CASE 2012-0019: JELBERT B. GALICTO VS. H.E. PRESIDENT BENIGNO SIMEON C. AQUINO III, IN HIS CAPACITY AS PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; ATTY. PAQUITO N. OCHOA, JR., IN HIS CAPACITY AS EXECUTIVE SECRETARY; AND FLORENCIO B. ABAD, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF BUDGET AND MANAGEMENT (G.R. NO. 193978, 28 FEBRUARY 2012, BRION, J.) SUBJECT/S: SINCE EO IS NOT JUDICIAL, CERTIORARI IS WRONG REMEDY; LOCUS STANDI; WHO IS REAL PARTY IN INTEREST; WHAT IS COMPETENT EVIDENCE OF IDENTITY; DEFECTIVE JURAT NOT FATAL; WHAT IS A MOOT CASE. (BRIEF TITLE: GALICTO VS. AQUINO).

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DISPOSITIVE PORTION:

WHEREFORE, premises considered, the petition is DISMISSED.  No costs.

            SO ORDERED.

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Republic of the Philippines

Supreme Court

Manila

EN BANC

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R E S O L U T I O N

BRION, J.:

Before us is a Petition for Certiorari and Prohibition with Application for Writ of Preliminary Injunction and/or Temporary Restraining Order,^[1][1] seeking to nullify and enjoin the implementation of Executive Order No. (EO) 7 issued by the Office of the President onSeptember 8, 2010.  Petitioner Jelbert B. Galicto asserts that EO 7 is unconstitutional for having been issued beyond the powers of the President and for being in breach of existing laws.

The petitioner is a Filipino citizen and an employee of the Philippine Health Insurance Corporation (PhilHealth).^[2][2]  He is currently holding the position of Court Attorney IV and is assigned at the PhilHealth Regional Office CARAGA.^[3][3]

Respondent Benigno Simeon C. Aquino III is the President of the Republic of the Philippines(Pres. Aquino); he issued EO 7 and has the duty of implementing it.  Respondent Paquito N. Ochoa, Jr. is the incumbent Executive Secretary and, as the alter ego of Pres. Aquino, is tasked with the implementation of EO 7.  Respondent Florencio B. Abad is the incumbent Secretary of the Department of Budget and Management (DBM) charged with the implementation of EO 7.^[4][4]

The Antecedent Facts

On July 26, 2010, Pres. Aquino made public in his first State of the Nation Address the alleged excessive allowances, bonuses and other benefits of Officers and Members of the Board of Directors of the Manila Waterworks and Sewerage System – a government owned and controlled corporation (GOCC) which has been unable to meet its standing obligations.^[5][5]  Subsequently, the Senate of the Philippines (Senate), through the Senate Committee on Government Corporations and Public Enterprises, conducted an inquiry in aid of legislation on the reported excessive salaries, allowances, and other benefits of GOCCs and government financial institutions (GFIs).^[6][6]

Based on its findings that “officials and governing boards of various [GOCCs] and [GFIs] x x x have been granting themselves unwarranted allowances, bonuses, incentives, stock options, and other benefits [as well as other] irregular and abusive practices,”^[7][7] the Senate issued Senate Resolution No. 17 “urging the President to order the immediate suspension of the unusually large and apparently excessive allowances, bonuses, incentives and other perks of members of the governing boards of [GOCCs] and [GFIs].”^[8][8]

Heeding the call of Congress, Pres. Aquino, on September 8, 2010, issued EO 7, entitled “Directing the Rationalization of the Compensation and Position Classification System in the [GOCCs] and [GFIs], and for Other Purposes.”  EO 7 provided for the guiding principles and framework to establish a fixed compensation and position classification system for GOCCs and GFIs.  A Task Force was also created to review all remunerations of GOCC and GFI employees and officers, while GOCCs and GFIs were ordered to submit to the Task Force information regarding their compensation.  Finally, EO 7 ordered (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,^[9][9] and (2) a suspension of all allowances, bonuses and incentives of members of the Board of Directors/Trustees until December 31, 2010.^[10][10]

 EO 7 was published on September 10, 2010.^[11][11]  It took effect on September 25, 2010 and precluded the Board of Directors, Trustees and/or Officers of GOCCs from granting and releasing bonuses and allowances to members of the board of directors, and from increasing salary rates of and granting new or additional benefits and allowances to their employees.

The Petition

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, based on the following arguments:

I.

EXECUTIVE ORDER NO. 7 IS NULL AND VOID FOR LACK OF LEGAL BASIS DUE TO THE FOLLOWING GROUNDS:

A.        P.D. 985 IS NOT APPLICABLE AS BASIS FOR EXECUTIVE ORDER NO. 7 BECAUSE THE GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS WERE SUBSEQUENTLY GRANTED THE POWER TO FIX COMPENSATION LONG AFTER SUCH POWER HAS BEEN REVOKED BY P.D. 1597 AND R.A. 6758.

B.         THE GOVERNMENT-OWNED AND CONTROLLED CORPORATIONS DO NOT NEED TO HAVE ITS COMPENSATION PLANS, RATES AND POLICIES REVIEWED BY THE DBM AND APPROVED BY THE PRESIDENT BECAUSE P.D. 1597 REQUIRES ONLY THE GOCCs TO REPORT TO THE OFFICE TO THE PRESIDENT THEIR COMPENSATION PLANS AND RATES BUT THE SAME DOES NOT GIVE THE PRESIDENT THE POWER OF CONTROL OVER THE FISCAL POWER OF THE GOCCs.

C.        J.R. NO. 4, [SERIES] 2009 IS NOT APPLICABLE AS LEGAL BASIS BECAUSE IT HAD NOT RIPENED INTO X X X LAW, THE SAME NOT HAVING BEEN PUBLISHED.

D.        ASSUMING ARGUENDO THAT J.R. NO. 1, S. 2004 (sic) AND J.R. 4, S. 2009 ARE VALID, STILL THEY ARE NOT APPLICABLE AS LEGAL BASIS BECAUSE THEY ARE NOT LAWS WHICH MAY VALIDLY DELEGATE POWER TO THE PRESIDENT TO SUSPEND THE POWER OF THE BOARD TO FIX COMPENSATION.

II.

EXECUTIVE ORDER NO. 7 IS INVALID FOR DIVESTING THE BOARD OF DIRECTORS OF [THE] GOCCS OF THEIR POWER TO FIX THE COMPENSATION, A POWER WHICH IS A LEGISLATIVE GRANT AND WHICH COULD NOT BE REVOKED OR MODIFIED BY AN EXECUTIVE FIAT.

III.

EXECUTIVE ORDER NO. 7 IS BY SUBSTANCE A LAW, WHICH IS A DEROGATION OF CONGRESSIONAL PREROGATIVE AND IS THEREFORE UNCONSTITUTIONAL.

IV.

THE ACTS OF SUSPENDING AND IMPOSING MORATORIUM ARE ULTRA VIRES ACTS BECAUSE J.R. NO. 4 DOES NOT EXPRESSLY AUTHORIZE THE PRESIDENT TO EXERCISE SUCH POWERS.

V.

EXECUTIVE ORDER NO. 7 IS AN INVALID ISSUANCE BECAUSE IT  HAS NO SUFFICIENT STANDARDS AND IS THEREFORE ARBITRARY, UNREASONABLE AND A VIOLATION OF SUBSTANTIVE DUE PROCESS.

VI.

EXECUTIVE ORDER NO. 7 INVOLVES THE DETERMINATION AND DISCRETION AS TO WHAT THE LAW SHALL BE AND IS THEREFORE INVALID FOR ITS USURPATION OF LEGISLATIVE POWER.

VII.

CONSISTENT WITH THE DECISION OF THE SUPREME COURT IN PIMENTEL V. AGUIRRE CASE, EXECUTIVE ORDER NO. 7  IS ONLY DIRECTORY AND NOT MANDATORY.^[12][12]

The Case for the Respondents

On December 13, 2010, the respondents filed their Comment. They pointed out the following procedural defects as grounds for the petition’s dismissal: (1) the petitioner lacks locus standi; (2) the petitioner failed to attach a board resolution or secretary’s certificate authorizing him to question EO 7  in behalf of PhilHealth; (3) the petitioner’s signature does not indicate his PTR Number, Mandatory Continuing Legal Education (MCLE) Compliance Number and Integrated Bar of the Philippines (IBP) Number; (4) the jurat of the Verification and Certification of Non-Forum Shopping  failed to indicate a valid identification card as provided under A.M. No. 02-8-13-SC; (5) the President should be dropped as a party respondent as he is immune from suit; and (6) certiorari is not applicable to this case.^[13][13]

          The respondents also raised substantive defenses to support the validity of EO 7.  They claim that the President exercises control over the governing boards of the GOCCs and GFIs; thus, he can fix their compensation packages.   In addition, EO 7 was issued in accordance with law for the purpose of controlling the grant of excessive salaries, allowances, incentives and other benefits to GOCC and GFI employees.  They also advocate the validity of Joint Resolution (J.R.) No. 4, which they point to as the authority for issuing EO 7.^[14][14]

          Meanwhile, on June 6, 2011, Congress enacted Republic Act (R.A.) No. 10149,^[15][15] otherwise known as the “GOCC Governance Act of 2011.”  Section 11 of RA 10149 expressly authorizes the President to fix the compensation framework of GOCCs and GFIs.

The Court’s Ruling

We resolve to DISMISS the petition for its patent formal and procedural infirmities, and for having been mooted by subsequent events.

1. A.   Certiorari is not the proper remedy.

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:

            Section 1.  Who may file petition.  Any person interested under a deed, will, contract or other written instrument, whose rights are affected by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or duties, thereunder. (Emphases ours.)

Liga ng mga Barangay National v. City Mayor of Manila^[16][16] is a case in point.^[17][17]  In Liga, we dismissed the petition for certiorari to set aside an EO issued by a City Mayor and insisted that a petition for declaratory relief should have been filed with the RTC.  We painstakingly ruled:

After due deliberation on the pleadings filed, we resolve to dismiss this petition for certiorari.

