J.A.B. Bulao & Associates

CASE NO. 2011-0109: CANDELARIO L. VERZOSA, JR. (IN HIS FORMER CAPACITY AS EXECUTIVE   DIRECTOR   OF   THE COOPERATIVE DEVELOPMENT AUTHORITY) VS.  GUILLERMO N. CARAGUE (IN HIS OFFICIAL  CAPACITY  AS CHAIRMAN OF THE COMMISSION ON AUDIT), RAUL C. FLORES, CELSO D. GANGAN, SOFRONIO B. URSAL AND  COMMISSION ON AUDIT (G.R. NO. 157838, 8 MARCH 2011, VILLARAMA, JR., J.) SUBJECTS: NOTICE OF DISALLOWANCE, PUBLIC BIDDING, OVERPRICING. (BRIEF TITLE: VERZOSA VS. CARAGUE ET AL.)

EN BANC

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

DECISION

VILLARAMA, JR., J.:

          The present petition for review on certiorari assails  the Decision Nos. 98-424^[1] and 2003-061^[2] dated October 21, 1998 and March 18, 2003, respectively, of the Commission on Audit (COA) affirming the Notice of Disallowance No. 93-0016-101 datedNovember 17, 1993 and the corresponding CSB No. 94-001-101 dated January 10, 1994.

          The facts are:

          On two separate occasions in December 1992, the Cooperative Development Authority (CDA) purchased from Tetra Corporation (Tetra) a total of forty-six (46) units of computer equipment and peripherals in the total amount of P2,285,279.00.  Tetra was chosen from among three qualified bidders (Tetra, Microcircuits and Columbia). In the technical evaluation of the units to be supplied by the qualified bidders, CDA engaged the services of the Development Academy of the Philippines-Technical Evaluation Committee (DAP-TEC).  The bidding was conducted in accordance with the Approved Guidelines and Procedures of Public Bidding for Information Technology (IT) Resources and Memorandum Order No. 237 issued by the Office of the President. Petitioner who was then the Executive Director of the CDA approved the purchase.

On May 18, 1993, the Resident Auditor sought the assistance of the Technical Services Office (TSO), COA in the determination of the reasonableness of the prices of the purchased computers.^[3]   In its reply-letter dated October 18, 1993, the TSO found that the purchased computers were overpriced/excessive by a total of P881,819.00.  It was noted that (1) no volume discount was given by the supplier, considering the number of units sold; (2) as early as 1992, there were so much supply of computers in the market so that the prices of computers were relatively low already; and (3) when CDA first offered to buy computers, of the three qualified bidders, Microcircuits offered the lowest bid of P1,123,315.00 while Tetra offered the highest bid of P1,269,630.00.^[4]  The Resident Auditor issued Notice of Disallowance No. 93-0016-101 dated November 17, 1993, for the amount of P881,819.00.^[5]

          In a letter^[6] dated May 13, 1994, CDA Chairman Edna E. Aberilla appealed for reconsideration of the disallowance to COA Chairman Celso D. Gangan, submitting the following justifications:

[1.]    The basis of comparison (Genesis vs. Trigem computers and ferro-resonant type UPS vs. ordinary UPS) is erroneous, as it is like comparing apples to oranges. x x x Genesis, a non-branded computer, is incomparable to Trigem, a branded computer in the same manner as the MAGTEK-UPS, a ferro-resonant type of UPS, should not be compared with APC-1000W, ADMATE 1000W and PK 1000W, which are all ordinary types of UPS.

         x x x It would have been more appropriate, therefore, to compare the acquired computer equipment and peripherals with the same models of other branded computers.

[2.]    The technical specifications and other added features were given due weight. x x x [T]he criteria for determining the winning bidder is as follows:

            Cost/price                                        50%

            Technical Specifications                 30%

            Support Services                             20%

[3.]    The same technical specifications and special features explained the advantages of the acquired computer equipment and peripherals with those that are being compared with.  With regards to our branded computer, the advantages include the following:

[a.]    Original and Licensed Copy of its Disk Operating System specifically MS-DOS Ver 5.0.

[b.]    Original and Licensed Operating System Diskettes and its Manuals.

         x x x x

[c.]    User’s Manual and Installation Guide x x x

[d.]   Computers offered should run PROGRESS Application Development System as indicated in the Bid Document x x x because the developing system for the establishment of the agency’s Management Information System (MIS) is based on PROGRESS Application Software.

[e.]    Legal Bios/License Agreement for the particular brand of computers offered to CDA. x x x

   With these features, the agency is assured that the computers were acquired through a legitimate process (not smuggled/“pirated”), thereby, upholding the agency’s respect for Intellectual Property Law or P.D. No. 49.

   With regard to the UPS, x x x it is a ferro-resonant type x x x [which has] advantages to ensure greater reliability and will enable users to operate without interruption.

[4.]    [As declared in] COA Circular No. 85-55-A, “the price is not necessarily excessive when the service/item is offered with warranty or special features which are relevant to the needs of the agency and are reflected in the offer or award.  As will be seen from the criteria adopted by the agency, both the warranty and special features were considered and given corresponding weights in the computation for the support services offered by the bidder.

[5.]    x x x [T]here is no overpricing because in the process of comparing “apples vs. apples”, the other buyers in effect procured their units at a higher price than those of the CDA.  We x x x are still in the process of gathering additional data of other transactions to further support our stand. x x x

[6.]    x x x The rapid changes due to research and development in Information Technology (I.T.) results in the significant reduction of prices of computer equipment.  x x x [M]aking a comparison given two different periods (December 1992 vs. August 1993) may be invalid x x x.

[7.]    The procedures of the public bidding as adopted by the [CDA] x x x demonstrate a very effective mechanism for avoiding any possible overpricing.^[7]

            In compliance with the request of the Legal Office Director, the TSO submitted its comments on the justifications submitted by the CDA.  On the non-comparability of Genesis and Trigem brands, it explained that the reference values were in accordance with the same specifications but exclusive of the “branded” information, since this was not stated in the P.O./Invoice, which was used as basis of the canvass.  Since the said brands are both computers of the same general characteristics/attributes, the branded and non-branded labels propounded by the supplier is of scant consideration.  As regards the UPS, it was pointed out that the enumerated advantages of the delivered items are the same advantages that can be generated from a UPS of the same specifications and standard features; in this case, the reference value pertains to a UPS with the same capacity, input, output, battery pack and back-up time, except for the brand.  As to the period of purchase by the CDA, the TSO noted that based on its monitoring from October 1993 to May 1994, prices of Star and Epson printers and hard disk (120 MB Model St-3144A) either remained the same or even increased by 2% to 5%.  It is therefore valid that the price of an item is the same from one period to another, and that an item may be available unless it is out of stock, or phased out, with or without a replacement.  In this case, the reference value cannot be considered as the reduced price as a result of rapid changes due to research since the said reference value is the price for the same model already existing in December 1992 when the purchase was made and still available in August 1993, and not an equivalent nor replacement of a phased out model.^[8]

          On the other hand, the Resident Auditor maintained her stand on the disallowance and  submitted to Assistant Commissioner Raul C. Flores  her replies to the CDA’s justifications, as follows: (1) on the allegedly erroneous comparison between Genesis and Trigem brands, if this will be the basis, then their bidding will not be acceptable because in the Abstract of Bids, the comparison of prices was not based on similar brands, i.e., Tetra offered Trigem-Korean for P1,269,620, Microcircuits offered Arche-US brand forP1,123,315, and Columbia offered Acer-Taiwan brand for P1,476,600; what is important is that, the specifications and functions are similar; (2) the 2^nd, 3^rd and 4^th justifications are of no moment as all the offers of the three qualified bidders were of similar technical specifications, features and warranty as contained in the Proposal Bid Form; (3) on the 5^th justification — the companies referred to procured only one unit each and of much higher grade; (4) on the 6^th justification — while the date of the canvass conducted by the TSO does not coincide with the date of purchase, there is no showing that foreign exchange rate changed during the latter part of 1992 which will significantly increase the prices of computers; and (5) on the 7^th justification — while the COA witnessed the public bidding, the post-evaluation was left to the Pre-qualifications, Bids and Awards Committee (PBAC).  The National Government Audit Office I concurred with the opinion of the Resident Auditor that CDA’s request may not be given due course.^[9]

On October 21, 1998, respondent COA issued the assailed decision affirming the disallowance.  It held that whether or not the product is branded is irrelevant in the determination of the reasonableness of the price since the brand was not stated in the Call for Bids nor in the Purchase Order.  The bids of the three qualified bidders were based on similar technical specifications, features and warranty as contained in their proposals.  It was also found that the performance of the competing computer equipment would not vary or change even if the attributes or characteristics of said computers cited by petitioner were to be factored in.  The difference in brands, microprocessors, BIOSes, as well as casings will not affect the efficiency of the computer’s performance.^[10]

          Further, COA declared that CDA should not have awarded the contract to Tetra but to the other competing bidders, whose bid is more advantageous to the government.  It noted that Microcircuits offered the lowest bid of P1,123,315.00 for the US brand said to be more durable than the Korean brand supplied by Tetra.  CDA also should have been entitled to volume discount considering the number of units it procured from Tetra.  Lastly, COA emphasized that the requirements and specifications of the end-user are of prime consideration and the other added features of the equipment, if not specified or needed by the end-user, should not be taken into account in determining the purchase price. The conduct of public bidding should be made objectively with the end in view of purchasing quality equipment as needed at the least cost to the government.  The price for the equipment delivered having been paid, when such equipment could be acquired at a lower cost, the disallowance of the price difference was justified.^[11]

          Petitioner’s motion for reconsideration having been denied, he now comes to this Court for relief on the following grounds:

RESPONDENT COMMISSION ON AUDIT’S FINDING THAT THE AMOUNT OF P881,819.00 SHOULD BE DISALLOWED IN THE PURCHASE OF THE COMPUTER EQUIPMENT BY THE CDA IS NOT SUPPORTED BY EVIDENCE AND IS CONTRADICTORY TO LAW AND JURISPRUDENCE.

RESPONDENT COMMISSION ON AUDIT ERRED IN HOLDING THE PETITIONER PERSONALLY AND SOLIDARILY LIABLE FOR THE DISALLOWED SUM OF P881,819.00, ABSENT ANY FINDING MUCH LESS EVEN AN ALLEGATION THAT HE HAD ACTED IN BAD FAITH, WITH MALICIOUS INTENT OR WITH NEGLIGENCE IN THE PURCHASE OF THE COMPUTER EQUIPMENT BY THE CDA.^[12]

            Petitioner reiterates his argument that price was not the sole criteria in determining the winning bid for the purchased computers, price comprising only 50% of the criteria, while technical evaluation and support services were accorded 30% and 20%, respectively.  He points out that the computer/hardware of generic class which was provided to the COA-TSO with low-priced quotations for comparison with the winning bid and as bases for disallowance in audit, never underwent technical or physical evaluation as did the computer equipment of the three final bidders.  Moreover, the CDA-PBAC Bidding Procedure was designed in such a way that generic type (cloned) computers were eliminated even in the pre-qualification stage.  It is for this reason that the final bidders all offered branded computers which, by their very nature, were all considered to be efficient by no less than the Information Technology Center (ITC) of the COA, as mentioned in the memorandum dated December 9, 1996 of Director Marieta SF. Acorda. The mere fact that the offered computers had different manufacturers can lead to a reasonable conclusion that the life spans of the same and reliability would also vary.^[13]

          As to the COA’s position that even if only the price was considered, the contract should have been awarded to Microcircuits, petitioner points out that in such a case, CDA’s disallowance would have been only P140,000.00, much lower than the present P881,819.00 disallowance.  But as it is, on the basis of the three criteria applied during the pre-qualification stage, Tetra garnered the highest points as certified by the PBAC in its memorandum-update dated November 20, 1992.  The application of all three criteria meets the standard set by COA Circular No. 85-55-A.  Thus, although Microcircuits got the highest percentage on Cost/Price factor, it only ranked second in over-all performance, to Tetra, as evaluated by the PBAC.^[14]

          Petitioner cites the dissenting opinion^[15] of COA Commissioner Emmanuel M. Dalman who found no overpricing in this case and the CDA decision as one done in good faith and with the presumption of regularity in the performance of official functions. Indeed, it behooved on COA to prove that the standards set by the COA circular were met in audit disallowance; it even failed to produce actual canvass sheets and/or price quotations from identified suppliers. The Summary of Price Data and comparison sheets attached to the Notice of Disallowance by themselves are not sufficient basis for the disallowance herein since they do not satisfy the requirement highlighted in the case of Arriola v. Commission on Audit.^[16]  The COA auditor herself (author of the Notice of Disallowance) admitted that she did not personally prepare actual canvass sheets and only a telephone canvass was conducted.  As to the volume discount, again no evidence was adduced to show that the other bidders would have given the same if the contract was awarded to them.  What is certain is that, owing to the consideration of the two major criteria of “technical evaluation” and “after-sales support”, most of the computer equipments provided by Tetra pursuant to the disallowed transaction are still functioning to date, even after twelve (12) years of continued use.^[17]

          Finally, petitioner contends that he should not be made personally liable for the disallowed expense.  He invokes the prevailing doctrine that unless they have exceeded their authority, corporate officers, as a general rule, are not personally liable for their official acts, because a corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders and members. CDA though a government corporation, there is no single allegation or imputation, much less any evidence of any act, constituting bad faith, malice or negligence on the part of petitioner during his service as Executive Director of the CDA, he being a mere signatory to the documents after the winning bidder had been chosen, and was only a recommending officer on these matters.^[18]

          In its Manifestation and Motion^[19] dated September 10, 2003, the Office of the Solicitor General stated that after a thorough review of the records of the case, it is constrained to adopt a position adverse to the COA.

