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 699 1 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.

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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. 1991 2 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

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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

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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.Pangramuyen 17 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. 20The presumption is against inconsistency and repugnancy for the

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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.

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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. ...

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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

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

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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, that subject contracts should be executed by the President of the Philippines or by an 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).

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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:

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(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.

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS6

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. 145972. March 23, 2004]

IGNACIA BALICAS, petitioner, vs. FACT-FINDING & INTELLIGENCE BUREAU (FFIB), OFFICE OF THE OMBUDSMAN, respondent.

D E C I S I O N

QUISUMBING, J.:

This petition for review on certiorari assails the Court of Appeals decision[1] dated August 25, 2000 and resolution[2] of November 13, 2000 in CA-G.R. SP No. 56386, which affirmed the Ombudsmans decision[3] dismissing petitioner from government service for gross neglect of duty in connection with the tragedy at the Cherry Hills Subdivision in Antipolo City on August 3, 1999.

The antecedent facts as summarized in the Ombudsmans decision are as follows:

Based on the evidence adduced by the complainant, the following is the chronological series of events which led to the development of the CHS (Cherry Hills Subdivision):

August 28, 1990 Philjas Corporation, whose primary purposes, among others are: to own, develop, subdivide, market and provide low-cost housing for the poor, was registered with the Securities and Exchange Commission (SEC).

February 19, 1991 then City Mayor Daniel S. Garcia, endorsed to the Housing and Land Use Regulatory Board (HLURB) the proposed CHS.

Thereafter, or on 07 March 1991, based on the favorable recommendations of Mayor Garcia, respondent TAN, issued the Preliminary Approval and Locational Clearance (PALC) for the development of CHS.

On July 5, 1991, then HLURB Commissioner respondent TUNGPALAN issued Development Permit No. 91-0216 for land development only for the entire land area of 12.1034 hectares covered by TCT No. 35083 (now TCT 208837) and with 1,003 saleable lots/units with project classification B.P. 220 Model A-Socialized Housing (p. 96, Records), with several conditions for its development.

Three (3) days thereafter or on July 8, 1991, respondent JASARENO, allowed/granted the leveling/earth-moving operations of the development project of the area subject to certain conditions.

On November 18, 1991, then HLURB Commissioner AMADO B. DELORIA issued Certificate of Registration No. 91-11-0576 in favor of CHS, with License to Sell No. 91-11-0592 for the 1,007 lots/units in the subdivision.

Eventually, on December 10, 1991, respondent POLLISCO issued Small Scale Mining Permit (SSMP) No. IV-316 to Philjas to extract and remove 10,000 cu. meters of filling materials from the area where the CHS is located.

Thereafter, or on January 12, 1994, Philjas applied for a Small Scale Mining Permit (SSMP) under P.D. 1899 with the Rizal Provincial Government to extract and remove 50,000 metric tons of filling materials per annum on CHS 2.8 hectares.

Thus, on January 17, 1994, respondent MAGNO, informed ELIEZER I. RODRIGUEZ of Philjas that CHS is within the EIS System and as such must secure ECC from the DENR. Philjas was accordingly informed of the matter such that it applied for the issuance of ECC from the DENR-Region IV, on February 3, 1994.

On March 12, 1994, an Inspection Report allegedly prepared by respondent BALICAS, attested by respondent RUTAQUIO and approved by respondent TOLENTINO re: field evaluation to the issuance of ECC, was submitted.

Consequently, on April 28, 1994, upon recommendations of respondent TOLENTINO, Philjas application for ECC was approved by respondent PRINCIPE, then Regional Executive Director, DENR under ECC-137-R1-212-94.

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS7

A Mining Field Report for SSMP dated May 10, 1994 was submitted pursuant to the inspection report prepared by respondents CAYETANO, FELICIANO, HILADO and BURGOS, based on their inspection conducted on April 25 to 29, 1994. The report recommended, among others, that the proposed extraction of materials would pose no adverse effect to the environment.

Records further disclosed that on August 10, 1994, respondent BALICAS monitored the implementation of the CHS Project Development to check compliance with the terms and conditions in the ECC. Again, on August 23, 1995, she conducted another monitoring on the project for the same purpose. In both instances, she noted that the project was still in the construction stage hence, compliance with the stipulated conditions could not be fully assessed, and therefore, a follow-up monitoring is proper. It appeared from the records that this August 23, 1995 monitoring inspection was the last one conducted by the DENR.

On September 24, 1994, GOV. CASIMIRO I. YNARES, JR., approved the SSMP applied for by Philjas under SSMP No. RZL-012, allowing Philjas to extract and remove 50,000 metric tons of filling materials from the area for a period of two (2) years from date of its issue until September 6, 1996.[4]

Immediately after the tragic incident on August 3, 1999, a fact-finding investigation was conducted by the Office of the Ombudsman through its Fact-Finding and Intelligence Bureau (FFIB), which duly filed an administrative complaint with the Office of the Ombudsman against several officials of the Housing and Land Use Regulatory Board (HLURB), Department of Environment and Natural Resources (DENR), and the local government of Antipolo.

The charge against petitioner involved a supposed failure on her part to monitor and inspect the development of Cherry Hills Subdivision, which was assumed to be her duty as DENR senior environmental management specialist assigned in the province of Rizal.

For her part, petitioner belied allegations that monitoring was not conducted, claiming that she monitored the development of Cherry Hills Subdivision as evidenced by three (3) monitoring reports dated March 12, 1994, August 10, 1994 and August 23,

1995. She averred that she also conducted subsequent compliance monitoring of the terms and conditions of Philjas Environmental Compliance Certificate (ECC) on May 19, 1997 and noted no violation thereon. She further claimed good faith and exercise of due diligence, insisting that the tragedy was a fortuitous event. She reasoned that the collapse did not occur in Cherry Hills, but in the adjacent mountain eastern side of the subdivision.

On November 15, 1999, the Office of the Ombudsman rendered a decision imposing upon petitioner the supreme penalty of dismissal from office for gross neglect of duty finding:

RESPONDENT BALICAS

Records show that she monitored and inspected the CHS [Cherry Hills Subdivision] only thrice (3), to wit:

1. Inspection Report dated 12 March 1994

2. Monitoring Report dated 10 August 1994

3. Monitoring Report dated 23 August 1995

Verily, with this scant frequency, how can respondent Balicas sweepingly claim that there was no violation of ECC compliance and that she had done what is necessary in accordance with the regular performance of her duties. She herself recognized the fact that the collapsed area is not the subdivision in question but the adjacent mountain eastern side of the CHS. It is incumbent upon her to establish the same in her monitoring and inspection reports and make objective recommendations re: its possible adverse effect to the environment and to the residents of the CHS and nearby areas. Her defense that the position of the CHS shows the impossibility of checking the would-be adverse effect clearly established her incompetence. No expert mind is needed to know that mountains cause landslide and erosion. Cherry Hills Subdivision is a living witness to this.[5]

Petitioner seasonably filed a petition for review of the Ombudsmans decision with the Court of Appeals. In its decision dated August 25, 2000, the Court of Appeals dismissed the petition for lack of merit and affirmed the appealed decision. It found that the landslide was a preventable occurrence and that

petitioner was guilty of gross negligence in failing to closely monitor Philjas compliance with the conditions of the ECC given the known inherent instability of the ground where the subdivision was developed. The appellate court likewise denied petitioners motion for reconsideration in its resolution dated November 13, 2000.

Petitioner now comes to this Court for review on certiorari, under Rule 45 of the Rules of Civil Procedure, of the appellate courts decision. She alleges that the Court of Appeals committed serious errors of law in affirming the Ombudsmans conclusion that:

1 There was gross negligence on the part of petitioner Balicas in the performance of her official duties as Senior Environmental Management Specialist (SEMS) of the Provincial Environment and Natural Resources Office (PENRO) Province of Rizal, DENR Region IV; and the alleged gross neglect of duty of petitioner warranted the imposition of the extreme penalty of dismissal from the service.

2. The landslide which caused the death of several residents of the subdivision and the destruction of property is not a fortuitous event and therefore preventible.[6]

The main issues are whether or not the Court of Appeals committed serious errors of law in: (1) holding petitioner guilty of gross neglect of duty and (2) imposing upon her the extreme penalty of dismissal from office.

In order to ascertain if there had been gross neglect of duty, we have to look at the lawfully prescribed duties of petitioner. Unfortunately, DENR regulations are silent on the specific duties of a senior environmental management specialist. Internal regulations merely speak of the functions of the Provincial Environment and Natural Resources Office (PENRO) to which petitioner directly reports.

Nonetheless, petitioner relies on a letter[7] dated December 13, 1999 from the chief of personnel, DENR Region IV, which defines the duties of a senior environmental management specialist as follows:

1. Conducts investigation of pollution sources or complaints;

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS8

2. Review[s] plans and specifications of proposes (sic) or existing treatment plants and pollution abatement structures and devices to determine their efficiency and suitability for the kind of pollutants to be removed and to recommend issuance or denial of permits;

3. Conducts follow-up inspection of construction of pollution abatement/work and structures to oversee compliance with approved plans and specifications;

4. Recommends remedial measures for the prevention, abatement and control of pollution;

5. Prepares technical reports on pollution investigation and related activities; and

6. Performs related work as assigned.

It is readily apparent that no monitoring duty whatsoever is mentioned in the said letter. The PENRO, on the other hand, is mandated to:

1. conduct surveillance and inspection of pollution sources and control facilities and undertake/initiate measures relative to pollution-related complaints of the general public for appropriate referral to the regional office;

2. comment on the project description, determine if the project fall within the Environmental Impact Statement (EIS) System[8] and submit the same to the regional office; and

3. implement programs and projects related to environmental management within the PENRO.[9]

In addition, the PENRO is likewise tasked to monitor the project proponents compliance with the conditions stipulated in the ECC, with support from the DENR regional office and the Environmental Management Bureau.[10] The primary purpose of compliance monitoring is to ensure the judicious implementation of sound and standard environmental quality during the development stage of a particular project. Specifically, it aims to:

1. monitor project compliance with the conditions set in the ECC;

2. monitor compliance with the Environmental Management Plan (EMP) and applicable laws, rules and regulations; and

3. provide a basis for timely decision-making and effective planning and management of environmental measures through the monitoring of actual project impacts vis--vis predicted impacts in the EIS.[11]

Based on the foregoing, the monitoring duties of the PENRO mainly deal with broad environmental concerns, particularly pollution abatement. This general monitoring duty is applicable to all types of physical developments that may adversely impact on the environment, whether housing projects, industrial sites, recreational facilities, or scientific undertakings.

However, a more specific monitoring duty is imposed on the HLURB as the sole regulatory body for housing and land development. It is mandated to encourage greater private sector participation in low-cost housing through (1) liberalization of development standards, (2) simplification of regulations and (3) decentralization of approvals for permits and licenses.[12]

P.D. No. 1586[13] prescribes the following duties on the HLURB (then Ministry of Human Settlements) in connection with environmentally critical projects requiring an ECC:

SECTION 4. Presidential Proclamation of Environmentally Critical Areas and Projects. The President of the Philippines may, on his own initiative or upon recommendation of the National Environment Protection Council, by proclamation declare certain projects, undertakings or areas in the country as environmentally critical. No person, partnership or corporation shall undertake or operate any such declared environmentally critical project or area without first securing an Environmental Compliance Certificate issued by the President or his duly authorized representative.For the proper management of said critical project or area, the President may by his proclamation reorganize such government offices, agencies, institutions, corporations or instrumentalities including the re-alignment of government personnel, and their specific functions and responsibilities.

For the same purpose as above, the Ministry of Human Settlements [now HLURB] shall: (a) prepare the proper land

or water use pattern for said critical project(s) or area(s); (b) establish ambient environmental quality standards; (c) develop a program of environmental enhancement or protective measures against calamitous factors such as earthquake, floods, water erosion and others; and (d) perform such other functions as may be directed by the President from time to time. (Emphasis ours.)

The legal duty to monitor housing projects, like the Cherry Hills Subdivision, against calamities such as landslides due to continuous rain, is clearly placed on the HLURB, not on the petitioner as PENRO senior environmental management specialist. In fact, the law imposes no clear and direct duty on petitioner to perform such narrowly defined monitoring function.

In the related case of Principe v. Fact-Finding and Intelligence Bureau,[14] this Court found Antonio Principe, regional executive director for DENR Region IV who approved Philjas application for ECC, not liable for gross neglect of duty. The Court reversed the decision of the Court of Appeals and thereby annulled the decision of the Ombudsman in OMB-ADM-09-661, dated December 1, 1999, dismissing Principe from the government service. We ordered his reinstatement with back pay and without loss of seniority.[15]

The rationale for our decision in Principe bears reiteration: the responsibility of monitoring housing and land development projects is not lodged with the DENR, but with the HLURB as the sole regulatory body for housing and land development. Thus, we must stress that we find no legal basis to hold petitioner, who is an officer of DENR, liable for gross neglect of the duty pertaining to another agency, the HLURB. It was grave error for the appellate court to sustain the Ombudsmans ruling that she should be dismissed from the service. The reinstatement of petitioner is clearly called for.

WHEREFORE, the petition is hereby GRANTED. The Court of Appeals decision affirming the Ombudsmans dismissal of petitioner IGNACIA BALICAS from office is REVERSED and SET ASIDE, and petitioners REINSTATEMENT to her position with back pay and without loss of seniority rights is hereby ordered.

SO ORDERED.ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS9

G.R. No. 111091 August 21, 1995

ENGINEER CLARO J. PRECLARO, petitioner, vs.SANDIGANBAYAN and PEOPLE OF THE PHILIPPINES, respondents.

 

KAPUNAN, J.:

On 14 June 1990, petitioner was charged before the Sandiganbayan with a violation of Sec. 3(b) of R.A. No. 3019 as amended, otherwise known as the Anti-Graft and Corrupt Practices Act. The information against him read as follows:

That on or about June 8, 1990, or sometime prior thereto, in Quezon City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a public officer, being then the Project Manager/ Consultant of the Chemical Mineral Division, Industrial Technology Development Institute, Department of Science and Technology, a component of the Industrial Development Institute (ITDI for brevity) which is an agency of the Department of Science and Technology (DOST for brevity), wherein the Jaime Sta. Maria Construction undertook the construction of the building in Bicutan, Taguig, Metro Manila, with a total cost of SEVENTEEN MILLION SIX HUNDRED NINETY FIVE THOUSAND PESOS (P17,695,000.00) jointly funded by the Philippine and Japanese Governments, and while the said construction has not yet been finally completed, accused either directly requested and/or demanded for himself or for another, the sum of TWO HUNDRED THOUSAND PESOS (P200,000.00), claimed as part of the expected profit of FOUR HUNDRED SIXTY THOUSAND PESOS (P460,000.00) in connection with the construction of that government building wherein the accused had to intervene under the law in his capacity as Project Manager/Consultant of said construction — said offense having been committed in relation to the performance of his official duties.

CONTRARY TO LAW. 1

On 20 July 1990, during arraignment, petitioner pleaded "not guilty" to the charges against him.

On 30 June 1993, after trial on the merits, the Second Division of the Sandiganbayan rendered judgment finding petitioner guilty beyond reasonable doubt. The dispositive portion reads as follows:

WHEREFORE, judgment is hereby rendered finding accused Claro Preclaro y Jambalos GUILTY beyond reasonable doubt of the violation of Section 3, paragraph (b) of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act, and he is hereby sentenced to suffer an indeterminate penalty ranging from SIX (6) YEARS and ONE (1) MONTH, as the minimum, to TEN (10) YEARS and ONE (1) DAY, as the maximum, perpetual disqualification from public office and to pay the costs of this action.

SO ORDERED. 2

The antecedent facts are largely undisputed.

On 1 October 1989, the Chemical Mineral Division of the Industrial Technology Development Institute (ITDI), a component of the Department of Science and Technology (DOST) employed Petitioner under a written contract of services as Project Manager to supervise the construction of the ITDI-CMD (JICA) Building at the DOST Compound in Bicutan, Taguig, Metro Manila. 3

The contract was to remain in effect from October 1, 1989 up to the end of the construction period unless sooner terminated. 4 Petitioner was to be paid a monthly salary drawn from counter-part funds duly financed by foreign-assisted projects and government funds duly released by the Department of Budget and Management. 5

In November 1989, to build the aforementioned CMD Structure, DOST contracted the services of the Jaime Sta. Maria Construction Company with Engr. Alexander Resoso, as the company's project engineer. 6

How petitioner committed a violation of the Anti-Graft & Corrupt Practices Act is narrated in the Comment of the Solicitor

General and amply supported by the records. The material portions are hereunder reproduced:

xxx xxx xxx

3. In the month of May, 1990, Alexander Resoso, Project Engineer of the Sta. Maria Construction Company, was in the process of evaluating a Change Order for some electricals in the building construction when petitioner approached him at the project site (p. 11, 25, Ibid.).

4. Unexpectedly, petitioner made some overtures that expenses in the Change Order will be deductive (meaning, charged to the contractor by deducting from the contract price), instead of additive (meaning, charged to the owner). Petitioner intimated that he can forget about the deductive provided he gets P200,000.00, a chunk of the contractor's profit which he roughly estimated to be around P460,000.00 (pp. 12-13, 22, Ibid.).

5. Having conveyed the proposal to Jaime Sta. Maria, Sr., the owner of Sta. Maria Construction Company, Resoso thereafter asked petitioner if he wanted a rendezvous for him to receive the money. Petitioner chose Wendy's Restaurant, corner E. Delos Santos Avenue and Camias Street, on June 6, 1990 at around 8:00 o'clock in the evening (p. 14, Ibid.).

6. However, Sta. Maria, Sr. asked for two (2) more days or until the 8th of June, perceiving financial constraints (Ibid.).

7. Petitioner relented, saying "O.K. lang with me because we are not in a hurry." (p. 15, Ibid.) Petitioner was thereafter asked to bring along the result of the punch list (meaning, the list of defective or correctible works to be done by the contractor) (p. 15, Ibid.; p. 10, TSN, 18 Oct. 1991).

8. On 7 June 1990, Sta. Maria, Sr. and Resoso proceeded to the National Bureau of Investigation (NBI) to report the incident (p. 15, 35, Ibid.).

9. The NBI suggested an entrapment plan to which Sta. Maria, Sr. signified his conformity (p. 16, TSN, 12 Oct. 1990). Accordingly, Sta. Maria, Sr. was requested to produce the amount of P50,000.00 in P500.00 denomination to represent the grease money (p. 37, TSN, 6 Sept. 1990).

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS10

10. The next day, or on 8 June 1990, Resoso delivered the money to the NBI. Thereafter, the money was dusted with flourescent powder and placed inside an attache case (pp. 16-17, Ibid.). Resoso got the attache case and was instructed not to open it. Similarly, he was advised to proceed at the Wendy's Restaurant earlier than the designated time where a group of NBI men awaited him and his companion, Sta. Maria, Jr. (pp. 17-18, Ibid.).

11. Hence, from the NBI, Resoso passed by the Jade Valley Restaurant in Timog, Quezon City, to fetch Sta. Maria, Jr. (Ibid.).

12. At around 7:35 p.m., Resoso and Sta. Maria, Jr. arrived at the Wendy's Restaurant. They were led by the NBI men to a table previously reserved by them which was similarly adjacent to a table occupied by them (pp. 18-19, Ibid.).

13. Twenty minutes later, petitioner arrived. Supposedly, the following conversation took place, to wit:

JUSTICE BALAJADIA:

q. When Dave Preclaro arrived, what did he do?

a. We asked him his order and we talked about the punch list.

q. What was his comment about the punch list?

a. He told us that it is harder to produce small items than big ones.

q. How long did you converse with Engr. Claro Preclaro?

a. I think thirty minutes or so.

q. Was Preclaro alone when he came?

a. Yes, Your Honor.

xxx xxx xxx

PROS. CAOILI:

q. When you talk[ed] about his punch list, did you talk about anything else?

a. Engineer Sta. Maria, Jr., they were conversing with Dave Preclaro and he told [him], "O, paano na."

JUSTICE ESCAREAL:

q. Who said "Paano na?"

a. Engineer Sta. Maria, [Jr.]. And then Preclaro told [him], "Paano, How will the money be arranged and can I bring it?" he said.

And then Jimmy Sta. Maria, Jr. told him it was arranged on two bundles on two envelopes.

And then Dave Preclaro told, "Puede" and he asked Jimmy Sta. Maria, Jr. if there is express teller and could he deposit during night time but Engineer Sta. Maria, Jr. told him, "I do not have any knowledge or I do not have any express teller you can deposit. I only know credit card."

PROS. CAOILI:

q. When Engr. Sta. Maria intervened and interviewed him that way, was there anything that happened?

a. Jimmy Sta. Maria, Jr. handed two envelopes to Preclaro.

q. Did Claro Preclaro receive these two envelopes from Engineer Sta. Maria?

a. Yes, sir. (pp. 19-21, Ibid., See also pp. 13-14, TSN, 29 Oct. 1990.)

14. From the moment petitioner received the two envelopes with his right hand, thereafter placing them under his left armpit, he was accosted by the NBI men (p. 22, TSN, 12 Oct. 1990).

15. A camera flashed to record the event. Petitioner instinctively docked to avoid the taking of pictures. In such manner, the two envelopes fell (p. 23, Ibid.).

16. The NBI men directed petitioner to pick up the two envelopes. Petitioner refused. Hence, one of the NBI men picked up the envelopes and placed them inside a big brown envelope (p. 27, Ibid.)

17. Petitioner was thenceforth brought to the NBI for examination (p. 28; Ibid.).

18. At the NBI Forensic Chemistry Section, petitioner's right palmar hand was tested positive of flourescent powder. The same flourescent powder, however, cannot be detected in petitioner's T-shirt and pants (p. 5, TSN, 29 Oct. 1990). 7

xxx xxx xxx

Thus, as brought out at the outset, an information was filed against petitioner which, after due hearing, resulted in his conviction by the Sandiganbayan. Not satisfied with the decision, petitioner instituted the present petition for review, ascribing to the Sandiganbayan the following errors:

1. THE SANDIGANBAYAN ERRED IN TAKING COGNIZANCE OF THE CASE, INSTEAD OF DISMISSING IT FOR LACK OF JURISDICTION, THE [PETITIONER] NOT BEING A PUBLIC OFFICER; and

2. THE SANDIGANBAYAN ERRED IN NOT RULING THAT NOT ALL THE ELEMENTS OF THE OFFENSE CHARGED HAVE BEEN ESTABLISHED BEYOND REASONABLE DOUBT AND/OR THAT THE GUILT OF THE [PETITIONER] HAS NOT BEEN ESTABLISHED BEYOND REASONABLE DOUBT.

We find the petition unmeritorious.

On the first issue, petitioner asserts that he is not a public officer as defined by Sec. 2(b) of the Anti-Graft & Corrupt Practices Act (R.A. No. 3019 as amended), because he was neither elected nor appointed to a public office. Rather, petitioner maintains that he is merely a private individual hired by the ITDI on contractual basis for a particular project and for a specified period  8 as evidenced by the contract of services 9 he entered into with the ITDI. Petitioner, to further support his "theory," alleged that he was not issued any appointment paper separate from the

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS11

abovementioned contract. He was not required to use the bundy clock to record his hours of work and neither did he take an oath of office. 10

We are not convinced by petitioner's arguments.

Petitioner miscontrues the definition of "public officer" in R.A. No. 3019 which, according to Sec. 2(b) thereof "includes elective and appointive officials and employees, permanent or temporary, whether in the classified or unclassified or exemption service receiving compensation, even nominal, from the government. . . ."

The word "includes" used in defining a public officer in Sec. 2(b) indicates that the definition is not restrictive. The terms "classified, unclassified or exemption service" were the old categories of positions in the civil service which have been reclassified into Career Service and Non-Career Service 11 by PD 807 providing for the organization of the Civil Service Commission 12 and by the Administrative Code of 1987. 13

Non-career service in particular is characterized by —

(1) entrance on bases other than those of the usual test of merit and fitness utilized for the career service;and (2) tenure which is limited to a period specified by law, or which is coterminous with that of the appointing authority or subject to his pleasure, or which is limited to the duration of a particular project for which purpose employment was made.

The Non-Career Service shall include:

(1) Elective officials and their personal or confidential staff;

(2) Secretaries and other officials of Cabinet rank who hold their positions at the pleasure of the President and their personal or confidential staff(s);

(3) Chairman and members of commissions and boards with fixed terms of office and their personal or confidential staff;

(4) Contractual personnel or those whose employment in the government is in accordance with a special contract to undertake a specific work or job, requiring special or technical

skills not available in the employing agency, to be accomplished within a specific period, which in no case shall exceed one year, and performs or accomplishes the specific work or job, under his own responsibility with a minimum of direction and supervision from the hiring agency; and

(5) Emergency and seasonal personnel. (Emphasis ours.) 14

From the foregoing classification, it is quite evident that petitioner falls under the non-career service category (formerly termed the unclassified or exemption service) of the Civil Service and thus is a public officer as defined by Sec. 2(b) of the Anti-Graft & Corrupt Practices Act (R.A. No. 3019).

