside an office where a report was instantly prepared against him. 9

The RTC Ruling

In a Decision 10 dated August 27, 2015, the RTC found Ramos guilty beyond reasonable doubt of the
crime charged, and accordingly, sentenced him to suffer the penalty of imprisonment for an indeterminate
period of twelve (12) years and one (1) day, as minimum, to thirteen (13) years, as maximum, and to pay
a fine in the amount of P300,000.00. 11

The RTC found that the prosecution had established beyond reasonable doubt that Ramos committed the
crime charged as he was caught in flagrante delicto by the arresting police officers in possession of a
sachet containing shabu. In this regard, the RTC pointed out that the chain of custody of the seized drug
had been preserved, since it was brought to the crime laboratory on the date of the seizure. 12

Aggrieved, Ramos appealed 13 to the CA.

The CA Ruling

In a Decision 14 dated March 21, 2017, the CA upheld the RTC ruling, finding all the elements of the
crime present, and further holding that the prosecution was able to establish an unbroken chain of
custody of the illegal drug from the time of its confiscation by SPO1 Medina until its identification in court.
It ruled that despite the failure to strictly follow the requirements under Section 21, Article II of RA 9165,
the following circumstances show substantial compliance thereof: (a) the marking and inventory of the
subject specimen were immediately done at the police station; and (b) the absence of representatives
from the DOJ and the media, or any elected official during the inventory was justified, since SPO1 Medina
exerted efforts to secure their presence but they failed to appear. The CA further pointed out that while
the photographs of the seized items were not presented as evidence, SPO1 Medina testified that pictures
were actually taken by SPO1 Voluntad. Finally, the CA held that it is within the prosecution's discretion
whether or not to present SPO1 Voluntad but in any case, the failure to do so was not crucial in proving
Ramos's guilt. 15

Unperturbed, Ramos moved for reconsideration 16 which was, however, denied in a Resolution 17 dated
August 4, 2017; hence, this petition. 18 DETACa

The Issue before the Court

175
The issue for the Court's resolution is whether or not Ramos is guilty beyond reasonable doubt of
violating Section 11, Article II of RA 9165.

The Court's Ruling

The appeal is meritorious.

At the outset, it must be stressed that an appeal in criminal cases opens the entire case for review, and
thus, it is the duty of the reviewing tribunal to correct, cite, and appreciate errors in the appealed judgment
whether they are assigned or unassigned. 19 "The appeal confers the appellate court full jurisdiction over
the case and renders such court competent to examine records, revise the judgment appealed from,
increase the penalty, and cite the proper provision of the penal law." 20

In this case, Ramos was charged with Illegal Possession of Dangerous Drugs, defined and penalized
under Section 11, Article II of RA 9165. In order to properly secure the conviction of an accused charged
with Illegal Possession of Dangerous Drugs, the prosecution must prove that: (a) the accused was in
possession of an item or object identified as a dangerous drug; (b) such possession was not authorized
by law; and (c) the accused freely and consciously possessed the said drug. 21 Notably, it is essential
that the identity of the prohibited drug be established with moral certainty, considering that the dangerous
drug itself forms an integral part of the corpus delicti of the crime. Thus, in order to obviate any
unnecessary doubt on the identity of the dangerous drugs, the prosecution has to show an unbroken
chain of custody over the same and account for each link in the chain of custody from the moment the
drugs are seized up to their presentation in court as evidence of the crime. 22

Section 21, Article II of RA 9165 outlines the procedure which the police officers must follow when
handling the seized drugs in order to preserve their integrity and evidentiary value. 23 Under the said
section, prior to its amendment by RA 10640, 24 the apprehending team shall, among others,
immediately after seizure and confiscation conduct a physical inventory and photograph the seized items
in the presence of the accused or the person from whom the items were seized, or his representative or
counsel, a representative from the media and the Department of Justice (DOJ), and any elected public
official who shall be required to sign the copies of the inventory and be given a copy of the same, and the
seized drugs must be turned over to the PNP Crime Laboratory within twenty-four (24) hours from
confiscation for examination. 25 In the case of People v. Mendoza, 26 the Court stressed that "[w]ithout
the insulating presence of the representative from the media or the Department of Justice, or any elected
public official during the seizure and marking of the [seized drugs], the evils of switching, 'planting' or
contamination of the evidence that had tainted the buy-busts conducted under the regime of RA No. 6425
(Dangerous Drugs Act of 1972) again reared their ugly heads as to negate the integrity and credibility of
the seizure and confiscation of the [said drugs] that were evidence herein of the corpus delicti, and thus
adversely affected the trustworthiness of the incrimination of the accused. Indeed, the x x x presence of
such witnesses would have preserved an unbroken chain of custody." 27 aDSIHc

The Court, however, clarified that under varied field conditions, strict compliance with the requirements of
Section 21 of RA 9165 may not always be possible. 28 In fact, the Implementing Rules and Regulations
(IRR) of RA 9165 — which is now crystallized into statutory law with the passage of RA 10640 — provide
that the said inventory and photography may be conducted at the nearest police station or office of the
apprehending team in instances of warrantless seizure, and that non-compliance with the requirements of
Section 21 of RA 9165 — under justifiable grounds — will not render void and invalid the seizure and
custody over the seized items so long as the integrity and evidentiary value of the seized items are
properly preserved by the apprehending officer or team. 29 In other words, the failure of the
apprehending team to strictly comply with the procedure laid out in Section 21 of RA 9165 and its IRR

176
does not ipso facto render the seizure and custody over the items as void and invalid, provided that the
prosecution satisfactorily proves that: (a) there is justifiable ground for non-compliance; and (b) the
integrity and evidentiary value of the seized items are properly preserved. 30 In People v. Almorfe, 31 the
Court explained that for the above-saving clause to apply, the prosecution must explain the reasons
behind the procedural lapses, and that the integrity and evidentiary value of the seized evidence had
nonetheless been preserved. 32 Also, in People v. De Guzman, 33 it was emphasized that the justifiable
ground for non-compliance must be proven as a fact, because the Court cannot presume what these
grounds are or that they even exist. 34

After a judicious study of the case, the Court finds that the police officers committed unjustified deviations
from the prescribed chain of custody rule, thereby putting into question the integrity and evidentiary value
of the dangerous drugs allegedly seized from Ramos.

It is glaring from the records that no less than SPO1 Medina admitted on cross-examination that the
inventory of the drugs purportedly seized from Ramos was conducted without the presence of any elected
public official or representatives from both the DOJ and the media. 35 When questioned on the reason
behind such irregularity, SPO1 Medina offered the following justification:

[PROSECUTOR CO]:

In this inventory it appears that there is no signature coming from an elected official, media
representative and DOJ representative, why is it so? ETHIDa

[SPO1 Medina]:

At that time, there were no available barangay kagawad(s), Sir.

[PROSECUTOR CO]:

How [about] the media and the DOJ representative, did you exert effort at that time?

[SPO1 Medina]:

We exerted effort but there nobody was (sic) available, Sir. 36

At this point, it is well to note that the absence of these required witnesses does not per se render the
confiscated items inadmissible. 37 However, a justifiable reason for such failure or a showing of any
genuine and sufficient effort to secure the required witnesses under Section 21 of RA 9165 must be
adduced. 38 In People v. Umipang, 39 the Court held that the prosecution must show that earnest efforts
were employed in contacting the representatives enumerated under the law for "a sheer statement that
representatives were unavailable without so much as an explanation on whether serious attempts were
employed to look for other representatives, given the circumstances is to be regarded as a flimsy
excuse." 40 Verily, mere statements of unavailability, absent actual serious attempts to contact the

177
required witnesses are unacceptable as justified grounds for non-compliance. 41 These considerations
arise from the fact that police officers are ordinarily given sufficient time — beginning from the moment
they have received the information about the activities of the accused until the time of his arrest — to
prepare for a buy-bust operation and consequently, make the necessary arrangements beforehand
knowing full well that they would have to strictly comply with the set procedure prescribed in Section 21 of
RA 9165. As such, police officers are compelled not only to state reasons for their non-compliance, but
must in fact, also convince the Court that the exerted earnest efforts to comply with the mandated
procedure, and that under the given circumstance, their actions were reasonable. 42

Thus, for failure of the prosecution to provide justifiable grounds or show that special circumstances exist
which would excuse their transgression — as in fact the only reason given was that "they exerted effort
but nobody was available" — the Court is constrained to conclude that the integrity and evidentiary value
of the items purportedly seized from Ramos have been compromised. It is settled that in a prosecution for
the illegal sale and possession of dangerous drugs under RA 9165, the State carries the heavy burden of
proving not only the elements of the offense, but also to prove the integrity of the corpus delicti, failing in
which, renders the case for the State insufficient to prove the guilt of the accused beyond reasonable
doubt. 43 Moreover, jurisprudence dictates that the procedure in Section 21 of RA 9165, as amended by
RA 10640, is a matter of substantive law, and cannot be brushed aside as a simple procedural
technicality; or worse, ignored as an impediment to the conviction of illegal drug suspects. 44 Accordingly,
since the prosecution failed to provide justifiable grounds for non-compliance therewith, Ramos's acquittal
is in order. cSEDTC

As a final note, the Court finds it fitting to echo its recurring pronouncement in recent jurisprudence on the
subject matter:

The Court strongly supports the campaign of the government against drug addiction and commends the
efforts of our law enforcement officers against those who would inflict this malediction upon our people,
especially the susceptible youth. But as demanding as this campaign may be, it cannot be more so than
the compulsions of the Bill of Rights for the protection of liberty of every individual in the realm, including
the basest of criminals. The Constitution covers with the mantle of its protection the innocent and the
guilty alike against any manner of high-handedness from the authorities, however praiseworthy their
intentions.

Those who are supposed to enforce the law are not justified in disregarding the right of the individual in
the name of order. [For indeed,] [o]rder is too high a price for the loss of liberty. x x x. 45 AIDSTE

"In this light, prosecutors are strongly reminded that they have the positive duty to prove compliance with
the procedure set forth in Section 21, Article II of RA 9165, as amended. As such, they must have the
initiative to not only acknowledge but also justify any perceived deviations from the said procedure during
the proceedings before the trial court. Since compliance with this procedure is determinative of the
integrity and evidentiary value of the corpus delicti and ultimately, the fate of the liberty of the accused,
the fact that any issue regarding the same was not raised, or even threshed out in the court/s below,
would not preclude the appellate court, including this Court, from fully examining the records of the case if
only to ascertain whether the procedure had been completely complied with, and if not, whether justifiable
reasons exist to excuse any deviation. If no such reasons exist, then it is the appellate court's bounden
duty to acquit the accused, and perforce, overturn a conviction." 46

WHEREFORE, the appeal is GRANTED. The Decision dated March 21, 2017 and the Resolution dated
August 4, 2017 of the Court of Appeals in CA-G.R. CR No. 38528 are hereby REVERSED and SET
ASIDE. Accordingly, petitioner Alfredo A. Ramos is ACQUITTED of the crime charged. The Director of the
Bureau of Corrections is ordered to cause his immediate release, unless he is being lawfully held in
custody for any other reason. SDAaTC

SO ORDERED.||| (Ramos v. People, G.R. No. 233572, [July 30, 2018])

178
SECOND DIVISION

[G.R. No. 235498. July 30, 2018.]

RENALYN A. MASBATE and SPOUSES RENATO MASBATE and MARLYN MASBATE, petitioners, vs.
RICKY JAMES RELUCIO, respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated January 12, 2017 and the
Omnibus Resolution 3 dated October 3, 2017 of the Court of Appeals (CA) in CA-G.R. SP No. 144406,
which set aside the Orders dated December 4, 2015 4 and January 7, 2016 5 of the Regional Trial Court
of Legazpi City, Albay, Branch 8 (RTC) in Special Proceeding (SP) No. FC-15-239, directed the remand
of the case to the RTC for trial, and granted respondent Ricky James Relucio (Ricky James) "temporary
custody" once a month for a period not exceeding twenty-four (24) hours over the minor, Queenie Angel
M. Relucio (Queenie), his illegitimate daughter with petitioner Renalyn A. Masbate (Renalyn), on top of
visitation rights fixed at two (2) days per week.

The Facts

Queenie was born on May 3, 2012 to Renalyn and Ricky James, who had been living together with
Renalyn's parents without the benefit of marriage. Three (3) years later, or in April 2015, the relationship
ended. Renalyn went to Manila, supposedly leaving Queenie behind in the care and custody of her father,
Ricky James. 6

Ricky James alleged that on November 7, 2015, Spouses Renato and Marlyn Masbate (Renalyn's
parents) took Queenie from the school where he had enrolled her. When asked to give Queenie back,
Renalyn's parents refused and instead showed a copy of a Special Power of Attorney 7 (SPA) executed
by Renalyn granting full parental rights, authority, and custody over Queenie to them. Consequently,
Ricky James filed a petition for habeas corpus and child custody 8 docketed as SP No. FC-15-239 before
the RTC (petition a quo). 9 CAIHTE

A hearing was conducted on December 3, 2015, where Renalyn brought Queenie and expressed the
desire for her daughter to remain in her custody. 10

The RTC Ruling

In an Order 11 dated December 4, 2015, the RTC ruled that the custody of three (3)-year-old Queenie
rightfully belongs to Renalyn, citing the second paragraph of Article 213 of the Family Code, which states
that "[n]o child under seven [(7)] years of age shall be separated from the mother x x x." The RTC likewise
found that, while Renalyn went to Manila to study dentistry and left Queenie in the custody of her parents,

179
her intention was to bring Queenie to Manila at a later time. Thus, in the fallo of said Order, the RTC
declared that it will "NOT GIVE FURTHER DUE COURSE" to the petition a quo. 12

Dissatisfied, Ricky James moved for reconsideration, 13 lamenting the "[extraordinary] speed in the
issuance of the x x x award of custody over the child to [petitioners]." 14 He claimed that the hearing
conducted on December 3, 2015 was not the kind of hearing that was procedurally contemplated under
A.M. No. 03-04-04-SC, 15 otherwise known as the "Rule on Custody of Minors and Writ of Habeas
Corpus in Relation to Custody of Minors," because the RTC merely propounded random questions
without placing the witnesses on the stand to testify under oath. Moreover, he was allegedly deprived of
his right to due process when the RTC refused to give further due course to the petition a quo. 16

The motion was denied in an Order 17 dated January 7, 2016, wherein the RTC emphasized that
Queenie was born out of wedlock, for which reason she shall be under the parental authority of her
mother, Renalyn, pursuant to Article 176 18 of the Family Code. In addition, the RTC faulted Ricky James
for failing to present credible evidence in court to demonstrate that Renalyn is unfit to take custody of their
daughter. 19

Aggrieved, Ricky James filed an appeal 20 before the CA, imputing error upon the RTC: (a) in not
conducting a full blown trial and not receiving evidence; (b) in granting sole custody to Renalyn without
giving paramount consideration to the best interests of the child; and (c) in not granting him shared
custody and/or visitation rights. 21 Ricky James insisted that the tender-age presumption in Article 213 of
the Family Code is rebuttable by evidence of the mother's neglect, abandonment, and unemployment,
among other factors, and claimed that Renalyn abandoned Queenie when she went to live in Manila and
failed to seek employment to support her daughter. 22

For their part, Renalyn and her parents (petitioners) moved for the outright dismissal of the appeal on the
ground that no appeal can be had against an order denying a motion for reconsideration. In addition,
petitioners argued that being the illegitimate father of Queenie, Ricky James has absolutely no right of
custody over her, and that Renalyn's act of entrusting the care of Queenie to her parents was not a
renunciation of parental authority but only a temporary separation necessitated by her need to adjust to
her studies, which she undertook to improve her and Queenie's life. 23 DETACa

On September 2, 2016, the case was referred to mediation, but the parties were unable to arrive at a
settlement. 24

The CA Ruling

In a Decision 25 dated January 12, 2017, the CA set aside the assailed RTC Orders and remanded the
case to the lower court for determination of who should exercise custody over Queenie. 26 The CA found
that the RTC hastily dismissed the petition a quo upon Queenie's production in court, when the objective
of the case was to establish the allegation that Renalyn had been neglecting Queenie, which was a
question of fact that must be resolved by trial. 27 Citing Section 18 of A.M. No. 03-04-04-SC, which states
that, "[a]fter trial, the court shall render judgment awarding the custody of the minor to the proper party
considering the best interests of the minor," the CA declared that the dismissal by the RTC of the petition
a quo was not supported by the Rules. 28

180
Nonetheless, the CA affirmed the RTC Orders granting custody to Renalyn "pending the outcome of the
case," stating that only Queenie's mother, Renalyn, has parental authority over her as she is an
illegitimate child. Further, the CA declared that the RTC must thresh out Renalyn's capacity to raise her
daughter, which shall, in turn, determine whether or not the tender-age presumption must be upheld, or
whether Queenie's well-being is better served with her remaining in the custody of her maternal
grandparents in the exercise of their substitute parental authority or with Ricky James, who was
Queenie's actual custodian before the controversy. 29

Finally, the CA granted Ricky James visitation rights of two (2) days a week, with provision for additional
visitation days that may be permitted by Renalyn. 30

Petitioners filed a motion for reconsideration, 31 while Ricky James filed a motion for clarification 32
asking that he be allowed to pick up Queenie from petitioners' residence on a Friday afternoon and to
return the child on a Sunday afternoon. 33 In their Comment, 34 petitioners argued that the arrangement
proposed by Ricky James is not within the scope of his visitation rights, but that he may, through
Renalyn's written consent, take Queenie home on certain family occasions. 35

In its Omnibus Resolution 36 dated October 3, 2017, the CA denied petitioners' motion for
reconsideration for lack of merit, insisting on its application of the case of Bagtas v. Santos, 37 which held
that a trial is still necessary to determine the issue of custody despite the production of the child. 38 On
the other hand, the CA ruled in favor of Ricky James' motion for clarification, granting the latter what it
calls a "limited and temporary custody" that will allow him to take Queenie out once a month, or on the
first Saturday of each month, for a period not exceeding twenty-four (24) hours, but which shall not
reduce his visitation days fixed at two (2) days per week. 39 In so holding, the appellate court cited
"humane and practical considerations" 40 and argued that it is in Queenie's best interest to have an
exclusive time with Ricky James. 41

Undaunted, petitioners filed the instant petition for review on certiorari, maintaining that the RTC correctly
dismissed the petition a quo after the hearing on December 3, 2015 on the grounds that: (a) the purported
custodial right that Ricky James seeks to enforce in filing his petition has no legal basis; (b) the petition a
quo does not comply with the requisites for habeas corpus petitions involving custody of minors; and (c)
there are no more factual issues to be resolved as it had already been admitted by Renalyn during the
hearing that she goes to Manila to study but that she comes home every week for Queenie and whenever
there is a problem. 42 aDSIHc

Ricky James filed a Comment/Opposition, 43 as well as an Urgent Omnibus Motion 44 to dismiss the
petition and for immediate execution pending appeal of the Omnibus Resolution dated October 3, 2017,
claiming that the instant petition was filed out of time and that it was erroneous for petitioners to state that
the last day of filing fell on November 4, 2017, a Saturday, which compelled them to file their petition on
November 6, 2017, a Monday. By his calculation, the fifteen (15)-day reglementary period, which
commenced to run upon petitioners' receipt on October 19, 2017 of the Omnibus Resolution dated
October 3, 2017, ended on November 3, 2017, a Friday, and not on November 4, 2017. 45

The Issue before the Court

The main issue for the Court's resolution is whether or not the CA correctly remanded the case a quo for
determination of who should exercise custody over Queenie.

181
The Court's Ruling

The petition is partially meritorious.

I.

At the outset, it must be stressed that while petitioners may have erroneously determined the expiration of
the reglementary period for filing the instant petition, which resulted in the same being filed a day late on
November 6, 2017, the Court finds it proper to overlook this procedural lapse given the compelling merit
of the petition in the interest of substantial justice.

The Court has declared that rules on the perfection of appeals, particularly on the period of filing thereof,
must occasionally yield to the loftier ends of substantial justice and equity. In the same manner that the
CA took cognizance of respondent's appeal from the denial of his motion for reconsideration of the RTC
Order dated December 4, 2015, 46 which is technically prohibited under the Rules of Court, so shall this
Court hold that the ends of justice would be served better when cases are determined, not on mere
technicality or some procedural nicety, but on the merits — after all the parties are given full opportunity
to ventilate their causes and defenses. Lest it be forgotten, dismissal of appeals purely on technical
grounds is frowned upon. The rules of procedure ought not to be applied in a very rigid, technical sense,
for they have been adopted to help secure — not override — substantial justice. 47 ATICcS

In this relation, it may not be amiss to point out that the fundamental policy of the State, as embodied in
the Constitution in promoting and protecting the welfare of children, shall not be disregarded by the courts
by mere technicality in resolving disputes which involve the family and the youth. 48 The State is
mandated to provide protection to those of tender years. Through its laws, it safeguards them from
everyone, even their own parents, to the end that their eventual development as responsible citizens and
members of society shall not be impeded, distracted or impaired by family acrimony. 49

Accordingly, the Court shall delve into the substantive arguments propounded in this case.

II.

It is settled that habeas corpus may be resorted to in cases where "the rightful custody of any person is
withheld from the person entitled thereto." 50 In custody cases involving minors, the writ of habeas corpus
is prosecuted for the purpose of determining the right of custody over a child. The grant of the writ
depends on the concurrence of the following requisites: (1) that the petitioner has the right of custody
over the minor; (2) that the rightful custody of the minor is being withheld from the petitioner by the
respondents; and (3) that it is to the best interest of the minor concerned to be in the custody of petitioner
and not that of the respondents. 51

"The right of custody accorded to parents springs from the exercise of parental authority. Parental
authority or patria potestas in Roman Law is the juridical institution whereby parents rightfully assume
control and protection of their unemancipated children to the extent required by the latter's needs. It is a
mass of rights and obligations which the law grants to parents for the purpose of the children's physical
preservation and development, as well as the cultivation of their intellect and the education of their heart

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and senses. As regards parental authority, 'there is no power, but a task; no complex of rights, but a sum
of duties; no sovereignty but a sacred trust for the welfare of the minor.'" 52

As a general rule, the father and the mother shall jointly exercise parental authority over the persons of
their common children. 53 However, insofar as illegitimate children are concerned, Article 176 54 of the
Family Code states that illegitimate children shall be under the parental authority of their mother.
Accordingly, mothers (such as Renalyn) are entitled to the sole parental authority of their illegitimate
children (such as Queenie), notwithstanding the father's recognition of the child. In the exercise of that
authority, mothers are consequently entitled to keep their illegitimate children in their company, and the
Court will not deprive them of custody, absent any imperative cause showing the mother's unfitness to
exercise such authority and care. 55

In addition, Article 213 of the same Code provides for the so-called tender-age presumption, stating that
"[n]o child under seven [(7)] years of age shall be separated from the mother unless the court finds
compelling reasons to order otherwise." The rationale behind the rule was explained by the Code
Commission in this wise: TIADCc

The general rule is recommended in order to avoid many a tragedy where a mother has seen her baby
torn away from her. No man can sound the deep sorrows of a mother who is deprived of her child of
tender age. The exception allowed by the rule has to be for "compelling reasons" for the good of the child;
those cases must indeed be rare, if the mother's heart is not to be unduly hurt. x x x 56

According to jurisprudence, the following instances may constitute "compelling reasons" to wrest away
custody from a mother over her child although under seven (7) years of age: neglect, abandonment,
unemployment, immorality, habitual drunkenness, drug addiction, maltreatment of the child, insanity or
affliction with a communicable disease. 57

As the records show, the CA resolved to remand the case to the RTC, ratiocinating that there is a need to
establish whether or not Renalyn has been neglecting Queenie, 58 for which reason, a trial is
indispensable for reception of evidence relative to the preservation or overturning of the tender-age
presumption under Article 213 of the Family Code. 59 In opposition, petitioners contend that the second
paragraph of Article 213 of the Family Code would not even apply in this case (so as to determine
Renalyn's unfitness as a mother) because the said provision only applies to a situation where the parents
are married to each other. 60 As basis, petitioners rely on the Court's ruling in Pablo-Gualberto v.
Gualberto V 61 (Pablo-Gualberto), the pertinent portion of which reads:

In like manner, the word "shall" in Article 213 of the Family Code and Section 6 of Rule 99 of the Rules of
Court has been held to connote a mandatory character. Article 213 and Rule 99 similarly contemplate a
situation in which the parents of the minor are married to each other, but are separated by virtue of either
a decree of legal separation or a de facto separation. x x x 62

For easy reference, Article 213 of the Family Code and Section 6, Rule 99 of the Rules of Court, which
were cited in Pablo-Gualberto, are quoted hereunder in full:

Article 213 of the Family Code

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Article 213. In case of separation of the parents, parental authority shall be exercised by the parent
designated by the Court. The Court shall take into account all relevant considerations, especially the
choice of the child over seven years of age, unless the parent chosen is unfit.

No child under seven years of age shall be separated from the mother unless the court finds compelling
reasons to order otherwise.

Section 6, Rule 99 of the Rules of Court

Section 6. Proceedings as to child whose parents are separated. Appeal. — When husband and wife are
divorced or living separately and apart from each other, and the question to the care, custody, and control
of a child or children of their marriage is brought before a Court of First Instance by petition or as an
incident to any other proceeding, the court, upon hearing the testimony as may be pertinent, shall award
the care, custody, and control of each such child as will be for its best interest, permitting the child to
choose which parent it prefers to live with if it be over ten years of age, unless the parent so chosen be
unfit to take charge of the child by reason of moral depravity, habitual drunkenness, incapacity, or
poverty. If, upon such hearing, it appears that both parents are improper persons to have the care,
custody, and control of the child, the court may either designate the paternal or maternal grandparent of
the child, or his oldest brother or sister, or some reputable and discreet person to take charge of such
child, or commit it to any suitable asylum, children's home, or benevolent society. The court may in
conformity with the provisions of the Civil Code order either or both parents to support or help support
said child, irrespective of who may be its custodian, and may make any order that is just and reasonable
permitting the parent who is deprived of its care and custody to visit the child or have temporary custody
thereof. Either parent may appeal from an order made in accordance with the provisions of this section.
No child under seven years of age shall be separated from its mother, unless the court finds there are
compelling reasons therefor. AIDSTE

Notably, after a careful reading of Pablo-Gualberto, it has been determined that the aforequoted
pronouncement therein is based on a previous child custody case, namely, Briones v. Miguel 63
(Briones), wherein the Court pertinently held as follows:

However, the CA erroneously applied Section 6 of Rule 99 of the Rules of Court. This provision
contemplates a situation in which the parents of the minor are married to each other but are separated
either by virtue of a decree of legal separation or because they are living separately de facto. In the
present case, it has been established that petitioner and Respondent Loreta were never married. Hence,
that portion of the CA Decision allowing the child to choose which parent to live with is deleted, but
without disregarding the obligation of petitioner to support the child. 64

For guidance, the relevant issue in Briones for which the stated excerpt was made is actually the
application of Section 6, Rule 99 of the Rules of Court insofar as it permits the child over ten (10) years of
age to choose which parent he prefers to live with. As the Court's ruling in Briones was prefaced: "[t]he
Petition has no merit. However, the assailed Decision should be modified in regard to its erroneous
application of Section 6 of Rule 99 of the Rules of Court." 65 Accordingly, since the statement in Pablo-
Gualberto invoked by petitioners, i.e., that "Article 213 and Rule 99 similarly contemplate a situation in
which the parents of the minor are married to each other x x x," was based on Briones, then that same
statement must be understood according to its proper context — that is, the issue pertaining to the right of
a child to choose which parent he prefers to live with. The reason as to why this statement should be
understood in said manner is actually not difficult to discern: the choice of a child over seven (7) years of
age (first paragraph of Article 213 of the Family Code) and over ten (10) years of age (Rule 99 of the
Rules of Court) shall be considered in custody disputes only between married parents because they are,

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pursuant to Article 211 of the Family Code, accorded joint parental authority over the persons of their
common children. On the other hand, this choice is not available to an illegitimate child, much more one
of tender age such as Queenie (second paragraph of Article 213 of the Family Code), because sole
parental authority is given only to the mother, unless she is shown to be unfit or unsuitable (Article 176 of
the Family Code). Thus, since the issue in this case is the application of the exception to the tender-age
presumption under the second paragraph of Article 213 of the Family Code, and not the option given to
the child under the first paragraph to choose which parent to live with, petitioners' reliance on Pablo-
Gualberto is grossly misplaced. SDAaTC

In addition, it ought to be pointed out that the second paragraph of Article 213 of the Family Code, which
was the basis of the CA's directive to remand the case, does not even distinguish between legitimate and
illegitimate children — and hence, does not factor in whether or not the parents are married — in
declaring that "[n]o child under seven [(7)] years of age shall be separated from the mother unless the
court finds compelling reasons to order otherwise." "Ubi lex non distinguit nec nos distinguere debemos.
When the law makes no distinction, we (this Court) also ought not to recognize any distinction." 66 As
such, petitioners' theory that Article 213 of the Family Code is herein inapplicable — and thus, negates
the need for the ordered remand — is not only premised on an erroneous reading of jurisprudence, but is
also one that is fundamentally off-tangent with the law itself.

III.

The Court cannot also subscribe to petitioners' contention that even if there are compelling reasons to
separate Queenie from her mother, Renalyn, pursuant to the second paragraph of Article 213 of the
Family Code, Ricky James would still not acquire custody over their daughter because there is no
provision of law granting custody rights to an illegitimate father. 67

In the event that Renalyn is found unfit or unsuitable to care for her daughter, Article 214 of the Family
Code mandates that substitute parental authority shall be exercised by the surviving grandparent.
However, the same Code further provides in Article 216 that "[i]n default of parents or judicially appointed
guardian, the following persons shall exercise substitute parental authority over the child in the order
indicated:"

Article 216. x x x

(1) The surviving grandparent as provided in Art. 214;

(2) The oldest brother or sister, over twenty-one years of age, unless unfit or disqualified; and

(3) The child's actual custodian, over twenty-one years of age, unless unfit or disqualified.

The same order of preference with respect to substitute parental authority is reiterated in Section 13 of
A.M. No. 03-04-04-SC, the "Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody
of Minors," to wit:

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Section 13. Provisional order awarding custody. — After an answer has been filed or after expiration of
the period to file it, the court may issue a provisional order awarding custody of the minor. As far as
practicable, the following order of preference shall be observed in the award of custody:

(a) Both parents jointly;

(b) Either parent, taking into account all relevant considerations, especially the choice of the minor over
seven years of age and of sufficient discernment, unless the parent chosen is unfit;

(c) The grandparent, or if there are several grandparents, the grandparent chosen by the minor over
seven years of age and of sufficient discernment, unless the grandparent chosen is unfit or disqualified;

(d) The eldest brother or sister over twenty-one years of age, unless he or she is unfit or disqualified;

(e) The actual custodian of the minor over twenty-one years of age, unless the former is unfit or
disqualified; or

(f) Any other person or institution the court may deem suitable to provide proper care and guidance for
the minor.

It was not disputed that Ricky James was in actual physical custody of Queenie when Renalyn left for
Manila to pursue her studies until the instant controversy took place. As such, Ricky James had already
assumed obligations and enjoyed privileges of a custodial character, giving him a cause of action to file a
case of habeas corpus to regain custody of Queenie as her actual custodian. acEHCD

Indeed, it may be argued that Article 176 of the Family Code has effectively disqualified the father of an
illegitimate child from exercising substitute parental authority under Article 216 even if he were the actual
custodian of the child under the premise that no one is allowed to do indirectly what he is prohibited to do
directly. However, the Court cannot adopt a rigid view, without running afoul to the overarching
consideration in custody cases, which is the best interest of the minor. Even way back, Article 363 of the
Civil Code provides that in all questions relating to the care, custody, education and property of the
children, the latter's welfare is paramount. 68 Under present rules, A.M. No. 03-04-04-SC explicitly states
that "[i]n awarding custody, the court shall consider the best interests of the minor and shall give
paramount consideration to [her] material and moral welfare. The best interests of the minor refer to the
totality of the circumstances and conditions as are most congenial to the survival, protection, and feelings
of security of the minor encouraging to [her] physical, psychological and emotional development. It also
means the least detrimental available alternative for safeguarding the growth and development of the
minor." 69

In light of the foregoing, the Court finds that Queenie's best interest demands that a proper trial be
conducted to determine if she had, indeed, been neglected and abandoned by her mother, rendering the
latter unfit to exercise parental authority over her, and in the event that Renalyn is found unsuitable,
whether it is in Queenie's best interest that she be in the custody of her father rather than her
grandparents upon whom the law accords a far superior right to exercise substitute parental authority. In
the case of Bagtas v. Santos, 70 which was a tug-of-war between the maternal grandparents of the
illegitimate minor child and the actual custodians of the latter, the Court faulted the trial court for hastily

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dismissing the petition for habeas corpus and awarding the custody of the minor to the grandparents
without conducting any trial. The import of such decision is that the preference accorded by Article 216 of
the Family Code does not automatically attach to the grandparents, and is conditioned upon the
determination of their fitness to take care of their grandchild. In ruling as it did, the Court ratiocinated that
the child's welfare being the most important consideration, it is not bound by any legal right of a person
over the child. Reiterating its pronouncement in the early case of Sombong v. CA, 71 the Court held that:

[I]n passing on the writ in a child custody case, the court deals with a matter of an equitable nature. Not
bound by any mere legal right of parent or guardian, the court gives his or her claim to the custody of the
child due weight as a claim founded on human nature and considered generally equitable and just.
Therefore, these cases are decided, not on the legal right of the petitioner to be relieved from unlawful
imprisonment or detention, as in the case of adults, but on the court's view of the best interests of those
whose welfare requires that they be in custody of one person or another. Hence, the court is not bound to
deliver a child into the custody of any claimant or of any person, but should, in the consideration of the
facts, leave it in such custody as its welfare at the time appears to require. In short, the child's welfare is
the supreme consideration.

Considering that the child's welfare is an all-important factor in custody cases, the Child and Youth
Welfare Code unequivocally provides that in all questions regarding the care and custody, among others,
of the child, his welfare shall be the paramount consideration. In the same vein, the Family Code
authorizes the courts to, if the welfare of the child so demands, deprive the parents concerned of parental
authority over the child or adopt such measures as may be proper under the circumstances. 72

The Court cannot close its eyes to the sad reality that not all fathers, especially those who have sired
children out of wedlock, have risen to the full height of a parent's responsibility towards his offspring. Yet,
here is a father of an illegitimate child who is very much willing to take on the whole gamut of parenting.
He, thus, deserves, at the very least, to be given his day in court to prove that he is entitled to regain
custody of his daughter. As such, the CA's order to remand the case is proper. SDHTEC

IV.

While the appellate court correctly remanded the case for trial, the Court, however, holds that it erred in
granting Ricky James temporary custody for a limited period of twenty-four (24) consecutive hours once
every month, in addition to visitation rights, invoking "humane and practical considerations," 73 which
were based solely on Ricky James' allegations.

It should be stressed that Section 15 of A.M. No. 03-04-04-SC provides for temporary visitation rights, not
temporary custody, as follows:

Section 15. Temporary visitation rights. — The court shall provide in its order awarding provisional
custody appropriate visitation rights to the non-custodial parent or parents, unless the court finds said
parent or parents unfit or disqualified.

The temporary custodian shall give the court and non-custodial parent or parents at least five days' notice
of any plan to change the residence of the minor or take him out of his residence for more than three days
provided it does not prejudice the visitation rights of the non-custodial parent or parents.

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It is only after trial, when the court renders its judgment awarding the custody of the minor to the proper
party, that the court may likewise issue "any order that is just and reasonable permitting the parent who is
deprived of the care and custody of the minor to visit or have temporary custody," pursuant to Section 18
of A.M. No. 03-04-04-SC, to wit: HSAcaE

Section 18. Judgment. — After trial, the court shall render judgment awarding the custody of the minor to
the proper party considering the best interests of the minor.

If it appears that both parties are unfit to have the care and custody of the minor, the court may designate
either the paternal or maternal grandparent of the minor, or his oldest brother or sister, or any reputable
person to take charge of such minor, or to commit him to any suitable home for children.

In its judgment, the court may order either or both parents to give an amount necessary for the support,
maintenance and education of the minor, irrespective of who may be its custodian. In determining the
amount of support, the court may consider the following factors: (1) the financial resources of the
custodial and non-custodial parent and those of the minor; (2) the physical and emotional health, special
needs, and aptitude of the minor; (3) the standard of living the minor has been accustomed to; and (4) the
non-monetary contributions that the parents would make toward the care and well-being of the minor.

The court may also issue any order that is just and reasonable permitting the parent who is deprived of
the care and custody of the minor to visit or have temporary custody. (Emphasis supplied)

By granting temporary albeit limited custody ahead of trial, the appellate court overturned the tender-age
presumption with nothing but Ricky James' bare allegations, to which the Court cannot give its
imprimatur. As earlier intimated, the issue surrounding Renalyn's fitness as a mother must be properly
threshed out in the trial court before she can be denied custody, even for the briefest of periods, over
Queenie.

In view of the disposition in Silva and Briones and the rules quoted above, the Court can only uphold
Ricky James' visitation rights, which shall be limited to two (2) days per week, without prejudice to
Renalyn allowing him additional days. However, consistent with the aforesaid cases, as well as the more
recent case of Grande v. Antonio, 74 Ricky James may take Queenie out only upon the written consent of
Renalyn. Contrary to the posturing 75 of the appellate court, the requirement for the consent of the
mother is consistent with the regime of sole maternal custody under the second paragraph of Article 213
of the Family Code with respect to children under seven (7) years of age, which may be overcome only by
compelling evidence of the mother's unfitness. 76 Until and unless Ricky James is able to substantiate his
allegations, he can only claim visitation rights over his daughter.

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated January 12, 2017 and the
Omnibus Resolution dated October 3, 2017 of the Court of Appeals in CA-G.R. SP No. 144406 are
hereby AFFIRMED with the MODIFICATION deleting the grant of limited and temporary custody for lack
of legal and factual basis. The grant of visitation rights of two (2) days per week shall be maintained.
Respondent Ricky James Relucio may take his daughter, Queenie Angel M. Relucio, out but only with the
written consent of petitioner Renalyn A. Masbate in accordance with this Decision.

The Regional Trial Court of Legazpi City, Albay, Branch 8 is DIRECTED to immediately proceed with
hearing Special Proceeding No. FC-15-239 upon notice of this Decision. HESIcT

SO ORDERED.||| (Masbate v. Relucio, G.R. No. 235498, [July 30, 2018])

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SECOND DIVISION

[G.R. No. 193874. July 24, 2013.]

REPUBLIC OF THE PHILIPPINES, petitioner, vs. RICORDITO N. DE ASIS, JR., respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the January 26, 2010 Decision 2 and October 1,
2010 Resolution 3 of the Court of Appeals (CA) in CA-G.R. CV No. 79569 which affirmed in toto the May
27, 2003 Decision 4 of the Regional Trial Court of Quezon City, Branch 77 (RTC) in LRC Case No. Q-
15289(02), granting the verified amended petition for reconstitution of title filed by respondent Ricordito N.
De Asis, Jr. (De Asis).

The Facts

On August 7, 2002, De Asis filed a verified amended petition for reconstitution 5 (amended petition) of
Transfer Certificate of Title (TCT) No. 8240 of the Register of Deeds of Quezon City (Register of Deeds)
in the name of his uncle, Lauriano De Asis (Lauriano), covering Lot No. 804-C located at Pasong Tamo,
Caloocan, Rizal (now No. 4, Panama St., Veterans Village, Brgy. Holy Spirit, Quezon City), 6 with an area
of 30,052 square meters, more or less (subject property).

De Asis alleged that he purchased the subject property from Lauriano through a Deed of Absolute Sale 7
dated January 5, 1978 and that the same is free from any encumbrances. Likewise, no deed affecting it
has been presented or is pending before the Register of Deeds. Unfortunately, the original copy of TCT
No. 8240 was destroyed by the fire that gutted the Quezon City Hall on June 11, 1988, 8 hence, the
amended petition based on the owner's duplicate copy of TCT No. 8240, 9 which was in his possession.

Finding the amended petition to be sufficient in form and substance, the RTC, in its September 4, 2002
Order, 10 scheduled the initial hearing on January 30, 2003 and directed that the Land Registration
Authority (LRA), inter alia, be furnished a copy thereof. The RTC likewise ordered that notice of the
amended petition be published in the Official Gazette once a week for two (2) consecutive weeks. The
notice was published in the December 23, 2002 (Vol. 98, No. 51) and December 30, 2002 (Vol. 98, No.
52) issues of the Official Gazette. 11

On January 30, 2003, after compliance with the jurisdictional requirements and without any opposition
having been raised, the RTC allowed 12 De Asis to present his evidence ex-parte. Later, on February 7,
2003, the Office of the Solicitor General (OSG), as counsel for herein petitioner Republic of the
Philippines (Republic), filed a notice of appearance 13 and deputized 14 the City Prosecutor of Quezon
City to assist the OSG and appear in the case on its behalf, which the RTC noted. 15 TECcHA

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On February 20, 2003, upon request of the LRA 16 and in accordance with paragraph 4 (a) 17 of LRC
Circular No. 35, De Asis was required to submit a certified true copy of the owner's duplicate certificate of
title of the subject property, 18 with which he complied. 19 Subsequently, the LRA submitted its April 29,
2003 Report 20 (LRA's report) before the RTC stating that "[t]he technical description of Lot [No.] 804-C
of the subdivision plan Psd-2341, appearing on the reproduction of [TCT] No. T-8240, was found correct
after examination and due computation. Said technical description, however, when plotted in the
Municipal Index Sheet No. 5708-B, it overlaps with (LRC) Psd-372628 and (LRC) Psd-314053." 21

The RTC Ruling

In its May 27, 2003 Decision, 22 the RTC granted the amended petition based on the evidence presented
ex parte by De Asis.

The Republic appealed the RTC Decision to the CA, arguing 23 that De Asis failed to strictly comply with
the mandatory jurisdictional requirement on publication. It pointed out that while the notice of the
amended petition was indeed published in the December 23 and 30, 2002 issues of the Official Gazette,
the last issue was, however, officially released only on January 3, 2003, or less than thirty (30) days prior
to the date of hearing set on January 30, 2003, per Certificate of Publication 24 of the National Printing
Office (NPO).

Likewise, the Republic argued 25 that the RTC erred in granting the amended petition despite the LRA's
report that the technical description of the subject property overlaps with other properties, rendering
doubtful the authenticity of the title sought to be reconstituted.

The CA Ruling

In its assailed Decision, the CA affirmed the RTC Decision in toto, ratiocinating that the thirty-day notice
should be reckoned from the date of issue of the Official Gazette, not from the date of its actual release,
citing Section 13 26 of Republic Act No. 26 (RA 26). 27 While the CA conceded the stringent and
mandatory nature of the requirement of publication, it however considered the fact that the source of the
reconstitution in this case was the owner's duplicate copy of title in De Asis' possession, the authenticity
of which was never disputed by the Republic. AHDaET

Further, the appellate court cited the case of Imperial v. CA (Imperial), 28 where the Court upheld the
validity of the publication of the notice of the petition in the March 27, 1995 and April 3, 1995 issues of the
Official Gazette despite the NPO certification that the last issue (pertaining to the April 3, 1995 issue) was
officially released on March 28, 1995. The Court observed in the Imperial case that it is not uncommon
among publishing companies to release issues before the actual date of issue reflected on the cover of
the publication. What matters is that the petitioner in a reconstitution case caused the publication of the
notice of the petition in two (2) consecutive issues of the Official Gazette thirty (30) days prior to the date
of hearing.

Following the Court's pronouncement in Imperial, the CA ruled in the present case that since the notice of
the amended petition was duly published in the December 23 and 30, 2002 issues of the Official Gazette,
De Asis had sufficiently complied with the requirement of publication, despite the NPO's certification that
the second issue was officially released on January 3, 2003, or three (3) days short of the thirty-day

190
period before the scheduled January 30, 2003 hearing. Consequently, the RTC acquired jurisdiction over
the case.

With respect to the Republic's second assigned error, the CA found that the RTC did not err in giving little
credence to the LRA's report declaring that the technical description of the subject property overlaps with
(LRC) Psd-372628 and (LRC) Psd-314053, which failed to mention sufficient details in support of its
finding or to identify the specific titles with which TCT No. 8240 supposedly overlaps. Moreover, the CA
held that the LRA's report was not even a condition sine qua non before a petition for reconstitution could
be given due course. cDACST

The Republic's motion for reconsideration was denied in the CA's October 1, 2010 Resolution, hence, the
present recourse.

The Issues before the Court

The Republic insists that the CA committed reversible error in affirming the RTC Decision which granted
the amended petition on the basis of (a) non-compliance with Sections 9 and 10 of RA 26 requiring
publication of the notice of hearing in two (2) successive issues of the Official Gazette at least thirty (30)
days prior to the date of hearing, a jurisdictional requisite; and (b) the LRA's report which declared that
the technical description of the subject property overlaps with other properties. The Republic also bewails
that it was not afforded its day in court despite the RTC's receipt of its notice of appearance.

The Court's Ruling

The petition is meritorious.

At the outset, the Court notes that the present amended petition for reconstitution is anchored on the
owner's duplicate copy of TCT No. 8240 — a source for reconstitution of title under Section 3 (a) 29 of RA
26 which, in turn, is governed by the provisions of Section 10 in relation to Section 9 of RA 26 with
respect to the publication, posting, and notice requirements. 30 Section 10 reads:

SEC. 10. Nothing hereinbefore provided shall prevent any registered owner or person in interest from
filing the petition mentioned in section five of this Act directly with the proper Court of First Instance,
based on sources enumerated in Sections 2(a), 2(b), 3(a), 3(b), and/or 4(a) of this Act: Provided,
however, That the court shall cause a notice of the petition, before hearing and granting the same, to be
published in the manner stated in section nine hereof: And, provided, further, That certificates of title
reconstituted pursuant to this section shall not be subject to the encumbrance referred to in section seven
of this Act. (Italics and emphasis supplied) cSEAHa

Corollarily, Section 9 reads in part:

SEC. 9. . . . Thereupon, the court shall cause a notice of the petition to be published, at the expense of
the petitioner, twice in successive issues of the Official Gazette, and to be posted on the main entrance of
the provincial building and of the municipal building of the municipality or city in which the land lies, at

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least thirty days prior to the date of hearing, and after hearing, shall determine the petition and render
such judgment as justice and equity may require. . . . . (Emphasis supplied)

The foregoing provisions, therefore, clearly require that (a) notice of the petition should be published in
two (2) successive issues of the Official Gazette; and (b) publication should be made at least thirty (30)
days prior to the date of hearing. Substantial compliance with this jurisdictional requirement is not
enough; it bears stressing that the acquisition of jurisdiction over a reconstitution case is hinged on a strict
compliance with the requirements of the law. 31

The factual antecedents of this case are undisputed: De Asis caused the publication of the notice of the
amended petition in the December 23 and 30, 2002 issues of the Official Gazette. However, the NPO
certified that the December 30, 2002 issue was officially released only on January 3, 2003, evidently short
of the thirty-day period preceding the January 30, 2003 scheduled hearing. Indubitably, therefore, there
was a defect in the mandatory publication of the notice required under Section 10 in relation to Section 9
of RA 26.

In The Register of Deeds of Malabon, Metro Manila v. RTC of Malabon, Metro Manila, Branch 170, 32 the
Court struck down as invalid the actual publication of the notice of the petition in the Official Gazette forty-
seven (47) days after the August 17, 1988 hearing, despite the fact that notice of the petition was
published in the May 23 and 30, 1988 issues of the Official Gazette. Finding that the May 30, 1988 issue
was released for circulation only on October 3, 1988 and declaring that the said publication was not
sufficient to vest jurisdiction upon the RTC to hear and decide the petition, the Court held: DHSCTI

. . . The purpose of the publication of the notice of the petition for reconstitution in the Official Gazette is to
apprise the whole world that such a petition has been filed and that whoever is minded to oppose it for
good cause may do so within thirty (30) days before the date set by the court for hearing the petition. It is
the publication of such notice that brings in the whole world as a party in the case and vests the court with
jurisdiction to hear and decide it. 33 (Emphasis supplied)

Hence, while Section 9 merely required that the notice of the petition should be "published . . . twice in
successive issues of the Official Gazette," jurisprudence expressly clarified that "publication" means the
actual circulation or release of the issue of the Official Gazette on which the notice of the petition is
printed. The law could not have possibly contemplated "publication" independent of its actual
dissemination to the public, for whose benefit the requisite of publication is mandated in the first place.
For sure, publication without actual circulation of the printed material is worthless.

