February 2012 Supreme Court Decisions on Political Law

Here are selected February 2012 rulings of the Supreme Court of the Philippines on political law.

Constitutional Law

Autonomous Region; plebiscite requirement. Section 18, Article X of the Constitution provides that “the creation of the autonomous region shall be effective when approved by majority of the votes cast by the constituent units in a plebiscite called for the purpose.”  The Supreme Court interpreted this to mean that only amendments to, or revisions of, the Organic Act constitutionally-essential to the creation of autonomous regions – i.e., those aspects specifically mentioned in the Constitution which Congress must provide for in the Organic Act– require ratification through a plebiscite.   While it agrees with the petitioners’ underlying premise that sovereignty ultimately resides with the people, it disagrees that this legal reality necessitates compliance with the plebiscite requirement for all amendments to RA No. 9054. For if we were to go by the petitioners’ interpretation of Section 18, Article X of the Constitution that all amendments to the Organic Act have to undergo the plebiscite requirement before becoming effective, this would lead to impractical and illogical results – hampering the ARMM’s progress by impeding Congress from enacting laws that timely address problems as they arise in the region, as well as weighing down the ARMM government with the costs that unavoidably follow the holding of a plebiscite. Also, Sec. 3 of R.A. No. 10153 cannot be seen as changing the basic structure of the ARMM regional government. On the contrary, this provision clearly preserves the basic structure of the ARMM regional government when it recognizes the offices of the ARMM regional government and directs the OICs who shall temporarily assume these offices to “perform the functions pertaining to the said offices.” Datu Michael Abas Kida, etc., et al. vs. Senate of the Phil., etc., et al./Basari D. Mapupuno vs. Sixto Brillantes, etc., et al./Rep. Edcel C. Lagman vs. Paquito N. Ochoa, Jr., etc., et al./Almarin Centi Tillah, et al. vs. The Commission on Elections, etc., et al./Atty. Romulo B. Macalintal vs. Commission on Elections, et al./Luis “Barok” Biraogo, G.R. No. 196271, February 28, 2012.

Citizenship; proceeding for declaration of Philippine citizenship. There is no specific statutory or procedural rule which authorizes the direct filing of a petition for declaration of election of Philippine citizenship before the courts. The special proceeding provided under Section 2, Rule 108 of the Rules of Court on Cancellation or Correction of Entries in the Civil Registry, merely allows any interested party to file an action for cancellation or correction of entry in the civil registry, i.e., election, loss and recovery of citizenship, which is not the relief prayed for by the respondent. The Republic of the Philippines v. Nora Fe Sagun, G.R. No. 187567, February 15, 2012.

COMELEC; authority to hold special elections. The Constitution merely empowers the COMELEC to enforce and administer all laws and regulations relative to the conduct of an election. Although the legislature, under the Omnibus Election Code (Batas Pambansa Bilang [BP] 881), has granted the COMELEC the power to postpone elections to another date, this power is confined to the specific terms and circumstances provided for in the law. Specifically, this power falls within the narrow confines of Sections 5 and 6, which address instances when elections have already been scheduled to take place but do not occur or had to be suspended because of unexpected and unforeseen circumstances, such as violence, fraud, terrorism, and other analogous circumstances. In contrast, the ARMM elections were postponed by law, in furtherance of the constitutional mandate of synchronization of national and local elections. Obviously, this does not fall under any of the circumstances contemplated by Section 5 or Section 6 of BP 881. More important, RA No. 10153 has already fixed the date for the next ARMM elections and COMELEC has no authority to set a different election date. Datu Michael Abas Kida, etc., et al. vs. Senate of the Phil., etc., et al./Basari D. Mapupuno vs. Sixto Brillantes, etc., et al./Rep. Edcel C. Lagman vs. Paquito N. Ochoa, Jr., etc., et al./Almarin Centi Tillah, et al. vs. The Commission on Elections, etc., et al./Atty. Romulo B. Macalintal vs. Commission on Elections, et al./Luis “Barok” Biraogo, G.R. No. 196271, February 28, 2012.

Commission on Audit; authority to determine if price is excessive; power to conduct post-audit. The COA, under the Constitution, is empowered to examine and audit the use of funds by an agency of the national government on a post-audit basis. For this purpose, the Constitution has provided that the COA “shall have exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties.” Candelario Verzosa Jr. v. Guillermo Carague and COA, et. al, G.R. No. 157838, February 7, 2012.

Commission on Audit; Memorandum No. 07-012; relevance of brand of an equipment as basis for what is reasonable.  The COA, under the Constitution, is empowered to examine and audit the use of funds by an agency of the national government on a post-audit basis. For this purpose, the Constitution has provided that the COA “shall have exclusive authority, subject to the limitations in this Article, to define the scope of its audit and examination, establish the techniques and methods required therefor, and promulgate accounting and auditing rules and regulations, including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant, or unconscionable expenditures, or uses of government funds and properties.” As such, CDA’s decisions regarding procurement of equipment for its own use, including computers and its accessories, is subject to the COA’s auditing rules and regulations for the prevention and disallowance of irregular, unnecessary, excessive and extravagant expenditures.  Necessarily, CDA’s preferences regarding brand of its equipment have to conform to the criteria set by the COA rules on what is reasonable price for the items purchased. Candelario Verzosa Jr. v. Guillermo Carague and COA, et. al, G.R. No. 157838, February 7, 2012.

Commission on Audit; Memorandum No. 97-012 (guidelines on evidence to support audit findings of over-pricing). 3.1 When the price/prices of a transaction under audit is found beyond the allowable ten percent (10%) above the prices indicated in reference price lists referred to in pa[r].2.1 as market price indicators, the auditor shall secure additional evidence to firm-up the initial audit finding to a reliable degree of certainty. 3.2 To firm-up the findings to a reliable degree of certainty, initial findings of over-pricing based on market price indicators mentioned in pa[r]. 2.1 above have to be supported with canvass sheets and/or price quotations indicating: a) the identities/names of the suppliers or sellers; b) the availability of stock sufficient in quantity to meet the requirements of the procuring agency; c)   the specifications of the items which should match those involved in the finding of over-pricing; and d) the purchase/contract terms and conditions which should be the same as those of the questioned transaction. Candelario Verzosa Jr. v. Guillermo Carague and COA, et. al, G.R. No. 157838, February 7, 2012.