          Respondents filed their Comment, arguing that this Court’s jurisdiction was not correctly invoked by petitioner who filed a petition for review under Rule 45 and not a petition for certiorari under Rule 65.  Petitioner failed to allege that respondents acted without or in excess of their jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction.  On the allegation that their finding of overprice was not supported by evidence, respondents assert that the evaluation report of the DAP-TEC clearly showed that Tetra ranked last in its evaluation while Microcircuits ranked the highest.  It was clear that the most advantageous deal for the government should have been concluded with Microcircuits since their computer specifications were at par with those of Tetra and they offered a much lower cost to the government – lower than half the price offered by Tetra.^[20]

          Moreover, respondents point out that petitioner’s contention that price was not the only basis for the award is negated by the finding of the Resident Auditor (Luzviminda V. Rubico) that the DAP-TEC technical evaluation report which became the basis for declaring Tetra as the winning bidder, was fraudulently acquired.  Director Mesina signed the same unaware that it was already another version of the technical evaluation report which she had signed earlier, when Tetra’s computers were found to be the most inferior in quality.  It can be safely asserted that the computers of Tetra and Microcircuits were of the same quality, and therefore, the only basis left in determining the winning bid was the price/cost of the computers (P1,123,315.00 for  Microcircuits andP2,285,279.00 for Tetra).^[21]

          Lastly, respondents maintain that petitioner is personally and solidarily liable for the disallowed amount of P881,819.00.  As Executive Director, petitioner ordered the reconstitution of PBAC without any valid reason, on August 25, 1992 amending Special Order No. 91-117 dated October 24, 1991, which nullified the previous bidding conducted in December 1991.  Petitioner then engaged the services of the DAP-TEC which came out with two different technical evaluation reports, when it was no longer his duty to do so but that of the PBAC Chairman.  These acts show bad faith on the part of petitioner.  Mr. Antonio L. Quintos, Jr. of the DAP-TEC confirmed that Mr. Rey Evangelista, staff of PBAC Chairman Edwin T. Canonizado, talked to him and asked him to change and/or make alterations on the first evaluation report, which he did, as set forth in his letter^[22] dated November 23, 1995 to Ms. Minnie Mesina of the Center for Information Technology Development (CITD) of the DAP.  As provided in the Manual on Certificate of Settlement and Balances (Revised 1973), “[a] public officer shall not be civilly liable for acts done in the performance of his official duties, unless there is clear showing of bad faith, malice or gross negligence.”    ^[23]

          We deny the petition.

          To begin with, petitioner availed of the wrong remedy in filing a petition for review under Rule 45. Article IX-A, Section 7 of the Constitution provides that decisions, orders or rulings of the Commission on Audit may be brought to the Supreme Court on certiorari by the aggrieved party.^[24]  Moreover, under Section 2, Rule 64, of the Revised Rules of Civil Procedure, a judgment or final order or resolution of the Commission on Audit may be brought by the aggrieved party to the Supreme Court on certiorari under Rule 65.  Moreover, on the merits, the petition lacks merit.

          Pursuant to its constitutional mandate to “promulgate accounting and auditing rules, and regulations including those for the prevention and disallowance of irregular, unnecessary, excessive, extravagant or unconscionable expenditures, or uses of government funds and properties,”^[25] the COA promulgated the amended Rules under COA Circular No. 85-55-A^[26] dated September 8, 1985.  With respect to excessive expenditures, these shall be determined by place and origin of goods, volume or quantity of purchase, service warranties, quality, special features of units purchased and the like.^[27] 

          Price is considered “excessive” if it is more than the 10% allowable price variance between the price paid for the item bought and the price of the same item per canvass of the auditor.  In determining whether or not the price is excessive, the following factors may be considered^[28]:

A –    Supply and demand forces in the market.

Ex. –  Where there is  a supply shortage of a particular product, such as cement or GI sheets, prices of these products may vary within a day.

B –    Government Price Quotations

C –    Warranty of Products or Special Features

The price is not necessarily excessive when the service/item is offered with warranty or special features which are relevant to the needs of the agency and are reflected in the offer or award.

D –    Brand of Products

Products of recognized brand coming from countries known for producing such quality products are relatively expensive.

Ex. –  Solingen scissors and the like which are made in Germany are more expensive than scissors which do not carry such brand and are not made in Germany.

The issue to be resolved is whether the computer units bought by CDA from Tetra were overpriced.

          Records showed that while the respondents found nothing wrong per se with the criteria adopted by the CDA in the overall evaluation of the bids, the technical aspect was seriously questioned. The final technical evaluation report was apparently manipulated to favor Tetra, which offered a Korean-made brand as against Microcircuits which offered a US-made brand said to be more durable, at a lower price.  The letter^[29] dated November 3, 1992 signed by Ms. Mesina in behalf of DAP Vice-President Austere A. Panadero informed petitioner that based on their evaluation in compliance with the “grading system” specified by CDA, the DAP found the units of Tetra as “best suited” to the needs of CDA. 

Upon investigation, respondents discovered that there was an earlier report (1^st report) which actually stated a contrary finding (Tetra units emerged as the most inferior in quality) but the representative from CDA (Rey Evangelista) came to the DAP-CITD and gave further instructions on “penalty points” for deviation in hardware specifications, resulting in a modified 2^nd report (faxed to petitioner’s office) in which Tetra was already indicated to have the highest ranking.

          These findings were detailed by Auditor Rubico in her letter dated November 23, 1995 to the COA Legal Counsel, to wit: 

            x x x x

6.      After CDA and DAP came into an agreement, CDA PBAC Committee informed and instructed all the 3 qualified bidders to submit and brought [sic] their respective hardwares to DAP for Technical Evaluation for 3 consecutive days (As stated in the agreement) in which they all complied with.

7.      Eventually, on November 4, 1992 10:07 A.M., the [DAP] released/faxed the FIRST and IMPARTIAL RESULT (Exhibit 5) of the conducted technical evaluation by DAP-TEC signed by Director Minerva Mecina for and in behalf of Mr. A. Panadero.  Most, if not all, on the categories of computer testing results showed that among the 3 computer hardwares evaluated, the product of [TETRA] which is Trigem Brand is of the most inferior quality and last in the over-all ranking.  The technical evaluation was conducted by Mr. Antonio Quintos, Jr.  This result was never presented to this office nor attached to the CDA disbursement voucher as supporting document in payment made to DAP but accidentally handed over to us.

8.      On the same date, November 4, 1992 11:20 A.M., the CDA PBAC Committee together with the presence of representatives from each suppliers/bidders and this office (as witness), opened the bid documents (Exhibits 6, 6A & 6B).  Among the 3 bidders, [TETRA] offered the highest bid price quotation, (Tetra – P1,269,630; Microcircuits – P1,123,315; and Columbia – P1,177,600) in spite of the inferior quality of their products.

9.      It can be noted that CDA PBAC Committee had formulated their grading/point system (Exhibit 1).  There were three (3) factors to consider in awarding the bid such as COST (50%), TECHNICAL EVALUATION (30%) and SUPPORT SERVICE (20%).  In view of the above, as regards to the results of the technical evaluation and price bidding, there’s no way [TETRA] could possibly win and be chosen as the winning bidder.

10.    The day after the results of the technical evaluation and opening of the bid prices were known, in which it could be clearly seen who’s going to be the winner, MR. REY EVANGELISTA, staff of Mr. Canonizado (Who incidentally is the PBAC Chairman), went to DAP Office.  As confirmed by Mr. Quintos, Jr. to us, Mr. Evangelista talked to him and asked him to change and/or make alterations on the 1^st evaluation result and to indicate the name of [TETRA] the number one in the over-all ranking in the evaluation result which he did.

11.    Thus, on November 5, 1992, Mr. Quintos, Jr. issued and faxed the SECOND (2^nd) RESULT (Exhibit 7).  It was antedated November 3, 1992 and was signed by Director Mecina also on November 5, 1992 for and in behalf of Mr. A. Panadero.  In this 2^nd result, [TETRA] became the number one (1) in the over-all ranking and apparently there was the intention to favor [TETRA] and to make sure that it will turn out to be the winning bidder.  It may be noted in attachment “A” of the letter sent by Mr. A. Panadero (Exhibit 4), which contained the manner and detailed activities the evaluation is to be conducted that there was no evaluation/testing really performed in this 2^nd evaluation result.  Notice the irrelevant columns added to the said result (CDA Grading system).  We asked Mr. Quintos, Jr. if figures in the column “Below Specifications” will affect the capability and quality of the computer hardware that will make it inferior from the other and he answered in the negative.  Therefore, in our view, the purpose of adding this “penalty” column is of no relevance to the evaluation conducted but just to give the CDA PBAC Committee all the reasons to give a plus or minus  grade/percentage to the hardwares offered by the suppliers/bidders and to satisfy their need.  Moreover, we believed that DAP from which CDA paid the amount of P15,000 for the technical service rendered should give an independent report.

12.    As regard to the factor in the CDA PBAC grading system which is the Support Service (20%) (Exhibit 1), we believe that Columbia Computer Center (UPSON) offering ACER brand is of more established and has advantage in terms of support service because of its business standing, facilities and equipment than [TETRA].  Please take note on the computation the CDA PBAC made as regard to this factor.  The CDA PBAC Committee and its Secretariat never  presented nor submitted data/documents to this office to support this computation.

All the above facts were documented and confirmed.  As to authenticity and genuineness of the 1^st and 2^nd results, Mr. Quintos, Jr. told us that he was able to make Director Minerva Mecina signed the documents in behalf of Mr. A. Panadero without informing her of the discrepancies. On the other hand, Director Mecina admitted that it was her signature indeed but not knowing that she signed two different documents.  This irregularity, we believed, is known to all members of the CDA PBAC Committee, more so by its Chairman, since all these documents were retrieved from the file of its Secretariat with some documents stamped received by CDA Planning Division Staff.

            x x x x^[30] (Emphasis supplied.)

          Convinced that there was indeed manipulations in the conduct of bidding to favor Tetra, particularly the introduction of additional features in the CDA grading system after the bids have been opened in order to justify the DAP to change, upon request of CDA, the results of its first evaluation, COA General Counsel Raquel R. Habitan referred the matter to COA’s ITC to determine whether or not (1) the additional features introduced in CDA’s grading system are really irrelevant to the efficiency of the computers’ performance; and (2) the products of Tetra were the most inferior in quality as compared to those offered by the losing bidders at lower price on the basis of the specifications and function.^[31]

          In her Memorandum dated December 9, 1996 to Director Habitan, Ms. Marieta SF. Acorda, Director of COA’s ITC, gave the following comments:

x x x x

1.  On the first issue – we observed that no additional computer features were introduced in CDA’s grading system, rather the bidders were penalized for non-compliance with technical specifications fixed by CDA.

On CDA’s representation with the Development Academy of the Philippines – Technical Evaluation Committee (DAP Committee) and based on the grading system devised by the former, the DAP Committee agreed to impose penalties for non-compliance of the bids with the technical specifications.  Hereunder are their reasons for the penalties and our comments thereto:

1.1  Columbia Computer Center (Columbia) and MicroCircuits Corporation (MCC) were penalized because the microprocessor of the computer hardware they delivered for evaluation were AMD and not Intel as required in the technical specification.

AMD and Intel are both microprocessor brands.  It rarely malfunctions.  Hence, the difference in brands, as in this case, will not affect the efficiency of the computer’s performance.  However, Intel microprocessors are more expensive and are manufactured by Intel Corporation which pioneered the production of microprocessors for personal computers.

1.2  Columbia was penalized because the ROM BIOSes of the computer hardware they delivered were AcerBios. a deviation from the technical specifications which requires ROM BIOSes licensed by IBM, AMI, Phoenix or Awards.

This will not affect the efficiency of the computer’s performance.  What is important is that these ROM BIOSes are legal or licensed.

1.3  Columbia was again penalized because the casing of the computer they delivered for evaluation in the Tower 386DX category has a desktop casing and not tower casing as provided in the technical specification.

Casings do not affect the efficiency of the computer’s performance but may affect office furniture requirements such as the design of computer tables.

1.4  Tetra Corporation (Tetra) was penalized because the RAM of the Notebook it delivered for evaluation was only 640K instead of 2M (expandable).

We agree that RAM capacity will affect the efficiency of the computer’s performance.

2.  On the second issue  –  the Benchmark testing conducted by DAP-Committee in which Tetra got the lowest score in terms of Technical Evaluation is not a sufficient basis for us to determine whether or not Trigem computers are inferior to the computer brands offered by the other bidders.

In Benchmark Testing, weights are allocated to the different technical features of a computer. The computers are then evaluated/appraised using diagnostic software and ranked in accordance with the results of such evaluation/appraisal.  The resulting ranking merely suggests which computer best the appraisals.^[32] (Emphasis supplied.)

          Based on the foregoing findings and observations supported by documentary evidence, respondents concluded that contrary to CDA’s claims, the difference in brands, microprocessors, BIOSes, as well as casings will not affect the efficiency of the computers’ performance.    Clearly, the conduct of public bidding in this case was not made objectively with the end in view of purchasing quality equipment at the least cost to the government.  The price difference far exceeded the 10% allowable variance in the unit bought and the same item’s price, as shown by the following report submitted to the TSO Director^[33]: 

x x x x

Subject: Summary of Price Data & Feedback Form

Agency/Address: Cooperative Development Authority – Q.C.

PED Q#/Item Classification: 93-06-370-372 / Computer

T S O Reference Code: N=060393/190.5

SUMMARY

As above-indicated, the price per item of the PC units, laptop and UPS were overpriced by almost 50%.  This comparison was based on the initial purchase of 23 PC units with the bid price by Tetra of P1,269,630.00 (23 PC units, 1 unit 386 Tower and 1 unit 386 Notebook) under Disbursement Voucher No. 01-92-12-2399.  There was an additional (repeat) purchase of 21 PC units forP929,649.00 (same price per item of P44,269.00) and one unit UPS for P86,000.00.   The total contract price obtained by Tetra wasP2,285,279.00, of which COA disallowed the amount of P881,819.00 representing the overprice per the auditor’s findings.       

As to petitioner’s objection regarding the non-presentation of actual canvass sheets used by the auditor, the same is immaterial, considering the disparity in the prices of the computers paid by CDA to Tetra and offered by the lowest bidder, Microcircuits.  The TSO report, prepared by personnel having the knowledge and expertise on computer equipment, supplied the auditor with reliable field data on which the auditor based her final computation.   “Excessive expenditures” under COA Circular No. 85-55-A covered cases of “[o]verpricing of purchases, characterized by grossly exaggerated or inflated quotations, in excess of the current and prevailing market price by a 10% variance from the purchased item.”  The telephone canvass initially done by the resident auditor was merely confirmatory of the overpricing based on similar specifications and features as indicated in the TSO report. 

Another important factor apparently ignored by the CDA was Microcircuits’ branded computers reputed to be more durable (US-made) compared with Tetra’s branded computers (Korean-made).  Had this factor been considered together with the much lower quotation from Microcircuits, CDA would have assured a deal that is most advantageous to the government at the least cost.  

