G.R. No.
103982 December 11, 1992
ANTONIO A. MECANO, petitioner,
vs.
COMMISSION ON AUDIT, respondent.
CAMPOS, JR., J.:
Antonio A. Mecano, through a petition for certiorari, seeks to nullify the decision of the
Commission on Audit (COA, for brevity) embodied in its 7th Indorsement, dated January 16,
1992, denying his claim for reimbursement under Section 699 of the Revised Administrative
Code (RAC), as amended, in the total amount of P40,831.00.
Petitioner is a Director II of the National Bureau of Investigation (NBI). He was hospitalized
for cholecystitis from March 26, 1990 to April 7, 1990, on account of which he incurred
medical and hospitalization expenses, the total amount of which he is claiming from the
COA.
On May 11, 1990, in a memorandum to the NBI Director, Alfredo S. Lim (Director Lim, for
brevity), he requested reimbursement for his expenses on the ground that he is entitled to
the benefits under Section 6991 of the RAC, the pertinent provisions of which read:
Sec. 699. Allowances in case of injury, death, or sickness incurred in
performance of duty. — When a person in the service of the national
government of a province, city, municipality or municipal district is so injured
in the performance of duty as thereby to receive some actual physical hurt or
wound, the proper Head of Department may direct that absence during any
period of disability thereby occasioned shall be on full pay, though not more
than six months, and in such case he may in his discretion also authorize the
payment of the medical attendance, necessary transportation, subsistence
and hospital fees of the injured person. Absence in the case contemplated
shall be charged first against vacation leave, if any there be.
xxx xxx xxx
In case of sickness caused by or connected directly with the performance of
some act in the line of duty, the Department head may in his discretion
authorize the payment of the necessary hospital fees.
Director Lim then forwarded petitioner's claim, in a 1st Indorsement dated June 22, 1990, to
the Secretary of Justice, along with the comment, bearing the same date, of Gerarda
Galang, Chief, LED of the NBI, "recommending favorable action thereof". Finding
petitioner's illness to be service-connected, the Committee on Physical Examination of the
Department of Justice favorably recommended the payment of petitioner's claim.
However, then Undersecretary of Justice Silvestre H. Bello III, in a 4th Indorsement dated
November 21, 1990, returned petitioner's claim to Director Lim, having considered the
statements of the Chairman of the COA in its 5th Indorsement dated 19 September 1990, to
the effect that the RAC being relied upon was repealed by the Administrative Code of 1987.
Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion No. 73, S.
19912 dated April 26, 1991 of then Secretary of Justice Franklin M. Drilon (Secretary Drilon,
for brevity) stating that "the issuance of the Administrative Code did not operate to repeal
or abregate in its entirety the Revised Administrative Code, including the particular Section
699 of the latter".
On May 10, 1991, Director Lim, under a 5th Indorsement transmitted anew Mecano's claim
to then Undersecretary Bello for favorable consideration. Under a 6th Indorsement, dated
July 2, 1991, Secretary Drilon forwarded petitioner's claim to the COA Chairman,
recommending payment of the same. COA Chairman Eufemio C. Domingo, in his 7th
Indorsement of January 16, 1992, however, denied petitioner's claim on the ground that
Section 699 of the RAC had been repealed by the Administrative Code of 1987, solely for
the reason that the same section was not restated nor re-enacted in the Administrative
Code of 1987. He commented, however, that the claim may be filed with the Employees'
Compensation Commission, considering that the illness of Director Mecano occurred after
the effectivity of the Administrative Code of 1987.
Eventually, petitioner's claim was returned by Undersecretary of Justice Eduardo
Montenegro to Director Lim under a 9th Indorsement dated February 7, 1992, with the
advice that petitioner "elevate the matter to the Supreme Court if he so desires".
On the sole issue of whether or not the Administrative Code of 1987 repealed or abrogated
Section 699 of the RAC, this petition was brought for the consideration of this Court.
Petitioner anchors his claim on Section 699 of the RAC, as amended, and on the
aforementioned Opinion No. 73, S. 1991 of Secretary Drilon. He further maintains that in
the event that a claim is filed with the Employees' Compensation Commission, as suggested
by respondent, he would still not be barred from filing a claim under the subject section.
Thus, the resolution of whether or not there was a repeal of the Revised Administrative
Code of 1917 would decide the fate of petitioner's claim for reimbursement.
The COA, on the other hand, strongly maintains that the enactment of the Administrative
Code of 1987 (Exec. Order No. 292) operated to revoke or supplant in its entirety the
Revised Administrative Code of 1917. The COA claims that from the "whereas" clauses of
the new Administrative Code, it can be gleaned that it was the intent of the legislature to
repeal the old Code. Moreover, the COA questions the applicability of the aforesaid opinion
of the Secretary of Justice in deciding the matter. Lastly, the COA contends that
employment-related sickness, injury or death is adequately covered by the Employees'
Compensation Program under P.D. 626, such that to allow simultaneous recovery of
benefits under both laws on account of the same contingency would be unfair and unjust to
the Government.
The question of whether a particular law has been repealed or not by a subsequent law is a
matter of legislative intent. The lawmakers may expressly repeal a law by incorporating
therein a repealing provision which expressly and specifically cites the particular law or
laws, and portions thereof, that are intended to be repealed.3 A declaration in a statute,
usually in its repealing clause, that a particular and specific law, identified by its number or
title, is repealed is an express repeal; all others are implied repeals.4
In the case of the two Administrative Codes in question, the ascertainment of whether or
not it was the intent of the legislature to supplant the old Code with the new Code partly
depends on the scrutiny of the repealing clause of the new Code. This provision is found in
Section 27, Book VII (Final Provisions) of the Administrative Code of 1987 which reads:
Sec. 27. Repealing Clause. — All laws, decrees, orders, rules and regulations,
or portions thereof, inconsistent with this Code are hereby repealed or
modified accordingly.
The question that should be asked is: What is the nature of this repealing clause? It is
certainly not an express repealing clause because it fails to identify or designate the act or
acts that are intended to be repealed.5 Rather, it is an example of a general repealing
provision, as stated in Opinion No. 73, S. 1991. It is a clause which predicates the intended
repeal under the condition that substantial conflict must be found in existing and prior acts.
The failure to add a specific repealing clause indicates that the intent was not to repeal any
existing law, unless an irreconcilable inconcistency and repugnancy exist in the terms of the
new and old laws.6 This latter situation falls under the category of an implied repeal.
Repeal by implication proceeds on the premise that where a statute of later date clearly
reveals an intention on the part of the legislature to abrogate a prior act on the subject, that
intention must be given effect.7 Hence, before there can be a repeal, there must be a clear
showing on the part of the lawmaker that the intent in enacting the new law was to
abrogate the old one. The intention to repeal must be clear and manifest;8 otherwise, at
least, as a general rule, the later act is to be construed as a continuation of, and not a
substitute for, the first act and will continue so far as the two acts are the same from the
time of the first enactment.9
There are two categories of repeal by implication. The first is where provisions in the two
acts on the same subject matter are in an irreconcilable conflict, the later act to the extent
of the conflict constitutes an implied repeal of the earlier one. The second is if the later act
covers the whole subject of the earlier one and is clearly intended as a substitute, it will
operate to repeal the earlier law.10
Implied repeal by irreconcilable inconsistency takes place when the two statutes cover the
same subject matter; they are so clearly inconsistent and incompatible with each other that
they cannot be reconciled or harmonized; and both cannot be given effect, that is, that one
law cannot be enforced without nullifying the other.11
Comparing the two Codes, it is apparent that the new Code does not cover nor attempt to
cover the entire subject matter of the old Code. There are several matters treated in the old
Code which are not found in the new Code, such as the provisions on notaries public, the
leave law, the public bonding law, military reservations, claims for sickness benefits under
Section 699, and still others.
Moreover, the COA failed to demonstrate that the provisions of the two Codes on the
matter of the subject claim are in an irreconcilable conflict. In fact, there can be no such
conflict because the provision on sickness benefits of the nature being claimed by petitioner
has not been restated in the Administrative Code of 1987. However, the COA would have Us
consider that the fact that Section 699 was not restated in the Administrative Code of 1987
meant that the same section had been repealed. It further maintained that to allow the
particular provisions not restated in the new Code to continue in force argues against the
Code itself. The COA anchored this argument on the whereas clause of the 1987 Code,
which states:
WHEREAS, the effectiveness of the Government will be enhanced by a new
Administrative Code which incorporate in a unified document the major
structural, functional and procedural principles and rules of governance; and
xxx xxx xxx
It argues, in effect, that what is contemplated is only one Code — the Administrative Code
of 1987. This contention is untenable.
The fact that a later enactment may relate to the same subject matter as that of an earlier
statute is not of itself sufficient to cause an implied repeal of the prior act, since the new
statute may merely be cumulative or a continuation of the old one. 12 What is necessary is a
manifest indication of legislative purpose to repeal.13
We come now to the second category of repeal — the enactment of a statute revising or
codifying the former laws on the whole subject matter. This is only possible if the revised
statute or code was intended to cover the whole subject to be a complete and perfect
system in itself. It is the rule that a subsequent statute is deemed to repeal a prior law if the
former revises the whole subject matter of the former statute.14 When both intent and
scope clearly evidence the idea of a repeal, then all parts and provisions of the prior act that
are omitted from the revised act are deemed repealed.15 Furthermore, before there can be
an implied repeal under this category, it must be the clear intent of the legislature that the
later act be the substitute to the prior act.16
According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears clear is the
intent to cover only those aspects of government that pertain to administration,
organization and procedure, understandably because of the many changes that transpired
in the government structure since the enactment of the RAC decades of years ago. The COA
challenges the weight that this opinion carries in the determination of this controversy
inasmuch as the body which had been entrusted with the implementation of this particular
provision has already rendered its decision. The COA relied on the rule in administrative law
enunciated in the case of Sison vs. Pangramuyen17 that in the absence of palpable error or
grave abuse of discretion, the Court would be loathe to substitute its own judgment for that
of the administrative agency entrusted with the enforcement and implementation of the
law. This will not hold water. This principle is subject to limitations. Administrative decisions
may be reviewed by the courts upon a showing that the decision is vitiated by fraud,
imposition or mistake.18 It has been held that Opinions of the Secretary and Undersecretary
of Justice are material in the construction of statutes in pari materia.19
Lastly, it is a well-settled rule of statutory construction that repeals of statutes by
implication are not favored.20 The presumption is against inconsistency and repugnancy for
the legislature is presumed to know the existing laws on the subject and not to have
enacted inconsistent or conflicting statutes.21
This Court, in a case, explains the principle in detail as follows: "Repeals by implication are
not favored, and will not be decreed unless it is manifest that the legislature so intended. As
laws are presumed to be passed with deliberation with full knowledge of all existing ones
on the subject, it is but reasonable to conclude that in passing a statute it was not intended
to interfere with or abrogate any former law relating to some matter, unless the
repugnancy between the two is not only irreconcilable, but also clear and convincing, and
flowing necessarily from the language used, unless the later act fully embraces the subject
matter of the earlier, or unless the reason for the earlier act is beyond peradventure
renewed. Hence, every effort must be used to make all acts stand and if, by any reasonable
construction, they can be reconciled, the later act will not operate as a repeal of the
earlier.22
Regarding respondent's contention that recovery under this subject section shall bar the
recovery of benefits under the Employees' Compensation Program, the same cannot be
upheld. The second sentence of Article 173, Chapter II, Title II (dealing on Employees'
Compensation and State Insurance Fund), Book IV of the Labor Code, as amended by P.D.
1921, expressly provides that "the payment of compensation under this Title shall not bar
the recovery of benefits as provided for in Section 699 of the Revised Administrative Code . .
. whose benefits are administered by the system (meaning SSS or GSIS) or by other agencies
of the government."
WHEREFORE, premises considered, the Court resolves to GRANT the petition; respondent is
hereby ordered to give due course to petitioner's claim for benefits. No costs.
SO ORDERED.
G.R. No. L-66614 January 25, 1988
PRIMITIVO LEVERIZA, FE LEVERIZA, PARUNGAO & ANTONIO C. VASCO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT, MOBIL OIL PHILIPPINES & CIVIL AERONAUTICS
ADMINISTRATION, respondents.
BIDIN, J.:
This is a Petition for Review on certiorari seeking the reversal of the decision of the
Intermediate Appellate Court, Third Division * dated February 29, 1984 in AC-G.R. No. CV
No. 61705 entitled Mobil Oil Philippines, Inc., plaintiff-appellee vs. Primitivo Leveriza
Parungao, Antonio C. Vasco and Civil Aeronautics Administration, defendants-appellants;
Primitive Leveriza, Fe Leveriza Parungao and Antonio C. Leveriza, cross-defendant,
affirming in toto the decision of the trial court dated April 6, 1976.
As found by the trial court and adopted by the Intermediate Appellate Court, the facts of
this case are as follows:
Around three contracts of lease resolve the basic issues in the instant case.
These three contracts are as follows:
First Contract. — For purposes of easy reference and brevity, this contract
shall be referred to hereinafter as Contract A. This is a "CONTRACT OF
LEASE", executed between the REPUBLIC OF THE PHILIPPINES, represented
by Defendant CIVIL AERONAUTICS ADMINISTRATION, as lessor, and ROSARIO
C. LEVERIZA, as lessee, on April 2, 1965, over a certain parcel of land at the
MIA area, consisting of approximately 4,502 square meters, at a monthly
rental of P450.20, for a period of 25 years, (Exhibit "A", Exhibit "I-Leverizas",
Exhibit "I-CAA").
Second Contracts. — For purposes of easy references and brevity, this
contract shall be referred to hereinafter as Contract B. This is a "LEASE
AGREEMENT", executed between ROSARIO C. LEVERIZA, as lessor, and
Plaintiff MOBIL OIL PHILIPPINES, INC., as lessee on May 21, 1965, over 3,000
square meters of that SAME Parcel of land subject of Contract A above
mentioned, at a monthly rental of P1,500.00, for a period of 25 years (Exhibit
'B', Exhibit 4-Leverizas' ).
Third Contract. — For purposes of easy reference and brevity, this contract
shall be referred to hereinafter as Contract C. This is a "LEASE AGREEMENT",
executed between Defendant CIVIL AERONAUTICS ADMINISTRATION, as
lessor, and plaintiff MOBIL OIL PHILIPPINES, INC., as lessee, on June 1, 1968
over that SAME parcel of land (Lot A, on plan being a portion of Parcel, Psu
2031), containing an area of 3,000 square meters more or less, at a monthly
rental of P.25 per square meter for the second 200 square meters, and P.20
per square meter for the rest, for a period of 29 (sic) years. (Exhibit "C").
There is no dispute among the parties that the subject matter of the three
contracts of lease above mentioned, Contract A, Contract B, and Contract C,
is the same parcel of land, with the noted difference that while in Contract A,
the area leased is 4,502 square meters, in Contract B and Contract C, the
area has been reduced to 3,000 square meters. To summarize:
Contract A — a lease contract of April 2, 1965 between the
Republic of the Philippines, represented by Defendant Civil
Aeronautics Administration and Rosario C. Leveriza over a
parcel of land containing an area of 4,502 square meters, for
25 years.
Contract B — a lease contract (in effect a sublease) of May 21,
1965 between defendant Rosario C. Leveriza and plaintiff
 Mobil Oil Philippines, Inc. over the same parcel of land, but
reduced to 3,000 square meters for 25 years; and
Contract C — a lease contract of June 1, 1968 between
defendant Civil Aeronautics Administration and plaintiff Mobil
Oil Philippines, Inc., over the same parcel of land, but reduced
to 3,000 square meters, for 25 years.
It is important to note, for a clear understanding of the issues involved, that
it appears that defendant Civil Aeronautics Administration as LESSOR, leased
the same parcel of land, for durations of time that overlapped to two lessees,
to wit: (1) Defendant Rosario C. Leveriza, and that plaintiff Mobil Oil
Philippines, Inc., as LESSEE, leased the same parcel of land from two lessors,
to wit: (1) defendant Rosario C. Leveriza and (2) defendant Civil Aeronautics
Administration, Inc., for durations of time that also overlapped.
For purposes of brevity defendant Civil Aeronautics Administration shall be
referred to hereinafter as defendant CAA.
Rosario C. Leveriza, the lessee in Contract A and the lessor in Contract B, is
now deceased. This is the reason why her successor-in-interest, her heirs, are
sued, namely: Defendants Primitive Leveriza, her second husband, (now also
deceased), Fe Leveriza Parungao, her daughter by her second husband, and
Antonio C. Vasco, her son by her first husband. For purposes of brevity, these
defendants shall be referred to hereinafter as Defendants Leveriza.
Plaintiff Mobil Oil Philippines, Inc., shall be referred to hereinafter simply as
the Plaintiff. (pp. 95-99, Record on Appeal).
Plaintiff in this case seeks the rescission or cancellation of Contract A and
Contract B on the ground that Contract A from which Contract B is derived
and depends has already been cancelled by the defendant Civil Aeronautics
Administration and maintains that Contract C with the defendant CAA is the
only valid and subsisting contract insofar as the parcel of land, subject to the
present litigation is concerned. On the other hand, defendants Leverizas'
claim that Contract A which is their contract with CAA has never been legally
cancelled and still valid and subsisting; that it is Contract C between plaintiff
and defendant CAA which should be declared void.
Defendant CAA asserts that Exhibit "A" is still valid and subsisting because its
cancellation by Guillermo Jurado was ineffective and asks the court to annul
Contract A because of the violation committed by defendant Leveriza in
leasing the parcel of land to plaintiff by virtue of Contract B without the
consent of defendant CAA. Defendant CAA further asserts that Contract C
not having been approved by the Director of Public Works and
Communications is not valid. ...
xxx xxx xxx
After trial, the lower court render judgment on April 6, 1976 the dispositive part of which
reads:
WHEREFORE, after having thus considered the evidence of all the parties,
testimonial and documentary, and their memoranda and reply-memoranda,
this Court hereby renders judgment:
1. Declaring Contract A as having been validly cancelled on
June 28, 1966, and has therefore ceased to have any effect as
of that date;
2. Declaring that Contract B has likewise ceased to have any
effect as of June 28, 1966 because of the cancellation of
Contract A;
3. Declaring that Contract C was validly entered into on June 1,
1968, and that it is still valid and subsisting;
4. Ordering defendant CAA to refund to defendants Leverizas
the amount of P32,189.30 with 6% per annum until fully paid;
5. Ordering defendants Leverizas to refund to plaintiff the
amount of P48,000.00 with 6% interest per annum until fully
paid;
 6. Dismissing defendants Leverizas' four counterclaims against
plaintiff;
7. Dismissing defendants Leverizas' cross-claim against
defendant CAA;
8. Dismissing defendant CAA's counterclaim against plaintiff;
9. Dismissing defendant CAA's counterclaim against defendant
Leverizas.
No pronouncements as to costs.
On June 2, 1976, defendant Leveriza filed a motion for new trial on the ground of newly
discovered evidence, lack of jurisdiction of the court over the case and lack of evidentiary
support of the decision which was denied in the order of November 12,1976 (Rollo, p. 17).
On July 27, 1976, the CAA filed a Motion for Reconsideration, averring that because the lot
lease was properly registered in the name of the Republic of the Philippines, it was only the
President of the Philippines or an officer duly designated by him who could execute the
lease contract pursuant to Sec. 567 of the Revised Administrative Code; that the Airport
General Manager has no authority to cancel Contract A, the contract entered into between
the CAA and Leveriza, and that Contract C between the CAA and Mobil was void for not
having been approved by the Secretary of Public Works and Communications. Said motion
was however denied on November 12, 1976 (Rollo, p. 18).
On appeal, the Intermediate Appellate Court, being in full accord with the trial court,
rendered a decision on February 29, 1984, the dispositive part of which reads:
WHEREFORE, finding no reversible error in the decision of the lower court
dated April 6, 1976, the same is hereby affirmed in toto.
Hence, this petition.
The petitioners raised the following assignment of errors:
I that subject contracts should be executed by the President of the Philippines or by an
THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE
ADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION (CAA) HAD
THE STATUTORY AUTHORITY TO LEASE, EVEN WITHOUT APPROVAL OF THE
THEN SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, REAL
PROPERTY BELONGING TO THE REPUBLIC OF THE PHILIPPINES.
II
THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE
ADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION HAD
STATUTORY AUTHORITY, WITHOUT THE APPROVAL OF THE THEN SECRETARY
OF PUBLIC WORKS AND COMMUNICATIONS, TO CANCEL A LEASE CONTRACT
OVER REAL PROPERTY OWNED BY THE REPUBLIC OF THE PHILIPPINES, WHICH
CONTRACT WAS APPROVED, AS REQUIRED BY LAW, BY THE SECRETARY.
III
THE INTERMEDIATE APPELLATE COURT ERRED WHEN IT RULED THAT THE
CONTRACT OF SUBLEASE (CONTRACT B) ENTERED INTO BETWEEN
PETITIONERS' PREDECESSOR-IN-INTEREST AND RESPONDENT MOBIL OIL
PHILIPPINES, INC. WAS WITHOUT THE CONSENT OF THE ADMINISTRATOR OF
THE CIVIL AERONAUTICS ADMINISTRATION.
The petition is devoid of merit.
There is no dispute that Contract "A" at the time of its execution was a valid contract. The
issue therefore is whether or not said contract is still subsisting after its cancellation by CAA
on the ground of a sublease executed by petitioners with Mobil Oil Philippines without the
consent of CAA and the execution of another contract of lease between CAA and Mobil Oil
Philippines (Contract "C").
Petitioners contend that Contract "A" is still subsisting because Contract "B" is a valid
sublease and does not constitute a ground for the cancellation of Contract "A", while
Contract "C", a subsequent lease agreement between CAA and Mobil Oil Philippines is null
and void, for lack of approval by the Department Secretary. Petitioners anchor their position
on Sections 567 and 568 of the Revised Administrative Code which require among others,
officer duly designated by him, unless authority to execute the same is by law vested in
some other officer (Petition, Rollo, pp. 15-16).
At the other extreme, respondent Mobil Oil Philippines asserts that Contract "A" was validly
cancelled on June 28, 1966 and so was Contract "B" which was derived therefrom.
Accordingly, it maintains that Contract "C" is the only valid contract insofar as the parcel of
land in question is concerned and that approval of the Department Head is not necessary
under Section 32 (par. 24) of the Republic Act 776 which expressly vested authority to enter
into such contracts in the Administrator of CAA (Comment; Rollo, p. 83).
On its part, respondent Civil Aeronautics Administration took the middle ground with its
view that Contract "A" is still subsisting as its cancellation is ineffective without the approval
of the Department Head but said contract is not enforceable because of petitioners'
violation of its terms and conditions by entering into Contract "B" of sublease without the
consent of CAA. The CAA further asserts that Contract "C" not having been approved by the
Secretary of Public Works and Communications, is not valid (Rollo, p. 43). However, in its
comment filed with the Supreme Court, the CAA made a complete turnabout adopting the
interpretation and ruling made by the trial court which was affirmed by the Intermediate
Appellate Court (Court of Appeals), that the CAA Administrator has the power to execute
the deed or contract of lease involving real properties under its administration belonging to
the Republic of the Philippines without the approval of the Department Head as clearly
provided in Section 32, paragraph (24) of Republic Act 776.
The issue narrows down to whether or not there is a valid ground for the cancellation of
Contract "A."
Contract "A" was entered into by CAA as the lessor and the Leverizas as the lessee
specifically "for the purpose of operating and managing a gasoline station by the latter, to
serve vehicles going in and out of the airport."
As regards prior consent of the lessor to the transfer of rights to the leased premises, the
provision of paragraph 7 of said Contract reads in full:
7. The Party of the Second part may transfer her rights to the leased
premises but in such eventuality, the consent of the Party of the First Part
shall first be secured. In any event, such transfer of rights shall have to
respect the terms and conditions of this agreement.
Paragraph 8 provides the sanction for the violation of the above-mentioned terms and
conditions of the contract. Said paragraph reads:
8. Failure on the part of the Party of the Second Part to comply with the
terms and conditions herein agreed upon shall be sufficient for revocation of
this contract by the Party of the First Part without need of judicial demand.
It is not disputed that the Leverizas (lessees) entered into a contract of sublease (Contract
"B") with Mobil Oil Philippines without the consent of CAA (lessor). The cancellation of the
contract was made in a letter dated June 28, 1966 of Guillermo P. Jurado, Airport General
Manager of CAA addressed to Rosario Leveriza, as follows:
(Letterhead)
June 28, 1966
Mrs. Rosario Leveriza
Manila International Airport
Madam:
It has been found out by the undersigned that you have sublet
the property of the CAA leased to you and by virtue of this,
your lease contract is hereby cancelled because of the
violation of the stipulations of the contract. I would like to
inform you that even without having sublet the said property
the said contract would have been cancelled as per attached
communication.
Very truly yours,
For the Director:
(Sgd.) Illegible
(Typed)
 GUILLERMO P. JURADO
Airport General Manager
Respondent Leverizas and the CAA assailed the validity of such cancellation, claiming that
the Airport General Manager had no legal authority to make the cancellation. They maintain
that it is only the Secretary of Public Works and Communications, acting for the President,
or by delegation of power, the Director of Civil Aeronautics Administration who could
validly cancel the contract. They do admit, however, and it is evident from the records that
the Airport General Manager signed "For the Director." Under the circumstances, there is
no question that such act enjoys the presumption of regularity, not to mention the
unassailable fact that such act was subsequently affirmed or ratified by the Director of the
CAA himself (Record on Appeal, pp. 108-110).
Petitioners argue that cancelling or setting aside a contract approved by the Secretary is, in
effect, repealing an act of the Secretary which is beyond the authority of the Administrator.
Such argument is untenable. The terms and conditions under which such revocation or
cancellation may be made, have already been specifically provided for in Contract "A" which
has already been approved by the Department Head, It is evident that in the
implementation of aforesaid contract, the approval of said Department Head is no longer
necessary if not redundant.
It is further contended that even granting that such cancellation was effective, a subsequent
billing by the Accounting Department of the CAA has in effect waived or nullified the
rescission of Contract "A."
It will be recalled that the questioned cancellation of Contract "A" was among others,
mainly based on the violation of its terms and conditions, specifically, the sublease of the
property by the lessee without the consent of the lessor.
The billing of the petitioners by the Accounting Department of the CAA if indeed it
transpired, after the cancellation of Contract "A" is obviously an error. However, this Court
has already ruled that the mistakes of government personnel should not affect public
interest. In San Mauricio Mining Company v. Ancheta (105 SCRA 391, 422), it has been held
that as a matter of law rooted in the protection of public interest, and also as a general
policy to protect the government and the people, errors of government personnel in the
performance of their duties should never deprive the people of the right to rectify such
error and recover what might be lost or be bartered away in any actuation, deal or
transaction concerned. In the case at bar, the lower court in its decision which has been
affirmed by the Court of Appeals, ordered the CAA to refund to the petitioners the amount
of rentals which was not due from them with 6% interest per annum until fully paid.
Petitioners further assail the interpretation of Contract "A", claiming that Contract "B" was a
mere sublease to respondent Mobil Oil Philippines, Inc. and requires no prior consent of
CAA to perfect the same. Citing Article 1650 of the Civil Code, they assert that the
prohibition to sublease must be expressed and cannot be merely implied or inferred (Rollo,
p. 151).
As correctly found by the Court of Appeals, petitioners in asserting the non- necessity for a
prior consent interprets the first sentence of paragraph 7 of Contract "A" to refer to an
assignment of lease under Article 1649 of the Civil Code and not to a mere sublease. A
careful scrutiny of said paragraph of Contract "A" clearly shows that it speaks of transfer of
rights of Rosario Leveriza to the leased premises and not to assignment of the lease (Rollo,
pp. 48-49).
Petitioners likewise argued that it was contemplated by the parties to Contract "A" that
Mobil Oil Philippines would be the owner of the gasoline station it would construct on the
leased premises during the period of the lease, hence, it is understood that it must be given
a right to use and occupy the lot in question in the form of a sub-lease (Rollo, p. 152).
In Contract "A", it was categorically stated that it is the lessee (petitioner) who will manage
and operate the gasoline station. The fact that Mobil Oil was mentioned in that contract
was clearly not intended to give approval to a sublease between petitioners and said
company but rather to insure that in the arrangements to be made between them, it must
be understood that after the expiration of the lease contract, whatever improvements have
been constructed in the leased premises shall be relinquished to CAA. Thus, this Court held
that "the primary and elementary rule of construction of documents is that when the words
or language thereof is clear and plain or readily understandable by any ordinary reader
thereof, there is absolutely no room for interpretation or construction anymore." (San
Mauricio Mining Company v. Ancheta, supra).
Finally, petitioners contend that the administrator of CAA cannot execute without approval
of the Department Secretary, a valid contract of lease over real property owned by the
Republic of the Philippines, citing Sections 567 and 568 of the Revised Administrative Code,
which provide as follows:
SEC. 567. Authority of the President of the Philippines to execute contracts
relative to real property. — When the Republic of the Philippines is party to a
deed conveying the title to real property or is party to any lease or other
contract relating to real property belonging to said government, said deed or
contract shall be executed on behalf of said government by the President of
the Philippines or by an officer duly designated by him, unless authority to
execute the same is by law expressly vested in some other officer. (Emphasis
supplied)
SEC. 568. Authority of national officials to make contract. — Written
contracts not within the purview of the preceding section shall, in the
absence of special provision, be executed, with the approval of the proper
Department Head, by the Chief of the Bureau or Office having control of the
appropriation against which the contract would create a charge; or if there is
no such chief, by the proper Department Head himself or the President of
the Philippines as the case may require.