Commission on Audit; Memorandum No. 97-012; no retroactive effect. In Arriola v. COA, this Court ruled that the disallowance made by the COA was not sufficiently supported by evidence, as it was based on undocumented claims.  The documents that were used as basis of the COA Decision were not shown to petitioners therein despite their repeated demands to see them; they were denied access to the actual canvass sheets or price quotations from accredited suppliers.  Absent due process and evidence to support COA’s disallowance, COA’s ruling on petitioners’ liability has no basis. We categorically ruled in Nava v. Palattao that neither Arriola nor the COA Memorandum No. 97-012 can be given any retroactive effect.  Thus, although Arriolawas already promulgated at the time, it is not correct to say that the COA in this case violated the afore-quoted guidelines which have not yet been issued at the time the audit was conducted in 1993. Candelario Verzosa Jr. v. Guillermo Carague and COA, et. al, G.R. No. 157838, February 7, 2012.

Commission on Audit; pre-audit. On 26 October 1982, the COA issued Circular No. 82-195, lifting the system of pre-audit of government financial transactions, albeit with certain exceptions. With the normalization of the political system and the stabilization of government operations, the COA saw it fit to issue Circular No. 89-299, which again lifted the pre-audit of government transactions of national government agencies (NGAs) and government-owned or -controlled corporations (GOCCs). Petitioner claims that the constitutional duty of COA includes the duty to conduct pre-audit. The Supreme Court found that there is nothing in section 2 of Article IX-D of the 1987 Constitution that requires the COA to conduct a pre-audit of all government transactions and for all government agencies. The only clear reference to a pre-audit requirement is found in Section 2, paragraph 1, which provides that a post-audit is mandated for certain government or private entities with state subsidy or equity and only when the internal control system of an audited entity is inadequate. In such a situation, the COA may adopt measures, including a temporary or special pre-audit, to correct the deficiencies. Hence, the conduct of a pre-audit is not a mandatory duty that the Supreme Court may compel the COA to perform. This discretion on its part is in line with the constitutional pronouncement that the COA has the exclusive authority to define the scope of its audit and examination. When the language of the law is clear and explicit, there is no room for interpretation, only application. Neither can the scope of the provision be unduly enlarged by the Court. Gualberto J. Dela Llana v. The Chairperson, Commission on Audit, the Executive Secretary and the National Treasurer, G.R. No. 180989, February 7, 2012.

Constitutionality; locus standi. Pres. Aquino, on September 8, 2010, issued EO 7 ordering (1) a moratorium on the increases in the salaries and other forms of compensation, except salary adjustments under EO 8011 and EO 900, of all GOCC and GFI employees for an indefinite period to be set by the President, and (2) a suspension of all allowances, bonuses and incentives of members of the Board of Directors/Trustees until December 31, 2010. The petitioner claims that as a PhilHealth employee, he is affected by the implementation of EO 7, which was issued with grave abuse of discretion amounting to lack or excess of jurisdiction. Locus standi or legal standing has been defined as a personal and substantial interest in a case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged.  The gist of the question on standing is whether a party alleges such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions.”  This requirement of standing relates to the constitutional mandate that this Court settle only actual cases or controversies. The Supreme Court was not convinced that the petitioner has demonstrated that he has a personal stake or material interest in the outcome of the case because his interest, if any, is speculative and based on a mere expectancy.   In this case, the curtailment of future increases in his salaries and other benefits cannot but be characterized as contingent events or expectancies.  To be sure, he has no vested rights to salary increases and, therefore, the absence of such right deprives the petitioner of legal standing to assail EO 7.  Neither can the lack of locus standi be cured by the petitioner’s claim that he is instituting the present petition as a member of the bar in good standing who has an interest in ensuring that laws and orders of the Philippine government are legally and validly issued.  This supposed interest has been branded by the Court in Integrated Bar of the Phils. (IBP) v. Hon. Zamora, “as too general an interest which is shared by other groups and [by] the whole citizenry.” Thus, the Court ruled in IBP that the mere invocation by the IBP of its duty to preserve the rule of law and nothing more, while undoubtedly true, is not sufficient to clothe it with standing in that case. Jelbert B. Galicto vs. H.E. President Benigno Simeon C. Aquino III, et al. G.R. No. 193978, February 28, 2012.

DAR Administrative Order No. 01; 2003 Rules Governing Issuance of Notice of Coverage and Acquisition of Agricultural Lands under RA No. 6657; procedure; commencement. Commencement by the Municipal Agrarian Reform Officer (MARO) – After determining that a landholding is coverable under the CARP, and upon accomplishment of the Pre-Ocular Inspection Report, the MARO shall prepare the NO (CARP Form No. 5-1). Corolarilly, Administrative Order No. 01, Series of 1998, which outlines the steps in the acquisition of lands, details that in the 3rd step, the Department of Agrarian Reform Municipal Office (DARMO) should conduct a “preliminary ocular inspection to determine initially whether or not the property maybe covered under the CARP,” which findings will be contained in CARP Form No. 3.a, or the Preliminary Ocular Inspection Report. Gonzalo Puyat & Sons, Inc. vs. Ruben Alcaide (deceased), substituted by Gloria Alcaide representative of the Farmer-Beneficiaries, G.R. No. 167952, February 1, 2012.

Declaratory relief. Under the Rules of Court, petitions for Certiorari and Prohibition are availed of to question judicial, quasi-judicial and mandatory acts.  Since the issuance of an EO is not judicial, quasi-judicial or a mandatory act, a petition for certiorari and prohibition is an incorrect remedy; instead a petition for declaratory relief under Rule 63 of the Rules of Court, filed with the Regional Trial Court (RTC), is the proper recourse to assail the validity of EO 7. Jelbert B. Galicto vs. H.E. President Benigno Simeon C. Aquino III, et al. G.R. No. 193978, February 28, 2012.

Double jeopardy. The rule against double jeopardy cannot be properly invoked in a Rule 65 petition, predicated on two (2) exceptional grounds, namely: in a judgment of acquittal rendered with grave abuse of discretion by the court; and where the prosecution had been deprived of due process. The rule against double jeopardy does not apply in these instances because a Rule 65 petition does not involve a review of facts and law on the merits in the manner done in an appeal. In certiorari proceedings, judicial review does not examine and assess the evidence of the parties nor weigh the probative value of the evidence. It does not include an inquiry on the correctness of the evaluation of the evidence. A review under Rule 65 only asks the question of whether there has been a validly rendered decision, not the question of whether the decision is legally correct. In other words, the focus of the review is to determine whether the judgment is per se void on jurisdictional grounds. Arnold James M. Ysidoro vs. Hon. Teresita J. Leonardo-de Castro, et al, G.R. No. 171513, February 6, 2012.

