July 2011 Philippine Supreme Court Decisions on Political Law

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

Constitutional Law

Court proceedings; denial of due process.  The SC here ruled that the Energy Regulatory Commission did not deprive petitioners of their right to be heard.  Where opportunity to be heard either through oral arguments or through pleadings is granted, there is no denial of due process. In this case, prior to the issuance of the assailed ERC Decision approving Meralco’s application for rate increase, petitioners were given several opportunities to attend the hearings and to present all their pleadings and evidence.  Petitioners voluntarily failed to appear in most of those hearings.  Although the ERC erred in prematurely issuing its Decision (as the same was issued prior to the lapse of the period for petitioners to file their comment on the application), its subsequent act of ordering petitioners to file their comments on another party’s motion for reconsideration cured this defect. Even though petitioners never filed their own motion for reconsideration, the fact that they were still given notice of the other motion and the opportunity to file their comments renders immaterial ERC’s failure to admit their comment on the rate application.  National Association of Electricity Consumers of reforms, Inc. [Nasecore], et al. vs. Energy Regulator Commission (ERC), et al., G.R. No. 190795. July 6, 2011.

Value added tax on toll fees; non-impairment clause.  Petitioners argue that since VAT was never factored into the formula for computing toll fees under the Toll Operation Agreements, its imposition would violate the non-impairment of contract clause of the constitution.  The SC held that Petitioner Timbol has no personality to invoke the non-impairment clause on behalf of private investors in the tollway projects.  She will neither be prejudiced nor affected by the alleged diminution in return of investments that may result from the VAT imposition.  She has no interest in the profits to be earned under the TOAs. The interest in and right to recover investments belongs solely to the private tollway investors. Renato V. Diaz and Aurora Ma. F. Timbol vs. The Secretary of Finance and the Commissioner of Internal Revenue, G.R. No. 193007. July 19, 2011.

Administrative Law

Public official; effect of resignation on filing of administrative complaint.  The Ombudsman can no longer institute an administrative case against Andutan because the latter was not a public servant at the time the case was filed.  It is irrelevant, according to the Ombudsman, that Andutan had already resigned prior to the filing of the administrative case since the operative fact that determines its jurisdiction is the commission of an offense while in the public service.  The SC observed that indeed it has held in the past that a public official’s resignation does not render moot an administrative case that was filed prior to the official’s resignation.  However, the facts of those cases are not entirely applicable to the present case. In the past cases, the Court found that the public officials – subject of the administrative cases – resigned, either to prevent the continuation of a case already filed or to pre-empt the imminent filing of one. Here, neither situation obtains. First, Andutan’s resignation was neither his choice nor of his own doing; he was forced to resign.  Second, Andutan resigned from his DOF post on July 1, 1998, while the administrative case was filed on September 1, 1999, exactly one year and two months after his resignation. What is clear from the records is that Andutan was forced to resign more than a year before the Ombudsman filed the administrative case against him. If the SC agreed with the interpretation of the Ombudsman, any official – even if he has been separated from the service for a long time – may still be subject to the disciplinary authority of his superiors, ad infinitum.  Likewise, if the act committed by the public official is indeed inimical to the interests of the State, other legal mechanisms are available to redress the same.  Office of the Ombudsman vs. Uldarico P. Andutan, Jr., G.R. No. 164679. July 27, 2011.

Public officials; prohibited positions.  Respondent in this case was charged with violation of Section 7(d) of Republic Act 6713 for solicitation or acceptance of gifts by reason of public office.  The CA found that RA 6713 was repealed by RA 6938; thus, respondent was not liable.  The SC found the contrary.  There was no repeal.  The ban on Cooperative Development Authority (CDA) officials holding a position in a cooperative provided in RA 6938 should be taken as a prohibition in addition to those provided in RA 6713 and specifically applicable to CDA officials and employees.  True, RA 6938 allows CDA officials and employees to become members of cooperatives and enjoy the privileges and benefits attendant to membership.  However, RA 6938 should not be taken as creating in favor of CDA officials and employees an exemption from the coverage of Section 7(d), RA 6713 considering that the benefits and privileges attendant to membership in a cooperative are not confined solely to availing of loans and not all cooperatives are established for the sole purpose of providing credit facilities to their members. Petra C. Martinez, In her capacity as General Manager of Claveria Agri-based Multi-Purpose Cooperative, Inc. vs. Filomena L. villanueva/Office of the Ombudsman vs. Filomena L. Villanueva, G.R. No. 169196/G.R. No. 169198, July 6, 2011.

