Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No.

142381 October 15, 2003

PHILIPPINE BLOOMING MILLS, INC., and ALFREDO CHING, petitioners, vs. COURT OF APPEALS and TRADERS ROYAL BANK, respondents. DECISION CARPIO, J.: The Case This is a petition for review on certiorari1 to annul the Decision2 dated 16 July 1999 of the Court of Appeals in CA-G.R. CV No. 39690, as well as its Resolution dated 17 February 2000 denying the motion for reconsideration. The Court of Appeals affirmed with modification the Decision3 dated 31 August 1992 rendered by Branch 113 of the Regional Trial Court of Pasay City ("trial court"). The trial courts Decision declared petitioner Alfredo Ching ("Ching") liable to respondent Traders Royal Bank ("TRB") for the payment of the credit accommodations extended to Philippine Blooming Mills, Inc. ("PBM"). Antecedent Facts This case stems from an action to compel Ching to pay TRB the following amounts: 1. P959,611.96 under Letter of Credit No. 479 AD covered by Trust Receipt No. 106;4 2. P1,191,137.13 under Letter of Credit No. 563 AD covered by Trust Receipt No. 113;5 and 3. P3,500,000 under the trust loan covered by a notarized Promissory Note.6 Ching was the Senior Vice President of PBM. In his personal capacity and not as a corporate officer, Ching signed a Deed of Suretyship dated 21 July 1977 binding himself as follows: xxx as primary obligor(s) and not as mere guarantor(s), hereby warrant to the TRADERS ROYAL BANK, its successors and assigns, the due and punctual payment by the following individuals and/or companies/firms, hereinafter called the DEBTOR(S), of such amounts whether due or not, as indicated opposite their respective names, to wit: NAME OF DEBTOR(S) AMOUNT OF OBLIGATION

PHIL. BLOOMING MILLS CORP. TEN MILLION PESOS

(P 10,000,000.00) owing to said TRADERS ROYAL BANK, hereafter called the CREDITOR, as evidenced by all notes, drafts, overdrafts and other credit obligations of every kind and nature contracted/incurred by said DEBTOR(S) in favor of said CREDITOR. In case of default by any and/or all of the DEBTOR(S) to pay the whole or part of said indebtedness herein secured at maturity, I/We, jointly and severally, agree and engage to the CREDITOR, its successors and assigns, the prompt payment, without demand or notice from said CREDITOR, of such notes, drafts, overdrafts and other credit obligations on which the DEBTOR(S) may now be indebted or may hereafter become indebted to the CREDITOR, together with all interests, penalty and other bank charges as may accrue thereon and all expenses which may be incurred by the latter in collecting any or all such instruments. I/WE further warrant the due and faithful performance by the DEBTOR(S) of all the obligations to be performed under any contracts, evidencing indebtedness/obligations and any supplements, amendments, charges or modifications made thereto, including but not limited to, the due and punctual payment by the said DEBTOR(S). I/WE hereby expressly waive notice of acceptance of this suretyship, and also presentment, demand, protest and notice of dishonor of any and all such instruments, loans, advances, credits, or other indebtedness or obligations hereinbefore referred to. MY/OUR liability on this Deed of Suretyship shall be solidary, direct and immediate and not contingent upon the pursuit by the CREDITOR, its successors or assigns, of whatever remedies it or they may have against the DEBTOR(S) or the securities or liens it or they may possess; and I/WE hereby agree to be and remain bound upon this suretyship, irrespective of the existence, value or condition of any collateral, and notwithstanding also that all obligations of the DEBTOR(S) to you outstanding and unpaid at any time may exceed the aggregate principal sum herein above stated. In the event of judicial proceedings, I/WE hereby expressly agree to pay the creditor for and as attorneys fees a sum equivalent to TEN PER CENTUM (10%) of the total indebtedness (principal and interest) then unpaid, exclusive of all costs or expenses for collection allowed by law.7 (Emphasis supplied) On 24 March and 6 August 1980, TRB granted PBM letters of credit on application of Ching in his capacity as Senior Vice President of PBM. Ching later accomplished and delivered to TRB trust receipts, which acknowledged receipt in trust for TRB of the merchandise subject of the letters of credit. Under the trust receipts, PBM had the right to sell the merchandise for cash with the obligation to turn over the entire proceeds of the sale to TRB as payment of PBMs indebtedness. Letter of Credit No. 479 AD, covered by Trust Receipt No. 106, has a face value of US$591,043, while Letter of Credit No. 563 AD, covered by Trust Receipt No. 113, has a face value of US$155,460.34. Ching further executed an Undertaking for each trust receipt, which uniformly provided that:

xxx 6. All obligations of the undersigned under the agreement of trusts shall bear interest at the rate of __ per centum ( __%) per annum from the date due until paid. 7. [I]n consideration of the Trust Receipt, the undersigned hereby jointly and severally undertake and agree to pay on demand on the said BANK, all sums and amounts of money which said BANK may call upon them to pay arising out of, pertaining to, and/or in any manner connected with this receipt. In case it is necessary to collect the draft covered by the Trust Receipt by or through an attorneyat-law, the undersigned hereby further agree(s) to pay an additional of 10% of the total amount due on the draft as attorneys fees, exclusive of all costs, fees and other expenses of collection but shall in no case be less than P200.00"8 (Emphasis supplied) On 27 April 1981, PBM obtained a P3,500,000 trust loan from TRB. Ching signed as comaker in the notarized Promissory Note evidencing this trust loan. The Promissory Note reads: FOR VALUE RECEIVED THIRTY (30) DAYS after date, I/We, jointly and severally, promise to pay the TRADERS ROYAL BANK or order, at its Office in 4th Floor, Kanlaon Towers Bldg., Roxas Blvd., Pasay City, the sum of Pesos: THREE MILLION FIVE HUNDRED THOUSAND ONLY (P3,500,000.00), Philippine Currency, with the interest rate of Eighteen Percent (18%) per annum until fully paid. In case of non-payment of this note at maturity, I/We, jointly and severally, agree to pay an additional amount equivalent to two per cent (2%) of the principal sum per annum, as penalty and collection charges in the form of liquidated damages until fully paid, and the further sum of ten percent (10%) thereof in full, without any deduction, as and for attorneys fees whether actually incurred or not, exclusive of costs and other judicial/extrajudicial expenses; moreover, I/We jointly and severally, further empower and authorize the TRADERS ROYAL BANK at its option, and without notice to set off or to apply to the payment of this note any and all funds, which may be in its hands on deposit or otherwise belonging to anyone or all of us, and to hold as security therefor any real or personal property which may be in its possession or control by virtue of any other contract.9 (Emphasis supplied) PBM defaulted in its payment of Trust Receipt No. 106 (Letter of Credit No. 479 AD) for P959,611.96, and of Trust Receipt No. 113 (Letter of Credit No. 563 AD) for P1,191,137.13. PBM also defaulted on its P3,500,000 trust loan. On 1 April 1982, PBM and Ching filed a petition for suspension of payments with the Securities and Exchange Commission ("SEC"), docketed as SEC Case No. 2250.10 The petition sought to suspend payment of PBMs obligations and prayed that the SEC allow PBM to continue its normal business operations free from the interference of its creditors. One of the listed creditors of PBM was TRB.11 On 9 July 1982, the SEC placed all of PBMs assets, liabilities, and obligations under the rehabilitation receivership of Kalaw, Escaler and Associates.12

On 13 May 1983, ten months after the SEC placed PBM under rehabilitation receivership, TRB filed with the trial court a complaint for collection against PBM and Ching. TRB asked the trial court to order defendants to pay solidarily the following amounts: (1) P6,612,132.74 exclusive of interests, penalties, and bank charges [representing its indebtedness arising from the letters of credit issued to its various suppliers]; (2) P4,831,361.11, exclusive of interests, penalties, and other bank charges [due and owing from the trust loan of 27 April 1981 evidenced by a promissory note]; (3) P783,300.00 exclusive of interests, penalties, and other bank charges [due and owing from the money market loan of 1 April 1981 evidenced by a promissory note]; (4) To order defendant Ching to pay P10,000,000.00 under the Deed of Suretyship in the event plaintiff can not recover the full amount of PBMs indebtedness from the latter; (5) The sum equivalent to 10% of the total sum due as and for attorneys fees; (6) Such other amounts that may be proven by the plaintiff during the trial, by way of damages and expenses for litigation.13 On 25 May 1983, TRB moved to withdraw the complaint against PBM on the ground that the SEC had already placed PBM under receivership.14 The trial court thus dismissed the complaint against PBM.15 On 23 June 1983, PBM and Ching also moved to dismiss the complaint on the ground that the trial court had no jurisdiction over the subject matter of the case. PBM and Ching invoked the assumption of jurisdiction by the SEC over all of PBMs assets and liabilities.16 TRB filed an opposition to the Motion to Dismiss. TRB argued that (1) Ching is being sued in his personal capacity as a surety for PBM; (2) the SEC decision declaring PBM in suspension of payments is not binding on TRB; and (3) Presidential Decree No. 1758 ("PD No. 1758"),17 which Ching relied on to support his assertion that all claims against PBM are suspended, does not apply to Ching as the decree regulates corporate activities only.18 In its order dated 15 August 1983,19 the trial court denied the motion to dismiss with respect to Ching and affirmed its dismissal of the case with respect to PBM. The trial court stressed that TRB was holding Ching liable under the Deed of Suretyship. As Chings obligation was solidary, the trial court ruled that TRB could proceed against Ching as surety upon default of the principal debtor PBM. The trial court also held that PD No. 1758 applied only to corporations, partnerships and associations and not to individuals. Upon the trial courts denial of his Motion for Reconsideration, Ching filed a Petition for Certiorari and Prohibition20 before the Court of Appeals. The appellate court granted Chings petition and ordered the dismissal of the case. The appellate court ruled that the SEC assumed jurisdiction over Ching and PBM to the exclusion of courts or tribunals of coordinate rank. TRB assailed the Court of Appeals Decision21 before this Court. In Traders Royal Bank v. Court of Appeals,22 this Court upheld TRB and ruled that Ching was merely a nominal party

in SEC Case No. 2250. Creditors may sue individual sureties of debtor corporations, like Ching, in a separate proceeding before regular courts despite the pendency of a case before the SEC involving the debtor corporation. In his Answer dated 6 November 1989, Ching denied liability as surety and accommodation co-maker of PBM. He claimed that the SEC had already issued a decision23 approving a revised rehabilitation plan for PBMs creditors, and that PBM obtained the credit accommodations for corporate purposes that did not redound to his personal benefit. He further claimed that even as a surety, he has the right to the defenses personal to PBM. Thus, his liability as surety would attach only if, after the implementation of payments scheduled under the rehabilitation plan, there would remain a balance of PBMs debt to TRB.24 Although Ching admitted PBMs availment of the credit accommodations, he did not show any proof of payment by PBM or by him. TRB admitted certain partial payments on the PBM account made by PBM itself and by the SEC-appointed receiver.25 Thus, the trial court had to resolve the following remaining issues: 1. How much exactly is the corporate defendants outstanding obligation to the plaintiff? 2. Is defendant Alfredo Ching personally answerable, and for exactly how much?26 TRB presented Mr. Lauro Francisco, loan officer of the Remedial Management Department of TRB, and Ms. Carla Pecson, manager of the International Department of TRB, as witnesses. Both witnesses testified to the following: 1. The existence of a Deed of Suretyship dated 21 July 1977 executed by Ching for PBMs liabilities to TRB up to P10,000,000;27 2. The application of PBM and grant by TRB on 13 March 1980 of Letter of Credit No. 479 AD for US$591,043, and the actual availment by PBM of the full proceeds of the credit accommodation;28 3. The application of PBM and grant by TRB on 6 August 1980 of Letter of Credit No. 563 AD for US$156,000, and the actual availment by PBM of the full proceeds of the credit accommodation;29 and 4. The existence of a trust loan of P3,500,000 evidenced by a notarized Promissory Note dated 27 April 1981 wherein Ching bound himself solidarily with PBM;30 and 5. Per TRBs computation, Ching is liable for P19,333,558.16 as of 31 October 1991.31 Ching presented Atty. Vicente Aranda, corporate secretary and First Vice President of the Human Resources Department of TRB, as witness. Ching sought to establish that TRBs Board of Directors adopted a resolution fixing the PBM account at an amount lower than what TRB wanted to collect from Ching. The trial court allowed Atty. Aranda to testify over TRBs manifestation that the Answer failed to plead the subject matter of his testimony. Atty. Aranda produced TRB Board Resolution No. 5935, series of 1990, which contained the minutes of the special meeting of TRBs Board of Directors held on 8 June 1990.32 In the

resolution, the Board of Directors advised TRBs Management "not to release Alfredo Ching from his JSS liability to the bank."33 The resolution also stated the following: a) Accept the P1.373 million deposits remitted over a period of 17 years or until 2006 which shall be applied directly to the account (as remitted per hereto attached schedule). The amount of P1.373 million shall be considered as full payment of PBMs account. (The receiver is amenable to this alternative) The initial deposit/remittance which amounts to P150,000.00 shall be remitted upon approval of the above and conforme to PISCOR and PBM. Subsequent deposits shall start on the 3rd year and annually thereafter (every June 30th of the year) until June 30, 2006. Failure to pay one annual installment shall make the whole obligation due and demandable. b) Write-off immediately P4.278 million. The balance [of] P1.373 million to remain outstanding in the books of the Bank. Said balance will equal the deposits to be remitted to the Bank for a period of 17 years.34 However, Atty. Aranda himself testified that both items (a) and (b) quoted above were never complied with or implemented. Not only was there no initial deposit of P150,000 as required in the resolution, TRB also disapproved the document prepared by the receiver, which would have released Ching from his suretyship.35 The Ruling of the Trial Court The trial court found Ching liable to TRB for P19,333,558.16 under the Deed of Suretyship. The trial court explained: [T]he liability of Ching as a surety attaches independently from his capacity as a stockholder of the Philippine Blooming Mills. Indisputably, under the Deed of Suretyship defendant Ching unconditionally agreed to assume PBMs liability to the plaintiff in the event PBM defaulted in the payment of the said obligation in addition to whatever penalties, expenses and bank charges that may occur by reason of default. Clear enough, under the Deed of Suretyship (Exh. J), defendant Ching bound himself jointly and severally with PBM in the payment of the latters obligation to the plaintiff. The obligation being solidary, the plaintiff Bank can hold Ching liable upon default of the principal debtor. This is explicitly provided in Article 1216 of the New Civil Code already quoted above.36 The dispositive portion of the trial courts Decision reads: WHEREFORE, judgment is hereby rendered declaring defendant Alfredo Ching liable to plaintiff bank in the amount of P19,333,558.16 (NINETEEN MILLION THREE HUNDRED THIRTY THREE THOUSAND FIVE HUNDRED FIFTY EIGHT & 16/100) as of October 31, 1991, and to pay the legal interest thereon from such date until it is fully paid. To pay plaintiff 5% of the entire amount by way of attorneys fees. SO ORDERED.37 The Ruling of the Court of Appeals

On appeal, Ching stated that as surety and solidary debtor, he should benefit from the changed nature of the obligation as provided in Article 1222 of the Civil Code, which reads: Article 1222. A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are derived from the nature of the obligation and of those which are personal to him, or pertain to his own share. With respect to those which personally belong to the others, he may avail himself thereof only as regards that part of the debt for which the latter are responsible. Ching claimed that his liability should likewise be reduced since the equitable apportionment of PBMs remaining assets among its creditors under the rehabilitation proceedings would have the effect of reducing PBMs liability. He also claimed that the amount for which he was being held liable was excessive. He contended that the outstanding principal balance, as stated in TRB Board Resolution No. 5893-1990, was only P5,650,749.09.38 Ching also contended that he was not liable for interest, as the loan documents did not stipulate the interest rate, pursuant to Article 1956 of the Civil Code.39 Finally, Ching asserted that the Deed of Suretyship executed on 21 July 1977 could not guarantee obligations incurred after its execution.40 TRB did not file its appellees brief. Thus, the Court of Appeals resolved to submit the case for decision.41 The Court of Appeals considered the following issues for its determination: 1. Whether the Answer of Ching amounted to an admission of liability. 2. Whether Ching can still be sued as a surety after the SEC placed PBM under rehabilitation receivership, and if in the affirmative, for how much.42 The Court of Appeals resolved the first two questions in favor of TRB. The appellate court stated: Ching did not deny under oath the genuineness and due execution of the L/Cs, Trust Receipts, Undertaking, Deed of Surety, and the 3.5 Million Peso Promissory Note upon which TRBs action rested. He is, therefore, presumed to be liable unless he presents evidence showing payment, partially or in full, of these obligations (Investment and Underwriting Corporation of the Philippines v. Comptronics Philippines, Inc. and Gene v. Tamesis, 192 SCRA 725 [1990]). As surety of a corporation placed under rehabilitation receivership, Ching can answer separately for the obligations of debtor PBM (Rizal Banking Corporation v. Court of Appeals, Philippine Blooming Mills, Inc., and Alfredo Ching, 178 SCRA 738 [1990], and Traders Royal Bank v. Philippine Blooming Mills and Alfredo Ching, 177 SCRA 788 [1989]). Even a[n] SEC injunctive order cannot suspend payment of the suretys obligation since the rehabilitation receivers are limited to the existing assets of the corporation.43 The dispositive portion of the Decision of the Court of Appeals reads:

WHEREFORE, the judgment of the lower court is hereby AFFIRMED but modified with respect to the amount of liability of defendant Alfredo Ching which is lowered from P19,333,558.16 to P15,773,708.78 with legal interest of 12% per annum until it is fully paid. SO ORDERED.44 The Court of Appeals denied Chings Motion for Reconsideration for lack of merit. Hence, this petition. Issues Ching assigns the following as errors of the Court of Appeals: 1. THE COURT OF APPEALS COMMITTED AN ERROR WHEN IT RULED THAT PETITIONER ALFREDO CHING WAS LIABLE FOR OBLIGATIONS CONTRACTED BY PBM LONG AFTER THE EXECUTION OF THE DEED OF SURETYSHIP. 2. THE COURT OF APPEALS COMMITTED AN ERROR WHEN IT RULED THAT THE PETITIONERS WERE LIABLE FOR THE TRUST RECEIPTS DESPITE THE FACT THAT PRIVATE RESPONDENT HAD PREVENTED THEIR FULFILLMENT. 3. THE COURT OF APPEALS COMMITTED AN ERROR WHEN IT FOUND PETITIONER ALFREDO CHING LIABLE FOR P15,773,708.78 WITH LEGAL INTEREST AT 12% PER ANNUM UNTIL FULLY PAID DESPITE THE FACT THAT UNDER THE REHABILITATION PLAN OF PETITIONER PBM, WHICH WAS APPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, PRIVATE RESPONDENT IS ONLY ENTITLED TO P1,373,415.00.45 Ching asserted that the Deed of Suretyship dated 21 July 1977 could not answer for obligations not yet in existence at the time of its execution. Specifically, Ching maintained that the Deed of Suretyship could not answer for debts contracted by PBM in 1980 and 1981. Ching contended that no accessory contract of suretyship could arise without an existing principal contract of loan. Ching likewise argued that TRB could no longer claim on the trust receipts because TRB had already taken the properties subject of the trust receipts. Ching likewise maintained that his obligation as surety could not exceed the P1,373,415 apportioned to PBM under the SEC-approved rehabilitation plan. In its Comment, TRB asserted that the first two assigned errors raised factual issues not brought before the trial court. Furthermore, TRB pointed out that Ching never presented PBMs rehabilitation plan before the trial court. TRB also stated that the Supreme Court ruling in Traders Royal Bank v. Court of Appeals46 constitutes res judicata between the parties. Therefore, TRB could proceed against Ching separately from PBM to enforce in full Chings liability as surety.47 The Ruling of the Court The petition has no merit. The case before us is an offshoot of the trial courts denial of Chings motion to have the case dismissed against him. The petition is a thinly veiled attempt to make this Court

reconsider its decision in the prior case of Traders Royal Bank v. Court of Appeals.48 This Court has already resolved the issue of Chings separate liability as a surety despite the rehabilitation proceedings before the SEC. We held in Traders Royal Bank that: Although Ching was impleaded in SEC Case No. 2250, as a co-petitioner of PBM, the SEC could not assume jurisdiction over his person and properties. The Securities and Exchange Commission was empowered, as rehabilitation receiver, to take custody and control of the assets and properties of PBM only, for the SEC has jurisdiction over corporations only [and] not over private individuals, except stockholders in an intra-corporate dispute (Sec. 5, P.D. 902-A and Sec. 2 of P.D. 1758). Being a nominal party in SEC Case No. 2250, Chings properties were not included in the rehabilitation receivership that the SEC constituted to take custody of PBMs assets. Therefore, the petitioner bank was not barred from filing a suit against Ching, as a surety for PBM. An anomalous situation would arise if individual sureties for debtor corporations may escape liability by simply co-filing with the corporation a petition for suspension of payments in the SEC whose jurisdiction is limited only to corporations and their corporate assets. xxx Ching can be sued separately to enforce his liability as surety for PBM, as expressly provided by Article 1216 of the New Civil Code. xxx It is elementary that a corporation has a personality distinct and separate from its individual stockholders and members. Being an officer or stockholder of a corporation does not make ones property the property also of the corporation, for they are separate entities (Adelio Cruz vs. Quiterio Dalisay, 152 SCRA 482). Chings act of joining as a co-petitioner with PBM in SEC Case No. 2250 did not vest in the SEC jurisdiction over his person or property, for jurisdiction does not depend on the consent or acts of the parties but upon express provision of law (Tolentino vs. Social Security System, 138 SCRA 428; Lee vs. Municipal Trial Court of Legaspi City, Br. I, 145 SCRA 408). (Emphasis supplied) Traders Royal Bank has fully resolved the issue regarding Chings liability as a surety of the credit accommodations TRB extended to PBM. The decision amounts to res judicata49 which bars Ching from raising the same issue again. Hence, the only question that remains is the amount of Chings liability. Nevertheless, we shall resolve the issues Ching has raised in his attempt to escape liability under his surety. Whether Ching is liable for obligations PBM contracted after execution of the Deed of Suretyship Ching is liable for credit obligations contracted by PBM against TRB before and after the execution of the 21 July 1977 Deed of Suretyship. This is evident from the tenor of the deed itself, referring to amounts PBM "may now be indebted or may hereafter become indebted" to TRB. The law expressly allows a suretyship for "future debts". Article 2053 of the Civil Code provides:

A guaranty may also be given as security for future debts, the amount of which is not yet known; there can be no claim against the guarantor until the debt is liquidated. A conditional obligation may also be secured. (Emphasis supplied) Furthermore, this Court has ruled in Dio v. Court of Appeals50 that: Under the Civil Code, a guaranty may be given to secure even future debts, the amount of which may not be known at the time the guaranty is executed. This is the basis for contracts denominated as continuing guaranty or suretyship. A continuing guaranty is one which is not limited to a single transaction, but which contemplates a future course of dealing, covering a series of transactions, generally for an indefinite time or until revoked. It is prospective in its operation and is generally intended to provide security with respect to future transactions within certain limits, and contemplates a succession of liabilities, for which, as they accrue, the guarantor becomes liable. Otherwise stated, a continuing guaranty is one which covers all transactions, including those arising in the future, which are within the description or contemplation of the contract of guaranty, until the expiration or termination thereof. A guaranty shall be construed as continuing when by the terms thereof it is evident that the object is to give a standing credit to the principal debtor to be used from time to time either indefinitely or until a certain period; especially if the right to recall the guaranty is expressly reserved. Hence, where the contract states that the guaranty is to secure advances to be made "from time to time," it will be construed to be a continuing one. In other jurisdictions, it has been held that the use of particular words and expressions such as payment of "any debt," "any indebtedness," or "any sum," or the guaranty of "any transaction," or money to be furnished the principal debtor "at any time," or "on such time" that the principal debtor may require, have been construed to indicate a continuing guaranty. Whether Chings liability is limited to the amount stated in PBMs rehabilitation plan Ching would like this Court to rule that his liability is limited, at most, to the amount stated in PBMs rehabilitation plan. In claiming this reduced liability, Ching invokes Article 1222 of the Civil Code which reads: Art. 1222. A solidary debtor may, in actions filed by the creditor, avail himself of all defenses which are derived from the nature of the obligation and of those which are personal to him, or pertain to his own share. With respect to those which personally belong to the others, he may avail himself thereof only as regards that part of the debt for which the latter are responsible. In granting the loan to PBM, TRB required Chings surety precisely to insure full recovery of the loan in case PBM becomes insolvent or fails to pay in full. This was the very purpose of the surety. Thus, Ching cannot use PBMs failure to pay in full as justification for his own reduced liability to TRB. As surety, Ching agreed to pay in full PBMs loan in case PBM fails to pay in full for any reason, including its insolvency. TRB, as creditor, has the right under the surety to proceed against Ching for the entire amount of PBMs loan. This is clear from Article 1216 of the Civil Code: ART. 1216. The creditor may proceed against any one of the solidary debtors or some or all of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others, so long as the debt has not been fully collected. (Emphasis supplied)

Ching further claims a reduced liability under TRB Board Resolution No. 5935. This resolution states that PBMs outstanding loans may be reduced to P1.373 million subject to certain conditions like the payment of P150,000 initial payment.51 The resolution also states that TRB should not release Chings solidary liability under his surety. The resolution even directs TRBs management to study Chings criminal liability under the trust documents.52 Chings own witness testified that Resolution No. 5935 was never implemented. For one, PBM or its receiver never paid the P150,000 initial payment to TRB. TRB also rejected the document that PBMs receiver presented which would have released Ching from his suretyship. Clearly, Ching cannot rely on Resolution No. 5935 to escape liability under his suretyship. Chings attempts to have this Court review the factual issues of the case are improper. It is not a function of the Supreme Court to assess and evaluate again the evidence, testimonial and evidentiary, adduced by the parties particularly where the findings of both the trial court and the appellate court coincide on the matter.53 Whether Ching is liable for the trust receipts Ching is still liable for the amounts stated in the letters of credit covered by the trust receipts. Other than his bare allegations, Ching has not shown proof of payment or settlement with TRB. Atty. Vicente Aranda, TRBs corporate secretary and First Vice President of its Human Resource Management Department, testified that the conditions in the TRB board resolution presented by Ching were not met or implemented, thus: ATTY. AZURA Q Going into the resolution itself. A certain stipulation ha[s] been outlined, and may I refer you to condition or step No. 1, which reads: "a) Accept the P1.373 million deposits remitted over a period of 17 years or until 2006 which shall be applied directly to the account (as remitted per hereto attached schedule). The amount of P1.373 million shall be considered as full payment of PBMs account. (The receiver is amenable to this alternative.) The initial deposit/remittance which amounts to P150,000.00 shall be remitted upon approval of the above and conforme of PISCOR [xxx] and PBM. Subsequent deposits shall start on the 3rd year and annually thereafter (every June 30th of the year) until June 30, 2006. Failure to pay one annual installment shall make the whole obligation due and demandable. Now Mr. Witness, would you be in a position to inform [the court] if these conditions listed in item (a) in Resolution No. 5935, series of 1990, were implemented or met? A Yes. I know for a fact that the conditions, more particularly the initial deposit/remittance in the amount of P150,000.00 which have to be done with approval was not remitted or met. Q Will you clarify your answer. Would you be in a position to inform the court if those conditions were met? Because your initial answer was yes. A Yes sir, I am in a position to state that these conditions were not met.

Q Let me refer you to the condition listed as item (b) of the same resolution which I read and quote: "Write off immediately P4.278 million. The balance of P1.373 million to remain outstanding in the books of the bank. Said balance will be remitted to the Bank for a period of 17 years." Mr. Witness, would you be in a position to inform the court if the bank implemented that particular condition? A In the implementation of this settlement the receiver prepared a document for approval and conformity of the bank. The said document would in effect release the suretyship of Alfredo Ching and for that reason the bank refused or denied fixing its conformity and approval with the court. xxx ATTY. ATIENZA ON REDIRECT EXAMINATION Q Mr. Witness you stated that the reason why the plaintiff bank did not implement these conditionalities [sic] was because the former defendant corporation requested that the suretyship of Alfredo Ching be released, is that correct? A I did not say that. I said that in effect the document prepared by the lawyer of the receiver xxx the bank would release the suretyship of Alfredo Ching, that is why the bank is not amenable to such a document. Q Despite this approved resolution the bank, because of said requirement or conformity did not seek to implement these conditionalities [sic]? A Yes sir because the conditions imposed by the board is not being followed in that document because it was the condition of the board that the suretyship should not be released but the document being presented to the bank for signature and conformity in effect if signed would release the suretyship. So it would be a violation with the approval of the board so the bank did not sign the conformity.54 Ching also claims that TRB prevented PBM from fulfilling its obligations under the trust receipts when TRB, together with other creditor banks, took hold of PBMs inventories, including the goods covered by the trust receipts. Ching asserts that this act of TRB released him from liability under the suretyship. Ching forgets that he executed, on behalf of PBM, separate Undertakings for each trust receipt expressly granting to TRB the right to take possession of the goods at any time to protect TRBs interests. TRB may exercise such right without waiving its right to collect the full amount of the loan to PBM. The Undertakings also provide that any suspension of payment or any assignment by PBM for the benefit of creditors renders the loan due and demandable. Thus, the separate Undertakings uniformly provide: 2. That the said BANK may at any time cancel the foregoing trust and take possession of said merchandise with the right to sell and dispose of the same under such terms and conditions it may deem best, or of the proceeds of such of the same as may then have been sold, wherever the said merchandise or proceeds may then be found and all the provisions of the Trust Receipt shall apply to and be deemed to include said abovementioned merchandise if the same shall have been made up or used in the manufacture of any other goods, or merchandise, and the said BANK shall have the same rights and remedies against the said merchandise in its manufactured state, or the product of said manufacture as it would have had in the event that such merchandise had remained [in] its

original state and irrespective of the fact that other and different merchandise is used in completing such manufacture. In the event of any suspension, or failure or assignment for the benefit of creditors on the part of the undersigned or of the non-fulfillment of any obligation, or of the non-payment at maturity of any acceptance made under said credit, or any other credit issued by the said BANK on account of the undersigned or of the non-payment of any indebtedness on the part of the undersigned to the said BANK, all obligations, acceptances, indebtedness and liabilities whatsoever shall thereupon without notice mature and become due and payable and the BANK may avail of the remedies provided herein.55 (Emphasis supplied) Presidential Decree No. 115 ("PD No. 115"), otherwise known as the Trust Receipts Law, expressly allows TRB to take possession of the goods covered by the trust receipts. Thus, Section of 7 of PD No. 115 states: SECTION 7. Rights of the entruster. The entruster shall be entitled to the proceeds from the sale of the goods, documents or instruments released under a trust receipt to the entrustee to the extent of the amount owing to the entruster or as appears in the trust receipt, or to the return of the goods, documents or instruments in case of non-sale, and to the enforcement of all other rights conferred on him in the trust receipt provided such are not contrary to the provisions of this Decree. The entruster may cancel the trust and take possession of the goods, documents or instruments subject of the trust or of the proceeds realized therefrom at any time upon default or failure of the entrustee to comply with any of the terms and conditions of the trust receipt or any other agreement between the entruster and the entrustee, and the entruster in possession of the goods, documents or instruments may, on or after default, give notice to the entrustee of the intention to sell, and may, not less than five days after serving or sending of such notice, sell the goods, documents or instruments at public or private sale, and the entruster may, at a public sale, become a purchaser. The proceeds of any such sale, whether public or private, shall be applied (a) to the payment of the expenses thereof; (b) to the payment of the expenses of re-taking, keeping and storing the goods, documents or instruments; (c) to the satisfaction of the entrustees indebtedness to the entruster. The entrustee shall receive any surplus but shall be liable to the entruster for any deficiency. Notice of sale shall be deemed sufficiently given if in writing, and either personally served on the entrustee or sent by post-paid ordinary mail to the entrustees last known business address. (Emphasis supplied) Thus, even though TRB took possession of the goods covered by the trust receipts, PBM and Ching remained liable for the entire amount of the loans covered by the trust receipts. Absent proof of payment or settlement of PBM and Chings credit obligations with TRB, Chings liability is what the Deed of Suretyship stipulates, plus the applicable interest and penalties. The trust receipts, as well as the Letter of Undertaking dated 16 April 198056 executed by PBM, stipulate in writing the payment of interest without specifying the rate. In such a case, the applicable interest rate shall be the legal rate, which is now 12% per annum.57 This is in accordance with Central Bank Circular No. 416, which states: By virtue of the authority granted to it under Section 1 of Act No. 2655, as amended, otherwise known as the "Usury Law," the Monetary Board, in its Resolution No. 1622 dated July 29, 1974, has prescribed that the rate of interest for the loan or forbearance of any money, goods or credits and the rate allowed in judgments, in the absence of express

contract as to such rate of interest, shall be twelve per cent (12%) per annum. (Emphasis supplied) On the other hand, the Promissory Note evidencing the P3,500,000 trust loan provides for 18% interest per annum plus 2% penalty interest per annum in case of default. This stipulated interest should continue to run until full payment of the P3,500,000 trust loan. In addition, the accrued interest on all the credit accommodations should earn legal interest from the date of filing of the complaint pursuant to Article 2212 of the Civil Code. Art. 2212. Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point. The trial court found and the appellate court affirmed that the outstanding principal amounts as of the filing of the complaint with the trial court on 13 May 1983 were P959,611.96 under Trust Receipt No. 106, P1,191,137.13 under Trust Receipt No. 113, and P3,500,000 for the trust loan. As extracted from TRBs Statement of Account as of 31 October 1991,58 the accrued interest on the trust receipts and the trust loan as of the filing of the complaint on 13 May 1983 were P311,387.5159 under Trust Receipt No. 106, P338,739.8160 under Trust Receipt No. 113, and P1,287,616.4461 under the trust loan. The penalty interest on the trust loan amounted to P137,315.07.62 Ching did not rebut this Statement of Account which TRB presented during trial. Thus, the following is the summary of Chings liability under the suretyship as of 13 May 1983, the date of filing of TRBs complaint with the trial court: 1. On Trust Receipt No. 106 (Letter of Credit No. 479 AD) Outstanding Principal P 959,611.96 Accrued Interest (12% per annum) 311,387.51 2. On Trust Receipt No. 113 (Letter of Credit No. 563 AD) Outstanding Principal P 1,191,137.13 Accrued Interest (12% per annum) 338,739.82 3. On the Trust Loan (Promissory Note) Outstanding Principal P 3,500,000.00 Accrued Interest (18% per annum) 1,287,616.44 Accrued Penalty Interest (2% per annum) 137,315.07 WHEREFORE, we AFFIRM the decision of the Court of Appeals with MODIFICATION. Petitioner Alfredo Ching shall pay respondent Traders Royal Bank the following (1) on the credit accommodations under the trust receipts, the total principal amount of P2,150,749.09 with legal interest at 12% per annum from 14 May 1983 until full payment; (2) on the trust loan evidenced by the Promissory Note, the principal sum of P3,500,000 with 20% interest per annum from 14 May 1983 until full payment; (3) on the total accrued interest as of 13

May 1983, P2,075,058.84 with 12% interest per annum from 14 May 1983 until full payment. Petitioner Alfredo Ching shall also pay attorneys fees to respondent Traders Royal Bank equivalent to 5% of the total principal and interest. SO ORDERED. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-63915 April 24, 1985 LORENZO M. TAADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. [MABINI], petitioners, vs. HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON. JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President , MELQUIADES P. DE LA CRUZ, in his capacity as Director, Malacaang Records Office, and FLORENDO S. PABLO, in his capacity as Director, Bureau of Printing, respondents.