First, the respondents neither acted in any judicial or quasi-judicial capacity nor arrogated unto themselves any judicial or quasi-judicial prerogatives.  A petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure is a special civil action that may be invoked only against a tribunal, board, or officer exercising judicial or quasi-judicial functions.

Section 1, Rule 65 of the 1997 Rules of Civil Procedure provides:

SECTION 1.  Petition for certiorari. — When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

Elsewise stated, for a writ of certiorari to issue, the following requisites must concur:  (1) it must be directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions; (2) the tribunal, board, or officer must have acted without or in excess of jurisdiction or with grave abuse of discretion amounting [to] lack or excess of jurisdiction; and (3) there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law.

A respondent is said to be exercising judicial function where he has the power to determine what the law is and what the legal rights of the parties are, and then undertakes to determine these questions and adjudicate upon the rights of the parties.

Quasi-judicial function, on the other hand, is “a term which applies to the actions, discretion, etc., of public administrative officers or bodies … required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their official action and to exercise discretion of a judicial nature.”

Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be a law that gives rise to some specific rights of persons or property under which adverse claims to such rights are made, and the controversy ensuing therefrom is brought before a tribunal, board, or officer clothed with power and authority to determine the law and adjudicate the respective rights of the contending parties.

The respondents do not fall within the ambit of tribunal, board, or officer exercising judicial or quasi-judicial functions.  As correctly pointed out by the respondents, the enactment by the City Council of Manila of the assailed ordinance and the issuance by respondent Mayor of the questioned executive order were done in the exercise of legislative and executive functions, respectively, and not of judicial or quasi-judicial functions.  On this score alone, certiorari will not lie.

Second, although the instant petition is styled as a petition for certiorari, in essence, it seeks the declaration by this Court of the unconstitutionality or illegality of the questioned ordinance and executive order.  It, thus, partakes of the nature of a petition for declaratory relief over which this Court has only appellate, not original, jurisdiction. Section 5, Article VIII of the Constitution provides:

Sec. 5.  The Supreme Court shall have the following powers:

(1)           Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.

(2)        Review, revise, reverse, modify, or affirm on appeal or certiorari as the law or the Rules of Court may provide, final judgments and orders of lower courts in:

(a)   All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question. (Italics supplied).

As such, this petition must necessar[ily] fail, as this Court does not have original jurisdiction over a petition for declaratory relief even if only questions of law are involved.^[18][18]

Likewise, in Southern Hemisphere Engagement Network, Inc. v. Anti Terrorism Council,^[19][19] we similarly dismissed the petitions for certiorari and prohibition challenging the constitutionality of R.A. No. 9372, otherwise known as the “Human Security Act of 2007,” since the respondents therein (members of the Anti-Terrorism Council) did not exercise judicial or quasi-judicial functions.

While we have recognized in the past that we can exercise the discretion and rulemaking authority we are granted under the Constitution,^[20][20] and set aside procedural considerations to permit parties to bring a suit before us at the first instance through certiorari and/or prohibition,^[21][21] this liberal policy remains to be an exception to the general rule, and thus, has its limits.  In Concepcion v. Commission on Elections (COMELEC),^[22][22] we emphasized the importance of availing of the proper remedies and cautioned against the wrongful use of certiorari in order to assail the quasi-legislative acts of the COMELEC, especially by the wrong party.  In ruling that liberality and the transcendental doctrine cannot trump blatant disregard of procedural rules, and considering that the petitioner had other available remedies (such as a petition for declaratory relief with the appropriate RTC under the terms of Rule 63 of the Rules of Court), as in this case, we categorically ruled:

The petitioner’s unusual approaches and use of Rule 65 of the Rules of Court do not appear to us to be the result of any error in reading Rule 65, given the way the petition was crafted.  Rather, it was a backdoor approach to achieve what the petitioner could not directly do in his individual capacity under Rule 65.  It was, at the very least, an attempted bypass of other available, albeit lengthier, modes of review that the Rules of Court provide.  While we stop short of concluding that the petitioner’s approaches constitute an abuse of process through a manipulative reading and application of the Rules of Court, we nevertheless resolve that the petition should be dismissed for its blatant violation of the Rules.  The transgressions alleged in a petition, however weighty they may sound, cannot be justifications for blatantly disregarding the rules of procedure, particularly when remedial measures were available under these same rules to achieve the petitioner’s objectives.  For our part, we cannot and should not – in the name of liberality and the “transcendental importance” doctrine – entertain these types of petitions.  As we held in the very recent case of Lozano, et al. vs. Nograles, albeit from a different perspective, our liberal approach has its limits and should not be abused.^[23][23] [emphasis supplied]      

1. B.   Petitioner lacks locus standi.

“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.”^[24][24]  This requirement of standing relates to the constitutional mandate that this Court settle only actual cases or controversies.^[25][25] 

Thus, as a general rule, a party is allowed to “raise a constitutional question” when (1) he can show that he will personally suffer some actual or threatened injury because of the allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and (3) the injury is likely to be redressed by a favorable action.^[26][26]

Jurisprudence defines interest as “material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest. By real interest is meant a present substantial interest, as distinguished from a mere expectancy or a future, contingent, subordinate, or consequential interest.”^[27][27]  

To support his claim that he has locus standi to file the present petition, the petitioner contends that as an employee of PhilHealth, he “stands to be prejudiced by [EO] 7, which suspends or imposes a moratorium on the grants of salary increases or new or increased benefits to officers and employees of GOCC[s] and x x x curtail[s] the prerogative of those officers who are to fix and determine his compensation.”^[28][28] The petitioner also claims that he has standing 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 and implemented.

The respondents meanwhile argue that the petitioner is not a real party-in-interest since future increases in salaries and other benefits are merely contingent events or expectancies.^[29][29]  The petitioner, too, is not asserting a public right for which he is entitled to seek judicial protection.  Section 9 of EO 7 reads:

            Section 9. Moratorium on Increases in Salaries, Allowances, Incentives and Other Benefits. –Moratorium on increases in the rates of salaries, and the grant of new increases in the rates of allowances, incentives and other benefits, except salary adjustments pursuant to Executive Order No. 8011 dated June 17, 2009 and Executive Order No. 900 dated June 23, 2010, are hereby imposed until specifically authorized by the President. [emphasis ours]

          In the present case, we are 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. 
           It has been held that as to the element of injury, such aspect is not something that just anybody with some grievance or pain may assert.  It has to be direct and substantial to make it worth the court’s time, as well as the effort of inquiry into the constitutionality of the acts of another department of government.  If the asserted injury is more imagined than real, or is merely superficial and insubstantial, then the courts may end up being importuned to decide a matter that does not really justify such an excursion into constitutional adjudication.^[30][30]  The rationale for this constitutional requirement of locus standi is by no means trifle.  Not only does it assure the vigorous adversary presentation of the case; more importantly, it must suffice to warrant the Judiciary’s overruling the determination of a coordinate, democratically elected organ of government, such as the President, and the clear approval by Congress, in this case. Indeed, the rationale goes to the very essence of representative democracies.^[31][31]

          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,^[32][32] “as too general an interest which is shared by other groups and [by] the whole citizenry.”^[33][33]  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.  The Court made a similar ruling in Prof. David v. Pres. Macapagal-Arroyo^[34][34] and held that the petitioners therein, who are national officers of the IBP, have no legal standing, having failed to allege any direct or potential injury which the IBP, as an institution, or its members may suffer as a consequence of the issuance of Presidential Proclamation No. 1017 and General Order No. 5.^[35][35]          

We note that while the petition raises vital constitutional and statutory questions concerning the power of the President to fix the compensation packages of GOCCs and GFIs with possible implications on their officials and employees, the same cannot “infuse” or give the petitioner locus standi under the transcendental importance or paramount public interest doctrine.   In Velarde v. Social Justice Society,^[36][36] we held that even if the Court could have exempted the case from the stringent locus standi requirement, such heroic effort would be futile because the transcendental issue could not be resolved any way, due to procedural infirmities and shortcomings, as in the present case.^[37][37]  In other words, giving due course to the present petition which is saddled with formal and procedural infirmities explained above in this Resolution, cannot but be an exercise in futility that does not merit the Court’s liberality.  As we emphasized in Lozano v. Nograles,^[38][38] “while the Court has taken an increasingly liberal approach to the rule of locus standi, evolving from the stringent requirements of ‘personal injury’ to the broader ‘transcendental importance’ doctrine, such liberality is not to be abused.”^[39][39] 

Finally, since the petitioner has failed to demonstrate a material and personal interest in the issue in dispute, he cannot also be considered to have filed the present case as a representative of PhilHealth.  In this regard, we cannot ignore or excuse the blatant failure of the petitioner to provide a Board Resolution or a Secretary’s Certificate from PhilHealth to act as its representative. 

1. C.    The petition has a defective

      jurat.

The respondents claim that the petition should be dismissed for failing to comply with Section 3, Rule 7 of the Rules of Civil Procedure, which requires the party or the counsel representing him to sign the pleading and indicate an address that should not be a post office box.  The petition also allegedly violated the Supreme Court En Banc Resolution dated November 12, 2001, requiring counsels to indicate in their pleadings their Roll of Attorneys Number, their PTR Number and their IBP Official Receipt or Lifetime Member Number; otherwise, the pleadings would be considered unsigned and dismissible.  Bar Matter No. 1922 likewise states that a counsel should note down his MCLE Certificate of Compliance or Certificate of Exemption in the pleading, but the petitioner had failed to do so.^[40][40]

We do not see any violation of Section 3, Rule 7 of the Rules of Civil Procedure as the petition bears the petitioner’s signature and office address.  The present suit was brought before this Court by the petitioner himself as a party litigant and not through counsel. Therefore, the requirements under the Supreme Court En Banc Resolution datedNovember 12, 2001 and Bar Matter No. 1922 do not apply.  In Bar Matter No. 1132, April 1, 2003, we clarified that a party who is not a lawyer is not precluded from signing his own pleadings as this is allowed by the Rules of Court; the purpose of requiring a counsel to indicate his IBP Number and PTR Number is merely to protect the public from bogus lawyers.  A similar construction should be given to Bar Matter No. 1922, which requires lawyers to indicate their MCLE Certificate of Compliance or Certificate of Exemption; otherwise, the provision that allows parties to sign their own pleadings will be negated.