Consequently, the thirty-day period that precedes the scheduled hearing should be reckoned from the
time of the actual circulation or release of the last issue of the Official Gazette, and not on the date of its
issue as reflected on its front cover. To interpret it otherwise, as the CA had erroneously done in this
case, would render nugatory the purposes of publication in reconstitution proceedings, which are to
safeguard against spurious and unfounded land ownership claims, to apprise all interested parties of the
existence of such action, and to give them enough time to intervene. 34 Otherwise, unscrupulous parties
would merely invoke compliance with the requirement of two-time publication in the Official Gazette,
without regard to the date of its actual release, as a convenient excuse for their failure to observe the
mandatory prerequisite of publication. HIACac

Moreover, while it is true that the thirty-day period in this case was short by only three (3) days, the
principle of substantial compliance cannot apply, as the law requires strict compliance, 35 without which

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the Court is devoid of authority to pass upon and resolve the petition. As the Court has declared in the
case of Castillo v. Republic: 36

. . . In all cases where the authority of the courts to proceed is conferred by a statute, the mode of
proceeding is mandatory, and must be strictly complied with, or the proceeding will be utterly void. When
the trial court lacks jurisdiction to take cognizance of a case, it lacks authority over the whole case and all
its aspects. All the proceedings before the trial court, including its order granting the petition for
reconstitution, are void for lack of jurisdiction. 37 (Emphasis supplied)

Furthermore, there is dearth of reason to afford liberality in this case as the Court had similarly done in
the Imperial case, as cited by the CA. A punctilious scrutiny of the factual milieu in Imperial shows that
despite the apparent discrepancy between the dates of issue of the Official Gazette where the notice of
the petition was published (March 27, 1995 and April 3, 1995) and the date of the official release of the
last issue (March 28, 1995), the thirty-day period required under Section 9 of RA 26 was nonetheless
complied with, considering that the hearing was scheduled on May 10, 1995. Hence, it is inconsequential
whether the thirty-day period was to be reckoned either from April 3, 1995, the date of issue of the second
Official Gazette, or from March 28, 1995, the date of its official release — as the notice of the petition
would still be considered as having been published at least thirty (30) days prior to the date of hearing on
May 10, 1995. As the Court had ardently observed in that case: aIcDCT

. . . We feel, too, that the petitioner can neither be faulted nor punished for the NPO's act of releasing the
April 3, 1995 issue early; it was a matter wholly outside the petitioner's control given that this is a decision
wholly for NPO to make. What is important, to the Court's mind, is that the petitioner fulfilled his obligation
to cause the publication of the notice of the petition in two consecutive issues of the Official Gazette 30
days prior to the date of hearing. We keenly realize that the early publication of the Official Gazette more
than met these requirements, as the publication transpired more than 30 days before the date of hearing.
Thus, there is every reason to exercise liberality in the greater interest of justice. 38 (Emphasis supplied)

Hence, in view of the defect in the mandatory requirement of publication set forth in Section 10 in relation
to Section 9 of RA 26, therefore, the RTC did not acquire jurisdiction in this case, rendering null and void
the entire proceedings before it.

Finally, the Court notes that the RTC, as affirmed by the CA, failed to give due consideration to the LRA's
report stating that the technical description of the subject property overlaps with other properties. In light
of the LRA's finding, therefore, it behooved the RTC — in observance of diligence and prudence — to
notify the adjoining lot owners of the proceedings or, at the very least, to order a resurvey of the subject
property, at the expense of De Asis. As the Republic had pointed out, 39 the RTC ought to have
proceeded with the utmost caution, having been apprised of the LRA's report on the overlapping of
properties. Records show, however, that neither the Republic nor the LRA was afforded the opportunity to
appear and present further evidence in support of the LRA's report. Instead, the RTC merely disregarded
the same.

On this score, it bears stressing that the nature of reconstitution proceedings under RA 26 denotes a
restoration of the instrument, which is supposed to have been lost or destroyed, in its original form and
condition. 40 aEDCSI

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On this score, it bears stressing that the nature of reconstitution proceedings under RA 26 denotes a
restoration of the instrument, which is supposed to have been lost or destroyed, in its original form and
condition. 40 As such, reconstitution must be granted only upon clear proof that the title sought to be
restored had previously existed and was issued to the petitioner. 41 Strict compliance with the
requirements of the law aims to thwart dishonest parties from abusing reconstitution proceedings as a
means of illegally obtaining properties otherwise already owned by other parties. As the Court had
eloquently pronounced in Director of Lands v. CA: 42

The efficacy and integrity of the Torrens system must be protected and preserved to ensure the stability
and security of land titles for otherwise land ownership in the country would be rendered erratic and
restless and can certainly be a potent and veritable cause of social unrest and agrarian agitation. The
courts must exercise caution and vigilance in order to guard the indefeasibility and imprescriptibility of the
Torrens Registration System against spurious claims and forged documents concocted and foisted upon
the destruction and loss of many public records as a result of the last World War. The real purpose of the
Torrens System which is to quiet title to the land must be upheld and defended, and once a title is
registered, the owner may rest secure, without the necessity of waiting in the portals of the court or sitting
in the mirador de su casa to avoid the possibility of losing his land. 43

WHEREFORE, the instant petition is GRANTED. The assailed January 26, 2010 Decision and October 1,
2010 Resolution of the Court of Appeals in CA-G.R. CV No. 79569 are REVERSED and SET ASIDE. The
amended petition for reconstitution docketed as LRC Case No. Q-15289(02) is DISMISSED.

SO ORDERED. TAEcCS

||| (Republic v. De Asis, Jr., G.R. No. 193874, [July 24, 2013], 715 PHIL 245-259)

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SECOND DIVISION

[G.R. No. 232154. August 20, 2018.]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. BENJAMIN FERIOL y PEREZ, accused-appellant.

DECISION

PERLAS-BERNABE, J p:

Before this Court is an ordinary appeal 1 filed by accused-appellant Benjamin Feriol y Perez (Feriol)
assailing the Decision 2 dated June 14, 2016 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No.
07201, which affirmed the Decision 3 dated November 27, 2014 of the Regional Trial Court of Makati
City, Branch 65 (RTC) in Criminal Case No. 14-104 finding him guilty beyond reasonable doubt of
violating Section 5, Article II of Republic Act No. (RA) 9165, 4 otherwise known as the "Comprehensive
Dangerous Drugs Act of 2002."

The Facts

This case stemmed from an Information 5 filed before the RTC, charging Feriol with the crime of Illegal
Sale of Dangerous Drugs, the accusatory portion of which states:

On the 28th day of January 2014, in the City of Makati, the Philippines, accused, without the necessary
license or prescription and without being authorized by law, did then and there willfully, unlawfully and
feloniously sell, deliver, and distribute a total of zero point twenty three (0.23) gram of white crystalline
substance containing methamphetamine hydrochloride, a dangerous drug, in consideration of P500.

CONTRARY TO LAW. 6 EcTCAD

The prosecution alleged that at around four (4) o'clock in the afternoon of January 28, 2014, the Makati
City Police received an information from a confidential informant (CI) that a certain "Allan," who was later
on identified as Feriol, was engaged in illegal drug activities along Sampaloc Street, Barangay Cembo,
Makati City. Acting on the information, a buy-bust team was organized with Makati Anti-Drug Abuse
Council Operative Delno A. Encarnacion (MADAC Encarnacion) as the designated poseur-buyer and
Police Officer 1 Mark Anthony L. Angulo (PO1 Angulo) as the immediate back-up. Subsequently, the
team, together with the CI, proceeded to the target area where the latter introduced MADAC Encarnacion
to Feriol as buyer of shabu. MADAC Encarnacion handed over the marked money in the amount of
P500.00 to Feriol who, in turn, gave him a small plastic sachet containing white crystalline substance.
MADAC Encarnacion then executed the pre-arranged signal, causing PO1 Angulo to rush and assist him
in arresting Feriol. The buy-bust team conducted a body search upon Feriol and recovered from the
latter's left pocket the marked money. Due to security reasons, the buy-bust team brought Feriol and the
seized items to the barangay hall, where the required inventory and photography were conducted in the
presence of Feriol and Barangay Kagawad Roderick P. Bien (Kagawad Bien). Afterwards, Feriol and the
seized items were turned over to the investigator on duty, Senior Police Officer 1 Ramon D. Esperanzate,

195
who then prepared the letter request for laboratory examination. Shortly after, the said letter request and
the plastic sachet were given to MADAC Encarnacion, who delivered the same to the crime laboratory for
examination, during which the substance recovered from Feriol tested positive for the presence
methamphetamine hydrochloride, a dangerous drug. 7

In his defense, Feriol denied the accusations against him, claiming that at around four (4) o'clock in the
afternoon of January 28, 2014, he was taking a bath inside his house when he heard a number of
individuals shouting his name. He averred that upon opening the door of the bathroom, someone
suddenly poked a gun at him and asked for his ID. Thereafter, he was handcuffed and brought to the
barangay hall where all the pieces of evidence were shown to him. 8

The RTC Ruling

In a Decision 9 dated November 27, 2014, the RTC found Feriol guilty beyond reasonable doubt of
violating Section 5, Article II of RA 9165, and accordingly, sentenced him to suffer the penalty of life
imprisonment and to pay a fine in the amount of P500,000.00. 10 It ruled that the prosecution adequately
proved all the elements of the crime of Illegal Sale of Dangerous Drugs. Moreover, it established an
unbroken chain of custody over the seized dangerous drug, as it was shown that: (a) MADAC
Encarnacion purchased from Feriol a sachet containing a white crystalline substance which he marked
with "Allan"; (b) after conducting the inventory and photography, MADAC Encarnacion delivered the
seized drug to the crime laboratory; (c) upon delivery, the said drug was received and examined by the
forensic chemist, who confirmed that it was shabu; and (d) the said drug was officially brought to the court
and presented as evidence. 11 HSAcaE

In addition, the RTC observed that the apprehending officers' failure to secure the representatives from
the Department of Justice (DOJ) and the media during the conduct of inventory was not fatal — and thus
did not render Feriol's arrest void and the evidence obtained from him inadmissible — as it was proved
that the integrity and the evidentiary value of the seized items were duly preserved. 12

Aggrieved, Feriol appealed 13 to the CA.

The CA Ruling

In a Decision 14 dated June 14, 2016, the CA affirmed in toto the ruling of the RTC. 15 It found no
showing that the chain of custody had been broken from the moment the dangerous drug was seized by
the apprehending officers until such time that it was introduced in evidence. Furthermore, it declared that
Feriol had the burden of proving that the confiscated item had been tampered with, as the integrity of the
evidence is presumed to have been preserved absent any showing of bad faith or ill will on the part of the
apprehending officers. Feriol, however, failed to discharge such burden in this case. 16

Hence, the instant appeal.

The Issue before the Court

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The issue for the Court's resolution is whether or not the CA correctly upheld Feriol's conviction for the
crime charged.

The Court's Ruling

The appeal is meritorious.

At the outset, it must be stressed that an appeal in criminal cases opens the entire case for review and,
thus, it is the duty of the reviewing tribunal to correct, cite, and appreciate errors in the appealed judgment
whether they are assigned or unassigned. 17 "The appeal confers the appellate court full jurisdiction over
the case and renders such court competent to examine records, revise the judgment appealed from,
increase the penalty, and cite the proper provision of the penal law." 18 HESIcT

In this case, Feriol was charged with the crime of Illegal Sale of Dangerous Drugs, defined and penalized
under Section 5, Article II of RA 9165. In order to properly secure the conviction of an accused charged
with Illegal Sale of Dangerous Drugs, the following elements must be proven with moral certainty: (a) the
identity of the buyer and the seller, the object, and the consideration; and (b) the delivery of the thing sold
and the payment. 19 Case law instructs that it is essential that the identity of the dangerous drug be
established with moral certainty, considering that the dangerous drug itself forms an integral part of the
corpus delicti of the crime. The prosecution has to show an unbroken chain of custody over the
dangerous drugs so as to obviate any unnecessary doubts on their identity on account of switching,
"planting," or contamination of evidence. Accordingly, the prosecution must be able to account for each
link of the chain from the moment that the drugs are seized up to their presentation in court as evidence
of the crime. 20

Section 21, Article II of RA 9165 outlines the procedure which the apprehending officers must follow when
handling the seized drugs in order to preserve their integrity and evidentiary value. 21 Under the said
section, prior to its amendment by RA 10640, 22 the apprehending team shall, among others,
immediately after seizure and confiscation conduct a physical inventory and photograph the seized items
in the presence of the accused or the person from whom the items were seized, or his representative or
counsel, a representative from the media and the DOJ, and any elected public official who shall be
required to sign the copies of the inventory and be given a copy of the same, and the seized drugs must
be turned over to the Philippine National Police Crime Laboratory within twenty-four (24) hours from
confiscation for examination. 23 In the case of People v. Mendoza, 24 the Court stressed that "[w]ithout
the insulating presence of the representative from the media or the [DOJ], or any elected public official
during the seizure and marking of the [seized drugs], the evils of switching, 'planting' or contamination of
the evidence that had tainted the buy-busts conducted under the regime of [RA] 6425 (Dangerous Drugs
Act of 1972) again reared their ugly heads as to negate the integrity and credibility of the seizure and
confiscation of the [said drugs] that were evidence herein of the corpus delicti, and thus adversely
affected the trustworthiness of the incrimination of the accused. Indeed, the x x x presence of such
witnesses would have preserved an unbroken chain of custody." 25 caITAC

The Court, however, clarified that under varied field conditions, strict compliance with the requirements of
Section 21 of RA 9165 may not always be possible. 26 In fact, the Implementing Rules and Regulations
(IRR) of RA 9165 — which is now crystallized into statutory law with the passage of RA 10640 27 —
provide that the said inventory and photography may be conducted at the nearest police station or office
of the apprehending team in instances of warrantless seizure, and that non-compliance with the
requirements of Section 21 of RA 9165 — under justifiable grounds — will not render void and invalid the
seizure and custody over the seized items so long as the integrity and evidentiary value of the seized
items are properly preserved by the apprehending officer or team. 28 Tersely put, the failure of the

197
apprehending team to strictly comply with the procedure laid out in Section 21 of RA 9165 and its IRR
does not ipso facto render the seizure and custody over the items as void and invalid, provided that the
prosecution satisfactorily proves that: (a) there is justifiable ground for non-compliance; and (b) the
integrity and evidentiary value of the seized items are properly preserved. 29 In People v. Almorfe, 30 the
Court explained that for the above-saving clause to apply, the prosecution must explain the reasons
behind the procedural lapses, and that the integrity and evidentiary value of the seized evidence had
nonetheless been preserved. 31 Also, in People v. De Guzman, 32 it was emphasized that the justifiable
ground for non-compliance must be proven as a fact, because the Court cannot presume what these
grounds are or that they even exist. 33

After a judicious study of the case, the Court finds that the apprehending officers committed unjustified
deviations from the prescribed chain of custody rule, thereby putting into question the integrity and
evidentiary value of the dangerous drug allegedly seized from Feriol.

In this case, while the inventory 34 and the photography of the seized items were made in the presence
of Feriol and an elected public official, the records do not show that the said inventory and photography
were done before any representative from the DOJ and the media. The apprehending officers did not
bother to acknowledge or explain such lapse, as the records even fail to disclose that there was an
attempt to contact or secure these witnesses' presence.

In the recent case of People v. Miranda, 35 the Court held that "the procedure in Section 21[, Article II] of
RA 9165 is a matter of substantive law, and cannot be brushed aside as a simple procedural technicality;
or worse, ignored as an impediment to the conviction of illegal drug suspects. Therefore, as the
requirements are clearly set forth in the law, then the State retains the positive duty to account for any
lapses in the chain of custody of the drugs/items seized from the accused, regardless of whether or not
the defense raises the same in the proceedings a quo; otherwise, it risks the possibility of having a
conviction overturned on grounds that go into the evidence's integrity and evidentiary value, albeit the
same are raised only for the first time on appeal, or even not raised, become apparent upon further
review." 36 ICHDca

In the same vein, the Court, in recent drug cases, has exhorted:

[P]rosecutors are strongly reminded that they have the positive duty to prove compliance with the
procedure set forth in Section 21[, Article II] of RA 9165, as amended. As such, they must have the
initiative to not only acknowledge but also justify any perceived deviations from the said procedure during
the proceedings before the trial court. Since compliance with this procedure is determinative of the
integrity and evidentiary value of the corpus delicti and ultimately, the fate of the liberty of the accused,
the fact that any issue regarding the same was not raised, or even threshed out in the court/s below,
would not preclude the appellate court, including this Court, from fully examining the records of the case if
only to ascertain whether the procedure had been completely complied with, and if not, whether justifiable
reasons exist to excuse any deviation. If no such reasons exist, then it is the appellate court's bounden
duty to acquit the accused and, perforce, overturn a conviction. 37

Thus, in view of the prosecution's failure to provide justifiable grounds which would excuse their
transgression in this case, the Court is constrained to conclude that the integrity and evidentiary value of
the item purportedly seized from Feriol have been compromised, thereby militating against a finding of
guilt beyond reasonable doubt. As such, Feriol's acquittal is in order. 38

198
WHEREFORE, the appeal is GRANTED. The Decision dated June 14, 2016 of the Court of Appeals in
CA-G.R. CR-H.C. No. 07201 is hereby REVERSED and SET ASIDE. Accordingly, accused-appellant
Benjamin Feriol y Perez is ACQUITTED of the crime charged. The Director of the Bureau of Corrections
is ordered to cause his immediate release, unless he is being lawfully held in custody for any other
reason. TCAScE

SO ORDERED.

||| (People v. Feriol y Perez, G.R. No. 232154, [August 20, 2018])

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SECOND DIVISION

[G.R. No. 226013. July 2, 2018.]

LUZVIMINDA DELA CRUZ MORISONO, petitioner, vs. RYOJI * MORISONO and LOCAL CIVIL
REGISTRAR OF QUEZON CITY, respondents.

DECISION

PERLAS-BERNABE, J p:

This is a direct recourse to the Court from the Regional Trial Court of Quezon City, Branch 105 (RTC),
through a petition for review on certiorari 1 assailing the Decision 2 dated July 18, 2016 of the RTC in SP.
PROC. NO. Q-12-71830 which denied petitioner Luzviminda Dela Cruz Morisono's (Luzviminda) petition
before it.

The Facts

Luzviminda was married to private respondent Ryoji Morisono (Ryoji) in Quezon City on December 8,
2009. 3 Thereafter, they lived together in Japan for one (1) year and three (3) months but were not
blessed with a child. During their married life, they would constantly quarrel mainly due to Ryoji's
philandering ways, in addition to the fact that he was much older than Luzviminda. 4 As such, she and
Ryoji submitted a "Divorce by Agreement" before the City Hall of Mizuho-Ku, Nagoya City, Japan, which
was eventually approved on January 17, 2012 and duly recorded with the Head of Mizuho-Ku, Nagoya
City, Japan on July 1, 2012. 5 In view of the foregoing, she filed a petition for recognition of the foreign
divorce decree obtained by her and Ryoji 6 before the RTC so that she could cancel the surname of her
former husband in her passport and for her to be able to marry again. 7 aICcHA

After complying with the jurisdictional requirements, the RTC set the case for hearing. Since nobody
appeared to oppose her petition except the government, Luzviminda was allowed to present her evidence
ex parte. After the presentation and absent any objection from the Public Prosecutor, Luzviminda's formal
offer of evidence was admitted as proof of compliance with the jurisdictional requirements, and as part of
the testimony of the witnesses. 8

The RTC Ruling

In a Decision 9 dated July 18, 2016, the RTC denied Luzviminda's petition. It held that while a divorce
obtained abroad by an alien spouse may be recognized in the Philippines — provided that such decree is
valid according to the national law of the alien — the same does not find application when it was the
Filipino spouse, i.e., petitioner, who procured the same. Invoking the nationality principle provided under
Article 15 of the Civil Code, in relation to Article 26 (2) of the Family Code, the RTC opined that since
petitioner is a Filipino citizen whose national laws do not allow divorce, the foreign divorce decree she
herself obtained in Japan is not binding in the Philippines; 10 hence, this petition. EHaASD

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The Issue Before the Court

The issue for the Court's resolution is whether or not the RTC correctly denied Luzviminda's petition for
recognition of the foreign divorce decree she procured with Ryoji.

The Court's Ruling

The petition is partly meritorious.

The rules on divorce prevailing in this jurisdiction can be summed up as follows: first, Philippine laws do
not provide for absolute divorce, and hence, the courts cannot grant the same; second, consistent with
Articles 15 11 and 17 12 of the Civil Code, the marital bond between two (2) Filipino citizens cannot be
dissolved even by an absolute divorce obtained abroad; third, an absolute divorce obtained abroad by a
couple, who are both aliens, may be recognized in the Philippines, provided it is consistent with their
respective national laws; and fourth, in mixed marriages involving a Filipino and a foreigner, the former is
allowed to contract a subsequent marriage in case the absolute divorce is validly obtained abroad by the
alien spouse capacitating him or her to remarry. 13

The fourth rule, which has been invoked by Luzviminda in this case, is encapsulated in Article 26 (2) of
the Family Code which reads:

Article 26. x x x

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino
spouse shall likewise have capacity to remarry under Philippine law.

This provision confers jurisdiction on Philippine courts to extend the effect of a foreign divorce decree to a
Filipino spouse without undergoing trial to determine the validity of the dissolution of the marriage. It
authorizes our courts to adopt the effects of a foreign divorce decree precisely because the Philippines
does not allow divorce. Philippine courts cannot try the case on the merits because it is tantamount to
trying a divorce case. Under the principles of comity, our jurisdiction recognizes a valid divorce obtained
by a spouse of foreign nationality, but the legal effects thereof, e.g., on custody, care and support of the
children or property relations of the spouses, must still be determined by our courts. The rationale for this
rule is to avoid the absurd situation of a Filipino as still being married to his or her alien spouse, although
the latter is no longer married to the former because he or she had obtained a divorce abroad that is
recognized by his or her national law. 14 In Corpuz v. Sto. Tomas, 15 the Court held:

As the RTC correctly stated, the provision was included in the law "to avoid the absurd situation where
the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer
married to the Filipino spouse." The legislative intent is for the benefit of the Filipino spouse, by clarifying
his or her marital status, settling the doubts created by the divorce decree. Essentially, the second
paragraph of Article 26 of the Family Code provided the Filipino spouse a substantive right to have his or
her marriage to the alien spouse considered as dissolved, capacitating him or her to remarry. Without the
second paragraph of Article 26 of the Family Code, the judicial recognition of the foreign decree of
divorce, whether in a proceeding instituted precisely for that purpose or as a related issue in another

201
proceeding, would be of no significance to the Filipino spouse since our laws do not recognize divorce as
a mode of severing the marital bond; Article 17 of the Civil Code provides that the policy against absolute
divorces cannot be subverted by judgments promulgated in a foreign country. The inclusion of the second
paragraph in Article 26 of the Family Code provides the direct exception to this rule and serves as basis
for recognizing the dissolution of the marriage between the Filipino spouse and his or her alien spouse.

Additionally, an action based on the second paragraph of Article 26 of the Family Code is not limited to
the recognition of the foreign divorce decree. If the court finds that the decree capacitated the alien
spouse to remarry, the courts can declare that the Filipino spouse is likewise capacitated to contract
another marriage. No court in this jurisdiction, however, can make a similar declaration for the alien
spouse (other than that already established by the decree), whose status and legal capacity are generally
governed by his national law. 16 (Emphases and underscoring supplied)

According to Republic v. Orbecido III, 17 the following elements must concur in order for Article 26 (2) to
apply, namely: (a) that there is a valid marriage celebrated between a Filipino citizen and a foreigner; and
(b) that a valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry. 18 In
the same case, the Court also initially clarified that Article 26 (2) applies not only to cases where a
foreigner was the one who procured a divorce of his/her marriage to a Filipino spouse, but also to
instances where, at the time of the celebration of the marriage, the parties were Filipino citizens, but later
on, one of them acquired foreign citizenship by naturalization, initiated a divorce proceeding, and
obtained a favorable decree. 19

However, in the recent case of Republic v. Manalo (Manalo), 20 the Court En Banc extended the
application of Article 26 (2) of the Family Code to further cover mixed marriages where it was the Filipino
citizen who divorced his/her foreign spouse. Pertinent portions of the ruling read: HDICSa

Now, the Court is tasked to resolve whether, under the same provision, a Filipino citizen has the capacity
to remarry under Philippine law after initiating a divorce proceeding abroad and obtaining a favorable
judgment against his or her alien spouse who is capacitated to remarry. x x x.

We rule in the affirmative.

xxx xxx xxx

When this Court recognized a foreign divorce decree that was initiated and obtained by the Filipino
spouse and extended its legal effects on the issues of child custody and property relation, it should not
stop short in likewise acknowledging that one of the usual and necessary consequences of absolute
divorce is the right to remarry. Indeed, there is no longer a mutual obligation to live together and observe
fidelity. When the marriage tie is severed and ceased to exist, the civil status and the domestic relation of
the former spouses change as both of them are freed from the marital bond.

xxx xxx xxx

Paragraph 2 of Article 26 speaks of "a divorce x x x validly obtained abroad by the alien spouse
capacitating him or her to remarry." Based on a clear and plain reading of the provision, it only requires
that there be a divorce validly obtained abroad. The letter of the law does not demand that the alien

202
spouse should be the one who initiated the proceeding wherein the divorce decree was granted. It does
not distinguish whether the Filipino spouse is the petitioner or the respondent in the foreign divorce
proceeding. The Court is bound by the words of the statute; neither can We put words in the mouths of
the lawmakers. "The legislature is presumed to know the meaning of the words, to have used words
advisedly, and to have expressed its intent by the use of such words as are found in the statute. Verba
legis non est recedendum, or from the words of a statute there should be no departure."

Assuming, for the sake of argument, that the word "obtained" should be interpreted to mean that the
divorce proceeding must be actually initiated by the alien spouse, still, the Court will not follow the letter of
the statute when to do so would depart from the true intent of the legislature or would otherwise yield
conclusions inconsistent with the general purpose of the act. Laws have ends to achieve, and statutes
should be so construed as not to defeat but to carry out such ends and purposes. x x x.

xxx xxx xxx

To reiterate, the purpose of Paragraph 2 of Article 26 is to avoid the absurd situation where the Filipino
spouse remains married to the alien spouse who, after a foreign divorce decree that is effective in the
country where it was rendered, is no longer married to the Filipino spouse. The provision is a corrective
measure to address an anomaly where the Filipino spouse is tied to the marriage while the foreign
spouse is free to marry under the laws of his or her country. Whether the Filipino spouse initiated the
foreign divorce proceeding or not, a favorable decree dissolving the marriage bond and capacitating his
or her alien spouse to remarry will have the same result: the Filipino spouse will effectively be without a
husband or wife. A Filipino who initiated a foreign divorce proceeding is in the same place and in like
circumstance as a Filipino who is at the receiving end of an alien initiated proceeding. Therefore, the
subject provision should not make a distinction. In both instance, it is extended as a means to recognize
the residual effect of the foreign divorce decree on Filipinos whose marital ties to their alien spouses are
severed by operation of the latter's national law.

xxx xxx xxx

A Filipino who is married to another Filipino is not similarly situated with a Filipino who is married to a
foreign citizen. There are real, material and substantial differences between them. Ergo, they should not
be treated alike, both as to rights conferred and liabilities imposed. Without a doubt, there are political,
economic, cultural, and religious dissimilarities as well as varying legal systems and procedures, all too
unfamiliar, that a Filipino national who is married to an alien spouse has to contend with. More
importantly, while a divorce decree obtained abroad by a Filipino against another Filipino is null and void,
a divorce decree obtained by an alien against his or her Filipino spouse is recognized if made in
accordance with the national law of the foreigner. cDSAEI

On the contrary, there is no real and substantial difference between a Filipino who initiated a foreign
divorce proceedings and a Filipino who obtained a divorce decree upon the instance of his or her alien
spouse. In the eyes of the Philippine and foreign laws, both are considered as Filipinos who have the
same rights and obligations in an alien land. The circumstances surrounding them are alike. Were it not
for Paragraph 2 of Article 26, both are still married to their foreigner spouses who are no longer their
wives/husbands. Hence, to make a distinction between them based merely on the superficial difference of
whether they initiated the divorce proceedings or not is utterly unfair. Indeed, the treatment gives undue
favor to one and unjustly discriminate against the other.

xxx xxx xxx

203
The declared State policy that marriage, as an inviolable social institution, is the foundation of the family
and shall be protected by the State, should not be read in total isolation but must be harmonized with
other constitutional provisions. Aside from strengthening the solidarity of the Filipino family, the State is
equally mandated to actively promote its total development. It is also obligated to defend, among others,
the right of children to special protection from all forms of neglect, abuse, cruelty, exploitation, and other
conditions prejudicial to their development. To Our mind, the State cannot effectively enforce these
obligations if We limit the application of Paragraph 2 of Article 26 only to those foreign divorce initiated by
the alien spouse. x x x. EDCcaS

A prohibitive view of Paragraph 2 of Article 26 would do more harm than good. If We disallow a Filipino
citizen who initiated and obtained a foreign divorce from the coverage of Paragraph 2 of Article 26 and
still require him or her to first avail of the existing "mechanisms" under the Family Code, any subsequent
relationship that he or she would enter in the meantime shall be considered as illicit in the eyes of the
Philippine law. Worse, any child born out of such "extra-marital" affair has to suffer the stigma of being
branded as illegitimate. Surely, these are just but a few of the adverse consequences, not only to the
parent but also to the child, if We are to hold a restrictive interpretation of the subject provision. The irony
is that the principle of inviolability of marriage under Section 2, Article XV of the Constitution is meant to
be tilted in favor of marriage and against unions not formalized by marriage, but without denying State
protection and assistance to live-in arrangements or to families formed according to indigenous customs.

This Court should not turn a blind eye to the realities of the present time. With the advancement of
communication and information technology, as well as the improvement of the transportation system that
almost instantly connect people from all over the world, mixed marriages have become not too
uncommon. Likewise, it is recognized that not all marriages are made in heaven and that imperfect
humans more often than not create imperfect unions. Living in a flawed world, the unfortunate reality for
some is that the attainment of the individual's full human potential and self-fulfillment is not found and
achieved in the context of a marriage. Thus, it is hypocritical to safeguard the quantity of existing
marriages and, at the same time, brush aside the truth that some of them are of rotten quality.

Going back, We hold that marriage, being a mutual and shared commitment between two parties, cannot
possibly be productive of any good to the society where one is considered released from the marital bond
while the other remains bound to it. x x x. 21 (Emphases and underscoring supplied) ISHaCD

Thus, pursuant to Manalo, foreign divorce decrees obtained to nullify marriages between a Filipino and an
alien citizen may already be recognized in this jurisdiction, regardless of who between the spouses
initiated the divorce; provided, of course, that the party petitioning for the recognition of such foreign
divorce decree — presumably the Filipino citizen — must prove the divorce as a fact and demonstrate its
conformity to the foreign law allowing it. 22

In this case, a plain reading of the RTC ruling shows that the denial of Luzviminda's petition to have her
foreign divorce decree recognized in this jurisdiction was anchored on the sole ground that she admittedly
initiated the divorce proceedings which she, as a Filipino citizen, was not allowed to do. In light of the
doctrine laid down in Manalo, such ground relied upon by the RTC had been rendered nugatory.
However, the Court cannot just order the grant of Luzviminda's petition for recognition of the foreign
divorce decree, as Luzviminda has yet to prove the fact of her "Divorce by Agreement" obtained in
Nagoya City, Japan and its conformity with prevailing Japanese laws on divorce. Notably, the RTC did not
rule on such issues. Since these are questions which require an examination of various factual matters, a
remand to the court a quo is warranted.

204
WHEREFORE, the petition is PARTLY GRANTED. The Decision dated July 18, 2016 of the Regional
Trial Court of Quezon City, Branch 105 in SP. PROC. NO. Q-12-71830 is hereby REVERSED and SET
ASIDE. Accordingly, the instant case is REMANDED to the court a quo for further proceedings, as
directed in this Decision. cDTACE

SO ORDERED.

||| (Morisono v. Morisono, G.R. No. 226013, [July 2, 2018])

205
SECOND DIVISION

[A.C. No. 12084. June 6, 2018.]

HERNANIE P. DANDOY, complainant, vs. ATTY. ROLAND G. EDAYAN, respondent.

RESOLUTION

PERLAS-BERNABE, J p:

This administrative case stemmed from a verified letter-complaint 1 dated December 17, 2010 filed by
Hernanie P. Dandoy (Dandoy) before the Integrated Bar of the Philippines (IBP) against respondent Atty.
Roland G. Edayan (respondent) for violation of Canons 1, 3, and 7 of the Code of Professional
Responsibility (CPR). 2

The Facts

In the complaint, Dandoy alleged that on October 17, 2006, respondent notarized: (a) a Special Power of
Attorney 3 (SPA) executed by his (Dandoy) father, Jacinto S. Dandoy (Jacinto), in favor of a certain
Antoine Cyrus C. Garzo (Garzo) granting the latter authority to offer as collateral two (2) parcels of land
located in San Juan, Siquijor; and (b) a Deed of Extrajudicial Settlement of Real Estate 4 (Deed) of
Dandoy's late grandmother, Eutiquia Sumagang, wherein his father was also one of the parties. 5
According to Dandoy, Jacinto could not have been present before respondent on October 17, 2006
because he passed away on July 13, 1999. 6 He added that, through the SPA and the Deed, Garzo was
able to mortgage the two (2) parcels of land as security for a P400,000.00 loan. The mortgage was,
however, foreclosed and the mortgaged properties were not redeemed to the great prejudice of Dandoy
and his siblings. 7 In support thereof, Dandoy attached a certified true copy of the SPA, death certificate
of Jacinto stating that he died on July 13, 1999, a copy of the Deed, and a copy of the Deed of Real
Estate Mortgage 8 dated October 17, 2006 executed by Garzo on behalf of Jacinto and Felipe Dandoy
(Felipe), Dandoy's uncle.

In his Sworn Statement 9 dated May 22, 2011, respondent admitted to having notarized the two (2)
documents, but claimed that he verified the identities of the signatories thereto through their residence
certificates. He narrated that on the said date, two (2) persons came to his office claiming to be Jacinto
and Felipe and asked him to draft and notarize the SPA and the Deed. He added that Felipe even
confirmed the identity of Jacinto in the same manner that the witnesses to the documents, who were
likewise present at that time, confirmed the identities of the two. Finally, he submitted that while residence
certificates are not mentioned in the list of competent evidence of identity enumerated under Section 12,
Rule II of the 2004 Rules on Notarial Practice 10 (2004 Notarial Rules), these are still necessary for the
proper execution of the notarial act as it is still prescribed by various laws, i.e., Commonwealth Act No.
465, 11 the Notarial Law, 12 and the Local Government Code. 13 DEIHAa

The Report and Recommendation of the IBP

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In its Report and Recommendation 14 dated October 22, 2015, the IBP Investigating Commissioner (IBP-
IC) found respondent administratively liable for failure to comply with the 2004 Notarial Rules, and
accordingly, recommended that respondent's notarial commission, if existing, be revoked and that he be
disqualified from being commissioned as a notary public for a period of two (2) years. 15

The IBP-IC found that respondent failed to confirm the identity of the person claiming to be Jacinto
through the competent evidence of identity required by the 2004 Notarial Rules — the controlling rules on
notarial practice at the time of the notarization of the SPA and the Deed, not the Notarial Law invoked by
respondent. In this regard, the IBP-IC pointed out that under the 2004 Notarial Rules, competent
evidence of identity includes: (a) a government-issued identification document bearing their respective
photographs, which clearly does not include the community tax certificate presented in this case; and (b)
affirmation of one credible witness not privy to the instrument, etc. who is personally known to the notary
public and who personally knows the individual, which, in this case, was not satisfied by the statements
made by Felipe or Garzo as to the identity of Jacinto because they are privy to the Deed and the SPA.
Finally, the IBP-IC noted the apparent discrepancy between the signatures affixed by the person claiming
to be Jacinto in the SPA and in the Deed which, to the IBP-IC, should have already raised suspicion on
respondent's part and prompted him to require a signature and photograph-bearing identification card
from said person. Being a notary public, and therefore an officer of the court, the IBP-IC pointed out that
respondent must strictly comply with the rules on notarial practice as may be issued by the Court. 16
DcHSEa

The IBP-IC, however, found the evidence insufficient to show that respondent wilfully and maliciously
conspired with Garzo and Felipe in depriving Dandoy and his siblings of their grandmother's property in
order to hold him administratively liable under the CPR. 17

In a Resolution 18 dated February 25, 2016, the IBP Board of Governors adopted the above report and
recommendation of the IBP-IC. Dissatisfied, respondent sought reconsideration, 19 which the IBP denied
in a Resolution 20 dated April 20, 2017.

The Issue before the Court

The issue for the Court's resolution is whether or not the IBP correctly found respondent liable for
violation of the 2004 Notarial Rules.

The Court's Ruling

The Court affirms the findings and adopts the recommendations of the IBP with modifications.

Time and again, the Court has emphasized that the act of notarization is impressed with public interest.
Notarization converts a private document to a public document, making it admissible in evidence without
further proof of its authenticity. 21 A notarial document is, by law, entitled to full faith and credence. 22 As
such, a notary public must observe with utmost care the basic requirements in the performance of his
duties in order to preserve the confidence of the public in the integrity of the notarial system. 23 In this
light, the Court has ruled that notaries must inform themselves of the facts they certify to; most
importantly, they should not take part or allow themselves to be part of illegal transactions. 24

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The 2004 Rules on Notarial Practice provides that a notary public should not notarize a document unless
the signatory to the document is in the notary's presence personally at the time of the notarization, and
personally known to the notary public or otherwise identified through competent evidence of identity. 25
Section 12, Rule II of the same rules defines "competent evidence of identity" as follows:

Section 12. Competent Evidence of Identity. — The phrase "competent evidence of identity" refers to the
identification of an individual based on: CTHaSD

(a) at least one current identification document issued by an official agency bearing the photograph and
signature of the individual; or

(b) the oath or affirmation of one credible witness not privy to the instrument, document or transaction
who is personally known to the notary public and who personally knows the individual, or of two credible
witnesses neither of whom is privy to the instrument, document or transaction who each personally knows
the individual and shows to the notary public documentary identification. (Emphases and underscoring
supplied)

Pursuant to these Rules, a notary public should not notarize a document unless the person who signed
the same is the very person who executed and personally appeared before him to attest to the contents
and the truth of what are stated therein. 26

In this case, respondent, as duly found by the IBP, was remiss in the faithful observance of his duties as a
notary public when he failed to confirm the identity of the person claiming to be Jacinto through the
competent evidence of identity required by the 2004 Notarial Rules. Jurisprudence 27 provides that a
community tax certificate or cedula is no longer considered as a valid and competent evidence of identity
not only because it is not included in the list of competent evidence of identity under the Rules; but
moreso, it does not bear the photograph and signature of the persons appearing before them, which the
Rules deem as the more appropriate and competent means by which notaries public can ascertain the
person's identity. Records show that Jacinto passed away on July 13, 1999, and therefore, clearly could
not have appeared before respondent to sign and execute the two (2) documents. Had respondent been
more circumspect in performing his duties as notary public and asked for the photograph-and-signature-
bearing identification document required by the 2004 Notarial Rules, he would have immediately
discovered that the person before him was not the person whom he purports to be. All told, by accepting
the residence certificates presented by the person who claimed to be Jacinto as evidence of identity,
respondent made it appear that Jacinto personally appeared before him and subscribed the SPA and the
Deed in violation of the 2004 Notarial Rules and to the detriment of Dandoy and his siblings. TacSAE

Moreover, the statements made by the witnesses to the documents as regards the identity of the persons
who claimed to be Felipe and Jacinto and those made by the person purporting to be Felipe as regards
the latter do not comply with the 2004 Notarial Rules' requirements on competent evidence of identity.
Section 12 clearly states that the credible witness/es making the oath — as to the identity of the individual
subscribing the document — must: not be a privy to the document, etc.; personally know/s the individual
subscribing; and, must either be (a) personally known to the notary public, or (b) must show to the notary
public a photograph-and-signature-bearing identification document. In this case, Felipe and Garzo were
both privies to the document, and the records are bereft of any evidence showing that the other witnesses
to the document had shown to respondent the documentary identification which the 2004 Notarial Rules
require.

208
Moreover, as a lawyer, respondent is expected at all times to uphold the integrity and dignity of the legal
profession and refrain from any act or omission which might erode the trust and confidence reposed by
the public in the integrity of the legal profession. 28 By notarizing the subject documents, he engaged in
unlawful, dishonest, immoral, or deceitful conduct which makes him liable as well for violation of the CPR,
particularly Canon 1, Rule 1.01 thereof which provides:

CANON 1 — A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law
and legal processes.

Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

As a final note, the Court finds it unfortunate that notwithstanding the findings of the IBP, respondent still
fails to recognize the fact that his actions violated the provisions of the 2004 Notarial Rules, as he
maintains that the residence certificates presented before him sufficiently complied with the Rules'
identification requirements. 29 It must be remembered, however, that a lawyer is duty-bound to keep
abreast of legal developments; 30 the changes in our notarial rules are no exception. SDHacT

As herein discussed, respondent's failure to properly perform his duty as a notary public resulted not only
in damage to those directly affected by the notarized document, but also in undermining the integrity of
the office of a notary public and in degrading the function of notarization. 31 He should thus be held liable
for such negligence not only as a notary public but also as a lawyer. Consistent with prevailing
jurisprudence, 32 he should be meted out with the modified penalty of immediate revocation of his
notarial commission, if any, disqualification from being commissioned as notary public for a period of two
(2) years, and suspension from the practice of law for one (1) year.

WHEREFORE, the Court hereby finds respondent Atty. Roland G. Edayan (respondent) GUILTY of
violation of the 2004 Rules on Notarial Practice and of the Code of Professional Responsibility.
Accordingly, the Court resolves to: SUSPEND him from the practice of law for one (1) year; REVOKE his
incumbent commission as a notary public, if any; and, PROHIBIT him from being commissioned as a
notary public for two (2) years. He is WARNED that a repetition of the same offense or similar acts in the
future shall be dealt with more severely.

The suspension in the practice of law, the revocation of his notarial commission, and his disqualification
from being commissioned as notary public shall take effect immediately upon receipt of this Resolution by
respondent. He is DIRECTED to immediately file a Manifestation to the Court that his suspension has
started, copy furnished all courts and quasi-judicial bodies where he has entered his appearance as
counsel. ACETID

Let copies of this Resolution be furnished to: the Office of the Bar Confidant to be appended to
respondent's personal record as an attorney; the Integrated Bar of the Philippines for its information and
guidance; and the Office of the Court Administrator for circulation to all courts in the country. TaDSCA

SO ORDERED.

||| (Dandoy v. Edayan, A.C. No. 12084 (Resolution), [June 6, 2018])

209
[G.R. No. 229955. July 23, 2018.]

MELCHOR BARCENAS DEOCARIZA, petitioner, vs. FLEET MANAGEMENT SERVICES PHILIPPINES,

INC., MODERN ASIA SHIPPING CORPORATION, A.B.F. GAVIOLA, JR., and MA. CORAZON CRUZ,
respondents.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated June 3, 2016 and the
Resolution 3 dated February 9, 2017 of the Court of Appeals (CA) in CA-G.R. SP No. 135118 which
affirmed the Decision 4 dated January 30, 2014 and the Resolution 5 dated February 28, 2014 of the
National Labor Relations Commission (NLRC) in NLRC LAC No. (OFW-M) 01-000041-14, dismissing
petitioner Melchor Barcenas Deocariza's (petitioner) complaint for total and permanent disability benefits.

The Facts

Petitioner was initially hired in 2010 as Chief Officer by Fleet Management Services Philippines., Inc., for
and in behalf of its principal, Modern Asia Shipping Corporation (collectively, respondents) on board the
vessel, M.V. Morning Carina, a car and motor carrier ship. 6 On June 15, 2011, he was re-hired by
respondents for the same position under a six (6)-month contract 7 with a basic monthly salary of
US$1,350.00, exclusive of overtime pay and other benefits, and covered by a Collective Bargaining
Agreement (CBA). 8 His duties 9 entailed, among others, the supervision in the loading and unloading of
vehicles in the vessel. 10 After undergoing the required pre-employment medical examination (PEME),
where the company-designated physician declared him fit for sea duty, 11 petitioner boarded the vessel
on July 19, 2011. 12

In the course of his employment, or on December 3, 2011, petitioner complained of bruises on both
thighs, rashes on his neck, delayed healing of abrasion wound on his left forearm, fever, sore throat, and
loss of appetite. 13 Thus, on December 18, 2011, he was brought to the Seacare 14 Maritime Medical
Center Pte., Ltd. (Seacare Maritime) in Singapore, where he was noted to have "decreased hemoglobin,
total white cell count and platelet count on complete blood count" 15 for which reason he was declared a
"[h]igh-risk patient with mechanical heart valves." 16 Petitioner was thereafter confined at the Parkway
East Hospital's Intensive Care Unit in Singapore with the following diagnosis: "[t]o Consider Autoimmune
Disease, Hypoplastic Anemia, Viral induced Pantocytopenia and Acute Leukemia." 17 He was medically
repatriated on December 26, 2011 and was, consequently, referred to a company-designated physician
at the Metropolitan Medical Center (MMC) who diagnosed him to be suffering from "Aplastic Anemia." 18

In the Medical Report 19 dated February 10, 2012, the company-designated physician explained that the
cause of Aplastic Anemia is usually "idiopathic (unknown case)," and that the specialist opined that
"exposure to benzene and its compound derivatives may predispose to development of such condition."

210
Hence, the company-designated physician expressed that the work-relatedness of petitioner's illness
would depend on his exposure to such factors. 20 However, on September 10, 2012, the company-
designated physician informed respondents that after petitioner was seen on August 29, 2012, the latter
no longer appeared at his next scheduled follow-up session on September 3, 2012. 21

Meanwhile, claiming that his illness rendered him incapacitated to resume work as a seafarer for more
than 240 days, petitioner filed a complaint 22 dated April 16, 2013 against respondents, together with
their President, respondent A.B.F. Gaviola, and Treasurer/Director/Finance Manager, respondent Ma.
Corazon D. Cruz, for the payment of total and permanent disability benefits in accordance with the CBA,
in the amount of US$148,500.00, 23 moral and exemplary damages, and attorney's fees, before the
NLRC, docketed as NLRC NCR Case No. (M)-04-05638-13. 24 In support thereof, petitioner presented
among others, a letter 25 dated August 15, 2012 signed by Atty. German N. Pascua, Jr. (Atty. Pascua),
National Vice President and Chief Legal Counsel of the Philippine Seafarers' Union-ALU-TUCP-ITF PSU-
ITF, who pointed out that petitioner's illness is considered an occupational disease.

In their defense, respondents countered that petitioner was disqualified from claiming disability benefits
as the latter knowingly concealed and failed to disclose during his PEME that he had "mechanical heart
valves" or artificial heart valves that rendered him a "high-risk" worker, a vital information that would have
been considered in hiring him. 26

They added that the cause of his illness was not work-related, claiming that while the cars loaded in the
vessel contained gasoline which is said to have benzene elements, the cars' engines were nonetheless
always "OFF" during the voyage and turned "ON" only during the loading and unloading of the vehicles in
the vessel; as such, petitioner could not have accumulated benzene elements in his body given that the
vessel was equipped with many big exhaust fans that drive away the toxic fumes. 27 Lastly, they
contended that since petitioner concealed his true health condition, his other money claims were without
basis and thus, moved for the dismissal of the complaint. 28

The LA's Ruling

In a Decision 29 dated November 20, 2013, the Labor Arbiter (LA) dismissed the complaint for failure of
petitioner to establish that his illness was work-related. The LA ruled that it was improbable for petitioner
to be poisoned by benzene, considering that the cars' engines were turned on during loading and
unloading only, and that such short period of exposure could not have immediately caused petitioner's
illness, adding too that petitioner was provided with safety gears to prevent infusion of benzene into his
body. 30 In this regard, the LA held that the issue of concealment was immaterial since it was not relevant
to petitioner's illness. 31

Aggrieved, petitioner appealed 32 to the NLRC, docketed as NLRC LAC No. (OFW-M) 01-000041-14.

The NLRC's Ruling

In a Decision 33 dated January 30, 2014, the NLRC agreed with the findings of the LA that petitioner was
not able to discharge the burden of proving that his non-listed illness was work-related, and that the same
occurred during the term of his employment. 34 It likewise pointed out that petitioner fraudulently
concealed his artificial heart that disqualified him from claiming disability benefits under the 2010

211
Philippine Overseas Employment Administration-Standard Employment Contract (POEA-SEC) 35 and the
CBA. 36

Dissatisfied, petitioner moved for reconsideration 37 which was denied in a Resolution 38 dated February
28, 2014. Hence, the matter was elevated to the CA via a Petition for Certiorari, 39 docketed as CA-G.R.
SP No. 135118. In his petition, petitioner attached a Medical Certificate 40 dated April 8, 2014 issued by
his purported attending physician at MMC stating that he had never undergone any heart surgery and that
he has no mechanical heart valve as reflected in his chest x-ray 41 and 2D echocardiogram. 42

The CA Ruling

In a Decision 43 dated June 3, 2016, the CA found no grave abuse of discretion on the part of the NLRC
in sustaining the finding that petitioner is not entitled to disability benefits as the latter failed to prove by
substantial evidence that his illness was work-related, and that he acquired the same during the term of
his last employment contract. 44 It likewise agreed that petitioner was barred from claiming disability
benefits under Section 20 (A) of the 2010 POEA-SEC, considering his failure to disclose his artificial heart
during his PEME which constitutes misrepresentation or concealment. 45 Accordingly, the CA also
denied petitioner's claim for moral and exemplary damages, as well as attorney's fees. 46

Undaunted, petitioner moved for reconsideration 47 but the same was denied in a Resolution 48 dated
February 9, 2017; hence, this petition.

The Issue before the Court

The essential issue for the Court's resolution is whether or not the CA correctly held that petitioner is not
entitled to total and permanent disability benefits.

The Court's Ruling

The petition is meritorious.

The general rule is that only questions of law may be raised in and resolved by this Court on petitions
brought under Rule 45 of the Rules of Civil Procedure, because the Court, not being a trier of facts, is not
duty-bound to reexamine and calibrate the evidence on record. 49 Findings of fact of quasi-judicial
bodies, especially when affirmed by the CA, are generally accorded finality and respect. 50 There are,
however, recognized exceptions 51 to this general rule, such as the instant case, where the judgment is
based on a misapprehension of facts and the findings of facts are premised on the supposed absence of
evidence and contradicted by the evidence on record. 52

It is settled that the entitlement of a seafarer on overseas employment to disability benefits is governed by
law, by the parties' contracts, and by the medical findings. By law, the relevant statutory provisions are
Articles 197 to 199 53 (formerly Articles 191 to 193) of the Labor Code 54 in relation to Section 2 (a), Rule
X 55 of the Amended Rules on Employee Compensation. 56 By contract, the material contracts are the
POEA-SEC, which is deemed incorporated in every seafarer's employment contract and considered to be

212
the minimum requirements acceptable to the government, the parties' Collective Bargaining Agreement, if
any, and the employment agreement between the seafarer and employer. In this case, petitioner
executed his employment contract with respondents during the effectivity of the 2010 POEA-SEC; hence,
its provisions are applicable and should govern their relations. 57

I.