ESCOLIN, J.: Invoking the people's right to be informed on matters of public concern, a right recognized in Section 6, Article IV of the 1973 Philippine Constitution, 1 as well as the principle that laws to be valid and enforceable must be published in the Official Gazette or otherwise effectively promulgated, petitioners seek a writ of mandamus to compel respondent public officials to publish, and/or cause the publication in the Official Gazette of various presidential decrees, letters of instructions, general orders, proclamations, executive orders, letter of implementation and administrative orders. Specifically, the publication of the following presidential issuances is sought: a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184, 197, 200, 234, 265, 286, 298, 303, 312, 324, 325, 326, 337, 355, 358, 359, 360, 361, 368, 404, 406, 415, 427, 429, 445, 447, 473, 486, 491, 503, 504, 521, 528, 551, 566, 573, 574, 594, 599, 644, 658, 661, 718, 731, 733, 793, 800, 802, 835, 836, 923, 935, 961, 1017-1030, 1050, 1060-1061, 1085, 1143, 1165, 1166, 1242, 1246, 1250, 1278, 1279, 1300, 1644, 1772, 1808, 1810, 1813-1817, 1819-1826, 1829-1840, 1842-1847. b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136, 141, 150, 153, 155, 161, 173, 180, 187, 188, 192, 193, 199, 202, 204, 205, 209, 211-213, 215-224, 226-228, 231-239, 241-245, 248, 251, 253-261, 263-269, 271-273, 275-283, 285-289, 291, 293, 297-299, 301-303, 309, 312-315, 325, 327, 343, 346, 349, 357, 358, 362, 367, 370, 382, 385, 386, 396-397, 405, 438-440, 444- 445, 473, 486, 488, 498, 501, 399, 527, 561, 576, 587, 594,

599, 600, 602, 609, 610, 611, 612, 615, 641, 642, 665, 702, 712-713, 726, 837-839, 878-879, 881, 882, 939-940, 964,997,1149-1178,1180-1278. c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65. d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281, 13191526, 1529, 1532, 1535, 1538, 1540-1547, 1550-1558, 1561-1588, 15901595, 1594-1600, 1606-1609, 1612-1628, 1630-1649, 1694-1695, 16971701, 1705-1723, 1731-1734, 1737-1742, 1744, 1746-1751, 1752, 1754, 1762, 1764-1787, 1789-1795, 1797, 1800, 1802-1804, 1806-1807, 18121814, 1816, 1825-1826, 1829, 1831-1832, 1835-1836, 1839-1840, 18431844, 1846-1847, 1849, 1853-1858, 1860, 1866, 1868, 1870, 1876-1889, 1892, 1900, 1918, 1923, 1933, 1952, 1963, 1965-1966, 1968-1984, 19862028, 2030-2044, 2046-2145, 2147-2161, 2163-2244. e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457- 471, 474-492, 494-507, 509-510, 522, 524-528, 531-532, 536, 538, 543-544, 549, 551-553, 560, 563, 567-568, 570, 574, 593, 594, 598-604, 609, 611- 647, 649-677, 679-703, 705-707, 712-786, 788-852, 854-857. f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51, 59, 76, 80-81, 92, 94, 95, 107, 120, 122, 123. g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378, 380-433, 436439. The respondents, through the Solicitor General, would have this case dismissed outright on the ground that petitioners have no legal personality or standing to bring the instant petition. The view is submitted that in the absence of any showing that petitioners are personally and directly affected or prejudiced by the alleged non-publication of the presidential issuances in question 2 said petitioners are without the requisite legal personality to institute this mandamus proceeding, they are not being "aggrieved parties" within the meaning of Section 3, Rule 65 of the Rules of Court, which we quote: SEC. 3. Petition for Mandamus.When any tribunal, corporation, board or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use a rd enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered commanding the defendant, immediately or at some other specified time, to do the act required to be done to Protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the defendant. Upon the other hand, petitioners maintain that since the subject of the petition concerns a public right and its object is to compel the performance of a public duty, they need not show any specific interest for their petition to be given due course. The issue posed is not one of first impression. As early as the 1910 case of Severino vs. Governor General, 3 this Court held that while the general rule is that "a writ of mandamus

would be granted to a private individual only in those cases where he has some private or particular interest to be subserved, or some particular right to be protected, independent of that which he holds with the public at large," and "it is for the public officers exclusively to apply for the writ when public rights are to be subserved [Mithchell vs. Boardmen, 79 M.e., 469]," nevertheless, "when the question is one of public right and the object of the mandamus is to procure the enforcement of a public duty, the people are regarded as the real party in interest and the relator at whose instigation the proceedings are instituted need not show that he has any legal or special interest in the result, it being sufficient to show that he is a citizen and as such interested in the execution of the laws [High, Extraordinary Legal Remedies, 3rd ed., sec. 431]. Thus, in said case, this Court recognized the relator Lope Severino, a private individual, as a proper party to the mandamus proceedings brought to compel the Governor General to call a special election for the position of municipal president in the town of Silay, Negros Occidental. Speaking for this Court, Mr. Justice Grant T. Trent said: We are therefore of the opinion that the weight of authority supports the proposition that the relator is a proper party to proceedings of this character when a public right is sought to be enforced. If the general rule in America were otherwise, we think that it would not be applicable to the case at bar for the reason 'that it is always dangerous to apply a general rule to a particular case without keeping in mind the reason for the rule, because, if under the particular circumstances the reason for the rule does not exist, the rule itself is not applicable and reliance upon the rule may well lead to error' No reason exists in the case at bar for applying the general rule insisted upon by counsel for the respondent. The circumstances which surround this case are different from those in the United States, inasmuch as if the relator is not a proper party to these proceedings no other person could be, as we have seen that it is not the duty of the law officer of the Government to appear and represent the people in cases of this character. The reasons given by the Court in recognizing a private citizen's legal personality in the aforementioned case apply squarely to the present petition. Clearly, the right sought to be enforced by petitioners herein is a public right recognized by no less than the fundamental law of the land. If petitioners were not allowed to institute this proceeding, it would indeed be difficult to conceive of any other person to initiate the same, considering that the Solicitor General, the government officer generally empowered to represent the people, has entered his appearance for respondents in this case. Respondents further contend that publication in the Official Gazette is not a sine qua non requirement for the effectivity of laws where the laws themselves provide for their own effectivity dates. It is thus submitted that since the presidential issuances in question contain special provisions as to the date they are to take effect, publication in the Official Gazette is not indispensable for their effectivity. The point stressed is anchored on Article 2 of the Civil Code: Art. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided, ... The interpretation given by respondent is in accord with this Court's construction of said article. In a long line of decisions, 4 this Court has ruled that publication in the Official Gazette

is necessary in those cases where the legislation itself does not provide for its effectivity date-for then the date of publication is material for determining its date of effectivity, which is the fifteenth day following its publication-but not when the law itself provides for the date when it goes into effect. Respondents' argument, however, is logically correct only insofar as it equates the effectivity of laws with the fact of publication. Considered in the light of other statutes applicable to the issue at hand, the conclusion is easily reached that said Article 2 does not preclude the requirement of publication in the Official Gazette, even if the law itself provides for the date of its effectivity. Thus, Section 1 of Commonwealth Act 638 provides as follows: Section 1. There shall be published in the Official Gazette [1] all important legisiative acts and resolutions of a public nature of the, Congress of the Philippines; [2] all executive and administrative orders and proclamations, except such as have no general applicability; [3] decisions or abstracts of decisions of the Supreme Court and the Court of Appeals as may be deemed by said courts of sufficient importance to be so published; [4] such documents or classes of documents as may be required so to be published by law; and [5] such documents or classes of documents as the President of the Philippines shall determine from time to time to have general applicability and legal effect, or which he may authorize so to be published. ... The clear object of the above-quoted provision is to give the general public adequate notice of the various laws which are to regulate their actions and conduct as citizens. Without such notice and publication, there would be no basis for the application of the maxim "ignorantia legis non excusat." It would be the height of injustice to punish or otherwise burden a citizen for the transgression of a law of which he had no notice whatsoever, not even a constructive one. Perhaps at no time since the establishment of the Philippine Republic has the publication of laws taken so vital significance that at this time when the people have bestowed upon the President a power heretofore enjoyed solely by the legislature. While the people are kept abreast by the mass media of the debates and deliberations in the Batasan Pambansaand for the diligent ones, ready access to the legislative recordsno such publicity accompanies the law-making process of the President. Thus, without publication, the people have no means of knowing what presidential decrees have actually been promulgated, much less a definite way of informing themselves of the specific contents and texts of such decrees. As the Supreme Court of Spain ruled: "Bajo la denominacion generica de leyes, se comprenden tambien los reglamentos, Reales decretos, Instrucciones, Circulares y Reales ordines dictadas de conformidad con las mismas por el Gobierno en uso de su potestad. 5 The very first clause of Section I of Commonwealth Act 638 reads: "There shall be published in the Official Gazette ... ." The word "shall" used therein imposes upon respondent officials an imperative duty. That duty must be enforced if the Constitutional right of the people to be informed on matters of public concern is to be given substance and reality. The law itself makes a list of what should be published in the Official Gazette. Such listing, to our mind, leaves respondents with no discretion whatsoever as to what must be included or excluded from such publication. The publication of all presidential issuances "of a public nature" or "of general applicability" is mandated by law. Obviously, presidential decrees that provide for fines, forfeitures or penalties for their violation or otherwise impose a burden or. the people, such as tax and

revenue measures, fall within this category. Other presidential issuances which apply only to particular persons or class of persons such as administrative and executive orders need not be published on the assumption that they have been circularized to all concerned. 6 It is needless to add that the publication of presidential issuances "of a public nature" or "of general applicability" is a requirement of due process. It is a rule of law that before a person may be bound by law, he must first be officially and specifically informed of its contents. As Justice Claudio Teehankee said in Peralta vs. COMELEC 7: In a time of proliferating decrees, orders and letters of instructions which all form part of the law of the land, the requirement of due process and the Rule of Law demand that the Official Gazette as the official government repository promulgate and publish the texts of all such decrees, orders and instructions so that the people may know where to obtain their official and specific contents. The Court therefore declares that presidential issuances of general application, which have not been published, shall have no force and effect. Some members of the Court, quite apprehensive about the possible unsettling effect this decision might have on acts done in reliance of the validity of those presidential decrees which were published only during the pendency of this petition, have put the question as to whether the Court's declaration of invalidity apply to P.D.s which had been enforced or implemented prior to their publication. The answer is all too familiar. In similar situations in the past this Court had taken the pragmatic and realistic course set forth in Chicot County Drainage District vs. Baxter Bank 8 to wit: The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the challenged decree. Norton v. Shelby County, 118 U.S. 425, 442; Chicago, 1. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects-with respect to particular conduct, private and official. Questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. These questions are among the most difficult of those which have engaged the attention of courts, state and federal and it is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified. Consistently with the above principle, this Court in Rutter vs. Esteban 9 sustained the right of a party under the Moratorium Law, albeit said right had accrued in his favor before said law was declared unconstitutional by this Court. Similarly, the implementation/enforcement of presidential decrees prior to their publication in the Official Gazette is "an operative fact which may have consequences which cannot be

justly ignored. The past cannot always be erased by a new judicial declaration ... that an allinclusive statement of a principle of absolute retroactive invalidity cannot be justified." From the report submitted to the Court by the Clerk of Court, it appears that of the presidential decrees sought by petitioners to be published in the Official Gazette, only Presidential Decrees Nos. 1019 to 1030, inclusive, 1278, and 1937 to 1939, inclusive, have not been so published. 10 Neither the subject matters nor the texts of these PDs can be ascertained since no copies thereof are available. But whatever their subject matter may be, it is undisputed that none of these unpublished PDs has ever been implemented or enforced by the government. In Pesigan vs. Angeles, 11 the Court, through Justice Ramon Aquino, ruled that "publication is necessary to apprise the public of the contents of [penal] regulations and make the said penalties binding on the persons affected thereby. " The cogency of this holding is apparently recognized by respondent officials considering the manifestation in their comment that "the government, as a matter of policy, refrains from prosecuting violations of criminal laws until the same shall have been published in the Official Gazette or in some other publication, even though some criminal laws provide that they shall take effect immediately. WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all unpublished presidential issuances which are of general application, and unless so published, they shall have no binding force and effect. SO ORDERED. Relova, J., concurs. Aquino, J., took no part. Concepcion, Jr., J., is on leave.

Separate Opinions

FERNANDO, C.J., concurring (with qualification): There is on the whole acceptance on my part of the views expressed in the ably written opinion of Justice Escolin. I am unable, however, to concur insofar as it would unqualifiedly impose the requirement of publication in the Official Gazette for unpublished "presidential issuances" to have binding force and effect. I shall explain why. 1. It is of course true that without the requisite publication, a due process question would arise if made to apply adversely to a party who is not even aware of the existence of any legislative or executive act having the force and effect of law. My point is that such publication required need not be confined to the Official Gazette. From the pragmatic

standpoint, there is an advantage to be gained. It conduces to certainty. That is too be admitted. It does not follow, however, that failure to do so would in all cases and under all circumstances result in a statute, presidential decree or any other executive act of the same category being bereft of any binding force and effect. To so hold would, for me, raise a constitutional question. Such a pronouncement would lend itself to the interpretation that such a legislative or presidential act is bereft of the attribute of effectivity unless published in the Official Gazette. There is no such requirement in the Constitution as Justice Plana so aptly pointed out. It is true that what is decided now applies only to past "presidential issuances". Nonetheless, this clarification is, to my mind, needed to avoid any possible misconception as to what is required for any statute or presidential act to be impressed with binding force or effectivity. 2. It is quite understandable then why I concur in the separate opinion of Justice Plana. Its first paragraph sets forth what to me is the constitutional doctrine applicable to this case. Thus: "The Philippine Constitution does not require the publication of laws as a prerequisite for their effectivity, unlike some Constitutions elsewhere. It may be said though that the guarantee of due process requires notice of laws to affected Parties before they can be bound thereby; but such notice is not necessarily by publication in the Official Gazette. The due process clause is not that precise. 1 I am likewise in agreement with its closing paragraph: "In fine, I concur in the majority decision to the extent that it requires notice before laws become effective, for no person should be bound by a law without notice. This is elementary fairness. However, I beg to disagree insofar as it holds that such notice shall be by publication in the Official Gazette. 2 3. It suffices, as was stated by Judge Learned Hand, that law as the command of the government "must be ascertainable in some form if it is to be enforced at all. 3 It would indeed be to reduce it to the level of mere futility, as pointed out by Justice Cardozo, "if it is unknown and unknowable. 4 Publication, to repeat, is thus essential. What I am not prepared to subscribe to is the doctrine that it must be in the Official Gazette. To be sure once published therein there is the ascertainable mode of determining the exact date of its effectivity. Still for me that does not dispose of the question of what is the jural effect of past presidential decrees or executive acts not so published. For prior thereto, it could be that parties aware of their existence could have conducted themselves in accordance with their provisions. If no legal consequences could attach due to lack of publication in the Official Gazette, then serious problems could arise. Previous transactions based on such "Presidential Issuances" could be open to question. Matters deemed settled could still be inquired into. I am not prepared to hold that such an effect is contemplated by our decision. Where such presidential decree or executive act is made the basis of a criminal prosecution, then, of course, its ex post facto character becomes evident. 5 In civil cases though, retroactivity as such is not conclusive on the due process aspect. There must still be a showing of arbitrariness. Moreover, where the challenged presidential decree or executive act was issued under the police power, the non-impairment clause of the Constitution may not always be successfully invoked. There must still be that process of balancing to determine whether or not it could in such a case be tainted by infirmity. 6 In traditional terminology, there could arise then a question of unconstitutional application. That is as far as it goes. 4. Let me make therefore that my qualified concurrence goes no further than to affirm that publication is essential to the effectivity of a legislative or executive act of a general application. I am not in agreement with the view that such publication must be in the Official Gazette. The Civil Code itself in its Article 2 expressly recognizes that the rule as to laws taking effect after fifteen days following the completion of their publication in the Official Gazette is subject to this exception, "unless it is otherwise provided." Moreover, the Civil

Code is itself only a legislative enactment, Republic Act No. 386. It does not and cannot have the juridical force of a constitutional command. A later legislative or executive act which has the force and effect of law can legally provide for a different rule. 5. Nor can I agree with the rather sweeping conclusion in the opinion of Justice Escolin that presidential decrees and executive acts not thus previously published in the Official Gazette would be devoid of any legal character. That would be, in my opinion, to go too far. It may be fraught, as earlier noted, with undesirable consequences. I find myself therefore unable to yield assent to such a pronouncement. I am authorized to state that Justices Makasiar, Abad Santos, Cuevas, and Alampay concur in this separate opinion. Makasiar, Abad Santos, Cuevas and Alampay, JJ., concur.

TEEHANKEE, J., concurring: I concur with the main opinion of Mr. Justice Escolin and the concurring opinion of Mme. Justice Herrera. The Rule of Law connotes a body of norms and laws published and ascertainable and of equal application to all similarly circumstances and not subject to arbitrary change but only under certain set procedures. The Court has consistently stressed that "it is an elementary rule of fair play and justice that a reasonable opportunity to be informed must be afforded to the people who are commanded to obey before they can be punished for its violation, 1 citing the settled principle based on due process enunciated in earlier cases that "before the public is bound by its contents, especially its penal provisions, a law, regulation or circular must first be published and the people officially and specially informed of said contents and its penalties. Without official publication in the Official Gazette as required by Article 2 of the Civil Code and the Revised Administrative Code, there would be no basis nor justification for the corollary rule of Article 3 of the Civil Code (based on constructive notice that the provisions of the law are ascertainable from the public and official repository where they are duly published) that "Ignorance of the law excuses no one from compliance therewith. Respondents' contention based on a misreading of Article 2 of the Civil Code that "only laws which are silent as to their effectivity [date] need be published in the Official Gazette for their effectivity" is manifestly untenable. The plain text and meaning of the Civil Code is that "laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided, " i.e. a different effectivity date is provided by the law itself. This proviso perforce refers to a law that has been duly published pursuant to the basic constitutional requirements of due process. The best example of this is the Civil Code itself: the same Article 2 provides otherwise that it "shall take effect [only] one year [not 15 days] after such publication. 2 To sustain respondents' misreading that "most laws or decrees specify the date of their effectivity and for this reason, publication in the Official Gazette is not necessary for their effectivity 3 would be to nullify and render nugatory the Civil Code's indispensable and essential requirement of prior publication in the Official Gazette by the simple expedient of providing for immediate effectivity or an earlier effectivity date in the law itself before the completion of 15 days following its publication which is the period generally fixed by the Civil Code for its proper dissemination.

MELENCIO-HERRERA, J., concurring: I agree. There cannot be any question but that even if a decree provides for a date of effectivity, it has to be published. What I would like to state in connection with that proposition is that when a date of effectivity is mentioned in the decree but the decree becomes effective only fifteen (15) days after its publication in the Official Gazette, it will not mean that the decree can have retroactive effect to the date of effectivity mentioned in the decree itself. There should be no retroactivity if the retroactivity will run counter to constitutional rights or shall destroy vested rights.

PLANA, J., concurring (with qualification): The Philippine Constitution does not require the publication of laws as a prerequisite for their effectivity, unlike some Constitutions elsewhere. * It may be said though that the guarantee of due process requires notice of laws to affected parties before they can be bound thereby; but such notice is not necessarily by publication in the Official Gazette. The due process clause is not that precise. Neither is the publication of laws in the Official Gazette required by any statute as a prerequisite for their effectivity, if said laws already provide for their effectivity date. Article 2 of the Civil Code provides that "laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided " Two things may be said of this provision: Firstly, it obviously does not apply to a law with a built-in provision as to when it will take effect. Secondly, it clearly recognizes that each law may provide not only a different period for reckoning its effectivity date but also a different mode of notice. Thus, a law may prescribe that it shall be published elsewhere than in the Official Gazette. Commonwealth Act No. 638, in my opinion, does not support the proposition that for their effectivity, laws must be published in the Official Gazette. The said law is simply "An Act to Provide for the Uniform Publication and Distribution of the Official Gazette." Conformably therewith, it authorizes the publication of the Official Gazette, determines its frequency, provides for its sale and distribution, and defines the authority of the Director of Printing in relation thereto. It also enumerates what shall be published in the Official Gazette, among them, "important legislative acts and resolutions of a public nature of the Congress of the Philippines" and "all executive and administrative orders and proclamations, except such as have no general applicability." It is noteworthy that not all legislative acts are required to be published in the Official Gazette but only "important" ones "of a public nature." Moreover, the said law does not provide that publication in the Official Gazette is essential for the effectivity of laws. This is as it should be, for all statutes are equal and stand on the same footing. A law, especially an earlier one of general application such as Commonwealth Act No. 638, cannot nullify or restrict the operation of a subsequent statute that has a provision of its own as to when and how it will take effect. Only a higher law, which is the Constitution, can assume that role. In fine, I concur in the majority decision to the extent that it requires notice before laws become effective, for no person should be bound by a law without notice. This is elementary

fairness. However, I beg to disagree insofar as it holds that such notice shall be by publication in the Official Gazette. Cuevas and Alampay, JJ., concur.

GUTIERREZ, Jr., J., concurring: I concur insofar as publication is necessary but reserve my vote as to the necessity of such publication being in the Official Gazette.

DE LA FUENTE, J., concurring: I concur insofar as the opinion declares the unpublished decrees and issuances of a public nature or general applicability ineffective, until due publication thereof.

Separate Opinions FERNANDO, C.J., concurring (with qualification): There is on the whole acceptance on my part of the views expressed in the ably written opinion of Justice Escolin. I am unable, however, to concur insofar as it would unqualifiedly impose the requirement of publication in the Official Gazette for unpublished "presidential issuances" to have binding force and effect. I shall explain why. 1. It is of course true that without the requisite publication, a due process question would arise if made to apply adversely to a party who is not even aware of the existence of any legislative or executive act having the force and effect of law. My point is that such publication required need not be confined to the Official Gazette. From the pragmatic standpoint, there is an advantage to be gained. It conduces to certainty. That is too be admitted. It does not follow, however, that failure to do so would in all cases and under all circumstances result in a statute, presidential decree or any other executive act of the same category being bereft of any binding force and effect. To so hold would, for me, raise a constitutional question. Such a pronouncement would lend itself to the interpretation that such a legislative or presidential act is bereft of the attribute of effectivity unless published in the Official Gazette. There is no such requirement in the Constitution as Justice Plana so aptly pointed out. It is true that what is decided now applies only to past "presidential issuances". Nonetheless, this clarification is, to my mind, needed to avoid any possible misconception as to what is required for any statute or presidential act to be impressed with binding force or effectivity.

2. It is quite understandable then why I concur in the separate opinion of Justice Plana. Its first paragraph sets forth what to me is the constitutional doctrine applicable to this case. Thus: "The Philippine Constitution does not require the publication of laws as a prerequisite for their effectivity, unlike some Constitutions elsewhere. It may be said though that the guarantee of due process requires notice of laws to affected Parties before they can be bound thereby; but such notice is not necessarily by publication in the Official Gazette. The due process clause is not that precise. 1 I am likewise in agreement with its closing paragraph: "In fine, I concur in the majority decision to the extent that it requires notice before laws become effective, for no person should be bound by a law without notice. This is elementary fairness. However, I beg to disagree insofar as it holds that such notice shall be by publication in the Official Gazette. 2 3. It suffices, as was stated by Judge Learned Hand, that law as the command of the government "must be ascertainable in some form if it is to be enforced at all. 3 It would indeed be to reduce it to the level of mere futility, as pointed out by Justice Cardozo, "if it is unknown and unknowable. 4 Publication, to repeat, is thus essential. What I am not prepared to subscribe to is the doctrine that it must be in the Official Gazette. To be sure once published therein there is the ascertainable mode of determining the exact date of its effectivity. Still for me that does not dispose of the question of what is the jural effect of past presidential decrees or executive acts not so published. For prior thereto, it could be that parties aware of their existence could have conducted themselves in accordance with their provisions. If no legal consequences could attach due to lack of publication in the Official Gazette, then serious problems could arise. Previous transactions based on such "Presidential Issuances" could be open to question. Matters deemed settled could still be inquired into. I am not prepared to hold that such an effect is contemplated by our decision. Where such presidential decree or executive act is made the basis of a criminal prosecution, then, of course, its ex post facto character becomes evident. 5 In civil cases though, retroactivity as such is not conclusive on the due process aspect. There must still be a showing of arbitrariness. Moreover, where the challenged presidential decree or executive act was issued under the police power, the non-impairment clause of the Constitution may not always be successfully invoked. There must still be that process of balancing to determine whether or not it could in such a case be tainted by infirmity. 6 In traditional terminology, there could arise then a question of unconstitutional application. That is as far as it goes. 4. Let me make therefore that my qualified concurrence goes no further than to affirm that publication is essential to the effectivity of a legislative or executive act of a general application. I am not in agreement with the view that such publication must be in the Official Gazette. The Civil Code itself in its Article 2 expressly recognizes that the rule as to laws taking effect after fifteen days following the completion of their publication in the Official Gazette is subject to this exception, "unless it is otherwise provided." Moreover, the Civil Code is itself only a legislative enactment, Republic Act No. 386. It does not and cannot have the juridical force of a constitutional command. A later legislative or executive act which has the force and effect of law can legally provide for a different rule. 5. Nor can I agree with the rather sweeping conclusion in the opinion of Justice Escolin that presidential decrees and executive acts not thus previously published in the Official Gazette would be devoid of any legal character. That would be, in my opinion, to go too far. It may be fraught, as earlier noted, with undesirable consequences. I find myself therefore unable to yield assent to such a pronouncement.

I am authorized to state that Justices Makasiar, Abad Santos, Cuevas, and Alampay concur in this separate opinion. Makasiar, Abad Santos, Cuevas and Alampay, JJ., concur.

TEEHANKEE, J., concurring: I concur with the main opinion of Mr. Justice Escolin and the concurring opinion of Mme. Justice Herrera. The Rule of Law connotes a body of norms and laws published and ascertainable and of equal application to all similarly circumstances and not subject to arbitrary change but only under certain set procedures. The Court has consistently stressed that "it is an elementary rule of fair play and justice that a reasonable opportunity to be informed must be afforded to the people who are commanded to obey before they can be punished for its violation, 1 citing the settled principle based on due process enunciated in earlier cases that "before the public is bound by its contents, especially its penal provisions, a law, regulation or circular must first be published and the people officially and specially informed of said contents and its penalties. Without official publication in the Official Gazette as required by Article 2 of the Civil Code and the Revised Administrative Code, there would be no basis nor justification for the corollary rule of Article 3 of the Civil Code (based on constructive notice that the provisions of the law are ascertainable from the public and official repository where they are duly published) that "Ignorance of the law excuses no one from compliance therewith. Respondents' contention based on a misreading of Article 2 of the Civil Code that "only laws which are silent as to their effectivity [date] need be published in the Official Gazette for their effectivity" is manifestly untenable. The plain text and meaning of the Civil Code is that "laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided, " i.e. a different effectivity date is provided by the law itself. This proviso perforce refers to a law that has been duly published pursuant to the basic constitutional requirements of due process. The best example of this is the Civil Code itself: the same Article 2 provides otherwise that it "shall take effect [only] one year [not 15 days] after such publication. 2 To sustain respondents' misreading that "most laws or decrees specify the date of their effectivity and for this reason, publication in the Official Gazette is not necessary for their effectivity 3 would be to nullify and render nugatory the Civil Code's indispensable and essential requirement of prior publication in the Official Gazette by the simple expedient of providing for immediate effectivity or an earlier effectivity date in the law itself before the completion of 15 days following its publication which is the period generally fixed by the Civil Code for its proper dissemination.

MELENCIO-HERRERA, J., concurring: I agree. There cannot be any question but that even if a decree provides for a date of effectivity, it has to be published. What I would like to state in connection with that proposition is that when a date of effectivity is mentioned in the decree but the decree becomes effective only fifteen (15) days after its publication in the Official Gazette, it will not mean that the decree can have retroactive effect to the date of effectivity mentioned in the

decree itself. There should be no retroactivity if the retroactivity will run counter to constitutional rights or shall destroy vested rights.