The fact that petitioner is not required to record his working hours by means of a bundy clock or did not take an oath of office became unessential considerations in view of the above-mentioned provision of law clearly including petitioner within the definition of a public officer.

Similarly, petitioner's averment that he could not be prosecuted under the Anti-Graft & Corrupt Practices Act because his intervention "was not required by law but in the performance of a contract of services entered into by him as a private individual contractor," 15 is erroneous. As discussed above, petitioner falls within the definition of a public officer and as such, his duties delineated in Annex "B" of the contract of services 16 are subsumed under the phrase "wherein the public officer in his official capacity has to intervene under the law." 17 Petitioner's allegation, to borrow a cliche, is nothing but a mere splitting of hairs.

Among petitioner's duties as project manager is to evaluate the contractor's accomplishment reports/billings 18hence, as correctly ruled by the Sandiganbayan he has the "privilege and authority to make a favorable recommendation and act favorably in behalf of the government," signing acceptance papers and approving deductives and additives are some examples. 19 All of the elements of Sec. 3(b) of the Anti-Graft & Corrupt Practices Act are, therefore, present.

Anent the second issue, we likewise find Petitioner's allegations completely bereft of merit.

Petitioner insists that the prosecution has failed to establish his guilt beyond reasonable doubt and that the charges against him should be rejected for being improbable, unbelievable and contrary to human nature.

We disagree.

Proof beyond reasonable doubt does not mean that which produces absolute certainty. Only moral certainty is required or "that degree of proof which produces conviction in an unprejudiced mind." 20 We have extensively reviewed the records of this case and we find no reason to overturn the findings of the Sandiganbayan.

Petitioner enumerates the alleged improbabilities and inconsistencies in the testimonies of the prosecution witnesses. We shall examine the testimonies referred to with meticulousness.

Petitioner asserts that it was improbable for him to have demanded P200,000.00 from Engr. Resoso, when he could have just talked directly to the contractor himself. It is quite irrelevant from whom petitioner demanded his percentage share of P200,000.00 whether from the contractor's project engineer, Engr. Alexander Resoso or directly from the contractor himself Engr. Jaime Sta. Maria Sr. That petitioner made such a demand is all that is required by Sec. 3(b) of R.A. No. 3019 and this element has been sufficiently established by the testimony of Engr. Resoso, thus:

xxx xxx xxx

Q You said when you were computing your Change Order Mr. Preclaro or Dave Preclaro whom you identified approached you, what did you talk about?

A He mentioned to me that we are deductive in our Change Order three and four so after our conversation I told this conversation to my boss that we are deductible in the Change Order three and four and then my boss told me to ask why it is deductive.

Q Did you ask the accused here, Dave Preclaro why it is considered deductive?

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS12

A Yes, sir.

Q What was his answer if any?

A I asked him that my boss is asking me to ask you how come it became deductive when my computation is additive and he told me that I have done so much for your company already and then he picked up cement bag paper bag and computed our alleged profit amounting to One Hundred Sixty Thousand Pesos and then he told me that he used to use some percentage in projects maximum and minimum and in our case he would use a minimum percentage and multiply to 60 and . . .

JUSTICE ESCAREAL:

Q What is 460?

A P460,000.00 and he said take of the butal and get two Hundred Thousand Pesos.

JUSTICE BALAJADIA:

What is the translation now?

WITNESS:

A And he said disregard the excess and I will just get the P200,000.00. (Emphasis ours.)

PROS. CAOILI:

Q What does he mean by that if you know?

A I do not know sir.

He just said, I will get the P200,000.00 and tell it to your boss. (Emphasis ours.)

JUSTICE BALAJADIA:

Q What is P200,000.00?

A It is Two Hundred Thousand Pesos.

PROS. CAOILI:

Q What did you answer him when he told you that?

A He told me to forget the deductive and electrical and after that I told my boss what he told me.

Q Who is your boss?

A Santa Maria Sr.

Q What was the reaction of your boss when you relayed the message to Mr. Preclaro?

A The next day he told me to ask Dave where and when to pick up the money so the next day I asked Dave "Where do you intend to get the money, the Boss wanted to know."

Q What was the answer of Dave?

A And he told me, Wendy's Restaurant at 3:00 o'clock.

Q When?

A June 6 Wednesday.

Q When he told you that did you comply with June 6 appointment?

A I told my boss what he told me again that the meeting will take place at Wendy's Restaurant corner Edsa and Camias Street at around 8:00 o'clock p.m. June 6, Wednesday.

Q What did your boss tell you?

A The next day he told me to ask Dave.

Q What did your boss tell you?

A My boss told me to ask Dave to postpone the meeting on June 6 to be postponed on June 8 at the same place and same time because my boss is having financial problem.

Q Did you relay the postponement to Dave Preclaro?

A Yes sir. I told what my boss told me.

Q What was his reaction?

A Dave told me "O.K. lang with me" because we are not in a hurry. Any way we are the ones to sign the acceptance papers and my boss instructed me that on Friday to ask Dave to bring along the result of the punch list and if possible also to bring along the acceptance papers to be signed by Dave, Lydia Mejia and Dr. Lirag the director.

Q What happened next after meeting with Preclaro to relay the postponement if any?

A Nothing happened. The next day, Thursday the boss instructed me to go with him to the NBI to give a statement.

Q Did you go to the NBI and report to the incident to the NBI?

A Yes sir.

Q Did you give a statement before any of the agents of the of the NBI?

A Yes sir. 21

xxx xxx xxx

Likewise, petitioner's alleged refusal to see Mr. Jaime Sta. Maria Sr. when the latter tried to arrange meetings with him regarding his demand 22 does not weaken the cause against petitioner. It does not at all prove that petitioner did not ask for money. Conceivably petitioner did not muster enough courage to ask money directly from the contractor himself. Getting the amount through the project engineer would be safer because if Mr. Sta. Maria, Sr. had refused to give money, petitioner could always deny having made the demand.

Petitioner contends that the percentage demanded in the amount of P200,000.00 is too high considering that the estimated profit of the contractor from the CMD project is only P460,000.00. In petitioner's words, this would "scare the goose that lays the golden egg." 23 We reject this argument. The aforementioned contractor's profit is petitioner's own computation as testified to by Engr. Resoso:

xxx xxx xxx

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS13

A I asked him that my boss is asking me to ask you how come it became deductive when my computation is additive and he told me that I have done so much for your company alreadyand then he picked up cement bag paper bag and computed our alleged profit amounting to One Hundred Sixty Thousand Pesos and then he told me that he used to use some percentage in projects maximum and minimum and in our case he would use a minimum percentage and multiply to 460 and . . . (Emphasis ours.)

JUSTICE ESCAREAL:

Q What is 460?

A P460,000.00 and it ended to P215 thousand or P20,000.00 and he said take of the butal and get the Two Hundred Thousand Pesos. (Emphasis ours.)

JUSTICE BALAJADIA:

What is the translation now?

WITNESS:

A And he said disregard the excess and I will just get the P200,000.00.

PROS. CAOILI:

Q What does he mean by that if you know?

A I do not know sir.

He just said, I will get the P200,000.00 and tell it to your boss. 24

xxx xxx xxx

The records, however, do not show the true and actual amount that the Sta. Maria Construction will earn as profit. There is, therefore, no basis for petitioner's contention as the actual profit may be lower or higher than his estimation.

Besides, as related by Engr. Resoso, petitioner considers the P200,000.00 percentage proper compensation since he has

allegedly done so much for the Sta. Maria construction company. 25

Petitioner also argues that:

According to STA. MARIA, SR., they were deductive by P280,000.00 (Id., pp. 34-35).

If STA. MARIA CONSTRUCTION was deductive in the amount of P280,000.00, why would the petitioner still demand P200,000.00 which would increase the contractor's loss to P480,000.00!

It might have been different if the changes were additive where STA. MARIA CONSTRUCTION would have earned more, thereby providing motive for the petitioner to ask for a percentage! 26

But this is precisely what petitioner was bargaining for — P200,000.00 in exchange for forgetting about the deductive 27 and thus prevent the Sta. Maria Construction from incurring losses.

Petitioner's contention that it was impossible for him to make any demands because the final decision regarding accomplishments and billing lies with the DOST technical committee is unacceptable. Petitioner is part of the abovementioned technical committee as the ITDI representative consultant. This is part of his duties under the contract of services in connection with which he was employed by the ITDI. Even, assuming arguendo that petitioner does not make the final decision, as supervisor/consultant, his recommendations will necessarily carry much weight. Engr. Resoso testified thus:

PROS. CAOILI:

Q As a Project Engineer to whom do you present your billing papers accomplishment report or purchase order?

A The billing paper was being taken cared of by the, of our office. I personally do my job as supervision in the construction.

Q Do you have any counterpart to supervise the project from the government side?

A Yes, we have.

Yes, the DOST have a technical Committee Infra-Structure Committee and also the ITDI as its own representative.

Q Who composed the Technical Committee of the DOST?

A A certain Engineer Velasco, Engineer Sande Banez and Engineer Mejia.

Q How about the ITDI?

A The ITDI representative composed of Dave Preclaro.

Q Who is this Dave Preclaro?

A He is the consultant of ITDI. (Emphasis ours.)

xxx xxx xxx

ATTY. CAOILI:

Q As Project Engineer do you consult to any body regarding your job?

A First if there is any problem in the site I consult my boss.

PROS. CAOILI:

Q How about with the other consultants representing the ITDI and DOST?

A In the construction site we have meeting every Monday to discuss any problem.

Q With whom do you discuss this problem?

A The Infra-structure Committee of DOST and the Infra-structure Committee of ITDI, the architect and the contractor. We had weekly meetings.

Q What matters if any do you consult with Mr. Claro Preclaro?

ATTY. JIMENEZ:

No basis.

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS14

JUSTICE ESCAREAL:

They met on problems on Mondays.

ATTY. JIMENEZ:

But there is no mention of Preclaro specifically.

JUSTICE ESCAREAL:

With the representative of DOST and Preclaro

ATTY. JIMENEZ:

Does that also mean that Preclaro is also among the representatives he is going to consult with?

Well any way. . .

JUSTICE ESCAREAL:

Witness may answer the question.

Read back the question.

COURT STENOGRAPHER:

Reading back the question as ordered by the Court.

WITNESS:

A Every Monday meeting we tackle with accomplishment report the billing papers. 28 (Emphasis ours.)

xxx xxx xxx

Petitioner also claims that the testimonies of the prosecution witnesses regarding the entrapment itself are conflicting, doubtful or improbable:

(aaa) according to RESOSO, only FOUR (4) P500 bills were dusted with flourescent powder and used in the alleged entrapment.

Contradicting RESOSO, STA. MARIA, SR. said that he gave fifty thousand (P50,000.00) pesos in P500 denomination to the NBI. 29

There is no such inconsistency. Said witnesses were testifying on two different subjects. Engr. Sta. Maria, Sr.'s testimony touched on the amount he gave the NBI for use in the entrapment while Engr. Resoso's declaration referred only to the number of bills dusted with flourescent powder.

Petitioner, likewise, misappreciated the following testimony of Resoso:

PROS. CAOILI:

Q What did he do with the two envelopes upon receiving the same?

A Then he asked Jaime Sta. Maria, Jr. if there is bank teller express, if he could deposit the money but Mr. Sta. Maria said, "I do not have, I only have credit cards." 30

Petitioner intended to deposit the money in his own account not that of Mr. Sta. Maria, Jr. He was merely inquiring from the latter if there was an express teller nearby where he could make the deposit. Mr. Sta. Maria Jr. himself testified as follows:

A He asked me if there was express teller. I told him I do not know then he asked me whether it is possible to deposit at the Express Teller at that time. I told him I don't know because I have no express teller card and he asked me how am I going to arrange, how was it arranged if I will bring it, can I bring it. Then I told him that it was placed in two envelopes consisting of 500 Peso bills and then he said "Okay na yan." 31

The failure of the NBI to take photographs of the actual turn-over of the money to petitioner is not fatal to the People's cause. The transaction was witnessed by several people, among whom were Engr. Resoso, Mr. Sta. Maria Jr. and the NBI agents whose testimonies on the circumstances before, during and after the turn-over are consistent, logical and credible.

According to NBI Agent Francisco Balanban Sr., they purposely took no photographs of the actual turn-over so as not to alert and

scare off the petitioner. During cross-examination Agent Balanban Jr. stated:

xxx xxx xxx

Q Now, of course, this entrapment operation, you made certain preparation to make sure that you would be able to gather evidence in support of the entrapment?

A Yes sir.

Q As a matter of fact you even brought photographer for the purpose?

A That is right sir.

Q And that photographer was precisely brought along to record the entrapment?

A Yes sir.

Q From the beginning to the end, that was the purpose?

A At the time of the arrest sir.

ATTY. JIMENEZ:

From the time of the handing over of the envelopes until the entrapment would have been terminated?

A No sir we plan to take the photograph only during the arrest because if we take photographs he would be alerted during the handing of the envelopes. (Emphasis ours.)

Q So you did not intend to take photographs of the act of handing of the envelopes to the suspect?

A We intended but during that time we cannot take photographs at the time of the handling because the flash will alert the suspect. (Emphasis ours.)

JUSTICE ESCAREAL:

Why did you not position the photographer to a far distance place with camera with telescopic lens?

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS15

A We did not Your Honor.

ATTY. JIMENEZ:

So was it your intention to take photographs only at the time that he is already being arrested?

A Yes sir. 32

xxx xxx xxx

Petitioner insists that when his hands were placed under ultra-violet light, both were found negative for flourescent powder. This is petitioner's own conclusion which is not supported by evidence. Such self-serving statement will not prevail over the clear and competent testimony and the report 33 submitted by the forensic expert of the NBI Ms. Demelen R. dela Cruz, who was the one who conducted the test and found petitioner's right palmar hand positive for flourescent powder, the same hand he used, according to witnesses Resoso and Sta. Maria Jr., to get the money from the latter.

xxx xxx xxx

Q Mrs. dela Cruz since when have you been a Forensic Chemist at NBI?

A Since 1981 sir.

Q JUSTICE ESCAREAL:

Q By the way, is the defense willing to admit that the witness is a competent as . . . .

ATTY. JIMENEZ:

Admitted Your Honor.

PROS. CAOILI:

Madam Witness did you conduct a forensic examination in the person of one Dave Preclaro y Jambalos?

A Yes sir.

Q If that person whom you examined is here in court would you be able to recognize him?

ATTY. JIMENEZ:

We admit that the accused is the one examined by the witness.

ATTY. CAOILI:

Did you prepare the result of the examination in writing?

A Yes sir.

PROS. CAOILI:

Showing to you Physic Examination No. 90-961 which for purposes of identification has already been marked as Exh. H what relation has this have with the report that you mentioned a while ago?

A This is the same report that I prepared sir.

Q How did you conduct such flourescent examination?

A The left and right hands of the accused were placed under the ultra violet lamp sir.

Q What was the result?

A It gave a . . . under the ultra violent lamp the palmer hands of the suspect gave positive result for the presence of flourescent powder.

Q What palmar hands?

A Right hand sir.

Q What other examination did you conduct?

A And also the clothing, consisting of the t-shirts and the pants were examined. Under the ultra violet lamp the presence of the flourescent powder of the t-shirts and pants cannot be seen or distinguished because the fibers or the material of the cloth under the ultra violet lamp was flouresce.

Q Please tell the Court why the t-shirts and pants under the ultra violent lamp was flouresce?

A The materials or the fibers of the clothings it could have been dyed with flourescent dyes sir.34

xxx xxx xxx

What we find improbable and contrary to human experience is petitioner's claim that he was set up by Engr. Sta. Maria Sr. and Engr. Resoso for no other purpose but revenge on account, for petitioner's failure to recommend the Sta. Maria Construction to perform the extra electrical works. 35

The Sandiganbayan has aptly ruled on this matter, thus:

For another, the claim of accused that there was ill-will on the part of the construction company is hardly plausible. It is highly improbable for the company to embark on a malicious prosecution of an innocent person for the simple reason that such person had recommended the services of another construction firm. And it is extremely impossible for such company to enlist the cooperation and employ the services of the government's chief investigative agency for such an anomalous undertaking. It is more in accord with reason and logic to presuppose that there was some sort of a mischievous demand made by the accused in exchange for certain favorable considerations, such as, favorable recommendation on the completeness of the project, hassle-free release of funds, erasure of deductives, etc. Indeed, the rationale for the occurrence of the meeting and the demand for money is infinite and boundless. 36

As correctly pointed out by the Solicitor General, Engr. Sta. Maria Sr., who was then engaged in the construction of another DOST building, would not risk his business or livelihood just to exact revenge which is neither profitable nor logical. As we aptly stated in Maleg v. Sandiganbayan: 37

It is hard to believe that the complainant who is a contractor would jeopardize and prejudice his business interests and risk being blacklisted in government infrastructure projects, knowing that with the institution of the case, he may find it no longer advisable nor profitable to continue in his construction ventures. It is hardly probable that the complainant would weave out of the

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS16

blue a serious accusation just to retaliate and take revenge on the accused.

From the foregoing, the conclusion is inescapable that on the basis of the testimonial and documentary evidence presented during the trial, the guilt of petitioner has been established beyond reasonable doubt.

WHEREFORE, the appealed decision of the Sandiganbayan is hereby AFFIRMED.

SO ORDERED.

G.R. No. 127685 July 23, 1998

BLAS F. OPLE, petitioner,

vs.

RUBEN D. TORRES, ALEXANDER AGUIRRE, HECTOR VILLANUEVA, CIELITO HABITO, ROBERT BARBERS, CARMENCITA REODICA, CESAR SARINO, RENATO VALENCIA, TOMAS P. AFRICA, HEAD OF THE NATIONAL COMPUTER CENTER and CHAIRMAN OF THE COMMISSION ON AUDIT, respondents.

 

PUNO, J.:

The petition at bar is a commendable effort on the part of Senator Blas F. Ople to prevent the shrinking of the right to privacy, which the revered Mr. Justice Brandeis considered as "the most comprehensive of rights and the right most valued by civilized men." 1 Petitioner Ople prays that we invalidate Administrative Order No. 308 entitled "Adoption of a National Computerized Identification Reference System" on two important constitutional grounds, viz: one, it is a usurpation of the power of Congress to legislate, and two, it impermissibly intrudes on our citizenry's protected zone of privacy. We grant the petition for the rights sought to be vindicated by the petitioner need stronger barriers against further erosion.

A.O. No. 308 was issued by President Fidel V. Ramos On December 12, 1996 and reads as follows:

ADOPTION OF A NATIONAL COMPUTERIZED

IDENTIFICATION REFERENCE SYSTEM

WHEREAS, there is a need to provide Filipino citizens and foreign residents with the facility to conveniently transact business with basic service and social security providers and other government instrumentalities;

WHEREAS, this will require a computerized system to properly and efficiently identify persons seeking basic services on social security and reduce, if not totally eradicate fraudulent transactions and misrepresentations;

WHEREAS, a concerted and collaborative effort among the various basic services and social security providing agencies and other government intrumentalities is required to achieve such a system;

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by law, do hereby direct the following:

Sec. 1. Establishment of a National Compoterized Identification Reference System. A decentralized Identification Reference System among the key basic services and social security providers is hereby established.

Sec. 2. Inter-Agency Coordinating Committee. An Inter-Agency Coordinating Committee (IACC) to draw-up the implementing guidelines and oversee the implementation of the System is hereby created, chaired by the Executive Secretary, with the following as members:

Head, Presidential Management Staff

Secretary, National Economic Development Authority

Secretary, Department of the Interior and Local Government

Secretary, Department of Health

Administrator, Government Service Insurance System,

Administrator, Social Security System,

Administrator, National Statistics Office

Managing Director, National Computer Center.

Sec. 3. Secretariat. The National Computer Center (NCC) is hereby designated as secretariat to the IACC and as such shall provide administrative and technical support to the IACC.

Sec. 4. Linkage Among Agencies. The Population Reference Number (PRN) generated by the NSO shall serve as the common reference number to establish a linkage among concerned agencies. The IACC Secretariat shall coordinate with the different Social Security and Services Agencies to establish the standards in the use of Biometrics Technology and in computer application designs of their respective systems.

Sec. 5. Conduct of Information Dissemination Campaign. The Office of the Press Secretary, in coordination with the National Statistics Office, the GSIS and SSS as lead agencies and other concerned agencies shall undertake a massive tri-media information dissemination campaign to educate and raise public awareness on the importance and use of the PRN and the Social Security Identification Reference.

Sec. 6. Funding. The funds necessary for the implementation of the system shall be sourced from the respective budgets of the concerned agencies.

Sec. 7. Submission of Regular Reports. The NSO, GSIS and SSS shall submit regular reports to the Office of the President through the IACC, on the status of implementation of this undertaking.

Sec. 8. Effectivity. This Administrative Order shall take effect immediately.

DONE in the City of Manila, this 12th day of December in the year of Our Lord, Nineteen Hundred and Ninety-Six.

(SGD.) FIDEL V. RAMOS

A.O. No. 308 was published in four newspapers of general circulation on January 22, 1997 and January 23, 1997. On January 24, 1997, petitioner filed the instant petition against

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS17

respondents, then Executive Secretary Ruben Torres and the heads of the government agencies, who as members of the Inter-Agency Coordinating Committee, are charged with the implementation of A.O. No. 308. On April 8, 1997, we issued a temporary restraining order enjoining its implementation.

Petitioner contends:

A. THE ESTABLISNMENT OF A NATIONAL COMPUTERIZED IDENTIFICATION REFERENCE SYSTEM REQUIRES A LEGISLATIVE ACT. THE ISSUANCE OF A.O. NO. 308 BY THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES IS, THEREFORE, AN UNCONSTITUTIONAL USURPATION OF THE LEGISLATIVE POWERS OF THE CONGRESS OF THE REPUBLIC OF THE PHILIPPINES.

B. THE APPROPRIATION OF PUBLIC FUNDS BY THE PRESIDENT FOR THE IMPLEMENTATION OF A.O. NO. 308 IS AN UNCONSTITUTIONAL USURPATION OF THE EXCLUSIVE RIGHT OF CONGRESS TO APPROPRIATE PUBLIC FUNDS FOR EXPENDITURE.

C. THE IMPLEMENTATION OF A.O. NO. 308 INSIDIOUSLY LAYS THE GROUNDWORK FOR A SYSTEM WHICH WILL VIOLATE THE BILL OF RIGHTS ENSHRINED IN THE CONSTITUTION. 2

Respondents counter-argue:

A. THE INSTANT PETITION IS NOT A JUSTICIABLE CASE AS WOULD WARRANT A JUDICIAL REVIEW;

B. A.O. NO. 308 [1996] WAS ISSUED WITHIN THE EXECUTIVE AND ADMINISTRATIVE POWERS OF THE PRESIDENT WITHOUT ENCROACHING ON THE LEGISLATIVE POWERS OF CONGRESS;

C. THE FUNDS NECESSARY FOR THE IMPLEMENTATION OF THE IDENTIFICATION REFERENCE SYSTEM MAY BE SOURCED FROM THE BUDGETS OF THE CONCERNED AGENCIES;

D. A.O. NO. 308 [1996] PROTECTS AN INDIVIDUAL'S INTEREST IN PRIVACY. 3

We now resolve.

I

As is usual in constitutional litigation, respondents raise the threshold issues relating to the standing to sue of the petitioner and the justiciability of the case at bar. More specifically, respondents aver that petitioner has no legal interest to uphold and that the implementing rules of A.O. No. 308 have yet to be promulgated.

These submissions do not deserve our sympathetic ear. Petitioner Ople is a distinguished member of our Senate. As a Senator, petitioner is possessed of the requisite standing to bring suit raising the issue that the issuance of A.O. No. 308 is a usurpation of legislative power. 4 As taxpayer and member of the Government Service Insurance System (GSIS), petitioner can also impugn the legality of the misalignment of public funds and the misuse of GSIS funds to implement A.O. No. 308. 5

The ripeness for adjudication of the Petition at bar is not affected by the fact that the implementing rules of A.O. No. 308 have yet to be promulgated. Petitioner Ople assails A.O. No. 308 as invalid per se and as infirmed on its face. His action is not premature for the rules yet to be promulgated cannot cure its fatal defects. Moreover, the respondents themselves have started the implementation of A.O. No. 308 without waiting for the rules. As early as January 19, 1997, respondent Social Security System (SSS) caused the publication of a notice to bid for the manufacture of the National Identification (ID) card. 6 Respondent Executive Secretary Torres has publicly announced that representatives from the GSIS and the SSS have completed the guidelines for the national identification system. 7 All signals from the respondents show their unswerving will to implement A.O. No. 308 and we need not wait for the formality of the rules to pass judgment on its constitutionality. In this light, the dissenters insistence that we tighten the rule on standing is not a commendable stance as its result would be to throttle an important constitutional principle and a fundamental right.

