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March 2011 Philippine Supreme Court Decisions on Political Law « LEXOTERICA: A PHILIPPINE BLAWG

March 2011 Philippine Supreme Court Decisions on Political Law « LEXOTERICA: A PHILIPPINE BLAWG

March 2011 Philippine Supreme Court Decisions on Political Law

April 26, 2011
Vicente D. Gerochi IV

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

Constitutional Law

COMELEC; House of Representatives Electoral Tribunal; Jurisdiction. The Supreme Court held in this case that despite recourse to it, it cannot rule on the issue of citizenship of petitioner 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. 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 the candidate’s election and qualifications ends, and the HRET’s own jurisdiction begins. Fernando V. Gonzalez v. Commission on Elections, et al., G.R. No. 192856, March 8, 2011.

Equal Protection. The main issue in this case is whether or not PAGCOR is still exempt from corporate income tax and VAT with the enactment of R.A. No. 9337. The Supreme Court held that under Section 1 of R.A. No. 9337, amending Section 27 (c) of the National Internal Revenue Code of 1977, petitioner is no longer exempt from corporate income tax as it has been effectively omitted from the list of GOCCs that are exempt from it. The burden of proof rests upon the party claiming exemption to prove that it is, in fact, covered by the exemption so claimed. In this case, PAGCOR failed to prove that it is still exempt from the payment of corporate income tax, considering that Section 1 of R.A. No. 9337 amended Section 27 (c) of the National Internal Revenue Code of 1997 by omitting PAGCOR from the exemption. PAGCOR cannot find support in the equal protection clause of the Constitution, as the legislative records of the Bicameral Conference Meeting dated October 27, 1997, of the Committee on Ways and Means, show that PAGCOR’s exemption from payment of corporate income tax, as provided in Section 27 (c) of R.A. No. 8424, or the National Internal Revenue Code of 1997, was not made pursuant to a valid classification based on substantial distinctions and the other requirements of a reasonable classification by legislative bodies, so that the law may operate only on some, and not all, without violating the equal protection clause. The legislative records show that the basis of the grant of exemption to PAGCOR from corporate income tax was PAGCOR’s own request to be exempted. Philippine Amusement and Gaming Corporation v. Bureau of Internal Revenue, G.R. No. 172087, March 15, 2011.

Impeachment; Initiation. The Supreme Court reiterated its previous ruling that the term “initiate” as used in Section 3, Article XI of the Constitution refers to the filing of the impeachment complaint coupled with Congress’ taking initial action on said complaint. The initial action of the House of Representatives on the complaint is the referral of the same to the Committee on Justice. Ma. Merceditas C. Gutierrez v. The House of Representatives Committee on Justice, et al., G.R. No. 193459, March 8, 2011.

Impeachment; Promulgation of Rules. When the Constitution uses the word “promulgate,” it does not necessarily mean to publish in the Official Gazette or in a newspaper of general circulation. Promulgation, as used in Section 3(8), Article XI of the Constitution, suitably takes the meaning of “to make known” as it should be generally understood. Ma. Merceditas C. Gutierrez v. The House of Representatives Committee on Justice, et al., G.R. No. 193459, March 8, 2011.

Non-impairment Clause. Petitioner PAGCOR, in this case, states that the private parties/investors transacting with it considered the tax exemptions, which inure to their benefit, as the main consideration and inducement for their decision to transact/invest with it. Petitioner argues that the withdrawal of its exemption from corporate income tax by R.A. No. 9337 has the effect of changing the main consideration and inducement for the transactions of private parties with it; thus, the amendatory provision is violative of the non-impairment clause of the Constitution. The SC held that a franchise partakes of the nature of a grant which is beyond the purview of the non-impairment clause of the Constitution. Under Section 11, Article XII of the Constitution, PAGCOR’s franchise is subject to amendment, alteration or repeal by Congress such as the amendment under Section 1 of R.A. No. 9377. Hence, the provision in Section 1 of R.A. No. 9337, amending Section 27 (c) of R.A. No. 8424 by withdrawing the exemption of PAGCOR from corporate income tax, which may affect any benefits to PAGCOR’s transactions with private parties, is not violative of the non-impairment clause of the Constitution. Philippine Amusement and Gaming Corporation v. Bureau of Internal Revenue, G.R. No. 172087, March 15, 2011.