On the other hand, respondent CAA avers that the CAA Administrator has the authority to
lease real property belonging to the Republic of the Philippines under its administration
even without the approval of the Secretary of Public Works and Communications, which
authority is expressly vested in it by law, more particularly Section 32 (24) of Republic Act
776, which reads:
Sec. 32. Powers and Duties of the Administrator. — Subject to the general
control and supervision of the Department Head, the Administrator shall
have, among others, the following powers and duties:
xxx xxx xxx
(24) To administer, operate, manage, control, maintain and develop the
Manila International Airport and all government aerodromes except those
controlled or operated by the Armed Forces of the Philippines including such
power and duties as: ... (b) to enter into, make and execute contracts of any
kind with any person, firm, or public or private corporation or entity; (c) to
acquire, hold, purchase, or lease any personal or real property; right of ways,
and easements which may be proper or necessary: Provided, that no real
property thus acquired and any other real property of the Civil Aeronautics
Administration shall be sold without the approval of the President of the
Philippines. ...
There is no dispute that the Revised Administrative Code is a general law
while Republic Act 776 is a special law nor in the fact that the real property
subject of the lease in Contract "C" is real property belonging to the Republic
of the Philippines.
Under 567 of the Revised Administrative Code, such contract of lease must be executed: (1)
by the President of the Philippines, or (2) by an officer duly designated by him or (3) by an
officer expressly vested by law. It is readily apparent that in the case at bar, the Civil
Aeronautics Administration has the authority to enter into Contracts of Lease for the
government under the third category. Thus, as correctly ruled by the Court of Appeals, the
Civil Aeronautics Administration has the power to execute the deed or contract involving
leases of real properties belonging to the Republic of the Philippines, not because it is an
entity duly designated by the President but because the said authority to execute the same
is, by law expressly vested in it.
Under the above-cited Section 32 (par. 24) of Republic Act 776, the Administrator (Director)
of the Civil Aeronautics Administration by reason of its creation and existence, administers
properties belonging to the Republic of the Philippines and it is on these properties that the
Administrator must exercise his vast power and discharge his duty to enter into, make and
execute contract of any kind with any person, firm, or public or private corporation or entity
and to acquire, hold, purchase, or lease any personal or real property, right of ways and
easements which may be proper or necessary. The exception, however, is the sale of
properties acquired by CAA or any other real properties of the same which must have the
approval of the President of the Philippines. The Court of appeals took cognizance of the
striking absence of such proviso in the other transactions contemplated in paragraph (24)
and is convinced as we are, that the Director of the Civil Aeronautics Administration does
not need the prior approval of the President or the Secretary of Public Works and
Communications in the execution of Contract "C."
In this regard, this Court, ruled that another basic principle of statutory construction
mandates that general legislation must give way to special legislation on the same subject,
and generally be so interpreted as to embrace only cases in which the special provisions are
not applicable (Sto. Domingo v. De los Angeles, 96 SCRA 139),. that specific statute prevails
over a general statute (De Jesus v. People, 120 SCRA 760) and that where two statutes are
of equal theoretical application to a particular case, the one designed therefor specially
should prevail (Wil Wilhensen, Inc. v. Baluyot, 83 SCRA 38)
WHEREFORE, the petition is DISMISSED for lack of merit and the decision of the Court of
Appeals appealed from is AFFIRMED in toto.
SO ORDERED.
G.R. No. 120319 October 6, 1995
LUZON DEVELOPMENT BANK, petitioner,
vs.
ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S. GARCIA in
her capacity as VOLUNTARY ARBITRATOR, respondents.
ROMERO, J.:
From a submission agreement of the Luzon Development Bank (LDB) and the Association of
Luzon Development Bank Employees (ALDBE) arose an arbitration case to resolve the
following issue:
Whether or not the company has violated the Collective Bargaining
Agreement provision and the Memorandum of Agreement dated April 1994,
on promotion.
At a conference, the parties agreed on the submission of their respective Position Papers on
December 1-15, 1994. Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received
ALDBE's Position Paper on January 18, 1995. LDB, on the other hand, failed to submit its
Position Paper despite a letter from the Voluntary Arbitrator reminding them to do so. As of
May 23, 1995 no Position Paper had been filed by LDB.
On May 24, 1995, without LDB's Position Paper, the Voluntary Arbitrator rendered a
decision disposing as follows:
WHEREFORE, finding is hereby made that the Bank has not adhered to the
Collective Bargaining Agreement provision nor the Memorandum of
Agreement on promotion.
Hence, this petition for certiorari and prohibition seeking to set aside the decision of the
Voluntary Arbitrator and to prohibit her from enforcing the same.
In labor law context, 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.
Arbitration may be classified, on the basis of the obligation on which it is based, as either
compulsory or voluntary.
Compulsory arbitration is a system whereby the parties to a dispute are compelled by the
government to forego their right to strike and are compelled to accept the resolution of
their dispute through arbitration by a third party.1 The essence of arbitration remains since
a resolution of a dispute is arrived at by resort to a disinterested third party whose decision
is final and binding on the parties, but in compulsory arbitration, such a third party is
normally appointed by the government.
Under voluntary arbitration, on the other hand, referral of a dispute by the parties is made,
pursuant to a voluntary arbitration clause in their collective agreement, to an impartial third
person for a final and binding resolution.2 Ideally, arbitration awards are supposed to be
complied with by both parties without delay, such that once an award has been rendered
by an arbitrator, nothing is left to be done by both parties but to comply with the same.
After all, they are presumed to have freely chosen arbitration as the mode of settlement for
that particular dispute. Pursuant thereto, they have chosen a mutually acceptable arbitrator
who shall hear and decide their case. Above all, they have mutually agreed to de bound by
said arbitrator's decision.
In the Philippine context, the parties to a Collective Bargaining Agreement (CBA) are
required to include therein provisions for a machinery for the resolution of grievances
arising from the interpretation or implementation of the CBA or company personnel
policies.3 For this purpose, parties to a CBA shall name and designate therein a voluntary
arbitrator or a panel of arbitrators, or include a procedure for their selection, preferably
from those accredited by the National Conciliation and Mediation Board (NCMB). Article
261 of the Labor Code accordingly provides for exclusive original jurisdiction of such
voluntary arbitrator or panel of arbitrators over (1) the interpretation or implementation of
the CBA and (2) the interpretation or enforcement of company personnel policies. Article
262 authorizes them, but only upon agreement of the parties, to exercise jurisdiction over
other labor disputes.
On the other hand, a labor arbiter under Article 217 of the Labor Code has jurisdiction over
the following enumerated cases:
. . . (a) Except as otherwise provided under this Code the Labor Arbiters shall
have original and exclusive jurisdiction to hear and decide, within thirty (30)
calendar days after the submission of the case by the parties for decision
without extension, even in the absence of stenographic notes, the following
cases involving all workers, whether agricultural or non-agricultural:
1. Unfair labor practice cases;
2. Termination disputes;
3. If accompanied with a claim for reinstatement, those cases that workers
may file involving wages, rates of pay, hours of work and other terms and
conditions of employment;
4. Claims for actual, moral, exemplary and other forms of damages arising
from the employer-employee relations;
5. Cases arising from any violation of Article 264 of this Code, including
questions involving the legality of strikes and lockouts;
6. Except claims for Employees Compensation, Social Security, Medicare and
maternity benefits, all other claims, arising from employer-employee
relations, including those of persons in domestic or household service,
involving an amount exceeding five thousand pesos (P5,000.00) regardless of
whether accompanied with a claim for reinstatement.
xxx xxx xxx
It will thus be noted that the jurisdiction conferred by law on a voluntary arbitrator or a
panel of such arbitrators is quite limited compared to the original jurisdiction of the labor
arbiter and the appellate jurisdiction of the National Labor Relations Commission (NLRC) for
that matter.4 The state of our present law relating to voluntary arbitration provides that
"(t)he award or decision of the Voluntary Arbitrator . . . shall be final and executory after
ten (10) calendar days from receipt of the copy of the award or decision by the
parties,"5 while the "(d)ecision, awards, or orders of the Labor Arbiter are final and
executory unless appealed to the Commission by any or both parties within ten (10)
calendar days from receipt of such decisions, awards, or orders."6 Hence, while there is an
express mode of appeal from the decision of a labor arbiter, Republic Act No. 6715 is silent
with respect to an appeal from the decision of a voluntary arbitrator.
Yet, past practice shows that a decision or award of a voluntary arbitrator is, more often
than not, elevated to the Supreme Court itself on a petition for certiorari,7 in effect equating
the voluntary arbitrator with the NLRC or the Court of Appeals. In the view of the Court, this
is illogical and imposes an unnecessary burden upon it.
In Volkschel Labor Union, et al. v. NLRC, et al.,8 on the settled premise that the judgments of
courts and awards of quasi-judicial agencies must become final at some definite time, this
Court ruled that the awards of voluntary arbitrators determine the rights of parties; hence,
their decisions have the same legal effect as judgments of a court. In Oceanic Bic Division
(FFW), et al. v. Romero, et al.,9 this Court ruled that "a voluntary arbitrator by the nature of
her functions acts in a quasi-judicial capacity." Under these rulings, it follows that the
voluntary arbitrator, whether acting solely or in a panel, enjoys in law the status of a quasi-
judicial agency but independent of, and apart from, the NLRC since his decisions are not
appealable to the latter.10
Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of
Appeals shall exercise:
xxx xxx xxx
 (B) Exclusive appellate jurisdiction over all final judgments, decisions,
resolutions, orders or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards or commissions, including the Securities
and Exchange Commission, the Employees Compensation Commission and
the Civil Service Commission, except those falling within the appellate
jurisdiction of the Supreme Court in accordance with the Constitution, the
Labor Code of the Philippines under Presidential Decree No. 442, as
amended, the provisions of this Act, and of subparagraph (1) of the third
paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the
Judiciary Act of 1948.
xxx xxx xxx
Assuming arguendo that the voluntary arbitrator or the panel of voluntary arbitrators may
not strictly be considered as a quasi-judicial agency, board or commission, still both he and
the panel are comprehended within the concept of a "quasi-judicial instrumentality." It may
even be stated that it was to meet the very situation presented by the quasi-judicial
functions of the voluntary arbitrators here, as well as the subsequent arbitrator/arbitral
tribunal operating under the Construction Industry Arbitration Commission,11 that the
broader term "instrumentalities" was purposely included in the above-quoted provision.
An "instrumentality" is anything used as a means or agency.12 Thus, the terms governmental
"agency" or "instrumentality" are synonymous in the sense that either of them is a means
by which a government acts, or by which a certain government act or function is
performed.13 The word "instrumentality," with respect to a state, contemplates an authority
to which the state delegates governmental power for the performance of a state
function.14 An individual person, like an administrator or executor, is a judicial
instrumentality in the settling of an estate,15 in the same manner that a sub-agent
appointed by a bankruptcy court is an instrumentality of the court,16and a trustee in
bankruptcy of a defunct corporation is an instrumentality of the state. 17
The voluntary arbitrator no less performs a state function pursuant to a governmental
power delegated to him under the provisions therefor in the Labor Code and he falls,
therefore, within the contemplation of the term "instrumentality" in the aforequoted Sec. 9
of B.P. 129. The fact that his functions and powers are provided for in the Labor Code does
not place him within the exceptions to said Sec. 9 since he is a quasi-judicial instrumentality
as contemplated therein. It will be noted that, although the Employees Compensation
Commission is also provided for in the Labor Code, Circular No. 1-91, which is the
forerunner of the present Revised Administrative Circular No. 1-95, laid down the
procedure for the appealability of its decisions to the Court of Appeals under the foregoing
rationalization, and this was later adopted by Republic Act No. 7902 in amending Sec. 9 of
B.P. 129.
A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should
likewise be appealable to the Court of Appeals, in line with the procedure outlined in
Revised Administrative Circular No. 1-95, just like those of the quasi-judicial agencies,
boards and commissions enumerated therein.
This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-
91 to provide a uniform procedure for the appellate review of adjudications of all quasi-
judicial entities18 not expressly excepted from the coverage of Sec. 9 of B.P. 129 by either
the Constitution or another statute. Nor will it run counter to the legislative intendment
that decisions of the NLRC be reviewable directly by the Supreme Court since, precisely, the
cases within the adjudicative competence of the voluntary arbitrator are excluded from the
jurisdiction of the NLRC or the labor arbiter.
In the same vein, it is worth mentioning that under Section 22 of Republic Act No. 876, also
known as the Arbitration Law, arbitration is deemed a special proceeding of which the court
specified in the contract or submission, or if none be specified, the Regional Trial Court for
the province or city in which one of the parties resides or is doing business, or in which the
arbitration is held, shall have jurisdiction. A party to the controversy may, at any time within
one (1) month after an award is made, apply to the court having jurisdiction for an order
confirming the award and the court must grant such order unless the award is vacated,
modified or corrected.19
In effect, this equates the award or decision of the voluntary arbitrator with that of the
regional trial court. Consequently, in a petition for certiorari from that award or decision,
the Court of Appeals must be deemed to have concurrent jurisdiction with the Supreme
Court. As a matter of policy, this Court shall henceforth remand to the Court of Appeals
petitions of this nature for proper disposition.
ACCORDINGLY, the Court resolved to REFER this case to the Court of Appeals.
SO ORDERED.

G.R. No. 102976 October 25, 1995
IRON AND STEEL AUTHORITY, petitioner,
vs.
THE COURT OF APPEALS and MARIA CRISTINA FERTILIZER CORPORATION, respondents.
FELICIANO, J.:
Petitioner Iron and Steel Authority ("ISA") was created by Presidential Decree (P.D.) No. 272
dated 9 August 1973 in order, generally, to develop and promote the iron and steel industry
in the Philippines. The objectives of the ISA are spelled out in the following terms:
Sec. 2. Objectives — The Authority shall have the following objectives:
(a) to strengthen the iron and steel industry of the Philippines and to expand
the domestic and export markets for the products of the industry;
(b) to promote the consolidation, integration and rationalization of the
industry in order to increase industry capability and viability to service the
domestic market and to compete in international markets;
(c) to rationalize the marketing and distribution of steel products in order to
achieve a balance between demand and supply of iron and steel products for
the country and to ensure that industry prices and profits are at levels that
provide a fair balance between the interests of investors, consumers
suppliers, and the public at large;
(d) to promote full utilization of the existing capacity of the industry, to
discourage investment in excess capacity, and in coordination, with
appropriate government agencies to encourage capital investment in priority
areas of the industry;
(e) to assist the industry in securing adequate and low-cost supplies of raw
materials and to reduce the excessive dependence of the country on imports
of iron and steel.
The list of powers and functions of the ISA included the following:
Sec. 4. Powers and Functions. — The authority shall have the following
powers and functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron and steel facilities
for subsequent resale and/or lease to the companies involved if it is shown
that such use of the State's power is necessary to implement the
construction of capacity which is needed for the attainment of the objectives
of the Authority;
xxx xxx xxx
(Emphasis supplied)
P.D. No. 272 initially created petitioner ISA for a term of five (5) years counting from 9
August 1973.1 When ISA's original term expired on 10 October 1978, its term was extended
for another ten (10) years by Executive Order No. 555 dated 31 August 1979.
The National Steel Corporation ("NSC") then a wholly owned subsidiary of the National
Development Corporation which is itself an entity wholly owned by the National
Government, embarked on an expansion program embracing, among other things, the
construction of an integrated steel mill in Iligan City. The construction of such a steel mill
was considered a priority and major industrial project of the Government. Pursuant to the
expansion program of the NSC, Proclamation No. 2239 was issued by the President of the
Philippines on 16 November 1982 withdrawing from sale or settlement a large tract of
public land (totalling about 30.25 hectares in area) located in Iligan City, and reserving that
land for the use and immediate occupancy of NSC.
Since certain portions of the public land subject matter Proclamation No. 2239 were
occupied by a non-operational chemical fertilizer plant and related facilities owned by
private respondent Maria Cristina Fertilizer Corporation ("MCFC"), Letter of Instruction
(LOI), No. 1277, also dated 16 November 1982, was issued directing the NSC to "negotiate
with the owners of MCFC, for and on behalf of the Government, for the compensation of
MCFC's present occupancy rights on the subject land." LOI No. 1277 also directed that
should NSC and private respondent MCFC fail to reach an agreement within a period of sixty
(60) days from the date of LOI No. 1277, petitioner ISA was to exercise its power of eminent
domain under P.D. No. 272 and to initiate expropriation proceedings in respect of
occupancy rights of private respondent MCFC relating to the subject public land as well as
the plant itself and related facilities and to cede the same to the NSC.2
Negotiations between NSC and private respondent MCFC did fail. Accordingly, on 18 August
1983, petitioner ISA commenced eminent domain proceedings against private respondent
MCFC in the Regional Trial Court, Branch 1, of Iligan City, praying that it (ISA) be places in
possession of the property involved upon depositing in court the amount of P1,760,789.69
representing ten percent (10%) of the declared market values of that property. The
Philippine National Bank, as mortgagee of the plant facilities and improvements involved in
the expropriation proceedings, was also impleaded as party-defendant.
On 17 September 1983, a writ of possession was issued by the trial court in favor of ISA. ISA
in turn placed NSC in possession and control of the land occupied by MCFC's fertilizer plant
installation.
The case proceeded to trial. While the trial was ongoing, however, the statutory existence
of petitioner ISA expired on 11 August 1988. MCFC then filed a motion to dismiss,
contending that no valid judgment could be rendered against ISA which had ceased to be a
juridical person. Petitioner ISA filed its opposition to this motion.
In an Order dated 9 November 1988, the trial court granted MCFC's motion to dismiss and
did dismiss the case. The dismissal was anchored on the provision of the Rules of Court
stating that "only natural or juridical persons or entities authorized by law may be parties in
a civil case."3 The trial court also referred to non-compliance by petitioner ISA with the
requirements of Section 16, Rule 3 of the Rules of Court.4
Petitioner ISA moved for reconsideration of the trial court's Order, contending that despite
the expiration of its term, its juridical existence continued until the winding up of its affairs
could be completed. In the alternative, petitioner ISA urged that the Republic of the
Philippines, being the real party-in-interest, should be allowed to be substituted for
petitioner ISA. In this connection, ISA referred to a letter from the Office of the President
dated 28 September 1988 which especially directed the Solicitor General to continue the
expropriation case.
The trial court denied the motion for reconsideration, stating, among other things that:
The property to be expropriated is not for public use or benefit [__] but for
the use and benefit [__] of NSC, a government controlled private corporation
engaged in private business and for profit, specially now that the
government, according to newspaper reports, is offering for sale to the
public its [shares of stock] in the National Steel Corporation in line with the
pronounced policy of the present administration to disengage the
government from its private business ventures.5 (Brackets supplied)
Petitioner went on appeal to the Court of Appeals. In a Decision dated 8 October 1991, the
Court of Appeals affirmed the order of dismissal of the trial court. The Court of Appeals held
that petitioner ISA, "a government regulatory agency exercising sovereign functions," did
not have the same rights as an ordinary corporation and that the ISA, unlike corporations
organized under the Corporation Code, was not entitled to a period for winding up its affairs
after expiration of its legally mandated term, with the result that upon expiration of its term
on 11 August 1987, ISA was "abolished and [had] no more legal authority to perform
governmental functions." The Court of Appeals went on to say that the action for
expropriation could not prosper because the basis for the proceedings, the ISA's exercise of
its delegated authority to expropriate, had become ineffective as a result of the delegate's
dissolution, and could not be continued in the name of Republic of the Philippines,
represented by the Solicitor General:
It is our considered opinion that under the law, the complaint cannot
prosper, and therefore, has to be dismissed without prejudice to the refiling
of a new complaint for expropriation if the Congress sees it fit." (Emphases
supplied)
At the same time, however, the Court of Appeals held that it was premature for the
trial court to have ruled that the expropriation suit was not for a public purpose,
considering that the parties had not yet rested their respective cases.
In this Petition for Review, the Solicitor General argues that since ISA initiated and
prosecuted the action for expropriation in its capacity as agent of the Republic of the
Philippines, the Republic, as principal of ISA, is entitled to be substituted and to be made a
party-plaintiff after the agent ISA's term had expired.
Private respondent MCFC, upon the other hand, argues that the failure of Congress to enact
a law further extending the term of ISA after 11 August 1988 evinced a "clear legislative
intent to terminate the juridical existence of ISA," and that the authorization issued by the
Office of the President to the Solicitor General for continued prosecution of the
expropriation suit could not prevail over such negative intent. It is also contended that the
exercise of the eminent domain by ISA or the Republic is improper, since that power would
be exercised "not on behalf of the National Government but for the benefit of NSC."
The principal issue which we must address in this case is whether or not the Republic of the
Philippines is entitled to be substituted for ISA in view of the expiration of ISA's term. As will
be made clear below, this is really the only issue which we must resolve at this time.
Rule 3, Section 1 of the Rules of Court specifies who may be parties to a civil action:
Sec. 1. Who May Be Parties. — Only natural or juridical persons or entities
authorized by law may be parties in a civil action.
Under the above quoted provision, it will be seen that those who can be parties to a
civil action may be broadly categorized into two (2) groups:
(a) those who are recognized as persons under the law whether natural, i.e.,
biological persons, on the one hand, or juridical person such as corporations,
on the other hand; and
(b) entities authorized by law to institute actions.
Examination of the statute which created petitioner ISA shows that ISA falls under category
(b) above. P.D. No. 272, as already noted, contains express authorization to ISA to
commence expropriation proceedings like those here involved:
Sec. 4. Powers and Functions. — The Authority shall have the following
powers and functions:
xxx xxx xxx
(j) to initiate expropriation of land required for basic iron and steel
facilities for subsequent resale and/or lease to the companies involved if it is
shown that such use of the State's power is necessary to implement the
construction of capacity which is needed for the attainment of the objectives
of the Authority;
xxx xxx xxx
(Emphasis supplied)
It should also be noted that the enabling statute of ISA expressly authorized it to
enter into certain kinds of contracts "for and in behalf of the Government" in the
following terms:
xxx xxx xxx
(i) to negotiate, and when necessary, to enter into contracts for and in behalf
of the government, for the bulk purchase of materials, supplies or services for
any sectors in the industry, and to maintain inventories of such materials in
order to insure a continuous and adequate supply thereof and thereby
reduce operating costs of such sector;
xxx xxx xxx
(Emphasis supplied)
Clearly, ISA was vested with some of the powers or attributes normally associated with
juridical personality. There is, however, no provision in P.D. No. 272 recognizing ISA as
possessing general or comprehensive juridical personality separate and distinct from that of
the Government. The ISA in fact appears to the Court to be a non-incorporated agency or
instrumentality of the Republic of the Philippines, or more precisely of the Government of
the Republic of the Philippines. It is common knowledge that other agencies or
instrumentalities of the Government of the Republic are cast in corporate form, that is to
say, are incorporated agencies or instrumentalities, sometimes with and at other times
without capital stock, and accordingly vested with a juridical personality distinct from the
personality of the Republic. Among such incorporated agencies or instrumentalities are:
National Power Corporation;6 Philippine Ports Authority;7 National Housing
Authority;8 Philippine National Oil Company;9 Philippine National Railways; 10 Public Estates
Authority; 11 Philippine Virginia Tobacco Administration,12 and so forth. It is worth noting
that the term "Authority" has been used to designate both incorporated and non-
incorporated agencies or instrumentalities of the Government.
We consider that the ISA is properly regarded as an agent or delegate of the Republic of the
Philippines. The Republic itself is a body corporate and juridical person vested with the full
panoply of powers and attributes which are compendiously described as "legal personality."
The relevant definitions are found in the Administrative Code of 1987:
Sec. 2. General Terms Defined. — Unless the specific words of the text, or the
context as a whole, or a particular statute, require a different meaning:
(1) Government of the Republic of the Philippines refers to the corporate
governmental entity through which the functions of government are
exercised throughout the Philippines, including, save as the contrary appears
from the context, the various arms through which political authority is made
effective in the Philippines, whether pertaining to the autonomous regions,
the provincial, city, municipal or barangay subdivisions or other forms of local
government.
xxx xxx xxx
(4) Agency of the Government refers to any of the various units of the
Government, including a department, bureau, office, instrumentality, or
government-owned or controlled corporation, or a local government or a
distinct unit therein.
xxx xxx xxx
(10) Instrumentality refers to any agency of the National Government, not
integrated within the department framework, vested with special functions
or jurisdiction by law, endowed with some if not all corporate powers,
administering special funds, and enjoying operational autonomy, usually
through a charter. This term includes regulatory agencies, chartered
institutions and government-owned or controlled corporations.
xxx xxx xxx
(Emphases supplied)
When the statutory term of a non-incorporated agency expires, the powers, duties and
functions as well as the assets and liabilities of that agency revert back to, and are re-
assumed by, the Republic of the Philippines, in the absence of special provisions of law
specifying some other disposition thereof such as, e.g., devolution or transmission of such
powers, duties, functions, etc. to some other identified successor agency or instrumentality
of the Republic of the Philippines. When the expiring agency is an incorporated one, the
consequences of such expiry must be looked for, in the first instance, in the charter of that
agency and, by way of supplementation, in the provisions of the Corporation Code. Since, in
the instant case, ISA is a non-incorporated agency or instrumentality of the Republic, its
powers, duties, functions, assets and liabilities are properly regarded as folded back into the
Government of the Republic of the Philippines and hence assumed once again by the
Republic, no special statutory provision having been shown to have mandated succession
thereto by some other entity or agency of the Republic.
The procedural implications of the relationship between an agent or delegate of the
Republic of the Philippines and the Republic itself are, at least in part, spelled out in the
Rules of Court. The general rule is, of course, that an action must be prosecuted and
defended in the name of the real party in interest. (Rule 3, Section 2) Petitioner ISA was, at
the commencement of the expropriation proceedings, a real party in interest, having been
explicitly authorized by its enabling statute to institute expropriation proceedings. The Rules
of Court at the same time expressly recognize the role of representative parties:
Sec. 3. Representative Parties. — A trustee of an expressed trust, a guardian,
an executor or administrator, or a party authorized by statute may sue or be
sued without joining the party for whose benefit the action is presented or
defended; but the court may, at any stage of the proceedings, order such
beneficiary to be made a party. . . . . (Emphasis supplied)
In the instant case, ISA instituted the expropriation proceedings in its capacity as an agent
or delegate or representative of the Republic of the Philippines pursuant to its authority
under P.D. No. 272. The present expropriation suit was brought on behalf of and for the
benefit of the Republic as the principal of ISA. Paragraph 7 of the complaint stated:
7. The Government, thru the plaintiff ISA, urgently needs the subject parcels
of land for the construction and installation of iron and steel manufacturing
facilities that are indispensable to the integration of the iron and steel
making industry which is vital to the promotion of public interest and
welfare. (Emphasis supplied)
The principal or the real party in interest is thus the Republic of the Philippines and
not the National Steel Corporation, even though the latter may be an ultimate user
of the properties involved should the condemnation suit be eventually successful.
From the foregoing premises, it follows that the Republic of the Philippines is entitled to be
substituted in the expropriation proceedings as party-plaintiff in lieu of ISA, the statutory
term of ISA having expired. Put a little differently, the expiration of ISA's statutory term did
not by itself require or justify the dismissal of the eminent domain proceedings.
It is also relevant to note that the non-joinder of the Republic which occurred upon the
expiration of ISA's statutory term, was not a ground for dismissal of such proceedings since
a party may be dropped or added by order of the court, on motion of any party or on the
court's own initiative at any stage of the action and on such terms as are just. 13 In the
instant case, the Republic has precisely moved to take over the proceedings as party-
plaintiff.
In E.B. Marcha Transport Company, Inc. v. Intermediate Appellate Court, 14 the Court
recognized that the Republic may initiate or participate in actions involving its agents. There
the Republic of the Philippines was held to be a proper party to sue for recovery of
possession of property although the "real" or registered owner of the property was the
Philippine Ports Authority, a government agency vested with a separate juridical
personality. The Court said:
It can be said that in suing for the recovery of the rentals, the Republic of the
Philippines acted as principal of the Philippine Ports Authority, directly
exercising the commission it had earlier conferred on the latter as its agent. . .
.15 (Emphasis supplied)
In E.B. Marcha, the Court also stressed that to require the Republic to commence all
over again another proceeding, as the trial court and Court of Appeals had required,
was to generate unwarranted delay and create needless repetition of proceedings:
More importantly, as we see it, dismissing the complaint on the ground that
the Republic of the Philippines is not the proper party would result in needless
delay in the settlement of this matter and also in derogation of the policy
against multiplicity of suits. Such a decision would require the Philippine
Ports Authority to refile the very same complaint already proved by the
Republic of the Philippines and bring back as it were to square
one.16 (Emphasis supplied)
As noted earlier, the Court of Appeals declined to permit the substitution of the Republic of
the Philippines for the ISA upon the ground that the action for expropriation could not
prosper because the basis for the proceedings, the ISA's exercise of its delegated authority
to expropriate, had become legally ineffective by reason of the expiration of the statutory
term of the agent or delegated i.e., ISA. Since, as we have held above, the powers and
functions of ISA have reverted to the Republic of the Philippines upon the termination of
the statutory term of ISA, the question should be addressed whether fresh legislative
authority is necessary before the Republic of the Philippines may continue the expropriation
proceedings initiated by its own delegate or agent.
While the power of eminent domain is, in principle, vested primarily in the legislative
department of the government, we believe and so hold that no new legislative act is
necessary should the Republic decide, upon being substituted for ISA, in fact to continue to
prosecute the expropriation proceedings. For the legislative authority, a long time ago,
enacted a continuing or standing delegation of authority to the President of the Philippines
to exercise, or cause the exercise of, the power of eminent domain on behalf of the
Government of the Republic of the Philippines. The 1917 Revised Administrative Code,
which was in effect at the time of the commencement of the present expropriation
proceedings before the Iligan Regional Trial Court, provided that:
Sec. 64. Particular powers and duties of the President of the Philippines. — In
addition to his general supervisory authority, the President of the Philippines
shall have such other specific powers and duties as are expressly conferred
or imposed on him by law, and also, in particular, the powers and duties set
forth in this Chapter.