II

We now come to the core issues. Petitioner claims that A.O. No. 308 is not a mere administrative order but a law and hence, beyond the power of the President to issue. He alleges that A.O. No. 308 establishes a system of identification that is all-encompassing in scope, affects the life and liberty of every Filipino citizen and foreign resident, and more particularly, violates their right to privacy.

Petitioner's sedulous concern for the Executive not to trespass on the lawmaking domain of Congress is understandable. The blurring of the demarcation line between the power of the Legislature to make laws and the power of the Executive to execute laws will disturb their delicate balance of power and cannot be allowed. Hence, the exercise by one branch of government of power belonging to another will be given a stricter scrutiny by this Court.

The line that delineates Legislative and Executive power is not indistinct. Legislative power is "the authority, under the Constitution, to make laws, and to alter and repeal them." 8 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. 9 The grant of legislative power to Congress is broad, general and comprehensive. 10 The legislative body possesses plenary power for all purposes of civil government. 11 Any power, deemed to be legislative by usage and tradition, is necessarily possessed by Congress, unless the Constitution has lodged it elsewhere. 12 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. 13

While Congress is vested with the power to enact laws, the President executes the laws. 14 The executive power is vested in the Presidents. 15 It is generally defined as the power to enforce and administer the laws. 16 It is the power of carrying the laws into practical operation and enforcing their due observance. 17

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. 18 He has control over the executive department,

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS18

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. 19 Corollary to the power of control, the President also has the duty of supervising the 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. 20

Administrative power is concerned with the work of applying policies and enforcing orders as determined by proper governmental organs. 21 It enables the President to fix a uniform standard of administrative efficiency and check the official conduct of his agents. 22 To this end, he can issue administrative orders, rules and regulations.

Prescinding from these precepts, we hold that A.O. No. 308 involves a subject that is not appropriate to be covered by an administrative order. An administrative order is:

Sec. 3. Administrative Orders. — Acts of the President which relate to particular aspects of governmental operation in pursuance of his duties as administrative head shall be promulgated in administrative orders. 23

An administrative order is an ordinance issued by the President which relates to specific aspects in the administrative operation of government. It must be in harmony with the law and should be for the sole purpose of implementing the law and carrying out the legislative policy. 24 We reject the argument that A.O. No. 308 implements the legislative policy of the Administrative Code of 1987. The Code is a general law and "incorporates in a unified document the major structural, functional and procedural principles of governance." 25 and "embodies changes in administrative structure and procedures designed to serve thepeople." 26 The Code is divided into seven (7) Books: Book I deals with Sovereignty and General Administration, Book II with the Distribution of Powers of the three branches of Government, Book III on the Office of the President, Book IV on the Executive Branch, Book V on Constitutional Commissions, Book VI on National Government Budgeting, and Book VII on Administrative Procedure. These Books contain provisions on the organization, powers and general

administration of the executive, legislative and judicial branches of government, the organization and administration of departments, bureaus and offices under the executive branch, the organization and functions of the Constitutional Commissions and other constitutional bodies, the rules on the national government budget, as well as guideline for the exercise by administrative agencies of quasi-legislative and quasi-judicial powers. The Code covers both the internal administration of government, i.e, internal organization, personnel and recruitment, supervision and discipline, and the effects of the functions performed by administrative officials on private individuals or parties outside government. 27

It cannot be simplistically argued that A.O. No. 308 merely implements the Administrative Code of 1987. It establishes for the first time a National Computerized Identification Reference System. Such a System requires a delicate adjustment of various contending state policies — the primacy of national security, the extent of privacy interest against dossier-gathering by government, the choice of policies, etc. Indeed, the dissent of Mr. Justice Mendoza states that the A.O. No. 308 involves the all-important freedom of thought. As said administrative order redefines the parameters of some basic rights of our citizenry vis-a-vis the State as well as the line that separates the administrative power of the President to make rules and the legislative power of Congress, it ought to be evident that it deals with a subject that should be covered by law.

Nor is it correct to argue as the dissenters do that A.D. No. 308 is not a law because it confers no right, imposes no duty, affords no proctection, and creates no office. Under A.O. No. 308, a citizen cannot transact business with government agencies delivering basic services to the people without the contemplated identification card. No citizen will refuse to get this identification card for no one can avoid dealing with government. It is thus clear as daylight that without the ID, a citizen will have difficulty exercising his rights and enjoying his privileges. Given this reality, the contention that A.O. No. 308 gives no right and imposes no duty cannot stand.

Again, with due respect, the dissenting opinions unduly expand the limits of administrative legislation and consequently erodes the plenary power of Congress to make laws. This is contrary to

the established approach defining the traditional limits of administrative legislation. As well stated by Fisher: ". . . Many regulations however, bear directly on the public. It is here that administrative legislation must he restricted in its scope and application. Regulations are not supposed to be a substitute for the general policy-making that Congress enacts in the form of a public law. Although administrative regulations are entitled to respect, the authority to prescribe rules and regulations is not an independent source of power to make laws." 28

III

Assuming, arguendo, that A.O. No. 308 need not be the subject of a law, still it cannot pass constitutional muster as an administrative legislation because facially it violates the right to privacy. The essence of privacy is the "right to be let alone." 29 In the 1965 case of Griswold v. Connecticut, 30 the United States Supreme Court gave more substance to the right of privacy when it ruled that the right has a constitutional foundation. It held that there is a right of privacy which can be found within the penumbras of the First, Third, Fourth, Fifth and Ninth Amendments, 31 viz:

Specific guarantees in the Bill of Rights have penumbras formed by emanations from these guarantees that help give them life and substance . . . various guarantees create zones of privacy. The right of association contained in the penumbra of the First Amendment is one, as we have seen. The Third Amendment in its prohibition against the quartering of soldiers "in any house" in time of peace without the consent of the owner is another facet of that privacy. The Fourth Amendment explicitly affirms the ''right of the people to be secure in their persons, houses and effects, against unreasonable searches and seizures." The Fifth Amendment in its Self-Incrimination Clause enables the citizen to create a zone of privacy which government may not force him to surrender to his detriment. The Ninth Amendment provides: "The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people."

In the 1968 case of Morfe v. Mutuc, 32 we adopted the Griswold ruling that there is a constitutional right to privacy. Speaking thru Mr. Justice, later Chief Justice, Enrique Fernando, we held:

xxx xxx xxxADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS19

The Griswold case invalidated a Connecticut statute which made the use of contraceptives a criminal offence on the ground of its amounting to an unconstitutional invasion of the right of privacy of married persons; rightfully it stressed "a relationship lying within the zone of privacy created by several fundamental constitutional guarantees." It has wider implications though. The constitutional right to privacy has come into its own.

So it is likewise in our jurisdiction. The right to privacy as such is accorded recognition independently of its identification with liberty; in itself, it is fully deserving of constitutional protection. The language of Prof. Emerson is particularly apt: "The concept of limited government has always included the idea that governmental powers stop short of certain intrusions into the personal life of the citizen. This is indeed one of the basic distinctions between absolute and limited government. Ultimate and pervasive control of the individual, in all aspects of his life, is the hallmark of the absolute state. In contrast, a system of limited government safeguards a private sector, which belongs to the individual, firmly distinguishing it from the public sector, which the state can control. Protection of this private sector — protection, in other words, of the dignity and integrity of the individual — has become increasingly important as modern society has developed. All the forces of a technological age — industrialization, urbanization, and organization — operate to narrow the area of privacy and facilitate intrusion into it. In modern terms, the capacity to maintain and support this enclave of private life marks the difference between a democratic and a totalitarian society."

Indeed, if we extend our judicial gaze we will find that the right of privacy is recognized and enshrined in several provisions of our Constitution. 33 It is expressly recognized in section 3 (1) of the Bill of Rights:

Sec. 3. (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the court, or when public safety or order requires otherwise as prescribed by law.

Other facets of the right to privacy are protectad in various provisions of the Bill of Rights, viz: 34

Sec. 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.

Sec. 2. The right of the people to be secure in their persons, houses papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized.

xxx xxx xxx

Sec. 6. The liberty of abode and of changing the same within the limits prescribed by law shall not be impaired except upon lawful order of the court. Neither shall the right to travel be impaired except in the interest of national security, public safety, or public health as may be provided by law.

xxx xxx xxx

Sec. 8. The right of the people, including those employed in the public and private sectors, to form unions, associations, or societies for purposes not contrary to law shall not be abridged.

Sec. 17. No person shall be compelled to be a witness against himself.

Zones of privacy are likewise recognized and protected in our laws. The Civil Code provides that "[e]very person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons" and punishes as actionable torts several acts by a person of meddling and prying into the privacy of another. 35 It also holds a public officer or employee or any private individual liable for damages for any violation of the rights and liberties of another person, 36 and recognizes the privacy of letters and other private communications. 37 The Revised Penal Code makes a crime the violation of secrets by an officer, 38 the revelation of trade and industrial secrets, 39 and trespass to dwelling. 40Invasion of privacy is an offense in special laws like the Anti-Wiretapping Law, 41 the Secrecy of

Bank Deposits Act 42 and the Intellectual Property Code. 43 The Rules of Court on privileged communication likewise recognize the privacy of certain information. 44

Unlike the dissenters, we prescind from the premise that the right to privacy is a fundamental right guaranteed by the Constitution, hence, it is the burden of government to show that A.O. No. 308 is justified by some compelling state interest and that it is narrowly drawn. A.O. No. 308 is predicated on two considerations: (1) the need to provides our citizens and foreigners with the facility to conveniently transact business with basic service and social security providers and other government instrumentalities and (2) the need to reduce, if not totally eradicate, fraudulent transactions and misrepresentations by persons seeking basic services. It is debatable whether these interests are compelling enough to warrant the issuance of A.O. No. 308. But what is not arguable is the broadness, the vagueness, the overbreadth of A.O. No. 308 which if implemented will put our people's right to privacy in clear and present danger.

The heart of A.O. No. 308 lies in its Section 4 which provides for a Population Reference Number (PRN) as a "common reference number to establish a linkage among concerned agencies" through the use of "Biometrics Technology" and "computer application designs."

Biometry or biometrics is "the science of the applicatin of statistical methods to biological facts; a mathematical analysis of biological data." 45 The term "biometrics" has evolved into a broad category of technologies which provide precise confirmation of an individual's identity through the use of the individual's own physiological and behavioral characteristics. 46 A physiological characteristic is a relatively stable physical characteristic such as a fingerprint, retinal scan, hand geometry or facial features. A behavioral characteristic is influenced by the individual's personality and includes voice print, signature and keystroke. 47 Most biometric idenfication systems use a card or personal identificatin number (PIN) for initial identification. The biometric measurement is used to verify that the individual holding the card or entering the PIN is the legitimate owner of the card or PIN. 48

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS20

A most common form of biological encoding is finger-scanning where technology scans a fingertip and turns the unique pattern therein into an individual number which is called a biocrypt. The biocrypt is stored in computer data banks 49 and becomes a means of identifying an individual using a service. This technology requires one's fingertip to be scanned every time service or access is provided. 50 Another method is the retinal scan. Retinal scan technology employs optical technology to map the capillary pattern of the retina of the eye. This technology produces a unique print similar to a finger print. 51 Another biometric method is known as the "artificial nose." This device chemically analyzes the unique combination of substances excreted from the skin of people. 52 The latest on the list of biometric achievements is the thermogram. Scientists have found that by taking pictures of a face using infra-red cameras, a unique heat distribution pattern is seen. The different densities of bone, skin, fat and blood vessels all contribute to the individual's personal "heat signature." 53

In the last few decades, technology has progressed at a galloping rate. Some science fictions are now science facts. Today, biometrics is no longer limited to the use of fingerprint to identify an individual. It is a new science that uses various technologies in encoding any and all biological characteristics of an individual for identification. It is noteworthy that A.O. No. 308 does not state what specific biological characteristics and what particular biometrics technology shall be used to identify people who will seek its coverage. Considering the banquest of options available to the implementors of A.O. No. 308, the fear that it threatens the right to privacy of our people is not groundless.

A.O. No. 308 should also raise our antennas for a further look will show that it does not state whether encoding of data is limited to biological information alone for identification purposes. In fact, the Solicitor General claims that the adoption of the Identification Reference System will contribute to the "generation of population data for development planning." 54 This is an admission that the PRN will not be used solely for identification but the generation of other data with remote relation to the avowed purposes of A.O. No. 308. Clearly, the indefiniteness of A.O. No. 308 can give the government the roving authority to store and retrieve

information for a purpose other than the identification of the individual through his PRN.

The potential for misuse of the data to be gathered under A.O. No. 308 cannot be undarplayed as the dissenters do. Pursuant to said administrative order, an individual must present his PRN everytime he deals with a government agency to avail of basic services and security. His transactions with the government agency will necessarily be recorded — whether it be in the computer or in the documentary file of the agency. The individual's file may include his transactions for loan availments, income tax returns, statement of assets and liabilities, reimbursements for medication, hospitalization, etc. The more frequent the use of the PRN, the better the chance of building a huge formidable informatin base through the electronic linkage of the files. 55 The data may be gathered for gainful and useful government purposes; but the existence of this vast reservoir of personal information constitutes a covert invitation to misuse, a temptation that may be too great for some of our authorities to resist. 56

We can even grant, arguendo, that the computer data file will be limited to the name, address and other basic personal infomation about the individual. 57 Even that hospitable assumption will not save A.O. No. 308 from constitutional infirmity for again said order does not tell us in clear and categorical terms how these information gathered shall he handled. It does not provide who shall control and access the data, under what circumstances and for what purpose. These factors are essential to safeguard the privacy and guaranty the integrity of the information. 58 Well to note, the computer linkage gives other government agencies access to the information. Yet, there are no controls to guard against leakage of information. When the access code of the control programs of the particular computer system is broken, an intruder, without fear of sanction or penalty, can make use of the data for whatever purpose, or worse, manipulate the data stored within the system. 59

It is plain and we hold that A.O. No. 308 falls short of assuring that personal information which will be gathered about our people will only be processed for unequivocally specified purposes. 60 The lack of proper safeguards in this regard of A.O. No. 308 may interfere with the individual's liberty of abode and

travel by enabling authorities to track down his movement; it may also enable unscrupulous persons to access confidential information and circumvent the right against self-incrimination; it may pave the way for "fishing expeditions" by government authorities and evade the right against unreasonable searches and seizures. 61 The possibilities of abuse and misuse of the PRN, biometrics and computer technology are accentuated when we consider that the individual lacks control over what can be read or placed on his ID, much less verify the correctness of the data encoded. 62 They threaten the very abuses that the Bill of Rights seeks to prevent. 63

The ability of sophisticated data center to generate a comprehensive cradle-to-grave dossier on an individual and transmit it over a national network is one of the most graphic threats of the computer revolution. 64 The computer is capable of producing a comprehensive dossier on individuals out of information given at different times and for varied purposes. 65 It can continue adding to the stored data and keeping the information up to date. Retrieval of stored date is simple. When information of a privileged character finds its way into the computer, it can be extracted together with other data on the subject. 66 Once extracted, the information is putty in the hands of any person. The end of privacy begins.

Though A.O. No. 308 is undoubtedly not narrowly drawn, the dissenting opinions would dismiss its danger to the right to privacy as speculative and hypothetical. Again, we cannot countenance such a laidback posture. The Court will not be true to its role as the ultimate guardian of the people's liberty if it would not immediately smother the sparks that endanger their rights but would rather wait for the fire that could consume them.

We reject the argument of the Solicitor General that an individual has a reasonable expectation of privacy with regard to the Natioal ID and the use of biometrics technology as it stands on quicksand. The reasonableness of a person's expectation of privacy depends on a two-part test: (1) whether by his conduct, the individual has exhibited an expectation of privacy; and (2) whether this expectation is one that society recognizes as reasonable.67 The factual circumstances of the case determines the reasonableness of the expectation. 68 However, other factors,

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS21

such as customs, physical surroundings and practices of a particular activity, may serve to create or diminish this expectation. 69 The use of biometrics and computer technology in A.O. No. 308 does not assure the individual of a reasonable expectation of privacy. 70 As technology advances, the level of reasonably expected privacy decreases. 71 The measure of protection granted by the reasonable expectation diminishes as relevant technology becomes more widely accepted. 72 The security of the computer data file depends not only on the physical inaccessibility of the file but also on the advances in hardware and software computer technology. A.O. No. 308 is so widely drawn that a minimum standard for a reasonable expectation of privacy, regardless of technology used, cannot be inferred from its provisions.

The rules and regulations to be by the IACC cannot remedy this fatal defect. Rules and regulations merely implement the policy of the law or order. On its face, A.O. No. gives the IACC virtually infettered discretion to determine the metes and bounds of the ID System.

Nor do your present laws prvide adequate safeguards for a reasonable expectation of privacy. Commonwealth Act. No. 591 penalizes the disclosure by any person of data furnished by the individual to the NSO with imprisonment and fine. 73 Republic Act. No. 1161 prohibits public disclosure of SSS employment records and reports. 74These laws, however, apply to records and data with the NSO and the SSS. It is not clear whether they may be applied to data with the other government agencies forming part of the National ID System. The need to clarify the penal aspect of A.O. No. 308 is another reason why its enactment should be given to Congress.

Next, the Solicitor General urges us to validate A.O. No. 308's abridgment of the right of privacy by using the rational relationship test. 75 He stressed that the purposes of A.O. No. 308 are: (1) to streamline and speed up the implementation of basic government services, (2) eradicate fraud by avoiding duplication of services, and (3) generate population data for development planning. He cocludes that these purposes justify the incursions into the right to privacy for the means are rationally related to the end. 76

We are not impressed by the argument. In Morfe v. Mutuc, 77 we upheld the constitutionality of R.A. 3019, the Anti-Graft and Corrupt Practices Act, as a valid police power measure. We declared that the law, in compelling a public officer to make an annual report disclosing his assets and liabilities, his sources of income and expenses, did not infringe on the individual's right to privacy. The law was enacted to promote morality in public administration by curtailing and minimizing the opportunities for official corruption and maintaining a standard of honesty in the public service. 78

The same circumstances do not obtain in the case at bar. For one, R.A. 3019 is a statute, not an administrative order. Secondly, R.A. 3019 itself is sufficiently detailed. The law is clear on what practices were prohibited and penalized, and it was narrowly drawn to avoid abuses. IN the case at bar, A.O. No. 308 may have been impelled by a worthy purpose, but, it cannot pass constitutional scrutiny for it is not narrowly drawn. And we now hod that when the integrity of a fundamental right is at stake, this court will give the challenged law, administrative order, rule or regulation a stricter scrutiny. It will not do for the authorities to invoke the presumption of regularity in the performance of official duties. Nor is it enough for the authorities to prove that their act is not irrational for a basic right can be diminished, if not defeated, even when the government does not act irrationally. They must satisfactorily show the presence of compelling state interests and that the law, rule or regulation is narrowly drawn to preclude abuses. This approach is demanded by the 1987 Constitution whose entire matrix is designed to protect human rights and to prevent authoritarianism. In case of doubt, the least we can do is to lean towards the stance that will not put in danger the rights protected by the Constitutions.

The case of Whalen v. Roe 79 cited by the Solicitor General is also off-line. In Whalen, the United States Supreme Court was presented with the question of whether the State of New York could keep a centralized computer record of the names and addresses of all persons who obtained certain drugs pursuant to a doctor's prescription. The New York State Controlled Substance Act of 1972 required physicians to identify parties obtaining prescription drugs enumerated in the statute, i.e., drugs with a recognized medical use but with a potential for abuse, so that the names and addresses of the patients can be recorded in a

centralized computer file of the State Department of Health. The plaintiffs, who were patients and doctors, claimed that some people might decline necessary medication because of their fear that the computerized data may be readily available and open to public disclosure; and that once disclosed, it may stigmatize them as drug addicts. 80 The plaintiffs alleged that the statute invaded a constitutionally protected zone of privacy, i.e., the individual interest in avoiding disclosure of personal matters, and the interest in independence in making certain kinds of important decisions. The U.S. Supreme Court held that while an individual's interest in avoiding disclosuer of personal matter is an aspect of the right to privacy, the statute did not pose a grievous threat to establish a constitutional violation. The Court found that the statute was necessary to aid in the enforcement of laws designed to minimize the misuse of dangerous drugs. The patient-identification requirement was a product of an orderly and rational legislative decision made upon recommmendation by a specially appointed commission which held extensive hearings on the matter. Moreover, the statute was narrowly drawn and contained numerous safeguards against indiscriminate disclosure. The statute laid down the procedure and requirements for the gathering, storage and retrieval of the informatin. It ebumerated who were authorized to access the data. It also prohibited public disclosure of the data by imposing penalties for its violation. In view of these safeguards, the infringement of the patients' right to privacy was justified by a valid exercise of police power. As we discussed above, A.O. No. 308 lacks these vital safeguards.

Even while we strike down A.O. No. 308, we spell out in neon that the Court is not per se agains the use of computers to accumulate, store, process, retvieve and transmit data to improve our bureaucracy. Computers work wonders to achieve the efficiency which both government and private industry seek. Many information system in different countries make use of the computer to facilitate important social objective, such as better law enforcement, faster delivery of public services, more efficient management of credit and insurance programs, improvement of telecommunications and streamlining of financial activities. 81 Used wisely, data stored in the computer could help good administration by making accurate and comprehensive information for those who have to frame policy and make key decisions. 82 The benefits of the computer has

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS22

revolutionized information technology. It developed the internet, 83 introduced the concept of cyberspace 84 and the information superhighway where the individual, armed only with his personal computer, may surf and search all kinds and classes of information from libraries and databases connected to the net.

In no uncertain terms, we also underscore that the right to privacy does not bar all incursions into individual privacy. The right is not intended to stifle scientific and technological advancements that enhance public service and the common good. It merely requires that the law be narrowly focused 85 and a compelling interest justify such intrusions. 86 Intrusions into the right must be accompanied by proper safeguards and well-defined standards to prevent unconstitutional invasions. We reiterate that any law or order that invades individual privacy will be subjected by this Court to strict scrutiny. The reason for this stance was laid down in Morfe v. Mutuc, to wit:

The concept of limited government has always included the idea that governmental powers stop short of certain intrusions into the personal life of the citizen. This is indeed one of the basic disctinctions between absolute and limited government. Ultimate and pervasive control of the individual, in all aspects of his life, is the hallmark of the absolute state. In contrast, a system of limited government safeguards a private sector, which belongs to the individual, firmly distinguishing it from the public sector, which the state can control. Protection of this private sector — protection, in other words, of the dignity and integrity of the individual — has become increasingly important as modern society has developed. All the forces of a technological age — industrialization, urbanization, and organization — operate to narrow the area of privacy and facilitate intrusion into it. In modern terms, the capacity to maintain and support this enclave of private life marks the difference between a democratic and a totalitarian society. 87

IV

The right to privacy is one of the most threatened rights of man living in a mass society. The threats emanate from various sources — governments, journalists, employers, social scientists, etc. 88 In th case at bar, the threat comes from the executive branch of government which by issuing A.O. No. 308 pressures

the people to surrender their privacy by giving information about themselves on the pretext that it will facilitate delivery of basic services. Given the record-keeping power of the computer, only the indifferent fail to perceive the danger that A.O. No. 308 gives the government the power to compile a devastating dossier against unsuspecting citizens. It is timely to take note of the well-worded warning of Kalvin, Jr., "the disturbing result could be that everyone will live burdened by an unerasable record of his past and his limitations. In a way, the threat is that because of its record-keeping, the society will have lost its benign capacity to forget." 89 Oblivious to this counsel, the dissents still say we should not be too quick in labelling the right to privacy as a fundamental right. We close with the statement that the right to privacy was not engraved in our Constitution for flattery.

IN VIEW WHEREOF, the petition is granted and Adminisrative Order No. 308 entitled "Adoption of a National Computerized Identification Reference System" declared null and void for being unconstitutional.

SO ORDERED.

[G.R. Nos. 95203-05 :  December 18, 1990.]