          Findings of quasi-judicial agencies, such as the COA, which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but at times even finality if such findings are supported by substantial evidence.^[34]  It is only upon a clear showing that the COA acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction that this Court will set aside its decisions or final orders.^[35]  We find no such arbitrariness or grave abuse on the part of the COA when it disallowed in audit the amount representing the overprice in the payment by CDA for the purchased computer units and peripherals, its findings are well-supported by the evidence on record.

          With respect to the liability of petitioner, we likewise affirm the COA’s ruling that he is personally and solidarily liable for the disallowed amount.  The doctrine of separate personality of a corporation finds no application because CDA is not a private entity but a government agency created by virtue of Republic Act No. 6939 in compliance with the provisions of Section 15, Article XII of the 1987 Constitution. Moreover, respondents satisfactorily established that petitioner acted in bad faith when he prevailed upon the DAP-TEC to modify the initial result of the technical evaluation of the computers by imposing an irrelevant grading system that was intended to favor one of the bidders, after the bids had been opened.

          Section 103 of Presidential Decree No. 1445 (Government Auditing Code of the Philippines) provides:

SECTION 103. General liability for unlawful expenditures. —  Expenditures of government funds or uses of government property in violation of law or regulations shall be a personal liability of the official or employee found to be directly responsible therefor.  (Emphasis supplied.)

          Further, Section 19 of the Manual on Certificate of Settlement and Balances under COA Circular No. 94-001 dated January 20, 1994 provides:

19.1. The liability of public officers and other persons for audit disallowances shall be determined on the basis of: a) the nature of the disallowance; b) the duties, responsibilities or obligations of the officers/persons concerned; c) the extent of their participation or involvement in the disallowed transaction; and d) the amount of losses or damages suffered by the government thereby. x x x

          Petitioner believes that there is no basis to hold him personally liable on account of the fact that the purchased computers were not inferior in quality.  In support thereof, he submitted a certification dated September 12, 2003 issued by incumbent CDA Executive Director, Atty. Niel A. Santillan, that 68% of the Tetra computers, or 30 out of 44 units, are still operational even after twelve (12) years of continuous use.  Only fourteen (14) units have become unserviceable, which means that the Tetra computers have proven their worth and thus vindicated petitioner, the CDA, CDA-PBAC and the DAP-TEC.^[36]

          We are not persuaded.

          The continued serviceability of the purchased computers is not a factor in the determination of whether the price paid by the government was unreasonable or excessive.  The damage or injury caused to the government refers primarily to the amount exceeding the allowable variance in the price paid for the item purchased under a transaction which is not the most advantageous to the government.  In this case, it was clearly shown that CDA could have purchased the same quality computers with similar technical specifications at much lower cost and the result of technical evaluation was manipulated to favor one bidder, for which the COA found the petitioner to be directly responsible. 

          WHEREFORE, the petition is DENIED.    The COA Decision Nos. 98-424 and 2003-061 dated October 21, 1998 andMarch 18, 2003, respectively, are AFFIRMED and UPHELD.  Petitioner Candelario L. Verzosa, Jr. is hereby ordered toREIMBURSE the amount of P881,819.00 subject of Notice of Disallowance No. 93-0016-101 dated November 17, 1993 and the corresponding CSB No. 94-001-101 dated January 10, 1994. 

          With costs against the petitioner.

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.

^*       On official leave.

^[1]       Rollo, pp. 50-52.

^[2]       Id. at 61-63.

^[3]       COA Records.

^[4]       Id., I^st Indorsement dated June 6, 1994.

^[5]       Rollo, pp. 165-169.

^[6]       Id. at 73, 170.

^[7]       Id. at 74-77, 171-174.

^[8]       COA Records, Memorandum dated April 24, 1995.

^[9]       Id., Memorandum dated August 29, 1994.

^[10]     Rollo, p. 51.

^[11]     Id. at 51-52.

^[12]     Id. at 17-18.

^[13]     Id. at 23-29, 80-81.

^[14]     Id. at 29-33.

^[15]     Id. at 92-93.

^[16]     G.R. No. 90364, September 30, 1991, 202 SCRA 147.

^[17]     Rollo, pp. 33-40.

^[18]     Id. at 40-43.

^[19]     Id. at 109-111.

^[20]     Id. at 145-148.

^[21]     Id. at 148.

^[22]     Id. at 248-249.

^[23]     Id. at 148-152.

^[24]     Reyes v. Commission on Audit, G.R. No. 125129, March 29, 1999, 305 SCRA 512, 516.

^[25]     Art. IX-D, Sec. 2 [2], 1987 Constitution.

^[26]     Which amended, revised and/or amplified the existing rules contained in COA Circular No. 77-55 dated March 29, 1977.

^[27]     COA Circular No. 85-55-A, 2.6.

^[28]     Id., 3.3 (Standards for “Excessive” Expenditure).

^[29]     Rollo, pp. 88-89.

^[30]     Id. at 245-246.

^[31]     COA Records.

^[32]     Rollo, pp. 235-236.

^[33]     Rollo, pp. 166-169.

^[34]     Laysa v. Commission on Audit, G.R No. 128134, October 18, 2000, 343 SCRA 520, 526.

^[35]     See Villanueva v. Commission on Audit, G.R. No. 151987, March 18, 2005, 453 SCRA 782, 801.

^[36]     Rollo, pp. 292-294.

CASE NO. 2011-0108: FERNANDO V. GONZALEZ VS. COMMISSION ON ELECTIONS,RENO G. LIM, STEPHEN C. BICHARA AND THE SPECIAL BOARD OF CANVASSERS CONSTITUTED PER RES. DATED JULY 23, 2010 OF THE COMMISSION ON ELECTIONS EN BANC (G.R. NO. 192856, 8 MARCH 2011, VILLARAMA, JR., J.) SUBJECT: DISQUALIFICATION AND CANCELLATION OF CERTIFICATE OF CANDIDACY; SECOND PLACER RULE. (BRIEF TITLE: GONZALEZ VS. COMELEC ET AL.)

EN BANC

x- – – – – – – – – – – – – – – – – – – – – – – – – – – – — – – – – – – – – – – – – – – – – – – – x

DECISION

VILLARAMA, JR., J.:

          This is a petition for certiorari, prohibition and mandamus under Rule 65 in relation to Rule 64 of the 1997 Rules of Civil Procedure, as amended, assailing the Resolution^[1] dated May 8, 2010 of the Commission on Elections (COMELEC) Second Division and Resolution^[2] dated July 23, 2010 of the Commission En Banc, in SPA No. 10-074 (DC).

          The facts are uncontroverted.

          Petitioner Fernando V. Gonzalez and private respondent Reno G. Lim both filed certificates of candidacy for the position of Representative of the 3rd congressional district of the Province of Albay in the May 10, 2010 elections.  Lim was the incumbent congressman of the 3rd district while Gonzalez was former Governor of Albay, having been elected to said position in 2004 but lost his re-election bid in 2007.

          On March 30, 2010, a Petition for Disqualification and Cancellation of Certificate of Candidacy (COC)^[3] was filed by Stephen Bichara [SPA No. 10-074 (DC)] on the ground that Gonzalez is a Spanish national, being the legitimate child of a Spanish father and a Filipino mother, and that he failed to elect Philippine citizenship upon reaching the age of majority in accordance with the provisions of Commonwealth Act (C.A.) No. 625.  It was further alleged that Gonzalez’s late registration of his certificate of birth with the Civil Registry of Ligao City on January 17, 2006, even if accompanied by an affidavit of election of Philippine citizenship, was not done within a reasonable time as it was in fact registered 45 years after Gonzalez reached the age of majority on September 11, 1961.

          In his Answer,^[4] Gonzalez denied having willfully made false and misleading statement in his COC regarding his citizenship and pointed out that Bichara had filed the wrong petition under Section 68 of the Omnibus Election Code (OEC) to question his eligibility as a candidate.  Gonzalez also argued that the petition which should have been correctly filed under Section 78 of the OEC was filed out of time.   He asserted that he is a Filipino citizen as his Alien Certificate of Registration was issued during his minority. However, he took an Oath of Allegiance to the Republic of the Philippines before the Justice of the Peace in Ligao, Albay on his 21^stbirthday on September 11, 1961.  Since then he had comported himself as a Filipino considering that he is married to a Filipina; he is a registered voter who voted during elections; he has been elected to various local positions; he holds a Philippine passport; and most importantly, he has established his life in the Philippines as a Filipino. Gonzalez contended that he is deemed a natural-born Filipino citizen under the 1987 Constitution which includes in the definition of natural-born citizens “[t]hose born before January 17, 1973, of Filipino mothers, who elect Philippine citizenship upon reaching the age of majority.”

          On May 8, 2010, the COMELEC’s Second Division issued the assailed resolution which decreed:

WHEREFORE, premises considered, we resolve to, as we do hereby, GRANT this Petition.  Respondent Fernando Vallejo Gonzalez is hereby declared disqualified to be a candidate for the position of Member of the House of Representatives, 3^rd District, Province of Albay, in the forthcoming National and Local Elections on May 10, 2010.

SO ORDERED.^[5]

          Finding the petition to be both a petition for disqualification and cancellation of COC, the Second Division ruled that the same was filed on time.  On the election of Philippine citizenship by Gonzalez, it held that what Gonzalez submitted is a mere photocopy of his oath of allegiance which was not duly certified by the National Statistics Office, and hence there was no compliance with the requirement of filing with the nearest civil registry, the last act required of a valid oath of allegiance under C.A. No. 625.  Further, the Second Division found that in the late registration of Gonzalez’s birth on January 17, 2006, he declared that he is a citizen of the Philippines; this at best, was his own conclusion, and at worst, conflicts with his purported oath of allegiance for it would have been a superfluity to express his choice of Philippine citizenship by taking the oath of allegiance if he was already a Filipino citizen.  And the fact that Gonzalez attended formal schooling in this country, worked in private firms and in the government service, should not take the place of the stringent requirements of constitutional and statutory provisions on acquisition of Philippine citizenship.^[6]

          Gonzalez thru counsel received a copy of the aforesaid resolution on May 11, 2010 at 5:20 p.m.^[7]  On even date, Lim petitioned the Provincial Board of Canvassers (PBOC) to consider the votes cast for Gonzalez as stray or not counted and/or suspend his proclamation, citing the Second Division’s May 8, 2010 resolution disqualifying Gonzalez as a candidate for the May 10, 2010 elections.^[8]  The PBOC, however, dismissed the petition stating that the period for filing of a motion for reconsideration of the COMELEC resolution has not yet lapsed, and hence the same is not yet final and executory.^[9]   Lim appealed the PBOC’s dismissal of his petition to the COMELEC (SPC No. 10-006) but his appeal was eventually dismissed after he filed a motion to withdraw the same.^[10]   

          Based on the results of the counting and canvassing of votes, Gonzalez emerged as the winner having garnered a total of 96,000 votes while Lim ranked second with 68,701 votes. On May 12, 2010, the PBOC officially proclaimed Gonzalez as the duly elected Representative of the 3^rd district of Albay.  Gonzalez took his oath of office on the same day.^[11]  On May 13, 2010, Bichara filed a Very Urgent Motion to Suspend the Effects of the Proclamation of Fernando V. Gonzalez.^[12]

          On May 14, 2010, Gonzalez filed a motion for reconsideration of the May 8, 2010 resolution.  Gonzalez reiterated that the Second Division’s finding that Bichara’s petition is both a petition for disqualification and to cancel COC is not borne by the petition itself and contrary to Section 68 of the OEC and COMELEC Resolution No. 8696. Applying Section 78 of the OEC which is the proper petition based on alleged deliberate misrepresentation and false statement in the COC, Gonzalez contended that Bichara’s petition was filed out of time.  It was further argued that the subsequent election, proclamation and taking of oath of office of Gonzalez are events warranting the dismissal of SPA No. 10-074 (DC).   Stressing that the voice of the people must be respected in this case, Gonzalez pointed out that his not being a Filipino was never an issue in the previous elections where he ran and won (Ligao City Mayor for three terms and Governor of Albay from 2004-2007).  He claimed that the petition filed by Bichara, who ran against Gonzalez’s wife, Linda Passi Gonzalez (for re-election as Ligao City Mayor) in the recently concluded elections was indicative of harassment considering that a similar petition for disqualification and cancellation of COC was also filed against his wife by Anna Marie C. Bichara, said to be a sister of the petitioner in SPA No. 10-074 (DC).^[13]

          On May 22, 2010, Lim filed a Motion for Leave to Intervene as Petitioner stating that being a candidate for the same position, he has legal interest in the success of the petition in SPA No. 10-074 (DC).^[14]

          In its Resolution dated July 23, 2010, the COMELEC En Banc denied the motion for reconsideration and affirmed its finding that Gonzalez failed to prove with sufficient evidence that he had fully complied with the requirements for electing Philippine citizenship under C.A. No. 625.  It likewise emphasized that the motion for reconsideration filed by Gonzalez was pro forma and hence it did not suspend the effects of the May 8, 2010 resolution disqualifying him as a candidate, conformably with Sections 1 and 4, Rule 19 of the COMELEC Rules of Procedure in relation to Section 7 of COMELEC Resolution No. 8696. Invoking its power to suspend and set aside the proclamation of winning candidates pursuant to Section 16 of COMELEC Resolution No. 8678 in relation to Section 6 of Republic Act (R.A.) No. 6646,^[15] the Commission held that the proclamation of Gonzalez by the PBOC was premature and illegal. Finally, the motion to intervene filed by Lim was found to be proper and was accordingly granted.

          The dispositive portion of the resolution reads:

WHEREFORE, premises considered, the Commission (En Banc) RESOLVED to, as it does hereby:

1.  ANNUL the invalid proclamation of the respondent Fernando V. Gonzalez as the elected Member of the House of Representative as he is DISQUALIFIED to run and be voted for the position of Member of the House of Representatives in the May 10, 2010 elections;

2.  DENY for utter lack of merit the Motion for Reconsideration of respondent FERNANDO V. GONZALEZ; and

3.  AFFIRM the Resolution of the Second Division declaring respondent Fernando V. Gonzalez DISQUALIFIED to run and be voted for as such.

4.  Immediately CONSTITUTE a Special Provincial Board of Canvassers of Albay who will PROCLAIM RENO G. LIM as the duly elected Member of the House of Representative of the Third District of Albay for being the bona fide candidate who garnered the highest number of votes in the May 10, 2010 elections.

