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G.R. No.

147571
May 5, 2001
SOCIAL WEATHER STATIONS, INCORPORATED and KAMAHALAN
PUBLISHING CORPORATION, doing business as MANILA STANDARD,
petitioners,
vs.
COMMISSION ON ELECTIONS, respondent.

G.R. No. 141961


January 23, 2002
STA. CLARA HOMEOWNERS ASSOCIATION thru its Board of Directors
composed of ARNEIL CHUA, LUIS SARROSA, JOCELYN GARCIA, MA.
MILAGROS VARGAS, LORENZO LACSON, ERNESTO PICCIO, DINDO
ILAGAN, DANILO GAMBOA JR. and RIZZA DE LA RAMA; SECURITY
GUARD CAPILLO; "JOHN DOE"; and SANTA CLARA ESTATE,
INC., petitioners,
vs.
Spouses VICTOR MA. GASTON and LYDIA GASTON, respondents.
G.R. No. 95770 December 29, 1995
ROEL EBRALINAG, EMILY EBRALINAG, represented by their parents,
MR. & MRS. LEONARDO EBRALINAG, JUSTINIANA TANTOG,
represented by her father, AMOS TANTOG, JEMIL OYAO & JOEL OYAO,
represented by their parents MR. & MRS. ELIEZER OYAO, JANETH
DIAMOS & JEREMIAS DIAMOS, represented by parents MR. & MRS.
GODOFREDO DIAMOS, SARA OSTIA & JONATHAN OSTIA, represented
by their parents MR. & MRS. FAUSTO OSTIA, IRVIN SEQUINO &
RENAN SEQUINO, represented by their parents MR. & MRS. LYDIO
SEQUINO, NAPTHALE TUNACAO represented by his parents MR. &
MRS. MANUEL TUNACAO PRECILA PINO represented by her parents
MR. & MRS. FELIPE PINO, MARICRIS ALFAR, RUWINA ALFAR,
represented by their parents MR. & MRS. HERMINIGILDO ALFAR,
FREDESMINDA ALFAR & GUMERSINDO ALFAR, represented by their
parents ABDON ALFAR ALBERTO ALFAR & ARISTIO ALFAR,
represented by their parents MR. & MRS. GENEROSO ALFAR,
MARTINO VILLAR, represented by their parents MR. & MRS. GENARO
VILLAR, PERGEBRIEL GUINITA & CHAREN GUINITA, represented by
their parents MR. & MRS. CESAR GUINITA, ALVIN DOOP represented
by his parents MR. & MRS. LEONIDES DOOP, RHILYN LAUDE
represented by her parents MR. & MRS. RENE LAUDE, LEOREMINDA

MONARES represented by her parents MR. & MRS. FLORENCIO


MONARES, MERCY MONTECILLO, represented by her parents MR. &
MRS. MANUEL MONTECILLO, ROBERTO TANGAHA, represented by his
parent ILUMINADA TANGAHA, EVELYN MARIA & FLORA TANGAHA
represented by their parents MR. & MRS. ALBERTO TANGAHA,
MAXIMO EBRALINAG represented by his parents MR. & MRS.
PAQUITO EBRALINAG, JUTA CUMON, GIDEON CUMON & JONATHAN
CUMON, represented by their father RAFAEL CUMON, EVIE
LUMAKANG and JUAN LUMAKANG, represented by their parents MR.
& MRS. LUMAKANG, EMILIO SARSOZO & PAZ AMOR SARSOZO, & IGNA
MARIE SARSOZO represented by their parents MR. & MRS. VIRGILIO
SARSOZO, MICHAEL JOSEPH & HENRY JOSEPH, represented by parent
ANNIE JOSEPH, EMERSON TABLASON & MASTERLOU TABLASON,
represented by their parents EMERLITO TABLASON, petitioners,
vs.
THE DIVISION SUPERINTENDENT OF SCHOOLS OF CEBU, and MR.
MANUEL F. BIONGCOG, Cebu District Supervisor, respondents.
G.R. No. 95887 December 29, 1995
MAY AMOLO, represented by her parents MR. & MRS. ISAIAS AMOLO,
REDFORD ALSADO, JOEBERT ALSADO, & RUDYARD ALSADO
represented by their parents MR. & MRS. ABELARDO ALSADO, NESIA
ALSADO, REU ALSADO and LILIBETH ALSADO, represented by their
parents MR. & MRS. ROLANDO ALSADO, SUZETTE NAPOLES,
represented by her parents ISMAILITO NAPOLES and OPHELIA
NAPOLES, JESICA CARMELOTES, represented by her parents MR. &
MRS. SERGIO CARMELOTES, BABY JEAN MACAPAS, represented by
her parents MR. & MRS. TORIBIO MACAPAS, GERALDINE ALSADO,
represented by her parents MR. & MRS. JOEL ALSADO, RAQUEL
DEMOTOR, and LEAH DEMOTOR, represented by their parents MR. &
MRS. LEONARDO DEMOTOR, JURELL VILLA and MELONY VILLA,
represented by their parents MR. & MRS. JOVENIANO VILLA, JONELL
HOPE MAHINAY, MARY GRACE MAHINAY, and MAGDALENE MAHINAY,
represented by their parents MR. & MRS. FELIX MAHINAY, JONALYN
ANTIOLA and JERWIN ANTIOLA, represented by their parents FELIPE
ANTIOLA and ANECITA ANTIOLA, MARIA CONCEPCION CABUYAO,
represented by her parents WENIFREDO CABUYAO and ESTRELLITA
CABUYAO, NOEMI TURNO represented by her parents MANUEL
TURNO and VEVENCIA TURNO, SOLOMON PALATULON, SALMERO
PALATULON and ROSALINA PALATULON, represented by their parents
MARTILLANO PALATULON and CARMILA PALATULON, petitioners,
vs.

THE DIVISION SUPERINTENDENT OF SCHOOLS OF CEBU, and


ANTONIO A. SANGUTAN, respondents.
G.R. No. 122539 March 4, 1999
JESUS V. TIOMICO, petitioner,
vs.
THE HON. COURT OF APPEALS (FORMER FIFTH DIVISION) and PEOPLE
OF THE PHILIPPINES, respondent.
G.R. No. 172087
March 15, 2011
PHILIPPINE AMUSEMENT AND GAMING CORPORATION
(PAGCOR), Petitioner,
vs.
THE BUREAU OF INTERNAL REVENUE (BIR), represented herein by
HON. JOSE MARIO BUAG, in his official capacity as COMMISSIONER
OF INTERNAL REVENUE, Public Respondent,
JOHN DOE and JANE DOE, who are persons acting for, in behalf, or
under the authority of Respondent.Public and Private Respondents.
G.R. No. L-19313
January 19, 1962
DOMINADOR R. AYTONA, petitioner,
vs.
ANDRES V. CASTILLO, ET AL., respondents.

G.R. No. L-19313


January 19, 1962
DOMINADOR R. AYTONA, petitioner,
vs.
ANDRES V. CASTILLO, ET AL., respondents.
R E S O L U T I O N.
BENGZON, C.J.:
Without prejudice to the subsequent promulgation of more extended opinion, the Court adopted today, the following
resolutions: .
On December 29, 1961, then President Carlos P. Garcia appointed Dominador R. Aytona as ad interim Governor of the
Central Bank. On the same day, the latter took the corresponding oath.
On December 30, 1961, at noon, President-elect Diosdado Macapagal assumed office; and on December 31, 1961, he
issued Administrative Order No. 2 recalling, withdrawing, and cancelling all ad interim appointment made by President
Garcia after December 13, 1961, (date when he, Macapagal, had been proclaimed elected by the Congress). On January
1, 1962, President Macapagal appointed Andres V. Castillo as ad interim Governor of the Central Bank, and the latter
qualified immediately.
On January 2, 1962, both appointed exercised the powers of their office, although Castillo informed Aytona of his title
thereto; and some unpleasantness developed in the premises of the Central Bank. However, the next day and thereafter,
Aytona was definitely prevented from holding office in the Central Bank.
So, he instituted this proceeding which is practically, a quo warranto, challenging Castillo's right to exercise the powers of
Governor of the Central Bank. Aytona claims he was validly appointed, had qualified for the post, and therefore, the
subsequent appointment and qualification of Castillo was void, because the position was then occupied by him. Castillo
replies that the appointment of Aytona had been revoked by Administrative Order No. 2 of Macapagal; and so, the real
issue is whether the new President had power to issue the order of cancellation of the ad interim appointments made by
the past President, even after the appointees had already qualified.1wph1.t
The record shows that President Garcia sent to the Commission on Appointments which was not then in session a
communication dated December 29, 1961, submitting "for confirmation" ad interim appointments of assistant director of
lands, councilors, mayors, members of the provincial boards, fiscals, justices of the peace, officers of the army, etc.; and
the name of Dominador R. Aytona as Governor of the Central Bank occupies number 45, between a justice of the peace
and a colonel of the Armed Forces.
Another communication of President Garcia bearing the same date, submitted a list of ad interim appointments of Foreign
Affairs officers, judges, fiscals, chiefs of police, justices of the peace, mayors, councilors, etc. number 63 of which was
that of Dominador R. Aytona for Governor of the Philippines in the Boards of International Monetary Fund, International
Bank for Reconstruction and Development, etc.
A third communication likewise dated December 29, 1961, addressed to the Commission on Appointments submitted for
confirmation 124 names of persons appointed as judges of first instance, members of provincial boards, and boards of

government corporations, fiscals, justice of the peace, even one associate justice of this Court occupying position No. 8
and two associate justices of the Court of Appeals (9 and 10) between an assistant of the Solicitor-General's Office, and
the chairman of the board of tax appeals of Pasay City, who in turn are followed by judges of first instance, and inserted
between the latter is the name of another associate justice of the Court of Appeals.
There were other appointments thus submitted by President Garcia on that date, December 29, 1961. All in all, about
three hundred fifty (350) "midnight" or "last minute" appointments.

insure approval of his selection either previous consultation with the members of the Commission or by thereafter
explaining to them the reason such selection. Where, however, as in this case, the Commission on Appointments that will
consider the appointees is different from that existing at the time of the appointment 2and where the names are to be
submitted by successor, who may not wholly approve of the selections, the President should be doubly careful in
extending such appointments. Now, it is hard to believe that in signing 350 appointments in one night, President Garcia
exercised such "double care" which was required and expected of him; and therefore, there seems to be force to the
contention that these appointments fall beyond the intent and spirit of the constitutional provision granting to the
Executive authority to issue ad interim appointments.

In revoking the appointments, President Macapagal is said to have acted for these and other reasons: (1) the outgoing
President should have refrained from filling vacancies to give the new President opportunity to consider names in the light
of his new policies, which were approved by the electorate in the last elections; (2) these scandalously hurried
appointments in mass do not fall within the intent and spirit of the constitutional provision authorizing the issuance of ad
interim appointments; (3) the appointments were irregular, immoral and unjust, because they were issued only upon the
condition that the appointee would immediately qualify obviously to prevent a recall or revocation by the incoming
President, with the result that those deserving of promotion or appointment who preferred to be named by the new
President declined and were by-passed; and (4) the abnormal conditions surrounding the appointment and qualifications
evinced a desire on the part of the outgoing President merely subvert the policies of the incoming administration.

Under the circumstances above described, what with the separation of powers, this Court resolves that it must decline to
disregard the Presidential Administrative Order No. 2, cancelling such "midnight" or "last-minute" appointments.

It is admitted that many of the persons mentioned in the communication to the Commission on Appointments dated
December 29, 1961, did not qualify. There is evidence that in the night of December 29, there was a scramble in
Malacaan of candidates for positions trying to get their written appointments or having such appointments changed to
more convenient places, after some last minute bargaining. There was unusual hurry in the issuance of the appointments
which were not coursed through the Department Heads and in the confusion, a woman appointed judge was
designated "Mr." and a man was designated "Madam." One appointee who got his appointment and was required to
qualify, resorted to the rush of asking permission to swear before a relative official, and then never qualified.

Incidentally, it should be stated that the underlying reason for denying the power to revoke after the appointee has
qualified is the latter's equitable rights. Yet it is doubtful if such equity might be successfully set up in the present
situation, considering the rush conditional appointments, hurried maneuvers and other happenings detracting from that
degree of good faith, morality and propriety which form the basic foundation of claims to equitable relief. The appointees,
it might be argued, wittingly or unwittingly cooperated with the stratagem to beat the deadline, whatever the resultant
consequences to the dignity and efficiency of the public service. Needless to say, there are instances wherein not only
strict legality, but also fairness, justice and righteousness should be taken into account.

We are informed, it is Malacaan's practice which we find to be logical to submit ad interim appointments only when
the Commission on Appointments is in session. One good reason for the practice is that only those who have accepted the
appointment and qualified are submitted for confirmation. Nevertheless, this time, Malacaan submitted its
appointments on the same day they were issued; and the Commission was not then in session; obviously because it
foresaw the possibility that the incoming President would refuse to submit later the appointees of his predecessor. As a
result, as already adverted to, some persons whose names were submitted for confirmation had not qualified nor
accepted their appointments.

WHEREFORE, the Court exercising its judgment and discretion in the matter, hereby dismiss the action, without costs.

Because of the haste and irregularities, some judges of first instance qualified for districts wherein no vacancies existed,
because the incumbents had not qualified for other districts to which they had been supposedly transferred or promoted.
Referring specifically to judges who had not qualified, the course of conduct adopted by Former Chief Justice Moran is
cited. Being ambassador in Spain and desiring to return to this Court even as associate justice, Moran was tendered
an ad interim appointment thereto by President Quirino, after the latter had lost the election to President Magsaysay, and
before leaving the Presidency. Said Ambassador declined to qualify being of the opinion that the matter should be left to
the incoming newly-elected President.
Of course, nobody will assert that President Garcia ceased to be such earlier than at noon of December 30, 1961. But it is
common sense to believe that after the proclamation of the election of President Macapagal, his was no more than a
"care-taker" administration. He was duty bound to prepare for the orderly transfer of authority the incoming President,
and he should not do acts which he ought to know, would embarrass or obstruct the policies of his successor. The time for
debate had passed; the electorate had spoken. It was not for him to use powers as incumbent President to continue the
political warfare that had ended or to avail himself of presidential prerogatives to serve partisan purposes. The filling up
vacancies in important positions, if few, and so spaced to afford some assurance of deliberate action and careful
consideration of the need for the appointment and the appointee's qualifications may undoubtedly be permitted. But the
issuance of 350 appointments in one night and planned induction of almost all of them a few hours before the
inauguration of the new President may, with some reason, be regarded by the latter as an abuse Presidential
prerogatives, the steps taken being apparently a mere partisan effort to fill all vacant positions 1 irrespective of fitness and
other conditions, and thereby deprive the new administration of an opportunity to make the corresponding appointments.
Normally, when the President makes appointments the consent of the Commission on Appointments, he has benefit of
their advice. When he makes ad interim appointments, he exercises a special prerogative and is bound to be prudent to

Of course, the Court is aware of many precedents to the effect that once an appointment has been issued, it cannot be
reconsidered, specially where the appointee has qualified. But none of them refer to mass ad interimappointments (threehundred and fifty), issued in the last hours of an outgoing Chief Executive, in a setting similar to that outlined herein. On
the other hand, the authorities admit of exceptional circumstances justifying revocation 3 and if any circumstances justify
revocation, those described herein should fit the exception.

Labrador, Reyes, J.B.L., Paredes and De Leon, J.J., concur.


Separate Opinions
PADILLA, J., concurring:
Once more this Court has to pass upon and determine a controversy that calls for an interpretation of the provisions of
the Constitution. The facts that gave rise to the petition need not be restated as they are set forth in opinion rendered for
the Court. The question is whether the appointment of a person to a public office by a President whose term of office was
about to expire or cease is lawful or does not contravene the Constitution; or, if lawful after the appointee has taken his
oath, until when would such appointment be valid and effective. The constitutional point involved seems to have been
overlooked the framers of the Constitution. It would seem that the framers, well-meaning persons that they were, never
foresaw an eventuality such as the one confronting the Republic. The framers never thought and anticipated that citizen
elevated by the people to such an exalted office the President of the Republic, would perform an act which though not
expressly prohibited by the Constitution and the law, ought not to be done, since a sense of propriety would be enough to
stop him from performing it.
The petitioner invokes section 10, paragraph 4, article VII, of the Constitution which provides that
The President shall have the power to make appointments during the recess of the Congress, but such
appointments shall be effective only until disapproval by the Commission on Appointments or until the next
adjournment of the Congress.
Under these constitutional provisions there seems to be no doubt that the President may make the appointment, and if
approved by the Commission on Appointments, it would unquestionably be lawful, valid and effective, but if disapproved
or not acted upon by the Commission on Appointments then the appointment becomes ineffectual and the appointee
ceases and can no longer perform the duties of the office to which he had been appointed.

It is urged that the petitioner's appointment having been made by the President during the recess of the Congress and he
having taken his oath, the appointment is lawful, valid and effective until disapproval by the Commission on
Appointments or until the next adjournment of the Congress should the Commission on Appointments fail to act on it.
Ad interim appointments that the President may make during the recess of the Congress are those made during a period
of time from the adjournment of the Congress to the opening session, regular or special, of the same Congress. In other
words, if the President had convened in a special session the fourth Congress whose term was to expire on the 30th of
December 1961 and during such session the ad interim appointments had been confirmed by the Commission on
Appointments there would be little doubt that the appointments would be lawful and valid.
The government established by the Constitution is one of checks and balances to preclude and prevent arrogation of
powers by officers elected or appointed under it.
Under the provisions of the Constitution "The term of office of Senators shall be six years and shall begin on the thirtieth
day of December next following their election." 1 And "The term of office of the Members of the House of Representatives
shall be four years and shall begin on the thirtieth day of December next following their election." 2 Under section 10,
paragraph 4, article VII, of the Constitution, above quoted, the President may make appointments during the recess of
the Congress, "but such appointments shall be effective only until disapproval by the Commission on Appointments or
until the next adjournment of the Congress." .
The term "recess", in its broadest sense, means and refers to the intervening period between adjournment of a regular
session of one hundred days exclusive of Sundays, or of a Special session which cannot continue longer than thirty days,
and the convening thereof in regular session once every year on the fourth Monday of January or in special session to
consider general legislation or only such subjects as he (the President) may designate. 3And such intervening period refers
to the same Congress that had adjourned and was to be convened. Such intervening period cannot refer to two different
Congresses, one that has adjourned and one newly chosen or elected to meet in regular session as provided for by the
Constitution, or in special session by the call of the President.
The term of the President ... shall end at noon the thirtieth day of December following the expiration four years
after (his) election and the term of (his) successor shall begin from such time. 4
If the ad interim appointments made by the President during the recess of the Congress are effective only until
disapproval by the Commission on Appointments or until the next adjournment of the Congress a limitation on the
power of the President there is a cogent and strong reason for holding to be the intent of the framers of the
Constitution that such appointments made by him ceased to be valid and effective after the term of the Congress existing
at the time of the making of such appointments had ended or expired. The end or expiration of the of the Congress
existing at the time of the making of the ad interim appointments by the President is a stronger cause or reason for the
lapse or ineffectuality of such appointments than "the next adjournment of the Congress." Since that Congress no longer
exists and hence can no longer convene and then "adjourn." The effectivity and validity of the appointment of the
petitioner as Governor of the Central Bank ceased, lapsed and expired on thirtieth of December 1961. He is no longer
entitled hold the office to which he had been appointed. My vote, therefore, is for the denial of the petition.
Dizon, J., concurs.
I concur with the foregoing concurring opinion of Justice Padilla, the same being based on an additional ground justifying
denial of the petition under consideration.
BAUTISTA ANGELO, J., concurring: .
In addition to the reasons stated in the resolution adopted by this Court on January 19, 1962, I wish to express the
following views: .
1. The "midnight appointments" made by President Garcia were extended by him under Section 10, Paragraph 4, Article
VII of the Constitution which provides: "The President shall have the power to make appointments during the recess of
the Congress, but such appointments shall be effective only until disapproval by the Commission on Appointments or until

the next adjournment of the Congress." It is clear that these appointments can only be made during the recess of
Congress because they are ad interim appointments.
The term "recess" has a definite legal meaning. It means the interval between a session of Congress that has adjourned
and another of the same Congress. It does not refer to the interval between the session of one Congress and that of
another. In that case the interval is not referred to as a "recess" but an adjournment sine die. Thus, in the case of Tipton
v. Parker, 71 Ark. 194, the court said: "The 'recess' here referred to by Judge Cooley means the intermission between
sittings of the same body at its regular or adjourned session, and not to the interval between the final adjournment of
one body and the convening of another at the next regular session. When applied to a legislative body, it means a
temporary dismissal, and not an adjournment sine die." Since the appointments in question were made after the Fourth
Congress has adjourned sine die and ceased to function on December 30, 1961, they cannot partake of the nature of ad
interim appointments within the meaning of the Constitution.
2. The Commission on Appointments under our constitutional set-up is not continuing body but one that co-exists with
the Congress that has created it. This is so because said Commission is a creation of the Senate and of the House of
Representatives. While the Senate is a continuing body, the House ceases at the end of its fourth year. It cannot therefore
be continuing it being a creation of a body half of which is alive and the other half has ceased to exist. This theory can
also be gleaned from the proceedings of the constitutional convention.
Thus, the preliminary draft of the Philippine Constitution provides for a permanent Commission and for the holding of
sessions of the Commission even during the recess of Congress. After mature deliberation the proposal was defeated and
a substitute was adopted which is now embodied in Article VI, Section 12, of our Constitution. As a matter of fact, as
finally adopted, the Commission on Appointments has to be organized upon the convening of a new Congress after the
election of the Speaker of the House of Representatives or of the President of the Senate, as the case may be, as
provided for in Section 13, Article VI of the Constitution (Article VII, Preliminary Draft of the Constitution, Vol. 2, Aruego:
The Framing of the Constitution, pp. 982, 987).
An ad interim appointment, to be complete, needs to be submitted to the Commission on Appointments one the same is
constituted. This is reflected in the Constitution when it provides that "such appointments shall be effective only until
disapproval by the Commission on Appointments or until the next adjournment of the Congress" (Section 10, Paragraph
4, Article VII). This mean that it must be submitted to the Commission on Appointments of the Congress that has created
it. It cannot be submitted to the Commission on Appointments of a different Congress. Since the appointments in
question were submitted to the Commission on Appointments which ceased to function on December 30, 1961, they
lapsed upon the cessation of said Commission. Consequently, they can be recalled by the new Chief Executive.
3. An ad interim appointment is not complete until the appointee takes the oath of office and actually takes possession of
the position or enters upon the discharge of its duties. The mere taking of the oath of office without actual assumption of
office is not sufficient to constitute the appointee the actual occupant thereof who may not be removed therefrom except
for cause (McChesney v. Sampson, 23 S.W. 2d. 584). The case of Summers v. Ozaeta, 81 Phil., 754, cannot be cited as a
precedent as to when an ad interim appointment becomes permanent and binding. That case involves a cadastral judge
who was given an ad interim appointment as judge at large. After assuming the office and discharging his duties, his
appointment was not confirmed. He claimed that he could still revert to his former position as cadastral judge. True, this
Court made a statement therein that an ad interimappointment becomes permanent after taking the oath of office, but
such statement is merely an obiter dictumbecause the case could have been decided on the doctrine that, having
accepted an incompatible office, petitioner was deemed to have abandoned the position of cadastral judge.
In relying on certain cases for the proposition that once an appointee has taken the oath of office his appointment
becomes irrevocable petitioner fails to consider that in said cases there had either been an actual discharge of duty and
actual physical possession or assumption of office following the oath-taking as to constitute the appointee the occupant of
the position from which he cannot be removed without cause. Even the case ofMarbury v. Madison, 1 Cranch, U.S. 137, 2
L. Ed., 61, 69, cannot be invoked as a precedent, for there the appointees were merely nominated and their nominations
confirmed by the Commission on Appointments even if they have later taken their oath of office. Certainly, they can no
longer be deprived of their appointments for then the executive would be acting in disregard of the confirming body which
is a coordinate and independent body not subject to his control.
Since the appointments in question were made not in the light of the views herein expressed, I am of the opinion that
they did not ripen into valid and permanent appointments and as such were properly recalled by the new Chief Executive.