PLANA, J., concurring (with qualification): The Philippine Constitution does not require the publication of laws as a prerequisite for their effectivity, unlike some Constitutions elsewhere. * It may be said though that the guarantee of due process requires notice of laws to affected parties before they can be bound thereby; but such notice is not necessarily by publication in the Official Gazette. The due process clause is not that precise. Neither is the publication of laws in the Official Gazette required by any statute as a prerequisite for their effectivity, if said laws already provide for their effectivity date. Article 2 of the Civil Code provides that "laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided " Two things may be said of this provision: Firstly, it obviously does not apply to a law with a built-in provision as to when it will take effect. Secondly, it clearly recognizes that each law may provide not only a different period for reckoning its effectivity date but also a different mode of notice. Thus, a law may prescribe that it shall be published elsewhere than in the Official Gazette. Commonwealth Act No. 638, in my opinion, does not support the proposition that for their effectivity, laws must be published in the Official Gazette. The said law is simply "An Act to Provide for the Uniform Publication and Distribution of the Official Gazette." Conformably therewith, it authorizes the publication of the Official Gazette, determines its frequency, provides for its sale and distribution, and defines the authority of the Director of Printing in relation thereto. It also enumerates what shall be published in the Official Gazette, among them, "important legislative acts and resolutions of a public nature of the Congress of the Philippines" and "all executive and administrative orders and proclamations, except such as have no general applicability." It is noteworthy that not all legislative acts are required to be published in the Official Gazette but only "important" ones "of a public nature." Moreover, the said law does not provide that publication in the Official Gazette is essential for the effectivity of laws. This is as it should be, for all statutes are equal and stand on the same footing. A law, especially an earlier one of general application such as Commonwealth Act No. 638, cannot nullify or restrict the operation of a subsequent statute that has a provision of its own as to when and how it will take effect. Only a higher law, which is the Constitution, can assume that role. In fine, I concur in the majority decision to the extent that it requires notice before laws become effective, for no person should be bound by a law without notice. This is elementary fairness. However, I beg to disagree insofar as it holds that such notice shall be by publication in the Official Gazette. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-23794 February 17, 1968

ORMOC SUGAR COMPANY, INC., plaintiff-appellant, vs. THE TREASURER OF ORMOC CITY, THE MUNICIPAL BOARD OF ORMOC CITY, HON. ESTEBAN C. CONEJOS as Mayor of Ormoc City and ORMOC CITY, defendantsappellees. Ponce Enrile, Siguion Reyna, Montecillo & Belo and Teehankee, Carreon & Taada for plaintiff-appellant. Ramon O. de Veyra for defendants-appellees. BENGZON, J.P., J.: On January 29, 1964, the Municipal Board of Ormoc City passed 1 Ordinance No. 4, Series of 1964, imposing "on any and all productions of centrifugal sugar milled at the Ormoc Sugar Company, Inc., in Ormoc City a municipal tax equivalent to one per centum (1%) per export sale to the United States of America and other foreign countries." 2 Payments for said tax were made, under protest, by Ormoc Sugar Company, Inc. on March 20, 1964 for P7,087.50 and on April 20, 1964 for P5,000, or a total of P12,087.50. On June 1, 1964, Ormoc Sugar Company, Inc. filed before the Court of First Instance of Leyte, with service of a copy upon the Solicitor General, a complaint 3 against the City of Ormoc as well as its Treasurer, Municipal Board and Mayor, alleging that the afore-stated ordinance is unconstitutional for being violative of the equal protection clause (Sec. 1[1], Art. III, Constitution) and the rule of uniformity of taxation (Sec. 22[1]), Art. VI, Constitution), aside from being an export tax forbidden under Section 2287 of the Revised Administrative Code. It further alleged that the tax is neither a production nor a license tax which Ormoc City under Section 15-kk of its charter and under Section 2 of Republic Act 2264, otherwise known as the Local Autonomy Act, is authorized to impose; and that the tax amounts to a customs duty, fee or charge in violation of paragraph 1 of Section 2 of Republic Act 2264 because the tax is on both the sale and export of sugar. Answering, the defendants asserted that the tax ordinance was within defendant city's power to enact under the Local Autonomy Act and that the same did not violate the aforecited constitutional limitations. After pre-trial and submission of the case on memoranda, the Court of First Instance, on August 6, 1964, rendered a decision that upheld the constitutionality of the ordinance and declared the taxing power of defendant chartered city broadened by the Local Autonomy Act to include all other forms of taxes, licenses or fees not excluded in its charter. Appeal therefrom was directly taken to Us by plaintiff Ormoc Sugar Company, Inc. Appellant alleges the same statutory and constitutional violations in the aforesaid taxing ordinance mentioned earlier. Section 1 of the ordinance states: "There shall be paid to the City Treasurer on any and all productions of centrifugal sugar milled at the Ormoc Sugar Company, Incorporated, in Ormoc City, a municipal tax equivalent to one per centum (1%) per export sale to the United States of America and other foreign countries." Though referred to as a tax on the export of centrifugal sugar produced at Ormoc Sugar Company, Inc. For production of sugar alone is not taxable; the only time the tax applies is when the sugar produced is exported.

Appellant questions the authority of the defendant Municipal Board to levy such an export tax, in view of Section 2287 of the Revised Administrative Code which denies from municipal councils the power to impose an export tax. Section 2287 in part states: "It shall not be in the power of the municipal council to impose a tax in any form whatever, upon goods and merchandise carried into the municipality, or out of the same, and any attempt to impose an import or export tax upon such goods in the guise of an unreasonable charge for wharfage use of bridges or otherwise, shall be void." Subsequently, however, Section 2 of Republic Act 2264 effective June 19, 1959, gave chartered cities, municipalities and municipal districts authority to levy for public purposes just and uniform taxes, licenses or fees. Anent the inconsistency between Section 2287 of the Revised Administrative Code and Section 2 of Republic Act 2264, this Court, in Nin Bay Mining Co. v. Municipality of Roxas 4 held the former to have been repealed by the latter. And expressing Our awareness of the transcendental effects that municipal export or import taxes or licenses will have on the national economy, due to Section 2 of Republic Act 2264, We stated that there was no other alternative until Congress acts to provide remedial measures to forestall any unfavorable results. The point remains to be determined, however, whether constitutional limits on the power of taxation, specifically the equal protection clause and rule of uniformity of taxation, were infringed. The Constitution in the bill of rights provides: ". . . nor shall any person be denied the equal protection of the laws." (Sec. 1 [1], Art. III) In Felwa vs. Salas, 5 We ruled that the equal protection clause applies only to persons or things identically situated and does not bar a reasonable classification of the subject of legislation, and a classification is reasonable where (1) it is based on substantial distinctions which make real differences; (2) these are germane to the purpose of the law; (3) the classification applies not only to present conditions but also to future conditions which are substantially identical to those of the present; (4) the classification applies only to those who belong to the same class. A perusal of the requisites instantly shows that the questioned ordinance does not meet them, for it taxes only centrifugal sugar produced and exported by the Ormoc Sugar Company, Inc. and none other. At the time of the taxing ordinance's enactment, Ormoc Sugar Company, Inc., it is true, was the only sugar central in the city of Ormoc. Still, the classification, to be reasonable, should be in terms applicable to future conditions as well. The taxing ordinance should not be singular and exclusive as to exclude any subsequently established sugar central, of the same class as plaintiff, for the coverage of the tax. As it is now, even if later a similar company is set up, it cannot be subject to the tax because the ordinance expressly points only to Ormoc City Sugar Company, Inc. as the entity to be levied upon. Appellant, however, is not entitled to interest; on the refund because the taxes were not arbitrarily collected (Collector of Internal Revenue v. Binalbagan). 6 At the time of collection, the ordinance provided a sufficient basis to preclude arbitrariness, the same being then presumed constitutional until declared otherwise. WHEREFORE, the decision appealed from is hereby reversed, the challenged ordinance is declared unconstitutional and the defendants-appellees are hereby ordered to refund the P12,087.50 plaintiff-appellant paid under protest. No costs. So ordered.

Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 105371 November 11, 1993 THE PHILIPPINE JUDGES ASSOCIATION, duly rep. by its President, BERNARDO P. ABESAMIS, Vice-President for Legal Affairs, MARIANO M. UMALI, Director for Pasig, Makati, and Pasay, Metro Manila, ALFREDO C. FLORES, and Chairman of the Committee on Legal Aid, JESUS G. BERSAMIRA, Presiding Judges of the Regional Trial Court, Branch 85, Quezon City and Branches 160, 167 and 166, Pasig, Metro Manila, respectively: the NATIONAL CONFEDERATION OF THE JUDGES ASSOCIATION OF THE PHILIPPINES, composed of the METROPOLITAN TRIAL COURT JUDGES ASSOCIATION rep. by its President. REINATO QUILALA of the MUNICIPAL TRIAL CIRCUIT COURT, Manila; THE MUNICIPAL JUDGES LEAGUE OF THE PHILIPPINES rep. by its President, TOMAS G. TALAVERA; by themselves and in behalf of all the Judges of the Regional Trial and Shari'a Courts, Metropolitan Trial Courts and Municipal Courts throughout the Country, petitioners, vs. HON. PETE PRADO, in his capacity as Secretary of the Department of Transportation and Communications, JORGE V. SARMIENTO, in his capacity as Postmaster General, and the PHILIPPINE POSTAL CORP., respondents.

CRUZ, J.: The basic issue raised in this petition is the independence of the Judiciary. It is asserted by the petitioners that this hallmark of republicanism is impaired by the statute and circular they are here challenging. The Supreme Court is itself affected by these measures and is thus an interested party that should ordinarily not also be a judge at the same time. Under our system of government, however, it cannot inhibit itself and must rule upon the challenge, because no other office has the authority to do so. We shall therefore act upon this matter not with officiousness but in the discharge of an unavoidable duty and, as always, with detachment and fairness. The main target of this petition is Section 35 of R.A. No. 7354 as implemented by the Philippine Postal Corporation through its Circular No. 92-28. These measures withdraw the franking privilege from the Supreme Court, the Court of Appeals, the Regional Trial Courts, the Metropolitan Trial Courts, the Municipal Trial Courts, and the Land Registration Commission and its Registers of Deeds, along with certain other government offices. The petitioners are members of the lower courts who feel that their official functions as judges will be prejudiced by the above-named measures. The National Land Registration Authority has taken common cause with them insofar as its own activities, such as sending of requisite notices in registration cases, affect judicial proceedings. On its motion, it has been allowed to intervene.

The petition assails the constitutionality of R.A. No. 7354 on the grounds that: (1) its title embraces more than one subject and does not express its purposes; (2) it did not pass the required readings in both Houses of Congress and printed copies of the bill in its final form were not distributed among the members before its passage; and (3) it is discriminatory and encroaches on the independence of the Judiciary. We approach these issues with one important principle in mind, to wit, the presumption of the constitutionality of statutes. The theory is that as the joint act of the Legislature and the Executive, every statute is supposed to have first been carefully studied and determined to be constitutional before it was finally enacted. Hence, unless it is clearly shown that it is constitutionally flawed, the attack against its validity must be rejected and the law itself upheld. To doubt is to sustain. I We consider first the objection based on Article VI, Sec. 26(l), of the Constitution providing that "Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof." The purposes of this rule are: (1) to prevent hodge-podge or "log-rolling" legislation; (2) to prevent surprise or fraud upon the legislature by means of provisions in bills of which the title gives no intimation, and which might therefore be overlooked and carelessly and unintentionally adopted; and (3) to fairly apprise the people, through such publication of legislative proceedings as is usually made, of the subject of legislation that is being considered, in order that they may have opportunity of being heard thereon, by petition or otherwise, if they shall so desire. 1 It is the submission of the petitioners that Section 35 of R.A. No. 7354 which withdrew the franking privilege from the Judiciary is not expressed in the title of the law, nor does it reflect its purposes. R.A. No. 7354 is entitled "An Act Creating the Philippine Postal Corporation, Defining its Powers, Functions and Responsibilities, Providing for Regulation of the Industry and for Other Purposes Connected Therewith." The objectives of the law are enumerated in Section 3, which provides: The State shall pursue the following objectives of a nationwide postal system: a) to enable the economical and speedy transfer of mail and other postal matters, from sender to addressee, with full recognition of their privacy or confidentiality; b) to promote international interchange, cooperation and understanding through the unhampered flow or exchange of postal matters between nations; c) to cause or effect a wide range of postal services to cater to different users and changing needs, including but not limited to, philately, transfer of monies and valuables, and the like;

d) to ensure that sufficient revenues are generated by and within the industry to finance the overall cost of providing the varied range of postal delivery and messengerial services as well as the expansion and continuous upgrading of service standards by the same. Sec. 35 of R.A. No. 7354, which is the principal target of the petition, reads as follows: Sec. 35. Repealing Clause. All acts, decrees, orders, executive orders, instructions, rules and regulations or parts thereof inconsistent with the provisions of this Act are repealed or modified accordingly. All franking privileges authorized by law are hereby repealed, except those provided for under Commonwealth Act No. 265, Republic Acts Numbered 69, 180, 1414, 2087 and 5059. The Corporation may continue the franking privilege under Circular No. 35 dated October 24, 1977 and that of the Vice President, under such arrangements and conditions as may obviate abuse or unauthorized use thereof. The petitioners' contention is untenable. We do not agree that the title of the challenged act violates the Constitution. The title of the bill is not required to be an index to the body of the act, or to be as comprehensive as to cover every single detail of the measure. It has been held that if the title fairly indicates the general subject, and reasonably covers all the provisions of the act, and is not calculated to mislead the legislature or the people, there is sufficient compliance with the constitutional requirement. 2 To require every end and means necessary for the accomplishment of the general objectives of the statute to be expressed in its title would not only be unreasonable but would actually render legislation impossible. 3 As has been correctly explained: The details of a legislative act need not be specifically stated in its title, but matter germane to the subject as expressed in the title, and adopted to the accomplishment of the object in view, may properly be included in the act. Thus, it is proper to create in the same act the machinery by which the act is to be enforced, to prescribe the penalties for its infraction, and to remove obstacles in the way of its execution. If such matters are properly connected with the subject as expressed in the title, it is unnecessary that they should also have special mention in the title (Southern Pac. Co. v. Bartine, 170 Fed. 725). This is particularly true of the repealing clause, on which Cooley writes: "The repeal of a statute on a given subject is properly connected with the subject matter of a new statute on the same subject; and therefore a repealing section in the new statute is valid, notwithstanding that the title is silent on the subject. It would be difficult to conceive of a matter more germane to an act and to the object to be accomplished thereby than the repeal of previous legislations connected therewith." 4 The reason is that where a statute repeals a former law, such repeal is the effect and not the subject of the statute; and it is the subject, not the effect of a law, which is required to be briefly expressed in its title. 5 As observed in one case, 6 if the title of an act embraces only one subject, we apprehend it was never claimed that every other act which repeals it or

alters by implication must be mentioned in the title of the new act. Any such rule would be neither within the reason of the Constitution, nor practicable. We are convinced that the withdrawal of the franking privilege from some agencies is germane to the accomplishment of the principal objective of R.A. No. 7354, which is the creation of a more efficient and effective postal service system. Our ruling is that, by virtue of its nature as a repealing clause, Section 35 did not have to be expressly included in the title of the said law. II The petitioners maintain that the second paragraph of Sec. 35 covering the repeal of the franking privilege from the petitioners and this Court under E.O. 207, PD 1882 and PD 26 was not included in the original version of Senate Bill No. 720 or House Bill No. 4200. As this paragraph appeared only in the Conference Committee Report, its addition, violates Article VI, Sec. 26(2) of the Constitution, reading as follows: (2) No bill passed by either House shall become a law unless it has passed three readings on separate days, and printed copies thereof in its final form have been distributed to its Members three days before its passage, except when the President certifies to the necessity of its immediate enactment to meet a public calamity or emergency. Upon the last reading of a bill, no amendment thereto shall be allowed, and the vote thereon shall be taken immediately thereafter, and the yeas and nays entered in the Journal. The petitioners also invoke Sec. 74 of the Rules of the House of Representatives, requiring that amendment to any bill when the House and the Senate shall have differences thereon may be settled by a conference committee of both chambers. They stress that Sec. 35 was never a subject of any disagreement between both Houses and so the second paragraph could not have been validly added as an amendment. These argument are unacceptable. While it is true that a conference committee is the mechanism for compromising differences between the Senate and the House, it is not limited in its jurisdiction to this question. Its broader function is described thus: A conference committee may, deal generally with the subject matter or it may be limited to resolving the precise differences between the two houses. Even where the conference committee is not by rule limited in its jurisdiction, legislative custom severely limits the freedom with which new subject matter can be inserted into the conference bill. But occasionally a conference committee produces unexpected results, results beyond its mandate, These excursions occur even where the rules impose strict limitations on conference committee jurisdiction. This is symptomatic of the authoritarian power of conference committee (Davies, Legislative Law and Process: In a Nutshell, 1986 Ed., p.81). It is a matter of record that the conference Committee Report on the bill in question was returned to and duly approved by both the Senate and the House of Representatives. Thereafter, the bill was enrolled with its certification by Senate President Neptali A. Gonzales and Speaker Ramon V. Mitra of the House of Representatives as having been duly passed

by both Houses of Congress. It was then presented to and approved by President Corazon C. Aquino on April 3, 1992. Under the doctrine of separation powers, the Court may not inquire beyond the certification of the approval of a bill from the presiding officers of Congress. Casco Philippine Chemical Co. v. Gimenez 7 laid down the rule that the enrolled bill, is conclusive upon the Judiciary (except in matters that have to be entered in the journals like the yeas and nays on the final reading of the bill). 8 The journals are themselves also binding on the Supreme Court, as we held in the old (but still valid) case of U.S. vs. Pons, 9 where we explained the reason thus: To inquire into the veracity of the journals of the Philippine legislature when they are, as we have said, clear and explicit, would be to violate both the, letter and spirit of the organic laws by which the Philippine Government was brought into existence, to invade a coordinate and independent department of the Government, and to interfere with the legitimate powers and functions, of the Legislature. Applying these principles, we shall decline to look into the petitioners' charges that an amendment was made upon the last reading of the bill that eventually became R.A. No. 7354 and that copies thereof in its final form were not distributed among the members of each House. Both the enrolled bill and the legislative journals certify that the measure was duly enacted i.e., in accordance with Article VI, Sec. 26(2) of the Constitution. We are bound by such official assurances from a coordinate department of the government, to which we owe, at the very least, a becoming courtesy. III The third and most serious challenge of the petitioners is based on the equal protection clause. It is alleged that R.A. No. 7354 is discriminatory because while withdrawing the franking privilege from the Judiciary, it retains the same for the President of the Philippines, the Vice President of the Philippines; Senators and Members of the House of Representatives, the Commission on Elections; former Presidents of the Philippines; the National Census and Statistics Office; and the general public in the filing of complaints against public offices and officers. 10 The respondents counter that there is no discrimination because the law is based on a valid classification in accordance with the equal protection clause. In fact, the franking privilege has been withdrawn not only from the Judiciary but also the Office of Adult Education, the Institute of National Language; the Telecommunications Office; the Philippine Deposit Insurance Corporation; the National Historical Commission; the Armed Forces of the Philippines; the Armed Forces of the Philippines Ladies Steering Committee; the City and Provincial Prosecutors; the Tanodbayan (Office of Special Prosecutor); the Kabataang Barangay; the Commission on the Filipino Language; the Provincial and City Assessors; and the National Council for the Welfare of Disabled Persons. 11 The equal protection of the laws is embraced in the concept of due process, as every unfair discrimination offends the requirements of justice and fair play. It has nonetheless been embodied in a separate clause in Article III Sec. 1., of the Constitution to provide for a more, specific guaranty against any form of undue favoritism or hostility from the government.

Arbitrariness in general may be challenged on the basis of the due process clause. But if the particular act assailed partakes of an unwarranted partiality or prejudice, the sharper weapon to cut it down is the equal protection clause. According to a long line of decisions, equal protection simply requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed, 12 Similar subjects, in other words, should not be treated differently, so as to give undue favor to some and unjustly discriminate against others. The equal protection clause does not require the universal application of the laws on all persons or things without distinction. This might in fact sometimes result in unequal protection, as where, for example, a law prohibiting mature books to all persons, regardless of age, would benefit the morals of the youth but violate the liberty of adults. What the clause requires is equality among equals as determined according to a valid classification. By classification is meant the grouping of persons or things similar to each other in certain particulars and different from all others in these same particulars. 13 What is the reason for the grant of the franking privilege in the first place? Is the franking privilege extended to the President of the Philippines or the Commission on Elections or to former Presidents of the Philippines purely as a courtesy from the lawmaking body? Is it offered because of the importance or status of the grantee or because of its need for the privilege? Or have the grantees been chosen pell-mell, as it were, without any basis at all for the selection? We reject outright the last conjecture as there is no doubt that the statute as a whole was carefully deliberated upon, by the political departments before it was finally enacted. There is reason to suspect, however, that not enough care or attention was given to its repealing clause, resulting in the unwitting withdrawal of the franking privilege from the Judiciary. We also do not believe that the basis of the classification was mere courtesy, for it is unimaginable that the political departments would have intended this serious slight to the Judiciary as the third of the major and equal departments the government. The same observations are made if the importance or status of the grantee was the criterion used for the extension of the franking privilege, which is enjoyed by the National Census and Statistics Office and even some private individuals but not the courts of justice. In our view, the only acceptable reason for the grant of the franking privilege was the perceived need of the grantee for the accommodation, which would justify a waiver of substantial revenue by the Corporation in the interest of providing for a smoother flow of communication between the government and the people. Assuming that basis, we cannot understand why, of all the departments of the government, it is the Judiciary, that has been denied the franking privilege. There is no question that if there is any major branch of the government that needs the privilege, it is the Judicial Department, as the respondents themselves point out. Curiously, the respondents would justify the distinction on the basis precisely of this need and, on this basis, deny the Judiciary the franking privilege while extending it to others less deserving. In their Comment, the respondents point out that available data from the Postal Service Office show that from January 1988 to June 1992, the total volume of frank mails amounted to P90,424,175.00. Of this amount, frank mails from the Judiciary and other agencies whose functions include the service of judicial processes, such as the intervenor, the Department of

Justice and the Office of the Ombudsman, amounted to P86,481,759. Frank mails coming fromthe Judiciary amounted to P73,574,864.00, and those coming from the petitioners reached the total amount of P60,991,431.00. The respondents' conclusion is that because of this considerable volume of mail from the Judiciary, the franking privilege must be withdrawn from it. The argument is self-defeating. The respondents are in effect saying that the franking privilege should be extended only to those who do not need it very much, if at all, (like the widows of former Presidents) but not to those who need it badly (especially the courts of justice). It is like saying that a person may be allowed cosmetic surgery although it is not really necessary but not an operation that can save his life. If the problem of the respondents is the loss of revenues from the franking privilege, the remedy, it seems to us, is to withdraw it altogether from all agencies of government, including those who do not need it. The problem is not solved by retaining it for some and withdrawing it from others, especially where there is no substantial distinction between those favored, which may or may not need it at all, and the Judiciary, which definitely needs it. The problem is not solved by violating the Constitution. In lumping the Judiciary with the other offices from which the franking privilege has been withdrawn, Section 35 has placed the courts of justice in a category to which it does not belong. If it recognizes the need of the President of the Philippines and the members of Congress for the franking privilege, there is no reason why it should not recognize a similar and in fact greater need on the part of the Judiciary for such privilege. While we may appreciate the withdrawal of the franking privilege from the Armed Forces of the Philippines Ladies Steering Committee, we fail to understand why the Supreme Court should be similarly treated as that Committee. And while we may concede the need of the National Census and Statistics Office for the franking privilege, we are intrigued that a similar if not greater need is not recognized in the courts of justice. (On second thought, there does not seem to be any justifiable need for withdrawing the privilege from the Armed Forces of the Philippines Ladies Steering Committee, which, like former Presidents of the Philippines or their widows, does not send as much frank mail as the Judiciary.) It is worth observing that the Philippine Postal Corporation, as a government-controlled corporation, was created and is expected to operate for the purpose of promoting the public service. While it may have been established primarily for private gain, it cannot excuse itself from performing certain functions for the benefit of the public in exchange for the franchise extended to it by the government and the many advantages it enjoys under its charter. 14 Among the services it should be prepared to extend is free carriage of mail for certain offices of the government that need the franking privilege in the discharge of their own public functions. We also note that under Section 9 of the law, the Corporation is capitalized at P10 billion pesos, 55% of which is supplied by the Government, and that it derives substantial revenues from the sources enumerated in Section 10, on top of the exemptions it enjoys. It is not likely that the retention of the franking privilege of the Judiciary will cripple the Corporation. At this time when the Judiciary is being faulted for the delay in the administration of justice, the withdrawal from it of the franking privilege can only further deepen this serious problem. The volume of judicial mail, as emphasized by the respondents themselves, should stress

the dependence of the courts of justice on the postal service for communicating with lawyers and litigants as part of the judicial process. The Judiciary has the lowest appropriation in the national budget compared to the Legislative and Executive Departments; of the P309 billion budgeted for 1993, only .84%, or less than 1%, is alloted for the judiciary. It should not be hard to imagine the increased difficulties of our courts if they have to affix a purchased stamp to every process they send in the discharge of their judicial functions. We are unable to agree with the respondents that Section 35 of R.A. No. 7354 represents a valid exercise of discretion by the Legislature under the police power. On the contrary, we find its repealing clause to be a discriminatory provision that denies the Judiciary the equal protection of the laws guaranteed for all persons or things similarly situated. The distinction made by the law is superficial. It is not based on substantial distinctions that make real differences between the Judiciary and the grantees of the franking privilege. This is not a question of wisdom or power into which the Judiciary may not intrude. It is a matter of arbitrariness that this Court has the duty and power to correct. IV In sum, we sustain R.A. No. 7354 against the attack that its subject is not expressed in its title and that it was not passed in accordance with the prescribed procedure. However, we annul Section 35 of the law as violative of Article 3, Sec. 1, of the Constitution providing that no person shall "be deprived of the equal protection of laws." We arrive at these conclusions with a full awareness of the criticism it is certain to provoke. While ruling against the discrimination in this case, we may ourselves be accused of similar discrimination through the exercise of our ultimate power in our own favor. This is inevitable. Criticism of judicial conduct, however undeserved, is a fact of life in the political system that we are prepared to accept.. As judges, we cannot debate with our detractors. We can only decide the cases before us as law imposes on us the duty to be fair and our own conscience gives us the light to be right. ACCORDINGLY, the petition is partially GRANTED and Section 35 of R.A. No. 7354 is declared UNCONSTITUTIONAL. Circular No. 92-28 is SET ASIDE insofar as it withdraws the franking privilege from the Supreme Court, the Court of Appeals, the Regional trail Courts, the Municipal trial Courts, and the National Land Registration Authority and its Register of Deeds to all of which offices the said privilege shall be RESTORED. The temporary restraining order dated June 2, 1992, is made permanent. SO ORDERED. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-59234 September 30, 1982 TAXICAB OPERATORS OF METRO MANILA, INC., FELICISIMO CABIGAO and ACE TRANSPORTATION CORPORATION, petitioners,

vs. THE BOARD OF TRANSPORTATION and THE DIRECTOR OF THE BUREAU OF LAND TRANSPORTATION, respondents.

MELENCIO-HERRERA, J.: This Petition for "Certiorari, Prohibition and mandamus with Preliminary Injunction and Temporary Restraining Order" filed by the Taxicab Operators of Metro Manila, Inc., Felicisimo Cabigao and Ace Transportation, seeks to declare the nullity of Memorandum Circular No. 77-42, dated October 10, 1977, of the Board of Transportation, and Memorandum Circular No. 52, dated August 15, 1980, of the Bureau of Land Transportation. Petitioner Taxicab Operators of Metro Manila, Inc. (TOMMI) is a domestic corporation composed of taxicab operators, who are grantees of Certificates of Public Convenience to operate taxicabs within the City of Manila and to any other place in Luzon accessible to vehicular traffic. Petitioners Ace Transportation Corporation and Felicisimo Cabigao are two of the members of TOMMI, each being an operator and grantee of such certificate of public convenience. On October 10, 1977, respondent Board of Transportation (BOT) issued Memorandum Circular No. 77-42 which reads: SUBJECT: Phasing out and Replacement of Old and Dilapidated Taxis WHEREAS, it is the policy of the government to insure that only safe and comfortable units are used as public conveyances; WHEREAS, the riding public, particularly in Metro-Manila, has, time and again, complained against, and condemned, the continued operation of old and dilapidated taxis; WHEREAS, in order that the commuting public may be assured of comfort, convenience, and safety, a program of phasing out of old and dilapidated taxis should be adopted; WHEREAS, after studies and inquiries made by the Board of Transportation, the latter believes that in six years of operation, a taxi operator has not only covered the cost of his taxis, but has made reasonable profit for his investments; NOW, THEREFORE, pursuant to this policy, the Board hereby declares that no car beyond six years shall be operated as taxi, and in implementation of the same hereby promulgates the following rules and regulations: 1. As of December 31, 1977, all taxis of Model 1971 and earlier are ordered withdrawn from public service and thereafter may no longer be registered and operated as taxis. In the registration of cards for 1978, only taxis of

Model 1972 and later shall be accepted for registration and allowed for operation; 2. As of December 31, 1978, all taxis of Model 1972 are ordered withdrawn from public service and thereafter may no longer be registered and operated as taxis. In the registration of cars for 1979, only taxis of Model 1973 and later shall be accepted for registration and allowed for operation; and every year thereafter, there shall be a six-year lifetime of taxi, to wit: 1980 Model 1974 1981 Model 1975, etc. All taxis of earlier models than those provided above are hereby ordered withdrawn from public service as of the last day of registration of each particular year and their respective plates shall be surrendered directly to the Board of Transportation for subsequent turnover to the Land Transportation Commission. For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be effective in Metro-Manila. Its implementation outside Metro- Manila shall be carried out only after the project has been implemented in Metro-Manila and only after the date has been determined by the Board. 1 Pursuant to the above BOT circular, respondent Director of the Bureau of Land Transportation (BLT) issued Implementing Circular No. 52, dated August 15, 1980, instructing the Regional Director, the MV Registrars and other personnel of BLT, all within the National Capitol Region, to implement said Circular, and formulating a schedule of phase-out of vehicles to be allowed and accepted for registration as public conveyances. To quote said Circular: Pursuant to BOT Memo-Circular No. 77-42, taxi units with year models over six (6) years old are now banned from operating as public utilities in Metro Manila. As such the units involved should be considered as automatically dropped as public utilities and, therefore, do not require any further dropping order from the BOT. Henceforth, taxi units within the National Capitol Region having year models over 6 years old shall be refused registration. The following schedule of phase-out is herewith prescribed for the guidance of all concerned:
Year Model

Automatic Phase-Out Year 1980

1974 1975

1981 1982

1976 1977 etc.

1983

etc.