SO ORDERED.^[16]

          Commissioner Rene V. Sarmiento dissented from the majority ruling denying the motion for reconsideration of Gonzalez, stating that the people of the 3^rd District of Albay has already spoken as to who is their choice of Representative in the Lower House of Congress and in case of doubt as to the qualification of the winning candidate, the doubt will be resolved in favor of the will of the people.^[17]

          A separate opinion was written by Commissioner Armando C. Velasco stating that the COMELEC no longer has jurisdiction to decide on the matter of the qualifications of Gonzalez, the winning candidate who had already been proclaimed, taken his oath and assumed the office as Representative of the 3^rd District of Albay, for which reason the COMELEC’s jurisdiction ends and that of the House of Representatives Electoral Tribunal (HRET) begins. He likewise disagreed with the majority’s conclusion that Gonzalez’s proclamation was invalid considering that: (1) records are bereft of indication that the PBOC had been ordered to suspend the proclamation of Gonzalez; (2) the May 8, 2010 Resolution disqualifying Gonzalez had not yet become final and executory; (3)  the date  of said resolution was not a previously fixed date as required by Section 6 of COMELEC Resolution No. 8696, as the records do not show that the parties have been informed of said date of promulgation beforehand; and (4) the three-day period for the filing of a motion for reconsideration should be reckoned from the date of receipt  by Gonzalez of copy of the resolution which is May 11, 2010, hence the PBOC acted well within its authority in proclaiming Gonzalez.  Commissioner Velasco also disagreed with the majority ruling that Gonzalez’s motion for reconsideration was pro forma, and maintained that said motion was timely filed which effectively suspended the execution of the May 8, 2010 Resolution.  Lastly, he found the order to constitute a Special Provincial Board of Canvassers for the purpose of proclaiming intervenor Lim without basis.  Since the May 8, 2010 Resolution was not yet final on election day, the votes cast for Gonzalez cannot be considered stray. Besides, a minority or defeated candidate like Lim cannot be deemed elected to the office in cases where the winning candidate is declared ineligible.^[18]

          Gonzalez filed the instant petition on July 29, 2010 while Lim filed a Very Urgent Motion For the Issuance of Writ of Execution which the COMELEC granted on August 5, 2010.^[19]  On August 18, 2010, Lim was proclaimed by a Special Board of Canvassers and subsequently took his oath of office before Assistant State Prosecutor Nolibien N. Quiambao.^[20] 

          In a letter dated August 23, 2010, Lim requested Speaker Feliciano R. Belmonte, Jr. for the administration of his oath and registration in the Roll of the House of Representatives representing the 3^rd District of Albay.   However, Speaker Belmonte refused to grant Lim’s request saying that the issue of qualification of Gonzalez for the position of Member of the House of Representatives is within the exclusive jurisdiction of the HRET, citing this Court’s ruling in Limkaichong v. Commission on Elections^[21]/^[22].

          Gonzalez contends that the COMELEC gravely abused its discretion in issuing the assailed resolutions insofar as –

1.  It would install the Respondent Reno G. Lim as the Third District of Albay’s Representative even though Lim never won the election, and who never became a legal party in the case;

2.  It would hold that the petitioner Gonzalez is not a Filipino citizen;

3.    It would go on to convene a “Special Board of Canvassers of Albay” created for the sole purpose of proclaiming the respondent Lim as the actual winner of the May 10 elections in the Third District of Albay;

x x x the Commission’s resolutions, insofar as it was:

4.  Issued with such great speed and haste that its mistakes are glaring;

5.   Issued without the required (valid) certification;

6.  Insofar as it did not hold that the respondent Reno [G.] Lim had committed more than one act of forum-shopping.^[23]    

          In his Comment,^[24] the Solicitor General found no grave abuse of discretion committed by the COMELEC in issuing the assailed resolutions stating that the Commission correctly ruled that Gonzalez is not a natural-born citizen of the Philippines by his failure to perfect his election of Philippine citizenship in accordance with C.A. No. 625 and R.A. No. 562.   He likewise adopted the position of the COMELEC that Limkaichong is not applicable to the present case and that the motion for reconsideration filed by Gonzalez was pro forma.

          The petition presents the following issues for resolution: (1) whether the petition in SPA No. 10-074 (DC) was timely filed; (2) whether Gonzalez was validly proclaimed as the duly elected Representative of the 3^rd District of Albay in the May 10, 2010 elections; and (3) whether the COMELEC had lost jurisdiction over the issue of Gonzalez’s citizenship.

          We find the petition meritorious.

          A petition to cancel a candidate’s COC may be filed under Section 78 of the OEC which provides:

SEC. 78. Petition to deny due course to or cancel a certificate of candidacy.  —  A verified petition seeking to deny due course or to cancel a certificate of candidacy may be filed by any person exclusively on the ground that any material representation contained therein as required under Section 74  hereof is false.  The petition may be filed at any time not later than twenty-five days from the time of the filing of the certificate of candidacy and shall be decided, after due notice and hearing, not later than fifteen days before the election. (Underlining supplied.)

          A petition for disqualification of a candidate may also be filed pursuant to Section 68 of the same Code which states:

SEC. 68.  Disqualifications. —  Any candidate who, in an action or protest in which he is a party is declared by final decision of a competent court guilty of, or found by the Commission of having: (a) given money or other material consideration to influence, induce or corrupt the voters or public officials performing electoral functions; (b) committed acts of terrorism to enhance his candidacy; (c) spent in his election campaign an amount in excess of that allowed by this Code; (d) solicited, received or made any contribution prohibited under Sections 89, 95, 96, 97 and 104; or (e) violated any of Sections 80, 83, 85, 86 and 261, paragraphs d, e, k, v, and cc, sub-paragraph 6, shall be disqualified from continuing as a candidate, or if he has been elected, from holding the office.  Any person who is a permanent resident of or an immigrant to a foreign country shall not be qualified to run for any elective office under this Code, unless said person has waived his status as permanent resident or immigrant of a foreign country in accordance with the residence requirement provided for in the election laws.

          The prohibited acts covered by Section 68  refer to election campaign or political activity outside the campaign period (Section 80); removal, destruction or defacement of lawful election propaganda (Section 83); certain forms of election propaganda (Section 85); violation of rules and regulations on election propaganda through mass media; coercion of subordinates (Section 261 [d]); threats, intimidation, terrorism, use of fraudulent device or other forms of coercion (Section 261 [e]); unlawful electioneering (Section 261 [k]); release, disbursement or expenditure of public funds (Section 261 [v]); solicitation of votes or undertaking any propaganda on the day of the election (Section 261 [cc], sub-par.6).  

          As to the ground of false representation in the COC under Section 78, we held in Salcedo II v. Commission on Elections^[25]that in order to justify the cancellation of COC, it is essential that the false representation mentioned therein pertain to a material matter for the sanction imposed by this provision would affect the substantive rights of a candidate – the right to run for the elective post for which he filed the certificate of candidacy.   Although the law does not specify what would be considered as a “material representation”, the Court concluded that this refers to qualifications for elective office.  Citing previous cases in which the Court interpreted this phrase, we held that Section 78 contemplates statements regarding age,^[26] residence^[27] and citizenship or non-possession of natural-born Filipino status.^[28]  Furthermore, aside from the requirement of materiality, the false representation must consist of a deliberate attempt to mislead, misinform, or hide a fact which would otherwise render a candidate ineligible.  In other words, it must be made with an intention to deceive the electorate as to one’s qualification for public office.^[29]

          Significantly, we pointed out in Salcedo II the two remedies available for questioning the qualifications of a candidate, thus:

There are two instances where a petition questioning the qualifications of a registered candidate to run for the office for which his certificate of candidacy was filed can be raised under the Omnibus Election Code (B.P. Blg. 881), to wit:

“(1) Before election, pursuant to Section 78 thereof which provides that:

x x x

and

“(2) After election, pursuant to Section 253 thereof, viz:

‘Sec. 253. Petition for quo warranto. – Any voter contesting the election of any Member of the Batasang Pambansa, regional, provincial, or city officer on the ground of ineligibility or of disloyalty to the Republic of the Philippines shall file a sworn petition for quo warranto with the Commission within ten days after the proclamation of the results of the election.”

(emphasis supplied)

The only difference between the two proceedings is that, under Section 78, the qualifications for elective office are misrepresented in thecertificate of candidacy and the proceedings must be initiated before the elections, whereas a petition for quo warranto under Section 253 may be brought on the basis of two grounds – (1) ineligibility or (2) disloyalty to the Republic of the Philippines, and must be initiated within ten days after the proclamation of the election results. Under Section 253, a candidate is ineligible if he is disqualified to be elected to office, and he is disqualified if he lacks any of the qualifications for elective office.^[30] (Emphasis supplied.)

          Clearly, the only instance where a petition questioning the qualifications of a candidate for elective office can be filed before election is when the petition is filed under Section 78 of the OEC.

          The petition in SPA No. 10-074 (DC) based on the allegation that Gonzalez was not a natural-born Filipino which was filed before the elections, is in the nature of a petition filed under Section 78.  The recitals in the petition in said case, however, state that it was filed pursuant to Section 4 (b) of COMELEC Resolution No. 8696 and Section 68 of the OEC to disqualify a candidate for lack of qualifications or possessing some grounds for disqualification.  The COMELEC treated the petition as one filed both for disqualification and cancellation of COC, with the effect that Section 68, in relation to Section 3, Rule 25 of the COMELEC Rules of Procedure, is applicable insofar as determining the period for filing the petition.

          Rule 25 of the COMELEC Rules of Procedure on Disqualification of Candidates provides:

Section 1.  Grounds for Disqualification.  – Any candidate who does not possess all the qualifications of a candidate as provided for by the Constitution or by existing law or who commits any act declared by law to be grounds for disqualification may be disqualified from continuing as a candidate.

x x x x

Sec. 3.  Period to File Petition.  —  The petition shall be filed any day after the last day for filing of certificates of candidacy but not later than the date of proclamation. (Emphasis supplied.)         

          On the other hand, the procedure for filing a petition for cancellation of COC is covered by Rule 23 of the COMELEC Rules of Procedure, which provides:

Section 1.  Grounds for Denial of Certificate of Candidacy.  —  A petition to deny due course to or cancel a certificate of candidacy for any elective office may be filed with the Law Department of the Commission by any citizen of voting age or a duly registered political party, organization, or coalition or political parties on the exclusive ground  that any material representation contained therein as required by law is false.

Sec. 2. Period to File Petition. – The petition must be filed within five (5) days following the last day for the filing of certificate of candidacy.

x x x x (Emphasis supplied.)

          In Loong v. Commission on Elections,^[31] we categorically declared that the period for filing a petition for cancellation of COC based on false representation is covered by Rule 23 and not Rule 25 of the COMELEC Rules of Procedure.  Further, we held that Section 3 of Rule 25 allowing the filing of a petition at any time after the last day for filing of COC’s but not later than the date of proclamation, is merely a procedural rule that cannot supersede Section 78 of the OEC.  We quote the following pertinent discussion in said case:   

x x x Section 78 of the same Code states that in case a person filing a certificate of candidacy has committed false representation, a petition to cancel the certificate of the aforesaid person may be filed within twenty-five (25) days from the time the certificate was filed.

Clearly, SPA No. 90-006 was filed beyond the 25-day period prescribed by Section 78 of the Omnibus Election Code.

We do not agree with private respondent Ututalum’s contention that the petition for disqualification, as in the case at bar, may be filed at any time after the last day for filing a certificate of candidacy but not later than the date of proclamation, applying Section 3, Rule 25 of the Comelec Rules of Procedure.

x x x x

The petition filed by private respondent Ututalum with the respondent Comelec to disqualify petitioner Loong on the ground that the latter made a false representation in his certificate of candidacy as to his age, clearly does not fall under the grounds of disqualification as provided for in Rule 25 but is expressly covered by Rule 23 of the Comelec Rules of Procedure governing petitions to cancel certificate of candidacy.  Moreover, Section 3, Rule 25 which allows the filing of the petition at any time after the last day for the filing of certificates of candidacy but not later than the date of proclamation, is merely a procedural rule issued by respondent Commission which, although a constitutional body, has no legislative powers.  Thus, it can not supersede Section 78 of the Omnibus Election Code which is a legislative enactment.

We also do not find merit in the contention of respondent Commission that in the light of the provisions of Section 6 and 7 of Rep. Act No. 6646, a petition to deny due course to or cancel a certificate of candidacy may be filed even beyond the 25-day period prescribed by Section 78 of the Code, as long as it is filed within a reasonable time from the discovery of the ineligibility.

Sections 6 and 7 of Rep. Act No. 6646 are here re-quoted:

“SEC. 6. Effect of Disqualification Case. – Any candidate who has been declared by final judgment to be disqualified shall not be voted for, and the votes cast for him shall not be counted.  If for any reason a candidate is not declared by final judgment before an election to be disqualified and he is voted for and receives the winning number of votes in such election, the Court or Commission shall continue with the trial and hearing of the action, inquiry or protest and, upon motion of the complainant or any intervenor, may during the pendency thereof order the suspension of the proclamation of such candidate whenever the evidence of his guilt is strong.”

“SEC. 7.  Petition to Deny Due Course To or Cancel a Certificate of Candidacy. – The procedure hereinabove provided shall apply to petitions to deny due course to or cancel a certificate of candidacy as provided in Section 78 of Batas Pambansa Blg. 881.”

It will be noted that nothing in Sections 6 or 7 modifies or alters the 25-day period prescribed by Section 78 of the Code for filing the appropriate action to cancel a certificate of candidacy on account of any false represent­ation made therein.  On the contrary, said Section 7 affirms and reiterates Section 78 of the Code.

We note that Section 6 refers only to the effects of a disqualification case which may be based on grounds other than that provided under Section 78 of the Code.  But Section 7 of Rep. Act No. 6646 also makes the effects referred to in Section 6 applicable to disqualification cases filed under Section 78 of the Code.  Nowhere in Sections 6 and 7 of Rep. Act No. 6646 is mention made of the period within which these disqualification cases may be filed.  This is because there are provisions in the Code which supply the periods within which a petition relating to disqualification of candidates must be filed, such as Section 78, already discussed, and Section 253 on petitions for quowarranto.

Thus, if a person qualified to file a petition to disqualify a certain candidate fails to file the petition within the 25-day period prescribed by Section 78 of the Code for whatever reasons, the election laws do not leave him completely helpless as he has another chance to raise the disqualification of the candidate by filing a petition for quo warranto within ten (10) days from the proclamation of the results of the election, as provided under Section 253 of the Code. x x x^[32] (Additional emphasis supplied.)