Senate Ethics Committee; Due Process. This case refers to the ethics complaint filed against Sen. Manny Villar on the alleged double insertion of Php200 million for the C-5 Road Extension Project in the 2008 General Appropriations Act. Petitioners allege that the adoption of the Rules of the Ethics Committee by the Senate Committee of the Whole is violative of Senator Villar’s right to due process. The SC did not agree. The Constitutional right of the Senate to promulgate its own rules of proceedings has been recognized and affirmed by this Court. The only limitation to the power of Congress to promulgate its own rules is the observance of quorum, voting, and publication when required. As long as these requirements are complied with, according to the SC, the Court will not interfere with the right of Congress to amend its own rules. Aquilino Q. Pimentel, Jr., et al. v. Senate Committee of the Whole represented by Senate President Juan Ponce Enrile, G.R. No. 187714, March 8, 2011.

Senate Ethics Committee; Equal Protection. Petitioners allege that the Senate Committee of the Whole was constituted solely for the purpose of assuming jurisdiction over the complaint against Senator Villar. Petitioners further allege that the act was discriminatory and removed Senator Villar’s recourse against any adverse report of the Ethics Committee to the Senate as a body. The SC did not agree with this. The Rules of the Ethics Committee provide that “all matters relating to the conduct, rights, privileges, safety, dignity, integrity and reputation of the Senate and its Members shall be under the exclusive jurisdiction of the Senate Committee on Ethics and Privileges.” However, in this case, the refusal of the Minority to name its members to the Ethics Committee stalled the investigation. In short, while ordinarily an investigation about one of its members’ alleged irregular or unethical conduct is within the jurisdiction of the Ethics Committee, the Minority effectively prevented it from pursuing the investigation when they refused to nominate their members to the Ethics Committee. Even Senator Villar called the Ethics Committee a kangaroo court and declared that he would answer the accusations against him on the floor and not before the Ethics Committee. Given the circumstances, the referral of the investigation to the Committee of the Whole was an extraordinary remedy undertaken by the Ethics Committee and approved by a majority of the members of the Senate. Aquilino Q. Pimentel, Jr., et al. v. Senate Committee of the Whole represented by Senate President Juan Ponce Enrile, G.R. No. 187714, March 8, 2011.

Senate; Publication of Rules. Petitioners assail the non-publication of the Rules of the Senate Committee of the Whole. Respondent counters that publication is not necessary because the Senate Committee of the Whole merely adopted the Rules of the Ethics Committee which had been published in the Official Gazette on 23 March 2009. Respondent alleges that there is only one set of Rules that governs both the Ethics Committee and the Senate Committee of the Whole. The SC held that the Constitution does not require publication of the internal rules of the House or Senate. Since rules of the House or the Senate that affect only their members are internal to the House or Senate, such rules need not be published, unless such rules expressly provide for their publication before the rules can take effect. In this particular case, the Rules of the Senate Committee of the Whole itself provide that the Rules must be published before the Rules can take effect. Thus, even if publication is not required under the Constitution, publication of the Rules of the Senate Committee of the Whole is required because the Rules expressly mandate their publication. To comply with due process requirements, the Senate must follow its own internal rules if the rights of its own members are affected. Aquilino Q. Pimentel, Jr., et al. v. Senate Committee of the Whole represented by Senate President Juan Ponce Enrile, G.R. No. 187714, March 8, 2011.

Senate; Quorum and Voting. If the Senate is constituted as a Committee of the Whole, a majority of the Senate is required to constitute a quorum to do business pursuant to Section 16(2), Article VI of the Constitution. Otherwise, there will be a circumvention of this express provision of the Constitution on quorum requirement. Obviously, the Rules of the Senate Committee of the Whole require modification to comply with requirements of quorum and voting which the Senate must have overlooked in this case. In any event, in case of conflict between the Rules of the Senate Committee of the Whole and the Constitution, the latter will of course prevail. . Aquilino Q. Pimentel, Jr., et al. v. Senate Committee of the Whole represented by Senate President Juan Ponce Enrile, G.R. No. 187714, March 8, 2011.

Unlawful Expenditure for being Excessive; Factors. 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: (a) supply and demand forces in the market; (b) government price quotations; (c) warranty of products or special features; (d) brand of products. In this case, the issue was whether the computer units bought by Cooperative Development Authority (CDA) from Tetra were overpriced. The 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 SC concluded that 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 Php1,269,630.00 (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 for Php929,649.00 (same price per item of Php44,269.00) and one unit UPS for Php86,000.00. The total contract price obtained by Tetra was Php2,285,279.00, of which COA disallowed the amount of Php881,819.00 representing the overprice per the auditor’s findings. Candelario L. Verzosa, Jr. v. Guillermo N. Carague, et al., G.R. No. 157838, March 8, 2011.