CONCEPCION, J., concurring in part and dissenting in part: .


It is well settled that the granting of writs of prohibition and mandamus is ordinarily within the sound discretion of the
courts, to be exercised on equitable principles, and that said writs should be issued when the right to the relief is clear
(55 C.J.S. 25, 29, 73 C.J.S. 18). Insofar as the majority resolution relied upon discretion and the equities of the case in
denying said writs, I concur, therefore, in the aforementioned resolution.
However, I cannot see my way clear to subscribing the observations therein made representing the motives allegedly
underlying petitioner's appointment and that of many others who are not parties in this case, and justifying the
revocation of such appointments. My reasons, among others, are: .
1. Save where the incumbent has a temporary appointment or is removable at the will of the appointing power, an
appointment once complete, by the performance of all acts required by law of the appointing power, is irrevocable.

2. An ad interim appointment, made during a recess of Congress, is complete and irrevocable upon the performance of
the last act required by law from the appointing power, even without previous notice to the appointee, or acceptance by
him, or without subsequent action of the legislative organ that may terminate its effectivity.
In the case of appointment made by a single executive such as a governor, mayor, etc., it is undisputed that the
appointment once made is irrevocable.
xxx

After the act of appointment is complete, the appointing authority may not revoke its former appointment and
make another. And appointment to office is complete when the last act required of the person or body vested
with the appointing power has been performed. (56 C., p. 954) .
In all jurisdictions where appointment to office is regarded as an executive function, as here, an appointment to
office once made is incapable of revocation or cancellation by the appointing executive in the absence of a
statutory or constitutional power of removal. Barrett v. Duff 114, Kan. 220; 217 P. 918; People v. Mizner, 7 Cal.
519, State v. Williams, 222 Mo. 268, 121 S.W. 64, 17 Ann. Cas. 1006; Draper v. State, 175 Ala. 547, 57 So.
772, Ann. Cas. 1914D, page 305, Annotation." (McChesney v. Sampson, 23 S.W. 2d., 584) .
May an appointment be revoked by reason of error or fraud? This question was taken up in Ex rel Coogan vs. Barbour (22
A 686) and Ex rel Scofield vs. Starr (63 A 512). The first involved a City Charter providing that its common council shall,
in joint convention, appoint a prosecuting attorney. In such convention, Coogan obtained a majority of the votes cast and
of the convention. Upon announcement of this result, a member of the convention offered a resolution declaring Coogan
elected, but the resolution was defeated. Then, two resolutions were offered and approved: one declaring that the ballots
taken were null and of no effect by reason of errors in the same and another declaring Barbour elected prosecuting
attorney. The issue was who had been appointed thereto. The court held that it was Coogan, he having obtained a clear
majority and there having been no error or fraud in the voting, although it did not deny the power of the convention to
correct errors and to nullify the effects of fraud in the voting by invalidating the same and calling another election, had
the proceedings been tainted with such error or fraud.
The second case referred to a similar provision in a city charter, to the effect that appointments by the common council
shall be by ballot and that the person receiving a plurality of ballots shall be elected. The first balloting taken for the
election of the city surveyor of Brigeport resulted in 25 ballots being cast. It was announced that there was one ballot
more than members voting, and that there were 13 ballots for Scofield, 11 for Starr and one blank ballot. Scofield
maintained that this result amounted to his appointment precluding the council from taking a new ballot but such
pretense was rejected. Inasmuch as the number of ballots cast exceeded the number of persons voting, the council was
justified in believing that the proceeding was not free from suspicion of fraud or mistake in the voting and, accordingly in
taking another vote.
In both cases, the fraud or mistake alluded to referred to the manner of voting or of counting the ballots cast, not to the
intent of the voters in choosing a particular appointee.

xxx

Where an appointment subject to confirmation by the senate is made by a governor during a recess of the
senate, ... the question arises as to whether such an appointment may be reconsidered and withdrawn by the
governor before it is acted upon by the Senate.
xxx

An appointment to office may be revoked at any time before the appointment becomes final and complete, but
thereafter unless the appointee is removable at the will of appointing power. For the purpose of this rule, an
appointment to office is complete when the last act required of the person or body vested with the appointing
power has been performed. Where by constitutional, statutory, or other legal provision it is required that
certain steps be taken to make effective appointment, it has been held that the appointment becomes complete
beyond the possibility of recall when the last of the prescribed steps is taken, and that, where no method of
appointment is provided, an appointment does not become effective and beyond recall until the appointing
officer by some act or word evinces a final intent to vest the appointee with title to the office." (67 C.J.S., pp.
161-162) .

xxx

xxx

xxx

In Barrett v. Duff (1923) 114 Kan. 220, 217 Pac. 918, where appointments made by the governor during a
recess of the legislature, which appointments could not be confirmed by the senate as required by law until the
next session of that body, were revoked by the governor's successor, and other persons were appointed to the
offices, such action by him being taken after the senate had convened and had taken under advisement the
confirmation of the persons first appointed to the offices, but before the senate had taken any definite action
with regard to such confirmation, and the senate, confirmed the first appointee, but, despite this act of the
senate, commissions were issued by the governor to the second appointee, it was held, in reliance upon the
terms of the statutes which provided that the governor should 'appoint' persons to such offices with the advice
and consent of the senate, as distinguished from the provision of the Constitution of the United States
governing appointments by the President, which provides that the President shall 'nominate' and, by and with
the advice and consent of the senate, shall 'appoint' persons to office, that the act of the governor in making
the first appointments was final and exhausted the power of the governor's office in that regard unless and
until the appointments were rejected by the senate, and that, therefore, the persons appointed by the first
governor were entitled to the office. In the words of the court, 'The power of the governor having been
exercised, he had no further power of the governor having been exercised, he had no further control over the
respective offices unless and until the appointees had been rejected by the senate.' In reaching this result, the
court emphasized the difference between a nomination and an appointment, holding that, where the statute
relating to appointments by the governor with the consent of the senate provides that the governor shall
appoint persons to the office with the consent of the senate, rather than merely nominate persons for
consideration by the senate, the appointment is final and conclusive without confirmation. ... .
Likewise in McChesney v. Sampson (1930) 232 Ky 395, 23 S.W. (2d.) 584, the act of governor in making a
recess appointment was held to be not merely a nomination subject to revocation by the governor at any time
prior to action thereon by the senate, but a final and irrevocable appointment subject only to rejection by the
senate. In support of this result, it was said: 'It is urged that appointment to the office consists of two separate
acts, one by the governor and one by the senate, and until both have acted there is no appointment such as to
bring the incumbent within the protection of the law. Even so, the two powers do not act concurrently, but
consecutively, and action once taken and completed by the executive is not subject to reconsideration or
recall. ... The fact that the title to the office, and the tenure of the officer, are subject to the action of the
senate, does not render incomplete the act of the chief executive in making the appointment. The appointment
alone confers upon the appointee for the time being the right to take and hold the office, and constitutes the
last act respecting the matter to be performed by the executive power.' .
xxx

xxx

xxx

In People ex rel. Byder v. Mizner (1857) 7 Cal. 519, in holding that an appointment made by a governor to fill
an office which had expired during a recess of the legislature was not merely an appointment to fill a vacancy
which would expire at the end of the next session of the legislature, but was an appointment for a full term,
and that the act of the governor during a subsequent session of the legislature, in appointing another to the
office and asking his confirmation by the legislature, was unauthorized and void, it was said that, the power of
the executive having been once exercised, he had no further control over the office until the appointee has
been rejected by the senate." (89 ALR, pp. 138, 139, 140.) .

3. The irrevocability of the ad interim appointment adverted to above becomes more apparent when we consider that the
House, Commission on Appointments or other agency of Congress charged with the function of terminating the effectivity
of such appointment, may act thereon, by approving or disapproving the same, even though the Executive had not
submitted or forwarded it to said House, Commission or agency of Congress, and even though either the outgoing or the
incoming Executive shall have submitted for confirmation the name of a subsequent appointee in lieu of the first one..
This was the situation met in People ex rel, Emerson vs. Shawver (30 Wyo 366, 222 Pac. 11). The facts therein were: On
July 1, 1919, Governor Carey of Wyoming appointed Emerson as state engineer, to fill the vacancy caused by the
resignation of its incumbent. Upon the expiration of the latter's term, Governor Carey reappointed Emerson for a full term
of six (6) years, from and after April 1, 1921. This last appointment was confirmed by the state legislature at its next
session in 1923. Prior thereto, however, Governor Carey's term had expired and his successor had appointed Shawver as
state engineer. Thereupon Shawver ousted Emerson from such office. It was held that Emerson had a better right
thereto; that his appointment in 1921 was a completed appointment,requiring no action by the Senate to entitle him to
hold said office; that a recess appointment once made by "the executive is not subject to reconsideration or recall, "even
though not as yet confirmed by the Senate, inasmuch as," the appointment alone confers upon the appointee for the time
being the right to take and hold the office, and constitutes the last act respecting the matter to be performed by the
executive power"; and that, although the term of Governor Carey had expired and neither he nor his successor had
forwarded Emerson's appointment to the Senate for confirmation or requested the Senate to act upon said appointment,
the same had been validly confirmed by said body, for .
The provision as to the office here in question found in the Constitution does not say that the appointment
made by the Governor shall be confirmed by the Senate when requested by the former, or upon a
communication by him submitting the matter to the Senate. And we perceive no substantial reason for adding
by construction any such restriction upon the Senate's right to act. (People v. Shawver, 222 P. 11; see, also,
Commonwealth v. Waller, 145 Pa. 235, 23 Atl. 382; State v. Williams, 20 S.C. 13; Richardson v. Henderson, 4
Wyo. 535, 35 Pac. 517, and other cases cited in the Shawver case.) .
4. The foregoing goes to show, also, that the question whether the Commission on Appointments is or is not a continuing
body can not affect the determination of the case. Besides, the constitutional provision making an ad
interim appointment, if not disapproved by the Commission on Appointments, effective only until the next adjournment of
Congress, clearly indicates that such Commission must have an opportunity to approve or disapprove the
appointment and that its inaction, despite such opportunity, at the session of Congress next following the making of the
appointment during which it could have met, and, probably, did meet must be understood as an expression of
unwillingness to stamp its approval upon the act of the executive. No such opportunity exists when the outgoing Congress
has not held any session, regular or special after the making of the appointment and before the expiration of the term of
said Congress, and the new Congress has not, as yet, organized itself or even met.

the same to function after the adjournment sine die of the regular session of the state General Assembly. The State
Supreme Court considered as decisive authority the view expressed by Judge Cooley, to the effect that a legislative
committee "has no authority to sit during a recess of a House which appointed him, without its permission to that effect".
The issue thus hinged on the meaning of the term "recess" as used by Judge Cooley. Resolving this question, said court
held that the recess referred to by Judge Cooleywas "only the intermission between the sittings of the same body at its
regular or adjourned session and not to the interval between the final adjournment of one body and the convening of
another at the next regular session"..
In this connection, it should be noted that, as an agency of the Senate, the committee involved in said case could not
operate for its principal beyond the latter's term. Moreover, under the Constitution of Arkansas, the regular biennial
session of the General Assembly could not exceed 60 days, unless by a vote of 2/3 of the members of each of
the two Houses of the legislature. Inasmuch as the Senate could not, without the concurrence of the House, directly
extend the period of its regular session, neither could it, without such concurrence, indirectly extend said period, by
granting its aforementioned committee the authority to function beyond said period. As stated by the Court "the
committee, being the mere agency of the body which appointed it, dies when the body itself dies, unless it is continued
by law", which the Senate may not enact, without the concurrence of the House..
The decision in said case did not seek to define the meaning of the term "recess" as used in any constitution or statute. It
did not even refer to the authority to make appointments during "recess". It has absolutely no bearing, therefore, on the
issue before us.
Upon the other hand, Dr. Jose M. Aruego, a prominent member of the constitutional convention, says, in his work on "The
Framing of the Philippine Constitution" (Vol I, pp. 434-435), that the draft of the provision on ad interimappointments by
the President, as submitted by the corresponding committee, followed the principles of the Jones Law and that the
recommendation of the committee was readily approved on the floor of the convention, although the committee on style
gave said provision its present phraseology. Pursuant to the Jones Law, "appointments made while the Senate is not in
session shall be effective either until disapproval or until the next adjournment of the Senate". Hence, the term "recess"
appearing in Section 10(4) of Article VII of our Constitution should be construed to mean "while Congress is not in
session" and this is confirmed by the practice consistently observed in the Philippines for time immemorial, as well as
the ad interim appointment extended by President Macapagal to respondent Castillo.
8. The case of McChesney vs. Sampson (23 S. W. 2d. 584) has, also, been invoked in support of the proposition that
"an ad interim appointment is not complete until the appointee takes the oath of office and actually takes possession of
the position or enters upon the discharge of its duties" and that, before such actual taking of possession, though after the
oath taking, the appointee may be removed without cause.

5. The American rule concerning irrevocability of appointments is bolstered up in the Philippines by Section 4 of Article XII
of the Constitution, which provides that "no officer of employee in the Civil Service shall be removed except for cause
as provided by law." (Article VII, Section 4.) .

We have not found in said case anything justifying such claim. The issue in said case was whether a state governor could
recall an unconfirmed appointment of McChesney to the state textbook commission when there had been no session of
the Senate subsequent to the appointment, and such issue was decided in the negative.

In fact, in his concurring opinion in Eraa vs. Vergel de Dios (85 Phil., 17), our distinguished Chief Justice pointed out that
the revocation of an appointment, if feasible, "should be communicated to the appointee before the moment he
qualified," and that "any revocation thereafter, is tantamount to removal and must be judged according to the rules
applicable to the removal" (emphasis ours). In the present case, the revocation of petitioner's appointment was not
communicated to him before he qualified by taking his oath of office. It is not even claimed that any of the statutory
causes for removal of petitioner herein exists, or that the procedure prescribed for such removal has been complied with.

Although, in addition to accepting the appointment, McChesney had qualified and exercised the function of the office, the
decision of the Court clearly indicates that it was not necessary for him either to discharge the duties of the office or even
to take the oath of office, in order to render his appointment irrevocable. The Court explicitly declared that the
appointment, once "completed by the executive is not subject to reconsideration or recall;" that the appointment "is
complete when the appointing authority has performed the acts incumbent upon him to accomplish the purpose;" and
that in the case of recess appointments, like that of McChesney," the appointment alone confers upon the appointee for
the time being the right to take and hold the office and constitutes the last act respecting the matter to be performed by
the executive power" completing the appointment and rendering the same irrevocable.

6. Once an appointee has qualified, he acquires a legal, not merely equitable right, which is protected not only by statute,
but, also by the Constitution, for it cannot be taken away from him, either by revocation of the appointment or by
removal, except for cause, and with previous notice and hearing, consistently with said Section 4 of Article XII of our
fundamental law, and with the constitutional requirement of due process (Segovia vs. Noel, 47 Phil., 547; Sec. 67 C.J.S.
117, 42 Am. Jur. 887). (See also, People ex rel Ryan v. Green, 58 N. v. 295; People vs. Gardner, 59 Barb 198; II Lewis
Sutherland Statutory Construction, pp. 1161 and 1162; Mechem on Public Officers, Sec. 389; 22 R. C. L. 377- 378; 25
Am. Dec. 690-691, 703).
7. The case of Tipton vs. Parker (74 S. W., 298) has been cited in support of the theory that Congress of the Philippines
was not in "recess" on December 29, 1961, and that, accordingly, ad interim appointments could not validly be made in
such date. The question involved in said case was whether a committee of the Senate of Arkansas could be authorized by

In short, the McChesney case is authority for the petitioner herein.


9. Most, if not all appointments made by the President have two (2) aspects, namely, the legal and the political. The first
refers to his authority to make the appointment. The second deals with the wisdom in the exercise of such authority, as
well as with its propriety. Whether given vacancy or number of vacancies should be filled, or who among several qualified
persons shall be chosen, or whether a given appointment or number of appointment will favor the political party to whom
the power of appointment belongs and will injure the interest of a rival political party and to what extent, are, to my
mind, essentially and typically political matters. Hence, I believe that the question whether certain appointments should
be sanctioned or turned down by reason of the improper, immoral or malevolent motives with which said matters were

allegedly handled is, likewise, clearly political, and as such, its determination belongs, not to the courts of justice (Vera
vs. Avelino, 77 Phil., 192, 205; 16 C.J.S 689-690; Willoughby on the Constitution, Vol. III 1326-1327), but to the political
organ established precisely to check possible abuses in the exercise of the appointing power the Commission on
Appointments.
Indeed, I can hardly conceive of any question more patently and characteristically political than this one, or more
appropriate for determination of said body. Neither the possible or probable control thereof by members of the
Nacionalista Party nor the number of offices or appointments involved can affect the nature of the issue. Surely, its
political character is the same whichever political party may have the largest number of votes in the Commission on
Appointments. The big number of said appointments merely tend to make more manifest the political complexion thereof
and its non-justifiable nature.
10. In Osmea vs. Pendatum (L-17144, October 28, 1960), we refused to disturb the action of the House of
Representatives in suspending a member thereof who had made derogatory imputations against the President of the
Philippines upon the ground that such imputations constituted a breach of the courtesy due to a coordinate branch of
the Government. Yet, in the present case, imputations similarly derogatory to the same branch of the Government are, in
effect, made in the majority resolution.
I cannot see how such imputations can be reconciled with the position taken by this Court in the Osmea case and in
other cases (Barcelona vs. Baker, 5 Phil., 87; Severino vs. Governor-General, 16 Phil., 366; Abueva vs. Wood, 45 Phil.,
612; Alejandrino vs. Quezon, 46 Phil., 85; Mabanag vs. Lopez Vito, 78 Phil., 1; Cabili vs. Francisco, L-4638, May 8, 1951)
in which it "fastidiously observed" the theory of separation of powers (Osmea vs. Pendatum, supra). Thus, in Santos vs.
Yatco (55 Off. Gaz. 8641), in which a department head was sought to be enjoined from electioneering, in view of the
explicit provision of the Civil Service Act of 1959 (Republic Act No. 2260, section 29), prohibiting all officers and
employees in the civil service, "whether in the competitive or classified, or non-competitive or unclassified service," from
engaging directly or indirectly in partisan political activities or taking part in any election except to vote, we held that the
issue therein raised was one of "impropriety as distinguished from illegality," and that, as such, it "is not justiciable by
this Court." In Mabanag vs. Lopez Vito(78 Phil., 1), we refused to decide, upon the same ground, whether specified
numbers of votes constituted three-fourths of all members of each House of Congress. In Vera vs. Avelino (77 Phil., 192),
we not only declared that "the judiciary is not the repository of remedies for all political or social evils," but, also, quoted
with approval the statement, made in Alejandrino vs. Quezon (46 Phil., 81), to the effect that "the judicial department
has no power to revise even the most arbitrary and unfair action of the legislative department, or of either House thereof,
taken in pursuance of the power committed exclusively to that department by the Constitution." (Emphasis ours.) .
11. In the present case, we have completely reversed our stand on the principle of separation of powers. We have
inquired into the motives of the Executive department in making the appointments in question, although it is well settled,
under the aforementioned principle, that: .
Generally courts cannot inquire into the motive, policy, wisdom, or expediency of legislation.
The justice, wisdom, policy, necessity, or expediency, of a law which is within its powers are for the legislature, and are
not open to inquiry by the courts, except as an aid to proper interpretation." (16 C.J.S. 471-478) .
If this is true as regards the legislative branch of the government, I can see no valid reason, and none has been pointed
out, why the same norm should not govern our relations, with the executive department. However, we have not merely
disregarded such norm. We are, also, in effect, restraining the Commission on Appointments an organ of a coordinate,
co-equal branch of the Government from acting on the questioned appointments. What is more, we are virtually
assuming in advance that said body which has not been organized as yet and whose membership is still undetermined
will not act in harmony with the spirit of our Constitution.
12. It is trite to say that certain moral and political aspects of the issue before us cannot but produce a strong aversion
towards the case of petitioner herein and the hundreds of others appointed under the same conditions as he was.
Although members of the bench must always endeavor to minimize the influence of emotional factors tending to affect
the objectivity essential to a fair and impartial appraisal of the issues submitted for their determination, it is only natural
and, I venture to add, fortunate (for, otherwise, how could they hope to do justice to their fellowmen?) that they
should basically react as other members of the human family. This is probably the reason why Justice Douglas of the
Federal Supreme Court of the U.S., said, in Abel v. U.S. (4 Lawyers Edition, 2d, 668, 688) :