 Among such special powers and duties shall be:
xxx xxx xxx
(h) To determine when it is necessary or advantageous to exercise the right
of eminent domain in behalf of the Government of the Philippines; and to
direct the Secretary of Justice, where such act is deemed advisable, to cause
the condemnation proceedings to be begun in the court having proper
jurisdiction. (Emphasis supplied)
The Revised Administrative Code of 1987 currently in force has substantially
reproduced the foregoing provision in the following terms:
Sec. 12. Power of eminent domain. — The President shall determine when it
is necessary or advantageous to exercise the power of eminent domain in
behalf of the National Government, and direct the Solicitor General,
whenever he deems the action advisable, to institute expopriation
proceedings in the proper court. (Emphasis supplied)
In the present case, the President, exercising the power duly delegated under both
the 1917 and 1987 Revised Administrative Codes in effect made a determination
that it was necessary and advantageous to exercise the power of eminent domain in
behalf of the Government of the Republic and accordingly directed the Solicitor
General to proceed with the suit. 17
It is argued by private respondent MCFC that, because Congress after becoming once more
the depository of primary legislative power, had not enacted a statute extending the term
of ISA, such non-enactment must be deemed a manifestation of a legislative design to
discontinue or abort the present expropriation suit. We find this argument much too
speculative; it rests too much upon simple silence on the part of Congress and casually
disregards the existence of Section 12 of the 1987 Administrative Code already quoted
above.
Other contentions are made by private respondent MCFC, such as, that the constitutional
requirement of "public use" or "public purpose" is not present in the instant case, and that
the indispensable element of just compensation is also absent. We agree with the Court of
Appeals in this connection that these contentions, which were adopted and set out by the
Regional Trial Court in its order of dismissal, are premature and are appropriately addressed
in the proceedings before the trial court. Those proceedings have yet to produce a decision
on the merits, since trial was still on going at the time the Regional Trial Court precipitously
dismissed the expropriation proceedings. Moreover, as a pragmatic matter, the Republic is,
by such substitution as party-plaintiff, accorded an opportunity to determine whether or
not, or to what extent, the proceedings should be continued in view of all the subsequent
developments in the iron and steel sector of the country including, though not limited to,
the partial privatization of the NSC.
WHEREFORE, for all the foregoing, the Decision of the Court of Appeals dated 8 October
1991 to the extent that it affirmed the trial court's order dismissing the expropriation
proceedings, is hereby REVERSED and SET ASIDE and the case is REMANDED to the court a
quo which shall allow the substitution of the Republic of the Philippines for petitioner Iron
and Steel Authority and for further proceedings consistent with this Decision. No
pronouncement as to costs.
SO ORDERED.
[G.R. No. 106296. July 5, 1996.]
ISABELO T. CRISOSTOMO, Petitioner, v. THE COURT OF APPEALS and the PEOPLE OF THE
PHILIPPINES, Respondents. *
SYLLABUS
1. ADMINISTRATIVE LAW; PUBLIC OFFICE; ABOLITION OF OFFICE; MUST BE MADE BY
MEANS OF AN EXPRESS DECLARATION TO THAT EFFECT BY THE LAWMAKING AUTHORITY.
— P.D. No. 1341 did not abolish, but only changed, the former Philippine College of
Commerce into what is now the Polytechnic University of the Philippines, in the same way
that earlier in 1952, R.A. No. 778 had converted what was then the Philippine School of
Commerce into the Philippine College of Commerce. What took place was a change in
academic status of the educational institution, not in its corporate life. Hence the change in
its name, the expansion of its curricular offerings, and the changes in its structure and
organization. As petitioner correctly points out, when the purpose is to abolish a
department or an office or an organization and to replace it with another one, the
lawmaking authority says so.
2. ID.; ID.; EXPIRATION OF TERM OF OFFICE; BARS A PUBLIC OFFICER FROM INVOKING HIS
CLAIM OF REINSTATEMENT. — But the reinstatement of petitioner to the position of
president of the PUP could not be ordered by the trial court because on June 10, 1978, P.D.
No. 1437 had been promulgated fixing the term of office of presidents of state universities
and colleges at six (6) years, renewable for another term of six (6) years, and authorizing the
President of the Philippines to terminate the terms of incumbents who were not
reappointed. In this case, Dr. Pablo T. Mateo, Jr., who had been acting president of the
university since April 3, 1979, was appointed president of the PUP for a term of six (6) years
on March 28, 1980, with the result that petitioner’s term was cut short. In accordance with
§7 of the law, therefore, petitioner became entitled only to retirement benefits or the
payment of separation pay. Petitioner must have recognized this fact, that is why in 1992 he
asked then President Aquino to consider him for appointment to the same position after it
had become vacant in consequence of the retirement of Dr. Prudente.
DECISION
MENDOZA, J.:
This is a petition to review the decision of the Court of Appeals dated July 15, 1992, the
dispositive portion of which reads:chanrob1es virtual 1aw library
WHEREFORE, the present petition is partially granted. The questioned Orders and writs
directing (1) "reinstatement" of respondent Isabelo T. Crisostomo to the position of
"President of the Polytechnic University of the Philippines", and (2) payment of "salaries
and benefits" which said respondent failed to receive during his suspension insofar as such
payment includes those accruing after the abolition of the PCC and its transfer to the PUP,
are hereby set aside. Accordingly, further proceedings consistent with this decision may be
taken by the court a quo to determine the correct amounts due and payable to said
respondent by the said university.
The background of this case is as follows:chanrob1es virtual 1aw library
Petitioner Isabelo Crisostomo was President of the Philippine College of Commerce (PCC),
having been appointed to that position by the President of the Philippines on July 17, 1974.
During his incumbency as president of the PCC, two administrative cases were filed against
petitioner for illegal use of government vehicles, misappropriation of construction materials
belonging to the college, oppression and harassment, grave misconduct, nepotism and
dishonesty. The administrative cases, which were filed with the Office of the President,
were subsequently referred to the Office of the Solicitor General for investigation.
Charges of violations of R.A. No. 3019, §3 (e) and R.A. No. 992, §§20-21 and R.A. No. 733,
§14 were likewise filed against him with the Office of Tanodbayan.
On June 14, 1976, three (3) informations for violation of Sec. 3 (e) of the Anti-Graft and
Corrupt Practices Act (R.A. No. 3019, as amended) were filed against him. The informations
alleged that he appropriated for himself a bahay kubo, which was intended for the College,
and construction materials worth P250,000.00, more or less. Petitioner was also accused of
using a driver of the College as his personal and family driver. 1
On October 22, 1976, petitioner was preventively suspended from office pursuant to R.A.
No. 3019, §13, as amended. In his place Dr. Pablo T. Mateo, Jr. was designated as officer-in-
charge on November 10, 1976, and then as Acting President on May 13, 1977.
On April 1, 1978, P.D. No. 1341 was issued by then President Ferdinand E. Marcos,
CONVERTING THE PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC UNIVERSITY,
DEFINING ITS OBJECTIVES, ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND
EXPANDING ITS CURRICULAR OFFERINGS.
Mateo continued as the head of the new University. On April 3, 1979, he was appointed
Acting President and on March 28, 1980, as President for a term of six (6)years.
On July 11, 1980, the Circuit Criminal Court of Manila rendered judgment acquitting
petitioner of the charges against him. The dispositive portion of the decision
reads:chanrob1es virtual 1aw library
WHEREFORE, the Court finds the accused, Isabelo T. Crisostomo, not guilty of the violations
charged in all these three cases and hereby acquits him therefrom, with costs de oficio. The
bail bonds filed by said accused for his provisional liberty are hereby cancelled and released.
Pursuant to the provisions of Section 13, R.A. No. 3019, as amended, otherwise known as
The Anti-Graft and Corrupt Practices Act, and under which the accused has been suspended
by this Court in an Order dated October 22, 1976, said accused is hereby ordered reinstated
to the position of President of the Philippine College of Commerce, now known as the
Polytechnic University of the Philippines, from which he has been suspended. By virtue of
said reinstatement, he is entitled to receive the salaries and other benefits which he failed
to receive during suspension, unless in the meantime administrative proceedings have been
filed against him. The bail bonds filed by the accused for his provisional liberty in these
cases are hereby cancelled and released.
SO ORDERED.
The cases filed before the Tanodbayan (now the Ombudsman) were likewise dismissed on
August 8, 1991 on the ground that they had become moot and academic. On the other
hand, the administrative cases were dismissed for failure of the complainants to prosecute
them.
On February 12, 1992, petitioner filed with the Regional Trial Court a motion for execution
of the judgment, particularly the part ordering his reinstatement to the position of
president of the PUP and the payment of his salaries and other benefits during the period of
suspension.
The motion was granted and a partial writ of execution was issued by the trial court on
March 6, 1992. On March 26, 1992, however, President Corazon C. Aquino appointed Dr.
Jaime Gellor as acting president of the PUP, following the expiration of the term of office of
Dr. Nemesio Prudente, who had succeeded Dr. Mateo. Petitioner was one of the five
nominees considered by the President of the Philippines for the position.
On April 24, 1992, the Regional Trial Court, through respondent Judge Teresita Dy-Liaco
Flores, issued another order, reiterating her earlier order for the reinstatement of petitioner
to the position of PUP president. A writ of execution, ordering the sheriff to implement the
order of reinstatement, was issued.
In his return dated April 28, 1992, the sheriff stated that he had executed the writ by
installing petitioner as President of the PUP, although Dr. Gellor did not vacate the office as
he wanted to consult with the President of the Philippines first. This led to a contempt
citation against Dr. Gellor. A hearing was set on May 7, 1992. On May 5, 1992, petitioner
also moved to cite Department of Education, Culture and Sports Secretary Isidro Cariño in
contempt of court. Petitioner assumed the office of president of the PUP.
On May 18, 1992, therefore, the People of the Philippines filed a petition for certiorari and
prohibition (CA G.R. No. 27931), assailing the two orders and the writs of execution issued
by the trial court. It also asked for a temporary restraining order.
On June 25, 1992, the Court of Appeals issued a temporary restraining order, enjoining
petitioner to cease and desist from acting as president of the PUP pursuant to the
reinstatement orders of the trial court, and enjoining further proceedings in Criminal Cases
Nos. VI-2329-2331.
On July 15, 1992, the Seventh Division of the Court of Appeals rendered a decision, 2 the
dispositive portion of which is set forth at the beginning of this opinion. Said decision set
aside the orders and writ of reinstatement issued by the trial court. The payment of salaries
and benefits to petitioner accruing after the conversion of the PCC to the PUP was
disallowed. Recovery of salaries and benefits was limited to those accruing from the time of
petitioner’s suspension until the conversion of the PCC to the PUP. The case was remanded
to the trial court for a determination of the amounts due and payable to petitioner.
Hence this petition. Petitioner argues that P.D. No. 1341, which converted the PCC into the
PUP, did not abolish the PCC. He contends that if the law had intended the PCC to lose its
existence, it would have specified that the PCC was being "abolished" rather than
"converted" and that if the PUP was intended to be a new institution, the law would have
said it was being "created." Petitioner claims that the PUP is merely a continuation of the
existence of the PCC, and, hence, he could be reinstated to his former position as president.
In part the contention is well taken, but, as will presently be explained, reinstatement is no
longer possible because of the promulgation of P.D. No. 1437 by the President of the
Philippines on June 10, 1978.
P.D. No. 1341 did not abolish, but only changed, the former Philippine College of Commerce
into what is now the Polytechnic University of the Philippines, in the same way that earlier
in 1952, R.A. No. 778 had converted what was then the Philippine School of Commerce into
the Philippine College of Commerce. What took place was a change in academic status of
the educational institution, not in its corporate life. Hence the change in its name, the
expansion of its curricular offerings, and the changes in its structure and organization.
As petitioner correctly points out, when the purpose is to abolish a department or an office
or an organization and to replace it with another one, the lawmaking authority says so. He
cites the following examples:chanrob1es virtual 1aw library
E.O. No. 709:chanrob1es virtual 1aw library
§1. There is hereby created a Ministry of Trade and Industry, hereinafter referred to as the
Ministry. The existing Ministry of Trade established pursuant to Presidential Decree No. 721
as amended, and the existing Ministry established pursuant to Presidential Decree No. 488
as amended, are abolished together with their services, bureaus and similar agencies,
regional offices, and all other entities under their supervision and control. . .
E.O. No. 710:chanrob1es virtual 1aw library
§1. There is hereby created a Ministry of Public Works and Highways, hereinafter referred
to as the Ministry. The existing Ministry of Public Works established pursuant to Executive
Order No. 546 as amended, and the existing Ministry of Public Highways established
pursuant to Presidential Decree No. 458 as amended, are abolished together with their
services, bureaus and similar agencies, regional offices, and all other entities within their
supervision and control. . . .
R.A. No. 6975:chanrob1es virtual 1aw library
§13. Creation and Composition. — A National Police Commission, hereinafter referred to as
the Commission, is hereby created for the purpose of effectively discharging the functions
prescribed in the Constitution and provided in this Act. The Commission shall be a collegial
body within the Department. It shall be composed of a Chairman and four (4) regular
commissioners, one (1) of whom shall be designated as Vice-Chairman by the President. The
Secretary of the Department shall be the ex-officio Chairman of the Commission, while the
Vice-Chairman shall act as the executive officer of the Commission.
x x x
§90. Status of Present NAPOLCOM, PC-INP. — Upon the effectivity Of this Act, the present
National Police Commission, and the Philippine Constabulary-Integrated National Police
shall cease to exist. The Philippine Constabulary, which is the nucleus of the integrated
Philippine Constabulary-Integrated National Police, shall cease to be a major service of the
Armed Forces of the Philippines. The Integrated National Police, which is the civilian
component of the Philippine Constabulary-Integrated National Police, shall cease to be the
national police force and in lieu thereof, a new police force shall be established and
constituted pursuant to this Act.
In contrast, P.D. No. 1341, provides:chanrob1es virtual 1aw library
§1. The present Philippine College of Commerce is hereby converted into a university to be
known as the "Polytechnic University of the Philippines," hereinafter referred to in this
Decree as the University.
As already noted, R.A. No. 778 earlier provided:chanrob1es virtual 1aw library
§1. The present Philippine School of Commerce, located in the City of Manila, Philippines, is
hereby granted full college status and converted into the Philippine College of Commerce,
which will offer not only its present one-year and two-year vocational commercial curricula,
the latter leading to the titles of Associate in Business Education and/or Associate in
Commerce, but also four-year courses leading to the degrees of Bachelor of Science in
Business in Education and Bachelor of Science in Commerce, and five-year courses leading
to the degrees of Master of Arts in Business Education and Master of Arts in Commerce,
respectively.
The appellate court ruled, however, that the PUP and the PCC are not "one and the same
institution" but "two different entities" and that since petitioner Crisostomo’s term was
coterminous with the legal existence of the PCC, petitioner’s term expired upon the
abolition of the PCC. In reaching this conclusion, the Court of Appeals took into account the
following:chanrob1es virtual 1aw library
a) After respondent Crisostomo’s suspension, P.D. No. 1341 (entitled "CONVERTING THE
PHILIPPINE COLLEGE OF COMMERCE INTO A POLYTECHNIC UNIVERSITY, DEFINING ITS
OBJECTIVES, ORGANIZATIONAL STRUCTURE AND FUNCTIONS, AND EXPANDING ITS
CURRICULAR OFFERINGS") was issued on April 1, 1978. This decree explicitly provides that
PUP’s objectives and purposes cover not only PCC’s offering of programs "in the field of
commerce and business administration" but also "programs in other polytechnic areas" and
"in other fields such as agriculture, arts and trades and fisheries . . ." (section 2). Being a
university, PUP was conceived as a bigger institution absorbing, merging and integrating the
entire PCC and other "national schools" as may be "transferred" to this new state university.
b) The manner of selection and appointment of the university head is substantially different
from that provided by the PCC Charter. The PUP President "shall be appointed by the
President of the Philippines upon recommendation of the Secretary of Education and
Culture after consultation with the University Board of Regents" (section 4, P.D. 1341). The
President of PCC, on the other hand, was appointed "by the President of the Philippines
upon recommendation of the Board of Trustees" (Section 4, R.A. 778).
c) The composition of the new university’s Board of Regents in likewise different from that
of the PCC Board of Trustees (which included the chairman of the Senate Committee on
Education and the chairman of the House Committee on Education, the President of the
PCC Alumni Association as well as the President of the Chamber of Commerce of the
Philippines). Whereas, among others, the NEDA Director-General, the Secretary of Industry
and the Secretary of Labor are members of the PUP Board of Regents. (section 6, P.D.
1341).
d) The decree moreover transferred to the new university all the properties including
"equipment and facilities:"
". . . owned by the Philippine College of Commerce and such other National Schools as may
be integrated . . . including their obligations and appropriations . . ." (sec. 12; Emphasis
supplied). 3
But these are hardly indicia of an intent to abolish an existing institution and to create a
new one. New course offerings can be added to the curriculum of a school without affecting
its legal existence. Nor will changes in its existing structure and organization bring about its
abolition and the creation of a new one. Only an express declaration to that effect by the
lawmaking authority will.
The Court of Appeals also cites the provision of P.D. No. 1341 as allegedly implying the
abolition of the PCC and the creation of a new one — the PUP — in its stead:chanrob1es
virtual 1aw library
§12. All parcels of land, buildings, equipment and facilities owned by the Philippine College
of Commerce and such other national schools as may be integrated by virtue of this decree,
including their obligations and appropriations thereof, shall stand transferred to the
Polytechnic University of the Philippines, provided, however, that said national schools shall
continue to receive their corresponding shares from the special education fund of the
municipal/provincial/city government concerned as are now enjoyed by them in accordance
with existing laws and/or decrees.
The law does not state that the lands, buildings and equipment owned by the PCC were
being "transferred" to the PUP but only that they "stand transferred" to it. "Stand
transferred" simply means, for example, that lands transferred to the PCC were to be
understood as transferred to the PUP as the new name of the institution.
But the reinstatement of petitioner to the position of president of the PUP could not be
ordered by the trial court because on June 10, 1978, P.D. No. 1437 had been promulgated
fixing the term of office of presidents of state universities and colleges at six (6) years,
renewable for another term of six (6) years, and authorizing the President of the Philippines
to terminate the terms of incumbents who were not reappointed. P.D. No. 1437
provides:chanrob1es virtual 1aw library
§6. The head of the university or college shall be known as the President of the university or
college. He shall be qualified for the position and appointed for a term of six (6) years by the
President of the Philippines upon recommendation of the Secretary of Education and
Culture after consulting with the Board which may be renewed for another term upon
recommendation of the Secretary of Education and Culture after consulting the Board. In
case of vacancy by reason of death, absence or resignation, the Secretary of Education and
Culture shall have the authority to designate an officer in charge of the college or university G.R. No. 115844 August 15, 1997
pending the appointment of the President.
CESAR G. VIOLA, Chairman, Brgy. 167, Zone 15, District II, Manila, petitioner,
The powers and duties of the President of the university or college, in addition to those vs.
specifically provided for in this Decree shall be those usually pertaining to the office of the HON. RAFAEL M. ALUNAN III, Secretary DILG, ALEX L. DAVID, President/Secretary General,
president of a university or college. National Liga ng mga Barangay, LEONARDO L. ANGAT, President, City of Manila, Liga ng
mga Barangay, respondents.
§7. The incumbent president of a chartered state college or university whose term may be
terminated according to this Decree, shall be entitled to full retirement benefits: provided
that he has served the government for at least twenty (20) years and provided, further that
in case the number of years served is less than 20 years, he shall be entitled to one month MENDOZA, J.:
pay for every year of service.
This is a petition for prohibition challenging the validity of Art. III, §§ 1-2 of the Revised
In this case, Dr. Pablo T. Mateo Jr., who had been acting president of the university since Implementing Rules and Guidelines for the General Elections of the Liga ng mga Barangay
April 3, 1979, was appointed president of PUP for a term of six (6) years on March 28, 1980, Officers so far as they provide for the election of first, second and third vice presidents and
with the result that petitioner’s term was cut short. In accordance with §7 of the law, for auditors for the National Liga ng mga Barangay and its chapters. The provisions in
therefore, petitioner became entitled only to retirement benefits or the payment of question read:
separation pay. Petitioner must have recognized this fact, that is why in 1992 he asked then
President Aquino to consider him for appointment to the same position after it had become §1. Local Liga Chapters. The Municipal, City, Metropolitan and Provincial
vacant in consequence of the retirement of Dr. Prudente. Chapters shall directly elect the following officers and directors to constitute
their respective Board of Directors, namely:
WHEREFORE, the decision of the Court of Appeals is MODIFIED by SETTING ASIDE the
questioned orders of the Regional Trial Court directing the reinstatement of the petitioner 1.1 President
Isabelo T. Crisostomo to the position of president of the Polytechnic University of the
Philippines and the payment to him of salaries and benefits which he failed to receive 1.2 Executive Vice-President
during his suspension in so far as such payment would include salaries accruing after March
28, 1980 when petitioner Crisostomo’s term was terminated. Further proceedings in 1.3 First Vice-President
accordance with this decision may be taken by the trial court to determine the amount due
1.4 Second Vice-President
and payable to petitioner by the university up to March 28, 1980.
1.5 Third Vice-President
SO ORDERED.
1.6 Auditor

1.7 Five (5) Directors

 §2. National Liga. The National Liga shall directly elect the following officers
and directors to constitute the National Liga Board of Directors namely:
2.1 President
2.2 Executive Vice-President
2.3 First Vice-President
2.4 Second Vice-President
2.5 Third Vice-President
2.6 Secretary General
2.7 Auditor
2.8 Five (5) Directors
Petitioner Cesar G. Viola brought this action as barangay chairman of Brgy. 167, Zone 15,
District II, Manila against then Secretary of Interior and Local Government Rafael M. Alunan
III, Alex L. David, president/secretary general of the National Liga ng mga Barangay, and
Leonardo L. Angat, president of the City of Manila Liga ng mga Barangay, to restrain them
from carrying out the elections for the questioned positions on July 3, 1994.
Petitioner's contention is that the positions in question are in excess of those provided in
the Local Government Code (R.A. No. 7160), §493 of which mentions as elective positions
only those of president, vice president, and five members of the board of directors in each
chapter at the municipal, city, provincial, metropolitan political subdivision, and national
levels. Petitioner argues that, in providing for the positions of first, second and third vice
presidents and auditor for each chapter, §§1-2 of the Implementing Rules expand the
number of positions authorized in §493 of the Local Government Code in violation of the
principle that implementing rules and regulations cannot add or detract from the provisions
of the law they are designed to implement.
Although the elections are now over, the issues raised in this case are likely to arise again in
future elections of officers of the Liga ng mga Barangay. For one thing, doubt may be cast
on the validity of the acts of those elected. For another, this comes within the rule that
courts will decide a question which is otherwise moot and academic if it is "capable of
repetition, yet evading review."1
We will therefore proceed to the merits of this case.
Petitioner's contention that the additional positions in question have been created without
authority of law is untenable. To begin with, the creation of these positions was actually
made in the Constitution and By-laws of the Liga ng Mga Barangay, which was adopted by
the First Barangay National Assembly on January 11, 1994. This Constitution and By-laws
provide in pertinent parts:
ARTICLE VI
OFFICERS AND DIRECTORS
Sec. 1. Organization of Board of Directors of Local Chapters. — The chapters
shall directly elect their respective officers, namely, a president; executive
vice president; first, second, and third vice presidents; auditor; and five (5)
members to constitute the Board of Directors of their respective chapter.
Thereafter, the Board shall appoint a secretary, treasurer, and public
relations officer from among the five (5) members, with the rest serving as
Directors of Board. The Board may create such other positions as it may
deem necessary for the management of the chapter. Pending elections of the
president of the municipal, city, provincial and metropolitan chapters of the
Liga, the incumbent presidents of the ABCs of the municipality, city province
and Metropolitan Manila shall continue to act as presidents of the
corresponding Liga chapters, subject to the provisions of the Local
Government Code of 1991.
Sec. 2. Organization of Board of Directors of the National Liga. — The
National Liga shall be composed of the presidents of the provincial Liga
chapters, highly urbanized and independent component city chapters, and
the metropolitan chapter who shall directly elect their respective officers,
namely, a president, executive vice president; first, second, and third vice
president, auditor, secretary general; and five (5) members to constitute the
Board of Directors of the National Liga. Thereafter, the Board shall appoint a
 treasurer, secretary and public relations officers from among the five (5)
members with the rest serving as directors of the Board. The Board may
create such other positions as it may deem necessary for the management of
the National Liga. Pending election of Secretary-General, the incumbent
president of the Pambansang Katipunan ng mga Barangay (PKB) shall act as
the Secretary-General. The incumbent members of the Board of the PKB,
headed by the Secretary-General who continue to be presidents of the
respective chapters of the Liga to which they belong, shall constitute a
committee to exercise the powers and duties of the National Liga and with
the primordial responsibility of drafting a Constitution and By-Laws needed
for the organization of the Liga as a whole pursuant to the provisions of the
Local Government Code of 1991.
The post of executive vice president is in reality that of the vice president in §493 of the
LGC, so that the only additional positions created for each chapter in the Constitution and
By-laws are those of first, second and third vice presidents and auditor. Contrary to
petitioner's contention, the creation of the additional positions is authorized by the LGC
which provides as follows:
§493. Organization. The liga at the municipal, city, provincial, Metropolitan
political subdivision, and national levels directly elect a president, a vice-
president, and five (5) members of the board of directors. The board
shall appoint its secretary and treasurer and create such other positions as it
may deem necessary for the management of the chapter. A secretary-general
shall be elected form among the members of the national liga and shall be
charged with the overall operation of the liga on the national level. The
board shall coordinate the activities of the chapters of the liga. (emphasis
added)
This provision in fact requires — and not merely authorizes the board of directors to "create
such other positions as it may deem necessary for the management of the chapter" and
belies petitioner's claim that said provision (§493) limits the officers of a chapter to the
president, vice president, five members of the board of directors, secretary, and treasurer.
That Congress can delegate the power to create positions such as these has been settled by
our decisions upholding the validity of reorganization statutes authorizing the President of
the Philippines to create, abolish or merge officers in the executive department.2 The
question is whether, in making a delegation of this power to the board of directors of each
chapter of the Liga ng Mga Barangay, Congress provided a sufficient standard so that, in the
phrase of Justice Cardozo, administrative discretion may be "canalized within proper banks
that keep it from overflowing."3
Statutory provisions authorizing the President of the Philippines to make reforms and
changes in government owned or controlled corporations for the purpose of promoting
"simplicity, economy and efficiency"4 in their operations and empowering the Secretary of
Education to prescribe minimum standards of "adequate and efficient instruction" 5 in
private schools and colleges have been found to be sufficient for the purpose of valid
delegation. Judged by these cases, we hold that §493 of the Local Government Code, in
directing the board of directors of the liga to "create such other positions as may be
deemed necessary for the management of the chapter[s]," embodies a fairly intelligible
standard. There is no undue delegation of power by Congress.
Justice Davide contends in dissent, however, that "only the Board of Directors — and not
any other body — is vested with the power to create other positions as may be necessary
for the management of the chapter" and that, in any case, there is no showing that the
Barangay National Assembly was authorized to draft the Constitution and By-laws because
he is unable to find any creating it. The Barangay National Assembly is actually the
Pambansang Katipunan ng mga Barangay (PKB) referred to in Art. 210(f)(2)(3) of the Rules
and Regulations Implementing the Local Government Code of 1991, which Justice Davide's
dissent cites. It will be helpful to quote these provisions:
(2) A secretary-general shall be elected from among the members of the
national liga who shall be responsible for the overall operation of the liga.
Pending election of a secretary-general under this rule, the incumbent
president of the pambansang katipunan ng mga barangay shall act as the
secretary-general. The incumbent members of the board of the pambansang
katipunan ng mga barangay, headed by the secretary-general, who continue
to be presidents of the respective chapters of the liga to which they belong,
shall constitute a committee to exercise the powers and duties of the national
liga and draft or amend the constitution and by-laws of the national liga to
conform to the provisions of this Rule.
(3) The board of directors shall coordinate the activities of the various
chapters of the liga.
 (Emphasis added)
Pursuant to these provisions, pending the organization of the Liga ng mga Barangay, the
board of directors of the PKB was constituted into a committee, headed by the PKB
president, who acted as secretary general, with a two-fold mandate: "[I] exercise the
powers and duties of the national liga and [2] draft or amend the constitution and by-laws
of the national liga to conform to the provisions of this Rule." The board of directors of the
PKB, functioning in place of the board of directors of the National Liga ng mga Barangay,
exercised one of these powers of the National Liga board, namely, to create additional
positions which it deemed necessary for the management of a chapter. There is therefore
no basis for the claim that because the power to create additional positions in the Liga on
its chapters is vested only in the board of directors the exercise of this power by the
Barangay National Assembly is unauthorized and illegal and positions created are void. The
Barangay National Assembly was actually the Pambansang Katipunan ng mga Barangay or
PKB. Pending the organization of the Liga ng mga Barangay, it served as the Liga.
But it is contended in the dissent that "Section 493 of the LGC . . . vests the power to create
additional positions in the Board of Directors of the chapter." The implication seems to be
that the board of the directors at the national level did not have that power. It is necessary
to consider the organizational structure of the Liga ng mga Barangay as provided in the LGC,
as follows:
§492. Representation, Chapters, National Liga. — Every barangay shall be
represented in said liga by the punong barangay, or in his absence or
incapacity, by a sangguniang member duly elected for the purpose among its
members, who shall attend all meetings or deliberations called by the
different chapters of the liga.