Double jeopardy; exceptions. The rule on double jeopardy is one of the pillars of our criminal justice system. It dictates that when a person is charged with an offense, and the case is terminated – either by acquittal or conviction or in any other manner without the consent of the accused – the accused cannot again be charged with the same or an identical offense. This principle is founded upon the law of reason, justice and conscience. It is embodied in the civil law maxim non bis in idem found in the common law of England and undoubtedly in every system of jurisprudence. It found expression in the Spanish Law, in the Constitution of the United States, and in our own Constitution as one of the fundamental rights of the citizen, viz: The rule on double jeopardy thus prohibits the state from appealing the judgment in order to reverse the acquittal or to increase the penalty imposed either through a regular appeal under Rule 41 of the Rules of Court or through an appeal by certiorari on pure questions of law under Rule 45 of the same Rules. The requisites for invoking double jeopardy are the following: (a) there is a valid complaint or information; (b) it is filed before a competent court; (c) the defendant pleaded to the charge; and (d) the defendant was acquitted or convicted, or the case against him or her was dismissed or otherwise terminated without the defendant’s express consent. A verdict of acquittal is immediately final and a reexamination of the merits of such acquittal, even in the appellate courts, will put the accused in jeopardy for the same offense. The finality-of-acquittal doctrine has several avowed purposes. Primarily, it prevents the State from using its criminal processes as an instrument of harassment to wear out the accused by a multitude of cases with accumulated trials. It also serves the additional purpose of precluding the State, following an acquittal, from successively retrying the defendant in the hope of securing a conviction. And finally, it prevents the State, following conviction, from retrying the defendant again in the hope of securing a greater penalty. An acquitted defendant is entitled to the right of repose as a direct consequence of the finality of his acquittal.  This prohibition, however, is not absolute. The state may challenge the lower court’s acquittal of the accused or the imposition of a lower penalty on the latter in the following recognized exceptions: (1) where the prosecution is deprived of a fair opportunity to prosecute and prove its case, tantamount to a deprivation of due process; (2) where there is a finding of mistrial; or (3) where there has been a grave abuse of discretion. Artemio Villareal vs. People of the Philippines/People of the Philippines vs. The Honorable Court of Appeals, et al./Fidelito Dizon vs. People of the Philippines/Gerarda H. Villa vs. Manuel Lorenzo Escalona II, et al. G.R. No. 151258/G.R. No. 154954/G.R. No. 155101/G.R. Nos. 178057 & G.R. No. 178080, February 1, 2012.

Due process; deprivation of the State’s right to due process. The State, like any other litigant, is entitled to its day in court; in criminal proceedings, the public prosecutor acts for and represents the State, and carries the burden of diligently pursuing the criminal prosecution in a manner consistent with public interest. The State’s right to be heard in court rests to a large extent on whether the public prosecutor properly undertook his duties in pursuing the criminal action for the punishment of the guilty. The prosecutor’s role in the administration of justice is to lay before the court, fairly and fully, every fact and circumstance known to him or her to exist, without regard to whether such fact tends to establish the guilt or innocence of the accused and without regard to any personal conviction or presumption on what the judge may or is disposed to do. The prosecutor owes the State, the court and the accused the duty to lay before the court the pertinent facts at his disposal with methodical and meticulous attention, clarifying contradictions and filling up gaps and loopholes in his evidence to the end that the court’s mind may not be tortured by doubts; that the innocent may not suffer; and that the guilty may not escape unpunished. In the conduct of the criminal proceedings, the prosecutor has ample discretionary power to control the conduct of the presentation of the prosecution evidence, part of which is the option to choose what evidence to present or who to call as witness. In this case, the State was not denied due process in the proceedings before the Sandiganbayan. There was no indication that the special prosecutor deliberately and willfully failed to present available evidence or that other evidence could be secured. People of the Philippines, v. Hon. Sandiganbayan (Fourth Division), et al., G.R. No. 153304-05, February 7, 2012.

Elections; synchronization of ARMM elections with local elections. The Court was unanimous in holding that the Constitution mandates the synchronization of national and local elections. While the Constitution does not expressly instruct Congress to synchronize the national and local elections, the intention can be inferred from Sections 1, 2 and 5 of the Transitory Provisions (Article XVIII) of the Constitution. The framers of the Constitution could not have expressed their objective more clearly – there was to be a single election in 1992 for all elective officials – from the President down to the municipal officials. Significantly, the framers were even willing to temporarily lengthen or shorten the terms of elective officials in order to meet this objective, highlighting the importance of this constitutional mandate. That the ARMM elections were not expressly mentioned in the Transitory Provisions of the Constitution on synchronization cannot be interpreted to mean that the ARMM elections are not covered by the constitutional mandate of synchronization. It is to be considered that the ARMM, as we now know it, had not yet been officially organized at the time the Constitution was enacted and ratified by the people. Keeping in mind that a constitution is not intended to provide merely for the exigencies of a few years but is to endure through generations for as long as it remains unaltered by the people as ultimate sovereign, a constitution should be construed in the light of what actually is a continuing instrument to govern not only the present but also the unfolding events of the indefinite future. Although the principles embodied in a constitution remain fixed and unchanged from the time of its adoption, a constitution must be construed as a dynamic process intended to stand for a great length of time, to be progressive and not static. Article X of the Constitution, entitled “Local Government,” clearly shows the intention of the Constitution to classify autonomous regions, such as the ARMM, as local governments. The inclusion of autonomous regions in the enumeration of political subdivisions of the State under the heading “Local Government” indicates quite clearly the constitutional intent to consider autonomous regions as one of the forms of local governments. That the Constitution mentions only the “national government” and the “local governments,” and does not make a distinction between the “local government” and the “regional government,” is particularly revealing, betraying as it does the intention of the framers of the Constitution to consider the autonomous regions not as separate forms of government, but as political units which, while having more powers and attributes than other local government units, still remain under the category of local governments. Since autonomous regions are classified as local governments, it follows that elections held in autonomous regions are also considered as local elections. Datu Michael Abas Kida, et. al v. Senate of the Philippines, G.R. No. 196271, February 28, 2012.