Public officials; misconduct.  The prohibition in Section 7(d) of RA 6713 is malum prohibitum.  It is the commission of that act as defined by the law, and not the character or effect thereof, that determines whether or not the provision has been violated.  Therefore, it is immaterial whether respondent has fully paid her loans since the law prohibits the mere act of soliciting a loan under the circumstances provided in Section 7(d) of RA 6713. Neither is undue influence on respondent’s part required to be proven as held by the CA. Whether respondent used her position or authority as a CDA official is of no consequence in the determination of her administrative liability. And considering that respondent admitted having taken two loans from CABMPCI, which is a cooperative whose operations are directly regulated by respondent’s office, respondent was correctly meted the penalty of suspension by the Deputy Ombudsman for Luzon  for violation of Section 7(d). Petra C. Martinez, In her capacity as General Manager of Claveria Agri-based Multi-Purpose Cooperative, Inc. vs. Filomena L. villanueva/Office of the Ombudsman vs. Filomena L. Villanueva, G.R. No. 169196/G.R. No. 169198, July 6, 2011.

Agrarian Reform

Agrarian reform; distribution of shares to farmers.  In this case, Farmworkers Agrarian Reform Movement, Inc. (FARM) argues that Sec. 31 of RA 6657 is unconstitutional as it permits stock transfer in lieu of outright agricultural land transfer; in fine, there is stock certificate ownership of the farmers or farmworkers instead of them owning the land, as envisaged in the Constitution.  For FARM, this modality of distribution is an anomaly to be annulled for being inconsistent with the basic concept of agrarian reform ingrained in Sec. 4, Art. XIII of the Constitution. The Supreme Court denied FARM’s contention of unconstitutionality.  First, there was a failure on the part of FARM and its members to raise the question of constitutionality at the first opportunity.  It took them 27 years before they raised the same before the SC and after they have already received some benefits from its implementation.  Second, the issue of constitutionality is not the lis mota of this case, the lis mota being the alleged non-compliance by Hacienda Luisita, Inc. with the conditions of the Stock Distribution Plan (SDP) to support a plea for its revocation.  And before the Supreme Court, the lis mota is whether or not the Presidential Agrarian Reform Council acted in grave abuse of discretion when it ordered the recall of the SDP for such non-compliance and the fact that the SDP, as couched and implemented, offends certain constitutional and statutory provisions.  The SC held that any of these key issues may be resolved without going into the constitutionality of Sec. 31 of RA 6657.  Finally, there appears to be no breach of the fundamental law.  The wording of the Section 4 of Article XIII of the Constitution is unequivocal––the farmers and regular farmworkers have a right to own directly or collectively the lands they till.  Accordingly, the basic law allows two modes of land distribution—direct and indirect ownership.  Direct transfer to individual farmers is the most commonly used method by DAR and widely accepted.  Indirect transfer through collective ownership of the agricultural land is the alternative to direct ownership of agricultural land by individual farmers.  Therefore, Section 4 expressly authorizes collective ownership by farmers. No language can be found in the 1987 Constitution that disqualifies or prohibits corporations or cooperatives of farmers from being the legal entity through which collective ownership can be exercised.   Hacienda Luisita, Inc., et al. vs. Presidential Agrarian Reform Council, G.R. No. 171101, July 5, 2011.  

(Teng thanks Charmaine Haw for her assistance in preparing this post.)