However, the point raised by the respondents regarding the petitioner’s defective jurat is correct.  Indeed, A.M. No. 02-8-13-SC, dated February 19, 2008, calls for a current identification document issued by an official agency bearing the photograph and signature of the individual as competent evidence of identity.  Nevertheless, we hasten to clarify that the defective jurat in the Verification/Certification of Non-Forum Shopping is not a fatal defect, as we held in In-N-Out Burger, Inc. v. Sehwani, Incorporated.^[41][41]  The verification is only a formal, not a jurisdictional, requirement that the Court may waive. 

1. D.   The petition has been mooted

     by supervening events.

          Because of the transitory nature of EO 7, it has been pointed out that the present case has already been rendered moot by these supervening events: (1) the lapse on December 31, 2010 of Section 10 of EO 7 that suspended the allowances and bonuses of the directors and trustees of GOCCs and GFIs; and (2) the enactment of R.A. No. 10149 amending the provisions in the charters of GOCCs and GFIs empowering their board of directors/trustees to determine their own compensation system, in favor of the grant of authority to the President to perform this act.

With the enactment of the GOCC Governance Act of 2011, the President is now authorized to fix the compensation framework of GOCCs and GFIs.  The pertinent provisions read:

Section 5. Creation of the Governance Commission for Government-Owned or -Controlled Corporations. — There is hereby created an advisory, monitoring, and oversight body with authority to formulate, implement and coordinate policies to be known as the Governance Commission for Government-Owned or-Controlled Corporations, hereinafter referred to as the GCG, which shall be attached to the Office of the President.  The GCG shall have the following powers and functions:

x x x x

            h) Conduct compensation studies, develop and recommend to the President a competitive compensation and remuneration system which shall attract and retain talent, at the same time allowing the GOCC to be financially sound and sustainable;

x x x x

            Section 8.  Coverage of the Compensation and Position Classification System. — The GCG, after conducting a compensation study, shall develop a Compensation and Position Classification System which shall apply to all officers and employees of the GOCCs whether under the Salary Standardization Law or exempt therefrom and shall consist of classes of positions grouped into such categories as the GCG may determine, subject to approval of the President.

            Section 9.  Position Titles and Salary Grades. — All positions in the Positions Classification System, as determined by the GCG and as approved by the President, shall be allocated to their proper position titles and salary grades in accordance with an Index of Occupational Services, Position Titles and Salary Grades of the Compensation and Position Classification System, which shall be prepared by the GCG and approved by the President.

x x x x

            [N]o GOCC shall be exempt from the coverage of the Compensation and Position Classification System developed by the GCG under this Act.

As may be gleaned from these provisions, the new law amended R.A. No. 7875 and other laws that enabled certain GOCCs and GFIs to fix their own compensation frameworks; the law now authorizes the President to fix the compensation and position classification system for all GOCCs and GFIs, as well as other entities covered by the law.   This means that, the President can now reissue an EO containing these same provisions without any legal constraints.

A moot case is “one that ceases to present a justiciable controversy by virtue of supervening events, so that a declaration thereon would be of no practical use or value.”^[42][42]  “[A]n action is considered ‘moot’ when it no longer presents a justiciable controversy because the issues involved have become academic or dead[,] or when the matter in dispute has already been resolved and hence, one is not entitled to judicial intervention unless the issue is likely to be raised again between the parties x x x.  Simply stated, there is nothing for the x x x court to resolve as [its] determination x x x has been overtaken by subsequent events.”^[43][43]

This is the present situation here. Congress, thru R.A. No. 10149, has expressly empowered the President to establish the compensation systems of GOCCs and GFIs.  For the Court to still rule upon the supposed unconstitutionality of EO 7 will merely be an academic exercise.  Any further discussion of the constitutionality of EO 7 serves no useful purpose since such issue is moot in its face in light of the enactment of R.A. No. 10149.  In the words of the eminent constitutional law expert, Fr. Joaquin Bernas, S.J., “the Court normally [will not] entertain a petition touching on an  issue  that  has  become  moot  because x x x there would [be] no longer x x x a ‘flesh and blood’ case for the Court to resolve.”^[44][44]   

All told, in view of the supervening events rendering the petition moot, as well as its patent formal and procedural infirmities, we no longer see any reason for the Court to resolve the other issues raised in the certiorari petition.

WHEREFORE, premises considered, the petition is DISMISSED.  No costs.

            SO ORDERED.

                                                ARTURO D. BRION

                                                Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

         (On leave)

MARIA LOURDES P. A. SERENO                        BIENVENIDO L. REYES

         Associate Justice                                               Associate Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

C E R T I F I C A T I O N

          Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

                                                RENATO C. CORONA

                                                Chief Justice

CASE 2012-0017 (G.R. NO. 196271: DATU MICHAEL ABAS KIDA ET AL VS. SENATE OF THE PHILIPPINES ET AL.) AND OTHER RELATED CASES) (28 FEBRUARY 2012, BRION, J.) SUBJECT: CONSTITUTIONALITY OF RA NO. 10163 (BRIEF TITLE: THE RA 10163 CASE)

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DISPOSITIVE:

WHEREFORE, premises considered, we DENY with FINALITY the motions for reconsideration for lack of merit and UPHOLD the constitutionality of RA No. 10153.

        SO ORDERED.

                                        ARTURO D. BRION

                                        Associate Justice

====================

Republic of thePhilippines

Supreme Court

Manila

EN BANC

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RESOLUTION

BRION, J.:

We resolve: (a) the motion for reconsideration filed by petitioners Datu Michael Abas Kida, et al. in G.R. No. 196271; (b) the motion for reconsideration filed by petitioner Rep. Edcel Lagman in G.R. No. 197221; (c) the ex abundante ad cautelam motion for reconsideration filed by petitioner Basari Mapupuno in G.R. No. 196305; (d) the motion for reconsideration filed by petitioner Atty. Romulo Macalintal in G.R. No. 197282; (e) the motion for reconsideration filed by petitioners Almarim Centi Tillah, Datu Casan Conding Cana and Partido Demokratiko Pilipino Lakas ng Bayan in G.R. No. 197280; (f) the manifestation and motion filed by petitioners Almarim Centi Tillah, et al. in G.R. No. 197280; and (g) the very urgent motion to issue clarificatory resolution that the temporary restraining order (TRO) is still existing and effective.

These motions assail our Decision dated October 18, 2011, where we upheld the constitutionality of Republic Act (RA) No. 10153. Pursuant to the constitutional mandate of synchronization, RA No. 10153 postponed the regional elections in the Autonomous Region in Muslim Mindanao (ARMM) (which were scheduled to be held on the second Monday of August 2011) to the second Monday of May 2013 and recognized the President’s power to appoint officers-in-charge (OICs) to temporarily assume these positions upon the expiration of the terms of the elected officials. 

The Motions for Reconsideration

          The petitioners in G.R. No. 196271 raise the following grounds in support of their motion:

1. THE HONORABLE COURT ERRED IN CONCLUDING THAT THE ARMM ELECTIONS ARE LOCAL ELECTIONS, CONSIDERING THAT THE CONSTITUTION GIVES THE ARMM A SPECIAL STATUS AND IS SEPARATE AND DISTINCT FROM ORDINARY LOCAL GOVERNMENT UNITS.

1. R.A. 10153 AND R.A. 9333 AMEND THE ORGANIC ACT.

1. THE SUPERMAJORITY PROVISIONS OF THE ORGANIC ACT (R.A. 9054) ARE NOT IRREPEALABLE LAWS.

1. SECTION 3, ARTICLE XVII OF R.A. 9054 DOES NOT VIOLATE SECTION 18, ARTICLE X OF THE CONSTITUTION.

1. BALANCE OF INTERESTS TILT IN FAVOR OF THE DEMOCRATIC PRINCIPLE[.]^[1][1]

          The petitioner in G.R. No. 197221 raises similar grounds, arguing that:

1. THE ELECTIVE REGIONAL EXECUTIVE AND LEGISLATIVE OFFICIALS OF ARMM CANNOT BE CONSIDERED AS OR EQUATED WITH THE TRADITIONAL LOCAL GOVERNMENT OFFICIALS IN THE LOCAL GOVERNMENT UNITS (LGUs) BECAUSE (A) THERE IS NO EXPLICIT CONSTITUTIONAL PROVISION ON SUCH PARITY; AND (B) THE ARMM IS MORE SUPERIOR THAN LGUs IN STRUCTURE, POWERS AND AUTONOMY, AND CONSEQUENTLY IS A CLASS OF ITS OWN APART FROM TRADITIONAL LGUs.

1. THE UNMISTAKABLE AND UNEQUIVOCAL CONSTITUTIONAL MANDATE FOR AN ELECTIVE AND REPRESENTATIVE EXECUTIVE DEPARTMENT AND LEGISLATIVE ASSEMBLY IN ARMM INDUBITABLY PRECLUDES THE APPOINTMENT BY THE PRESIDENT OF OFFICERS-IN-CHARGE (OICs), ALBEIT MOMENTARY OR TEMPORARY, FOR THE POSITIONS OF ARMM GOVERNOR, VICE GOVERNOR AND MEMBERS OF THE REGIONAL ASSEMBLY.

1. THE PRESIDENT’S APPOINTING POWER IS LIMITED TO APPOINTIVE OFFICIALS AND DOES NOT EXTEND TO ELECTIVE OFFICIALS EVEN AS THE PRESIDENT IS ONLY VESTED WITH SUPERVISORY POWERS OVER THE ARMM, THEREBY NEGATING THE AWESOME POWER TO APPOINT AND REMOVE OICs OCCUPYING ELECTIVE POSITIONS.