The liga shall have chapters at the municipal, city, provincial and
metropolitan political subdivision levels.
The municipal and city chapters of the liga shall be composed of the
barangay representatives of municipal and city barangays, respectively. The
duly elected presidents of component municipal and city chapters shall
constitute the provincial chapter or the metropolitan political subdivision
chapter. The duly elected presidents of highly-urbanized cities, provincial
chapters, the Metropolitan Manila chapter and metropolitan political
subdivision chapters shall constitute the National Liga ng mga Barangay.
§493. Organization. — The liga at the municipal, city, provincial, metropolitan
political subdivision, and national levels directly elect a president, a vice-
president, and five (5) members of the board of directors. The board shall
appoint its secretary and treasurer and create such other positions as it may
deem necessary for the management of the chapter. A secretary-general
shall be elected from among the members of the national liga and shall be
charged with the overall operation of the liga on the national level. The
board shall coordinate the activities of the chapters of the liga.
(Emphasis added)
While the board of directors of a local chapter can create additional positions to provide for
the needs of the chapter, the board of directors of the National Liga must be deemed to
have the power to create additional positions not only for its management but also for that
of all the chapters at the municipal, city, provincial and metropolitan political subdivision
levels. Otherwise the National Liga would be no different from the local chapters. There
would then be only so many local chapters without a national one, when what is
contemplated in the above-quoted provisions of the LGC is that there should be one Liga ng
mga Barangay with local chapters at all levels of local government units. The dissent, by
denying to the board of directors at the National Liga the power to create additional
positions in the local chapters, would reduce such board to a board of a local chapter. The
fact is that §493 grants the power to create positions not only to the boards of the local
chapters but to the board of the Liga at the national level as well.
Indeed what was done in the Constitution and By-laws of their liga was to create additional
positions in each chapters, whether national or local, without however precluding the
boards of directors of the chapters as well as that of the national liga from creating other
positions for their peculiar needs. The creation by the board of the National Liga of the
positions of first, second and third vice presidents, auditors and public relations officers was
intended to provide uniform officers for the various chapters in line with the mandate in
Art. 210(g)(2) of the Rules and Regulations Implementing the Local Government Code of
1991 to the Barangay National Assembly to "formulate uniform constitution and by-laws
applicable to the national liga and all local chapters." The various chapters could have
different minor officers depending on their local needs, but they must have the same major
elective officers, meaning to say, the additional vice-presidents and auditors.
The dissent further argues that, following the rule of ejusdem generis, what may be created
as additional positions can only be appointive ones because the positions of secretary and
treasurer are appointive positions. The rule might apply if what is involved is
the appointment of other officers. But what we are dealing with in this case is
the creation of additional positions. Section 493 actually gives the board the power to
"[1] appoint its secretary and treasurer and [2] create such other positions as it may deem
necessary for the management of the chapter." The additional positions to be created need
not therefore be appointive positions.
Nor is it correct to say that §493, in providing that additional positions to be created must
be those which are "deemed necessary for the management of the chapter," contemplates
only appointive positions. Management positions are not necessarily limited to appointive
positions. Elective officers, such as the president and vice-president, can be expected to be
involved in the general administration or management of the chapter. Hence, the creation
of other elective positions which may be deemed necessary for the management of the
chapter is within the purview of §493.
WHEREFORE, the petition for prohibition is DISMISSED for lack of merit.
SO ORDERED.
G.R. No. 192935 December 7, 2010
LOUIS "BAROK" C. BIRAOGO, Petitioner,
vs.
THE PHILIPPINE TRUTH COMMISSION OF 2010, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 193036
REP. EDCEL C. LAGMAN, REP. RODOLFO B. ALBANO, JR., REP. SIMEON A.
DATUMANONG, and REP. ORLANDO B. FUA, SR., Petitioners,
vs.
EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR. and DEPARTMENT OF BUDGET AND
MANAGEMENT SECRETARY FLORENCIO B. ABAD, Respondents.
DECISION
MENDOZA, J.:
When the judiciary mediates to allocate constitutional boundaries, it does not assert any
superiority over the other departments; it does not in reality nullify or invalidate an act of
the legislature, but only asserts the solemn and sacred obligation assigned to it by the
Constitution to determine conflicting claims of authority under the Constitution and to
establish for the parties in an actual controversy the rights which that instrument secures
and guarantees to them.
--- Justice Jose P. Laurel1
The role of the Constitution cannot be overlooked. It is through the Constitution that the
fundamental powers of government are established, limited and defined, and by which
these powers are distributed among the several departments.2 The Constitution is the basic
and paramount law to which all other laws must conform and to which all persons,
including the highest officials of the land, must defer.3 Constitutional doctrines must remain
steadfast no matter what may be the tides of time. It cannot be simply made to sway and
accommodate the call of situations and much more tailor itself to the whims and caprices of
government and the people who run it.4
For consideration before the Court are two consolidated cases5 both of which essentially
assail the validity and constitutionality of Executive Order No. 1, dated July 30, 2010,
entitled "Creating the Philippine Truth Commission of 2010."
The first case is G.R. No. 192935, a special civil action for prohibition instituted by petitioner
Louis Biraogo (Biraogo) in his capacity as a citizen and taxpayer. Biraogo assails Executive
Order No. 1 for being violative of the legislative power of Congress under Section 1, Article
VI of the Constitution6 as it usurps the constitutional authority of the legislature to create a
public office and to appropriate funds therefor.7
The second case, G.R. No. 193036, is a special civil action for certiorari and prohibition filed
by petitioners Edcel C. Lagman, Rodolfo B. Albano Jr., Simeon A. Datumanong, and Orlando
B. Fua, Sr. (petitioners-legislators) as incumbent members of the House of Representatives.
The genesis of the foregoing cases can be traced to the events prior to the historic May
2010 elections, when then Senator Benigno Simeon Aquino III declared his staunch
condemnation of graft and corruption with his slogan, "Kung walang corrupt, walang
mahirap." The Filipino people, convinced of his sincerity and of his ability to carry out this
noble objective, catapulted the good senator to the presidency.
To transform his campaign slogan into reality, President Aquino found a need for a special
body to investigate reported cases of graft and corruption allegedly committed during the
previous administration.
Thus, at the dawn of his administration, the President on July 30, 2010, signed Executive
Order No. 1 establishing the Philippine Truth Commission of 2010 (Truth Commission).
Pertinent provisions of said executive order read:
EXECUTIVE ORDER NO. 1
CREATING THE PHILIPPINE TRUTH COMMISSION OF 2010
WHEREAS, Article XI, Section 1 of the 1987 Constitution of the Philippines solemnly
enshrines the principle that a public office is a public trust and mandates that public officers
and employees, who are servants of the people, must at all times be accountable to the
latter, serve them with utmost responsibility, integrity, loyalty and efficiency, act with
patriotism and justice, and lead modest lives;
WHEREAS, corruption is among the most despicable acts of defiance of this principle and
notorious violation of this mandate;
WHEREAS, corruption is an evil and scourge which seriously affects the political, economic,
and social life of a nation; in a very special way it inflicts untold misfortune and misery on
the poor, the marginalized and underprivileged sector of society;
WHEREAS, corruption in the Philippines has reached very alarming levels, and undermined
the people’s trust and confidence in the Government and its institutions;
WHEREAS, there is an urgent call for the determination of the truth regarding certain
reports of large scale graft and corruption in the government and to put a closure to them
by the filing of the appropriate cases against those involved, if warranted, and to deter
others from committing the evil, restore the people’s faith and confidence in the
Government and in their public servants;
WHEREAS, the President’s battlecry during his campaign for the Presidency in the last
elections "kung walang corrupt, walang mahirap" expresses a solemn pledge that if elected,
he would end corruption and the evil it breeds;
WHEREAS, there is a need for a separate body dedicated solely to investigating and finding
out the truth concerning the reported cases of graft and corruption during the previous
administration, and which will recommend the prosecution of the offenders and secure
justice for all;
WHEREAS, Book III, Chapter 10, Section 31 of Executive Order No. 292, otherwise known as
the Revised Administrative Code of the Philippines, gives the President the continuing
authority to reorganize the Office of the President.
NOW, THEREFORE, I, BENIGNO SIMEON AQUINO III, President of the Republic of the
Philippines, by virtue of the powers vested in me by law, do hereby order:
SECTION 1. Creation of a Commission. – There is hereby created the PHILIPPINE TRUTH
COMMISSION, hereinafter referred to as the "COMMISSION," which shall primarily seek
and find the truth on, and toward this end, investigate reports of graft and corruption of
such scale and magnitude that shock and offend the moral and ethical sensibilities of the
people, committed by public officers and employees, their co-principals, accomplices and
accessories from the private sector, if any, during the previous administration; and
thereafter recommend the appropriate action or measure to be taken thereon to ensure
that the full measure of justice shall be served without fear or favor.
The Commission shall be composed of a Chairman and four (4) members who will act as an
independent collegial body.
SECTION 2. Powers and Functions. – The Commission, which shall have all the powers of an
investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987, is
primarily tasked to conduct a thorough fact-finding investigation of reported cases of graft
and corruption referred to in Section 1, involving third level public officers and higher, their
co-principals, accomplices and accessories from the private sector, if any, during the
previous administration and thereafter submit its finding and recommendations to the
President, Congress and the Ombudsman.
In particular, it shall:
a) Identify and determine the reported cases of such graft and corruption which it
will investigate;
b) Collect, receive, review and evaluate evidence related to or regarding the cases of
large scale corruption which it has chosen to investigate, and to this end require any
agency, official or employee of the Executive Branch, including government-owned
or controlled corporations, to produce documents, books, records and other papers;
c) Upon proper request or representation, obtain information and documents from
the Senate and the House of Representatives records of investigations conducted by
committees thereof relating to matters or subjects being investigated by the
Commission;
d) Upon proper request and representation, obtain information from the courts,
including the Sandiganbayan and the Office of the Court Administrator, information
or documents in respect to corruption cases filed with the Sandiganbayan or the
regular courts, as the case may be;
e) Invite or subpoena witnesses and take their testimonies and for that purpose,
administer oaths or affirmations as the case may be;
f) Recommend, in cases where there is a need to utilize any person as a state
witness to ensure that the ends of justice be fully served, that such person who
qualifies as a state witness under the Revised Rules of Court of the Philippines be
admitted for that purpose;
g) Turn over from time to time, for expeditious prosecution, to the appropriate
prosecutorial authorities, by means of a special or interim report and
recommendation, all evidence on corruption of public officers and employees and
their private sector co-principals, accomplices or accessories, if any, when in the
course of its investigation the Commission finds that there is reasonable ground to
believe that they are liable for graft and corruption under pertinent applicable laws;
h) Call upon any government investigative or prosecutorial agency such as the
Department of Justice or any of the agencies under it, and the Presidential Anti-Graft
Commission, for such assistance and cooperation as it may require in the discharge
of its functions and duties;
i) Engage or contract the services of resource persons, professionals and other
personnel determined by it as necessary to carry out its mandate;
j) Promulgate its rules and regulations or rules of procedure it deems necessary to
effectively and efficiently carry out the objectives of this Executive Order and to
ensure the orderly conduct of its investigations, proceedings and hearings, including
the presentation of evidence;
k) Exercise such other acts incident to or are appropriate and necessary in
connection with the objectives and purposes of this Order.
SECTION 3. Staffing Requirements. – x x x.
SECTION 4. Detail of Employees. – x x x.
SECTION 5. Engagement of Experts. – x x x
SECTION 6. Conduct of Proceedings. – x x x.
SECTION 7. Right to Counsel of Witnesses/Resource Persons. – x x x.
SECTION 8. Protection of Witnesses/Resource Persons. – x x x.
SECTION 9. Refusal to Obey Subpoena, Take Oath or Give Testimony. – Any government
official or personnel who, without lawful excuse, fails to appear upon subpoena issued by
the Commission or who, appearing before the Commission refuses to take oath or
affirmation, give testimony or produce documents for inspection, when required, shall be
subject to administrative disciplinary action. Any private person who does the same may be
dealt with in accordance with law.
SECTION 10. Duty to Extend Assistance to the Commission. – x x x.
SECTION 11. Budget for the Commission. – The Office of the President shall provide the
necessary funds for the Commission to ensure that it can exercise its powers, execute its
functions, and perform its duties and responsibilities as effectively, efficiently, and
expeditiously as possible.
SECTION 12. Office. – x x x.
SECTION 13. Furniture/Equipment. – x x x.
SECTION 14. Term of the Commission. – The Commission shall accomplish its mission on or
before December 31, 2012.
SECTION 15. Publication of Final Report. – x x x.
SECTION 16. Transfer of Records and Facilities of the Commission. – x x x.
SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the
President there is a need to expand the mandate of the Commission as defined in Section 1
hereof to include the investigation of cases and instances of graft and corruption during the
prior administrations, such mandate may be so extended accordingly by way of a
supplemental Executive Order.
SECTION 18. Separability Clause. If any provision of this Order is declared unconstitutional,
the same shall not affect the validity and effectivity of the other provisions hereof.
SECTION 19. Effectivity. – This Executive Order shall take effect immediately.
DONE in the City of Manila, Philippines, this 30th day of July 2010.
(SGD.) BENIGNO S. AQUINO III
By the President:
(SGD.) PAQUITO N. OCHOA, JR.
Executive Secretary
Nature of the Truth Commission
As can be gleaned from the above-quoted provisions, the Philippine Truth Commission
(PTC) is a mere ad hoc body formed under the Office of the President with the primary task
to investigate reports of graft and corruption committed by third-level public officers and
employees, their co-principals, accomplices and accessories during the previous
administration, and thereafter to submit its finding and recommendations to the President,
Congress and the Ombudsman. Though it has been described as an "independent collegial
body," it is essentially an entity within the Office of the President Proper and subject to his
control. Doubtless, it constitutes a public office, as an ad hoc body is one. 8
To accomplish its task, the PTC shall have all the powers of an investigative body under
Section 37, Chapter 9, Book I of the Administrative Code of 1987. It is not, however, a quasi-
judicial body as it cannot adjudicate, arbitrate, resolve, settle, or render awards in disputes
between contending parties. All it can do is gather, collect and assess evidence of graft and
corruption and make recommendations. It may have subpoena powers but it has no power
to cite people in contempt, much less order their arrest. Although it is a fact-finding body, it
cannot determine from such facts if probable cause exists as to warrant the filing of an
information in our courts of law. Needless to state, it cannot impose criminal, civil or
administrative penalties or sanctions.
The PTC is different from the truth commissions in other countries which have been created
as official, transitory and non-judicial fact-finding bodies "to establish the facts and context
of serious violations of human rights or of international humanitarian law in a country’s
past."9 They are usually established by states emerging from periods of internal unrest, civil
strife or authoritarianism to serve as mechanisms for transitional justice.
Truth commissions have been described as bodies that share the following characteristics:
(1) they examine only past events; (2) they investigate patterns of abuse committed over a
period of time, as opposed to a particular event; (3) they are temporary bodies that finish
their work with the submission of a report containing conclusions and recommendations;
and (4) they are officially sanctioned, authorized or empowered by the
State.10 "Commission’s members are usually empowered to conduct research, support
victims, and propose policy recommendations to prevent recurrence of crimes. Through
their investigations, the commissions may aim to discover and learn more about past
abuses, or formally acknowledge them. They may aim to prepare the way for prosecutions
and recommend institutional reforms."11
Thus, their main goals range from retribution to reconciliation. The Nuremburg and Tokyo
war crime tribunals are examples of a retributory or vindicatory body set up to try and
punish those responsible for crimes against humanity. A form of a reconciliatory tribunal is
the Truth and Reconciliation Commission of South Africa, the principal function of which
was to heal the wounds of past violence and to prevent future conflict by providing a
cathartic experience for victims.
The PTC is a far cry from South Africa’s model. The latter placed more emphasis on
reconciliation than on judicial retribution, while the marching order of the PTC is the
identification and punishment of perpetrators. As one writer12puts it:
The order ruled out reconciliation. It translated the Draconian code spelled out by Aquino in
his inaugural speech: "To those who talk about reconciliation, if they mean that they would
like us to simply forget about the wrongs that they have committed in the past, we have
this to say: There can be no reconciliation without justice. When we allow crimes to go
unpunished, we give consent to their occurring over and over again."
The Thrusts of the Petitions
Barely a month after the issuance of Executive Order No. 1, the petitioners asked the Court
to declare it unconstitutional and to enjoin the PTC from performing its functions. A perusal
of the arguments of the petitioners in both cases shows that they are essentially the same.
The petitioners-legislators summarized them in the following manner:
(a) E.O. No. 1 violates the separation of powers as it arrogates the power of the
Congress to create a public office and appropriate funds for its operation.
(b) The provision of Book III, Chapter 10, Section 31 of the Administrative Code of
1987 cannot legitimize E.O. No. 1 because the delegated authority of the President
to structurally reorganize the Office of the President to achieve economy, simplicity
and efficiency does not include the power to create an entirely new public office
which was hitherto inexistent like the "Truth Commission."
(c) E.O. No. 1 illegally amended the Constitution and pertinent statutes when it
vested the "Truth Commission" with quasi-judicial powers duplicating, if not
superseding, those of the Office of the Ombudsman created under the 1987
Constitution and the Department of Justice created under the Administrative Code
of 1987.
(d) E.O. No. 1 violates the equal protection clause as it selectively targets for
investigation and prosecution officials and personnel of the previous administration
as if corruption is their peculiar species even as it excludes those of the other
administrations, past and present, who may be indictable.
(e) The creation of the "Philippine Truth Commission of 2010" violates the consistent
and general international practice of four decades wherein States constitute truth
commissions to exclusively investigate human rights violations, which customary
practice forms part of the generally accepted principles of international law which
the Philippines is mandated to adhere to pursuant to the Declaration of Principles
enshrined in the Constitution.
(f) The creation of the "Truth Commission" is an exercise in futility, an adventure in
partisan hostility, a launching pad for trial/conviction by publicity and a mere
populist propaganda to mistakenly impress the people that widespread poverty will
altogether vanish if corruption is eliminated without even addressing the other
major causes of poverty.
(g) The mere fact that previous commissions were not constitutionally challenged is
of no moment because neither laches nor estoppel can bar an eventual question on
the constitutionality and validity of an executive issuance or even a statute." 13
In their Consolidated Comment,14 the respondents, through the Office of the Solicitor
General (OSG), essentially questioned the legal standing of petitioners and defended the
assailed executive order with the following arguments:
1] E.O. No. 1 does not arrogate the powers of Congress to create a public office
because the President’s executive power and power of control necessarily include
the inherent power to conduct investigations to ensure that laws are faithfully
executed and that, in any event, the Constitution, Revised Administrative Code of
1987 (E.O. No. 292), 15 Presidential Decree (P.D.) No. 141616 (as amended by P.D. No.
1772), R.A. No. 9970,17 and settled jurisprudence that authorize the President to
create or form such bodies.
 2] E.O. No. 1 does not usurp the power of Congress to appropriate funds because
there is no appropriation but a mere allocation of funds already appropriated by
Congress.
3] The Truth Commission does not duplicate or supersede the functions of the Office
of the Ombudsman (Ombudsman) and the Department of Justice (DOJ), because it is
a fact-finding body and not a quasi-judicial body and its functions do not duplicate,
supplant or erode the latter’s jurisdiction.
4] The Truth Commission does not violate the equal protection clause because it was
validly created for laudable purposes.
The OSG then points to the continued existence and validity of other executive orders and
presidential issuances creating similar bodies to justify the creation of the PTC such as
Presidential Complaint and Action Commission (PCAC) by President Ramon B. Magsaysay,
Presidential Committee on Administrative Performance Efficiency (PCAPE) by President
Carlos P. Garcia and Presidential Agency on Reform and Government Operations (PARGO)by
President Ferdinand E. Marcos.18
From the petitions, pleadings, transcripts, and memoranda, the following are the principal
issues to be resolved:
1. Whether or not the petitioners have the legal standing to file their respective
petitions and question Executive Order No. 1;
2. Whether or not Executive Order No. 1 violates the principle of separation of
powers by usurping the powers of Congress to create and to appropriate funds for
public offices, agencies and commissions;
3. Whether or not Executive Order No. 1 supplants the powers of the Ombudsman
and the DOJ;
4. Whether or not Executive Order No. 1 violates the equal protection clause; and
5. Whether or not petitioners are entitled to injunctive relief.
Essential requisites for judicial review
Before proceeding to resolve the issue of the constitutionality of Executive Order No. 1, the
Court needs to ascertain whether the requisites for a valid exercise of its power of judicial
review are present.
Like almost all powers conferred by the Constitution, the power of judicial review is subject
to limitations, to wit: (1) there must be an actual case or controversy calling for the exercise
of judicial power; (2) the person challenging the act must have the standing to question the
validity of the subject act or issuance; otherwise stated, he must have a personal and
substantial interest in the case such that he has sustained, or will sustain, direct injury as a
result of its enforcement; (3) the question of constitutionality must be raised at the earliest
opportunity; and (4) the issue of constitutionality must be the very lis mota of the case.19
Among all these limitations, only the legal standing of the petitioners has been put at issue.
Legal Standing of the Petitioners
The OSG attacks the legal personality of the petitioners-legislators to file their petition for
failure to demonstrate their personal stake in the outcome of the case. It argues that the
petitioners have not shown that they have sustained or are in danger of sustaining any
personal injury attributable to the creation of the PTC. Not claiming to be the subject of the
commission’s investigations, petitioners will not sustain injury in its creation or as a result of
its proceedings.20
The Court disagrees with the OSG in questioning the legal standing of the petitioners-
legislators to assail Executive Order No. 1. Evidently, their petition primarily invokes
usurpation of the power of the Congress as a body to which they belong as members. This
certainly justifies their resolve to take the cudgels for Congress as an institution and present
the complaints on the usurpation of their power and rights as members of the legislature
before the Court. As held in Philippine Constitution Association v. Enriquez, 21
To the extent the powers of Congress are impaired, so is the power of each member
thereof, since his office confers a right to participate in the exercise of the powers of that
institution.
An act of the Executive which injures the institution of Congress causes a derivative but
nonetheless substantial injury, which can be questioned by a member of Congress. In such a
case, any member of Congress can have a resort to the courts.
Indeed, legislators have a legal standing to see to it that the prerogative, powers and
privileges vested by the Constitution in their office remain inviolate. Thus, they are allowed
to question the validity of any official action which, to their mind, infringes on their
prerogatives as legislators.22
With regard to Biraogo, the OSG argues that, as a taxpayer, he has no standing to question
the creation of the PTC and the budget for its operations.23 It emphasizes that the funds to
be used for the creation and operation of the commission are to be taken from those funds
already appropriated by Congress. Thus, the allocation and disbursement of funds for the
commission will not entail congressional action but will simply be an exercise of the
President’s power over contingent funds.
As correctly pointed out by the OSG, Biraogo has not shown that he sustained, or is in
danger of sustaining, any personal and direct injury attributable to the implementation of
Executive Order No. 1. Nowhere in his petition is an assertion of a clear right that may
justify his clamor for the Court to exercise judicial power and to wield the axe over
presidential issuances in defense of the Constitution. The case of David v.
Arroyo24 explained the deep-seated rules on locus standi. Thus:
Locus standi is defined as "a right of appearance in a court of justice on a given question." In
private suits, standing is governed by the "real-parties-in interest" rule as contained in
Section 2, Rule 3 of the 1997 Rules of Civil Procedure, as amended. It provides that "every
action must be prosecuted or defended in the name of the real party in interest."
Accordingly, the "real-party-in interest" is "the party who stands to be benefited or injured
by the judgment in the suit or the party entitled to the avails of the suit." Succinctly put, the
plaintiff’s standing is based on his own right to the relief sought.
The difficulty of determining locus standi arises in public suits. Here, the plaintiff who
asserts a "public right" in assailing an allegedly illegal official action, does so as a
representative of the general public. He may be a person who is affected no differently
from any other person. He could be suing as a "stranger," or in the category of a "citizen,"
or ‘taxpayer." In either case, he has to adequately show that he is entitled to seek judicial
protection. In other words, he has to make out a sufficient interest in the vindication of the
public order and the securing of relief as a "citizen" or "taxpayer.
Case law in most jurisdictions now allows both "citizen" and "taxpayer" standing in public
actions. The distinction was first laid down in Beauchamp v. Silk, where it was held that the
plaintiff in a taxpayer’s suit is in a different category from the plaintiff in a citizen’s suit. In
the former, the plaintiff is affected by the expenditure of public funds, while in the latter, he
is but the mere instrument of the public concern. As held by the New York Supreme Court
in People ex rel Case v. Collins: "In matter of mere public right, however…the people are the
real parties…It is at least the right, if not the duty, of every citizen to interfere and see that a
public offence be properly pursued and punished, and that a public grievance be remedied."
With respect to taxpayer’s suits, Terr v. Jordan held that "the right of a citizen and a
taxpayer to maintain an action in courts to restrain the unlawful use of public funds to his
injury cannot be denied."
However, to prevent just about any person from seeking judicial interference in any official
policy or act with which he disagreed with, and thus hinders the activities of governmental
agencies engaged in public service, the United State Supreme Court laid down the more
stringent "direct injury" test in Ex Parte Levitt, later reaffirmed in Tileston v. Ullman. The
same Court ruled that for a private individual to invoke the judicial power to determine the
validity of an executive or legislative action, he must show that he has sustained a direct
injury as a result of that action, and it is not sufficient that he has a general interest
common to all members of the public.
This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera, it held that
the person who impugns the validity of a statute must have "a personal and substantial
interest in the case such that he has sustained, or will sustain direct injury as a result."
The Vera doctrine was upheld in a litany of cases, such as, Custodio v. President of the
Senate, Manila Race Horse Trainers’ Association v. De la Fuente, Pascual v. Secretary of
Public Works and Anti-Chinese League of the Philippines v. Felix. [Emphases included.
Citations omitted]
Notwithstanding, the Court leans on the doctrine that "the rule on standing is a matter of
procedure, hence, can be relaxed for nontraditional plaintiffs like ordinary citizens,
taxpayers, and legislators when the public interest so requires, such as when the matter is
of transcendental importance, of overreaching significance to society, or of paramount
public interest."25
Thus, in Coconut Oil Refiners Association, Inc. v. Torres,26 the Court held that in cases of
paramount importance where serious constitutional questions are involved, the standing
requirements may be relaxed and a suit may be allowed to prosper even where there is no
direct injury to the party claiming the right of judicial review. In the first Emergency Powers
Cases,27 ordinary citizens and taxpayers were allowed to question the constitutionality of
several executive orders although they had only an indirect and general interest shared in
common with the public.
The OSG claims that the determinants of transcendental importance 28 laid down in CREBA v.
ERC and Meralco29are non-existent in this case. The Court, however, finds reason in
Biraogo’s assertion that the petition covers matters of transcendental importance to justify
the exercise of jurisdiction by the Court. There are constitutional issues in the petition
which deserve the attention of this Court in view of their seriousness, novelty and weight as
precedents. Where the issues are of transcendental and paramount importance not only to
the public but also to the Bench and the Bar, they should be resolved for the guidance of
all.30 Undoubtedly, the Filipino people are more than interested to know the status of the
President’s first effort to bring about a promised change to the country. The Court takes
cognizance of the petition not due to overwhelming political undertones that clothe the
issue in the eyes of the public, but because the Court stands firm in its oath to perform its
constitutional duty to settle legal controversies with overreaching significance to society.
Power of the President to Create the Truth Commission
In his memorandum in G.R. No. 192935, Biraogo asserts that the Truth Commission is a
public office and not merely an adjunct body of the Office of the President.31 Thus, in order
that the President may create a public office he must be empowered by the Constitution, a
statute or an authorization vested in him by law. According to petitioner, such power
cannot be presumed32 since there is no provision in the Constitution or any specific law that
authorizes the President to create a truth commission.33 He adds that Section 31 of the
Administrative Code of 1987, granting the President the continuing authority to reorganize
his office, cannot serve as basis for the creation of a truth commission considering the
aforesaid provision merely uses verbs such as "reorganize," "transfer," "consolidate,"
"merge," and "abolish."34 Insofar as it vests in the President the plenary power to
reorganize the Office of the President to the extent of creating a public office, Section 31 is
inconsistent with the principle of separation of powers enshrined in the Constitution and
must be deemed repealed upon the effectivity thereof.35
Similarly, in G.R. No. 193036, petitioners-legislators argue that the creation of a public office
lies within the province of Congress and not with the executive branch of government. They
maintain that the delegated authority of the President to reorganize under Section 31 of the
Revised Administrative Code: 1) does not permit the President to create a public office,
much less a truth commission; 2) is limited to the reorganization of the administrative
structure of the Office of the President; 3) is limited to the restructuring of the internal
organs of the Office of the President Proper, transfer of functions and transfer of agencies;
and 4) only to achieve simplicity, economy and efficiency.36Such continuing authority of the
President to reorganize his office is limited, and by issuing Executive Order No. 1, the
President overstepped the limits of this delegated authority.