Pursuant to Section 20 (A) of the 2010 POEA-SEC, the employer is liable for disability benefits when the
seafarer suffers from a work-related injury or illness during the term of his contract. In this regard, Section
20 (E) thereof mandates the seafarer to disclose all his pre-existing illnesses or conditions in his PEME;
failing in which shall disqualify him from receiving disability compensation, viz.:

E. A seafarer who knowingly conceals a pre-existing illness or condition in the Pre-Employment Medical
Examination (PEME) shall be liable for misrepresentation and shall be disqualified from any
compensation and benefits. This is likewise a just cause for termination of employment and imposition of
appropriate administrative sanctions.

In holding that petitioner was not entitled to disability benefits, the appellate court subscribed to the
NLRC's finding of concealment, to wit:

Complainant's condition may have been brought about by his artificial heart which he failed to disclose to
the company doctor during the Pre-Employment Medical Examination (PEME). In the examination at the
Seacare Maritime Medical Center in Singapore, complainant was noted with decreased hemoglobin, total
white cell and platelet count or complete blood count. He was considered a high risk patient with
Mechanical Heart Valve. 58 (Emphasis supplied)

The Court, however, finds the foregoing conclusion anchored on pure speculation. At the outset, it bears
to point out that Section 20 (E) of the 2010 POEA-SEC speaks of an instance where an employer is
absolved from liability when a seafarer suffers a work-related injury or illness on account of the latter's
willful concealment or misrepresentation of a pre-existing condition or illness. Thus, the burden is on the
employer to prove such concealment of a pre-existing illness or condition on the part of the seafarer to be
discharged from any liability. In this regard, an illness shall be considered as pre-existing if prior to the
processing of the POEA contract, any of the following conditions is present, namely: (a) the advice of a
medical doctor on treatment was given for such continuing illness or condition; or (b) the seafarer had
been diagnosed and has knowledge of such illness or condition but failed to disclose the same during the
PEME, and such cannot be diagnosed during the PEME. 59

Records show that aside from the company-designated physician's diagnosis of Aplastic Anemia, 60 a
rare and serious condition wherein there is a reduction in the production of both red and white blood cells
from the bone marrow in humans, 61 petitioner was also declared by a foreign doctor at Seacare
Maritime in Singapore to have "mechanical heart valves." 62 While the company-designated physician
confirmed petitioner's Aplastic Anemia in the 2nd Medical Report 63 dated January 6, 2012 after having
undertaken a bone marrow aspiration biopsy, the said report failed to confirm the latter's mechanized
heart valves. In fact, there is nothing in the records to support such declaration given that mechanized
heart valves are implanted in patients with valvular heart disease. 64

213
On the contrary, the Court finds the following pieces of evidence as substantial to support a conclusion
that petitioner had no mechanical heart valves.

First, it is worthy to note that petitioner was initially hired by respondents in 2010 and re-hired anew on
June 15, 2011. Among the procedures to be undertaken during his routine PEME were chest x-ray, a
common type of exam that reveals, among others, the size and outline of a heart and blood vessels, 65
and 2D echogram, a test in which ultrasound technique is used to take excellent images of the heart,
paracardiac structures and the great vessels. 66 Therefore, if indeed petitioner was implanted with a
mechanical heart valve, it could have been easily detected by the respondents in the course thereof.

Second, Dr. Melissa Co Sia (Dr. Sia), a specialized cardiologist and petitioner's attending physician at
MMC since December 2011 until June 2012 and April 2014, certified 67 that: (a) the latter never
underwent any heart surgery; (b) his heart was in good condition; and (c) he did not have mechanical
heart valves as evidenced by his x-ray 68 record in 2014 and 2D echocardiogram. 69 This declaration by
Dr. Sia, although presented only before the CA, was not controverted by respondents. In fact, records
show that petitioner, in his reply to respondents' position paper and reiterated in his motion for
reconsideration before the NLRC, had already offered to submit himself for examination by an
independent doctor to disprove respondents' claim, 70 which the latter did not heed. Evidently,
respondents' claim of concealment based on a bare declaration from a doctor in Singapore without any
supporting document cannot stand.

Perforce, it was grave error on the part of the CA to sustain the finding of concealment on the part of
petitioner absent substantial evidence to support the foregoing claim.

II.

Section 20 (A) of the 2010 POEA-SEC provides that a seafarer shall be entitled to compensation if he
suffers from a work-related injury or illness during the term of his contract. A work-related illness is
defined as "any sickness as a result of an occupational disease listed under Section 32-A of this Contract
with the conditions therein satisfied." 71

In this case, petitioner was medically repatriated and diagnosed by the company-designated physician to
be suffering from "Aplastic Anemia." In denying petitioner's disability claims, respondents argued that his
illness was not a listed disease under Section 32-A of the 2010 POEA-SEC, adding too that the former
was not able to present substantial evidence to prove the work-relation of the illness.

Contrary to the claim of respondents, petitioner's illness is an occupational disease listed under Sub-Item
Number 7 of Section 32-A of the 2010 POEA-SEC, which provides:

7. Ionizing radiation disease, inflammation, ulceration or malignant disease of the skin or subcutaneous
tissues of the bones or leukemia, or anemia of the aplastic type due to x-rays, ionizing particle, radium or
other radioactive substances

a. Acute radiation syndrome

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b. Chronic radiation syndrome

c. Glass Blower's cataract (Emphasis supplied)

To be considered as work-related, Aplastic Anemia should be contracted under the condition that there
should be exposure to x-rays, ionizing particles of radium or other radioactive substances or other forms
of radiant energy. As pointed out by the company-designated physician, "exposure to benzene and its
compound derivatives may predispose to development of such condition," and that work-relatedness will
depend on exposure to any of the above-mentioned factors. 72 In finding that petitioner's illness was not
work-related, the CA ruled in this wise:

Petitioner likewise failed to specify the nature of his work, the working conditions, the risks attendant to
the nature of his work with which he was allegedly exposed to, as well as how and to what degree the
nature of his work caused or contributed to his alleged medical condition. In the absence of substantial
evidence, We cannot just presume that petitioner's job caused his illness or that it aggravated any pre-
existing condition he might have had. 73

However, as borne out by the records, it was not disputed that petitioner, as Chief Officer of M.V. Morning
Carina, actively supervised the loading and unloading operations of cars/motor vehicles in every voyage
that constantly exposed him to an atmosphere of cargoes with nearly 6,000 cars in just one voyage alone.
Benzene, an important component of gasoline, 74 is emitted from the engines of these cars in the course
of their loading and unloading. Since studies show that Benzene is highly volatile, and exposure occurs
mostly through inhalation, 75 it cannot be denied that petitioner was constantly exposed to the hazards of
benzene in the course of his employment. The use of safety gears in the performance of his duties, as
advanced by respondents, 76 did not foreclose the possibility of petitioner's exposure to such harmful
chemical, given that he was in fact diagnosed with Aplastic Anemia brought about by chronic exposure to
benzene. Under the foregoing circumstances, it is evident that petitioner's illness is clearly work-related in
accordance with the POEA-SEC.

In fine, having sufficiently established by substantial evidence the reasonable link between the nature of
petitioner's work as Chief Officer and the illness contracted during his last employment with no showing
that he was notoriously negligent in the exercise of his functions, the latter's ailment, as well as the
resulting disability, is a compensable work-related illness under Section 32-A 77 of the 2010 POEA-SEC.

III.

Section 20 (A) of the 2010 POEA-SEC lays down the procedure to be followed in assessing the seafarer's
disability in addition to specifying the employer's liabilities on account of such injury or illness, to wit:

SEC. 20. COMPENSATION AND BENEFITS. —

A. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS

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The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of
his contract are as follows:

xxx xxx xxx

2. x x x However, if after repatriation, the seafarer still requires medical attention arising from said injury or
illness, he shall be so provided at cost to the employer until such time he is declared fit or the degree of
his disability has been established by the company-designated physician.

3. In addition to the above obligation of the employer to provide medical attention, the seafarer shall also
receive sickness allowance from his employer in an amount equivalent to his basic wage computed from
the time he signed off until he is declared fit to work or the degree of disability has been assessed by the
company-designated physician. The period within which the seafarer shall be entitled to his sickness
allowance shall not exceed 120 days. Payment of the sickness allowance shall be made on a regular
basis, but not less than once a month.

xxx xxx xxx

For this purpose, the seafarer shall submit himself to a post-employment medical examination by a
company-designated physician within three working days upon his return except when he is physically
incapacitated to do so, in which case, a written notice to the agency within the same period is deemed as
compliance. In the course of the treatment, the seafarer shall also report regularly to the company-
designated physician specifically on the dates as prescribed by the company-designated physician and
agreed to by the seafarer. Failure of the seafarer to comply with the mandatory reporting requirement
shall result in his forfeiture of the right to claim the above benefits.

If a doctor appointed by the seafarer disagrees with the assessment, a third doctor may be agreed jointly
between the Employer and the seafarer. The third doctor's decision shall be final and binding on both
parties.

xxx xxx xxx

When a seafarer suffers a work-related injury or illness in the course of employment, the latter's fitness or
degree of disability shall be determined by the company-designated physician who is expected to arrive
at a definite assessment within a period of 120 days from repatriation. 78 If the 120 days initial period is
exceeded and no definitive declaration is made because the seafarer requires further medical attention,
then the temporary total disability period may be extended up to a maximum of 240 days, subject to the
right of the employer to declare within this period that a permanent partial or total disability already exists.
79 Should the company-designated physician fail in this respect and the seafarer's medical condition
remain unresolved, the seafarer shall be conclusively presumed totally and permanently disabled. 80

In this case, records reveal that from the time petitioner was repatriated on December 26, 2011, a total of
247 days had lapsed when he last consulted with the company-designated physician on August 29, 2012.
Concededly, said period have already exceeded the maximum 240-day extension as explained by this
Court in a long line of cases, 81 without any definitive assessment of petitioner's disability. Hence,
petitioner is conclusively presumed totally and permanently disabled.

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However, petitioner is entitled to the payment of total and permanent disability benefits under the 2010
POEA-SEC and not under the CBA as he claimed, considering the lack of proof that he met an accident
82 and was injured while on board the vessel, or while traveling to or from the same. Thus, petitioner is
entitled to US$60,000.00, which is the amount due for permanent total disability under Section 32 of the
2010 POEA-SEC.

The Court likewise finds petitioner entitled to attorney's fees in accordance with Article 2208 of the New
Civil Code which grants the same in actions for indemnity under the workmen's compensation and
employer's liability laws. 83 It is also recoverable when the defendant's act or omission has compelled the
plaintiff to incur expenses to protect his interest, as in this case. Case law states that "[w]here an
employee is forced to litigate and incur expenses to protect his right and interest, he is entitled to an
award of attorney's fees equivalent to [ten percent] (10%) of the award." 84

On the other hand, the Court finds no basis to award petitioner's claim for moral and exemplary damages
absent a showing of ill-motive on the part of respondents in denying petitioner's claim.

WHEREFORE, the petition is GRANTED. The Decision dated June 3, 2016 and the Resolution dated
February 9, 2017 of the Court of Appeals in CA-G.R. SP No. 135118 are hereby REVERSED and SET
ASIDE. A new judgment is rendered ORDERING respondents Fleet Management Services Philippines,
Inc., Modern Asia Shipping Corporation, A.B.F. Gaviola, Jr., and Ma. Corazon Cruz to jointly and
severally pay petitioner Melchor Barcenas Deocariza the amount of US$60,000.00 or its equivalent
amount in Philippine currency at the time of payment, representing total and permanent disability benefits
in accordance with the 2010 Philippine Overseas Employment Administration-Standard Employment
Contract, as well as ten percent (10%) thereof, as attorney's fees.

SO ORDERED.

||| (Deocariza v. Fleet Management Services Philippines, Inc., G.R. No. 229955, [July 23, 2018])

217
SECOND DIVISION

[G.R. No. 232950. August 13, 2018.]

KENNETH SANTOS y ITALIG, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated August 30, 2016 and
Resolution 3 dated July 10, 2017 rendered by the Court of Appeals (CA) in CA-G.R. CR No. 37743
affirming with modification the Decision 4 dated June 10, 2015 of the Regional Trial Court of Caloocan
City, Branch 127 (RTC) in Crim. Case No. 88635 finding petitioner Kenneth Santos y Italig (petitioner)
guilty beyond reasonable doubt of violation of Section 11, Article II of Republic Act (RA) No. 9165 5 and
sentencing him to suffer the indeterminate penalty of twelve (12) years and one (1) day, as minimum, to
fourteen (14) years and eight (8) months, as maximum, and to pay a fine of P300,000.00.

The Facts

This case stemmed from an Information 6 dated September 13, 2012 charging petitioner with violation of
Section 11, Article II of RA 9165, to wit:

That on or about the 11th day of September, 2012 in Caloocan City, Metro Manila and within the
jurisdiction of this Honorable Court, the above-named accused, without authority of law, did then and
there willfully, unlawfully and feloniously have in his possession, custody and control [t]hirteen (13) heat-
sealed transparent plastic sachets each containing MARIJUANA leaves and fruiting tops weighing 0.39
gram, 0.36 gram, 0.34 gram, 0.35 gram, 0.34 gram, 0.39 gram, 0.37 gram, 0.38 gram, 0.37 gram, 0.39
gram, 0.38 gram, 0.38 gram & 1.24 gram, which when subjected for laboratory examination gave
POSITIVE result to the tests for Marijuana, a dangerous drug, in gross violation of the above-cited law[.]

Contrary to law. 7

The prosecution alleges that on September 11, 2012, at around 5:30 in the afternoon, the team of police
officers led by one Police Chief Inspector Mendoza and consisting of Police Officer (PO) 3 Jeffred Pacis
(PO3 Pacis), Senior Police Officer (SPO) 1 John Bombase (SPO1 Bombase), a certain PO3 Ablaza, and
PO2 Joel Rosales (PO2 Rosales) conducted a routine patrol along Libis Talisay, Barangay 12, Caloocan
City. Thereafter, PO3 Pacis and SPO1 Bombase rested for a while in front of a store. 8

While there, at a distance of about five (5) meters, PO3 Pacis noticed petitioner, standing at a street
corner and removing something from his pocket. PO3 Pacis saw that it was a plastic sachet, prompting
him to alert SPO1 Bombase. Discreetly, they approached petitioner to further scrutinize what he was
holding in his hands. At a distance of an arm's length, PO3 Pacis saw that petitioner was holding a plastic

218
sachet containing marijuana. When PO3 Pacis and SPO1 Bombase introduced themselves as police
officers, petitioner attempted to run. However, PO3 Pacis was able to immediately grab petitioner's hands
and recover the plastic sachet from him. 9

Thereafter, SPO1 Bombase apprised petitioner of his rights, while PO3 Pacis conducted a search on the
body of petitioner. The search yielded another twelve (12) plastic sachets of marijuana from petitioner's
pocket. PO3 Pacis marked the seized plastic sachets with "KSI/JP-1" to "KSI/JP-14" and the date 09-11-
12; after which, they returned to the Station Anti-Illegal Drugs, Samson Road, Caloocan City, and turned
over the confiscated plastic sachets and the person of petitioner to the investigator. Subsequently,
petitioner and the confiscated sachets were brought to the crime laboratory for examination. While
petitioner tested negative 10 for drug use, the specimens found in the plastic sachets tested positive 11
for marijuana, a dangerous drug. 12

For his defense, petitioner claimed that on September 11, 2012, between 5:00 to 6:00 o'clock in the
afternoon, he was watching a basketball game at Orcania Street, Caloocan City when five (5) men
approached him and invited him to the police station. When he asked what his violation was, they merely
told him to go with them. He was first brought to the Diosdado Macapagal Medical Center (now Caloocan
City Medical Center) where he was examined and thereafter, to the police station where he was frisked
and the police recovered his cellphone and wallet. Subsequently, two (2) persons, who introduced
themselves as "Tanod" and "Ex-O," arrived and claimed to be the victims of a robbery-snatching incident.
However, they denied that petitioner was the perpetrator thereof. After they left, the police asked
petitioner for P10,000.00; otherwise, they would file a criminal case against him. When petitioner replied
that he had no money, they showed him an ice bag containing dried marijuana leaves, which they
threatened to use as evidence against him. The following day, he was subjected to inquest proceedings.
13

The RTC Ruling

In a Decision 14 dated June 10, 2015, the RTC found petitioner guilty beyond reasonable doubt of
violation of Section 11, Article II of RA 9165, and accordingly, sentenced him to suffer the indeterminate
penalty of twelve (12) years and one (1) day, as minimum, to seventeen (17) years and eight (8) months,
as maximum, and to pay a fine of P300,000.00. 15

In convicting petitioner, the RTC found that the prosecution was able to prove all the elements of the
offense charged, to wit: (1) petitioner was in possession of dried leaves of marijuana, a dangerous drug,
after a valid warrantless arrest by PO3 Pacis; (2) petitioner was not authorized by law to possess said
marijuana; and (3) petitioner freely and consciously possessed the same. 16 Moreover, the prosecution
was able to establish the identity of the seized drugs in accordance with the requirements of Section 21,
Article II of RA 9165 notwithstanding the absence of a representative from the media and the Department
of Justice (DOJ), or an elected public official during the inventory of the seized items. As the integrity and
evidentiary value thereof were preserved by the arresting officers, the RTC ruled that the chain of custody
of the seized items had been satisfactorily established. 17 In contrast, it rejected petitioner's defenses of
denial and alibi, as the latter failed to prove the same with convincing evidence. 18

Aggrieved, petitioner appealed 19 his conviction to the CA. CAIHTE

The CA Ruling

219
In a Decision 20 dated August 30, 2016, the CA affirmed petitioner's conviction with the modification
decreasing the maximum penalty to fourteen (14) years and eight (8) months.

Concurring with the RTC, the CA found that petitioner knowingly possessed and had under his control
marijuana without legal authority to do so, and that he was arrested in flagrante delicto, which is justified
under Section 5 (a), Rule 113 of the Rules of Court. Furthermore, the CA held that there was substantial
compliance with the procedure set forth under Section 21, Article II of RA 9165 regarding the custody and
handling of the seized items, considering that the integrity and evidentiary value thereof had been
preserved by the apprehending officers. On this score, the CA posited that the links in the chain of
custody of the seized items were all established by the prosecution. 21

However, considering that petitioner had in his possession a total of 5.68 grams of marijuana, the CA
ruled that the maximum term of imprisonment in this case should be fourteen (14) years and eight (8)
months, in accordance with the ruling in People v. Simon. 22

Petitioner moved for reconsideration, 23 but was denied in a Resolution 24 dated July 10, 2017; hence,
this petition.

The Issue before the Court

The issue for the Court's resolution is whether or not the CA erred in affirming petitioner's conviction for
violation of Section 11, Article II of RA 9165.

In his petition, petitioner insists that his conviction was erroneous considering the illegality of his
warrantless arrest, the non-compliance with the requirements of Section 21 of RA 9165, as well as its
Implementing Rules and Regulations (IRR), and the broken chain of custody of the allegedly confiscated
plastic sachets containing marijuana. On the other hand, the Office of the Solicitor General, on behalf of
respondent People of the Philippines, maintains that his in flagrante delicto arrest was valid, that there
was substantial compliance with Section 21 of RA 9165 and its IRR, and that the prosecution had
established the unbroken chain of custody of the seized items.

The Court's Ruling

The appeal is partly meritorious.

At the outset, it must be emphasized that an appeal in criminal cases leaves the whole case open for
review, and the appellate court has the duty to correct, cite, and appreciate errors in the appealed
judgment, whether or not assigned or unassigned. 25 The appeal confers the appellate court full
jurisdiction over the case and renders such court competent to examine records, revise the judgment
appealed from, increase the penalty, and cite the proper provision of the penal law. 26

A lawful arrest without a warrant may be made by a peace officer or a private individual under the
circumstances set forth in Section 5, Rule 113 of the Rules of Court, viz.:

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Section 5. Arrest without Warrant; When Lawful. — A peace officer or a private person may, without a
warrant, arrest a person:

(a) When, in his presence, the person to be arrested has committed, is actually committing, or is
attempting to commit an offense;

(b) When an offense has just been committed and he has probable cause to believe based on personal
knowledge of facts or circumstances that the person to be arrested has committed it; and

(c) When the person to be arrested is a prisoner who has escaped from a penal establishment or place
where he is serving final judgment or is temporarily confined while his case is pending, or has escaped
while being transferred from one confinement to another. aScITE

Section 5 (a) above-cited speaks of an in flagrante delicto arrest, where the concurrence of two (2)
elements is necessary, to wit: (1) the person to be arrested must execute an overt act indicating that he
has just committed, is actually committing, or is attempting to commit a crime; and (2) such overt act is
done in the presence or within the view of the arresting officer. 27 Non-confluence of these elements
renders an in flagrante delicto arrest constitutionally infirm.

In this case, records show that petitioner was actually committing a crime when he was arrested. A
cursory examination of the testimony given by PO3 Pacis before the RTC will show that at the time of his
arrest, petitioner had in his possession a plastic sachet containing marijuana, to wit:

PROS. GALLO —

And you said that you saw this male person in red shirt, what was he doing at that time?

PO3 PACIS —

He was standing at the corner street and then he drew out something from his right pocket, Ma'am.

Q — So what now if he draw out something from his pocket?

A — Then I take a look at him and I saw him examining a plastic sachet, Ma'am.

COURT —

This person that you saw, was he walking or sitting?

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A — He was standing at the corner, your Honor.

PROS. GALLO —

Was there anybody near him at that time?

A — None, ma'am.

Q — And you said that you were at the distance of five (5) meters, were you able to see the contents of
that plastic sachet?

A — Not yet, Ma'am.

Q — So what now?

A — I informed SPO1 Bombase about what I saw and then we discreetly approached that male person,
Ma'am.

Q — What was the reason why you have to approach that person?

A — Because I want to know what he was looking at on his hands, Ma'am.

Q — So what did you see?

A — When I approached him I saw a plastic sachet of marijuana from his hands, Ma'am.

Q — How far were you already from that person when you saw the plastic sachet of marijuana?

A — About a tapping distance, Ma'am.

Q — You want to tell the Honorable Court that at that tapping distance the person did not notice you?

A — Yes, Ma'am.

Q — Why?

222
A — Because he was busy looking at the plastic sachet, Ma'am.

xxx xxx xxx 28 (Emphases and underscoring supplied)

Records reveal that when PO3 Pacis and SPO1 Bombase approached petitioner, they were not effecting
a warrantless arrest just yet; hence, there was no intrusion into the person of petitioner. Their purpose
was merely to investigate into what appeared to be suspicious actuations of the latter. It was only upon
closer scrutiny that they were able to discern exactly what the plastic sachet contained; hence, the
warrantless arrest that they effected immediately thereafter is clearly justified under Section 5 (a) above-
quoted, it having been established that petitioner was actually committing a crime, i.e., having in his
possession marijuana, a dangerous drug, without legal authority to do so, in the presence of the arresting
officers, and which personal knowledge they obtained in the performance of their investigative duties as
police officers.

Notwithstanding the validity of petitioner's warrantless arrest, however, the Court is wont to acquit him on
the basis of the non-observance of the stringent requirements under the IRR of RA 9165, 29 Section 21
of which partly states:

Section 21. Custody and Disposition of Confiscated, Seized and/or Surrendered Dangerous Drugs, Plant
Sources of Dangerous Drugs, Controlled Precursors and Essential Chemicals, Instruments/Paraphernalia
and/or Laboratory Equipment. — The PDEA shall take charge and have custody of all dangerous drugs,
plant sources of dangerous drugs, controlled precursors and essential chemicals, as well as
instruments/paraphernalia and/or laboratory equipment so confiscated, seized and/or surrendered, for
proper disposition in the following manner:

(a) The apprehending officer/team having initial custody and control of the drugs shall, immediately after
seizure and confiscation, physically inventory and photograph the same in the presence of the accused or
the person/s from whom such items were confiscated and/or seized, or his/her representative or counsel,
a representative from the media and the Department of Justice (DOJ), and any elected public official who
shall be required to sign the copies of the inventory and be given a copy thereof: Provided, that the
physical inventory and photograph shall be conducted at the place where the search warrant is served; or
at the nearest police station or at the nearest office of the apprehending officer/team, whichever is
practicable, in case of warrantless seizures; Provided, further, that non-compliance with these
requirements under justifiable grounds, as long as the integrity and the evidentiary value of the seized
items are properly preserved by the apprehending officer/team, shall not render void and invalid such
seizures of and custody over said items;

xxx xxx xxx (Emphases and underscoring supplied)

As a general rule, the apprehending team must strictly comply with the foregoing procedure. However,
failure to do so will not ipso facto render the seizure and custody over the items as void and invalid
provided: (a) there is justifiable ground for non-compliance; and (b) the integrity and evidentiary value of
the seized items are properly preserved. 30 For the saving clause to apply, it is important that the
prosecution should explain the reasons behind the procedural lapses and that the integrity and value of
the seized evidence had been preserved. 31 Further, the justifiable ground for non-compliance must be
proven as a fact, as the Court cannot presume what these grounds are or that they even exist. 32
Notably, these rules have been effectively set into law with the passage of RA 10640.

223
As the records disclose, there were unjustified deviations committed by the police officers in the handling
of the confiscated items after petitioner's arrest in breach of the chain of custody procedure as discussed
above. First, while it is true that a physical inventory 33 of the seized items was prepared by the
investigating officer, SPO3 Fernando Moran (SPO3 Moran), no photographs thereof were taken. Second,
although it appears that the physical inventory had been prepared in the presence of petitioner who
merely refused to sign, 34 it was not shown that a representative from the media and the Department of
Justice (DOJ), as well as an elected public official had been present during the inventory. If any of them
had been present, they should have signed the physical inventory itself and been given a copy thereof.

The mere marking of the seized drugs, unsupported by a physical inventory and taking of photographs,
and in the absence of the necessary personalities under the law, as in this case, fails to approximate
compliance with the mandatory procedure under Section 21 of RA 9165. 35 In People v. Mendoza, 36 the
Court stressed that "[w]ithout the insulating presence of the representative from the media or the [DOJ],
or any elected public official during the seizure and marking of the [seized drugs], the evils of switching,
'planting' or contamination of the evidence that had tainted the buy-busts conducted under the regime of
[RA] 6425 (Dangerous Drugs Act of 1972) again reared their ugly heads as to negate the integrity and
credibility of the seizure and confiscation of the [said drugs] that were evidence herein of the corpus
delicti, and thus adversely affected the trustworthiness of the incrimination of the accused. Indeed, the x x
x presence of such witnesses would have preserved an unbroken chain of custody." 37

To make matters worse, no practicable reasons were given by the arresting officers, such as a threat to
their safety and security or the time and distance which the other witnesses might need to consider, 38 for
such non-compliance. It is well-settled that the procedure in Section 21 of RA 9165 is a matter of
substantive law, and cannot be brushed aside as a simple procedural technicality. Therefore, it must be
shown that earnest efforts were exerted by the police officers involved to comply with the mandated
procedure so as to convince the Court that the failure to comply was reasonable under the given
circumstances. 39 Evidently, such is not the case here, thereby leading to no other conclusion than that
there was an unjustified breach of procedure rendering the integrity and evidentiary value of the corpus
delicti in this case highly suspect. Consequently, petitioner's acquittal is in order.

As a final note, the Court finds it fitting to echo its recurring pronouncement in recent jurisprudence on the
subject matter:

The Court strongly supports the campaign of the government against drug addiction and commends the
efforts of our law enforcement officers against those who would inflict this malediction upon our people,
especially the susceptible youth. But as demanding as this campaign may be, it cannot be more so than
the compulsions of the Bill of Rights for the protection of liberty of every individual in the realm, including
the basest of criminals. The Constitution covers with the mantle of its protection the innocent and the
guilty alike against any manner of high-handedness from the authorities, however praiseworthy their
intentions.

Those who are supposed to enforce the law are not justified in disregarding the right of the individual in
the name of order. [For indeed,] [o]rder is too high a price for the loss of liberty. x x x. 40

"In this light, prosecutors are strongly reminded that they have the positive duty to prove compliance with
the procedure set forth in Section 21, Article II of RA 9165, as amended. As such, they must have the
initiative to not only acknowledge but also justify any perceived deviations from the said procedure during
the proceedings before the trial court. Since compliance with this procedure is determinative of the

224
integrity and evidentiary value of the corpus delicti and ultimately, the fate of the liberty of the accused,
the fact that any issue regarding the same was not raised, or even threshed out in the court/s below,
would not preclude the appellate court, including this Court, from fully examining the records of the case if
only to ascertain whether the procedure had been completely complied with, and if not, whether justifiable
reasons exist to excuse any deviation. If no such reasons exist, then it is the appellate court's bounden
duty to acquit the accused, and perforce, overturn a conviction." 41

WHEREFORE, the appeal is GRANTED. The Decision dated August 30, 2016 and the Resolution dated
July 10, 2017 of the Court of Appeals in CA-G.R. CR No. 37743 are hereby REVERSED and SET ASIDE.
Accordingly, petitioner Kenneth Santos y Italig is ACQUITTED of the crime charged. The Director of the
Bureau of Corrections is ordered to cause his immediate release, unless he is being lawfully held in
custody for any other reason. HEITAD

SO ORDERED.

||| (Santos y Italig v. People, G.R. No. 232950, [August 13, 2018])

225
[G.R. No. 232154. August 20, 2018.]

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. BENJAMIN FERIOL y PEREZ, accused-appellant.

DECISION

PERLAS-BERNABE, J p:

Before this Court is an ordinary appeal 1 filed by accused-appellant Benjamin Feriol y Perez (Feriol)
assailing the Decision 2 dated June 14, 2016 of the Court of Appeals (CA) in CA-G.R. CR-H.C. No.
07201, which affirmed the Decision 3 dated November 27, 2014 of the Regional Trial Court of Makati
City, Branch 65 (RTC) in Criminal Case No. 14-104 finding him guilty beyond reasonable doubt of
violating Section 5, Article II of Republic Act No. (RA) 9165, 4 otherwise known as the "Comprehensive
Dangerous Drugs Act of 2002."

The Facts

This case stemmed from an Information 5 filed before the RTC, charging Feriol with the crime of Illegal
Sale of Dangerous Drugs, the accusatory portion of which states:

On the 28th day of January 2014, in the City of Makati, the Philippines, accused, without the necessary
license or prescription and without being authorized by law, did then and there willfully, unlawfully and
feloniously sell, deliver, and distribute a total of zero point twenty three (0.23) gram of white crystalline
substance containing methamphetamine hydrochloride, a dangerous drug, in consideration of P500.

CONTRARY TO LAW. 6 EcTCAD

The prosecution alleged that at around four (4) o'clock in the afternoon of January 28, 2014, the Makati
City Police received an information from a confidential informant (CI) that a certain "Allan," who was later
on identified as Feriol, was engaged in illegal drug activities along Sampaloc Street, Barangay Cembo,
Makati City. Acting on the information, a buy-bust team was organized with Makati Anti-Drug Abuse
Council Operative Delno A. Encarnacion (MADAC Encarnacion) as the designated poseur-buyer and
Police Officer 1 Mark Anthony L. Angulo (PO1 Angulo) as the immediate back-up. Subsequently, the
team, together with the CI, proceeded to the target area where the latter introduced MADAC Encarnacion
to Feriol as buyer of shabu. MADAC Encarnacion handed over the marked money in the amount of
P500.00 to Feriol who, in turn, gave him a small plastic sachet containing white crystalline substance.
MADAC Encarnacion then executed the pre-arranged signal, causing PO1 Angulo to rush and assist him
in arresting Feriol. The buy-bust team conducted a body search upon Feriol and recovered from the
latter's left pocket the marked money. Due to security reasons, the buy-bust team brought Feriol and the
seized items to the barangay hall, where the required inventory and photography were conducted in the
presence of Feriol and Barangay Kagawad Roderick P. Bien (Kagawad Bien). Afterwards, Feriol and the
seized items were turned over to the investigator on duty, Senior Police Officer 1 Ramon D. Esperanzate,
who then prepared the letter request for laboratory examination. Shortly after, the said letter request and
the plastic sachet were given to MADAC Encarnacion, who delivered the same to the crime laboratory for
examination, during which the substance recovered from Feriol tested positive for the presence
methamphetamine hydrochloride, a dangerous drug. 7

226
In his defense, Feriol denied the accusations against him, claiming that at around four (4) o'clock in the
afternoon of January 28, 2014, he was taking a bath inside his house when he heard a number of
individuals shouting his name. He averred that upon opening the door of the bathroom, someone
suddenly poked a gun at him and asked for his ID. Thereafter, he was handcuffed and brought to the
barangay hall where all the pieces of evidence were shown to him. 8

The RTC Ruling

In a Decision 9 dated November 27, 2014, the RTC found Feriol guilty beyond reasonable doubt of
violating Section 5, Article II of RA 9165, and accordingly, sentenced him to suffer the penalty of life
imprisonment and to pay a fine in the amount of P500,000.00. 10 It ruled that the prosecution adequately
proved all the elements of the crime of Illegal Sale of Dangerous Drugs. Moreover, it established an
unbroken chain of custody over the seized dangerous drug, as it was shown that: (a) MADAC
Encarnacion purchased from Feriol a sachet containing a white crystalline substance which he marked
with "Allan"; (b) after conducting the inventory and photography, MADAC Encarnacion delivered the
seized drug to the crime laboratory; (c) upon delivery, the said drug was received and examined by the
forensic chemist, who confirmed that it was shabu; and (d) the said drug was officially brought to the court
and presented as evidence. 11 HSAcaE

In addition, the RTC observed that the apprehending officers' failure to secure the representatives from
the Department of Justice (DOJ) and the media during the conduct of inventory was not fatal — and thus
did not render Feriol's arrest void and the evidence obtained from him inadmissible — as it was proved
that the integrity and the evidentiary value of the seized items were duly preserved. 12

Aggrieved, Feriol appealed 13 to the CA.

The CA Ruling

In a Decision 14 dated June 14, 2016, the CA affirmed in toto the ruling of the RTC. 15 It found no
showing that the chain of custody had been broken from the moment the dangerous drug was seized by
the apprehending officers until such time that it was introduced in evidence. Furthermore, it declared that
Feriol had the burden of proving that the confiscated item had been tampered with, as the integrity of the
evidence is presumed to have been preserved absent any showing of bad faith or ill will on the part of the
apprehending officers. Feriol, however, failed to discharge such burden in this case. 16

Hence, the instant appeal.

The Issue before the Court

The issue for the Court's resolution is whether or not the CA correctly upheld Feriol's conviction for the
crime charged.

The Court's Ruling

227
The appeal is meritorious.

At the outset, it must be stressed that an appeal in criminal cases opens the entire case for review and,
thus, it is the duty of the reviewing tribunal to correct, cite, and appreciate errors in the appealed judgment
whether they are assigned or unassigned. 17 "The appeal confers the appellate court full jurisdiction over
the case and renders such court competent to examine records, revise the judgment appealed from,
increase the penalty, and cite the proper provision of the penal law." 18 HESIcT

In this case, Feriol was charged with the crime of Illegal Sale of Dangerous Drugs, defined and penalized
under Section 5, Article II of RA 9165. In order to properly secure the conviction of an accused charged
with Illegal Sale of Dangerous Drugs, the following elements must be proven with moral certainty: (a) the
identity of the buyer and the seller, the object, and the consideration; and (b) the delivery of the thing sold
and the payment. 19 Case law instructs that it is essential that the identity of the dangerous drug be
established with moral certainty, considering that the dangerous drug itself forms an integral part of the
corpus delicti of the crime. The prosecution has to show an unbroken chain of custody over the
dangerous drugs so as to obviate any unnecessary doubts on their identity on account of switching,
"planting," or contamination of evidence. Accordingly, the prosecution must be able to account for each
link of the chain from the moment that the drugs are seized up to their presentation in court as evidence
of the crime. 20

Section 21, Article II of RA 9165 outlines the procedure which the apprehending officers must follow when
handling the seized drugs in order to preserve their integrity and evidentiary value. 21 Under the said
section, prior to its amendment by RA 10640, 22 the apprehending team shall, among others,
immediately after seizure and confiscation conduct a physical inventory and photograph the seized items
in the presence of the accused or the person from whom the items were seized, or his representative or
counsel, a representative from the media and the DOJ, and any elected public official who shall be
required to sign the copies of the inventory and be given a copy of the same, and the seized drugs must
be turned over to the Philippine National Police Crime Laboratory within twenty-four (24) hours from
confiscation for examination. 23 In the case of People v. Mendoza, 24 the Court stressed that "[w]ithout
the insulating presence of the representative from the media or the [DOJ], or any elected public official
during the seizure and marking of the [seized drugs], the evils of switching, 'planting' or contamination of
the evidence that had tainted the buy-busts conducted under the regime of [RA] 6425 (Dangerous Drugs
Act of 1972) again reared their ugly heads as to negate the integrity and credibility of the seizure and
confiscation of the [said drugs] that were evidence herein of the corpus delicti, and thus adversely
affected the trustworthiness of the incrimination of the accused. Indeed, the x x x presence of such
witnesses would have preserved an unbroken chain of custody." 25 caITAC

The Court, however, clarified that under varied field conditions, strict compliance with the requirements of
Section 21 of RA 9165 may not always be possible. 26 In fact, the Implementing Rules and Regulations
(IRR) of RA 9165 — which is now crystallized into statutory law with the passage of RA 10640 27 —
provide that the said inventory and photography may be conducted at the nearest police station or office
of the apprehending team in instances of warrantless seizure, and that non-compliance with the
requirements of Section 21 of RA 9165 — under justifiable grounds — will not render void and invalid the
seizure and custody over the seized items so long as the integrity and evidentiary value of the seized
items are properly preserved by the apprehending officer or team. 28 Tersely put, the failure of the
apprehending team to strictly comply with the procedure laid out in Section 21 of RA 9165 and its IRR
does not ipso facto render the seizure and custody over the items as void and invalid, provided that the
prosecution satisfactorily proves that: (a) there is justifiable ground for non-compliance; and (b) the
integrity and evidentiary value of the seized items are properly preserved. 29 In People v. Almorfe, 30 the
Court explained that for the above-saving clause to apply, the prosecution must explain the reasons
behind the procedural lapses, and that the integrity and evidentiary value of the seized evidence had
nonetheless been preserved. 31 Also, in People v. De Guzman, 32 it was emphasized that the justifiable

228
ground for non-compliance must be proven as a fact, because the Court cannot presume what these
grounds are or that they even exist. 33

After a judicious study of the case, the Court finds that the apprehending officers committed unjustified
deviations from the prescribed chain of custody rule, thereby putting into question the integrity and
evidentiary value of the dangerous drug allegedly seized from Feriol.

In this case, while the inventory 34 and the photography of the seized items were made in the presence
of Feriol and an elected public official, the records do not show that the said inventory and photography
were done before any representative from the DOJ and the media. The apprehending officers did not
bother to acknowledge or explain such lapse, as the records even fail to disclose that there was an
attempt to contact or secure these witnesses' presence.

In the recent case of People v. Miranda, 35 the Court held that "the procedure in Section 21[, Article II] of
RA 9165 is a matter of substantive law, and cannot be brushed aside as a simple procedural technicality;
or worse, ignored as an impediment to the conviction of illegal drug suspects. Therefore, as the
requirements are clearly set forth in the law, then the State retains the positive duty to account for any
lapses in the chain of custody of the drugs/items seized from the accused, regardless of whether or not
the defense raises the same in the proceedings a quo; otherwise, it risks the possibility of having a
conviction overturned on grounds that go into the evidence's integrity and evidentiary value, albeit the
same are raised only for the first time on appeal, or even not raised, become apparent upon further
review." 36 ICHDca

In the same vein, the Court, in recent drug cases, has exhorted:

[P]rosecutors are strongly reminded that they have the positive duty to prove compliance with the
procedure set forth in Section 21[, Article II] of RA 9165, as amended. As such, they must have the
initiative to not only acknowledge but also justify any perceived deviations from the said procedure during
the proceedings before the trial court. Since compliance with this procedure is determinative of the
integrity and evidentiary value of the corpus delicti and ultimately, the fate of the liberty of the accused,
the fact that any issue regarding the same was not raised, or even threshed out in the court/s below,
would not preclude the appellate court, including this Court, from fully examining the records of the case if
only to ascertain whether the procedure had been completely complied with, and if not, whether justifiable
reasons exist to excuse any deviation. If no such reasons exist, then it is the appellate court's bounden
duty to acquit the accused and, perforce, overturn a conviction. 37

Thus, in view of the prosecution's failure to provide justifiable grounds which would excuse their
transgression in this case, the Court is constrained to conclude that the integrity and evidentiary value of
the item purportedly seized from Feriol have been compromised, thereby militating against a finding of
guilt beyond reasonable doubt. As such, Feriol's acquittal is in order. 38

WHEREFORE, the appeal is GRANTED. The Decision dated June 14, 2016 of the Court of Appeals in
CA-G.R. CR-H.C. No. 07201 is hereby REVERSED and SET ASIDE. Accordingly, accused-appellant
Benjamin Feriol y Perez is ACQUITTED of the crime charged. The Director of the Bureau of Corrections
is ordered to cause his immediate release, unless he is being lawfully held in custody for any other
reason. TCAScE

SO ORDERED.

||| (People v. Feriol y Perez, G.R. No. 232154, [August 20, 2018])

229
[G.R. No. 226013. July 2, 2018.]

LUZVIMINDA DELA CRUZ MORISONO, petitioner, vs. RYOJI * MORISONO and LOCAL CIVIL
REGISTRAR OF QUEZON CITY, respondents.

DECISION

PERLAS-BERNABE, J p:

This is a direct recourse to the Court from the Regional Trial Court of Quezon City, Branch 105 (RTC),
through a petition for review on certiorari 1 assailing the Decision 2 dated July 18, 2016 of the RTC in SP.
PROC. NO. Q-12-71830 which denied petitioner Luzviminda Dela Cruz Morisono's (Luzviminda) petition
before it.

The Facts

Luzviminda was married to private respondent Ryoji Morisono (Ryoji) in Quezon City on December 8,
2009. 3 Thereafter, they lived together in Japan for one (1) year and three (3) months but were not
blessed with a child. During their married life, they would constantly quarrel mainly due to Ryoji's
philandering ways, in addition to the fact that he was much older than Luzviminda. 4 As such, she and
Ryoji submitted a "Divorce by Agreement" before the City Hall of Mizuho-Ku, Nagoya City, Japan, which
was eventually approved on January 17, 2012 and duly recorded with the Head of Mizuho-Ku, Nagoya
City, Japan on July 1, 2012. 5 In view of the foregoing, she filed a petition for recognition of the foreign
divorce decree obtained by her and Ryoji 6 before the RTC so that she could cancel the surname of her
former husband in her passport and for her to be able to marry again. 7 aICcHA

After complying with the jurisdictional requirements, the RTC set the case for hearing. Since nobody
appeared to oppose her petition except the government, Luzviminda was allowed to present her evidence
ex parte. After the presentation and absent any objection from the Public Prosecutor, Luzviminda's formal
offer of evidence was admitted as proof of compliance with the jurisdictional requirements, and as part of
the testimony of the witnesses. 8

The RTC Ruling

In a Decision 9 dated July 18, 2016, the RTC denied Luzviminda's petition. It held that while a divorce
obtained abroad by an alien spouse may be recognized in the Philippines — provided that such decree is
valid according to the national law of the alien — the same does not find application when it was the
Filipino spouse, i.e., petitioner, who procured the same. Invoking the nationality principle provided under
Article 15 of the Civil Code, in relation to Article 26 (2) of the Family Code, the RTC opined that since
petitioner is a Filipino citizen whose national laws do not allow divorce, the foreign divorce decree she
herself obtained in Japan is not binding in the Philippines; 10 hence, this petition. EHaASD

The Issue Before the Court

230
The issue for the Court's resolution is whether or not the RTC correctly denied Luzviminda's petition for
recognition of the foreign divorce decree she procured with Ryoji.

The Court's Ruling

The petition is partly meritorious.

The rules on divorce prevailing in this jurisdiction can be summed up as follows: first, Philippine laws do
not provide for absolute divorce, and hence, the courts cannot grant the same; second, consistent with
Articles 15 11 and 17 12 of the Civil Code, the marital bond between two (2) Filipino citizens cannot be
dissolved even by an absolute divorce obtained abroad; third, an absolute divorce obtained abroad by a
couple, who are both aliens, may be recognized in the Philippines, provided it is consistent with their
respective national laws; and fourth, in mixed marriages involving a Filipino and a foreigner, the former is
allowed to contract a subsequent marriage in case the absolute divorce is validly obtained abroad by the
alien spouse capacitating him or her to remarry. 13

The fourth rule, which has been invoked by Luzviminda in this case, is encapsulated in Article 26 (2) of
the Family Code which reads:

Article 26. x x x

Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is
thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino
spouse shall likewise have capacity to remarry under Philippine law.

This provision confers jurisdiction on Philippine courts to extend the effect of a foreign divorce decree to a
Filipino spouse without undergoing trial to determine the validity of the dissolution of the marriage. It
authorizes our courts to adopt the effects of a foreign divorce decree precisely because the Philippines
does not allow divorce. Philippine courts cannot try the case on the merits because it is tantamount to
trying a divorce case. Under the principles of comity, our jurisdiction recognizes a valid divorce obtained
by a spouse of foreign nationality, but the legal effects thereof, e.g., on custody, care and support of the
children or property relations of the spouses, must still be determined by our courts. The rationale for this
rule is to avoid the absurd situation of a Filipino as still being married to his or her alien spouse, although
the latter is no longer married to the former because he or she had obtained a divorce abroad that is
recognized by his or her national law. 14 In Corpuz v. Sto. Tomas, 15 the Court held:

As the RTC correctly stated, the provision was included in the law "to avoid the absurd situation where
the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer
married to the Filipino spouse." The legislative intent is for the benefit of the Filipino spouse, by clarifying
his or her marital status, settling the doubts created by the divorce decree. Essentially, the second
paragraph of Article 26 of the Family Code provided the Filipino spouse a substantive right to have his or
her marriage to the alien spouse considered as dissolved, capacitating him or her to remarry. Without the
second paragraph of Article 26 of the Family Code, the judicial recognition of the foreign decree of
divorce, whether in a proceeding instituted precisely for that purpose or as a related issue in another
proceeding, would be of no significance to the Filipino spouse since our laws do not recognize divorce as
a mode of severing the marital bond; Article 17 of the Civil Code provides that the policy against absolute
divorces cannot be subverted by judgments promulgated in a foreign country. The inclusion of the second

231
paragraph in Article 26 of the Family Code provides the direct exception to this rule and serves as basis
for recognizing the dissolution of the marriage between the Filipino spouse and his or her alien spouse.

Additionally, an action based on the second paragraph of Article 26 of the Family Code is not limited to
the recognition of the foreign divorce decree. If the court finds that the decree capacitated the alien
spouse to remarry, the courts can declare that the Filipino spouse is likewise capacitated to contract
another marriage. No court in this jurisdiction, however, can make a similar declaration for the alien
spouse (other than that already established by the decree), whose status and legal capacity are generally
governed by his national law. 16 (Emphases and underscoring supplied)

According to Republic v. Orbecido III, 17 the following elements must concur in order for Article 26 (2) to
apply, namely: (a) that there is a valid marriage celebrated between a Filipino citizen and a foreigner; and
(b) that a valid divorce is obtained abroad by the alien spouse capacitating him or her to remarry. 18 In
the same case, the Court also initially clarified that Article 26 (2) applies not only to cases where a
foreigner was the one who procured a divorce of his/her marriage to a Filipino spouse, but also to
instances where, at the time of the celebration of the marriage, the parties were Filipino citizens, but later
on, one of them acquired foreign citizenship by naturalization, initiated a divorce proceeding, and
obtained a favorable decree. 19

However, in the recent case of Republic v. Manalo (Manalo), 20 the Court En Banc extended the
application of Article 26 (2) of the Family Code to further cover mixed marriages where it was the Filipino
citizen who divorced his/her foreign spouse. Pertinent portions of the ruling read: HDICSa

Now, the Court is tasked to resolve whether, under the same provision, a Filipino citizen has the capacity
to remarry under Philippine law after initiating a divorce proceeding abroad and obtaining a favorable
judgment against his or her alien spouse who is capacitated to remarry. x x x.

We rule in the affirmative.

xxx xxx xxx

When this Court recognized a foreign divorce decree that was initiated and obtained by the Filipino
spouse and extended its legal effects on the issues of child custody and property relation, it should not
stop short in likewise acknowledging that one of the usual and necessary consequences of absolute
divorce is the right to remarry. Indeed, there is no longer a mutual obligation to live together and observe
fidelity. When the marriage tie is severed and ceased to exist, the civil status and the domestic relation of
the former spouses change as both of them are freed from the marital bond.

xxx xxx xxx

Paragraph 2 of Article 26 speaks of "a divorce x x x validly obtained abroad by the alien spouse
capacitating him or her to remarry." Based on a clear and plain reading of the provision, it only requires
that there be a divorce validly obtained abroad. The letter of the law does not demand that the alien
spouse should be the one who initiated the proceeding wherein the divorce decree was granted. It does
not distinguish whether the Filipino spouse is the petitioner or the respondent in the foreign divorce
proceeding. The Court is bound by the words of the statute; neither can We put words in the mouths of

232
the lawmakers. "The legislature is presumed to know the meaning of the words, to have used words
advisedly, and to have expressed its intent by the use of such words as are found in the statute. Verba
legis non est recedendum, or from the words of a statute there should be no departure."