          COMELEC Resolution No. 8696 entitled “Rules on Disqualification Cases Filed in Connection with the May 10, 2010 Automated National and Local Elections” was promulgated on November 11, 2009.  Section 4 thereof provides:

SEC. 4.  Procedure in filing petitions.  – For purposes of the preceding sections, the following procedure shall be observed:

A.  PETITION TO DENY DUE COURSE TO OR CANCEL CERTIFICATE OF CANDIDACY

1.  A verified petition to deny due course or to cancel certificate of candidacy may be filed by any person within five (5) days from the last day for the filing of certificate of candidacy but not later than twenty-five (25) days from the filing of certificate of candidacy under Section 78 of the Omnibus Election Code (OEC);

x x x x

B.  PETITION TO DISQUALIFY A CANDIDATE PURSUANT TO SECTION 68 OF THE OMNIBUS ELECTION CODE AND PETITION TO DISQUALIFY FOR LACK OF QUALIFICATIONS OR POSSESSING SOME GROUNDS FOR DISQUALIFICATION

1.   A verified petition to disqualify a candidate pursuant to Section 68 of the OEC and the verified petition to disqualify a candidate for lack of qualifications or possessing some grounds for disqualification may be filed on any day after the last day for filing of certificates of candidacy but not later than the date of proclamation;

x x x x

          As can be gleaned, Section 4(B) of Resolution No. 8696 allowing a petition to disqualify a candidate based on his lack ofqualifications for elective office such as age, residence and citizenship to be filed “on any day after the last day for filing of certificates of candidacy but not later than the date of proclamation” (the period provided in Section 68 of the OEC), instead of the period for filing under Section 78 (not later than twenty-five days from the filing of the certificate of candidacy) is similar to Rule 25 of the COMELEC Rules of Procedure. Following our ruling in Loong v. Commission on Elections,^[33]  we find that Section 4(B) of Resolution No. 8696 represents another attempt  to modify by a mere procedural rule the statutory period for filing a petition to cancel COC on the ground of false representation therein regarding a candidate’s qualifications.  Like Rule 25 of the COMELEC Rules of Procedure, Section 4(B) of Resolution No. 8696 would supplant the prescribed period of filing of petition under Section 78 with that provided in Section 68 even if the latter provision does not at all cover the false representation regarding age, residence and citizenship which may be raised in a petition under Section 78.   Indeed, if the purpose behind this rule promulgated by the COMELEC – allowing a petition to cancel COC based on the candidate’s non-compliance with constitutional and statutory requirements for elective office, such as citizenship, to be filed even beyond the period provided in Section 78 – was simply to remedy a perceived “procedural gap” though not expressly stated in Resolution No. 8696, the Court had already rejected such justification.  Thus, we declared in Loong:

It is true that the discovery of false representation as to material facts required to be stated in a certificate of candidacy, under Section 74 of the Code, may be made only after the lapse of the 25-day period prescribed by Section 78 of the Code, through no fault of the person who discovers such misrepresentations and who would want the disqualification of the candidate committing the misrepresentation.  It would seem, therefore, that there could indeed be a gap between the time of the discovery of the misrepresentation, (when the discovery is made after the 25-day period under Sec. 78 of the Code has lapsed) and the time when the proclamation of the results of the election is made.  During this so-called “gap” the would-be petitioner (who would seek the disqualification of the candidate) is left with nothing to do except to wait for the proclamation of the results, so that he could avail of a remedy against the misrepresenting candidate, that is, by filing a petition for quo warranto against him.  Respondent Commission sees this “gap” in what it calls a procedural gap which, according to it, is unnecessary and should be remedied.

At the same time, it can not be denied that it is the purpose and intent of the legislative branch of the government to fix a definite time within which petitions or protests related to eligibility of candidates for elective offices must be filed, as seen in Sections 78 and 253 of the Code. Respondent Commission may have seen the need to remedy this so-called “procedural gap”, but it is not for it to prescribe what the law does not provide, its function not being legislative.  The question of whether the time to file these petitions or protests is too short or ineffective is one for the Legislature to decide and remedy.^[34] (Emphasis supplied.)

          In the more recent case of Fermin v. Commission on Elections,^[35] we stressed that a petition filed under Section 78 must not be interchanged or confused with one filed under Section 68.  A petition which is properly a “Section 78 petition” must therefore be filed within the period prescribed therein, and a procedural rule subsequently issued by COMELEC cannot supplant this statutory period under Section 78.  We further distinguished the two petitions as to their nature, grounds and effects, to wit:

Lest it be misunderstood, the denial of due course to or the cancellation of the CoC is not based on the lack of qualifications but on a finding that the candidate made a material representation that is false, which may relate to the qualifications required of the public office he/she is running for. It is noted that the candidate states in his/her CoC that he/she is eligible for the office he/she seeks. Section 78 of the OEC, therefore, is to be read in relation to the constitutional and statutory provisions on qualifications or eligibility for public office. If the candidate subsequently states a material representation in the CoC that is false, the COMELEC, following the law, is empowered to deny due course to or cancel such certificate. Indeed, the Court has already likened a proceeding under Section 78 to a quo warrantoproceeding under Section 253 of the OEC since they both deal with the eligibility or qualification of a candidate, with the distinction mainly in the fact that a “Section 78” petition is filed before proclamation, while a petition for quo warranto is filed after proclamation of the winning candidate.

At this point, we must stress that a “Section 78” petition ought not to be interchanged or confused with a “Section 68” petition.They are different remedies, based on different grounds, and resulting in different eventualities. Private respondent’s insistence, therefore, that the petition it filed before the COMELEC in SPA No. 07-372 is in the nature of a disqualification case under Section 68, as it is in fact captioned a “Petition for Disqualification,” does not persuade the Court.
x x x x

Considering that the Dilangalen petition does not state any of these grounds for disqualification, it cannot be categorized as a “Section 68” petition.

x x x x

In support of his claim that he actually filed a “petition for  disqualification” and not a “petition to deny due course to or cancel a CoC,” Dilangalen takes refuge in Rule 25 of the COMELEC Rules of Procedure, specifically Section 1 thereof, to the extent that it states, “[a]ny candidate who does not possess all the qualifications of a candidate as provided for by the Constitution or by existing law x x x may be disqualified from continuing as a candidate,” and COMELEC Resolution No. 7800 (Rules Delegating to COMELEC Field Officials the Authority to Hear and Receive Evidence in Disqualification Cases Filed in Connection with the May 14, 2007 National and Local Elections x  x  x

x x x x

We disagree. A COMELEC rule or resolution cannot supplant or vary the legislative enactments that distinguish the grounds for disqualification from those of ineligibility, and the appropriate proceedings to raise the said grounds. In other words, Rule 25 and COMELEC Resolution No. 7800 cannot supersede the dissimilar requirements of the law for the filing of a petition for disqualification under Section 68, and a petition for the denial of due course to or cancellation of CoC under Section 78 of the OEC. As aptly observed by the eminent constitutionalist, Supreme Court Justice Vicente V. Mendoza, in his separate opinion in Romualdez-Marcos v. Commission on Elections:

x x x x

Having thus determined that the Dilangalen petition is one under Section 78 of the OEC, the Court now declares that the same has to comply with the 25-day statutory period for its filing. Aznar v. Commission on Elections and Loong v. Commission on Elections give ascendancy to the express mandate of the law that “the petition may be filed at any time not later than twenty-five days from the time of the filing of the certificate of candidacy.” Construed in relation to reglementary periods and the principles of prescription, the dismissal of “Section 78” petitions filed beyond the 25-day period must come as a matter of course.

We find it necessary to point out that Sections 5 and 7 of Republic Act (R.A.) No. 6646, contrary to the erroneous arguments of both parties, did not in any way amend the period for filing “Section 78” petitions. While Section 7 of the said law makes reference to Section 5 on the procedure in the conduct of cases for the denial of due course to the CoCs of nuisance candidates (retired Chief Justice Hilario G. Davide, Jr., in his dissenting opinion in Aquino v. Commission on Elections explains that “the ‘procedure hereinabove provided’ mentioned in Section 7 cannot be construed to refer to Section 6 which does not provide for a procedure but for the effects of  disqualification cases, [but] can only refer to the procedure provided in Section 5 of the said Act on nuisance candidates x x x.”), the same cannot be taken to mean that the 25-day period for filing “Section 78” petitions under the OEC is changed to 5 days counted from the last day for the filing of CoCs. The clear language of Section 78 certainly cannot be amended or modified by the mere reference in a subsequent statute to the use of a procedure specifically intended for another type of action. Cardinal is the rule in statutory construction that repeals by implication are disfavored and will not be so declared by the Court unless the intent of the legislators is manifest. In addition, it is noteworthy that Loong, which upheld the 25-day period for filing “Section 78” petitions, was decided long after the enactment of R.A. 6646. In this regard, we therefore find as contrary to the unequivocal mandate of the law, Rule 23, Section 2 of the COMELEC Rules of Procedure x x x.

x x x x

As the law stands, the petition to deny due course to or cancel a CoC “may be filed at any time not later than twenty-five days from the time of the filing of the certificate of candidacy.”

Accordingly, it is necessary to determine when Fermin filed his CoC in order to ascertain whether the Dilangalen petition filed on April 20, 2007 was well within the restrictive 25-day period. If it was not, then the COMELEC should have, as discussed above, dismissed the petition outright.

x x x x^[36] (Additional emphasis supplied.)

          Since the petition in SPA No. 10-074 (DC) sought to cancel the COC filed by Gonzalez and disqualify him as a candidate on the ground of false representation as to his citizenship, the same should have been filed within twenty-five days from the filing of the COC, pursuant to Section 78 of the OEC.  Gonzales filed his COC on December 1, 2009.  Clearly, the petition for disqualification and cancellation of COC filed by Lim on March 30, 2010 was filed out of time. The COMELEC therefore erred in giving due course to the petition.

          Even assuming arguendo that the petition in SPA No. 10-074 (DC) was timely filed, we find that the COMELEC gravely erred when it held that the proclamation of Gonzalez by the PBOC of Albay on May 12, 2010 was premature and illegal.

          Section 72 of the OEC, was amended by Section 6 of R.A. No. 6646 which reads:

Section 6. Effect of Disqualification Case.  —  Any candidate who has been declared by final judgment to be disqualified shall not be voted for, and the votes cast for him shall not be counted.  If for any reason a candidate is not declared by final judgment before an election to be disqualified and he is voted for and receives the winning number of votes in such election, the Court or Commission shall continue with the trial and hearing of the action, inquiry, or protest and, upon motion of the complainant or any intervenor may[,] during the pendency thereof order the suspension of the proclamation of such candidate whenever the evidence of his guilt is strong. (Emphasis supplied.)

          In its July 23, 2010 Resolution, the COMELEC ruled that the motion for reconsideration of the Second Division’s May 8, 2010 Resolution filed by Gonzalez on May 14, 2010 was pro forma and hence did not suspend the execution of the May 8, 2010 resolution disqualifying him as a candidate.  

          Section 7 of COMELEC Resolution No. 8696 provides:

SEC. 7.  Motion for reconsideration.  A motion to reconsider a Decision, Resolution, Order or Ruling of a Division shall be filed within three (3) days from the promulgation thereof.  Such motion, if not pro-forma, suspends the execution or implementation of the Decision, Resolution, Order or Ruling.

Within twenty-four (24) hours from the filing thereof, the Clerk of the Commission shall notify the Presiding Commissioner.  The latter shall within two (2) days thereafter, certify the case to the Commission en banc.

The Clerk of the Commission shall calendar the Motion for Reconsideration for the resolution of the Commission en banc within three (3) days from the certification thereof.

          Section 13, Rule 18 of the COMELEC Rules of Procedure on the Finality of Decisions or Resolutions provides that –

(c)  Unless a motion for reconsideration is seasonably filed, a decision or resolution of a Division shall become final and executory after the lapse of five (5) days in Special actions and Special cases and after fifteen (15) days in all other actions or proceedings, following its promulgation.

          Section 2, Rule 19 of the COMELEC Rules of Procedure also states:

SEC. 2.  Period for Filing Motions for Reconsideration. —  A motion to reconsider a decision, resolution, order, or ruling of a Division shall be filed within five (5) days from the promulgation thereof.  Such motion, if not pro forma, suspends the execution or implementation of the decision, resolution, order or ruling.

          The Commission En Banc in its July 23, 2010 Resolution said:

As found by this Commission, the motion for reconsideration merely mentioned that respondent was already proclaimed as the winning candidate for Representative of the 3^rd District of Albay.  Nothing was, however, averred nor any document was submitted to attest to the fact that that respondent has complied with all the legal requirements and procedure for the election of Philippine citizenship as laid down in Commonwealth Act No. 625 which specifically requires that the oath of allegiance should be filed with the nearest civil registry.^[37]  

          We have held that mere reiteration of issues already passed upon by the court does not automatically make a motion for reconsideration pro forma. What is essential is compliance with the requisites of the Rules.^[38]   Indeed, in the cases where a motion for reconsideration was held to be pro forma, the motion was so held because (1) it was a second motion for reconsideration, or (2) it did not comply with the rule that the motion must specify the findings and conclusions alleged to be contrary to law or not supported by the evidence, or (3) it failed to substantiate the alleged errors, or (4) it merely alleged that the decision in question was contrary to law, or (5) the adverse party was not given notice thereof.^[39]

          In the case at bar, the motion for reconsideration^[40] filed by Gonzalez failed to show that it suffers from the foregoing defects.   Although the motion repeatedly stressed that the people of the Third District of Albay had spoken through the winning margin of votes for Gonzalez that they chose the latter to represent them in the House of Representatives, it also reiterated his position that the petition filed by Bichara is time-barred, adding that it was just an act of political harassment.  But the main argument asserts that the evidence of petitioner Bichara was insufficient to justify the Second Division’s ruling that Gonzalez is not a natural-born Filipino and hence disqualified to be a candidate for the position of Member of the House of Representatives.  Verily, under prevailing jurisprudence, to successfully challenge herein Gonzalez’s disqualification, petitioner in SPA No. 10-074 (DC) must clearly demonstrate that Gonzalez’s ineligibility is so patently antagonistic to constitutional and legal principles that overriding such ineligibility and thereby giving effect to the apparent will of the people would ultimately create greater prejudice to the very democratic institutions and juristic traditions that our Constitution and laws so zealously protect and promote.^[41]  The COMELEC thus seriously erred in ruling that Gonzalez’s motion for reconsideration was pro forma.