"Cases of notorious criminals like cases of small, miserable ones are apt to make bad law. When guilt
permeates a record, even judges sometimes relax and let the police take shortcuts not sanctioned by
constitutional procedures. .... The harm in the given case may seem excusable. But the practices generated by
the precedent have far-reaching consequences that are harmful and injurious beyond measurement.".
Let us hope that no such consequences will flow from the precedent established in this case.
BARRERA, J., dissenting:
The instant case started with a simple petition for prohibition and mandamus with preliminary injunction instituted by
petitioner Aytona who claims to have been duly appointed ad interim Governor of the Central Bank, against respondent
Castillo who, allegedly accompanied by his correspondent Colonel Gutierrez and a host of heavily armed Philippine
Constabulary Rangers, interfered with and prevented the petitioner in the discharge of his duties and prerogatives as
such Governor of the Central Bank. During the hearing, however, and immediately thereafter, a great amount of
extraneous matter affecting persons not parties to the proceedings has been introduced into the case and a veritable
avalanche of memoranda after memoranda and manifestations after manifestations swelled the records and helped
involve the issues. One among the dozens who asked to be admitted as amici curiae, even presented an answer in behalf
of the people to support the side of the respondents. Unfortunately, in the confusion, the case of the immediate parties
became obscured by considerations of circumstances and matters for and with which petitioner and respondents are not
directly connected..
In my opinion, the fundamental questions which this Court is called upon to resolve in the present case a specifically: .
(1) Is the ad interim, appointment of petitioner Aytona valid when extended? .
(2) If so, did it automatically lapse with the ending the term of office of the twelve Congressmen composing
one-half of the membership of the Commission Appointments? .
(3) May this appointment be legally recalled or withdrawal after Aytona has qualified? .
Before entering into the discussion of the "propriety, morality and wisdom" of the appointment, it is necessary, I believe,
that the foregoing legal propositions must first be cleared out.
I. The Validity of Aytona's Appointment: .
Aytona's ad interim appointment is assailed on the theory that it was not made during a "recess" of Congress as provided
in paragraph 4, section 10 of Article VII of the Constitution. It is claimed for the respondents dents that the word "recess"
means "the intermission between sittings of the same body at its regular or adjourned session, and not to the interval
between the final adjournment of one body and the convening of another at the next regular session. When applied to a
legislative body, it means a temporary dismissal, and not adjournment sine die." In support of this view, counsel cites the
case of Tipton v. Parker, 71 Ark. 193, from which the foregoing quotation was taken.
An examination of this case, however, discloses that it did not refer to the power of the President to make ad
interim appointments. The pronouncement was made in connection with the interpretation of Section 17, Article 5 of the
Constitution of the State of Arkansas. The case involved the validity of the certificate of the auditor with reference to the
legality of the expenses of a committee of the State Senate authorized by the latter to make certain investigations
beyond the duration of the session of the General Assembly. The court, in declaring the certificate without sanction of law,
stated: .
"The Senate has no power by resolution of its own to extend its session, and neither did it have power to such
separate resolution to continue its committee, a mere agency of the body, beyond the term of the body itself
which created it." .
in view of the provisions of the aforementioned Section 17, Article 5 of the state Constitution prescribing "that the regular
biennial session of the Legislature shall not exceed 60 days, unless by 2/3 vote of the members elected to each house,

and section 23 requiring a vote of the majority of each house to enact a law or pass a resolution having the force and
effect of a law". Apparently an opinion of Judge Cooley seemingly to the contrary was cited to refute this view of the
court, and so the decision went on to say:
Each house, says Judge Cooley, must also be allowed to proceed in its own way in the collection of such
information may seem important to a proper discharge of its functions; and whenever it is deemed desirable
that witnesses should be examined, the power and the authority to do so is very properly referred to a
committee, with any such powers short of final legislative or judicial action as may seem necessary or
expedient in the particular case. Such a committee has no authority to sit during a recess of the housewhich
has appointed it, without its permission to that effect. But the house is at liberty to confer such authority if it
sees fit.
It is in this connection and evidently in a desire to explain the opinion of Judge Cooley that the court made the
pronouncement relied upon by respondents, thus: .
.... The recess here referred to by Judge Cooley we think should be construed to mean only the intermission
between sittings of the same body at its regular or adjourned session, and not to the interval between the final
adjournment of one body and the convening of another at the next regular session. When applied to a
legislative body, it means a temporary dismissal and not an adjournment sine die.
The conclusion reached by the court can not be otherwise. The case refers to the powers of one house of the state
Legislature, with the concurrence of the other, to confer authority upon its own committee to act beyond the duration of
the session of the General Assembly. Certainly, Judge Cooley's view that each house has power to confer authority to its
committee to act during a recess must be understood to exist only during the life of the house creating the committee. It
can not go beyond its own existence, that is, beyond its adjournment sine die.
But this ruling is no argument that the Executive's power to make appointments during such adjournment sine diedoes
not exist just because a house of the legislature lacks power to authorize its committee to act during the same
adjournment. One refers to the power of a defunct body to act beyond its life; the other refers to the power of another
authority, the executive, to perform its functions after the expiration of that other body. Non-existence of the first does
not mean non-existence of the other.
It is to be noted that the different counsel advocating the cause of the respondents are not even agreed in the application
of their interpretation of the word "recess". Some of them argue that the interregnum which they contend is not recess,
compromises the entire period between the adjournment of the 4th Congress in May, 1961 and the opening of the 1st
session of the first session of the 5th Congress on January 22, 1962, so that all ad interim appointments extended during
this period are null and void. Others claim that such interregnum is that period between December 13, 1961, date of
adjournment of the last session of the 4th Congress, and January 22, 1962. It seems that President Macapagal is of this
same view because his administrative Order No. 2 specifically refers to all appointments made after December 13, 1961.
Still others, at least one, advanced the theory during the oral argument that the banned period is that between the
adjournment of the 4th Congress in May, and December 30, 1961, excluding therefrom the period between this last date
and January 22, 1962. Obviously, this theory was advanced in an effort to lend validity to the appointments recently
made by President Macapagal, for if the entire period between May or December, 1961 to January 22, 1962 is held not a
recess, but an adjournment sine die, then all appointments heretofore made by the present Chief Executive would suffer
the same defect as those extended by former President Garcia. This last argument is unavailing because it, likewise, is
untenable, tested upon the same authority cited by counsel, i.e., that the term "recess" means "the
intermissionbetween sittings of the same body." Since the 5th Congress has not as yet even convened, the period
between December 30 and January 22 can not be a recess of the 5th Congress because it, definitely, is not an
intermission between sittings of the same body.
In the circumstances, it seems it is an over-statement to say that the term "recess has a definite legal meaning in the
sense attributed to it in the Tipton vs. Parker case. The confusion in the minds of the several counsels for the respondents
as to the application of the alleged meaning of the term, indicates a belabored effort on their part to impute a meaning to
satisfy their case. Upon the other hand, we find in "Hinds Precedents of the House of Representatives" (Vol. 5, pp. 852853), a legislative interpretation by the United States Senate made during the discussion of the term "recess of the
Senate" in connection with the President's1 power to make appointments, as follows: .

The word 'recess' is one of ordinary, not technical, signification, and it is evidently used in the constitutional
provision in its common and popular sense. It means in Article II, above referred to, precisely what it means in
Article III, in which it is again used. Conferring power upon the executive of a State to make temporary
appointment of a Senator, it says: .
And if vacancies happen, by resignation or otherwise, during the recess of the legislature of any State, the
executive thereof may make temporary appointments until the next meeting of the legislature, which shall then
fill such vacancies.' .
It means just what was meant by it in the Article of Confederation, in which it is found in the following
provision": .
The United States in Congress assembled shall have authority to appoint a committee to sit in the recess of
Congress, it be denominated a committee of the States, and to consist of one delegate from each State.' .
It was evidently intended by the framers of the Constitution that it should mean something real, not something
imaginary; something actual, not something fictitious. They used the word as the mass of mankind then
understood it and now understand it. It means, in our judgment, in this connection the period of time when the
Senate is not sitting in regular or extraordinary session as a branch of the Congress, or in extraordinary session
for the discharge of executive functions; when its members owe no duty of attendance; when its Chamber is
empty; when, because of its absence, it cannot receive communications from the President or participate as
body in making appointments." .
The Attorney General of the United States was also of this view when he stated: .
The recess of the Senate during which the President shall have power to fill a vacancy that may happen, means
the period after the final adjournment of Congress for the session and before the next session begins; while an
adjournment during a session of Congress means a merely temporary suspension of business from day to day,
or for such brief periods of time as are agreed upon by the joint action of the two houses. The President is not
authorized to appoint an officer during the current holiday adjournment of the Senate, which will have the
effect of an appointment made in the recess occurring between two sessions of the Senate." (President Appointment Officers - Holiday Recess, 1901, 23 Op. Atty. Gen. 599, (U.S.C.A. Const. Art. 2, Sec. 2[2]..
It is worthwhile to note that our Constitution in paragraph 4, Section 10 of Article VII speaks of "recess" without making
any distribution between the sessions one congress and the sessions of another. And it is trite to say that when the law
makes no distinction, no distinction should be made, especially if to do so would result in a strained interpretation thereof
and defeat the evident purpose of the framers of the Constitution - in this instance, to render it certain that at times
there should be, whether the Congress is in session or not, an officer for every office, entitled to discharge the duties
thereof. (5 Hinds, op. cit., p. 853.) .
II. Lapsing of Aytona's Appointment: .
It is contended for the respondents that since 12 members of the Commission on Appointments ceased to be such upon
the expiration of their term of office at midnight of December 29, 1961, the Commission on Appointments likewise ceased
to exist on the theory that creation can not exist beyond the life of its creator at least with respect to one-half of its
members. This seems to stem from the wrong notion that the Commission on Appointments is a creature of the
Congress. This confuses the Commission on Appointments as a constitutional body with its members. The body continued
to exist, but only its membership changes periodically. When the Constitution provides in Section 13 of Article 6 thereof
that "the Electoral Tribunals and the Commission on Appointments shall be constituted within 30 days after the Senate
and the House of Representatives shall have been organized with the election of their President and Speaker,
respectively", it did not mean that the Senate and the House of Representatives thereby create said bodies, no more than
the President can be said to create the Supreme Court by appointing the Justices therein. It simply ordained that the
Commission be constituted or organized by electing the members thereof, whose positions have already been created in
virtue of Section 12 of the same Constitution. To hold the Electoral Tribunals and the Commission on Appointments are
non-existing during the period from December 30, 1961 to January 22, 1962 (and during the corresponding period every
four years thereafter) will result in an absurdity and a situation destructive of the normal processes provided in the
Constitution. One of such absurd results would be that no electoral protest against any elected and proclaimed

congressman or senator can be legally filed with the Electoral Tribunals within the period prescribe by their rules, that is,
within fifteen days following the proclamation of the results of the election, which period falls within the time when the
Electoral Tribunals (as is the case of Commission on Appointments) are allegedly non-existent.
The proceedings in the Constitutional Convention are cited to support the theory that the Commission on Appointments is
not a permanent commission. A review of the records, however, of that convention reveals that what was intended in the
proposed draft was to authorize the Commission on Appointments to hold sessions even when the Congress is not in
session. The mere fact that such a proposal was defeated and, consequently, the word "permanent" was not adopted in
the final text, does not import that the Constitution meant to give an off and on existence to the Commission on
Appointments lapsing every four years when the twelve of its members cease to be such. On the contrary, it seems more
logical to hold that the legal existence of the Commission as well as the Electoral Tribunals continue irrespective of the
vacancies that may exist in the membership thereof. It is for this reason that the personnel of these bodies do not cease
periodically, but continue to perform their duties in their respective offices for which they are legally paid their salaries by
the government. It seems clear, therefore, that the Commission on Appointments did not lapse on December 29, 1961.
Neither did the appointment of Aytona lapse on that date because the same could not be acted upon by the Commission
on Appointments during the recess of the Congress.
III. May the appointment of Aytona be legally recalled or withdrawn after he has qualified for the position to which he
was appointed? .
Precedents are to the effect that when once an appointment has been extended by the Chief Executive who, as is
provided in our Constitution, has the sole power of appointment subject only to the consent of the Commission on
Appointments, and the appointee has accepted the appointment, the same becomes complete and the appointing power
can not withdraw it except in cases where the tenure of the appointee is at the Chief Executive's pleasure or upon
grounds justifying removal and after due process. This is not because the appointment constitutes a contract (for truly a
public office can not be subject of any contract), but because of the provisions of the Constitution itself to the effect that
"no officer or employee in the Civil Service shall be removed or suspended except for cause as provided by law." If,
therefore, the recall or the withdrawal of the appointment of Aytona was not authorized by law, then his assumption of
the functions of his office on January 2, 1962 was clearly within his legal right and the interference of Castillo, aggravated
by the assistance or at least the presence of members of the Armed Forces, was clearly unlawful.
The foregoing disposes, in my opinion, the legal issue and the rights of the parties in the present case. But against these,
to me, clear mandates of the Constitution and the legal and judicial precedents, respondents have appealed to this Court
for it to exercise "judicial statesmanship" invoking the spirit of the Constitution. It is claimed that there was a manifest
abuse of power by the outgoing President in extending, on the eve of the expiration of his term, some three hundred and
fifty ad interim appointments to fill an equal number of vacancies in the different branches of the government; that no
proper consideration was given of the merits of the appointees, it appearing that in the case of at least some of the
appointees to the judiciary, their assurance of an immediate assumption of office or the taking of oath was made a
condition precedent to the appointments, and that there was a wild scramble in Malacaan among the appointees on the
night of December 29. We are scandalized by this and expect the Court to apply the remedy. What of the proceedings in
Congress during the last day of session when bills after bills are passed in a manner not too dissimilar to the described
scene in Malacaan? Can the Supreme Court be expected to correct this too by declaring all such laws as invalid just as
we are asked to invalidate these appointments? .
Be this as it may, whatever may be our personal views on this matter, I agree with Mr. Justice Concepcion that not all
wrongs or even abuse of power can be corrected by the exercise of the high prerogatives of the Supreme Court vested in
it by the Constitution. As I take it, the higher and more delicate is the prerogative, the greater should be the degree of
self-restraint in the exercise thereof, lest the fine and tested scale of checks and balances set up by the Constitution be
jarred. In the same manner that we expect circumspection and care, even double care, on the part of the other two coequal coordinate departments of the government, so must we be most cautious and slow in judging the morality,
propriety and good faith involved in the actuations of the other departments in matters coming within their competence.
The remedy, I believe, under the circumstances is with the Commission on Appointments to which the appointments have
been submitted. The more fact that it is expected that the Commission on Appointments would be controlled by the party
of the outgoing President is immaterial, because legal processes can not be made to depend upon the fortunes of political
parties, for there is still the ultimate remedy by the people in all authority. At any rate, as has already been aptly said:
the judiciary is not the repository of remedies for all political or social evils, and that the judicial department has no
power to revise even arbitrary or unfair action of the other departments taken in pursuance of the power committed
exclusively to those departments by the Constitution..

May I add: all the scandalous circumstances brought to the attention of this Court did not link the petitioner herein, save
for the fact that this appointment was extended on the same day as those issued under the unusual and irregular
circumstances attending the other appointments. If at all, there is evidence in favor of Aytona to the effect that insofar as
he is concerned, his appointment to the position of Governor of the Central Bank has been under consideration for a long
time and that he is qualified for the position. It can not, therefore be said that with respect to him there was no mature
deliberation and due consideration of his qualifications and of the need of the service. he charge was made that the
position of Governor of the Central Bank has been vacant for several months and that the President should have filled it
earlier. Yet, when the President actually filled it as he did, he is criticized claiming that there was no immediate need for
such action in view of the fact that there was an Acting Governor. That it was really necessary to fill the position is
evidenced by the act of President Macapagal himself in making his own appointment hardly twenty-four hours after he
recalled the appointment of Aytona.
Summarizing, I would say that all the circumstances cited by the respondents that have surrounded the issuance of the
appointments in question, have to do with the mode or manner of the exercise of the authority to make the appointment,
quite apart from the existence of the authority itself. The observance of good faith, morality and propriety by the other
two co-equal coordinate departments in the performance of their functions must be secured by their sense of duty and
official oath hand not by any supervisory power of the courts..
The role of courts in our scheme of government is to interpret the law and render justice under it. This simply means that
whatever may be our own personal feelings as to the propriety, morality, or wisdom of any official act or actuation of a
public officer or any agency of the government within their respective competence brought to the attention of the Court
for adjudication, they should not be permitted to prevail over clear legal considerations, for ours is a regime under the
Rule of Law..
In view of the foregoing, I am constrained to register my dissent.

G.R. No. 172087


March 15, 2011
PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR), Petitioner,
vs.
THE BUREAU OF INTERNAL REVENUE (BIR), represented herein by HON. JOSE MARIO BUAG, in his official
capacity as COMMISSIONER OF INTERNAL REVENUE, Public Respondent,
JOHN DOE and JANE DOE, who are persons acting for, in behalf, or under the authority of Respondent.Public
and Private Respondents.
DECISION
PERALTA, J.:
For resolution of this Court is the Petition for Certiorari and Prohibition1 with prayer for the issuance of a Temporary
Restraining Order and/or Preliminary Injunction, dated April 17, 2006, of petitioner Philippine Amusement and Gaming
Corporation (PAGCOR), seeking the declaration of nullity of Section 1 of Republic Act (R.A.) No. 9337 insofar as it amends
Section 27 (c) of the National Internal Revenue Code of 1997, by excluding petitioner from exemption from corporate
income tax for being repugnant to Sections 1 and 10 of Article III of the Constitution. Petitioner further seeks to prohibit
the implementation of Bureau of Internal Revenue (BIR) Revenue Regulations No. 16-2005 for being contrary to law.
The undisputed facts follow.
PAGCOR was created pursuant to Presidential Decree (P.D.) No. 1067-A2 on January 1, 1977. Simultaneous to its
creation, P.D. No. 1067-B3 (supplementing P.D. No. 1067-A) was issued exempting PAGCOR from the payment of any type
of tax, except a franchise tax of five percent (5%) of the gross revenue. 4 Thereafter, on June 2, 1978, P.D. No. 1399 was
issued expanding the scope of PAGCOR's exemption. 5
To consolidate the laws pertaining to the franchise and powers of PAGCOR, P.D. No. 18696 was issued. Section 13 thereof
reads as follows:

Sec. 13. Exemptions. x x x


(1) Customs Duties, taxes and other imposts on importations. - All importations of equipment,
vehicles, automobiles, boats, ships, barges, aircraft and such other gambling paraphernalia, including
accessories or related facilities, for the sole and exclusive use of the casinos, the proper and efficient
management and administration thereof and such other clubs, recreation or amusement places to be
established under and by virtue of this Franchise shall be exempt from the payment of duties, taxes
and other imposts, including all kinds of fees, levies, or charges of any kind or nature.
Vessels and/or accessory ferry boats imported or to be imported by any corporation having existing
contractual arrangements with the Corporation, for the sole and exclusive use of the casino or to be
used to service the operations and requirements of the casino, shall likewise be totally exempt from
the payment of all customs duties, taxes and other imposts, including all kinds of fees, levies,
assessments or charges of any kind or nature, whether National or Local.
(2) Income and other taxes. - (a) Franchise Holder: No tax of any kind or form, income or otherwise,
as well as fees, charges, or levies of whatever nature, whether National or Local, shall be assessed
and collected under this Franchise from the Corporation; nor shall any form of tax or charge attach in
any way to the earnings of the Corporation, except a Franchise Tax of five percent (5%)of the gross
revenue or earnings derived by the Corporation from its operation under this Franchise. Such tax
shall be due and payable quarterly to the National Government and shall be in lieu of all kinds of
taxes, levies, fees or assessments of any kind, nature or description, levied, established, or collected
by any municipal, provincial or national government authority.
(b) Others: The exemption herein granted for earnings derived from the operations
conducted under the franchise, specifically from the payment of any tax, income or
otherwise, as well as any form of charges, fees or levies, shall inure to the benefit of and
extend to corporation(s), association(s), agency(ies), or individual(s) with whom the
Corporation or operator has any contractual relationship in connection with the operations
of the casino(s) authorized to be conducted under this Franchise and to those receiving
compensation or other remuneration from the Corporation as a result of essential facilities
furnished and/or technical services rendered to the Corporation or operator.