Assuming, for the sake of argument, that the word "obtained" should be interpreted to mean that the
divorce proceeding must be actually initiated by the alien spouse, still, the Court will not follow the letter of
the statute when to do so would depart from the true intent of the legislature or would otherwise yield
conclusions inconsistent with the general purpose of the act. Laws have ends to achieve, and statutes
should be so construed as not to defeat but to carry out such ends and purposes. x x x.

xxx xxx xxx

To reiterate, the purpose of Paragraph 2 of Article 26 is to avoid the absurd situation where the Filipino
spouse remains married to the alien spouse who, after a foreign divorce decree that is effective in the
country where it was rendered, is no longer married to the Filipino spouse. The provision is a corrective
measure to address an anomaly where the Filipino spouse is tied to the marriage while the foreign
spouse is free to marry under the laws of his or her country. Whether the Filipino spouse initiated the
foreign divorce proceeding or not, a favorable decree dissolving the marriage bond and capacitating his
or her alien spouse to remarry will have the same result: the Filipino spouse will effectively be without a
husband or wife. A Filipino who initiated a foreign divorce proceeding is in the same place and in like
circumstance as a Filipino who is at the receiving end of an alien initiated proceeding. Therefore, the
subject provision should not make a distinction. In both instance, it is extended as a means to recognize
the residual effect of the foreign divorce decree on Filipinos whose marital ties to their alien spouses are
severed by operation of the latter's national law.

xxx xxx xxx

A Filipino who is married to another Filipino is not similarly situated with a Filipino who is married to a
foreign citizen. There are real, material and substantial differences between them. Ergo, they should not
be treated alike, both as to rights conferred and liabilities imposed. Without a doubt, there are political,
economic, cultural, and religious dissimilarities as well as varying legal systems and procedures, all too
unfamiliar, that a Filipino national who is married to an alien spouse has to contend with. More
importantly, while a divorce decree obtained abroad by a Filipino against another Filipino is null and void,
a divorce decree obtained by an alien against his or her Filipino spouse is recognized if made in
accordance with the national law of the foreigner. cDSAEI

On the contrary, there is no real and substantial difference between a Filipino who initiated a foreign
divorce proceedings and a Filipino who obtained a divorce decree upon the instance of his or her alien
spouse. In the eyes of the Philippine and foreign laws, both are considered as Filipinos who have the
same rights and obligations in an alien land. The circumstances surrounding them are alike. Were it not
for Paragraph 2 of Article 26, both are still married to their foreigner spouses who are no longer their
wives/husbands. Hence, to make a distinction between them based merely on the superficial difference of
whether they initiated the divorce proceedings or not is utterly unfair. Indeed, the treatment gives undue
favor to one and unjustly discriminate against the other.

xxx xxx xxx

233
The declared State policy that marriage, as an inviolable social institution, is the foundation of the family
and shall be protected by the State, should not be read in total isolation but must be harmonized with
other constitutional provisions. Aside from strengthening the solidarity of the Filipino family, the State is
equally mandated to actively promote its total development. It is also obligated to defend, among others,
the right of children to special protection from all forms of neglect, abuse, cruelty, exploitation, and other
conditions prejudicial to their development. To Our mind, the State cannot effectively enforce these
obligations if We limit the application of Paragraph 2 of Article 26 only to those foreign divorce initiated by
the alien spouse. x x x. EDCcaS

A prohibitive view of Paragraph 2 of Article 26 would do more harm than good. If We disallow a Filipino
citizen who initiated and obtained a foreign divorce from the coverage of Paragraph 2 of Article 26 and
still require him or her to first avail of the existing "mechanisms" under the Family Code, any subsequent
relationship that he or she would enter in the meantime shall be considered as illicit in the eyes of the
Philippine law. Worse, any child born out of such "extra-marital" affair has to suffer the stigma of being
branded as illegitimate. Surely, these are just but a few of the adverse consequences, not only to the
parent but also to the child, if We are to hold a restrictive interpretation of the subject provision. The irony
is that the principle of inviolability of marriage under Section 2, Article XV of the Constitution is meant to
be tilted in favor of marriage and against unions not formalized by marriage, but without denying State
protection and assistance to live-in arrangements or to families formed according to indigenous customs.

This Court should not turn a blind eye to the realities of the present time. With the advancement of
communication and information technology, as well as the improvement of the transportation system that
almost instantly connect people from all over the world, mixed marriages have become not too
uncommon. Likewise, it is recognized that not all marriages are made in heaven and that imperfect
humans more often than not create imperfect unions. Living in a flawed world, the unfortunate reality for
some is that the attainment of the individual's full human potential and self-fulfillment is not found and
achieved in the context of a marriage. Thus, it is hypocritical to safeguard the quantity of existing
marriages and, at the same time, brush aside the truth that some of them are of rotten quality.

Going back, We hold that marriage, being a mutual and shared commitment between two parties, cannot
possibly be productive of any good to the society where one is considered released from the marital bond
while the other remains bound to it. x x x. 21 (Emphases and underscoring supplied) ISHaCD

Thus, pursuant to Manalo, foreign divorce decrees obtained to nullify marriages between a Filipino and an
alien citizen may already be recognized in this jurisdiction, regardless of who between the spouses
initiated the divorce; provided, of course, that the party petitioning for the recognition of such foreign
divorce decree — presumably the Filipino citizen — must prove the divorce as a fact and demonstrate its
conformity to the foreign law allowing it. 22

In this case, a plain reading of the RTC ruling shows that the denial of Luzviminda's petition to have her
foreign divorce decree recognized in this jurisdiction was anchored on the sole ground that she admittedly
initiated the divorce proceedings which she, as a Filipino citizen, was not allowed to do. In light of the
doctrine laid down in Manalo, such ground relied upon by the RTC had been rendered nugatory.
However, the Court cannot just order the grant of Luzviminda's petition for recognition of the foreign
divorce decree, as Luzviminda has yet to prove the fact of her "Divorce by Agreement" obtained in
Nagoya City, Japan and its conformity with prevailing Japanese laws on divorce. Notably, the RTC did not
rule on such issues. Since these are questions which require an examination of various factual matters, a
remand to the court a quo is warranted.

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated July 18, 2016 of the Regional
Trial Court of Quezon City, Branch 105 in SP. PROC. NO. Q-12-71830 is hereby REVERSED and SET
ASIDE. Accordingly, the instant case is REMANDED to the court a quo for further proceedings, as
directed in this Decision.

SO ORDERED.||| (Morisono v. Morisono, G.R. No. 226013, [July 2, 2018])

234
SECOND DIVISION

[A.C. No. 12084. June 6, 2018.]

HERNANIE P. DANDOY, complainant, vs. ATTY. ROLAND G. EDAYAN, respondent.

RESOLUTION

PERLAS-BERNABE, J p:

This administrative case stemmed from a verified letter-complaint 1 dated December 17, 2010 filed by
Hernanie P. Dandoy (Dandoy) before the Integrated Bar of the Philippines (IBP) against respondent Atty.
Roland G. Edayan (respondent) for violation of Canons 1, 3, and 7 of the Code of Professional
Responsibility (CPR). 2

The Facts

In the complaint, Dandoy alleged that on October 17, 2006, respondent notarized: (a) a Special Power of
Attorney 3 (SPA) executed by his (Dandoy) father, Jacinto S. Dandoy (Jacinto), in favor of a certain
Antoine Cyrus C. Garzo (Garzo) granting the latter authority to offer as collateral two (2) parcels of land
located in San Juan, Siquijor; and (b) a Deed of Extrajudicial Settlement of Real Estate 4 (Deed) of
Dandoy's late grandmother, Eutiquia Sumagang, wherein his father was also one of the parties. 5
According to Dandoy, Jacinto could not have been present before respondent on October 17, 2006
because he passed away on July 13, 1999. 6 He added that, through the SPA and the Deed, Garzo was
able to mortgage the two (2) parcels of land as security for a P400,000.00 loan. The mortgage was,
however, foreclosed and the mortgaged properties were not redeemed to the great prejudice of Dandoy
and his siblings. 7 In support thereof, Dandoy attached a certified true copy of the SPA, death certificate
of Jacinto stating that he died on July 13, 1999, a copy of the Deed, and a copy of the Deed of Real
Estate Mortgage 8 dated October 17, 2006 executed by Garzo on behalf of Jacinto and Felipe Dandoy
(Felipe), Dandoy's uncle.

In his Sworn Statement 9 dated May 22, 2011, respondent admitted to having notarized the two (2)
documents, but claimed that he verified the identities of the signatories thereto through their residence
certificates. He narrated that on the said date, two (2) persons came to his office claiming to be Jacinto
and Felipe and asked him to draft and notarize the SPA and the Deed. He added that Felipe even
confirmed the identity of Jacinto in the same manner that the witnesses to the documents, who were
likewise present at that time, confirmed the identities of the two. Finally, he submitted that while residence
certificates are not mentioned in the list of competent evidence of identity enumerated under Section 12,
Rule II of the 2004 Rules on Notarial Practice 10 (2004 Notarial Rules), these are still necessary for the
proper execution of the notarial act as it is still prescribed by various laws, i.e., Commonwealth Act No.
465, 11 the Notarial Law, 12 and the Local Government Code. 13 DEIHAa

The Report and Recommendation of the IBP

235
In its Report and Recommendation 14 dated October 22, 2015, the IBP Investigating Commissioner (IBP-
IC) found respondent administratively liable for failure to comply with the 2004 Notarial Rules, and
accordingly, recommended that respondent's notarial commission, if existing, be revoked and that he be
disqualified from being commissioned as a notary public for a period of two (2) years. 15

The IBP-IC found that respondent failed to confirm the identity of the person claiming to be Jacinto
through the competent evidence of identity required by the 2004 Notarial Rules — the controlling rules on
notarial practice at the time of the notarization of the SPA and the Deed, not the Notarial Law invoked by
respondent. In this regard, the IBP-IC pointed out that under the 2004 Notarial Rules, competent
evidence of identity includes: (a) a government-issued identification document bearing their respective
photographs, which clearly does not include the community tax certificate presented in this case; and (b)
affirmation of one credible witness not privy to the instrument, etc. who is personally known to the notary
public and who personally knows the individual, which, in this case, was not satisfied by the statements
made by Felipe or Garzo as to the identity of Jacinto because they are privy to the Deed and the SPA.
Finally, the IBP-IC noted the apparent discrepancy between the signatures affixed by the person claiming
to be Jacinto in the SPA and in the Deed which, to the IBP-IC, should have already raised suspicion on
respondent's part and prompted him to require a signature and photograph-bearing identification card
from said person. Being a notary public, and therefore an officer of the court, the IBP-IC pointed out that
respondent must strictly comply with the rules on notarial practice as may be issued by the Court. 16
DcHSEa

The IBP-IC, however, found the evidence insufficient to show that respondent wilfully and maliciously
conspired with Garzo and Felipe in depriving Dandoy and his siblings of their grandmother's property in
order to hold him administratively liable under the CPR. 17

In a Resolution 18 dated February 25, 2016, the IBP Board of Governors adopted the above report and
recommendation of the IBP-IC. Dissatisfied, respondent sought reconsideration, 19 which the IBP denied
in a Resolution 20 dated April 20, 2017.

The Issue before the Court

The issue for the Court's resolution is whether or not the IBP correctly found respondent liable for
violation of the 2004 Notarial Rules.

The Court's Ruling

The Court affirms the findings and adopts the recommendations of the IBP with modifications.

Time and again, the Court has emphasized that the act of notarization is impressed with public interest.
Notarization converts a private document to a public document, making it admissible in evidence without
further proof of its authenticity. 21 A notarial document is, by law, entitled to full faith and credence. 22 As
such, a notary public must observe with utmost care the basic requirements in the performance of his
duties in order to preserve the confidence of the public in the integrity of the notarial system. 23 In this
light, the Court has ruled that notaries must inform themselves of the facts they certify to; most
importantly, they should not take part or allow themselves to be part of illegal transactions. 24

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The 2004 Rules on Notarial Practice provides that a notary public should not notarize a document unless
the signatory to the document is in the notary's presence personally at the time of the notarization, and
personally known to the notary public or otherwise identified through competent evidence of identity. 25
Section 12, Rule II of the same rules defines "competent evidence of identity" as follows:

Section 12. Competent Evidence of Identity. — The phrase "competent evidence of identity" refers to the
identification of an individual based on: CTHaSD

(a) at least one current identification document issued by an official agency bearing the photograph and
signature of the individual; or

(b) the oath or affirmation of one credible witness not privy to the instrument, document or transaction
who is personally known to the notary public and who personally knows the individual, or of two credible
witnesses neither of whom is privy to the instrument, document or transaction who each personally knows
the individual and shows to the notary public documentary identification. (Emphases and underscoring
supplied)

Pursuant to these Rules, a notary public should not notarize a document unless the person who signed
the same is the very person who executed and personally appeared before him to attest to the contents
and the truth of what are stated therein. 26

In this case, respondent, as duly found by the IBP, was remiss in the faithful observance of his duties as a
notary public when he failed to confirm the identity of the person claiming to be Jacinto through the
competent evidence of identity required by the 2004 Notarial Rules. Jurisprudence 27 provides that a
community tax certificate or cedula is no longer considered as a valid and competent evidence of identity
not only because it is not included in the list of competent evidence of identity under the Rules; but
moreso, it does not bear the photograph and signature of the persons appearing before them, which the
Rules deem as the more appropriate and competent means by which notaries public can ascertain the
person's identity. Records show that Jacinto passed away on July 13, 1999, and therefore, clearly could
not have appeared before respondent to sign and execute the two (2) documents. Had respondent been
more circumspect in performing his duties as notary public and asked for the photograph-and-signature-
bearing identification document required by the 2004 Notarial Rules, he would have immediately
discovered that the person before him was not the person whom he purports to be. All told, by accepting
the residence certificates presented by the person who claimed to be Jacinto as evidence of identity,
respondent made it appear that Jacinto personally appeared before him and subscribed the SPA and the
Deed in violation of the 2004 Notarial Rules and to the detriment of Dandoy and his siblings. TacSAE

Moreover, the statements made by the witnesses to the documents as regards the identity of the persons
who claimed to be Felipe and Jacinto and those made by the person purporting to be Felipe as regards
the latter do not comply with the 2004 Notarial Rules' requirements on competent evidence of identity.
Section 12 clearly states that the credible witness/es making the oath — as to the identity of the individual
subscribing the document — must: not be a privy to the document, etc.; personally know/s the individual
subscribing; and, must either be (a) personally known to the notary public, or (b) must show to the notary
public a photograph-and-signature-bearing identification document. In this case, Felipe and Garzo were
both privies to the document, and the records are bereft of any evidence showing that the other witnesses
to the document had shown to respondent the documentary identification which the 2004 Notarial Rules
require.

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Moreover, as a lawyer, respondent is expected at all times to uphold the integrity and dignity of the legal
profession and refrain from any act or omission which might erode the trust and confidence reposed by
the public in the integrity of the legal profession. 28 By notarizing the subject documents, he engaged in
unlawful, dishonest, immoral, or deceitful conduct which makes him liable as well for violation of the CPR,
particularly Canon 1, Rule 1.01 thereof which provides:

CANON 1 — A lawyer shall uphold the constitution, obey the laws of the land and promote respect for law
and legal processes.

Rule 1.01 — A lawyer shall not engage in unlawful, dishonest, immoral or deceitful conduct.

As a final note, the Court finds it unfortunate that notwithstanding the findings of the IBP, respondent still
fails to recognize the fact that his actions violated the provisions of the 2004 Notarial Rules, as he
maintains that the residence certificates presented before him sufficiently complied with the Rules'
identification requirements. 29 It must be remembered, however, that a lawyer is duty-bound to keep
abreast of legal developments; 30 the changes in our notarial rules are no exception. SDHacT

As herein discussed, respondent's failure to properly perform his duty as a notary public resulted not only
in damage to those directly affected by the notarized document, but also in undermining the integrity of
the office of a notary public and in degrading the function of notarization. 31 He should thus be held liable
for such negligence not only as a notary public but also as a lawyer. Consistent with prevailing
jurisprudence, 32 he should be meted out with the modified penalty of immediate revocation of his
notarial commission, if any, disqualification from being commissioned as notary public for a period of two
(2) years, and suspension from the practice of law for one (1) year.

WHEREFORE, the Court hereby finds respondent Atty. Roland G. Edayan (respondent) GUILTY of
violation of the 2004 Rules on Notarial Practice and of the Code of Professional Responsibility.
Accordingly, the Court resolves to: SUSPEND him from the practice of law for one (1) year; REVOKE his
incumbent commission as a notary public, if any; and, PROHIBIT him from being commissioned as a
notary public for two (2) years. He is WARNED that a repetition of the same offense or similar acts in the
future shall be dealt with more severely.

The suspension in the practice of law, the revocation of his notarial commission, and his disqualification
from being commissioned as notary public shall take effect immediately upon receipt of this Resolution by
respondent. He is DIRECTED to immediately file a Manifestation to the Court that his suspension has
started, copy furnished all courts and quasi-judicial bodies where he has entered his appearance as
counsel. ACETID

Let copies of this Resolution be furnished to: the Office of the Bar Confidant to be appended to
respondent's personal record as an attorney; the Integrated Bar of the Philippines for its information and
guidance; and the Office of the Court Administrator for circulation to all courts in the country. TaDSCA

SO ORDERED.

||| (Dandoy v. Edayan, A.C. No. 12084 (Resolution), [June 6, 2018])

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FIRST DIVISION

[G.R. No. 218172. March 16, 2016.]

UNIVERSAL ROBINA SUGAR MILLING CORPORATION, petitioner, vs. ELMER ABLAY, ILDEFONSO
CLAVECILLAS, STANLEY BLAZA, VINCENT VILLAVICENCIO, ROBERTO CACAS, and ELSA
CADAYUNA, in behalf of her deceased husband, ELEAZAR CADAYUNA, respondents.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated June 28, 2013 and the
Amended Decision 3 dated April 30, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 02078, which
reversed and set aside the Decision 4 dated April 26, 2006 and the Resolution 5 dated May 30, 2006 of
the National Labor Relations Commission (NLRC) in NLRC Case No. V-000593-05 and, accordingly,
declared respondents Elmer Ablay (Ablay), Ildefonso Clavecillas (Clavecillas), Stanley Blaza (Blaza),
Vincent Villavicencio (Villavicencio), Roberto Cacas (Cacas), and Eleazar Cadayuna 6 (Cadayuna;
collectively, respondents) to have been illegally dismissed by petitioner Universal Robina Sugar Milling
Corporation (petitioner). As such, respondents are entitled to reinstatement — except for Ablay who is
awarded separation pay in lieu of reinstatement — and backwages.

The Facts

The instant case arose from a complaint 7 dated June 1, 2004 for illegal dismissal, unfair labor practice,
and recovery of damages filed by respondents, members of the Nagkahiusang Mamumuo sa Ursumco-
National Federation of Labor (the Union), against petitioner before the Sub-Regional Arbitration Branch
No. VII, Dumaguete City of the NLRC. Respondents alleged that sometime in 1997, the Union filed a
complaint against petitioner for non-compliance with Wage Order No. 3 issued by the Regional Tripartite
Wages and Productivity Board before the Department of Labor and Employment (DOLE). 8 After due
proceedings, the DOLE found petitioner liable to the members of the Union in the total amount of
P210,217.54 and, consequently, issued a Writ of Execution to enforce the said ruling. 9 On September
11, 2003, DOLE Sheriff Ignacio Calinawan (Sheriff Calinawan) went to petitioner's premises to serve the
writ to petitioner's Personnel Manager, Jocelyn Teo (Teo), but the latter refused to comply by reason of
petitioner's pending appeal before the Secretary of Labor. 10 Two (2) months later, or on November 12,
2003, Sheriff Calinawan went back to petitioner's premises in another attempt to serve the writ of
execution, this time, seeking the help of the Union Officers, including respondents, in its enforcement.
Despite Teo's refusal to receive the writ, Sheriff Calinawan and respondents still effected a levy on one of
petitioner's forklifts, took it outside the company premises, and deposited it at the municipal hall for
safekeeping. 11

Due to the foregoing incidents, petitioner issued a Notice of Offense 12 dated November 18, 2003 to each
of the respondents, requiring them to explain in writing why no disciplinary action should be taken against
them. Thereafter, or on November 24, 2003, petitioner issued a Notice of Administrative Investigation 13
to each of the respondents, charging them of stealing company property, fraudulent acquisition or release
to other persons of company property, unauthorized possession/use of company property, unauthorized
operation of company equipment, and serious misconduct during official working hours or within company

239
premises. On December 1, 2003, after due investigation, petitioner furnished respondents with a Notice of
Dismissal 14 for being found guilty as charged. This prompted the filing of the instant complaint. 15
EcTCAD

The LA Ruling

In a Decision 16 dated May 4, 2005, the LA dismissed respondents' complaint for illegal dismissal for lack
of merit. Nevertheless, the LA ordered petitioner to pay respondents their unpaid salary for November 16
to December 1, 2003, 13th month pay, off-milling bonus, Social Amelioration Bonus, and unused
vacation/sick leave in the aggregate amount of P175,577.50, broken down as follows: Ablay —
P28,940.00; Cadayuna — P32,737.50; Clavecillas — P26,460.00; Villavicencio — P26,460.00; Cacas —
P28,165.00; and Blaza — P32,815.00. 17

The LA found that respondents' participation in the execution of the writ by Sheriff Calinawan, while legal,
was tainted with arrogance and lawlessness, considering that the same was effected with the use of force
and intimidation. The LA highlighted the fact that their act of assisting Sheriff Calinawan in an intimidating
mob-like manner to divest the company of its property was inimical to the interest of petitioner company.
18

Aggrieved, both parties appealed 19 to the NLRC.

The NLRC Ruling

In a Decision 20 dated April 26, 2006, the NLRC affirmed the LA ruling with modification, reducing the
monetary awards in favor of respondents to P124,635.25, broken down as follows: Ablay — P25,662.81;
Cadayuna — P25,035.80; Clavecillas — P16,453.93; Villavicencio — P17,689.14; Cacas — P22,588.37;
and Blaza — P17,205.20. 21

The NLRC agreed with the LA that the manner in which respondents assisted in the execution of the writ
was arrogant and unlawful and, thus, deemed the legality of their termination as valid. In this relation, it
reduced the monetary awards in favor of the respondents, finding lack of basis to grant respondents' off-
milling bonus for their failure to work during the milling season, aside from the fact that respondents'
award of money claims was subject to deductions, i.e., withholding taxes and legal obligations. 22

Dissatisfied, both parties moved for reconsideration, 23 but the same were denied in a Resolution 24
dated May 30, 2006. Undaunted, respondents filed a petition for certiorari 25 before the CA.

The CA Ruling

In a Decision 26 dated June 28, 2013, the CA reversed and set aside the NLRC ruling by declaring
respondents to have been illegally dismissed by petitioner. Accordingly, petitioner was ordered to
reinstate respondents and pay them backwages, unpaid salaries, 13th month pay, unused leave pay, and
social amelioration pay. 27 While the CA agrees with the finding that respondents violated company rules
in the manner by which they assisted Sheriff Calinawan in enforcing the writ of execution, it ruled that

240
dismissal is too severe a penalty for the infraction. Finding that: (a) respondent's act of bringing the forklift
out of the company premises was not tantamount to robbery or theft as they did not do so with intent to
gain, but were merely motivated by their strong desire to collect what is due them as a matter of right; (b)
they were mere equipment operators, technicians, and electricians, and thus, not occupying managerial
nor confidential positions; and (c) it was their first offense in their 14-15 years of service, the CA
concluded that the penalty of suspension would have sufficed as a penalty. 28

Dissatisfied, petitioner moved for reconsideration, 29 insisting that respondents' act of wresting
possession of company property constitutes a serious infraction which warrants their dismissal. Moreover,
petitioner brought to the CA's attention Ablay's conviction as an accomplice in the murder of one of its
former assistant managers. In view of this, petitioner contended that the relationship between it and Ablay
has already been strained and, as such, he should neither be reinstated nor granted separation pay and
backwages. 30

In an Amended Decision 31 dated April 30, 2015, the CA partially granted petitioner's motion by modifying
its earlier ruling, but only insofar as the reinstatement of Ablay is concerned. The CA agreed that Ablay's
conviction as an accomplice to the murder of one of its former assistant managers strained the
relationship between him and petitioner, and, as such, he should no longer be reinstated to his former
position. Nevertheless, the CA pointed out that since Ablay's conviction stemmed from a cause entirely
different from his participation in the enforcement of the writ of execution, he should still receive the
benefits accorded to him by law prior to such conviction, i.e., separation pay, backwages, and other
benefits. 32 HSAcaE

Hence, this petition.

The Issues Before the Court

The issues raised for the Court's resolution are whether or not the CA correctly ruled that: (a) respondents
were illegally dismissed as the penalty of suspension would have sufficed; and (b) Ablay is entitled to his
benefits prior to his conviction, i.e., separation pay, backwages, and other benefits.

The Court's Ruling

The petition is partly meritorious.

Article 297 (formerly Article 282) of the Labor Code, 33 which includes the ground of serious misconduct,
provides for the just causes where the employee may be validly terminated from employment. It reads in
full:

Article 297 [282]. Termination by Employer. — An employer may terminate an employment for any of the
following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;

241
(b) Gross and habitual neglect by the employee of his duties;

(c) Fraud or willful breach by the employee of the trust reposed in him by his employer or duly authorized
representative;

(d) Commission of a crime or offense by the employee against the person of his employer or any
immediate member of his family or his duly authorized representatives; and

(e) Other causes analogous to the foregoing. (Emphasis and underscoring supplied)

Misconduct is defined as an improper or wrong conduct. It is a transgression of some established and

definite rule of action, a forbidden act, a dereliction of duty, willful in character, and implies wrongful intent
and not mere error in judgment. To constitute a valid cause for the dismissal within the text and meaning
of Article 282 of the Labor Code, the employee's misconduct must be serious, i.e., of such grave and
aggravated character, and not merely trivial or unimportant. Additionally, the misconduct must be related
to the performance of the employee's duties showing him to be unfit to continue working for the employer.
Further, and equally important and required, the act or conduct must have been performed with wrongful
intent. In other words, for serious misconduct to be a just cause for dismissal, the concurrence of the
following elements is required: (a) the misconduct must be serious; (b) it must relate to the performance
of the employee's duties showing that the employee has become unfit to continue working for the
employer; and (c) it must have been performed with wrongful intent. 34

In this case, the following facts are undisputed: (a) the Union, which the respondents are members of,
filed a case for violation of labor standards against petitioner before the DOLE; 35 (b) after due
proceedings, the DOLE ruled in favor of the Union and awarded its members the aggregate amount of
P210,217.54, and accordingly, a writ of execution was issued in the Union's favor; 36 (c) Sheriff
Calinawan failed in his first attempt to enforce the writ of execution as Teo refused to receive a copy of
the same; 37 (d) on Sheriff Calinawan's second attempt to enforce the writ of execution, he sought the
assistance of Union members, including respondents, and insisted that Teo comply with said writ, but the
latter still refused; 38 (e) despite Teo's refusal, Sheriff Calinawan and the respondents effected a levy on
one of petitioner's forklifts, took it outside the company premises, and deposited it at the municipal hall for
safekeeping; 39 and (f) the taking of the forklift was without authority from petitioner or any of its officers.
40

Clearly, respondents committed some form of misconduct when they assisted Sheriff Calinawan in
effecting the levy on the forklift and depositing the same to the municipal hall for safekeeping as they
operated the forklift and took it out of company premises, all without the authority and consent from
petitioner or any of its officers. However, as correctly pointed out by the CA, respondents did not perform
the said acts with intent to gain or with wrongful intent. Rather, they were impelled by their belief — albeit
misplaced — that they were merely facilitating the enforcement of a favorable decision in a labor
standards case in order to finally collect what is due them as a matter of right, which is the balance of
their unpaid benefits. In light of the foregoing, the Court upholds the right of petitioner to take the
appropriate disciplinary action against respondents, but nevertheless, holds that respondents should not
have been dismissed from service as a less punitive sanction, i.e., suspension, would have sufficed. In
Philippine Long Distance Company v. Teves, 41 the Court stressed that while it is the prerogative of the

242
management to discipline its employees, it should not be indiscriminate in imposing the ultimate penalty
of dismissal as it not only affect the employee concerned, but also those who depend on his livelihood,
viz.: HESIcT

While management has the prerogative to discipline its employees and to impose appropriate penalties
on erring workers, pursuant to company rules and regulations, however, such management prerogatives
must be exercised in good faith for the advancement of the employer's interest and not for the purpose of
defeating or circumventing the rights of the employees under special laws and valid agreements. The
Court is wont to reiterate that while an employer has its own interest to protect, and pursuant thereto, it
may terminate an employee for a just cause, such prerogative to dismiss or lay off an employee must be
exercised without abuse of discretion. Its implementation should be tempered with compassion and
understanding. The employer should bear in mind that, in the execution of said prerogative, what is at
stake is not only the employee's position, but his very livelihood, his very breadbasket.

Dismissal is the ultimate penalty that can be meted to an employee. Even where a worker has committed
an infraction, a penalty less punitive may suffice, whatever missteps maybe committed by labor ought not
to be visited with a consequence so severe. This is not only the laws concern for the workingman. There
is, in addition, his or her family to consider. Unemployment brings untold hardships and sorrows upon
those dependent on the wage-earner. 42 (Emphases and underscoring supplied)

Further, considering the fact that respondents were mere equipment operators, technicians, and
electricians, and thus, not occupying managerial nor confidential positions, and that the incident
concerning the forklift was only their first offense in their 14-15 years of service, the Court agrees with the
CA that they should have only been meted a penalty that is less severe than dismissal, i.e., suspension.
Hence, respondents could not be validly dismissed by petitioner. 43

As a general rule, an illegally dismissed employee is entitled to reinstatement (or separation pay, if
reinstatement is not viable) and payment of full backwages. In certain cases, however, the Court has
carved out an exception to the foregoing rule and thereby ordered the reinstatement of the employee
without backwages on account of the following: (a) the fact that the dismissal of the employee would be
too harsh a penalty; and (b) that the employer was in good faith in terminating the employee. 44 The
application of such exception was thoroughly discussed in the case of Pepsi-Cola Products Philippines,
Inc. v. Molon, 45 to wit: AcICHD

An illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay if

reinstatement is no longer viable, and backwages. In certain cases, however, the Court has ordered the
reinstatement of the employee without backwages considering the fact that (1) the dismissal of the
employee would be too harsh a penalty, and (2) the employer was in good faith in terminating the
employee. For instance, in the case of Cruz v. Minister of Labor and Employment the Court ruled as
follows:

The Court is convinced that petitioner's guilt was substantially established. Nevertheless, we agree with
respondent Minister's order of reinstating petitioner without backwages instead of dismissal which may be
too drastic. Denial of backwages would sufficiently penalize her for her infractions. The bank officials
acted in good faith. They should be exempt from the burden of paying backwages. The good faith of the
employer, when clear under the circumstances, may preclude or diminish recovery of backwages. Only
employees discriminately dismissed are entitled to backpay. . . .

243
Likewise, in the case of Itogon-Suyoc Mines, Inc. v. National Labor Relations Commission, the Court
pronounced that "[t]he ends of social and compassionate justice would therefore be served if private
respondent is reinstated but without backwages in view of petitioner's good faith." 46 (Emphasis and
underscoring supplied)

To reiterate, respondents were indeed guilty of some form of misconduct and, as such, petitioner was
justified in exercising disciplinary action against them. Absent any evidence to the contrary, petitioner's
resort to disciplinary proceedings should be presumed to have been done in good faith. 47 Thus,
perceiving that petitioner had ample ground to proceed with its disciplinary action against respondents,
and that the disciplinary proceedings appear to have been conducted in good faith, the Court finds it
proper to apply the exception to the rule on backwages, and consequently, direct the deletion of
backwages in favor of respondents. 48

Finally, the CA correctly observed that Ablay's conviction as an accomplice to the murder of petitioner's
former assistant manager had strained the relationship between Ablay and petitioner. Hence, Ablay
should not be reinstated in the company and, instead, be paid separation pay, as reinstatement would
only create an atmosphere of antipathy and antagonism would be generated as to adversely affect his
efficiency and productivity. 49 In this relation, it should be clarified that said strained relation should not
affect the grant of benefits in his favor prior to his conviction, as the latter pertains to an offense entirely
separate and distinct from the acts constituting petitioner's charges against him in the case at bar, i.e.,
taking of the company equipment without authority. Petitioner's payment of separation pay to Ablay in lieu
of his reinstatement is therefore warranted.

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated June 28, 2013 and the Amended
Decision dated April 30, 2015 of the Court of Appeals in CA-G.R. SP No. 02078 are hereby MODIFIED,
directing the DELETION of the award of backwages in favor of respondents Elmer Ablay, Ildefonso
Clavecillas, Stanley Blaza, Vincent Villavicencio, Roberto Cacas, and Eleazar Cadayuna. The rest of the
decision STANDS.

SO ORDERED.

||| (Universal Robina Sugar Milling Corp. v. Ablay, G.R. No. 218172, [March 16, 2016])

244
FIRST DIVISION

[G.R. No. 220998. August 8, 2016.]

HOLCIM PHILIPPINES, INC., petitioner, vs. RENANTE J. OBRA, respondent.

DECISION

PERLAS-BERNABE, J p:

Before the Court is a petition for review on certiorari, 1 filed by petitioner Holcim Philippines, Inc.
(petitioner), assailing the Decision 2 dated February 13, 2015 and the Resolution 3 dated September 7,
2015 of the Court of Appeals (CA) in CA-G.R. SP No. 136413, which affirmed the Decision 4 dated March
31, 2014 and the Resolution 5 dated April 30, 2014 of the National Labor Relations Commission (NLRC)
in NLRC LAC No. 03-000696-14(8)/NLRC CN. RAB-I-09-1102-13(LU-1), holding that respondent
Renante J. Obra (respondent) was illegally dismissed and, thereby, ordering petitioner to pay him
separation pay amounting to P569,772.00 in lieu of reinstatement. CAIHTE

The Facts

Respondent was employed by petitioner as packhouse operator in its La Union Plant for nineteen (19)
years, from March 19, 1994 6 until August 8, 2013. 7 As packhouse operator, respondent ensures the
safe and efficient operation of rotopackers. auto-bag placers, and cariramats, as well as their auxiliaries.
8 At the time of his dismissal, he was earning a monthly salary of P29,988.00. 9

On July 10, 2013, at around 4 o'clock in the afternoon, respondent was about to exit Gate 2 of petitioner's
La Union Plant when the security guard on duty, Kristian Castillo (Castillo), asked him to submit himself
and the backpack he was carrying for inspection. 10 Respondent refused and confided to Castillo that he
has a piece of scrap electrical wire in his bag. 11 He also requested Castillo not to report the incident to
the management, and asked the latter if respondent could bring the scrap wire outside the company
premises; otherwise, he will return it to his locker in the Packhouse Office. 12 However, Castillo did not
agree, which prompted respondent to turn around and hurriedly go back to the said office where he took
the scrap wire out of his bag. 13 Soon thereafter, a security guard arrived and directed him to go to the
Security Office where he was asked to write a statement regarding the incident. 14 aScITE

In his statement, 15 respondent admitted the incident, but asserted that he had no intention to steal. 16
He explained that the 16-meter electrical wire was a mere scrap that he had asked from the contractor
who removed it from the Packhouse Office. 17 He also averred that as far as he knows, only scrap
materials which are to be taken out of the company premises in bulk required a gate pass and that he had
no idea that it was also necessary to takeout a piece of loose, scrap wire out of the company's premises.
18 Respondent also clarified that he hurriedly turned around because he had decided to just return the
scrap wire to the said office. 19

245
On July 16, 2013, respondent received a Notice of Gap 20 requiring him to explain within five (5) days
therefrom why no disciplinary action, including termination, should be taken against him on account of the
abovementioned incident. 21 He was also placed on preventive suspension for thirty (30) days effective
immediately. 22 In a statement 23 dated July 23, 2013, respondent reiterated that he had no intention to
steal from petitioner and that the scrap wire which he had asked from a contractor was already for
disposal anyway. 24 He also expressed his remorse over the incident and asked that he be given a
chance to correct his mistake. 25 Meetings of petitioner's Review Committee were thereafter conducted,
with respondent and the security guards concerned in attendance. 26

On August 8, 2013, petitioner issued a Decision/Resolution Memo 27 dismissing from service respondent
for serious misconduct. 28 Petitioner found no merit in respondent's claim that he was unaware that a
gate pass is required to take out a piece of scrap wire, pointing out that the same is incredulous since he
had been working thereat for nineteen (19) years already. 29 It also drew attention to the fact that
respondent refused to submit his bag for inspection, which, according to petitioner, confirmed his intention
to take the wire for his personal use. 30 Further, petitioner emphasized that respondent's actions violated
its rules which, among others, limit the use of company properties for business purposes only and
mandate the employees, such as respondent, to be fair, honest, ethical, and act responsibly and with
integrity. 31

In a letter 32 dated August 14, 2013, respondent sought reconsideration and prayed for a lower penalty,
especially considering the length of his service to it and the lack of intent to steal. 33 However, in a Memo
34 dated August 28, 2013, petitioner denied respondent's appeal. Hence, on September 30, 2013,
respondent filed a complaint 35 before the NLRC for illegal dismissal and money claims, docketed as
NLRC Case No. (CN) RAB-I-09-1102-13(LU-1), averring that the penalty of dismissal from service
imposed upon him was too harsh since he had acted in good faith in taking the piece of scrap wire. 36
Respondent maintained that there was no wrongful intent on his part which would justify his dismissal
from service for serious misconduct, considering that the contractor who removed it from the Packhouse
Office led him to believe that the same was already for disposal. 37 DETACa

Meanwhile, petitioner countered that respondent's taking of the electrical wire for his personal use,
without authority from the management, shows his intent to gain. 38 In addition to this, it was highlighted
that respondent refused to submit himself and his bag for inspection and attempted to corrupt Castillo by
convincing him to refrain from reporting the incident to the management. 39 These, coupled with his
sudden fleeing from Gate 2, bolster the charge of serious misconduct against him. 40 With respect to
respondent's claim that the contractor who removed the wire from the Packhouse Office led him to
believe that the same was already for disposal, petitioner pointed out that the contractor's personnel have
issued statements belying respondent's claim and categorically stated that they did not give away any
electrical wire to anyone. 41

The Labor Arbiter's Ruling

In a Decision 42 dated January 24, 2014, the Labor Arbiter (LA) dismissed respondent's complaint and
held that the latter was validly dismissed from service by petitioner for committing the crime of theft, and
therefore, not entitled to reinstatement, backwages, and other money claims. 43

The NLRC Ruling

246
In a Decision 44 dated March 31, 2014, the NLRC reversed the LA's ruling and held that the penalty of
dismissal from service imposed upon respondent was unduly harsh since his misconduct was not so
gross to deserve such penalty. 45 It found merit in respondent's defense that he took the scrap wire on
the belief that it was already for disposal, noting that petitioner never denied the same. 46 The NLRC also
emphasized that petitioner did not suffer any damage since respondent was not able to take the wire
outside the company premises. 47 Moreover, he did not hold a position of trust and confidence and was
remorseful of his mistake, as evidenced by his repeated pleas for another chance. 48 These, coupled
with the fact that he had been in petitioner's employ for nineteen (19) years, made respondent's dismissal
from service excessive and harsh. 49 Considering, however, the strained relations between the parties,
the NLRC awarded separation pay in favor of respondent in lieu of reinstatement. 50

Petitioner moved for reconsideration, 51 which was, however, denied in a Resolution 52 dated April 30,
2014.

The CA Ruling

In a Decision 53 dated February 13, 2015, the CA dismissed the petition for certiorari and affirmed the
ruling of the NLRC. It agreed with the NLRC's observation that respondent was illegally dismissed,
pointing out that petitioner failed to prove that it prohibited its employees from taking scrap materials
outside the company premises. Besides, respondent's taking of the scrap wire did not relate to the
performance of his work as packhouse operator. 54 HEITAD

The CA also drew attention to respondent's unblemished record in the company where he had been
employed for nineteen (19) years already, adding too that bad faith cannot be ascribed to him since he
volunteered the information about the scrap wire to Castillo and offered to return the same if it was not
possible to bring it outside of the company premises. 55 According to the CA, respondent's acts only
constituted a lapse in judgment which does not amount to serious misconduct that would warrant his
dismissal from service. 56

Dissatisfied, petitioner moved for reconsideration, 57 which was denied by the CA in its Resolution 58
dated September 7, 2015; hence, the present petition.

The Issue Before the Court

The sole issue for the Court's resolution is whether or not the CA erred in affirming the ruling of the
NLRC.

The Court's Ruling

The petition is partly meritorious.

There is no question that the employer has the inherent right to discipline, including that of dismissing its
employees for just causes. 59 This right is, however, subject to reasonable regulation by the State in the
exercise of its police power. 60 Accordingly, the finding that an employee violated company rules and

247
regulations is subject to scrutiny by the Court to determine if the dismissal is justified and, if so, whether
the penalty imposed is commensurate to the gravity of his offense. 61

In this case, the Court agrees with the CA and the NLRC that respondent's misconduct is not so gross as
to deserve the penalty of dismissal from service. As correctly observed by the NLRC, while there is no
dispute that respondent took a piece of wire from petitioner's La Union Plant and tried to bring it outside
the company premises. he did so in the belief that the same was already for disposal. Notably, petitioner
never denied that the piece of wire was already for disposal and, hence, practically of no value. At any
rate, petitioner did not suffer any damage from the incident, given that after being asked to submit himself
and his bag for inspection, respondent had a change of heart and decided to just return the wire to the
Packhouse Office. Respondent has also shown remorse for his mistake, pleading repeatedly with
petitioner to reconsider the penalty imposed upon him. 62

Time and again, the Court has held that infractions committed by an employee should merit only the
corresponding penalty demanded by the circumstance. 63 The penalty must be commensurate with the
act, conduct or omission imputed to the employee. 64

In Sagales v. Rustan's Commercial Corporation, 65 the dismissal of a Chief Cook who tried to take home
a pack of squid heads, which were considered as scrap goods and usually thrown away, was found to be
excessive. In arriving at such decision, the Court took into consideration the fact that the Chief Cook had
been employed by the company for 31 years already and the incident was his first offense. Besides, the
value of the squid heads was a negligible sum of P50.00 and the company practically lost nothing since
the squid heads were considered scrap goods and usually thrown away. Moreover, the ignominy he
suffered when he was imprisoned over the incident, and his preventive suspension for one (1) month was
enough punishment for his infraction. aDSIHc

Similarly, in Farrol v. CA, 66 a district manager of a bank was dismissed after he incurred a shortage of
P50,985.37, which sum was used to pay the retirement benefits of five (5) employees of the bank.
Despite being able to return majority of the missing amount, leaving a balance of only P6,995.37, the
district manager was dismissed on the ground that under the bank's rules, the penalty therefor is
dismissal. According to the Court, the "dismissal imposed on [him] is unduly harsh and grossly
disproportionate to the infraction which led to the termination of his services. A lighter penalty would have
been more just, if not humane," 67 considering that it was his first infraction and he has rendered 24
years of service to the bank.

Meanwhile, in the earlier case of Associated Labor Unions-TUCP v. NLRC, 68 the dismissal of an
employee, who was caught trying to take a pair of boots, an empty aluminum container, and 15
hamburger patties, was considered excessive. The Court ruled that the employee's dismissal would be
disproportionate to the gravity of the offense committed, considering the value of the articles he pilfered
and the fact that he had no previous derogatory record during his two (2) years of employment in the
company. According to the Court, while the items taken were of some value, such misconduct was not
enough to warrant his dismissal.

As in the foregoing cases, herein respondent deserves compassion and humane understanding more
than condemnation, especially considering that he had been in petitioner's employ for nineteen (19) years
already, and this is the first time that he had been involved in taking company property, which item, at the
end of the day, is practically of no value. Besides, respondent did not occupy a position of trust and
confidence, the loss of which would have justified his dismissal over the incident. As packhouse operator,
respondent's duties are limited to ensuring the safe and efficient operation of rotopackers, auto-bag
placers, and cariramats, as well as their auxiliaries. 69 He is not a managerial employee vested with the

248
powers or prerogatives to lay down management policies and to hire, transfer, suspend, lay-off, recall,
discharge, assign or discipline employees or effectively recommend such managerial actions, or one who,
in the normal and routine exercise of his functions, regularly handles significant amounts of money or
property. 70

Neither can respondent's infraction be characterized as a serious misconduct which, under Article 282
(now Article 297) of the Labor Code, 71 is a just cause for dismissal. Misconduct is an improper or wrong
conduct, or a transgression of some established and definite rule of action, a forbidden act, a dereliction
of duty, willful in character, and implies wrongful intent and not mere error in judgment. 72 To constitute a
valid cause for dismissal within the text and meaning of Article 282 (now Article 297) of the Labor Code,
the employee's misconduct must be serious, i.e., of such grave and aggravated character and not merely
trivial or unimportant, 73 as in this case where the item which respondent tried to takeout was practically
of no value to petitioner. Moreover, ill will or wrongful intent cannot be ascribed to respondent.
considering that, while he asked Castillo not to report the incident to the management, he also
volunteered the information that he had a piece of scrap wire in his bag and offered to return it if the same
could not possibly be brought outside the company premises sans a gate pass. ATICcS

The Court is not unaware of its ruling in Reno Foods, Inc. v. Nagkakaisang Lakas ng Manggawa (NLM)
— KATIPUNAN, 74 which was cited in the petition, 75 where an employee was dismissed after being
caught hiding six (6) Reno canned goods wrapped in nylon leggings inside her bag. However, in that
case, the main issue was the payment of separation pay and/or financial assistance and not the validity of
the employee's dismissal. Furthermore, unlike the present case where respondent tried to take a piece of
scrap wire, the employee in Reno Foods tried to steal items manufactured and sold by the company. Her
wrongful intent is also evident as she tried to hide the canned goods by wrapping them in nylon leggings.
Here, as earlier adverted to, respondent volunteered the information that he had a piece of scrap wire in
his bag.

In fine, the dismissal imposed on respondent as penalty for his attempt to take a piece of scrap wire is
unduly harsh and excessive. The CA therefore did not err in affirming the NLRC's ruling finding
respondent's dismissal to be invalid. Clearly, the punishment meted against an errant employee should
be commensurate with the offense committed. 76 Thus, care should be exercised by employers in
imposing dismissal to erring employees. 77 Based on the circumstances of this case, respondent's
dismissal was not justified. This notwithstanding, the disposition of the CA should be modified with
respect to the consequential award of "separation pay in lieu of reinstatement," which was assailed in the
instant petition as one which has "no factual, legal or even equitable basis." 78

As a general rule, an illegally dismissed employee is entitled to: (a) reinstatement (or separation pay, if
reinstatement is not viable); and (b) payment of full backwages. 79

In this case, the Court cannot sustain the award of separation pay in lieu of respondent's reinstatement on
the bare allegation of the existence of "strained relations" between him and the petitioner. It is settled that
the doctrine on "strained relations" cannot be applied indiscriminately since every labor dispute almost
invariably results in "strained relations;" otherwise, reinstatement can never be possible simply because
some hostility is engendered between the parties as a result of their disagreement. 80 It is imperative,
therefore, that strained relations be demonstrated as a fact and adequately supported by substantial
evidence showing that the relationship between the employer and the employee is indeed strained as a
necessary consequence of the judicial controversy. 81 ETHIDa

Unfortunately, the Court failed to find the factual basis for the award of separation pay to herein
respondent. The NLRC Decision did not state the facts which demonstrate that reinstatement is no longer

249
a feasible option that could have justified the alternative relief of granting separation pay. 82 Hence,
reinstatement cannot be barred, especially, as in this case, when the employee has not indicated an
aversion to returning to work, or does not occupy a position of trust and confidence in, or has no say in
the operation of the employer's business. 83 As priorly stated, respondent had expressed remorse over
the incident and had asked to be given the chance to correct his mistake. He had also prayed for a lower
penalty than dismissal, especially considering his lack of intent to steal, and his unblemished record of 19
years of employment with petitioner. All these clearly indicate his willingness to continue in the employ of
petitioner and to redeem himself. Considering further that respondent did not occupy a position of trust
and confidence and that his taking of the scrap wire did not relate to the performance of his work as
packhouse operator, his reinstatement remains a viable remedy. The award of separation pay, therefore,
being a mere exception to the rule, finds no application herein. Accordingly, he should be reinstated to his
former position.

Meanwhile, anent the propriety of awarding backwages, the Court observes that respondent's
transgression — even if not deserving of the ultimate penalty of dismissal — warrants the denial of the
said award following the parameters in Integrated Microelectronics, Inc. v. Pionilla. 84 In that case, the
Court ordered the reinstatement of the employee without backwages on account of the following: (a) the
fact that the dismissal of the employee would be too harsh a penalty; and (b) that the employer was in
good faith in terminating the employee, viz.:

The aforesaid exception was recently applied in the case of Pepsi-Cola Products Phils., Inc. v. Molon
[(704 Phil.120, 144-145 [2013]), wherein the Court, citing several precedents, held as follows:

An illegally dismissed employee is entitled to either reinstatement, if viable, or separation pay[,] if

reinstatement is no longer viable, and backwages. In certain cases, however, the Court has ordered the
reinstatement of the employee without backwages[,] considering the fact that: (1) the dismissal of the
employee would be too harsh a penalty; and (2) the employer was in good faith in terminating the
employee. For instance, in the case of Cruz v. Minister of Labor and Employment [(205 Phil. 14, 18-19
[1983]), the Court ruled as follows:

The Court is convinced that petitioner's guilt was substantially established. Nevertheless, we agree with
respondent Minister's order of reinstating petitioner without backwages instead of dismissal which may be
too drastic. Denial of backwages would sufficiently penalize her for her infractions. The bank officials
acted in good faith. They should be exempt from the burden of paying backwages. The good faith of the
employer, when clear under the circumstances, may preclude or diminish recovery of backwages. Only
employees discrimnately dismissed are entitled to backpay. TIADCc

Likewise, in the case of Itogon-Suyoc Mines, Inc. v. [NLRC] [(202 Phil. 850, 856 [1982]), the Court
pronounced that "the ends of social and compassionate justice would therefore be served if private
respondent is reinstated but without backwages in view of petitioner's good faith."