1. THE CONSTITUTION DOES NOT PROSCRIBE THE HOLDOVER OF ARMM ELECTED OFFICIALS PENDING THE ELECTION AND QUALIFICATION OF THEIR SUCCESSORS.

1. THE RULING IN OSMENA DOES NOT APPLY TO ARMM ELECTED OFFICIALS WHOSE TERMS OF OFFICE ARE NOT PROVIDED FOR BY THE CONSTITUTION BUT PRESCRIBED BY THE ORGANIC ACTS.

1. THE REQUIREMENT OF A SUPERMAJORITY OF ¾ VOTES IN THE HOUSE OF REPRESENTATIVES AND THE SENATE FOR THE VALIDITY OF A SUBSTANTIVE AMENDMENT OR REVISION OF THE ORGANIC ACTS DOES NOT IMPOSE AN IRREPEALABLE LAW.

1. THE REQUIREMENT OF A PLEBISCITE FOR THE EFFECTIVITY OF A SUBSTANTIVE AMENDMENT OR REVISION OF THE ORGANIC ACTS DOES NOT UNDULY EXPAND THE PLEBISCITE REQUIREMENT OF THE CONSTITUTION.

1. SYNCHRONIZATION OF THE ARMM ELECTION WITH THE NATIONAL AND LOCAL ELECTIONS IS NOT MANDATED BY THE CONSTITUTION.

1. THE COMELEC HAS THE AUTHORITY TO HOLD AND CONDUCT SPECIAL ELECTIONS IN ARMM, AND THE ENACTMENT OF AN IMPROVIDENT AND UNCONSTITUTIONAL STATUTE IS AN ANALOGOUS CAUSE WARRANTING COMELEC’S HOLDING OF SPECIAL ELECTIONS.^[2][2]  (italics supplied)

The petitioner in G.R. No. 196305 further asserts that:

1. BEFORE THE COURT MAY CONSTRUE OR INTERPRET A STATUTE, IT IS A CONDITION SINE QUA NON THAT THERE BE DOUBT OR AMBIGUITY IN ITS LANGUAGE.

            THE TRANSITORY PROVISIONS HOWEVER ARE CLEAR AND UNAMBIGUOUS: THEY REFER TO THE 1992 ELECTIONS AND TURN-OVER OF ELECTIVE OFFICIALS.

IN THUS RECOGNIZING A SUPPOSED “INTENT” OF THE FRAMERS, AND APPLYING THE SAME TO ELECTIONS 20 YEARS AFTER, THE HONORABLE SUPREME COURT MAY HAVE VIOLATED THE FOREMOST RULE IN STATUTORY CONSTRUCTION.

x x x x

1. THE HONORABLE COURT SHOULD HAVE CONSIDERED THAT RA 9054, AN ORGANIC ACT, WAS COMPLETE IN ITSELF. HENCE, RA 10153 SHOULD BE CONSIDERED TO HAVE BEEN ENACTED PRECISELY TO AMEND RA 9054.

                        x x x x

1. THE HONORABLE COURT MAY HAVE COMMITTED A SERIOUS ERROR IN DECLARING THE 2/3 VOTING REQUIREMENT SETFORTHIN RA 9054 AS UNCONSTITUTIONAL.

                        x x x x

1. THE HONORABLE COURT MAY HAVE COMMITTED A SERIOUS ERROR IN HOLDING THAT A PLEBISCITE IS NOT NECESSARY IN AMENDING THE ORGANIC ACT.

            x x x x

1. THE HONORABLE COURT COMMITTED A SERIOUS ERROR IN DECLARING THE HOLD-OVER OF ARMM ELECTIVE OFFICIALS UNCONSTITUTIONAL.

            x x x x

1. THE HONORABLE COURT COMMITTED A SERIOUS ERROR IN UPHOLDING THE APPOINTMENT OF OFFICERS-IN-CHARGE.^[3][3]  (italics and underscoring supplied)

The petitioner in G.R. No. 197282 contends that:

ASSUMING WITHOUT CONCEDING THAT THE APPOINTMENT OF OICs FOR THE REGIONAL GOVERNMENT OF THE ARMM IS NOT UNCONSTITUTIONAL TO BEGIN WITH, SUCH APPOINTMENT OF OIC REGIONAL OFFICIALS WILL CREATE A FUNDAMENTAL CHANGE IN THE BASIC STRUCTURE OF THE REGIONAL GOVERNMENT SUCH THAT R.A. NO. 10153 SHOULD HAVE BEEN SUBMITTED TO A PLEBISCITE IN THE ARMM FOR APPROVAL BY ITS PEOPLE, WHICH PLEBISCITE REQUIREMENT CANNOT BE CIRCUMVENTED BY SIMPLY CHARACTERIZING THE PROVISIONS OF R.A. NO. 10153 ON APPOINTMENT OF OICs AS AN “INTERIM MEASURE”.

B.

THE HONORABLE COURT ERRED IN RULING THAT THE APPOINTMENT BY THE PRESIDENT OF OICs FOR THE ARMM REGIONAL GOVERNMENT IS NOT VIOLATIVE OF THE CONSTITUTION.

C.

THE HOLDOVER PRINCIPLE ADOPTED IN R.A. NO. 9054 DOES NOT VIOLATE THE CONSTITUTION, AND BEFORE THEIR SUCCESSORS ARE ELECTED IN EITHER AN ELECTION TO BE HELD AT THE SOONEST POSSIBLE TIME OR IN MAY 2013, THE SAID INCUMBENT ARMM REGIONAL OFFICIALS MAY VALIDLY CONTINUE FUNCTIONING AS SUCH IN A HOLDOVER CAPACITY IN ACCORDANCE WITH SECTION 7, ARTICLE VII OF R.A. NO. 9054.

D.

WITH THE CANCELLATION OF THE AUGUST 2011 ARMM ELECTIONS, SPECIAL ELECTIONS MUST IMMEDIATELY BE HELD FOR THE ELECTIVE REGIONAL OFFICIALS OF THE ARMM WHO SHALL SERVE UNTIL THEIR SUCCESSORS ARE ELECTED IN THE MAY 2013 SYNCHRONIZED ELECTIONS.^[4][4]

Finally, the petitioners in G.R. No. 197280 argue that:

a)                 the Constitutional mandate of synchronization does not apply to the ARMM elections;

b)                RA No. 10153 negates the basic principle of republican democracy which, by constitutional mandate, guides the governance of the Republic;

c)                 RA No. 10153 amends the Organic Act (RA No. 9054) and, thus, has to comply with the 2/3 vote from the House of Representatives and the Senate, voting separately, and be ratified in a plebiscite;

d)                if the choice is between elective officials continuing to hold their offices even after their terms are over and non-elective individuals getting into the vacant elective positions by appointment as OICs, the holdover option is the better choice;

e)                 the President only has the power of supervision over autonomous regions, which does not include the power to appoint OICs to take the place of ARMM elective officials; and

f)                  it would be better to hold the ARMM elections separately from the national and local elections as this will make it easier for the authorities to implement election laws.

In essence, the Court is asked to resolve the following questions:

(a)              Does the Constitution mandate the synchronization of ARMM regional elections with national and local elections?

(b)             Does RA No. 10153 amend RA No. 9054? If so, does RA No. 10153 have to comply with the supermajority vote and plebiscite requirements? 

(c)              Is the holdover provision in RA No. 9054 constitutional?

(d)             Does the COMELEC have the power to call for special elections in ARMM?

(e)              Does granting the President the power to appoint OICs violate the elective and representative nature of ARMM regional legislative and executive offices?

(f)               Does the appointment power granted to the President exceed the President’s supervisory powers over autonomous regions?

The Court’s Ruling

We deny the motions for lack of merit.

Synchronization mandate includes ARMM 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 the following provisions of the Transitory Provisions (Article XVIII) of the Constitution, which state:

            Section 1. The first elections of Members of the Congress under this Constitution shall be held on the second Monday of May, 1987.

            The first local elections shall be held on a date to be determined by the President, which may be simultaneous with the election of the Members of the Congress. It shall include the election of all Members of the city or municipal councils in the Metropolitan Manila area.

            Section 2. The Senators, Members of the House of Representatives, and the local officials first elected under this Constitution shall serve until noon of June 30, 1992.

            Of the Senators elected in the elections in 1992, the first twelve obtaining the highest number of votes shall serve for six years and the remaining twelve for three years.

                        x x x  x

            Section 5. The six-year term of the incumbent President and Vice-President elected in the February 7, 1986 election is, for purposes of synchronization of elections, hereby extended to noon of June 30, 1992.

            The first regular elections for the President and Vice-President under this Constitution shall be held on the second Monday of May, 1992.

To fully appreciate the constitutional intent behind these provisions, we refer to the discussions of the Constitutional Commission:

            MR. MAAMBONG. For purposes of identification, I will now read a section which we will temporarily indicate as Section 14. It reads: “THE SENATORS, MEMBERS OF THE HOUSE OF REPRESENTATIVES AND THE LOCAL OFFICIALS ELECTED IN THE FIRST ELECTION SHALL SERVE FOR FIVE YEARS, TO EXPIRE AT NOON OF JUNE 1992.”

            This was presented by Commissioner Davide, so may we ask that Commissioner Davide be recognized.

            THE PRESIDING OFFICER (Mr. Rodrigo). Commissioner Davide is recognized.

            MR. DAVIDE. Before going to the proposed amendment, I would only state that in view of the action taken by the Commission on Section 2 earlier, I am formulating a new proposal. It will read as follows: “THE SENATORS, MEMBERS OF THE HOUSE OF REPRESENTATIVES AND THE LOCAL OFFICIALS FIRST ELECTED UNDER THIS CONSTITUTION SHALL SERVE UNTIL NOON OF JUNE 30, 1992.”