The OSG counters that there is nothing exclusively legislative about the creation by the
President of a fact-finding body such as a truth commission. Pointing to numerous offices
created by past presidents, it argues that the authority of the President to create public
offices within the Office of the President Proper has long been recognized. 37 According to
the OSG, the Executive, just like the other two branches of government, possesses the
inherent authority to create fact-finding committees to assist it in the performance of its
constitutionally mandated functions and in the exercise of its administrative
functions.38 This power, as the OSG explains it, is but an adjunct of the plenary powers
wielded by the President under Section 1 and his power of control under Section 17, both of
Article VII of the Constitution.39
It contends that the President is necessarily vested with the power to conduct fact-finding
investigations, pursuant to his duty to ensure that all laws are enforced by public officials
and employees of his department and in the exercise of his authority to assume directly the
functions of the executive department, bureau and office, or interfere with the discretion of
his officials.40 The power of the President to investigate is not limited to the exercise of his
power of control over his subordinates in the executive branch, but extends further in the
exercise of his other powers, such as his power to discipline subordinates, 41 his power for
rule making, adjudication and licensing purposes42 and in order to be informed on matters
which he is entitled to know.43
The OSG also cites the recent case of Banda v. Ermita,44 where it was held that the President
has the power to reorganize the offices and agencies in the executive department in line
with his constitutionally granted power of control and by virtue of a valid delegation of the
legislative power to reorganize executive offices under existing statutes.
Thus, the OSG concludes that the power of control necessarily includes the power to create
offices. For the OSG, the President may create the PTC in order to, among others, put a
closure to the reported large scale graft and corruption in the government. 45
The question, therefore, before the Court is this: Does the creation of the PTC fall within the
ambit of the power to reorganize as expressed in Section 31 of the Revised Administrative
Code? Section 31 contemplates "reorganization" as limited by the following functional and
structural lines: (1) restructuring the internal organization of the Office of the President
Proper by abolishing, consolidating or merging units thereof or transferring functions from
one unit to another; (2) transferring any function under the Office of the President to any
other Department/Agency or vice versa; or (3) transferring any agency under the Office of
the President to any other Department/Agency or vice versa. Clearly, the provision refers to
reduction of personnel, consolidation of offices, or abolition thereof by reason of economy
or redundancy of functions. These point to situations where a body or an office is already
existent but a modification or alteration thereof has to be effected. The creation of an office
is nowhere mentioned, much less envisioned in said provision. Accordingly, the answer to
the question is in the negative.
To say that the PTC is borne out of a restructuring of the Office of the President under
Section 31 is a misplaced supposition, even in the plainest meaning attributable to the term
"restructure"– an "alteration of an existing structure." Evidently, the PTC was not part of the
structure of the Office of the President prior to the enactment of Executive Order No. 1. As
held in Buklod ng Kawaning EIIB v. Hon. Executive Secretary,46
But of course, the list of legal basis authorizing the President to reorganize any department
or agency in the executive branch does not have to end here. We must not lose sight of the
very source of the power – that which constitutes an express grant of power. Under Section
31, Book III of Executive Order No. 292 (otherwise known as the Administrative Code of
1987), "the President, subject to the policy in the Executive Office and in order to achieve
simplicity, economy and efficiency, shall have the continuing authority to reorganize the
administrative structure of the Office of the President." For this purpose, he may transfer
the functions of other Departments or Agencies to the Office of the President. In
Canonizado v. Aguirre [323 SCRA 312 (2000)], we ruled that reorganization "involves the
reduction of personnel, consolidation of offices, or abolition thereof by reason of economy
or redundancy of functions." It takes place when there is an alteration of the existing
structure of government offices or units therein, including the lines of control, authority and
responsibility between them. The EIIB is a bureau attached to the Department of Finance. It
falls under the Office of the President. Hence, it is subject to the President’s continuing
authority to reorganize. [Emphasis Supplied]
In the same vein, the creation of the PTC is not justified by the President’s power of control.
Control is essentially the power to alter or modify or nullify or set aside what a subordinate
officer had done in the performance of his duties and to substitute the judgment of the
former with that of the latter.47 Clearly, the power of control is entirely different from the
power to create public offices. The former is inherent in the Executive, while the latter finds
basis from either a valid delegation from Congress, or his inherent duty to faithfully execute
the laws.
The question is this, is there a valid delegation of power from Congress, empowering the
President to create a public office?
According to the OSG, the power to create a truth commission pursuant to the above
provision finds statutory basis under P.D. 1416, as amended by P.D. No. 1772.48 The said law
granted the President the continuing authority to reorganize the national government,
including the power to group, consolidate bureaus and agencies, to abolish offices, to
transfer functions, to create and classify functions, services and activities, transfer
appropriations, and to standardize salaries and materials. This decree, in relation to Section
20, Title I, Book III of E.O. 292 has been invoked in several cases such as Larin v. Executive
Secretary.49
The Court, however, declines to recognize P.D. No. 1416 as a justification for the President
to create a public office. Said decree is already stale, anachronistic and inoperable. P.D. No.
1416 was a delegation to then President Marcos of the authority to reorganize the
administrative structure of the national government including the power to create offices
and transfer appropriations pursuant to one of the purposes of the decree, embodied in its
last "Whereas" clause:
WHEREAS, the transition towards the parliamentary form of government will necessitate
flexibility in the organization of the national government.
Clearly, as it was only for the purpose of providing manageability and resiliency during the
interim, P.D. No. 1416, as amended by P.D. No. 1772, became functus oficio upon the
convening of the First Congress, as expressly provided in Section 6, Article XVIII of the 1987
Constitution. In fact, even the Solicitor General agrees with this view. Thus:
ASSOCIATE JUSTICE CARPIO: Because P.D. 1416 was enacted was the last whereas clause of
P.D. 1416 says "it was enacted to prepare the transition from presidential to parliamentary.
Now, in a parliamentary form of government, the legislative and executive powers are
fused, correct?
SOLICITOR GENERAL CADIZ: Yes, Your Honor.
ASSOCIATE JUSTICE CARPIO: That is why, that P.D. 1416 was issued. Now would you agree
with me that P.D. 1416 should not be considered effective anymore upon the promulgation,
adoption, ratification of the 1987 Constitution.
SOLICITOR GENERAL CADIZ: Not the whole of P.D. [No.] 1416, Your Honor.
ASSOCIATE JUSTICE CARPIO: The power of the President to reorganize the entire National
Government is deemed repealed, at least, upon the adoption of the 1987 Constitution,
correct.
SOLICITOR GENERAL CADIZ: Yes, Your Honor.50
While the power to create a truth commission cannot pass muster on the basis of P.D. No.
1416 as amended by P.D. No. 1772, the creation of the PTC finds justification under Section
17, Article VII of the Constitution, imposing upon the President the duty to ensure that the
laws are faithfully executed. Section 17 reads:
Section 17. The President shall have control of all the executive departments, bureaus, and
offices. He shall ensure that the laws be faithfully executed. (Emphasis supplied).
As correctly pointed out by the respondents, the allocation of power in the three principal
branches of government is a grant of all powers inherent in them. The President’s power to
conduct investigations to aid him in ensuring the faithful execution of laws – in this case,
fundamental laws on public accountability and transparency – is inherent in the President’s
powers as the Chief Executive. That the authority of the President to conduct investigations
and to create bodies to execute this power is not explicitly mentioned in the Constitution or
in statutes does not mean that he is bereft of such authority.51 As explained in the landmark
case of Marcos v. Manglapus:52
x x x. The 1987 Constitution, however, brought back the presidential system of government
and restored the separation of legislative, executive and judicial powers by their actual
distribution among three distinct branches of government with provision for checks and
balances.
It would not be accurate, however, to state that "executive power" is the power to enforce
the laws, for the President is head of state as well as head of government and whatever
powers inhere in such positions pertain to the office unless the Constitution itself withholds
it. Furthermore, the Constitution itself provides that the execution of the laws is only one of
the powers of the President. It also grants the President other powers that do not involve
the execution of any provision of law, e.g., his power over the country's foreign relations.
On these premises, we hold the view that although the 1987 Constitution imposes
limitations on the exercise of specific powers of the President, it maintains intact what is
traditionally considered as within the scope of "executive power." Corollarily, the powers of
the President cannot be said to be limited only to the specific powers enumerated in the
Constitution. In other words, executive power is more than the sum of specific powers so
enumerated.
It has been advanced that whatever power inherent in the government that is neither
legislative nor judicial has to be executive. x x x.
Indeed, the Executive is given much leeway in ensuring that our laws are faithfully
executed. As stated above, the powers of the President are not limited to those specific
powers under the Constitution.53 One of the recognized powers of the President granted
pursuant to this constitutionally-mandated duty is the power to create ad hoc committees.
This flows from the obvious need to ascertain facts and determine if laws have been
faithfully executed. Thus, in Department of Health v. Camposano,54 the authority of the
President to issue Administrative Order No. 298, creating an investigative committee to look
into the administrative charges filed against the employees of the Department of Health for
the anomalous purchase of medicines was upheld. In said case, it was ruled:
The Chief Executive’s power to create the Ad hoc Investigating Committee cannot be
doubted. Having been constitutionally granted full control of the Executive Department, to
which respondents belong, the President has the obligation to ensure that all executive
officials and employees faithfully comply with the law. With AO 298 as mandate, the legality
of the investigation is sustained. Such validity is not affected by the fact that the
investigating team and the PCAGC had the same composition, or that the former used the
offices and facilities of the latter in conducting the inquiry. [Emphasis supplied]
It should be stressed that the purpose of allowing ad hoc investigating bodies to exist is to
allow an inquiry into matters which the President is entitled to know so that he can be
properly advised and guided in the performance of his duties relative to the execution and
enforcement of the laws of the land. And if history is to be revisited, this was also the
objective of the investigative bodies created in the past like the PCAC, PCAPE, PARGO, the
Feliciano Commission, the Melo Commission and the Zenarosa Commission. There being no
changes in the government structure, the Court is not inclined to declare such executive
power as non-existent just because the direction of the political winds have changed.
On the charge that Executive Order No. 1 transgresses the power of Congress to
appropriate funds for the operation of a public office, suffice it to say that there will be no
appropriation but only an allotment or allocations of existing funds already appropriated.
Accordingly, there is no usurpation on the part of the Executive of the power of Congress to
appropriate funds. Further, there is no need to specify the amount to be earmarked for the
operation of the commission because, in the words of the Solicitor General, "whatever
funds the Congress has provided for the Office of the President will be the very source of
the funds for the commission."55 Moreover, since the amount that would be allocated to
the PTC shall be subject to existing auditing rules and regulations, there is no impropriety in
the funding.
Power of the Truth Commission to Investigate
The President’s power to conduct investigations to ensure that laws are faithfully executed
is well recognized. It flows from the faithful-execution clause of the Constitution under
Article VII, Section 17 thereof.56 As the Chief Executive, the president represents the
government as a whole and sees to it that all laws are enforced by the officials and
employees of his department. He has the authority to directly assume the functions of the
executive department.57
Invoking this authority, the President constituted the PTC to primarily investigate reports of
graft and corruption and to recommend the appropriate action. As previously stated, no
quasi-judicial powers have been vested in the said body as it cannot adjudicate rights of
persons who come before it. It has been said that "Quasi-judicial powers involve the power
to hear and determine questions of fact to which the legislative policy is to apply and to
decide in accordance with the standards laid down by law itself in enforcing and
administering the same law."58 In simpler terms, judicial discretion is involved in the
exercise of these quasi-judicial power, such that it is exclusively vested in the judiciary and
must be clearly authorized by the legislature in the case of administrative agencies.
The distinction between the power to investigate and the power to adjudicate was
delineated by the Court in Cariño v. Commission on Human Rights.59 Thus:
"Investigate," commonly understood, means to examine, explore, inquire or delve or probe
into, research on, study. The dictionary definition of "investigate" is "to observe or study
closely: inquire into systematically: "to search or inquire into: x x to subject to an official
probe x x: to conduct an official inquiry." The purpose of investigation, of course, is to
discover, to find out, to learn, obtain information. Nowhere included or intimated is the
notion of settling, deciding or resolving a controversy involved in the facts inquired into by
application of the law to the facts established by the inquiry.
The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by
patient inquiry or observation. To trace or track; to search into; to examine and inquire into
with care and accuracy; to find out by careful inquisition; examination; the taking of
evidence; a legal inquiry;" "to inquire; to make an investigation," "investigation" being in
turn described as "(a)n administrative function, the exercise of which ordinarily does not
require a hearing. 2 Am J2d Adm L Sec. 257; x x an inquiry, judicial or otherwise, for the
discovery and collection of facts concerning a certain matter or matters."
"Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge,
decide, determine, resolve, rule on, settle. The dictionary defines the term as "to settle
finally (the rights and duties of the parties to a court case) on the merits of issues raised: x x
to pass judgment on: settle judicially: x x act as judge." And "adjudge" means "to decide or
rule upon as a judge or with judicial or quasi-judicial powers: x x to award or grant judicially
in a case of controversy x x."
In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority. To
determine finally. Synonymous with adjudge in its strictest sense;" and "adjudge" means:
"To pass on judicially, to decide, settle or decree, or to sentence or condemn. x x. Implies a
judicial determination of a fact, and the entry of a judgment." [Italics included. Citations
Omitted]
Fact-finding is not adjudication and it cannot be likened to the judicial function of a court of
justice, or even a quasi-judicial agency or office. The function of receiving evidence and
ascertaining therefrom the facts of a controversy is not a judicial function. To be considered
as such, the act of receiving evidence and arriving at factual conclusions in a controversy
must be accompanied by the authority of applying the law to the factual conclusions to the
end that the controversy may be decided or resolved authoritatively, finally and definitively,
subject to appeals or modes of review as may be provided by law.60 Even respondents
themselves admit that the commission is bereft of any quasi-judicial power.61
Contrary to petitioners’ apprehension, the PTC will not supplant the Ombudsman or the
DOJ or erode their respective powers. If at all, the investigative function of the commission
will complement those of the two offices. As pointed out by the Solicitor General, the
recommendation to prosecute is but a consequence of the overall task of the commission to
conduct a fact-finding investigation."62 The actual prosecution of suspected offenders, much
less adjudication on the merits of the charges against them,63 is certainly not a function
given to the commission. The phrase, "when in the course of its investigation," under
Section 2(g), highlights this fact and gives credence to a contrary interpretation from that of
the petitioners. The function of determining probable cause for the filing of the appropriate
complaints before the courts remains to be with the DOJ and the Ombudsman. 64
At any rate, the Ombudsman’s power to investigate under R.A. No. 6770 is not exclusive but
is shared with other similarly authorized government agencies. Thus, in the case of
Ombudsman v. Galicia,65 it was written:
This power of investigation granted to the Ombudsman by the 1987 Constitution and The
Ombudsman Act is not exclusive but is shared with other similarly authorized government
agencies such as the PCGG and judges of municipal trial courts and municipal circuit trial
courts. The power to conduct preliminary investigation on charges against public employees
and officials is likewise concurrently shared with the Department of Justice. Despite the
passage of the Local Government Code in 1991, the Ombudsman retains concurrent
jurisdiction with the Office of the President and the local Sanggunians to investigate
complaints against local elective officials. [Emphasis supplied].
Also, Executive Order No. 1 cannot contravene the power of the Ombudsman to investigate
criminal cases under Section 15 (1) of R.A. No. 6770, which states:
(1) Investigate and prosecute on its own or on complaint by any person, any act or omission
of any public officer or employee, office or agency, when such act or omission appears to be
illegal, unjust, improper or inefficient. It has primary jurisdiction over cases cognizable by
the Sandiganbayan and, in the exercise of its primary jurisdiction, it may take over, at any
stage, from any investigatory agency of government, the investigation of such cases.
[Emphases supplied]
The act of investigation by the Ombudsman as enunciated above contemplates the conduct
of a preliminary investigation or the determination of the existence of probable cause. This
is categorically out of the PTC’s sphere of functions. Its power to investigate is limited to
obtaining facts so that it can advise and guide the President in the performance of his duties
relative to the execution and enforcement of the laws of the land. In this regard, the PTC
commits no act of usurpation of the Ombudsman’s primordial duties.
The same holds true with respect to the DOJ. Its authority under Section 3 (2), Chapter 1,
Title III, Book IV in the Revised Administrative Code is by no means exclusive and, thus, can
be shared with a body likewise tasked to investigate the commission of crimes.
Finally, nowhere in Executive Order No. 1 can it be inferred that the findings of the PTC are
to be accorded conclusiveness. Much like its predecessors, the Davide Commission, the
Feliciano Commission and the Zenarosa Commission, its findings would, at best, be
recommendatory in nature. And being so, the Ombudsman and the DOJ have a wider
degree of latitude to decide whether or not to reject the recommendation. These offices,
therefore, are not deprived of their mandated duties but will instead be aided by the
reports of the PTC for possible indictments for violations of graft laws.
Violation of the Equal Protection Clause
Although the purpose of the Truth Commission falls within the investigative power of the
President, the Court finds difficulty in upholding the constitutionality of Executive Order No.
1 in view of its apparent transgression of the equal protection clause enshrined in Section 1,
Article III (Bill of Rights) of the 1987 Constitution. Section 1 reads:
Section 1. No person shall be deprived of life, liberty, or property without due process of
law, nor shall any person be denied the equal protection of the laws.
The petitioners assail Executive Order No. 1 because it is violative of this constitutional
safeguard. They contend that it does not apply equally to all members of the same class
such that the intent of singling out the "previous administration" as its sole object makes
the PTC an "adventure in partisan hostility."66 Thus, in order to be accorded with validity,
the commission must also cover reports of graft and corruption in virtually all
administrations previous to that of former President Arroyo.67
The petitioners argue that the search for truth behind the reported cases of graft and
corruption must encompass acts committed not only during the administration of former
President Arroyo but also during prior administrations where the "same magnitude of
controversies and anomalies"68 were reported to have been committed against the Filipino
people. They assail the classification formulated by the respondents as it does not fall under
the recognized exceptions because first, "there is no substantial distinction between the
group of officials targeted for investigation by Executive Order No. 1 and other groups or
persons who abused their public office for personal gain; and second, the selective
classification is not germane to the purpose of Executive Order No. 1 to end
corruption."69 In order to attain constitutional permission, the petitioners advocate that the
commission should deal with "graft and grafters prior and subsequent to the Arroyo
administration with the strong arm of the law with equal force."70
Position of respondents
According to respondents, while Executive Order No. 1 identifies the "previous
administration" as the initial subject of the investigation, following Section 17 thereof, the
PTC will not confine itself to cases of large scale graft and corruption solely during the said
administration.71 Assuming arguendo that the commission would confine its proceedings to
officials of the previous administration, the petitioners argue that no offense is committed
against the equal protection clause for "the segregation of the transactions of public officers
during the previous administration as possible subjects of investigation is a valid
classification based on substantial distinctions and is germane to the evils which the
Executive Order seeks to correct."72 To distinguish the Arroyo administration from past
administrations, it recited the following:
First. E.O. No. 1 was issued in view of widespread reports of large scale graft and
corruption in the previous administration which have eroded public confidence in public
institutions. There is, therefore, an urgent call for the determination of the truth regarding
certain reports of large scale graft and corruption in the government and to put a closure to
them by the filing of the appropriate cases against those involved, if warranted, and to
deter others from committing the evil, restore the people’s faith and confidence in the
Government and in their public servants.
Second. The segregation of the preceding administration as the object of fact-finding is
warranted by the reality that unlike with administrations long gone, the current
administration will most likely bear the immediate consequence of the policies of the
previous administration.
Third. The classification of the previous administration as a separate class for investigation
lies in the reality that the evidence of possible criminal activity, the evidence that could lead
to recovery of public monies illegally dissipated, the policy lessons to be learned to ensure
that anti-corruption laws are faithfully executed, are more easily established in the regime
that immediately precede the current administration.
Fourth. Many administrations subject the transactions of their predecessors to
investigations to provide closure to issues that are pivotal to national life or even as a
routine measure of due diligence and good housekeeping by a nascent administration like
the Presidential Commission on Good Government (PCGG), created by the late President
Corazon C. Aquino under Executive Order No. 1 to pursue the recovery of ill-gotten wealth
of her predecessor former President Ferdinand Marcos and his cronies, and the Saguisag
Commission created by former President Joseph Estrada under Administrative Order No, 53,
to form an ad-hoc and independent citizens’ committee to investigate all the facts and
circumstances surrounding "Philippine Centennial projects" of his predecessor, former
President Fidel V. Ramos.73 [Emphases supplied]
Concept of the Equal Protection Clause
One of the basic principles on which this government was founded is that of the equality of
right which is embodied in Section 1, Article III of the 1987 Constitution. The equal
protection of the laws is embraced in the concept of due process, as every unfair
discrimination offends the requirements of justice and fair play. It has been embodied in a
separate clause, however, to provide for a more specific guaranty against any form of
undue favoritism or hostility from the government. Arbitrariness in general may be
challenged on the basis of the due process clause. But if the particular act assailed partakes
of an unwarranted partiality or prejudice, the sharper weapon to cut it down is the equal
protection clause.74
"According to a long line of decisions, equal protection simply requires that all persons or
things similarly situated should be treated alike, both as to rights conferred and
responsibilities imposed."75 It "requires public bodies and institutions to treat similarly
situated individuals in a similar manner."76 "The purpose of the equal protection clause is to
secure every person within a state’s jurisdiction against intentional and arbitrary
discrimination, whether occasioned by the express terms of a statue or by its improper
execution through the state’s duly constituted authorities."77 "In other words, the concept
of equal justice under the law requires the state to govern impartially, and it may not draw
distinctions between individuals solely on differences that are irrelevant to a legitimate
governmental objective."78
The equal protection clause is aimed at all official state actions, not just those of the
legislature.79 Its inhibitions cover all the departments of the government including the
political and executive departments, and extend to all actions of a state denying equal
protection of the laws, through whatever agency or whatever guise is taken. 80
It, however, does not require the universal application of the laws to all persons or things
without distinction. What it simply requires is equality among equals as determined
according to a valid classification. Indeed, the equal protection clause permits classification.
Such classification, however, to be valid must pass the test of reasonableness. The test has
four requisites: (1) The classification rests on substantial distinctions; (2) It is germane to the
purpose of the law; (3) It is not limited to existing conditions only; and
(4) It applies equally to all members of the same class.81 "Superficial differences do not
make for a valid classification."82
For a classification to meet the requirements of constitutionality, it must include or
embrace all persons who naturally belong to the class.83 "The classification will be regarded
as invalid if all the members of the class are not similarly treated, both as to rights conferred
and obligations imposed. It is not necessary that the classification be made with absolute
symmetry, in the sense that the members of the class should possess the same
characteristics in equal degree. Substantial similarity will suffice; and as long as this is
achieved, all those covered by the classification are to be treated equally. The mere fact
that an individual belonging to a class differs from the other members, as long as that class
is substantially distinguishable from all others, does not justify the non-application of the
law to him."84
The classification must not be based on existing circumstances only, or so constituted as to
preclude addition to the number included in the class. It must be of such a nature as to
embrace all those who may thereafter be in similar circumstances and conditions. It must
not leave out or "underinclude" those that should otherwise fall into a certain classification.
As elucidated in Victoriano v. Elizalde Rope Workers' Union85 and reiterated in a long line of
cases,86
The guaranty of equal protection of the laws is not a guaranty of equality in the application
of the laws upon all citizens of the state. It is not, therefore, a requirement, in order to
avoid the constitutional prohibition against inequality, that every man, woman and child
should be affected alike by a statute. Equality of operation of statutes does not mean
indiscriminate operation on persons merely as such, but on persons according to the
circumstances surrounding them. It guarantees equality, not identity of rights. The
Constitution does not require that things which are different in fact be treated in law as
though they were the same. The equal protection clause does not forbid discrimination as
to things that are different. It does not prohibit legislation which is limited either in the
object to which it is directed or by the territory within which it is to operate.
The equal protection of the laws clause of the Constitution allows classification.
Classification in law, as in the other departments of knowledge or practice, is the grouping
of things in speculation or practice because they agree with one another in certain
particulars. A law is not invalid because of simple inequality. The very idea of classification is
that of inequality, so that it goes without saying that the mere fact of inequality in no
manner determines the matter of constitutionality. All that is required of a valid
classification is that it be reasonable, which means that the classification should be based
on substantial distinctions which make for real differences, that it must be germane to the
purpose of the law; that it must not be limited to existing conditions only; and that it must
apply equally to each member of the class. This Court has held that the standard is satisfied
if the classification or distinction is based on a reasonable foundation or rational basis and is
not palpably arbitrary. [Citations omitted]
Applying these precepts to this case, Executive Order No. 1 should be struck down as
violative of the equal protection clause. The clear mandate of the envisioned truth
commission is to investigate and find out the truth "concerning the reported cases of graft
and corruption during the previous administration"87 only. The intent to single out the
previous administration is plain, patent and manifest. Mention of it has been made in at
least three portions of the questioned executive order. Specifically, these are:
WHEREAS, there is a need for a separate body dedicated solely to investigating and finding
out the truth concerning the reported cases of graft and corruption during the previous
administration, and which will recommend the prosecution of the offenders and secure
justice for all;
SECTION 1. Creation of a Commission. – There is hereby created the PHILIPPINE TRUTH
COMMISSION, hereinafter referred to as the "COMMISSION," which shall primarily seek
and find the truth on, and toward this end, investigate reports of graft and corruption of
such scale and magnitude that shock and offend the moral and ethical sensibilities of the
people, committed by public officers and employees, their co-principals, accomplices and
accessories from the private sector, if any, during the previous administration; and
thereafter recommend the appropriate action or measure to be taken thereon to ensure
that the full measure of justice shall be served without fear or favor.
SECTION 2. Powers and Functions. – The Commission, which shall have all the powers of an
investigative body under Section 37, Chapter 9, Book I of the Administrative Code of 1987, is
primarily tasked to conduct a thorough fact-finding investigation of reported cases of graft
and corruption referred to in Section 1, involving third level public officers and higher, their
co-principals, accomplices and accessories from the private sector, if any, during the
previous administration and thereafter submit its finding and recommendations to the
President, Congress and the Ombudsman. [Emphases supplied]
In this regard, it must be borne in mind that the Arroyo administration is but just a member
of a class, that is, a class of past administrations. It is not a class of its own. Not to include
past administrations similarly situated constitutes arbitrariness which the equal protection
clause cannot sanction. Such discriminating differentiation clearly reverberates to label the
commission as a vehicle for vindictiveness and selective retribution.
Though the OSG enumerates several differences between the Arroyo administration and
other past administrations, these distinctions are not substantial enough to merit the
restriction of the investigation to the "previous administration" only. The reports of
widespread corruption in the Arroyo administration cannot be taken as basis for
distinguishing said administration from earlier administrations which were also blemished
by similar widespread reports of impropriety. They are not inherent in, and do not inure
solely to, the Arroyo administration. As Justice Isagani Cruz put it, "Superficial differences
do not make for a valid classification."88
The public needs to be enlightened why Executive Order No. 1 chooses to limit the scope of
the intended investigation to the previous administration only. The OSG ventures to opine
that "to include other past administrations, at this point, may unnecessarily overburden the
commission and lead it to lose its effectiveness."89The reason given is specious. It is without
doubt irrelevant to the legitimate and noble objective of the PTC to stamp out or "end
corruption and the evil it breeds."90
The probability that there would be difficulty in unearthing evidence or that the earlier
reports involving the earlier administrations were already inquired into is beside the point.
Obviously, deceased presidents and cases which have already prescribed can no longer be
the subjects of inquiry by the PTC. Neither is the PTC expected to conduct simultaneous
investigations of previous administrations, given the body’s limited time and resources.
"The law does not require the impossible" (Lex non cogit ad impossibilia).91
Given the foregoing physical and legal impossibility, the Court logically recognizes the
unfeasibility of investigating almost a century’s worth of graft cases. However, the fact
remains that Executive Order No. 1 suffers from arbitrary classification. The PTC, to be true
to its mandate of searching for the truth, must not exclude the other past administrations.
The PTC must, at least, have the authority to investigate all past administrations.
While reasonable prioritization is permitted, it should not be arbitrary lest it be struck
down for being unconstitutional. In the often quoted language of Yick Wo v. Hopkins, 92
Though the law itself be fair on its face and impartial in appearance, yet, if applied and
administered by public authority with an evil eye and an unequal hand, so as practically to
make unjust and illegal discriminations between persons in similar circumstances, material
to their rights, the denial of equal justice is still within the prohibition of the constitution.
[Emphasis supplied]
It could be argued that considering that the PTC is an ad hoc body, its scope is limited. The
Court, however, is of the considered view that although its focus is restricted, the
constitutional guarantee of equal protection under the laws should not in any way be
circumvented. The Constitution is the fundamental and paramount law of the nation to
which all other laws must conform and in accordance with which all private rights
determined and all public authority administered.93 Laws that do not conform to the
Constitution should be stricken down for being unconstitutional. 94While the thrust of the
PTC is specific, that is, for investigation of acts of graft and corruption, Executive Order No.
1, to survive, must be read together with the provisions of the Constitution. To exclude the
earlier administrations in the guise of "substantial distinctions" would only confirm the
petitioners’ lament that the subject executive order is only an "adventure in partisan
hostility." In the case of US v. Cyprian,95 it was written: "A rather limited number of such
classifications have routinely been held or assumed to be arbitrary; those include: race,
national origin, gender, political activity or membership in a political party, union activity or
membership in a labor union, or more generally the exercise of first amendment rights."
To reiterate, in order for a classification to meet the requirements of constitutionality, it
must include or embrace all persons who naturally belong to the class.96 "Such a
classification must not be based on existing circumstances only, or so constituted as to
preclude additions to the number included within a class, but must be of such a nature as to
embrace all those who may thereafter be in similar circumstances and conditions.