192 SCRA 363

SENATOR ERNESTO MACEDA, Petitioner, vs. ENERGY REGULATORY BOARD (ERB); MARCELO N. FERNANDO, ALEJANDRO B. AFURONG; REX V. TANTIONGCO; and OSCAR E. ALA, in their collective official capacities as Chairman and Members of the Board (ERB), respectively; CATALINO MACARAIG, in his quadruple official capacities as Executive Secretary, Chairman of Philippine National Oil Company; Office of the Energy Affairs, and with MANUEL ESTRELLA, in their respective official capacities as Chairman and President of the Petron Corporation; PILIPINAS SHELL PETROLEUM CORPORATION; with CESAR BUENAVENTURA and REY GAMBOA as chairman and President, respectively; CALTEX PHILIPPINES with FRANCIS ABLAN, President and Chief Executive Officer; and the Presidents of Philippine Petroleum Dealer's Association, Caltex Dealer's Co., Petron Dealer's Asso., Shell Dealer's Asso. of the Phil., Liquefied Petroleum Gas Institute of the Phils., any and all concerned

gasoline and petrol dealers or stations; and such other persons, officials, and parties, acting for and on their behalf; or in representation of and/or under their authority, Respondents.

[G.R. Nos. 95119-21 :  December 18, 1990.]

192 SCRA 363

OLIVER O. LOZANO, Petitioner, vs. ENERGY REGULATORY BOARD (ERB), PILIPINAS SHELL PETROLEUM CORPORATION, CALTEX (PHIL.), INC., and PETRON CORPORATION, Respondents.

 

D E C I S I O N

 

SARMIENTO, J.:

 

The petitioners pray for injunctive relief, to stop the Energy Regulatory Board (Board hereinafter) from implementing its Order, dated September 21, 1990, mandating a provisional increase in the prices of petroleum and petroleum products, as follows:

 PRODUCTS IN PESOS PER LITER

  OPSF

 Premium Gasoline 1.7700

 Regular Gasoline 1.7700

 Avturbo 1.8664

 Kerosene 1.2400

 Diesel Oil 1.2400

 Fuel Oil 1.4900

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS23

 Feedstock 1.4900

 LPG 0.8487

 Asphalts 2.7160

 Thinners 1.7121 1

It appears that on September 10, 1990, Caltex (Philippines), Inc., Pilipinas Shell Petroleum Corporation, and Petron Corporation proferred separate applications with the Board for permission to increase the wholesale posted prices of petroleum products, as follows:

 Caltex P3.2697 per liter

 Shell 2.0338 per liter

 Petron 2.00 per liter 2

and meanwhile, for provisional authority to increase temporarily such wholesale posted prices pending further proceedings.:-cralaw

On September 21, 1990, the Board, in a joint (on three applications) Order granted provisional relief as follows:

WHEREFORE, considering the foregoing, and pursuant to Section 8 of Executive Order No. 172, this Board hereby grants herein applicants' prayer for provisional relief and, accordingly, authorizes said applicants a weighted average provisional increase of ONE PESO AND FORTY-TWO CENTAVOS (P1.42) per liter in the wholesale posted prices of their various petroleum products enumerated below, refined and/or marketed by them locally. 3

The petitioners submit that the above Order had been issued with grave abuse of discretion, tantamount to lack of jurisdiction, and correctible by Certiorari.

The petitioner, Senator Ernesto Maceda, 4 also submits that the same was issued without proper notice and hearing in violation of Section 3, paragraph (e), of Executive Order No. 172; that the Board, in decreeing an increase, had created a new source for the Oil Price Stabilization Fund (OPSF), or otherwise that it had

levied a tax, a power vested in the legislature, and/or that it had "re-collected", by an act of taxation, ad valorem taxes on oil which Republic Act No. 6965 had abolished.

The petitioner, Atty. Oliver Lozano, 5 likewise argues that the Board's Order was issued without notice and hearing, and hence, without due process of law.

The intervenor, the Trade Union of the Philippines and Allied Services (TUPAS/FSM)-W.F.T.U., 6 argues on the other hand, that the increase cannot be allowed since the respondents oil companies had not exhausted their existing oil stock which they had bought at old prices and that they cannot be allowed to charge new rates for stock purchased at such lower rates.

The Court set the cases (in G.R. Nos. 95203-05) for hearing on October 25, 1990, in which Senator Maceda and his counsel, Atty. Alexander Padilla, argued. The Solicitor General, on behalf of the Board, also presented his arguments, together with Board Commissioner Rex Tantiangco. Attys. Federico Alikpala, Jr. and Joselia Poblador represented the oil firms (Petron and Caltex, respectively).

The parties were thereafter required to submit their memorandums after which, the Court considered the cases submitted for resolution.

On November 20, 1990, the Court ordered these cases consolidated.

On November 27, 1990, we gave due course to both petitions.

The Court finds no merit in these petitions.

Senator Maceda and Atty. Lozano, in questioning the lack of a hearing, have overlooked the provisions of Section 8 of Executive Order No. 172, which we quote:

"SECTION 8. Authority to Grant Provisional Relief . — The Board may, upon the filing of an application, petition or complaint or at any stage thereafter and without prior hearing, on the basis of supporting papers duly verified or authenticated, grant provisional relief on motion of a party in the case or on its own initiative, without prejudice to a final decision after hearing,

should the Board find that the pleadings, together with such affidavits, documents and other evidence which may be submitted in support of the motion, substantially support the provisional order: Provided, That the Board shall immediately schedule and conduct a hearing thereon within thirty (30) days thereafter, upon publication and notice to all affected parties.: nad

As the Order itself indicates, the authority for provisional increase falls within the above provision.

There is no merit in the Senator's contention that the "applicable" provision is Section 3, paragraph (e) of the Executive Order, which we quote:

(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.

What must be stressed is that while under Executive Order No. 172, a hearing is indispensable, it does not preclude the Board from ordering, ex parte, a provisional increase, as it did here, subject to its final disposition of whether or not: (1) to make it permanent; (2) to reduce or increase it further; or (3) to deny the application. Section 37 paragraph (e) is akin to a temporary restraining order or a writ of preliminary attachment issued by the courts, which are given ex parte, and which are subject to the resolution of the main case.

Section 3, paragraph (e) and Section 8 do not negate each other, or otherwise, operate exclusively of the other, in that the Board may resort to one but not to both at the same time. Section 3(e) outlines the jurisdiction of the Board and the grounds for which it may decree a price adjustment, subject to the requirements of notice and hearing. Pending that, however, it may order, under Section 8, an authority to increase provisionally, without need of a hearing, subject to the final outcome of the proceeding. The Board, of course, is not prevented from conducting a hearing on

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS24

the grant of provisional authority — which is of course, the better procedure — however, it cannot be stigmatized later if it failed to conduct one. As we held in Citizens' Alliance for Consumer Protection v. Energy Regulatory Board. 7

In the light of Section 8 quoted above, public respondent Board need not even have conducted formal hearings in these cases prior to issuance of its Order of 14 August 1987 granting a provisional increase of prices. The Board, upon its own discretion and on the basis of documents and evidence submitted by private respondents, could have issued an order granting provisional relief immediately upon filing by private respondents of their respective applications. In this respect, the Court considers the evidence presented by private respondents in support of their applications — i.e., evidence showing that importation costs of petroleum products had gone up; that the peso had depreciated in value; and that the Oil Price Stabilization Fund (OPSF) had by then been depleted — as substantial and hence constitutive of at least prima facie basis for issuance by the Board of a provisional relief order granting an increase in the prices of petroleum products. 8

We do not therefore find the challenged action of the Board to have been done in violation of the due process clause. The petitioners may contest however, the applications at the hearings proper.

Senator Maceda's attack on the Order in question on premises that it constitutes an act of taxation or that it negates the effects of Republic Act No. 6965, cannot prosper. Republic Act No. 6965 operated to lower taxes on petroleum and petroleum products by imposing specific taxes rather than ad valorem taxes thereon; it is, not, however, an insurance against an "oil hike", whenever warranted, or is it a price control mechanism on petroleum and petroleum products. The statute had possibly forestalled a larger hike, but it operated no more.: nad

The Board Order authorizing the proceeds generated by the increase to be deposited to the OPSF is not an act of taxation. It is authorized by Presidential Decree No. 1956, as amended by Executive Order No. 137, as follows:

SECTION 8.  There is hereby created a Trust Account in the books of accounts of the Ministry of Energy to be designated as

Oil Price Stabilization Fund (OPSF) for the purpose of minimizing frequent price changes brought about by exchange rate adjustments and/or changes in world market prices of crude oil and imported petroleum products. The Oil Price Stabilization Fund (OPSF) may be sourced from any of the following:

a) Any increase in the tax collection from ad valorem tax or customs duty imposed on petroleum products subject to tax under this Decree arising from exchange rate adjustment, as may be determined by the Minister of Finance in consultation with the Board of Energy;

b) Any increase in the tax collection as a result of the lifting of tax exemptions of government corporations, as may be determined by the Minister of Finance in consultation with the Board of Energy;

c) Any additional amount to be imposed on petroleum products to augment the resources of the Fund through an appropriate Order that may be issued by the Board of Energy requiring payment by persons or companies engaged in the business of importing, manufacturing and/or marketing petroleum products;

d) Any resulting peso cost differentials in case the actual peso costs paid by oil companies in the importation of crude oil and petroleum products is less than the peso costs computed using the reference foreign exchange rates as fixed by the Board of Energy.

Anent claims that oil companies cannot charge new prices for oil purchased at old rates, suffice it to say that the increase in question was not prompted alone by the increase in world oil prices arising from tension in the Persian Gulf. What the Court gathers from the pleadings as well as events of which it takes judicial notice, is that: (1) as of June 30, 1990, the OPSF has incurred a deficit of P6.1 Billion; (2) the exchange rate has fallen to P28.00 to $1.00; (3) the country's balance of payments is expected to reach $1 Billion; (4) our trade deficit is at $2.855 Billion as of the first nine months of the year.

Evidently, authorities have been unable to collect enough taxes necessary to replenish the OPSF as provided by Presidential Decree No. 1956, and hence, there was no available alternative but to hike existing prices.

The OPSF, as the Court held in the aforecited CACP cases, must not be understood to be a funding designed to guarantee oil firms' profits although as a subsidy, or a trust account, the Court has no doubt that oil firms make money from it. As we held there, however, the OPSF was established precisely to protect the consuming public from the erratic movement of oil prices and to preclude oil companies from taking advantage of fluctuations occurring every so often. As a buffer mechanism, it stabilizes domestic prices by bringing about a uniform rate rather than leaving pricing to the caprices of the market.

In all likelihood, therefore, an oil hike would have probably been imminent, with or without trouble in the Gulf, although trouble would have probably aggravated it.: nad

The Court is not to be understood as having prejudged the justness of an oil price increase amid the above premises. What the Court is saying is that it thinks that based thereon, the Government has made out a prima facie case to justify the provisional increase in question. Let the Court therefore make clear that these findings are not final; the burden, however, is on the petitioners' shoulders to demonstrate the fact that the present economic picture does not warrant a permanent increase.

There is no doubt that the increase in oil prices in question (not to mention another one impending, which the Court understands has been under consideration by policy-makers) spells hard(er) times for the Filipino people. The Court can not, however, debate the wisdom of policy or the logic behind it (unless it is otherwise arbitrary), not because the Court agrees with policy, but because the Court is not the suitable forum for debate. It is a question best judged by the political leadership which after all, determines policy, and ultimately, by the electorate, that stands to be better for it or worse off, either in the short or long run.

At this point, the Court shares the indignation of the people over the conspiracy of events and regrets its own powerlessness, if by this Decision it has been powerless. The constitutional scheme of things has simply left it with no choice.

In fine, we find no grave abuse of discretion committed by the respondent Board in issuing its questioned Order.

WHEREFORE, these petitions are DISMISSED. No costs.

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS25

SO ORDERED.

G.R. No. 96266 July 18, 1991

ERNESTO M. MACEDA, petitioner, vs.ENERGY REGULATORY BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL PETROLEUM CORPORATION AND PETRON CORPORATION, respondents.

G.R. No. 96349 July 18, 1991

EUGENIO O. ORIGINAL, IRENEO N. AARON, JR., RENE LEDESMA, ROLANDO VALLE, ORLANDO MONTANO, STEVE ABITANG, NERI JINON, WILFREDO DELEONIO, RENATO BORRO, RODRIGO DE VERA, ALVIN BAYUANG, JESUS MELENDEZ, NUMERIANO CAJILIG JR., RUFINO DE LA CRUZ AND JOVELINO G. TIPON, petitioners, vs.ENERGY REGULATORY BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL PETROLEUM CORPORATION AND PETRON CORPORATION, respondents.

G.R. No. 96284 July 18,1991

CEFERINO S. PAREDES, JR., petitioner, vs.ENERGY REGULATORY BOARD, CALTEX (Philippines), INC., PILIPINAS SHELL, INC. AND PETROPHIL CORPORATION, respondents.

R E S O L U T I O N

 

MEDIALDEA, J.:p

In G.R. No. 96266, petitioner Maceda seeks nullification of the Energy Regulatory Board (ERB) Orders dated December 5 and 6, 1990 on the ground that the hearings conducted on the second

provisional increase in oil prices did not allow him substantial cross-examination, in effect, allegedly, a denial of due process.

The facts of the case are as follows:

Upon the outbreak of the Persian Gulf conflict on August 2, 1990, private respondents oil companies filed with the ERB their respective applications on oil price increases (docketed as ERB Case Nos. 90-106, 90-382 and 90-384, respectively).

On September 21, 1990, the ERB issued an order granting a provisional increase of P1.42 per liter. Petitioner Maceda filed a petition for Prohibition on September 26, 1990 (E. Maceda v. ERB, et al., G.R. No. 95203), seeking to nullify the provisional increase. We dismissed the petition on December 18, 1990, reaffirming ERB's authority to grant provisional increase even without prior hearing, pursuant to Sec. 8 of E.O. No. 172, clarifying as follows:

What must be stressed is that while under Executive Order No. 172, a hearing is indispensable, it does not preclude the Board from ordering, ex-parte, a provisional increase, as it did here, subject to its final disposition of whether or not: (1) to make it permanent; (2) to reduce or increase it further; or (3) to deny the application. Section 3, paragraph (e) is akin to a temporary restraining order or a writ of preliminary attachment issued by the courts, which are given ex-parte and which are subject to the resolution of the main case.

Section 3, paragraph (e) and Section 8 do not negate each other, or otherwise, operate exclusively of the other, in that the Board may resort to one but not to both at the same time. Section 3(e) outlines the jurisdiction of the Board and the grounds for which it may decree a price adjustment, subject to the requirements of notice and hearing. Pending that, however, it may order, under Section 8, an authority to increase provisionally, without need of a hearing, subject to the final outcome of the proceeding. The Board, of course, is not prevented from conducting a hearing on the grant of provisional authority-which is of course, the better procedure — however, it cannot be stigmatized later if it failed to conduct one. (pp. 129-130, Rollo) (Emphasis supplied)

In the same order of September 21, 1990, authorizing provisional increase, the ERB set the applications for hearing with due

notice to all interested parties on October 16, 1990. Petitioner Maceda failed to appear at said hearing as well as on the second hearing on October 17, 1990.

To afford registered oppositors the opportunity to cross-examine the witnesses, the ERB set the continuation of the hearing to October 24, 1990. This was postponed to November 5, 1990, on written notice of petitioner Maceda.

On November 5, 1990, the three oil companies filed their respective motions for leave to file or admit amended/supplemental applications to further increase the prices of petroleum products.

The ERB admitted the respective supplemental/amended petitions on November 6, 1990 at the same time requiring applicants to publish the corresponding Notices of Public Hearing in two newspapers of general circulation (p. 4, Rollo and Annexes "F" and "G," pp. 60 and 62, Rollo).

Hearing for the presentation of the evidence-in-chief commenced on November 21, 1990 with ERB ruling that testimonies of witnesses were to be in the form of Affidavits (p. 6, Rollo). ERB subsequently outlined the procedure to be observed in the reception of evidence, as follows:

CHAIRMAN FERNANDO:

Well, at the last hearing, applicant Caltex presented its evidence-in-chief and there is an understanding or it is the Board's wish that for purposes of good order in the presentation of the evidence considering that these are being heard together, we will defer the cross-examination of applicant Caltex's witness and ask the other applicants to present their evidence-in-chief so that the oppositors win have a better Idea of what an of these will lead to because as I mentioned earlier, it has been traditional and it is the intention of the Board to act on these applications on an industry-wide basis, whether to accept, reject, modify or whatever, the Board win do it on an industry wide basis, so, the best way to have (sic) the oppositors and the Board a clear picture of what the applicants are asking for is to have all the evidence-in-chief to be placed on record first and then the examination will come later, the cross-examination will come

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS26

later. . . . (pp. 5-6, tsn., November 23, 1990, ERB Cases Nos. 90-106, 90382 and 90-384). (p. 162, Rollo)

Petitioner Maceda maintains that this order of proof deprived him of his right to finish his cross-examination of Petron's witnesses and denied him his right to cross-examine each of the witnesses of Caltex and Shell. He points out that this relaxed procedure resulted in the denial of due process.

We disagree. The Solicitor General has pointed out:

. . . The order of testimony both with respect to the examination of the particular witness and to the general course of the trial is within the discretion of the court and the exercise of this discretion in permitting to be introduced out of the order prescribed by the rules is not improper (88 C.J.S. 206-207).

Such a relaxed procedure is especially true in administrative bodies, such as the ERB which in matters of rate or price fixing is considered as exercising a quasi-legislative, not quasi-judicial, function As such administrative agency, it is not bound by the strict or technical rules of evidence governing court proceedings (Sec. 29, Public Service Act; Dickenson v. United States, 346, U.S. 389, 98 L. ed. 132, 74 S. St. 152). (Emphasis supplied)

In fact, Section 2, Rule I of the Rules of Practice and Procedure Governing Hearings Before the ERB provides that —

These Rules shall govern pleadings, practice and procedure before the Energy Regulatory Board in all matters of inquiry, study, hearing, investigation and/or any other proceedings within the jurisdiction of the Board. However, in the broader interest of justice, the Board may, in any particular matter, except itself from these rules and apply such suitable procedure as shall promote the objectives of the Order.

(pp. 163-164, Rollo)

Petitioner Maceda also claims that there is no substantial evidence on record to support the provisional relief.

We have, in G.R. Nos. 95203-05, previously taken judicial notice of matters and events related to the oil industry, as follows:

. . . (1) as of June 30, 1990, the OPSF has incurred a deficit of P6.1 Billion; (2) the exchange rate has fallen to P28.00 to $1.00; (3) the country's balance of payments is expected to reach $1 Billion; (4) our trade deficit is at P2.855 Billion as of the first nine months of the year.

. . . (p. 150, Rollo)

The Solicitor General likewise commented:

Among the pieces of evidence considered by ERB in the grant of the contested provisional relief were: (1) certified copies of bins of lading issued by crude oil suppliers to the private respondents; (2) reports of the Bankers Association of the Philippines on the peso-dollar exchange rate at the BAP oil pit; and (3) OPSF status reports of the Office of Energy Affairs. The ERB was likewise guided in the determination of international crude oil prices by traditional authoritative sources of information on crude oil and petroleum products, such as Platt's Oilgram and Petroleum Intelligence Weekly. (p. 158, Rollo)

Thus, We concede ERB's authority to grant the provisional increase in oil price, as We note that the Order of December 5, 1990 explicitly stated:

in the light, therefore, of the rise in crude oil importation costs, which as earlier mentioned, reached an average of $30.3318 per barrel at $25.551/US $ in September-October 1990; the huge OPSF deficit which, as reported by the Office of Energy Affairs, has amounted to P5.7 Billion (based on filed claims only and net of the P5 Billion OPSF) as of September 30, 1990, and is estimated to further increase to over P10 Billion by end December 1990; the decision of the government to discontinue subsidizing oil prices in view of inflationary pressures; the apparent inadequacy of the proposed additional P5.1 Billion government appropriation for the OPSF and the sharp drop in the value of the peso in relation to the US dollar to P28/US $, this Board is left with no other recourse but to grant applicants oil companies further relief by increasing the prices of petroleum products sold by them. (p. 161, Rollo)

Petitioner Maceda together with petitioner Original (G.R. No. 96349) also claim that the provisional increase involved amounts over and above that sought by the petitioning oil companies.

The Solicitor General has pointed out that aside from the increase in crude oil prices, all the applications of the respondent oil companies filed with the ERB covered claims from the OPSF.

We shall thus respect the ERB's Order of December 5, 1990 granting a provisional price increase on petroleum products premised on the oil companies' OPSF claims, crude cost peso differentials, forex risk for a subsidy on sale to NPC (p. 167, Rollo), since the oil companies are "entitled to as much relief as the fact alleged constituting the course of action may warrant," (Javellana v. D.O. Plaza Enterprises, Inc., G.R. No. L-28297, March 30, 1970, 32 SCRA 261 citing Rosales v. Reyes, 25 Phil. 495; Aguilar v. Rubiato, 40 Phil. 470) as follows:

Per Liter

Weighted

Petron Shell Caltex Average

Crude Cost P3.11 P3.6047 P2.9248 P3.1523

Peso Cost

Diffn'l 2.1747 1.5203 1.5669 1.8123

Forex Risk

Fee -0.1089 -0,0719 -0.0790 -0.0896

Subsidy on

Sales to NPC 0.1955 0.0685 0.0590 0.1203

Total Price

Increase

Applied for P59.3713 P5.1216 P4.4717 P4.9954

Less: September 21 Price

Relief

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS27

Actual Price Increase P1.42

Actual Tax Reduction:

Ad Valorem Tax

(per Sept. 1, 1990

price build-up) P1.3333

Specific Tax (per

Oct. 5, 1990 price

build-up) .6264 .7069 2.1269

Net Price Increase

Applied for 2.8685

Nonetheless, it is relevant to point out that on December 10, 1990, the ERB, in response to the President's appeal, brought back the increases in Premium and Regular gasoline to the levels mandated by the December 5, 1990 Order (P6.9600 and P6.3900, respectively), as follows:

Product In Pesos Per Liter

OPSF

Premium Gasoline 6.9600

Regular Gasoline 6.3900

Avturbo 4.9950

Kerosene 1.4100

Diesel Oil 1.4100

Fuel Oil/Feedstock 0.2405

LPG 1.2200

Asphalt 2.5000

Thinner 2.5000

In G.R. No. 96349, petitioner Original additionally claims that if the price increase will be used to augment the OPSF this will constitute illegal taxation. In the Maceda case, (G.R. Nos. 95203-05, supra) this Court has already ruled that "the Board Order authorizing the proceeds generated by the increase to be deposited to the OPSF is not an act of taxation but is authorized by Presidential Decree No. 1956, as amended by Executive Order No. 137.

The petitions of E.O. Original et al. (G.R. No. 96349) and C.S. Povedas, Jr. (G.R. No. 96284), insofar as they question the ERB's authority under Sec. 8 of E.O. 172, have become moot and academic.

We lament Our helplessness over this second provisional increase in oil price. We have stated that this "is a question best judged by the political leadership" (G.R. Nos. 95203-05, G.R. Nos. 95119-21, supra). We wish to reiterate Our previous pronouncements therein that while the government is able to justify a provisional increase, these findings "are not final, and it is up to petitioners to demonstrate that the present economic picture does not warrant a permanent increase."

In this regard, We also note the Solicitor General's comments that "the ERB is not averse to the idea of a presidential review of its decision," except that there is no law at present authorizing the same. Perhaps, as pointed out by Justice Padilla, our lawmakers may see the wisdom of allowing presidential review of the decisions of the ERB since, despite its being a quasi-judicial body, it is still "an administrative body under the Office of the President whose decisions should be appealed to the President under the established principle of exhaustion of administrative remedies," especially on a matter as transcendental as oil price increases which affect the lives of almost an Filipinos.

ACCORDINGLY, the petitions are hereby DISMISSED.

SO ORDERED.

G.R. No. 97149 March 31, 1992

FIDENCIO Y. BEJA, SR., petitioner, vs.COURT OF APPEALS, HONORABLE REINERIO O. REYES, in his capacity as Secretary of the Department of Transportation and Communications; COMMODORE ROGELIO A. DAYAN, in his capacity as General Manager of the Philippine Ports Authority; DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, ADMINISTRATIVE ACTION BOARD; and JUSTICE ONOFRE A. VILLALUZ, in his capacity as Chairman of the Administrative Action Board, DOTC, respondents.

 

ROMERO, J.:

The instant petition for certiorari questions the jurisdiction of the Secretary of the Department of Transportation and Communications (DOTC) and/or its Administrative Action Board (AAB) over administrative cases involving personnel below the rank of Assistant General Manager of the Philippine Ports Authority (PPA), an agency attached to the said Department.