Strict compliance here is desired. 2 In accordance therewith, cabs of model 1971 were phase-out in registration year 1978; those of model 1972, in 1979; those of model 1973, in 1980; and those of model 1974, in 1981. On January 27, 1981, petitioners filed a Petition with the BOT, docketed as Case No. 807553, seeking to nullify MC No. 77-42 or to stop its implementation; to allow the registration and operation in 1981 and subsequent years of taxicabs of model 1974, as well as those of earlier models which were phased-out, provided that, at the time of registration, they are roadworthy and fit for operation. On February 16, 1981, petitioners filed before the BOT a "Manifestation and Urgent Motion", praying for an early hearing of their petition. The case was heard on February 20, 1981. Petitioners presented testimonial and documentary evidence, offered the same, and manifested that they would submit additional documentary proofs. Said proofs were submitted on March 27, 1981 attached to petitioners' pleading entitled, "Manifestation, Presentation of Additional Evidence and Submission of the Case for Resolution." 3 On November 28, 1981, petitioners filed before the same Board a "Manifestation and Urgent Motion to Resolve or Decide Main Petition" praying that the case be resolved or decided not later than December 10, 1981 to enable them, in case of denial, to avail of whatever remedy they may have under the law for the protection of their interests before their 1975 model cabs are phased-out on January 1, 1982. Petitioners, through its President, allegedly made personal follow-ups of the case, but was later informed that the records of the case could not be located. On December 29, 1981, the present Petition was instituted wherein the following queries were posed for consideration by this Court: A. Did BOT and BLT promulgate the questioned memorandum circulars in accord with the manner required by Presidential Decree No. 101, thereby safeguarding the petitioners' constitutional right to procedural due process? B. Granting, arguendo, that respondents did comply with the procedural requirements imposed by Presidential Decree No. 101, would the implementation and enforcement of the assailed memorandum circulars violate the petitioners' constitutional rights to. (1) Equal protection of the law; (2) Substantive due process; and (3) Protection against arbitrary and unreasonable classification and standard?

On Procedural and Substantive Due Process: Presidential Decree No. 101 grants to the Board of Transportation the power 4. To fix just and reasonable standards, classification, regulations, practices, measurements, or service to be furnished, imposed, observed, and followed by operators of public utility motor vehicles. Section 2 of said Decree provides procedural guidelines for said agency to follow in the exercise of its powers: Sec. 2. Exercise of powers. In the exercise of the powers granted in the preceding section, the Board shag proceed promptly along the method of legislative inquiry. Apart from its own investigation and studies, the Board, in its discretion, may require the cooperation and assistance of the Bureau of Transportation, the Philippine Constabulary, particularly the Highway Patrol Group, the support agencies within the Department of Public Works, Transportation and Communications, or any other government office or agency that may be able to furnish useful information or data in the formulation of the Board of any policy, plan or program in the implementation of this Decree. The Board may also can conferences, require the submission of position papers or other documents, information, or data by operators or other persons that may be affected by the implementation of this Decree, or employ any other suitable means of inquiry. In support of their submission that they were denied procedural due process, petitioners contend that they were not caged upon to submit their position papers, nor were they ever summoned to attend any conference prior to the issuance of the questioned BOT Circular. It is clear from the provision aforequoted, however, that the leeway accorded the Board gives it a wide range of choice in gathering necessary information or data in the formulation of any policy, plan or program. It is not mandatory that it should first call a conference or require the submission of position papers or other documents from operators or persons who may be affected, this being only one of the options open to the Board, which is given wide discretionary authority. Petitioners cannot justifiably claim, therefore, that they were deprived of procedural due process. Neither can they state with certainty that public respondents had not availed of other sources of inquiry prior to issuing the challenged Circulars. operators of public conveyances are not the only primary sources of the data and information that may be desired by the BOT. Dispensing with a public hearing prior to the issuance of the Circulars is neither violative of procedural due process. As held in Central Bank vs. Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972): Pevious notice and hearing as elements of due process, are constitutionally required for the protection of life or vested property rights, as well as of liberty, when its limitation or loss takes place in consequence of a judicial or quasi-judicial proceeding, generally dependent upon a past act or event

which has to be established or ascertained. It is not essential to the validity of general rules or regulations promulgated to govern future conduct of a class or persons or enterprises, unless the law provides otherwise. (Emphasis supplied) Petitioners further take the position that fixing the ceiling at six (6) years is arbitrary and oppressive because the roadworthiness of taxicabs depends upon their kind of maintenance and the use to which they are subjected, and, therefore, their actual physical condition should be taken into consideration at the time of registration. As public contend, however, it is impractical to subject every taxicab to constant and recurring evaluation, not to speak of the fact that it can open the door to the adoption of multiple standards, possible collusion, and even graft and corruption. A reasonable standard must be adopted to apply to an vehicles affected uniformly, fairly, and justly. The span of six years supplies that reasonable standard. The product of experience shows that by that time taxis have fully depreciated, their cost recovered, and a fair return on investment obtained. They are also generally dilapidated and no longer fit for safe and comfortable service to the public specially considering that they are in continuous operation practically 24 hours everyday in three shifts of eight hours per shift. With that standard of reasonableness and absence of arbitrariness, the requirement of due process has been met. On Equal Protection of the Law: Petitioners alleged that the Circular in question violates their right to equal protection of the law because the same is being enforced in Metro Manila only and is directed solely towards the taxi industry. At the outset it should be pointed out that implementation outside Metro Manila is also envisioned in Memorandum Circular No. 77-42. To repeat the pertinent portion: For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be effective in Metro Manila. Its implementation outside Metro Manila shall be carried out only after the project has been implemented in Metro Manila and only after the date has been determined by the Board. 4 In fact, it is the understanding of the Court that implementation of the Circulars in Cebu City is already being effected, with the BOT in the process of conducting studies regarding the operation of taxicabs in other cities. The Board's reason for enforcing the Circular initially in Metro Manila is that taxicabs in this city, compared to those of other places, are subjected to heavier traffic pressure and more constant use. This is of common knowledge. Considering that traffic conditions are not the same in every city, a substantial distinction exists so that infringement of the equal protection clause can hardly be successfully claimed. As enunciated in the preambular clauses of the challenged BOT Circular, the overriding consideration is the safety and comfort of the riding public from the dangers posed by old and dilapidated taxis. The State, in the exercise, of its police power, can prescribe regulations to promote the health, morals, peace, good order, safety and general welfare of the people. It can prohibit all things hurtful to comfort, safety and welfare of society. 5 It may also regulate property rights. 6 In the language of Chief Justice Enrique M. Fernando "the necessities imposed by public welfare may justify the exercise of governmental authority to regulate even if thereby certain groups may plausibly assert that their interests are disregarded". 7

In so far as the non-application of the assailed Circulars to other transportation services is concerned, it need only be recalled that the equal protection clause does not imply that the same treatment be accorded all and sundry. It applies to things or persons Identically or similarly situated. It permits of classification of the object or subject of the law provided classification is reasonable or based on substantial distinction, which make for real differences, and that it must apply equally to each member of the class. 8 What is required under the equal protection clause is the uniform operation by legal means so that all persons under Identical or similar circumstance would be accorded the same treatment both in privilege conferred and the liabilities imposed. 9 The challenged Circulars satisfy the foregoing criteria. Evident then is the conclusion that the questioned Circulars do not suffer from any constitutional infirmity. To declare a law unconstitutional, the infringement of constitutional right must be clear, categorical and undeniable. 10 WHEREFORE, the Writs prayed for are denied and this Petition is hereby dismissed. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-59234 September 30, 1982 TAXICAB OPERATORS OF METRO MANILA, INC., FELICISIMO CABIGAO and ACE TRANSPORTATION CORPORATION, petitioners, vs. THE BOARD OF TRANSPORTATION and THE DIRECTOR OF THE BUREAU OF LAND TRANSPORTATION, respondents.

MELENCIO-HERRERA, J.: This Petition for "Certiorari, Prohibition and mandamus with Preliminary Injunction and Temporary Restraining Order" filed by the Taxicab Operators of Metro Manila, Inc., Felicisimo Cabigao and Ace Transportation, seeks to declare the nullity of Memorandum Circular No. 77-42, dated October 10, 1977, of the Board of Transportation, and Memorandum Circular No. 52, dated August 15, 1980, of the Bureau of Land Transportation. Petitioner Taxicab Operators of Metro Manila, Inc. (TOMMI) is a domestic corporation composed of taxicab operators, who are grantees of Certificates of Public Convenience to operate taxicabs within the City of Manila and to any other

place in Luzon accessible to vehicular traffic. Petitioners Ace Transportation Corporation and Felicisimo Cabigao are two of the members of TOMMI, each being an operator and grantee of such certificate of public convenience. On October 10, 1977, respondent Board of Transportation (BOT) issued Memorandum Circular No. 77-42 which reads:
SUBJECT: Phasing out and Replacement of Old and Dilapidated Taxis WHEREAS, it is the policy of the government to insure that only safe and comfortable units are used as public conveyances; WHEREAS, the riding public, particularly in Metro-Manila, has, time and again, complained against, and condemned, the continued operation of old and dilapidated taxis; WHEREAS, in order that the commuting public may be assured of comfort, convenience, and safety, a program of phasing out of old and dilapidated taxis should be adopted; WHEREAS, after studies and inquiries made by the Board of Transportation, the latter believes that in six years of operation, a taxi operator has not only covered the cost of his taxis, but has made reasonable profit for his investments; NOW, THEREFORE, pursuant to this policy, the Board hereby declares that no car beyond six years shall be operated as taxi, and in implementation of the same hereby promulgates the following rules and regulations: 1. As of December 31, 1977, all taxis of Model 1971 and earlier are ordered withdrawn from public service and thereafter may no longer be registered and operated as taxis. In the registration of cards for 1978, only taxis of Model 1972 and later shall be accepted for registration and allowed for operation; 2. As of December 31, 1978, all taxis of Model 1972 are ordered withdrawn from public service and thereafter may no longer be registered and operated as taxis. In the registration of cars for 1979, only taxis of Model 1973 and later shall be accepted for registration and allowed for operation; and every year thereafter, there shall be a six-year lifetime of taxi, to wit: 1980 Model 1974 1981 Model 1975, etc. All taxis of earlier models than those provided above are hereby ordered withdrawn from public service as of the last day of registration of each particular year and their respective plates shall be surrendered directly to the Board of Transportation for subsequent turnover to the Land Transportation Commission. For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be effective in Metro-Manila. Its implementation outside Metro-

Manila shall be carried out only after the project has been implemented in MetroManila and only after the date has been determined by the Board. 1

Pursuant to the above BOT circular, respondent Director of the Bureau of Land Transportation (BLT) issued Implementing Circular No. 52, dated August 15, 1980, instructing the Regional Director, the MV Registrars and other personnel of BLT, all within the National Capitol Region, to implement said Circular, and formulating a schedule of phase-out of vehicles to be allowed and accepted for registration as public conveyances. To quote said Circular:
Pursuant to BOT Memo-Circular No. 77-42, taxi units with year models over six (6) years old are now banned from operating as public utilities in Metro Manila. As such the units involved should be considered as automatically dropped as public utilities and, therefore, do not require any further dropping order from the BOT. Henceforth, taxi units within the National Capitol Region having year models over 6 years old shall be refused registration. The following schedule of phase-out is herewith prescribed for the guidance of all concerned:
Year Model Automatic PhaseOut Year 1980 1974 1975 1976 1977 etc. etc. 1981 1982 1983

Strict compliance here is desired. 2

In accordance therewith, cabs of model 1971 were phase-out in registration year 1978; those of model 1972, in 1979; those of model 1973, in 1980; and those of model 1974, in 1981. On January 27, 1981, petitioners filed a Petition with the BOT, docketed as Case No. 80-7553, seeking to nullify MC No. 77-42 or to stop its implementation; to allow the registration and operation in 1981 and subsequent years of taxicabs of model 1974, as well as those of earlier models which were phased-out, provided that, at the time of registration, they are roadworthy and fit for operation. On February 16, 1981, petitioners filed before the BOT a "Manifestation and Urgent Motion", praying for an early hearing of their petition. The case was heard on February 20, 1981. Petitioners presented testimonial and documentary evidence, offered the same, and manifested that they would submit additional

documentary proofs. Said proofs were submitted on March 27, 1981 attached to petitioners' pleading entitled, "Manifestation, Presentation of Additional Evidence and Submission of the Case for Resolution." 3 On November 28, 1981, petitioners filed before the same Board a "Manifestation and Urgent Motion to Resolve or Decide Main Petition" praying that the case be resolved or decided not later than December 10, 1981 to enable them, in case of denial, to avail of whatever remedy they may have under the law for the protection of their interests before their 1975 model cabs are phased-out on January 1, 1982. Petitioners, through its President, allegedly made personal follow-ups of the case, but was later informed that the records of the case could not be located. On December 29, 1981, the present Petition was instituted wherein the following queries were posed for consideration by this Court:
A. Did BOT and BLT promulgate the questioned memorandum circulars in accord with the manner required by Presidential Decree No. 101, thereby safeguarding the petitioners' constitutional right to procedural due process? B. Granting, arguendo, that respondents did comply with the procedural requirements imposed by Presidential Decree No. 101, would the implementation and enforcement of the assailed memorandum circulars violate the petitioners' constitutional rights to. (1) Equal protection of the law; (2) Substantive due process; and (3) Protection against arbitrary and unreasonable classification and standard?

On Procedural and Substantive Due Process: Presidential Decree No. 101 grants to the Board of Transportation the power
4. To fix just and reasonable standards, classification, regulations, practices, measurements, or service to be furnished, imposed, observed, and followed by operators of public utility motor vehicles.

Section 2 of said Decree provides procedural guidelines for said agency to follow in the exercise of its powers:
Sec. 2. Exercise of powers. In the exercise of the powers granted in the preceding section, the Board shag proceed promptly along the method of legislative inquiry.

Apart from its own investigation and studies, the Board, in its discretion, may require the cooperation and assistance of the Bureau of Transportation, the Philippine Constabulary, particularly the Highway Patrol Group, the support agencies within the Department of Public Works, Transportation and Communications, or any other government office or agency that may be able to furnish useful information or data in the formulation of the Board of any policy, plan or program in the implementation of this Decree. The Board may also can conferences, require the submission of position papers or other documents, information, or data by operators or other persons that may be affected by the implementation of this Decree, or employ any other suitable means of inquiry.

In support of their submission that they were denied procedural due process, petitioners contend that they were not caged upon to submit their position papers, nor were they ever summoned to attend any conference prior to the issuance of the questioned BOT Circular. It is clear from the provision aforequoted, however, that the leeway accorded the Board gives it a wide range of choice in gathering necessary information or data in the formulation of any policy, plan or program. It is not mandatory that it should first call a conference or require the submission of position papers or other documents from operators or persons who may be affected, this being only one of the options open to the Board, which is given wide discretionary authority. Petitioners cannot justifiably claim, therefore, that they were deprived of procedural due process. Neither can they state with certainty that public respondents had not availed of other sources of inquiry prior to issuing the challenged Circulars. operators of public conveyances are not the only primary sources of the data and information that may be desired by the BOT. Dispensing with a public hearing prior to the issuance of the Circulars is neither violative of procedural due process. As held in Central Bank vs. Hon. Cloribel and Banco Filipino, 44 SCRA 307 (1972):
Pevious notice and hearing as elements of due process, are constitutionally required for the protection of life or vested property rights, as well as of liberty, when its limitation or loss takes place in consequence of a judicial or quasijudicial proceeding, generally dependent upon a past act or event which has to be established or ascertained. It is not essential to the validity of general rules or regulations promulgated to govern future conduct of a class or persons or enterprises, unless the law provides otherwise. (Emphasis supplied)

Petitioners further take the position that fixing the ceiling at six (6) years is arbitrary and oppressive because the roadworthiness of taxicabs depends upon their kind of maintenance and the use to which they are subjected, and, therefore, their actual physical condition should be taken into consideration at the time of registration. As public contend, however, it is impractical to subject every taxicab to constant and recurring evaluation, not to speak of the fact that it can open the door to the adoption of multiple standards, possible collusion, and even

graft and corruption. A reasonable standard must be adopted to apply to an vehicles affected uniformly, fairly, and justly. The span of six years supplies that reasonable standard. The product of experience shows that by that time taxis have fully depreciated, their cost recovered, and a fair return on investment obtained. They are also generally dilapidated and no longer fit for safe and comfortable service to the public specially considering that they are in continuous operation practically 24 hours everyday in three shifts of eight hours per shift. With that standard of reasonableness and absence of arbitrariness, the requirement of due process has been met. On Equal Protection of the Law: Petitioners alleged that the Circular in question violates their right to equal protection of the law because the same is being enforced in Metro Manila only and is directed solely towards the taxi industry. At the outset it should be pointed out that implementation outside Metro Manila is also envisioned in Memorandum Circular No. 77-42. To repeat the pertinent portion:
For an orderly implementation of this Memorandum Circular, the rules herein shall immediately be effective in Metro Manila. Its implementation outside Metro Manila shall be carried out only after the project has been implemented in Metro Manila and only after the date has been determined by the Board. 4

In fact, it is the understanding of the Court that implementation of the Circulars in Cebu City is already being effected, with the BOT in the process of conducting studies regarding the operation of taxicabs in other cities. The Board's reason for enforcing the Circular initially in Metro Manila is that taxicabs in this city, compared to those of other places, are subjected to heavier traffic pressure and more constant use. This is of common knowledge. Considering that traffic conditions are not the same in every city, a substantial distinction exists so that infringement of the equal protection clause can hardly be successfully claimed. As enunciated in the preambular clauses of the challenged BOT Circular, the overriding consideration is the safety and comfort of the riding public from the dangers posed by old and dilapidated taxis. The State, in the exercise, of its police power, can prescribe regulations to promote the health, morals, peace, good order, safety and general welfare of the people. It can prohibit all things hurtful to comfort, safety and welfare of society. 5 It may also regulate property rights. 6 In the language of Chief Justice Enrique M. Fernando "the necessities imposed by public welfare may justify the exercise of governmental authority to regulate even if thereby certain groups may plausibly assert that their interests are disregarded". 7 In so far as the non-application of the assailed Circulars to other transportation services is concerned, it need only be recalled that the equal protection clause

does not imply that the same treatment be accorded all and sundry. It applies to things or persons Identically or similarly situated. It permits of classification of the object or subject of the law provided classification is reasonable or based on substantial distinction, which make for real differences, and that it must apply equally to each member of the class. 8 What is required under the equal protection clause is the uniform operation by legal means so that all persons under Identical or similar circumstance would be accorded the same treatment both in privilege conferred and the liabilities imposed. 9 The challenged Circulars satisfy the foregoing criteria. Evident then is the conclusion that the questioned Circulars do not suffer from any constitutional infirmity. To declare a law unconstitutional, the infringement of constitutional right must be clear, categorical and undeniable. 10 WHEREFORE, the Writs prayed for are denied and this Petition is hereby dismissed. No costs. SO ORDERED. Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. 113811 October 7, 1994 ISHMAEL HIMAGAN, petitioner, vs. PEOPLE OF THE PHILIPPINES and HON. JUDGE HILARIO MAPAYO, RTC, Br. 11, Davao City, respondents. Victorio S. Advincula for petitioner.

KAPUNAN, J.: Petitioner, a policeman assigned with the medical company of the Philippine National Police Regional Headquarters at Camp Catitigan, Davao City, was implicated in the killing of Benjamin Machitar, Jr. and the attempted murder of Bernabe Machitar. After the informations for murder 1 and attempted murder 2 were filed with the Regional Trial Court, Branch 11, Davao City, on September 16, 1992, the trial court issued an Order suspending petitioner until the

termination of the case on the basis of Section 47, R.A. 6975, otherwise known as Department of Interior and Local Government Act of 1990, which provides:
Sec. 47. Preventive Suspension Pending Criminal Case. Upon the filing of a complaint or information sufficient in form and substance against a member of the PNP for grave felonies where the penalty imposed by law is six (6) years and one (1) day or more, the court shall immediately suspend the accused from office until the case is terminated. Such case shall be subject to continuous trial and shall be terminated within ninety (90) days from arraignment of the accused (Emphasis ours).

On October 11, 1993, petitioner filed a motion to lift the order for his suspension, 3 relying on Section 42 of P.D. 807 of the Civil Service Decree, that his suspension should be limited to ninety (90) days and, also, on our ruling in Deloso v. Sandiganbayan, 4 and Layno v. Sandiganbayan. 5 In his order dated December 14, 1993 6 respondent judge denied the motion pointing out that under Section 47 of R.A. 6975, the accused shall be suspended from office until his case is terminated. The motion for reconsideration of the order of denial was, likewise, denied. 7 Hence, the petition for certiorari and mandamus to set aside the orders of respondent Judge and to command him to lift petitioner's preventive suspension. We find the petition devoid of merit. There is no question that the case of petitioner who is charged with murder and attempted murder under the Revised Penal Code falls squarely under Sec. 47 of RA 6975 which specifically applies to members of the PNP. In dispute however, is whether the provision limits the period of suspension to 90 days, considering that while the first sentence of Sec. 47 provides that the accused who is charged with grave felonies where the penalty imposed is six (6) years and one (1) day shall be suspended from office "until the case is terminated", the second sentence of the same section mandates that the case, which shall be subject to continuous trial, shall be terminated within 90 days from the arraignment of the accused. Petitioner posits that as a member of the Philippine National Police, under Sec. 91 of RA 6975 which reads:
Sec. 91. The Civil Service Law and its implementing rules and regulations shall apply to all personnel of the Department.

he is covered by the Civil Service Law, particularly Sec. 42 of PD 807 of the Civil Service Decree, which limits the maximum period of suspension to ninety (90) days, thus:
Sec. 42. Lifting of Preventive Suspension Pending Administrative Investigation. When the administrative case against the officer or employee under preventive suspension is not finally decided by the disciplining authority within the period of ninety (90) days after the date of suspension of the respondent who

is not a presidential appointee, the respondent shall be automatically reinstated in the service; Provided, That when the delay in the disposition of the case is due to the fault, negligence or petition of the respondent, the period of delay shall not be counted in computing the period of suspension herein provided.

He claims that an imposition of preventive suspension of over 90 days is contrary to the Civil Service Law and would be a violation of his constitutional right to equal protection of laws. He further asserts that the requirements in Sec. 47 of R.A. 6975 that "the court shall immediately suspend the accused from office until the case is terminated" and the succeeding sentence, "Such case shall be subject to continuous trial and shall be terminated within ninety (90) days from arraignment of the accused" are both substantive and should be taken together to mean that if the case is not terminated within 90 days, the period of preventive suspension must be lifted because of the command that the trial must be terminated within ninety (90) days from arraignment. We disagree. First. The language of the first sentence of Sec. 47 of R.A. 6975 is clear, plain and free from ambiguity. It gives no other meaning than that the suspension from office of the member of the PNP charged with grave offense where the penalty is six years and one day or more shall last until the termination of the case. The suspension cannot be lifted before the termination of the case. The second sentence of the same Section providing that the trial must be terminated within ninety (90) days from arraignment does not qualify or limit the first sentence. The two can stand independently of each other. The first refers to the period of suspension. The second deals with the time frame within which the trial should be finished. Suppose the trial is not terminated within ninety days from arraignment, should the suspension of accused be lifted? The answer is certainly no. While the law uses the mandatory word "shall" before the phrase "be terminated within ninety (90) days", there is nothing in R.A. 6975 that suggests that the preventive suspension of the accused will be lifted if the trial is not terminated within that period. Nonetheless, the Judge who fails to decide the case within the period without justifiable reason may be subject to administrative sanctions and, in appropriate cases where the facts so warrant, to criminal 8 or civil liability. 9 If the trial is unreasonably delayed without fault of the accused such that he is deprived of his right to a speedy trial, he is not without a remedy. He may ask for the dismissal of the case. Should the court refuse to dismiss the case, the accused can compel its dismissal by certiorari, prohibition or mandamus, or secure his liberty by habeas corpus. 10 Second. Petitioner misapplies Sec. 42 of PD 807. A meticulous reading of the section clearly shows that it refers to the lifting of preventive suspension in pending administrative investigation, not in criminal cases, as here. What is more, Section 42 expressly limits the period of preventive suspension to ninety

(90) days. Sec. 91 of R.A. 6975 which states that "The Civil Service Law and its implementing rules shall apply to all personnel of the Department" simply means that the provisions of the Civil Service Law and its implementing rules and regulations are applicable to members of the Philippine National Police insofar as the provisions, rules and regulations are not inconsistent with R.A. 6975. Certainly, Section 42 of the Civil Service Decree which limits the preventive suspension to ninety (90) days cannot apply to members of the PNP because Sec. 47 of R.A. 6995 provides differently, that is, the suspension where the penalty imposed by law exceeds six (6) years shall continue until the case is terminated. Third. Petitioner's reliance on Layno and Deloso is misplaced. These cases all stemmed from charges in violation of R.A. 3019 (1060), otherwise known as the Anti-Graft and Corrupt Practices Act which, unlike R.A. 6975, is silent on the duration of the preventive suspension. Sec. 13 of R.A. 3019 reads as follows:
Suspension and loss of benefits. Any public officer against whom any criminal prosecution under a valid information under this Act or under the provisions of the Revised Penal Code on bribery is pending in court, shall be suspended from office. Should he be convicted by final judgment, he shall lose all retirement or gratuity benefits under any law, but if he is acquitted, he shall be entitled to reinstatement and to the salaries and benefits which he failed to receive during suspension, unless in the meantime administrative proceedings have been filed against him.

In the case of Layno, the duly elected mayor of Lianga, Surigao del Sur, was preventively suspended after an information was filed against him for offenses under R.A. 3019 (1060), the Anti-Graft Corrupt Practices Act. He had been suspended for four (4) months at the time he filed a motion to lift his preventive suspension. We held that his indefinite preventive suspension violated the "equal protection clause" and shortened his term of office. Thus:
2. Petitioner is a duly elected municipal mayor of Lianga, Surigao del Sur. His term of office does not expire until 1986. Were it not for this information and the suspension decreed by the Sandiganbayan according to the Anti-Graft and Corrupt Practices Act, he would have been all this while in the full discharge of his functions as such municipal mayor. He was elected precisely to do so. As of October 26, 1983, he has been unable to. It is a basic assumption of the electoral process implicit in the right of suffrage that the people are entitled to the services of elective officials of their choice. For misfeasance or malfeasance, any of them could, of course, be proceeded against administratively or, as in this instance, criminally. In either case, his culpability must be established. Moreover, if there be a criminal action, he is entitled to the constitutional presumption of innocence. A preventive suspension may be justified. Its continuance, however, for an unreasonable length of time raises a due process question. For even if thereafter he were acquitted, in the meanwhile his right to hold office had been nullified. Clearly, there would be in such a case an injustice suffered by him. Nor is he the only victim. There is injustice inflicted likewise on the people of Lianga. They were deprived of the services of the man they had elected to serve as mayor. In that sense, to paraphrase Justice Cardozo, the protracted continuance of this

preventive suspension had outrun the bounds of reason and resulted in sheer oppression. A denial of due process is thus quite manifest. It is to avoid such an unconstitutional application that the order of suspension should be lifted. 3. Nor is it solely the denial of procedural due process that is apparent. There is likewise an equal protection question. If the case against petitioner Layno were administrative in character the Local Government Code would be applicable. It is therein clearly provided that while preventive suspension is allowable for the causes therein enumerated, there is this emphatic limitation on the duration thereof: "In all cases, preventive suspension shall not extend beyond sixty days after the start of said suspension." It may be recalled that the principle against indefinite suspension applies equally to national government officials. So it was held in the leading case of Garcia v. Hon. Executive Secretary. According to the opinion of Justice Barrera: "To adopt the theory of respondents that an officer appointed by the President, facing administrative charges, can be preventively suspended indefinitely, would be to countenance a situation where the preventive suspension can, in effect, be the penalty itself without a finding of guilt after due hearing, contrary to the express mandate of the Constitution and the Civil Service law." Further: "In the guise of a preventive suspension, his term of office could be shortened and he could in effect, be removed without a finding of a cause duly established after due hearing, in violation of the Constitution. Clearly then, the policy of the law mandated by the Constitution frowns at a suspension of indefinite duration. In this particular case, the mere fact that petitioner is facing a charge under the Anti-Graft and Corrupt Practices Act does not justify a different rule of law. To do so would be to negate the safeguard of the equal protection guarantee. 11

The case of Deloso, likewise, involved another elective official who was preventively suspended as provincial governor, also under RA 3019 the Anti-Graft Law. This Court, faced with similar factual circumstances as in Layno, applied the ruling in the latter case "in relation to the principles of due process and equal protection." It is readily apparent that Section 13 of R.A. 3019 upon which the preventive suspension of the accused in Layno and Deloso was based is silent with respect to the duration of the preventive suspension, such that the suspension of the accused therein for a prolonged and unreasonable length of time raised a due process question. Not so in the instant case. Petitioner is charged with murder under the Revised Penal Code and it is undisputed that he falls squarely under Sec. 47 of R.A. 6975 which categorically states that his suspension shall last until the case is terminated. The succeeding sentence of the same section requires the case to be subjected to continuous trial which shall be terminated within ninety (90) days from arraignment of the accused. As previously emphasized, nowhere in the law does it say that after the lapse of the 90-day period for trial, the preventive suspension should be lifted. The law is clear, the ninety (90) days duration applies to the trial of the case not to the suspension. Nothing else should be read into the law. When the words and phrases of the statute are clear and unequivocal, their meaning determined from the language employed and the statute must be taken to mean exactly what it says. 12

Fourth. From the deliberations of the Bicameral Conference Committee on National Defense relative to the bill that became R.A. 6975, the meaning of Section 47 of R.A. 6975 insofar as the period of suspension is concerned becomes all the more clear. We quote:
So other than that in that particular section, ano ba itong "Jurisdiction in Criminal Cases?" What is this all about? REP. ZAMORA. In case they are charged with crimes. THE CHAIRMAN (SEN. MACEDA). Ah, the previous one is administrative, no. Now, if it is charged with a crime, regular courts. SEN. GONZALES. Ano, the courts mismo ang magsasabing . . . THE CHAIRMAN (SEN. MACEDA). No, the jurisdiction. REP. ZAMORA. The jurisdiction if there is robbery. THE CHAIRMAN (SEN. MACEDA). Okay. "Preventive Suspension Pending Criminal Case. Upon the filing of a complaint or informations sufficient in form and substance against a member of the PNP for grave felonies where the penalty imposed by law is six years and one day or more, the court shall immediately suspend the accused from the office until the case is terminated." REP. ALBANO. Where are we now Mr. Chairman. THE CHAIRMAN (SEN. MACEDA). Grave felonies ito e. Six years and one day or more. SEN. SAGUISAG. Kung five years and litigation ng Supreme Court, ganoon ba and . . .? THE CHAIRMAN (SEN. MACEDA). Hindi, dahil iyong iba panay disciplinary iyon e. SEN. PIMENTEL. Anong page iyan, Rene? THE CHAIRMAN (SEN. MACEDA). Page 29 Preventive Suspension. REP. GUTANG. Ang complaint kasi ng mga tao, pagka may pulis na may criminal case at may baril pa rin at nag-uuniforme, hindi magandang tingnan e. So parang natatakot iyong mga witnesses. SEN. GONZALES. Anyway, kung ma-exempt na rito naman siya e.

REP. GUTANG. Mayroong entitlement to reinstatement and pay. ... xxx xxx xxx SEN. PIMENTEL. Dito sa "Preventive Suspension Pending Criminal Case." Okay ito but I think we should also mandate the early termination of the case. Ibig sabihin, okay, hindi ba "the suspension of the accused from office until the case is terminated?" Alam naman natin ang takbo ng mga kaso rito sa ating bansa e. REP. ZAMORA. Twenty days, okay na. SEN. PIMENTEL. Hindi, and ibig kong sabihin, let us just assume that a case can be, as Rene pointed out, can run to six years bago ma-terminate, sometimes ten years pa nga e. Okay, but maybe we should mandate. . . REP. ZAMORA. Continuous hearing. SEN. PIMENTEL. Not only that, but the case must be terminated within a period. REP. ALBANO. Ninety days na ho sa Supreme Court the trial. SEN. PIMENTEL. Ha? REP. ALBANO. The trial must be done within ninety days, SEN. PIMENTEL. Ang ibig kong sabihin kung maari sanang ilagay rito that the case shall also be terminated in one year from the time . . . aywan ko kung kaya nating gawin iyon. REP. ALBANO. One solution, Mr. Chairman. THE CHAIRMAN (SEN. MACEDA). Criminal case? Hindi ba that has all been held as directory even if you put it in the law? SEN. PIMENTEL. I know, but, iyon na nga, we are looking at some solution to a particular situation. SEN. ANGARA. Let's have continuous hearing and be terminated not later than ninety days. REP. ZAMORA. Ang point ni Ernie, that's really only the directory. All of these, well, looks exactly the same thing. SEN. ANGARA. No, but at least, we will shorten it up in a case like this. We are really keen on having it quick, swift.