Furthermore, all who are in situations and circumstances which are relative to the
discriminatory legislation and which are indistinguishable from those of the members of the
class must be brought under the influence of the law and treated by it in the same way as
are the members of the class."97
The Court is not unaware that "mere underinclusiveness is not fatal to the validity of a law
under the equal protection clause."98 "Legislation is not unconstitutional merely because it
is not all-embracing and does not include all the evils within its reach."99 It has been written
that a regulation challenged under the equal protection clause is not devoid of a rational
predicate simply because it happens to be incomplete.100 In several instances, the
underinclusiveness was not considered a valid reason to strike down a law or regulation
where the purpose can be attained in future legislations or regulations. These cases refer to
the "step by step" process.101 "With regard to equal protection claims, a legislature does not
run the risk of losing the entire remedial scheme simply because it fails, through
inadvertence or otherwise, to cover every evil that might conceivably have been
attacked."102
In Executive Order No. 1, however, there is no inadvertence. That the previous
administration was picked out was deliberate and intentional as can be gleaned from the
fact that it was underscored at least three times in the assailed executive order. It must be
noted that Executive Order No. 1 does not even mention any particular act, event or report
to be focused on unlike the investigative commissions created in the past. "The equal
protection clause is violated by purposeful and intentional discrimination."103
To disprove petitioners’ contention that there is deliberate discrimination, the OSG clarifies
that the commission does not only confine itself to cases of large scale graft and corruption
committed during the previous administration.104The OSG points to Section 17 of Executive
Order No. 1, which provides:
SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the
President there is a need to expand the mandate of the Commission as defined in Section 1
hereof to include the investigation of cases and instances of graft and corruption during the
prior administrations, such mandate may be so extended accordingly by way of a
supplemental Executive Order.
The Court is not convinced. Although Section 17 allows the President the discretion to
expand the scope of investigations of the PTC so as to include the acts of graft and
corruption committed in other past administrations, it does not guarantee that they would
be covered in the future. Such expanded mandate of the commission will still depend on
the whim and caprice of the President. If he would decide not to include them, the section
would then be meaningless. This will only fortify the fears of the petitioners that the
Executive Order No. 1 was "crafted to tailor-fit the prosecution of officials and personalities
of the Arroyo administration."105
The Court tried to seek guidance from the pronouncement in the case of Virata v.
Sandiganbayan,106 that the "PCGG Charter (composed of Executive Orders Nos. 1, 2 and 14)
does not violate the equal protection clause." The decision, however, was devoid of any
discussion on how such conclusory statement was arrived at, the principal issue in said case
being only the sufficiency of a cause of action.
A final word
The issue that seems to take center stage at present is - whether or not the Supreme Court,
in the exercise of its constitutionally mandated power of Judicial Review with respect to
recent initiatives of the legislature and the executive department, is exercising undue
interference. Is the Highest Tribunal, which is expected to be the protector of the
Constitution, itself guilty of violating fundamental tenets like the doctrine of separation of
powers? Time and again, this issue has been addressed by the Court, but it seems that the
present political situation calls for it to once again explain the legal basis of its action lest it
continually be accused of being a hindrance to the nation’s thrust to progress.
The Philippine Supreme Court, according to Article VIII, Section 1 of the 1987 Constitution,
is vested with Judicial Power that "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 of abuse of discretion amounting to lack
or excess of jurisdiction on the part of any branch or instrumentality of the government."
Furthermore, in Section 4(2) thereof, it is vested with the power of judicial review which is
the power to declare a treaty, international or executive agreement, law, presidential
decree, proclamation, order, instruction, ordinance, or regulation unconstitutional. This
power also includes the duty to rule on the constitutionality of the application, or operation
of presidential decrees, proclamations, orders, instructions, ordinances, and other
regulations. These provisions, however, have been fertile grounds of conflict between the
Supreme Court, on one hand, and the two co-equal bodies of government, on the other.
Many times the Court has been accused of asserting superiority over the other
departments.
To answer this accusation, the words of Justice Laurel would be a good source of
enlightenment, to wit: "And when the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority over the other departments; it does not in
reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred
obligation assigned to it by the Constitution to determine conflicting claims of authority
under the Constitution and to establish for the parties in an actual controversy the rights
which that instrument secures and guarantees to them."107
Thus, the Court, in exercising its power of judicial review, is not imposing its own will upon a
co-equal body but rather simply making sure that any act of government is done in
consonance with the authorities and rights allocated to it by the Constitution. And, if after
said review, the Court finds no constitutional violations of any sort, then, it has no more
authority of proscribing the actions under review. Otherwise, the Court will not be deterred
to pronounce said act as void and unconstitutional.
It cannot be denied that most government actions are inspired with noble intentions, all
geared towards the betterment of the nation and its people. But then again, it is important
to remember this ethical principle: "The end does not justify the means." No matter how
noble and worthy of admiration the purpose of an act, but if the means to be employed in
accomplishing it is simply irreconcilable with constitutional parameters, then it cannot still
be allowed.108 The Court cannot just turn a blind eye and simply let it pass. It will continue
to uphold the Constitution and its enshrined principles.
"The Constitution must ever remain supreme. All must bow to the mandate of this law.
Expediency must not be allowed to sap its strength nor greed for power debase its
rectitude."109
Lest it be misunderstood, this is not the death knell for a truth commission as nobly
envisioned by the present administration. Perhaps a revision of the executive issuance so as
to include the earlier past administrations would allow it to pass the test of reasonableness
and not be an affront to the Constitution. Of all the branches of the government, it is the
judiciary which is the most interested in knowing the truth and so it will not allow itself to
be a hindrance or obstacle to its attainment. It must, however, be emphasized that the
search for the truth must be within constitutional bounds for "ours is still a government of
laws and not of men."110
WHEREFORE, the petitions are GRANTED. Executive Order No. 1 is hereby declared
UNCONSTITUTIONAL insofar as it is violative of the equal protection clause of the
Constitution.
As also prayed for, the respondents are hereby ordered to cease and desist from carrying
out the provisions of Executive Order No. 1.
SO ORDERED.
[ GR NO. 166052, Aug 29, 2007 ]
ANAK MINDANAO PARTY-LIST GROUP v. EXECUTIVE SECRETARY
558 Phil. 338
CARPIO MORALES, J.:
Petitioners Anak Mindanao Party-List Group (AMIN) and Mamalo Descendants
Organization, Inc. (MDOI) assail the constitutionality of Executive Order (E.O.) Nos. 364 and
379, both issued in 2004, via the present Petition for Certiorari and Prohibition with prayer
for injunctive relief.
E.O. No. 364, which President Gloria Macapagal-Arroyo issued on September 27, 2004,
reads:
EXECUTIVE ORDER NO. 364
TRANSFORMING THE DEPARTMENT OF AGRARIAN REFORM INTO THE DEPARTMENT OF
LAND REFORM
WHEREAS, one of the five reform packages of the Arroyo administration is Social Justice and
Basic [N]eeds;
WHEREAS, one of the five anti-poverty measures for social justice is asset reform;
WHEREAS, asset reforms covers [sic] agrarian reform, urban land reform, and ancestral
domain reform;
WHEREAS, urban land reform is a concern of the Presidential Commission [for] the Urban
Poor (PCUP) and ancestral domain reform is a concern of the National Commission on
Indigenous Peoples (NCIP);
WHEREAS, another of the five reform packages of the Arroyo administration is Anti-
Corruption and Good Government;
WHEREAS, one of the Good Government reforms of the Arroyo administration is
rationalizing the bureaucracy by consolidating related functions into one department;
WHEREAS, under law and jurisprudence, the President of the Philippines has broad powers
to reorganize the offices under her supervision and control;
NOW[,] THEREFORE[,] I, Gloria Macapagal-Arroyo, by the powers vested in me as President
of the Republic of the Philippines, do hereby order:
SECTION 1. The Department of Agrarian Reform is hereby transformed into
the Department of Land Reform. It shall be responsible for all land reform in the country,
including agrarian reform, urban land reform, and ancestral domain reform.
SECTION 2. The PCUP is hereby placed under the supervision and control of the
Department of Land Reform. The Chairman of the PCUP shall be ex-officio Undersecretary
of the Department of Land Reform for Urban Land Reform.
SECTION 3. The NCIP is hereby placed under the supervision and control of the Department
of Land Reform. The Chairman of the NCIP shall be ex-officio Undersecretary of the
Department of Land Reform for Ancestral Domain Reform.
SECTION 4. The PCUP and the NCIP shall have access to the services provided by the
Department's Finance, Management and Administrative Office; Policy, Planning and Legal
Affairs Office, Field Operations and Support Services Office, and all other offices of the
Department of Land Reform.
SECTION 5. All previous issuances that conflict with this Executive Order are hereby
repealed or modified accordingly.
SECTION 6. This Executive Order takes effect immediately. (Emphasis and underscoring
supplied)
E.O. No. 379, which amended E.O. No. 364 a month later or on October 26, 2004, reads:
EXECUTIVE ORDER NO. 379
AMENDING EXECUTIVE ORDER NO. 364 ENTITLED TRANSFORMING THE DEPARTMENT OF
AGRARIAN REFORM INTO THE DEPARTMENT OF LAND REFORM
WHEREAS, Republic Act No. 8371 created the National Commission on Indigenous Peoples;
WHEREAS, pursuant to the Administrative Code of 1987, the President has the continuing
authority to reorganize the administrative structure of the National Government.
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Republic of the
Philippines, by virtue of the powers vested in me by the Constitution and existing laws, do
hereby order:
Section 1. Amending Section 3 of Executive Order No. 364. Section 3 of Executive Order No.
364, dated September 27, 2004 shall now read as follows:
"Section 3. The National Commission on Indigenous Peoples (NCIP) shall be an attached
agency of the Department of Land Reform."
Section 2. Compensation. The Chairperson shall suffer no diminution in rank and salary.
Section 3. Repealing Clause. All executive issuances, rules and regulations or parts thereof
which are inconsistent with this Executive Order are hereby revoked, amended or modified
accordingly.
Section 4. Effectivity. This Executive Order shall take effect immediately. (Emphasis and
underscoring in the original)
Petitioners contend that the two presidential issuances are unconstitutional for violating:
-THE CONSTITUTIONAL PRINCIPLES OF SEPARATION OF POWERS AND OF THE RULE OF
LAW[;]
-THE CONSTITUTIONAL SCHEME AND POLICIES FOR AGRARIAN REFORM, URBAN LAND
REFORM, INDIGENOUS PEOPLES' RIGHTS AND ANCESTRAL DOMAIN[; AND]
-THE CONSTITUTIONAL RIGHT OF THE PEOPLE AND THEIR ORGANIZATIONS TO EFFECTIVE
AND REASONABLE PARTICIPATION IN DECISION-MAKING, INCLUDING THROUGH ADEQUATE
CONSULTATION[.][1]
By Resolution of December 6, 2005, this Court gave due course to the Petition and required
the submission of memoranda, with which petitioners and respondents complied on March
24, 2006 and April 11, 2006, respectively.
The issue on the transformation of the Department of Agrarian Reform (DAR) into the
Department of Land Reform (DLR) became moot and academic, however, the department
having reverted to its former name by virtue of E.O. No. 456[2] which was issued on August
23, 2005.
The Court is thus left with the sole issue of the legality of placing the Presidential
Commission[3] for the Urban Poor (PCUP) under the supervision and control of the DAR, and
the National Commission on Indigenous Peoples (NCIP) under the DAR as an attached
agency.
Before inquiring into the validity of the reorganization, petitioners' locus standi or legal
standing, inter alia,[4]becomes a preliminary question.
The Office of the Solicitor General (OSG), on behalf of respondents, concedes that
AMIN[5] has the requisite legal standing to file this suit as member[6] of Congress.
Petitioners find it impermissible for the Executive to intrude into the domain of the
Legislature. They posit that an act of the Executive which injures the institution of Congress
causes a derivative but nonetheless substantial injury, which can be questioned by a
member of Congress.[7] They add that to the extent that the powers of Congress are
impaired, so is the power of each member thereof, since his office confers a right to
participate in the exercise of the powers of that institution.[8]
Indeed, a member of the House of Representatives has standing to maintain inviolate the
prerogatives, powers and privileges vested by the Constitution in his office. [9]
The OSG questions, however, the standing of MDOI, a registered people's organization
of Teduray and Lambangian tribesfolk of (North) Upi and South Upi in the province of
Maguindanao.
As co-petitioner, MDOI alleges that it is concerned with the negative impact of NCIP's
becoming an attached agency of the DAR on the processing of ancestral domain claims. It
fears that transferring the NCIP to the DAR would affect the processing of ancestral domain
claims filed by its members.
Locus standi or legal standing has been defined as a personal and substantial interest in a
case such that the party has sustained or will sustain direct injury as a result of the
governmental act that is being challenged. 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.[10]
It has been held that a party who assails the constitutionality of a statute must have a direct
and personal interest. It must show not only that the law or any governmental act is invalid,
but also that it sustained or is in immediate danger of sustaining some direct injury as a
result of its enforcement, and not merely that it suffers thereby in some indefinite way. It
must show that it has been or is about to be denied some right or privilege to which it is
lawfully entitled or that it is about to be subjected to some burdens or penalties by reason
of the statute or act complained of.[11]
For a concerned party to be allowed to raise a constitutional question, it must show that (1)
it has personally suffered some actual or threatened injury as a result of the allegedly illegal
conduct of the government, (2) the injury is fairly traceable to the challenged action, and (3)
the injury is likely to be redressed by a favorable action.[12]
An examination of MDOI's nebulous claims of "negative impact" and "probable
setbacks"[13] shows that they are too abstract to be considered judicially cognizable. And the
line of causation it proffers between the challenged action and alleged injury is too
attenuated.
Vague propositions that the implementation of the assailed orders will work injustice and
violate the rights of its members cannot clothe MDOI with the requisite standing. Neither
would its status as a "people's organization" vest it with the legal standing to assail the
validity of the executive orders.[14]
La Bugal-B'laan Tribal Association, Inc. v. Ramos,[15] which MDOI cites in support of its claim
to legal standing, is inapplicable as it is not similarly situated with the therein petitioners
who alleged personal and substantial injury resulting from the mining activities permitted
by the assailed statute. And so is Cruz v. Secretary of Environment and Natural
Resources,[16] for the indigenous peoples' leaders and organizations were not the petitioners
therein, who necessarily had to satisfy the locus standi requirement, but were intervenors
who sought and were allowed to be impleaded, not to assail but to defend the
constitutionality of the statute.
Moreover, MDOI raises no issue of transcendental importance to justify a relaxation of the
rule on legal standing. To be accorded standing on the ground of transcendental
importance, Senate of the Philippines v. Ermita[17]requires that the following elements must
be established: (1) the public character of the funds or other assets involved in the case, (2)
the presence of a clear case of disregard of a constitutional or statutory prohibition by the
public respondent agency or instrumentality of government, and (3) the lack of any other
party with a more direct and specific interest in raising the questions being raised. The
presence of these elements MDOI failed to establish, much less allege.
Francisco, Jr. v. Fernando[18] more specifically declares that the transcendental importance
of the issues raised must relate to the merits of the petition.
This Court, not being a venue for the ventilation of generalized grievances, must thus deny
adjudication of the matters raised by MDOI.
Now, on AMIN's position. AMIN charges the Executive Department with transgression of
the principle of separation of powers.
Under the principle of separation of powers, Congress, the President, and the Judiciary may
not encroach on fields allocated to each of them. The legislature is generally limited to the
enactment of laws, the executive to the enforcement of laws, and the judiciary to their
interpretation and application to cases and controversies. The principle presupposes mutual
respect by and between the executive, legislative and judicial departments of the
government and calls for them to be left alone to discharge their duties as they see fit. [19]
AMIN contends that since the DAR, PCUP and NCIP were created by statutes,[20] they can
only be transformed, merged or attached by statutes, not by mere executive orders.
While AMIN concedes that the executive power is vested in the President [21] who, as Chief
Executive, holds the power of control of all the executive departments, bureaus, and
offices, [22] it posits that this broad power of control including the power to reorganize is
qualified and limited, for it cannot be exercised in a manner contrary to law, citing the
constitutional duty [23] of the President to ensure that the laws, including those creating the
agencies, be faithfully executed.
AMIN cites the naming of the PCUP as a presidential commission to be clearly an extension
of the President, and the creation of the NCIP as an "independent agency under the Office
of the President."[24] It thus argues that since the legislature had seen fit to create these
agencies at separate times and with distinct mandates, the President should respect that
legislative disposition.
In fine, AMIN contends that any reorganization of these administrative agencies should be
the subject of a statute.

AMIN's position fails to impress.
The Constitution confers, by express provision, the power of control over executive
departments, bureaus and offices in the President alone. And it lays down a limitation on
the legislative power.
The line that delineates the Legislative and Executive power is not indistinct. Legislative
power is "the authority, under the Constitution, to make laws, and to alter and repeal
them." The Constitution, as the will of the people in their original, sovereign and unlimited
capacity, has vested this power in the Congress of the Philippines. The grant of legislative
power to Congress is broad, general and comprehensive. The legislative body possesses
plenary power for all purposes of civil government. Any power, deemed to be legislative by
usage and tradition, is necessarily possessed by Congress, unless the Constitution has
lodged it elsewhere. In fine, except as limited by the Constitution, either expressly or
impliedly, legislative power embraces all subjects and extends to matters of general concern
or common interest.
While Congress is vested with the power to enact laws, the President executes the laws. The
executive power is vested in the President. It is generally defined as the power to enforce
and administer the laws. It is the power of carrying the laws into practical operation and
enforcing their due observance.
As head of the Executive Department, the President is the Chief Executive. He represents
the government as a whole and sees to it that all laws are enforced by the officials and
employees of his department. He has control over the executive department, bureaus and
offices. This means that he has the authority to assume directly the functions of the
executive department, bureau and office, or interfere with the discretion of its officials.
Corollary to the power of control, the President also has the duty of supervising and
enforcement of laws for the maintenance of general peace and public order. Thus, he is
granted administrative power over bureaus and offices under his control to enable him to
discharge his duties effectively.[25] (Italics omitted, underscoring supplied)
The Constitution's express grant of the power of control in the President justifies an
executive action to carry out reorganization measures under a broad authority of law. [26]
In enacting a statute, the legislature is presumed to have deliberated with full knowledge of
all existing laws and jurisprudence on the subject.[27] It is thus reasonable to conclude that
in passing a statute which places an agency under the Office of the President, it was in
accordance with existing laws and jurisprudence on the President's power to reorganize.
In establishing an executive department, bureau or office, the legislature necessarily
ordains an executive agency's position in the scheme of administrative structure. Such
determination is primary,[28] but subject to the President's continuing authority to
reorganize the administrative structure. As far as bureaus, agencies or offices in the
executive department are concerned, the power of control may justify the President to
deactivate the functions of a particular office. Or a law may expressly grant the President
the broad authority to carry out reorganization measures.[29] The Administrative Code of
1987 is one such law:[30]
SEC. 30. Functions of Agencies under the Office of the President.- Agencies under the Office
of the President shall continue to operate and function in accordance with their respective
charters or laws creating them, except as otherwise provided in this Code or by law.
SEC. 31. Continuing Authority of the President to Reorganize his Office.- The
President, subject to the policy in the Executive Office and in order to achieve simplicity,
economy and efficiency, shall have continuing authority to reorganize the administrative
structure of the Office of the President. For this purpose, he may take any of the following
actions:
(1) Restructure the internal organization of the Office of the President Proper, including the
immediate Offices, the Presidential Special Assistants/Advisers System and the Common
Staff Support System, by abolishing, consolidating, or merging units thereof or transferring
functions from one unit to another;
(2) Transfer any function under the Office of the President to any other Department or
Agency as well as transfer functions to the Office of the President from other Departments
and Agencies; and
(3) Transfer any agency under the Office of the President to any other department or
agency as well as transfer agencies to the Office of the President from other departments or
agencies. [31] (Italics in the original; emphasis and underscoring supplied)
In carrying out the laws into practical operation, the President is best equipped to assess
whether an executive agency ought to continue operating in accordance with its charter or
the law creating it. This is not to say that the legislature is incapable of making a similar
assessment and appropriate action within its plenary power. The Administrative Code of
1987 merely underscores the need to provide the President with suitable solutions to
situations on hand to meet the exigencies of the service that may call for the exercise of the
power of control.
x x x The law grants the President this power in recognition of the recurring need of every
President to reorganize his office "to achieve simplicity, economy and efficiency." The Office
of the President is the nerve center of the Executive Branch. To remain effective and
efficient, the Office of the President must be capable of being shaped and reshaped by the
President in the manner he deems fit to carry out his directives and policies. After all, the
Office of the President is the command post of the President. This is the rationale behind
the President's continuing authority to reorganize the administrative structure of the Office
of the President.[32]
The Office of the President consists of the Office of the President proper and the agencies
under it.[33] It is not disputed that PCUP and NCIP were formed as agencies under the Office
of the President.[34] The "Agencies under the Office of the President" refer to those offices
placed under the chairmanship of the President, those under the supervision and control of
the President, those under the administrative supervision of the Office of the President,
those attached to the Office for policy and program coordination, and those that are not
placed by law or order creating them under any special department.[35]
As thus provided by law, the President may transfer any agency under the Office of the
President to any other department or agency, subject to the policy in the Executive Office
and in order to achieve simplicity, economy and efficiency. Gauged against these
guidelines,[36] the challenged executive orders may not be said to have been issued with
grave abuse of discretion or in violation of the rule of law.
The references in E.O. 364 to asset reform as an anti-poverty measure for social justice and
to rationalization of the bureaucracy in furtherance of good government [37] encapsulate a
portion of the existing "policy in the Executive Office." As averred by the OSG, the President
saw it fit to streamline the agencies so as not to hinder the delivery of crucial social
reforms.[38]
The consolidation of functions in E.O. 364 aims to attain the objectives of "simplicity,
economy and efficiency" as gathered from the provision granting PCUP and NCIP access to
the range of services provided by the DAR's technical offices and support systems.[39]
The characterization of the NCIP as an independent agency under the Office of the
President does not remove said body from the President's control and supervision with
respect to its performance of administrative functions. So it has been opined:
That Congress did not intend to place the NCIP under the control of the President in all
instances is evident in the IPRA itself, which provides that the decisions of the NCIP in the
exercise of its quasi-judicial functions shall be appealable to the Court of Appeals, like those
of the National Labor Relations Commission (NLRC) and the Securities and Exchange
Commission (SEC). Nevertheless, the NCIP, although independent to a certain degree, was
placed by Congress "under the office of the President" and, as such, is still subject to the
President's power of control and supervision granted under Section 17, Article VII of the
Constitution with respect to its performance of administrative functions[.][40] (Underscoring
supplied)
In transferring the NCIP to the DAR as an attached agency, the President effectively
tempered the exercise of presidential authority and considerably recognized that degree of
independence.
The Administrative Code of 1987 categorizes administrative relationships into (1)
supervision and control, (2) administrative supervision, and (3) attachment.[41] With respect
to the third category, it has been held that an attached agency has a larger measure of
independence from the Department to which it is attached than one which is under
departmental supervision and control or administrative supervision. This is borne out by the
"lateral relationship" between the Department and the attached agency. The attachment is
merely for "policy and program coordination."[42] Indeed, the essential autonomous
character of a board is not negated by its attachment to a commission.[43]
AMIN argues, however, that there is an anachronism of sorts because there can be no
policy and program coordination between conceptually different areas of reform. It claims
that the new framework subsuming agrarian reform, urban land reform and ancestral
domain reform is fundamentally incoherent in view of the widely different contexts. [44] And
it posits that it is a substantive transformation or reorientation that runs contrary to the
constitutional scheme and policies.
AMIN goes on to proffer the concept of "ordering the law"[45] which, so it alleges, can be
said of the Constitution's distinct treatment of these three areas, as reflected in separate
provisions in different parts of the Constitution.[46] It argues that the Constitution did not
intend an over-arching concept of agrarian reform to encompass the two other areas, and
that how the law is ordered in a certain way should not be undermined by mere executive
orders in the guise of administrative efficiency.
The Court is not persuaded.
The interplay of various areas of reform in the promotion of social justice is not something
implausible or unlikely.[47] Their interlocking nature cuts across labels and works against a
rigid pigeonholing of executive tasks among the members of the President's official family.
Notably, the Constitution inhibited from identifying and compartmentalizing the
composition of the Cabinet. In vesting executive power in one person rather than in a plural
executive, the evident intention was to invest the power holder with energy.[48]
AMIN takes premium on the severed treatment of these reform areas in marked provisions
of the Constitution. It is a precept, however, that inferences drawn from title, chapter or
section headings are entitled to very little weight.[49] And so must reliance on sub-
headings,[50] or the lack thereof, to support a strained deduction be given the weight of
helium.
Secondary aids may be consulted to remove, not to create doubt.[51] AMIN's thesis
unsettles, more than settles the order of things in construing the Constitution. Its
interpretation fails to clearly establish that the so-called "ordering" or arrangement of
provisions in the Constitution was consciously adopted to imply a signification in terms of
government hierarchy from where a constitutional mandate can per se be derived or
asserted. It fails to demonstrate that the "ordering" or layout was not simply a matter of
style in constitutional drafting but one of intention in government structuring. With its
inherent ambiguity, the proposed interpretation cannot be made a basis for declaring a law
or governmental act unconstitutional.
A law has in its favor the presumption of constitutionality. For it to be nullified, it must be
shown that there is a clear and unequivocal breach of the Constitution. The ground for
nullity must be clear and beyond reasonable doubt.[52] Any reasonable doubt should,
following the universal rule of legal hermeneutics, be resolved in favor of the
constitutionality of a law.[53]
Ople v. Torres[54] on which AMIN relies is unavailing. In that case, an administrative order
involved a system of identification that required a "delicate adjustment of various
contending state policies" properly lodged in the legislative arena. It was declared
unconstitutional for dealing with a subject that should be covered by law and for violating
the right to privacy.
In the present case, AMIN glaringly failed to show how the reorganization by executive fiat
would hamper the exercise of citizen's rights and privileges. It rested on the ambiguous
conclusion that the reorganization jeopardizes economic, social and cultural rights. It
intimated, without expounding, that the agendum behind the issuances is to weaken the
indigenous peoples' rights in favor of the mining industry. And it raised concerns about the
possible retrogression in DAR's performance as the added workload may impede the
implementation of the comprehensive agrarian reform program.
AMIN has not shown, however, that by placing the NCIP as an attached agency of the DAR,
the President altered the nature and dynamics of the jurisdiction and adjudicatory functions
of the NCIP concerning all claims and disputes involving rights of indigenous cultural
communities and
indigenous peoples. Nor has it been shown, nay alleged, that the reorganization was made
in bad faith.[55]
As for the other arguments raised by AMIN which pertain to the wisdom or soundness of
the executive decision, the Court finds it unnecessary to pass upon them. The raging debate
on the most fitting framework in the delivery of social services is endless in the political
arena. It is not the business of this Court to join in the fray. Courts have no judicial power to
review cases involving political questions and, as a rule, will desist from taking cognizance of
speculative or hypothetical cases, advisory opinions and cases that have become moot. [56]
Finally, a word on the last ground proffered for declaring the unconstitutionality of the
assailed issuances â"€ that they violate Section 16, Article XIII of the Constitution [57] on the
people's right to participate in decision-making through adequate consultation mechanisms.
The framers of the Constitution recognized that the consultation mechanisms were already
operating without the State's action by law, such that the role of the State would be mere
facilitation, not necessarily creation of these consultation mechanisms. The State provides
the support, but eventually it is the people, properly organized in their associations, who
can assert the right and pursue the objective. Penalty for failure on the part of the
government to consult could only be reflected in the ballot box and would not nullify
government action.[58]
WHEREFORE, the petition is DISMISSED. Executive Order Nos. 364 and 379 issued on
September 27, 2004 and October 26, 2004, respectively, are declared not unconstitutional.
SO ORDERED.
Bagaoisan vs National Tobacco Administration, G.R. No. 152845 August 5, 2003
Petitioner Kapisanan ng mga Kawani ng Energy Regulatory Board (KERB) seeks to declare
Section 38 of Republic Act No. 9136 (RA 9136), which abolished the Energy Regulatory
Board (ERB) and created the ERC, as unconstitutional and to prohibit the ERC
Commissioners from filling up the ERC’s plantilla.
The Facts
RA 9136, popularly known as EPIRA (for Electric Power Industry Reform Act of 2001), was
enacted on 8 June 2001 and took effect on 26 June 2001. Section 38 of RA 9136 provides for
the abolition of the ERB and the creation of the ERC. The pertinent portions of Section 38
read:
Creation of the Energy Regulatory Commission. — There is hereby created an independent,
quasi-judicial regulatory board to be named the Energy Regulatory Commission (ERC). For
this purpose, the existing Energy Regulatory Board (ERB) created under Executive Order No.
172, as amended, is hereby abolished.

G.R. No. 150974 June 29, 2007 The Commission shall be composed of a Chairman and four (4) members to be appointed by
the President of the Philippines. x x x
KAPISANAN NG MGA KAWANI NG ENERGY REGULATORY BOARD, petitioner,
vs. Within three (3) months from the creation of the ERC, the Chairman shall submit for the
COMMISSIONER FE B. BARIN, DEPUTY COMMISSIONERS CARLOS R. ALINDADA, LETICIA V. approval of the President of the Philippines the new organizational structure and plantilla
IBAY, OLIVER B. BUTALID, and MARY ANNE B. COLAYCO, of the ENERGY REGULATORY positions necessary to carry out the powers and functions of the ERC.
COMMISSION, respondent.
xxxx
DECISION
The Chairman and members of the Commission shall assume office at the beginning of their
CARPIO, J.: terms: Provided, That, if upon the effectivity of this Act, the Commission has not been
constituted and the new staffing pattern and plantilla positions have not been approved
The Case and filled-up, the current Board and existing personnel of ERB shall continue to hold office.

This is a special civil action for certiorari and prohibition1 of the selection and appointment
of employees of the Energy Regulatory Commission (ERC) by the ERC Board of
Commissioners.