          Petitioner’s motion for reconsideration of the May 8, 2010 resolution of the Second Division having been timely filed, the said resolution had not become final and executory.  Considering that at the time of the proclamation of Gonzalez who garnered the highest number of votes for the position of Representative in the 3^rd district of Albay, the said Division Resolution declaring Gonzalez disqualified as a candidate for the said position was not yet final, he had at that point in time remained qualified.  Therefore, his proclamation on May 12, 2010 by the PBOC was valid or legal.^[42]  Moreover, the May 8, 2010 resolution cannot as yet be implemented for not having attained finality.

          Despite recourse to this Court, however, we cannot rule on the issue of citizenship of Gonzalez.  Subsequent events showed that Gonzalez had not only been duly proclaimed, he had also taken his oath of office and assumed office as Member of the House of Representatives. We  have consistently held that  once a winning candidate has been proclaimed, taken his oath, and assumed office as a member of the House of Representatives, COMELEC’s jurisdiction over election contests relating to his election, returns, and qualifications ends, and the HRET’s  own jurisdiction begins.^[43]    In Perez v. Commission on Elections,^[44] we declared that the Court does not have jurisdiction to pass upon the eligibility of the private respondent who was already a Member of the House of Representatives at the time of filing of the petition for certiorari.^[45]

          Under Article VI, Section 17 of the 1987 Constitution, the HRET is the sole judge of all contests relating to the election, returns, and qualifications of the members of the House of Representatives.   As this Court explained in Lazatin v. House Electoral Tribunal^[46]:

The use of the word “sole” emphasizes the exclusive character of the jurisdiction conferred x x x.  The exercise of the power by the Electoral Commission under the 1935 Constitution has been described as “intended to be as complete and unimpaired as if it had remained originally in the legislature” x x x. Earlier, this grant of power to the legislature was characterized by Justice Malcolm “as full, clear and complete” x x x. Under the amended 1935 Constitution, the power was unqualifiedly reposed upon the Electoral Tribunal x x x and it remained as full, clear and complete as that previously granted the legislature and the Electoral Commission x x x.  The same may be said with regard to the jurisdiction of the Electoral Tribunals under the 1987 Constitution.

          Limkaichong v. Commission on Elections^[47] recently reiterated this settled rule on the COMELEC’s loss of jurisdiction over a petition questioning the qualifications of a candidate upon his election, proclamation and assumption of office.  In said case, petitioner Limkaichong faced two disqualification cases alleging that she is not a natural-born Filipino because her parents were Chinese citizens at the time of her birth.  The cases remained pending by the time the May 14, 2007 elections were held in whichLimkaichong emerged as the winner with 65,708 votes or by a margin of 7,746 votes.  Subsequently, another congressional candidate (Olivia Paras) who obtained the second highest number of votes filed a motion for leave to intervene and to suspend the proclamation of Limkaichong, which the COMELEC’s Second Division granted. The day after the PBOC suspended her proclamation, the COMELEC issued Resolution No. 8062 adopting the policy-guidelines of not suspending the proclamation of winning candidates with pending disqualification cases which shall be without prejudice to the continuation of the hearing and resolution of the cases.  Accordingly, Limkaichong moved to reconsider the resolution disqualifying her as a candidate and to lift the order suspending her proclamation. In compliance with Resolution No. 8062, the PBOC reconvened and proclaimed Limkaichong as the duly elected Member of the House of Representatives for the 1^st district of Negros Oriental. Thereafter, Paras filed a petition to annul Limkaichong’s proclamation, which was dismissed by the COMELEC’s First Division, upon the ground that the disqualification cases were not yet final when Limkaichong was proclaimed.  Her proclamation being valid or legal, the COMELEC ruled that it effectively divested the Commission of jurisdiction over the cases.

          Limkaichong then moved to declare the disqualification cases as dismissed, contending that with her proclamation, her having taken her oath of office and her assumption of the position, the COMELEC was divested of jurisdiction to hear the disqualification cases.  Since the COMELEC did not resolve her motion despite her repeated pleas, Limkaichong filed a petition for certiorari before this Court.  Said petition was consolidated with the petition for prohibition and injunction filed by Louis C. Biraogo, petition for certiorari and injunction filed by Renald F. Villando and the petition for quo warranto, prohibition and mandamus with prayer for temporary restraining order and preliminary injunction instituted by Paras. 

By Decision dated April 1, 2009, this Court upheld the validity of Limkaichong’s proclamation and the HRET’s jurisdiction over the issue of disqualification of Limkaichong, as follows:

The Court has held in the case of Planas v. COMELEC, that at the time of the proclamation of Defensor, the respondent therein who garnered the highest number of votes, the Division Resolution invalidating his certificate of candidacy was not yet final.   As such, his proclamation was valid or legal, as he had at that point in time remained qualified.   Limkaichong’s situation is no different from that of Defensor, the former having been disqualified by a Division Resolution on the basis of her not being a natural-born Filipino citizen.   When she was proclaimed by the PBOC, she was the winner during the elections for obtaining the highest number of votes, and at that time, the Division Resolution disqualifying her has not yet became final as a result of the motion for reconsideration. 

x x x x

In her petition x x x, Limkaichong argued that her proclamation on May 25, 2007 by the PBOC divested the COMELEC of its jurisdiction over all issues relating to her qualifications, and that jurisdiction now lies with the HRET.    

Biraogo, on the other hand, believed otherwise.   He argued x x x that the issue concerning Limkaichong’s disqualification is still within the exclusive jurisdiction of the COMELEC En Banc to resolve because when Limkaichong was proclaimed on May 25, 2007, the matter was still pending resolution before the COMELEC En Banc.

We do not agree.   The Court has invariably held that once a winning candidate has been proclaimed, taken his oath, and assumed office as a Member of the House of Representatives, the COMELEC’s jurisdiction over election contests relating to his election, returns, and qualifications ends, and the HRET’s own jurisdiction begins. It follows then that the proclamation of a winning candidate divests the COMELEC of its jurisdiction over matters pending before it at the time of the proclamation. The party questioning his qualification should now present his case in a proper proceeding before the HRET, the constitutionally mandated tribunal to hear and decide a case involving a Member of the House of Representatives with respect to the latter’s election, returns and qualifications.   The use of the word “sole” in Section 17, Article VI of the Constitution and in Section 250 of the OEC underscores the exclusivity of the Electoral Tribunals’ jurisdiction over election contests relating to its members.

x x x x^[48] (Additional emphasis supplied.)

          Maintaining that it retains jurisdiction over SPA No. 10-074 (DC), the COMELEC En Banc declared in its July 23, 2010 Resolution that the ruling in Limkaichong v. Commission on Elections does not apply to the case of Gonzalez since this Court found Limkaichong’s proclamation to be valid pursuant to COMELEC Resolution No. 8062 which adopted the policy guideline, in connection with the May 14, 2007 elections, of not suspending the proclamation of winning candidates with pending disqualification cases which shall be without prejudice to the continuation of the hearing and decision of the involved cases.

In the case of Gonzalez, the COMELEC said that the applicable rule is Section 16 of COMELEC Resolution No. 8678 promulgated on October 6, 2009 which specifically governs the proceedings for the May 10, 2010 Automated Elections.  Said provision reads:

SEC. 16.  Effects of Disqualification.  —  Any candidate who has been declared disqualified by final judgment shall not be voted for and the votes cast in his favor shall not be counted.  If, for any reason, he is not declared disqualified by final judgment before the election and he is voted for and receives the winning number of votes, the case shall continue and upon motion of the petitioner, complainant, or intervenor, the proclamation of such candidate may be ordered suspended during the pendency of the said case whenever the evidence is strong.

a)  where a similar complaint/petition is filed before the election and before the proclamation of the respondent and the case is not resolved before the election, the trial and hearing of the case shall continue and referred to the Law Department for preliminary investigation.

b)  where the complaint/petition is filed after the election and before the proclamation of the respondent, the trial and hearing of the case shall be suspended and referred to the Law Department for preliminary investigation.

In either case, if the evidence of guilt is strong, the Commission may order the suspension of the proclamation of respondent, and if proclaimed, to suspend the effects of proclamation. (Emphasis supplied.)

          Invoking the last paragraph of the foregoing provision which the COMELEC said is in harmony with Section 6 of R.A. No. 6646 (Electoral Reforms Law of 1987), the COMELEC ruled that Gonzalez’s proclamation was premature and illegal, thus:

Third, as found by the Supreme Court in Limkaichong, the COMELEC en banc on August 16, 2007 ruled on Limkaichong’s manifestation and motion for clarification, thus:

“In view of the proclamation of Limkaichong and her subsequent assumption of office on June 30, 2007, this Commission rules that all pending incidents relating to the qualifications of Limkaichong should now be determined by the House of Representatives Electoral Tribunal in accordance with the above-quoted provision of the Constitution.

“xxx”

On the contrary, in the present case, the Second Division of the Commission, in the exercise of its power to suspend such proclamation under the aforequoted provisions of law, refused to set aside the proclamation and the effects thereof.

Clearly, therefore, there is no taint of doubt that with the Resolution of the Second Division disqualifying the respondent, his proclamation by the Provincial Board of Canvassers was pre-mature and illegal and should therefore be annulled. There is no question that this Commission has the power to suspend such proclamation.  Notably, in several jurisprudence where the Supreme Court refused the annulment of proclamation and held that the jurisdiction pertained already to HRET, it was the Comelec itself that eventually allowed the proclamation and the effects thereof, as shown in [the] Decision of the Supreme Court above-referred to.  In stark contrast with the case at bar, this Commission itself is exercising its prerogative and power to nullify an illegal and premature proclamation of the respondent on the basis of the continued proceedings pursuant to both Section 16 of Resolution 8678 and Section 6 of Republic Act 6646.

Lastly, it must be taken into consideration that, unlike in the previous elections, the ballots were now already printed with the names of the candidates as of the date of printing, and it was already impossible without incurring tremendous expense and delay merely to remove the name of the disqualified candidate and program the PCOS machines not to count the votes cast in favor of the disqualified candidate in a short period of time prior to the actual elections.  For said reason, this Commission has ample power to suspend the effects of, and ultimately annul, the proclamation of the disqualified candidate whose votes should not have been counted in the first place.

x x x x^[49] (Emphasis supplied.)

We find the above ruling contrary to our pronouncement in Limkaichong and jurisprudence interpreting Section 72 of the OEC and Section 6 of R.A. No. 6646 which amended said provision.

          First, as already stated, there was no legal bar to the proclamation of Gonzalez as the winning candidate on May 12, 2010 since the May 8, 2010 Resolution at that time had not yet become final; in fact Gonzalez received a copy thereof only on May 11, 2010.  We have held that the five-day period for filing a motion for reconsideration under Rule 19, Section 2 of the COMELEC Rules of Procedure should be counted from the receipt of the decision, resolution, order, or ruling of the COMELEC Division.^[50]  With his filing of a motion for reconsideration within the three-day period provided in Section 7 of COMELEC Resolution No. 8696, the execution of the said resolution was effectively suspended. 

          Moreover, there is nothing in the May 8, 2010 Resolution of the Second Division ordering the suspension of the proclamation of Gonzalez.  From the language of Section 6 of R.A. No. 6646 upon which the first paragraph of Section 16 of COMELEC Resolution No. 8678 was based, the Commission can order the suspension of the proclamation of the winning candidate only upon motion during the pendency of the disqualification case.  The Court has ruled that the suspension of proclamation of a winning candidate is not a matter which the COMELEC Second Division can dispose of motu proprio.  Section 6 of R.A. No. 6646 requires that the suspension must be “upon motion by the complainant or any intervenor.”^[51]

          The rule then is that candidates who are disqualified by final judgment before the election shall not be voted for and the votes cast for them shall not be counted. But those against whom no final judgment of disqualification had been rendered may be voted for and proclaimed, unless, on motion of the complainant, the COMELEC suspends their proclamation because the grounds for their disqualification or cancellation of their certificates of candidacy are strong.^[52]  There being no final judgment of disqualification yet at the time of his proclamation on May 12, 2010, it was grave error for the COMELEC En Banc to rule that Gonzalez’s proclamation was illegal and premature.  Also, the May 8, 2010 Resolution rendered by the Second Division cannot be construed as an implicit exercise by the Commission of its power to suspend the proclamation of Gonzalez as it could not have yet ordered such suspension considering that Bichara (petitioner in SPA No. 10-074 [DC]) filed his “Urgent Motion to Stop/Suspend The Proclamation of Fernando Vallejo Gonzalez” only on May 11, 2010 after the promulgation of the May 8, 2010 Resolution.^[53]  Moreover, the COMELEC En Banc did not act on said motion of Bichara even after Gonzalez had been proclaimed by the PBOC.  Subsequently, Lim filed a motion for leave to intervene and suspend the effects of proclamation of Gonzalez, which was followed by ten very urgent motions for the COMELEC En Banc to resolve the same.^[54]

          Neither can the COMELEC anchor its ruling that the May 12, 2010 proclamation of Gonzalez was illegal and premature on the ground that votes for said candidate, who was disqualified under the May 8, 2010 Resolution of the Second Division, should not have been counted.  This is apparent from the other reason cited by the COMELEC as one of the circumstances distinguishing the present case from that of Limkaichong, thus:

Lastly, it must be taken into consideration that, unlike the previous elections, the ballots were now already printed with the names of the candidates as of the date of printing, and it was already impossible without incurring tremendous expense and delay merely to remove the name of the disqualified candidate and program the PCOS machines not to count the votes cast in favor of the disqualified candidate in a short period of time prior to the actual elections.  For said reason, this Commission has ample power to suspend the effects of, and ultimately annul, the proclamation of the disqualified candidate whose votes should not have been counted in the first place.^[55] (Emphasis supplied.)

          The above proposition is untenable.  The advent of automated elections did not make any difference in the application of Section 6 of R.A. No. 6646 insofar as the effects of disqualification are concerned.  Even at the time when ballots were physically read by the board of election inspectors and counted manually, it had not been absolutely necessary to reprint the ballots or remove the names of candidates who were disqualified before election.  The votes cast for such candidates considered as “stray votes” even if read by the PCOS machines will have to be disregarded by the board of canvassers upon proper order from the COMELEC.    