            I proposed this because of the proposed section of the Article on Transitory Provisions giving a term to the incumbent President and Vice-President until 1992. Necessarily then, since the term provided by the Commission for Members of the Lower House and for local officials is three years, if there will be an election in 1987, the next election for said officers will be in 1990, and it would be very close to 1992. We could never attain, subsequently, any synchronization of election which is once every three years.

            So under my proposal we will be able to begin actual synchronization in 1992, and consequently, we should not have a local election or an election for Members of the Lower House in 1990 for them to be able to complete their term of three years each. And if we also stagger the Senate, upon the first election it will result in an election in 1993 for the Senate alone, and there will be an election for 12 Senators in 1990. But for the remaining 12 who will be elected in 1987, if their term is for six years, their election will be in 1993. So, consequently we will have elections in 1990, in 1992 and in 1993. The later election will be limited to only 12 Senators and of course to the local officials and the Members of the Lower House. But, definitely, thereafter we can never have an election once every three years, therefore defeating the very purpose of the Commission when we adopted the term of six years for the President and another six years for the Senators with the possibility of staggering with 12 to serve for six years and 12 for three years insofar as the first Senators are concerned. And so my proposal is the only way to effect the first synchronized election which would mean, necessarily, a bonus of two years to the Members of the Lower House and a bonus of two years to the local elective officials.

            THE PRESIDING OFFICER (Mr. Rodrigo). What does the committee say?

            MR. DE CASTRO. Mr. Presiding Officer.

            THE PRESIDING OFFICER (Mr. Rodrigo). Commissioner de Castro is recognized.

            MR. DE CASTRO. Thank you.

            During the discussion on the legislative and the synchronization of elections, I was the one who proposed that in order to synchronize the elections every three years, which the body approved — the first national and local officials to be elected in 1987 shall continue in office for five years, the same thing the Honorable Davide is now proposing. That means they will all serve until 1992, assuming that the term of the President will be for six years and continue beginning in 1986. So from 1992, we will again have national, local and presidential elections. This time, in 1992, the President shall have a term until 1998 and the first 12 Senators will serve until 1998, while the next 12 shall serve until 1995, and then the local officials elected in 1992 will serve until 1995. From then on, we shall have an election every three years.

            So, I will say that the proposition of Commissioner Davide is in order, if we have to synchronize our elections every three years which was already approved by the body.

            Thank you, Mr. Presiding Officer.

            x x x x

            MR. GUINGONA. What will be synchronized, therefore, is the election of the incumbent President and Vice-President in 1992.

            MR. DAVIDE. Yes.

            MR. GUINGONA. Not the reverse. Will the committee not synchronize the election of the Senators and local officials with the election of the President?

            MR. DAVIDE. It works both ways, Mr. Presiding Officer. The attempt here is on the assumption that the provision of the Transitory Provisions on the term of the incumbent President and Vice-President would really end in 1992.

            MR. GUINGONA. Yes.

            MR. DAVIDE. In other words, there will be a single election in 1992 for all, from the President up to the municipal officials.^[5][5] (emphases and underscoring ours)

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.

We came to the same conclusion in Osmeña v. Commission on Elections,^[6][6] where we unequivocally stated that “the Constitution has mandated synchronized national and local elections.”^[7][7] Despite the length and verbosity of their motions, the petitioners have failed to convince us to deviate from this established ruling. 

Neither do we find any merit in the petitioners’ contention that the ARMM elections are not covered by the constitutional mandate of synchronization because the ARMM elections were not specifically mentioned in the above-quoted Transitory Provisions of the Constitution.

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. We have to consider 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.^[8][8]

To reiterate, 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. We refer to Section 1 of this Article, which provides:

            Section 1. The territorial and political subdivisions of the Republic of the Philippines are the provinces, cities, municipalities, and barangays. There shall be autonomous regions in Muslim Mindanao and the Cordilleras as hereinafter provided. 

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.

The petitioners further argue that even assuming that the Constitution mandates the synchronization of elections, the ARMM elections are not covered by this mandate since they are regional elections and not local elections.

In construing provisions of the Constitution, the first rule is verba legis, “that is, wherever possible, the words used in the Constitution must be given their ordinary meaning except where technical terms are employed.”^[9][9] Applying this principle to determine the scope of “local elections,” we refer to the meaning of the word “local,” as understood in its ordinary sense. As defined in Webster’s Third New International Dictionary Unabridged, “local” refers to something “that primarily serves the needs of a particular limited district, often a community or minor political subdivision.”  Obviously, the ARMM elections, which are held within the confines of the autonomous region of Muslim Mindanao, fall within this definition.

To be sure, the fact that the ARMM possesses more powers than other provinces, cities, or municipalities is not enough reason to treat the ARMM regional elections differently from the other local elections. Ubi lex non distinguit nec nos distinguire debemus.  When the law does not distinguish, we must not distinguish.^[10][10]

RA No. 10153 does not amend RA No. 9054

          The petitioners are adamant that the provisions of RA No. 10153, in postponing the ARMM elections, amend RA No. 9054.

We cannot agree with their position.

A thorough reading of RA No. 9054 reveals that it fixes the schedule for only the first ARMM elections;^[11][11] it does not provide the date for the succeeding regular ARMM elections. In providing for the date of the regular ARMM elections, RA No. 9333 and RA No. 10153 clearly do not amend RA No. 9054 since these laws do not change or revise any provision in RA No. 9054. In fixing the date of the ARMM elections subsequent to the first election, RA No. 9333 and RA No. 10153 merely filled the gap left in RA No. 9054.

          We reiterate our previous observations:

This view – that Congress thought it best to leave the determination of the date of succeeding ARMM elections to legislative discretion – finds support in ARMM’s recent history.

To recall, RA No. 10153 is not the first law passed that rescheduled the ARMM elections.  The First Organic Act – RA No. 6734 – not only did not fix the date of the subsequent elections; it did not even fix the specific date of the first ARMM elections, leaving the date to be fixed in another legislative enactment. Consequently, RA No. 7647, RA No. 8176, RA No. 8746, RA No. 8753, and RA No. 9012 were all enacted by Congress to fix the dates of the ARMM elections. Since these laws did not change or modify any part or provision of RA No. 6734, they were not amendments to this latter law.  Consequently, there was no need to submit them to any plebiscite for ratification.

The Second Organic Act – RA No. 9054 – which lapsed into law on March 31, 2001, provided that the first elections would be held on the second Monday of September 2001. Thereafter, Congress passed RA No. 9140 to reset the date of the ARMM elections.  Significantly, while RA No. 9140 also scheduled the plebiscite for the ratification of the Second Organic Act (RA No. 9054), the new date of the ARMM regional elections fixed in RA No. 9140 was not among the provisions ratified in the plebiscite held to approve RA No. 9054. Thereafter, Congress passed RA No. 9333, which further reset the date of the ARMM regional elections. Again, this law was not ratified through a plebiscite.

From these legislative actions, we see the clear intention of Congress to treat the laws which fix the date of the subsequent ARMM elections as separate and distinct from the Organic Acts. Congress only acted consistently with this intent when it passed RA No. 10153 without requiring compliance with the amendment prerequisites embodied in Section 1 and Section 3, Article XVII of RA No. 9054.^[12][12]  (emphases supplied)

The petitioner in G.R. No. 196305 contends, however, that there is no lacuna in RA No. 9054 as regards the date of the subsequent ARMM elections. In his estimation, it can be implied from the provisions of RA No. 9054 that the succeeding elections are to be held three years after the date of the first ARMM regional elections.

We find this an erroneous assertion. Well-settled is the rule that the court may not, in the guise of interpretation, enlarge the scope of a statute and include therein situations not provided nor intended by the lawmakers. An omission at the time of enactment, whether careless or calculated, cannot be judicially supplied however later wisdom may recommend the inclusion.^[13][13] Courts are not authorized to insert into the law what they think should be in it or to supply what they think the legislature would have supplied if its attention had been called to the omission.^[14][14] Providing for lapses within the law falls within the exclusive domain of the legislature, and courts, no matter how well-meaning, have no authority to intrude into this clearly delineated space.  

Since RA No. 10153 does not amend, but merely fills in the gap in RA No. 9054, there is no need for RA No. 10153 to comply with the amendment requirements set forth in Article XVII of RA No. 9054.

Supermajority vote requirement makes RA No. 9054 an irrepealable law

Even assuming that RA No. 10153 amends RA No. 9054, however, we have already established that the supermajority vote requirement set forth in Section 1, Article XVII of RA No. 9054^[15][15] 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. As we explained in Duarte v. Dade:^[16][16]

A state legislature has a plenary law-making power over all subjects, whether pertaining to persons or things, within its territorial jurisdiction, either to introduce new laws or repeal the old, unless prohibited expressly or by implication by the federal constitution or limited or restrained by its own. It cannot bind itself or its successors by enacting irrepealable laws except when so restrained. Every legislative body may modify or abolish the acts passed by itself or its predecessors. This power of repeal may be exercised at the same session at which the original act was passed; and even while a bill is in its progress and before it becomes a law. This legislature cannot bind a future legislature to a particular mode of repeal. It cannot declare in advance the intent of subsequent legislatures or the effect of subsequent legislation upon existing statutes. [emphasis ours]

Under our Constitution, each House of Congress has the power to approve bills by a mere majority vote, provided there is quorum.^[17][17] 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 we sought to establish in Duarte. To reiterate, the act of one legislature is not binding upon, and cannot tie the hands of, future legislatures.^[18][18]

We also highlight an important point raised by Justice Antonio T. Carpio in his dissenting opinion, where he stated: “Section 1, Article XVII of RA 9054 erects a high vote threshold for each House of Congress to surmount, effectively and unconstitutionally, taking RA 9054 beyond the reach of Congress’ amendatory powers. One Congress cannot limit or reduce the plenary legislative power of succeeding Congresses by requiring a higher vote threshold than what the Constitution requires to enact, amend or repeal laws. No law can be passed fixing such a higher vote threshold because Congress has no power, by ordinary legislation, to amend the Constitution.”^[19][19]

Plebiscite requirement in RA No. 9054 overly broad

Similarly, we struck down the petitioners’ contention that the plebiscite requirement^[20][20] applies to all amendments of RA No. 9054 for being an unreasonable enlargement of the plebiscite requirement set forth in the Constitution.