Eminent domain; just compensation. When the State exercises its inherent power of eminent domain, the Constitution imposes the corresponding obligation to compensate the landowner for the expropriated property. When the State exercises the power of eminent domain in the implementation of its agrarian reform program, the constitutional provision which governs is Section 4, Article XIII of the Constitution. Notably, this provision also imposes upon the State the obligation of paying the landowner compensation for the land taken, even if it is for the government’s agrarian reform purposes. That the compensation mentioned here pertains to the fair and full price of the taken property is evident from the exchange between the members of the Constitutional Commission during the discussion on the government’s agrarian reform program. Land Bank of the Philippines v. Honeycomb Farms Corporation, G.R. No. 169903, February 29, 2012.

Equal protection clause. The equal protection clause means that no person or class of persons shall be deprived of the same protection of laws enjoyed by other persons or other classes in the same place in like circumstances. Thus, the guarantee of the equal protection of laws is not violated if there is a reasonable classification. For a classification to be reasonable, it must be shown that (1) it rests on substantial distinctions; (2) it is germane to the purpose of the law; (3) it is not limited to existing conditions only; and (4) it applies equally to all members of the same class. Unfortunately, CMO 27-2003 does not meet these requirements. It was not seen how the quality of wheat is affected by who imports it, where it is discharged, or which country it came from. Commissioner of Customs and the District Collector of the Port of Subic v. Hypermix Feeds Corporation, G.R. No. 179579, February 1, 2012.

Executive agreement; requisites. An executive agreement is similar to a treaty, except that the former (a) does not require legislative concurrence; (b) is usually less formal; and (c) deals with a narrower range of subject matters. Despite these differences, to be considered an executive agreement, the following three requisites provided under the Vienna Convention must nevertheless concur: (a) the agreement must be between states; (b) it must be written; and (c) it must governed by international law. China National machinery & Equipment Corp. v. Hon. Cesar Santamaria, et. al, G.R. No. 185572, February 7, 2012.

Executive Power; power to classify or reclassify lands. The power to classify or reclassify lands is essentially an executive prerogative, albeit local government units, thru zoning ordinances, may, subject to certain conditions, very well effect reclassification of land use within their respective territorial jurisdiction. Reclassification decrees issued by the executive department, through its appropriate agencies, carry the same force and effect as any statute.  As it were, PD 27 and Proclamation 1637 are both presidential issuances, each forming, by virtue of Sec. 3(2), Article XVII of the 1973 Constitution, a part of the law of the land. Land Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796;161830 & 190456, February 8, 2012.

Irrepealable law. The supermajority vote requirement set forth in Section 1, Article XVII of RA No. 9054 is unconstitutional for violating the principle that Congress cannot pass irrepealable laws. The power of the legislature to make laws includes the power to amend and repeal these laws. Where the legislature, by its own act, attempts to limit its power to amend or repeal laws, the Court has the duty to strike down such act for interfering with the plenary powers of Congress. Under our Constitution, each House of Congress has the power to approve bills by a mere majority vote, provided there is quorum. In requiring all laws which amend RA No. 9054 to comply with a higher voting requirement than the Constitution provides (2/3 vote), Congress, which enacted RA No. 9054, clearly violated the very principle which the Supreme Court sought to establish in Duarte. To reiterate, the act of one legislature is not binding upon, and cannot tie the hands of, future legislatures. Datu Michael Abas Kida, etc., et al. vs. Senate of the Phil., etc., et al./Basari D. Mapupuno vs. Sixto Brillantes, etc., et al./Rep. Edcel C. Lagman vs. Paquito N. Ochoa, Jr., etc., et al./Almarin Centi Tillah, et al. vs. The Commission on Elections, etc., et al./Atty. Romulo B. Macalintal vs. Commission on Elections, et al./Luis “Barok” Biraogo, G.R. No. 196271, February 28, 2012.

President; judicial courtesy. Firstly, the principle of judicial courtesy is based on the hierarchy of courts and applies only to lower courts in instances where, even if there is no writ of preliminary injunction or TRO issued by a higher court, it would be proper for a lower court to suspend its proceedings for practical and ethical considerations. In other words, the principle of “judicial courtesy” applies where there is a strong probability that the issues before the higher court would be rendered moot and moribund as a result of the continuation of the proceedings in the lower court or court of origin. Consequently, this principle cannot be applied to the President, who represents a co-equal branch of government. To suggest otherwise would be to disregard the principle of separation of powers, on which our whole system of government is founded upon. Secondly, the fact that our previous decision was based on a slim vote of 8-7 does not, and cannot, have the effect of making our ruling any less effective or binding. Regardless of how close the voting is, so long as there is concurrence of the majority of the members of the en banc who actually took part in the deliberations of the case, a decision garnering only 8 votes out of 15 members is still a decision of the Supreme Court en banc and must be respected as such. The petitioners are, therefore, not in any position to speculate that, based on the voting, “the probability exists that their motion for reconsideration may be granted.” Datu Michael Abas Kida, etc., et al. vs. Senate of the Phil., etc., et al./Basari D. Mapupuno vs. Sixto Brillantes, etc., et al./Rep. Edcel C. Lagman vs. Paquito N. Ochoa, Jr., etc., et al./Almarin Centi Tillah, et al. vs. The Commission on Elections, etc., et al./Atty. Romulo B. Macalintal vs. Commission on Elections, et al./Luis “Barok” Biraogo, G.R. No. 196271, February 28, 2012.

President; power to appoint officer in charge.  The power to appoint has traditionally been recognized as executive in nature. Section 16, Article VII of the Constitution describes in broad strokes the extent of this power.   The main distinction between the provision in the 1987 Constitution and its counterpart in the 1935 Constitution is the sentence construction; while in the 1935 Constitution, the various appointments the President can make are enumerated in a single sentence, the 1987 Constitution enumerates the various appointments the President is empowered to make and divides the enumeration in two sentences. The change in style is significant; in providing for this change, the framers of the 1987 Constitution clearly sought to make a distinction between the first group of presidential appointments and the second group of presidential appointments. he first group of presidential appointments, specified as the heads of the executive departments, ambassadors, other public ministers and consuls, or officers of the Armed Forces, and other officers whose appointments are vested in the President by the Constitution, pertains to the appointive officials who have to be confirmed by the Commission on Appointments. The second group of officials the President can appoint are “all other officers of the Government whose appointments are not otherwise provided for by law, and those whom he may be authorized by law to appoint.” The second sentence acts as the “catch-all provision” for the President’s appointment power, in recognition of the fact that the power to appoint is essentially executive in nature. The wide latitude given to the President to appoint is further demonstrated by the recognition of the President’s power to appoint officials whose appointments are not even provided for by law. In other words, where there are offices which have to be filled, but the law does not provide the process for filling them, the Constitution recognizes the power of the President to fill the office by appointment. There is no incompatibility between the President’s power of supervision over local governments and autonomous regions, and the power granted to the President, within the specific confines of RA No. 10153, to appoint OICs. Datu Michael Abas Kida, etc., et al. vs. Senate of the Phil., etc., et al./Basari D. Mapupuno vs. Sixto Brillantes, etc., et al./Rep. Edcel C. Lagman vs. Paquito N. Ochoa, Jr., etc., et al./Almarin Centi Tillah, et al. vs. The Commission on Elections, etc., et al./Atty. Romulo B. Macalintal vs. Commission on Elections, et al./Luis “Barok” Biraogo, G.R. No. 196271, February 28, 2012.