Petitioner Fidencio Y. Beja, Sr. 1 was first employed by the PPA as arrastre supervisor in 1975. He became Assistant Port Operations Officer in 1976 and Port Operations Officer in 1977. In February 1988, as a result of the reorganization of the PPA, he was appointed Terminal Supervisor.

On October 21, 1988, the PPA General Manager, Rogelio A. Dayan, filed Administrative Case No. 11-04-88 against petitioner Beja and Hernando G. Villaluz for grave dishonesty, grave misconduct, willful violation of reasonable office rules and regulations and conduct prejudicial to the best interest of the service. Beja and Villaluz allegedly erroneously assessed storage fees resulting in the loss of P38,150.77 on the part of the PPA. Consequently, they were preventively suspended for the charges. After a preliminary investigation conducted by the district attorney for Region X, Administrative Case No. 11-04-88 was "considered closed for lack of merit."

On December 13, 1988, another charge sheet, docketed as Administrative Case No. 12-01-88, was filed against Beja by the

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS28

PPA General Manager also for dishonesty, grave misconduct, violation of reasonable office rules and regulations, conduct prejudicial to the best interest of the service and for being notoriously undesirable. The charge consisted of six (6) different specifications of administrative offenses including fraud against the PPA in the total amount of P218,000.00. Beja was also placed under preventive suspension pursuant to Sec. 41 of P.D. No. 807.

The case was redocketed as Administrative Case No. PPA-AAB-1-049-89 and thereafter, the PPA general manager indorsed it to the AAB for "appropriate action." At the scheduled hearing, Beja asked for continuance on the ground that he needed time to study the charges against him. The AAB proceeded to hear the case and gave Beja an opportunity to present evidence. However, on February 20, 1989, Beja filed a petition for certiorari with preliminary injunction before the Regional Trial Court of Misamis Oriental. 2 Two days later, he filed with the AAB a manifestation and motion to suspend the hearing of Administrative Case No. PPA-AAB-1-049-89 on account of the pendency of the certiorari proceeding before the court. AAB denied the motion and continued with the hearing of the administrative case.

Thereafter, Beja moved for the dismissal of the certiorari case below and proceeded to file before this Court a petition for certiorari with preliminary injunction and/or temporary restraining order. The case was docketed as G.R. No. 87352 captioned "Fidencio Y. Beja v. Hon. Reinerio 0. Reyes, etc., et al." In the en banc resolution of March 30, 1989, this Court referred the case to the Court of Appeals for "appropriate action." 3 G.R. No. 87352 was docketed in the Court of Appeals as CA-G.R. SP No. 17270.

Meanwhile, a decision was rendered by the AAB in Administrative Case No. PPA-AAB-049-89. Its dispositive portion reads:

WHEREFORE, judgment is hereby rendered, adjudging the following, namely:

a) That respondents Geronimo Beja, Jr. and Hernando Villaluz are exonerated from the charge against them;

b) That respondent Fidencio Y. Beja be dismissed from the service;

c) That his leave credits and retirement benefits are declared forfeited;

d) That he be disqualified from re-employment in the government service;

e) That his eligibility is recommended to be cancelled.

Pasig, Metro Manila, February 28, 1989.

On December 10, 1990, after appropriate proceedings, the Court of Appeals also rendered a decision 4 in CA-G.R. SP No. 17270 dismissing the petition for certiorari for lack of merit. Hence, Beja elevated the case back to this Court through an "appeal by certiorari with preliminary injunction and/or temporary restraining order."

We find the pleadings filed in this case to be sufficient bases for arriving at a decision and hence, the filing of memoranda has been dispensed with.

In his petition, Beja assails the Court of Appeals for having "decided questions of substance in a way probably not in accord with law or with the applicable decisions" of this Court. 5 Specifically, Beja contends that the Court of Appeals failed to declare that: (a) he was denied due process; (b) the PPA general manager has no power to issue a preventive suspension order without the necessary approval of the PPA board of directors; (c) the PPA general manager has no power to refer the administrative case filed against him to the DOTC-AAB, and (d) the DOTC Secretary, the Chairman of the DOTC-AAB and DOTC-AAB itself as an adjudicatory body, have no jurisdiction to try the administrative case against him. Simply put, Beja challenges the legality of the preventive suspension and the jurisdiction of the DOTC Secretary and/or the AAB to initiate and hear administrative cases against PPA personnel below the rank of Assistant General Manager.

Petitioner anchors his contention that the PPA general manager cannot subject him to a preventive suspension on the following

provision of Sec. 8, Art. V of Presidential Decree No. 857 reorganizing the PPA:

(d) the General Manager shall, subject to the approval of the Board, appoint and remove personnel below the rank of Assistant General Manager. (Emphasis supplied.)

Petitioner contends that under this provision, the PPA Board of Directors and not the PPA General Manager is the "proper disciplining authority. 6

As correctly observed by the Solicitor General, the petitioner erroneously equates "preventive suspension" as a remedial measure with "suspension" as a penalty for administrative dereliction. The imposition of preventive suspension on a government employee charged with an administrative offense is subject to the following provision of the Civil Service Law, P.D. No. 807:

Sec. 41. Preventive Suspension. — The proper disciplining authority may preventively suspend any subordinate officer or employee under his authority pending an investigation, if the charge against such officer or employee involves dishonesty, oppression or grave misconduct, or neglect in the performance of duty, or if there are reasons to believe that the respondent is guilty of charges which would warrant his removal from the service.

Imposed during the pendency of an administrative investigation, preventive suspension is not a penalty in itself. It is merely a measure of precaution so that the employee who is charged may be separated, for obvious reasons, from the scene of his alleged misfeasance while the same is being investigated. 7 Thus, preventive suspension is distinct from the administrative penalty of removal from office such as the one mentioned in Sec. 8(d) of P.D. No 857. While the former may be imposed on a respondent during the investigation of the charges against him, the latter is the penalty which may only be meted upon him at the termination of the investigation or the final disposition of the case.

The PPA general manager is the disciplining authority who may, by himself and without the approval of the PPA Board of Directors, subject a respondent in an administrative case to

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS29

preventive suspension. His disciplinary powers are sanctioned, not only by Sec. 8 of P.D. No. 857 aforequoted, but also by Sec. 37 of P.D. No. 807 granting heads of agencies the "jurisdiction to investigate and decide matters involving disciplinary actions against officers and employees" in the PPA.

Parenthetically, the period of preventive suspension is limited. It may be lifted even if the disciplining authority has not finally decided the administrative case provided the ninety-day period from the effectivity of the preventive suspension has been exhausted. The employee concerned may then be reinstated. 8 However, the said ninety-day period may be interrupted. Section 42 of P.D. No. 807 also mandates that any fault, negligence or petition of a suspended employee may not be considered in the computation of the said period. Thus, when a suspended employee obtains from a court of justice a restraining order or a preliminary injunction inhibiting proceedings in an administrative case, the lifespan of such court order should be excluded in the reckoning of the permissible period of the preventive suspension. 9

With respect to the issue of whether or not the DOTC Secretary and/or the AAB may initiate and hear administrative cases against PPA Personnel below the rank of Assistant General Manager, the Court qualifiedlyrules in favor of petitioner.

The PPA was created through P.D. No. 505 dated July 11, 1974. Under that Law, the corporate powers of the PPA were vested in a governing Board of Directors known as the Philippine Port Authority Council. Sec. 5(i) of the same decree gave the Council the power "to appoint, discipline and remove, and determine the composition of the technical staff of the Authority and other personnel."

On December 23, 1975, P.D. No. 505 was substituted by P.D. No. 857, See. 4(a) thereof created the Philippine Ports Authority which would be "attached" to the then Department of Public Works, Transportation and Communication. When Executive Order No. 125 dated January 30, 1987 reorganizing the Ministry of Transportation and Communications was issued, the PPA retained its "attached" status. 10 Even Executive Order No. 292 or the Administrative Code of 1987 classified the PPA as an agency "attached" to the Department of Transportation and

Communications (DOTC). Sec. 24 of Book IV, Title XV, Chapter 6 of the same Code provides that the agencies attached to the DOTC "shall continue to operate and function in accordance with the respective charters or laws creating them, except when they conflict with this Code."

Attachment of an agency to a Department is one of the three administrative relationships mentioned in Book IV, Chapter 7 of the Administrative Code of 1987, the other two being supervision and control and administrative supervision. "Attachment" is defined in Sec. 38 thereof as follows:

(3) Attachment. — (a) This refers to the lateral relationship between the Department or its equivalent and the attached agency or corporation for purposes of policy and program coordination. The coordination shall 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;

(b) Matters of day-to-day administration or all those pertaining to internal operations shall he left to the discretion or judgment of the executive officer of the agency or corporation. In the event that the Secretary and the head of the board or the attached agency or corporation strongly disagree on the interpretation and application of policies, and the Secretary is unable to resolve the disagreement, he shall bring the matter to the President for resolution and direction;

(c) Government-owned or controlled corporations attached to a department shall submit to the Secretary concerned their audited financial statements within sixty (60) days after the close of the fiscal year; and

(d) Pending submission of the required financial statements, the corporation shall continue to operate on the basis of the preceding year's budget until the financial statements shall have been submitted. Should any government-owned or controlled

corporation incur an operation deficit at the close of its fiscal year, it shall be subject to administrative supervision of the department; and the corporation's operating and capital budget shall be subject to the department's examination, review, modification and approval. (emphasis supplied.)

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." With respect to administrative matters, the independence of an attached agency from Departmental control and supervision is further reinforced by the fact that even an agency under a Department's administrative supervision is free from Departmental interference with respect to appointments and other personnel actions "in accordance with the decentralization of personnel functions" under the Administrative Code of 1987. 11 Moreover, the Administrative Code explicitly provides that Chapter 8 of Book IV on supervision and control shall not apply to chartered institutions attached to a Department. 12

Hence, the inescapable conclusion is that with respect to the management of personnel, an attached agency is, to a certain extent, free from Departmental interference and control. This is more explicitly shown by P.D. No. 857 which provides:

Sec. 8. Management and Staff. — a) The President shall, upon the recommendation of the Board, appoint the General Manager and the Assistant General Managers.

(b) All other officials and employees of the Authority shall be selected and appointed on the basis of merit and fitness based on a comprehensive and progressive merit system to be established by the Authority immediately upon its organization and consistent with Civil Service rules and regulations.The recruitment, transfer, promotion, and dismissal of all personnel of the Authority, including temporary workers, shall be governed by such merit system.

(c) The General Manager shall, subject to the approval of the Board, determine the staffing pattern and the number of personnel of the Authority, define their duties and

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS30

responsibilities, and fix their salaries and emoluments. For professional and technical positions, the General Manager shall recommend salaries and emoluments that are comparable to those of similar positions in other government-owned corporations, the provisions of existing rules and regulations on wage and position classification notwithstanding.

(d) The General Manager shall, subject to the approval by the Board, appoint and remove personnel below the rank of Assistant General Manager.

xxx xxx xxx

(emphasis supplied.)

Although the foregoing section does not expressly provide for a mechanism for an administrative investigation of personnel, by vesting the power to remove erring employees on the General Manager, with the approval of the PPA Board of Directors, the law impliedly grants said officials the power to investigate its personnel below the rank of Assistant Manager who may be charged with an administrative offense. During such investigation, the PPA General Manager, as earlier stated, may subject the employee concerned to preventive suspension. The investigation should be conducted in accordance with the procedure set out in Sec. 38 of P.D. No. 807. 13 Only after gathering sufficient facts may the PPA General Manager impose the proper penalty in accordance with law. It is the latter action which requires the approval of the PPA Board of Directors. 14

From an adverse decision of the PPA General Manager and the Board of Directors, the employee concerned mayelevate the matter to the Department Head or Secretary. Otherwise, he may appeal directly to the Civil Service Commission. The permissive recourse to the Department Secretary is sanctioned by the Civil Service Law (P.D. No. 807) under the following provisions:

Sec. 37. Disciplinary Jurisdiction. — (a) The Commission shall decide upon appeal all administrative disciplinary cases involving the imposition of a penalty of suspension for more than thirty days, or fine in an amount exceeding thirty days salary, demotion in rank or salary or transfer, removal or dismissal from office. A complaint may be filed directly with the Commission by a private citizen against a government official or

employee in which case it may hear and decide the case or it may deputize any department or agency or official or group of officials to conduct the investigation. The results of the investigation shall be submitted to the Commission with recommendation as to the penalty to be imposed or other action to be taken.

(b) The heads of departments, agencies and instrumentalities, provinces, cities and municipalities shall have jurisdiction to investigate and decide matters involving disciplinary action against officers and employees under their jurisdiction. The decisions shall be final in case the penalty imposed is suspension for not more than thirty days or fine in an amount not exceeding thirty days' salary. In case the decision rendered by a bureau or office head is appealable to the Commission, the same may be initially appealed to the department and finally to the Commission and pending appeal, the same shall be executory except when the penalty is removal, in which case the same shall be executory only after confirmation by the department head.

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(Emphasis supplied.)

It is, therefore, clear that the transmittal of the complaint by the PPA General Manager to the AAB was premature. The PPA General Manager should have first conducted an investigation, made the proper recommendation for the imposable penalty and sought its approval by the PPA Board of Directors. It was discretionary on the part of the herein petitioner to elevate the case to the then DOTC Secretary Reyes. Only then could the AAB take jurisdiction of the case.

The AAB, which was created during the tenure of Secretary Reyes under Office Order No. 88-318 dated July 1, 1988, was designed to act, decide and recommend to him "all cases of administrative malfeasance, irregularities, grafts and acts of corruption in the Department." Composed of a Chairman and two (2) members, the AAB came into being pursuant to Administrative Order No. 25 issued by the President on May 25, 1987. 15 Its special nature as a quasi-judicial administrative body notwithstanding, the AAB is not exempt from the observance of due process in its proceedings. 16 We are not satisfied that it did so in this case the respondents protestation that petitioner waived

his right to be heard notwithstanding. It should be observed that petitioner was precisely questioning the AAB's jurisdiction when it sought judicial recourse.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED insofar as it upholds the power of the PPA General Manager to subject petitioner to preventive suspension and REVERSED insofar as it validates the jurisdiction of the DOTC and/or the AAB to act on Administrative Case No. PPA-AAB-1-049-89 and rules that due process has been accorded the petitioner.

The AAB decision in said case is hereby declared NULL and VOID and the case in REMANDED to the PPA whose General Manager shall conduct with dispatch its reinvestigation.

The preventive suspension of petitioner shall continue unless after a determination of its duration, it is found that he had served the total of ninety (90) days in which case he shall be reinstated immediately.

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

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS31

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 Commission 2 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:

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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.

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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)

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS32

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, 1974 4 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.

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS33

(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 than thirteen (13) Regional offices each to be headed by a Director, and such field offices as may be needed, each to be headed by an official with at least the rank of an Assistant Director.

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.

IN VIEW WHEREOF, the petition is granted and Resolution No. 93-4359 of the respondent Commission is hereby annulled and set aside. No costs.

SO ORDERED.

[G.R. No. 134990. April 27, 2000]

MANUEL M. LEYSON JR., petitioner, vs. OFFICE OF THE OMBUDSMAN, TIRSO ANTIPORDA, Chairman, UCPB and CIIF Oil Mills, and OSCAR A. TORRALBA, President, CIIF Oil Mills, respondents. ALEX

D E C I S I O N

BELLOSILLO, J.:

On 7 February 1996 International Towage and Transport Corporation (ITTC), a domestic corporation engaged in the lighterage or shipping business, entered into a one (1)-year contract with Legaspi Oil Company, Inc. (LEGASPI OIL), Granexport Manufacturing Corporation (GRANEXPORT) and United Coconut Chemicals, Inc. (UNITED COCONUT), comprising the Coconut Industry Investment Fund (CIIF) companies, for the transport of coconut oil in bulk through MT Transasia. The majority shareholdings of these CIIF companies are owned by the United Coconut Planters Bank (UCPB) as administrator of the CIIF. Under the terms of the contract, either party could terminate the agreement provided a three (3)-month

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS34

advance notice was given to the other party. However, in August 1996, or prior to the expiration of the contract, the CIIF companies with their new President, respondent Oscar A. Torralba, terminated the contract without the requisite advance notice. The CIIF companies engaged the services of another vessel, MT Marilag, operated by Southwest Maritime Corporation. miso

On 11 March 1997 petitioner Manuel M. Leyson Jr., Executive Vice President of ITTC, filed with public respondent Office of the Ombudsman a grievance case against respondent Oscar A. Torralba. The following is a summary of the irregularities and corrupt practices allegedly committed by respondent Torralba: (a) breach of contract - unilateral cancellation of valid and existing contract; (b) bad faith - falsification of documents and reports to stop the operation of MT Transasia; (c) manipulation - influenced their insurance to disqualify MT Transasia; (d) unreasonable denial of requirement imposed; (e) double standards and inconsistent in favor of MT Marilag; (f) engaged and entered into a contract with Southwest Maritime Corp. which is not the owner of MT Marilag, where liabilities were waived and whose paid-up capital is only P250,000.00; and, (g) overpricing in the freight rate causing losses of millions of pesos to Cocochem.[1]

On 2 January 1998 petitioner charged respondent Tirso Antiporda, Chairman of UCPB and CIIF Oil Mills, and respondent Oscar A. Torralba with violation of The Anti-Graft and Corrupt Practices Act also before the Ombudsman anchored on the aforementioned alleged irregularities and corrupt practices. spped

On 30 January 1998 public respondent dismissed the complaint based on its finding that

The case is a simple case of breach of contract with damages which should have been filed in the regular court. This Office has no jurisdiction to determine the legality or validity of the termination of the contract entered into by CIIF and ITTC. Besides the entities involved are private corporations (over) which this Office has no jurisdiction.[2]

On 4 June 1998 reconsideration of the dismissal of the complaint was denied. The Ombudsman was unswayed in his finding that

the present controversy involved breach of contract as he also took into account the circumstance that petitioner had already filed a collection case before the Regional Trial Court of Manila-Br. 15, docketed as Civil Case No. 97-83354. Moreover, the Ombudsman found that the filing of the motion for reconsideration on 31 March 1998 was beyond the inextendible period of five (5) days from notice of the assailed resolution on 19 March 1998.[3] miso

Petitioner now imputes grave abuse of discretion on public respondent in dismissing his complaint. He submits that inasmuch as Philippine Coconut Producers Federation, Inc. (COCOFED) v. PCGG[4] and Republic v. Sandiganbayan[5] have declared that the coconut levy funds are public funds then, conformably with Quimpo v. Tanodbayan,[6]corporations formed and organized from those funds or whose controlling stocks are from those funds should be regarded as government owned and/or controlled corporations. As in the present case, since the funding or controlling interest of the companies being headed by private respondents was given or owned by the CIIF as shown in the certification of their Corporate Secretary,[7] it follows that they are government owned and/or controlled corporations. Corollarily, petitioner asserts that respondents Antiporda and Torralba are public officers subject to the jurisdiction of the Ombudsman. Sdaadsc

Petitioner alleges next that public respondent's conclusion that his complaint refers to a breach of contract is whimsical, capricious and irresponsible amounting to a total disregard of its main point, i. e., whether private respondents violated The Anti-Graft and Corrupt Practices Act when they entered into a contract with Southwest Maritime Corporation which was grossly disadvantageous to the government in general and to the CIIF in particular. Petitioner admits that his motion for reconsideration was filed out of time. Nonetheless, he advances that public respondent should have relaxed its rules in the paramount interest of justice; after all, the delay was just a matter of days and he, a layman not aware of technicalities, personally filed the complaint. Rtcspped

Private respondents counter that the CIIF companies were duly organized and are existing by virtue of the Corporation Code. Their stockholders are private individuals and entities. In

addition, private respondents contend that they are not public officers as defined under The Anti-Graft and Corrupt Practices Act but are private executives appointed by the Boards of Directors of the CIIF companies. They asseverate that petitioner's motion for reconsideration was filed through the expert assistance of a learned counsel. They then charge petitioner with forum shopping since he had similarly filed a case for collection of a sum of money plus damages before the trial court.

The Office of the Solicitor General maintains that the Ombudsman approved the recommendation of the investigating officer to dismiss the complaint because he sincerely believed there was no sufficient basis for the criminal indictment of private respondents. spped

We find no grave abuse of discretion committed by the Ombudsman. COCOFED v. PCGG referred to in Republic v. Sandiganbayan reviewed the history of the coconut levy funds. I These funds actually have four (4) general classes: (a) the Coconut Investment Fund created under R. A. No. 6260;[8] (b) the Coconut Consumers Stabilization Fund created under P. D. No. 276;[9] (c) the Coconut Industry Development Fund created under P. D. No. 582;[10] and, (d) the Coconut Industry Stabilization Fund created under P. D. No. 1841.[11]

The various laws relating to the coconut industry were codified in 1976. On 21 October of that year, P. D. No. 961[12] was promulgated. On 11 June 1978 it was amended by P. D. No. 1468[13] by inserting a new provision authorizing the use of the balance of the Coconut Industry Development Fund for the acquisition of "shares of stocks in corporations organized for the purpose of engaging in the establishment and operation of industries x x x commercial activities and other allied business undertakings relating to coconut and other palm oil indust(ries)."[14] From this fund thus created, or the CIIF, shares of stock in what have come to be known as the "CIIF companies" were purchased. miso

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS35

We then stated in COCOFED that the coconut levy funds were raised by the State's police and taxing powers such that the utilization and proper management thereof were certainly the concern of the Government. These funds have a public character and are clearly affected with public interest.

Quimpo v. Tanodbayan involved the issue as to whether PETROPHIL was a government owned or controlled corporation the employees of which fell within the jurisdictional purview of the Tanodbayan for purposes of The Anti-Graft and Corrupt Practices Act. We upheld the jurisdiction of the Tanodbayan on the ratiocination that -

While it may be that PETROPHIL was not originally "created" as a government-owned or controlled corporation, after it was acquired by PNOC, which is a government-owned or controlled corporation, PETROPHIL became a subsidiary of PNOC and thus shed-off its private status. It is now funded and owned by the government as, in fact, it was acquired to perform functions related to government programs and policies on oil, a vital commodity in the economic life of the nation. It was acquired not temporarily but as a permanent adjunct to perform essential government or government-related functions, as the marketing arm of the PNOC to assist the latter in selling and distributing oil and petroleum products to assure and maintain an adequate and stable domestic supply. Korte

But these jurisprudential rules invoked by petitioner in support of his claim that the CIIF companies are government owned and/or controlled corporations are incomplete without resorting to the definition of "government owned or controlled corporation" contained in par. (13), Sec. 2, Introductory Provisions of the Administrative Code of 1987, i. e., any agency organized as a stock or non-stock corporation vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) percent of its capital stock. The definition mentions three (3) requisites, namely, first, any agency organized as a stock or non-stock corporation; second, vested with functions relating to public needs whether governmental or proprietary in nature; and, third, owned by the Government directly or through

its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) percent of its capital stock. Sclaw

In the present case, all three (3) corporations comprising the CIIF companies were organized as stock corporations. The UCPB-CIIF owns 44.10% of the shares of LEGASPI OIL, 91.24% of the shares of GRANEXPORT, and 92.85% of the shares of UNITED COCONUT.[15] Obviously, the below 51% shares of stock in LEGASPI OIL removes this firm from the definition of a government owned or controlled corporation. Our concern has thus been limited to GRANEXPORT and UNITED COCONUT as we go back to the second requisite. Unfortunately, it is in this regard that petitioner failed to substantiate his contentions. There is no showing that GRANEXPORT and/ or UNITED COCONUT was vested with functions relating to public needs whether governmental or proprietary in nature unlike PETROPHIL in Quimpo. The Court thus concludes that the CIIF companies are, as found by public respondent, private corporations not within the scope of its jurisdiction. Sclex

With the foregoing conclusion, we find it unnecessary to resolve the other issues raised by petitioner.

A brief note on private respondents' charge of forum shopping. Executive Secretary v. Gordon[16] is instructive that forum shopping consists of filing multiple suits involving the same parties for the same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment. It is readily apparent that the present charge will not prosper because the cause of action herein, i. e., violation of The Anti-Graft and Corrupt Practices Act, is different from the cause of action in the case pending before the trial court which is collection of a sum of money plus damages. miso

WHEREFORE, the petition is DISMISSED. The Resolution of public respondent Office of the Ombudsman of 30 January 1998 which dismissed the complaint of petitioner Manuel M. Leyson Jr., as well as its Order of 4 June 1998 denying his motion for reconsideration, is AFFIRMED. Costs against petitioner.

SO ORDERED.apdc

[G.R. No. 106296. July 5, 1996]

ISABELO T. CRISOSTOMO, petitioner, vs. THE COURT OF APPEALS and the PEOPLE OF THE PHILIPPINES, respondents.*

D E C I S I O N

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:

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:

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.