Section 18, Article X of the Constitution provides that “[t]he 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[.]”  We 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^[21][21] – require ratification through a plebiscite.  We stand by this interpretation.

The petitioners argue that to require all amendments to RA No. 9054 to comply with the plebiscite requirement is to recognize that sovereignty resides primarily in the people.

While we agree with the petitioners’ underlying premise that sovereignty ultimately resides with the people, we disagree 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. 

Interestingly, the petitioner in G.R. No. 197282 posits that RA No. 10153, in giving the President the power to appoint OICs to take the place of the elective officials of the ARMM, creates a fundamental change in the basic structure of the government, and thus requires compliance with the plebiscite requirement embodied in RA No. 9054.  

Again, we disagree.

The pertinent provision in this regard is Section 3 of RA No. 10153, which reads:

            Section 3. Appointment of Officers-in-Charge. — The President shall appoint officers-in-charge for the Office of the Regional Governor, Regional Vice Governor and Members of the Regional Legislative Assembly who shall perform the functions pertaining to the said offices until the officials duly elected in the May 2013 elections shall have qualified and assumed office.

We cannot see how the above-quoted provision has changed 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.”

Unconstitutionality of the holdover provision

          The petitioners are one in defending the constitutionality of Section 7(1), Article VII of RA No. 9054, which allows the regional officials to remain in their positions in a holdover capacity.  The petitioners essentially argue that the ARMM regional officials should be allowed to remain in their respective positions until the May 2013 elections since there is no specific provision in the Constitution which prohibits regional elective officials from performing their duties in a holdover capacity.

          The pertinent provision of the Constitution is Section 8, Article X which provides:

            Section 8. The term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years and no such official shall serve for more than three consecutive terms. [emphases ours]

On the other hand, Section 7(1), Article VII of RA No. 9054 provides:

            Section 7.  Terms of Office of Elective Regional Officials. – (1) Terms of Office. The terms of office of the Regional Governor, Regional Vice Governor and members of the Regional Assembly shall be for a period of three (3) years, which shall begin at noon on the 30^th day of September next following the day of the election and shall end at noon of the same date three (3) years thereafter. The incumbent elective officials of the autonomous region shall continue in effect until their successors are elected and qualified.

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. We have 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, we have, in the past, recognized the validity of holdover provisions in various laws. One significant difference between the present case and these past cases^[22][22] 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.^[23][23]

Congress, in passing RA No. 10153 and removing the holdover option, has made it clear that it wants to suppress the holdover rule expressed in RA No. 9054. Congress, in the exercise of its plenary legislative powers, has clearly acted within its discretion when it deleted the holdover option, and this Court has no authority to question the wisdom of this decision, absent any evidence of unconstitutionality or grave abuse of discretion. It is for the legislature and the executive, and not this Court, to decide how to fill the vacancies in the ARMM regional government which arise from the legislature complying with the constitutional mandate of synchronization.

COMELEC has no authority to hold special elections

          Neither do we find any merit in the contention that the Commission on Elections (COMELEC) is sufficiently empowered to set the date of special elections in the ARMM. To recall, the Constitution has merely empowered the COMELEC to enforce and administer all laws and regulations relative to the conduct of an election.^[24][24] 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 the following provisions:

            Section 5. Postponement of election. – When for any serious cause such as violence, terrorism, loss or destruction of election paraphernalia or records, force majeure, and other analogous causes of such a nature that the holding of a free, orderly and honest election should become impossible in any political subdivision, the Commission, motu proprio or upon a verified petition by any interested party, and after due notice and hearing, whereby all interested parties are afforded equal opportunity to be heard, shall postpone the election therein to a date which should be reasonably close to the date of the election not held, suspended or which resulted in a failure to elect but not later than thirty days after the cessation of the cause for such postponement or suspension of the election or failure to elect.

            Section 6. Failure of election. – If, on account of force majeure, violence, terrorism, fraud, or other analogous causes the election in any polling place has not been held on the date fixed, or had been suspended before the hour fixed by law for the closing of the voting, or after the voting and during the preparation and the transmission of the election returns or in the custody or canvass thereof, such election results in a failure to elect, and in any of such cases the failure or suspension of election would affect the result of the election, the Commission shall, on the basis of a verified petition by any interested party and after due notice and hearing, call for the holding or continuation of the election not held, suspended or which resulted in a failure to elect on a date reasonably close to the date of the election not held, suspended or which resulted in a failure to elect but not later than thirty days after the cessation of the cause of such postponement or suspension of the election or failure to elect. [emphases and underscoring ours]

As we have previously observed in our assailed decision, both Section 5 and Section 6 of BP 881 address instances where 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 importantly, RA No. 10153 has already fixed the date for the next ARMM elections and the COMELEC has no authority to set a different election date.

          Even assuming that the COMELEC has the authority to hold special elections, and this Court can compel the COMELEC to do so, there is still the problem of having to shorten the terms of the newly elected officials in order to synchronize the ARMM elections with the May 2013 national and local elections. Obviously, neither the Court nor the COMELEC has the authority to do this, amounting as it does to an amendment of Section 8, Article X of the Constitution, which limits the term of local officials to three years.   

President’s authority to appoint OICs

The petitioner in G.R. No. 197221 argues that the President’s power to appoint pertains only to appointive positions and cannot extend to positions held by elective officials.

The power to appoint has traditionally been recognized as executive in nature.^[25][25] Section 16, Article VII of the Constitution describes in broad strokes the extent of this power, thus:

            Section 16. The President shall nominate and, with the consent of the Commission on Appointments, appoint the heads of the executive departments, ambassadors, other public ministers and consuls, or officers of the armed forces from the rank of colonel or naval captain, and other officers whose appointments are vested in him in this Constitution. He shall also appoint 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 Congress may, by law, vest the appointment of other officers lower in rank in the President alone, in the courts, or in the heads of departments, agencies, commissions, or boards. [emphasis ours]

The 1935 Constitution contained a provision similar to the one quoted above. Section 10(3), Article VII of the 1935 Constitution provides:

            (3) The President shall nominate and with the consent of the Commission on Appointments, shall appoint the heads of the executive departments and bureaus, officers of the Army from the rank of colonel, of the Navy and Air Forces from the rank of captain or commander, and all other officers of the Government whose appointments are not herein otherwise provided for, and those whom he may be authorized by law to appoint; but the Congress may by law vest the appointment of inferior officers, in the President alone, in the courts, or in the heads of departments.  [emphasis ours]

          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, as made evident in the following exchange:

            MR. FOZ. Madame President x x x I propose to put a period (.) after “captain” and x x x delete “and all” and substitute it with HE SHALL ALSO APPOINT ANY.

            MR. REGALADO. Madam President, the Committee accepts the proposed amendment because it makes it clear that those other officers mentioned therein do not have to be confirmed by the Commission on Appointments.^[26][26]

          The 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.”^[27][27] 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.^[28][28] 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. 

Any limitation on or qualification to the exercise of the President’s appointment power should be strictly construed and must be clearly stated in order to be recognized.^[29][29] Given that the President derives his power to appoint OICs in the ARMM regional government from law, it falls under the classification of presidential appointments covered by the second sentence of Section 16, Article VII of the Constitution; the President’s appointment power thus rests on clear constitutional basis.

The petitioners also jointly assert that RA No. 10153, in granting the President the power to appoint OICs in elective positions, violates Section 16, Article X of the Constitution,^[30][30] which merely grants the President the power of supervision over autonomous regions.

This is an overly restrictive interpretation of the President’s appointment power. 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.

          The power of supervision is defined as “the power of a superior officer to see to it that lower officers perform their functions in accordance with law.”^[31][31] This is distinguished from the power of control or “the power of an officer to alter or modify or set aside what a subordinate officer had done in the performance of his duties and to substitute the judgment of the former for the latter.”^[32][32]

The petitioners’ apprehension regarding the President’s alleged power of control over the OICs is rooted in their belief that the President’s appointment power includes the power to remove these officials at will. In this way, the petitioners foresee that the appointed OICs will be beholden to the President, and act as representatives of the President and not of the people.

Section 3 of RA No. 10153 expressly contradicts the petitioners’ supposition. The provision states:

            Section 3. Appointment of Officers-in-Charge. — The President shall appoint officers-in-charge for the Office of the Regional Governor, Regional Vice Governor and Members of the Regional Legislative Assembly who shall perform the functions pertaining to the said offices until the officials duly elected in the May 2013 elections shall have qualified and assumed office.

The wording of the law is clear. Once the President has appointed the OICs for the offices of the Governor, Vice Governor and members of the Regional Legislative Assembly, these same officials will remain in office until they are replaced by the duly elected officials in the May 2013 elections. Nothing in this provision even hints that the President has the power to recall the appointments he already made. Clearly, the petitioners’ fears in this regard are more apparent than real.

RA No. 10153 as an interim measure

We reiterate once more the importance of considering RA No. 10153 not in a vacuum, but within the context it was enacted in. In the first place, Congress enacted RA No. 10153 primarily to heed the constitutional mandate to synchronize the ARMM regional elections with the national and local elections. To do this, Congress had to postpone the scheduled ARMM elections for another date, leaving it with the problem of how to provide the ARMM with governance in the intervening period, between the expiration of the term of those elected in August 2008 and the assumption to office – twenty-one (21) months away – of those who will win in the synchronized elections on May 13, 2013. 

In our assailed Decision, we already identified the three possible solutions open to Congress to address the problem created by synchronization – (a) allow the incumbent officials to remain in office after the expiration of their terms in a holdover capacity; (b) call for special elections to be held, and shorten the terms of those to be elected so the next ARMM regional elections can be held on May 13, 2013; or (c) recognize that the President, in the exercise of his appointment powers and in  line with his power of supervision over the ARMM, can appoint interim OICs to hold the vacated positions in the ARMM regional government upon the expiration of their terms. We have already established the unconstitutionality of the first two options, leaving us to consider the last available option.