The existing personnel of the ERB, if qualified, shall be given preference in the filling up of
plantilla positions created in the ERC, subject to existing civil service rules and regulations.
At the time of the filing of this petition, the ERC was composed of Commissioner Fe B. Barin
and Deputy Commissioners Carlos R. Alindada, Leticia V. Ibay, Oliver B. Butalid, and Mary
Anne B. Colayco (collectively, Commissioners). The Commissioners assumed office on 15
August 2001. Pursuant to Section 38 of RA 9136, the Commissioners issued the proposed
Table of Organization, Staffing Pattern, and Salary Structure on 25 September 2001 which
the President of the Philippines approved on 13 November 2001. Meanwhile, KERB
submitted to the Commissioners its Resolution No. 2001-02 on 13 September 2001.
Resolution No. 2001-02 requested the Commissioners for an opportunity to be informed on
the proposed plantilla positions with their equivalent qualification standards.
On 17 October 2001, the Commissioners issued the guidelines for the selection and hiring of
ERC employees. A portion of the guidelines reflects the Commissioners’ view on the
selection and hiring of the ERC employees vis-a-vis Civil Service rules, thus:
Since R.A. 9136 has abolished the Energy Regulatory Board (ERB), it is the view of the
Commission that the provisions of Republic Act No. 6656 (An Act to Protect the Security of
[Tenure of] Civil Service Officers and Employees in the Implementation of Government
Reorganization) will not directly apply to ERC’s current efforts to establish a new
organization. Civil Service laws, rules and regulations, however, will have suppletory
application to the extent possible in regard to the selection and placement of employees in
the ERC.2 (Emphasis supplied)
On 5 November 2005, KERB sent a letter to the Commissioners stating the KERB members’
objection to the Commissioners’ stand that Civil Service laws, rules and regulations have
suppletory application in the selection and placement of the ERC employees. KERB asserted
that RA 9136 did not abolish the ERB or change the ERB’s character as an economic
regulator of the electric power industry. KERB insisted that RA 9136 merely changed the
ERB’s name to the ERC and expanded the ERB’s functions and objectives. KERB sent the
Commissioners yet another letter on 13 November 2001. KERB made a number of requests:
(1) the issuance of a formal letter related to the date of filing of job applications, including
the use of Civil Service application form no. 212; (2) the creation of a
placement/recruitment committee and setting guidelines relative to its functions, without
prejudice to existing Civil Service rules and regulations; and (3) copies of the plantilla
positions and their corresponding qualification standards duly approved by either the
President of the Philippines or the Civil Service Commission (CSC).
Commissioner Barin replied to KERB’s letter on 15 November 2001. She stated that Civil
Service application form no. 212 and the ERC-prescribed application format are
substantially the same. Furthermore, the creation of a placement/recruitment committee is
no longer necessary because there is already a prescribed set of guidelines for the
recruitment of personnel. The ERC hired an independent consultant to administer the
necessary tests for the technical and managerial levels. Finally, the ERC already posted the
plantilla positions, which prescribe higher standards, as approved by the Department of
Budget and Management. Commissioner Barin stated that positions in the ERC do not need
the prior approval of the CSC, as the ERC is only required to submit the qualification
standards to the CSC.
On 5 December 2001, the ERC published a classified advertisement in the Philippine Star.
Two days later, the CSC received a list of vacancies and qualification standards from the
ERC. The ERC formed a Selection Committee to process all applications.
KERB, fearful of the uncertainty of the employment status of its members, filed the present
petition on 20 December 2001. KERB later filed an Urgent Ex Parte Motion to Enjoin
Termination of Petitioner ERB Employees on 2 January 2002. However, before the ERC
received KERB’s pleadings, the Selection Committee already presented its list of proposed
appointees to the Commissioners.
In their Comment, the Commissioners describe the status of the ERB employees’
appointment in the ERC as follows:
As of February 1, 2002, of the two hundred twelve (212) ERB employees, one hundred thirty
eighty [sic] (138) were rehired and appointed to ERC plantilla positions and sixty six (66)
opted to retire or be separated from the service. Those who were rehired and those who
opted to retire or be separated constituted about ninety six (96%) percent of the entire ERB
employees. The list of the ERB employees appointed to new positions in the ERC is attached
hereto as Annex 1. Only eight (8) ERB employees could not be appointed to new positions
due to the reduction of the ERC plantilla and the absence of positions appropriate to their
respective qualifications and skills. The appropriate notice was issued to each of them
informing them of their separation from the service and assuring them of their entitlement
to "separation pay and other benefits in accordance with existing laws." 3
The Issues
KERB raises the following issues before this Court:
1. Whether Section 38 of RA 9136 abolishing the ERB is constitutional; and
2. Whether the Commissioners of the ERC were correct in disregarding and considering
merely suppletory in character the protective mantle of RA 6656 as to the ERB employees
or petitioner in this case.4
The Ruling of the Court
The petition has no merit.
We disregard the procedural defects in the petition, such as KERB’s personality to file the
petition on behalf of its alleged members and Elmar Agir’s authority to institute the action,
because of the demands of public interest.5
Constitutionality of the ERB’s Abolition
and the ERC’s Creation
All laws enjoy the presumption of constitutionality. To justify the nullification of a law, there
must be a clear and unequivocal breach of the Constitution. KERB failed to show any breach
of the Constitution.
A public office is created by the Constitution or by law or by an officer or tribunal to which
the power to create the office has been delegated by the legislature. 6 The power to create
an office carries with it the power to abolish. President Corazon C. Aquino, then exercising
her legislative powers, created the ERB by issuing Executive Order No. 172 on 8 May 1987.
The question of whether a law abolishes an office is a question of legislative intent. There
should not be any controversy if there is an explicit declaration of abolition in the law
itself.7 Section 38 of RA 9136 explicitly abolished the ERB. However, abolition of an office
and its related positions is different from removal of an incumbent from his office. Abolition
and removal are mutually exclusive concepts. From a legal standpoint, there is no occupant
in an abolished office. Where there is no occupant, there is no tenure to speak of. Thus,
impairment of the constitutional guarantee of security of tenure does not arise in the
abolition of an office. On the other hand, removal implies that the office and its related
positions subsist and that the occupants are merely separated from their positions. 8
A valid order of abolition must not only come from a legitimate body, it must also be made
in good faith. An abolition is made in good faith when it is not made for political or personal
reasons, or when it does not circumvent the constitutional security of tenure of civil service
employees.9 Abolition of an office may be brought about by reasons of economy, or to
remove redundancy of functions, or a clear and explicit constitutional mandate for such
termination of employment.10 Where one office is abolished and replaced with another
office vested with similar functions, the abolition is a legal nullity.11 When there is a void
abolition, the incumbent is deemed to have never ceased holding office.
KERB asserts that there was no valid abolition of the ERB but there was merely a
reorganization done in bad faith. Evidences of bad faith are enumerated in Section 2 of
Republic Act No. 6656 (RA 6656),12 Section 2 of RA 6656 reads:
No officer or employee in the career service shall be removed except for a valid cause and
after due notice and hearing. A valid cause for removal exists when, pursuant to a bona
fide reorganization, a position has been abolished or rendered redundant or there is a need
to merge, divide, or consolidate positions in order to meet the exigencies of the service, or
other lawful causes allowed by the Civil Service Law. The existence of any or some of the
following circumstances may be considered as evidence of bad faith in the removals made
as a result of reorganization, giving rise to a claim for reinstatement or reappointment by an
aggrieved party:
(a) Where there is a significant increase in the number of positions in the new staffing
pattern of the department or agency concerned;
(b) Where an office is abolished and another performing substantially the same functions is
created;
(c) Where incumbents are replaced by those less qualified in terms of status of
appointment, performance and merit;
(d) Where there is a reclassification of offices in the department or agency concerned and
the reclassified offices perform substantially the same function as the original offices;
(e) Where the removal violates the order of separation provided in Section 3 hereof.
KERB claims that the present case falls under the situation described in Section 2(b) of RA
6656. We thus need to compare the provisions enumerating the powers and functions of
the ERB and the ERC to see whether they have substantially the same functions. Under
Executive Order No. 172, the ERB has the following powers and functions:
SEC. 3. Jurisdiction, Powers and Functions of the Board. ― When warranted and only when
public necessity requires, the Board may regulate the business of importing, exporting, re-
exporting, shipping, transporting, processing, refining, marketing and distributing energy
resources. Energy resource means any substance or phenomenon which by itself or in
combination with others, or after processing or refining or the application to it of
technology, emanates, generates or causes the emanation or generation of energy, such as
but not limited to, petroleum or petroleum products, coal, marsh gas, methane gas,
geothermal and hydroelectric sources of energy, uranium and other similar radioactive
minerals, solar energy, tidal power, as well as non-conventional existing and potential
sources.
The Board shall, upon proper notice and hearing, exercise the following, among other
powers and functions:
(a) Fix and regulate the prices of petroleum products;
(b) Fix and regulate the rate schedule or prices of piped gas to be charged by duly
franchised gas companies which distribute gas by means of underground pipe system;
(c) Fix and regulate the rates of pipeline concessionaires under the provisions of Republic
Act No. 387, as amended, otherwise known as the "Petroleum Act of 1949," as amended by
Presidential Decree No. 1700;
(d) Regulate the capacities of new refineries or additional capacities of existing refineries
and license refineries that may be organized after the issuance of this Executive Order,
under such terms and conditions as are consistent with the national interest;
(e) Whenever the Board has determined that there is a shortage of any petroleum product,
or when public interest so requires, it may take such steps as it may consider necessary,
including the temporary adjustment of the levels of prices of petroleum products and the
payment to the Oil Price Stabilization Fund created under Presidential Decree No. 1956 by
persons or entities engaged in the petroleum industry of such amounts as may be
determined by the Board, which will enable the importer to recover its cost of importation.
SEC. 4. Reorganized or Abolished Agency. ― (a) The Board of Energy is hereby reconstituted
into the Energy Regulatory Board, and the former’s powers and functions under Republic
Act No. 6173, as amended by Presidential Decree No. 1208, as amended, are transferred to
the latter.
(b) The regulatory and adjudicatory powers and functions exercised by the Bureau of Energy
Utilization under Presidential Decree No. 1206, as amended, are transferred to the Board,
the provisions of Executive Order No. 131 notwithstanding.
SEC. 5. Other Transferred Powers and Functions. ― The power of the Land Transportation
Commission to determine, fix and/or prescribe rates or charges pertaining to the hauling of
petroleum products are transferred to the Board. The power to fix and regulate the rates or
charges pertinent to shipping or transporting of petroleum products shall also be exercised
by the Board.
The foregoing transfer of powers and functions shall include applicable funds and
appropriations, records, equipment, property and such personnel as may be
necessary; Provided, That with reference to paragraph (b) of Section 4 hereof, only such
amount of funds and appropriations of the Bureau of Energy Utilization, as well as only the
personnel thereof who are completely or primarily involved in the exercise by said Bureau
of its regulatory and adjudicatory powers and functions, shall be affected by such
transfer: Provided, further, That the funds and appropriations as well as the records,
equipment, property and all personnel of the reorganized Board of Energy shall be
transferred to the Energy Regulatory Board.
SEC. 6. Power to Promulgate Rules and Perform Other Acts. ― The Board shall have the
power to promulgate rules and regulations relevant to procedures governing hearings
before it and enforce compliance with any rule, regulation, order or other requirements:
Provided, That said rules and regulations shall take effect fifteen (15) days after publication
in the Official Gazette. It shall also perform such other acts as may be necessary or
conducive to the exercise of its powers and functions, and the attainment of the purposes
of this Order.
On the other hand, Section 43 of RA 9136 enumerates the basic functions of the ERC.
SEC. 43. Functions of the ERC. ― The ERC shall promote competition, encourage market
development, ensure customer choice and discourage/penalize abuse of market power in
the restructured electricity industry. In appropriate cases, the ERC is authorized to issue
cease and desist order after due notice and hearing. Towards this end, it shall be
responsible for the following key functions in the restructured industry:
(a) Enforce the implementing rules and regulations of this Act;
(b) Within six (6) months from the effectivity of this Act, promulgate and enforce, in
accordance with law, a National Grid Code and a Distribution Code which shall include, but
not limited to, the following:
(i) Performance standards for TRANSCO O & M Concessionaire, distribution utilities and
suppliers: Provided, That in the establishment of the performance standards, the nature and
function of the entities shall be considered; and
(ii) Financial capability standards for the generating companies, the TRANSCO, distribution
utilities and suppliers: Provided, That in the formulation of the financial capability
standards, the nature and function of the entity shall be considered: Provided, further, That
such standards are set to ensure that the electric power industry participants meet the
minimum financial standards to protect the public interest. Determine, fix, and approve,
after due notice and public hearings the universal charge, to be imposed on all electricity
end-users pursuant to Section 34 hereof;
(c) Enforce the rules and regulations governing the operations of the electricity spot market
and the activities of the spot market operator and other participants in the spot market, for
the purpose of ensuring a greater supply and rational pricing of electricity;
(d) Determine the level of cross subsidies in the existing retail rate until the same is
removed pursuant to Section 73 hereof;
(e) Amend or revoke, after due notice and hearing, the authority to operate of any person
or entity which fails to comply with the provisions hereof, the IRR or any order or resolution
of the ERC. In the event a divestment is required, the ERC shall allow the affected party
sufficient time to remedy the infraction or for an orderly disposal, but shall in no case
exceed twelve (12) months from the issuance of the order;
(f) In the public interest, establish and enforce a methodology for setting transmission and
distribution wheeling rates and retail rates for the captive market of a distribution utility,
taking into account all relevant considerations, including the efficiency or inefficiency of the
regulated entities. The rates must be such as to allow the recovery of just and reasonable
costs and a reasonable return on rate base (RORB) to enable the entity to operate viably.
The ERC may adopt alternative forms of internationally-accepted rate setting methodology
as it may deem appropriate. The rate-setting methodology so adopted and applied must
ensure a reasonable price of electricity. The rates prescribed shall be non-discriminatory. To
achieve this objective and to ensure the complete removal of cross subsidies, the cap on the
recoverable rate of system losses prescribed in Section 10 of Republic Act No. 7832, is
hereby amended and shall be replaced by caps which shall be determined by the ERC based
on load density, sales mix, cost of service, delivery voltage and other technical
considerations it may promulgate. The ERC shall determine such form of rate-setting
methodology, which shall promote efficiency. In case the rate setting methodology used is
RORB, it shall be subject to the following guidelines:
(i) For purposes of determining the rate base, the TRANSCO or any distribution utility may
be allowed to revalue its eligible assets not more than once every three (3) years by an
independent appraisal company: Provided, however, That ERC may give an exemption in
case of unusual devaluation: Provided, further, That the ERC shall exert efforts to minimize
price shocks in order to protect the consumers;
(ii) Interest expenses are not allowable deductions from permissible return on rate base;
(iii) In determining eligible cost of services that will be passed on to the end-users, the ERC
shall establish minimum efficiency performance standards for the TRANSCO and distribution
utilities including systems losses, interruption frequency rates, and collection efficiency;
(iv) Further, in determining rate base, the TRANSCO or any distribution utility shall not be
allowed to include management inefficiencies like cost of project delays not excused
by force majeure, penalties and related interest during construction applicable to these
unexcused delays; and
(v) Any significant operating costs or project investments of TRANSCO and distribution
utilities which shall become part of the rate base shall be subject to the verification of the
ERC to ensure that the contracting and procurement of the equipment, assets and services
have been subjected to transparent and accepted industry procurement and purchasing
practices to protect the public interest.
(g) Three (3) years after the imposition of the universal charge, ensure that the charges of
the TRANSCO or any distribution utility shall bear no cross subsidies between grids, within
grids, or between classes of customers, except as provided herein;
(h) Review and approve any changes on the terms and conditions of service of the TRANSCO
or any distribution utility;
(i) Allow the TRANSCO to charge user fees for ancillary services to all electric power industry
participants or self-generating entities connected to the grid. Such fees shall be fixed by the
ERC after due notice and public hearing;
(j) Set a lifeline rate for the marginalized end-users;
(k) Monitor and take measures in accordance with this Act to penalize abuse of market
power, cartelization, and anti-competitive or discriminatory behavior by any electric power
industry participant;
(l) Impose fines or penalties for any non-compliance with or breach of this Act, the IRR of
this Act and the rules and regulations which it promulgates or administers;
(m) Take any other action delegated to it pursuant to this Act;
(n) Before the end of April of each year, submit to the Office of the President of the
Philippines and Congress, copy furnished the DOE, an annual report containing such matters
or cases which have been filed before or referred to it during the preceding year, the
actions and proceedings undertaken and its decision or resolution in each case. The ERC
shall make copies of such reports available to any interested party upon payment of a
charge which reflects the printing costs. The ERC shall publish all its decisions involving rates
and anticompetitive cases in at least one (1) newspaper of general circulation, and/or post
electronically and circulate to all interested electric power industry participants copies of its
resolutions to ensure fair and impartial treatment;
(o) Monitor the activities of the generation and supply of the electric power industry with
the end in view of promoting free market competition and ensuring that the allocation or
pass through of bulk purchase cost by distributors is transparent, non-discriminatory and
that any existing subsidies shall be divided pro rata among all retail suppliers;
(p) Act on applications for or modifications of certificates of public convenience and/or
necessity, licenses or permits of franchised electric utilities in accordance with law and
revoke, review and modify such certificates, licenses or permits in appropriate cases, such
as in cases of violations of the Grid Code, Distribution Code and other rules and regulations
issued by the ERC in accordance with law;
(q) Act on applications for cost recovery and return on demand side management projects;
(r) In the exercise of its investigative and quasi-judicial powers, act against any participant
or player in the energy sector for violations of any law, rule and regulation governing the
same, including the rules on cross ownership, anticompetitive practices, abuse of market
positions and similar or related acts by any participant in the energy sector, or by any
person as may be provided by law, and require any person or entity to submit any report or
data relative to any investigation or hearing conducted pursuant to this Act;
(s) Inspect, on its own or through duly authorized representatives, the premises, books of
accounts and records of any person or entity at any time, in the exercise of its quasi-judicial
power for purposes of determining the existence of any anticompetitive behavior and/or
market power abuse and any violation of rules and regulations issued by the ERC;
(t) Perform such other regulatory functions as are appropriate and necessary in order to
ensure the successful restructuring and modernization of the electric power industry, such
as, but not limited to, the rules and guidelines under which generation companies,
distribution utilities which are not publicly listed shall offer and sell to the public a portion
not less than fifteen percent (15%) of their common shares of stocks: Provided, however,
That generation companies, distribution utilities or their respective holding companies that
are already listed in the PSE are deemed in compliance. For existing companies, such public
offering shall be implemented not later than five (5) years from the effectivity of this Act.
New companies shall implement their respective public offerings not later than five (5)
years from the issuance of their certificate of compliance; and
(u) The ERC shall have the original and exclusive jurisdiction over all cases contesting rates,
fees, fines and penalties imposed by the ERC in the exercise of the abovementioned
powers, functions and responsibilities and over all cases involving disputes between and
among participants or players in the energy sector.
All notices of hearings to be conducted by the ERC for the purpose of fixing rates or fees
shall be published at least twice for two successive weeks in two (2) newspapers of
nationwide circulation.
Aside from Section 43, additional functions of the ERC are scattered throughout RA 9136:
1. SEC. 6. Generation Sector. ― Generation of electric power, a business affected with
public interest, shall be competitive and open.
Upon the effectivity of this Act, any new generation company shall, before it operates,
secure from the Energy Regulatory Commission (ERC) a certificate of compliance pursuant
to the standards set forth in this Act, as well as health, safety and environmental clearances
from the appropriate government agencies under existing laws.
xxxx
2. SEC. 8. Creation of the National Transmission Company. ― x x x
That the subtransmission assets shall be operated and maintained by TRANSCO until their
disposal to qualified distribution utilities which are in a position to take over the
responsibility for operating, maintaining, upgrading, and expanding said assets. x x x
In case of disagreement in valuation, procedures, ownership participation and other issues,
the ERC shall resolve such issues.
xxxx
3. SEC. 23. Functions of Distribution Utilities. ― x x x
Distribution utilities shall submit to the ERC a statement of their compliance with the
technical specifications prescribed in the Distribution Code and the performance standards
prescribed in the IRR of this Act. Distribution utilities which do not comply with any of the
prescribed technical specifications and performance standards shall submit to the ERC a
plan to comply, within three (3) years, with said prescribed technical specifications and
performance standards. The ERC shall, within sixty (60) days upon receipt of such plan,
evaluate the same and notify the distribution utility concerned of its action. Failure to
submit a feasible and credible plan and/or failure to implement the same shall serve as
grounds for the imposition of appropriate sanctions, fines or penalties.
xxxx
4. SEC. 28. De-monopolization and Shareholding Dispersal. ― In compliance with the
constitutional mandate for dispersal of ownership and de-monopolization of public utilities,
the holdings of persons, natural or juridical, including directors, officers, stockholders and
related interests, in a distribution utility and their respective holding companies shall not
exceed twenty-five (25%) percent of the voting shares of stock unless the utility or the
company holding the shares or its controlling stockholders are already listed in the
Philippine Stock Exchange (PSE): Provided, That controlling stockholders of small
distribution utilities are hereby required to list in the PSE within five (5) years from the
enactment of this Act if they already own the stocks. New controlling stockholders shall
undertake such listing within five (5) years from the time they acquire ownership and
control. A small distribution company is one whose peak demand is equal to Ten megawatts
(10MW).
The ERC shall, within sixty (60) days from the effectivity of this Act, promulgate the rules
and regulations to implement and effect this provision.
xxxx
5. SEC. 29. Supply Sector. ― x x x all suppliers of electricity to the contestable market shall
require a license from the ERC.
For this purpose, the ERC shall promulgate rules and regulations prescribing the
qualifications of electricity suppliers which shall include, among other requirements, a
demonstration of their technical capability, financial capability, and
creditworthiness: Provided, That the ERC shall have authority to require electricity suppliers
to furnish a bond or other evidence of the ability of a supplier to withstand market
disturbances or other events that may increase the cost of providing service.
xxxx
6. SEC. 30. Wholesale Electricity Spot Market. ― x x x
Subject to the compliance with the membership criteria, all generating companies,
distribution utilities, suppliers, bulk consumers/end-users and other similar entities
authorized by the ERC shall be eligible to become members of the wholesale electricity spot
market.
The ERC may authorize other similar entities to become eligible as members, either directly
or indirectly, of the wholesale electricity spot market.
xxxx
7. SEC. 31. Retail Competition and Open Access. ― x x x
Upon the initial implementation of open access, the ERC shall allow all electricity end-users
with a monthly average peak demand of at least one megawatt (1MW) for the preceding
twelve (12) months to be the contestable market. xxx Subsequently and every year
thereafter, the ERC shall evaluate the performance of the market. x x x
8. SEC. 32. NPC Stranded Debt and Contract Cost Recovery. ― x x x
The ERC shall verify the reasonable amounts and determine the manner and duration for
the full recovery of stranded debt and stranded contract costs as defined herein x x x x
9. SEC. 34. Universal Charge. ― Within one (1) year from the effectivity of this Act, a
universal charge to be determined, fixed and approved by the ERC, shall be imposed on all
electricity end-users x x x x
10. SEC. 35. Royalties, Returns and Tax Rates for Indigenous Energy Resources. ― x x x
To ensure lower rates for end-users, the ERC shall forthwith reduce the rates of power from
all indigenous sources of energy.
11. SEC. 36. Unbundling of Rates and Functions. ― x x x
each distribution utility shall file its revised rates for the approval by the ERC. x x x x
12. SEC. 40. Enhancement of Technical Competence. ― The ERC shall establish rigorous
training programs for its staff for the purpose of enhancing the technical competence of the
ERC in the following areas: evaluation of technical performance and monitoring of
compliance with service and performance standards, performance-based rate-setting
reform, environmental standards and such other areas as will enable the ERC to adequately
perform its duties and functions.
13. SEC. 41. Promotion of Consumer Interests. ― The ERC shall handle consumer complaints
and ensure the adequate promotion of consumer interests.
14. SEC. 45. Cross Ownership, Market Power Abuse and Anti-Competitive Behavior. ― No
participant in the electricity industry may engage in any anti-competitive behavior including,
but not limited to, cross-subsidization, price or market manipulation, or other unfair trade
practices detrimental to the encouragement and protection of contestable markets.
xxxx
(c) x x x The ERC shall, within one (1) year from the effectivity of this Act, promulgate rules
and regulations to promote competition, encourage market development and customer
choice and discourage/penalize abuse of market power, cartelization and any
anticompetitive or discriminatory behavior, in order to further the intent of this Act and
protect the public interest. Such rules and regulations shall define the following:
(a) the relevant markets for purposes of establishing abuse or misuse of monopoly or
market position;
(b) areas of isolated grids; and
(c) the periodic reportorial requirements of electric power industry participants as may be
necessary to enforce the provisions of this Section.
The ERC shall, motu proprio, monitor and penalize any market power abuse or
anticompetitive or discriminatory act or behavior by any participant in the electric power
industry.
15. SEC. 51. Powers. ― The PSALM Corp. shall, in the performance of its functions and for
the attainment of its objective, have the following powers: x x x
(e) To liquidate the NPC stranded contract costs utilizing proceeds from sales and other
property contributed to it, including the proceeds from the universal charge;
xxxx
16. SEC. 60. Debts of Electric Cooperatives. ― x x x The ERC shall ensure a reduction in the
rates of electric cooperatives commensurate with the resulting savings due to the removal
of the amortization payments of their loans. x x x x
17. SEC. 62. Joint Congressional Power Commission. ― x x x
x x x the Power Commission is hereby empowered to require the DOE, ERC, NEA, TRANSCO,
generation companies, distribution utilities, suppliers and other electric power industry
participants to submit reports and all pertinent data and information relating to the
performance of their respective functions in the industry. xxx
xxxx
18. SEC. 65. Environmental Protection. ― Participants in the generation, distribution and
transmission sub-sectors of the industry shall comply with all environmental laws, rules,
regulations and standards promulgated by the Department of Environment and Natural
Resources including, in appropriate cases, the establishment of an environmental guarantee
fund.
19. SEC. 67. NPC Offer of Transition Supply Contracts. ― Within six (6) months from the
effectivity of this Act, NPC shall file with the ERC for its approval a transition supply contract
duly negotiated with the distribution utilities containing the terms and conditions of supply
and a corresponding schedule of rates, consistent with the provisions hereof, including
adjustments and/or indexation formulas which shall apply to the term of such contracts.
xxxx
20. SEC. 69. Renegotiation of Power Purchase and Energy Conversion Agreements between
Government Entities. ― Within three (3) months from the effectivity of this Act, all power
purchase and energy conversion agreements between the PNOC-Energy Development
Corporation (PNOC-EDC) and NPC, including but not limited to the Palimpinon, Tongonan
and Mt. Apo Geothermal complexes, shall be reviewed by the ERC and the terms thereof
amended to remove any hidden costs or extraordinary mark-ups in the cost of power or
steam above their true costs. All amended contracts shall be submitted to the Joint
Congressional Power Commission for approval. The ERC shall ensure that all savings realized
from the reduction of said mark-ups shall be passed on to all end-users.
After comparing the functions of the ERB and the ERC, we find that the ERC indeed assumed
the functions of the ERB. However, the overlap in the functions of the ERB and of the ERC
does not mean that there is no valid abolition of the ERB. The ERC has new and expanded
functions which are intended to meet the specific needs of a deregulated power industry.
Indeed, National Land Titles and Deeds Registration Administration v. Civil Service
Commission stated that:
[I]f the newly created office has substantially new, different or additional functions, duties
or powers, so that it may be said in fact to create an office different from the one abolished,
even though it embraces all or some of the duties of the old office it will be considered as
an abolition of one office and the creation of a new or different one. The same is true if one
office is abolished and its duties, for reasons of economy are given to an existing officer or
office.13
KERB argues that "RA 9136 did not abolish the ERB nor did it alter its essential character as
an economic regulator of the electric power industry. x x x RA 9136 rather changed merely
ERB’s name and title to that of the ERC even as it expanded its functions and objectives to
keep pace with the times." To uphold KERB’s argument regarding the invalidity of the ERB’s
abolition is to ignore the developments in the history of energy regulation.
The regulation of public services started way back in 1902 with the enactment of Act No.
520 which created the Coastwise Rate Commission. In 1906, Act No. 1507 was passed
creating the Supervising Railway Expert. The following year, Act No. 1779 was enacted
creating the Board of Rate Regulation. Then, Act No 2307, which was patterned after the
Public Service Law of the State of New Jersey, was approved by the Philippine Commission
in 1914, creating the Board of Public Utility Commissioners, composed of three members,
which absorbed all the functions of the Coastwise Rate Commission, the Supervising
Railway Expert, and the Board of Rate Regulation.
Thereafter, several laws were enacted on public utility regulation. On November 7, 1936,
Commonwealth Act No. 146, otherwise known as the Public Service Law, was enacted by
the National Assembly. The Public Service Commission (PSC) had jurisdiction, supervision,
and control over all public services, including the electric power service.
After almost four decades, significant developments in the energy sector changed the
landscape of economic regulation in the country.
· April 30, 1971 ― R.A. No. 6173 was passed creating the Oil Industry Commission (OIC),
which was tasked to regulate the oil industry and to ensure the adequate supply of
petroleum products at reasonable prices.
· September 24, 1972 ― then President Ferdinand E. Marcos issued Presidential Decree No.
1 which ordered the preparation of the Integrated Reorganization Plan by the Commission
on Reorganization. The Plan abolished the PSC and transferred the regulatory and
adjudicatory functions pertaining to the electricity industry and water resources to then
Board of Power and Waterworks (BOPW).