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS36

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:

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 Cario 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 petitioners 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

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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:

E.O. No. 709:

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:

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:

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.

xxx xxx xxx

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:

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:

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 Crisostomos term was coterminous with the legal existence of the PCC, petitioners term expired upon the abolition of the PCC. In reaching this conclusion, the Court of Appeals took into account the following:

a) After respondent Crisostomos 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 PUPs objectives and purposes cover not only PCCs 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 universitys Board of Regents is 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; Italics 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

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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:

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:

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 pending the appointment of the President.

The powers and duties of the President of the university or college, in addition to those specifically provided for in this Decree shall be those usually pertaining to the office of the president of a university or college.

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 pay for every year of service.

In this case, Dr. Pablo T. Mateo Jr., who had been acting president of the university since April 3, 1979, was appointed president of PUP for a term of six (6) years on March 28, 1980, with the result that petitioners 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.

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 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 during his suspension in so far as such payment would include salaries accruing after March 28, 1980 when petitioner Crisostomos term was terminated. Further proceedings in accordance with this decision may be taken by the trial court to determine the amount due and payable to petitioner by the university up to March 28, 1980.

SO ORDERED.

G.R. No. L-57883 March 12, 1982

GUALBERTO J. DE LA LLANA Presiding Judge, Branch II of the City Court of Olongapo, ESTANISLAO L. CESA, JR., FIDELA Y. VARGAS, BENJAMIN C. ESCOLANGO, JUANITO C. ATIENZA, MANUEL REYES ROSAPAPAN, JR., VIRGILIO E. ACIERTO, and PORFIRIO AGUILLON AGUILA, petitioners, vs.MANUEL ALBA, Minister of Budget, FRANCISCO TANTUICO, Chairman, Commission on Audit, and RICARDO PUNO, Minister of Justice, Respondents.

 

FERNANDO, C.J.:

This Court, pursuant to its grave responsibility of passing upon the validity of any executive or legislative act in an appropriate cases, has to resolve the crucial issue of the constitutionality of Batas Pambansa Blg. 129, entitled "An act reorganizing the Judiciary, Appropriating Funds Therefor and for Other Purposes." The task of judicial review, aptly characterized as exacting and delicate, is never more so than when a conceded legislative power, that of judicial reorganization, 1 may possibly collide with the time-honored principle of the independence of the judiciary 2as protected and safeguarded by this constitutional provision: "The Members of the Supreme Court and judges of inferior courts shall hold office during good behavior until they reach the age of seventy years or become incapacitated to discharge the duties of their office. The Supreme Court shall have the power to discipline judges of inferior courts and, by a vote of at least eight Members, order their dismissal." 3 For the assailed legislation mandates that Justices and judges of inferior courts from the Court of Appeals to municipal circuit courts, except the occupants of the Sandiganbayan and the Court of Tax Appeals, unless appointed to the inferior courts established by such Act, would be considered separated from the judiciary. It is the termination of their incumbency that for petitioners justifies a suit of this character, it being alleged that thereby the security of tenure provision of the Constitution has been ignored and disregarded,

That is the fundamental issue raised in this proceeding, erroneously entitled Petition for Declaratory Relief and/or for

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Prohibition 4 considered by this Court as an action for prohibited petition, seeking to enjoin respondent Minister of the Budget, respondent Chairman of the Commission on Audit, and respondent Minister of Justice from taking any action implementing Batas Pambansa Blg. 129. Petitioners 5 sought to bolster their claim by imputing lack of good faith in its enactment and characterizing as an undue delegation of legislative power to the President his authority to fix the compensation and allowances of the Justices and judges thereafter appointed and the determination of the date when the reorganization shall be deemed completed. In the very comprehensive and scholarly Answer of Solicitor General Estelito P. Mendoza, 6 it was pointed out that there is no valid justification for the attack on the constitutionality of this statute, it being a legitimate exercise of the power vested in the Batasang Pambansa to reorganize the judiciary, the allegations of absence of good faith as well as the attack on the independence of the judiciary being unwarranted and devoid of any support in law. A Supplemental Answer was likewise filed on October 8, 1981, followed by a Reply of petitioners on October 13. After the hearing in the morning and afternoon of October 15, in which not only petitioners and respondents were heard through counsel but also the amici curiae, 7 and thereafter submission of the minutes of the proceeding on the debate on Batas Pambansa Blg. 129, this petition was deemed submitted for decision.

The importance of the crucial question raised called for intensive and rigorous study of all the legal aspects of the case. After such exhaustive deliberation in several sessions, the exchange of views being supplemented by memoranda from the members of the Court, it is our opinion and so hold that Batas Pambansa Blg. 129 is not unconstitutional.

1. The argument as to the lack of standing of petitioners is easily resolved. As far as Judge de la Llana is concerned, he certainly falls within the principle set forth in Justice Laurel's opinion in People v. Vera. 8 Thus: "The unchallenged rule is 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 of its enforcement." 9 The other petitioners as members of the bar and officers of the court cannot be considered as devoid of "any personal and substantial interest" on the matter. There is

relevance to this excerpt from a separate opinion in Aquino, Jr. v. Commission on Elections: 10 "Then there is the attack on the standing of petitioners, as vindicating at most what they consider a public right and not protecting their rights as individuals. This is to conjure the specter of the public right dogma as an inhibition to parties intent on keeping public officials staying on the path of constitutionalism. As was so well put by Jaffe: 'The protection of private rights is an essential constituent of public interest and, conversely, without a well-ordered state there could be no enforcement of private rights. Private and public interests are, both in substantive and procedural sense, aspects of the totality of the legal order.' Moreover, petitioners have convincingly shown that in their capacity as taxpayers, their standing to sue has been amply demonstrated. There would be a retreat from the liberal approach followed in Pascual v. Secretary of Public Works,foreshadowed by the very decision of People v. Vera where the doctrine was first fully discussed, if we act differently now. I do not think we are prepared to take that step. Respondents, however, would hark back to the American Supreme Court doctrine in Mellon v. Frothingham with their claim that what petitioners possess 'is an interest which is shared in common by other people and is comparatively so minute and indeterminate as to afford any basis and assurance that the judicial process can act on it.' That is to speak in the language of a bygone era even in the United States. For as Chief Justice Warren clearly pointed out in the later case of Flast v. Cohen, the barrier thus set up if not breached has definitely been lowered." 11

2. The imputation of arbitrariness to the legislative body in the enactment of Batas Pambansa Blg. 129 to demonstrate lack of good faith does manifest violence to the facts. Petitioners should have exercised greater care in informing themselves as to its antecedents. They had laid themselves open to the accusation of reckless disregard for the truth, On August 7, 1980, a Presidential Committee on Judicial Reorganization was organized.12 This Executive Order was later amended by Executive Order No. 619-A., dated September 5 of that year. It clearly specified the task assigned to it: "1. The Committee shall formulate plans on the reorganization of the Judiciary which shall be submitted within seventy (70) days from August 7, 1980 to provide the President sufficient options for the reorganization of the entire Judiciary which shall embrace all lower courts,

including the Court of Appeals, the Courts of First Instance, the City and Municipal Courts, and all Special Courts, but excluding the Sandigan Bayan." 13 On October 17, 1980, a Report was submitted by such Committee on Judicial Reorganization. It began with this paragraph: "The Committee on Judicial Reorganization has the honor to submit the following Report. It expresses at the outset its appreciation for the opportunity accorded it to study ways and means for what today is a basic and urgent need, nothing less than the restructuring of the judicial system. There are problems, both grave and pressing, that call for remedial measures. The felt necessities of the time, to borrow a phrase from Holmes, admit of no delay, for if no step be taken and at the earliest opportunity, it is not too much to say that the people's faith in the administration of justice could be shaken. It is imperative that there be a greater efficiency in the disposition of cases and that litigants, especially those of modest means — much more so, the poorest and the humblest — can vindicate their rights in an expeditious and inexpensive manner. The rectitude and the fairness in the way the courts operate must be manifest to all members of the community and particularly to those whose interests are affected by the exercise of their functions. It is to that task that the Committee addresses itself and hopes that the plans submitted could be a starting point for an institutional reform in the Philippine judiciary. The experience of the Supreme Court, which since 1973 has been empowered to supervise inferior courts, from the Court of Appeals to the municipal courts, has proven that reliance on improved court management as well as training of judges for more efficient administration does not suffice. I hence, to repeat, there is need for a major reform in the judicial so stem it is worth noting that it will be the first of its kind since the Judiciary Act became effective on June 16, 1901." 14 I t went to say: "I t does not admit of doubt that the last two decades of this century are likely to be attended with problems of even greater complexity and delicacy. New social interests are pressing for recognition in the courts. Groups long inarticulate, primarily those economically underprivileged, have found legal spokesmen and are asserting grievances previously ignored. Fortunately, the judicially has not proved inattentive. Its task has thus become even more formidable. For so much grist is added to the mills of justice. Moreover, they are likewise to be quite novel. The need for an innovative approach is thus apparent. The national leadership, as is well-known, has been constantly on the search

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS40

for solutions that will prove to be both acceptable and satisfactory. Only thus may there be continued national progress." 15 After which comes: "To be less abstract, the thrust is on development. That has been repeatedly stressed — and rightly so. All efforts are geared to its realization. Nor, unlike in the past, was it to b "considered as simply the movement towards economic progress and growth measured in terms of sustained increases in per capita income and Gross National Product (GNP). 16 For the New Society, its implication goes further than economic advance, extending to "the sharing, or more appropriately, the democratization of social and economic opportunities, the substantiation of the true meaning of social justice." 17 This process of modernization and change compels the government to extend its field of activity and its scope of operations. The efforts towards reducing the gap between the wealthy and the poor elements in the nation call for more regulatory legislation. That way the social justice and protection to labor mandates of the Constitution could be effectively implemented." 18 There is likelihood then "that some measures deemed inimical by interests adversely affected would be challenged in court on grounds of validity. Even if the question does not go that far, suits may be filed concerning their interpretation and application. ... There could be pleas for injunction or restraining orders. Lack of success of such moves would not, even so, result in their prompt final disposition. Thus delay in the execution of the policies embodied in law could thus be reasonably expected. That is not conducive to progress in development." 19 For, as mentioned in such Report, equally of vital concern is the problem of clogged dockets, which "as is well known, is one of the utmost gravity. Notwithstanding the most determined efforts exerted by the Supreme Court, through the leadership of both retired Chief Justice Querube Makalintal and the late Chief Justice Fred Ruiz Castro, from the time supervision of the courts was vested in it under the 1973 Constitution, the trend towards more and more cases has continued." 20 It is understandable why. With the accelerated economic development, the growth of population, the increasing urbanization, and other similar factors, the judiciary is called upon much oftener to resolve controversies. Thus confronted with what appears to be a crisis situation that calls for a remedy, the Batasang Pambansa had no choice. It had to act, before the ailment became even worse. Time was of the essence, and yet it

did not hesitate to be duly mindful, as it ought to be, of the extent of its coverage before enacting Batas Pambansa Blg. 129.

3. There is no denying, therefore, the need for "institutional reforms," characterized in the Report as "both pressing and urgent." 21 It is worth noting, likewise, as therein pointed out, that a major reorganization of such scope, if it were to take place, would be the most thorough after four generations. 22 The reference was to the basic Judiciary Act generations . enacted in June of 1901, 23 amended in a significant way, only twice previous to the Commonwealth. There was, of course, the creation of the Court of Appeals in 1935, originally composed "of a Presiding Judge and ten appellate Judges, who shall be appointed by the President of the Philippines, with the consent of the Commission on Appointments of the National Assembly, 24 It could "sit en banc, but it may sit in two divisions, one of six and another of five Judges, to transact business, and the two divisions may sit at the same time." 25 Two years after the establishment of independence of the Republic of the Philippines, the Judiciary Act of 1948 26 was passed. It continued the existing system of regular inferior courts, namely, the Court of Appeals, Courts of First Instance, 27 the Municipal Courts, at present the City Courts, and the Justice of the Peace Courts, now the Municipal Circuit Courts and Municipal Courts. The membership of the Court of Appeals has been continuously increased. 28 Under a 1978 Presidential Decree, there would be forty-five members, a Presiding Justice and forty-four Associate Justices, with fifteen divisions. 29 Special courts were likewise created. The first was the Court of Tax Appeals in 1954, 30 next came the Court of Agrarian Relations in 1955, 31 and then in the same year a Court of the Juvenile and Domestic Relations for Manila in 1955, 32 subsequently followed by the creation of two other such courts for Iloilo and Quezon City in 1966. 33 In 1967, Circuit Criminal Courts were established, with the Judges having the same qualifications, rank, compensation, and privileges as judges of Courts of First Instance. 34

4. After the submission of such Report, Cabinet Bill No. 42, which later became the basis of Batas Pambansa Blg. 129, was introduced. After setting forth the background as above narrated, its Explanatory Note continues: "Pursuant to the President's instructions, this proposed legislation has been drafted in accordance with the guidelines of that report with particular

attention to certain objectives of the reorganization, to wit, the attainment of more efficiency in disposal of cases, a reallocation of jurisdiction, and a revision of procedures which do not tend to the proper meeting out of justice. In consultation with, and upon a consensus of, the governmental and parliamentary leadership, however, it was felt that some options set forth in the Report be not availed of. Instead of the proposal to confine the jurisdiction of the intermediate appellate court merely to appellate adjudication, the preference has been opted to increase rather than diminish its jurisdiction in order to enable it to effectively assist the Supreme Court. This preference has been translated into one of the innovations in the proposed Bill." 35 In accordance with the parliamentary procedure, the Bill was sponsored by the Chairman of the Committee on Justice, Human Rights and Good Government to which it was referred. Thereafter, Committee Report No. 225 was submitted by such Committee to the Batasang Pambansa recommending the approval with some amendments. In the sponsorship speech of Minister Ricardo C. Puno, there was reference to the Presidential Committee on Judicial Reorganization. Thus: "On October 17, 1980, the Presidential Committee on Judicial Reorganization submitted its report to the President which contained the 'Proposed Guidelines for Judicial Reorganization.' Cabinet Bill No. 42 was drafted substantially in accordance with the options presented by these guidelines. Some options set forth in the aforesaid report were not availed of upon consultation with and upon consensus of the government and parliamentary leadership. Moreover, some amendments to the bill were adopted by the Committee on Justice, Human Rights and Good Government, to which The bill was referred, following the public hearings on the bill held in December of 1980. The hearings consisted of dialogues with the distinguished members of the bench and the bar who had submitted written proposals, suggestions, and position papers on the bill upon the invitation of the Committee on Justice, Human Rights and Good Government." 36 Stress was laid by the sponsor that the enactment of such Cabinet Bill would, firstly, result in the attainment of more efficiency in the disposal of cases. Secondly, the improvement in the quality of justice dispensed by the courts is expected as a necessary consequence of the easing of the court's dockets. Thirdly, the structural changes introduced in the bill, together with the reallocation of jurisdiction and the revision of the rules of procedure, are designated to suit the court system to the

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exigencies of the present day Philippine society, and hopefully, of the foreseeable future." 37 it may be observed that the volume containing the minutes of the proceedings of the Batasang Pambansa show that 590 pages were devoted to its discussion. It is quite obvious that it took considerable time and effort as well as exhaustive study before the act was signed by the President on August 14, 1981. With such a background, it becomes quite manifest how lacking in factual basis is the allegation that its enactment is tainted by the vice of arbitrariness. What appears undoubted and undeniable is the good faith that characterized its enactment from its inception to the affixing of the Presidential signature.

5. 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. The ponencia of Justice J.B.L. Reyes in Cruz v. Primicias, Jr. 38reiterated such a doctrine: "We find this point urged by respondents, to be without merit. No removal or separation of petitioners from the service is here involved, but the validity of the abolition of their offices. This is a legal issue that is for the Courts to decide. It is well-known rule also that valid abolition of offices is neither removal nor separation of the incumbents. ... And, of course, if the abolition is void, the incumbent is deemed never to have ceased to hold office. The preliminary question laid at rest, we pass to the merits of the case. As well-settled as the rule that the abolition of an office does not amount to an illegal removal of its incumbent is the principle that, in order to be valid, the abolition must be made in good faith." 39 The above excerpt was quoted with approval in Bendanillo, Sr. v. Provincial Governor, 40 two earlier cases enunciating a similar doctrine having preceded it. 41 As with the offices in the other branches of the government, so it is with the judiciary. The test remains whether the abolition is in good faith. As that element is conspicuously present in the enactment of Batas Pambansa Blg. 129, then the lack of merit of this petition becomes even more apparent. The concurring opinion of Justice Laurel in Zandueta v. De la Costa 42 cannot be any clearer. This is a quo warranto proceeding filed by petitioner, claiming that he, and not respondent, was entitled to he office of judge of the Fifth Branch of the Court of First Instance of Manila. There was a Judicial Reorganization Act in 1936, 43 a year after the inauguration of the Commonwealth, amending the Administrative Code to organize courts of original

jurisdiction known as the Courts of First Instance Prior to such statute, petitioner was the incumbent of such branch. Thereafter, he received an ad interim appointment, this time to the Fourth Judicial District, under the new legislation. Unfortunately for him, the Commission on Appointments of then National Assembly disapproved the same, with respondent being appointed in his place. He contested the validity of the Act insofar as it resulted in his being forced to vacate his position This Court did not rule squarely on the matter. His petition was dismissed on the ground of estoppel. Nonetheless, the separate concurrence of Justice Laurel in the result reached, to repeat, reaffirms in no uncertain terms the standard of good faith to preclude any doubt as to the abolition of an inferior court, with due recognition of the security of tenure guarantee. Thus: " I am of the opinion that Commonwealth Act No. 145 in so far as it reorganizes, among other judicial districts, the Ninth Judicial District, and establishes an entirely new district comprising Manila and the provinces of Rizal and Palawan, is valid and constitutional. This conclusion flows from the fundamental proposition that the legislature may abolish courts inferior to the Supreme Court and therefore may reorganize them territorially or otherwise thereby necessitating new appointments and commissions. Section 2, Article VIII of the Constitution vests in the National Assembly the power to define, prescribe and apportion the jurisdiction of the various courts, subject to certain limitations in the case of the Supreme Court. It is admitted that section 9 of the same article of the Constitution provides for the security of tenure of all the judges. The principles embodied in these two sections of the same article of the Constitution must be coordinated and harmonized. A mere enunciation of a principle will not decide actual cases and controversies of every sort. (Justice Holmes in Lochner vs. New York, 198 U.S., 45; 49 Law. ed; 937)" 44 justice Laurel continued: "I am not insensible to the argument that the National Assembly may abuse its power and move deliberately to defeat the constitutional provision guaranteeing security of tenure to all judges, But, is this the case? One need not share the view of Story, Miller and Tucker on the one hand, or the opinion of Cooley, Watson and Baldwin on the other, to realize that the application of a legal or constitutional principle is necessarily factual and circumstantial and that fixity of principle is the rigidity of the dead and the unprogressive. I do say, and emphatically, however, that cases may arise where the violation of the constitutional provision

regarding security of tenure is palpable and plain, and that legislative power of reorganization may be sought to cloak an unconstitutional and evil purpose. When a case of that kind arises, it will be the time to make the hammer fall and heavily. But not until then. I am satisfied that, as to the particular point here discussed, the purpose was the fulfillment of what was considered a great public need by the legislative department and that Commonwealth Act No. 145 was not enacted purposely to affect adversely the tenure of judges or of any particular judge. Under these circumstances, I am for sustaining the power of the legislative department under the Constitution. To be sure, there was greater necessity for reorganization consequent upon the establishment of the new government than at the time Acts Nos. 2347 and 4007 were approved by the defunct Philippine Legislature, and although in the case of these two Acts there was an express provision providing for the vacation by the judges of their offices whereas in the case of Commonwealth Act No. 145 doubt is engendered by its silence, this doubt should be resolved in favor of the valid exercise of the legislative power." 45

6. A few more words on the question of abolition. In the above-cited opinion of Justice Laurel in Zandueta, reference was made to Act No. 2347 46 on the reorganization of the Courts of First Instance and to Act No. 4007 47 on the reorganization of all branches of the government, including the courts of first instance. In both of them, the then Courts of First Instance were replaced by new courts with the same appellation. As Justice Laurel pointed out, there was no question as to the fact of abolition. He was equally categorical as to Commonwealth Act No. 145, where also the system of the courts of first instance was provided for expressly. It was pointed out by Justice Laurel that the mere creation of an entirely new district of the same court is valid and constitutional. such conclusion flowing "from the fundamental proposition that the legislature may abolish courts inferior to the Supreme Court and therefore may reorganize them territorially or otherwise thereby necessitating new appointments and commissions." 48 The challenged statute creates an intermediate appellate court, 49 regional trial courts, 50 metropolitan trial courts of the national capital region, 51 and other metropolitan trial courts, 52 municipal trial courts in cities, 53 as well as in municipalities, 54 and municipal circuit trial courts. 55 There is even less reason then to doubt the fact that existing inferior courts were abolished. For the

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS42

Batasang Pambansa, the establishment of such new inferior courts was the appropriate response to the grave and urgent problems that pressed for solution. Certainly, there could be differences of opinion as to the appropriate remedy. The choice, however, was for the Batasan to make, not for this Court, which deals only with the question of power. It bears mentioning that in Brillo v. Eñage56 this Court, in an unanimous opinion penned by the late Justice Diokno, citing Zandueta v. De la Costa, ruled: "La segunda question que el recurrrido plantea es que la Carta de Tacloban ha abolido el puesto. Si efectivamente ha sido abolido el cargo, entonces ha quedado extinguido el derecho de recurente a ocuparlo y a cobrar el salario correspodiente.Mc Culley vs. State, 46 LRA, 567. El derecho de un juez de desempenarlo hasta los 70 años de edad o se incapacite no priva al Congreso de su facultad de abolir, fusionar o reorganizar juzgados no constitucionales." 57 Nonetheless, such well-established principle was not held applicable to the situation there obtaining, the Charter of Tacloban City creating a city court in place of the former justice of the peace court. Thus: "Pero en el caso de autos el Juzgado de Tacloban no ha sido abolido. Solo se le ha cambiado el nombre con el cambio de forma del gobierno local." 58 The present case is anything but that. Petitioners did not and could not prove that the challenged statute was not within the bounds of legislative authority.