On January 1, 1998, R.A. No. 8424,8 otherwise known as the National Internal Revenue Code of 1997, took effect.
Section 27 (c) of R.A. No. 8424 provides that government-owned and controlled corporations (GOCCs) shall pay corporate
income tax, except petitioner PAGCOR, the Government Service and Insurance Corporation, the Social Security System,
the Philippine Health Insurance Corporation, and the Philippine Charity Sweepstakes Office, thus:
(c) Government-owned or Controlled Corporations, Agencies or Instrumentalities. - The provisions of existing special
general laws to the contrary notwithstanding, all corporations, agencies or instrumentalities owned and controlled by the
Government, except the Government Service and Insurance Corporation (GSIS), the Social Security System (SSS), the
Philippine Health Insurance Corporation (PHIC), the Philippine Charity Sweepstakes Office (PCSO), and the Philippine
Amusement and Gaming Corporation (PAGCOR), shall pay such rate of tax upon their taxable income as are imposed by
this Section upon corporations or associations engaged in similar business, industry, or activity.9
With the enactment of R.A. No. 933710 on May 24, 2005, certain sections of the National Internal Revenue Code of 1997
were amended. The particular amendment that is at issue in this case is Section 1 of R.A. No. 9337, which amended
Section 27 (c) of the National Internal Revenue Code of 1997 by excluding PAGCOR from the enumeration of GOCCs that
are exempt from payment of corporate income tax, thus:
(c) Government-owned or Controlled Corporations, Agencies or Instrumentalities. - The provisions of existing special
general laws to the contrary notwithstanding, all corporations, agencies, or instrumentalities owned and controlled by the
Government, except the Government Service and Insurance Corporation (GSIS), the Social Security System (SSS), the
Philippine Health Insurance Corporation (PHIC), and the Philippine Charity Sweepstakes Office (PCSO), shall pay such rate
of tax upon their taxable income as are imposed by this Section upon corporations or associations engaged in similar
business, industry, or activity.
Different groups came to this Court via petitions for certiorari and prohibition11 assailing the validity and constitutionality
of R.A. No. 9337, in particular:
1) Section 4, which imposes a 10% Value Added Tax (VAT) on sale of goods and properties; Section 5, which
imposes a 10% VAT on importation of goods; and Section 6, which imposes a 10% VAT on sale of services and
use or lease of properties, all contain a uniform proviso authorizing the President, upon the recommendation of
the Secretary of Finance, to raise the VAT rate to 12%. The said provisions were alleged to be violative of
Section 28 (2), Article VI of the Constitution, which section vests in Congress the exclusive authority to fix the
rate of taxes, and of Section 1, Article III of the Constitution on due process, as well as of Section 26 (2),
Article VI of the Constitution, which section provides for the "no amendment rule" upon the last reading of a
bill;

The fee or remuneration of foreign entertainers contracted by the Corporation or operator in


pursuance of this provision shall be free of any tax.
(3) Dividend Income. Notwithstanding any provision of law to the contrary, in the event the
Corporation should declare a cash dividend income corresponding to the participation of the private
sector shall, as an incentive to the beneficiaries, be subject only to a final flat income rate of ten
percent (10%) of the regular income tax rates. The dividend income shall not in such case be
considered as part of the beneficiaries' taxable income; provided, however, that such dividend income
shall be totally exempted from income or other form of taxes if invested within six (6) months from
the date the dividend income is received in the following:
(a) operation of the casino(s) or investments in any affiliate activity that will ultimately
redound to the benefit of the Corporation; or any other corporation with whom the
Corporation has any existing arrangements in connection with or related to the operations
of the casino(s);
(b) Government bonds, securities, treasury notes, or government debentures; or
(c) BOI-registered or export-oriented corporation(s). 7
PAGCOR's tax exemption was removed in June 1984 through P.D. No. 1931, but it was later restored by Letter of
Instruction No. 1430, which was issued in September 1984.

2) Sections 8 and 12 were alleged to be violative of Section 1, Article III of the Constitution, or the guarantee
of equal protection of the laws, and Section 28 (1), Article VI of the Constitution; and
3) other technical aspects of the passage of the law, questioning the manner it was passed.
On September 1, 2005, the Court dismissed all the petitions and upheld the constitutionality of R.A. No. 9337. 12
On the same date, respondent BIR issued Revenue Regulations (RR) No. 16-2005,13 specifically identifying PAGCOR as
one of the franchisees subject to 10% VAT imposed under Section 108 of the National Internal Revenue Code of 1997, as
amended by R.A. No. 9337. The said revenue regulation, in part, reads:
Sec. 4. 108-3. Definitions and Specific Rules on Selected Services.
xxxx
(h) x x x

Gross Receipts of all other franchisees, other than those covered by Sec. 119 of the Tax Code, regardless of how their
franchisees may have been granted, shall be subject to the 10% VAT imposed under Sec.108 of the Tax Code. This
includes, among others, the Philippine Amusement and Gaming Corporation (PAGCOR), and its licensees or franchisees.

The main issue is whether or not PAGCOR is still exempt from corporate income tax and VAT with the enactment of R.A.
No. 9337.
After a careful study of the positions presented by the parties, this Court finds the petition partly meritorious.

Hence, the present petition for certiorari.


PAGCOR raises the following issues:
I
WHETHER OR NOT RA 9337, SECTION 1 (C) IS NULL AND VOID AB INITIO FOR BEING REPUGNANT TO THE EQUAL
PROTECTION [CLAUSE] EMBODIED IN SECTION 1, ARTICLE III OF THE 1987 CONSTITUTION.
II
WHETHER OR NOT RA 9337, SECTION 1 (C) IS NULL AND VOID AB INITIO FOR BEING REPUGNANT TO THE NONIMPAIRMENT [CLAUSE] EMBODIED IN SECTION 10, ARTICLE III OF THE 1987 CONSTITUTION.
III
WHETHER OR NOT RR 16-2005, SECTION 4.108-3, PARAGRAPH (H) IS NULL AND VOID AB INITIO FOR BEING BEYOND
THE SCOPE OF THE BASIC LAW, RA 8424, SECTION 108, INSOFAR AS THE SAID REGULATION IMPOSED VAT ON THE
SERVICES OF THE PETITIONER AS WELL AS PETITIONERS LICENSEES OR FRANCHISEES WHEN THE BASIC LAW, AS
INTERPRETED BY APPLICABLE JURISPRUDENCE, DOES NOT IMPOSE VAT ON PETITIONER OR ON PETITIONERS
LICENSEES OR FRANCHISEES.14

Under Section 1 of R.A. No. 9337, amending Section 27 (c) of the National Internal Revenue Code of 1977, petitioner is
no longer exempt from corporate income tax as it has been effectively omitted from the list of GOCCs that are exempt
from it. Petitioner argues that such omission is unconstitutional, as it is violative of its right to equal protection of the laws
under Section 1, Article III of the Constitution:
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.
In City of Manila v. Laguio, Jr.,17 this Court expounded the meaning and scope of equal protection, thus:
Equal protection requires that all persons or things similarly situated should be treated alike, both as to rights conferred
and responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor
to some and unjustly discriminate against others. The guarantee means that no person or class of persons shall be denied
the same protection of laws which is enjoyed by other persons or other classes in like circumstances. The "equal
protection of the laws is a pledge of the protection of equal laws." It limits governmental discrimination. The equal
protection clause extends to artificial persons but only insofar as their property is concerned.
xxxx
Legislative bodies are allowed to classify the subjects of legislation. If the classification is reasonable, the law may
operate only on some and not all of the people without violating the equal protection clause. The classification must, as
an indispensable requisite, not be arbitrary. To be valid, it must conform to the following requirements:

The BIR, in its Comment15 dated December 29, 2006, counters:


1) It must be based on substantial distinctions.
I
2) It must be germane to the purposes of the law.
SECTION 1 OF R.A. NO. 9337 AND SECTION 13 (2) OF P.D. 1869 ARE BOTH VALID AND CONSTITUTIONAL PROVISIONS
OF LAWS THAT SHOULD BE HARMONIOUSLY CONSTRUED TOGETHER SO AS TO GIVE EFFECT TO ALL OF THEIR
PROVISIONS WHENEVER POSSIBLE.
II
SECTION 1 OF R.A. NO. 9337 IS NOT VIOLATIVE OF SECTION 1 AND SECTION 10, ARTICLE III OF THE 1987
CONSTITUTION.
III
BIR REVENUE REGULATIONS ARE PRESUMED VALID AND CONSTITUTIONAL UNTIL STRICKEN DOWN BY LAWFUL
AUTHORITIES.
The Office of the Solicitor General (OSG), by way of Manifestation In Lieu of Comment,16 concurred with the arguments of
the petitioner. It added that although the State is free to select the subjects of taxation and that the inequity resulting
from singling out a particular class for taxation or exemption is not an infringement of the constitutional limitation, a tax
law must operate with the same force and effect to all persons, firms and corporations placed in a similar situation.
Furthermore, according to the OSG, public respondent BIR exceeded its statutory authority when it enacted RR No. 162005, because the latter's provisions are contrary to the mandates of P.D. No. 1869 in relation to R.A. No. 9337.

3) It must not be limited to existing conditions only.


4) It must apply equally to all members of the class.18
It is not contested that before the enactment of R.A. No. 9337, petitioner was one of the five GOCCs exempted from
payment of corporate income tax as shown in R.A. No. 8424, Section 27 (c) of which, reads:
(c) Government-owned or Controlled Corporations, Agencies or Instrumentalities. - The provisions of existing special or
general laws to the contrary notwithstanding, all corporations, agencies or instrumentalities owned and controlled by the
Government, except the Government Service and Insurance Corporation (GSIS), the Social Security System (SSS), the
Philippine Health Insurance Corporation (PHIC), the Philippine Charity Sweepstakes Office (PCSO), and the Philippine
Amusement and Gaming Corporation (PAGCOR), shall pay such rate of tax upon their taxable income as are imposed by
this Section upon corporations or associations engaged in similar business, industry, or activity.19
A perusal of the legislative records of the Bicameral Conference Meeting of the Committee on Ways on Means dated
October 27, 1997 would show that the exemption of PAGCOR from the payment of corporate income tax was due to the
acquiescence of the Committee on Ways on Means to the request of PAGCOR that it be exempt from such tax. 20 The
records of the Bicameral Conference Meeting reveal:
HON. R. DIAZ. The other thing, sir, is we --- I noticed we imposed a tax on lotto winnings.

CHAIRMAN ENRILE. Wala na, tinanggal na namin yon.


HON. R. DIAZ. Tinanggal na ba natin yon?

With the subsequent enactment of R.A. No. 9337, amending R.A. No. 8424, PAGCOR has been excluded from the
enumeration of GOCCs that are exempt from paying corporate income tax. The records of the Bicameral Conference
Meeting dated April 18, 2005, of the Committee on the Disagreeing Provisions of Senate Bill No. 1950 and House Bill No.
3555, show that it is the legislative intent that PAGCOR be subject to the payment of corporate income tax, thus:

CHAIRMAN ENRILE. Oo.

THE CHAIRMAN (SEN. RECTO). Yes, Osmea, the proponent of the amendment.

HON. R. DIAZ. Because I was wondering whether we covered the tax on --- Whether on a universal basis, we included a
tax on cockfighting winnings.

SEN. OSMEA. Yeah. Mr. Chairman, one of the reasons why we're even considering this VAT bill is we want to show the
world who our creditors, that we are increasing official revenues that go to the national budget. Unfortunately today,
Pagcor is unofficial.

CHAIRMAN ENRILE. No, we removed the --HON. R. DIAZ. I . . . (inaudible) natin yong lotto?
CHAIRMAN ENRILE. Pati PAGCOR tinanggal upon request.
CHAIRMAN JAVIER. Yeah, Philippine Insurance Commission.
CHAIRMAN ENRILE. Philippine Insurance --- Health, health ba. Yon ang request ng Chairman, I will accept. (laughter)
Pag-Pag-ibig yon, maliliit na sa tao yon.

Now, in 2003, I took a quick look this morning, Pagcor had a net income of 9.7 billion after paying some small taxes that
they are subjected to. Of the 9.7 billion, they claim they remitted to national government seven billion. Pagkatapos, there
are other specific remittances like to the Philippine Sports Commission, etc., as mandated by various laws, and then
about 400 million to the President's Social Fund. But all in all, their net profit today should be about 12 billion. That's why
I am questioning this two billion. Because while essentially they claim that the money goes to government, and I
will accept that just for the sake of argument. It does not pass through the appropriation process. And I
think that at least if we can capture 35 percent or 32 percent through the budgetary process, first, it is
reflected in our official income of government which is applied to the national budget, and secondly, it goes
through what is constitutionally mandated as Congress appropriating and defining where the money is spent
and not through a board of directors that has absolutely no accountability.
REP. PUENTEBELLA. Well, with all due respect, Mr. Chairman, follow up lang.

HON. ROXAS. Mr. Chairman, I wonder if in the revenue gainers if we factored in an amount that would reflect the VAT and
other sales taxes---

There is wisdom in the comments of my good friend from Cebu, Senator Osmea.

CHAIRMAN ENRILE. No, were talking of this measure only. We will not --- (discontinued)

SEN. OSMEA. And Negros.

HON. ROXAS. No, no, no, no, from the --- arising from the exemption. Assuming that when we release the money into
the hands of the public, they will not use that to --- for wallpaper. They will spend that eh, Mr. Chairman. So when they
spend that---

REP. PUENTEBELLA. And Negros at the same time ay Kasimanwa. But I would not want to put my friends from the
Department of Finance in a difficult position, but may we know your comments on this knowing that as Senator Osmea
just mentioned, he said, "I accept that that a lot of it is going to spending for basic services," you know, going to most, I
think, supposedly a lot or most of it should go to government spending, social services and the like. What is your
comment on this? This is going to affect a lot of services on the government side.

CHAIRMAN ENRILE. Theres a VAT.


HON. ROXAS. There will be a VAT and there will be other sales taxes no. Is there a quantification? Is there an
approximation?

THE CHAIRMAN (REP. LAPUS). Mr. Chair, Mr. Chair.


SEN. OSMEA. It goes from pocket to the other, Monico.

CHAIRMAN JAVIER. Not anything.


HON. ROXAS. So, in effect, we have sterilized that entire seven billion. In effect, it is not circulating in the economy which
is unrealistic.

REP. PUENTEBELLA. I know that. But I wanted to ask them, Mr. Senator, because you may have your own pre-judgment
on this and I don't blame you. I don't blame you. And I know you have your own research. But will this not affect a lot,
the disbursements on social services and other?

CHAIRMAN JAVIER. That 7.7 loss because of tax exemption. That will be extra income for the taxpayers.

REP. LOCSIN. Mr. Chairman. Mr. Chairman, if I can add to that question also. Wouldn't it be easier for you to explain to,
say, foreign creditors, how do you explain to them that if there is a fiscal gap some of our richest corporations has [been]
spared [from] taxation by the government which is one rich source of revenues. Now, why do you save, why do you spare
certain government corporations on that, like Pagcor? So, would it be easier for you to make an argument if everything
was exposed to taxation?

HON. ROXAS. Precisely, so they will be spending it. 21

REP. TEVES. Mr. Chair, please.

The discussion above bears out that under R.A. No. 8424, the exemption of PAGCOR from paying corporate income tax
was not based on a classification showing substantial distinctions which make for real differences, but to reiterate, the
exemption was granted upon the request of PAGCOR that it be exempt from the payment of corporate income tax.

THE CHAIRMAN (REP. LAPUS). Can we ask the DOF to respond to those before we call Congressman Teves?

CHAIRMAN ENRILE. It does, it does, because this is taken and spent by government, somebody receives it in the form of
wages and supplies and other services and other goods. They are not being taken from the public and stored in a vault.

MR. PURISIMA. Thank you, Mr. Chair.

Yes, from definitely improving the collection, it will help us because it will then enter as an official revenue
although when dividends declare it also goes in as other income. (sic)

petitioner PAGCOR must be regarded as coming within the purview of the general rule that GOCCs shall pay corporate
income tax, expressed in the maxim: exceptio firmat regulam in casibus non exceptis. 28

xxxx

PAGCOR cannot find support in the equal protection clause of the Constitution, as the legislative records of the Bicameral
Conference Meeting dated October 27, 1997, of the Committee on Ways and Means, show that PAGCORs exemption from
payment of corporate income tax, as provided in Section 27 (c) of R.A. No. 8424, or the National Internal Revenue Code
of 1997, was not made pursuant to a valid classification based on substantial distinctions and the other requirements of a
reasonable classification by legislative bodies, so that the law may operate only on some, and not all, without violating
the equal protection clause. The legislative records show that the basis of the grant of exemption to PAGCOR from
corporate income tax was PAGCORs own request to be exempted.

REP. TEVES. Mr. Chairman.


xxxx
THE CHAIRMAN (REP. LAPUS). Congressman Teves.
REP. TEVES. Yeah. Pagcor is controlled under Section 27, that is on income tax. Now, we are talking here on
value-added tax. Do you mean to say we are going to amend it from income tax to value-added tax, as far as
Pagcor is concerned?
THE CHAIRMAN (SEN. RECTO). No. We are just amending that section with regard to the exemption from
income tax of Pagcor.

Petitioner further contends that Section 1 (c) of R.A. No. 9337 is null and void ab initio for violating the non-impairment
clause of the Constitution. Petitioner avers that laws form part of, and is read into, the contract even without the parties
expressly saying so. Petitioner states that the private parties/investors transacting with it considered the tax exemptions,
which inure to their benefit, as the main consideration and inducement for their decision to transact/invest with it.
Petitioner argues that the withdrawal of its exemption from corporate income tax by R.A. No. 9337 has the effect of
changing the main consideration and inducement for the transactions of private parties with it; thus, the amendatory
provision is violative of the non-impairment clause of the Constitution.
Petitioners contention lacks merit.

xxxx
REP. NOGRALES. Mr. Chairman, Mr. Chairman. Mr. Chairman.
THE CHAIRMAN (REP. LAPUS). Congressman Nograles.
REP. NOGRALES. Just a point of inquiry from the Chair. What exactly are the functions of Pagcor that are VATable? What
will we VAT in Pagcor?
THE CHAIRMAN (REP. LAPUS). This is on own income tax. This is Pagcor income tax.
REP. NOGRALES. No, that's why. Anong i-va-Vat natin sa kanya. Sale of what?
xxxx
REP. VILLAFUERTE. Mr. Chairman, my question is, what are we VATing Pagcor with, is it the . . .
REP. NOGRALES. Mr. Chairman, this is a secret agreement or the way they craft their contract, which basis?
THE CHAIRMAN (SEN. RECTO). Congressman Nograles, the Senate version does not discuss a VAT on Pagcor but
it just takes away their exemption from non-payment of income tax. 22
Taxation is the rule and exemption is the exception.23 The burden of proof rests upon the party claiming exemption to
prove that it is, in fact, covered by the exemption so claimed. 24 As a rule, tax exemptions are construed strongly against
the claimant.25 Exemptions must be shown to exist clearly and categorically, and supported by clear legal provision. 26
In this case, PAGCOR failed to prove that it is still exempt from the payment of corporate income tax, considering that
Section 1 of R.A. No. 9337 amended Section 27 (c) of the National Internal Revenue Code of 1997 by omitting PAGCOR
from the exemption. The legislative intent, as shown by the discussions in the Bicameral Conference Meeting, is to require
PAGCOR to pay corporate income tax; hence, the omission or removal of PAGCOR from exemption from the payment of
corporate income tax. It is a basic precept of statutory construction that the express mention of one person, thing, act, or
consequence excludes all others as expressed in the familiar maxim expressio unius est exclusio alterius. 27 Thus, the
express mention of the GOCCs exempted from payment of corporate income tax excludes all others. Not being excepted,

The non-impairment clause is contained in Section 10, Article III of the Constitution, which provides that no law impairing
the obligation of contracts shall be passed. The non-impairment clause is limited in application to laws that derogate from
prior acts or contracts by enlarging, abridging or in any manner changing the intention of the parties. 29 There is
impairment if a subsequent law changes the terms of a contract between the parties, imposes new conditions, dispenses
with those agreed upon or withdraws remedies for the enforcement of the rights of the parties. 30
As regards franchises, Section 11, Article XII of the Constitution 31 provides that no franchise or right shall be granted
except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common
good so requires.32
In Manila Electric Company v. Province of Laguna,33 the Court held that a franchise partakes the nature of a grant, which
is beyond the purview of the non-impairment clause of the Constitution. 34 The pertinent portion of the case states:
While the Court has, not too infrequently, referred to tax exemptions contained in special franchises as being in the
nature of contracts and a part of the inducement for carrying on the franchise, these exemptions, nevertheless, are far
from being strictly contractual in nature. Contractual tax exemptions, in the real sense of the term and where the nonimpairment clause of the Constitution can rightly be invoked, are those agreed to by the taxing authority in contracts,
such as those contained in government bonds or debentures, lawfully entered into by them under enabling laws in which
the government, acting in its private capacity, sheds its cloak of authority and waives its governmental immunity. Truly,
tax exemptions of this kind may not be revoked without impairing the obligations of contracts. These contractual tax
exemptions, however, are not to be confused with tax exemptions granted under franchises. A franchise partakes the
nature of a grant which is beyond the purview of the non-impairment clause of the Constitution. Indeed, Article XII,
Section 11, of the 1987 Constitution, like its precursor provisions in the 1935 and the 1973 Constitutions, is explicit that
no franchise for the operation of a public utility shall be granted except under the condition that such privilege shall be
subject to amendment, alteration or repeal by Congress as and when the common good so requires. 35
In this case, PAGCOR was granted a franchise to operate and maintain gambling casinos, clubs and other recreation or
amusement places, sports, gaming pools, i.e., basketball, football, lotteries, etc., whether on land or sea, within the
territorial jurisdiction of the Republic of the Philippines.36 Under Section 11, Article XII of the Constitution, PAGCORs
franchise is subject to amendment, alteration or repeal by Congress such as the amendment under Section 1 of R.A. No.
9377. Hence, the provision in Section 1 of R.A. No. 9337, amending Section 27 (c) of R.A. No. 8424 by withdrawing the
exemption of PAGCOR from corporate income tax, which may affect any benefits to PAGCORs transactions with private
parties, is not violative of the non-impairment clause of the Constitution.
Anent the validity of RR No. 16-2005, the Court holds that the provision subjecting PAGCOR to 10% VAT is invalid for
being contrary to R.A. No. 9337. Nowhere in R.A. No. 9337 is it provided that petitioner can be subjected to VAT. R.A. No.