In this way, RA No. 10153 is in reality an interim measure, enacted to respond to the adjustment that synchronization requires. Given the context, we have to judge RA No. 10153 by the standard of reasonableness in responding to the challenges brought about by synchronizing the ARMM elections with the national and local elections. In other words, “given the plain unconstitutionality of providing for a holdover and the unavailability of constitutional possibilities for lengthening or shortening the term of the elected ARMM officials, is the choice of the President’s power to appoint – for a fixed and specific period as an interim measure, and as allowed under Section 16, Article VII of the Constitution – an unconstitutional or unreasonable choice for Congress to make?”^[33][33]

We admit that synchronization will temporarily disrupt the election process in a local community, the ARMM, as well as the community’s choice of leaders. However, we have to keep in mind that the adoption of this measure is a matter of necessity in order to comply with a mandate that the Constitution itself has set out for us. Moreover, the implementation of the provisions of RA No. 10153 as an interim measure is comparable to the interim measures traditionally practiced when, for instance, the President appoints officials holding elective offices upon the creation of new local government units.  

The grant to the President of the power to appoint OICs in place of the elective members of the Regional Legislative Assembly is neither novel nor innovative. The power granted to the President, via RA No. 10153, to appoint members of the Regional Legislative Assembly is comparable to the power granted by BP 881 (the Omnibus Election Code) to the President to fill any vacancy for any cause in the Regional Legislative Assembly (then called the Sangguniang Pampook).^[34][34]

Executive is not bound by the principle of judicial courtesy

          The petitioners in G.R. No. 197280, in their Manifestation and Motion dated December 21, 2011, question the propriety of the appointment by the President of Mujiv Hataman as acting Governor and Bainon Karon as acting Vice Governor of the ARMM. They argue that since our previous decision was based on a close vote of 8-7, and given the numerous motions for reconsideration filed by the parties, the President, in recognition of the principle of judicial courtesy, should have refrained from implementing our decision until we have ruled with finality on this case.

          We find the petitioners’ reasoning specious.

          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.^[35][35] 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.^[36][36] 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,^[37][37] 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.”^[38][38] 

          Similarly, the petitioner in G.R. No. 197282, in his Very Urgent Motion to Issue Clarificatory Resolution, argues that since motions for reconsideration were filed by the aggrieved parties challenging our October 18, 2011 decision in the present case, the TRO we initially issued on September 13, 2011 should remain subsisting and effective. He further argues that any attempt by the Executive to implement our October 18, 2011 decision pending resolution of the motions for reconsideration “borders on disrespect if not outright insolence”^[39][39] to this Court. 

In support of this theory, the petitioner cites Samad v. COMELEC,^[40][40] where the Court held that while it had already issued a decision lifting the TRO, the lifting of the TRO is not yet final and executory, and can also be the subject of a motion for reconsideration. The petitioner also cites the minute resolution issued by the Court in Tolentino v. Secretary of Finance,^[41][41]  where the Court reproached the Commissioner of the Bureau of Internal Revenue for manifesting its intention to implement the decision of the Court, noting that the Court had not yet lifted the TRO previously issued.^[42][42]

          We agree with the petitioner that the lifting of a TRO can be included as a subject of a motion for reconsideration filed to assail our decision. It does not follow, however, that the TRO remains effective until after we have issued a final and executory decision, especially considering the clear wording of the dispositive portion of our October 18, 2011 decision, which states:

WHEREFORE, premises considered, we DISMISS the consolidated petitions assailing the validity of RA No. 10153 for lack of merit, and UPHOLD the constitutionality of this law. We likewise LIFT the temporary restraining order we issued in our Resolution of September 13, 2011. No costs.^[43][43]  (emphases ours)

In this regard, we note an important distinction between Tolentino and the present case. While it may be true that Tolentino and the present case are similar in that, in both cases, the petitions assailing the challenged laws were dismissed by the Court, an examination of the dispositive portion of the decision in Tolentino reveals that the Court did not categorically lift the TRO. In sharp contrast, in the present case, we expressly lifted the TRO issued on September 13, 2011. There is, therefore, no legal impediment to prevent the President from exercising his authority to appoint an acting ARMM Governor and Vice Governor as specifically provided for in RA No. 10153. 

Conclusion

As a final point, we wish to address the bleak picture that the petitioner in G.R. No. 197282 presents in his motion, that our Decision has virtually given the President the power and authority to appoint 672,416 OICs in the event that the elections of barangay and Sangguniang Kabataan officials are postponed or cancelled.

We find this speculation nothing short of fear-mongering.

This argument fails to take into consideration the unique factual and legal circumstances which led to the enactment of RA No. 10153. RA No. 10153 was passed in order to synchronize the ARMM elections with the national and local elections. In the course of synchronizing the ARMM elections with the national and local elections, Congress had to grant the President the power to appoint OICs in the ARMM, in light of the fact that: (a) holdover by the incumbent ARMM elective officials is legally impermissible; and (b) Congress cannot call for special elections and shorten the terms of elective local officials for less than three years. 

Unlike local officials, as the Constitution does not prescribe a term limit for barangay and Sangguniang Kabataan officials, there is no legal proscription which prevents these specific government officials from continuing in a holdover capacity should some exigency require the postponement of barangay or Sangguniang Kabataan elections.  Clearly, these fears have neither legal nor factual basis to stand on. 

          For the foregoing reasons, we deny the petitioners’ motions for reconsideration.

WHEREFORE, premises considered, we DENY with FINALITY the motions for reconsideration for lack of merit and UPHOLD the constitutionality of RA No. 10153.

            SO ORDERED.

                                                ARTURO D. BRION

                                                Associate Justice

WE CONCUR:

RENATO C. CORONA

Chief Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

C E R T I F I C A T I O N

          Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Resolution had been reached in consultation before the case was assigned to the writer of the opinion of the Court.

                                                RENATO C. CORONA

                                                Chief Justice

CASE 2012-0016: CHINA BANKING CORPORATION VS. QBRO FISHING ENTERPRISES (G.R. NO. 184556, 22 FEBRUARY 2012, VILLARAMA, JR. J.) SUBJECT/S: EFFECT OF MORTGAGE FORECLOSURE ON THIRD PARTY MORTGAGOR; EXCEPTION TO THE RULE THAT SC MUST ONLY RESOLVE QUESTIONS OF LAW (BRIEF TITLE: CHINA BANKING VS. QBRO FISHING)

========================  

DISPOSITIVE:

WHEREFORE, the petition for review on certiorari is GRANTED.  The June 27, 2008 Decision and the September 5, 2008 Resolutionof the Court of Appeals in CA-G.R. CV No. 00226 are hereby REVERSED and SET ASIDE.  The February 26, 2004 Decision of the Regional Trial Court, Branch 23, of General Santos City in Civil Case No. 6665 is REINSTATED.

No costs.

SO ORDERED.

========================

FIRST DIVISION

x- – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – -x

DECISION

VILLARAMA, JR., J.:

Petitioner China Banking Corporation appeals the June 27, 2008 Decision^[1][1] and September 5, 2008 Resolution^[2][2] of the Court of Appeals (CA) in CA-G.R. CV No. 00226 which set aside the Decision^[3][3] of the Regional Trial Court (RTC) of General Santos City in Civil Case No. 6665.

The facts follow:

In 1994, Trans-Filipinas Realty Corporation (TFRC) obtained a loan from petitioner China Banking Corporation in the amount of Seven Million Pesos (P7,000,000).  The loan was secured by a real estate mortgage over two parcels of land covered by Transfer Certificate of Title (TCT) Nos. T-34226 and T-34227.  The credit line of TFRC was later increased to P14,000,000.^[4][4]

On May 10, 1996, the Board of Directors of respondent QBRO Fishing Enterprises, Inc. issued a resolution^[5][5] authorizing the mortgage of its properties to secure “the obligations incurred or which may [t]hereafter be incurred by [TFRC] with [petitioner] irrespective of the amount including any renewals, extensions and/or roll-overs thereof.”^[6][6] 

On June 3, 1996, respondent, represented by Armando Cesar A. Reyes and Concepcion R. Quintana, its president and treasurer, respectively, executed a real estate mortgage over nine parcels of land, covered by TCT Nos. T-38759 to T-38767, inclusive, as collateral for TFRC’s additional loan in the amount of P34,500,000.^[7][7]  The mortgage was annotated in the Registry of Deeds of General Santos City.

TFRC, however, defaulted on the payment of its obligation and failed to settle its account despite having received several demand letters from petitioner.^[8][8]   Thus, petitioner filed a petition for extrajudicial foreclosure of the real properties respondent and TFRC had mortgaged.^[9][9]  During the public auction, petitioner emerged as the highest bidder and was issued a Certificate of Sale.^[10][10]

          Aggrieved, respondent filed a Complaint^[11][11] with the RTC to annul the real estate mortgage, foreclosure proceedings and auction sale.  It alleged that petitioner unlawfully treated the TFRC and respondent’s separate loan accounts, which were secured by two different and separate real estate mortgages, as a single, inseparable account.  Furthermore, respondent claimed that the loan in the amount of P34,500,000 had unilaterally ballooned to an unconscionable amount of P72,208,673.19, thus preventing TFRC from settling its obligation. 

          In its Answer,^[12][12] petitioner denied that there were two separate loan accounts.  It maintained that the real estate mortgage over respondent’s properties was executed to serve as additional security to accommodate TFRC’s request for an increase in its loan line.  There being only one loan, petitioner asserted that the filing of a petition for extrajudicial foreclosure was proper.