· October 6, 1977 ― the government created the Department of Energy (DOE) and
consequently abolished the OIC, which was replaced by the creation of the Board of Energy
(BOE) through Presidential Decree No. 1206. The BOE, in addition, assumed the powers and
functions of the BOPW over the electric power industry.
· May 8, 1987 ― the BOE was reconstituted into the Energy Regulatory Board (ERB),
pursuant to Executive Order No. 172 issued by then President Corazon C. Aquino as part of
her government’s reorganization program. The rationale was to consolidate and entrust
into a single body all the regulatory and adjudicatory functions pertaining to the energy
sector. Thus, the power to regulate the power rates and services of private electric utilities
was transferred to the ERB.
· December 28, 1992 ― Republic Act No. 7638 signed, where the power to fix the rates of
the National Power Corporation (NPC) and the rural electric cooperatives (RECs) was passed
on to the ERB. Non-pricing functions of the ERB with respect to the petroleum industry
were transferred to the DOE, i.e., regulating the capacities of new refineries.
· February 10, 1998 ― enactment of Republic Act 8479: Downstream Oil Industry
Deregulation Act of 1998, which prescribed a five-month transition period, before full
deregulation of the oil industry, during which ERB would implement an automatic pricing
mechanism (APM) for petroleum products every month.
· June 12, 1998 ― the Philippine oil industry was fully deregulated, thus, ERB’s focus of
responsibility centered on the electric industry.
· June 8, 2001 ― enactment of Republic Act No. 9136, otherwise known as the Electric
Power Industry Reform Act (EPIRA) of 2001. The Act abolished the ERB and created in its
place the Energy Regulatory Commission (ERC) which is a purely independent regulatory
body performing the combined quasi-judicial, quasi-legislative and administrative functions
in the electric industry.14
Throughout the years, the scope of the regulation has gradually narrowed from that of
public services in 1902 to the electricity industry and water resources in 1972 to the electric
power industry and oil industry in 1977 to the electric industry alone in 1998. The ERC
retains the ERB’s traditional rate and service regulation functions. However, the ERC now
also has to promote competitive operations in the electricity market. RA 9136 expanded the
ERC’s concerns to encompass both the consumers and the utility investors.
Thus, the EPIRA provides a framework for the restructuring of the industry, including the
privatization of the assets of the National Power Corporation (NPC), the transition to a
competitive structure, and the delineation of the roles of various government agencies and
the private entities. The law ordains the division of the industry into four (4) distinct sectors,
namely: generation, transmission, distribution and supply. Corollarily, the NPC generating
plants have to privatized and its transmission business spun off and privatized thereafter.
In tandem with the restructuring of the industry is the establishment of "a strong and purely
independent regulatory body." Thus, the law created the ERC in place of the Energy
Regulatory Board (ERB).
To achieve its aforestated goal, the law has reconfigured the organization of the regulatory
body. x x x15
There is no question in our minds that, because of the expansion of the ERC’s functions and
concerns, there was a valid abolition of the ERB. Thus, there is no merit to KERB’s allegation
that there is an impairment of the security of tenure of the ERB’s employees.
WHEREFORE, we DISMISS the petition. No costs.
SO ORDERED.

[G.R. No. 84301. April 7, 1993.]
NATIONAL LAND TITLES AND DEEDS REGISTRATION ADMINISTRATION, Petitioner, v. CIVIL
SERVICE COMMISSION and VIOLETA L. GARCIA, Respondents.
The Solicitor General for Petitioner.
Raul R. Estrella for Private Respondent.
SYLLABUS
1. ADMINISTRATIVE LAW; EXECUTIVE ORDER NO. 649; REORGANIZED LAND REGISTRATION
COMMISSION TO NALTDRA; EXPRESSLY PROVIDED THE ABOLITION OF EXISTING POSITIONS.
— Executive Order No. 649 authorized the reorganization of the Land Registration
Commission (LRC) into the National Land Titles and Deeds Registration Administration
(NALTDRA). It abolished all the positions in the now defunct LRC and required new
appointments to be issued to all employees of the NALTDRA. The question of whether or
not a law abolishes an office is one of legislative intent about which there can be no
controversy whatsoever if there is an explicit declaration in the law itself. A closer
examination of Executive Order No. 649 which authorized the reorganization of the Land
Registration Commission (LRC) into the National Land Titles and Deeds Registration
Administration (NALTDRA), reveals that said law in express terms, provided for the abolition
of existing positions. Thus, without need of any interpretation, the law mandates that from
the moment an implementing order is issued, all positions in the Land Registration
Commission are deemed non-existent. This, however, does not mean removal. Abolition of
a position does not involve or mean removal for the reason that removal implies that the
post subsists and that one is merely separated therefrom. (Arao v. Luspo, 20 SCRA 722
[1967]) After abolition, there is in law no occupant. Thus, there can be no tenure to speak
of. It is in this sense that from the standpoint of strict law, the question of any impairment
of security of tenure does not arise. (De la Llana v. Alba, 112 SCRA 294 [1982])
2. ID.; ID.; ID.; REORGANIZATION, VALID WHEN PURSUED IN GOOD FAITH; CASE AT BAR. —
Nothing is better settled in our law than that the abolition of an office within the
competence of a legitimate body if done in good faith suffers from no infirmity. Two
questions therefore arise: (1) was the abolition carried out by a legitimate body?; and (2)
was it done in good faith? There is no dispute over the authority to carry out a valid
reorganization in any branch or agency of the Government. Under Section 9, Article XVII of
the 1973 Constitution. The power to reorganize is, however; not absolute. We have held in
Dario v. Mison that reorganizations in this jurisdiction have been regarded as valid provided
they are pursued in good faith. This court has pronounced that if the newly created office
has substantially new, different or additional functions, duties or powers, so that it may be
said in fact to create an office different from the one abolished, even though it embraces all
or some of the duties of the old office it will be considered as an abolition of one office and
the creation of a new or different one. The same is true if one office is abolished and its
duties, for reasons of economy are given to an existing officer or office. Executive Order No.
649 was enacted to improve the services and better systematize the operation of the Land
Registration Commission. A reorganization is carried out in good faith if it is for the purpose
of economy or to make bureaucracy more efficient. To this end, the requirement of Bar
membership to qualify for key positions in the NALTDRA was imposed to meet the changing
circumstances and new development of the times. Private respondent Garcia who formerly
held the position of Deputy Register of Deeds II did not have such qualification. It is thus
clear that she cannot hold any key position in the NALTDRA, The additional qualification was
not intended to remove her from office. Rather, it was a criterion imposed concomitant
with a valid reorganization measure.
3. ID.; ID.; ID.; THERE IS NO VESTED PROPERTY RIGHT TO BE RE-EMPLOYED IN A
REORGANIZED OFFICE; CASE AT BAR. — There is no such thing as a vested interest or an
estate in an office, or even an absolute right to hold it. Except constitutional offices which
provide for special immunity as regards salary and tenure, no one can be said to have any
vested right in an office or its salary. None of the exceptions to this rule are obtaining in this
case. To reiterate, the position which private respondent Garcia would like to occupy anew
was abolished pursuant to Executive Order No. 649, a valid reorganization measure. There
is no vested property right to be re employed in a reorganized office. Not being a member
of the Bar, the minimum requirement to qualify under the reorganization law for
permanent appointment as Deputy Register of Deeds II, she cannot be reinstated to her
former position without violating the express mandate of the law.

DECISION
CAMPOS, JR., J.:
The sole issue for our consideration in this case is whether or not membership in the bar,
which is the qualification requirement prescribed for appointment to the position of Deputy
Register of Deeds under Section 4 of Executive Order No. 649 (Reorganizing the Land
Registration Commission (LRC) into the National Land Titles and Deeds Registration
Administration or NALTDRA) should be required of and/or applied only to new applicants
and not to those who were already in the service of the LRC as deputy register of deeds at
the time of the issuance and implementation of the abovesaid Executive
Order.chanrobles.com : virtual law library
The facts, as succinctly stated in the Resolution ** of the Civil Service Commission, are as
follows:jgc:chanrobles.com.ph
"The records show that in 1977, petitioner Garcia, a Bachelor of Laws graduate and a first
grade civil service eligible was appointed Deputy Register of Deeds VII under permanent
status. Said position was later reclassified to Deputy Register of Deeds III pursuant to PD
1529, to which position, petitioner was also appointed under permanent status up to
September 1984. She was for two years, more or less, designated as Acting Branch Register
of Deeds of Meycauayan, Bulacan. By virtue of Executive Order No. 649 (which took effect
on February 9, 1981) which authorized the restructuring of the Land Registration
Commission to National Land Titles and Deeds Registration Administration and regionalizing
the Offices of the Registers therein, petitioner Garcia was issued an appointment as Deputy
Register of Deeds II on October 1, 1984, under temporary status, for not being a member of
the Philippine Bar. She appealed to the Secretary of Justice but her request was denied.
Petitioner Garcia moved for reconsideration but her motion remained unacted. On October
23, 1984, petitioner Garcia was administratively charged with Conduct Prejudicial to the
Best Interest of the Service. While said case was pending decision, her temporary
appointment as such was renewed in 1985. In a Memorandum dated October 30, 1986, the
then Minister, now Secretary, of Justice notified petitioner Garcia of the termination of her
services as Deputy Register of Deeds II on the ground that she was "receiving bribe money."
Said Memorandum of Termination which took effect on February 9, 1987, was the subject
of an appeal to the Inter-Agency Review Committee which in turn referred the appeal to the
Merit Systems Protection Board (MSPB).
In its Order dated July 6, 1987, the MSPB dropped the appeal of petitioner Garcia on the
ground that since the termination of her services was due to the expiration of her
temporary appointment, her separation is in order. Her motion for reconsideration was
denied on similar ground." 1
However, in its Resolution 2 dated June 30, 1988, the Civil Service Commission directed that
private respondent Garcia be restored to her position as Deputy Register of Deeds II or its
equivalent in the NALTDRA. It held that "under the vested right theory the new requirement
of BAR membership to qualify for permanent appointment as Deputy Register of Deeds II or
higher as mandated under said Executive Order, would not apply to her (private respondent
Garcia) but only to the filling up of vacant lawyer positions on or after February 9, 1981, the
date said Executive Order took effect." 3 A fortiori, since private respondent Garcia had
been holding the position of Deputy Register of Deeds II from 1977 to September 1984, she
should not be affected by the operation on February 1, 1981 of Executive Order No. 649.
Petitioner NALTDRA filed the present petition to assail the validity of the above Resolution
of the Civil Service Commission. It contends that Sections 8 and 10 of Executive Order No.
649 abolished all existing positions in the LRC and transferred their functions to the
appropriate new offices created by said Executive Order, which newly created offices
required the issuance of new appointments to qualified office holders. Verily, Executive
Order No. 649 applies to private respondent Garcia, and not being a member of the Bar, she
cannot be reinstated to her former position as Deputy Register of Deeds II.
We find merit in the petition.
Executive Order No. 649 authorized the reorganization of the Land Registration Commission
(LRC) into the National Land Titles and Deeds Registration Administration (NALTDRA). It
abolished all the positions in the now defunct LRC and required new appointments to be
issued to all employees of the NALTDRA.chanrobles virtual lawlibrary
The question of whether or not a law abolishes an office is one of legislative intent about
which there can be no controversy whatsoever if there is an explicit declaration in the law
itself. 4 A closer examination of Executive Order No. 649 which authorized the
reorganization of the Land Registration Commission (LRC) into the National Land Titles and
Deeds Registration Administration (NALTDRA), reveals that said law in express terms,
provided for the abolition of existing positions, to wit:chanrob1es virtual 1aw library
Sec. 8. Abolition of Existing Positions in the Land Registration Commission . . .
All structural units in the Land Registration Commission and in the registries of deeds, and
all Positions therein shall cease to exist from the date specified in the implementing order
to be issued by the President pursuant to the preceding paragraph. Their pertinent
functions, applicable appropriations, records, equipment and property shall be transferred
to the appropriate staff or offices therein created. (Emphasis Supplied.)
Thus, without need of any interpretation, the law mandates that from the moment an
implementing order is issued, all positions in the Land Registration Commission are deemed
non-existent. This, however, does not mean removal. Abolition of a position does not
involve or mean removal for the reason that removal implies that the post subsists and that
one is merely separated therefrom. 5 After abolition, there is in law no occupant. Thus,
there can be no tenure to speak of. It is in this sense that from the standpoint of strict law,
the question of any impairment of security of tenure does not arise. 6
Nothing is better settled in our law than that the abolition of an office within the
competence of a legitimate body if done in good faith suffers from no infirmity. Two
questions therefore arise: (1) was the abolition carried out by a legitimate body?; and (2)
was it done in good faith?
There is no dispute over the authority to carry out a valid reorganization in any branch or
agency of the Government. Under Section 9, Article XVII of the 1973 Constitution, the
applicable law at that time:chanrob1es virtual 1aw library
Sec. 9. All officials and employees in the existing Government of the Republic of the
Philippines shall continue in office until otherwise provided by law or decreed by the
incumbent President of the Philippines, but all officials whose appointments are by this
Constitution vested in the Prime Minister shall vacate their respective offices upon the
appointment and qualifications of their successors.
The power to reorganize is, however; not absolute. We have held in Dario v. Mison 7 that
reorganizations in this jurisdiction have been regarded as valid provided they are pursued in
good faith. This court has pronounced 8 that if the newly created office has substantially
new, different or additional functions, duties or powers, so that it may be said in fact to
create an office different from the one abolished, even though it embraces all or some of
the duties of the old office it will be considered as an abolition of one office and the
creation of a new or different one. The same is true if one office is abolished and its duties,
for reasons of economy are given to an existing officer or office.
Executive Order No. 649 was enacted to improve the services and better systematize the
operation of the Land Registration Commission. 9 A reorganization is carried out in good
faith if it is for the purpose of economy or to make bureaucracy more efficient. 10 To this
end, the requirement of Bar membership to qualify for key positions in the NALTDRA was
imposed to meet the changing circumstances and new development of the times. 11 Private
respondent Garcia who formerly held the position of Deputy Register of Deeds II did not
have such qualification. It is thus clear that she cannot hold any key position in the
NALTDRA, The additional qualification was not intended to remove her from office. Rather,
it was a criterion imposed concomitant with a valid reorganization
measure.chanrobles.com:cralaw:red
A final word, on the "vested right theory" advanced by respondent Civil Service
Commission. There is no such thing as a vested interest or an estate in an office, or even an
absolute right to hold it. Except constitutional offices which provide for special immunity as
regards salary and tenure, no one can be said to have any vested right in an office or its
salary. 12 None of the exceptions to this rule are obtaining in this case.
To reiterate, the position which private respondent Garcia would like to occupy anew was
abolished pursuant to Executive Order No. 649, a valid reorganization measure. There is no
vested property right to be re employed in a reorganized office. Not being a member of the
Bar, the minimum requirement to qualify under the reorganization law for permanent
appointment as Deputy Register of Deeds II, she cannot be reinstated to her former position
without violating the express mandate of the law.
WHEREFORE, premises considered, We hereby GRANT the petition and SET ASIDE the
questioned Resolution of the Civil Service Commission reinstating private respondent to her
former position as Deputy Register of Deeds II or its equivalent in the National Land Titles
and Deeds Registration Administration.
SO ORDERED.
G.R. No. 115863 March 31, 1995
AIDA D. EUGENIO, petitioner,
vs.
CIVIL SERVICE COMMISSION, HON. TEOFISTO T. GUINGONA, JR. & HON. SALVADOR
ENRIQUEZ, JR., respondents.
PUNO, J.:
The power of the Civil Service Commission to abolish the Career Executive Service Board is
challenged in this petition for certiorari and prohibition.
First the facts. Petitioner is the Deputy Director of the Philippine Nuclear Research Institute.
She applied for a Career Executive Service (CES) Eligibility and a CESO rank on August 2,
1993, she was given a CES eligibility. On September 15, 1993, she was recommended to the
President for a CESO rank by the Career Executive Service Board. 1
All was not to turn well for petitioner. On October 1, 1993, respondent Civil Service
Commission2 passed Resolution No. 93-4359, viz:
RESOLUTION NO. 93-4359
WHEREAS, Section 1(1) of Article IX-B provides that Civil Service shall be
administered by the Civil Service Commission, . . .;
WHEREAS, Section 3, Article IX-B of the 1987 Philippine Constitution provides
that "The Civil Service Commission, as the central personnel agency of the
government, is mandated to establish a career service and adopt measures
to promote morale, efficiency, integrity, responsiveness, progresiveness and
courtesy in the civil service, . . .";
WHEREAS, Section 12 (1), Title I, Subtitle A, Book V of the Administrative
Code of 1987 grants the Commission the power, among others, to administer
and enforce the constitutional and statutory provisions on the merit system
for all levels and ranks in the Civil Service;
WHEREAS, Section 7, Title I, Subtitle A, Book V of the Administrative Code of
1987 Provides, among others, that The Career Service shall be characterized
by (1) entrance based on merit and fitness to be determined as far as
practicable by competitive examination, or based highly technical
qualifications; (2) opportunity for advancement to higher career positions;
and (3) security of tenure;
WHEREAS, Section 8 (c), Title I, Subtitle A, Book V of the administrative Code
of 1987 provides that "The third level shall cover Positions in the Career
Executive Service";
WHEREAS, the Commission recognizes the imperative need to consolidate,
integrate and unify the administration of all levels of positions in the career
service.
WHEREAS, the provisions of Section 17, Title I, Subtitle A. Book V of the
Administrative Code of 1987 confers on the Commission the power and
authority to effect changes in its organization as the need arises.
WHEREAS, Section 5, Article IX-A of the Constitution provides that the Civil
Service Commission shall enjoy fiscal autonomy and the necessary
implications thereof;
NOW THEREFORE, foregoing premises considered, the Civil Service
Commission hereby resolves to streamline reorganize and effect changes in
its organizational structure. Pursuant thereto, the Career Executive Service
Board, shall now be known as the Office for Career Executive Service of the
Civil Service Commission. Accordingly, the existing personnel, budget,
 properties and equipment of the Career Executive Service Board shall now
form part of the Office for Career Executive Service.
The above resolution became an impediment. to the appointment of petitioner as Civil
Service Officer, Rank IV. In a letter to petitioner, dated June 7, 1994, the Honorable Antonio
T. Carpio, Chief Presidential legal Counsel, stated:
xxx xxx xxx
On 1 October 1993 the Civil Service Commission issued CSC Resolution No.
93-4359 which abolished the Career Executive Service Board.
Several legal issues have arisen as a result of the issuance of CSC Resolution
No. 93-4359, including whether the Civil Service Commission has authority to
abolish the Career Executive Service Board. Because these issues remain
unresolved, the Office of the President has refrained from considering
appointments of career service eligibles to career executive ranks.
xxx xxx xxx
You may, however, bring a case before the appropriate court to settle the
legal issues arising from issuance by the Civil Service Commission of CSC
Resolution No. 93-4359, for guidance of all concerned.
Thank You.
Finding herself bereft of further administrative relief as the Career Executive Service Board
which recommended her CESO Rank IV has been abolished, petitioner filed the petition at
bench to annul, among others, resolution No. 93-4359. The petition is anchored on the
following arguments:
A.
IN VIOLATION OF THE CONSTITUTION, RESPONDENT COMMISSION USURPED
THE LEGISLATIVE FUNCTIONS OF CONGRESS WHEN IT ABOLISHED THE CESB,
AN OFFICE CREATED BY LAW, THROUGH THE ISSUANCE OF CSC: RESOLUTION
NO. 93-4359;
B.
ALSO IN VIOLATION OF THE CONSTITUTION, RESPONDENT CSC USURPED THE
LEGISLATIVE FUNCTIONS OF CONGRESS WHEN IT ILLEGALLY AUTHORIZED
THE TRANSFER OF PUBLIC MONEY, THROUGH THE ISSUANCE OF CSC
RESOLUTION NO. 93-4359.
Required to file its Comment, the Solicitor General agreed with the contentions of
petitioner. Respondent Commission, however, chose to defend its ground. It posited the
following position:
ARGUMENTS FOR PUBLIC RESPONDENT-CSC
I. THE INSTANT PETITION STATES NO CAUSE OF ACTION AGAINST THE PUBLIC
RESPONDENT-CSC.
II. THE RECOMMENDATION SUBMITTED TO THE PRESIDENT FOR
APPOINTMENT TO A CESO RANK OF PETITIONER EUGENIO WAS A VALID ACT
OF THE CAREER EXECUTIVE SERVICE BOARD OF THE CIVIL SERVICE
COMMISSION AND IT DOES NOT HAVE ANY DEFECT.
III. THE OFFICE OF THE PRESIDENT IS ESTOPPED FROM QUESTIONING THE
VALIDITY OF THE RECOMMENDATION OF THE CESB IN FAVOR OF PETITIONER
EUGENIO SINCE THE PRESIDENT HAS PREVIOUSLY APPOINTED TO CESO RANK
FOUR (4) OFFICIALS SIMILARLY SITUATED AS SAID PETITIONER.
FURTHERMORE, LACK OF MEMBERS TO CONSTITUTE A QUORUM. ASSUMING
THERE WAS NO QUORUM, IS NOT THE FAULT OF PUBLIC RESPONDENT CIVIL
SERVICE COMMISSION BUT OF THE PRESIDENT WHO HAS THE POWER TO
APPOINT THE OTHER MEMBERS OF THE CESB.
IV. THE INTEGRATION OF THE CESB INTO THE COMMISSION IS AUTHORIZED
BY LAW (Sec. 12 (1), Title I, Subtitle A, Book V of the Administrative Code of
the 1987). THIS PARTICULAR ISSUE HAD ALREADY BEEN SETTLED WHEN THE
HONORABLE COURT DISMISSED THE PETITION FILED BY THE HONORABLE
MEMBERS OF THE HOUSE OF REPRESENTATIVES, NAMELY: SIMEON A.
DATUMANONG, FELICIANO R. BELMONTE, JR., RENATO V. DIAZ, AND
MANUEL M. GARCIA IN G.R. NO. 114380. THE AFOREMENTIONED
 PETITIONERS ALSO QUESTIONED THE INTEGRATION OF THE CESB WITH THE
COMMISSION.
We find merit in the petition.3
The controlling fact is that the Career Executive Service Board (CESB) was created in the
Presidential Decree (P.D.) No. 1 on September 1, 19744 which adopted the Integrated Plan.
Article IV, Chapter I, Part of the III of the said Plan provides:
Article IV — Career Executive Service
1. A Career Executive Service is created to form a continuing pool of well-
selected and development oriented career administrators who shall provide
competent and faithful service.
2. A Career Executive Service hereinafter referred to in this Chapter as the
Board, is created to serve as the governing body of the Career Executive
Service. The Board shall consist of the Chairman of the Civil Service
Commission as presiding officer, the Executive Secretary and the
Commissioner of the Budget as ex-officio members and two other members
from the private sector and/or the academic community who are familiar
with the principles and methods of personnel administration.
xxx xxx xxx
5. The Board shall promulgate rules, standards and procedures on the
selection, classification, compensation and career development of members
of the Career Executive Service. The Board shall set up the organization and
operation of the service. (Emphasis supplied)
It cannot be disputed, therefore, that as the CESB was created by law, it can only be
abolished by the legislature. This follows an unbroken stream of rulings that the creation
and abolition of public offices is primarily a legislative function. As aptly summed up in AM
JUR 2d on Public Officers and
Employees, 5 viz:
Except for such offices as are created by the Constitution, the creation of
public offices is primarily a legislative function. In so far as the legislative
power in this respect is not restricted by constitutional provisions, it
supreme, and the legislature may decide for itself what offices are suitable,
necessary, or convenient. When in the exigencies of government it is
necessary to create and define duties, the legislative department has the
discretion to determine whether additional offices shall be created, or
whether these duties shall be attached to and become ex-officio duties of
existing offices. An office created by the legislature is wholly within the
power of that body, and it may prescribe the mode of filling the office and
the powers and duties of the incumbent, and if it sees fit, abolish the office.
In the petition at bench, the legislature has not enacted any law authorizing the abolition of
the CESB. On the contrary, in all the General Appropriations Acts from 1975 to 1993, the
legislature has set aside funds for the operation of CESB. Respondent Commission,
however, invokes Section 17, Chapter 3, Subtitle A. Title I, Book V of the Administrative
Code of 1987 as the source of its power to abolish the CESB. Section 17 provides:
Sec. 17. Organizational Structure. — Each office of the Commission shall be
headed by a Director with at least one Assistant Director, and may have such
divisions as are necessary independent constitutional body, the Commission
may effect changes in the organization as the need arises.
But as well pointed out by petitioner and the Solicitor General, Section 17 must be read
together with Section 16 of the said Code which enumerates the offices under the
respondent Commission, viz:
Sec. 16. Offices in the Commission. — The Commission shall have the
following offices:
(1) The Office of the Executive Director headed by an Executive Director, with
a Deputy Executive Director shall implement policies, standards, rules and
regulations promulgated by the Commission; coordinate the programs of the
offices of the Commission and render periodic reports on their operations,
and perform such other functions as may be assigned by the Commission.
(2) The Merit System Protection Board composed of a Chairman and two (2)
members shall have the following functions:
xxx xxx xxx
(3) The Office of Legal Affairs shall provide the Chairman with legal advice
and assistance; render counselling services; undertake legal studies and
researches; prepare opinions and ruling in the interpretation and application
of the Civil Service law, rules and regulations; prosecute violations of such
law, rules and regulations; and represent the Commission before any court
or tribunal.
(4) The Office of Planning and Management shall formulate development
plans, programs and projects; undertake research and studies on the
different aspects of public personnel management; administer management
improvement programs; and provide fiscal and budgetary services.
(5) The Central Administrative Office shall provide the Commission with
personnel, financial, logistics and other basic support services.
(6) The Office of Central Personnel Records shall formulate and implement
policies, standards, rules and regulations pertaining to personnel records
maintenance, security, control and disposal; provide storage and extension
services; and provide and maintain library services.
(7) The Office of Position Classification and Compensation shall formulate and
implement policies, standards, rules and regulations relative to the
administration of position classification and compensation.
(8) The Office of Recruitment, Examination and Placement shall provide
leadership and assistance in developing and implementing the overall
Commission programs relating to recruitment, execution and placement, and
formulate policies, standards, rules and regulations for the proper
implementation of the Commission's examination and placement programs.
(9) The Office of Career Systems and Standards shall provide leadership and
assistance in the formulation and evaluation of personnel systems and
standards relative to performance appraisal, merit promotion, and employee
incentive benefit and awards.
(10) The Office of Human Resource Development shall provide leadership and
assistance in the development and retention of qualified and efficient work
force in the Civil Service; formulate standards for training and staff
development; administer service-wide scholarship programs; develop
training literature and materials; coordinate and integrate all training
activities and evaluate training programs.
(11) The Office of Personnel Inspection and Audit shall develop policies,
standards, rules and regulations for the effective conduct or inspection and
audit personnel and personnel management programs and the exercise of
delegated authority; provide technical and advisory services to Civil Service
Regional Offices and government agencies in the implementation of their
personnel programs and evaluation systems.
(12) The Office of Personnel Relations shall provide leadership and assistance
in the development and implementation of policies, standards, rules and
regulations in the accreditation of employee associations or organizations
and in the adjustment and settlement of employee grievances and
management of employee disputes.
(13) The Office of Corporate Affairs shall formulate and implement policies,
standards, rules and regulations governing corporate officials and employees
in the areas of recruitment, examination, placement, career development,
merit and awards systems, position classification and compensation,
performing appraisal, employee welfare and benefit, discipline and other
aspects of personnel management on the basis of comparable industry
practices.
(14) The Office of Retirement Administration shall be responsible for the
enforcement of the constitutional and statutory provisions, relative to
retirement and the regulation for the effective implementation of the
retirement of government officials and employees.
 (15) The Regional and Field Offices. — The Commission shall have not less IN VIEW WHEREOF, the petition is granted and Resolution No. 93-4359 of the respondent
than thirteen (13) Regional offices each to be headed by a Director, and such Commission is hereby annulled and set aside. No costs.
field offices as may be needed, each to be headed by an official with at least
the rank of an Assistant Director. SO ORDERED.

As read together, the inescapable conclusion is that respondent Commission's

power to reorganize is limited to offices under its control as enumerated in Section
16, supra. From its inception, the CESB was intended to be an autonomous entity,
albeit administratively attached to respondent Commission. As conceptualized by
the Reorganization Committee "the CESB shall be autonomous. It is expected to
view the problem of building up executive manpower in the government with a
broad and positive outlook." 6 The essential autonomous character of the CESB is
not negated by its attachment to respondent Commission. By said attachment, CESB
was not made to fall within the control of respondent Commission. Under the
Administrative Code of 1987, the purpose of attaching one functionally inter-related
government agency to another is to attain "policy and program coordination." This is
clearly etched out in Section 38(3), Chapter 7, Book IV of the aforecited Code, to wit:

(3) Attachment. — (a) This refers to the lateral relationship between the
department or its equivalent and attached agency or corporation for
purposes of policy and program coordination. The coordination may be
accomplished by having the department represented in the governing board
of the attached agency or corporation, either as chairman or as a member,
with or without voting rights, if this is permitted by the charter; having the
attached corporation or agency comply with a system of periodic reporting
which shall reflect the progress of programs and projects; and having the
department or its equivalent provide general policies through its
representative in the board, which shall serve as the framework for the
internal policies of the attached corporation or agency.

Respondent Commission also relies on the case of Datumanong, et al., vs. Civil Service
Commission, G. R. No. 114380 where the petition assailing the abolition of the CESB was
dismissed for lack of cause of action. Suffice to state that the reliance is misplaced
considering that the cited case was dismissed for lack of standing of the petitioner, hence,
the lack of cause of action.