The factual similarity of these cases to Remandaban's situation deems it appropriate to render the same
disposition. 85 (Emphases supplied)

Having established that respondent's dismissal was too harsh a penalty for attempting to take a piece of
scrap wire that was already for disposal and, hence, practically of no value, and considering that
petitioner was in good faith when it dismissed respondent for his misconduct, the Court deems it proper to
order the reinstatement of respondent to his former position but without backwages. Respondent was not
entirely faultlessand therefore, should not profit from a wrongdoing.

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated February 13, 2015 and the
Resolution dated September 7, 2015 of the Court of Appeals in CA-G.R. SP No. 136413 are hereby
AFFIRMED with MODIFICATION deleting the award of separation pay and in lieu thereof, directing the
reinstatement of respondent Renante J. Obra to his former position without backwages.

SO ORDERED.

||| (Holcim Philippines, Inc. v. Obra, G.R. No. 220998, [August 8, 2016])

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EN BANC

[G.R. No. 226622. March 14, 2017.]

COMMISSION ON ELECTIONS, petitioner, vs. BAI HAIDY D. MAMALINTA, respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated March 11, 2016 and the
Resolution 3 dated August 26, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 134368, which
reversed and set aside the Decision No. 13-0969 4 dated September 24, 2013 and the Resolution No.
14-00135 5 dated January 28, 2014 of the Civil Service Commission (CSC), and accordingly, reinstated
respondent Bai Haidy D. Mamalinta (Mamalinta) to her former position prior to her dismissal, without loss
of seniority rights, and with payment of the corresponding back salaries and all benefits which she would
have been entitled to if not for her illegal dismissal.

The Facts

During the May 10, 2004 Synchronized National and Local Elections, petitioner Commission on Elections
(COMELEC) appointed Mamalinta as Chairman of the Municipal Board of Canvassers (MBOC) for South
Upi, Maguindanao, together with Abdullah K. Mato (Mato) and Pablito C. Peñafiel (Peñafiel), Sr. as Vice-
Chairman and Member, respectively. While performing their functions as such, the MBOC allegedly
committed the following acts: (a) on May 16, 2004, the MBOC proclaimed Datu Israel Sinsuat (Sinsuat) as
Mayor, Datu Jabarael Sinsuat 6 as Vice-Mayor, and eight (8) members of the Sangguniang Bayan as
winning candidates, on the basis of nineteen (19) out of the thirty-five (35) total election returns; (b) on
even date, the MBOC caused the transfer of the place for canvassing of votes from Tinaman Elementary
School, South Upi, Maguindanao to Cotabato City without prior authority from the COMELEC; and (c) two
days later or on May 18, 2004, they proclaimed a new set of winning candidates, headlined by Antonio
Gunsi, Jr. (Gunsi) as Mayor and four (4) new members of the Sangguniang Bayan on the basis of thirty
(30) out of thirty-five (35) election returns. Thus, on May 20, 2004, Atty. Clarita Callar, Regional Election
Director of the COMELEC Regional Office No. XII, reported the incidents to the COMELEC En Banc,
which in turn, directed the COMELEC Law Department to conduct a fact-finding investigation on the
matter. Thereafter, the COMELEC Law Department recommended the filing of administrative and criminal
cases against the members of the MBOC, and subsequently, Mamalinta was formally charged with Grave
Misconduct, Gross Neglect of Duty, Gross Inefficiency and Incompetence, and Conduct Prejudicial to the
Best Interest of the Service. 7

In her defense, 8 Mamalinta denied the charges against her, essentially claiming that the MBOC's acts of
double proclamation and transferring the place for canvassing were attended by duress in view of the
imminent danger to their lives due to the violence and intimidation initiated by Gunsi's supporters. 9

The COMELEC En Banc Ruling

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In a Resolution 10 dated May 24, 2012, the COMELEC En Banc found Mamalinta guilty of Grave
Misconduct, Gross Neglect of Duty, and Conduct Prejudicial to the Best Interest of the Service, and
accordingly, dismissed her from public service, with imposition of all accessory penalties relative thereto.
11

Adopting the findings of its Law Department, the COMELEC En Banc ruled that the MBOC's acts of
proclaiming two (2) sets of winning candidates; issuing such proclamations based on an incomplete
canvass of votes; and transferring the place for the canvassing of votes are blatant violations of various
laws and COMELEC resolutions on the conduct of elections, and thus, sufficient to hold Mamalinta liable
for the aforesaid administrative offenses, thereby justifying her dismissal from service. In this relation, the
COMELEC En Banc did not lend credence to Mamalinta's claim of duress and/or threats, opining her
failure to substantiate the same. 12

Mamalinta moved for reconsideration, 13 which was denied in a Resolution 14 dated November 27, 2012.
Aggrieved, she appealed to the CSC. 15 CAIHTE

The CSC Ruling

In Decision No. 13-0969 16 dated September 24, 2013, the CSC affirmed the COMELEC En Banc ruling.
It held that as MBOC Chairman, Mamalinta clearly committed the acts complained of which violated
various election laws and rules and tarnished the image and integrity of her public office, as well as the
elections in South Upi, Maguindanao, in general. The CSC likewise did not lend credence to Mamalinta's
claims of violence, opining that they were self-serving, absent any evidence supporting the same. 17

Dissatisfied, Mamalinta filed a motion for reconsideration, 18 attaching thereto the Minutes 19 of the
MBOC dated May 14 and 15, 2004 and the Report 20 dated May 16, 2004, both prepared by Peñafiel
narrating the incidents that transpired during the canvassing in South Upi, Maguindanao. 21 Such motion
was, however, denied by the CSC through Resolution No. 14-00135 22 dated January 28, 2014.
Undaunted, she elevated the matter to the CA via a petition 23 for review under Rule 43 of the Rules of
Court.

The CA Ruling

In a Decision 24 dated March 11, 2016, the CA reversed and set aside the CSC ruling, and accordingly,
reinstated Mamalinta to her former position prior to her dismissal, without loss of seniority rights, and with
payment of the corresponding back salaries and all benefits which she would have been entitled to if not
for her illegal dismissal.

Contrary to the findings of the COMELEC En Banc and the CSC, the CA found that Mamalinta sufficiently
substantiated her claims of duress by presenting various documentary evidence, namely, the Joint-
Affidavit 25 dated May 18, 2004 she executed with her Vice-Chairman, Mato, and the Minutes 26 of the
MBOC dated May 14 and 15, 2004 and the Report 27 dated May 16, 2004 both prepared by Peñafiel, all
of which recounted the acts of duress and intimidation pressed on them. Further noting that Mamalinta
immediately flew to Manila after escaping the hostile incidents they experienced in order to report the
same to then-COMELEC Chairman Benjamin Abalos, the CA concluded that Mamalinta and the rest of
the MBOC were indeed forced, intimidated, and coerced into performing the acts constituting the charges
against them, and thus, they could not be held administratively liable therefor. 28

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The COMELEC moved for reconsideration, 29 which was, however, denied in a Resolution 30 dated
August 26, 2016; hence, this petition.

The Issue before the Court

The sole issue for the Court's resolution is whether or not the CA correctly reversed and set aside the
CSC ruling, and consequently, absolved Mamalinta from the administrative charges of Grave Misconduct,
Gross Neglect of Duty, and Conduct Prejudicial to the Best Interest of the Service.

The Court's Ruling

The petition is meritorious.

Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful
behavior or gross negligence by the public officer. To warrant dismissal from the service, the misconduct
must be grave, serious, important, weighty, momentous, and not trifling. The misconduct must imply
wrongful intention and not a mere error of judgment and must also have a direct relation to and be
connected with the performance of the public officer's official duties amounting either to maladministration
or willful, intentional neglect, or failure to discharge the duties of the office. In order to differentiate gross
misconduct from simple misconduct, the elements of corruption, clear intent to violate the law, or flagrant
disregard of established rule, must be manifest in the former. 31

On the other hand, and as compared to Simple Neglect of Duty which is defined as the failure of an
employee to give proper attention to a required task or to discharge a duty due to carelessness or
indifference, Gross Neglect of Duty is characterized by want of even the slightest care, or by conscious
indifference to the consequences, or by flagrant and palpable breach of duty. 32

Meanwhile, certain acts may be considered as Conduct Prejudicial to the Best Interest of Service as long
as they tarnish the image and integrity of the public office and may or may not be characterized by
corruption or a willful intent to violate the law or to disregard established rules. 33 In Encinas v. Agustin,
Jr., 34 the Court outlined the following acts that constitute this offense, such as: misappropriation of public
funds, abandonment of office, failure to report back to work without prior notice, failure to keep in safety
public records and property, making false entries in public documents, and falsification of court orders. 35

In order to sustain a finding of administrative culpability under the foregoing offenses, only the quantum of
proof of substantial evidence is required, or that amount or relevant evidence which a reasonable mind
might accept as adequate to support a conclusion. 36

In the case at bar, a judicious review of the records reveals that Mamalinta is being charged of committing
the following acts, namely: (a) the double proclamation of Sinsuat and Gunsi as mayor of South Upi; (b)
the transfer of the place for canvassing of votes from Tinaman Elementary School, South Upi,
Maguindanao to Cotabato City without prior authority from the COMELEC; and (c) the premature
proclamation of Sinsuat as the winning candidate on the basis of an incomplete canvass of election
returns.

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Anent the first two (2) acts complained of, i.e., the double proclamation and the unauthorized transfer of
the place for canvassing, the Court agrees with the CA that Mamalinta should not be held administratively
liable for the same to warrant her dismissal from the service, as such acts were committed while under
duress and intimidation. In People v. Nuñez, 37 the Court defined duress as follows:

Duress, force, fear or intimidation to be available as a defense, must be present, imminent and
impending, and of such a nature as to induce a well-grounded apprehension of death or serious bodily
harm if the act is not done. A threat of future injury is not enough.

To be available as a defense, the fear must be well-founded, an immediate and actual danger of death or
great bodily harm must be present and the compulsion must be of such a character as to leave no
opportunity to accused for escape or self-defense in equal combat. It would be a most dangerous rule if a
defendant could shield himself from prosecution for crime by merely setting up a fear from or because of
a threat of a third person. 38 (Emphases and underscoring supplied)

Thus, "[d]uress, as a valid defense, should be based on real, imminent or reasonable fear for one's own
life. It should not be inspired by speculative, fanciful or remote fear. A threat of future injury is not enough.
It must be clearly shown that the compulsion must be of such character as to leave no opportunity for the
accused to escape." 39 DETACa

In the instant case, records reveal that Mamalinta and the rest of the MBOC of South Upi, Maguindanao,
were under heavy duress from supporters of mayoralty candidate Gunsi. As stated in Mamalinta's Joint
Affidavit 40 with Mato, the Vice-Chairman of the MBOC, they were forcibly taken and held hostage by
Gunsi's supporters, and while detained, were forced, intimidated, and coerced into declaring Gunsi as the
winning candidate, despite their earlier proclamation that Sinsuat was the true winner of the mayoralty
elections. Mamalinta and Mato's statements in their Joint Affidavit were then corroborated by the Minutes
41 of the MBOC dated May 14 and 15, 2004 and the Report 42 dated May 16, 2004 both prepared by
Peñafiel, another member of the MBOC, stating inter alia, that while the MBOC was canvassing the
votes, Gunsi's supporters kicked open the doors of the room, rushed towards the members of the MBOC,
and even attempted to throw chairs to them. Irrefragably, the foregoing incidents show that duress and
intimidation were clearly exercised against Mamalinta and the rest of the MBOC, and thus, the latter
succumbed to the same by performing the aforesaid acts, i.e., the double proclamation and the
unauthorized transfer of the place for canvassing, albeit against their will.

Furthermore, the CA aptly pointed out that as soon as Mamalinta and the MBOC escaped from their dire
situation, she immediately flew to Manila to report the incidents to the COMELEC, and such fact was not
seriously disputed by the latter. 43 Thus, there is more reason to believe that Mamalinta and the MBOC
did not willingly commit the aforementioned acts.

To clarify, the CA did not err in considering Mamalinta and Mato's Joint Affidavit — as well as the Minutes
of the MBOC dated May 14 and 15, 2004 and the Report dated May 16, 2004 both prepared by Peñafiel
— although they were not formally offered as evidence during the investigation before the COMELEC. As
a rule, technical rules of procedure and evidence are not strictly applied in administrative proceedings.
Hence, in proper cases such as this, the procedural rules may be relaxed for the furtherance of just
objectives. 44 Thus, the CA did not err in taking these documents in consideration.

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The foregoing notwithstanding, the Court notes that the CA failed to determine Mamalinta's administrative
liability on the third act she was accused of committing, i.e., the premature proclamation of Sinsuat as the
winning candidate on the basis of an incomplete canvass of election returns. In Nasser Immam v.
COMELEC, 45 the Court ruled that a complete canvass of votes is necessary in order to reflect the true
desire of the electorate, and that a proclamation of winning candidates on the basis of incomplete
canvass is illegal and of no effect, viz.:

Jurisprudence provides that all votes cast in an election must be considered, otherwise voters shall be
disenfranchised. A canvass cannot be reflective of the true vote of the electorate unless and until all
returns are considered and none is omitted. In this case, fourteen (14) precincts were omitted in the
canvassing.

xxx xxx xxx

An incomplete canvass of votes is illegal and cannot be the basis of a subsequent proclamation. A
canvass cannot be reflective of the true vote of the electorate unless all returns are considered and none
is omitted. This is true when the election returns missing or not counted will affect the results of the
election.

We note that the votes of petitioner totaled one thousand nine hundred and sixty-one (1,961) while private
respondent garnered a total of one thousand nine hundred thirty (1,930) votes. The difference was only
thirty-one (31) votes. There were fourteen (14) precincts unaccounted for whose total number of
registered voters are two thousand three hundred and forty-eight (2,348). Surely, these votes will affect
the result of the election. Consequently, the non-inclusion of the 14 precincts in the counting
disenfranchised the voters. 46 (Emphases and underscoring supplied)

In the case at bar, the COMELEC En Banc correctly pointed out that the uncanvassed election returns
can still drastically affect the outcome of the elections, since "at the time of Sinsuat's proclamation, he
garnered only [1,230] votes, with the exclusion of the [12] election returns and [4] election returns that
have yet to be canvassed. These [4] election returns amount to [3,049] votes, or equivalent to 42.91% of
the total registered voters of South Upi, Maguindanao." 47 Notably, Mamalinta's defense of duress —
which was upheld in her other two (2) acts of double proclamation and unauthorized transfer of the place
for canvassing — is untenable in this instance as there was no showing that the MBOC was intimidated
or coerced into proclaiming Sinsuat as the winning candidate for the position of Mayor of South Upi,
Maguindanao. The allegations of Mamalinta that force and threats were exerted on her to make said
premature proclamation are self-serving and not supported by any other evidence, hence, cannot be
relied upon. 48 Therefore, Mamalinta's afore-described act of premature proclamation may still be
considered as Grave Misconduct, Gross Neglect of Duty, and/or Conduct Prejudicial to the Best Interest
of Service, and thus, she should be held administratively liable therefor.

In sum, while Mamalinta may be absolved from administrative liability for her acts of double proclamation
and unauthorized transfer of the place for canvassing as such acts were done under duress, she is
nevertheless administratively liable for her premature proclamation of Sinsuat as the winning candidate
on the basis of an incomplete canvass of votes.

WHEREFORE, the petition is GRANTED. The Decision dated March 11, 2016 and the Resolution dated
August 26, 2016 of the Court of Appeals in CA-G.R. SP No. 134368 are REVERSED and SET ASIDE.
Respondent Bai Haidy D. Mamalinta is hereby found GUILTY of Grave Misconduct, Gross Neglect of
Duty, and Conduct Prejudicial to the Best Interest of the Service. Accordingly, her civil service eligibility is

255
CANCELLED, and her retirement and other benefits, except accrued leave credits, are hereby
FORFEITED. Further, she is PERPETUALLY DISQUALIFIED from re-employment in any government
agency or instrumentality, including any government-owned and controlled corporation or government
financial institution.

SO ORDERED.

||| (Commission on Elections v. Mamalinta, G.R. No. 226622, [March 14, 2017])

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FIRST DIVISION

[G.R. No. 215994. June 6, 2016.]

OFFICE OF THE OMBUDSMAN AND FIELD INVESTIGATION OFFICE, petitioner, vs. ROLANDO B.
FALLER, respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated May 22, 2014 and the
Resolution 3 dated December 17, 2014 of the Court of Appeals (CA) in CA-G.R. SP No. 123745, which
found petitioner Rolando B. Faller (Faller) guilty of simple misconduct and conduct prejudicial to the best
interest of the service and, accordingly, meted the penalty of suspension for one (1) year, directed him to
restitute the amount of P760,000.00 to the Office of the Government Corporate Counsel (OGCC), and
imposed the accessory penalty of disqualification from promotion corresponding to the one-year period of
suspension. AIDSTE

The Facts

On May 25, 2005, the Government Service and Insurance System (GSIS), represented by its President
and General Manager, Winston F. Garcia (Garcia), executed a Memorandum of Agreement 4 (MOA) with
the OGCC, headed by then Government Corporate Counsel (GCC) Agnes VST Devanadera
(Devanadera), whereby the OGCC agreed to handle the extrajudicial foreclosure of delinquent real estate
loan accounts of GSIS (GSIS Foreclosure Project). In consideration thereof, GSIS endeavored to pay
special assessment fees in accordance with the actual service that the OGCC may render. 5 The total
special assessment fees received by the OGCC from the GSIS Foreclosure Project was in the amount of
P11,845,000.00. 6

Sometime thereafter, Devanadera issued two (2) memoranda authorizing the release of proceeds from
the special assessment fees collected from the GSIS Foreclosure Project, purportedly as their partial
share therefrom as attorney's fees. Thus, a Memorandum 7 dated January 23, 2007 (January 23, 2007
Memo) requested the release of the amounts of P500,000.00 to Devanadera and P200,000.00 to her
then Chief of Staff and Head Executive Assistant, 8 herein respondent Rolando B. Faller (Faller). The
January 23, 2007 Memo was accompanied by Disbursement Voucher (DV) Nos. 2007-01-273 9 and
2007-01-274, 10 both of which were certified by Divina Gracia F. Cruz (Cruz), then Accountant III.
Subsequently, Landbank Check Nos. 310159 11 for P450,000.00 and 310160 12 for P180,000.00 were
issued in favor of Devanadera and Faller, respectively, co-signed by Jose Capili (Capili), the Assistant
GCC for Administration, and Devanadera herself.

Likewise, Devanadera issued a Memorandum 13 dated February 8, 2007 (February 8, 2007 Memo)
requesting the release of the amounts of P100,000.00 to Devanadera and P30,000.00 to Faller from the
special assessment fees received from the GSIS Foreclosure Project, purportedly for the purchase of
reading materials to aid them in the discharge of their duties. It was accompanied by DV Nos. 2007-02-
413 14 and 2007-02-414, 15 which were both certified by Cruz. On the same day, Landbank Check Nos.

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310276 16 for P30,000.00 and 310277 17 for P100,000.00 were issued in favor of Faller and
Devanadera, respectively, again co-signed by Capili and Devanadera herself.

On January 23, 2008, the Commission on Audit (COA) issued Audit Observation Memorandum (AOM)
No. 2008-002 18 finding irregularities surrounding the alleged purchase of reading materials amounting to
P130,000.00 charged from the special assessment fees from the GSIS Foreclosure Project. The COA
found that disbursements were made directly to the agency officials, i.e., Devanadera and Faller, instead
of to bona fide suppliers and without proper documentation, in violation of the provisions of Section 4 (6)
of Presidential Decree (PD) No. 1445, 19 otherwise known as the "Government Auditing Code of the
Philippines."

When herein petitioner Field Investigation Office (FIO), Office of the Ombudsman (Ombudsman) issued a
subpoena duces tecum 20 directing the Accounting Division of the OGCC to submit before it the
supporting documents relative to the OGCC's purchase of reading materials, Accountant III Ariel J. Ubiña
certified 21 that no such documents were available in their records given that the procurement of these
reading materials did not undergo the proper procedure which required the execution of the said
documents.

Consequently, the FIO filed the instant complaint 22 against Devanadera, Faller, Cruz, and Capili: (a)
criminally charging them with two (2) counts of violation of Article 217 23 of the Revised Penal Code or
Malversation of Public Funds as well as two (2) counts of violation of Section 3 (e) of Republic Act No.
3019; and (b) administratively charging them with grave misconduct, dishonesty, and conduct prejudicial
to the best interest of the service, all in connection with the disbursements charged against the special
assessment fees collected from the GSIS Foreclosure Project with an aggregate amount of P830,000.00.

In their defense, 24 Devanadera and Faller claimed that their receipt of the attorney's fees from the GSIS
Foreclosure Project fees was sanctioned under the Administrative Code of 1987 and, more specifically,
under OGCC Office Order No. 006, series of 2004 25 which prescribed guidelines in the distribution of
attorney's fees. They likewise contended that they indeed purchased reading materials from the funds
paid to them and left them in the OGCC premises. 26 They averred that the lack of documentation was
the responsibility of Cruz who, unfortunately, can no longer be located as she had already left the OGCC.
27 Finally, they claimed that they cannot be held liable for Malversation, not being "accountable officers"
as contemplated under the law. 28

For his part, Capili argued that he cannot be held liable as a co-conspirator in the absence of any positive
evidence showing that he actively participated in the alleged offenses. Moreover, he claimed that his act
of affixing his signature on the checks issued in favor of Devanadera and Faller was only ministerial. 29

The Ombudsman Ruling

In a Decision 30 dated March 3, 2010, the Ombudsman found Devanadera, Faller, Cruz, and Capili guilty
of grave misconduct, dishonesty, and conduct prejudicial to the best interest of the service and
accordingly, ordered their dismissal. They were likewise directed to jointly and solidarily restitute to the
OGCC Trust Liability Account the total amount of P760,000.00. 31

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The Ombudsman found dearth of evidence to show that Devanadera and Faller had actually purchased
reading materials using the funds given to them, and that the said reading materials exist in the OGCC
premises. 32 It pointed out that the purported purchase could have been easily substantiated with the
presentation of official receipts, invoices, delivery receipts, turn-over lists, or other similar documents. 33
Thus, without positive proof that the purchase had been made or that the reading materials exist, coupled
with the lack of supporting documentation, the implication was that Devanadera and Faller had
appropriated to themselves the total amount of P130,000.00. 34

With respect to the payment of attorney's fees, the Ombudsman ruled that the context of "attorney's fees"
provided in the Administrative Code of 1987 (Section 10, Chapter 3, Title III, Book IV) is in contemplation
of attorney's fees awarded by the courts in connection with a litigated case. 35 Taken together with
OGCC Order No. 006, series of 2004, these are the attorney's fees which shall be further distributed to
handling lawyers of litigated cases as incentives. 36 In this case, the GSIS Foreclosure Project was
extrajudicial in character. 37 Moreover, it appears that Faller was the sole OGCC lawyer assigned to the
said project whose participation was not as a litigating lawyer but as Operations Manager thereof. 38

Furthermore, the MOA between GSIS and the OGCC specified that the fees paid by the former are
special assessment fees, not attorney's fees. 39 As such, it cannot be the subject of distribution in the
manner set forth under Office Order No. 006, series of 2004. Relative thereto, special assessment fees
are governed by separate guidelines, distinct from those governing the distribution of attorney's fees. 40

In view of its findings, the Ombudsman held that there was undue injury to the government when
Devanadera and Faller appropriated for themselves the amount of money charged against the GSIS
Foreclosure Project fees to which they were not entitled. 41 Similarly, Capili was adjudged liable as a co-
signatory of the subject checks. The Ombudsman opined that as Assistant GCC, he should have been
familiar with the prescribed procedure for the procurement of reading materials as well as payment of
attorney's fees. 42

Finally, the Ombudsman ruled that conspiracy existed in this case, as Devanadera, Faller, Cruz, and
Capili had colluded to defraud the government of the total amount of P830,000.00. It appreciated the
aggravating circumstance of "taking undue advantage of official position" as having attended the
commission of the offense. 43

Aggrieved, Devanadera and Faller moved for reconsideration 44 while Capili moved for reinvestigation.
45 Both motions were, however, denied in an Omnibus Order 46 dated October 3, 2011. AaCTcI

Faller, for and on his sole behalf, elevated the matter before the CA via petition for review. 47

The CA Ruling

In a Decision 48 dated May 22, 2014, the CA modified the Ombudsman ruling insofar as Faller is
concerned, finding him guilty only of simple misconduct and conduct prejudicial to the best interest of the
service and accordingly, imposed upon him the penalty of suspension for one (1) year with the accessory
penalty of disqualification from promotion corresponding to the one (1) year period of suspension.
Likewise, he was ordered to restitute to the OGCC Trust Liability Account the amount of P760,000.00. 49

259
In so ruling, the CA found the third element that constitutes grave misconduct, i.e., corruption, clear intent
to violate the law or flagrant disregard of the established rule, to be lacking in this case. 50 Thus, the CA
found no evidence to prove that Faller's receipt of the attorney's fees as well as the funds for the
purchase of reading materials was done with a clear intent to violate the law, or was done in flagrant
disregard of established rules. Consequently, Faller can only be found guilty of simple misconduct. 51

The CA further exonerated Faller from liability for dishonesty, finding that he "merely received attorney's
fees, and amounts representing payment for reading materials." He had no hand in preparing the
documents required therefor nor did he authorize any disbursement. 52

However, the CA sustained Faller's liability for conduct prejudicial to the best interest of the service,
considering that he received sums of money without compliance with the rules. In this regard, the CA held
that Faller should have been more circumspect with respect to his conduct, as his involvement in the
foregoing incidents diminished, or tended to diminish, the people's trust in the OGCC. 53

The Ombudsman 54 and Faller 55 filed separate motions for partial reconsideration, which were both
denied in a Resolution 56 dated December 17, 2014; hence, this petition filed by the FIO of the
Ombudsman.

The Issue Before the Court

The essential issue for the Court's resolution is whether or not the CA erred when it ruled that Faller is
administratively liable for simple misconduct and conduct prejudicial to the best interest of the service.

The Court's Ruling

The petition is without merit.

Misconduct is a transgression of some established and definite rule of action, more particularly, unlawful
behavior or gross negligence by a public officer. 57 To constitute an administrative offense, misconduct
should relate to or be connected with the performance of the official functions and duties of a public
officer. 58 The misconduct is considered as grave if it involves additional elements such as corruption or
willful intent to violate the law or to disregard established rules, which must be proven by substantial
evidence; otherwise, the misconduct is only simple. Corruption, as an element of grave misconduct,
consists in the act of an official or fiduciary person who unlawfully and wrongfully uses his station or
character to procure some benefit for himself or for another person, contrary to duty and the rights of
others. 59

On the other hand, dishonesty is defined as the concealment or distortion of truth in a matter of fact
relevant to one's office or connected with the performance of his duty. 60 It implies a disposition to lie,
cheat, deceive or defraud; untrustworthiness; lack of integrity; lack of honesty, probity, or integrity in
principle; and lack of fairness and straightforwardness; 61 disposition to defraud, deceive or betray. 62

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After a punctilious review of the records, the Court concurs with the findings of the CA that Faller should
not be held administratively liable for grave misconduct and/or dishonesty.

While there were violations of established and definite rules of action, namely: (a) the disbursement of
attorney's fees to Faller despite the fact that the GSIS Foreclosure Project did not involve any court
litigation contrary to OGCC Office No. 006, series of 2004, 63 and (b) the failure to comply with Section 4
(6) 64 of PD No. 1445, and paragraph V of COA Circular No. 97-004 dated July 1, 1997 65 which should
have been observed in the purchase of the reading materials subject of this case, there is no substantial
evidence to prove that the foregoing violations were precipitated by Faller with corruption or a willful intent
to violate the law so as to render him administratively liable for Grave Misconduct. Apart from admittedly
receiving the checks for P180,000.00 purportedly as attorney's fees and P30,000.00 for the purchase of
reading materials, both charged against the GSIS Foreclosure Project fees, records do not show that
Faller directly or actively participated in the disbursement of the said funds, or authorized the same. His
receipt of the sum of P180,000.00 was based on his assumption that the funds he received were in the
nature of attorney's fees as compensation for his work on the GSIS Foreclosure Project, which,
unfortunately, does not qualify as a matter of litigation under OGCC Office Order No. 006, series of 2004
as above-explained. EcTCAD

Neither were the foregoing infractions indicative of a disposition to deceive or lie so as to hold Faller
administratively liable for dishonesty. While it has been established that Faller received the check for
P30,000.00 purportedly as funds for the purchase of reading materials in connection with the discharge of
his duties, it has not been shown, however, that he intended to defraud the government of the said
amount. Moreover, the affidavits 66 executed by Atty. Alberto C. Agra (Atty. Agra), Devanadera's
successor as GCC, tend to prove that the reading materials do exist in the OGCC premises, the same
having been purchased during the tenure of his predecessor — Devanadera — and turned over to him
upon his assumption in office.

Nonetheless, for the above-said violations, Faller should be held liable for simple misconduct. A person
charged with grave misconduct may be held liable for simple misconduct if the misconduct does not
involve any of the additional elements to qualify the misconduct as grave, 67 as in this case. Faller,
despite the lack of proof to show that his infractions were tainted with corruption, should have been more
circumspect in complying with the pertinent OGCC and procurement rules, for which he should remain
accountable.

In the same light, Faller's mistakes and/or the irregularities involved in the contested disbursements which
he actually received resulted in an anomaly that tainted the public's perception of his office, thereby
subjecting him to administrative liability for conduct prejudicial to the best interest of the service.
Jurisprudence states that acts may constitute conduct prejudicial to the best interest of the service as
long as they tarnish the image and integrity of his/her public office, 68 as in this case.

In these respects, therefore, the Court upholds the CA. However, considering that Faller received only the
total amount of P210,000.00, 69 P30,000.00 of which was used to purchase the reading materials
existing in the OGCC premises, he is therefore liable to return only the sum of P180,000.00 that he
received purportedly as attorney's fees. 70

Simple misconduct is classified as a less grave offense punishable by suspension for a period of one (1)
month and one (1) day to six (6) months for the first offense, while conduct prejudicial to the best interest
of the service is classified as a grave offense punishable by suspension for a period of six (6) months and
one (1) day to one (1) year for the first offense. Under Section 50 71 of the Revised Rules on
Administrative Cases in the Civil Service, if the respondent is found guilty of two (2) or more charges, the

261
penalty for the most serious charge shall be imposed and the other charges shall be considered as
aggravating circumstances. Likewise, under Section 49 72 of the same Rules, the maximum of the
penalty shall be imposed where only aggravating and no mitigating circumstances are present, as in this
case. Accordingly, the Court concurs with the CA that the penalty of suspension for one (1) year must be
imposed upon Faller, and, conformably with Section 52 73 of the same Rules, meted the accessory
penalty of disqualification from promotion for the entire period of the suspension.

WHEREFORE, the Decision dated May 22, 2014 and the Resolution dated December 17, 2014 of the
Court of Appeals in CA-G.R. SP No. 123745 are hereby AFFIRMED with MODIFICATION. Respondent
Rolando B. Faller is found GUILTY of simple misconduct and conduct prejudicial to the best interest of
the service. Accordingly, he is ordered SUSPENDED for a period of one (1) year and directed to restitute
the total amount of P180,000.00 to the Office of the Government Corporate Counsel Trust Liability
Account. The accessory penalty of disqualification from promotion corresponding to the one-year period
of suspension is likewise imposed.

SO ORDERED.

||| (Office of the Ombudsman v. Faller, G.R. No. 215994, [June 6, 2016])

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FIRST DIVISION

[G.R. No. 225044. October 3, 2016.]

MANILA DOCTORS COLLEGE and TERESITA O. TURLA, petitioners, vs. EMMANUEL M. OLORES,
respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated July 27, 2015 and the
Resolution 3 dated June 7, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 129400, which reversed
the Decision 4 dated December 26, 2012 and the Resolution 5 dated February 5, 2013 of the National
Labor Relations Commission (NLRC) in NLRC LER No. 11-244-12 deleting the award of reinstatement
backwages in favor of respondent Emmanuel M. Olores (respondent) in the amount of P201,538.46
contained in the Order 6 dated October 23, 2012 of Labor Arbiter (LA) Romelita N. Rioflorido (LA
Rioflorido) in NLRC-NCR Case No. 06-08402-10. cSEDTC

The Facts

Respondent was a faculty member of petitioner Manila Doctors College (MDC) assigned at the
Humanities Department of the College of Arts and Sciences. 7 On June 7, 2010, he was dismissed for
Grave Misconduct, Gross Inefficiency, and Incompetence, 8 after due investigation finding him guilty of
employing a grading system that was not in accordance with the guidelines set by MDC. 9 Respondent
lost no time in filing a case for illegal dismissal, money claims, regularization, damages, and attorney's
fees against petitioners MDC and Teresita O. Turla 10 (petitioners), President of MDC, 11 before the
NLRC, docketed as NLRC-NCR Case No. 06-08402-10, claiming that there was no just cause for his
dismissal, and that he should be accorded a permanent appointment after having served as an instructor
on a full-time basis for five (5) consecutive years. 12

On December 8, 2010, LA Arthur L. Amansec (LA Amansec) rendered a Decision 13 declaring

respondent to have been illegally dismissed 14 after finding that his act of liberally implementing the
guidelines in arriving at his students' final grades did not constitute serious misconduct, as he was not
inspired by malice, bad faith, personal gain or outright malevolence; 15 and that his five (5)-year
continuous service as faculty member without any derogatory record belies the charge of inefficiency and
incompetence against him. 16

However, with respect to the claim for regularization, LA Amansec found that respondent failed to meet
the requisites for the acquisition of permanent status, as he became a full-time faculty member, with at
least 18 units of teaching load, only on the second semester of School Year 2008-2009, even if he was
employed since June of 2005, 17 thereby falling short of the necessary three (3) consecutive years of
service as full-time teacher. 18 The Manual of Regulations for Private Higher Education (MORPHE)
provides that a full academic teaching personnel who has satisfactorily completed his probationary
employment for a period of six (6) consecutive semesters, or nine (9) consecutive trimesters, shall
acquire a regular or permanent status if he is re-hired immediately after the end of probation. 19 AIDSTE

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Accordingly, LA Amansec ordered petitioners to reinstate respondent as faculty member under the same
terms and conditions of his employment, without loss of seniority rights, but denied payment of
backwages on the grounds that (1) no malice or bad faith attended respondent's dismissal, (2)
respondent had showed disrespect to his superior by writing a letter containing disrespectful remarks, and
(3) respondent failed to inform or discuss with said superior his decision to depart from the guidelines in
giving grades. 20 LA Amansec specifically stated in his December 8, 2010 Decision that, "[MDC] is
hereby ordered to reinstate [respondent] as faculty member under the same terms and conditions of his
employment, without loss of seniority rights but without backwages. However, instead of being reinstated,
[respondent] is hereby given the option to receive a separation pay equivalent to his full month's pay for
every year of service, a fraction of at least six months to be considered a full year or the amount of
P100,000.00 (his monthly salary of P20,000.00 multiplied by the equivalent of five years' service)." 21

Petitioners filed an appeal 22 before the NLRC, docketed as NLRC LAC No. 01-000197-11, which was
initially dismissed for non-perfection in a Resolution 23 dated February 10, 2011. However, upon motion
for reconsideration, 24 the NLRC, in a Decision 25 dated September 30, 2011, reinstated and granted the
appeal and, accordingly, reversed the December 8, 2010 Decision of LA Amansec and dismissed the
complaint a quo for lack of merit. He found respondent guilty of serious misconduct when he defied the
prescribed grading system and arbitrarily adjusted the grades of his students. 26 Separately, the NLRC
ordered the payment to respondent of service incentive leave pay for a period of 3 years, considering
petitioners' failure to prove payment thereof. 27

On January 11, 2012, while the case was pending appeal, 28 respondent filed a Motion for Issuance of
Writ of Execution 29 seeking to collect (a) the service incentive leave pay ordered in the September 30,
2011 Decision of the NLRC, and (b) the equivalent wages from the issuance of the December 8, 2010
Decision of LA Amansec ordering reinstatement until the finality of the September 30, 2011 Decision of
the NLRC reversing the LA, or on November 5, 2011, as per Entry of Judgment 30 dated December 5,
2011. 31 SDAaTC

The LA Ruling

In an Order 32 dated October 23, 2012, LA Romelita N. Rioflorido (LA Rioflorido) granted respondent's
motion and ordered the issuance of a writ of execution for the total amount of P213,076.92 computed as
follows:

a. Reinstatement Backwages

(Dec. 8, 2010-Oct. 8, 2011) 10 mos. x P20,000.00 =

P180,000.00

(Oct. 9, 2011-Nov. 5, 2011) 28 days x P20,000.00/26 =

21,538.46

––––––––––

264
P201,538.46

=========

b. Service Incentive Leave Pay

P20,000.00/26 x 5 days x 3 years =

P11,538.46

––––––––––

P213,076.92

LA Rioflorido emphasized that an order of reinstatement entitles an employee to receive his accrued
backwages from the moment the reinstatement order was issued up to the date when the same was
reversed by a higher court without fear of refunding what he had received. 33

Aggrieved, petitioners sought an injunction and/or temporary restraining order (TRO) in a petition 34
before the NLRC, docketed as NLRC LER Case No. 11-244-12. In an Order 35 dated November 20,
2012, the NLRC issued a TRO commanding LA Rioflorido to desist from execution proceedings.

The NLRC Ruling

Subsequently, in a Decision 36 dated December 26, 2012, the NLRC granted the petition and modified
the Order dated October 23, 2012 of LA Rioflorido by deleting the award of the supposed reinstatement
backwages in the amount of P201,538.46. It retained, however, the grant of service incentive leave pay of
P11,538.46. 37

Anent the deletion of the award of reinstatement backwages, the NLRC observed that since respondent's
dismissal was eventually determined to be legal, there is no more basis for either payroll reinstatement
backwages or separation pay. 38

Respondent filed a Motion for Partial Reconsideration, 39 which was, however, denied in a Resolution 40
dated February 5, 2013, prompting him to elevate the matter via a petition for certiorari 41 before the CA,
docketed as CA-G.R. SP No. 129400.

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The CA Ruling

In a Decision 42 dated July 27, 2015, the CA reversed the December 26, 2012 Decision and February 5,
2013 Resolution of the NLRC, citing jurisprudence to the effect that the LA's order of reinstatement is
immediately executory; thus, the employer has to either re-admit the employee to work under the same
terms and conditions prevailing prior to his dismissal, or to reinstate him in the payroll; and that even if
such order of reinstatement is reversed on appeal, the employer is still obliged to reinstate and pay the
wages of the employee during the period of appeal until reversal by a higher court or tribunal. 43 AaCTcI

Petitioners moved for a reconsideration 44 of the foregoing Decision, arguing that the December 8, 2010
Decision of LA Amansec explicitly granted respondent, not petitioners, the option of being reinstated or
being paid separation pay, and that respondent had not exercised said option. 45 The motion was denied,
however, in a Resolution 46 dated June 7, 2016; hence, the instant petition.

The Issue Before the Court

The issue for the Court's resolution is whether or not the CA correctly reversed the NLRC ruling deleting
the award of reinstatement backwages in favor of respondent in the amount of P201,538.46.

The Court's Ruling

The petition is denied.

Under Article 223 (now Article 229) 47 of the Labor Code, "the decision of the [LA] reinstating a dismissed
or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be
executory, even pending appeal. The employee shall either be admitted back to work under the same
terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer,
merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for
reinstatement . . . ." 48 Verily, the employer is duty-bound to reinstate the employee, failing which, the
employer is liable instead to pay the dismissed employee's salary. 49

However, in the event that the LA's decision is reversed by a higher tribunal, the employer's duty to
reinstate the dismissed employee is effectively terminated. This means that an employer is no longer
obliged to keep the employee in the actual service or in the payroll. The employee, in turn, is not required
to return the wages that he had received prior to the reversal of the LA's decision. Notwithstanding the
reversal of the finding of illegal dismissal, an employer, who, despite the LA's order of reinstatement, did
not reinstate the employee during the pendency of the appeal up to the reversal by a higher tribunal may
still be held liable for the accrued wages of the employee, i.e., the unpaid salary accruing up to the time of
the reversal. By way of exception, an employee may be barred from collecting the accrued wages if
shown that the delay in enforcing the reinstatement pending appeal was without fault on the part of the
employer. 50

In this case, petitioners contend that that they should not be faulted for failing to enforce the December 8,
2010 Decision of LA Amansec — which had given respondent the option to receive separation pay in lieu

266
of reinstatement — for the reason that it was respondent who failed to choose either relief. 51 However,
as above-discussed, the reinstatement aspect of the LA's Decision is immediately executory and, hence,
the active duty to reinstate the employee — either actually or in payroll — devolves upon no other than
the employer, even pending appeal. In Pfizer, Inc. v. Velasco 52 (Pfizer, Inc.), the Court chastised the
employer therein as it "did not immediately admit [the employee] back to work which, according to the
law, should have been done as soon as an order or award of reinstatement is handed down by the Labor
Arbiter . . . ." 53 Meanwhile, the Court, in Bergonio, Jr., v. South East Asian Airlines, 54 remarked that "an
order of reinstatement issued by the LA is self-executory, i.e., the dismissed employee need not even
apply for and the LA need not even issue a writ of execution to trigger the employer's duty to reinstate the
dismissed employee." 55 Thus, while herein respondent may have been given an alternative option to
instead receive separation pay in lieu of reinstatement, there is no denying that, based on the provisions
of the Labor Code and as attributed in jurisprudence, it is his employer who should have first discharged
its duty to reinstate him. acEHCD

In any event, petitioners have no one else to blame but themselves for misconstruing LA Amansec's
December 8, 2010 Decision, despite its straightforward language of primarily directing MDC, as employer,
to reinstate respondent:

WHEREFORE, judgment is hereby made finding the complainant to have been illegally dismissed from
employment. Concomitantly, the respondent school is hereby ordered to reinstate him as faculty member
under the same terms and conditions of his employment, without loss of seniority rights but without
backwages. However, instead of being reinstated, the complainant is hereby given the option to receive a
separation pay equivalent to his full month's pay for every year of service, a fraction of at least six months
to be considered a full year or the amount of P100,000.00 (his monthly salary of P20,000.00 multiplied by
the equivalent of five years' service[)].

Other claims are dismissed for lack of merit.

SO ORDERED. 56

Clearly, the statement of such directive is only secondarily followed by the alternative option given to
respondent. This is consistent with the above-stated conclusion that the duty to reinstate is initiated by, as
it only devolves upon, the employer from the time the LA renders its Decision directing reinstatement.

Therefore, the Court cannot subscribe to the theory postulated by petitioners that the aforementioned LA
Decision took out from their hands the duty to reinstate respondent, for to do so would be to frustrate the
immediate and self-executory nature of the reinstatement aspect of the LA's Decision as provided by law.
To emphasize, to the point of repetition, petitioners were duty-bound to reinstate respondent either by
admitting him back to work under the same terms and conditions prevailing prior to his dismissal, or by
merely reinstating him in the payroll, which alternative options must be exercised in good faith; 57
otherwise, they are bound to pay his accrued salaries. EcTCAD

The Court is not unaware of the peculiarity attending educational institutions where the engagement of
faculty members and the assignment of teaching loads are done at the commencement of each
semester. 58 In the early case of the University of Santo Tomas v. NLRC (UST), 59 the Court, while
pronouncing that the dismissed faculty members must be actually reinstated during the pendency of the
labor dispute between the faculty union and the University, took into account the fact that the return-to-
work order was given in the middle of the first semester of the academic year, and that any change of
faculty members at such time would adversely affect and prejudice the students. Consequently, the Court

267
ordered that actual reinstatement take effect at the start of the second semester, and adjudged the faculty
members as entitled to full wages, backwages and other benefits prior to reinstatement to their actual
teaching loads. 60

In this case, while petitioners could not actually reinstate respondent at the time of the issuance of LA
Amansec's December 8, 2010 Decision, following the ruling in the aforementioned case of UST, as it
would be impracticable and detrimental to the students to change teachers in the middle of the semester,
petitioners should nonetheless have given respondent his new teaching load assignments and schedules
at the beginning of the succeeding semester, whether or not respondent was present during such
assignment. After all, it can be gleaned from the arguments presented by petitioners that the presence of
respondent during the assignment of teaching loads and schedules is merely for conferment regarding
availability and preference, 61 and petitioners could always require respondent to report for work on the
pre-assigned schedules. Had petitioners done so despite the absence of respondent, it would have
indicated their sincere willingness to comply with the reinstatement order. But they did not. There was
even no proof that petitioners required respondent to report for assignment of teaching load and
schedules. Besides, respondent's alleged failure to secure teaching load assignments did not prevent
petitioners from simply reinstating him in the payroll as an alternative. Sadly, petitioners also failed to
employ the same.

Finally, the Court deems inconsequential petitioners' submissions that respondent had claimed separation
pay during the execution proceedings at the NLRC level and had also alleged strained relations (and
therefore, intimated separation pay) in his pleadings. 62 The Court had previously ruled in Pfizer, Inc. that
the circumstance that the employee opted for separation pay in lieu of reinstatement as manifested in her
counsel's letter had no legal effect, not only because there was no genuine compliance by the employer
of the reinstatement order but also because the employer chose not to act on said claim. 63 The same
observations are made in this case. As aptly pointed out by the CA, there was "apparent apathy" 64 on
the part of petitioners towards the reinstatement order issued by LA Amansec during the pendency of
their appeal therefrom. Hence, for failure of the petitioners to comply with said order, the CA correctly
declared respondent to be entitled to the payment of his accrued salaries during the period of the appeal
until the reversal of the December 8, 2010 Decision of LA Amansec. The NLRC's Decision dated
December 26, 2012, which deleted the said award on the notion that the same had no more basis in view
of the eventual ruling declaring respondent's dismissal to be legal, failed to take into account the
provisions of the Labor Code and existing jurisprudence on the immediately executory nature of
reinstatement, as well as the consequences of non-compliance. Palpably, this smacks of grave abuse of
discretion as properly found by the CA. As jurisprudence conveys, there is "grave abuse of discretion . . .
when a lower court or tribunal patently violates . . . the law or existing jurisprudence." 65 SDHTEC

WHEREFORE, the petition is DENIED. The Decision dated July 27, 2015 and the Resolution dated June
7, 2016 of the Court of Appeals in CA-G.R. SP No. 129400 are hereby AFFIRMED.

SO ORDERED.

||| (Manila Doctors College v. Olores, G.R. No. 225044, [October 3, 2016])

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[G.R. No. 220605. September 21, 2016.]

COCA-COLA FEMSA PHILIPPINES, INC., * petitioner, vs. BACOLOD SALES FORCE UNION-
CONGRESS OF INDEPENDENT ORGANIZATION-ALU, respondent.

DECISION

PERLAS-BERNABE, J p:

Before the Court is a petition for review on certiorari 1 assailing the Decision 2 dated December 22, 2014
and the Resolution 3 dated September 8, 2015 of the Court of Appeals (CA) in CA-G.R. CEB-SP. No.
06892, which denied petitioner Coca-Cola Femsa Philippines, Inc.'s (petitioner) petition for review and
upheld the Decision 4 dated February 3, 2012 of the Panel of Voluntary Arbitrators (VA) of the National
Conciliation and Mediation Board (NCMB)-Department of Labor and Employment in Case Nos. AC-777-
RB6-06-01-10-2011, AC-782-RB6-06-01-10-2011, and AC-960-RB6-06-01-10-2011 on the ground that
the same had already attained finality.