SEN. PIMENTEL. Swift justice. REP. ALBANO. Mr. Chairman. THE CHAIRMAN. (SEN. MACEDA). Yes. REP. ALBANO. Following the Veloso case in Anti-graft cases before the Sandiganbayan, the preventive suspension is only ninety days. In no case shall it go beyond ninety days which can also be applicable here because this is a preventive suspension. SEN. PIMENTEL. No, because you can legislate at least. SEN. SAGUISAG. But then the case may be anti-graft ha. The case filed against a policeman may be anti-graft in nature. . . SEN. PIMENTEL. Correct, correct, but is that a constitutional provision? Is it? REP. ALBANO. No, but as a standard procedure. SEN. PIMENTEL. Then you can legislate. THE CHAIRMAN (SEN. MACEDA). No, because this particular provision is for criminal cases. I know anti-graft is a criminal case but here we are talking, let's say, of murder, rape, treason, robbery. That's why it is in that context that there is a difference between a purely anti-graft case and a criminal case which could be a serious case since it is six years and one day or more, so it must be already a grave felony. xxx xxx xxx REP. ALBANO. . . . What I mean to say is, preventive suspension, we can use the Veloso case. THE CHAIRMAN (SEN. MACEDA). No, that's too short, that's what I am saying. The feeling here is, for policeman, we have to be stricter especially if it is a criminal case. What Rene is just trying to say is, he is agreeable that the suspension is until the case is terminated, but he just wants some administrative balancing to expedite it. So let us study what kind of language could be done along that line. So just on the National Police Commission . . . SEN. ANGARA. Can I suggest a language that may reflect. . . THE CHAIRMAN (SEN. MACEDA). Okay, please.

SEN. ANGARA. "Such case shall be subject to continuous trial and be terminated not later than . . ." whatever we agree. THE CHAIRMAN (SEN. MACEDA). Okay, so let's study that. So if there are any further amendments to Chapter 2 on the National Police Commission. . . . . . 13

The foregoing discussions reveal the legislative intent to place on preventive suspension a member of the PNP charged with grave felonies where the penalty imposed by law exceeds six years of imprisonment and which suspension continues until the case against him is terminated. The reason why members of the PNP are treated differently from the other classes of persons charged criminally or administratively insofar as the application of the rule on preventive suspension is concerned is that policemen carry weapons and the badge of the law which can be used to harass or intimidate witnesses against them, as succinctly brought out in the legislative discussions. If a suspended policeman criminally charged with a serious offense is reinstated to his post while his case is pending, his victim and the witnesses against him are obviously exposed to constant threat and thus easily cowed to silence by the mere fact that the accused is in uniform and armed. The imposition of preventive suspension for over 90 days under Section 47 of R.A. 6975 does not violate the suspended policeman's constitutional right to equal protection of the laws. The equal protection clause exists to prevent undue favor or privilege. It is intended to eliminate discrimination and oppression based on inequality. Recognizing the existence of real differences among men, the equal protection clause does not demand absolute equality. It merely requires that all persons shall be treated alike, under like circumstances and conditions both as to the privileges conferred and liabilities enforced. 14 Thus, the equal protection clause does not absolutely forbid classifications, such as the one which exists in the instant case. If the classification is based on real and substantial differences; 15 is germane to the purpose of the law; 16 applies to all members of the same class; 17 and applies to current as well as future conditions, 18 the classification may not be impugned as violating the Constitution's equal protection guarantee. A distinction based on real and reasonable considerations related to a proper legislative purpose such as that which exists here is neither unreasonable, capricious nor unfounded. ACCORDINGLY, the petition is hereby DISMISSED. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 148208 December 15, 2004

CENTRAL BANK (now Bangko Sentral ng Pilipinas) EMPLOYEES ASSOCIATION, INC., petitioner, vs. BANGKO SENTRAL NG PILIPINAS and the EXECUTIVE SECRETARY, respondents.

DECISION

PUNO, J.: Can a provision of law, initially valid, become subsequently unconstitutional, on the ground that its continued operation would violate the equal protection of the law? We hold that with the passage of the subsequent laws amending the charter of seven (7) other governmental financial institutions (GFIs), the continued operation of the last proviso of Section 15(c), Article II of Republic Act (R.A.) No. 7653, constitutes invidious discrimination on the 2,994 rank-and-file employees of the Bangko Sentral ng Pilipinas (BSP). I. The Case First the facts. On July 3, 1993, R.A. No. 7653 (the New Central Bank Act) took effect. It abolished the old Central Bank of the Philippines, and created a new BSP. On June 8, 2001, almost eight years after the effectivity of R.A. No. 7653, petitioner Central Bank (now BSP) Employees Association, Inc., filed a petition for prohibition against BSP and the Executive Secretary of the Office of the President, to restrain respondents from further implementing the last proviso in Section 15(c), Article II of R.A. No. 7653, on the ground that it is unconstitutional. Article II, Section 15(c) of R.A. No. 7653 provides: Section 15. Exercise of Authority - In the exercise of its authority, the Monetary Board shall: xxx xxx xxx

(c) establish a human resource management system which shall govern the selection, hiring, appointment, transfer, promotion, or dismissal of all personnel. Such system shall aim to establish professionalism and excellence at all levels of the Bangko Sentral in accordance with sound principles of management. A compensation structure, based on job evaluation studies and wage surveys and subject to the Board's approval, shall be instituted as an integral component of the Bangko Sentral's human resource development program: Provided, That the Monetary Board shall make its own system conform as closely as possible with the principles provided for under Republic Act No. 6758 [Salary Standardization Act]. Provided, however, That compensation and wage structure of employees whose positions fall under salary grade 19 and below shall be in accordance with the rates prescribed under Republic Act No. 6758. [emphasis supplied] The thrust of petitioner's challenge is that the above proviso makes an unconstitutional cut between two classes of employees in the BSP, viz: (1) the BSP officers or those exempted from the coverage of the Salary Standardization Law (SSL) (exempt class); and (2) the rank-and-file (Salary Grade [SG] 19 and below), or those not exempted from the coverage of the SSL (non-exempt class). It is contended that this classification is "a classic case of class legislation," allegedly not based on substantial distinctions which make real differences, but solely on the SG of the BSP personnel's position. Petitioner also claims that it is not germane to the purposes of Section 15(c), Article II of R.A. No. 7653, the most important of which is to establish professionalism and excellence at all levels in the BSP.1 Petitioner offers the following sub-set of arguments: a. the legislative history of R.A. No. 7653 shows that the questioned proviso does not appear in the original and amended versions of House Bill No. 7037, nor in the original version of Senate Bill No. 1235; 2 b. subjecting the compensation of the BSP rank-and-file employees to the rate prescribed by the SSL actually defeats the purpose of the law3 of establishing professionalism and excellence at all levels in the BSP; 4 (emphasis supplied) c. the assailed proviso was the product of amendments introduced during the deliberation of Senate Bill No. 1235, without showing its relevance to the objectives of the law, and even admitted by one senator as discriminatory against low-salaried employees of the BSP;5 d. GSIS, LBP, DBP and SSS personnel are all exempted from the coverage of the SSL; thus within the class of rank-and-file personnel of government financial institutions (GFIs), the BSP rank-and-file are also discriminated upon;6 and e. the assailed proviso has caused the demoralization among the BSP rank-and-file and resulted in the gross disparity between their compensation and that of the BSP officers'.7 In sum, petitioner posits that the classification is not reasonable but arbitrary and capricious, and violates the equal protection clause of the Constitution.8 Petitioner also stresses: (a) that R.A. No. 7653 has a separability clause, which will allow the declaration of the unconstitutionality of the proviso in question without affecting the other provisions; and (b) the urgency and propriety of the petition, as some 2,994 BSP rank-and-file employees have been prejudiced since 1994 when the proviso was implemented. Petitioner concludes

that: (1) since the inequitable proviso has no force and effect of law, respondents' implementation of such amounts to lack of jurisdiction; and (2) it has no appeal nor any other plain, speedy and adequate remedy in the ordinary course except through this petition for prohibition, which this Court should take cognizance of, considering the transcendental importance of the legal issue involved.9 Respondent BSP, in its comment,10 contends that the provision does not violate the equal protection clause and can stand the constitutional test, provided it is construed in harmony with other provisions of the same law, such as "fiscal and administrative autonomy of BSP," and the mandate of the Monetary Board to "establish professionalism and excellence at all levels in accordance with sound principles of management." The Solicitor General, on behalf of respondent Executive Secretary, also defends the validity of the provision. Quite simplistically, he argues that the classification is based on actual and real differentiation, even as it adheres to the enunciated policy of R.A. No. 7653 to establish professionalism and excellence within the BSP subject to prevailing laws and policies of the national government.11 II. Issue Thus, the sole - albeit significant - issue to be resolved in this case is whether the last paragraph of Section 15(c), Article II of R.A. No. 7653, runs afoul of the constitutional mandate that "No person shall be. . . denied the equal protection of the laws."12 III. Ruling A. UNDER THE PRESENT STANDARDS OF EQUAL PROTECTION, SECTION 15(c), ARTICLE II OF R.A. NO. 7653 IS VALID. Jurisprudential standards for equal protection challenges indubitably show that the classification created by the questioned proviso, on its face and in its operation, bears no constitutional infirmities. It is settled in constitutional law that the "equal protection" clause does not prevent the Legislature from establishing classes of individuals or objects upon which different rules shall operate - so long as the classification is not unreasonable. As held in Victoriano v. Elizalde Rope Workers' Union,13 and reiterated in a long line of cases:14 The guaranty of equal protection of the laws is not a guaranty of equality in the application of the laws upon all citizens of the state. It is not, therefore, a requirement, in order to avoid the constitutional prohibition against inequality, that every man, woman and child should be affected alike by a statute. Equality of operation of statutes does not mean indiscriminate operation on persons merely as such, but on persons according to the circumstances surrounding them. It guarantees equality, not identity of rights. The Constitution does not require that things which are different in fact be treated in law as though they were the same. The equal protection clause does not forbid discrimination as to things that are different. It

does not prohibit legislation which is limited either in the object to which it is directed or by the territory within which it is to operate. The equal protection of the laws clause of the Constitution allows classification. Classification in law, as in the other departments of knowledge or practice, is the grouping of things in speculation or practice because they agree with one another in certain particulars. A law is not invalid because of simple inequality. The very idea of classification is that of inequality, so that it goes without saying that the mere fact of inequality in no manner determines the matter of constitutionality. All that is required of a valid classification is that it be reasonable, which means that the classification should be based on substantial distinctions which make for real differences, that it must be germane to the purpose of the law; that it must not be limited to existing conditions only; and that it must apply equally to each member of the class. This Court has held that the standard is satisfied if the classification or distinction is based on a reasonable foundation or rational basis and is not palpably arbitrary. In the exercise of its power to make classifications for the purpose of enacting laws over matters within its jurisdiction, the state is recognized as enjoying a wide range of discretion. It is not necessary that the classification be based on scientific or marked differences of things or in their relation. Neither is it necessary that the classification be made with mathematical nicety. Hence, legislative classification may in many cases properly rest on narrow distinctions, for the equal protection guaranty does not preclude the legislature from recognizing degrees of evil or harm, and legislation is addressed to evils as they may appear. (citations omitted) Congress is allowed a wide leeway in providing for a valid classification.15 The equal protection clause is not infringed by legislation which applies only to those persons falling within a specified class.16 If the groupings are characterized by substantial distinctions that make real differences, one class may be treated and regulated differently from another.17 The classification must also be germane to the purpose of the law and must apply to all those belonging to the same class.18 In the case at bar, it is clear in the legislative deliberations that the exemption of officers (SG 20 and above) from the SSL was intended to address the BSP's lack of competitiveness in terms of attracting competent officers and executives. It was not intended to discriminate against the rank-and-file. If the end-result did in fact lead to a disparity of treatment between the officers and the rank-and-file in terms of salaries and benefits, the discrimination or distinction has a rational basis and is not palpably, purely, and entirely arbitrary in the legislative sense. 19 That the provision was a product of amendments introduced during the deliberation of the Senate Bill does not detract from its validity. As early as 1947 and reiterated in subsequent cases,20 this Court has subscribed to the conclusiveness of an enrolled bill to refuse invalidating a provision of law, on the ground that the bill from which it originated contained no such provision and was merely inserted by the bicameral conference committee of both Houses. Moreover, it is a fundamental and familiar teaching that all reasonable doubts should be resolved in favor of the constitutionality of a statute.21 An act of the legislature, approved by the executive, is presumed to be within constitutional limitations.22 To justify the nullification of a law, there must be a clear and unequivocal breach of the Constitution, not a doubtful and equivocal breach.23

B. THE ENACTMENT, HOWEVER, OF SUBSEQUENT LAWS EXEMPTING ALL OTHER RANK-AND-FILE EMPLOYEES OF GFIs FROM THE SSL - RENDERS THE CONTINUED APPLICATION OF THE CHALLENGED PROVISION A VIOLATION OF THE EQUAL PROTECTION CLAUSE. While R.A. No. 7653 started as a valid measure well within the legislature's power, we hold that the enactment of subsequent laws exempting all rank-and-file employees of other GFIs leeched all validity out of the challenged proviso. 1. The concept of relative constitutionality. The constitutionality of a statute cannot, in every instance, be determined by a mere comparison of its provisions with applicable provisions of the Constitution, since the statute may be constitutionally valid as applied to one set of facts and invalid in its application to another.24 A statute valid at one time may become void at another time because of altered circumstances.25 Thus, if a statute in its practical operation becomes arbitrary or confiscatory, its validity, even though affirmed by a former adjudication, is open to inquiry and investigation in the light of changed conditions.26 Demonstrative of this doctrine is Vernon Park Realty v. City of Mount Vernon,27 where the Court of Appeals of New York declared as unreasonable and arbitrary a zoning ordinance which placed the plaintiff's property in a residential district, although it was located in the center of a business area. Later amendments to the ordinance then prohibited the use of the property except for parking and storage of automobiles, and service station within a parking area. The Court found the ordinance to constitute an invasion of property rights which was contrary to constitutional due process. It ruled: While the common council has the unquestioned right to enact zoning laws respecting the use of property in accordance with a well-considered and comprehensive plan designed to promote public health, safety and general welfare, such power is subject to the constitutional limitation that it may not be exerted arbitrarily or unreasonably and this is so whenever the zoning ordinance precludes the use of the property for any purpose for which it is reasonably adapted. By the same token, an ordinance valid when adopted will nevertheless be stricken down as invalid when, at a later time, its operation under changed conditions proves confiscatory such, for instance, as when the greater part of its value is destroyed, for which the courts will afford relief in an appropriate case.28 (citations omitted, emphasis supplied) In the Philippine setting, this Court declared the continued enforcement of a valid law as unconstitutional as a consequence of significant changes in circumstances. Rutter v. Esteban29 upheld the constitutionality of the moratorium law - its enactment and operation being a valid exercise by the State of its police power30 - but also ruled that the continued enforcement of the otherwise valid law would be unreasonable and oppressive. It noted the subsequent changes in the country's business, industry and agriculture. Thus, the law was set aside because its continued operation would be grossly discriminatory and lead to the oppression of the creditors. The landmark ruling states:31

The question now to be determined is, is the period of eight (8) years which Republic Act No. 342 grants to debtors of a monetary obligation contracted before the last global war and who is a war sufferer with a claim duly approved by the Philippine War Damage Commission reasonable under the present circumstances? It should be noted that Republic Act No. 342 only extends relief to debtors of prewar obligations who suffered from the ravages of the last war and who filed a claim for their losses with the Philippine War Damage Commission. It is therein provided that said obligation shall not be due and demandable for a period of eight (8) years from and after settlement of the claim filed by the debtor with said Commission. The purpose of the law is to afford to prewar debtors an opportunity to rehabilitate themselves by giving them a reasonable time within which to pay their prewar debts so as to prevent them from being victimized by their creditors. While it is admitted in said law that since liberation conditions have gradually returned to normal, this is not so with regard to those who have suffered the ravages of war and so it was therein declared as a policy that as to them the debt moratorium should be continued in force (Section 1). But we should not lose sight of the fact that these obligations had been pending since 1945 as a result of the issuance of Executive Orders Nos. 25 and 32 and at present their enforcement is still inhibited because of the enactment of Republic Act No. 342 and would continue to be unenforceable during the eight-year period granted to prewar debtors to afford them an opportunity to rehabilitate themselves, which in plain language means that the creditors would have to observe a vigil of at least twelve (12) years before they could effect a liquidation of their investment dating as far back as 1941. his period seems to us unreasonable, if not oppressive. While the purpose of Congress is plausible, and should be commended, the relief accorded works injustice to creditors who are practically left at the mercy of the debtors. Their hope to effect collection becomes extremely remote, more so if the credits are unsecured. And the injustice is more patent when, under the law, the debtor is not even required to pay interest during the operation of the relief, unlike similar statutes in the United States. xxx xxx xxx

In the face of the foregoing observations, and consistent with what we believe to be as the only course dictated by justice, fairness and righteousness, we feel that the only way open to us under the present circumstances is to declare that the continued operation and enforcement of Republic Act No. 342 at the present time is unreasonable and oppressive, and should not be prolonged a minute longer, and, therefore, the same should be declared null and void and without effect. (emphasis supplied, citations omitted) 2. Applicability of the equal protection clause. In the realm of equal protection, the U.S. case of Atlantic Coast Line R. Co. v. Ivey32 is illuminating. The Supreme Court of Florida ruled against the continued application of statutes authorizing the recovery of double damages plus attorney's fees against railroad companies, for animals killed on unfenced railroad right of way without proof of negligence. Competitive motor carriers, though creating greater hazards, were not subjected to similar liability because they were not yet in existence when the statutes were enacted. The Court ruled

that the statutes became invalid as denying "equal protection of the law," in view of changed conditions since their enactment. In another U.S. case, Louisville & N.R. Co. v. Faulkner,33 the Court of Appeals of Kentucky declared unconstitutional a provision of a statute which imposed a duty upon a railroad company of proving that it was free from negligence in the killing or injury of cattle by its engine or cars. This, notwithstanding that the constitutionality of the statute, enacted in 1893, had been previously sustained. Ruled the Court: The constitutionality of such legislation was sustained because it applied to all similar corporations and had for its object the safety of persons on a train and the protection of property. Of course, there were no automobiles in those days. The subsequent inauguration and development of transportation by motor vehicles on the public highways by common carriers of freight and passengers created even greater risks to the safety of occupants of the vehicles and of danger of injury and death of domestic animals. Yet, under the law the operators of that mode of competitive transportation are not subject to the same extraordinary legal responsibility for killing such animals on the public roads as are railroad companies for killing them on their private rights of way. The Supreme Court, speaking through Justice Brandeis in Nashville, C. & St. L. Ry. Co. v. Walters, 294 U.S. 405, 55 S.Ct. 486, 488, 79 L.Ed. 949, stated, "A statute valid when enacted may become invalid by change in the conditions to which it is applied. The police power is subject to the constitutional limitation that it may not be exerted arbitrarily or unreasonably." A number of prior opinions of that court are cited in support of the statement. The State of Florida for many years had a statute, F.S.A. 356.01 et seq. imposing extraordinary and special duties upon railroad companies, among which was that a railroad company was liable for double damages and an attorney's fee for killing livestock by a train without the owner having to prove any act of negligence on the part of the carrier in the operation of its train. In Atlantic Coast Line Railroad Co. v. Ivey, it was held that the changed conditions brought about by motor vehicle transportation rendered the statute unconstitutional since if a common carrier by motor vehicle had killed the same animal, the owner would have been required to prove negligence in the operation of its equipment. Said the court, "This certainly is not equal protection of the law."34 (emphasis supplied) Echoes of these rulings resonate in our case law, viz: [C]ourts are not confined to the language of the statute under challenge in determining whether that statute has any discriminatory effect. A statute nondiscriminatory on its face may be grossly discriminatory in its operation. Though the law itself be fair on its face and impartial in appearance, yet, if it is applied and administered by public authority with an evil eye and unequal hand, so as practically to make unjust and illegal discriminations between persons in similar circumstances, material to their rights, the denial of equal justice is still within the prohibition of the Constitution.35 (emphasis supplied, citations omitted) [W]e see no difference between a law which denies equal protection and a law which permits of such denial. A law may appear to be fair on its face and impartial in appearance, yet, if it permits of unjust and illegal discrimination, it is within the constitutional prohibition.. In other words, statutes may be adjudged

unconstitutional because of their effect in operation. If a law has the effect of denying the equal protection of the law it is unconstitutional. .36 (emphasis supplied, citations omitted 3. Enactment of R.A. Nos. 7907 + 8282 + 8289 + 8291 + 8523 + 8763 + 9302 = consequential unconstitutionality of challenged proviso. According to petitioner, the last proviso of Section 15(c), Article II of R.A. No. 7653 is also violative of the equal protection clause because after it was enacted, the charters of the GSIS, LBP, DBP and SSS were also amended, but the personnel of the latter GFIs were all exempted from the coverage of the SSL.37 Thus, within the class of rank-and-file personnel of GFIs, the BSP rank-and-file are also discriminated upon. Indeed, we take judicial notice that after the new BSP charter was enacted in 1993, Congress also undertook the amendment of the charters of the GSIS, LBP, DBP and SSS, and three other GFIs, from 1995 to 2004, viz: 1. R.A. No. 7907 (1995) for Land Bank of the Philippines (LBP); 2. R.A. No. 8282 (1997) for Social Security System (SSS); 3. R.A. No. 8289 (1997) for Small Business Guarantee and Finance Corporation, (SBGFC); 4. R.A. No. 8291 (1997) for Government Service Insurance System (GSIS); 5. R.A. No. 8523 (1998) for Development Bank of the Philippines (DBP); 6. R.A. No. 8763 (2000) for Home Guaranty Corporation (HGC);38 and 7. R.A. No. 9302 (2004) for Philippine Deposit Insurance Corporation (PDIC). It is noteworthy, as petitioner points out, that the subsequent charters of the seven other GFIs share this common proviso: a blanket exemption of all their employees from the coverage of the SSL, expressly or impliedly, as illustrated below: 1. LBP (R.A. No. 7907) Section 10. Section 90 of [R.A. No. 3844] is hereby amended to read as follows: Section 90. Personnel. xxx xxx xxx

All positions in the Bank shall be governed by a compensation, position classification system and qualification standards approved by the Bank's Board of Directors based on a comprehensive job analysis and audit of actual duties and responsibilities. The compensation plan shall be comparable with the prevailing compensation plans in the private sector and shall be subject to periodic review by the Board no more than once every two (2) years without prejudice to yearly merit reviews or increases based on productivity and profitability. The Bank shall therefore be exempt from existing

laws, rules and regulations on compensation, position classification and qualification standards. It shall however endeavor to make its system conform as closely as possible with the principles under Republic Act No. 6758. (emphasis supplied) xxx 2. SSS (R.A. No. 8282) Section 1. [Amending R.A. No. 1161, Section 3(c)]: xxx xxx xxx xxx xxx

(c)The Commission, upon the recommendation of the SSS President, shall appoint an actuary and such other personnel as may [be] deemed necessary; fix their reasonable compensation, allowances and other benefits; prescribe their duties and establish such methods and procedures as may be necessary to insure the efficient, honest and economical administration of the provisions and purposes of this Act: Provided, however, That the personnel of the SSS below the rank of Vice President shall be appointed by the SSS President: Provided, further, That the personnel appointed by the SSS President, except those below the rank of assistant manager, shall be subject to the confirmation by the Commission; Provided further, That the personnel of the SSS shall be selected only from civil service eligibles and be subject to civil service rules and regulations: Provided, finally, That the SSS shall be exempt from the provisions of Republic Act No. 6758 and Republic Act No. 7430. (emphasis supplied) 3. SBGFC (R.A. No. 8289) Section 8. [Amending R.A. No. 6977, Section 11]: xxx xxx xxx

The Small Business Guarantee and Finance Corporation shall: xxx xxx xxx

(e) notwithstanding the provisions of Republic Act No. 6758, and Compensation Circular No. 10, series of 1989 issued by the Department of Budget and Management, the Board of Directors of SBGFC shall have the authority to extend to the employees and personnel thereof the allowance and fringe benefits similar to those extended to and currently enjoyed by the employees and personnel of other government financial institutions. (emphases supplied) 4. GSIS (R.A. No. 8291) Section 1. [Amending Section 43(d)]. xxx xxx xxx

Sec. 43. Powers and Functions of the Board of Trustees. - The Board of Trustees shall have the following powers and functions: xxx xxx xxx

(d) upon the recommendation of the President and General Manager, to approve the GSIS' organizational and administrative structures and staffing pattern, and to establish, fix, review, revise and adjust the appropriate compensation package for the officers and employees of the GSIS with reasonable allowances, incentives, bonuses, privileges and other benefits as may be necessary or proper for the effective management, operation and administration of the GSIS, which shall be exempt from Republic Act No. 6758, otherwise known as the Salary Standardization Law and Republic Act No. 7430, otherwise known as the Attrition Law. (emphasis supplied) xxx 5. DBP (R.A. No. 8523) Section 6. [Amending E.O. No. 81, Section 13]: Section 13. Other Officers and Employees. - The Board of Directors shall provide for an organization and staff of officers and employees of the Bank and upon recommendation of the President of the Bank, fix their remunerations and other emoluments. All positions in the Bank shall be governed by the compensation, position classification system and qualification standards approved by the Board of Directors based on a comprehensive job analysis of actual duties and responsibilities. The compensation plan shall be comparable with the prevailing compensation plans in the private sector and shall be subject to periodic review by the Board of Directors once every two (2) years, without prejudice to yearly merit or increases based on the Bank's productivity and profitability. The Bank shall, therefore, be exempt from existing laws, rules, and regulations on compensation, position classification and qualification standards. The Bank shall however, endeavor to make its system conform as closely as possible with the principles under Compensation and Position Classification Act of 1989 (Republic Act No. 6758, as amended). (emphasis supplied) 6. HGC (R.A. No. 8763) Section 9. Powers, Functions and Duties of the Board of Directors. - The Board shall have the following powers, functions and duties: xxx xxx xxx xxx xxx

(e) To create offices or positions necessary for the efficient management, operation and administration of the Corporation: Provided, That all positions in the Home Guaranty Corporation (HGC) shall be governed by a compensation and position classification system and qualifications standards approved by the Corporation's Board of Directors based on a comprehensive job analysis and audit of actual duties and responsibilities: Provided, further, That the compensation plan shall be comparable with the prevailing compensation plans in the private sector and

which shall be exempt from Republic Act No. 6758, otherwise known as the Salary Standardization Law, and from other laws, rules and regulations on salaries and compensations; and to establish a Provident Fund and determine the Corporation's and the employee's contributions to the Fund; (emphasis supplied) xxx 7. PDIC (R.A. No. 9302) Section 2. Section 2 of [Republic Act No. 3591, as amended] is hereby further amended to read: xxx 3. xxx xxx xxx xxx xxx xxx xxx

A compensation structure, based on job evaluation studies and wage surveys and subject to the Board's approval, shall be instituted as an integral component of the Corporation's human resource development program: Provided, That all positions in the Corporation shall be governed by a compensation, position classification system and qualification standards approved by the Board based on a comprehensive job analysis and audit of actual duties and responsibilities. The compensation plan shall be comparable with the prevailing compensation plans of other government financial institutions and shall be subject to review by the Board no more than once every two (2) years without prejudice to yearly merit reviews or increases based on productivity and profitability. The Corporation shall therefore be exempt from existing laws, rules and regulations on compensation, position classification and qualification standards. It shall however endeavor to make its system conform as closely as possible with the principles under Republic Act No. 6758, as amended. (emphases supplied) Thus, eleven years after the amendment of the BSP charter, the rank-and-file of seven other GFIs were granted the exemption that was specifically denied to the rank-andfile of the BSP. And as if to add insult to petitioner's injury, even the Securities and Exchange Commission (SEC) was granted the same blanket exemption from the SSL in 2000!39 The prior view on the constitutionality of R.A. No. 7653 was confined to an evaluation of its classification between the rank-and-file and the officers of the BSP, found reasonable because there were substantial distinctions that made real differences between the two classes. The above-mentioned subsequent enactments, however, constitute significant changes in circumstance that considerably alter the reasonability of the continued operation of the last proviso of Section 15(c), Article II of Republic Act No. 7653, thereby exposing the proviso to more serious scrutiny. This time, the scrutiny relates to the constitutionality of the classification - albeit made indirectly as a consequence of the passage of eight other laws - between the rank-and-file of the BSP and the seven other GFIs. The classification must not only be reasonable, but must also apply equally to all

members of the class. The proviso may be fair on its face and impartial in appearance but it cannot be grossly discriminatory in its operation, so as practically to make unjust distinctions between persons who are without differences.40 Stated differently, the second level of inquiry deals with the following questions: Given that Congress chose to exempt other GFIs (aside the BSP) from the coverage of the SSL, can the exclusion of the rank-and-file employees of the BSP stand constitutional scrutiny in the light of the fact that Congress did not exclude the rank-and-file employees of the other GFIs? Is Congress' power to classify so unbridled as to sanction unequal and discriminatory treatment, simply because the inequity manifested itself, not instantly through a single overt act, but gradually and progressively, through seven separate acts of Congress? Is the right to equal protection of the law bounded in time and space that: (a) the right can only be invoked against a classification made directly and deliberately, as opposed to a discrimination that arises indirectly, or as a consequence of several other acts; and (b) is the legal analysis confined to determining the validity within the parameters of the statute or ordinance (where the inclusion or exclusion is articulated), thereby proscribing any evaluation vis--vis the grouping, or the lack thereof, among several similar enactments made over a period of time? In this second level of scrutiny, the inequality of treatment cannot be justified on the mere assertion that each exemption (granted to the seven other GFIs) rests "on a policy determination by the legislature." All legislative enactments necessarily rest on a policy determination - even those that have been declared to contravene the Constitution. Verily, if this could serve as a magic wand to sustain the validity of a statute, then no due process and equal protection challenges would ever prosper. There is nothing inherently sacrosanct in a policy determination made by Congress or by the Executive; it cannot run riot and overrun the ramparts of protection of the Constitution. In fine, the "policy determination" argument may support the inequality of treatment between the rank-and-file and the officers of the BSP, but it cannot justify the inequality of treatment between BSP rank-and-file and other GFIs' who are similarly situated. It fails to appreciate that what is at issue in the second level of scrutiny is not the declared policy of each law per se, but the oppressive results of Congress' inconsistent and unequal policy towards the BSP rank-and-file and those of the seven other GFIs. At bottom, the second challenge to the constitutionality of Section 15(c), Article II of Republic Act No. 7653 is premised precisely on the irrational discriminatory policy adopted by Congress in its treatment of persons similarly situated. In the field of equal protection, the guarantee that "no person shall be denied the equal protection of the laws" includes the prohibition against enacting laws that allow invidious discrimination, directly or indirectly. If a law has the effect of denying the equal protection of the law, or permits such denial, it is unconstitutional.41 It is against this standard that the disparate treatment of the BSP rank-and-file from the other GFIs cannot stand judicial scrutiny. For as regards the exemption from the coverage of the SSL, there exist no substantial distinctions so as to differentiate, the BSP rank-and-file from the other rank-and-file of the seven GFIs. On the contrary, our legal history shows that GFIs have long been recognized as comprising one distinct class, separate from other governmental entities. Before the SSL, Presidential Decree (P.D.) No. 985 (1976) declared it as a State policy (1) to provide equal pay for substantially equal work, and (2) to base differences in pay upon substantive differences in duties and responsibilities, and qualification requirements of the

positions. P.D. No. 985 was passed to address disparities in pay among similar or comparable positions which had given rise to dissension among government employees. But even then, GFIs and government-owned and/or controlled corporations (GOCCs) were already identified as a distinct class among government employees. Thus, Section 2 also provided, "[t]hat notwithstanding a standardized salary system established for all employees, additional financial incentives may be established by government corporation and financial institutions for their employees to be supported fully from their corporate funds and for such technical positions as may be approved by the President in critical government agencies."42 The same favored treatment is made for the GFIs and the GOCCs under the SSL. Section 3(b) provides that one of the principles governing the Compensation and Position Classification System of the Government is that: "[b]asic compensation for all personnel in the government and government-owned or controlled corporations and financial institutions shall generally be comparable with those in the private sector doing comparable work, and must be in accordance with prevailing laws on minimum wages." Thus, the BSP and all other GFIs and GOCCs were under the unified Compensation and Position Classification System of the SSL,43 but rates of pay under the SSL were determined on the basis of, among others, prevailing rates in the private sector for comparable work. Notably, the Compensation and Position Classification System was to be governed by the following principles: (a) just and equitable wages, with the ratio of compensation between pay distinctions maintained at equitable levels;44 and (b) basic compensation generally comparable with the private sector, in accordance with prevailing laws on minimum wages.45 Also, the Department of Budget and Management was directed to use, as guide for preparing the Index of Occupational Services, the Benchmark Position Schedule, and the following factors:46 (1) the education and experience required to perform the duties and responsibilities of the positions; (2) the nature and complexity of the work to be performed; (3) the kind of supervision received; (4) mental and/or physical strain required in the completion of the work; (5) nature and extent of internal and external relationships; (6) kind of supervision exercised; (7) decision-making responsibility; (8) responsibility for accuracy of records and reports; (9) accountability for funds, properties and equipment; and (10) hardship, hazard and personal risk involved in the job. The Benchmark Position Schedule enumerates the position titles that fall within Salary Grades 1 to 20.