9337 is clear only as to the removal of petitioner's exemption from the payment of corporate income tax, which was
already addressed above by this Court.
As pointed out by the OSG, R.A. No. 9337 itself exempts petitioner from VAT pursuant to Section 7 (k) thereof, which
reads:

April 1997. Acesite tried to shift the said taxes to PAGCOR by incorporating it in the amount assessed to PAGCOR.
However, PAGCOR refused to pay the taxes because of its tax-exempt status. PAGCOR paid only the amount due to
Acesite minus VAT in the sum of P30,152,892.02. Acesite paid VAT in the amount of P30,152,892.02 to the Commissioner
of Internal Revenue, fearing the legal consequences of its non-payment. In May 1998, Acesite sought the refund of the
amount it paid as VAT on the ground that its transaction with PAGCOR was subject to zero rate as it was rendered to a
tax-exempt entity. The Court ruled that PAGCOR and Acesite were both exempt from paying VAT, thus:

Sec. 7. Section 109 of the same Code, as amended, is hereby further amended to read as follows:

xxxx

Section 109. Exempt Transactions. - (1) Subject to the provisions of Subsection (2) hereof, the following transactions
shall be exempt from the value-added tax:

PAGCOR is exempt from payment of indirect taxes

xxxx

It is undisputed that P.D. 1869, the charter creating PAGCOR, grants the latter an exemption from the payment of taxes.
Section 13 of P.D. 1869 pertinently provides:

(k) Transactions which are exempt under international agreements to which the Philippines is a signatory orunder
special laws, except Presidential Decree No. 529.37

Sec. 13. Exemptions.

Petitioner is exempt from the payment of VAT, because PAGCORs charter, P.D. No. 1869, is a special law that grants
petitioner exemption from taxes.
Moreover, the exemption of PAGCOR from VAT is supported by Section 6 of R.A. No. 9337, which retained Section 108 (B)
(3) of R.A. No. 8424, thus:
[R.A. No. 9337], SEC. 6. Section 108 of the same Code (R.A. No. 8424), as amended, is hereby further amended to read
as follows:
SEC. 108. Value-Added Tax on Sale of Services and Use or Lease of Properties.
(A) Rate and Base of Tax. There shall be levied, assessed and collected, a value-added tax equivalent to ten percent
(10%) of gross receipts derived from the sale or exchange of services, including the use or lease of properties: x x x

xxxx
(2) Income and other taxes. - (a) Franchise Holder: No tax of any kind or form, income or otherwise, as well as fees,
charges or levies of whatever nature, whether National or Local, shall be assessed and collected under this Franchise from
the Corporation; nor shall any form of tax or charge attach in any way to the earnings of the Corporation, except a
Franchise Tax of five (5%) percent of the gross revenue or earnings derived by the Corporation from its operation under
this Franchise. Such tax shall be due and payable quarterly to the National Government and shall be in lieu of all kinds of
taxes, levies, fees or assessments of any kind, nature or description, levied, established or collected by any municipal,
provincial, or national government authority.
(b) Others: The exemptions herein granted for earnings derived from the operations conducted under the franchise
specifically from the payment of any tax, income or otherwise, as well as any form of charges, fees or levies, shall inure
to the benefit of and extend to corporation(s), association(s), agency(ies), or individual(s) with whom the Corporation or
operator has any contractual relationship in connection with the operations of the casino(s) authorized to be conducted
under this Franchise and to those receiving compensation or other remuneration from the Corporation or operator as a
result of essential facilities furnished and/or technical services rendered to the Corporation or operator.

xxxx
(B) Transactions Subject to Zero Percent (0%) Rate. The following services performed in the Philippines by VATregistered persons shall be subject to zero percent (0%) rate;

Petitioner contends that the above tax exemption refers only to PAGCOR's direct tax liability and not to indirect taxes, like
the VAT.
We disagree.

xxxx
(3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the
Philippines is a signatory effectively subjects the supply of such services to zero percent (0%) rate;
x x x x38
As pointed out by petitioner, although R.A. No. 9337 introduced amendments to Section 108 of R.A. No. 8424 by
imposing VAT on other services not previously covered, it did not amend the portion of Section 108 (B) (3) that subjects
to zero percent rate services performed by VAT-registered persons to persons or entities whose exemption under special
laws or international agreements to which the Philippines is a signatory effectively subjects the supply of such services to
0% rate.
Petitioner's exemption from VAT under Section 108 (B) (3) of R.A. No. 8424 has been thoroughly and extensively
discussed in Commissioner of Internal Revenue v. Acesite (Philippines) Hotel Corporation.39 Acesite was the owner and
operator of the Holiday Inn Manila Pavilion Hotel. It leased a portion of the hotels premises to PAGCOR. It incurred VAT
amounting to P30,152,892.02 from its rental income and sale of food and beverages to PAGCOR from January 1996 to

A close scrutiny of the above provisos clearly gives PAGCOR a blanket exemption to taxes with no distinction on whether
the taxes are direct or indirect. We are one with the CA ruling that PAGCOR is also exempt from indirect taxes, like VAT,
as follows:
Under the above provision [Section 13 (2) (b) of P.D. 1869], the term "Corporation" or operator refers to PAGCOR.
Although the law does not specifically mention PAGCOR's exemption from indirect taxes, PAGCOR is undoubtedly exempt
from such taxes because the law exempts from taxes persons or entities contracting with PAGCOR in casino operations.
Although, differently worded, the provision clearly exempts PAGCOR from indirect taxes. In fact, it goes one step further
by granting tax exempt status to persons dealing with PAGCOR in casino operations. The unmistakable conclusion is that
PAGCOR is not liable for the P30, 152,892.02 VAT and neither is Acesite as the latter is effectively subject to zero percent
rate under Sec. 108 B (3), R.A. 8424. (Emphasis supplied.)
Indeed, by extending the exemption to entities or individuals dealing with PAGCOR, the legislature clearly granted
exemption also from indirect taxes. It must be noted that the indirect tax of VAT, as in the instant case, can be shifted or
passed to the buyer, transferee, or lessee of the goods, properties, or services subject to VAT. Thus,by extending the
tax exemption to entities or individuals dealing with PAGCOR in casino operations, it is exempting PAGCOR
from being liable to indirect taxes.

The manner of charging VAT does not make PAGCOR liable to said tax.
It is true that VAT can either be incorporated in the value of the goods, properties, or services sold or leased, in which
case it is computed as 1/11 of such value, or charged as an additional 10% to the value. Verily, the seller or lessor has
the option to follow either way in charging its clients and customer. In the instant case, Acesite followed the latter
method, that is, charging an additional 10% of the gross sales and rentals. Be that as it may, the use of either method,
and in particular, the first method, does not denigrate the fact that PAGCOR is exempt from an indirect tax, like VAT.

JESUS V. TIOMICO, petitioner,


vs.
THE HON. COURT OF APPEALS (FORMER FIFTH DIVISION) and PEOPLE OF THE PHILIPPINES, respondent.

PURISIMA, J.:
This is a petition for review by certiorari under Section 2, Rule 125, in relation to Section 1, Rule 45 of the Rules of Court
to correct, reverse and annul the decision 1 of the Court of Appeals which affirmed the judgment 2 of the trial court
convicting the petitioner herein for a violation of the Trust Receipts Law.

VAT exemption extends to Acesite


Thus, while it was proper for PAGCOR not to pay the 10% VAT charged by Acesite, the latter is not liable for the payment
of it as it is exempt in this particular transaction by operation of law to pay the indirect tax. Such exemption falls within
the former Section 102 (b) (3) of the 1977 Tax Code, as amended (now Sec. 108 [b] [3] of R.A. 8424), which provides:
Section 102. Value-added tax on sale of services.- (a) Rate and base of tax - There shall be levied, assessed and
collected, a value-added tax equivalent to 10% of gross receipts derived by any person engaged in the sale of services x
x x; Provided, that the following services performed in the Philippines by VAT registered persons shall be subject to 0%.
xxxx
(3) Services rendered to persons or entities whose exemption under special laws or international agreements to which the
Philippines is a signatory effectively subjects the supply of such services to zero (0%) rate (emphasis supplied).
The rationale for the exemption from indirect taxes provided for in P.D. 1869 and the extension of such exemption to
entities or individuals dealing with PAGCOR in casino operations are best elucidated from the 1987 case ofCommissioner
of Internal Revenue v. John Gotamco & Sons, Inc., where the absolute tax exemption of the World Health Organization
(WHO) upon an international agreement was upheld. We held in said case that the exemption of contractee WHO should
be implemented to mean that the entity or person exempt is the contractor itself who constructed the building owned by
contractee WHO, and such does not violate the rule that tax exemptions are personal because the manifest intention of
the agreement is to exempt the contractor so that no contractor's tax may be shifted to the contractee WHO. Thus, the
proviso in P.D. 1869, extending the exemption to entities or individuals dealing with PAGCOR in casino operations, is
clearly to proscribe any indirect tax, like VAT, that may be shifted to PAGCOR. 40
Although the basis of the exemption of PAGCOR and Acesite from VAT in the case of The Commissioner of Internal
Revenue v. Acesite (Philippines) Hotel Corporation was Section 102 (b) of the 1977 Tax Code, as amended, which section
was retained as Section 108 (B) (3) in R.A. No. 8424,41 it is still applicable to this case, since the provision relied upon
has been retained in R.A. No. 9337.421avvphi1
It is settled rule that in case of discrepancy between the basic law and a rule or regulation issued to implement said law,
the basic law prevails, because the said rule or regulation cannot go beyond the terms and provisions of the basic
law.43 RR No. 16-2005, therefore, cannot go beyond the provisions of R.A. No. 9337. Since PAGCOR is exempt from VAT
under R.A. No. 9337, the BIR exceeded its authority in subjecting PAGCOR to 10% VAT under RR No. 16-2005; hence,
the said regulatory provision is hereby nullified.
WHEREFORE, the petition is PARTLY GRANTED. Section 1 of Republic Act No. 9337, amending Section 27 (c) of the
National Internal Revenue Code of 1997, by excluding petitioner Philippine Amusement and Gaming Corporation from the
enumeration of government-owned and controlled corporations exempted from corporate income tax is valid and
constitutional, while BIR Revenue Regulations No. 16-2005 insofar as it subjects PAGCOR to 10% VAT is null and void for
being contrary to the National Internal Revenue Code of 1997, as amended by Republic Act No. 9337.

Petitioner Jesus V. Tiomico, (Tiomico) opened a Letter of Credit with the Bank of the Philippine Islands (BPI) for $5,600 to
be used for the importation of two (2) units of Forklifts, Shovel loader and a truck mounted with crane. On October 29,
1982, the said machineries were received by the accused, as evidenced by the covering trust receipt. Upon maturity of
the trust receipt, on December 28, 1982, he made a partial payment of US$855.94, thereby leaving an unpaid obligation
of US$4,770.46. As of December 21, 1989, Tiomico owed BPI US$4,770.46, or P109,386.65, computed at P22.93 per US
dollar, the rate of exchange at the time. Failing to pay the said amount or to deliver subject machineries and equipments,
despite several demands, the International Operations Department of BPI referred the matter to the Legal Department of
the bank. But the letter of demand sent to him notwithstanding, Tiomico failed to satisfy his monetary obligation sued
upon.
Consequently, he was accused of a violation of PD 115, otherwise known as the Trust Receipts Law, under an
Information 3 alleging:
That on or about the 29th day of October, 1982, in the Municipality of Makati, Metro, Manila,
Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, executed a
Trust Receipt Agreement for and in behalf of Paramount Calibrators Merchandising of which he is the
sole proprietor in favor of the Bank of the Philippine Islands. In consideration of the receipt by the
said accused of three (3) bares one unit Forklift Model FD-30 Toyota Branch 2-J70 Hp and one unit
Forklift Model LM-301 Toyota Branch 2-J 70 Hp and one unit shovel loader Model SOT 130 HP, 6 CylLC #2-16860, for which there is now due the sum of US$5600.00, wherein the accused agreed to sell
the same and with the express obligation to remit to the complainant-bank the proceeds of the sale,
and/or to turn over the same if not sold, on demand, but the accused once in possession of the said
items, far from complying with his obligation, with unfaithfulness and abuse of confidence, did then
and there wilfully, unlawfully and feloniously misappropriate, misapply and convert the same to his
own personal use and benefit despite repeated demands, failed and refused and still fails and refuses
account for and/or remit the proceeds of the sale thereof, to the damage and prejudice of the said
complainant-bank as represented by Lourdes V. Palomo in the aforementioned amount of US $5600
or its equivalent in Philippine currency.
Contrary to law.
Arraigned thereunder, Tiomico entered a plea of Not Guilty, at which juncture, Assistant Provincial Prosecutor John B.
Egana manisfested that he was authorizing the private prosecutor, Atty. Jose B. Soncuya, to prosecute the case subject to
his direction, supervision and control.
On October 16, 1989, Gretel S. Donato was presented to testify for the prosecution. According to her, she worked for the
Bank of the Philippine Islands (BPI) in 1981 and in 1982, she was assigned as one of the Letter of Credit processors in
the International Operations Department of BPI. Her duty, among others, was to process letter of credit applications
which included that of Tiomico. The trust receipt executed by the latter was given to her as part of the documents
supporting his Letter of Credit.

No costs.
SO ORDERED.
G.R. No. 122539 March 4, 1999

The following documents presented in the course of the testimony of Donato were identified by her as follows:

Undaunted, petitioner found his way to this Court via the Petition for Review by Certiorari at bar, seeking to annul the
decision 5 of the Court of Appeals; raising as issues:

(1) Exhibit "A" Letter of Credit;


(2) Exhibit "B" Pro Forma Invoice;
(3) Exhibit "C" Letter of Credit Confirmation;

(1) WHETHER OR NOT PD 115 OR TRUST RECEIPTS LAW IS


UNCONSTITUTIONAL;
(2) WHETHER OR NOT A TESTIMONY CAN BE ADMITTED DESPITE THE ABSENCE
OF FORMAL OFFER AS REQUIRED BY SECTIONS 34 AND 35, RULE 132, OF THE
REVISED RULES OF COURT;

(4) Exhibit "D" Trust Receipt; Exhibit D1-D4 signatures thereon;


(5) Exhibit "E" Statement of Account, the amount of P306,708.17 appearing
therein, as Exhibit E-1, and the signature thereto of an unidentified bank officer,
as Exhibit E-2;
(6) Exhibit "F" Letter of Demand of the bank's legal department; a return
card, as Exhibit F-1, and the signature of the addressee's agent, as Exhibit F-1 A.
Counsel for petitioner objected to the admission of Exhibits "A", "B", "C" and "D" on the ground that witness failed to
identify the said documents inasmuch as her testimony regarding the signatures appearing therein were evidently
hearsay. But the trial court admitted the said documentary evidence, despite the objections raised thereto by the
defense. Thereafter, the prosecution rested.
After the People rested its case, petitioner begged leave to file a demurrer to the evidence, theorizing that the evidence
on record does not suffice to prove beyond reasonable doubt the accusation against him. But instead of granting the said
motion of the defense, the trial court ordered a re-opening of the case, so as to enable the prosecution to adduce more
evidence. The defense objected but to no avail. The trial court proceeded with the continuation of trial "in the interest of
justice".
On September 5, 1990, the-lower court denied the demurrer to evidence. The Motion for Reconsideration of the defense
met the same fate. It was denied. The case was then set for continuation of trial on December 12, 1990. Reception of
evidence for the defense was set on January 7, 1991. But on January 4, 1991, three days before the scheduled
continuation of trial, the defense counsel filed an Urgent Motion for Postponement for the given reason that he had to
appear before Branch 12 of the Metropolitan Trial Court of Manila on January 7, 1991.
On January 7, 1991, the lower court denied the Urgent Motion for Postponement and adjudged petitioner to have waived
the right to introduce evidence on his behalf.

(3) WHETHER OR NOT THE TESTIMONY OF WITNESS WITH REGARD TO THE


LETTER OF CREDIT AND OTHER DOCUMENT IS HEARSAY AND;
(4) WHETHER OR NOT THERE WAS DEPRIVATION OF DUE PROCESS ON THE
RIGHTS OF THE ACCUSED WHEN THE TRIAL COURT DENIED THE MOTION FOR
POSTPONEMENT BY THE DEFENSE COUNSEL.
As regards the first issue, the Court has repeatedly upheld the validity of the Trust Receipts Law and consistently declared
that the said law does not violate the constitutional proscription againts imprisonment for non-payment of debts. (People
vs. Cuevo, 104 SCRA 312; People vs. Nitafan, 207 SCRA 726; Lee vs. Rodil, 175 SCRA 100). Such pronouncement was
thoroughly explained in Lee vs. Rodil (supra) thus:
Verily, PD 115 is a declaration by the legislative authority that, as a matter of public policy, the failure
of a person to turn over the proceeds of the sale of goods covered by a trust receipt or to return said
goods if not sold is a public nuisance to be abated by the imposition of penal sanctions. As held
inLozano vs. Martinez (146 SCRA 323, 338):
. . . certainly, it is within the authority of the lawmaking body to prescribe certain
act deemed pernicious and inimical to public welfare. Acts mala in se are not the
only acts that the law can punish. An act may not be considered by society as
inherently wrong, hence, not malum in se, but because of the harm that it inflicts
on the community, it can be outlawed and criminally punished as malum
prohibitum. The State can do this in the exercise of its police power.
In fine, PD 115 is a valid exercise of police power and is not repugnant to the constitutional provision
of non-imprisonment for non-payment of debt.
In a similar vein, the case of People vs. Nitafan (supra) held:

On January 30, 1991, the trial court promulgated its decision finding petitioner guilty of a violation of PD 115, and
sentencing him accordingly.
On appeal, the Court of Appeals came out with a judgment of affirmance, the dispositive portion which, is to the following
effect:
WHEREFORE, the Court finds JESUS V. TIOMICO guilty beyond reasonable doubt of violation of PD
115 and is hereby sentenced to suffer an indeterminate penalty of ten (10) years of prision mayor as
minimum, to fifteen (15) years of reclusion temporal as maximum; to indemnify Bank of the
Philippine Islands the sum of P109,386.65 and to pay the costs.
SO ORDERED.

The Trust Receipts Law punishes the dishonesty and abuse of confidence in the
handling of money or goods to the prejudice of another regardless of whether
the latter is the owner or not. The law does not seek to enforce payment of a
loan. Thus, there can be no violation of the right against imprisonment for nonpayment of a debt.
Anent the second issue, the pivotal question is: Should the testimony of a witness be admitted despite the failure of the
proponent to offer it formally in evidence, as required by Section 34 of Rule 132 6? We rule on this issue in the
affirmative.

Records disclose that the private prosecutor stated the purpose of the testimony in question although he did not formally
offer the same. The proceedings 7 went on as follows:
ATTY. SONCUYA:
The purpose of the testimony of the witness is to prove that the accused applied for a letter of credit,
for the opening of a letter of credit and for the importation of machinery from Japan and that those
machinery were delivered and received by the accused as evidenced by the trust receipt and that the
accused failed to comply with the terms and conditions of the said trust receipt, your Honor.

documents purporting to be written or signed by that person have been habitually submitted to the witness, or where
knowledge of handwriting is acquired by him in an official capacity. 13
Did the witness gain familiarity with the signature of the accused? The answer is yes. Exhibits "A" to "D": Letter of
Credit, Pro-Forma Invoice, Letter of Credit Confirmation and Trust Receipt, respectively, were all familiar to the witness
since the said documents bearing the signature of the accused were all submitted to her for processing. It is therefore
beyond cavil that she acquired sufficient familiarity to make witness competent to testify on the signatures appearing in
subject documents. From the time of the application to its approval and when Tiomico defaulted, she (witness) was the
one who had overseen the transactions and recommended the actions to be taken thereon. As a matter of fact, she was
the one who referred the failure of Tiomico to pay his balance to Tiomico to pay his balance to the Legal Department of
BPI, prompting the said legal department to send him (Tiomico) a demand letter.

COURT:
All right, proceed.
As aptly stressed by the Solicitor General in his Comment, 8 "the absence of the words, 'we are formally offering the
testimony for the purpose of . . .'" should be considered merely as an excusable oversight on the part of the private
prosecutor.
It should be borne in mind that the rationale behind Section 34 of Rule 132 9 is to inform the Court of the purpose of the
testimony, to enable the judge to rule whether the said testimony is necessary or is irrelevant or immaterial.
In the case under scrutiny, since the purpose of subject testimony was succinctly stated, the reason behind the
requirement for its formal offer has been substantially complied with. What the defense counsel should have done should
have been to interpose his objection the moment the private respondent was called to testify, on the ground that there
was no prior offer made by the proponent. 10
The tendency of the rules on evidence, is towards substantial justice rather than strict adherence to technicalities. To
condemn the disputed testimony as inadmissible due to the failure of the private prosecutor to properly observe the rules
on presentation of evidence, would render nugatory, and defeat the proceedings before the lower court.
On the third issue whether or not the witness can testify on subject documents introduced as evidence despite her
admission that she did not see the accused sign the said exhibits, we likewise rule in the affirmative.