The Facts

Petitioner is a corporation engaged in the manufacture of non-alcoholic beverages. Sometime in 2001,

Cosmos Bottling Corporation (Cosmos) ceded its sales functions to petitioner which resulted in the
integration of a number of Cosmos's salesmen, including Fernando T. Oquiana, Norman F. Vinarta, and
Santiago B. Espino, Jr. (Cosmos integrees) into petitioner's workforce as route salesmen. The Cosmos
integrees were given salary adjustments that would align with that of petitioner's own route salesmen. At
the time of integration, petitioner's system of product distribution was by direct selling, but it subsequently
adopted the route-to-market (RTM) system of distribution which led to the abolition of the route salesman
position and its replacement by the account developer (AD) position. Thus, through an internal selection
process, the Cosmos integrees' positions were eventually designated as ADs. 5 AcICHD

Meanwhile, petitioner hired new ADS who were, however, subject to a different set of qualifications from
the Cosmos integrees. The newly-hired ADs received a higher basic monthly pay although, allegedly,
occupying the same position, job description, and functions as that of the Cosmos integrees.
Furthermore, the newly-hired ADs were given, upon union membership, a monthly 45-kilogram (kg.) rice
provision with a corresponding monthly deduction of the amount of P550.00 from their salaries. 6

Aggrieved by the difference in treatment, respondent Bacolod Sales Force Union-Congress of

Independent Organization-ALU, the recognized collective bargaining agent of the rank-and-file sales
personnel of petitioner's Bacolod Plant 7 (respondent), submitted its concerns to the grievance machinery
in accordance with the Collective Bargaining Agreement (CBA), demanding, among others, that: (a) the
salary rates of the Cosmos integrees be readjusted to equal to that of the newly-hired ADs' salary rates; 8
(b) the conversion of the P550.00 monthly deduction from the salaries of the Bacolod Plant sales
personnel into a 45-kg. rice provision be declared as a violation of the non-diminution rule under Article
100 9 of the Labor Code,as amended; and (c) the employees concerned be reimbursed for the amounts
illegally deducted. 10

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After the grievance process failed, the parties agreed to submit the unresolved matters to voluntary
arbitration pursuant to Article 5 of the CBA, and filed a preventive mediation case before the NCMB
raising the aforesaid issues. 11

Respondent claimed that the Cosmos integrees were being discriminated against the newly-hired ADs, in
light of the disparity between their salaries 12 and reiterated that the monthly P550.00 deduction from the
basic salaries of the new union members constitutes a violation of the non-diminution rule. 13

For its part, petitioner maintained that the fixing of hiring rates is a management prerogative, adding that
the Cosmos integrees and the newly-hired ADs were not similarly situated due to the apparent variance in
the manner by which they were appointed and hired, as well as their qualifications, skills, and
responsibilities for the position. 14 Further, it claimed that the Cosmos integrees failed to meet all the
basic qualifications for the AD position, such as age and educational attainment. 15 For another, it
contended that the rice subsidy of P550.00 per month to non-union members was automatically
converted into an actual 45-kg. sack of rice upon union membership, which is, in reality, valued more than
the amount of said subsidy and, thus, was not tantamount to any diminution of benefits. 16

The VA's Ruling

In a Decision 17 dated February 3, 2012 (VA Decision), the VA: (a) declared that the disparity in the
wages of the Cosmos integrees and the newly-hired ADs was discriminatory for lack of substantial basis
or valid criteria; (b) directed petitioner to realign or readjust the Cosmos integrees' basic salaries at par
with that of the newly-hired ADs; (c) declared that the P550.00 deduction from the union members' basic
salary in lieu of one (1) 45-kg. sack of rice every month was a violation of Article X 18 of the CBA and
Article 100 of the Labor Code,as amended; and (d) directed petitioner to comply with Article X of the CBA
by giving rice ration free of charge, and to cease and desist from deducting P550.00 from the monthly
salaries of the concerned employees, effective February 2012. 19

The VA held that the lower salary rate given to the Cosmos integrees smacks of discrimination given that
they hold the same position, perform the same work, share the same functions, and have the same job
description as that of the newly-hired ADs. Thus, under the principle of "equal pay for equal work," the
Cosmos integrees' failure to meet the new set of qualifications for ADs in view of their "over-age and lack
of educational attainment" did not justify their lower salary rates. 20 Moreover, the P550.00 deduction
from a union member's monthly salary and its conversion into a 45-kg. sack of rice ration constituted: (a)
non-compliance with Article X of the CBA, which clearly provides that the grant of rice ration to employees
shall be free of charge; and (b) a violation of the non-diminution rule under Article 100 of the Labor
Code,as amended, because the said benefit has become part of the employment contract. 21

Petitioner moved for reconsideration, 22 which was denied in a Resolution 23 dated April 25, 2012 (VA
Resolution).

The CA Proceedings

Petitioner received notice of the VA Resolution on May 21, 2012, 24 and filed its petition for review 25
under Rule 43 of the Rules of Court (Rules) before the CA on June 5, 2012. 26 TAIaHE

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Respondent countered, 27 among others, that the VA Decision had become final and executory after ten
(10) calendar days from receipt thereof pursuant to Article 262-A 28 of the Labor Code,as amended;
hence, the CA petition must, perforce, fail. 29

Subsequently, a writ of execution 30 dated July 26, 2013 was issued by the VA and served upon
petitioner. Thereafter, petitioner: (a) aligned the salaries of the Cosmos integrees with the newly-hired
ADs; (b) paid the corresponding wage differentials; (c) refunded the amounts deducted from the union
members' salaries; and (d) stopped the P550.00 monthly deductions from their salaries. 31

In a Decision 32 dated December 22, 2014, the CA denied the petition on the ground that the VA
Decision had attained finality pursuant to Section 5, 33 Article 5 of the CBA, which explicitly provides that
"[t]he decision of the Arbitration Committee shall be final and binding upon the COMPANY and the
UNION, and the employees and may be enforced in any court of competent jurisdiction." 34

Petitioner filed its motion for reconsideration, 35 which was, however, denied in a Resolution 36 dated
September 8, 2015; hence, this petition.

The Issue Before the Court

The essential issue for the Court's resolution is whether or not the CA correctly held that the VA Decision
can no longer be the subject of its review for having attained finality pursuant to the express provision
under Section 5, Article 5 of the CBA.

The Court's Ruling

In the context of labor law, arbitration is the reference of a labor dispute to an impartial third person for
determination on the basis of evidence and arguments presented by such parties who have bound
themselves to accept the decision of the arbitrator as final and binding. 37 However, in view of the nature
of their functions, voluntary arbitrators act in a quasi-judicial capacity; 38 hence, their judgments or final
orders which are declared final by law are not so exempt from judicial review when so warranted. 39 "Any
agreement stipulating that 'the decision of the arbitrator shall be final and unappealable' and 'that no
further judicial recourse if either party disagrees with the whole or any part of the arbitrator's award may
be availed of' cannot be held to preclude in proper cases the power of judicial review which is inherent in
courts." 40

Case law holds that the proper remedy to reverse or modify a Voluntary Arbitrator's or a Panel of
Voluntary Arbitrators' decision or award is to appeal the award or decision before the CA under Rule 43 of
the Rules 41 on questions of fact, of law, mixed questions of fact and law, 42 or a mistake of judgment.
43 However, in several cases, the Court allowed the filing of a petition for certiorari from the VA's
judgment to the CA under Rule 65 of the same Rules, 44 where the VA was averred to have acted
without or in excess of his jurisdiction or with grave abuse of discretion amounting to lack or excess of
jurisdiction. 45

In this case, petitioner availed of the correct mode of review of the VA Decision by filing a petition for
review with the CA under Rule 43 of the Rules, and in conformity with prevailing jurisprudence. In said
petition, petitioner assailed the arbitral award, first, on the ground that "[t]he Panel seriously erred in

271
declaring [that] the disparity between the wages of [the] Cosmos [i]ntegrees and [the] newly-hired [ADs]
as discriminatory, and [in] directing [petitioner] to [realign] or [readjust] the basic salary rate of the Cosmos
[i]ntegrees equivalent to that of the newly-hired [ADs]." 46 In this light, petitioner pointed out that the
Cosmos [i]ntegrees "were not hired by [petitioner] for the AD Position because they met the qualifications
therefor. Rather they were appointed as such because they passed the internal selection process which
[petitioner] specifically applied to them" and, "[i]n fact, . . . all three (3) Cosmos [i]ntegrees failed to meet
all the basic qualifications for the AD position, such as age and educational attainment." 47 On the other
hand, the newly-hired ADs "were engaged on the basis of the qualifications they presented to [petitioner]
at the time they applied for the job," and "were no longer required to undergo the same selection process
applied to the Cosmos [i]ntegrees inasmuch as they already possessed, at the time of their application,
the minimum requirements for the job." 48 Based on the differences in the selection processes and
qualifications, petitioner claimed that the "doctrine [of] 'equal pay for equal work' . . . has no application in
the present case." 49 Further, it added that the measure of providing for higher salary rates was not done
arbitrarily and illegally to discriminate against the Cosmos [i]ntegrees. Moreover, it claimed that "[b]eing
an exercise of management prerogative, [petitioner] may very well offer newly-hired ADs a more
competitive compensation scheme in order to attract more qualified candidates for the position." 50

In its petition before the Court, petitioner, citing certain cases on the matter, 51 restated the same
position, postulating that "the unilateral adoption [of] an upgraded salary scale that increased hiring rates
of newly-hired employees without increasing the salary rates of the old employees [should be treated as]
a valid exercise of business judgment prerogative, based on the high productivity of that particular group
and the need to increase the company's hiring rate[;] otherwise[,] the employer's hands would be
completely tie[d], and [it would be] discourage[d] from adjusting the salary rates for fear that it would
result to . . . [the] demand [by] all employees, for a similar increase, especially if the financial condition of
the business cannot address an across the board increase." 52 cDHAES

The Court sees the prima facie reasonableness of petitioner's asseverations and finds that the merits of
its case, based on such argumentation, properly warrant judicial review. As such, the CA should look into
the soundness of the VA rulings in relation to the nuances averred, particularly, the impact of the
differences in the selection processes applied and relevant qualifications between the Cosmos integrees
and the newly-hired ADs. Moreover, the CA ought to determine the proper application of the "equal pay
for equal work" principle vis-à-vis the business decision of an employer to adopt a more competitive
compensation scheme in light of the demands in human resource. Thus, borrowing the language in
Chung Fu Industries (Phils.) Inc. v. CA 53 — which similarly involved a restrictive stipulation on appeal
from an arbitral award — the Court finds that the CA erred in refusing "to look into the merits of [this]
case, despite [a] prima facie showing of the existence of grounds warranting judicial review," which, thus,
"effectively deprived petitione[r] of [the] opportunity to prove or substantiate [its] allegations." 54

In fact, aside from the above stated-issue, the following separate issues were left untouched by the CA:
(a) as raised by petitioner, whether or not the conversion of the monthly P550.00 rice subsidy into one (1)
45-kg. sack of rice upon union membership constitutes a violation of Article 100 of the Labor Code,as
amended, and non-compliance with Article X of the CBA; 55 and (b) as raised by respondent, whether or
not the petition for review was filed out of time. 56 The materiality of these issues all the more reinforces
the conclusion that the CA should not have refused to exercise judicial review of the assailed VA rulings,
notwithstanding the CBA stipulation that the decision of the Arbitration Committee, i.e., the VA, shall be
final and binding upon the parties. In fine, a remand to the CA for the prompt resolution of all these
issues, including any other ancillary issues which the parties may have raised before it, is, therefore, in
order. Verily, courts "should not shirk from exercising their power to review, where under applicable laws
and jurisprudence, such power may be rightfully exercised," 57 as in this case.

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated December 22, 2014 and the
Resolution dated September 8, 2015 of the Court of Appeals (CA) in CA-G.R. CEB-SP. No. 06892 are

272
hereby SET ASIDE. The case is REMANDED to the CA for the prompt resolution of the aforementioned
issues, including any other ancillary issues which the parties may have raised before it.

SO ORDERED.

||| (Coca-Cola Femsa Philippines, Inc. v. Bacolod Sales Force Union-Congress of Independent
Organization-ALU, G.R. No. 220605, [September 21, 2016])

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FIRST DIVISION

[G.R. No. 224943. March 20, 2017.]

JORGE B. NAVARRA, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated October 29, 2015 and the
Resolution 3 dated May 19, 2016 of the Court of Appeals (CA) in CA-G.R. CR No. 35855, which affirmed
the Decision 4 dated March 13, 2013 of the Regional Trial Court of Muntinlupa City, Branch 206 (RTC) in
Crim. Case No. 01-303 finding petitioner Jorge B. Navarra (petitioner) guilty beyond reasonable doubt of
the crime of violation of Section 22 (a), in relation to Section 28 (h) and (f), of Republic Act No. (RA) 8282.
5

The Facts

The instant case stemmed from an Information 6 dated January 18, 2001 filed before the RTC charging,
inter alia, petitioner of violation of Section 22 (a), in relation to Section 28 (h) and (f), of RA 8282, the
accusatory portion of which states:

The undersigned Assistant City Prosecutor accuses JORGE B. NAVARRA, x x x of the crime of violation
of Section 22 (a), in relation to Section 28 (h) and (f)[,] of R.A. 1161, as amended, by R.A. 8282,
committed as follows:

That in or about and during the period comprised between July 1997 and June 2000, in the City of
Muntinlupa, Philippines and within the jurisdiction of this Honorable Court, the above-named accused,
being members of the board of directors of the Far East Network of Integrated Circuits Subcontractors
(FENICS) Corporation, a covered member of the Social Security System (SSS), conspiring and
confederating together and mutually helping and aiding one another, did then and there willfully,
unlawfully and feloniously fail and refuse to remit and pay to the SSS the SS/Medicare/EC contributions
withheld by them from the salaries of the FENICS employees, the counterpart SSS/Medicare/EC
contributions of FENICS, as well as the salary/calamity loan payments due to the SSS withheld by them,
despite demands from them to remit and pay these obligations to the SSS.

Contrary to law. 7

Upon motion, 8 the criminal case was dismissed as against petitioner's co-accused as it was found that
they were no longer serving as members of FENICS's Board of Directors during the period when the
aforesaid crime was allegedly committed. 9 On the other hand, the case pushed through against
petitioner who pleaded "not guilty" to the charge. 10

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The prosecution alleged that from 1995 to 2000, petitioner served as the President and Chairman of the
Board of Directors of Far East Network of Integrated Circuits Subcontractors Corporation (FENICS), an
employer registered with the Social Security System (SSS) and with SSS ID No. 03-9020939-1. 11
Sometime in the years 1999 to 2002, a total of eleven (11) employees of FENICS filed separate
complaints before the SSS, Alabang Branch against FENICS for the latter's non-remittance of their SSS
contributions, prompting Account Officer Felicula B. Argamosa (Argamosa) to investigate the matter.
Upon verification, Argamosa discovered that FENICS indeed failed to remit the SSS contributions of its
employees from July 1997 to June 2000 and, thus, determined that FENICS's total unpaid obligations
amounted to P10,077,656.24, 12 excluding the three percent (3%) monthly penalty mandated by law. 13
Despite numerous demands, FENICS failed to pay its delinquencies, thus, constraining SSS to file an
Affidavit-Complaint 14 against petitioner and his co-accused for the aforesaid crime before the Office of
the City Prosecutor of Muntinlupa City (OCP). 15 CAIHTE

Meanwhile, pending preliminary investigation proceedings, petitioner sent a letter 16 dated October 25,
2000 to the SSS, offering to pay in installments FENICS' delinquent remittances from July 1997 to
September 2000, attaching thereto two (2) postdated checks in the amount of P500,000.00 each and
payable to SSS as payment, and promising to pay the remaining balance via 48 equal monthly
installments. 17 While the first check was encashed, the second was dishonored for being drawn against
a closed account. The SSS sent petitioner a notice of dishonor, but the latter ignored the same. 18 In
addition, petitioner failed to follow through with the monthly installments. 19 Later on and while the case
was pending trial, petitioner sent another letter 20 dated April 25, 2003 to the SSS, proposing a
restructuring of FENICS's account, but the SSS rejected such proposal. 21

In his defense, petitioner averred that while he is indeed the President and Chairman of the Board of
Directors of FENICS, he never had custody of the employees' SSS contributions, as it was the Human
Resources Department that was tasked to handle such matters. Further, he asserted that during the
period when the alleged delinquencies were incurred, FENICS had already shut down. In this relation,
petitioner narrated that: (a) from 1995-1996, FENICS diligently remitted the employees' SSS
contributions; (b) beginning 1997, its business started to decline due to the pull-out of one of its biggest
customers eventually leading to its shut down; and (c) since FENICS was already non-operational, its
employees were unable to work, and naturally, there could have been no wages/salaries from which the
SSS contributions could be sourced. 22

The RTC Ruling

In a Decision 23 dated March 13, 2013, the RTC found petitioner guilty beyond reasonable doubt of the
crime charged and, accordingly, sentenced him to suffer the penalty of imprisonment for the
indeterminate period of four (4) years and two (2) months of prision correccional, as minimum, to twenty
(20) years of reclusion temporal, as maximum, and ordered him to pay the SSS the unpaid obligation of
P9,577,656.24 24 plus three percent (3%) monthly interest reckoned from July 1997 until fully paid. 25

In so ruling, the RTC did not give credence to petitioner's claim that the FENICS's operations had already
shut down, considering that: (a) if this claim were indeed true, then it should have been raised from the
moment the SSS sent its first demand letter to FENICS and before the filing of the case before the court;
and (b) the same is inconsistent with the letters petitioner himself made in an attempt to amicably settle
FENICS's SSS delinquencies. Further, the RTC took note of petitioner's letter dated April 25, 2003
wherein he proposed to settle FENICS's outstanding delinquencies with the SSS. In this regard, the RTC
ratiocinated that since the said letter was made during the pendency of the instant criminal case, then the
same should be considered as an implied admission of guilt on his part. 26

275
Aggrieved, petitioner appealed 27 to the CA, arguing that: (a) the information against him was defective
as it failed to properly charge him with a criminal offense; (b) he cannot be held liable for violation of
Section 28 (h) of RA 8282 since under this provision, it is the employer, i.e., FENICS, that should be
charged with the same; (c) the prosecution failed to establish that the private complainants were indeed
FENICS's employees; and (d) in any event, his criminal liability was already extinguished by his
compromise agreement with the SSS. 28

The CA Ruling

In a Decision 29 dated October 29, 2015, the CA affirmed petitioner's conviction in toto. 30 It held that: (a)
petitioner's failure to raise the issue of the validity or regularity of the Information prior to entering his plea
was deemed a waiver of any defect in the same; (b) since FENICS is a corporation, its failure to remit the
SSS contributions of its employees subjects its officers, such as petitioner, to liability, especially since
FENICS had already been dissolved; (c) the prosecution's documentary evidence clearly show that the
private complainants were FENICS's employees; (d) petitioner's letters dated October 25, 2000 and April
25, 2003 proposing to settle FENICS's delinquencies should be viewed as an admission of guilt on his
part; and (e) there was no compromise as SSS did not assent thereto, and even assuming there was one,
such cannot extinguish petitioner's criminal liability. 31

Undaunted, petitioner moved for reconsideration, 32 which was, however, denied in a Resolution 33
dated May 19, 2016; hence, this petition.

The Issue before the Court

The sole issue raised for the Court's resolution is whether or not the CA correctly upheld petitioner's
conviction for violation of Section 22 (a), in relation to Section 28 (h) and (f), of RA 8282.

The Court's Ruling

The petition has no merit.

Preliminarily, the Court notes that petitioner assails the validity or regularity of the Information filed against
him on the ground that it allegedly did not charge a criminal offense. However, as pointed out by the CA,
petitioner never raised such issue prior to his arraignment. In fact, a reading of the records shows that
petitioner only raised the same after he was convicted by the RTC and the case was already on appeal
before the CA. Thus, the CA correctly ruled that his failure to object to the alleged defect in the
Information before entering his plea amounted to a waiver of such defects, especially since objections as
to matters of form or substance in the Information cannot be made for the first time on appeal. 34 Hence,
petitioner can no longer be allowed to raise this issue before the Court.

Going now to the substantive issue of the instant case, a plain reading of the Information reveals that
petitioner, as FENICS's President and Chairman of the Board of Directors at that time, is charged for
violation of Section 22 (a), in relation to Section 28 (h) 35 and (f), of RA 8282 for FENICS's failure and/or

276
refusal to remit its employees' SSS contributions to the SSS during the period from July 1997 to June
2000. Section 22 (a) of RA 8282 states:

Section 22. Remittance of Contributions. — (a) The contributions imposed in the preceding section shall
be remitted to the SSS within the first ten (10) days of each calendar month following the month for which
they are applicable or within such time as the Commission may prescribe. Every employer required to
deduct and to remit such contributions shall be liable for their payment and if any contribution is not paid
to the SSS as herein prescribed, he shall pay besides the contribution a penalty thereon of three percent
(3%) per month from the date the contribution falls due until paid. If deemed expedient and advisable by
the Commission, the collection and remittance of contributions shall be made quarterly or semi-annually
in advance, the contributions payable by the employees to be advanced by their respective employers:
Provided, That upon separation of an employee, any contribution so paid in advance but not due shall be
credited or refunded to his employer. DETACa

xxx xxx xxx

Verily, prompt remittance of SSS contributions under the aforesaid provision is mandatory. 36 Any
divergence from this rule subjects the employer not only to monetary sanctions, i.e., the payment of
penalty of three percent (3%) per month, but also to criminal prosecution if the employer fails to: (a)
register its employees with the SSS; (b) deduct monthly contributions from the salaries/wages of its
employees; or (c) remit to the SSS its employees' SSS contributions and/or loan payments after
deducting the same from their respective salaries/wages. 37 In this regard, Section 28 (f) of RA 8282
explicitly provides that "[i]f the act or omission penalized by this Act be committed by an association,
partnership, corporation or any other institution, its managing head, directors or partners shall be liable to
the penalties provided in this Act for the offense." Notably, the aforesaid punishable acts are considered
mala prohibita and, thus, the defenses of good faith and lack of criminal intent are rendered immaterial.
38

In this case, a judicious review of the records reveals that the prosecution — through a plethora of
documentary evidence 39 — had established by proof beyond reasonable doubt that during the period of
July 1997 to June 2000, FENICS failed to remit its employees' SSS contributions despite withholding
such amounts from their respective salaries. It is settled that "[f]actual findings of the RTC, when affirmed
by the CA, are entitled to great weight and respect by this Court and are deemed final and conclusive
when supported by the evidence on record," 40 as in this case.

In sum, the CA correctly affirmed petitioner's conviction for the crime of violation of Section 22 (a), in
relation to Section 28 (h) and (f), of RA 8282.

WHEREFORE, the petition is DENIED. The Decision dated October 29, 2015 and the Resolution dated
May 19, 2016 of the Court of Appeals in CA-G.R. CR No. 35855, which affirmed the Decision dated
March 13, 2013 of the Regional Trial Court of Muntinlupa City, Branch 206 in Crim. Case No. 01-303
finding petitioner Jorge B. Navarra GUILTY beyond reasonable doubt of the crime of violation of Section
22 (a), in relation to Section 28 (h) and (f), of Republic Act No. 8282 is hereby AFFIRMED. Accordingly,
petitioner Jorge B. Navarra is sentenced to suffer the penalty of imprisonment for the indeterminate
period of four (4) years and two (2) months of prision correccional, as minimum, to twenty (20) years of
reclusion temporal, as maximum, and is ordered to pay the SSS the unpaid obligation of P9,577,656.24
plus three percent (3%) monthly interest reckoned from July 1997 until fully paid.

SO ORDERED.

||| (Navarra v. People, G.R. No. 224943, [March 20, 2017])

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FIRST DIVISION

[G.R. No. 220617. January 30, 2017.]

NESTLE PHILIPPINES, INC., petitioner, vs. BENNY A. PUEDAN, JR., JAYFER D. LIMBO, BRODNEY N.
AVILA, ARTHUR C. AQUINO, RYAN A. MIRANDA, RONALD R. ALAVE, JOHNNY A. DIMAYA,
MARLON B. DELOS REYES, ANGELITO R. CORDOVA, EDGAR S. BARRUGA, CAMILO B.
CORDOVA, JR., JEFFRY B. LANGUISAN, EDISON U. VILLAPANDO, JHEIRNEY S. REMOLIN, MARY
LUZ A. MACATALAD, * JENALYN M. GAMUROT, DENNIS G. BAWAG, RAQUEL A. ABELLERA, and
RICANDRO G. GUATNO, JR., respondents.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated March 26, 2015 and the
Resolution 3 dated September 17, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 132686, which
affirmed the Decision 4 dated May 30, 2013 and the Resolution 5 dated August 30, 2013 of the National
Labor Relations Commission (NLRC) in LAC No. 02-000699-13/NCR-03-04761-12, declaring petitioner
Nestle Philippines, Inc. (NPI), jointly and severally liable with Ocho de Septiembre, Inc. (ODSI) to
respondents Benny A. Puedan, Jr., Jayfer D. Limbo, Brodney N. Avila, Arthur C. Aquino, Ryan A.
Miranda, Ronald R. Alave, Johnny A. Dimaya, Marlon B. Delos Reyes, Angelito R. Cordova, Edgar S.
Barruga, Camilo B. Cordova, Jr., Jeffry B. Languisan, Edison U. Villapando, Jheirney S. Remolin, Mary
Luz A. Macatalad, Jenalyn M. Gamurot, Dennis G. Bawag, Raquel A. Abellera, and Ricandro G. Guatno,
Jr. (respondents) for separation pay, nominal damages, and attorney's fees. ISHCcT

The Facts

The instant case arose from an amended 6 complaint 7 dated July 6, 2012 for illegal dismissal, damages,
and attorney's fees filed by respondents against, inter alia, ODSI and NPI. Respondents alleged that on
various dates, ODSI and NPI hired them to sell various NPI products in the assigned covered area. After
some time, respondents demanded that they be considered regular employees of NPI, but they were
directed to sign contracts of employment with ODSI instead. When respondents refused to comply with
such directives, NPI and ODSI terminated them from their position. 8 Thus, they were constrained to file
the complaint, claiming that: (a) ODSI is a labor-only contractor and, thus, they should be deemed regular
employees of NPI; and (b) there was no just or authorized cause for their dismissal. 9

For its part, ODSI averred that it is a company engaged in the business of buying, selling, distributing,
and marketing of goods and commodities of every kind and it enters into all kinds of contracts for the
acquisition thereof. ODSI admitted that on various dates, it hired respondents as its employees and
assigned them to execute the Distributorship Agreement 10 it entered with NPI, 11 the relevant portions
of which state: DHITCc

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3.1 DISTRIBUTOR (ODSI) shall assign a sales force in his/her regular employ, dedicated solely to the
handling of NPI Grocery Retail Products under this Agreement, and who shall exclusively cover assigned
areas/channels of distribution.

3.2 DISTRIBUTOR shall service the outlets within the Territory by re-selling Products obtained exclusively
from Nestle Philippines, Inc. and not from any other source.

3.3 DISTRIBUTOR shall utilize booking and distribution salesmen to undertake territory development.
Booking done by DISTRIBUTOR shall be delivered by its personnel. Collection of accounts shall be taken
cared (sic) of by DISTRIBUTOR, without prejudice to the provisions of Clause 13 hereof.

3.4 DISTRIBUTOR's route salesmen shall exclusively cover assigned ex-truck areas/channels of
distribution.

3.5 DISTRIBUTOR shall also provide training to its staff or personnel where necessary, to improve
operations in servicing the requirements of DISTRIBUTOR's customers. From time to time, NESTLÉ shall
offer to DISTRIBUTOR suggestions and recommendations to improve sales and to further develop the
market.

3.6 DISTRIBUTOR shall meet the sales, reach and distribution targets agreed upon by NESTLÉ and
DISTRIBUTOR. For purposes of this clause, reach targets refer to the number of stores, dealers and/or
outlets which DISTRIBUTOR should cover or service within a particular period. Distribution targets refer
to the number of stock keeping units and/or product lines covered by this Agreement.

In the event of DISTRIBUTOR's failure to meet NESTLÉ's sales targets, NESTLÉ has the sole discretion
of assigning another distributor of the Products and/or reducing the Territory covered by DISTRIBUTOR.

3.7 DISTRIBUTOR agrees to provide at its own cost and expense facilities and other resources
necessary for the distribution and sale of the Products.

3.8 NESTLÉ's sales personnel may get orders for the Products distributed by DISTRIBUTOR and pass
on the said orders to DISTRIBUTOR.

3.9 NESTLÉ shall provide the necessary promotional and marketing support for the Products through
promotional materials, product information literature, participation in trade fairs, and other market
development activities. CAacTH

3.10 Should NESTLÉ manufacture and/or distribute other products not subject of this Agreement, which,
in NESTLÉ's opinion, should likewise be extended to DISTRIBUTOR's outlets, such additional products
shall be included among those listed in Annex "A" hereof.

NESTLÉ shall deliver the Products to DISTRIBUTOR's warehouse(s) at its own expenses. Immediately
upon receipt of the Products, DISTRIBUTOR shall carry out a visual inspection thereof. In the event any

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quantity of the Products is found to be defective upon such visual inspection, NESTLÉ shall replace such
quantity of the Products at no cost to DISTRIBUTOR.

3.11 All costs for transportation and/or shipment of the Products from DISTRIBUTOR's warehouse(s) to
its outlets/customers shall be the account of the DISTRIBUTOR. 12

However, the business relationship between NPI and ODSI turned sour when the former's sales
department badgered the latter regarding the sales targets. Eventually, NPI downsized its marketing and
promotional support from ODSI which resulted to business reverses and in the latter's filing of a petition
for corporate rehabilitation and, subsequently, the closure of its Nestlé unit due to the termination of the
Distributorship Agreement and the failure of rehabilitation. Under the foregoing circumstances, ODSI
argued that respondents were not dismissed but merely put in floating status. 13

On the other hand, NPI did not file any position paper or appear in the scheduled conferences. 14

The Labor Arbiter Ruling

In a Decision 15 dated December 28, 2012, the Labor Arbiter (LA) dismissed the complaint for lack of
merit, but nevertheless, ordered, inter alia, ODSI and NPI to pay respondents nominal damages in the
aggregate amount of P235,728.00 plus attorney's fees amounting to ten percent (10%) of the total
monetary awards. 16 The LA found that: (a) respondents were unable to prove that they were NPI
employees; and (b) respondents were not illegally dismissed as ODSI had indeed closed down its
operations due to business losses. 17 As to the issue on the failure to give respondents a thirty (30)-day
notice prior to such closure, the LA concluded that all the impleaded respondents therein (i.e., including
NPI) should be held liable for the payment of nominal damages plus attorney's fees. 18

Aggrieved, respondents appealed to the NLRC. 19 cEaSHC

The NLRC Ruling

In a Decision 20 dated May 30, 2013, the NLRC reversed and set aside the LA ruling and, accordingly,
ordered ODSI and NPI to pay each of the respondents: (a) separation pay amounting to 1/2 month pay
for every year of service reckoned from the time they were employed until the finality of the Decision; and
(b) nominal damages in the amount of P30,000.00. The NLRC likewise ordered NPI and ODSI to pay
respondents attorney's fees amounting to ten percent (10%) of the monetary awards. 21

Contrary to the LA's findings, the NLRC found that while ODSI indeed shut down its operations, it failed to
prove that such closure was due to serious business losses as it did not present evidence, e.g., financial
statements, to corroborate its claims. As such, it ruled that respondents are entitled to separation pay. In
this relation, the NLRC also found that since ODSI failed to notify respondents of such closure, the latter
are likewise entitled to nominal damages. 22

Further, the NLRC found ODSI to be a labor-only contractor of NPI, considering that: (a) ODSI had no
substantial capitalization or investment; (b) respondents performed activities directly related to NPI's

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principal business; and (c) the fact that respondents' employment depended on the continuous supply of
NPI products shows that ODSI had not been carrying an independent business according to its own
manner and method. 23 Consequently, the NLRC deemed NPI to be respondents' true employer, and
thus, ordered it jointly and severally liable with ODSI to pay the monetary claims of respondents. 24

Respondents moved for a partial reconsideration, 25 arguing that since it was only ODSI that closed
down operations and not NPI and, considering the finding that the latter was deemed to be their true
employer, NPI should reinstate them, or if not practicable, to pay them separation pay equivalent to one
(1) month pay for every year of service. NPI also moved for reconsideration, 26 contending that: (a) it was
deprived of its right to participate in the proceedings before the LA and the NLRC; and (b) it had no
employer-employee relationship with respondents as ODSI was never its contractor, whether
independent or labor-only. 27 However, the NLRC denied both motions in a Resolution 28 dated August
30, 2013, holding that: (a) respondents' termination was due to the closure of ODSI's Nestlé unit, an
authorized cause and, thus, the monetary awards in their favor were proper; (b) NPI was not deprived of
its right to participate in the proceedings as it was duly served with copies of the parties' respective
pleadings, as well as the rulings of both the LA and the NLRC; (c) assuming arguendo that NPI was
indeed deprived of due process, its subsequent filing of a motion for reconsideration before the NLRC
cured the defect as it was able to argue its position in the said motion; and (d) the circumstances
surrounding the Distributorship Agreement between ODSI and NPI showed that the former is indeed a
labor-only contractor of the latter. 29 IAETDc

Dissatisfied, NPI filed a petition for certiorari 30 before the CA, essentially insisting that: (a) it was
deprived of due process before the tribunals a quo; and (b) there was no employer-employee relationship
between NPI and respondents. 31 Records reveal that no other party elevated the matter before the CA.

The CA Ruling

In a Decision 32 dated March 26, 2015, the CA affirmed the NLRC ruling. Anent the issue on due
process, the CA held that NPI was not deprived of its opportunity to be heard as it was able to receive a
copy of the complaint and other pleadings, albeit it failed to respond thereto. 33 As regards the
substantive issue, the CA ruled that despite ODSI and NPI's contract being denominated as a
"Distributorship Agreement," it contained provisions demonstrating a labor-only contracting arrangement
between them, as well as NPI's exercise of control over the business of ODSI. Moreover, the CA pointed
out that: (a) there was nothing in the records which showed that ODSI had substantial capital to
undertake an independent business; and (b) respondents performed tasks essential to NPI's business. 34

Undaunted, NPI moved for reconsideration, 35 which was, however, denied in a Resolution 36 dated
September 17, 2015; hence, this petition.

The Issues Before the Court

The essential issues for the Court's resolution are whether or not the CA correctly ruled that: (a) NPI was
accorded due process by the tribunals a quo; and (b) ODSI is a labor-only contractor of NPI, and
consequently, NPI is respondents' true employer and, thus, deemed jointly and severally liable with ODSI
for respondents' monetary claims.

The Court's Ruling

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To justify the grant of the extraordinary remedy of certiorari, the petitioner must satisfactorily show that the
court or quasi-judicial authority gravely abused the discretion conferred upon it. Grave abuse of discretion
connotes a capricious and whimsical exercise of judgment, done in a despotic manner by reason of
passion or personal hostility, the character of which being so patent and gross as to amount to an evasion
of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of
law. 37

In labor disputes, grave abuse of discretion may be ascribed to the NLRC when, inter alia, its findings and
conclusions are not supported by substantial evidence, or that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion. 38

Guided by the foregoing considerations, the Court finds that the CA was correct in ruling that the labor
tribunals a quo gave NPI an opportunity to be heard. However, it erred in not ascribing grave abuse of
discretion on the NLRC's finding that ODSI is a labor-only contractor of NPI and, thus, the latter is the
respondents' true employer, and jointly and severally liable with ODSI for respondents' monetary claims.
As will be explained hereunder, such finding by the NLRC is not supported by substantial evidence.
CTIEac

I.

The observance of fairness in the conduct of any investigation is at the very heart of procedural due
process. The essence of due process is to be heard, and, as applied to administrative proceedings, this
means a fair and reasonable opportunity to explain one's side, or an opportunity to seek a reconsideration
of the action or ruling complained of. Administrative due process cannot be fully equated with due
process in its strict judicial sense, for in the former a formal or trial-type hearing is not always necessary,
and technical rules of procedure are not strictly applied. 39 The Court's disquisition in Ledesma v. CA 40
is instructive on this matter, to wit:

Due process, as a constitutional precept, does not always and in all situations require a trial-type
proceeding. Due process is satisfied when a person is notified of the charge against him and given an
opportunity to explain or defend himself. In administrative proceedings, the filing of charges and giving
reasonable opportunity for the person so charged to answer the accusations against him constitute the
minimum requirements of due process. The essence of due process is simply to be heard, or as applied
to administrative proceedings, an opportunity to explain ones side, or an opportunity to seek a
reconsideration of the action or ruling complained of. 41 (Emphasis and underscoring supplied)

In this case, NPI essentially claims that it was deprived of its right to due process when it was not notified
of the proceedings before the LA and did not receive copies and issuances from the other parties and the
LA, respectively. 42 However, as correctly pointed out by the CA, NPI was furnished via courier of a copy
of the amended complaint filed by the respondents against it as shown by LBC Receipt No.
125158910840. 43 It is also apparent that NPI was also furnished with the respondents' Position Paper,
Reply, and Rejoinder. 44 Verily, NPI was indeed accorded due process, but as the LA mentioned, the
former chose not to file any position paper or appear in the scheduled conferences. 45

Assuming arguendo that NPI was somehow deprived of due process by either of the labor tribunals, such
defect was cured by: (a) NPI's filing of its motion for reconsideration before the NLRC; (b) the NLRC's
subsequent issuance of its Resolution dated August 30, 2013 wherein the tribunal considered all of NPI's

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arguments as contained in its motion; and (c) NPI's subsequent elevation of the case to the CA. In
Gonzales v. Civil Service Commission, 46 the Court reiterated the rule that "[a]ny seeming defect in [the]
observance [of due process] is cured by the filing of a motion for reconsideration," and that "denial of due
process cannot be successfully invoked by a party who [was] afforded the opportunity to be heard x x x."
47 Similarly, in Autencio v. Mañara, 48 it was held that defects in procedural due process may be cured
when the party has been afforded the opportunity to appeal or to seek reconsideration of the action or
ruling complained of. 49 DcHSEa

Evidently, the foregoing shows that NPI was not denied due process of law as it was afforded the fair and
reasonable opportunity to explain its side.

II.

In holding NPI jointly and severally liable with ODSI for the monetary awards in favor of respondents, both
the NLRC and the CA held that based on the provisions of the Distributorship Agreement between them,
ODSI is merely a labor-only contractor of NPI. 50 In this regard, the CA opined that the following
stipulations of the said Agreement evinces that NPI had control over the business of ODSI, namely, that:
(a) NPI shall offer to ODSI suggestions and recommendations to improve sales and to further develop the
market; (b) NPI prohibits ODSI from exporting its products (the No-Export provision); (c) NPI provided
standard requirements to ODSI for the warehousing and inventory management of the sold goods; and
(d) prohibition imposed on ODSI to sell any other products that directly compete with those of NPI. 51

However, a closer examination of the Distributorship Agreement reveals that the relationship of NPI and
ODSI is not that of a principal and a contractor (regardless of whether labor-only or independent), but that
of a seller and a buyer/re-seller. As stipulated in the Distributorship Agreement, NPI agreed to sell its
products to ODSI at discounted prices, 52 which in turn will be re-sold to identified customers, ensuring in
the process the integrity and quality of the said products based on the standards agreed upon by the
parties. 53 As aptly explained by NPI, the goods it manufactures are distributed to the market through
various distributors, e.g., ODSI, that in turn, re-sell the same to designated outlets through its own
employees such as the respondents. Therefore, the reselling activities allegedly performed by the
respondents properly pertain to ODSI, whose principal business consists of the "buying, selling,
distributing, and marketing goods and commodities of every kind" and "[entering] into all kinds of
contracts for the acquisition of such goods [and commodities]." 54

Thus, contrary to the CA's findings, the aforementioned stipulations in the Distributorship Agreement
hardly demonstrate control on the part of NPI over the means and methods by which ODSI performs its
business, nor were they intended to dictate how ODSI shall conduct its business as a distributor.
Otherwise stated, the stipulations in the Distributorship Agreement do not operate to control or fix the
methodology on how ODSI should do its business as a distributor of NPI products, but merely provide
rules of conduct or guidelines towards the achievement of a mutually desired result 55 — which in this
case is the sale of NPI products to the end consumer. In Steelcase, Inc. v. Design International
Selections, Inc., 56 the Court held that the imposition of minimum standards concerning sales, marketing,
finance and operations are nothing more than an exercise of sound business practice to increase sales
and maximize profits, to wit: SaCIDT

Finally, both the CA and DISI rely heavily on the Dealer Performance Expectation required by Steelcase
of its distributors to prove that DISI was not functioning independently from Steelcase because the same
imposed certain conditions pertaining to business planning, organizational structure, operational
effectiveness and efficiency, and financial stability. It is actually logical to expect that Steelcase, being
one of the major manufacturers of office systems furniture, would require its dealers to meet several

283
conditions for the grant and continuation of a distributorship agreement. The imposition of minimum
standards concerning sales, marketing, finance and operations is nothing more than an exercise of sound
business practice to increase sales and maximize profits for the benefit of both Steelcase and its
distributors. For as long as these requirements do not impinge on a distributor's independence, then there
is nothing wrong with placing reasonable expectations on them. 57 (Emphasis and underscoring
supplied)

Verily, it was only reasonable for NPI — it being a local arm of one of the largest manufacturers of foods
and grocery products worldwide — to require its distributors, such as ODSI, to meet various conditions for
the grant and continuation of a distributorship agreement for as long as these conditions do not control
the means and methods on how ODSI does its distributorship business, as shown in this case. This is to
ensure the integrity and quality of the products which will ultimately fall into the hands of the end
consumer.

Thus, the foregoing circumstances show that ODSI was not a labor-only contractor of NPI; hence, the
latter cannot be deemed the true employer of respondents. As a consequence, NPI cannot be held jointly
and severally liable to ODSI's monetary obligations towards respondents.

WHEREFORE, the petition is GRANTED. The Decision dated March 26, 2015 and the Resolution dated
September 17, 2015 of the Court of Appeals in CA-G.R. SP No. 132686 are hereby REVERSED and SET
ASIDE. Accordingly, the Decision dated May 30, 2013 and the Resolution dated August 30, 2013 of the
National Labor Relations Commission in LAC No. 02-000699-13/NCR-03-04761-12 are MODIFIED,
DELETING petitioner Nestle Philippines, Inc.'s solidary liability with Ocho de Septiembre, Inc. (ODSI) for
the latter's monetary obligations to respondents Benny A. Puedan, Jr., Jayfer D. Limbo, Brodney N. Avila,
Arthur C. Aquino, Ryan A. Miranda, Ronald R. Alave, Johnny A. Dimaya, Marlon B. Delos Reyes, Angelito
R. Cordova, Edgar S. Barruga, Camilo B. Cordova, Jr., Jeffry B. Languisan, Edison U. Villapando,
Jheirney S. Remolin, Mary Luz A. Macatalad, Jenalyn M. Gamurot, Dennis G. Bawag, Raquel A. Abellera,
and Ricandro G. Guatno, Jr. SCaITA

SO ORDERED.

||| (Nestle Philippines, Inc. v. Puedan, Jr., G.R. No. 220617, [January 30, 2017])

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[G.R. No. 224943. March 20, 2017.]

JORGE B. NAVARRA, petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated October 29, 2015 and the
Resolution 3 dated May 19, 2016 of the Court of Appeals (CA) in CA-G.R. CR No. 35855, which affirmed
the Decision 4 dated March 13, 2013 of the Regional Trial Court of Muntinlupa City, Branch 206 (RTC) in
Crim. Case No. 01-303 finding petitioner Jorge B. Navarra (petitioner) guilty beyond reasonable doubt of
the crime of violation of Section 22 (a), in relation to Section 28 (h) and (f), of Republic Act No. (RA) 8282.
5

The Facts

The instant case stemmed from an Information 6 dated January 18, 2001 filed before the RTC charging,
inter alia, petitioner of violation of Section 22 (a), in relation to Section 28 (h) and (f), of RA 8282, the
accusatory portion of which states:

The undersigned Assistant City Prosecutor accuses JORGE B. NAVARRA, x x x of the crime of violation
of Section 22 (a), in relation to Section 28 (h) and (f)[,] of R.A. 1161, as amended, by R.A. 8282,
committed as follows:

That in or about and during the period comprised between July 1997 and June 2000, in the City of
Muntinlupa, Philippines and within the jurisdiction of this Honorable Court, the above-named accused,
being members of the board of directors of the Far East Network of Integrated Circuits Subcontractors
(FENICS) Corporation, a covered member of the Social Security System (SSS), conspiring and
confederating together and mutually helping and aiding one another, did then and there willfully,
unlawfully and feloniously fail and refuse to remit and pay to the SSS the SS/Medicare/EC contributions
withheld by them from the salaries of the FENICS employees, the counterpart SSS/Medicare/EC
contributions of FENICS, as well as the salary/calamity loan payments due to the SSS withheld by them,
despite demands from them to remit and pay these obligations to the SSS.

Contrary to law. 7

Upon motion, 8 the criminal case was dismissed as against petitioner's co-accused as it was found that
they were no longer serving as members of FENICS's Board of Directors during the period when the
aforesaid crime was allegedly committed. 9 On the other hand, the case pushed through against
petitioner who pleaded "not guilty" to the charge. 10

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The prosecution alleged that from 1995 to 2000, petitioner served as the President and Chairman of the
Board of Directors of Far East Network of Integrated Circuits Subcontractors Corporation (FENICS), an
employer registered with the Social Security System (SSS) and with SSS ID No. 03-9020939-1. 11
Sometime in the years 1999 to 2002, a total of eleven (11) employees of FENICS filed separate
complaints before the SSS, Alabang Branch against FENICS for the latter's non-remittance of their SSS
contributions, prompting Account Officer Felicula B. Argamosa (Argamosa) to investigate the matter.
Upon verification, Argamosa discovered that FENICS indeed failed to remit the SSS contributions of its
employees from July 1997 to June 2000 and, thus, determined that FENICS's total unpaid obligations
amounted to P10,077,656.24, 12 excluding the three percent (3%) monthly penalty mandated by law. 13
Despite numerous demands, FENICS failed to pay its delinquencies, thus, constraining SSS to file an
Affidavit-Complaint 14 against petitioner and his co-accused for the aforesaid crime before the Office of
the City Prosecutor of Muntinlupa City (OCP). 15 CAIHTE

Meanwhile, pending preliminary investigation proceedings, petitioner sent a letter 16 dated October 25,
2000 to the SSS, offering to pay in installments FENICS' delinquent remittances from July 1997 to
September 2000, attaching thereto two (2) postdated checks in the amount of P500,000.00 each and
payable to SSS as payment, and promising to pay the remaining balance via 48 equal monthly
installments. 17 While the first check was encashed, the second was dishonored for being drawn against
a closed account. The SSS sent petitioner a notice of dishonor, but the latter ignored the same. 18 In
addition, petitioner failed to follow through with the monthly installments. 19 Later on and while the case
was pending trial, petitioner sent another letter 20 dated April 25, 2003 to the SSS, proposing a
restructuring of FENICS's account, but the SSS rejected such proposal. 21

In his defense, petitioner averred that while he is indeed the President and Chairman of the Board of
Directors of FENICS, he never had custody of the employees' SSS contributions, as it was the Human
Resources Department that was tasked to handle such matters. Further, he asserted that during the
period when the alleged delinquencies were incurred, FENICS had already shut down. In this relation,
petitioner narrated that: (a) from 1995-1996, FENICS diligently remitted the employees' SSS
contributions; (b) beginning 1997, its business started to decline due to the pull-out of one of its biggest
customers eventually leading to its shut down; and (c) since FENICS was already non-operational, its
employees were unable to work, and naturally, there could have been no wages/salaries from which the
SSS contributions could be sourced. 22

The RTC Ruling

In a Decision 23 dated March 13, 2013, the RTC found petitioner guilty beyond reasonable doubt of the
crime charged and, accordingly, sentenced him to suffer the penalty of imprisonment for the
indeterminate period of four (4) years and two (2) months of prision correccional, as minimum, to twenty
(20) years of reclusion temporal, as maximum, and ordered him to pay the SSS the unpaid obligation of
P9,577,656.24 24 plus three percent (3%) monthly interest reckoned from July 1997 until fully paid. 25

In so ruling, the RTC did not give credence to petitioner's claim that the FENICS's operations had already
shut down, considering that: (a) if this claim were indeed true, then it should have been raised from the
moment the SSS sent its first demand letter to FENICS and before the filing of the case before the court;
and (b) the same is inconsistent with the letters petitioner himself made in an attempt to amicably settle
FENICS's SSS delinquencies. Further, the RTC took note of petitioner's letter dated April 25, 2003
wherein he proposed to settle FENICS's outstanding delinquencies with the SSS. In this regard, the RTC
ratiocinated that since the said letter was made during the pendency of the instant criminal case, then the
same should be considered as an implied admission of guilt on his part. 26

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Aggrieved, petitioner appealed 27 to the CA, arguing that: (a) the information against him was defective
as it failed to properly charge him with a criminal offense; (b) he cannot be held liable for violation of
Section 28 (h) of RA 8282 since under this provision, it is the employer, i.e., FENICS, that should be
charged with the same; (c) the prosecution failed to establish that the private complainants were indeed
FENICS's employees; and (d) in any event, his criminal liability was already extinguished by his
compromise agreement with the SSS. 28

The CA Ruling

In a Decision 29 dated October 29, 2015, the CA affirmed petitioner's conviction in toto. 30 It held that: (a)
petitioner's failure to raise the issue of the validity or regularity of the Information prior to entering his plea
was deemed a waiver of any defect in the same; (b) since FENICS is a corporation, its failure to remit the
SSS contributions of its employees subjects its officers, such as petitioner, to liability, especially since
FENICS had already been dissolved; (c) the prosecution's documentary evidence clearly show that the
private complainants were FENICS's employees; (d) petitioner's letters dated October 25, 2000 and April
25, 2003 proposing to settle FENICS's delinquencies should be viewed as an admission of guilt on his
part; and (e) there was no compromise as SSS did not assent thereto, and even assuming there was one,
such cannot extinguish petitioner's criminal liability. 31

Undaunted, petitioner moved for reconsideration, 32 which was, however, denied in a Resolution 33
dated May 19, 2016; hence, this petition.

The Issue before the Court

The sole issue raised for the Court's resolution is whether or not the CA correctly upheld petitioner's
conviction for violation of Section 22 (a), in relation to Section 28 (h) and (f), of RA 8282.

The Court's Ruling

The petition has no merit.

Preliminarily, the Court notes that petitioner assails the validity or regularity of the Information filed against
him on the ground that it allegedly did not charge a criminal offense. However, as pointed out by the CA,
petitioner never raised such issue prior to his arraignment. In fact, a reading of the records shows that
petitioner only raised the same after he was convicted by the RTC and the case was already on appeal
before the CA. Thus, the CA correctly ruled that his failure to object to the alleged defect in the
Information before entering his plea amounted to a waiver of such defects, especially since objections as
to matters of form or substance in the Information cannot be made for the first time on appeal. 34 Hence,
petitioner can no longer be allowed to raise this issue before the Court.