Clearly, under R.A. No. 6758, the rank-and-file of all GFIs were similarly situated in all aspects pertaining to compensation and position classification, in consonance with Section 5, Article IX-B of the 1997 Constitution.47 Then came the enactment of the amended charter of the BSP, implicitly exempting the Monetary Board from the SSL by giving it express authority to determine and institute its own compensation and wage structure. However, employees whose positions fall under SG 19 and below were specifically limited to the rates prescribed under the SSL. Subsequent amendments to the charters of other GFIs followed. Significantly, each government financial institution (GFI) was not only expressly authorized to determine and institute its own compensation and wage structure, but also explicitly exempted - without distinction as to salary grade or position - all employees of the GFI from the SSL. It has been proffered that legislative deliberations justify the grant or withdrawal of exemption from the SSL, based on the perceived need "to fulfill the mandate of the institution concerned considering, among others, that: (1) the GOCC or GFI is essentially proprietary in character; (2) the GOCC or GFI is in direct competition with their [sic] counterparts in the private sector, not only in terms of the provisions of goods or services, but also in terms of hiring and retaining competent personnel; and (3) the GOCC or GFI are or were [sic] experiencing difficulties filling up plantilla positions with competent personnel and/or retaining these personnel. The need for the scope of exemption necessarily varies with the particular circumstances of each institution, and the corresponding variance in the benefits received by the employees is merely incidental." The fragility of this argument is manifest. First, the BSP is the central monetary authority,48 and the banker of the government and all its political subdivisions.49 It has the sole power and authority to issue currency;50 provide policy directions in the areas of money, banking, and credit; and supervise banks and regulate finance companies and non-bank financial institutions performing quasi-banking functions, including the exempted GFIs.51 Hence, the argument that the rank-and-file employees of the seven GFIs were exempted because of the importance of their institution's mandate cannot stand any more than an empty sack can stand. Second, it is certainly misleading to say that "the need for the scope of exemption necessarily varies with the particular circumstances of each institution." Nowhere in the deliberations is there a cogent basis for the exclusion of the BSP rank-and-file from the exemption which was granted to the rank-and-file of the other GFIs and the SEC. As point in fact, the BSP and the seven GFIs are similarly situated in so far as Congress deemed it necessary for these institutions to be exempted from the SSL. True, the SSL-exemption of the BSP and the seven GFIs was granted in the amended charters of each GFI, enacted separately and over a period of time. But it bears emphasis that, while each GFI has a mandate different and distinct from that of another, the deliberations show that the raison d'tre of the SSL-exemption was inextricably linked to and for the most part based on factors common to the eight GFIs, i.e., (1) the pivotal role they play in the economy; (2) the necessity of hiring and retaining qualified and effective personnel to carry out the GFI's mandate; and (3) the recognition that the compensation package of these GFIs is not competitive, and fall substantially below industry standards. Considering further that (a) the BSP was the first GFI granted SSL exemption; and (b) the subsequent exemptions of other GFIs did not distinguish between the officers and the rank-and-file; it is patent that the classification made between the BSP rank-and-file and those of the other seven GFIs was inadvertent, and NOT intended, i.e., it was not based on any substantial distinction vis-

-vis the particular circumstances of each GFI. Moreover, the exemption granted to two GFIs makes express reference to allowance and fringe benefits similar to those extended to and currently enjoyed by the employees and personnel of other GFIs,52 underscoring that GFIs are a particular class within the realm of government entities. It is precisely this unpremeditated discrepancy in treatment of the rank-and-file of the BSP made manifest and glaring with each and every consequential grant of blanket exemption from the SSL to the other GFIs - that cannot be rationalized or justified. Even more so, when the SEC - which is not a GFI - was given leave to have a compensation plan that "shall be comparable with the prevailing compensation plan in the [BSP] and other [GFIs],"53 then granted a blanket exemption from the SSL, and its rank-and-file endowed a more preferred treatment than the rank-and-file of the BSP. The violation to the equal protection clause becomes even more pronounced when we are faced with this undeniable truth: that if Congress had enacted a law for the sole purpose of exempting the eight GFIs from the coverage of the SSL, the exclusion of the BSP rank-andfile employees would have been devoid of any substantial or material basis. It bears no moment, therefore, that the unlawful discrimination was not a direct result arising from one law. "Nemo potest facere per alium quod non potest facere per directum." No one is allowed to do indirectly what he is prohibited to do directly. It has also been proffered that "similarities alone are not sufficient to support the conclusion that rank-and-file employees of the BSP may be lumped together with similar employees of the other GOCCs for purposes of compensation, position classification and qualification standards. The fact that certain persons have some attributes in common does not automatically make them members of the same class with respect to a legislative classification." Cited is the ruling in Johnson v. Robinson:54 "this finding of similarity ignores that a common characteristic shared by beneficiaries and nonbeneficiaries alike, is not sufficient to invalidate a statute when other characteristics peculiar to only one group rationally explain the statute's different treatment of the two groups." The reference to Johnson is inapropos. In Johnson, the US Court sustained the validity of the classification as there were quantitative and qualitative distinctions, expressly recognized by Congress, which formed a rational basis for the classification limiting educational benefits to military service veterans as a means of helping them readjust to civilian life. The Court listed the peculiar characteristics as follows: First, the disruption caused by military service is quantitatively greater than that caused by alternative civilian service. A conscientious objector performing alternative service is obligated to work for two years. Service in the Armed Forces, on the other hand, involves a six-year commitment xxx xxx xxx

Second, the disruptions suffered by military veterans and alternative service performers are qualitatively different. Military veterans suffer a far greater loss of personal freedom during their service careers. Uprooted from civilian life, the military veteran becomes part of the military establishment, subject to its discipline and potentially hazardous duty. Congress was acutely aware of the peculiar disabilities caused by military service, in consequence of which military servicemen have a special need for readjustment benefits55 (citations omitted)

In the case at bar, it is precisely the fact that as regards the exemption from the SSL, there are no characteristics peculiar only to the seven GFIs or their rank-and-file so as to justify the exemption which BSP rank-and-file employees were denied (not to mention the anomaly of the SEC getting one). The distinction made by the law is not only superficial,56 but also arbitrary. It is not based on substantial distinctions that make real differences between the BSP rank-and-file and the seven other GFIs. Moreover, the issue in this case is not - as the dissenting opinion of Mme. Justice CarpioMorales would put it - whether "being an employee of a GOCC or GFI is reasonable and sufficient basis for exemption" from R.A. No. 6758. It is Congress itself that distinguished the GFIs from other government agencies, not once but eight times, through the enactment of R.A. Nos. 7653, 7907, 8282, 8289, 8291, 8523, 8763, and 9302. These laws may have created a "preferred sub-class within government employees," but the present challenge is not directed at the wisdom of these laws. Rather, it is a legal conundrum involving the exercise of legislative power, the validity of which must be measured not only by looking at the specific exercise in and by itself (R.A. No. 7653), but also as to the legal effects brought about by seven separate exercises - albeit indirectly and without intent. Thus, even if petitioner had not alleged "a comparable change in the factual milieu as regards the compensation, position classification and qualification standards of the employees of the BSP (whether of the executive level or of the rank-and-file) since the enactment of the new Central Bank Act" is of no moment. In GSIS v. Montesclaros,57 this Court resolved the issue of constitutionality notwithstanding that claimant had manifested that she was no longer interested in pursuing the case, and even when the constitutionality of the said provision was not squarely raised as an issue, because the issue involved not only the claimant but also others similarly situated and whose claims GSIS would also deny based on the challenged proviso. The Court held that social justice and public interest demanded the resolution of the constitutionality of the proviso. And so it is with the challenged proviso in the case at bar. It bears stressing that the exemption from the SSL is a "privilege" fully within the legislative prerogative to give or deny. However, its subsequent grant to the rank-and-file of the seven other GFIs and continued denial to the BSP rank-and-file employees breached the latter's right to equal protection. In other words, while the granting of a privilege per se is a matter of policy exclusively within the domain and prerogative of Congress, the validity or legality of the exercise of this prerogative is subject to judicial review.58 So when the distinction made is superficial, and not based on substantial distinctions that make real differences between those included and excluded, it becomes a matter of arbitrariness that this Court has the duty and the power to correct.59 As held in the United Kingdom case of Hooper v. Secretary of State for Work and Pensions,60 once the State has chosen to confer benefits, "discrimination" contrary to law may occur where favorable treatment already afforded to one group is refused to another, even though the State is under no obligation to provide that favorable treatment. 61 The disparity of treatment between BSP rank-and-file and the rank-and-file of the other seven GFIs definitely bears the unmistakable badge of invidious discrimination - no one can, with candor and fairness, deny the discriminatory character of the subsequent blanket and total exemption of the seven other GFIs from the SSL when such was withheld from the BSP. Alikes are being treated as unalikes without any rational basis. Again, it must be emphasized that the equal protection clause does not demand absolute equality but it requires that all persons shall be treated alike, under like circumstances

and conditions both as to privileges conferred and liabilities enforced. Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances which, if not identical, are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion; whatever restrictions cast on some in the group is equally binding on the rest.62 In light of the lack of real and substantial distinctions that would justify the unequal treatment between the rank-and-file of BSP from the seven other GFIs, it is clear that the enactment of the seven subsequent charters has rendered the continued application of the challenged proviso anathema to the equal protection of the law, and the same should be declared as an outlaw. IV. Equal Protection Under International Lens In our jurisdiction, the standard and analysis of equal protection challenges in the main have followed the "rational basis" test, coupled with a deferential attitude to legislative classifications63 and a reluctance to invalidate a law unless there is a showing of a clear and unequivocal breach of the Constitution. 64 A. Equal Protection in the United States In contrast, jurisprudence in the U.S. has gone beyond the static "rational basis" test. Professor Gunther highlights the development in equal protection jurisprudential analysis, to wit: 65 Traditionally, equal protection supported only minimal judicial intervention in most contexts. Ordinarily, the command of equal protection was only that government must not impose differences in treatment "except upon some reasonable differentiation fairly related to the object of regulation." The old variety of equal protection scrutiny focused solely on the means used by the legislature: it insisted merely that the classification in the statute reasonably relates to the legislative purpose. Unlike substantive due process, equal protection scrutiny was not typically concerned with identifying "fundamental values" and restraining legislative ends. And usually the rational classification requirement was readily satisfied: the courts did not demand a tight fit between classification and purpose; perfect congruence between means and ends was not required. xxx xxx xxx

[From marginal intervention to major cutting edge: The Warren Court's "new equal protection" and the two-tier approach.] From its traditional modest role, equal protection burgeoned into a major intervention tool during the Warren era, especially in the 1960s. The Warren Court did not abandon the deferential ingredients of the old equal protection: in most areas of economic and social legislation, the demands imposed by equal protection remained as minimal as everBut the Court launched an equal protection revolution by finding large new areas for strict rather than deferential scrutiny. A sharply

differentiated two-tier approach evolved by the late 1960s: in addition to the deferential "old" equal protection, a "new" equal protection, connoting strict scrutiny, arose. The intensive review associated with the new equal protection imposed two demands - a demand not only as to means but also one as to ends. Legislation qualifying for strict scrutiny required a far closer fit between classification and statutory purpose than the rough and ready flexibility traditionally tolerated by the old equal protection: means had to be shown "necessary" to achieve statutory ends, not merely "reasonably related" ones. Moreover, equal protection became a source of ends scrutiny as well: legislation in the areas of the new equal protection had to be justified by "compelling" state interests, not merely the wide spectrum of "legitimate" state ends. The Warren Court identified the areas appropriate for strict scrutiny by searching for two characteristics: the presence of a "suspect" classification; or an impact on "fundamental" rights or interests. In the category of "suspect classifications," the Warren Court's major contribution was to intensify the strict scrutiny in the traditionally interventionist area of racial classifications. But other cases also suggested that there might be more other suspect categories as well: illegitimacy and wealth for example. But it was the 'fundamental interests" ingredient of the new equal protection that proved particularly dynamic, open-ended, and amorphous.. [Other fundamental interests included voting, criminal appeals, and the right of interstate travel .] xxx xxx xxx

The Burger Court and Equal Protection. The Burger Court was reluctant to expand the scope of the new equal protection, although its best established ingredient retains vitality. There was also mounting discontent with the rigid two-tier formulations of the Warren Court's equal protection doctrine. It was prepared to use the clause as an interventionist tool without resorting to the strict language of the new equal protection. [Among the fundamental interests identified during this time were voting and access to the ballot, while "suspect" classifications included sex, alienage and illegitimacy.] xxx xxx xxx

Even while the two-tier scheme has often been adhered to in form, there has also been an increasingly noticeable resistance to the sharp difference between deferential "old" and interventionist "new" equal protection. A number of justices sought formulations that would blur the sharp distinctions of the two-tiered approach or that would narrow the gap between strict scrutiny and deferential review. The most elaborate attack came from Justice Marshall, whose frequently stated position was developed most elaborately in his dissent in the Rodriguez case: 66 The Court apparently seeks to establish [that] equal protection cases fall into one of two neat categories which dictate the appropriate standard of review - strict scrutiny or mere rationality. But this (sic) Court's [decisions] defy such easy categorization. A principled reading of what this Court has done reveals that it has applied a spectrum of standards in reviewing discrimination allegedly violative of the equal protection clause. This spectrum clearly comprehends variations in the degree of care with which Court will scrutinize particular classification, depending, I believe, on

the constitutional and societal importance of the interests adversely affected and the recognized invidiousness of the basis upon which the particular classification is drawn. Justice Marshall's "sliding scale" approach describes many of the modern decisions, although it is a formulation that the majority refused to embrace. But the Burger Court's results indicate at least two significant changes in equal protection law: First, invocation of the "old" equal protection formula no longer signals, as it did with the Warren Court, an extreme deference to legislative classifications and a virtually automatic validation of challenged statutes. Instead, several cases, even while voicing the minimal "rationality" "hands-off" standards of the old equal protection, proceed to find the statute unconstitutional. Second, in some areas the modern Court has put forth standards for equal protection review that, while clearly more intensive than the deference of the "old" equal protection, are less demanding than the strictness of the "new" equal protection. Sex discrimination is the best established example of an "intermediate" level of review. Thus, in one case, the Court said that "classifications by gender must serve important governmental objectives and must be substantially related to achievement of those objectives." That standard is "intermediate" with respect to both ends and means: where ends must be "compelling" to survive strict scrutiny and merely "legitimate" under the "old" mode, "important" objectives are required here; and where means must be "necessary" under the "new" equal protection, and merely "rationally related" under the "old" equal protection, they must be "substantially related" to survive the "intermediate" level of review. (emphasis supplied, citations omitted) B. Equal Protection in Europe The United Kingdom and other members of the European Community have also gone forward in discriminatory legislation and jurisprudence. Within the United Kingdom domestic law, the most extensive list of protected grounds can be found in Article 14 of the European Convention on Human Rights (ECHR). It prohibits discrimination on grounds such as "sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status." This list is illustrative and not exhaustive. Discrimination on the basis of race, sex and religion is regarded as grounds that require strict scrutiny. A further indication that certain forms of discrimination are regarded as particularly suspect under the Covenant can be gleaned from Article 4, which, while allowing states to derogate from certain Covenant articles in times of national emergency, prohibits derogation by measures that discriminate solely on the grounds of "race, colour, language, religion or social origin."67 Moreover, the European Court of Human Rights has developed a test of justification which varies with the ground of discrimination. In the Belgian Linguistics case68 the European Court set the standard of justification at a low level: discrimination would contravene the Convention only if it had no legitimate aim, or there was no reasonable relationship of proportionality between the means employed and the aim sought to be realised.69 But over the years, the European Court has developed a hierarchy of grounds covered by Article 14 of the ECHR, a much higher level of justification being required in respect of those regarded as "suspect" (sex, race, nationality, illegitimacy, or sexual orientation) than of others. Thus, in Abdulaziz, 70 the European Court declared that: . . . [t]he advancement of the equality of the sexes is today a major goal in the member States of the Council of Europe. This means that very weighty reasons

would have to be advanced before a difference of treatment on the ground of sex could be regarded as compatible with the Convention. And in Gaygusuz v. Austria,71 the European Court held that "very weighty reasons would have to be put forward before the Court could regard a difference of treatment based exclusively on the ground of nationality as compatible with the Convention."72 The European Court will then permit States a very much narrower margin of appreciation in relation to discrimination on grounds of sex, race, etc., in the application of the Convention rights than it will in relation to distinctions drawn by states between, for example, large and small landowners. 73 C. Equality under International Law The principle of equality has long been recognized under international law. Article 1 of the Universal Declaration of Human Rights proclaims that all human beings are born free and equal in dignity and rights. Non-discrimination, together with equality before the law and equal protection of the law without any discrimination, constitutes basic principles in the protection of human rights. 74 Most, if not all, international human rights instruments include some prohibition on discrimination and/or provisions about equality.75 The general international provisions pertinent to discrimination and/or equality are the International Covenant on Civil and Political Rights (ICCPR);76 the International Covenant on Economic, Social and Cultural Rights (ICESCR); the International Convention on the Elimination of all Forms of Racial Discrimination (CERD);77 the Convention on the Elimination of all Forms of Discrimination against Women (CEDAW); and the Convention on the Rights of the Child (CRC). In the broader international context, equality is also enshrined in regional instruments such as the American Convention on Human Rights;78 the African Charter on Human and People's Rights;79 the European Convention on Human Rights;80 the European Social Charter of 1961 and revised Social Charter of 1996; and the European Union Charter of Rights (of particular importance to European states). Even the Council of the League of Arab States has adopted the Arab Charter on Human Rights in 1994, although it has yet to be ratified by the Member States of the League.81 The equality provisions in these instruments do not merely function as traditional "first generation" rights, commonly viewed as concerned only with constraining rather than requiring State action. Article 26 of the ICCPR requires "guarantee[s]" of "equal and effective protection against discrimination" while Articles 1 and 14 of the American and European Conventions oblige States Parties "to ensure ... the full and free exercise of [the rights guaranteed] ... without any discrimination" and to "secure without discrimination" the enjoyment of the rights guaranteed.82 These provisions impose a measure of positive obligation on States Parties to take steps to eradicate discrimination. In the employment field, basic detailed minimum standards ensuring equality and prevention of discrimination, are laid down in the ICESCR83 and in a very large number of Conventions administered by the International Labour Organisation, a United Nations body. 84 Additionally, many of the other international and regional human rights instruments have specific provisions relating to employment.85 The United Nations Human Rights Committee has also gone beyond the earlier tendency to view the prohibition against discrimination (Article 26) as confined to the ICCPR

rights.86 In Broeks87 and Zwaan-de Vries,88 the issue before the Committee was whether discriminatory provisions in the Dutch Unemployment Benefits Act (WWV) fell within the scope of Article 26. The Dutch government submitted that discrimination in social security benefit provision was not within the scope of Article 26, as the right was contained in the ICESCR and not the ICCPR. They accepted that Article 26 could go beyond the rights contained in the Covenant to other civil and political rights, such as discrimination in the field of taxation, but contended that Article 26 did not extend to the social, economic, and cultural rights contained in ICESCR. The Committee rejected this argument. In its view, Article 26 applied to rights beyond the Covenant including the rights in other international treaties such as the right to social security found in ICESCR: Although Article 26 requires that legislation should prohibit discrimination, it does not of itself contain any obligation with respect to the matters that may be provided for by legislation. Thus it does not, for example, require any state to enact legislation to provide for social security. However, when such legislation is adopted in the exercise of a State's sovereign power, then such legislation must comply with Article 26 of the Covenant.89 Breaches of the right to equal protection occur directly or indirectly. A classification may be struck down if it has the purpose or effect of violating the right to equal protection. International law recognizes that discrimination may occur indirectly, as the Human Rights Committee90 took into account the definitions of discrimination adopted by CERD and CEDAW in declaring that: . . . "discrimination" as used in the [ICCPR] should be understood to imply any distinction, exclusion, restriction or preference which is based on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status, and which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise by all persons, on an equal footing, of all rights and freedoms. 91 (emphasis supplied) Thus, the two-tier analysis made in the case at bar of the challenged provision, and its conclusion of unconstitutionality by subsequent operation, are in cadence and in consonance with the progressive trend of other jurisdictions and in international law. There should be no hesitation in using the equal protection clause as a major cutting edge to eliminate every conceivable irrational discrimination in our society. Indeed, the social justice imperatives in the Constitution, coupled with the special status and protection afforded to labor, compel this approach.92 Apropos the special protection afforded to labor under our Constitution and international law, we held in International School Alliance of Educators v. Quisumbing: 93 That public policy abhors inequality and discrimination is beyond contention. Our Constitution and laws reflect the policy against these evils. The Constitution in the Article on Social Justice and Human Rights exhorts Congress to "give highest priority to the enactment of measures that protect and enhance the right of all people to human dignity, reduce social, economic, and political inequalities." The very broad Article 19 of the Civil Code requires every person, "in the exercise of his rights and in the performance of his duties, [to] act with justice, give everyone his due, and observe honesty and good faith."

International law, which springs from general principles of law, likewise proscribes discrimination. General principles of law include principles of equity, i.e., the general principles of fairness and justice, based on the test of what is reasonable. The Universal Declaration of Human Rights, the International Covenant on Economic, Social, and Cultural Rights, the International Convention on the Elimination of All Forms of Racial Discrimination, the Convention against Discrimination in Education, the Convention (No. 111) Concerning Discrimination in Respect of Employment and Occupation - all embody the general principle against discrimination, the very antithesis of fairness and justice. The Philippines, through its Constitution, has incorporated this principle as part of its national laws. In the workplace, where the relations between capital and labor are often skewed in favor of capital, inequality and discrimination by the employer are all the more reprehensible. The Constitution specifically provides that labor is entitled to "humane conditions of work." These conditions are not restricted to the physical workplace - the factory, the office or the field - but include as well the manner by which employers treat their employees. The Constitution also directs the State to promote "equality of employment opportunities for all." Similarly, the Labor Code provides that the State shall "ensure equal work opportunities regardless of sex, race or creed." It would be an affront to both the spirit and letter of these provisions if the State, in spite of its primordial obligation to promote and ensure equal employment opportunities, closes its eyes to unequal and discriminatory terms and conditions of employment. xxx xxx xxx

Notably, the International Covenant on Economic, Social, and Cultural Rights, in Article 7 thereof, provides: The States Parties to the present Covenant recognize the right of everyone to the enjoyment of just and [favorable] conditions of work, which ensure, in particular: a. Remuneration which provides all workers, as a minimum, with: i. Fair wages and equal remuneration for work of equal value without distinction of any kind, in particular women being guaranteed conditions of work not inferior to those enjoyed by men, with equal pay for equal work; xxx xxx xxx

The foregoing provisions impregnably institutionalize in this jurisdiction the long honored legal truism of "equal pay for equal work." Persons who work with substantially equal qualifications, skill, effort and responsibility, under similar conditions, should be paid similar salaries. (citations omitted) Congress retains its wide discretion in providing for a valid classification, and its policies should be accorded recognition and respect by the courts of justice except when they run

afoul of the Constitution.94 The deference stops where the classification violates a fundamental right, or prejudices persons accorded special protection by the Constitution. When these violations arise, this Court must discharge its primary role as the vanguard of constitutional guaranties, and require a stricter and more exacting adherence to constitutional limitations. Rational basis should not suffice. Admittedly, the view that prejudice to persons accorded special protection by the Constitution requires a stricter judicial scrutiny finds no support in American or English jurisprudence. Nevertheless, these foreign decisions and authorities are not per se controlling in this jurisdiction. At best, they are persuasive and have been used to support many of our decisions.95 We should not place undue and fawning reliance upon them and regard them as indispensable mental crutches without which we cannot come to our own decisions through the employment of our own endowments. We live in a different ambience and must decide our own problems in the light of our own interests and needs, and of our qualities and even idiosyncrasies as a people, and always with our own concept of law and justice.96 Our laws must be construed in accordance with the intention of our own lawmakers and such intent may be deduced from the language of each law and the context of other local legislation related thereto. More importantly, they must be construed to serve our own public interest which is the be-all and the end-all of all our laws. And it need not be stressed that our public interest is distinct and different from others.97 In the 2003 case of Francisco v. House of Representatives, this Court has stated that: "[A]merican jurisprudence and authorities, much less the American Constitution, are of dubious application for these are no longer controlling within our jurisdiction and have only limited persuasive merit insofar as Philippine constitutional law is concerned....[I]n resolving constitutional disputes, [this Court] should not be beguiled by foreign jurisprudence some of which are hardly applicable because they have been dictated by different constitutional settings and needs."98 Indeed, although the Philippine Constitution can trace its origins to that of the United States, their paths of development have long since diverged. 99 Further, the quest for a better and more "equal" world calls for the use of equal protection as a tool of effective judicial intervention. Equality is one ideal which cries out for bold attention and action in the Constitution. The Preamble proclaims "equality" as an ideal precisely in protest against crushing inequities in Philippine society. The command to promote social justice in Article II, Section 10, in "all phases of national development," further explicitated in Article XIII, are clear commands to the State to take affirmative action in the direction of greater equality. [T]here is thus in the Philippine Constitution no lack of doctrinal support for a more vigorous state effort towards achieving a reasonable measure of equality.100 Our present Constitution has gone further in guaranteeing vital social and economic rights to marginalized groups of society, including labor.101 Under the policy of social justice, the law bends over backward to accommodate the interests of the working class on the humane justification that those with less privilege in life should have more in law.102 And the obligation to afford protection to labor is incumbent not only on the legislative and executive branches but also on the judiciary to translate this pledge into a living reality.103 Social justice calls for the humanization of laws and the equalization of social and economic forces by the State so that justice in its rational and objectively secular conception may at least be approximated.104 V.

A Final Word Finally, concerns have been raised as to the propriety of a ruling voiding the challenged provision. It has been proffered that the remedy of petitioner is not with this Court, but with Congress, which alone has the power to erase any inequity perpetrated by R.A. No. 7653. Indeed, a bill proposing the exemption of the BSP rank-and-file from the SSL has supposedly been filed. Under most circumstances, the Court will exercise judicial restraint in deciding questions of constitutionality, recognizing the broad discretion given to Congress in exercising its legislative power. Judicial scrutiny would be based on the "rational basis" test, and the legislative discretion would be given deferential treatment. 105 But if the challenge to the statute is premised on the denial of a fundamental right, or the perpetuation of prejudice against persons favored by the Constitution with special protection, judicial scrutiny ought to be more strict. A weak and watered down view would call for the abdication of this Court's solemn duty to strike down any law repugnant to the Constitution and the rights it enshrines. This is true whether the actor committing the unconstitutional act is a private person or the government itself or one of its instrumentalities. Oppressive acts will be struck down regardless of the character or nature of the actor. 106 Accordingly, when the grant of power is qualified, conditional or subject to limitations, the issue on whether or not the prescribed qualifications or conditions have been met, or the limitations respected, is justiciable or non-political, the crux of the problem being one of legality or validity of the contested act, not its wisdom. Otherwise, said qualifications, conditions or limitations - particularly those prescribed or imposed by the Constitution - would be set at naught. What is more, the judicial inquiry into such issue and the settlement thereof are the main functions of courts of justice under the Presidential form of government adopted in our 1935 Constitution, and the system of checks and balances, one of its basic predicates. As a consequence, We have neither the authority nor the discretion to decline passing upon said issue, but are under the ineluctable obligation - made particularly more exacting and peremptory by our oath, as members of the highest Court of the land, to support and defend the Constitution - to settle it. This explains why, in Miller v. Johnson, it was held that courts have a "duty, rather than a power", to determine whether another branch of the government has "kept within constitutional limits." Not satisfied with this postulate, the court went farther and stressed that, if the Constitution provides how it may be amended - as it is in our 1935 Constitution "then, unless the manner is followed, the judiciary as the interpreter of that constitution, will declare the amendment invalid." In fact, this very Court - speaking through Justice Laurel, an outstanding authority on Philippine Constitutional Law, as well as one of the highly respected and foremost leaders of the Convention that drafted the 1935 Constitution - declared, as early as July 15, 1936, that "(i)n times of social disquietude or political excitement, the great landmarks of the Constitution are apt to be forgotten or marred, if not entirely obliterated. In cases of conflict, the judicial department is the only constitutional organ which can be called upon to determine the proper allocation of powers between the several departments" of the government.107 (citations omitted; emphasis supplied) In the case at bar, the challenged proviso operates on the basis of the salary grade or officer-employee status. It is akin to a distinction based on economic class and status, with the higher grades as recipients of a benefit specifically withheld from the lower grades.

Officers of the BSP now receive higher compensation packages that are competitive with the industry, while the poorer, low-salaried employees are limited to the rates prescribed by the SSL. The implications are quite disturbing: BSP rank-and-file employees are paid the strictly regimented rates of the SSL while employees higher in rank - possessing higher and better education and opportunities for career advancement - are given higher compensation packages to entice them to stay. Considering that majority, if not all, the rank-and-file employees consist of people whose status and rank in life are less and limited, especially in terms of job marketability, it is they - and not the officers - who have the real economic and financial need for the adjustment This is in accord with the policy of the Constitution "to free the people from poverty, provide adequate social services, extend to them a decent standard of living, and improve the quality of life for all."108 Any act of Congress that runs counter to this constitutional desideratum deserves strict scrutiny by this Court before it can pass muster. To be sure, the BSP rank-and-file employees merit greater concern from this Court. They represent the more impotent rank-and-file government employees who, unlike employees in the private sector, have no specific right to organize as a collective bargaining unit and negotiate for better terms and conditions of employment, nor the power to hold a strike to protest unfair labor practices. Not only are they impotent as a labor unit, but their efficacy to lobby in Congress is almost nil as R.A. No. 7653 effectively isolated them from the other GFI rank-and-file in compensation. These BSP rank-and-file employees represent the politically powerless and they should not be compelled to seek a political solution to their unequal and iniquitous treatment. Indeed, they have waited for many years for the legislature to act. They cannot be asked to wait some more for discrimination cannot be given any waiting time. Unless the equal protection clause of the Constitution is a mere platitude, it is the Court's duty to save them from reasonless discrimination. IN VIEW WHEREOF, we hold that the continued operation and implementation of the last proviso of Section 15(c), Article II of Republic Act No. 7653 is unconstitutional. Davide, Jr., C.J., Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez, Azcuna, Tinga, and Chico-Nazario, JJ., concur. Panganiban, Carpio, Carpio-Morales, and Garcia, JJ., see dissenting. Corona, and Callejo, Sr., JJ., on leave.