State immunity; doctrine of state immunity. According to the classical or absolute theory, a sovereign cannot, without its consent, be made a respondent in the courts of another sovereign. According to the newer or restrictive theory, the immunity of the sovereign is recognized only with regard to public acts or acts jure imperii of a state, but not with regard to private acts or acts jure gestionis. Since the Philippines adheres to the restrictive theory, it is crucial to ascertain the legal nature of the act involved – whether the entity claiming immunity performs governmental, as opposed to proprietary, functions. A thorough examination of the basic facts of the case would show that CNMEG is engaged in a proprietary activity. Piecing together the content and tenor of the Contract Agreement, the Memorandum of Understanding dated 14 September 2002, Amb. Wang’s letter dated 1 October 2003, and the Loan Agreement would reveal the desire of CNMEG to construct the Luzon Railways in pursuit of a purely commercial activity performed in the ordinary course of its business. Even assuming arguendo that CNMEG performs governmental functions, such claim does not automatically vest it with immunity. It is readily apparent that CNMEG cannot claim immunity from suit, even if it contends that it performs governmental functions. Its designation as the Primary Contractor does not automatically grant it immunity, just as the term “implementing agency” has no precise definition for purposes of ascertaining whether GTZ was immune from suit. Although CNMEG claims to be a government-owned corporation, it failed to adduce evidence that it has not consented to be sued under Chinese law. Thus, following this Court’s ruling in Deutsche Gesellschaft, in the absence of evidence to the contrary, CNMEG is to be presumed to be a government-owned and -controlled corporation without an original charter. As a result, it has the capacity to sue and be sued under Section 36 of the Corporation Code. China National machinery & Equipment Corp. v. Hon. Cesar Santamaria, et. al, G.R. No. 185572, February 7, 2012.

State immunity; waiver by submission to arbitration. In the United States, the Foreign Sovereign Immunities Act of 1976 provides for a waiver by implication of state immunity. In the said law, the agreement to submit disputes to arbitration in a foreign country is construed as an implicit waiver of immunity from suit. Although there is no similar law in the Philippines, there is reason to apply the legal reasoning behind the waiver in this case. Under the provisions of The Conditions of Contract which is an integral part of the Contract Agreement,, if any dispute arises between Northrail and CNMEG, both parties are bound to submit the matter to the HKIAC for arbitration. In case the HKIAC makes an arbitral award in favor of Northrail, its enforcement in the Philippines would be subject to the Special Rules on Alternative Dispute Resolution (Special Rules). Rule 13 thereof provides for the Recognition and Enforcement of a Foreign Arbitral Award. Under Rules 13.2 and 13.3 of the Special Rules, the party to arbitration wishing to have an arbitral award recognized and enforced in the Philippines must petition the proper regional trial court (a) where the assets to be attached or levied upon is located; (b) where the acts to be enjoined are being performed; (c) in the principal place of business in the Philippines of any of the parties; (d) if any of the parties is an individual, where any of those individuals resides; or (e) in the National Capital Judicial Region. From all the foregoing, it is clear that CNMEG has agreed that it will not be afforded immunity from suit. Thus, the courts have the competence and jurisdiction to ascertain the validity of the Contract Agreement. China National machinery & Equipment Corp. v. Hon. Cesar Santamaria, et. al, G.R. No. 185572, February 7, 2012.

Supreme Court; respect to factual findings of administrative agencies. It is the general policy of the Court to sustain the decisions of administrative authorities, especially one which is constitutionally-created, not only on the basis of the doctrine of separation of powers but also for their presumed expertise in the laws they are entrusted to enforce. Findings of quasi-judicial agencies, such as the COA, which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but at times even finality if such findings are supported by substantial evidence, and the decision and order are not tainted with unfairness or arbitrariness that would amount to grave abuse of discretion. Candelario Verzosa Jr. v. Guillermo Carague and COA, et. al, G.R. No. 157838, February 7, 2012.

Taxpayer’s suit; standing. A taxpayer is deemed to have the standing to raise a constitutional issue when it is established that public funds from taxation have been disbursed in alleged contravention of the law or the Constitution. Gualberto J. Dela Llana v. The Chairperson, Commission on Audit, the Executive Secretary and the National Treasurer, G.R. No. 180989, February 7, 2012.

Administrative Law

Administrative Rule; due process; publication, when required. The Commissioner of Customs issued CMO 27-2003. Under the Memorandum, for tariff purposes, wheat was classified according to the following: (1) importer or consignee; (2) country of origin; and (3) port of discharge. The regulation provided an exclusive list of corporations, ports of discharge, commodity descriptions and countries of origin. Depending on these factors, wheat would be classified either as food grade or feed grade. The corresponding tariff for food grade wheat was 3%, for feed grade, 7%.CMO 27-2003 further provided for the proper procedure for protest or Valuation and Classification Review Committee (VCRC) cases. Considering that the regulation would affect the substantive rights of respondent, it therefore follows that petitioners should have applied Sections 3 and 9 of Book VII, Chapter 2 of the Revised Administrative Code. When an administrative rule is merely interpretative in nature, its applicability needs nothing further than its bare issuance, for it gives no real consequence more than what the law itself has already prescribed. When, on the other hand, the administrative rule goes beyond merely providing for the means that can facilitate or render least cumbersome the implementation of the law but substantially increases the burden of those governed, it behooves the agency to accord at least to those directly affected a chance to be heard, and thereafter to be duly informed, before that new issuance is given the force and effect of law. Because petitioners failed to follow the requirements enumerated by the Revised Administrative Code, the assailed regulation must be struck down. Commissioner of Customs and the District Collector of the Port of Subic v. Hypermix Feeds Corporation, G.R. No. 179579, February 1, 2012.