          After trial on the merits, the RTC dismissed respondent’s complaint.  The RTC found that while there were two mortgage contracts, the foreclosure of respondent’s properties could not be set aside because to allow respondent to avoid liability based on the real estate mortgage over its properties would amount to unjust enrichment.  The RTC noted, first, that the incorporators of TFRC and respondent are composed of the same persons.  Second, it noted that respondent failed to act on its obligation to pay despite several demands from petitioner.  Thus, the RTC ruled that foreclosure was petitioner’s proper remedy, citing the case of Valmonte v. Court of Appeals,^[13][13] which held that “[t]he only condition the law requires in extrajudicial foreclosure is that the loan is already due and demandable and there was failure on the part of the mortgagor to pay the mortgage debt.” Lastly, the RTC also noted that there was no merit to respondent’s claim that the mortgage it signed was void for being irregular.^[14][14]

          Not satisfied with the above RTC Decision, respondent appealed to the CA.^[15][15]  The issues respondent raised were simplified by the appellate court as follows:

1.                  Whether or not the plaintiff-appellant and Trans-Filipinas Realty Corporation have separate and distinct personality from each other.

2.                  Whether or not it was proper for defendant-appellee bank to have merged and consolidated the respective loan accounts of plaintiff-appellant and Trans-Filipinas Realty Corporation, as well as the mortgaged properties into a single loan account and single mortgage, respectively, when defendant-appellee bank extrajudicially foreclosed the properties of both corporations.^[16][16]

          On June 27, 2008, the CA promulgated the assailed Decision declaring the foreclosure proceedings with respect to respondent’s properties null and void. The dispositive portion of the decision reads:

          WHEREFORE, the Decision dated February 26, 2004 of the Regional Trial Court, 11^th Judicial Region, Branch 23, General Santos City, in Civil Case No. 6665, is REVERSED and SET ASIDE.  A new judgment is hereby ENTERED declaring the November 17, 1997 foreclosure proceedings NULL and VOID, with respect to the mortgaged properties of plaintiff-appellant QBRO Fishing Enterprises, Inc[.], to wit:  TCT No. T-38759, TCT No. T-38760, TCT No. T-38761, TCT No. T-38762, TCT No. T-38763, TCT No. T-38764, TCT No. T-38765, TCT No. T-38766 and TCT No. T-38767.  Furthermore, the Ex-Officio Sheriff of the Regional Trial Court of General Santos City is hereby DIRECTED to ISSUE an amended certificate of sale in the name of defendant-appellee China Banking Corporation, covering only the foreclosed properties of Trans-Filipinas Corporation, to wit: TCT No. T-34226 and TCT No. T-34227.  Defendant-appellee China Banking Corporation’s counterclaim before the trial court is hereby DISMISSED.  No pronouncement as to costs.

            SO ORDERED.^[17][17]

          The CA ruled that respondent and TFRC are admittedly sister companies, having the same set of Board of Directors.  However, it found that there was no allegation that their separate corporate entities were being used to defeat public convenience, justify wrong, protect fraud, or defend crime to disregard the separate juridical personality of a corporation.  Moreover, the CA held that the fact that respondent agreed to mortgage its properties to secure the obligation of TFRC was not a valid reason for petitioner to consolidate the two loans and the real estate mortgages.  The CA concluded that the foreclosure proceedings with respect to respondent’s properties are null and void considering that there are two separate loans by different corporations.

          Petitioner filed a motion for reconsideration.^[18][18]  In a Resolution dated September 5, 2008, the CA denied the motion. 

          Petitioner elevated the case to us via the present petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended.

          Petitioner argues that:

THE HONORABLE COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO APPRECIATE THE FACT THAT THERE WAS ACTUALLY ONLY ONE (1) LOAN OBLIGATION BY TRANS-FILIPINAS REALTY CORPORATION, PAYMENT OF WHICH WAS PARTLY SECURED BY THE MORTGAGE OF QBRO FISHING ENTERPRISES, AS THIRD-PARTY MORTGAGOR, THUS, THERE BEING ONLY ONE OBLIGATION, ALBEIT SECURED BY TWO (2) MORTGAGES, ONLY ONE (1) FORECLOSURE THEREOF WAS LEGALLY SUFFICIENT.

THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN ITS RULING WHEN IT FAILED TO APPRECIATE THE CORRECTNESS OF THE FORECLOSURE OF THE TWO (2) MORTGAGES WHERE BOTH MORTGAGORS WERE SPECIFICALLY NAMED AND IMPLEADED AS RESPONDENTS IN THE PETITION FOR EXTRA-JUDICIAL FORECLOSURE.^[19][19]

          The two issues to be resolved are: first, whether TFRC and respondent actually had two separate loan accounts and second, whether the petition for extrajudicial foreclosure is valid with respect to the mortgaged properties of respondent.

          Petitioner argues that there was only one loan extended to TFRC and that respondent never had a credit line with it.  It further contends that the CA erred in venturing into a non-issue, that is, the separate juridical personality of respondent and TFRC.  Petitioner stresses that it in fact recognized that the two corporations were distinct corporate entities; otherwise, it would not have required prior authorization from respondent’s board for the use of respondent’s properties as security to increase TFRC’s loan.  Petitioner insists that respondent’s role in the transaction was only as a third-party mortgagor.  Hence, the single petition for extrajudicial foreclosure was valid. 

          On the other hand, respondent submits that the issues raised in the petition are a mere rehash of the issues which were already passed upon and discussed by the CA.  Likewise, it points out that the issue of whether there was only a single loan account and not two is a question of fact as it involves the review of the evidence adduced.  Such factual issue may not be raised in the present petition.

          The petition is meritorious.

          The principle is well-established that this Court is not a trier of facts.  Therefore, in an appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, only questions of law may be raised.  The resolution of factual issues is the function of the lower courts whose findings on these matters are received with respect and are, as a rule, binding on this Court.^[20][20]

          The foregoing rule, however, is not without exceptions.  Findings of fact of the trial court and the CA may be set aside when such findings are not supported by the evidence or where the lower courts’ conclusions are based on a misapprehension of facts.^[21][21]

          Here, we find that while there were indeed two different corporations that executed two separate mortgages, there was in fact only one loan account, that of TFRC.  Respondent failed to offer evidence to prove that it had a separate loan account with petitioner.  What is clear from the records is that respondent’s Board of Directors specifically authorized the mortgage of its properties to serve as additional security to accommodate TFRC’s request for the increase in its credit line.  This is evidenced by the minutes of the Special Meeting of respondent’s Board of Directors dated May 10, 1996, to wit:

          RESOLVED as it is hereby resolved that the corporation be authorized and empowered to mortgage and encumber its parcel of land:

            x x x x

of the Registry of Deeds of General Santos City for the purpose of securing the obligations incurred or which may hereafter be incurred by TRANS-FILIPINAS REALTY CORPORATION with China Banking Corporation irrespective of the amount including any renewals, extensions and/or roll-overs thereof.^[22][22]  [Emphasis ours.]

          Undeniably, the real estate mortgage executed by respondent in favor of petitioner was intended to serve as additional security to accommodate the request of TFRC.  Likewise, we note that petitioner’s Executive Committee held a meeting on May 24, 1996, approving the loan requested by TFRC using the properties of respondent as collateral.  A reading of the excerpts of the meeting further supports the contention of petitioner that there was only one obligation, thus:

            Acting on a memorandum dated March 25, 1996, the Committee, upon motion duly made and seconded, approved the following credit facilities in favor of TFR [Trans-Filipinas Realty Corp.]:

            A.  Seven-year term loan —- P20,000,000.00

                        x x x x

            B.   Loan Line —                     P14,500,000.00

             x x x x

under the following joint terms and conditions:

            1. Real Estate Mortgage for 34.5 Million shall be executed by QBRO Fishing Enterprises, Inc. (QFE) for the account of TFR on nine lots totalling 3,870 sq.m. atI. Santiago Blvd.,GeneralSantosCity under TCT Nos. T-38759 to T-38767, inclusive, with a total appraised value of P58.050 Million and loan value of (70%) P34.83 Million per appraisal report dated March 22, 1996.

            x x x x^[23][23]  [Emphasis ours.]  

          As can be gleaned from the foregoing, there was indeed only one loan account with petitioner.  It is also clear from the records that respondent does not have a separate credit line. When respondent mortgaged its properties described under TCT Nos. T-38759 to T-38767, inclusive, as security for the increase in the loan of TFRC, it bound itself as a third-party mortgagor.

          It has been held that third persons who are not parties to the principal obligation may secure the latter by pledging or mortgaging their own property.^[24][24]  The fact that the loans were solely for the benefit of TFRC would not invalidate the mortgage with respect to respondent’s property as long as valid consent was given.  Thus, when respondent executed the real estate mortgage over its properties, such properties thereby secured the performance of the principal obligation notwithstanding the fact that respondent itself had not assumed any liability for the debt of TFRC. 

          We also note that on December 19, 1998, Armando Cesar Reyes, as President and General Manager of TFRC and respondent, wrote to petitioner requesting for an extension of the redemption period.^[25][25]  This is a clear indication that respondent recognized the rights of petitioner as mortgagee over the properties that were already foreclosed and sold to the highest bidder.  Respondent, therefore, is already estopped from questioning the validity of the foreclosure sale by raising issue on whether its mortgaged properties should answer for the loan indebtedness of a separate corporate entity.^[26][26]

          All told, we find that the CA overlooked and misappreciated facts and circumstances on record clearly showing that respondent’s role in the transaction was that of a third-party mortgagor who allowed its properties to be used as additional security for the loans obtained by TFRC.  Considering that the extrajudicial foreclosure proceedings initiated by petitioner pertain to only one loan account, we uphold the validity of the foreclosure sale which included the properties of respondent as third-party mortgagor.

WHEREFORE, the petition for review on certiorari is GRANTED.  The June 27, 2008 Decision and the September 5, 2008 Resolutionof the Court of Appeals in CA-G.R. CV No. 00226 are hereby REVERSED and SET ASIDE.  The February 26, 2004 Decision of the Regional Trial Court, Branch 23, of General Santos City in Civil Case No. 6665 is REINSTATED.

No costs.

SO ORDERED.

C E R T I F I C A T I O N

          Pursuant to Section 13, Article VIII of the 1987 Constitution, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.