Furthermore, whether there was due execution or authencity of such documents was impliedly admitted by the accused.
On this point, we quote with approval the conclusion reached by the Court of Appeals, to wit: 14
On the other hand, appellant impliedly admitted the due execution of the assailed documents
considering that he did not deny the fact that he opened a letter of credit. Neither did he deny that
the signature appearing thereon is his. What appellant intended to dispute was merely the balance of
his past due account with the complainant bank, thus:
COURT
Denied.
What is the defense of the accused?
Denial that he opened the letter of credit.
ATTY. EBRO
No, you honor.
COURT: What is the defense?

As aptly held by the appellate court:

11

xxx xxx xxx


Gretel Donato testified that she was not present when appellant affixed his signature on the
documents in question (p. 22 ibid). She, however, identified the signatures thereon (Exhs. "A-1", "A2", "D-1", "D-2" and "D-3", Letter of Credit; Exhibit B Pro Forma Invoice; Exhibit C Letter of
Credit Confirmation; Exhibit D-Trust Receipt; Exhibit D1-D4 signatures thereon; pp. 129 and 132
of Orig. Rec.) as those of the appellant Jesus V. Tiomico arising from her familiarity therewith
inasmuch as she was the one who processed the papers pertinent to the transactions between the
appellant and the complainant bank (TSN, Feb. 5, 1990, pp 4-6). Her testimony, therefore, cannot be
considered hearsay because it is principally based on her personal knowledge of bank transactions
and the documents and records which she processes in the regular course of the bank's business
operations.
It is not essential to the competence of a lay witness to express opinions on the genuineness of handwritings that he did
see the person in question
write. 12 It is enough that the witness has so adopted the same into business transactions as to induce a reasonable
presumption and belief of genuineness of the document. This is due to the fact that in the ordinary course of business,

ATTY. EBRO.
Q: Now you identified signatures allegedly of the accused on Exhibit A, which
is the application for the letter of credit, I ask you Miss Donato, were you
personally present when this signature was affixed to the document?
A: (witness going over Exhibit A) I was the one of the ones who processed the
letter of credit.
ATTY. EBRO
May we ask for an order directing that the witness respond to my question.

COURT
Just answer the question.
WITNESS
A: No, sir.

A motion for continue or postponement is not a matter of right. It is addressed to the sound discretion of the Court.
Action thereon will not be disturbed by appellate courts, in the absence of clear and manifest abuse of discretion resulting
in a denial of substantial justice. 20
Motions for postponement are generally frowned upon by Courts if there is evidence of bad faith, malice or inexcusable
negligence on the part of the movant. 21 The inadvertence of the defense of the defense counsel in failing to take note of
the trial dates and in belatedly informing the trial court of any conflict in his schedules of trial or court appearances,
constitutes inexcusable negligence. It should be borne in mind that a client is bound by his counsel's conduct, negligence
and mistakes in handling the case. 22

COURT
As gleanable from the records:
Does the accused deny the signature?
. . . Attached to the motion is the Order of said court dated November 19, 1990. Obviously, when the
case was called on December 12, 1990, the counsel for the accused had already known of the
scheduled hearing before the Metropolitan Trial Court, yet he agreed to the hearing on January 7,
1991. Counsel's conduct is not consistent with the thrust of the Judiciary to expedite the termination
of cases under the Mandatory Continuous Trial . . . 23

ATTY. EBRO
No, your Honor. I am just showing also that she has been exaggerating.
(TSN, Feb. 5, 1990, pp. 12-13, p. 22)
In light of the foregoing, it stands to reason and conclude that the documents under scrutiny are admissible in evidence,
as held by the trial court.
Anent the fourth issue, petitioner theorizes that the denial of the motion for postponement sent in by his lawyer violated
his constitutional right to due process.
It should be stressed that subject Urgent Motion for Postponement was not the first motion for resetting ever presented
by the counsel for petitioner. On December 12, 1990, upon motion of the latter, and without objection on the part of the
prosecution, the reception of evidence for the defense was reset once more to January 7, 1991, at 8:30 in the morning.
The most basic tenet of due process is the right to be heard. Where a party had been afforded an opportunity to
participate in the proceedings but failed to do so, he cannot complain of deprivation of due process. 15 Due process is
satisfied as long as the party is accorded an opportunity to be heard. If it is not availed of, it is deemed waived or
forfeited without violating the Bill of Rights. 16

A lawyer as an officer of the court is part of the judicial machinery in the administration of justice. As such, he has a
responsibility to assist in the proper and sound administration of justice. Like the court itself, he is an instrument to
advance its ends and the speedy, efficient, impartial, correct and inexpensive adjudication of cases. A lawyer should not
only help to attain these objectives. He should also avoid improper practices that impede, obstruct or prevent their
realization, charged as he is with the primary task of assisting the court in the speedy and efficient administration of
justice. 24
Petitioner invites attention to the Affidavit of Desistance by the Bank of the Philippine Islands (BPI). This issue raised by
the petitioner cannot be entertained as it was only raised for the first time on appeal. 25
Considering that the assailed decision is firmly anchored on prevailing law and established jurisprudence, the Court
cannot help but deny the petition.
WHEREFORE, the petition is DENIED and the decision of the Court of Appeals, dated May 31, 1995, affirming the
judgment of conviction rendered on January 28, 1991 by the court of origin AFFIRMED. No pronouncement as to costs.
SO ORDERED.

It is further theorized by petitioner that the lower court should have at least granted him another trial date so as to
enable him to present his evidence, so that the denial of his Urgent Motion for Postponement infringed his constitutional
right to be heard by himself and by counsel. 17 This submission is unsustainable.
When an accused is accorded a chance to present evidence on his behalf but due to his repeated unjustifiable failure to
appear at the trial without any justification, the lower court order's the case submitted for decision on the basis of the
evidence on record, said judicial action is not tainted with grave abuse of discretion because in such a case, the accused
is deemed to have waived the right to adduce evidence on his behalf. 18
Furthermore, records show that in this case the defense counsel did not even bother to appear for the scheduled
reception of evidence for his client on January 7, 1991, notwithstanding the fact that the trial court did not act upon,
much less grant, the Urgent Motion for Postponement which he filed on January 4, 1991. Lawyers should never presume
that their motions for postponement would be granted. 19

G.R. No. 95770 December 29, 1995


ROEL EBRALINAG, EMILY EBRALINAG, represented by their parents, MR. & MRS. LEONARDO EBRALINAG,
JUSTINIANA TANTOG, represented by her father, AMOS TANTOG, JEMIL OYAO & JOEL OYAO, represented by
their parents MR. & MRS. ELIEZER OYAO, JANETH DIAMOS & JEREMIAS DIAMOS, represented by parents MR.
& MRS. GODOFREDO DIAMOS, SARA OSTIA & JONATHAN OSTIA, represented by their parents MR. & MRS.
FAUSTO OSTIA, IRVIN SEQUINO & RENAN SEQUINO, represented by their parents MR. & MRS. LYDIO
SEQUINO, NAPTHALE TUNACAO represented by his parents MR. & MRS. MANUEL TUNACAO PRECILA PINO
represented by her parents MR. & MRS. FELIPE PINO, MARICRIS ALFAR, RUWINA ALFAR, represented by
their parents MR. & MRS. HERMINIGILDO ALFAR, FREDESMINDA ALFAR & GUMERSINDO ALFAR, represented
by their parents ABDON ALFAR ALBERTO ALFAR & ARISTIO ALFAR, represented by their parents MR. & MRS.
GENEROSO ALFAR, MARTINO VILLAR, represented by their parents MR. & MRS. GENARO VILLAR,
PERGEBRIEL GUINITA & CHAREN GUINITA, represented by their parents MR. & MRS. CESAR GUINITA, ALVIN
DOOP represented by his parents MR. & MRS. LEONIDES DOOP, RHILYN LAUDE represented by her parents
MR. & MRS. RENE LAUDE, LEOREMINDA MONARES represented by her parents MR. & MRS. FLORENCIO
MONARES, MERCY MONTECILLO, represented by her parents MR. & MRS. MANUEL MONTECILLO, ROBERTO
TANGAHA, represented by his parent ILUMINADA TANGAHA, EVELYN MARIA & FLORA TANGAHA represented
by their parents MR. & MRS. ALBERTO TANGAHA, MAXIMO EBRALINAG represented by his parents MR. &

MRS. PAQUITO EBRALINAG, JUTA CUMON, GIDEON CUMON & JONATHAN CUMON, represented by their father
RAFAEL CUMON, EVIE LUMAKANG and JUAN LUMAKANG, represented by their parents MR. & MRS.
LUMAKANG, EMILIO SARSOZO & PAZ AMOR SARSOZO, & IGNA MARIE SARSOZO represented by their parents
MR. & MRS. VIRGILIO SARSOZO, MICHAEL JOSEPH & HENRY JOSEPH, represented by parent ANNIE JOSEPH,
EMERSON TABLASON & MASTERLOU TABLASON, represented by their parents EMERLITO
TABLASON, petitioners,
vs.
THE DIVISION SUPERINTENDENT OF SCHOOLS OF CEBU, and MR. MANUEL F. BIONGCOG, Cebu District
Supervisor, respondents.
G.R. No. 95887 December 29, 1995
MAY AMOLO, represented by her parents MR. & MRS. ISAIAS AMOLO, REDFORD ALSADO, JOEBERT ALSADO,
& RUDYARD ALSADO represented by their parents MR. & MRS. ABELARDO ALSADO, NESIA ALSADO, REU
ALSADO and LILIBETH ALSADO, represented by their parents MR. & MRS. ROLANDO ALSADO, SUZETTE
NAPOLES, represented by her parents ISMAILITO NAPOLES and OPHELIA NAPOLES, JESICA CARMELOTES,
represented by her parents MR. & MRS. SERGIO CARMELOTES, BABY JEAN MACAPAS, represented by her
parents MR. & MRS. TORIBIO MACAPAS, GERALDINE ALSADO, represented by her parents MR. & MRS. JOEL
ALSADO, RAQUEL DEMOTOR, and LEAH DEMOTOR, represented by their parents MR. & MRS. LEONARDO
DEMOTOR, JURELL VILLA and MELONY VILLA, represented by their parents MR. & MRS. JOVENIANO VILLA,
JONELL HOPE MAHINAY, MARY GRACE MAHINAY, and MAGDALENE MAHINAY, represented by their parents
MR. & MRS. FELIX MAHINAY, JONALYN ANTIOLA and JERWIN ANTIOLA, represented by their parents FELIPE
ANTIOLA and ANECITA ANTIOLA, MARIA CONCEPCION CABUYAO, represented by her parents WENIFREDO
CABUYAO and ESTRELLITA CABUYAO, NOEMI TURNO represented by her parents MANUEL TURNO and
VEVENCIA TURNO, SOLOMON PALATULON, SALMERO PALATULON and ROSALINA PALATULON, represented
by their parents MARTILLANO PALATULON and CARMILA PALATULON, petitioners,
vs.
THE DIVISION SUPERINTENDENT OF SCHOOLS OF CEBU, and ANTONIO A. SANGUTAN, respondents.
R E SO L U T I O N

KAPUNAN, J.:
The State moves for a reconsideration of our decision dated March 1, 1993 granting private respondents' petition
for certiorari and prohibition and annulling the expulsion orders issued by the public respondents therein on the ground
that the said decision created an exemption in favor of the members of the religious sect, the Jehovah's Witnesses, in
violation of the "Establishment Clause" of the Constitution. The Solicitor General, on behalf of the public respondent,
furthermore contends that:
The accommodation by this Honorable Court to a demand for special treatment in favor of a minority
sect even on the basis of a claim of religious freedom may be criticized as granting preference to the
religious beliefs of said sect in violation of the "non-establishment guarantee" provision of the
Constitution. Surely, the decision of the Court constitutes a special favor which immunizes religious
believers such as Jehovah's Witnesses to the law and the DECS rules and regulations by interposing
the claim that the conduct required by law and the rules and regulation (sic) are violative of their
religious beliefs. The decision therefore is susceptible to the very criticism that the grant of
exemption is a violation of the "non-establishment" provision of the Constitution.
Furthermore, to grant an exemption to a specific religious minority poses a risk of collision course
with the "equal protection of the laws" clause in respect of the non-exempt, and, in public schools, a
collision course with the "non-establishment guarantee."
Additionally the public respondent insists that this Court adopt a "neutral stance" by reverting to its holding in Gerona
declaring the flag as being devoid of any religious significance. He stresses that the issue here is not curtailment of
religious belief but regulation of the exercise of religious belief. Finally, he maintains that the State's interests in the case
at bench are constitutional and legal obligations to implement the law and the constitutional mandate to inculcate in the

youth patriotism and nationalism and to encourage their involvement in public and civic affairs, referring to the test
devised by the United States Supreme Court in U.S. vs. O'Brien. 1
II
All the petitioners in the original case 2 were minor school children, and members of the sect, Jehovah's Witnesses
(assisted by their parents) who were expelled from their classes by various public school authorities in Cebu for refusing
to salute the flag, sing the national anthem and recite the patriotic pledge as required by Republic Act No. 1265 of July
11, 1955 and by Department Order No. 8, dated July 21, 1955 issued by the Department of Education. Aimed primarily at
private educational institutions which did not observe the flag ceremony exercises, Republic Act No. 1265 penalizes all
educational institutions for failure or refusal to observe the flag ceremony with public censure on first offense and
cancellation of the recognition or permit on second offense.
The implementing regulations issued by the Department of Education thereafter detailed the manner of observance of the
same. Immediately pursuant to these orders, school officials in Masbate expelled children belonging to the sect of the
Jehovah's Witnesses from school for failing or refusing to comply with the flag ceremony requirement. Sustaining these
expulsion orders, this Court in the 1959 case of Gerona vs. Secretary of Education 3 held that:
The flag is not an image but a symbol of the Republic of the Philippines, an emblem of national
sovereignty, of national unity and cohesion and of freedom and liberty which it and the Constitution
guarantee and protect. Considering the complete separation of church and state in our system of
government, the flag is utterly devoid of any religious significance. Saluting the flag consequently
does not involve any religious ceremony. . . .
After all, the determination of whether a certain ritual is or is not a religious ceremony must rest with
the courts. It cannot be left to a religious group or sect, much less to a follower of said group or sect;
otherwise, there would be confusion and misunderstanding for there might be as many
interpretations and meanings to be given to a certain ritual or ceremony as there are religious groups
or sects or followers.
Upholding religious freedom as a fundamental right deserving the "highest priority and amplest protection among human
rights," this Court, in Ebralinag vs. Division Superintendent of Schools of Cebu 4 re-examined our over two decades-old
decision in Gerona and reversed expulsion orders made by the public respondents therein as violative of both the free
exercise of religion clause and the right of citizens to education under the 1987 Constitution. 5
From our decision of March 1, 1993, the public respondents filed a motion for reconsideration on grounds hereinabove
stated. After a careful study of the grounds adduced in the government's Motion For Reconsideration of our original
decision, however, we find no cogent reason to disturb our earlier ruling.
The religious convictions and beliefs of the members of the religious sect, the Jehovah's Witnesses are widely known and
are equally widely disseminated in numerous books, magazines, brochures and leaflets distributed by their members in
their house to house distribution efforts and in many public places. Their refusal to render obeisance to any form or
symbol which smacks of idolatry is based on their sincere belief in the biblical injunction found in Exodus 20:4,5, against
worshipping forms or idols other than God himself. The basic assumption in their universal refusal to salute the flags of
the countries in which they are found is that such a salute constitutes an act of religious devotion forbidden by God's law.
This assumption, while "bizarre" to others is firmly anchored in several biblical passages. 6
And yet, while members of Jehovah's Witnesses, on the basis of religious convictions, refuse to perform an act (or acts)
which they consider proscribed by the Bible, they contend that such refusal should not be taken to indicate disrespect for
the symbols of the country or evidence that they are wanting in patriotism and nationalism. They point out that as
citizens, they have an excellent record as law abiding members of society even if they do not demonstrate their refusal to

conform to the assailed orders by overt acts of conformity. On the contrary, they aver that they show their respect
through less demonstrative methods manifesting their allegiance, by their simple obedience to the country's laws, 7 by not
engaging in antigovernment activities of any kind, 8 and by paying their taxes and dues to society as self-sufficient
members of the community. 9 While they refuse to salute the flag, they are willing to stand quietly and peacefully at
attention, hands on their side, in order not to disrupt the ceremony or disturb those who believe differently. 10
The religious beliefs, practices and convictions of the members of the sect as a minority are bound to be seen by others
as odd and different and at divergence with the complex requirements of contemporary societies, particularly those
societies which require certain practices as manifestations of loyalty and patriotic behavior. Against those who believe that
coerced loyalty and unity are mere shadows of patriotism, the tendency to exact "a hydraulic insistence on conformity to
majoritarian standards," 11 is seductive to the bureaucratic mindset as a shortcut to patriotism.
No doubt, the State possesses what the Solicitor General describes as the responsibility "to inculcate in the minds of the
youth the values of patriotism and nationalism and to encourage their involvement in public and civic affairs." The
teaching of these values ranks at the very apex of education's "high responsibility" of shaping up the minds of the youth
in those principles which would mold them into responsible and productive members of our society. However, the
government's interest in molding the young into patriotic and civic spirited citizens is "not totally free from a balancing
process" 12 when it intrudes into other fundamental rights such as those specifically protected by the Free Exercise Clause,
the constitutional right to education and the unassailable interest of parents to guide the religious upbringing of their
children in accordance with the dictates of their conscience and their sincere religious beliefs. 13 Recognizing these values,
Justice Carolina Grino-Aquino, the writer of the original opinion, underscored that a generation of Filipinos which cuts its
teeth on the Bill of Rights would find abhorrent the idea that one may be compelled, on pain of expulsion, to salute the
flag sing the national anthem and recite the patriotic pledge during a flag ceremony. 14 "This coercion of conscience has no
place in a free society". 15
The State's contentions are therefore, unacceptable, for no less fundamental than the right to take part is the right to
stand apart. 16 In the context of the instant case, the freedom of religion enshrined in the Constitution should be seen as
the rule, not the exception. To view the constitutional guarantee in the manner suggested by the petitioners would be to
denigrate the status of a preferred freedom and to relegate it to the level of an abstract principle devoid of any substance
and meaning in the lives of those for whom the protection is addressed. As to the contention that the exemption accorded
by our decision benefits a privileged few, it is enough to re-emphasize that "the constitutional protection of religious
freedom terminated disabilities, it did not create new privileges. It gave religious equality, not civil immunity." 17 The
essence of the free exercise clause is freedom from conformity to religious dogma, not freedom from conformity to law
because of religious dogma. 18 Moreover, the suggestion implicit in the State's pleadings to the effect that the flag
ceremony requirement would be equally and evenly applied to all citizens regardless of sect or religion and does not
thereby discriminate against any particular sect or denomination escapes the fact that "[a] regulation, neutral on its face,
may in its application, nonetheless offend the constitutional requirement for governmental neutrality if it unduly burdens
the free exercise of religion." 19
III
The ostensible interest shown by petitioners in preserving the flag as the symbol of the nation appears to be integrally
related to petitioner's disagreement with the message conveyed by the refusal of members of the Jehovah's Witness sect
to salute the flag or participate actively in flag ceremonies on religious grounds. 20 Where the governmental interest
clearly appears to be unrelated to the suppression of an idea, a religious doctrine or practice or an expression or form of
expression, this Court will not find it difficult to sustain a regulation. However, regulations involving this area are generally
held against the most exacting standards, and the zone of protection accorded by the Constitution cannot be violated,
except upon a showing of a clear and present danger of a substantive evil which the state has a right to protect. 21 Stated
differently, in the case of a regulation which appears to abridge a right to which the fundamental law accords high
significance it is the regulation, not the act (or refusal to act), which is the exception and which requires the court's
strictest scrutiny. In the case at bench, the government has not shown that refusal to do the acts of conformity exacted
by the assailed orders, which respondents point out attained legislative cachet in the Administrative Code of 1987, would
pose a clear and present danger of a danger so serious and imminent, that it would prompt legitimate State intervention.