In any case, the point raised by the COMELEC is irrelevant in resolving the present controversy.    It has long been settled that pursuant to Section 6 of R.A. No. 6646, a final judgment before the election is required for the votes of a disqualified candidate to be considered “stray.”  In the absence of any final judgment of disqualification against Gonzalez, the votes cast in his favor cannot be considered stray.^[56]   After proclamation, taking of oath and assumption of office by Gonzalez, jurisdiction over the matter of his qualifications, as well as questions regarding the conduct of election and contested returns – were transferred to the HRET as the constitutional body created to pass upon the same.  The Court thus does not concur with the COMELEC’s flawed assertion of jurisdiction premised on its power to suspend the effects of proclamation in cases involving disqualification of candidates based on commission of prohibited acts and election offenses.  As we held in Limkaichong, any allegations as to the invalidity of the proclamation will not prevent the HRET from assuming jurisdiction over all matters essential to a member’s qualification to sit in the House of Representatives.^[57]

          It must be noted that sub-paragraphs (a) and (b), Section 16 of COMELEC Resolution No. 8678 which contemplate disqualification cases against candidates over which the COMELEC retains jurisdiction even after those candidates have won the elections, duly proclaimed and assumed office,  cannot be applied to petitions filed against candidates for the position of  Member of the House of Representatives questioning their constitutional and statutory qualifications for the office under Section 78 of the OEC. The law is explicit in vesting jurisdiction over such cases in the HRET.  In our Resolution dated July 20, 2009 denying the motion for reconsideration with prayer for oral argument filed by Biraogo in the Limkaichong case, we affirmed our ruling in our Decision of April 1, 2009 that “the proper remedy of those who may assail Limkaichong’s disqualification based on citizenship is to file before the HRET the proper petition at any time during incumbency.”  That Lim had already withdrawn the petition for quo warranto he had earlier filed before the HRET is of no consequence, considering that citizenship is a continuing requirement for the holding of office of Members of the House of Representatives. 

Under the 1987 Constitution, Members of the House of Representatives must be natural-born citizens not only at the time of their election but during their entire tenure. Anyone who assails a Representative’s citizenship or lack of it may still question the same at any time, even beyond the ten-day prescriptive period set in the 1998 HRET Rules.^[58]

We also hold that there is no basis for the COMELEC’s order constituting a Special Provincial Board of Canvassers for the purpose of proclaiming Lim who got the next highest number of votes in the May 10, 2010 elections for the position of Representative of the 3^rd District of Albay.  It is well-settled that the ineligibility of a candidate receiving majority votes does not entitle the eligible candidate receiving the next highest number of votes to be declared elected. A minority or defeated candidate cannot be deemed elected to the office. The votes intended for the disqualified candidate should not be considered null and void, as it would amount to disenfranchising the electorate in whom sovereignty resides.^[59]  The second placer is just that, a second placer – he lost in the elections and was repudiated by either the majority or plurality of voters.^[60]

Private respondent Lim argues that the second placer rule will not apply in this case because Gonzalez was disqualified to be a candidate before election under the assailed COMELEC resolutions which became final and executory after five (5) days without a restraining order issued by this Court.  The effect of the ruling on Gonzalez’s disqualification retroacts to the day of election (May 10, 2010).  As reflected in the recent Statement of Votes prepared by the Special Board of Canvassers, the name of Fernando V. Gonzalez has been delisted from the lists of official candidates for the Members of the House of Representatives in the 3^rd District of Albay.^[61]

The exception to the second placer rule is predicated on the concurrence of the following: (1) the one who obtained the highest number of votes is disqualified; and (2) the electorate is fully aware in fact and in law of a candidate’s disqualification so as to bring such awareness within the realm of notoriety but would nonetheless cast their votes in favor of the ineligible candidate.^[62]  These facts warranting the exception to the rule are not present in the case at bar.  As noted by Commissioner Velasco, the date of promulgation of the resolution declaring Gonzalez disqualified to be a candidate in the May 10, 2010 was not a previously fixed date as required by Section 6^[63] of COMELEC Resolution No. 8696 as the records do not show that the parties were given prior notice thereof.   In fact, Gonzalez through his counsel received a copy of the May 8, 2010 Resolution only on May 11, 2010, one day after the elections.  

And as we held in Bautista v. Commission on Elections^[64]

Thus, when the electorate voted for Bautista as Punong Barangay on 15 July 2002, it was under the belief that he was qualified. There is no presumption that the electorate agreed to the invalidation of their votes as stray votes in case of Bautista’s disqualification. The Court cannot adhere to the theory of respondent Alcoreza that the votes cast in favor of Bautista are stray votes.  A subsequent finding by the COMELEC en bancthat Bautista is ineligible cannot retroact to the date of elections so as to invalidate the votes cast for him.  As held in Domino v. COMELEC:

Contrary to the claim of INTERVENOR, petitioner was not notoriously known by the public as an ineligible candidate.Although the resolution declaring him ineligible as candidate was rendered before the election, however, the same is not yet final and executory. In fact, it was no less than the COMELEC in its Supplemental Omnibus Resolution No. 3046 that allowed DOMINO to be voted for the office and ordered that the votes cast for him be counted as the Resolution declaring him ineligible has not yet attained finality. Thus the votes cast for DOMINO are presumed to have been cast in the sincere belief that he was a qualified candidate, without any intention to misapply their franchise. Thus, said votes can not be treated as stray, void, or meaningless.^[65](Emphasis supplied.)

          We have declared that not even this Court has authority under any law to impose upon and compel the people to accept a loser, as their representative or political leader.^[66]  The wreath of victory cannot be transferred from the disqualified winner to the repudiated loser.^[67]  The COMELEC clearly acted with grave abuse of discretion in ordering the proclamation of private respondent Lim who lost by a wide margin of 29,292 votes, after declaring Gonzalez, the winning candidate, disqualified to run as Member of the House of Representatives.   

          WHEREFORE, the petition is GRANTED.  The assailed Resolution of the Second Division dated May 8, 2010 and COMELEC En Banc  Resolution dated July 23, 2010 in SPA No. 10-074 (DC) are hereby ANNULLED and SET ASIDE. The Petition for Disqualification and Cancellation of Certificate of Candidacy of Fernando V. Gonzalez is DISMISSED, without prejudice to the filing of a proper petition before the House of Representatives Electoral Tribunal raising the same question on the citizenship qualification of Fernando V. Gonzalez.

          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.

^*       On official leave.

^[1]       Rollo, pp. 110-114. Penned by Presiding Commissioner Nicodemo T. Ferrer and concurred in by Commissioners Lucenito N. Tagle and Elias R. Yusoph.

^[2]       Id. at 72-82. Penned by Commissioner Nicodemo T. Ferrer and concurred in by Commissioners Lucenito N. Tagle, Elias R. Yusoph and Gregorio Y. Larrazabal.

^[3]       Id. at 159-172.

^[4]       Id. at 184-198.

^[5]       Id. at 114.

^[6]       Id. at 111-113.

^[7]       Id. at 115.

^[8]       Id. at 509-513.

^[9]       Id. at 507-508.

^[10]     Id. at 488-506.

^[11]     Id. at 138-142.

^[12]     Id. at 319-323.

^[13]     Id. at 115-137.

^[14]     Id. at 407-412.

^[15]     The Electoral Reforms Law of 1987.

^[16]     Id. at 81-82.

^[17]     Id. at 83-86.

^[18]     Id. at 87-89.

^[19]     Id. at 639-649.

^[20]     Id. at 863-865.

^[21]     G.R. Nos. 178831-32, 179120, 179132-33 & 179240-41, April 1, 2009, 583 SCRA 1.

^[22]     Rollo, pp. 866-868.

^[23]     Id. at 29.

^[24]     Id. at 926-955.

^[25]     G.R. No. 135886, August 16, 1999, 312 SCRA 447, 455.

^[26]     Id. at 458, citing  Loong v. Commission on Elections, G.R. No. 93986, December 22, 1992, 216 SCRA 760.

^[27]     Id. at 455, citing Abella v. Larrazabal, G.R. Nos. 87721-30 & 88004, December 21, 1989, 180 SCRA 509 and Aquino v. Commission on Elections, G.R. No. 120265, September 18, 1995,248 SCRA 400.

^[28]     Id. at 455-456, citing Labo, Jr. v. Commission on Elections, G.R. Nos. 105111 & 105384, July 3, 1992, 211 SCRA 297 and Frivaldo v. Commission on Elections, G.R. Nos. 120295 & 123755, June 28, 1996, 257 SCRA 727, G.R. No. 87193, June 23, 1989, 174 SCRA 245 and Republic v. De la Rosa, G.R. Nos. 104654, 105715 & 105735, June 6, 1994, 232 SCRA 785.

^[29]     Id. at 459, citing Romualdez-Marcos v. Commission on Elections, G.R. No. 119976, September 18, 1995, 248 SCRA 300, 326.

^[30]     Id. at 456-457.

^[31]     Supra note 26.

^[32]     Id. at 765-768.

^[33]     Supra note 26.

^[34]     Id. at 768-769.

^[35]     G.R. Nos. 179695 & 182369, December 18, 2008, 574 SCRA 782.

^[36]     Id. at 792-794, 796-798 and 800-803.

^[37]     Rollo, p. 74.

^[38]     Republic v. Asuncion, G.R. No. 159695, September 15, 2006, 502 SCRA 140, 147-148, citing  Marina Properties Corporation v. Court of Appeals, 355 Phil. 705, 716 (1998).

^[39]     Coquilla v. Commission on Elections, G.R. No. 151914, July 31, 2002, 385 SCRA 607, 614.

^[40]     Rollo, pp. 115-137.

^[41]     See Japzon v. Commission on Elections, G.R. No. 180088, January 19, 2009, 576 SCRA 331, 353.

^[42]     See Planas v. Commission on Elections, G.R. No. 167594, March 10, 2006, 484 SCRA 529, 537. 

^[43]     Guerrero v. Commission on Elections, G.R. No. 137004, July 26, 2000, 336 SCRA 458, 466-467, citing Aquino v. Commission on Elections, supra note 27 at 417-418 and  Romualdez-Marcos v. Commission on Elections, supra note 29 at 340-341.  See also Dimaporo v. Commission on Elections, G.R. No. 179285, February 11, 2008, 544 SCRA 381, 392.

^[44]     375 Phil. 1106 (1999).

^[45]     Id. at 1115.

^[46]     No. L-84297, December 8, 1988, 168 SCRA 391, 401.

^[47]     Supra note 21.

^[48]     Id. at 32-34.

^[49]     Rollo, pp. 79-80.

^[50]     Coquilla v. Commission on Elections, supra note 39 at 612, citing Bulaong v. COMELEC, First Division, G.R. No. 107987, March 31, 1993, 220 SCRA 745.

^[51]     Codilla, Sr. v. De Venecia, G.R. No. 150605, December 10, 2002, 393 SCRA 639, 663.            

^[52]     Coquilla v. Commission on Elections, supra note 39 at 615.

^[53]     Rollo, pp. 278-280.

^[54]     Id. at 373-487.

^[55]     Id. at 80.

^[56]     Quizon v. Commission on Elections, G.R. No. 177927, February 15, 2008, 545 SCRA 635, 642, citing  Codilla, Sr. v. De Venecia, supra note 51 at 672.

^[57]     Limkaichong v. Commission on Elections, supra note 21 at 36.

^[58]     Id. at 38.

^[59]     Albaña v. Commission on Elections, G.R. No. 163302, July 23, 2004, 435 SCRA 98, 109, citing  Labo, Jr. v. Commission on Elections, supra note 28 at 311;  Sunga v. Commission on Elections,  G.R. No. 125629, March 25, 1998, 288 SCRA 76.  See also  Labo, Jr. v. Commission on Elections, G.R. No. 86564, August 1, 1989, 176 SCRA 1;  Abella v. COMELEC, G.R. Nos. 100710 & 100739, September 3, 1991, 201 SCRA 253; Benito v. COMELEC, G.R. No. 106053, August 17, 1994, 235 SCRA 436; and  Domino v. Commission on Elections, G.R. No. 134015, July 19, 1999, 310 SCRA 546.

^[60]     Quizon v. Commission on Elections, supra note 56 at 643, citing Ocampo v. House of Representatives Electoral Tribunal, G.R. No. 158466, June 15, 2004, 432 SCRA 144, 150.

^[61]     Rollo, p. 858.

^[62]     Grego v. Commission on Elections, G.R. No. 125955, June 19, 1997, 274 SCRA 481, 501, citing Labo, Jr. v. Commission on Elections, supra note 28.

^[63]     SEC. 6.  Promulgation.  —  The promulgation of a Decision or Resolution of the Commission or a Division shall be made on a date previously fixed, notice of which shall be served in advance upon the parties or their attorneys personally, or by registered mail, telegram, fax or thru the fastest means of communication.

^[64]     G.R. Nos. 154796-97, October 23, 2003, 414 SCRA 299.

^[65]     Id. at 324-325.

^[66]     Miranda v. Abaya, G.R. No. 136351, July 28, 1999, 311 SCRA 617, 635.

^[67]     Domino v. Commission on Elections, supra note 59 at 574.

CASE  2011-0107: JULIAN S. LEBRUDO and REYNALDO L. LEBRUDO VS. REMEDIOS LOYOLA (G.R. No. 181370, 9 MARCH 2011, CARPIO, J.) SUBJECTS: CERTIFICATE OF LAND OWNERSHIP, TRANSFER OF RIGHTS (BRIEF TITLE: LEBRUDO VS. LOYOLA)

SECOND DIVISION

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

DECISION

CARPIO, J.:

The Case

Before the Court is a petition¹ for review on certiorari assailing the Resolution² dated 4 January 2008 and Decision³ dated 17 August 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 90048.

The Facts

Respondent Remedios Loyola (Loyola) owns a 240-square meter parcel of land located in Barangay Milagrosa, Carmona, Cavite, known as Lot No. 723-6, Block 1, Psd-73149 (lot), awarded by the Department of Agrarian Reform (DAR) under Republic Act No. 6657⁴ (RA 6657) or the Comprehensive Agrarian Reform Law of 1988. This lot is covered by Certificate of Land Ownership⁵ (CLOA) No. 20210 issued in favor of Loyola on 27 December 1990 and duly registered on 14 March 1991 under Transfer of Certificate of Title (TCT)/CLOA No. 998.

On 27 June 1995, petitioner Julian S. Lebrudo (Lebrudo), now deceased and represented by his son, petitioner Reynaldo L. Lebrudo, filed with the Office of the Provincial Agrarian Reform Adjudicator (PARAD) of Trece Martires City, Cavite, an action⁶ for the cancellation of the TCT/CLOA in the name of Loyola and the issuance of another for the one-half portion of the lot in Lebrudo’s favor.