Void government contract; payment for services. Parties who do not come to court with clean hands cannot be allowed to profit from their own wrongdoing. The action (or inaction) of the party seeking equity must be “free from fault, and he must have done nothing to lull his adversary into repose, thereby obstructing and preventing vigilance on the part of the latter.” Here, even with the respondents’ supposed failure to ascertain the validity of the contract and the authority of the public official involved in the construction agreements, there is no such confusion as to the matter of the contract’s validity and the equivalent compensation. As found by the court a quo, petitioner had assured the contractors that they would be paid for the work that they would do, as even DPWH Undersecretary Teodoro T. Encarnacion had told them to “fast-track” the project. Hence, respondents cannot by any stretch of logic, be deprived of compensation for their services when – despite their ostensible omissions – they only heeded the assurance of DPWH and proceeded to work on the urgent project. DPWH v. Ronaldo Quiwa, et. al, G.R. No. 183444, February 8, 2012.

Agrarian Reform

Agrarian Reform Law; agricultural lands. The primary governing agrarian law with regard to agricultural lands, be they of private or public ownership and regardless of tenurial arrangement and crops produced, is now RA 6657.  Section 3(c) of RA 6657 defines “agricultural lands” as “lands devoted to agricultural activity as defined in the Act and not classified as mineral, forest, residential, commercial or industrial land. Land Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796;161830 & 190456, February 8, 2012.

Agrarian Reform Law; applicability of PD 27, RA 6657, and Proclamation 1637. From the standpoint of agrarian reform, PD 27, being in context the earliest issuance, governed at the start the disposition of the rice-and-corn land portions of the Doronilla property.  And true enough, the DAR began processing land transfers through the OLT program under PD 27 and thereafter issued the corresponding CLTs.  However, when Proclamation 1637 went into effect, DAR discontinued with the OLT processing.  The tenants of Doronilla during that time desisted from questioning the halt in the issuance of the CLTs.  It is fairly evident that DAR noted the effect of the issuance of Proclamation 1637 on the subject land and decided not to pursue its original operation, recognizing the change of classification of the property from agricultural to residential. When it took effect on June 15, 1988, RA 6657 became the prevailing agrarian reform law.  This is not to say, however, that its coming into effect necessarily impeded the operation of PD 27, which, to repeat, covers only rice and corn land.   Far from it, for RA 6657, which identifies “rice and corn land” under PD 27 as among the properties the DAR shall acquire and distribute to the landless, no less provides that PD 27 shall be of suppletory application”. Land Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796; 161830 & 190456, February 8, 2012.

Agrarian Reform Law; certificates of title; merely an evidence of recognition by the government; inchoate right. While the PD 27 tenant-farmers are considered the owners by virtue of that decree, they cannot yet exercise all the attributes inherent in ownership, such as selling the lot, because, with respect to the government represented by DAR and LBP, they have in the meantime only inchoate rights in the lot––the being “amortizing owners.” This is because they must still pay all the amortizations over the lot to Land Bank before an EP is issued to them. Then and only then do they acquire, in the phraseology ofVinzons-Magana, “the vested right of absolute ownership in the landholding.” Land Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796; 161830 & 190456, February 8, 2012.

Agrarian Reform Law; private rights; just compensation. As payment  the farmer-beneficiaries who were given the 75 CLTs prior to the issuance of Proclamation 1283, as amended by Proclamation 1637, are deemed full owners of the lots covered by 75 CLTs vis-à-vis the real registered owner.  The farmer-beneficiaries have private rights over said lots as they were deemed owners prior to the establishment of the LS Townsite reservation or at least are subrogated to the rights of the registered lot owner.  Those farmer-beneficiaries who were issued CLTs or EPs after June 21, 1974 when Proclamation 1283, as amended, became effective do not acquire rights over the lots they were claiming under PD 27 or RA 6657, because the lots have already been reclassified as residential and are beyond the compulsory coverage for agrarian reform under RA 6657.  Perforce, the said CLTs or EPs issued after June 21, 1974 have to be annulled and invalidated for want of legal basis, since the lots in question are no longer subject to agrarian reform due to the reclassification of the erstwhile Doronilla estate to non-agricultural purposes. Land Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796;161830 & 190456, February 8, 2012.

Agricultural tenancy relationship; de jure tenant; grounds for ejection provided by law. Respondent, as landowner/agricultural lessor, has the burden to prove the existence of a lawful cause for the ejectment of petitioner, the tenant/agricultural lessee. This rule proceeds from the principle that a tenancy relationship, once established, entitles the tenant to a security of tenure. The tenant can only be ejected from the agricultural landholding on grounds provided by law, in this case Section 36 of R.A. No. 3844. SEC. 36. Possession of Landholding; Exceptions.– Notwithstanding any agreement as to the period or future surrender of the land, an agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been authorized by the Court in a judgment that is final and executory if after due hearing it is shown that: (1) The agricultural lessor-owner or a member of his immediate family will personally cultivate the landholding or will convert the landholding, if suitably located, into residential, factory, hospital or school site or other useful non-agricultural purposes: Provided; That the agricultural lessee shall be entitled to disturbance compensation equivalent to five years rental on his landholding in addition to his rights under Sections 25 and except when the land owned and leased by the agricultural lessor is not more than five hectares, in which case instead of disturbance compensation the lessee may be entitled to an advance notice of at least one agricultural year before ejectment proceedings are filed against him: Provided, further, That should the landholder not cultivate the land himself for three years or fail to substantially carry out such conversion within one year after the dispossession of the tenant, it shall be presumed that he acted in bad faith and the tenant shall have the right to demand possession of the land and recover damages for any loss incurred by him because of said dispossession; (2) The agricultural lessee failed to substantially comply with any of the terms and conditions of the contract or any of the provisions of this Code unless his failure is caused by fortuitous event orforce majeure; (3) The agricultural lessee planted crops or used the landholding for a purpose other than what had been previously agreed upon; (4) The agricultural lessee failed to adopt proven farm practices as determined under paragraph 3 of Section 29; (5) The land or other substantial permanent improvement thereon is substantially damaged or destroyed or has unreasonably deteriorated through the fault or negligence of the agricultural lessee; (6) The agricultural lessee does not pay the lease rental when it falls due: Provided, That if the non-payment of the rental shall be due to crop failure to the extent of seventy-five per centum as a result of a fortuitous event, the non-payment shall not be a ground for dispossession, although the obligation to pay the rental due that particular crop is not thereby extinguished; or (7) The lessee employed a sub-lessee on his landholding in violation of the terms of paragraph 2 of Section 27. Juan Galope v. Cresencia Bugarin, G.R. No. 185669, February 1, 2012.

