September 2011 Philippine Supreme Court Decisions on Political Law

Here are selected September 2011 rulings of the Supreme Court of the Philippines on political law.

Constitutional Law

COA; Powers and function.  Under the 1987 Constitution, the Commission on Audit is vested with authority to determine whether government entities, including LGUs, comply with laws and regulations in disbursing government funds, and to disallow illegal or irregular disbursements of these funds.  Pursuant to its mandate as the guardian of public funds, the COA is vested with broad powers over all accounts pertaining to government revenue and expenditures and the uses of public funds and property. This includes the exclusive authority to define the scope of its audit and examination, establish the techniques and methods for such review, and promulgate accounting and auditing rules and regulations. The COA is endowed with enough latitude to determine, prevent and disallow irregular, unnecessary, excessive, extravagant or unconscionable expenditures of government funds.  LGUs, though granted local fiscal autonomy, are still within the audit jurisdiction of the COA.  Luciano Veloso, Abraham Cabochan, Jocelyn Dawis-Asuncion and Marlon M. Lacson vs. Commission on Audit, G.R. No. 193677. September 6, 2011.

Local government units; grant of award to employees.  In the exercise of its power to “determine the positions and salaries, wages, allowances and other emoluments and benefits of officials and employees paid wholly or mainly from city funds and provide for expenditures necessary for the proper conduct of programs, projects, services, and activities of the city government”, the City Council of Manila enacted Ordinance No. 8040, which authorized the conferment of the EPSA (Exemplary Public Service Award) to the former three-term councilors and, as part of the award, the qualified city officials were to be given “retirement and gratuity pay remuneration.”  The Supreme Court, however, noted that the above power is not without limitations, such as the rule against double compensation.  The recomputation of the award disclosed that it is equivalent to the total compensation received by each awardee for nine years that includes basic salary, additional compensation, Personnel Economic Relief Allowance, representation and transportation allowance, rice allowance, financial assistance, clothing allowance, 13th month pay and cash gift. Undoubtedly, the awardees’ reward is excessive and tantamount to double and additional compensation.  The remuneration is equivalent to everything that the awardees received during the entire period that he served as such official.  Indirectly, their salaries and benefits are doubled, only that they receive half of them at the end of their last term.  Luciano Veloso, Abraham Cabochan, Jocelyn Dawis-Asuncion and Marlon M. Lacson vs. Commission on Audit, G.R. No. 193677. September 6, 2011.

Constitutionality; Tariff and Customs Code.  In this case, the issue was the validity of Customs Administrative Order No. 7-92 and Section 3506 of the Tariff and Customs Code (on the assignment of customs employees to overtime work).  Section 3506 provides: “Customs employees may be assigned by a Collector to do overtime work at rates fixed by the Commissioner of Customs when the service rendered is to be paid by the importers, shippers or other persons served.  The rates to be fixed shall not be less than that prescribed by law to be paid to employees of private enterprise.” The Supreme Court disagreed with the CA in excluding airline companies, aircraft owners, and operators from the coverage of Section 3506 of the TCCP.  The term “other persons served” refers to all other persons served by the BOC employees. Airline companies, aircraft owners, and operators are among other persons served by the BOC employees. The processing of embarking and disembarking from aircrafts of passengers, as well as their baggage and cargoes, forms part of the BOC functions. BOC employees who serve beyond the regular office hours are entitled to overtime pay for the services they render.  The SC also noted that the BOC created a committee to re-evaluate the proposed increase in the rate of overtime pay and for two years, several meetings were conducted with the agencies concerned to discuss the proposal. BAR and the Airline Operators Council participated in these meetings and discussions. Hence, BAR cannot claim that it was denied due process in the imposition of the increase of the overtime rate.  Sergio I. Carbonilla, et al. vs. Borad of Airlines, et al., G.R. No. 193247/G.R. No. 194276. September 14, 2011.

Undue Delegation; Tariff and Customs Code.  The SC did not agree with the Court of Appeals that Section 3506 of the TCCP failed the completeness and sufficient standard tests. Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate, the only thing he will have to do is to enforce it.  The second test requires adequate guidelines or limitations in the law to determine the boundaries of the delegate’s authority and prevent the delegation from running riot.  Contrary to the ruling of the Court of Appeals, Section 3506 of the TCCP complied with these requirements.  The law is complete in itself that it leaves nothing more for the BOC to do: it gives authority to the Collector to assign customs employees to do overtime work; the Commissioner of Customs fixes the rates; and it provides that the payments shall be made by the importers, shippers or other persons served.  Section 3506 also fixed the standard to be followed by the Commissioner of Customs when it provides that the rates shall not be less than that prescribed by law to be paid to employees of private enterprise.  Sergio I. Carbonilla, et al. vs. Borad of Airlines, et al., G.R. No. 193247/G.R. No. 194276. September 14, 2011.

Sequestration and Freeze Orders; nature and purpose.  Without making a definitive conclusion as to the validity of the Sequestration and Freeze Orders being the main issue in Civil Case No. 0142 which is yet to be decided by the Sandiganbayan, the SC concluded that the pieces of evidence enumerated by Tourist Duty Free Shops, Inc. (TDFSI) do not show that it has a right to be protected and that the implementation of the Sequestration and Freeze Orders violates its rights.  The power of the PCGG to sequester property claimed to be “ill-gotten” means to place or cause to be placed under its possession or control said property, or any building or office wherein any such property and any records pertaining thereto may be found, including “business enterprises and entities” – for the purpose of preventing the destruction, concealment or dissipation of, and otherwise conserving and preserving, the same – until  it can be determined, through appropriate judicial proceedings, whether the property was in truth “ill-gotten.”  On the other hand, a freeze order prohibits the person having possession or control of property alleged to constitute ill-gotten wealth from transferring, conveying, encumbering or otherwise depleting or concealing such property, or from assisting or taking part in its transfer, encumbrance, concealment, or dissipation.  In other words, it commands the possessor to hold the property and conserve it subject to the orders and disposition of the authority decreeing such freezing.  Presidential Commission on Good Government vs. Sandiganbayan (Second Division), et al., G.R. No. 152500. September 14, 2011.

Administrative Law

Public officers; administrative vs. criminal liability.  It is a basic rule in administrative law that public officials are under a three-fold responsibility for a violation of their duty or for a wrongful act or omission, such that they may be held civilly, criminally and administratively liable for the same act.  Administrative liability is separate and distinct from penal and civil liability.  First, there is a difference in the quantum of evidence required and, correlatively, the procedure observed and sanctions imposed.  Second, there is the principle that a single act may offend against two or more distinct and related provisions of law, or that the same act may give rise to criminal as well as administrative liability.  Accordingly, the dismissal of the criminal case for violation of R.A. No. 3019 by the Ombudsman does not foreclose administrative action against Cataquiz, as the general manager of Laguna Lake Development Authority.  Office of the President and Presidential Anti-Graft Commission vs. Calixto R. Cataquiz, G.R. No. 183445, September 14, 2011

Public officers; effect of removal or resignation from office on administrative liability.  Removal or resignation from office is not a bar to a finding of administrative liability.  Despite his removal from his position, Cataquiz can still be held administratively liable for acts committed during his service as General Manager of the Laguna Lake Development Authority and he can be made to suffer the corresponding penalties.  Office of the President and Presidential Anti-Graft Commission vs. Calixto R. Cataquiz, G.R. No. 183445, September 14, 2011.  

(Teng thanks Charmaine Rose K. Haw for assisting in the preparation of this post.)

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