7. This opinion then could very well stop at this point. The implementation of Batas Pambansa Blg. 129, concededly a task incumbent on the Executive, may give rise, however, to questions affecting a judiciary that should be kept independent. The all-embracing scope of the assailed legislation as far as all inferior courts from the Courts of Appeals to municipal courts are concerned, with the exception solely of the Sandiganbayan and the Court of Tax Appeals 59 gave rise, and understandably so, to misgivings as to its effect on such cherished Ideal. The first paragraph of the section on the transitory provision reads: "The provisions of this Act shall be immediately carried out in accordance with an Executive Order to be issued by the President. The Court of Appeals, the Courts of First Instance, the Circuit Criminal Courts, the Juvenile and Domestic Relations Courts, the Courts of Agrarian Relations, the City Courts, the Municipal Courts, and the Municipal Circuit Courts shall continue to function as presently constituted and organized, until the completion of the reorganization provided in this Act as

declared by the President. Upon such declaration, the said courts shall be deemed automatically abolished and the incumbents thereof shall cease to hold the office." 60 There is all the more reason then why this Court has no choice but to inquire further into the allegation by petitioners that the security of tenure provision, an assurance of a judiciary free from extraneous influences, is thereby reduced to a barren form of words. The amended Constitution adheres even more clearly to the long-established tradition of a strong executive that antedated the 1935 Charter. As noted in the work of former Vice-Governor Hayden, a noted political scientist, President Claro M. Recto of the 1934 Convention, in his closing address, in stressing such a concept, categorically spoke of providing "an executive power which, subject to the fiscalization of the Assembly, and of public opinion, will not only know how to govern, but will actually govern, with a firm and steady hand, unembarrassed by vexatious interferences by other departments, or by unholy alliances with this and that social group." 61 The above excerpt was cited with approval by Justice Laurel in Planas v. Gil.62 Moreover, under the 1981 Amendments, it may be affirmed that once again the principle of separation of powers, to quote from the same jurist as ponente in Angara v. Electoral Commission, 63 "obtains not through express provision but by actual division." 64 The president, under Article VII, shall be the head of state and chief executive of the Republic of the Philippines." 65 Moreover, it is equally therein expressly provided that all the powers he possessed under the 1935 Constitution are once again vested in him unless the Batasang Pambansa provides otherwise." 66 Article VII of the 1935 Constitution speaks categorically: "The Executive power shall be vested in a President of the Philippines." 67 As originally framed, the 1973 Constitution created the position of President as the "symbolic head of state." 68 In addition, there was a provision for a Prime Minister as the head of government exercising the executive power with the assistance of the Cabinet69 Clearly, a modified parliamentary system was established. In the light of the 1981 amendments though, this Court in Free Telephone Workers Union v. Minister of Labor 70 could state: "The adoption of certain aspects of a parliamentary system in the amended Constitution does not alter its essentially presidential character." 71 The retention, however, of the position of the Prime Minister with the Cabinet, a majority of the members of which shall come from the regional representatives of the

Batasang Pambansa and the creation of an Executive Committee composed of the Prime Minister as Chairman and not more than fourteen other members at least half of whom shall be members of the Batasang Pambansa, clearly indicate the evolving nature of the system of government that is now operative. 72 What is equally apparent is that the strongest ties bind the executive and legislative departments. It is likewise undeniable that the Batasang Pambansa retains its full authority to enact whatever legislation may be necessary to carry out national policy as usually formulated in a caucus of the majority party. It is understandable then why in Fortun v. Labang 73 it was stressed that with the provision transferring to the Supreme Court administrative supervision over the Judiciary, there is a greater need "to preserve unimpaired the independence of the judiciary, especially so at present, where to all intents and purposes, there is a fusion between the executive and the legislative branches." 74

8. To be more specific, petitioners contend that the abolition of the existing inferior courts collides with the security of tenure enjoyed by incumbent Justices and judges under Article X, Section 7 of the Constitution. There was a similar provision in the 1935 Constitution. It did not, however, go as far as conferring on this Tribunal the power to supervise administratively inferior courts. 75 Moreover, this Court is em powered "to discipline judges of inferior courts and, by a vote of at least eight members, order their dismissal." 76 Thus it possesses the competence to remove judges. Under the Judiciary Act, it was the President who was vested with such power. 77 Removal is, of course, to be distinguished from termination by virtue of the abolition of the office. There can be no tenure to a non-existent office. After the abolition, there is in law no occupant. In case of removal, there is an office with an occupant who would thereby lose his position. It is in that sense that from the standpoint of strict law, the question of any impairment of security of tenure does not arise. Nonetheless, for the incumbents of inferior courts abolished, the effect is one of separation. As to its effect, no distinction exists between removal and the abolition of the office. Realistically, it is devoid of significance. He ceases to be a member of the judiciary. In the implementation of the assailed legislation, therefore, it would be in accordance with accepted principles of constitutional construction that as far as incumbent justices and judges are concerned, this Court be consulted and that its view be accorded

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the fullest consideration. No fear need be entertained that there is a failure to accord respect to the basic principle that this Court does not render advisory opinions. No question of law is involved. If such were the case, certainly this Court could not have its say prior to the action taken by either of the two departments. Even then, it could do so but only by way of deciding a case where the matter has been put in issue. Neither is there any intrusion into who shall be appointed to the vacant positions created by the reorganization. That remains in the hands of the Executive to whom it properly belongs. There is no departure therefore from the tried and tested ways of judicial power, Rather what is sought to be achieved by this liberal interpretation is to preclude any plausibility to the charge that in the exercise of the conceded power of reorganizing tulle inferior courts, the power of removal of the present incumbents vested in this Tribunal is ignored or disregarded. The challenged Act would thus be free from any unconstitutional taint, even one not readily discernidble except to those predisposed to view it with distrust. Moreover, such a construction would be in accordance with the basic principle that in the choice of alternatives between one which would save and another which would invalidate a statute, the former is to be preferred. 78 There is an obvious way to do so. The principle that the Constitution enters into and forms part of every act to avoid any constitutional taint must be applied Nuñez v. Sandiganbayan, 79 promulgated last January, has this relevant excerpt: "It is true that other Sections of the Decree could have been so worded as to avoid any constitutional objection. As of now, however, no ruling is called for. The view is given expression in the concurring and dissenting opinion of Justice Makasiar that in such a case to save the Decree from the direct fate of invalidity, they must be construed in such a way as to preclude any possible erosion on the powers vested in this Court by the Constitution. That is a proposition too plain to be committed. It commends itself for approval." 80 Nor would such a step be unprecedented. The Presidential Decree constituting Municipal Courts into Municipal Circuit Courts, specifically provides: "The Supreme Court shall carry out the provisions of this Decree through implementing orders, on a province-to-province basis." 81 It is true there is no such provision in this Act, but the spirit that informs it should not be ignored in the Executive Order contemplated under its Section 44. 82 Thus Batas Pambansa Blg. 129 could stand the most rigorous test of constitutionality. 83

9. Nor is there anything novel in the concept that this Court is called upon to reconcile or harmonize constitutional provisions. To be specific, the Batasang Pambansa is expressly vested with the authority to reorganize inferior courts and in the process to abolish existing ones. As noted in the preceding paragraph, the termination of office of their occupants, as a necessary consequence of such abolition, is hardly distinguishable from the practical standpoint from removal, a power that is now vested in this Tribunal. It is of the essence of constitutionalism to assure that neither agency is precluded from acting within the boundaries of its conceded competence. That is why it has long been well-settled under the constitutional system we have adopted that this Court cannot, whenever appropriate, avoid the task of reconciliation. As Justice Laurel put it so well in the previously cited Angara decision, while in the main, "the Constitution has blocked out with deft strokes and in bold lines, allotment of power to the executive, the legislative and the judicial departments of the government, the overlapping and interlacing of functions and duties between the several departments, however, sometimes makes it hard to say just where the one leaves off and the other begins." 84 It is well to recall another classic utterance from the same jurist, even more emphatic in its affirmation of such a view, moreover buttressed by one of those insights for which Holmes was so famous "The classical separation of government powers, whether viewed in the light of the political philosophy of Aristotle, Locke, or Motesquieu or of the postulations of Mabini, Madison, or Jefferson, is a relative theory of government. There is more truism and actuality in interdependence than in independence and separation of powers, for as observed by Justice Holmes in a case of Philippine origin, we cannot lay down 'with mathematical precision and divide the branches into water-tight compartments' not only because 'the great ordinances of the Constitution do not establish and divide fields of black and white but also because 'even the more specific of them are found to terminate in a penumbra shading gradually from one extreme to the other.'" 85 This too from Justice Tuazon, likewise expressing with force and clarity why the need for reconciliation or balancing is well-nigh unavodiable under the fundamental principle of separation of powers: "The constitutional structure is a complicated system, and overlappings of governmental functions are recognized, unavoidable, and inherent necessities of governmental coordination." 86 In the same way that the

academe has noted the existence in constitutional litigation of right versus right, there are instances, and this is one of them, where, without this attempt at harmonizing the provisions in question, there could be a case of power against power. That we should avoid.

10. There are other objections raised but they pose no difficulty. Petitioners would characterize as an undue delegation of legislative power to the President the grant of authority to fix the compensation and the allowances of the Justices and judges thereafter appointed. A more careful reading of the challenged Batas Pambansa Blg. 129 ought to have cautioned them against raising such an issue. The language of the statute is quite clear. The questioned provisions reads as follows: "Intermediate Appellate Justices, Regional Trial Judges, Metropolitan Trial Judges, municipal Trial Judges, and Municipal Circuit Trial Judges shall receive such receive such compensation and allowances as may be authorized by the President along the guidelines set forth in Letter of Implementation No. 93 pursuant to Presidential Decree No. 985, as amended by Presidential Decree No. 1597." 87 The existence of a standard is thus clear. The basic postulate that underlies the doctrine of non-delegation is that it is the legislative body which is entrusted with the competence to make laws and to alter and repeal them, the test being the completeness of the statue in all its terms and provisions when enacted. As pointed out in Edu v. Ericta: 88 "To avoid the taint of unlawful delegation, there must be a standard, which implies at the very least that the legislature itself determines matters of principle and lays down fundamental policy. Otherwise, the charge of complete abdication may be hard to repel. A standard thus defines legislative policy, marks its limits, maps out its boundaries and specifies the public agency to apply it. It indicates the circumstances under which the legislative command is to be effected. It is the criterion by which legislative purpose may be carried out. Thereafter, the executive or administrative office designated may in pursuance of the above guidelines promulgate supplemental rules and regulations. The standard may be either express or implied. If the former, the non-delegation objection is easily met. The standard though does not have to be spelled out specifically. It could be implied from the policy and purpose of the act considered as a whole." 89 The undeniably strong links that bind the executive and legislative departments under the amended Constitution assure that the

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framing of policies as well as their implementation can be accomplished with unity, promptitude, and efficiency. There is accuracy, therefore, to this observation in the Free Telephone Workers Union decision: "There is accordingly more receptivity to laws leaving to administrative and executive agencies the adoption of such means as may be necessary to effectuate a valid legislative purpose. It is worth noting that a highly-respected legal scholar, Professor Jaffe, as early as 1947, could speak of delegation as the 'dynamo of modern government.'" 90 He warned against a "restrictive approach" which could be "a deterrent factor to much-needed legislation."91 Further on this point from the same opinion" "The spectre of the non-delegation concept need not haunt, therefore, party caucuses, cabinet sessions or legislative chambers." 92 Another objection based on the absence in the statue of what petitioners refer to as a "definite time frame limitation" is equally bereft of merit. They ignore the categorical language of this provision: "The Supreme Court shall submit to the President, within thirty (30) days from the date of the effectivity of this act, a staffing pattern for all courts constituted pursuant to this Act which shall be the basis of the implementing order to be issued by the President in accordance with the immediately succeeding section." 93 The first sentence of the next section is even more categorical: "The provisions of this Act shall be immediately carried out in accordance with an Executive Order to be issued by the President." 94 Certainly petitioners cannot be heard to argue that the President is insensible to his constitutional duty to take care that the laws be faithfully executed. 95 In the meanwhile, the existing inferior courts affected continue functioning as before, "until the completion of the reorganization provided in this Act as declared by the President. Upon such declaration, the said courts shall be deemed automatically abolished and the incumbents thereof shall cease to hold office." 96 There is no ambiguity. The incumbents of the courts thus automatically abolished "shall cease to hold office." No fear need be entertained by incumbents whose length of service, quality of performance, and clean record justify their being named anew, 97 in legal contemplation without any interruption in the continuity of their service. 98 It is equally reasonable to assume that from the ranks of lawyers, either in the government service, private practice, or law professors will come the new appointees. In the event that in certain cases a little more time is necessary in the appraisal of whether or not certain incumbents deserve reappointment, it is not from their

standpoint undesirable. Rather, it would be a reaffirmation of the good faith that will characterize its implementation by the Executive. There is pertinence to this observation of Justice Holmes that even acceptance of the generalization that courts ordinarily should not supply omissions in a law, a generalization qualified as earlier shown by the principle that to save a statute that could be done, "there is no canon against using common sense in construing laws as saying what they obviously mean." 99 Where then is the unconstitutional flaw

11. On the morning of the hearing of this petition on September 8, 1981, petitioners sought to have the writer of this opinion and Justices Ramon C. Aquino and Ameurfina Melencio-Herrera disqualified because the first-named was the chairman and the other two, members of the Committee on Judicial Reorganization. At the hearing, the motion was denied. It was made clear then and there that not one of the three members of the Court had any hand in the framing or in the discussion of Batas Pambansa Blg. 129. They were not consulted. They did not testify. The challenged legislation is entirely the product of the efforts of the legislative body. 100 Their work was limited, as set forth in the Executive Order, to submitting alternative plan for reorganization. That is more in the nature of scholarly studies. That the undertook. There could be no possible objection to such activity. Ever since 1973, this Tribunal has had administrative supervision over interior courts. It has had the opportunity to inform itself as to the way judicial business is conducted and how it may be improved. Even prior to the 1973 Constitution, it is the recollection of the writer of this opinion that either the then Chairman or members of the Committee on Justice of the then Senate of the Philippines 101consulted members of the Court in drafting proposed legislation affecting the judiciary. It is not inappropriate to cite this excerpt from an article in the 1975 Supreme Court Review: "In the twentieth century the Chief Justice of the United States has played a leading part in judicial reform. A variety of conditions have been responsible for the development of this role, and foremost among them has been the creation of explicit institutional structures designed to facilitate reform." 102 Also: "Thus the Chief Justice cannot avoid exposure to and direct involvement in judicial reform at the federal level and, to the extent issues of judicial federalism arise, at the state level as well." 103

12. It is a cardinal article of faith of our constitutional regime that it is the people who are endowed with rights, to secure which a government is instituted. Acting as it does through public officials, it has to grant them either expressly or impliedly certain powers. Those they exercise not for their own benefit but for the body politic. The Constitution does not speak in the language of ambiguity: "A public office is a public trust." 104 That is more than a moral adjuration It is a legal imperative. The law may vest in a public official certain rights. It does so to enable them to perform his functions and fulfill his responsibilities more efficiently. It is from that standpoint that the security of tenure provision to assure judicial independence is to be viewed. It is an added guarantee that justices and judges can administer justice undeterred by any fear of reprisal or untoward consequence. Their judgments then are even more likely to be inspired solely by their knowledge of the law and the dictates of their conscience, free from the corrupting influence of base or unworthy motives. The independence of which they are assured is impressed with a significance transcending that of a purely personal right. As thus viewed, it is not solely for their welfare. The challenged legislation Thus subject d to the most rigorous scrutiny by this Tribunal, lest by lack of due care and circumspection, it allow the erosion of that Ideal so firmly embedded in the national consciousness There is this farther thought to consider. independence in thought and action necessarily is rooted in one's mind and heart. As emphasized by former Chief Justice Paras in Ocampo v. Secretary of Justice, 105 there is no surer guarantee of judicial independence than the God-given character and fitness of those appointed to the Bench. The judges may be guaranteed a fixed tenure of office during good behavior, but if they are of such stuff as allows them to be subservient to one administration after another, or to cater to the wishes of one litigant after another, the independence of the judiciary will be nothing more than a myth or an empty Ideal. Our judges, we are confident, can be of the type of Lord Coke, regardless or in spite of the power of Congress — we do not say unlimited but as herein exercised — to reorganize inferior courts." 106 That is to recall one of the greatest Common Law jurists, who at the cost of his office made clear that he would not just blindly obey the King's order but "will do what becomes [him] as a judge." So it was pointed out in the first leading case stressing the independence of the judiciary, Borromeo v. Mariano, 107 Theponencia of Justice

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Malcolm Identified good judges with "men who have a mastery of the principles of law, who discharge their duties in accordance with law, who are permitted to perform the duties of the office undeterred by outside influence, and who are independent and self-respecting human units in a judicial system equal and coordinate to the other two departments of government." 108 There is no reason to assume that the failure of this suit to annul Batas Pambansa Blg. 129 would be attended with deleterious consequences to the administration of justice. It does not follow that the abolition in good faith of the existing inferior courts except the Sandiganbayan and the Court of Tax Appeals and the creation of new ones will result in a judiciary unable or unwilling to discharge with independence its solemn duty or one recreant to the trust reposed in it. Nor should there be any fear that less than good faith will attend the exercise be of the appointing power vested in the Executive. It cannot be denied that an independent and efficient judiciary is something to the credit of any administration. Well and truly has it been said that the fundamental principle of separation of powers assumes, and justifiably so, that the three departments are as one in their determination to pursue the Ideals and aspirations and to fulfilling the hopes of the sovereign people as expressed in the Constitution. There is wisdom as well as validity to this pronouncement of Justice Malcolm in Manila Electric Co. v. Pasay Transportation Company, 109 a decision promulgated almost half a century ago: "Just as the Supreme Court, as the guardian of constitutional rights, should not sanction usurpations by any other department or the government, so should it as strictly confine its own sphere of influence to the powers expressly or by implication conferred on it by the Organic Act." 110 To that basic postulate underlying our constitutional system, this Court remains committed.

WHEREFORE, the unconstitutionality of Batas Pambansa Blg. 129 not having been shown, this petition is dismissed. No costs.

[G.R. No. 115844. August 15, 1997.]

CESAR G. VIOLA, Chairman, Bgy. 167, Zone 15, District II, Manila, Petitioner, v. HON. RAFAEL M. ALUNAN III, Secretary, DILG, ALEX L. DAVID, President/Secretary General, National Liga ng mga Barangay, LEONARDO L.

ANGAT, President, City of Manila, Liga ng mga Barangay, Respondents.

D E C I S I O N

MENDOZA, J.:

This is a petition for prohibition challenging the validity of Art. III, §§1-2 of the Revised Implementing Rules and Guidelines for the General Elections of the Liga ng mga Barangay Officers so far as they provide for the election of first, second and third vice presidents and for auditors for the National Liga ng mga Barangay and its chapters. The provisions in question read:chanroblesvirtuallawlibrary

§1. Local Liga Chapters. The Municipal, City, Metropolitan and Provincial Chapters shall directly elect the following officers and directors to constitute their respective Board of Directors, namely:chanrob1es virtual 1aw library

1.1 President

1.2 Executive Vice-President

1.3 First Vice-President

1.4 Second Vice-President

1.5 Third Vice-President

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:chanrob1es virtual 1aw library

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 Bgy. 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.

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS46

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:chanrob1es virtual 1aw library

ARTICLE VI

OFFICERS AND DIRECTORS

Section 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.

Section 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:chanrob1es virtual 1aw library

§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)

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 offices 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 law 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:chanrobles.com : virtual lawlibrary

(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

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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:" [1] 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 or 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 the 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:chanrob1es virtual 1aw library

§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 sanggunian 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 chapter, 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.chanrobles.com : virtual law library

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

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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.

LOUIS BAROK C. BIRAOGO,

Petitioner,

- versus -

THE PHILIPPINE TRUTH COMMISSION OF 2010,

Respondent.

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

REP. EDCEL C. LAGMAN,

REP. RODOLFO B. ALBANO, JR., REP. SIMEON A. DATUMANONG, and REP. ORLANDO B. FUA, SR.,

Petitioners,

- versus EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR. and DEPARTMENT OF BUDGET AND MANAGEMENT SECRETARY FLORENCIO B. ABAD,

Respondents.

D E C I S I O N

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. Laurel[1]

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 cases[5] 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 Constitution[6] 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 peoples 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 peoples faith and confidence in the Government and in their public servants;

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WHEREAS, the Presidents 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.

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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 countrys 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] Commissions 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 Africas 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 writer[12] puts 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:

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(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 Presidents 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. 1416[16] (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 latters 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

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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 commissions 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 Presidents 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. Arroyo[24] 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 plaintiffs 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 taxpayers suit is in a different category from the plaintiff in a citizens 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, howeverthe people are the real partiesIt 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 taxpayers 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.

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The OSG claims that the determinants of transcendental importance[28] laid down in CREBA v. ERC and Meralco[29] are non-existent in this case. The Court, however, finds reason in Biraogos assertion that the petition covers matters of transcendental importance to justify the exercise of jurisdiction by the Court. There areconstitutional 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 Presidents 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 presumed[32] 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.[36] Such 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 purposes[42] 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

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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 Presidents continuing authority to reorganize. [Emphasis Supplied]

In the same vein, the creation of the PTC is not justified by the Presidents 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, becamefunctus 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 Presidents 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 Presidents 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 ofMarcos 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.

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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 Executives 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 Presidents 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 Cario 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

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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 Ombudsmans 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 PTCs 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 Ombudsmans 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 becausefirst, 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

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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 peoples 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 states jurisdiction against intentional and arbitrary discrimination, whether occasioned by the express terms of a statue or by its improper execution through the states 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 

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(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' Union[85] 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 administrationand 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.[89]The 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]

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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 bodys 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 centurys 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.[94] While 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.[104] The 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

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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 nations 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.

KAPISANAN NG MGA KAWANI NG ENERGY REGULATORY BOARD,

Petitioner

- versus -

COMMISSIONER FE B. BARIN, DEPUTY COMMISSIONERS CARLOS R. ALINDADA, LETICIA V. IBAY, OLIVER B. BUTALID, and MARY ANNE B. COLAYCO, of the ENERGY REGULATORY COMMISSION,

Respondents.

G.R. No. 150974

 Promulgated:

June 29, 2007

D E C I S I O N

CARPIO, J.:

The Case

This is a special civil action for certiorari and prohibition[1] of the selection and appointment of employees of the Energy Regulatory Commission (ERC) by the ERC Board of Commissioners.

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 ERCs plantilla.

The Facts

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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.

The Commission shall be composed of a Chairman and four (4) members to be appointed by the President of the Philippines. x x x

Within three (3) months from the creation of the ERC, the Chairman shall submit for the approval of the President of the Philippines the new organizational structure and plantillapositions necessary to carry out the powers and functions of the ERC.

x x x x

The Chairman and members of the Commission shall assume office at the beginning of their 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 and filled-up, the current Board and existing personnel of ERB shall continue to hold office.

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 Philippinesapproved

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 ERCs 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 theERBs character as an economic regulator of the electric power industry. KERB insisted that RA 9136 merely changed the ERBs name to the ERC and expanded theERBs 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 KERBs 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 Barinstated 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 ParteMotion to Enjoin Termination of Petitioner ERB Employees on 2 January 2002. However, before the ERC received KERBs 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

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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 KERBs personality to file the petition on behalf of its alleged members and Elmar Agirs authority to institute the action, because of the demands of public interest.[5]

 Constitutionality of the ERBs Abolition

and the ERCs 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;

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(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 formers 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

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS64

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,

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS65

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.

x x x x

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.

x x x x

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.

x x x x

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.

x x x x

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.

x x x x

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.

x x x x

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 xx 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.

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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.

x x x x

(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;

x x x x

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

x x x x

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.

x x x x

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 thePalimpinon, 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 ERBs name and title to that of the ERC even as it expanded its functions and objectives to keep pace with the times. To uphold KERBsargument regarding the invalidity of

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS67

the ERBs 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 governments 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, ERBs 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 ERBs traditional rate and service regulation functions.However, the ERC now also has to promote

competitive operations in the electricity market. RA 9136 expanded the ERCs 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 x[15]

There is no question in our minds that, because of the expansion of the ERCs functions and concerns, there was a valid abolition of the ERB. Thus, there is no merit toKERBs allegation that there is an impairment of the security of tenure of the ERBs employees.

WHEREFORE, we DISMISS the petition. No costs.

SO ORDERED.

G.R. No. 155336. November 25, 2004]

COMMISSION ON HUMAN RIGHTS EMPLOYEES ASSOCIATION (CHREA) Represented by its President, MARCIAL A. SANCHEZ, JR.,petitioner, vs. COMMISSION ON HUMAN RIGHTS, respondent.

D E C I S I O N

CHICO-NAZARIO, J.:

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS68

Can the Commission on Human Rights lawfully implement an upgrading and reclassification of personnel positions without the prior approval of the Department of Budget and Management?

Before this Court is a petition for review filed by petitioner Commission on Human Rights Employees Association (CHREA) challenging the Decision[1] dated 29 November 2001 of the Court of Appeals in CA-G.R. SP No. 59678 affirming the Resolutions[2] dated 16 December 1999 and 09 June 2000 of the Civil Service Commission (CSC), which sustained the validity of the upgrading and reclassification of certain personnel positions in the Commission on Human Rights (CHR) despite the disapproval thereof by the Department of Budget and Management (DBM). Also assailed is the resolution dated 11 September 2002 of the Court of Appeals denying the motion for reconsideration filed by petitioner.

The antecedent facts which spawned the present controversy are as follows:

On 14 February 1998, Congress passed Republic Act No. 8522, otherwise known as the General Appropriations Act of 1998. It provided for Special Provisions Applicable to All Constitutional Offices Enjoying Fiscal Autonomy. The last portion of Article XXXIII covers the appropriations of the CHR. These special provisions state:

1. Organizational Structure. Any provision of law to the contrary notwithstanding and within the limits of their respective appropriations as authorized in this Act, the Constitutional Commissions and Offices enjoying fiscal autonomy are authorized to formulate and implement the organizational structures of their respective offices, to fix and determine the salaries, allowances, and other benefits of their personnel, and whenever public interest so requires, make adjustments in their personal services itemization including, but not limited to, the transfer of item or creation of new positions in their respective offices: PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing laws, which shall be payable from any unexpended balance of, or savings in the appropriations of their respective offices: PROVIDED, FURTHER,That the

implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws.