Going now to the substantive issue of the instant case, a plain reading of the Information reveals that
petitioner, as FENICS's President and Chairman of the Board of Directors at that time, is charged for
violation of Section 22 (a), in relation to Section 28 (h) 35 and (f), of RA 8282 for FENICS's failure and/or

287
refusal to remit its employees' SSS contributions to the SSS during the period from July 1997 to June
2000. Section 22 (a) of RA 8282 states:

Section 22. Remittance of Contributions. — (a) The contributions imposed in the preceding section shall
be remitted to the SSS within the first ten (10) days of each calendar month following the month for which
they are applicable or within such time as the Commission may prescribe. Every employer required to
deduct and to remit such contributions shall be liable for their payment and if any contribution is not paid
to the SSS as herein prescribed, he shall pay besides the contribution a penalty thereon of three percent
(3%) per month from the date the contribution falls due until paid. If deemed expedient and advisable by
the Commission, the collection and remittance of contributions shall be made quarterly or semi-annually
in advance, the contributions payable by the employees to be advanced by their respective employers:
Provided, That upon separation of an employee, any contribution so paid in advance but not due shall be
credited or refunded to his employer. DETACa

xxx xxx xxx

Verily, prompt remittance of SSS contributions under the aforesaid provision is mandatory. 36 Any
divergence from this rule subjects the employer not only to monetary sanctions, i.e., the payment of
penalty of three percent (3%) per month, but also to criminal prosecution if the employer fails to: (a)
register its employees with the SSS; (b) deduct monthly contributions from the salaries/wages of its
employees; or (c) remit to the SSS its employees' SSS contributions and/or loan payments after
deducting the same from their respective salaries/wages. 37 In this regard, Section 28 (f) of RA 8282
explicitly provides that "[i]f the act or omission penalized by this Act be committed by an association,
partnership, corporation or any other institution, its managing head, directors or partners shall be liable to
the penalties provided in this Act for the offense." Notably, the aforesaid punishable acts are considered
mala prohibita and, thus, the defenses of good faith and lack of criminal intent are rendered immaterial.
38

In this case, a judicious review of the records reveals that the prosecution — through a plethora of
documentary evidence 39 — had established by proof beyond reasonable doubt that during the period of
July 1997 to June 2000, FENICS failed to remit its employees' SSS contributions despite withholding
such amounts from their respective salaries. It is settled that "[f]actual findings of the RTC, when affirmed
by the CA, are entitled to great weight and respect by this Court and are deemed final and conclusive
when supported by the evidence on record," 40 as in this case.

In sum, the CA correctly affirmed petitioner's conviction for the crime of violation of Section 22 (a), in
relation to Section 28 (h) and (f), of RA 8282.

WHEREFORE, the petition is DENIED. The Decision dated October 29, 2015 and the Resolution dated
May 19, 2016 of the Court of Appeals in CA-G.R. CR No. 35855, which affirmed the Decision dated
March 13, 2013 of the Regional Trial Court of Muntinlupa City, Branch 206 in Crim. Case No. 01-303
finding petitioner Jorge B. Navarra GUILTY beyond reasonable doubt of the crime of violation of Section
22 (a), in relation to Section 28 (h) and (f), of Republic Act No. 8282 is hereby AFFIRMED. Accordingly,
petitioner Jorge B. Navarra is sentenced to suffer the penalty of imprisonment for the indeterminate
period of four (4) years and two (2) months of prision correccional, as minimum, to twenty (20) years of
reclusion temporal, as maximum, and is ordered to pay the SSS the unpaid obligation of P9,577,656.24
plus three percent (3%) monthly interest reckoned from July 1997 until fully paid.

SO ORDERED.|| (Navarra v. People, G.R. No. 224943, [March 20, 2017])

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SECOND DIVISION

[G.R. No. 228449. December 6, 2017.]

GRACE R. ALUAG, petitioner, vs. BIR MULTI-PURPOSE COOPERATIVE, NORMA L. LIPANA, and
ESTELITA V. DATU, respondents.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated August 25, 2016 and the
Resolution 3 dated November 9, 2016 of the Court of Appeals (CA) in CA-G.R. SP No. 144608, which
reversed the Decision 4 dated October 16, 2014 and the Resolution 5 dated December 29, 2015 of the
National Labor Relations Commission (NLRC), and accordingly, reinstated the Decision 6 dated May 26,
2014 of the Labor Arbiter (LA) finding petitioner Grace R. Aluag (Aluag) to have been validly dismissed
from service by respondent BIR Multi-Purpose Cooperative (BIRMPC).

The Facts

This case arose from a complaint 7 for, inter alia, illegal dismissal filed by Aluag against BIRMPC and its
officers, respondents Norma L. Lipana and Estelita V. Datu (respondents). Aluag alleged that she was
employed as BIRMPC's cashier from November 16, 1994 until her termination on October 31, 2013. 8
Her duties, among others, were to receive remittances and payments, deposit all collections daily, record
fixed deposits, determine cash positions, issue checks for loans, collect cash receipts, and perform such
other duties that the general manager may assign to her. 9 She claimed that from the time of her
employment, she was tasked to give only verbal weekly reports on BIRMPC's funds until 2010 when she
was required to put them into writing. In 2011, BIRMPC's loan processors started accepting post-dated
checks with the prior approval of the general manager, who then was Gerardo Flores (Flores). 10 She
added that in July 2013, upon Flores' instruction, she submitted a report of bounced checks and
deposited the remaining checks in her possession. 11

On July 16, 2013 or ten (10) days before she gave birth, Aluag received a letter 12 from BIRMPC's Board
of Directors temporarily relieving her from her position pending an investigation against her and two (2)
loan processors involving several suspicious loans, requiring her to submit an answer within ten (10)
days. 13 She complied only after she gave birth or on July 29, 2013, wherein she admitted that she: (a)
was tasked to have all collections deposited everyday; (b) received verified post-dated checks for
safekeeping and deposit to the bank when due; and (c) opted not to deposit matured checks upon
request of the debtors. 14 She then went on a maternity leave from July 30 to September 30, 2013,
during which period, she received another letter from BIRMPC preventively suspending her from August 1
to October 31, 2013. 15 Claiming that the suspension was illegal, she filed a complaint for illegal
suspension with the NLRC. While the case was pending, Aluag received another letter 16 dated October
31, 2013 terminating her employment; hence, she amended the complaint to one for illegal dismissal. 17
CAIHTE

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For their part, respondents averred that Aluag was legally dismissed on the ground of loss of trust and
confidence. They narrated that while reviewing loan documents in June 2013, they found rampant
violations of BIRMPC's by-laws, rules, and regulations. When they interviewed Aluag, the latter admitted
the infractions, but claimed that Flores had full knowledge of them. 18 Thereafter, respondents sent
letters to Aluag and other concerned employees to explain why no charges should be filed against them
and, later on, placed them under preventive suspension. To validate the extent of the irregularities and
financial damage, they engaged the services of an external accountant who, in her report, observed that
the cashier failed to regularly report post-dated checks received and did not observe proper monitoring of
the checks' due dates to be deposited. The accountant also pointed out that some checks were not
deposited at all. 19 In light of the foregoing, BIRMPC terminated Aluag's employment effective November
1, 2013 on the ground of loss of trust and confidence for the following infractions: (a) acceptance of
accommodation checks; (b) failure to deposit checks on due dates, pursuant to a member/debtor's
request; (c) not reporting to the manager those checks with no sufficient funds or which accounts had
already closed; and (d) failure to act upon returned checks. 20

The LA Ruling

In a Decision 21 dated May 26, 2014, the LA dismissed the complaint for illegal dismissal for lack of merit.
Nonetheless, it ordered BIRMPC to pay Aluag the amounts of P15,416.48 and P3,557.65, representing
her 13th month pay and service incentive leave pay for the year 2013, respectively. 22

The LA found that as a company cashier, Aluag held a position of trust and confidence. Thus, her
commission of various infractions, which substantially contributed damages to BIRMPC's financial
position in the amount of P35,526,599.77, constituted sufficient basis for loss of trust and confidence. 23
Further, the LA found that BIRMPC accorded Aluag her procedural due process rights, as two (2) notices
were accordingly served on her, namely: (a) the written notice containing a statement of the cause of her
dismissal, in order to afford her an opportunity to be heard and defend herself; and (b) the written notice
of dismissal dated October 31, 2013, stating clearly the reasons therefor. 24 The foregoing
notwithstanding, the LA still ordered BIRMPC to pay Aluag her 13th month pay and service incentive
leave pay for 2013, absent any showing that the latter had already paid the same. 25

Aggrieved, Aluag appealed 26 to the NLRC.

The NLRC Ruling

In a Decision 27 dated October 16, 2014, the NLRC reversed the LA ruling, and found A1uag to have
been illegally dismissed. Accordingly, it ordered BIRMPC to pay Aluag the amounts of P250,187.18 as
backwages, P370,000.00 as separation pay, P15,416.48 as 13th month pay, P3,557.65 as service
incentive leave pay, and ten percent (10%) of the total monetary awards as attorney's fees. 28

Contrary to the LA's findings, the NLRC found that Aluag's perceived infractions were insufficient to
dismiss her on the ground of loss of trust and confidence because they were not violations of her
ministerial duties as cashier. 29 First, she merely received the accommodation checks which were
previously verified by the loan processors and approved by the general manager. The NLRC noted that
Aluag was neither clothed with the authority to inquire into the validity of the checks nor authorized to
exercise discretion in receiving them. 30 Second, Aluag's tasks did not include depositing the checks and
no evidence was presented to show that the general manager assigned this task to her. The NLRC added
that no evidence was presented to prove that the non-deposit of checks was due to debtors' requests. 31
Third, Aluag did submit a report on dishonored checks to the general manager upon his request. The

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NLRC observed that this function is not among the routine duties of a cashier. 32 Fourth, the NLRC
stated that acting upon returned or dishonored checks is not among Aluag's duties, but is a discretionary
function of the general manager. 33 As regards the external accountant's report, the NLRC added that
regular submission of reports and monitoring of the checks' status are not part of Aluag's routine
responsibilities. 34

Respondents moved for reconsideration, 35 which was denied in a Resolution 36 dated December 29,
2015. Dissatisfied, respondents filed a petition for certiorari 37 before the CA.

The CA Ruling

In a Decision 38 dated August 25, 2016, the CA reversed and set aside the NLRC ruling and reinstated
that of the LA. It held that Aluag was validly dismissed on the grounds of serious misconduct and loss of
trust and confidence, which were applicable because she served as a cashier — a position requiring trust
and confidence. 39 The CA rejected Aluag's argument that she was not liable for the charges levelled
against her as these were beyond her duties as a cashier. It explained that Aluag could have been more
circumspect by refusing to accept accommodation checks which appear to be unfunded based on
BIRMPC's records, and denying to issue checks after verifying that the loan applicant still had unpaid
loans with BIRMPC. Most importantly, she is tasked to deposit the checks on their due dates, which she
failed to do. 40 Thus, the CA concluded that it would already be inimical to BIRMPC's interests should it
be compelled to keep Aluag within its employ. 41 DETACa

Further, the CA held that BIRMPC complied with the two (2)-notice rule, as the evidence show that Aluag
was properly notified of the charges against her to enable her to respond thereto, and of her eventual
termination from service. 42

Aluag moved for reconsideration, 43 but was denied in a Resolution 44 dated November 9, 2016; hence,
the instant petition.

The Issue Before the Court

The issue for the Court's resolution is whether or not the CA correctly reversed and set aside the NLRC
ruling, and accordingly held that BIRMPC had just cause to terminate Aluag's employment.

The Court's Ruling

The petition is without merit.

I.

At the outset, the Court notes that, as aptly pointed out by respondents in their Comment, 45 Aluag failed
to serve a copy of the instant petition to the CA as required by Section 3, Rule 45 of the Rules of Court.
46 Resultantly, the CA issued a Resolution 47 dated March 24, 2017 stating that its Decision had become

291
final and executory on December 17, 2016, and, consequently, the Entry of Judgment 48 was issued in
due course. While Aluag filed a Motion and Manifestation 49 dated June 13, 2017 before the CA
explaining that the aforesaid omission was merely due to inadvertence and praying that the Entry of
Judgment be set aside, records are bereft of any showing that the CA acted on the same.

Sections 3 and 5 of Rule 45, in relation to Section 5 (d) of Rule 56, 50 of the Rules of Court, and item 2 of
Revised Circular No. 1-88 51 require a proof of service to the lower court concerned to be attached to the
petition filed before the Court. The first two (2) provisions read:

Sec. 3. Docket and other lawful fees; proof of service of petition. — Unless he has theretofore done so,
the petitioner shall pay the corresponding docket and other lawful fees to the clerk of court of the
Supreme Court and deposit the amount of P500.00 for costs at the time of the filing of the petition. Proof
of service of a copy thereof on the lower court concerned and on the adverse party shall be submitted
together with the petition.

Sec. 5. Dismissal or denial of petition. — The failure of the petitioner to comply with any of the foregoing
requirements regarding the payment of the docket and other lawful fees, deposit for costs, proof of
service of the petition, and the contents of and the documents which should accompany the petition shall
be sufficient ground for the dismissal thereof.

xxx xxx xxx (Emphases supplied)

In the present case, Aluag failed to serve a copy of the petition to the CA, thereby giving the Court
sufficient ground to deny her petition. Her omission even led to the CA's issuance of the resolution
declaring the finality of its Decision. Verily, Aluag's procedural mishap is a sufficient ground for the
dismissal of her petition, especially since the rules themselves expressly say so. 52 "Time and again, it
has been held that the right to appeal is not a natural right or a part of due process; it is merely a statutory
privilege, and may be exercised only in the manner and in accordance with the provisions of law. A party
who seeks to avail of the right must, therefore, comply with the requirements of the rules, failing which the
right to appeal is invariably lost," 53 as in this case.

In any event, the Court deems it appropriate to address the issue anent the validity of Aluag's dismissal
so as to finally resolve the main controversy at hand.

II.

Preliminarily, "the Court stresses the distinct approach in reviewing a CA's ruling in a labor case. In a Rule
45 review, the Court examines the correctness of the CA's Decision in contrast with the review of
jurisdictional errors under Rule 65. Furthermore, Rule 45 limits the review to questions of law. In ruling for
legal correctness, the Court views the CA Decision in the same context that the petition for certiorari was
presented to the CA. Hence, the Court has to examine the CA's Decision from the prism of whether the
CA correctly determined the presence or absence of grave abuse of discretion in the NLRC decision. 54

Case law states that grave abuse of discretion connotes a capricious and whimsical exercise of judgment,
done in a despotic manner by reason of passion or personal hostility, the character of which being so

292
patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty
enjoined by or to act at all in contemplation of law. 55

In labor cases, grave abuse of discretion may be ascribed to the NLRC when its findings and conclusions
are not supported by substantial evidence, which refers to that amount of relevant evidence that a
reasonable mind might accept as adequate to justify a conclusion. Thus, if the NLRC's ruling has basis in
the evidence and the applicable law and jurisprudence, then no grave abuse of discretion exists and the
CA should so declare and, accordingly, dismiss the petition." 56

Guided by the foregoing considerations, the Court finds that the CA correctly ascribed grave abuse of
discretion on the part of the NLRC, as the latter tribunal's finding that BIRMPC illegally dismissed Aluag
patently deviates from the evidence on record, as well as settled legal principles of labor law.

A valid dismissal necessitates compliance with both substantive and procedural due process
requirements. Substantive due process mandates that an employee may be dismissed based only on just
or authorized causes under the Labor Code. On the other hand, procedural due process requires the
employer to comply with the requirements of notice and hearing before effecting the dismissal. 57 aDSIHc

In the present case, BIRMPC alleged that Aluag's employment was terminated on the ground of loss of
trust and confidence under Article 297 (c) (formerly Article 282 [c]) 58 of the Labor Code. The requisites
for the existence of such ground are as follows: (a) the employee concerned holds a position of trust and
confidence; and (b) he performs an act that would justify such loss of trust and confidence. 59

Anent the first requisite, case law instructs that "[t]here are two (2) classes of positions of trust: first,
managerial employees whose primary duty consists of the management of the establishment in which
they are employed or of a department or a subdivision thereof, and to other officers or members of the
managerial staff; and second, fiduciary rank-and-file employees, such as cashiers, auditors, property
custodians, or those who, in the normal exercise of their functions, regularly handle significant amounts of
money or property. These employees, though rank-and-file, are routinely charged with the care and
custody of the employer's money or property, and are thus classified as occupying positions of trust and
confidence." 60 Being a cashier charged with the collection of remittances and payments, Aluag
undoubtedly occupied a position of trust and confidence. Notably, in holding a position requiring full trust
and confidence, Aluag "gave up some of the rigid guarantees available to ordinary employees." 61

As regards the second requisite, the employee's act causing the loss of confidence must be directly
related to her duties rendering her woefully unfit to continue working for the employer. 62 "In dismissing a
cashier on the ground of loss of confidence, it is sufficient that there is some basis for the same or that
the employer has a reasonable ground to believe that the employee is responsible for the misconduct,
thus making [her] unworthy of the trust and confidence reposed in [her]." 63 If there is sufficient evidence
showing that the employer has ample reason to dismiss her, labor tribunals should not deny the employer
the authority to dismiss her from employment. 64

In the present case, one of the infractions that BIRMPC cited in justifying Aluag's dismissal is her failure
to deposit checks on due dates, pursuant to a member/debtor's request. 65 While the NLRC held that
Aluag was not directly responsible for depositing the checks on their due dates and that no evidence was
presented showing that her failure to deposit the checks resulted from the request of debtors, 66 a more
thorough and circumspect review of the records reveals that the task of depositing checks on due dates
definitely falls within Aluag's scope of responsibilities. For one, the list of Aluag's responsibilities as
cashier stated that she was tasked to "have all collections deposited everyday." 67 For another, she

293
admitted in her explanation that she received verified post-dated checks for safekeeping and deposit to
the bank when due. 68 More relevantly, she likewise admitted in her explanation that she opted not to
deposit matured checks upon request of the debtors. 69 The external auditor's report 70 also confirmed
Aluag's infraction, thus:

The cashier failed to regularly report Post-Dated Checks (PDC) received and did not observe proper
monitoring of checks due to be deposited. There are checks which were not deposited at all. 71
(Emphasis supplied)

Verily, her failure to deposit the checks on their due dates means that she failed to deliver on her task to
safeguard BIRMPC's finances. It is also well to note that she was not given any discretion to determine
whether or not to deposit the checks. Under these circumstances, BIRMPC had ample reason to lose the
trust and confidence it reposed upon her and thereby, terminate her employment. Indeed, it would be
most unfair to require an employer to continue employing a cashier whole it reasonably believes is no
longer capable of giving full and wholehearted trustworthiness in the stewardship of company funds, 72
as in this case. In fine, BIRMPC had just cause for Aluag's dismissal.

On the issue of procedural due process, the Court exhaustively discussed the matter in Puncia v. Toyota
Shaw/Pasig, Inc. 73 as follows:

Anent the issue of procedural due process, Section 2 (I), Rule XXIII, Book V of the Omnibus Rules
Implementing the Labor Code provides for the required standard of procedural due process accorded to
employees who stand to be terminated from work, to wit:

Section 2. Standard of due process; requirements of notice. — In all cases of termination of employment,
the following standards of due process shall be substantially observed:

I. For termination of employment based on just causes as defined in Article 282 [now Article 297] of the
Labor Code:

(a) A written notice served on the employee specifying the ground or grounds for termination, and giving
to said employee reasonable opportunity within which to explain his side;

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the
employee so desires, is given opportunity to respond to the charge, present his evidence, or rebut the
evidence presented against him; and

(c) A written notice of termination served on the employee indicating that upon due consideration of all the
circumstances, grounds have been established to justify his termination.

The foregoing standards were then further refined in Unilever Philippines, Inc. v. Rivera 74 as follows:

To clarify, the following should be considered in terminating the services of employees:

294
(1) The first written notice to be served on the employees should contain the specific causes or grounds
for termination against them, and a directive that the employees are given the opportunity to submit their
written explanation within a reasonable period. "Reasonable opportunity" under the Omnibus Rules
means every kind of assistance that management must accord to the employees to enable them to
prepare adequately for their defense. This should be construed as a period of at least five (5) calendar
days from receipt of the notice to give the employees an opportunity to study the accusation against
them, consult a union official or lawyer, gather data and evidence, and decide on the defenses they will
raise against the complaint. Moreover, in order to enable the employees to intelligently prepare their
explanation and defenses, the notice should contain a detailed narration of the facts and circumstances
that will serve as basis for the charge against the employees. A general description of the charge will not
suffice. Lastly, the notice should specifically mention which company rules, if any, are violated and/or
which among the grounds under Art. 282 is being charged against the employees.

(2) After serving the first notice, the employers should schedule and conduct a hearing or conference
wherein the employees will be given the opportunity to: (1) explain and clarify their defenses to the charge
against them; (2) present evidence in support of their defenses; and (3) rebut the evidence presented
against them by the management. During the hearing or conference, the employees are given the chance
to defend themselves personally, with the assistance of a representative or counsel of their choice.
Moreover, this conference or hearing could be used by the parties as an opportunity to come to an
amicable settlement.

(3) After determining that termination of employment is justified, the employers shall serve the employees
a written notice of termination indicating that: (1) all circumstances involving the charge against the
employees have been considered; and (2) grounds have been established to justify the severance of their
employment." 75 (Emphases and underscoring in the original)

Proceeding from the foregoing parameters, the Court finds that BIRMPC sufficiently observed the
standards of procedural due process in effecting Aluag's dismissal, considering that it: (a) issued a written
notice specifying her infractions; (b) granted her ample opportunity to be heard or explain her side when
she was required to submit an explanation; and (c) served a written notice of termination after verifying
the infraction committed. Notably, the Court held in Perez v. Philippine Telegraph and Telephone
Company 76 that procedural due process is met even without an actual hearing as long as the employee
is accorded a chance to explain her side of the controversy, as what happened here.

All told, the CA correctly held that the NLRC gravely abused its discretion, and hence, reinstated the LA
ruling, considering that BIRMPC observed Aluag's procedural and substantive due process rights in
dismissing her from employment.

WHEREFORE, the petition is DENIED. Accordingly, the Decision dated August 25, 2016 and the
Resolution dated November 9, 2016 of the Court of Appeals in CA-G.R. SP No. 144608 are hereby
AFFIRMED. ETHIDa

SO ORDERED.

||| (Aluag v. BIR Multi-Purpose Cooperative, G.R. No. 228449, [December 6, 2017])

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FIRST DIVISION

[G.R. No. 219430. November 7, 2016.]

JINKY S. STA. ISABEL, petitioner, vs. PERLA COMPAÑIA * DE SEGUROS, INC., respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated March 25, 2015 and the
Resolution 3 dated June 15, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 134676, which nullified
and set aside the Decision 4 dated December 26, 2013 and the Resolution 5 dated February 27, 2014 of
the National Labor Relations Commission (NLRC) in NLRC LAC No. 06-001823-13 and, accordingly,
reinstated the Decision 6 dated April 10, 2013 of the Labor Arbiter (LA) in NLRC NCR Case No. 12-
17463-12 finding petitioner Jinky S. Sta. Isabel (Sta. Isabel) to have been validly dismissed from
employment by respondent Perla Compañia de Seguros, Inc. (Perla).

The Facts

On February 27, 2006, Perla, a corporation engaged in the insurance business, hired Sta. Isabel as a
Claims Adjuster with the task of handling and settling claims of Perla's Quezon City Branch (QC Branch).
Later on, Perla discovered that Sta. Isabel owned a separate insurance agency known as JRS Insurance
Agency (JRS). To avoid conflict of interests, Perla instructed its QC Branch manager to: (a) allow the
licensing of JRS as a licensed agent of the QC Branch at the soonest time possible; and (b) forward all
claims coded under JRS to Perla's Claims Department at the Head Office for processing, evaluation, and
approval. 7

Pending the resolution of the JRS issue, Sta. Isabel received a Notice to Explain 8 dated October 19,
2012 why no disciplinary action should be taken against her for her poor services towards the clients of
PAIS Insurance Agency (PAIS), to which she submitted her written explanation. 9 On October 29, 2012,
Sta. Isabel attended a meeting with Perla's officers concerning the JRS and PAIS incidents. On even
date, Perla issued a Report on Status of the Hearing for Jinky Sta. Isabel 10 wherein it resolved the
foregoing incidents by agreeing that: (a) claims under JRS shall be approved by the Head Office; and (b)
claims under PAIS will be transferred to the Head Office for processing. 11

On November 9, 2012, Sta. Isabel received another Notice to Explain 12 why no disciplinary action
should be taken against her for her poor services towards the clients of Ricsons Consultants and
Insurance Brokers, Inc. (Ricsons). In view of Sta. Isabel's failure to submit a written explanation and to
appear before the Head Office to explain herself, Perla issued a Final Written Warning 13 dated
November 22, 2012 to be more circumspect with her claims servicing, with a stern admonition that "any
repetition of the same offense or any acts analogous to the foregoing shall be dealt with more severely
and shall warrant drastic disciplinary action including the penalty of Termination in order to protect the
interest of the company." 14 On even date, Perla likewise issued a Final Directive to Report to Head
Office 15 instructing Sta. Isabel to report to the Head Office and explain her alleged refusal to receive the
afore-cited Final Written Warning.

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On November 26, 2012, Perla issued the following to Sta. Isabel: (a) a Notice to Explain 16 why no
disciplinary action should be taken against her for failing to report to the Head Office despite due notice;
and (b) a Notice of Termination 17 dismissing Sta. Isabel from employment on the ground of
insubordination. Consequently, Sta. Isabel filed the instant complaint 18 for: (a) illegal dismissal; (b)
underpayment of wages; (c) non-payment of overtime pay, service incentive leave pay, accrued leave
pay, and 13th to 16th month pay; (d) retirement pay benefits under the corporation's Provident Fund; (e)
actual, moral, and exemplary damages; and (f) attorney's fees against Perla before the NLRC. 19 In
relation to her claim for illegal dismissal, Sta. Isabel prayed for the grant of separation pay and
backwages, maintaining that there is already strained relations between her and Perla which would
render reinstatement impossible. 20

In support of her complaint, Sta. Isabel claimed that Perla could no longer use the PAIS and Ricsons
incidents against her, considering that she was already penalized with multiple warnings to be more
circumspect with her claims servicing. She likewise alleged that after receipt of the Final Directive to
Report to Head Office dated November 22, 2012, she met with Renato Carino (Carino), Perla's Vice-
President for Operations, 21 albeit not at the Head Office, but at a nearby restaurant where Carino
himself instructed her to proceed. At the restaurant, Carino asked Sta. Isabel if she would voluntarily
resign over the Ricsons incident, to which the latter replied that the incident had already been dealt with.
Finally, Sta. Isabel concluded that Perla was bent on easing her out of work, pointing out that the Notice
to Explain and Notice of Termination regarding her alleged insubordination was dated on the same day.
22 CAIHTE

In its defense, Perla maintained that it validly terminated Sta. Isabel's employment on the ground of
insubordination. It averred that since Sta. Isabel did not submit any written explanation regarding the
Notice to Explain dated November 9, 2012 (pertaining to the Ricsons incident), it was constrained to issue
the Final Written Warning dated November 22, 2012, which Sta. Isabel refused to accept. Carino then
called her via telephone to get an explanation and, thereafter, sent a Final Directive to Report to Head
Office. Instead of reporting at the Head Office, Sta. Isabel requested for an informal meeting with Carino
at a restaurant as she did not want to see the faces of the other officers. Thereat, Carino asked Sta.
Isabel if she was willing to voluntarily retire, and at the same time, reminded her to report to the Head
Office. In view of Sta. Isabel's recalcitrance in complying with the aforesaid directives, Perla issued a
Notice to Explain dated November 26, 2012 charging Sta. Isabel of insubordination. On November 27,
2012, Perla received a letter 23 from Sta. Isabel saying that she will only report to the Head Office if
Perla's President, Operations Head, Assistant Vice President, Human Resources Manager, and QC
Branch Manager will all be present for a meeting/conference to clear all issues surrounding her. Thus, on
November 28, 2012, Perla terminated Sta. Isabel's employment on the ground of insubordination. In this
regard, Perla explained that due to a typographical error, it "wrongly" indicated November 26, 2012 as the
date of issuance of Sta. Isabel's Notice of Termination instead of November 28, 2012. 24

The LA Ruling

In a Decision 25 dated April 10, 2013, the Labor Arbiter (LA) dismissed the complaint for lack of merit, but
nevertheless, ordered Perla to pay Sta. Isabel the amounts of P8,778.00 and P7,442.30 representing her
unpaid salary and service incentive leave pay, respectively. 26

The LA found that since Perla's directives for Sta. Isabel to appear before the Head Office were in
connection with the administrative proceedings against the latter, her refusal to comply therewith was not
tantamount to willful disobedience or insubordination. At the most, it only amounted to a waiver of her
opportunity to be heard in said proceedings. Nevertheless, the LA found just cause in terminating Sta.
Isabel's employment, opining that her disrespectful language in her letter dated November 27, 2012 not

297
only constitutes serious misconduct, but also insubordination as it showed her manifest refusal to
cooperate with Perla. 27

Aggrieved, Sta. Isabel appealed 28 to the NLRC.

The NLRC Ruling

In a Decision 29 dated December 26, 2013, the NLRC granted Sta. Isabel's appeal and, accordingly,
ordered Perla to pay her separation pay, backwages, benefits under the Provident Fund, 14th month pay,
and attorney's fees equivalent to 10% of all the monetary awards. 30

The NLRC held that Sta. Isabel's refusal to report to the Head Office was not willful disobedience,
considering that the directives were in connection with the administrative proceedings against her and, as
such, her failure to appear was only tantamount to a waiver of her opportunity to be heard. Hence, she
cannot be dismissed on such cause, which incidentally, was the sole ground for her termination as stated
in the Notice of Termination. In this relation, the NLRC ruled that the LA could not use Sta. Isabel's
November 27, 2012 letter as a ground for her termination as Perla itself did not invoke the same in the
first place. Even assuming that the letter may be used as evidence against Sta. Isabel, the NLRC held
that a careful perusal thereof would show that it was not discourteous, accusatory, or inflammatory. At the
most, the language in the letter would show that Sta. Isabel had written it out of confusion and frustration
over the matter the administrative proceedings against her were being handled, and not out of defiance
and arrogance. 31 In sum, the NLRC concluded that Sta. Isabel's dismissal was without just cause,
hence, unlawful. 32

Upon Perla's motion for reconsideration, 33 the NLRC issued a Resolution 34 dated February 27, 2014
affirming its Decision with modification deleting the award of benefits under the Provident Fund.
Dissatisfied, Perla filed a petition for certiorari 35 before the CA.

The CA Ruling

In a Decision 36 dated March 25, 2015, the CA nullified and set aside the NLRC ruling, and reinstated
that of the LA. 37 Essentially, it held that the NLRC gravely abused its discretion in failing to appreciate
the evidence showing Sta. Isabel's sheer defiant attitude on the orders of Perla and its officers. 38 In this
regard, the CA held that Sta. Isabel's conduct towards Perla's officers by deliberately ignoring the latter's
directives for her to appear before the Head Office, coupled with her letter dated November 27, 2012,
constitutes insubordination or willful disobedience. 39 Thus, the CA concluded that Sta. Isabel's dismissal
was valid, it being a valid exercise of management prerogative in dealing with its affairs, including the
right to dismiss its erring employees. 40

Undaunted, Sta. Isabel moved for reconsideration, 41 which was, however, denied in a Resolution 42
dated June 15, 2015; hence, this petition.

The Issue before the Court

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The essential issue for the Court's resolution is whether or not the CA correctly ascribed grave abuse of
discretion on the part of the NLRC in ruling that Sta. Isabel's dismissal was illegal. DETACa

The Court's Ruling

The petition is meritorious.

To justify the grant of the extraordinary remedy of certiorari, the petitioner must satisfactorily show that the
court or quasi-judicial authority gravely abused the discretion conferred upon it. Grave abuse of discretion
connotes a capricious and whimsical exercise of judgment, done in a despotic manner by reason of
passion or personal hostility, the character of which being so patent and gross as to amount to an evasion
of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of
law. 43

In labor disputes, grave abuse of discretion may be ascribed to the NLRC when, inter alia, its findings and
conclusions are not supported by substantial evidence, or that amount of relevant evidence which a
reasonable mind might accept as adequate to justify a conclusion. 44

Guided by the foregoing considerations, the Court finds that the CA committed reversible error in granting
Perla's certiorari petition considering that the NLRC's finding that Sta. Isabel was illegally dismissed from
employment is supported by substantial evidence.

As may be gleaned from the records, Sta. Isabel received a total of three (3) Notices to Explain dated
October 19, 2012, 45 November 9, 2012, 46 and November 26, 2012. 47

In the Notice to Explain dated October 19, 2012, Sta. Isabel was charged with serious misconduct for her
poor services towards the clients of PAIS. 48 After Sta. Isabel submitted her written explanation and
attended the corresponding meeting, Perla resolved the matter through a Report on Status of the Hearing
for Jinky Sta. Isabel 49 dated October 29, 2012 wherein she was penalized with a "VERBAL WARNING
to improve on the claims servicing of clients in QC Branch." 50 Thus, the proceedings with regard to the
PAIS incident should be deemed terminated.

In the Notice to Explain dated November 9, 2012, Sta. Isabel was charged with serious misconduct and
gross neglect of duty for her poor services towards the clients of Ricsons. 51 Notwithstanding Sta.
Isabel's failure to submit her written explanation despite due notice, Perla went ahead and resolved the
matter anyway in the Final Written Warning 52 dated November 22, 2012 wherein it penalized her with a
"FINAL WARNING to be more circumspect in [her] claims servicing with agents, brokers, and assureds"
with an admonition that "any repetition of the same offense or any acts analogous to the foregoing shall
be dealt with more severely and shall warrant drastic disciplinary action including the penalty of
Termination in order to protect the interest of the company." 53 Hence, Perla's issuance of the Final
Written Warning should have likewise terminated the administrative proceedings relative to the Ricsons
incident.

Finally, in the Notice to Explain dated November 26, 2012, Perla charged her of willful disobedience for
her failure to appear before the Head Office despite due notice. 54 In the Notice of Termination 55 of
even date — although Perla insists that the date indicated therein was a mere typographical error and

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that it was actually made on November 28, 2012 56 — Sta. Isabel was terminated from work on the
ground of insubordination. 57

Since Sta. Isabel was actually dismissed on the ground of insubordination, there is a need to determine
whether or not there is sufficient basis to hold her guilty on such ground.

Insubordination or willful disobedience, is a just cause for termination of employment listed under Article
297 (formerly Article 282) of the Labor Code,58 to wit:

Article 297 [282].Termination by Employer. — An employer may terminate an employment for any of the
following causes:

(a) Serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
representative in connection with his work;

xxx xxx xxx

Willful disobedience or insubordination, as a just cause for the dismissal of an employee, necessitates the
concurrence of at least two (2) requisites, namely: (a) the employee's assailed conduct must have been
willful, that is, characterized by a wrongful and perverse attitude; and (b) the order violated must have
been reasonable, lawful, made known to the employee, and must pertain to the duties which he had been
engaged to discharge. 59

In this case, a plain reading of the Notice to Explain and Notice of Termination both dated November 26,
2012 reveals that the charge of insubordination against Sta. Isabel was grounded on her refusal to report
to the Head Office despite due notice. While Perla's directives for Sta. Isabel to report to the Head Office
indeed appear to be reasonable, lawful, and made known to the latter, it cannot be said that such
directives pertain to her duties as a Claims Adjuster, i.e., handling and settling claims of Perla's Quezon
City Branch, regardless of whether her refusal to heed them was actually willful or not. The aforesaid
directives, whether contained in the Notice to Explain dated November 9, 2012 or the Final Directive to
Report to Head Office dated November 22, 2012, all pertain to Perla's investigation regarding the Ricsons
incident and, thus, were issued in compliance with the requisites of procedural due process in
administrative cases. Otherwise stated, such directives to appear before the Head Office were for the
purpose of affording Sta. Isabel an opportunity to be heard regarding the Notice to Explain dated
November 9, 2012. 60 As correctly pointed out by the labor tribunals, Sta. Isabel's failure or refusal to
comply with the foregoing directives should only be deemed as a waiver of her right to procedural due
process in connection with the Ricsons incident, and is not tantamount to willful disobedience or
insubordination. aDSIHc

Besides, contrary to Perla's claim that it could not wrap up its investigation on the Ricsons incident due to
Sta. Isabel's continuous disregard of said directives, 61 the Final Written Warning dated November 22,
2012 indubitably shows that Perla had already taken care of the Ricsons complaint despite Perla's non-
cooperation. To recapitulate, the Final Written Warning stated that Perla: (a) took into consideration Sta.
Isabel's refusal to appear before the Head Office or to submit her written explanation; (b) deemed such
refusal as a waiver of her opportunity to be heard; and (c) resultantly resolved the matter by penalizing
Sta. Isabel with, among others, a "FINAL WARNING to be more circumspect in [her] claims servicing with

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agents, brokers[,] and assureds." 62 Clearly, Perla cannot base the charge of insubordination against Sta.
Isabel in her refusal to report to the Head Office in connection with the Ricsons complaint.

As an additional basis for Sta. Isabel's alleged insubordination, Perla argues that Sta. Isabel's letter 63
dated November 27, 2012 signifies her outright defiance of management authority, considering that as an
employee, she had no right to impose conditions on management on when and what circumstances she
would explain her side. 64

The Court finds the argument untenable and simply an afterthought to put some semblance of legality to
Sta. Isabel's dismissal.

A careful examination of the records reveals that Perla already issued Sta. Isabel's Notice of Termination
on November 26, 2012 — the same day the Notice to Explain charging her of insubordination was issued
— even before Sta. Isabel wrote them the letter dated November 27, 2012. Evidently, Perla never took
this letter into consideration in dismissing Sta. Isabel. In an attempt to cover up this mishap, Perla claimed
that the date indicated on the Notice of Termination was only a typographical error, as it was actually
issued on November 28, 2012, even presenting the private courier receipt 65 showing that it was only
sent to Sta. Isabel on the latter date. While such private courier receipt indeed shows the date when the
Notice of Termination was sent, it does not prove that it was made on the same day. More revealing is the
fact that this November 27, 2012 letter allegedly showing insubordination on the part of Sta. Isabel was
not even mentioned in her Notice of Termination. Verily, Perla's excuse of typographical error in the date
indicated on the Notice of Termination is simply unacceptable for being a mere self-serving assertion that
deserves no weight in law. 66 Besides, as aptly put by the NLRC, a careful perusal of such letter reveals
that the wordings used therein were not discourteous, accusatory, or inflammatory, nor was the letter
written out of defiance and arrogance. Rather, it only exhibits Sta. Isabel's confusion and frustration over
the way the administrative proceedings against her were being handled.

In sum, the totality of the foregoing circumstances shows that Sta. Isabel was not guilty of acts
constituting insubordination, which would have given Perla a just cause to terminate her employment. As
such, the CA erred in holding that the NLRC gravely abuse its discretion in ruling that Sta. Isabel's
dismissal was illegal; hence, the NLRC ruling must be reinstated. However, since the NLRC erred in
reckoning the computation of Sta. Isabel's separation pay from February 27, 2007 instead of the actual
date of the commencement of her employment with Perla, a modification of the NLRC ruling to reflect this
correction is in order.

WHEREFORE, the petition is GRANTED. The Decision dated March 25, 2015 and the Resolution dated
June 15, 2015 of the Court of Appeals in CA-G.R. SP No. 134676 are hereby REVERSED and SET
ASIDE. Accordingly, the Decision dated December 26, 2013 and the Resolution dated February 27, 2014
of the National Labor Relations Commission in NLRC LAC No. 06-001823-13 are REINSTATED with
MODIFICATION in that the computation of separation pay due to petitioner Jinky S. Sta. Isabel should be
counted from February 26, 2006, the actual date of the commencement of her employment with
respondent Perla Compañia de Seguros, Inc., instead of February 27, 2007.

SO ORDERED. ETHIDa

||| (Sta. Isabel v. Perla Compañia De Seguros, Inc., G.R. No. 219430, [November 7, 2016])

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SECOND DIVISION

[G.R. No. 217426. December 4, 2017.]

ST. MARTIN POLYCLINIC, INC., petitioner, vs. LWV CONSTRUCTION CORPORATION, respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated July 11, 2014 and the
Resolution 3 dated February 27, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 125451, which
affirmed with modification the Decision 4 dated December 15, 2011 and the Order dated May 25, 2012 of
the Regional Trial Court of Mandaluyong City, Branch 211 (RTC) in SCA Case No. MC11-879 (Civil Case
No. 21881), and thereby ordered herein petitioner St. Martin Polyclinic, Inc. (petitioner) to pay respondent
LWV Construction Corporation (respondent) temperate damages in the amount of P50,000.00.

The Facts

Respondent is engaged in the business of recruiting Filipino workers for deployment to Saudi Arabia. 5
On the other hand, petitioner is an accredited member of the Gulf Cooperative Council Approved Medical
Centers Association (GAMCA) and as such, authorized to conduct medical examinations of prospective
applicants for overseas employment. 6

On January 10, 2008, respondent referred prospective applicant Jonathan V. Raguindin (Raguindin) to
petitioner for a pre-deployment medical examination in accordance with the instructions from GAMCA. 7
After undergoing the required examinations, petitioner cleared Raguindin and found him "fit for
employment," as evidenced by a Medical Report 8 dated January 11, 2008 (Medical Report). 9

Based on the foregoing, respondent deployed Raguindin to Saudi Arabia, allegedly incurring expenses in
the amount of P84,373.41. 10 Unfortunately, when Raguindin underwent another medical examination
with the General Care Dispensary of Saudi Arabia (General Care Dispensary) on March 24, 2008, he
purportedly tested positive for HCV or the hepatitis C virus. The Ministry of Health of the Kingdom of
Saudi Arabia (Ministry of Health) required a re-examination of Raguindin, which the General Care
Dispensary conducted on April 28, 2008. 11 However, the results of the re-examination remained the
same, i.e., Raguindin was positive for HCV, which results were reflected in a Certification 12 dated April
28, 2008 (Certification). An undated HCV Confirmatory Test Report 13 likewise conducted by the Ministry
of Health affirmed such finding, thereby leading to Raguindin's repatriation to the Philippines. 14

Claiming that petitioner was reckless in issuing its Medical Report stating that Raguindin is "fit for
employment" when a subsequent finding in Saudi Arabia revealed that he was positive for HCV,
respondent filed a complaint 15 for sum of money and damages against petitioner before the Metropolitan
Trial Court of Mandaluyong City, Branch 60 (MeTC). Respondent essentially averred that it relied on
petitioner's declaration and incurred expenses as a consequence. Thus, respondent prayed for the award

302
of damages in the amount of P84,373.41 representing the expenses it incurred in deploying Raguindin
abroad. 16

In its Answer with compulsory counterclaim, 17 petitioner denied liability and claimed that: first,
respondent was not a proper party in interest for lack of privity of contract between them; second, the
MeTC had no jurisdiction over the case as it involves the interpretation and implementation of a contract
of employment; third, the action is premature as Raguindin has yet to undergo a post-employment
medical examination following his repatriation; and fourth, the complaint failed to state a cause of action
as the Medical Report issued by petitioner had already expired on April 11, 2008, or three (3) months
after its issuance on January 11, 2008. 18

The MeTC Ruling

In a Decision 19 dated December 17, 2010, the MeTC rendered judgment in favor of respondent and
ordered petitioner to pay the amount of P84,373.41 as actual damages, P20,000.00 as attorney's fees,
and the costs of suit. 20

At the onset, the MeTC held that it had jurisdiction over the case, since respondent was claiming actual
damages incurred in the deployment of Raguindin in the amount of P84,373.41. 21 It further ruled that
respondent was a real party in interest, as it would not have incurred expenses had petitioner not issued
the Medical Report certifying that Raguindin was fit to work.

On the merits, the MeTC found that respondent was entitled to be informed accurately of the precise
condition of Raguindin before deploying the latter abroad and consequently, had sustained damage as a
result of the erroneous certification. 22 In this relation, it rejected petitioner's contention that Raguindin
may have contracted the disease after his medical examination in the Philippines up to the time of his
deployment, there being no evidence offered to corroborate the same. 23

Aggrieved, petitioner appealed to the RTC, contending, 24 among others, that respondent failed to
comply with the requirements on the authentication and proof of documents under Section 24, 25 Rule
132 of the Rules of Court, considering that respondent's evidence, particularly the April 28, 2008
Certification issued by the General Care Dispensary and the HCV Confirmatory Test Report issued by the
Ministry of Health, are foreign documents issued in Saudi Arabia.

The RTC Ruling

In a Decision 26 dated December 15, 2011, the RTC dismissed petitioner's appeal and affirmed the
MeTC Decision in its entirety. 27 Additionally, the RTC pointed out that petitioner can no longer change
the theory of the case or raise new issues on appeal, referring to the latter's argument on the
authentication of respondent's documentary evidence. 28

Petitioner's motion for reconsideration 29 was denied in an Order 30 dated May 25, 2012. Dissatisfied,
petitioner elevated the case to the CA. 31

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The CA Ruling

In a Decision 32 dated July 11, 2014, the CA affirmed the RTC Decision, with the modification deleting
the award of actual damages and instead, awarding temperate damages in the amount of P50,000.00. 33

The CA held that petitioner failed to perform its duty to accurately diagnose Raguindin when it issued its
Medical Report declaring the latter "fit for employment," considering that he was subsequently found
positive for HCV in Saudi Arabia. 34 Further, the CA opined that the Certification issued by the General
Care Dispensary is not a public document and in such regard, rejected petitioner's argument that the
same is inadmissible in evidence for not having been authenticated. Moreover, it remarked that
petitioner's own Medical Report does not enjoy the presumption of regularity as petitioner is merely an
accredited clinic. 35 Finally, the CA ruled that petitioner could not disclaim liability on the ground that
Raguindin tested positive for HCV in Saudi Arabia after the expiration of the Medical Report on April 11,
2008, noting that the General Care Dispensary issued its Certification on April 28, 2008, or a mere
seventeen (17) days from the expiration of petitioner's Medical Report. 36 Hence, the CA concluded that
"it is contrary to human experience that a newly-deployed overseas worker, such as Raguindin, would
immediately contract a serious virus at the very beginning of a deployment." 37

However, as the records are bereft of evidence to show that respondent actually incurred the amount of
P84,373.41 as expenses for Raguindin's deployment, the CA deleted the award of actual damages and
instead, awarded temperate damages in the amount of P50,000.00. 38

Aggrieved, petitioner filed a motion for partial reconsideration, 39 which the CA denied in a Resolution 40
dated February 27, 2015; hence, this petition.

The Issue Before the Court

The essential issue advanced for the Court's resolution is whether or not petitioner was negligent in
issuing the Medical Report declaring Raguindin "fit for employment" and hence, should be held liable for
damages.

The Court's Ruling

The petition is granted.

I.

At the outset, it should be pointed out that a re-examination of factual findings cannot be done acting on a
petition for review on certiorari because the Court is not a trier of facts but reviews only questions of law.
41 Thus, in petitions for review on certiorari, only questions of law may generally be put into issue. This
rule, however, admits of certain exceptions, such as "when the inference made is manifestly mistaken,
absurd or impossible"; or "when the findings are conclusions without citation of specific evidence on which
they are based." 42 Finding a confluence of certain exceptions in this case, the general rule that only
legal issues may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court would

304
not apply, and the Court retains the authority to pass upon the evidence presented and draw conclusions
therefrom. 43

II.

An action for damages due to the negligence of another may be instituted on the basis of Article 2176 of
the Civil Code, which defines a quasi-delict: ATICcS

Article 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is
obliged to pay for the damage done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

The elements of a quasi-delict are: (1) an act or omission; (2) the presence of fault or negligence in the
performance or non-performance of the act; (3) injury; (4) a causal connection between the negligent act
and the injury; and (5) no pre-existing contractual relation. 44

As a general rule, any act or omission coming under the purview of Article 2176 gives rise to a cause of
action under quasi-delict. This, in turn, gives the basis for a claim of damages. 45 Notably, quasi-delict is
one among several sources of obligation. Article 1157 of the Civil Code states:

Article 1157. Obligations arise from:

(1) Law;

(2) Contracts;

(3) Quasi-contracts;

(4) Acts or omissions punished by law; and

(5) Quasi-delicts.

However, as explained by Associate Justice Marvic M.V.F. Leonen (Justice Leonen) in his opinion in
Alano v. Magud-Logmao 46 (Alano), "Article 2176 is not an all-encompassing enumeration of all
actionable wrongs which can give rise to the liability for damages. Under the Civil Code, acts done in
violation of Articles 19, 20, and 21 will also give rise to damages." 47 These provisions — which were
cited as bases by the MTC, RTC and CA in their respective rulings in this case — read as follows:

Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith.

305
Article 20. Every person who, contrary to law, willfully or negligently causes damage to another, shall
indemnify the latter for the same.

Article 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals,
good customs, or public policy shall compensate the latter for the damage.

"[Article 19], known to contain what is commonly referred to as the principle of abuse of rights, sets
certain standards which must be observed not only in the exercise of one's rights, but also in the
performance of one's duties." 48 Case law states that "[w]hen a right is exercised in a manner which does
not conform with the norms enshrined in Article 19 and results in damage to another, a legal wrong is
thereby committed for which the wrongdoer must be held responsible. But while Article 19 lays down a
rule of conduct for the government of human relations and for the maintenance of social order, it does not
provide a remedy for its violation. Generally, an action for damages under either Article 20 or Article 21
would [then] be proper." 49 Between these two provisions as worded, it is Article 20 which applies to both
willful and negligent acts that are done contrary to law. On the other hand, Article 21 applies only to willful
acts done contra bonos mores. 50

In the Alano case, Justice Leonen aptly elaborated on the distinctive applications of Articles 19, 20 and
21, which are general provisions on human relations, vis-à-vis Article 2176, which particularly governs
quasi-delicts:

Article 19 is the general rule which governs the conduct of human relations. By itself, it is not the basis of
an actionable tort. Article 19 describes the degree of care required so that an actionable tort may arise
when it is alleged together with Article 20 or Article 21.