In a case involving the Flag Protection Act of 1989, the U.S. Supreme Court held that the "State's asserted interest in
preserving the fag as a symbol of nationhood and national unity was an interest related to the suppression of free
expression . . . because the State's concern with protecting the flag's symbolic meaning is implicated only when a
person's treatment of the flag communicates some message. 22 While the very concept of ordered liberty precludes this
Court from allowing every individual to subjectively define his own standards on matters of conformity in which society,
as a whole has important interests, the records of the case and the long history of flag salute cases abundantly supports
the religious quality of the claims adduced by the members of the sect Jehovah's Witnesses. Their treatment of flag as a
religious symbol is well-founded and well-documented and is based on grounds religious principle. The message conveyed
by their refusal to participate in the flag ceremony is religious, shared by the entire community of Jehovah's Witnesses
and is intimately related to their theocratic beliefs and convictions. The subsequent expulsion of members of the sect on
the basis of the regulations assailed in the original petitions was therefore clearly directed against religious practice. It is
obvious that the assailed orders and memoranda would gravely endanger the free exercise of the religious beliefs of the
members of the sect and their minor children.
Furthermore, the view that the flag is not a religious but a neutral, secular symbol expresses a majoritarian view intended
to stifle the expression of
the belief that an act of saluting the flag might sometimes be to some individuals so offensive as to be worth their
giving up another constitutional right the right to education. Individuals or groups of individuals get from a symbol the
meaning they put to it. 23 Compelling members of a religious sect to believe otherwise on the pain of denying minor
children the right to an education is a futile and unconscionable detour towards instilling virtues of loyalty and patriotism
which are best instilled and communicated by painstaking and non-coercive methods. Coerced loyalties, after all, only
serve to inspire the opposite. The methods utilized to impose them breed resentment and dissent. Those who attempt to
coerce uniformity of sentiment soon find out that the only path towards achieving unity is by way of suppressing
dissent.24 In the end, such attempts only find the "unanimity of the graveyard." 25
To the extent to which members of the Jehovah's Witnesses sect assiduously pursue their belief in the flag's religious
symbolic meaning, the State cannot, without thereby transgressing constitutionally protected boundaries, impose the
contrary view on the pretext of sustaining a policy designed to foster the supposedly far-reaching goal of instilling
patriotism among the youth. While conceding to the idea adverted to by the Solicitor General that certain methods
of religious expression may be prohibited 26 to serve legitimate societal purposes, refusal to participate in the flag
ceremony hardly constitutes a form of religious expression so offensive and noxious as to prompt legitimate State
intervention. It is worth repeating that the absence of a demonstrable danger of a kind which the State is empowered to
protect militates against the extreme disciplinary methods undertaken by school authorities in trying to enforce
regulations designed to compel attendance in flag ceremonies. Refusal of the children to participate in the flag salute
ceremony would not interfere with or deny the rights of other school children to do so. It bears repeating that their
absence from the ceremony hardly constitutes a danger so grave and imminent as to warrant the state's intervention.
Finally, the respondents' insistence on the validity of the actions taken by the government on the basis of their averment
that "a government regulation of expressive conduct is sufficiently justified if it is within the constitutional power of the
government (and) furthers an important and substantial government interest" 27 misses the whole point of the test
devised by the United States Supreme Court in O'Brien, cited by respondent, because the Court therein was emphatic in
stating that "the government interest (should be) unrelated to the suppression of free expression." We have already
stated that the interest in regulation in the case at bench was clearly related to the suppression of an expression directly
connected with the freedom of religion and that respondents have not shown to our satisfaction that the restriction was
prompted by a compelling interest in public order which the state has a right to protect. Moreover, if we were to refer (as
respondents did by referring to the test in O'Brien) to the standards devised by the US Supreme Court in determining the
validity or extent of restrictive regulations impinging on the freedoms of the mind, then the O'Brien standard is hardly
appropriate because the standard devised in O'Brien only applies if the State's regulation is not related to communicative
conduct. If a relationship exists, a more demanding standard is applied. 28
The responsibility of inculcating the values of patriotism, nationalism, good citizenship, and moral uprightness is a
responsibility shared by the State with parents and other societal institutions such as religious sects and denominations.
The manner in which such values are demonstrated in a plural society occurs in ways so variable that government cannot

make claims to the exclusivity of its methods of inculcating patriotism so all-encompassing in scope as to leave no room
for appropriate parental or religious influences. Provided that those influences do not pose a clear and present danger of
a substantive evil to society and its institutions, expressions of diverse beliefs, no matter how upsetting they may seem
to the majority, are the price we pay for the freedoms we enjoy.
WHEREFORE, premises considered, the instant Motion is hereby DENIED.
SO ORDERED.
Separate Opinions

MENDOZA, J., concurring:


The value of the national flag as a symbol of national unity is not in question in this case. The issue rather is whether it is
permissible to compel children in the Nation's schools to salute the flag as a means of promoting nationhood considering
that their refusal to do so is grounded on a religious belief.
Compulsory flag salute lies in a continuum, at one end of which is the obligation to pay taxes and, at the other, a
compulsion to bow down before a graven image. Members of a religious sect cannot refuse to pay taxes, 1 render military
service, 2 submit to vaccination 3 or give their children elementary school education 4 on the ground of conscience. But
public school children may not be compelled to attend religious instruction 5 or recite prayers or join in bible reading
before the opening of classes in such schools. 6
In determining the validity of compulsory flag salute, we must determine which of these polar principles exerts a greater
pull. The imposition of taxes is justified because, unless support for the government can be exacted, the existence of the
State itself may well be endangered. The compulsory vaccination of children is justified because unless the State can
compel compliance with vaccination program there is danger that a disease will spread. But unlike the refusal to pay
taxes or to submit to compulsory vaccination, the refusal to salute the flag threatens no such dire consequences to the
life or health of the State. Consequently, there is no compelling reason for resorting to compulsion or coercion to achieve
the purpose for which flag salute is instituted.
Indeed schools are not like army camps where the value of discipline justifies requiring a salute to the flag. Schools are
places where diversity and spontaneity are valued as much as personal discipline is. They are places for the nurturing of
ideals and values, not through compulsion or coercion but through persuasion, because thought control is a negation of
the very values which the educational system seeks to promote. Persuasion and not persecution is the means for winning
the allegiance of free men. That is why the Constitution provides that the development of moral character and the
cultivation of civic spirit are to be pursued through education that includes a study of the Constitution, an appreciation of
the role of national heroes in historical development, teaching the rights and duties of citizenship and, at the option of
parents and guardians, religious instruction to be taught by instructors designated by religious authorities of the religion
to which they belong. It is noteworthy that while the Constitution provides for the national flag, 7 it does not give the
State the power to compel a salute to the flag.
On the other hand, compelling flag salute cannot be likened to compelling members of a religious sect to bow down
before a graven image. The flag is not an image but a secular symbol. To regard it otherwise because a religious minority
regards it so would be to put in question many regulations that the State may constitutionally enact or measures which it
may adopt to promote civic virtues which the Constitution itself enjoins the State to promote. 8

It trivializes great principles to assimilate compulsory flag salute to a form of command to worship strange idols not only
because the flag is not a religious symbol but also because the salute required involves nothing more than standing at
attention or placing one's right hand over the right breast as the National Anthem is played and of raising the right hand
as the following pledge is recited:
Ako'y nanunumpang magtatapat sa watawat ng Pilipinas at sa Republikang kanyang kinakatawan
isang bansang nasa kalinga ng Dios buo at hindi mahahati, na may kalayaan at katarungan para sa
lahat.
(I pledge allegiance to the flag and to the nation for which it
stands one nation under God indivisible, with liberty and justice for all.)
In sum compulsory flag salute violates the Constitution not because the aim of the exercise is doubtful but because the
means employed for accomplishing it is not permitted. Legitimate ends cannot be pursued by methods which violate
fundamental freedoms when the ends may be achieved by rational ones.
For this reason I join in holding that compulsory flag salute is unconstitutional.
Separate Opinions
MENDOZA, J., concurring:
The value of the national flag as a symbol of national unity is not in question in this case. The issue rather is whether it is
permissible to compel children in the Nation's schools to salute the flag as a means of promoting nationhood considering
that their refusal to do so is grounded on a religious belief.
Compulsory flag salute lies in a continuum, at one end of which is the obligation to pay taxes and, at the other, a
compulsion to bow down before a graven image. Members of a religious sect cannot refuse to pay taxes, 1 render military
service, 2 submit to vaccination 3 or give their children elementary school education 4 on the ground of conscience. But
public school children may not be compelled to attend religious instruction 5 or recite prayers or join in bible reading
before the opening of classes in such schools. 6
In determining the validity of compulsory flag salute, we must determine which of these polar principles exerts a greater
pull. The imposition of taxes is justified because, unless support for the government can be exacted, the existence of the
State itself may well be endangered. The compulsory vaccination of children is justified because unless the State can
compel compliance with vaccination program there is danger that a disease will spread. But unlike the refusal to pay
taxes or to submit to compulsory vaccination, the refusal to salute the flag threatens no such dire consequences to the
life or health of the State. Consequently, there is no compelling reason for resorting to compulsion or coercion to achieve
the purpose for which flag salute is instituted.
Indeed schools are not like army camps where the value of discipline justifies requiring a salute to the flag. Schools are
places where diversity and spontaneity are valued as much as personal discipline is. They are places for the nurturing of
ideals and values, not through compulsion or coercion but through persuasion, because thought control is a negation of
the very values which the educational system seeks to promote. Persuasion and not persecution is the means for winning
the allegiance of free men. That is why the Constitution provides that the development of moral character and the
cultivation of civic spirit are to be pursued through education that includes a study of the Constitution, an appreciation of
the role of national heroes in historical development, teaching the rights and duties of citizenship and, at the option of
parents and guardians, religious instruction to be taught by instructors designated by religious authorities of the religion
to which they belong. It is noteworthy that while the Constitution provides for the national flag, 7 it does not give the
State the power to compel a salute to the flag.

On the other hand, compelling flag salute cannot be likened to compelling members of a religious sect to bow down
before a graven image. The flag is not an image but a secular symbol. To regard it otherwise because a religious minority
regards it so would be to put in question many regulations that the State may constitutionally enact or measures which it
may adopt to promote civic virtues which the Constitution itself enjoins the State to promote. 8

The CA4 affirmed the Orders5 of the Regional Trial Court (RTC) of Bacolod City (Branch 49) in Civil Case No. 98-10217,
which had refused to dismiss herein respondents Complaint for alleged lack of jurisdiction and lack of cause of action.

It trivializes great principles to assimilate compulsory flag salute to a form of command to worship strange idols not only
because the flag is not a religious symbol but also because the salute required involves nothing more than standing at
attention or placing one's right hand over the right breast as the National Anthem is played and of raising the right hand
as the following pledge is recited:

The factual antecedents of the case are summarized by the Court of Appeals in this wise:

Ako'y nanunumpang magtatapat sa watawat ng Pilipinas at sa Republikang kanyang kinakatawan


isang bansang nasa kalinga ng Dios buo at hindi mahahati, na may kalayaan at katarungan para sa
lahat.
(I pledge allegiance to the flag and to the nation for which it
stands one nation under God indivisible, with liberty and justice for all.)
In sum compulsory flag salute violates the Constitution not because the aim of the exercise is doubtful but because the
means employed for accomplishing it is not permitted. Legitimate ends cannot be pursued by methods which violate
fundamental freedoms when the ends may be achieved by rational ones.
For this reason I join in holding that compulsory flag salute is unconstitutional.

G.R. No. 141961


January 23, 2002
STA. CLARA HOMEOWNERS ASSOCIATION thru its Board of Directors composed of ARNEIL CHUA, LUIS
SARROSA, JOCELYN GARCIA, MA. MILAGROS VARGAS, LORENZO LACSON, ERNESTO PICCIO, DINDO ILAGAN,
DANILO GAMBOA JR. and RIZZA DE LA RAMA; SECURITY GUARD CAPILLO; "JOHN DOE"; and SANTA CLARA
ESTATE, INC., petitioners,
vs.
Spouses VICTOR MA. GASTON and LYDIA GASTON, respondents.

The Facts

"On 1 April 1998, Spouses Victor Ma. Gaston and Lydia M. Gaston, private respondents herein, filed a complaint
for damages with preliminary injunction/preliminary mandatory injunction and temporary restraining order
before the Regional Trial Court in Negros Occidental at Bacolod City against petitioners Santa Clara
Homeowners Association (SCHA for brevity) thru its Board of Directors, namely: Arneil Chua, Luis Sarrosa,
Jocelyn Garcia, Ma. Milagros Vargas, Lorenzo Lacson, Ernesto Piccio, Dindo Ilagan, Danilo Gamboa, Jr., Rizza de
la Rama and Security Guard Capillo and John Doe, and Santa Clara Estate, Incorporated. The case was
docketed as Civil Case No 98-10217 and raffled to RTC-Branch 49, Bacolod City.
"The complaint alleged that private respondents herein [were] residents of San Jose Avenue, Sta. Clara
Subdivision, Mandalagan, Bacolod City. They purchased their lots in the said subdivision sometime in 1974, and
at the time of purchase, there was no mention or requirement of membership in any homeowners association.
From that time on, they have remained non-members of SCHA. They also stated that an arrangement was
made wherein homeowners who [were] non-members of the association were issued non-member gatepass
stickers for their vehicles for identification by the security guards manning the subdivisions entrances and
exits. This arrangement remained undisturbed until sometime in the middle of March, 1998, when SCHA
disseminated a board resolution which decreed that only its members in good standing were to be issued
stickers for use in their vehicles. Thereafter, on three separate incidents, Victor M. Gaston, the son of the
private respondents herein who lives with them, was required by the guards on duty employed by SCHA to
show his drivers license as a prerequisite to his entrance to the subdivision and to his residence therein despite
their knowing him personally and the exact location of his residence. On 29 March 1998, private respondent
herein Victor Ma. Gaston was himself prevented from entering the subdivision and proceeding to his residential
abode when petitioner herein security guards Roger Capillo and a John Doe lowered the steel bar of the
KAMETAL gate of the subdivision and demanded from him his drivers license for identification. The complaint
further alleged that these acts of the petitioners herein done in the presence of other subdivision owners had
caused private respondents to suffer moral damage.
"On 3 April 1998, during the hearing of the private respondents application for the issuance of a temporary
restraining order before the lower court, counsel for the petitioners informed the court that he would be filing a
motion to dismiss the case and made assurance that pending the issuance of a temporary restraining order, the
private respondents would be granted unrestricted access to and from their place of residence.

PANGANIBAN, J.:
A motion to dismiss based on lack of jurisdiction and lack of cause of action hypothetically admits the truth of the
allegations in the complaint. It is not dependent on the pleas or the theories set forth in the answer or the motion to
dismiss. Membership in a homeowners association is voluntary and cannot be unilaterally forced by a provision in the
associations articles of incorporation or by-laws, which the alleged member did not agree to be bound to.
Statement of the Case
The Petition for Review before us assails the August 31, 1999 Decision 1 and the February 11, 2000 Resolution2of the
Court of Appeals (CA) in CA-GR SP No. 49130. The decretal portion of the challenged Decision reads as follows:
"WHEREFORE, the petition is DISMISSED for lack of merit. The assailed Orders of the trial court are AFFIRMED.
No costs."3

"On 8 April 1998, petitioners herein filed a motion to dismiss arguing that the trial court ha[d] no jurisdiction
over the case as it involve[d] an intra-corporate dispute between SCHA and its members pursuant to Republic
Act No. 580, as amended by Executive Order Nos. 535 and 90, much [less], to declare as null and void the
subject resolution of the board of directors of SCHA, the proper forum being the Home Insurance (and
Guaranty) Corporation (HIGC). To support their claim of intra-corporate controversy, petitioners stated that the
Articles of Incorporation of SCHA, which was duly approved by the Securities and Exchange Commission (SEC)
on 4 October 1973, provides that the association shall be a non-stock corporation with all homeowners of Sta.
Clara constituting its membership. Also, its by-laws contains a provision that all real estate owners in Sta.
Clara Subdivision automatically become members of the association. The private respondents, having become
lot owners of Sta. Clara Subdivision in 1974 after the approval by the SEC of SCHAs articles of incorporation
and by-laws, became members automatically in 1974 of SCHA argued the petitioners. Moreover, the private
respondents allegedly enjoyed the privileges and benefits of membership in and abided by the rules of the
association, and even attended the general special meeting of the association members on 24 March 1998.
Their non-payment of the association yearly dues [did] not make them non-members of SCHA continued the
petitioners. And even granting that the private respondents [were] not members of the association, the
petitioners opined that the HIGC still ha[d] jurisdiction over the case pursuant to Section 1 (a), Rule II of the
Rules of Procedure of the HIGC.

The assailed Resolution denied petitioners Motion for Reconsideration.


"On 6 July 1998, the lower court, after having received private respondents opposition to petitioners motion to
dismiss and other subsequent pleadings filed by the parties, resolved to deny petitioners motion to dismiss,
finding that there existed no intra-corporate controversy since the private respondents alleged that they ha[d]

never joined the association; and, thus, the HIGC had no jurisdiction to hear the case. On 18 July 1998,
petitioners submitted a Motion for Reconsideration, adding lack of cause of action as ground for the dismissal of
the case. This additional ground was anchored on the principle of damnum absque injuria as allegedly there
[was] no allegation in the complaint that the private respondents were actually prevented from entering the
subdivision and from having access to their residential abode. On 17 August 1998, thecourt a quo, taking into
consideration the comment filed by the private respondents[,] on petitioners motion for reconsideration and
the pleadings thereafter submitted by the parties, denied the said motion without however ruling on the
additional ground of lack of cause of action x x x.
xxx

xxx

First Issue:
Jurisdiction
Petitioners contend that the CA erred in upholding the trial courts jurisdiction to declare as null and void the SCHA
Resolution decreeing that only members in good standing would be issued vehicle stickers.
The RTC did not void the SCHA Resolution; it merely resolved the Motion to Dismiss filed by petitioners by holding that it
was the RTC, not the Home Insurance and Guaranty Corporation (HIGC), that had jurisdiction over the dispute.

xxx
HIGCs Jurisdiction

"On 18 August 1998, petitioners filed a motion to resolve defendants motion to dismiss on ground of lack of
cause of action. On 8 September 1998, after the petitioners and the private respondents submitted their
pleadings in support of or in opposition thereto, as the case may be, the trial court issued an order denying the
motion, x x x."6
On September 24, 1998, petitioners elevated the matter to the Court of Appeals via a Petition for Certiorari. 7

HIGC10 was created pursuant to Republic Act 580.11 Originally, administrative supervision over homeowners associations
was vested by law in the Securities and Exchange Commission (SEC).12
Pursuant to Executive Order (EO) No. 535, however,13 the HIGC assumed the regulatory and adjudicative functions of the
SEC over homeowners associations. Explicitly vesting such powers in the HIGC is paragraph 2 of EO 535, which we quote
hereunder:

Ruling of the Court of Appeals


The Court of Appeals dismissed the Petition and ruled that the RTC had jurisdiction over the dispute. It debunked
petitioners contention that an intra-corporate controversy existed between the SCHA and respondents. The CA held that
the Complaint had stated a cause of action. It likewise opined that jurisdiction and cause of action were determined by
the allegations in the complaint and not by the defenses and theories set up in the answer or the motion to dismiss.

"2. In addition to the powers and functions vested under the Home Financing Act, the Corporation, shall have
among others, the following additional powers:
(a) x x x; and exercise all the powers, authorities and responsibilities that are vested in the Securities
and Exchange Commission with respect to home owners associations, the provision of Act 1459, as
amended by P.D. 902-A, to the contrary nothwithstanding;

Hence, this Petition.8


(b) To regulate and supervise the activities and operations of all houseowners associations registered
in accordance therewith."

Issues
In their Memorandum, petitioners raise the following issues for the Courts consideration:
I

Moreover, by virtue of the aforequoted provision, the HIGC also assumed the SECs original and exclusive jurisdiction to
hear and decide cases involving controversies arising from intra-corporate or partnership relations. 14
In December 1994, the HIGC adopted the Revised Rules of Procedure in the Hearing of Homeowners Disputes, pertinent
portions of which are reproduced below:

"Whether or not Respondent Court of Appeals erred in upholding the jurisdiction of the court a quo, to declare
as null and void the resolution of the Board of SCHA, decreeing that only members [in] good standing of the
said association, were to be issued stickers for use in their vehicles.
II
"Whether or not private respondents are members of SCHA.
III
"Whether or not Respondent Court of Appeals erred in not ordering the dismissal of the Complaint in Civil Case
No. 98-10217 for lack of cause of action."9
In sum, the issues boil down to two: (1) Did the RTC have jurisdiction over the Complaint? and (2) Did the Complaint
state a cause of action?

"RULE II
Disputes Triable by HIGC/Nature of Proceedings
Section 1. Types of Disputes. - The HIGC or any person, officer, body, board or committee duly designated or
created by it shall have jurisdiction to hear and decide cases involving the following:
a) Devices or schemes employed by or any acts of the Board of Directors or officers of the
association amounting to fraud and misrepresentation which may be detrimental to the interest of
the public and/or of the members of the association or the association registered with HIGC
b) Controversies arising out of intra-corporate relations between and among members of the
association, between any or all of them and the association of which they are members; and between
such association and the state/general public or other entity in so far as it concerns its right to exist
as a corporate entity.

This Courts Rulings


xxx
The Petition has no merit.

xxx

x x x."

The aforesaid powers and responsibilities, which had been vested in the HIGC with respect to homeowners associations,
were later transferred to the Housing and Land Use Regulatory Board (HLURB) pursuant to Republic Act 8763. 15
Are Private Respondents SCHA Members?
In order to determine if the HIGC has jurisdiction over the dispute, it is necessary to resolve preliminarily -- on the basis
of the allegations in the Complaint -- whether private respondents are members of the SCHA.
Petitioners contend that because the Complaint arose from intra-corporate relations between the SCHA and its members,
the HIGC therefore has no jurisdiction over the dispute. To support their contention that private respondents are
members of the association, petitioners cite the SCHAs Articles of Incorporation 16 and By-laws17 which provide that all
landowners of the Sta. Clara Subdivision are automatically members of the SCHA.
We are not persuaded. The constitutionally guaranteed freedom of association18 includes the freedom not to
associate.19 The right to choose with whom one will associate oneself is the very foundation and essence of that
partnership.20 It should be noted that the provision guarantees the right to form an association. It does not include the
right to compel others to form or join one.21
More to the point, private respondents cannot be compelled to become members of the SCHA by the simple expedient of
including them in its Articles of Incorporation and By-laws without their express or implied consent. True, it may be to the
mutual advantage of lot owners in a subdivision to band themselves together to promote their common welfare. But that
is possible only if the owners voluntarily agree, directly or indirectly, to become members of the association. True also,
memberships in homeowners associations may be acquired in various ways -- often through deeds of sale, Torrens
certificates or other forms of evidence of property ownership. In the present case, however, other than the said Articles of
Incorporation and By-laws, there is no showing that private respondents have agreed to be SCHA members.
As correctly observed by the CA:
"x x x. The approval by the SEC of the said documents is not an operative act which bestows membership on
the private respondents because the right to associate partakes of the nature of freedom of contract which can
be exercised by and between the homeowners amongst themselves, the homeowners association and a
homeowner, and the subdivision owner and a homeowner/lot buyer x x x." 22

Sec. 39. Every person receiving a certificate of title in pursuance of a decree of registration,
andevery subsequent purchaser of registered land who takes a certificate of title for value in good
faith shall hold the same free of all encumbrances except those noted on said certificate x x x."
(Italics supplied)
The above ruling, however, does not apply to the case at bar. When private respondents purchased their property in 1974
and obtained Transfer Certificates of Title Nos. T-126542 and T-127462 for Lots 11 and 12 of Block 37 along San Jose
Avenue in Sta. Clara Subdivision, there was no annotation showing their automatic membership in the SCHA. Thus, no
privity of contract arising from the title certificate exists between petitioners and private respondents.
Further, the records are bereft of any evidence that would indicate that private respondents intended to become members
of the SCHA. Prior to the implementation of the aforesaid Resolution, they and the other homeowners who were not
members of the association were issued non-member gate pass stickers for their vehicles. This fact has not been disputed
by petitioners. Thus, the SCHA recognized that there were subdivision landowners who were not members thereof,
notwithstanding the provisions of its Articles of Incorporation and By-laws.
Jurisdiction Determined by Allegations in the Complaint
It is a settled rule that jurisdiction over the subject matter is determined by the allegations in the complaint. Jurisdiction
is not affected by the pleas or the theories set up by the defendant in an answer or a motion to dismiss. Otherwise,
jurisdiction would become dependent almost entirely upon the whims of the defendant. 26
The Complaint does not allege that private respondents are members of the SCHA. In point of fact, they deny such
membership. Thus, the HIGC has no jurisdiction over the dispute.
Petitioners likewise contend that even if private respondents are not members of the SCHA, an intra-corporate
controversy under the third type of dispute provided in Section 1(b) of Rule II of the HIGC Rules exists. Petitioners posit
that private respondents fall within the meaning of "general public." We are not convinced.
First, the third type of dispute refers only to cases wherein an associations right to exist as a corporate entity is at issue.
In the present case, the Complaint filed by private respondents refers to the SCHAs acts allegedly amounting to an
impairment of their free access to their place of residence inside the Sta. Clara Subdivision. 27The existence of SCHA as a
corporate entity is clearly not at issue in the instant case.