Agricultural tenancy relationship; requisites; may be established through written or oral contract. The essential elements of an agricultural tenancy relationship are: (1) the parties are the landowner and the tenant or agricultural lessee; (2) the subject matter of the relationship is agricultural land; (3) there is consent between the parties to the relationship; (4) the purpose of the relationship is to bring about agricultural production; (5) there is personal cultivation on the part of the tenant or agricultural lessee; and (6) the harvest is shared between the landowner and the tenant or agricultural lessee. Section 5 of Republic Act (R.A.) No. 3844, otherwise known as the Agricultural Land Reform Code, recognizes that an agricultural leasehold relation may exist upon an oral agreement. Juan Galope v. Cresencia Bugarin, G.R. No. 185669, February 1, 2012.

Jurisdiction of DAR; DARAB. The DARAB has been created and designed to exercise the DAR’s adjudicating functions. And just like any quasi-judicial body, DARAB derives its jurisdiction from law, specifically RA 6657, which invested it with adjudicatory powers over agrarian reform disputes and matters related to the implementation of CARL.  The Supreme Court need not belabor that DARAB’s jurisdiction over the subject matter, the Doronilla property, cannot be conferred by the main parties, let alone the intervening farmer-beneficiaries claiming to have “vested rights” under PD 27.  As earlier discussed, the process of land reform covering the 1,266 hectares of the Araneta estate was not completed prior to the issuance of Proclamation 1637. So the intervenors, with the exception of the 79 tenant-beneficiaries who were granted CLTs, failed to acquire private rights of ownership under PD 27 before the effective conversion of the Doronilla property to non-agricultural uses.  Hence, the Doronilla property, being outside of CARP coverage, is also beyond DARAB’s jurisdiction. Land Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796;161830 & 190456, February 8, 2012.

Social justice; laches. There can be little quibble about Duran, et al. being guilty of laches.  They failed and neglected to keep track of their case with their lawyer for 14 long years. As discussed above, Atty. Lara died even prior to the promulgation of the DARAB Decision.  Even then, they failed to notify the DARAB and the other parties of the case regarding the demise of Atty. Lara and even a change of counsel.  It certainly strains credulity to think that literally no one, among those constituting the petitioning-intervenors, had the characteristic good sense of following up the case with their legal counsel.    Only now, 14 years after, did some think of fighting for the right they slept on.  Thus, as to them, the CA Decision is deemed final and executory based on the principle of laches. Agrarian reform finds context in social justice in tandem with the police power of the State. But social justice itself is not merely granted to the marginalized and the underprivileged.  But while the concept of social justice is intended to favor those who have less in life, it should never be taken as a toll to justify let alone commit an injustice.  Land Bank of the Philippines vs. Estate of J. Amado Araneta / Department of Agrarian Reform vs. Estate of J. Armado Araneta / Ernesto B. Duran, Lope P. Abalos (deceased) represented by Lope Abalos, Jr., et al. vs. Estate of J. Amado Araneta, G.R. Nos. 161796;161830 & 190456, February 8, 2012.

Public Land

Public Land Act; alienable and disposable land. Public Land Act requires that the applicant for registration must prove (a) that the land is alienable public land; and (b) that the open, continuous, exclusive and notorious possession and occupation of the land must have been either since time immemorial or for the period prescribed in the Public Land Act. Certifications of the DENR are not sufficient to prove the foregoing. DENR Administrative Order (DAO) No. 20, 18 dated 30 May 1988, delineated the functions and authorities of the offices within the DENR. Under DAO No. 20, series of 1988, the CENRO issues certificates of land classification status for areas below 50 hectares. Further, it is not enough for the PENRO or CENRO to certify that a land is alienable and disposable. The applicant for land registration must prove that the DENR Secretary had approved the land classification and released the land of the public domain as alienable and disposable, and that the land subject of the application for registration falls within the approved area per verification through survey by the PENRO or CENRO. In addition, the applicant for land registration must present a copy of the original classification approved by the DENR Secretary and certified as a true copy by the legal custodian of the official records. These facts must be established to prove that the land is alienable and disposable. Respondent failed to do so because the certifications presented by respondent do not, by themselves, prove that the land is alienable and disposable. The CENRO is not the official repository or legal custodian of the issuances of the DENR Secretary declaring public lands as alienable and disposable. The CENRO should have attached an official publication of the DENR Secretary’s issuance declaring the land alienable and disposable. Republic of the Philippines v. Lucia Gomez, G.R. No. 189021, February 22, 2012.

Public Land Act; confirmation of of imperfect titles. It is explicit under Section 14 (1) that the possession and occupation required to acquire an imperfect title over an alienable and disposable public land must be “open, continuous, exclusive and notorious” in character. In Republic of the Philippines v. Alconaba, the Supreme Court explained that the intent behind the use of “possession” in conjunction with “occupation” is to  emphasize the need for actual and not just constructive or fictional possession. The law speaks of possession and occupation. Since these words are separated by the conjunction and, the clear intention of the law is not to make one synonymous with the other. Possession is broader than occupation because it includes constructive possession. When, therefore, the law adds the word occupation, it seeks to delimit the all-encompassing effect of constructive possession. Taken together with the words open, continuous, exclusive and notorious, the word occupation serves to highlight the fact that for an applicant to qualify, his possession must not be a mere fiction. Actual possession of a land consists in the manifestation of acts of dominion over it of such a nature as a party would naturally exercise over his own property. On the other hand, Section 14 (2) is silent as to the required nature of possession and occupation, thus, requiring a reference to the relevant provisions of the Civil Code on prescription. And under Article 1118 thereof, possession for purposes of prescription must be “in the concept of an owner, public, peaceful and uninterrupted”. It is concerned with lapse of time in the manner and under conditions laid down by law, namely, that the possession should be in the concept of an owner, public, peaceful, uninterrupted and adverse. Possession is open when it is patent, visible, apparent, notorious and not clandestine. It is continuous when uninterrupted, unbroken and not intermittent or occasional; exclusive when the adverse possessor can show exclusive dominion over the land and an appropriation of it to his own use and benefit; and notorious when it is so conspicuous that it is generally known and talked of by the public or the people in the neighborhood. The party who asserts ownership by adverse possession must prove the presence of the essential elements of acquisitive prescription. Republic of the Philippines v. East Silverlane Realty Development Corporation, G.R. No. 186961, February 20, 2012.