2. Use of Savings. The Constitutional Commissions and Offices enjoying fiscal autonomy are hereby authorized to use savings in their respective appropriations for: (a) printing and/or publication of decisions, resolutions, and training information materials; (b) repair, maintenance and improvement of central and regional offices, facilities and equipment; (c) purchase of books, journals, periodicals and equipment; (d) necessary expenses for the employment of temporary, contractual and casual employees; (e) payment of extraordinary and miscellaneous expenses, commutable representation and transportation allowances, and fringe benefits for their officials and employees as may be authorized by law; and (f) other official purposes, subject to accounting and auditing rules and regulations. (Emphases supplied)

On the strength of these special provisions, the CHR, through its then Chairperson Aurora P. Navarette-Recia and Commissioners Nasser A. Marohomsalic, Mercedes V. Contreras, Vicente P. Sibulo, and Jorge R. Coquia, promulgated Resolution No. A98-047 on 04 September 1998, adopting an upgrading and reclassification scheme among selected positions in the Commission, to wit:

WHEREAS, the General Appropriations Act, FY 1998, R.A. No. 8522 has provided special provisions applicable to all Constitutional Offices enjoying Fiscal Autonomy, particularly on organizational structures and authorizes the same to formulate and implement the organizational structures of their respective offices to fix and determine the salaries, allowances and other benefits of their personnel and whenever public interest so requires, make adjustments in the personnel services itemization including, but not limited to, the transfer of item or creation of new positions in their respective offices: PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing laws, which shall be payable from any unexpanded balance of, or savings in the appropriations of their respective offices;

WHEREAS, the Commission on Human Rights is a member of the Constitutional Fiscal Autonomy Group (CFAG) and on July 24, 1998, CFAG passed an approved Joint Resolution No. 49 adopting internal rules implementing the special provisions heretoforth mentioned;

NOW THEREFORE, the Commission by virtue of its fiscal autonomy hereby approves and authorizes the upgrading and augmentation of the commensurate amount generated from savings under Personal Services to support the implementation of this resolution effective Calendar Year 1998;

Let the Human Resources Development Division (HRDD) prepare the necessary Notice of Salary Adjustment and other appropriate documents to implement this resolution; . . . .[3] (Emphasis supplied)

Annexed to said resolution is the proposed creation of ten additional plantilla positions, namely: one Director IV position, with Salary Grade 28 for the Caraga Regional Office, four Security Officer II with Salary Grade 15, and five Process Servers, with Salary Grade 5 under the Office of the Commissioners. [4]

On 19 October 1998, CHR issued Resolution No. A98-055[5] providing for the upgrading or raising of salary grades of the following positions in the Commission:

Number of Positions

Position

Title

Salary Grade

From To From

12 Attorney VI (In the Regional Field Offices)

Director IV 26

4 Director III Director IV 27

1 Financial & Management

Director IV 24

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS69

Officer II

1 Budget Officer III Budget Officer IV 18

1 Accountant III Chief Accountant 18

1 Cashier III Cashier V 18

1 Information Officer V

Director IV 24

It, likewise, provided for the creation and upgrading of the following positions:

A. Creation

Number of Positions

Position Title Salary Grade

Total Salary Requirements

4 Security Officer II (Coterminous)

15 684,780.00

B. Upgrading

Number of Positions

Position Title Salary Grade

From To From

1 Attorney V Director IV 25

2 Security Officer I

Security Officer II

11

Total 3

To support the implementation of such scheme, the CHR, in the same resolution, authorized the augmentation of a commensurate amount generated from savings under Personnel Services.

By virtue of Resolution No. A98-062 dated 17 November 1998, the CHR collapsed the vacant positions in the body to provide additional source of funding for said staffing modification. Among the positions collapsed were: one Attorney III, four Attorney IV, one Chemist III, three Special Investigator I, one Clerk III, and one Accounting Clerk II.[8]

The CHR forwarded said staffing modification and upgrading scheme to the DBM with a request for its approval, but the then DBM secretary Benjamin Diokno denied the request on the following justification:

Based on the evaluations made the request was not favorably considered as it effectively involved the elevation of the field units from divisions to services.

The present proposal seeks further to upgrade the twelve (12) positions of Attorney VI, SG-26 to Director IV, SG-28. This would elevate the field units to a bureau or regional office, a level even higher than the one previously denied.

The request to upgrade the three (3) positions of Director III, SG-27 to Director IV, SG-28, in the Central Office in effect would elevate the services to Office and change the context from support to substantive without actual change in functions.

In the absence of a specific provision of law which may be used as a legal basis to elevate the level of divisions to a bureau or regional office, and the services to offices, we reiterate our previous stand denying the upgrading of the twelve (12) positions of Attorney VI, SG-26 to Director III, SG-27 or Director IV, SG-28, in the Field Operations Office (FOO) and three (3) Director III, SG-27 to Director IV, SG-28 in the Central Office.

As represented, President Ramos then issued a Memorandum to the DBM Secretary dated 10 December 1997, directing the latter to increase the number of Plantilla positions in the CHR both Central and Regional Offices to implement the Philippine Decade Plan on Human Rights Education, the Philippine Human Rights Plan and Barangay Rights Actions Center in accordance with existing laws. (Emphasis in the original)

Pursuant to Section 78 of the General Provisions of the General Appropriations Act (GAA) FY 1998, no organizational unit or changes in key positions shall be authorized unless provided by law or directed by the President, thus, the creation of a Finance Management Office and a Public Affairs Office cannot be given favorable recommendation.

Moreover, as provided under Section 2 of RA No. 6758, otherwise known as the Compensation Standardization Law, the Department of Budget and Management is directed to establish and administer a unified compensation and position classification system in the government. The Supreme Court ruled in the case of Victorina Cruz vs. Court of Appeals, G.R. No. 119155, dated January 30, 1996, that this Department has the sole power and discretion to administer the compensation and position classification system of the National Government.

Being a member of the fiscal autonomy group does not vest the agency with the authority to reclassify, upgrade, and create positions without approval of the DBM. While the members of the Group are authorized to formulate and implement the organizational structures of their respective offices and determine the compensation of their personnel, such authority is not absolute and must be exercised within the parameters of the Unified Position Classification and Compensation System established under RA 6758 more popularly known as the Compensation Standardization Law. We therefore reiterate our previous stand on the matter.[9] (Emphases supplied)

In light of the DBMs disapproval of the proposed personnel modification scheme, the CSC-National Capital Region Office, through a memorandum dated 29 March 1999, recommended to the CSC-Central Office that the subject appointments be rejected owing to the DBMs disapproval of the plantilla reclassification.

Meanwhile, the officers of petitioner CHREA, in representation of the rank and file employees of the CHR, requested the CSC-Central Office to affirm the recommendation of the CSC-Regional Office. CHREA stood its ground in saying that the DBM is the only agency with appropriate authority mandated by law to evaluate and approve matters of reclassification and upgrading, as well as creation of positions.

ADMINISTRATIVE LAW, LAW ON PUBLIC OFFICERS70

The CSC-Central Office denied CHREAs request in a Resolution dated 16 December 1999, and reversed the recommendation of the CSC-Regional Office that the upgrading scheme be censured. The decretal portion of which reads:

WHEREFORE, the request of Ronnie N. Rosero, Hubert V. Ruiz, Flordeliza A. Briones, George Q. Dumlao [and], Corazon A. Santos-Tiu, is hereby denied.[10]

CHREA filed a motion for reconsideration, but the CSC-Central Office denied the same on 09 June 2000.

Given the cacophony of judgments between the DBM and the CSC, petitioner CHREA elevated the matter to the Court of Appeals. The Court of Appeals affirmed the pronouncement of the CSC-Central Office and upheld the validity of the upgrading, retitling, and reclassification scheme in the CHR on the justification that such action is within the ambit of CHRs fiscal autonomy. The fallo of the Court of Appeals decision provides:

IN VIEW OF ALL THE FOREGOING, the instant petition is ordered DISMISSED and the questioned Civil Service Commission Resolution No. 99-2800 dated December 16, 1999 as well as No. 001354 dated June 9, 2000, are hereby AFFIRMED. No cost.[11]

Unperturbed, petitioner filed this petition in this Court contending that:

A.

THE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT UNDER THE 1987 CONSTITUTION, THE COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL AUTONOMY.

B.

THE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE CONSTRUCTION OF THE COMMISSION ON HUMAN RIGHTS OF REPUBLIC ACT NO. 8522 (THE GENERAL APPROPRIATIONS ACT FOR THE FISCAL YEAR 1998) DESPITE ITS BEING IN SHARP

CONFLICT WITH THE 1987 CONSTITUTION AND THE STATUTE ITSELF.

C.

THE COURT OF APPEALS SERIOUSLY AND GRAVELY ERRED IN AFFIRMING THE VALIDITY OF THE CIVIL SERVICE COMMISSION RESOLUTION NOS. 992800 AND 001354 AS WELL AS THAT OF THE OPINION OF THE DEPARTMENT OF JUSTICE IN STATING THAT THE COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL AUTONOMY UNDER THE 1987 CONSTITUTION AND THAT THIS FISCAL AUTONOMY INCLUDES THE ACTION TAKEN BY IT IN COLLAPSING, UPGRADING AND RECLASSIFICATION OF POSITIONS THEREIN.[12]

The central question we must answer in order to resolve this case is: Can the Commission on Human Rights validly implement an upgrading, reclassification, creation, and collapsing of plantilla positions in the Commission without the prior approval of the Department of Budget and Management?

Petitioner CHREA grouses that the Court of Appeals and the CSC-Central Office both erred in sanctioning the CHRs alleged blanket authority to upgrade, reclassify, and create positions inasmuch as the approval of the DBM relative to such scheme is still indispensable. Petitioner bewails that the CSC and the Court of Appeals erroneously assumed that CHR enjoys fiscal autonomy insofar as financial matters are concerned, particularly with regard to the upgrading and reclassification of positions therein.

Respondent CHR sharply retorts that petitioner has no locus standi considering that there exists no official written record in the Commission recognizing petitioner as abona fide organization of its employees nor is there anything in the records to show that its president, Marcial A. Sanchez, Jr., has the authority to sue the CHR. The CHR contends that it has the authority to cause the upgrading, reclassification, plantilla creation, and collapsing scheme sans the approval of the DBM because it enjoys fiscal autonomy.

After a thorough consideration of the arguments of both parties and an assiduous scrutiny of the records in the case at bar, it is the Courts opinion that the present petition is imbued with merit.

On petitioners personality to bring this suit, we held in a multitude of cases that a proper party is one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of.[13] Here, petitioner, which consists of rank and file employees of respondent CHR, protests that the upgrading and collapsing of positions benefited only a select few in the upper level positions in the Commission resulting to the demoralization of the rank and file employees. This sufficiently meets the injury test. Indeed, the CHRs upgrading scheme, if found to be valid, potentially entails eating up the Commissions savings or that portion of its budgetary pie otherwise allocated for Personnel Services, from which the benefits of the employees, including those in the rank and file, are derived.

Further, the personality of petitioner to file this case was recognized by the CSC when it took cognizance of the CHREAs request to affirm the recommendation of the CSC-National Capital Region Office. CHREAs personality to bring the suit was a non-issue in the Court of Appeals when it passed upon the merits of this case. Thus, neither should our hands be tied by this technical concern. Indeed, it is settled jurisprudence that an issue that was neither raised in the complaint nor in the court below cannot be raised for the first time on appeal, as to do so would be offensive to the basic rules of fair play, justice, and due process.[14]

We now delve into the main issue of whether or not the approval by the DBM is a condition precedent to the enactment of an upgrading, reclassification, creation and collapsing of plantilla positions in the CHR.

Germane to our discussion is Rep. Act No. 6758, An Act Prescribing a Revised Compensation and Position Classification System in the Government and For Other Purposes, or the Salary Standardization Law, dated 01 July 1989, which provides in Sections 2 and 4 thereof that it is the DBM that shall establish and administer a unified Compensation and Position Classification System. Thus:

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SEC. 2. Statement of Policy. -- It is hereby declared the policy of the State to provide equal pay for substantially equal work and to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions. In determining rates of pay, due regard shall be given to, among others, prevailing rates in the private sector for comparable work. For this purpose, the Department of Budget and Management (DBM) is hereby directed to establish and administer a unified Compensation and Position Classification System, hereinafter referred to as the System as provided for in Presidential Decree No. 985, as amended, that shall be applied for all government entities, as mandated by the Constitution. (Emphasis supplied.)

SEC. 4. Coverage. The Compensation and Position Classification System herein provided shall apply to all positions, appointive or elective, on full or part-time basis, now existing or hereafter created in the government, including government-owned or controlled corporations and government financial institutions.

The term government refers to the Executive, the Legislative and the Judicial Branches and the Constitutional Commissions and shall include all, but shall not be limited to, departments, bureaus, offices, boards, commissions, courts, tribunals, councils, authorities, administrations, centers, institutes, state colleges and universities, local government units, and the armed forces. The term government-owned or controlled corporations and financial institutions shall include all corporations and financial institutions owned or controlled by the National Government, whether such corporations and financial institutions perform governmental or proprietary functions. (Emphasis supplied.)

The disputation of the Court of Appeals that the CHR is exempt from the long arm of the Salary Standardization Law is flawed considering that the coverage thereof, as defined above, encompasses the entire gamut of government offices, sans qualification.

This power to administer is not purely ministerial in character as erroneously held by the Court of Appeals. The word to administer means to control or regulate in behalf of others; to

direct or superintend the execution, application or conduct of; and to manage or conduct public affairs, as to administer the government of the state.[15]

The regulatory power of the DBM on matters of compensation is encrypted not only in law, but in jurisprudence as well. In the recent case of Philippine   Retirement Authority (PRA) v. Jesusito L. Buag,[16] this Court, speaking through Mr. Justice Reynato Puno, ruled that compensation, allowances, and other benefits received by PRA officials and employees without the requisite approval or authority of the DBM are unauthorized and irregular. In the words of the Court

Despite the power granted to the Board of Directors of PRA to establish and fix a compensation and benefits scheme for its employees, the same is subject to the review of the Department of Budget and Management. However, in view of the express powers granted to PRA under its charter, the extent of the review authority of the Department of Budget and Management is limited. As stated in Intia, the task of the Department of Budget and Management is simply to review the compensation and benefits plan of the government agency or entity concerned and determine if the same complies with the prescribed policies and guidelines issued in this regard. The role of the Department of Budget and Management is supervisorial in nature, its main duty being to ascertain that the proposed compensation, benefits and other incentives to be given to PRA officials and employees adhere to the policies and guidelines issued in accordance with applicable laws.

In Victorina Cruz v. Court of Appeals,[17] we held that the DBM has the sole power and discretion to administer the compensation and position classification system of the national government.

In Intia, Jr. v. Commission on Audit,[18] the Court held that although the charter[19] of the Philippine Postal Corporation (PPC) grants it the power to fix the compensation and benefits of its employees and exempts PPC from the coverage of the rules and regulations of the Compensation and Position Classification Office, by virtue of Section 6 of P.D. No. 1597, the compensation system established by the PPC is, nonetheless, subject to the review of the DBM. This Court intoned:

It should be emphasized that the review by the DBM of any PPC resolution affecting the compensation structure of its personnel should not be interpreted to mean that the DBM can dictate upon the PPC Board of Directors and deprive the latter of its discretion on the matter. Rather, the DBMs function is merely to ensure that the action taken by the Board of Directors complies with the requirements of the law, specifically, that PPCs compensation system conforms as closely as possible with that provided for under R.A. No. 6758. (Emphasis supplied.)

As measured by the foregoing legal and jurisprudential yardsticks, the imprimatur of the DBM must first be sought prior to implementation of any reclassification or upgrading of positions in government. This is consonant to the mandate of the DBM under the Revised Administrative Code of 1987, Section 3, Chapter 1, Title XVII, to wit:

SEC. 3. Powers and Functions. The Department of Budget and Management shall assist the President in the preparation of a national resources and expenditures budget, preparation, execution and control of the National Budget, preparation and maintenance of accounting systems essential to the budgetary process, achievement of more economy and efficiency in the management of government operations, administration of compensation and position classification systems, assessment of organizational effectiveness and review and evaluation of legislative proposals having budgetary or organizational implications. (Emphasis supplied.)

Irrefragably, it is within the turf of the DBM Secretary to disallow the upgrading, reclassification, and creation of additional plantilla positions in the CHR based on its finding that such scheme lacks legal justification.

Notably, the CHR itself recognizes the authority of the DBM to deny or approve the proposed reclassification of positions as evidenced by its three letters to the DBM requesting approval thereof. As such, it is now estopped from now claiming that the nod of approval it has previously sought from the DBM is a superfluity.

The Court of Appeals incorrectly relied on the pronouncement of the CSC-Central Office that the CHR is a constitutional commission, and as such enjoys fiscal autonomy.[20]

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Palpably, the Court of Appeals Decision was based on the mistaken premise that the CHR belongs to the species of constitutional commissions. But, Article IX of the Constitution states in no uncertain terms that only the CSC, the Commission on Elections, and the Commission on Audit shall be tagged as Constitutional Commissions with the appurtenant right to fiscal autonomy. Thus:

Sec. 1. The Constitutional Commissions, which shall be independent, are the Civil Service Commission, the Commission on Elections, and the Commission on Audit.

Sec. 5. The Commission shall enjoy fiscal autonomy. Their approved annual appropriations shall be automatically and regularly released.

Along the same vein, the Administrative Code, in Chapter 5, Sections 24 and 26 of Book II on Distribution of Powers of Government, the constitutional commissions shall include only the Civil Service Commission, the Commission on Elections, and the Commission on Audit, which are granted independence and fiscal autonomy. In contrast, Chapter 5, Section 29 thereof, is silent on the grant of similar powers to the other bodies including the CHR. Thus:

SEC. 24. Constitutional Commissions. The Constitutional Commissions, which shall be independent, are the Civil Service Commission, the Commission on Elections, and the Commission on Audit.

SEC. 26. Fiscal Autonomy. The Constitutional Commissions shall enjoy fiscal autonomy. The approved annual appropriations shall be automatically and regularly released.

SEC. 29. Other Bodies. There shall be in accordance with the Constitution, an Office of the Ombudsman, a Commission on Human Rights, and independent central monetary authority, and a national police commission. Likewise, as provided in the Constitution, Congress may establish an independent economic and planning agency. (Emphasis ours.)

From the 1987 Constitution and the Administrative Code, it is abundantly clear that the CHR is not among the class of Constitutional Commissions. As expressed in the oft-repeated

maxim expressio unius est exclusio alterius, the express mention of one person, thing, act or consequence excludes all others. Stated otherwise, expressium facit cessare tacitum what is expressed puts an end to what is implied.[21]

Nor is there any legal basis to support the contention that the CHR enjoys fiscal autonomy. In essence, fiscal autonomy entails freedom from outside control and limitations, other than those provided by law. It is the freedom to allocate and utilize funds granted by law, in accordance with law, and pursuant to the wisdom and dispatch its needs may require from time to time.[22] In Blaquera v. Alcala and Bengzon v. Drilon,[23] it is understood that it is only the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman, which enjoy fiscal autonomy. Thus, in Bengzon,[24] we explained:

As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service Commission, the Commission on Audit, the Commission on Elections, and the Office of the Ombudsman contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom and dispatch that their needs require. It recognizes the power and authority to levy, assess and collect fees, fix rates of compensation not exceeding the highest rates authorized by law for compensation and pay plans of the government and allocate and disburse such sums as may be provided by law or prescribed by them in the course of the discharge of their functions.

. . .

The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the manner the independent constitutional offices allocate and utilize the funds appropriated for their operations is anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but especially as regards the Supreme Court, of the independence and separation of powers upon which the entire fabric of our constitutional system is based. In the interest of comity and cooperation, the Supreme Court, [the] Constitutional Commissions, and the Ombudsman have so far limited their

objections to constant reminders. We now agree with the petitioners that this grant of autonomy should cease to be a meaningless provision. (Emphasis supplied.)

Neither does the fact that the CHR was admitted as a member by the Constitutional Fiscal Autonomy Group (CFAG) ipso facto clothed it with fiscal autonomy. Fiscal autonomy is a constitutional grant, not a tag obtainable by membership.

We note with interest that the special provision under Rep. Act No. 8522, while cited under the heading of the CHR, did not specifically mention CHR as among those offices to which the special provision to formulate and implement organizational structures apply, but merely states its coverage to include Constitutional Commissions and Offices enjoying fiscal autonomy. In contrast, the Special Provision Applicable to the Judiciary under Article XXVIII of the General Appropriations Act of 1998 specifically mentions that such special provision applies to the judiciary and had categorically authorized the Chief Justice of the Supreme Court to formulate and implement the organizational structure of the Judiciary, to wit:

1. Organizational Structure. Any provision of law to the contrary notwithstanding and within the limits of their respective appropriations authorized in this Act, the Chief Justice of the Supreme Court is authorized to formulate and implement organizational structure of the Judiciary, to fix and determine the salaries, allowances, and other benefits of their personnel, and whenever public interest so requires, make adjustments in the personal services itemization including, but not limited to, the transfer of item or creation of new positions in the Judiciary; PROVIDED, That officers and employees whose positions are affected by such reorganization or adjustments shall be granted retirement gratuities and separation pay in accordance with existing law, which shall be payable from any unexpended balance of, or savings in the appropriations of their respective offices: PROVIDED, FURTHER, That the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws. (Emphasis supplied.)

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All told, the CHR, although admittedly a constitutional creation is, nonetheless, not included in the genus of offices accorded fiscal autonomy by constitutional or legislative fiat.

Even assuming en arguendo that the CHR enjoys fiscal autonomy, we share the stance of the DBM that the grant of fiscal autonomy notwithstanding, all government offices must, all the same, kowtow to the Salary Standardization Law. We are of the same mind with the DBM on its standpoint, thus-

Being a member of the fiscal autonomy group does not vest the agency with the authority to reclassify, upgrade, and create positions without approval of the DBM. While the members of the Group are authorized to formulate and implement the organizational structures of their respective offices and determine the compensation of their personnel, such authority is not absolute and must be exercised within the parameters of the Unified Position Classification and Compensation System established under RA 6758 more popularly known as the Compensation Standardization Law.[25] (Emphasis supplied.)

The most lucid argument against the stand of respondent, however, is the provision of Rep. Act No. 8522 that the implementation hereof shall be in accordance with salary rates, allowances and other benefits authorized under compensation standardization laws.[26]

Indeed, the law upon which respondent heavily anchors its case upon has expressly provided that any form of adjustment in the organizational structure must be within the parameters of the Salary Standardization Law.

The Salary Standardization Law has gained impetus in addressing one of the basic causes of discontent of many civil servants.[27] For this purpose, Congress has delegated to the DBM the power to administer the Salary Standardization Law and to ensure that the spirit behind it is observed. This power is part of the system of checks and balances or system of restraints in our government. The DBMs exercise of such authority is not in itself an arrogation inasmuch as it is pursuant to the paramount law of the land, the Salary Standardization Law and the Administrative Code.

In line with its role to breathe life into the policy behind the Salary Standardization Law of providing equal pay for substantially equal work and to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the positions, the DBM, in the case under review, made a determination, after a thorough evaluation, that the reclassification and upgrading scheme proposed by the CHR lacks legal rationalization.

The DBM expounded that Section 78 of the general provisions of the General Appropriations Act FY 1998, which the CHR heavily relies upon to justify its reclassification scheme, explicitly provides that no organizational unit or changes in key positions shall be authorized unless provided by law or directed by the President. Here, the DBM discerned that there is no law authorizing the creation of a Finance Management Office and a Public Affairs Office in the CHR. Anent CHRs proposal to upgrade twelve positions of Attorney VI, SG-26 to Director IV, SG-28, and four positions of Director III, SG-27 to Director IV, SG-28, in the Central Office, the DBM denied the same as this would change the context from support to substantive without actual change in functions.

This view of the DBM, as the laws designated body to implement and administer a unified compensation system, is beyond cavil. The interpretation of an administrative government agency, which is tasked to implement a statute is accorded great respect and ordinarily controls the construction of the courts. In Energy Regulatory Board v. Court of Appeals,[28] we echoed the basic rule that the courts will not interfere in matters which are addressed to the sound discretion of government agencies entrusted with the regulation of activities coming under the special technical knowledge and training of such agencies.

To be sure, considering his expertise on matters affecting the nations coffers, the Secretary of the DBM, as the Presidents alter ego, knows from where he speaks inasmuch as he has the front seat view of the adverse effects of an unwarranted upgrading or creation of positions in the CHR in particular and in the entire government in general.

WHEREFORE, the petition is GRANTED, the Decision dated 29 November 2001 of the Court of Appeals in CA-G.R. SP No.

59678 and its Resolution dated 11 September 2002 are hereby REVERSED and SET ASIDE. The ruling dated 29 March 1999 of the Civil Service Commision-National Capital Region is REINSTATED. The Commission on Human Rights Resolution No. A98-047 dated 04 September 1998, Resolution No. A98-055 dated 19 October 1998 and Resolution No. A98-062 dated 17 November 1998 without the approval of the Department of Budget and Management are disallowed. No pronouncement as to costs.

SO ORDERED.

 

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