In a Decision⁷ dated 18 December 1995, the PARAD dismissed the case without prejudice on the ground that the case was filed prematurely. On 11 March 1996, Lebrudo re-filed the same action.⁸

Lebrudo alleged that he was approached by Loyola sometime in 1989 to redeem the lot, which was mortgaged by Loyola’s mother, Cristina Hugo, to Trinidad Barreto. After Lebrudo redeemed the lot for P250.00 and a cavan of palay, Loyola again sought Lebrudo’shelp in obtaining title to the lot in her name by shouldering all the expenses for the transfer of the title of the lot from her mother, Cristina Hugo. In exchange, Loyola promised to give Lebrudo the one-half portion of the lot. Thereafter, TCT/CLOA No. 998 was issued in favor of Loyola. Loyola then allegedly executed a Sinumpaang Salaysay⁹ dated 28 December 1989, waiving and transferring her rights over the one-half portion of the lot in favor of Lebrudo. To reiterate her commitment, Loyola allegedly executed two more SinumpaangSalaysay¹⁰ dated 1 December 1992 and 3 December 1992, committing herself to remove her house constructed on the corresponding one-half portion to be allotted to Lebrudo.

Thereafter, Lebrudo asked Loyola to comply with her promise. However, Loyola refused. Lebrudo sought the assistance of theSangguniang Barangay of Milagrosa, Carmona, Cavite; the Philippine National Police (PNP) of Carmona, Cavite; and the Department of Agrarian Reform to mediate. However, despite steps taken to amicably settle the issue, as evidenced by certifications from the PNP and the barangay, there was no amicable settlement. Thus, Lebrudo filed an action against Loyola.

In her Answer, Loyola maintained that Lebrudo was the one who approached her and offered to redeem the lot and the release of the CLOA. Loyola denied promising one-half portion of the lot as payment for the transfer, titling and registration of the lot. Loyola explained that the lot was her only property and it was already being occupied by her children and their families. Loyola also denied the genuineness and due execution of the two Sinumpaang Salaysay dated 28 December 1989 and 3 December 1992. The records do not show whether Loyola renounced the Sinumpaang Salaysay dated 1 December 1992.

In a Decision¹¹ dated 13 February 2002, the PARAD of Trece Martires City,Cavite decided the case in Lebrudo’s favor. The dispositive portion of the decision states:

WHEREFORE, in view of the foregoing, JUDGMENT is hereby rendered:

a) Declaring Respondent Remedios Loyola disqualified as farmer beneficiary of the subject land identified asLot723-6, Block 1, under TCT/CLOA No. 998;

b) Declaring the Deed of sales over the subject lot illegal and ordered the same set aside;

c) Declaring Plaintiff JULIAN LEBRUDO entitled to one half (½) of the subject property under TCT/CLOA No. 998 in the name ofRemedios Loyola;

d) Ordering the other one half (½) of the subject lot ready for allocation to qualified beneficiary;

e) Ordering the DAR PARO Office thru the Operations Division to cancel TCT/CLOA No. 998 and in lieu thereof, to generate and issue another title over the 120 square meters in the name of JULIAN LEBRUDO;

f) Ordering the survey of the subject lot at the expense of the petitioner so that title be issued to plaintiff herein;

g) Ordering the Register of Deeds, Trece Martires Cityto cancel TCT/CLOA No. 998 in the name of Remedios Loyola;

h) Ordering the Register of Deeds, Trece Martires Cityto register the title in the name [of] Julian Lebrudo as presented by the DAR or its representative over the lot in question;

No pronouncement as to costs and damages.

SO ORDERED.¹²

Loyola appealed to the Department of Agrarian Reform Adjudication Board (DARAB).¹³ In a Decision¹⁴ dated 24 August 2004, the DARAB reversed the decision of the PARAD and ruled in Loyola’s favor. The dispositive portion states:

WHEREFORE, premises considered, the appealed decision is hereby REVERSED and SET ASIDE and a new judgment rendered as follows:

1. Upholding and maintaining the validity and effectivity of TCT/CLOA No. 998 in the name of the respondent;

2. Declaring the Sinumpaang Salaysay dated December 28, 1989 and December 3, 1992 attached to the petition as Annex C and F, null and void without legal force and effect;

3. Directing the Register of Deeds of Trece Martires City,Caviteto reinstate TCT/CLOA No. 998 in the name of the respondent.

The status quo ante order issued by this Board on November 3, 2003 is hereby LIFTED.

SO ORDERED.¹⁵

Lebrudo filed a motion for reconsideration which the DARAB denied in a Resolution¹⁶ dated 12 April 2005. Lebrudo then filed a petition¹⁷ for review with the CA.

In a Decision¹⁸ dated 17 August 2007, the CA affirmed the decision of the DARAB. Lebrudo filed a motion for reconsideration which the CA denied in a Resolution¹⁹ dated 4 January 2008.

Hence, this petition.

The Issue

The main issue is whether Lebrudo is entitled to the one-half portion of the lot covered by RA 6657 on the basis of the waiver and transfer of rights embodied in the two Sinumpaang Salaysay dated 28 December 1989 and 3 December 1992 allegedly executed by Loyola in his favor.

The Court’s Ruling

The petition lacks merit.

A Certificate of Land Ownership or CLOA is a document evidencing ownership of the land granted or awarded to the beneficiary by DAR, and contains the restrictions and conditions provided for in RA 6657 and other applicable laws. Section 27 of RA 6657, as amended by RA 9700,²⁰ which provides for the transferability of awarded lands, states:

SEC. 27. Transferability of Awarded Lands. – Lands acquired by beneficiaries under this ACT may not be sold, transferred or conveyed except through hereditary succession, or to the government, or to the LBP, or to other qualified beneficiaries for a period of ten (10) years: Provided, however, That the children or the spouse of the transferor shall have a right to repurchase the land from the government or LBP within a period of two (2) years. Due notice of the availability of the land shall be given by the LBP to the Barangay Agrarian Reform Committee (BARC) of the barangay where the land is situated. The Provincial Agrarian Coordinating Committee (PARCCOM), as herein provided, shall, in turn, be given due notice thereof by the BARC.

The title of the land awarded under the agrarian reform must indicate that it is an emancipation patent or a certificate of land ownership award and the subsequent transfer title must also indicate that it is an emancipation patent or a certificate of land ownership award.
If the land has not yet been fully paid by the beneficiary, the rights to the land may be transferred or conveyed, with prior approval of the DAR, to any heir of the beneficiary or to any other beneficiary who, as a condition for such transfer or conveyance, shall cultivate the land himself. Failing compliance herewith, the land shall be transferred to the LBP which shall give due notice of the availability of the land in the manner specified in the immediately preceding paragraph. x x x (Emphasis supplied)

It is clear from the provision that lands awarded to beneficiaries under the Comprehensive Agrarian Reform Program (CARP) may not be sold, transferred or conveyed for a period of 10 years. The law enumerated four exceptions: (1) through hereditary succession; (2) to the government; (3) to the Land Bank of the Philippines (LBP); or (4) to other qualified beneficiaries. In short, during the prohibitory 10-year period, any sale, transfer or conveyance of land reform rights is void, except as allowed by law, in order to prevent a circumvention of agrarian reform laws.

In the present case, Lebrudo insists that he is entitled to one-half portion of the lot awarded to Loyola under the CARP as payment for shouldering all the expenses for the transfer of the title of the lot from Loyola’s mother, Cristina Hugo, to Loyola’s name. Lebrudo used the two Sinumpaang Salaysay executed by Loyola alloting to him the one-half portion of the lot as basis for his claim.

Lebrudo’s assertion must fail. The law expressly prohibits any sale, transfer or conveyance by farmer-beneficiaries of their land reform rights within 10 years from the grant by the DAR. The law provides for four exceptions and Lebrudo does not fall under any of the exceptions. In Maylem v. Ellano,²¹ we held that the waiver of rights and interests over landholdings awarded by the government is invalid for being violative of agrarian reform laws. Clearly, the waiver and transfer of rights to the lot as embodied in the Sinumpaang Salaysayexecuted by Loyola is void for falling under the 10-year prohibitory period specified in RA 6657.

Lebrudo asserts that he is a qualified farmer beneficiary who is entitled to the lot under the CARP. DAR Administrative Order No. 3,²²series of 1990, enumerated the qualifications of a beneficiary:

1. Landless;

2. Filipino citizen;

3. Actual occupant/tiller who is at least 15 years of age or head of the family at the time of filing application; and

4. Has the willingness, ability and aptitude to cultivate and make the land productive.

Lebrudo does not qualify as a beneficiary because of (1) and (3). First, Lebrudo is not landless. According to the records,²³ Municipal Agrarian Reform Officer Amelia Sangalang issued a certification dated 28 February 1996 attesting that Lebrudo was awarded by the DAR with a homelot consisting of an area of 236 square meters situated at Japtinchay Estate, Bo. Milagrosa, Carmona,Cavite. Next, Lebrudois not the actual occupant or tiller of the lot at the time of the filing of the application. Loyola and her family were the actual occupants of the lot at the time Loyola applied to be a beneficiary under the CARP.

Further, the CA, in its Decision dated 17 August 2007, correctly observed that a certificate of title serves as evidence of an indefeasible title and after the expiration of the one-year period from the issuance of the registration decree upon which it is based, the title becomes incontrovertible. The CA also declared that the basis of Lebrudo’s claim, the two Sinumpaang Salaysay dated 28 December 1989 and 3 December 1992, were illegal and void ab initio for being patently intended to circumvent and violate the conditions imposed by the agrarian law. The relevant portions of the decision provide:

x x x It is undisputed that CLOA 20210 was issued to the respondent on December 27, 1990 and was registered by the Register of Deeds of Cavite on March 14, 1991, resulting in the issuance of TCT/CLOA No. 998 in her name.

Under Sec. 43, P.D. 1529, the certificate of title that may be issued by the Register of Deeds pursuant to any voluntary or involuntary instrument relating to the land shall be the transfer certificate of title, which shall show the number of the next previous certificate covering the same land and also the fact that it was previously registered, giving the record number of the original certificate of title and the volume and page of the registration book in which the original certificate of title is found.

The certificate of title serves as evidence of an indefeasible title to the property in favor of the person whose name appears therein. After the expiration of the one-year period from the issuance of the decree of registration upon which it is based, the title becomes incontrovertible.

Accordingly, by the time when original petitioner Julian Lebrudo filed on June 27, 1995 the first case (seeking the cancellation of the respondent’s CLOA), the respondent’s certificate of title had already become incontrovertible. That consequence was inevitable, for as the DARAB correctly observed, an original certificate of title issued by the Register of Deeds under an administrative proceeding was as indefeasible as a certificate of title issued under a judicial registration proceeding. Clearly, the respondent, as registered property owner, was entitled to the protection given to every holder of a Torrens title.

The issue of whether or not the respondent was bound by her waiver and transfer in favor of Julian Lebrudo, as contained in the several sinumpaangsalaysay, was irrelevant. Worse for the petitioner, the DARAB properly held that the undertaking of the respondent to Julian Lebrudo under thesinumpaang salaysay dated December 28, 1989 and December 3, 1992 – whereby she promised to give him ½ portion of the homelot in consideration of his helping her work on the release of the CLOA to her and shouldering all the expenses for the purpose – was “clearly illegal and void ab initio” for being patently intended to circumvent and violate the conditions imposed by the agrarian laws and their implementing rules. He could not, therefore, have his supposed right enforced. x x x²⁴

We see no reason to disturb the findings of the CA. The main purpose of the agrarian reform law is to ensure the farmer-beneficiary’s continued possession, cultivation and enjoyment of the land he tills.²⁵ To do otherwise is to revert back to the old feudal system whereby the landowners reacquired vast tracts of land and thus circumvent the government’s program of freeing the tenant-farmers from the bondage of the soil.²⁶

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 17 August 2007 and Resolution dated 4 January 2008 of the Court of Appeals in CA-G.R. SP No. 90048.

SO ORDERED.

ANTONIO T. CARPIO

Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.

Associate Justice

DIOSDADO M. PERALTA ROBERTO A. ABAD

Associate Justice Associate Justice

JOSE C. MENDOZA

Associate Justice

ATTESTATION

I attest 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.

ANTONIO T. CARPIO

Associate Justice

Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, 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.

RENATO C. CORONA

Chief Justice

*Designated additional member per Special Order No. 933 dated 24 January 2011.

1Under Rule 45 of the 1997 Revised Rules of Civil Procedure.

2Rollo, p. 19. Penned by Justice Lucas P. Bersamin (now a member of this Court) with Justices Portia Aliño Hormachuelos and Estela M. Perlas-Bernabe, concurring.

3Id. at 20-29.

4An Act Instituting a Comprehensive Agrarian Reform Program to Promote Social Justice and Industrialization, Providing the Mechanism for its Implementation, and for Other Purposes. Approved on 10 June 1988.

5Document evidencing ownership of the land granted or awarded to the beneficiary by DAR, and contains the restrictions and conditions provided for in R.A. 6657 and other applicable laws.

6Docketed as DARAB Case No. 269-95.

7Rollo, p. 32.

8Docketed as DARAB Case No. 0357-96.

9Rollo, p. 73.

10Id. at 74-75.

11Id. at 31-39.

12Id. at 38-39.

13Docketed as DARAB Case No. 11565 (Reg. Case No. 0357-96).

14Rollo, pp. 44-53.

15Id. at 52.

16Id. at 56-57.

17Docketed as CA-G.R. SP No. 90048.

18Supra note 3.

19Supra note 2.

20An Act Strengthening the Comprehensive Agrarian Reform Program (CARP), Extending the Acquisition and Distribution of All Agricultural Lands, Instituting Necessary Reforms, Amending for the Purpose Certain Provisions of Republic Act No. 6657, Otherwise Known as the Comprehensive Agrarian Reform Law of 1988, as Amended, and Appropriating Funds Therefor. Took effect on 1 July 2009.

21G.R. No. 162721, 13 July 2009, 592 SCRA 440, 452, citing Lapanday Agricultural & Development Corporation v. Estita, 490 Phil. 137, 152 (2005).

22Revised Rules and Procedure Governing Distribution and/or Titling of Lots in Landed Estates Administered by DAR. Issued on May 1990.

23Rollo, p. 50.

24Id. at 27-29.

25Corpuz v. Sps. Grospe, 388 Phil. 1100, 1110 (2000). See also Torres v. Ventura, G.R. No. 86044, 2 July 1990, 187 SCRA 96.

26Corpuz v. Sps. Grospe, supra.