Article 20 concerns violations of existing law as basis for an injury. It allows recovery should the act have
been willful or negligent. Willful may refer to the intention to do the act and the desire to achieve the
outcome which is considered by the plaintiff in tort action as injurious. Negligence may refer to a situation
where the act was consciously done but without intending the result which the plaintiff considers as
injurious.

Article 21, on the other hand, concerns injuries that may be caused by acts which are not necessarily
proscribed by law. This article requires that the act be willful, that is, that there was an intention to do the
act and a desire to achieve the outcome. In cases under Article 21, the legal issues revolve around
whether such outcome should be considered a legal injury on the part of the plaintiff or whether the
commission of the act was done in violation of the standards of care required in Article 19.

Article 2176 covers situations where an injury happens through an act or omission of the defendant.
When it involves a positive act, the intention to commit the outcome is irrelevant. The act itself must not
be a breach of an existing law or a pre-existing contractual obligation. What will be considered is whether
there is "fault or negligence" attending the commission of the act which necessarily leads to the outcome
considered as injurious by the plaintiff. The required degree of diligence will then be assessed in relation
to the circumstances of each and every case. 51 (Emphases and underscoring supplied)

Thus, with respect to negligent acts or omissions, it should therefore be discerned that Article 20 of the
Civil Code concerns "violations of existing law as basis for an injury," whereas Article 2176 applies when

306
the negligent act causing damage to another does not constitute "a breach of an existing law or a pre-
existing contractual obligation."

In this case, the courts a quo erroneously anchored their respective rulings on the provisions of Articles
19, 20, and 21 of the Civil Code.This is because respondent did not proffer (nor have these courts
mentioned) any law as basis for which damages may be recovered due to petitioner's alleged negligent
act. In its amended complaint, respondent mainly avers that had petitioner not issue a "fit for employment"
Medical Report to Raguindin, respondent would not have processed his documents, deployed him to
Saudi Arabia, and later on — in view of the subsequent findings that Raguindin was positive for HCV and
hence, unfit to work — suffered actual damages in the amount of P84,373.41. 52 Thus, as the claimed
negligent act of petitioner was not premised on the breach of any law, and not to mention the
incontestable fact that no pre-existing contractual relation was averred to exist between the parties,
Article 2176 — instead of Articles 19, 20 and 21 — of the Civil Code should govern.

III.

Negligence is defined as the failure to observe for the protection of the interests of another person, that
degree of care, precaution and vigilance which the circumstances justly demand, whereby such other
person suffers injury. 53

As early as the case of Picart v. Smith, 54 the Court elucidated that "the test by which to determine the
existence of negligence in a particular case is: Did the defendant in doing the alleged negligent act use
that reasonable care and caution which an ordinarily prudent person would have used in the same
situation? If not, then he is guilty of negligence." 55 Corollary thereto, the Court stated that "[t]he question
as to what would constitute the conduct of a prudent man in a given situation must of course be always
determined in the light of human experience and in view of the facts involved in the particular case.
Abstract speculation cannot here be of much value x x x: Reasonable men govern their conduct by the
circumstances which are before them or known to them. They are not, and are not supposed to be,
omniscient of the future. Hence[,] they can be expected to take care only when there is something before
them to suggest or warn of danger." 56

Under our Rules of Evidence, it is disputably presumed that a person takes ordinary care of his concerns
and that private transactions have been fair and regular. 57 In effect, negligence cannot be presumed,
and thus, must be proven by him who alleges it. 58 In Huang v. Philippine Hoteliers, Inc.: 59

[T]he negligence or fault should be clearly established as it is the basis of her action. The burden of proof
is upon [the plaintiff]. Section 1, Rule 131 of the Rules of Court provides that "burden of proof is the duty
of a party to present evidence on the facts in issue necessary to establish his claim or defense by the
amount of evidence required by law." It is then up for the plaintiff to establish his cause of action or the
defendant to establish his defense. Therefore, if the plaintiff alleged in his complaint that he was damaged
because of the negligent acts of the defendant, he has the burden of proving such negligence. It is even
presumed that a person takes ordinary care of his concerns. The quantum of proof required is
preponderance of evidence. 60 (Emphasis and underscoring supplied)

The records of this case show that the pieces of evidence mainly relied upon by respondent to establish
petitioner's negligence are: (a) the Certification 61 dated April 28, 2008; and (b) the HCV Confirmatory
Test Report. 62 However, these issuances only indicate the results of the General Care Dispensary and
Ministry of Health's own medical examination of Raguindin finding him to be positive for HCV. Notably,
the examination conducted by the General Care Dispensary, which was later affirmed by the Ministry of

307
Health, was conducted only on March 24, 2008, or at least two (2) months after petitioner issued its
Medical Report on January 11, 2008. Hence, even assuming that Raguindin's diagnosis for HCV was
correct, the fact that he later tested positive for the same does not convincingly prove that he was already
under the same medical state at the time petitioner issued the Medical Report on January 11, 2008. In
this regard, it was therefore incumbent upon respondent to show that there was already negligence at the
time the Medical Report was issued, may it be through evidence that show that standard medical
procedures were not carefully observed or that there were already palpable signs that exhibited
Raguindin's unfitness for deployment at that time. This is hardly the case when respondent only proffered
evidence which demonstrate that months after petitioner's Medical Report was issued, Raguindin, who
had already been deployed to Saudi Arabia, tested positive for HCV and as such, was no longer "fit for
employment."

In fact, there is a reasonable possibility that Raguindin became exposed to the HCV only after his medical
examination with petitioner on January 11, 2008. Based on published reports from the World Health
Organization, HCV or the hepatitis C virus causes both acute and chronic infection. Acute HCV infection
is usually asymptomatic, 63 and is only very rarely associated with life-threatening diseases. The
incubation period 64 for HCV is two (2) weeks to six (6) months, and following initial infection,
approximately 80% of people do not exhibit any symptoms. 65 Indisputably, Raguindin was not deployed
to Saudi Arabia immediately after petitioner's medical examination and hence, could have possibly
contracted the same only when he arrived thereat. In light of the foregoing, the CA therefore erred in
holding that "[h]ad petitioner more thoroughly and diligently examined Raguindin, it would likely have
discovered the existence of the HCV because it was contrary to human experience that a newly-deployed
overseas worker, such as Raguindin, would immediately have contracted the disease at the beginning of
his deployment." 66

While petitioner's Medical Report indicates an expiration of April 11, 2008, the Court finds it fitting to
clarify that the same could not be construed as a certified guarantee coming from petitioner that
Raguindin's medical status at the time the report was issued on January 11, 2008 (i.e., that he was fit for
employment) would remain the same up until that date (i.e., April 11, 2008). As earlier intimated, the
intervening period could very well account for a number of variables that could have led to a change in
Raguindin's condition, such as his deployment to a different environment in Saudi Arabia. If at all, the
expiration date only means that the Medical Report is valid — and as such, could be submitted — as a
formal requirement for overseas employment up until April 11, 2008; it does not, by any means, create
legal basis to hold the issuer accountable for any intervening change of condition from the time of
issuance up until expiration. Truly, petitioner could not be reasonably expected to predict, much less
assure, that Raguindin's medical status of being fit for employment would remain unchanged. Thus, the
fact that the Medical Report's expiration date of April 11, 2008 was only seventeen (17) days away from
the issuance of the General Care Dispensary's April 28, 2008 Certification finding Raguindin positive for
HCV should not — as it does not — establish petitioner's negligence. TIADCc

IV.

At any rate, the fact that Raguindin tested positive for HCV could not have been properly established
since the courts a quo, in the first place, erred in admitting and giving probative weight to the Certification
of the General Care Dispensary, which was written in an unofficial language. Section 33, Rule 132 of the
Rules of Court states that:

Section 33. Documentary evidence in an unofficial language. — Documents written in an unofficial

language shall not be admitted as evidence, unless accompanied with a translation into English or
Filipino. To avoid interruption of proceedings, parties or their attorneys are directed to have such
translation prepared before trial. 67

308
A cursory examination of the subject document would reveal that while it contains English words, the
majority of it is in an unofficial language. Sans any translation in English or Filipino provided by
respondent, the same should not have been admitted in evidence; thus their contents could not be given
probative value, and deemed to constitute proof of the facts stated therein.

Moreover, the due execution and authenticity of the said certification were not proven in accordance with
Section 20, Rule 132 of the Rules of Court:

Section 20. Proof of private document. — Before any private document offered as authentic is received in
evidence, its due execution and authenticity must be proved either:

(a) By anyone who saw the document executed or written; or

(b) By evidence of the genuineness of the signature or handwriting of the maker.

(c) Any other private document need only be identified as that which it is claimed to be.

Notably, the foregoing provision applies since the Certification does not fall within the classes of public
documents under Section 19, Rule 132 of the Rules of Court 68 — and hence, must be considered as
private. It has been settled that an unverified and unidentified private document cannot be accorded
probative value. 69 In addition, case law states that "since a medical certificate involves an opinion of one
who must first be established as an expert witness, it cannot be given weight or credit unless the doctor
who issued it is presented in court to show his qualifications. It is precluded because the party against
whom it is presented is deprived of the right and opportunity to cross-examine the person to whom the
statements or writings are attributed. Its executor or author should be presented as a witness to provide
the other party to the litigation the opportunity to question its contents. Being mere hearsay evidence,
failure to present the author of the medical certificate renders its contents suspect and of no probative
value," 70 as in this case.

Similarly, the HCV Confirmatory Test Report issued by the Ministry of Health of Saudi Arabia should have
also been excluded as evidence. Although the same may be considered a public document, being an
alleged written official act of an official body of a foreign country, 71 the same was not duly authenticated
in accordance with Section 24, 72 Rule 132 of the Rules of Court. While respondent provided a
translation 73 thereof from the National Commission on Muslim Filipinos, Bureau of External Relations,
Office of the President, the same was not accompanied by a certificate of the secretary of the embassy or
legation, consul-general, consul, vice-consul, or consular agent or any officer in the foreign service of the
Philippines stationed in Saudi Arabia, where the record is kept, and authenticated by the seal of his office.
74

To be sure, petitioner — contrary to respondent's contention 75 — has not changed its theory of the case
by questioning the foregoing documents. As petitioner correctly argued, it merely amplified its defense 76
that it is not liable for negligence when it further questioned the validity of the issuances of the General
Care Dispensary and Ministry of Health. In Limpangco Sons v. Yangco, 77 the Court explained that
"[t]here is a difference x x x between a change in the theory of the case and a shifting of the incidence of
the emphasis placed during the trial or in the briefs." "Where x x x the theory of the case as set out in the
pleadings remains the theory throughout the progress of the cause, the change of emphasis from one

309
phase of the case as presented by one set of facts to another phase made prominent by another set of
facts x x x does not result in a change of theory x x x." 78 In any case, petitioner had already questioned
the validity of these documents in its Position Paper 79 before the MeTC. 80 Hence, there is no change of
theory that would preclude petitioner's arguments on this score.

All told, there being no negligence proven by respondent through credible and admissible evidence,
petitioner cannot be held liable for damages under Article 2176 of the Civil Code as above-discussed.

WHEREFORE, the petition is GRANTED. Accordingly, the Decision dated July 11, 2014 and the
Resolution dated February 27, 2015 of the Court of Appeals in CA-G.R. SP No. 125451 are REVERSED
and SET ASIDE, and a NEW ONE is entered, DISMISSING the complaint of respondent LWV
Construction Corporation for lack of merit.

SO ORDERED.

||| (St. Martin Polyclinic, Inc. v. LWV Construction Corp., G.R. No. 217426, [December 4, 2017])

310
FIRST DIVISION

[G.R. No. 218871. January 11, 2017.]

JEBSENS * MARITIME, INC., SEA CHEFS LTD., ** and ENRIQUE M. ABOITIZ, petitioners, vs.
FLORVIN G. RAPIZ, respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated January 20, 2015 and the
Resolution 3 dated June 5, 2015 of the Court of Appeals (CA) in CA-G.R. SP No. 130442, which affirmed
the Decision 4 dated January 25, 2013 and the Resolution 5 dated May 22, 2013 of the Office of the
Panel of Voluntary Arbitrators (VA) of the National Conciliation and Mediation Board (NCMB) in AC-305-
NCMB-NCR-78-01-08-12 and, accordingly, ordered petitioners Jebsens Maritime, Inc., Sea Chefs Ltd.
(Sea Chefs), and Mr. Enrique Aboitiz (Aboitiz; collectively, petitioners) to jointly and severally pay
respondent Florvin G. Rapiz (respondent) permanent and total disability benefits in the amount of
US$60,000.00 plus attorney's fees in the amount of US$6,000.00 or their peso equivalent at the time of
payment.

The Facts

On March 16, 2011, Jebsens, on behalf of its foreign principal, Sea Chefs, engaged the services of
respondent to work on board the M/V Mercury as a buffet cook for a period of nine (9) months with a
basic monthly salary of US$501.00. 6 On March 30, 2011, respondent boarded the said vessel.
Sometime in September 2011, respondent experienced excruciating pain and swelling on his right
wrist/forearm while lifting a heavy load of meat. A consultation with the ship doctor revealed that
respondent was suffering from severe "Tendovaginitis DeQuevain" 7 which caused his medical
repatriation since it was not possible for him to work without using his right forearm. 8

On October 14, 2011, 9 respondent was repatriated to the Philippines and underwent consultation,
medication, and therapy with the company-designated physician. After a lengthy treatment, the company-
designated physician issued a 7th and Final Summary Medical Report 10 and a Disability Grading 11
both dated January 24, 2012, diagnosing respondent with "Flexor Carpi Radialis Tendinitis, Right; Sprain,
Right thumb; Extensor Carpi Ulnaris Tendinitis, Right," and classifying his condition as a "Grade 11"
disability pursuant to the disability grading provided for in the 2010 Philippine Overseas Employment
Association-Standard Employment Contract (POEA-SEC). Dissatisfied, respondent consulted an
independent physician, who classified his condition as a Grade 10 disability. 12 Thereafter, respondent
requested petitioners to pay him total and permanent disability benefits, which the latter did not heed,
thus, constraining the former to file a Notice to Arbitrate before the NCMB. As the parties failed to
amicably settle the case, the parties submitted the same to the VA for adjudication. 13

Respondent argued, inter alia, that while both the company-designated and independent physicians gave
him disability ratings of Grade 11 and 10, respectively, he is nevertheless entitled to permanent and total
disability benefits as he was unable to work as a cook for a period of 120 days from his medical

311
repatriation. 14 On the other hand, petitioners maintained that respondent is only entitled to Grade 11
disability benefits pursuant to the classification made by the company-designated physician. 15

The VA Ruling

In a Decision 16 dated January 25, 2013, the VA ruled in respondent's favor and, accordingly, ordered
petitioners to pay him permanent and total disability benefits in the amount of US$60,000.00 plus
attorney's fees in the amount of US$6,000.00 or their peso equivalent at the time of payment. 17

The VA found that respondent is entitled to permanent and total disability benefits, considering that: (a)
he suffered his disability on his right hand while working at petitioners' vessel; (b) he can no longer pursue
his work on board the vessel as a cook due to the recurrent nature of his disability; and (c) such disability
persisted beyond 120 days after his medical repatriation. 18 The VA also found respondent to be entitled
to attorney's fees as he was forced to litigate to protect his rights and interest. 19 CAIHTE

Petitioners filed a motion for reconsideration, 20 but the same was denied in a Resolution 21 dated May
22, 2013. Aggrieved, they appealed to the CA via a petition for review. 22

The CA Ruling

In a Decision 23 dated January 20, 2015, the CA affirmed the VA ruling. Similar to the VA's findings, the
CA held that: (a) respondent's disability should be considered permanent and total because he was
unable to continue his work as a seaman for more than 120 days from his medical repatriation on October
11, 2011; and (b) he is entitled to attorney's fees as he was forced to litigate and incur expenses to
protect his rights and interests. 24

Petitioners moved for reconsideration, 25 which was, however, denied in a Resolution 26 dated June 5,
2015; hence, this petition.

The Issue before the Court

The essential issue for the Court's resolution is whether or not the CA correctly held that respondent is
entitled to permanent and total disability benefits.

The Court's Ruling

The petition is meritorious.

In this case, the VA and the CA's award of permanent and total disability benefits in respondent's favor
was heavily anchored on his failure to obtain any gainful employment for more than 120 days after his
medical repatriation. However, in Ace Navigation Company v. Garcia, 27 the Court explained that the

312
company-designated physician is given an additional 120 days, or a total of 240 days from repatriation, to
give the seafarer further treatment and, thereafter, make a declaration as to the nature of the latter's
disability, viz.:

As these provisions operate, the seafarer, upon sign-off from his vessel, must report to the company-
designated physician within three (3) days from arrival for diagnosis and treatment. For the duration of the
treatment but in no case to exceed 120 days, the seaman is on temporary total disability as he is totally
unable to work. He receives his basic wage during this period until he is declared fit to work or his
temporary disability is acknowledged by the company to be permanent, either partially or totally, as his
condition is defined under the POEA-Standard Employment Contract [(SEC)] and by applicable Philippine
laws. If the 120 days initial period is exceeded and no such declaration is made because the seafarer
requires further medical attention, then the temporary total disability period may be extended up to a
maximum of 240 days, subject to the right of the employer to declare within this period that a permanent
partial or total disability already exists. The seaman may of course also be declared fit to work at any time
such declaration is justified by his medical condition.

xxx xxx xxx

As we outlined above, a temporary total disability only becomes permanent when so declared by the
company physician within the periods he is allowed to do so, or upon the expiration of the maximum 240-
day medical treatment period without a declaration of either fitness to work or the existence of a
permanent disability. In the present case, while the initial 120-day treatment or temporary total disability
period was exceeded, the company-designated doctor duly made a declaration well within the extended
240-day period that the petitioner was fit to work. 28 (Emphases and underscoring in the original)

In Elburg Shipmanagement Phils., Inc. v. Quiogue, Jr., 29 the Court further clarified that for the company-
designated physician to avail of the extended 240-day period, he must first perform some significant act
to justify an extension (e.g., that the illness still requires medical attendance beyond the initial 120 days
but not to exceed 240 days); otherwise, the seafarer's disability shall be conclusively presumed to be
permanent and total. 30 Accordingly, the Court laid down the following guidelines that shall govern
seafarers' claims for permanent and total disability benefits:

1. The company-designated physician must issue a final medical assessment on the seafarer's disability
grading within a period of 120 days from the time the seafarer reported to him;

2. If the company-designated physician fails to give his assessment within the period of 120 days, without
any justifiable reason, then the seafarer's disability becomes permanent and total;

3. If the company-designated physician fails to give his assessment within the period of 120 days with a
sufficient justification (e.g., seafarer required further medical treatment or seafarer was uncooperative),
then the period of diagnosis and treatment shall be extended to 240 days. The employer has the burden
to prove that the company-designated physician has sufficient justification to extend the period; and
DETACa

4. If the company-designated physician still fails to give his assessment within the extended period of 240
days, then the seafarer's disability becomes permanent and total, regardless of any justification. 31

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Here, records reveal that on October 14, 2011, respondent was medically repatriated for what was initially
diagnosed by the ship doctor as "Tendovaginitis DeQuevain." As early as January 24, 2012, or just 102
days from repatriation, the company-designated physician had already given his final assessment on
respondent when he diagnosed the latter with "Flexor Carpi Radialis Tendinitis, Right; Sprain, Right
thumb; Extensor Carpi Ulnaris Tendinitis, Right" and gave a final disability rating of "Grade 11" pursuant
to the disability grading provided in the 2010 POEA-SEC. 32 In view of the final disability rating made by
the company-designated physician classifying respondent's disability as merely permanent and partial 33
— which was not refuted by the independent physician except that respondent's condition was classified
as a Grade 10 disability — it is plain error to award permanent and total disability benefits to respondent.

Moreover, it bears noting that as per respondent's contract 34 with Jebsens, his employment is covered
by the 2010 POEA-SEC. It is well-settled that the POEA-SEC is the law between the parties and, as
such, its provisions bind both of them. 35 Under Section 20 (A) (6) of the 2010 POEA-SEC, the
determination of the proper disability benefits to be given to a seafarer shall depend on the grading
system provided by Section 32 of the said contract, regardless of the actual number of days that the
seafarer underwent treatment:

SECTION 20. COMPENSATION AND BENEFITS. —

A. COMPENSATION AND BENEFITS FOR INJURY OR ILLNESS

The liabilities of the employer when the seafarer suffers work-related injury or illness during the term of
his contract are as follows:

xxx xxx xxx

6. In case of permanent total or partial disability of the seafarer caused by either injury or illness[,] the
seafarer shall be compensated in accordance with the schedule of benefits enumerated in Section 32 of
this Contract. Computation of his benefits arising from an illness or disease shall be governed by the
rates and the rules of compensation applicable at the time the illness or disease was contracted.

The disability shall be based solely on the disability gradings provided under Section 32 of this Contract,
and shall not be measured or determined by the number of days a seafarer is under treatment or the
number of days in which sickness allowance is paid. (Emphasis and underscoring supplied)

In this case, respondent's disability was already determined as only permanent and partial, in view of its
classification as Grade 11 by the company-designated physician and Grade 10 by the independent
physician. As such, the award of US$60,000.00 representing Grade 1 (i.e., permanent and total disability)
benefits in favor of respondent clearly has no basis and, consequently, must be struck down. aDSIHc

Be that as it may, it remains undisputed that respondent suffered an injury while on board the M/V
Mercury, a work-related disability that is clearly compensable as it is a permanent and partial disability, as
classified by both the company-designated and independent physicians. As already adverted to, there is
a slight discrepancy with the classifications of the aforesaid physicians, as the former rated respondent's
disability as Grade 11, while the latter's rating was Grade 10. In this regard, the Court rules that the
findings of the company-designated physician should prevail, considering that he examined, diagnosed,

314
and treated respondent from his repatriation on October 14, 2011 until he was assessed with a Grade 11
disability rating on January 24, 2012; whereas the independent physician only examined him sparingly on
March 13, 2012. In Formerly INC Shipmanagement Incorporated (now INC Navigation Co. Philippines,
Inc.) v. Rosales, 36 the Court held that under these circumstances, the assessment of the company-
designated physician is more credible for having been arrived at after months of medical attendance and
diagnosis, compared with the assessment of a private physician done in one day on the basis of an
examination or existing medical records. 37 In view of the foregoing, respondent is therefore entitled to
permanent and partial disability benefits corresponding to a Grade 11 rating in the amount of
US$7,465.00 or its peso equivalent at the time of payment, 38 which shall then earn legal interest at the
rate of six percent (6%) per annum from the finality of this Decision until fully paid. 39

Finally, the Court finds that the award of attorney's fees lacks legal basis and, perforce, should be
deleted. 40

WHEREFORE, the petition is GRANTED. The Decision dated January 20, 2015 and the Resolution dated
June 5, 2015 of the Court of Appeals in CA-G.R. SP No. 130442 are hereby MODIFIED, ordering
petitioners Jebsens Maritime, Inc., Sea Chefs Ltd., and Enrique M. Aboitiz to jointly and severally pay
respondent Florvin G. Rapiz permanent and partial disability benefits corresponding to a Grade 11
disability under the 2010 POEA-SEC in the amount of US$7,465.00 or its peso equivalent at the time of
payment, with legal interest at the rate of six percent (6%) per annum from the finality of this Decision until
fully paid.

SO ORDERED. ETHIDa

||| (Jebsens Maritime, Inc. v. Rapiz, G.R. No. 218871, [January 11, 2017])

315
FIRST DIVISION

[G.R. No. 184262. ** April 24, 2017.]

UNIVERSITY OF SANTO TOMAS (UST), petitioner, vs. SAMAHANG MANGGAGAWA NG UST,

FERNANDO PONTESOR, * RODRIGO CLACER, SANTIAGO BUISA, JR., and JIMMY NAZARETH,
respondents.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 are the Decision 2 dated June 12, 2008 and the
Resolution 3 dated August 22, 2008 of the Court of Appeals (CA) in CA-G.R. SP No. 85464, which
reversed and set aside the Resolutions dated March 26, 2004 4 and May 25, 2004 5 of the National
Labor Relations Commission (NLRC) in NLRC NCR CASE NO. 00-08-08586-99 (NLRC CA No. 035509-
03) and, accordingly, reinstated the Decision 6 dated October 23, 2002 of the Labor Arbiter (LA) in NLRC-
NCR-0-08-08586-99 declaring respondents Fernando Pontesor (Pontesor), Rodrigo Clacer (Clacer),
Santiago Buisa, Jr. (Buisa), and Jimmy Nazareth (Nazareth; Pontesor, et al., collectively) as regular
employees of petitioner University of Santo Tomas (petitioner) and, thus, were illegally dismissed by the
latter. HTcADC

The Facts

The instant case stemmed from a complaint 7 for regularization and illegal dismissal filed by respondents
Samahang Manggagawa ng UST and Pontesor, et al. (respondents) against petitioner before the NLRC.
Respondents alleged that on various periods spanning the years 1990-1999, petitioner repeatedly hired
Pontesor, et al. to perform various maintenance duties within its campus, i.e., as laborer, mason, tinsmith,
painter, electrician, welder, carpenter. Essentially, respondents insisted that in view of Pontesor, et al.'s
performance of such maintenance tasks throughout the years, they should be deemed regular employees
of petitioner. Respondents further argued that for as long as petitioner continues to operate and exist as
an educational institution, with rooms, buildings, and facilities to maintain, the latter could not dispense
with Pontesor, et al.'s services which are necessary and desirable to the business of petitioner. 8

On the other hand, while petitioner admitted that it repeatedly hired Pontesor, et al. in different capacities
throughout the aforesaid years, it nevertheless maintained that they were merely hired on a per-project
basis, as evidenced by numerous Contractual Employee Appointments (CEAs) 9 signed by them. In this
regard, petitioner pointed out that each of the CEAs that Pontesor, et al. signed defined the nature and
term of the project to which they are assigned, and that each contract was renewable in the event the
project remained unfinished upon the expiration of the specified term. In accordance with the express
provisions of said CEAs, Pontesor, et al.'s project employment were automatically terminated: (a) upon
the expiration of the specific term specified in the CEA; (b) when the project is completed ahead of such
expiration; or (c) in cases when their employment was extended due to the non-completion of the specific
project for which they were hired, upon the completion of the said project. As such, the termination of
Pontesor, et al.'s employment with petitioner was validly made due to the completion of the specific
projects for which they were hired. 10

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The LA Ruling

In a Decision 11 dated October 23, 2002, the LA ruled in Pontesor, et al.'s favor and, accordingly, ordered
petitioner to reinstate them to their former jobs with full backwages and without loss of seniority rights. 12
The LA found that Pontesor, et al. should be deemed as petitioner's regular employees, considering that:
(a) they have rendered at least one (1) year of service to petitioner as its employees; (b) the activities for
which they were hired for are vital or inherently indispensable to the maintenance of the buildings or
classrooms where petitioner's classes were held; and (c) their CEAs were contrived to preclude them
from obtaining security of tenure. In this light and in the absence of any valid cause for termination, the LA
concluded that Pontesor, et al. were illegally dismissed by petitioner. 13 CAIHTE

Aggrieved, petitioner appealed 14 to the NLRC.

The NLRC Ruling

In a Resolution 15 dated March 26, 2004, the NLRC vacated the LA ruling and, consequently, entered a
new one dismissing respondents' complaint for lack of merit. 16 Contrary to the LA's findings, the NLRC
found that Pontesor, et al. cannot be considered regular employees as they knowingly and voluntarily
entered into fixed term contracts of employment with petitioner. As such, they could not have been
illegally dismissed upon the expiration of their respective last valid and binding fixed term employment
contracts with petitioner. This notwithstanding, the NLRC rejected petitioner's contention that Pontesor, et
al. should be deemed project employees, ratiocinating that their work were not usually necessary and
desirable to petitioner's main business or trade, which is to provide elementary, secondary, tertiary, and
post-graduate education. As such, the NLRC classified Pontesor, et al. as mere fixed term casual
employees. 17

Respondents moved for reconsideration, 18 which was, however, denied in a Resolution 19 dated May
25, 2004. Dissatisfied, they filed a petition 20 for certiorari before the CA.

The CA Ruling

In a Decision 21 dated June 12, 2008, the CA reversed and set aside the NLRC ruling and, accordingly,
reinstated that of the LA. 22 It held that Pontesor, et al. cannot be considered as merely fixed term or
project employees, considering that: (a) they performed work that is necessary and desirable to
petitioner's business, as evidenced by their repeated rehiring and petitioner's continuous need for their
services; and (b) the specific undertaking or project for which they were employed were not clear as the
project description set forth in their respective CEAs were either too general or too broad. Thus, the CA
classified Pontesor, et al. as regular employees, who are entitled to security of tenure and cannot be
terminated without any just or authorized cause. 23 aScITE

Undaunted, petitioner moved for reconsideration 24 but the same was denied in a Resolution 25 dated
August 22, 2008; hence, this petition.

The Issue Before the Court

317
The issue for the Court's resolution is whether or not the CA correctly ruled that Pontesor, et al. are
regular employees and, consequently, were illegally dismissed by petitioner.

The Court's Ruling

The petition is without merit.

"Preliminarily, the Court stresses the distinct approach in reviewing a CA's ruling in a labor case. In a Rule
45 review, the Court examines the correctness of the CA's Decision in contrast with the review of
jurisdictional errors under Rule 65. Furthermore, Rule 45 limits the review to questions of law. In ruling for
legal correctness, the Court views the CA Decision in the same context that the petition for certiorari was
presented to the CA. Hence, the Court has to examine the CA's Decision from the prism of whether the
CA correctly determined the presence or absence of grave abuse of discretion in the NLRC decision." 26

Case law states that grave abuse of discretion connotes a capricious and whimsical exercise of judgment,
done in a despotic manner by reason of passion or personal hostility, the character of which being so
patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty
enjoined by or to act at all in contemplation of law. 27

"In labor cases, grave abuse of discretion may be ascribed to the NLRC when its findings and
conclusions are not supported by substantial evidence, which refers to that amount of relevant evidence
that a reasonable mind might accept as adequate to justify a conclusion. Thus, if the NLRC's ruling has
basis in the evidence and the applicable law and jurisprudence, then no grave abuse of discretion exists
and the CA should so declare and, accordingly, dismiss the petition." 28

Guided by the foregoing considerations, the Court finds that the CA correctly ascribed grave abuse of
discretion on the part of the NLRC, as its finding that Pontesor, et al. are not regular employees of
petitioner patently deviates from the evidence on record as well as settled legal principles of labor law.

Article 295 29 of the Labor Code, 30 as amended, distinguishes project employment from regular
employment as follows: DETACa

Art. 295 [280]. Regular and casual employment. — The provisions of written agreement to the contrary
notwithstanding and regardless of the oral agreement of the parties, an employment shall be deemed to
be regular where the employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer, except where the employment has been fixed for
a specific project or undertaking the completion or termination of which has been determined at the time
of the engagement of the employee or where the work or services to be performed is seasonal in nature
and the employment is for the duration of the season.

An employment shall be deemed to be casual if it is not covered by the preceding paragraph: Provided,
That any employee who has rendered at least one year of service, whether such service is continuous or
broken, shall be considered a regular employee with respect to the activity in which he is employed and
his employment shall continue while such activity exists.

318
Under the foregoing provision, the law provides for two (2) types of regular employees, namely: (a) those
who are engaged to perform activities which are usually necessary or desirable in the usual business or
trade of the employer (first category); and (b) those who have rendered at least one year of service,
whether continuous or broken, with respect to the activity in which they are employed (second category).
31 In Universal Robina Corporation v. Catapang, 32 citing Abasolo v. NLRC, 33 the Court laid down the
test in determining whether one is a regular employee, to wit:

The primary standard, therefore, of determining regular employment is the reasonable connection
between the particular activity performed by the employee in relation to the usual trade or business of the
employer. The test is whether the former is usually necessary or desirable in the usual business or trade
of the employer. The connection can be determined by considering the nature of work performed and its
relation to the scheme of the particular business or trade in its entirety. Also, if the employee has been
performing the job for at least a year, even if the performance is not continuous and merely intermittent,
the law deems repeated and continuing need for its performance as sufficient evidence of the necessity if
not indispensability of that activity to the business. Hence, the employment is considered regular but only
with respect to such activity and while such activity exists. 34 (Emphasis and underscoring supplied.)
HEITAD

In Kimberly Independent Labor Union for Solidarity, Activism, and Nationalism — Organized Labor Ass'n.
in Line Industries and Agriculture (KILUSAN-OLALIA) v. Drilon (Kimberly), 35 the company was engaged
in the manufacture of paper products, while the questioned employees occupied the positions of
mechanics, electricians, machinists, machine shop helpers, warehouse helpers, painters, carpenters,
pipefitters and masons. In that case, the Court held that since they have worked for the company for more
than one (1) year, they should belong to the second category of regular employees by operation of law.

In the case at bar, a review of Pontesor, et al.'s respective CEAs 36 reveal that petitioner repeatedly
rehired them for various positions in the nature of maintenance workers, such as laborer, mason, painter,
tinsmith, electrician, carpenter, and welder, for various periods spanning the years 1990-1999. Akin to the
situation of the employees in Kimberly, Pontesor, et al.'s nature of work are not necessary and desirable
to petitioner's usual business as an educational institution; hence, removing them from the ambit of the
first category of regular employees under Article 295 of the Labor Code. Nonetheless, it is clear that their
respective cumulative periods of employment as per their respective CEAs each exceed one (1) year.
Thus, Pontesor, et al. fall under the second category of regular employees under Article 295 of the Labor
Code. Accordingly, they should be deemed as regular employees but only with respect to the activities for
which they were hired and for as long as such activities exist.

In this relation, the Court clarifies that Pontesor, et al. were not project employees of petitioner, who were
validly terminated upon the completion of their respective projects/undertakings. In Gadia v. Sykes Asia,
Inc., 37 the Court discussed the requisites for a valid project employment, to wit:

A project employee is assigned to a project which begins and ends at determined or determinable times.
Unlike regular employees who may only be dismissed for just and/or authorized causes under the Labor
Code, the services of employees who are hired as "project [-based] employees" may be lawfully
terminated at the completion of the project.

According to jurisprudence, the principal test for determining whether particular employees are properly
characterized as "project [-based] employees" as distinguished from "regular employees," is whether or
not the employees were assigned to carry out a "specific project or undertaking," the duration (and scope)
of which were specified at the time they were engaged for that project. The project could either be (1) a
particular job or undertaking that is within the regular or usual business of the employer company, but

319
which is distinct and separate, and identifiable as such, from the other undertakings of the company; or
(2) a particular job or undertaking that is not within the regular business of the corporation. In order to
safeguard the rights of workers against the arbitrary use of the word "project" to prevent employees from
attaining a regular status, employers claiming that their workers are project [-based] employees should
not only prove that the duration and scope of the employment was specified at the time they were
engaged, but also, that there was indeed a project. 38 (Emphases and underscoring supplied) aDSIHc

As aptly held by the CA, Pontesor, et al. could not be considered as project employees because the
specific undertakings or projects for which they were employed were not clearly delineated. This is
evidenced by the vagueness of the project descriptions set forth in their respective CEAs, 39 which states
that they were tasked "to assist" in various carpentry, electrical, and masonry work. In fact, when the
aforesaid CEAs are pieced together, it appears that during the years 1990 to 1999, Pontesor, et al. were
each engaged to perform all-around maintenance services throughout the various facilities/installations in
petitioner's campus. Thus, it seems that petitioner, through the CEAs, merely attempted to
compartmentalize Pontesor, et al.'s various tasks into purported "projects" so as to make it appear that
they were hired on a per-project basis. Verily, the Court cannot countenance this practice as to do so
would effectively permit petitioners to avoid hiring permanent or regular employees by simply hiring them
on a temporary or casual basis, thereby violating the employees' security of tenure relative to their jobs.
40

Lest it be misunderstood, there are instances when the validity of project 41 or fixed term 42
employments were upheld on the ground that it was "agreed upon knowingly and voluntarily by the
parties, without any force, duress or improper pressure being brought to bear upon the employee and
absent any other circumstances vitiating his consent, or where it satisfactorily appears that the employer
and employee dealt with each other on more or less equal terms with no moral dominance whatever
being exercised by the former over the latter." 43 However, if it is apparent from the circumstances of the
case "that periods have been imposed to preclude acquisition of tenurial security by the employee," such
project or fixed term contracts are disregarded for being contrary to public policy, 44 as in this case.
ATICcS

In view of the foregoing, Pontesor, et al. should, as discussed earlier, be considered regularized casual
employees who enjoy, inter alia, security of tenure. Accordingly, they cannot be terminated from
employment without any just and/or authorized cause, which unfortunately, petitioner was guilty of doing
in this case. Hence, Pontesor, et al. must be reinstated to their former or equivalent positions, with full
backwages and without loss of seniority rights. As pointed out by the LA, the NLRC Computation &
Examination Unit should be directed to compute the monetary awards that petitioner should be ordered to
pay Pontesor, et al. as a consequence of this ruling.

WHEREFORE, the petition is DENIED. The Decision dated June 12, 2008 and the Resolution dated
August 22, 2008 of the Court of Appeals in CA-G.R. SP No. 85464 are hereby AFFIRMED.

SO ORDERED.

||| (University of Santo Tomas v. Samahang Manggagawa ng UST, G.R. No. 184262, [April 24, 2017])

320
SECOND DIVISION

[G.R. No. 177845. August 20, 2014.]

GRACE CHRISTIAN HIGH SCHOOL, represented by its Principal, DR. JAMES TAN, petitioner, vs.
FILIPINAS A. LAVANDERA, respondent.

DECISION

PERLAS-BERNABE, J p:

Assailed in this petition for review on certiorari 1 is the Decision 2 dated April 30, 2007 of the Court of
Appeals (CA) in CA-G.R. SP. No. 75958 which affirmed with modification the Decision 3 dated August 30,
2002 of the National Labor Relations Commission (NLRC) in NLRC CA No. 031739-02, applying the
22.5-day multiplier in computing respondent Filipinas A. Lavandera's (Filipinas) retirement benefits
differential, with legal interest reckoned from the filing date of the latter's illegal dismissal complaint.

The Facts

Filipinas was employed by petitioner Grace Christian High School (GCHS) as high school teacher since
June 1977, with a monthly salary of P18,662.00 as of May 31, 2001. 4

On August 30, 2001, 5 Filipinas filed a complaint for illegal (constructive) dismissal, non-payment of
service incentive leave (SIL) pay, separation pay, service allowance, damages, and attorney's fees
against GCHS 6 and/or its principal, 7 Dr. James Tan. She alleged that on May 11, 2001, she was
informed that her services were to be terminated effective May 31, 2001, pursuant to GCHS' retirement
plan which gives the school the option to retire a teacher who has rendered at least 20 years of service,
regardless of age, with a retirement pay of one-half (1/2) month for every year of service. At that time,
Filipinas was only 58 years old and still physically fit to work. She pleaded with GCHS to allow her to
continue teaching but her services were terminated, 8 contrary to the provisions of Republic Act No. (RA)
7641, 9 otherwise known as the "Retirement Pay Law."

For their part, GCHS denied that they illegally dismissed Filipinas. They asserted that the latter was
considered retired on May 31, 1997 after having rendered 20 years of service pursuant to GCHS'
retirement plan and that she was duly advised that her retirement benefits in the amount of P136,210.00
based on her salary at the time of retirement, i.e., P13,621.00, had been deposited to the trustee-bank in
her name. Nonetheless, her services were retained on a yearly basis until May 11, 2001 when she was
informed that her year-to-year contract would no longer be renewed. 10

The LA Ruling

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In a Decision 11 dated March 26, 2002, the Labor Arbiter (LA) dismissed the illegal dismissal complaint
for lack of merit. ECcTaH

The LA found that GCHS has a retirement plan for its faculty and non-faculty members which pertinently
provides:

ARTICLE X

RETIREMENT DATES 12

Section 1. Normal Retirement Date. — For qualified members of the Plans, the normal retirement date
shall be the last day of the month during which he attains age sixty (60) regardless of length of service or
upon completion of 20 years of service unless extended at the option of the School. Such extension is
subject to the approval of the School on a case to case and year to year basis. The School reserves the
right to require an employee before it approves his application for an extension of service beyond the
normal retirement date, to have a licensed physician appointed by the School, certify that the employee
concerned has no physical and/or mental impediments which will prevent the employee from performing
the duties in the School. 13 (Emphasis supplied)

Consequently, the LA ruled that Filipinas was not terminated from employment but was considered retired
14 as of May 31, 1997 after rendering 20 years of service 15 and was only allowed by GCHS to continue
teaching on a year-to-year basis (until May 31, 2001) in the exercise of its option to do so under the
aforementioned retirement plan until she was informed that her contract would not be renewed. 16

Nonetheless, the LA found the retirement benefits payable under GCHS retirement plan to be deficient
vis-à-vis those provided under RA 7641, 17 and, accordingly, awarded Filipinas retirement pay
differentials based on her latest salary as follows:

P18,662.00/30 = P622.06/day

P622.06 x 22.5 = P13,996.35 x 20

P279,927.00

- P136,210.00

–––––––––––

P143,717.00 18

===========

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The LA, however, denied Filipinas' claims for service allowance, salary increase, and damages for lack of
sufficient bases, but awarded her attorney's fees equivalent to five percent (5%) of the total award, or the
amount of P7,185.85. 19

Dissatisfied, GCHS filed an appeal before the NLRC.

The NLRC Ruling

In a Decision 20 dated August 30, 2002 (August 30, 2002 Decision), the NLRC set aside the LA's award,
and ruled that Filipinas' retirement pay should be computed based on her monthly salary at the time of
her retirement on May 31, 1997, i.e., P13,621.00. Moreover, it held that under Article 287 of the Labor
Code, as amended by RA 7641, the retirement package consists of 15 days salary, plus 13th month pay
and SIL pay pro-rated to their one-twelfth (1/12) equivalent. 21

In view of the foregoing, the NLRC awarded Filipinas retirement pay differentials in the amount of
P27,057.20 consisting of one-twelfth (1/12) of the 13th month pay and SIL pay based on her salary at the
time of her retirement on May 31, 1997, or P13,621.00 multiplied by 20 years. It, however, deleted the
award of attorney's fees for failure of Filipinas to show that GCHS had unreasonably and in bad faith
refused to pay her retirement benefits. 22

Aggrieved, Filipinas filed a petition for certiorari before the CA.

The CA Ruling

In a Decision 23 dated April 30, 2007, the CA affirmed with modification the NLRC's Decision. It held that
the Court, in the case of Capitol Wireless, Inc. v. Sec. Confesor, 24 has simplified the computation of
"one-half month salary" by equating it to "22.5 days" which is "arrived at after adding 15 days plus 2.5
days representing one-twelfth of the 13th month pay, plus 5 days of [SIL]." 25 Accordingly, it computed
Filipinas' retirement benefits differential as follows: EcHTCD

Monthly salary

P13,624.00 26

÷ 30 days

÷ 30 days

––––––––––

Daily rate

454.13 27

x 22.5 days

x 22.5 days

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––––––––––

1/2 month salary 28

P10,218.00

x 20 years

x 20 years

––––––––––

Total amount of retirement benefits

P204,360.00

- Amount deposited in trust

136,210.00

––––––––––

Retirement benefits differential

P68,150.00 29

==========

The CA further imposed legal interest at the rate of six percent (6%) per annum on the award reckoned
from the date of the filing of the illegal dismissal complaint until actual payment 30 pursuant to the Court's
Decision in Manuel L. Quezon University v. NLRC (MLQU v. NLRC). 31

Unperturbed, GCHS filed the instant petition.

The Issue before the Court

The essential issue in this case is whether or not the CA committed reversible error in using the multiplier
"22.5. days" in computing the retirement pay differentials of Filipinas.

The Court's Ruling

The petition is bereft of merit.

RA 7641, which was enacted on December 9, 1992, amended Article 287 of the Labor Code,providing for
the rules on retirement pay to qualified private sector employees in the absence of any retirement plan in
the establishment. The said law 32 states that "an employee's retirement benefits under any collective
bargaining [agreement (CBA)] and other agreements shall not be less than those provided" under the

324
same — that is, at least one-half (1/2) month salary for every year of service, a fraction of at least six (6)
months being considered as one whole year — and that "[u]nless the parties provide for broader
inclusions, the term one-half (1/2) month salary shall mean fifteen (15) days plus one-twelfth (1/12) of the
13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves."

The foregoing provision is applicable where (a) there is no CBA or other applicable agreement providing
for retirement benefits to employees, or (b) there is a CBA or other applicable agreement providing for
retirement benefits but it is below the requirement set by law. 33 Verily, the determining factor in choosing
which retirement scheme to apply is still superiority in terms of benefits provided. 34

In the present case, GCHS has a retirement plan for its faculty and non-faculty members, which gives it
the option to retire a teacher who has rendered at least 20 years of service, regardless of age, with a
retirement pay of one-half (1/2) month for every year of service. Considering, however, that GCHS
computed Filipinas' retirement pay without including one-twelfth (1/12) of her 13th month pay and the
cash equivalent of her five (5) days SIL, both the NLRC and the CA correctly ruled that Filipinas'
retirement benefits should be computed in accordance with Article 287 of the Labor Code, as amended
by RA 7641, being the more beneficent retirement scheme. They differ, however, in the resulting benefit
differentials due to divergent interpretations of the term "one-half (1/2) month salary" as used under the
law.

The Court, in the case of Elegir v. Philippine Airlines, Inc., 35 has recently affirmed that "one-half (1/2)
month salary means 22.5 days: 15 days plus 2.5 days representing one-twelfth (1/12) of the 13th month
pay and the remaining 5 days for [SIL]." 36 The Court sees no reason to depart from this interpretation.
GCHS' argument 37 therefore that the 5 days SIL should be likewise pro-rated to their 1/12 equivalent
must fail. ECcTaH

Section 5.2, Rule II 38 of the Implementing Rules of Book VI of the Labor Code, as amended,
promulgated to implement RA 7641, further clarifies what comprises the "1/2 month salary" due a retiring
employee, to wit:

RULE II

Retirement Benefits

xxx xxx xxx

SEC. 5. Retirement Benefits. —

xxx xxx xxx

5.2 Components of One-half (1/2) Month Salary. — For the purpose of determining the minimum
retirement pay due an employee under this Rule, the term "one-half month salary" shall include all the
following:

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(a) Fifteen (15) days salary of the employee based on his latest salary rate. As used herein, the term
"salary" includes all remunerations paid by an employer to his employees for services rendered during
normal working days and hours, whether such payments are fixed or ascertained on a time, task, piece or
commission basis, or other method of calculating the same, and includes the fair and reasonable value,
as determined by the Secretary of Labor and Employment, of food, lodging or other facilities customarily
furnished by the employer to his employees. The term does not include cost of living allowance, profit-
sharing payments and other monetary benefits which are not considered as part of or integrated into the
regular salary of the employees.

(b) The cash equivalent of not more than five (5) days of service incentive leave;

(c) One-twelfth of the 13th month pay due the employee.

(d) All other benefits that the employer and employee may agree upon that should be included in the
computation of the employee's retirement pay.

xxx xxx xxx (Emphases supplied)

The foregoing rules are, thus, clear that the whole 5 days of SIL are included in the computation of a
retiring employees' pay, 39 as correctly ruled by the CA.

Nonetheless, the Court finds that the award of legal interest at the rate of 6% per annum on the amount of
P68,150.00 representing the retirement pay differentials due Filipinas should be reckoned from the
rendition of the LA's Decision on March 26, 2002 and not from the filing of the illegal dismissal complaint
as ordered by the CA, 40 in accordance with the ruling in Eastern Shipping Lines, Inc. v. CA 41 (Eastern
Shipping). Unlike in MLQU v. NLRC, where the retired teachers sued for the payment of the deficiency in
their retirement benefits, Filipinas' complaint was for illegal (constructive) dismissal, and the obligation to
provide retirement pay was only determined upon the rendition of the LA's Decision, which also found the
same to be deficient vis-à-vis those provided under RA 7641. As such, it is only from the date of the LA's
Decision that GCHS' obligation to pay Filipinas her retirement pay differentials may be deemed to have
been reasonably ascertained and its payment legally adjudged to be due, although the actual base for the
computation of legal interest shall be on the amount finally adjudged. As held in the Eastern Shipping
case:

When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the
amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum.
No interest, however, shall be adjudged on unliquidated claims or damages except when or until the
demand can be established with reasonable certainty. Accordingly, where the demand is established with
reasonable certainty, the interest shall begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the
time the demand is made, the interest shall begin to run only from the date the judgment of the court is
made (at which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount
finally adjudged. (Emphases supplied) TcCEDS

WHEREFORE, the petition is DENIED. The Decision dated April 30, 2007 of the Court of Appeals in CA-
G.R. SP. No. 75958 is hereby AFFIRMED with MODIFICATION that the legal interest at the rate of six
percent (6%) per annum on the amount of P68,150.00 representing the retirement pay differentials
payable by petitioner Grace Christian High School to respondent Filipinas A. Lavandera shall be
reckoned from the promulgation of the Labor Arbiter's Decision on March 26, 2002 until full payment.

SO ORDERED.

||| (Grace Christian High School v. Lavandera, G.R. No. 177845, [August 20, 2014])

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