CONCURRING OPINION CHICO-NAZARIO, J.: Does Sec. 15(c), Article II, Republic Act No. 6753,1 which allows the exemption of BSP employees occupying salary grade (SG) 20 and above from the coverage of Rep. Act No. 67582 result in a denial of petitioner's constitutional right to equal protection of the law? I submit that it does and said provision should therefore be declared unconstitutional on the ground that the division between BSP employees covered from SG 19 down and from SG 20 up is purely arbitrary. Even given the wide discretion vested in Congress to make classifications, it is nonetheless clear that the lawmaking body abused its discretion in making such classification.

It is not disputed that all that is required for a valid classification is that it must be reasonable, i.e., that it must be based on substantial distinctions which make for real differences; it must be germane to the purpose of the law; it must not be limited to existing conditions and it must apply equally to each member of the class.3 In the instant case, the classification was justified on the need of the BSP to compete in the labor market for economists, accountants, lawyers, experts in security, printing, commercial and rural banking, financial intermediation fund management, and other highly technical and professional personnel,4 which it could not do unless personnel occupying top positions are exempted from the coverage of Rep. Act No. 6758, the Salary Standardization Law. Under Rep. Act No. 6758, however, professional supervisory positions are covered by SG 9 to SG 33 which includes: (R)esponsible positions of a managerial character involving the exercise of management functions such as planning, organizing, directing, coordinating, controlling and overseeing within delegated authority the activities of an organization, a unit thereof or of a group, requiring some degree of professional, technical or scientific knowledge and experience, application of managerial or supervisory skills required to carry out their basic duties and responsibilities involving functional guidance and control, leadership, as well as line supervision. These positions require intense and thorough knowledge of a specialized field usually acquired from completion of a bachelor's degree or higher degree courses. The positions in this category are assigned Salary Grade 9 to Salary Grade 33.5 (Underscoring supplied) SG 33 is assigned to the President of the Philippines; SG 32 is for the Vice-President, Senate President, Speaker of the House and Chief Justice of this Court. SG 31 is for senators, associate justices of this Court, chairpersons of the constitutional commissions, department secretaries and other positions of equivalent rank while SG 30 is assigned to the constitutional commissioners and other positions of equivalent rank.6 Economists, accountants, lawyers and other highly technical and professional personnel are covered under SG 9 to 29 as already adverted to. Classification in law is the grouping of persons/objects because they agree with one another in certain particulars and differ from others in those same particulars. In the instant case, however, SG 20 and up do not differ from SG 19 and down in terms of technical and professional expertise needed as the entire range of positions all "require intense and thorough knowledge of a specialized field usually acquired from completion of a bachelor's degree or higher courses." Consequently, if BSP needs an exemption from Rep. Act No. 6758 for key positions in order that it may hire the best and brightest economists, accountants, lawyers and other technical and professional people, the exemption must not begin only in SG 20. Under the circumstances, the cut-off point, the great divide, between SG 19 and 20 is entirely arbitrary as it does not have a reasonable or rational foundation. This conclusion finds support in no less than the records of the congressional deliberations, the bicameral conference committee having pegged the cut-off period at SG 20 despite previous discussions in the Senate that the "executive group" is "probably" SG 23 and above.7

Moreover, even assuming that the classification is reasonable, nonetheless, its continued operation will result in hostile discrimination against those occupying grades 19 and below. As pointed out by Mr. Justice Puno, some other government corporations, by law, now exempt all their employees from the coverage of Rep. Act No. 6758. BSP employees occupying SG 19 and below, however, shall remain under Rep. Act No. 6758 considering the rule that the subject classification, to be valid, must not be limited only to conditions existing as of the time the law was passed. Thus, while BSP employees from SG 19 down will continue to be covered under Rep. Act No. 6758, other government employees of the same class and occupying the same positions in government corporations will be exempt. I therefore concur with Justice Puno in that respect and, considering his thorough discussion, I have nothing more to add thereto.

DISSENTING OPINION PANGANIBAN, J.: With all due respect, I dissent. I believe that it would be uncalled for, untimely and imprudent for this Court to void the last proviso of the second paragraph of Section 15(c) of Chapter 1 of Article II of Republic Act (RA) 7653. In the first place, the assailed provision is not unconstitutional, either on its face or as applied, and the theory of relative constitutionality finds no application to the case at bar. In the second place, a becoming respect on the part of this Court for Congress as a coequal and coordinate branch of government dictates that Congress should be given ample opportunity to study the situation, weigh its options and exercise its constitutional prerogative to enact whatever legislation it may deem appropriate to address the alleged inequity pointed out by petitioner. For the record, I am not against the exemption from the Salary Standardization Law of the Bangko Sentral ng Pilipinas (BSP) rank and file employees (with Salary Grade 19 and below). Neither am I against increases in their pay. I simply submit that (1) the factual milieu of this case does not show a denial of equal protection, (2) the theory of relative constitutionality does not come into play, and (3) petitioner should have addressed its plaint, not to this Court, but to Congress in the first instance. I am confident that given sufficient opportunity, the legislature will perform its constitutional duty accordingly. Hence, there is no need or warrant for this Court to intervene in legislative work. Theory of Relative Constitutionality Not Applicable to Extraneous Circumstances The ponencia advocates the application of the theory of relative constitutionality to the present case. The theory says that a statute valid at one time may become unconstitutional at another, because of altered circumstances or changed conditions that make the practical operation of such a statute arbitrary or confiscatory. Thus, the provisions of that statute, which may be valid as applied to one set of facts but invalid as applied to another, cannot be merely compared with those applicable under the Constitution. From the manner in which it has been utilized in American and Philippine jurisprudence, however, this novel theory finds relevance only when the factual situation covered by an

assailed law changes, not when another law is passed pertaining to subjects not directly covered by the former. Thus, the theory applies only when circumstances that were specifically addressed upon the passage of the law change. It does not apply to changes or alterations extraneous to those specifically addressed. To prove my point, allow me then to tackle seriatim the cases relied upon in the ponencia.1 Cited American Cases Not Applicable to and Not in Pari Materia with Present Facts Medill.2 The constitutionality issue in Medill v. State was raised by a bankruptcy trustee in regard to a statute exempting damages that were awarded to the claimants who suffered as a result of an automobile accident.3 Specifically, the contested provision exempted from "attachment, garnishment, or sale on any final process issued from any court" (1) general damages and (2) future special damages awarded in rights of action filed for injuries that were caused to the person of a debtor or of a relative.4 The Supreme Court of Minnesota said that the general damages portion of the right of action filed by claimants for personal injuries sustained in fact represented the monetary restoration of the physically and mentally damaged person; hence, claims for such damages could never constitute unreasonable amounts for exemption purposes.5 Such claims were thus fully exempt. It added that the legislature had assigned the role of determining the amounts that were reasonable to the state's judicial process.6 While a statute may be constitutional and valid as applied to one set of facts and invalid in its application to another, the said Court limited its discussion only to the set of facts as presented before it7 and held that the statute was "not unconstitutional."8 Distinguishing the facts of that case from those found in its earlier rulings,9 it concluded that -- by limiting the assets that were available for distribution to creditors10 -- the contested provision therein was a bankruptcy relief for protecting not only human capital,11 but also the debtor's fundamental needs. Cook.12 The bankruptcy trustee in In re Cook also objected to the same statutory exemption, inter alia, asserted by the debtors in another personal injury claim. The US Bankruptcy Court, following Medill, held that such exemption was "violative of x x x the Minnesota Constitution,"13 as applied to pre-petition special damages,14 but not as applied to general damages.15 The statute did not provide for any limitation on the amount of exemption as to the former type of damages.16 Neither did it set any objective criteria by which the bankruptcy court may limit its size.17 Nashville.18 The plaintiff in Nashville v. Walters questioned the constitutionality of a Tennessee statute imposing upon railroad companies one half of the total cost of grade separation in every instance that the state's Highway Commission issued an order for the elimination of a grade crossing. The plaintiff rested its contention not on the exercise of police power that promoted the safety of travel, but on the arbitrariness and unreasonableness of the imposition that deprived it of property without due process of law.19 Reversing the judgment that the Supreme Court of Tennessee had rendered against the plaintiff, the US Supreme Court however did not declare the statute unconstitutional.20 Instead, it remanded the case, because the determination of facts showing arbitrariness and

unreasonableness should have been made by the Tennessee Supreme Court in the first place.21 It enumerated the revolutionary changes incident to transportation wrought in the 1930s by the widespread introduction of motor vehicles; the assumption by the federal government of the functions of a road builder; the resulting depletion of rail revenues; the change in the character, construction and use of highways; the change in the occasion for the elimination of grade crossings, and in the purpose and beneficiaries of such elimination; and the change in the relative responsibility of railroads and vehicles moving on the highways.22 In addition, it held that the promotion of public convenience did not justify requiring a railroad company -- any more than others -- to spend money, unless it was shown that the duty to provide such convenience rested upon that company.23 Providing an underpass at one's own expense for private convenience, and not primarily as a safety measure, was a denial of due process.24 Atlantic.25 In Atlantic v. Ivey, the plaintiff filed an action for damages against the railroad company for the killing of a cow on an unfenced right of way of the railway. The defendant pointed out that the original Florida Act of 1889 and its later amendments in the 1940s had required railroad companies to fence their tracks for the protection and safety of the traveling public and their property against livestock roaming at large. Thus, the defendant averred that -- without imposing a similar fencing requirement on the owners of automobiles, trucks and buses that carry passengers upon unfenced public highways of the state where such vehicles operated -- the equal protection guarantees of the state and federal constitutions would be violated.26 Reversing the lower court's judgment for the plaintiff, the Supreme Court of Florida held that the application of the contested statutes under then existing conditions was violative of the equal protection clause.27 Citing Nashville, that Court took judicial notice of the fact that there were no motor carriers on public roads when the statutes were originally enacted. It also reasoned that the statutes were enacted in the exercise of the state's police power28 and were intended for the protection of everyone against accidents involving public transportation. Although motor-driven vehicles and railroad carriers were under a similar obligation to protect everyone against accidents to life and property when conducting their respective businesses, the hazard of accidents by reason of cattle straying onto the line of traffic of motor-driven vehicles was greater than that which arose when cattle strayed onto the line of traffic of railroad carriers.29 Yet the burden of expenses and penalties that were rendered in favor of individuals who were neither shippers nor passengers was imposed only on railroad carriers.30 In addition, the railroad carriers would be held liable for attorney's fees and double the value of the animals killed in their railways, without even requiring the plaintiffs who had sued them to prove the negligence of such carriers in operating their equipment.31 Although it was argued that motor-driven vehicles had no authority to fence on state and county highways over which they operated, the legislature could nevertheless authorize and require them to provide similar protection; or, in default thereof, to suffer similar penalties that were incidental to using such public roads for generating profit and serving the public.32 Louisville.33 The plaintiff in Louisville v. Faulkner also filed an action against defendantrailroad company to recover the value of her mule that had strayed from her premises and got struck and killed by the company's train.34 The judgment of the lower court for the plaintiff was based on the fact that the defendant did not offer any evidence to rebut the prima facie presumption of the latter's negligence under Kentucky statutes.35

The Court of Appeals of Kentucky held the contested provision unconstitutional and reversed the said judgment.36 Citing both Nashville and Atlantic, the appellate court said that because such legislation applied to all similar corporations and was aimed at the safety of all persons on a train and the protection of their property, it was sustained from its inception in 1893; however, under changed conditions, it could no longer be so. The court recognized the fact that, in the 1950s, the inauguration and development of transportation by motor vehicles on public highways created even greater risks, not only to the occupants of such vehicles but also to domestic animals.37 Yet, the operators of these vehicles were not subjected to the same extraordinary legal responsibility of proving that for the killing of those animals on public roads, they were free from negligence, unlike railroad companies that struck and killed such animals on private rights of way.38 Vernon.39 The plaintiff in Vernon v. City of Mount Vernon sought to declare unconstitutional a city zoning ordinance which had limited the business use of its realty, locally known as the "Plaza," only to the parking of automobiles and its incidental services.40 The Court of Appeals of New York ruled that the ordinance was unconstitutional.41 That ruling also affirmed the unanimous judgment earlier rendered in favor of the plaintiff. Again citing Nashville, the New York court ruled in the main that, no matter how compelling and acute the community traffic problem might be as to reach a strangulation point, the solution did not lie in placing an undue and uncompensated burden on a landowner in the guise of a regulation issued for a public purpose.42 Although for a long time the plaintiff's land had already been devoted to parking, the ordinance that prohibited any other use for it was not "a reasonable exercise of the police power."43 While the city's common council had the right to pass ordinances respecting the use of property according to well-considered and comprehensive plans designed to promote public health, safety and general welfare, the exercise of such right was still subject to the constitutional limitation that it may not be exerted arbitrarily or unreasonably. Thus, the zoning ordinance could not preclude the use of property for any purpose for which it was reasonably adapted.44 Although valid when adopted in 1927, the ordinance was stricken down, because its operation under changed conditions in the 1950s proved confiscatory, especially when the value of the greater part of the land -- to be used, for instance, in the erection of a retail shopping center -- was destroyed.45 Finally, Murphy v. Edmonds.46 An automobile driver and her husband brought action against a tractor-trailer driver and his employer and sought damages for the severe injuries she had sustained in a collision. Raised in issue mainly was the constitutionality of the statutory cap on noneconomic damages in personal injury actions.47 Affirming the judgment of the Court of Special Appeals rejecting all challenges to the validity of the law, the Court of Appeals of Maryland held that there was no irrationality, arbitrariness, or violation of equal protection in the legislative classification drawn between (1) the less seriously injured tort claimants whose noneconomic damages were less than the statutory cap; and (2) the more seriously injured tort claimants whose noneconomic damages were greater than, and thus subject to, the statutory cap.48 Although no express equal protection clause could be found in Maryland's Constitution, the due process clause therein nevertheless embodied equal protection to the same extent as that found in the Fourteenth Amendment49 of the federal Constitution.50 Indeed, the right to recover full damages for a noneconomic injury was recognized by common law even before the adoption of the state's Constitution, but the said court declared

that there was no vested interest in any rule ordained by common law.51 Concluding that only the traditional "rational basis test" should be used, the appellate court also rejected the lower court's view of the right to press a claim for pain and suffering as an "important right" requiring a "heightened scrutiny test" of the legislative classification.52 Under the "rational basis test," such legislative classification enjoyed a strong presumption of constitutionality and, not being clearly arbitrary, could not therefore be invalidated. 53 Moreover, the law was an economic response to a legislatively perceived crisis concerning not only the availability, but also the cost of liability insurance in the state.54 Putting a statutory cap on noneconomic damages was "reasonably related to a legitimate legislative objective,"55 for it led to a greater ease in the calculation of insurance premiums, thus making the market more attractive to insurers. Also, it ultimately reduced the cost of such premiums and made insurance more affordable to individuals and organizations that perform needed medical services.56 From the foregoing discussion, it is immediately evident that not one of the abovecited cases is either applicable to or in pari materia with the present case. Medill not only upheld the constitutionality of the contested provision therein, but also categorically stated that the peculiar facts of the case prompted such declaration. General damages were declared exempt; the law allowing their exemption was constitutional. Cook simply affirmed Medill when the same contested provision was applied to an issue similar to that which was raised in the latter case, but then declared that provision unconstitutional when applied to another issue. Thus, while general damages were also declared exempt, the claims for special damages filed prior to the filing of a petition for relief were not, and the law allowing the latter's exemption was unconstitutional. The court's action was to be expected, because the issue on special damages in Cook was not at all raised in Medill, and there was no precedent on the matter in Minnesota, other than the obiter dictum -- if it can be called one -- in the latter case.57 Had that issue been raised in Medill, a similar conclusion would inevitably have been reached. In fact, that case already stated that while the court "need not decide whether special damages incurred prior to judgment x x x [were] to be exempt in order to decide the question"58 on general damages raised therein, it felt that exempting special damages appeared reasonable and likely to be applied, following an earlier ruling in another case.59 Moreover, the facts of both Medill and Cook are not at all akin to so-called "changed conditions" prompting the declarations of constitutionality in the former and unconstitutionality in the latter. Such "altered circumstances" or "changed conditions" in these two cases refer to the non-exemption of special damages -- a subject matter distinct and separable, although covered by the same assailed statute. In fact, Cook precisely emphasized that "where a statute is not inherently unconstitutional, it may be found constitutional as applied to some separable subject matters, and unconstitutional as applied to others."60 In other words, it was the application of the contested provision therein to an entirely different and separable subject matter -- not the contested provision itself -- that was declared unconstitutional, but the statute itself was not inherently unconstitutional to begin with. Equally important, Nashville skirted the issue on constitutionality. The "changed conditions" referred to in that case, as well as in Atlantic and Louisville, were the revolutionary changes in the mode of transportation that were specifically covered by the statutes respectively imposing additional costs upon railroad companies only, requiring the fencing of their tracks,

or solely compelling them to present evidence to rebut the presumption of their negligence. In Vernon, these "changed conditions" were deemed to be the economic changes in the 1950s, through which the normal business use of the land was unduly limited by the zoning ordinance that was intended to address the acute traffic problem in the community. Nashville simply took judicial notice of the change in conditions which, together with the continued imposition of statutory charges and fees, caused deprivation of property without due process of law. Atlantic, Louisville and Vernon all relied upon Nashville, but then went further by rendering their respective contested provisions unconstitutional, because -- in the application of such provisions under "changed conditions" -- those similarly situated were no longer treated alike. Finally, Murphy -- obviously misplaced because it made no reference at all to the quoted sentence in the ponencia -- even upheld the validity of its contested provision. There was no trace, either, of any "changed conditions." If at all, the legislative classification therein was declared constitutional, because it was in fact a valid economic response to a legislatively perceived crisis concerning the availability and cost of liability insurance. In the present case, no "altered circumstances" or "changed conditions" in the application of the assailed provision can be found. It verily pertains to only one subject matter, not separable subject matters as earlier pointed out in both Medill and Cook. Hence, its application remains and will remain consistent. Not inherently unconstitutional to begin with, it cannot now be declared unconstitutional. Moreover, herein petitioner miserably fails to demonstrate -- unlike in Nashville, Atlantic, Louisville, and Vernon -- how those similarly situated have not been treated alike in the application of the assailed provision. Ponencia's Reference to "Changed Conditions" Misplaced From Nashville to Murphy, it can be seen that all the contested statutes were passed in the exercise of police power -- the inherent power of the State to regulate liberty and property for the promotion of the general welfare.61 The police measure may be struck down when an activity or property that ought to be regulated does not affect the public welfare; or when the means employed are not reasonably necessary for the accomplishment of the statute's purpose, and they become unduly oppressive upon individuals.62 As Justice Brandeis stresses in Nashville, "it may not be exerted arbitrarily or unreasonably."63 In the case before us today, the assailed provision can be considered a police measure that regulates the income of BSP employees. Indisputably, the regulation of such income affects the public welfare, because it concerns not only these employees, but also the public in general -- from whose various credits the banks earn their income, the CB generates its revenues, and eventually these employees get their salaries and other emoluments. Additionally, with the passage of RAs 6758 and 7653, the means employed by the State to accomplish its objectives are not unduly oppressive. They are in fact reasonably necessary, not only to attract the best and brightest bank regulatory personnel, but also to establish professionalism and excellence within the BSP in accordance with sound principles of management. Nothing, therefore, is arbitrary in the assailed provision; it cannot be stricken down. With due respect, the ponencia's reference to "changed conditions" is totally misplaced. In the above-cited US cases, this phrase never referred to subsequent laws or executive

pronouncements, but rather to the facts and circumstances that the law or ordinance specifically addressed upon its passage or adoption. A statute that is declared invalid because of a change in circumstances affecting its validity belongs only to a class of emergency laws.64 Being a manifestation of the State's exercise of its police power, it is valid at the time of its enactment. In contrast thereto, RA 7653 cannot be regarded as an emergency measure that is merely temporary in operation. It is not even a statute limited to the exigency that brought it about. The facts and circumstances it specifically addressed upon its passage have not been shown to have changed at all. Hence, the assailed provision of such a declaratory statute cannot be invalidated. Unlike congested traffic or motor-driven vehicles on public roads, the payment of salaries at differing scales in various GFIs vis--vis in the BSP, is not such a change in conditions as would cause deprivation of property without due process of law. Petitioner's members have not been deprived of their right to income as mandated by law. They have not received less than what they were entitled to ever since RA 7653 was passed eleven years ago. To repeat, the factual situation that the assailed provision specifically addressed upon passage of this law has not changed. The same substantive rights to a competitive and structured human resource development program existing then still exist now. Only the laws external to and not amendatory of this law did. Even if these new laws were to be considered as "changed conditions," those who have been affected in the BSP (as will be shown later) are not at all similarly situated as those in the GFIs to compel their like treatment in application. In addition, the rulings in all the above-cited American cases -- although entitled to great weight65 -- are merely of persuasive effect in our jurisdiction66 and cannot be stare decisis.67 These are not direct rulings of our Supreme Court68 that form part of the Philippine legal system.69 Granting gratia argumenti that the cited cases are to be considered binding precedents in our jurisdiction, Nashville -- the only one federal in character -- does not even make a categorical declaration on constitutionality. Furthermore, Murphy maintains that "[s]imply because a legal principle is part of the common law x x x does not give it any greater degree of insulation from legislative change."70 Common law, after all, is "a growing and everchanging system of legal principles and theories x x x."71 Every statute is presumed constitutional.72 This axiom reflects the respect that must be accorded to the wisdom, integrity and patriotism of the legislature that passed it and to the executive who approved it.73 Understandably, therefore, the judiciary should be reluctant to invalidate laws.74 Medill precisely emphasizes that the "court's power to declare a statute unconstitutional should be exercised with extreme caution and only when absolutely necessary."75 Although that case continues by saying that unless it is inherently unconstitutional, a law "must stand or fall x x x not upon assumptions" the court may make, the ponencia is still dauntless in relying thereon to support its arguments. Rutter Does Not Even Apply Again with due respect, the ponencia's citation of a local case, Rutter,76 is also inappropriate. In the said case, appellant instituted an action to recover the balance, and interest thereon, of a contract of sale entered into barely four months prior to the outbreak of the Second

World War.77 The lower court, however, rendered judgment78 for appellee who set up as defense79 the moratorium clause embodied in RA 342.80 The lower court reasoned further that the obligation sought to be enforced was not yet demandable under that law.81 Reversing the judgment, this Court invalidated82 the moratorium clause,83 not because the law was unconstitutional, but because both its continued operation and enforcement had become unreasonable and oppressive under postwar circumstances of observable reconstruction, rehabilitation and recovery of the country's general financial condition.84 The forced vigil suffered by prewar creditors was not only unwittingly extended from eight to twelve years, but was also imposed without providing for the payment of the corresponding interest in the interim.85 Thus, the success of their collection efforts, especially when their credits were unsecured, was extremely remote.86 Moreover, the settlement of claims filed with the United StatesPhilippine War Damage Commission was not only uncertain but was also practically futile, for it depended entirely on the appropriations to be made by the US Congress. The contested clause in Rutter was definitely a remedial measure passed to accord prewar debtors who suffered the ravages of war an opportunity to rehabilitate themselves within a reasonable time and to pay their prewar debts thereafter, thus preventing them from being victimized in the interim by their prewar creditors. The purpose having been achieved during the eight-year period, there was therefore no more reason for the law. Cessante ratione legis cessat et ipsa lex. When the reason for the law ceases, the law itself ceases. But it does not become unconstitutional. The altered circumstances or changed conditions in Rutter were specifically the very circumstances that the law addressed at its passage; they were not at all extraneous circumstances like subsequent laws or executive pronouncements. The eight-year moratorium period having lapsed, the debtors' concerns had been adequately addressed. It was now the turn of the creditors to be protected for the pre-war loans they granted. In stark contrast, the contested proviso in the instant case is not a remedial measure. It is not subject to a period within which a right of action or a remedy is suspended. Since the reason for the law still subsists, the law itself including the challenged proviso must continue in existence and operation. Relative Constitutionality Not Based on Positive Law Applying the concept of relative constitutionality strongly advocated in the ponencia, therefore, not only goes beyond the parameters of traditional constitutionalism, but also finds no express basis in positive law.87 While it has been asserted that "a statute valid when enacted may become invalid by change in conditions to which it is applied,"88 the present case has shown no such change in conditions that would warrant the invalidation of the assailed provision if applied under such conditions. Hence, no semblance of constitutional impuissance, other than its conjured possibility, can be seen. In a constitutional order that commands respect for coequal branches of government, speculation by the judiciary becomes incendiary and deserves no respectable place in our judicial chronicles. The ponencia further contends that the principles of international law can operate to render a valid law unconstitutional. The generally accepted definition states that international law is a body of legal rules that apply between sovereign states and such other entities as have been

granted international personality.89 Government employees at the BSP with salary grades 19 and below are not such entities vested with international personality; any possible discrimination as to them, in the light of the principles and application of international law would be too far-fetched. The dangerous consequences of the majority's Decision in the present case cannot and should not be ignored. Will there now be an automatic SSL exemption for employees of other GFIs and financial regulatory agencies? Will such exemption not infringe on Congress' prerogative? The ponencia overlooks the fact that the Bangko Sentral is not a GFI, but a regulatory body of GFIs and other financial/banking institutions. Therefore, it should not be compared with them. There is no parity. The Bangko Sentral is more akin to the Insurance Commission, the National Telecommunications Commission, and the Energy Regulatory Commission. Should not more appropriate comparisons be made with such regulatory bodies and their employees? Respect for Coequal Branch The trust reposed in this Court is "not to formulate policy but to determine its legality as tested by the Constitution."90 "It does not extend to an unwarranted intrusion into that broad and legitimate sphere of discretion enjoyed by the political branches to determine the policies to be pursued. This Court should ever be on the alert lest, without design or intent, it oversteps the boundary of judicial competence."91 Judicial activism should not be allowed to become judicial exuberance. "As was so well put by Justice Malcolm: 'Just as the Supreme Court, as the guardian of constitutional rights, should not sanction usurpations by any other department of the government, so should it as strictly confine its own sphere of influence to the powers expressly or by implication conferred on it by the Organic Act.'"92 Since Congress itself did not commit any constitutional violation or gravely abusive conduct when it enacted RA 7653, it should not be summarily blamed for what the ponencia calls "altered circumstances."93 Congress should be given the opportunity to correct the problem, if any. I repeat, I am not against exemption from the SSL of Bangko Sentral employees with salary grades 19 and below. Neither am I against increases in their pay. However, it is Congress, not this Court, that should provide a solution to their predicament, at least in the first instance. The remedy against any perceived legislative failure to enact corrective legislation is a resort, not to this Court, but to the bar of public opinion. The electorate can refuse to return to Congress members who, in their view, have been remiss in the discharge of their constitutional duties.94 Our Constitution presumes that, absent any inference of antipathy, improvident legislative decisions "will eventually be rectified by the democratic processes;"95 and that judicial intervention is unwarranted, no matter how unwisely a political branch may have acted.96 It is only the legislature, not the courts, that "must be appealed to for the change."97 If, however, Congress decides to act, the choice of appropriate measure lies within its discretion. Once determined, the measure chosen cannot be attacked on the ground that it is not the best solution, or that it is unwise or inefficacious.98 A law that advances a legitimate governmental interest will be sustained, even if it "works to the disadvantage of a particular group, or x x x the rationale for it seems tenuous."99 To compel this Court to make a more decisive but unnecessary action in advance of what Congress will do is a downright

derogation of the Constitution itself, for it converts the judiciary into a super-legislature and invests it with a power that to it has never belonged.100 In the words of the great Sir William Blackstone, "there is no court that has power to defeat the intent of the Legislature, when couched in such evident and express words, as leave no doubt whether it was the intent of the Legislature, or no[t]."101 As Rousseau further puts it, "according to the fundamental compact, only the general will can bind the individuals, and there can be no assurance that a particular will is in conformity with the general will, until it has been put to the free vote of the people."102 Thus, instead of this Court invalidating a sovereign act, Congress should be given the opportunity to enact the appropriate measure to address the so-called "changed conditions." We cannot second-guess the mind of the legislature as the repository of the sovereign will. For all we know, amidst the fiscal crisis and financial morass we are experiencing, Congress may altogether remove the blanket exemption, put a salary cap on the highest echelons,103 lower the salary grade scales subject to SSL exemption, adopt performance-based compensation structures, or even amend or repeal the SSL itself, but within the constitutional mandate that "at the earliest possible time, the Government shall increase the salary scales of x x x officials and employees of the National Government."104 Legislative reforms of whatever nature or scope may be taken one step at a time, addressing phases of problems that seem to the legislative mind most acute.105 Rightly so, our legislators must have "flexibility and freedom from judicial oversight in shaping and limiting their remedial efforts."106 Where there are plausible reasons for their action, the Court's "inquiry is at an end."107 Under the doctrine of separation of powers and the concomitant respect for coequal and coordinate branches of government, the exercise of prudent restraint by this Court would still be best under the present circumstances. Not Grossly Discriminatory

EN BANC [G.R. No. 147387 : December 10, 2003] RODOLFO C. FARIAS, MANUEL M. GARCIA, FRANCIS G. ESCUDERO, and AGAPITO A. AQUINO, AS MEMBERS OF THE HOUSE OF REPRESENTATIVES AND ALSO AS TAXPAYERS, IN THEIR OWN BEHALF AND IN REPRESENTATION OF THE MEMBERS OF THE MINORITY IN THE HOUSE OF REPRESENTATIVES, petitioners, vs. THE EXECUTIVE SECRETARY, COMMISSION ON ELECTIONS, HON. FELICIANO R. BELMONTE, JR., SECRETARY OF THE INTERIOR AND LOCAL GOVERNMENT, SECRETARY OF THE SENATE, AND SECRETARY GENERAL OF THE HOUSE OF REPRESENTATIVES, respondents. [G.R. No. 152161 : December 10, 2003] CONG. GERRY A. SALAPUDDIN, Petitioner, v. COMMISSION ON ELECTIONS, respondent.

DECISION

CALLEJO, SR., J.:

Before the Court are two Petitions under Rule 65 of the Rules of Court, as amended, seeking to declare as unconstitutional Section 14 of Republic Act No. 9006 (The Fair Election Act), insofar as it expressly repeals Section 67 of Batas Pambansa Blg. 881 (The Omnibus Election Code) which provides: SEC. 67. Candidates holding elective office. Any elective official, whether national or local, running for any office other than the one which he is holding in a permanent capacity, except for President and Vice-President, shall be considered ipso facto resigned from his office upon the filing of his certificate of candidacy. The petition for certiorari and prohibition in G.R. No. 147387 was filed by Rodolfo C. Farias, Manuel M. Garcia, Francis G. Escudero and Agapito A. Aquino. At the time of filing of the petition, the petitioners were members of the minority bloc in the House of Representatives. Impleaded as respondents are: the Executive Secretary, then Speaker of the House of Representatives Feliciano R. Belmonte, Jr., the Commission on Elections, the Secretary of the Department of the Interior and Local Government (DILG), the Secretary of the Senate and the Secretary General of the House of Representatives. The petition for prohibition in G.R. No. 152161 was filed by Gerry A. Salapuddin, then also a member of the House of Representatives. Impleaded as respondent is the COMELEC. Legislative History of Republic Act No. 9006 Rep. Act No. 9006, entitled An Act to Enhance the Holding of Free, Orderly, Honest, Peaceful and Credible Elections through Fair Election Practices, is a consolidation of the following bills originating from the House of Representatives and the Senate, respectively: House Bill (HB) No. 9000 entitled AN ACT ALLOWING THE USE OF MASS MEDIA FOR ELECTION PROPAGANDA, AMENDING FOR THE PURPOSE BATAS PAMBANSA BILANG 881, OTHERWISE KNOWN AS THE OMNIBUS ELECTION CODE, AS AMENDED, AND FOR OTHER PURPOSES;[1 Senate Bill (SB) No. 1742 entitled AN ACT TO ENHANCE THE HOLDING OF FREE, ORDERLY, HONEST, PEACEFUL, AND CREDIBLE ELECTIONS THROUGH FAIR ELECTION PRACTICES.[2 A Bicameral Conference Committee, composed of eight members of the Senate[3 and sixteen (16) members of the House of Representatives,[4 was formed to reconcile the conflicting provisions of the House and Senate versions of the bill.