No Privity of Contract
Clearly then, no privity of contract exists between petitioners and private respondents. As a general rule, a contract is a
meeting of minds between two persons.23 The Civil Code upholds the spirit over the form; thus, it deems an agreement to
exist, provided the essential requisites are present. A contract is upheld as long as there is proof of consent, subject
matter and cause. Moreover, it is generally obligatory in whatever form it may have been entered into. From the moment
there is a meeting of minds between the parties, it is perfected. 24
As already adverted to, there are cases in which a party who enters into a contract of sale is also bound by a lien
annotated on the certificate of title. We recognized this in Bel Air Village Association, Inc. v. Dionisio, 25 in which we ruled:
"There is no dispute that Transfer Certificate of Title No. 81136 covering the subject parcel of land issued in the
name of the petitioner contains an annotation to the effect that the lot owner becomes an automatic member of
the respondent Bel-Air Association and must abide by such rules and regulations laid down by the Association in
the interest of the sanitation, security and the general welfare of the community. It is likewise not disputed that
the provision on automatic membership was expressly annotated on the petitioners Transfer Certificate of Title
and on the title of his predecessor-in-interest.

Second, in United BF Homeowners Association v. BF Homes, Inc., 28 we held that Section 1(b), Rule II of HIGCs "Revised
Rules of Procedure in the Hearing of Homeowners Disputes" was void. The HIGC went beyond its lawful authority
provided by law when it promulgated its revised rules of procedure. There was a clear attempt to unduly expand the
provisions of Presidential Decree 902-A. As provided by the law, it is only the State -- not the "general public or other
entity" -- that can question an associations franchise or corporate existence. 29
To reiterate, the HIGC exercises limited jurisdiction over homeowners disputes. The law confines its authority to
controversies that arise from any of the following intra-corporate relations: (1) between and among members of the
association; (2) between any and/or all of them and the association of which they are members; and (3) between the
association and the state insofar as the controversy concerns its right to exist as a corporate entity.30
It should be stressed that the Complaint here is for damages. It does not assert membership in the SCHA as its basis.
Rather, it is based on an alleged violation of their alleged right of access through the subdivision and on the alleged
embarrassment and humiliation suffered by the plaintiffs.
Second Issue:
Sufficiency of Cause of Action

"The question, therefore, boils down to whether or not the petitioner is bound by such annotation.
"Section 39 of Art. 496 (The Land Registration Act) states:

Petitioners claim that the CA erred in not ordering the dismissal of the Complaint for lack of cause of action. They argue
that there was no allegation therein that private respondents were actually prevented from entering the subdivision and
gaining access to their residential abode.

This contention is untenable. A defendant moving to dismiss a complaint on the ground of lack of cause of action is
regarded as having hypothetically admitted all the factual averments in the complaint. The test of the sufficiency of the
allegations constituting the cause of action is whether, admitting the facts alleged, the court can render a valid judgment
on the prayers.31 This test implies that the issue must be passed upon on the basis of the bare allegations in the
complaint. The court does not inquire into the truth of such allegations and declare them to be false. To do so would
constitute a procedural error and a denial of the plaintiffs right to due process. 32
A complaint states a cause of action when it contains these three essential elements: (1) the legal right of the plaintiff,
(2) the correlative obligation of the defendant, and (3) the act or omission of the defendant in violation of the said legal
right.33
In the instant case, the records sufficiently establish a cause of action. First, the Complaint alleged that, under the
Constitution, respondents had a right of free access to and from their residential abode. Second, under the law,
petitioners have the obligation to respect this right. Third, such right was impaired by petitioners when private
respondents were refused access through the Sta. Clara Subdivision, unless they showed their drivers license for
identification.
Given these hypothetically admitted facts, the RTC, in the exercise of its original and exclusive jurisdiction, 34could have
rendered judgment over the dispute.
We stress that, in rendering this Decision, this Court is not prejudging the main issue of whether, in truth and in fact,
private respondents are entitled to a favorable decision by the RTC. That will be made only after the proper proceedings
therein. Later on, if it is proven during the trial that they are indeed members of the SCHA, then the case may be
dismissed on the ground of lack of jurisdiction. We are merely holding that, on the basis of the allegations in the
Complaint, (1) the RTC has jurisdiction over the controversy and (2) the Complaint sufficiently alleges a cause of action.
Therefore, it is not subject to attack by a motion to dismiss on these grounds.
WHEREFORE, the Petition is hereby DENIED and the assailed Decision AFFIRMED. Costs against petitioners.

The term "election surveys" is defined in 5.1 of the law as follows:


Election surveys refer to the measurement of opinions and perceptions of the voters as regards a candidate's
popularity, qualifications, platforms or a matter of public discussion in relation to the election, including voters
preference for candidates or publicly discussed issues during the campaign period (hereafter referred to as
"Survey").
The implement 5.4, Resolution 3636, 24(h), dated March I, 2001, of the COMELEC enjoins
Surveys affecting national candidates shall not be published fifteen (15) days before an election and surveys
affecting local candidates shall not be published seven (7) days be- fore an election.
Petitioner SWS states that it wishes to conduct an election survey throughout the period of the elections both at the
national and local levels and release to the media the results of such survey as well as publish them directly. Petitioner
Kamahalan Publishing Corporation, on the other hand, states that it intends to publish election survey results up to the
last day of the elections on May 14,2001.
Petitioners argue that the restriction on the publication of election survey results constitutes a prior restraint on the
exercise of freedom of speech without any clear and present danger to justify such restraint. They claim that SWS and
other pollsters conducted and published the results of surveys prior to the 1992, 1995, and 1998 elections up to as close
as two days before the election day without causing confusion among the voters and that there is neither empirical nor
historical evidence to support the conclusion that there is an immediate and inevitable danger to tile voting process posed
by election surveys. They point out that no similar restriction is imposed on politicians from explaining their opinion or on
newspapers or broadcast media from writing and publishing articles concerning political issues up to the day of the
election. Consequently, they contend that there is no reason for ordinary voters to be denied access to the results of
election surveys, which are relatively objective. 1wphi1.nt

SO ORDERED.
Melo, (Chairman), Sandoval-Gutierrez, and Carpio, JJ., concur.
Vitug, J., I concur although I might call attention to Article 2174 of the Civil Code as and when pertinent.

G.R. No. 147571


May 5, 2001
SOCIAL WEATHER STATIONS, INCORPORATED and KAMAHALAN PUBLISHING CORPORATION, doing business
as MANILA STANDARD, petitioners,
vs.
COMMISSION ON ELECTIONS, respondent.
MENDOZA, J.:
Petitioner, Social Weather Stations, Inc. (SWS), is a private non-stock, non-profit social research institution conducting
surveys in various fields, including economics, politics, demography, and social development, and thereafter processing,
analyzing, and publicly reporting the results thereof. On the other hand, petitioner Kamahalan Publishing Corporation
publishes the Manila Standard, a newspaper of general circulation, which features news- worthy items of information
including election surveys. 1wphi1.nt
Petitioners brought this action for prohibition to enjoin the Commission on Elections from enforcing 5.4 of RA. No.9006
(Fair Election Act), which provides:
Surveys affecting national candidates shall not be published fifteen (15) days before an election and surveys
affecting local candidates shall not be published seven (7) days be- fore an election.

Respondent Commission on Elections justifies the restrictions in 5.4 of R.A. No. 9006 as necessary to prevent the
manipulation and corruption of the electoral process by unscrupulous and erroneous surveys just before the election. It
contends that (1) the prohibition on the publication of election survey results during the period proscribed by law bears a
rational connection to the objective of the law, i.e., the prevention of the debasement of the electoral process resulting
from manipulated surveys, bandwagon effect, and absence of reply; (2) it is narrowly tailored to meet the "evils" sought
to be prevented; and (3) the impairment of freedom of expression is minimal, the restriction being limited both in
duration, i.e., the last 15 days before the national election and the last 7 days before a local election, and in scope as it
does not prohibit election survey results but only require timeliness. Respondent claims that in National Press Club v.
COMELEC,1 a total ban on political advertisements, with candidates being merely allocated broadcast time during the socalled COMELEC space or COMELEC hour, was upheld by this Court. In contrast, according to respondent, it states that
the prohibition in 5.4 of RA. No. 9006 is much more limited.
For reasons hereunder given, we hold that 5.4 of R.A. No. 9006 constitutes an unconstitutional abridgment of freedom
of speech, expression, and the press.
To be sure, 5.4Iays a prior restraint on freedom of speech, expression, and the press prohibiting the publication of
election survey results affecting candidates within the prescribed periods of fifteen (15) days immediately preceding a
national election seven (7) days before a local election. Because of tile preferred status of tile constitutional rights of
speech, expression, and he press, such a measure is vitiated by a weighty presumption of invalidity.2 Indeed, any system
of prior restraints of expression comes to this Court bearing a heavy Presumption against its constitutional validity. ...The
Government thus carries a heavy burden of showing justification for in enforcement of such restraint. "' 3 There, thus a
reversal of the normal presumption of validity that inheres in every legislation.

Nor may it be argued that because of Art. IX-C, 4 of the Constitution, which gives the COMELEC supervisory power to
regulate the enjoyment or utilization of franchise for the operation of media of communication, no presumption of
invalidity attaches to a measure like 5.4. For as we have pointed out in sustaining tile ban on media political
advertisements, the grant of power to the COMELEC under Art. IX-C, 4 is limited to ensuring "equal opportunity, time,
space, and the right to reply" as well as uniform and reasonable rates of charges for the use of such media facilities
"public information campaigns and forums among candidates."4 This Court stated:
The technical effect of Article IX (C) (4) of the Constitution may be seen to be that no presumption of invalidity
arises in respect of exercises of supervisory or regulatory authority on the part of the Comelec for the Purpose
of securing equal opportunity among candidates for political office, although such supervision or regulation may
result in some limitation of the rights of free speech and free press.5
MR JUSTICE KAPUNAN dissents. He rejects as inappropriate the test of clear and present danger for determining the
validity of 5.4. Indeed, as has been pointed out in Osmea v. COMELEC,6 this test was originally formulated for the
criminal law and only later appropriated for free speech cases. Hence, while it may be useful for determining the validity
of laws dealing with inciting to sedition or incendiary speech, it may not be adequate for such regulations as the one in
question. For such a test is concerned with questions of the gravity and imminence of the danger as basis for curtailing
free speech, which is not the case of 5.4 and similar regulations.
Instead, MR JUSTICE KAPUNAN purports to engage in a form of balancing by "weighing and balancing the circumstances
to determine whether public interest [in free, orderly, honest, peaceful and credible elections] is served by the regulation
of the free enjoyment of the rights" (page 7). After canvassing the reasons for the prohibition, i.e., to prevent last-minute
pressure on voters, the creation of bandwagon effect to favor candidates, misinformation, the junking" of weak and
"losing" candidates by their parties, and the form of election cheating called "dagdag-bawas" and invoking the State's
power to supervise media of information during the election period (pages 11-16), the dissenting opinion simply
concludes:
Viewed in the light of the legitimate and significant objectives of Section 5.4, It may be seen that its
limitingimpact on the rights of free speech and of the press is not unduly repressive or unreasonable. In
Indeed, it is a mere restriction, not an absolute prohibition, on the publication of election surveys. It is limited
in duration; it applies only during the period when the voters are presumably contemplating whom they should
elect and when they are most susceptible to such unwarranted persuasion. These surveys may be published
thereafter. (Pages 17-18)
The dissent does not, however, show why, on balance, these considerations should outweigh the value of freedom of
expression. Instead, reliance is placed on Art. IX-C, 4. As already stated, the purpose of Art. IX-C, 4 is to "ensure equal
opportunity, time, and space and the right of reply, including reasonable, equal rates therefor for public information
campaigns and forums among candidates. " Hence the validity of the ban on media advertising. It is noteworthy that R.A.
No. 9006, 14 has lifted the ban and now allows candidates to advertise their candidacies in print and broadcast media.
Indeed, to sustain the ban on the publication of survey results would sanction the censorship of all speaking by
candidates in an election on the ground that the usual bombasts and hyperbolic claims made during the campaigns can
confuse voters and thus debase the electoral process.
In sum, the dissent has engaged only in a balancing at the margin. This form of ad hoc balancing predictably results in
sustaining the challenged legislation and leaves freedom of speech, expression, and the press with little protection. For
anyone who can bring a plausible justification forward can easily show a rational connection between the statute and a
legitimate governmental purpose. In contrast, the balancing of interest undertaken by then Justice Castro
in Gonzales v. COMELEC,7 from which the dissent in this case takes its cue, was a strong one resulting in his conclusion
that , 50-B of R.A. No. 4880, which limited the period of election campaign and partisan political activity, was an
unconstitutional abridgment of freedom of expression.

Nor can the ban on election surveys be justified on the ground that there are other countries - 78, according to the
Solicitor General, while the dissent cites 28 - which similarly impose restrictions on the publication of election surveys. At
best this survey is inconclusive. It is note worthy that in the United States no restriction on the publication of election
survey results exists. It cannot be argued that this is because the United States is a mature democracy. Neither are there
laws imposing an embargo on survey results, even for a limited period, in other countries. As pointed out by petitioners,
the United Kingdom, Austria, Belgium, Denmark, Estonia, Finland, Iceland, Ireland, Latvia, Malta, Macedonia, the
Netherlands, Norway, Sweden, and Ukraine, some of which are no older nor more mature than the Philippines in political
development, do not restrict the publication of election survey results.
What test should then be employed to determine the constitutional validity of 5.4? The United States Supreme Court,
through Chief Justice Warren, held in United States v. O 'Brien:
[A] Government regulation is sufficiently justified [1] if it is within the constitutional power of the Government;
[2] if it furthers an important or substantial governmental interest; [3] if the governmental interest is unrelated
to the suppression of free expression; and [4] if the incidental restriction on alleged First Amendment freedoms
[of speech, expression and press] is no greater than is essential to the furtherance of that interest. 8
This is so far the most influential test for distinguishing content-based from content neutral regulations and is said to
have "become canonical in the review of such laws." 9 is noteworthy that the O 'Brien test has been applied by this Court
in at least two cases.10
Under this test, even if a law furthers an important or substantial governmental interest, it should be invalidated if such
governmental interest is "not unrelated to the Expression of free expression." Moreover, even if the purpose is unrelated
to the suppression of free speech, the law should nevertheless be invalidated if the restriction on freedom of expression is
greater than is necessary to achieve the governmental purpose in question.
Our inquiry should accordingly focus on these two considerations as applied to 5.4.
>First. Sec. 5.4 fails to meet criterion [3] of the O 'Brien test because the causal connection of expression to the asserted
governmental interest makes such interest "not related to the suppression of free expression." By prohibiting the
publication of election survey results because of the possibility that such publication might undermine the integrity of the
election, 5.4 actually suppresses a whole class of expression, while allowing the expression of opinion concerning the
same subject matter by newspaper columnists, radio and TV commentators, armchair theorists, and other opinion takers.
In effect, 5.4 shows a bias for a particular subject matter, if not viewpoint, by referring personal opinion to statistical
results. The constitutional guarantee of freedom of expression means that "the government has no power to restrict
expression because of its message, its ideas, its subject matter, or its content." 11 The inhibition of speech should be
upheld only if the expression falls within one of the few unprotected categories dealt with in Chaplinsky v. New
Hampshire, 12 thus:
There are certain well-defined and narrowly limited classes of speech, the prevention and punishment of which
have never been thought to raise any Constitutional problem. These include the lewd and obscene, the profane,
the libelous, and the insulting or 'fighting' words - those which by their very utterance inflict injury or tend to
incite an immediate breach of the peace. [S]uch utterances are no essential part of any exposition of ideas, and
are of such slight social value as a step to truth that any benefit that may be derived from them is clearly
outweighed by the social interest in order and morality
Nor is there justification for the prior restraint which 5.4Iays on protected speech. Near v. Minnesota,13 it was held:
[The] protection even as to previous restraint is not absolutely unlimited. But the limitation has been
recognized only in exceptional cases. No one would question but that a government might prevent actual
obstruction to its recruiting service or the publication of the sailing dates transports or the number and location

of troops. On similar grounds, the primary requirements of decency may be enforced against obscene
publications. The security of the community life may be protected against incitements to acts of violence and
overthrow by force of orderly government
Thus, contrary to the claim of the Solicitor General, the prohibition imposed by 5.4 cannot be justified on the ground
that it is only for a limited period and is only incidental. The prohibition may be for a limited time, but the curtailment of
the right of expression is direct, absolute, and substantial. It constitutes a total suppression of a category of speech and
is not made less so because it is only for a period of fifteen (15) days immediately before a national election and seven
(7) days immediately before a local election. ..
This sufficiently distinguishes 5.4 from R.A. No. 6646, 11(b), which this Court found to be valid in National Press Club
v. COMELEC,14 and Osmea v. COMELEC.15 For the ban imposed by R.A. No. 6646, 11(b) is not only authorized by a
specific constitutional provision,16 but it also provided an alternative so that, as this Court pointed out in Osmea, there
was actually no ban but only a substitution of media advertisements by the COMELEC space and COMELEC hour.
Second. Even if the governmental interest sought to be promoted is unrelated to the suppression of speech and the
resulting restriction of free expression is only incidental, 5.4 nonetheless fails to meet criterion [4] of the O'Brien test,
namely, that the restriction be not greater than is necessary to further the governmental interest. As already stated, 5.4
aims at the prevention of last-minute pressure on voters, the creation of bandwagon effect, "junking" of weak or "losing"
candidates, and resort to the form of election cheating called "dagdag-bawas." Praiseworthy as these aims of the
regulation might be, they cannot be attained at the sacrifice of the fundamental right of expression, when such aim can
be more narrowly pursued by punishing unlawful acts, rather than speechbecause of apprehension that such speech
creates the danger of such evils. Thus, under the Administrative Code of 1987, 17 the COMELEC is given the power:
To stop any illegal activity, or confiscate, tear down, and stop any unlawful, libelous, misleading or false election
propaganda, after due notice and hearing.

This is surely a less restrictive means than the prohibition contained in 5.4. Pursuant to this power of the COMELEC, it
can confiscate bogus survey results calculated to mislead voters. Candidates can have their own surveys conducted. No
right of reply can be invoked by others. No principle of equality is involved. It is a free market to which each candidate
brings his ideas. As for the purpose of the law to prevent bandwagon effects, it is doubtful whether the Government can
deal with this natural-enough tendency of some voters. Some voters want to be identified with the "winners." Some are
susceptible to the herd mentality. Can these be legitimately prohibited by suppressing the publication of survey results,
which are a form of expression? It has been held that "[mere] legislative preferences or beliefs respecting matters of
public convenience may well support regulation directed at other personal activities, but be insufficient to justify such as
diminishes the exercise of rights so vital to the maintenance of democratic institutions." 18
To summarize then, we hold that 5.4 is invalid because (1) it imposes a prior restraint on the freedom of expression, (2)
it is a direct and total suppression of a category of expression even though such suppression is only for a limited period,
and (3) the governmental interest sought to be promoted can be achieved by means other than suppression of freedom
of expression.
On the other hand, the COMELEC contends that under Art. IX-A, 7 of the Constitution, its decisions, orders, or resolution
may be reviewed by this Court only certiorari. The flaws in this argument is that it assumes that its Resolution 3636,
March 1, 2001 is a "decision, order, or resolution" within the meaning of Art. IX-A, 7. Indeed, counsel for COMELEC
maintain that Resolution 3636 was "rendered" by the Commission. However, the Resolution does not purport to
adjudicate the right of any party. It is not an exercise by the COMELEC of its adjudicatory power to settle the claims of
parties. To the contrary, Resolution 3636 clearly states that it is promulgated to implement the provisions of R.A. No.
9006. Hence, there is no basis for COMELEC's claim that this petition for prohibition is inappropriate. Prohibition has been
fund appropriate for testing the constitutionality of various election laws, rules, and regulations. 19
WHEREFORE, the petition for prohibited GRANTED and 5.4 of R.A. No. 9006 24(h) of COMELEC Resolution 3636, March
1, 2001, are declared unconstitutional. 1wphi1.nt
SO ORDERED.1wphi1.nt