Public Officers

Public officer; preventive suspension. The Sandiganbayan preventively suspended Ysidoro for 90 days in accordance with Section 13 of R.A. No. 3019. Clearly, by well-established jurisprudence, the provision of Section 13, Republic Act 3019 makes it mandatory for the Sandiganbayan to suspend, for a period not exceeding ninety (90) days, any public officer who has been validly charged with a violation of Republic Act 3019, as amended or Title 7, Book II of the Revised Penal Code or any offense involving fraud upon government of public funds or property. Arnold James M. Ysidoro vs. Hon. Teresita J. Leonardo-de Castro, et al. G.R. No. 171513, February 6, 2012.

Public officers; liability for overpricing; personal and solidary liability; reimbursement. The Court upholds the COA’s ruling that petitioner is personally and solidarily liable for the overpricing in the computers purchased by CDA. The directive for the payment of the amount of disallowance finally determined by the COA did not change the nature of the obligation as solidary because the demand thus made upon petitioner did not foreclose his right as solidary debtor to proceed against his co-debtors/obligors, in this case the members of the PBAC charged under Notice of Disallowance No. 93-0016-101, for their share in the total amount of disallowance.   Petitioner is therefore liable to restitute the P881,819.00 to the Government without prejudice, however, to his right to recover it from persons who were solidarily liable with him. Candelario Verzosa Jr. v. Guillermo Carague and COA, et. al, G.R. No. 157838, February 7, 2012.

Public officials; holdover. The clear wording of Section 8, Article X of the Constitution expresses the intent of the framers of the Constitution to categorically set a limitation on the period within which all elective local officials can occupy their offices. The Supreme Court has already established that elective ARMM officials are also local officials; they are, thus, bound by the three-year term limit prescribed by the Constitution. It, therefore, becomes irrelevant that the Constitution does not expressly prohibit elective officials from acting in a holdover capacity. Short of amending the Constitution, Congress has no authority to extend the three-year term limit by inserting a holdover provision in RA No. 9054. Thus, the term of three years for local officials should stay at three (3) years, as fixed by the Constitution, and cannot be extended by holdover by Congress. Admittedly, the Supreme Court has, in the past, recognized the validity of holdover provisions in various laws. One significant difference between the present case and these past cases is that while these past cases all refer to elective barangay or sangguniang kabataan officials whose terms of office are not explicitly provided for in the Constitution, the present case refers to local elective officials – the ARMM Governor, the ARMM Vice Governor, and the members of the Regional Legislative Assembly – whose terms fall within the three-year term limit set by Section 8, Article X of the Constitution. Even assuming that a holdover is constitutionally permissible, and there had been statutory basis for it (namely Section 7, Article VII of RA No. 9054), the rule of holdover can only apply as an available option where no express or implied legislative intent to the contrary exists; it cannot apply where such contrary intent is evident. Datu Michael Abas Kida, etc., et al. vs. Senate of the Phil., etc., et al./Basari D. Mapupuno vs. Sixto Brillantes, etc., et al./Rep. Edcel C. Lagman vs. Paquito N. Ochoa, Jr., etc., et al./Almarin Centi Tillah, et al. vs. The Commission on Elections, etc., et al./Atty. Romulo B. Macalintal vs. Commission on Elections, et al./Luis “Barok” Biraogo, G.R. No. 196271, February 28, 2012.

Signing bonus; legality. There is no dispute that the grant of a signing bonus had been previously disallowed by the express mandate of then President Gloria Macapagal-Arroyo (President Arroyo). On July 22, 2002, this Court declared in SSS v. COA that Social Services Commission’s authority to fix the compensation of its employees under its charter, Republic Act (R.A.) No. 1161 as amended, is subject to the provisions of R.A. No. 6758, which provides for the consolidation of allowances and compensation in the prescribed standardized salary rates. While there are exceptions provided under Sections 12 and 17 of R.A. No. 6758 in observance of the policy on non-diminution of pay, the signing bonus is not one of the benefits contemplated. This Court also ruled that the signing bonus is “not a truly reasonable compensation” since conduct of peaceful collective negotiations “should not come with a price tag”. hat MIAA’s Board of Directors did not make a mistake and their real intention was to reward the successful conclusion of collective negotiations by some pecuniary means is belied by simultaneous approval of the grant and the CNA between SMPP and MIAA betrays their real intention. Moreover, prior to the issuance of AOM No. JPA 03-35 declaring the subject benefit illegal, there was no effort on the part of its Board of Directors to rectify the alleged mistake in nomenclature. It was only after then Corporate Auditor Manalo and Director Nacion called MIAA’s attention as to the illegality of a signing bonus that MIAA alleged that the subject benefit is a CNA Incentive. Easily, such is a mere afterthought.Manila International Airport Authority v. Commission on Audit, G.R. No. 194710, February 14, 2012.

Signing bonus; return of illegal bonus. Good faith is anchored on an honest belief that one is legally entitled to the benefit. In this case, the MIAA employees who had no participation in the approval and release of the disallowed benefit accepted the same on the assumption that Resolution No. 2003-067 was issued in the valid exercise of the power vested in the Board of Directors under the MIAA charter. As they were not privy as to reason and motivation of the Board of Directors, they can properly rely on the presumption that the former acted regularly in the performance of their official duties in accepting the subject benefit. Furthermore, their acceptance of the disallowed grant, in the absence of any competent proof of bad faith on their part, will not suffice to render liable for a refund. The same is not true as far as the Board of Directors. Their authority under Section 8 of the MIAA charter is not absolute as their exercise thereof is “subject to existing laws, rules and regulations” and they cannot deny knowledge of SSS v. COA and the various issuances of the Executive Department prohibiting the grant of the signing bonus. In fact, they are duty-bound to understand and know the law that they are tasked to implement and their unexplained failure to do so barred them from claiming that they were acting in good faith in the performance of their duty. The presumptions of “good faith” or “regular performance of official duty” are disputable and may be contradicted and overcome by other evidence. Manila International Airport Authority v. Commission on Audit, G.R. No. 194710, February 14, 2012.

(Teng thanks Jiselle Compuesto for her assistance in the preparation of this post.)