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On November 29, 2000, the Bicameral Conference Committee submitted its Report,[5 signed by its members, recommending the approval of the bill as reconciled and approved by the conferees. During the plenary session of the House of Representatives on February 5, 2001, Rep. Jacinto V. Paras proposed an amendment to the Bicameral Conference Committee Report. Rep. Didagen P. Dilangalen raised a point of order commenting that the House could no longer submit an amendment thereto. Rep. Sergio A.F. Apostol thereupon moved that the House return the report to the Bicameral Conference Committee in view of the proposed amendment thereto. Rep. Dilangalen expressed his objection to the proposal. However, upon viva voce voting, the majority of the House approved the return of the report to the Bicameral Conference Committee for proper action.[6 In view of the proposed amendment, the House of Representatives elected anew its conferees[7 to the Bicameral Conference Committee.[8 Then again, for unclear reasons, upon the motion of Rep. Ignacio R. Bunye, the House elected another set of conferees[9 to the Bicameral Conference Committee.[10 On February 7, 2001, during the plenary session of the House of Representatives, Rep. Bunye moved that the House consider the Bicameral Conference Committee Report on the contrasting provisions of HB No. 9000 and SB No. 1742. Rep. Dilangalen observed that the report had been recommitted to the Bicameral Conference Committee. The Chair responded that the Bicameral Conference Report was a new one, and was a result of the reconvening of a new Bicameral Conference Committee. Rep. Dilangalen then asked that he be given time to examine the new report. Upon motion of Rep. Apostol, the House deferred the approval of the report until the other members were given a copy thereof.[11 After taking up other pending matters, the House proceeded to vote on the Bicameral Conference Committee Report on the disagreeing provisions of HB No. 9000 and SB No. 1742. The House approved the report with 125 affirmative votes, 3 negative votes and no abstention. In explaining their negative votes, Reps. Farias and Garcia expressed their belief that Section 14 thereof was a rider. Even Rep. Escudero, who voted in the affirmative, expressed his doubts on the constitutionality of Section 14. Prior to casting his vote, Rep. Dilangalen observed that no senator signed the Bicameral Conference Committee Report and asked if this procedure was regular.[12 On the same day, the Senate likewise approved the Bicameral Conference Committee Report on the contrasting provisions of SB No. 1742 and HB No. 9000. Thereafter, Rep. Act No. 9006 was duly signed by then Senate President Aquilino Pimentel, Jr. and then Speaker of the House of Representatives Feliciano R. Belmonte, Jr. and was duly certified by the Secretary of the Senate Lutgardo B. Barbo and the Secretary General of

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the House of Representatives Robert P. Nazareno as the consolidation of House Bill No. 9000 and Senate Bill No. 1742, and finally passed by both Houses on February 7, 2001. President Gloria Macapagal-Arroyo signed Rep. Act No. 9006 into law on February 12, 2001. The Petitioners Case The petitioners now come to the Court alleging in the main that Section 14 of Rep. Act No. 9006, insofar as it repeals Section 67 of the Omnibus Election Code, is unconstitutional for being in violation of Section 26(1), Article VI of the Constitution, requiring every law to have only one subject which should be expressed in its title. According to the petitioners, the inclusion of Section 14 repealing Section 67 of the Omnibus Election Code in Rep. Act No. 9006 constitutes a proscribed rider. They point out the dissimilarity in the subject matter of Rep. Act No. 9006, on the one hand, and Section 67 of the Omnibus Election Code, on the other. Rep. Act No. 9006 primarily deals with the lifting of the ban on the use of media for election propaganda and the elimination of unfair election practices, while Section 67 of the Omnibus Election Code imposes a limitation on elective officials who run for an office other than the one they are holding in a permanent capacity by considering them as ipso facto resigned therefrom upon filing of the certificate of candidacy. The repeal of Section 67 of the Omnibus Election Code is thus not embraced in the title, nor germane to the subject matter of Rep. Act No. 9006. The petitioners also assert that Section 14 of Rep. Act No. 9006 violates the equal protection clause of the Constitution because it repeals Section 67 only of the Omnibus Election Code, leaving intact Section 66 thereof which imposes a similar limitation to appointive officials, thus: SEC. 66. Candidates holding appointive office or position. Any person holding a public appointive office or position, including active members of the Armed Forces of the Philippines, and officers and employees in government-owned or controlled corporations, shall be considered ipso facto resigned from his office upon the filing of his certificate of candidacy. They contend that Section 14 of Rep. Act No. 9006 discriminates against appointive officials. By the repeal of Section 67, an elective official who runs for office other than the one which he is holding is no longer considered ipso facto resigned therefrom upon filing his certificate of candidacy. Elective officials continue in public office even as they campaign for reelection or election for another elective position. On the other hand, Section 66 has been retained; thus, the limitation on appointive officials remains - they are still considered ipso facto resigned from their offices upon the filing of their certificates of candidacy. The petitioners assert that Rep. Act No. 9006 is null and void in its entirety as irregularities attended its enactment into law. The law, not only Section 14 thereof, should be declared null and void. Even Section 16 of the law which provides that [t]his Act shall take effect upon its approval is a violation of the due process clause of the Constitution, as well as jurisprudence, which require publication of the law before it becomes effective. Finally, the petitioners maintain that Section 67 of the Omnibus Election Code is a good law; hence, should not have been repealed. The petitioners cited the ruling of the Court in

Dimaporo v. Mitra, Jr.,[13 that Section 67 of the Omnibus Election Code is based on the constitutional mandate on the Accountability of Public Officers:[14 Sec. 1. Public office is a public trust. Public officers and employees must at all times be accountable to the people, serve them with utmost responsibility, integrity, loyalty and efficiency, act with patriotism and justice, and lead modest lives. Consequently, the respondents Speaker and Secretary General of the House of Representatives acted with grave abuse of discretion amounting to excess or lack of jurisdiction for not considering those members of the House who ran for a seat in the Senate during the May 14, 2001 elections as ipso facto resigned therefrom, upon the filing of their respective certificates of candidacy. The Respondents Arguments For their part, the respondents, through the Office of the Solicitor General, urge this Court to dismiss the petitions contending, preliminarily, that the petitioners have no legal standing to institute the present suit. Except for the fact that their negative votes were overruled by the majority of the members of the House of Representatives, the petitioners have not shown that they have suffered harm as a result of the passage of Rep. Act No. 9006. Neither do petitioners have any interest as taxpayers since the assailed statute does not involve the exercise by Congress of its taxing or spending power. Invoking the enrolled bill doctrine, the respondents refute the petitioners allegations that irregularities attended the enactment of Rep. Act No. 9006. The signatures of the Senate President and the Speaker of the House, appearing on the bill and the certification signed by the respective Secretaries of both houses of Congress, constitute proof beyond cavil that the bill was duly enacted into law. The respondents contend that Section 14 of Rep. Act No. 9006, as it repeals Section 67 of the Omnibus Election Code, is not a proscribed rider nor does it violate Section 26(1) of Article VI of the Constitution. The title of Rep. Act No. 9006, An Act to Enhance the Holding of Free, Orderly, Honest, Peaceful and Credible Elections through Fair Election Practices, is so broad that it encompasses all the processes involved in an election exercise, including the filing of certificates of candidacy by elective officials. They argue that the repeal of Section 67 is germane to the general subject of Rep. Act No. 9006 as expressed in its title as it eliminates the effect of prematurely terminating the term of an elective official by his filing of a certificate of candidacy for an office other than the one which he is permanently holding, such that he is no longer considered ipso facto resigned therefrom. The legislature, by including the repeal of Section 67 of the Omnibus Election Code in Rep. Act No. 9006, has deemed it fit to remove the unfairness of considering an elective official ipso facto resigned from his office upon the filing of his certificate of candidacy for another elective office. With the repeal of Section 67, all elective officials are now placed on equal footing as they are allowed to finish their respective terms even if they run for any office, whether the presidency, vice-presidency or other elective positions, other than the one they are holding in a permanent capacity.

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The respondents assert that the repeal of Section 67 of the Omnibus Election Code need not be expressly stated in the title of Rep. Act No. 9006 as the legislature is not required to make the title of the act a complete index of its contents. It must be deemed sufficient that the title be comprehensive enough reasonably to include the general subject which the statute seeks to effect without expressing each and every means necessary for its accomplishment. Section 26(1) of Article VI of the Constitution merely calls for all the parts of an act relating to its subject to find expression in its title. Mere details need not be set forth. According to the respondents, Section 14 of Rep. Act No. 9006, insofar as it repeals Section 67, leaving Section 66 of the Omnibus Election Code intact and effective, does not violate the equal protection clause of the Constitution. Section 67 pertains to elective officials while Section 66 pertains to appointive officials. A substantial distinction exists between these two sets of officials; elective officials occupy their office by virtue of their mandate based upon the popular will, while the appointive officials are not elected by popular will. The latter cannot, therefore, be similarly treated as the former. Equal protection simply requires that all persons or things similarly situated are treated alike, both as to rights conferred and responsibilities imposed. Further, Section 16, or the Effectivity clause, of Rep. Act No. 9006 does not run afoul of the due process clause of the Constitution as it does not entail any arbitrary deprivation of life, liberty and property. Specifically, the section providing for penalties in cases of violations thereof presume that the formalities of the law would be observed, i.e., charges would first be filed, and the accused would be entitled to a hearing before judgment is rendered by a court having jurisdiction. In any case, the issue about lack of due process is premature as no one has, as yet, been charged with violation of Rep. Act No. 9006. Finally, the respondents submit that the respondents Speaker and Secretary General of the House of Representatives did not commit grave abuse of discretion in not excluding from the Rolls those members thereof who ran for the Senate during the May 14, 2001 elections. These respondents merely complied with Rep. Act No. 9006, which enjoys the presumption of validity until declared otherwise by the Court. The Courts Ruling Before resolving the petitions on their merits, the Court shall first rule on the procedural issue raised by the respondents, i.e., whether the petitioners have the legal standing or locus standi to file the petitions at bar. The petitions were filed by the petitioners in their capacities as members of the House of Representatives, and as taxpayers and registered voters. Generally, a party who impugns the validity of a statute must have a personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a result of its enforcement.[15 The rationale for requiring a party who challenges the constitutionality of a statute to allege such a personal stake in the outcome of the controversy is to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions.[16

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However, being merely a matter of procedure, this Court, in several cases involving issues of overarching significance to our society,[17 had adopted a liberal stance on standing. Thus, in Tatad v. Secretary of the Department of Energy,[18 this Court brushed aside the procedural requirement of standing, took cognizance of, and subsequently granted, the petitions separately filed by then Senator Francisco Tatad and several members of the House of Representatives assailing the constitutionality of Rep. Act No. 8180 (An Act Deregulating the Downstream Oil Industry and For Other Purposes). The Court likewise took cognizance of the petition filed by then members of the House of Representatives which impugned as unconstitutional the validity of a provision of Rep. Act No. 6734 (Organic Act for the Autonomous Region in Muslim Mindanao) in Chiongbian v. Orbos.[19 Similarly, the Court took cognizance of the petition filed by then members of the Senate, joined by other petitioners, which challenged the validity of Rep. Act No. 7716 (Expanded Value Added Tax Law) in Tolentino v. Secretary of Finance.[20 Members of Congress, such as the petitioners, were likewise allowed by this Court to challenge the validity of acts, decisions, rulings, or orders of various government agencies or instrumentalities in Del Mar v. Philippine Amusement and Gaming Corporation,[21 Kilosbayan, Inc. v. Guingona, Jr.,[22 Philippine Constitution Association v. Enriquez,[23 Albano v. Reyes,[24 and Bagatsing v. Committee on Privatization.[25 Certainly, the principal issue posed by the petitions, i.e., whether Section 67 of the Omnibus Election Code, which this Court had declared in Dimaporo[26 as deriving its existence from the constitutional provision on accountability of public officers, has been validly repealed by Section 14 of Rep. Act No. 9006, is one of overarching significance that justifies this Courts adoption of a liberal stance vis--vis the procedural matter on standing. Moreover, with the national elections barely seven months away, it behooves the Court to confront the issue now and resolve the same forthrightly. The following pronouncement of the Court is quite apropos: ... All await the decision of this Court on the constitutional question. Considering, therefore, the importance which the instant case has assumed and to prevent multiplicity of suits, strong reasons of public policy demand that [its] constitutionality . . . be now resolved. It may likewise be added that the exceptional character of the situation that confronts us, the paramount public interest, and the undeniable necessity for a ruling, the national elections beings barely six months away, reinforce our stand.[27

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Every statute is presumed valid.[28 The presumption is that the legislature intended to enact a valid, sensible and just law and one which operates no further than may be necessary to effectuate the specific purpose of the law.[29 It is equally well-established, however, that the courts, as guardians of the Constitution, have the inherent authority to determine whether a statute enacted by the legislature transcends the limit imposed by the fundamental law.[30 And where the acts of the other branches of government run afoul of the Constitution, it is the judiciarys solemn and sacred duty to nullify the same.[31 Proceeding from these guideposts, the Court shall now resolve the substantial issues raised by the petitions.

Section 14 of Rep. Act No. 9006 Is Not a Rider 32]

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At the core of the controversy is Section 14, the repealing clause of Rep. Act No. 9006, which provides: Sec. 14. Sections 67 and 85 of the Omnibus Election Code (Batas Pambansa Blg. 881) and Sections 10 and 11 of Republic Act No. 6646 are hereby repealed. As a consequence, the first proviso in the third paragraph of Section 11 of Republic Act No. 8436 is rendered ineffective. All laws, presidential decrees, executive orders, rules and regulations, or any part thereof inconsistent with the provisions of this Act are hereby repealed or modified or amended accordingly. The repealed provision, Section 67 of the Omnibus Election Code, quoted earlier, reads: SEC. 67. Candidates holding elective office. Any elective official, whether national or local, running for any office other than the one which he is holding in a permanent capacity, except for President and Vice-President, shall be considered ipso facto resigned from his office upon the filing of his certificate of candidacy. Section 26(1), Article VI of the Constitution provides: SEC. 26 (1). Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof. The proscription is aimed against the evils of the so-called omnibus bills and log-rolling legislation as well as surreptitious and/or unconsidered encroaches. The provision merely calls for all parts of an act relating to its subject finding expression in its title.[33 To determine whether there has been compliance with the constitutional requirement that the subject of an act shall be expressed in its title, the Court laid down the rule that

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Constitutional provisions relating to the subject matter and titles of statutes should not be so narrowly construed as to cripple or impede the power of legislation. The requirement that the subject of an act shall be expressed in its title should receive a reasonable and not a technical construction. It is sufficient if the title be comprehensive enough reasonably to include the general object which a statute seeks to effect, without expressing each and every end and means necessary or convenient for the accomplishing of that object. Mere details need not be set forth. The title need not be an abstract or index of the Act.[34 The title of Rep. Act No. 9006 reads: An Act to Enhance the Holding of Free, Orderly, Honest, Peaceful and Credible Elections through Fair Election Practices. Section 2 of the law provides not only the declaration of principles but also the objectives thereof: Sec. 2. Declaration of Principles. The State shall, during the election period, supervise or regulate the enjoyment or utilization of all franchises or permits for the operation of media of communication or information to guarantee or ensure equal opportunity for public service, including access to media time and space, and the equitable right to reply, for public information campaigns and fora among candidates and assure free, orderly, honest, peaceful and credible elections. The State shall ensure that bona fide candidates for any public office shall be free from any form of harassment and discrimination.[35 The Court is convinced that the title and the objectives of Rep. Act No. 9006 are comprehensive enough to include the repeal of Section 67 of the Omnibus Election Code within its contemplation. To require that the said repeal of Section 67 of the Code be expressed in the title is to insist that the title be a complete index of its content. [36 The purported dissimilarity of Section 67 of the Omnibus Election Code, which imposes a limitation on elective officials who run for an office other than the one they are holding, to the other provisions of Rep. Act No. 9006, which deal with the lifting of the ban on the use of media for election propaganda, does not violate the one subject-one title rule. This Court has held that an act having a single general subject, indicated in the title, may contain any number of provisions, no matter how diverse they may be, so long as they are not inconsistent with or foreign to the general subject, and may be considered in furtherance of such subject by providing for the method and means of carrying out the general subject.[37 The deliberations of the Bicameral Conference Committee on the particular matter are particularly instructive: SEN. LEGARDA-LEVISTE:

Yes, Mr. Chairman, I just wanted to clarify. So all were looking for now is an appropriate title to make it broader so that it would cover this provision [referring to the repeal of Section 67 of the Omnibus Election Code], is that correct? Thats all. Because I believe ... [ [ [ [

THE CHAIRMAN (REP. SYJUCO):

We are looking for an appropriate coverage which will result in the nomenclature or title.
SEN. LEGARDA-LEVISTE:

Because I really do not believe that it is out of place. I think that even with the term fair election practice, it really covers it, because as expressed by Senator Roco, those conditions inserted earlier seemed unfair and it is an election practice and, therefore, I think, Im very comfortable with the title Fair Election Practice so that we can get over with these things so that we dont come back again until we find the title. I mean, its one provision which I think is fair for everybody. It may seem like a limitation but this limitation actually provides for fairness in election practices as the title implies.
THE CHAIRMAN (REP. SYJUCO):

Yes.
SEN. LEGARDA-LEVISTE:

So I would want to beg the House contingent, lets get it over with. To me, ha, its not a very touchy issue. For me, its even a very correct provision. I feel very comfortable with it and it was voted in the Senate, at least, so I would like to appeal to the ... para matapos na, then we come back as a Bicam just for the title Is that what youre ...?
THE CHAIRMAN (REP. SYJUCO):

Its not the title per se, its the coverage. So if you will just kindly bear with us. Im happy that there is already one comfortable senator there among ... several of us were also comfortable with it. But it would be well that when we rise from this Bicam that were all comfortable with it.
THE CHAIRMAN (SEN. ROCO):

Yes. Anyway, lets listen to Congressman Marcos.

REP. MARCOS:

Mr. Chairman, may I just make the observation that although it is true that the bulk of provisions deals with the area of propaganda and political advertising, the complete title is actually one that indulge full coverage. It says An Act to enhance the holding of free, orderly, honest ... elections through fair election practices. But as you said, we will put that aside to discuss later one. Secondly, I think the Declaration of Principles contained in Section 2, paragraph 2 is perfectly adequate in that it says that it shall ensure candidates for public office that may be free from any form of harassment and discrimination.

Surely this provision in Section 67 of the old Election Code of the existing Omnibus Election Code is a form of harassment or discrimination. And so I think that in the effort at leveling the playing field, we can cover this and it should not be considered a rider.
SEN. LEGARDA-LEVISTE:

I agree, Mr. Chairman. I think the Congresswoman from Ilocos had very clearly put it, that it is covered in the Declaration of Principles and in the objective of this bill. And therefore, I hope that the House contingent would agree to this so that we can finish it now. And it expressly provides for fair election practices because ...
THE CHAIRMAN (SEN. ROCO):

Yeah, I think what is on the table is that we are not disputing this, but we are looking for a title that is more generic so that then we have less of an objection on constitutionality. I think thats the theory. So, there is acceptance of this. Maybe we should not call it na limitation on elected officials. Maybe we should say the special provision on elected officials. So how is that? Alam mo ito ...
REP. MARCOS:

I think we just change the Section 1, the short title.

THE CHAIRMAN (SEN. ROCO):

Also, Then we say - - on the short title of the Act, we say ...
REP. MARCOS:

What if we say fair election practices? Maybe that should be changed...

THE CHAIRMAN (SEN. ROCO):

O, sige, fine, fine. Lets a brainstorm. Equal...

REP. PADILLA:

Mr. Chairman, why dont we use An Act rationalizing the holding of free, orderly, honest, peaceful and credible elections, amending for the purpose Batasang Pambansa known as the Omnibus Election Code?
THE CHAIRMAN (SEN. ROCO):

Why dont we remove fair and then this shall be cited as Election Practices Act?
REP. PICHAY:

Thats not an election practice. Thats a limitation.

THE CHAIRMAN (SEN. ROCO):

Ah - - - ayaw mo iyong practice. O, give me another noun.

REP. MARCOS:

The Fair Election.

THE CHAIRMAN (SEN. ROCO):

O, Fair Election Act.

REP. MACARAMBON:

Nagbi-brainstorm tayo dito, eh. How about if we change the title to enhance the holding of free, orderly, honest, peaceful and ensure equal opportunity for public service through fair election practices?
REP. PICHAY:

Fair election practices?

REP. MACARAMBON:

Yeah. To ensure equal opportunity for public service through fair ...
THE CHAIRMAN (SEN. ROCO):

Wala nang practices nga.

REP. PICHAY:

Wala nang practices.

THE CHAIRMAN (SEN. ROCO):

It shall be cited as Fair Election Act. (Informal discussions)

REP. PICHAY:

Approve na iyan.
THE CHAIRMAN (SEN. ROCO):

Done. So, okay na iyon. The title will be Fair Election Act. The rest wala nang problema ano?
VOICES:

Wala na.
REP. MACARAMBON:

Wala na iyong practices?

THE CHAIRMAN (SEN. ROCO):

Wala na, wala na. Mahina tayo sa practice, eh. O, wala na? We will clean up.
REP. MARCOS:

Title?
THE CHAIRMAN (SEN. ROCO):

The short title, This Act ...

THE CHAIRMAN (REP. SYJUCO):

Youre back to your No. 21 already.

REP. MARCOS:

The full title, the same?

THE CHAIRMAN (SEN. ROCO):

Iyon na nga. The full title is An Act to enhance the holding ... Thats the House version, eh, dahil pareho, hindi ba? Then the short title This Act shall be known as the Fair Election Act.[38
The legislators considered Section 67 of the Omnibus Election Code as a form of harassment or discrimination that had to be done away with and repealed. The executive department found cause with Congress when the President of the Philippines signed the measure into law. For sure, some sectors of society and in government may believe that the repeal of Section 67 is bad policy as it would encourage political adventurism. But policy matters are not the concern of the Court. Government policy is within the exclusive dominion

of the political branches of the government.[39 It is not for this Court to look into the wisdom or propriety of legislative determination. Indeed, whether an enactment is wise or unwise, whether it is based on sound economic theory, whether it is the best means to achieve the desired results, whether, in short, the legislative discretion within its prescribed limits should be exercised in a particular manner are matters for the judgment of the legislature, and the serious conflict of opinions does not suffice to bring them within the range of judicial cognizance.[40 Congress is not precluded from repealing Section 67 by the ruling of the Court in Dimaporo v. Mitra[41 upholding the validity of the provision and by its pronouncement in the same case that the provision has a laudable purpose. Over time, Congress may find it imperative to repeal the law on its belief that the election process is thereby enhanced and the paramount objective of election laws the fair, honest and orderly election of truly deserving members of Congress is achieved. Moreover, the avowed purpose of the constitutional directive that the subject of a bill should be embraced in its title is to apprise the legislators of the purposes, the nature and scope of its provisions, and prevent the enactment into law of matters which have not received the notice, action and study of the legislators and the public.[42 In this case, it cannot be claimed that the legislators were not apprised of the repeal of Section 67 of the Omnibus Election Code as the same was amply and comprehensively deliberated upon by the members of the House. In fact, the petitioners, as members of the House of Representatives, expressed their reservations regarding its validity prior to casting their votes. Undoubtedly, the legislators were aware of the existence of the provision repealing Section 67 of the Omnibus Election Code.

Section 14 of Rep. Act No. 9006 Is Not Violative of the Equal Protection Clause of the Constitution 43]
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The petitioners contention, that the repeal of Section 67 of the Omnibus Election Code pertaining to elective officials gives undue benefit to such officials as against the appointive ones and violates the equal protection clause of the constitution, is tenuous. The equal protection of the law clause in the Constitution is not absolute, but is subject to reasonable classification. If the groupings are characterized by substantial distinctions that make real differences, one class may be treated and regulated differently from the other.[44 The Court has explained the nature of the equal protection guarantee in this manner: The equal protection of the law clause is against undue favor and individual or class privilege, as well as hostile discrimination or the oppression of inequality. It is not intended to prohibit legislation which is limited either in the object to which it is directed or by territory within which it is to operate. It does not demand absolute equality among residents; it merely requires that all persons shall be treated alike, under like circumstances and conditions both as to privileges conferred and liabilities enforced. The equal protection clause is not infringed by legislation which applies only to those persons falling within a specified class, if it applies

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alike to all persons within such class, and reasonable grounds exist for making a distinction between those who fall within such class and those who do not.[45 Substantial distinctions clearly exist between elective officials and appointive officials. The former occupy their office by virtue of the mandate of the electorate. They are elected to an office for a definite term and may be removed therefrom only upon stringent conditions.[46 On the other hand, appointive officials hold their office by virtue of their designation thereto by an appointing authority. Some appointive officials hold their office in a permanent capacity and are entitled to security of tenure[47 while others serve at the pleasure of the appointing authority.[48 Another substantial distinction between the two sets of officials is that under Section 55, Chapter 8, Title I, Subsection A. Civil Service Commission, Book V of the Administrative Code of 1987 (Executive Order No. 292), appointive officials, as officers and employees in the civil service, are strictly prohibited from engaging in any partisan political activity or take part in any election except to vote. Under the same provision, elective officials, or officers or employees holding political offices, are obviously expressly allowed to take part in political and electoral activities.[49 By repealing Section 67 but retaining Section 66 of the Omnibus Election Code, the legislators deemed it proper to treat these two classes of officials differently with respect to the effect on their tenure in the office of the filing of the certificates of candidacy for any position other than those occupied by them. Again, it is not within the power of the Court to pass upon or look into the wisdom of this classification. Since the classification justifying Section 14 of Rep. Act No. 9006, i.e., elected officials vis-avis appointive officials, is anchored upon material and significant distinctions and all the persons belonging under the same classification are similarly treated, the equal protection clause of the Constitution is, thus, not infringed.

The Enrolled Bill Doctrine Is Applicable In this Case

Not content with their plea for the nullification of Section 14 of Rep. Act No. 9006, the petitioners insist that the entire law should be nullified. They contend that irregularities attended the passage of the said law particularly in the House of Representatives catalogued thus: a. Creation of two (2) sets of BCC (Bicameral Conference Committee) members by the House during its session on February 5, 2001; b. No communication from the Senate for a conference on the compromise bill submitted by the BCC on November 29, 2000;

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c. The new Report submitted by the 2nd/3rd BCC was presented for approval on the floor without copies thereof being furnished the members; d. The 2nd/3rd BCC has no record of its proceedings, and the Report submitted by it was not signed by the Chairman (Sen. Roco) thereof as well as its senator-members at the time it was presented to and rammed for approval by the House; e. There was no meeting actually conducted by the 2nd/3rd BCC and that its alleged Report was instantly made and passed around for the signature of the BCC members; f. The Senate has no record of the creation of a 2nd BCC but only of the first one that convened on November 23, 2000; g. The Effectivity clauses of SB No. 1741 and HB No. 9000, as well as that of the compromise bill submitted by the BCC that convened on November 20, 2000, were couched in terms that comply with the publication required by the Civil Code and jurisprudence, to wit:

... However, it was surreptitiously replaced in its final form as it appears in 16, R.A. No. 9006, with the provision that This Act shall take effect immediately upon its approval;
h. The copy of the compromise bill submitted by the 2nd/3rd BCC that was furnished the members during its consideration on February 7, 2001, did not have the same 16 as it now appears in RA No. 9006, but 16 of the compromise bill, HB 9000 and SB 1742, reasons for which no objection thereto was made; i. The alleged BCC Report presented to the House on February 7, 2001, did not contain a detailed, sufficiently explicit statement of the changes in or amendments to the subject measure; and j. The disappearance of the Cayetano amendment, which is Section 12 of the compromise bill submitted by the BCC. In fact, this was the subject of the purported proposed amendment to the compromise bill of Member Paras as stated in paragraph 7 hereof. The said provision states, thusly:

Sec. 12. Limitation on Elected Officials. Any elected official who runs for president and vice-president shall be considered ipso facto resigned from his office upon the filing of the certificate of candidacy. 50
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The petitioners, thus, urge the Court to go behind the enrolled copy of the bill. The Court is not persuaded. Under the enrolled bill doctrine, the signing of a bill by the Speaker of the House and the Senate President and the certification of the Secretaries of both Houses of Congress that it was passed are conclusive of its due enactment. A review of cases[51 reveals the Courts consistent adherence to the rule. The Court finds no reason to deviate

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from the salutary rule in this case where the irregularities alleged by the petitioners mostly involved the internal rules of Congress, e.g., creation of the 2nd or 3rd Bicameral Conference Committee by the House. This Court is not the proper forum for the enforcement of these internal rules of Congress, whether House or Senate. Parliamentary rules are merely procedural and with their observance the courts have no concern.[52 Whatever doubts there may be as to the formal validity of Rep. Act No. 9006 must be resolved in its favor. The Court reiterates its ruling in Arroyo v. De Venecia,[53 viz.: But the cases, both here and abroad, in varying forms of expression, all deny to the courts the power to inquire into allegations that, in enacting a law, a House of Congress failed to comply with its own rules, in the absence of showing that there was a violation of a constitutional provision or the rights of private individuals. In Osmea v. Pendatun, it was held: At any rate, courts have declared that the rules adopted by deliberative bodies are subject to revocation, modification or waiver at the pleasure of the body adopting them. And it has been said that Parliamentary rules are merely procedural, and with their observance, the courts have no concern. They may be waived or disregarded by the legislative body. Consequently, mere failure to conform to parliamentary usage will not invalidate the action (taken by a deliberative body) when the requisite number of members have agreed to a particular measure.

The Effectivity Clause Is Defective

Finally, the Effectivity clause (Section 16) of Rep. Act No. 9006 which provides that it shall take effect immediately upon its approval, is defective. However, the same does not render the entire law invalid. In Taada v. Tuvera,[54 this Court laid down the rule: ... the clause unless it is otherwise provided refers to the date of effectivity and not to the requirement of publication itself, which cannot in any event be omitted. This clause does not mean that the legislator may make the law effective immediately upon approval, or on any other date without its previous publication. Publication is indispensable in every case, but the legislature may in its discretion provide that the usual fifteen-period shall be shortened or extended.[55 Following Article 2 of the Civil Code[56 and the doctrine enunciated in Taada, Rep. Act No. 9006, notwithstanding its express statement, took effect fifteen days after its publication in the Official Gazette or a newspaper of general circulation. In conclusion, it bears reiterating that one of the firmly entrenched principles in constitutional law is that the courts do not involve themselves with nor delve into the policy or wisdom of a statute. That is the exclusive concern of the legislative branch of the government. When the validity of a statute is challenged on constitutional grounds, the sole function of the court is to

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determine whether it transcends constitutional limitations or the limits of legislative power.[57 No such transgression has been shown in this case. WHEREFORE, the petitions are DISMISSED. No pronouncement as to costs. SO ORDERED.