Unlawful Expenditure; Liability of Public Officers. The SC held the petitioner liable personally and solidarily for the disallowed amount of Php881,819.00. The doctrine of separate personality of a corporation finds no application because the Cooperative Development Authority 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 Development Academy of the Philippines-Technical Evaluation Committee (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. Candelario L. Verzosa, Jr. v. Guillermo N. Carague, et al., G.R. No. 157838, March 8, 2011.

Administrative Law

Administrative Proceeding; Doctrine of Primary Jurisdiction. This case refers to the ethics complaint filed against Sen. Manny Villar on the alleged double insertion of Php200 million for the C-5 Road Extension Project in the 2008 General Appropriations Act. Respondent avers that primary recourse of petitioners should have been to the Senate and that the Supreme Court must uphold the separation of powers between the legislative and judicial branches of the government. The SC held that the doctrine of primary jurisdiction does not apply to this case. The issues presented here do not require the expertise, specialized skills and knowledge of respondent for their resolution. On the contrary, the issues here are purely legal questions which are within the competence and jurisdiction of the Court, and not for an administrative agency or the Senate to resolve. Aquilino Q. Pimentel, Jr., et al. v. Senate Committee of the Whole represented by Senate President Juan Ponce Enrile, G.R. No. 187714, March 8, 2011.

Agrarian Law

Agrarian Reform; Qualifications of Beneficiary. DAR Administrative Order No. 3, series 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. The SC found that petitioner Lebrudo does not qualify as a beneficiary because of (1) and (3). First, Lebrudo is not landless. According to the records, Municipal Agrarian Reform Officer Amelia Sangalang issued a certification dated 28 February 1996 attesting that Lebrudo was awarded by the DAR with a home lot consisting of an area of 236 square meters situated at Japtinchay Estate, Bo. Milagrosa, Carmona, Cavite. Next, Lebrudo is 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. Julian S. Lebrudo and Reynaldo L. Lebrudo v. Remedios Loyola, G.R. No. 181370, March 9, 2011.

Agrarian Reform; Role of Land Bank of the Philippines. In this case, the issue was whether the Land Bank of the Philippines has the personality to file a petition for determination of just compensation before the Special Agrarian Court. The SC held that LBP did. The LBP is an agency created primarily to provide financial support in all phases of agrarian reform pursuant to Section 74 of RA 3844 or the Agricultural Reform Code and Section 64 of RA 6657 or the Comprehensive Agrarian Reform Law of 1988. In the previous case of Heirs of Lorenzo and Carmen Vidad v. Land Bank of the Philippines, the SC held that LBP is not merely a nominal party in the determination of just compensation, but an indispensable participant in such proceedings. It is primarily responsible for the valuation and determination of compensation for all private lands. It has the discretion to approve or reject the land valuation and just compensation for a private agricultural land placed under the CARP. In case the LBP disagrees with the valuation of land and determination of just compensation by a party, the DAR, or even the courts, the LBP not only has the right, but the duty, to challenge the same, by appeal to the Court of Appeals or to this Court, if appropriate. Davao Fruits Corporation v. Land Bank of the Philippines, G.R. Nos. 181566 & 181570. March 9, 2011.

Agrarian Reform; Sale or Conveyance of Land. It is clear from Section 27 of RA 6657 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 this case, petitioner 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 respondent 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. In other words, waiver of rights and interests over landholdings awarded by the government is invalid for being violative of agrarian reform laws. Julian S. Lebrudo and Reynaldo L. Lebrudo v. Remedios Loyola, G.R. No. 181370, March 9, 2011.

Election Law

Cancellation of Certificate of Candidacy; Disqualification of Candidate; Period for Filing Petition. 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. On March 30, 2010, a Petition for Disqualification and Cancellation of Certificate of Candidacy (COC) 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. The SC explained the difference between Cancellation under Section 78 of the Omnibus Election Code and Disqualification under Section 68 of the OEC. A petition to cancel a candidate’s COC may be filed under Section 78 of the OEC exclusively on the ground that any material representation contained therein as required by law is false. On the other hand, a petition for disqualification of a candidate may also be filed pursuant to Section 68 for committing prohibited acts referred to in said section. As to the ground of false representation in the COC under Section 78, the Court in a previous case elaborated that the misrepresentation must be material, i.e. misrepresentation regarding age, residence and citizenship or non-possession of natural-born Filipino status. In this case, 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. This Rule provides the prescriptive period of filing to be not later than the date of proclamation. 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 as the prescriptive period to be within five (5) days following the last day for the filing of certificate of candidacy. 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. 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. 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, in a previous case, had already rejected such justification. Fernando V. Gonzalez v. Commission on Elections, et al., G.R. No. 192856, March 8, 2011.

AM No. 11-3-6-SC; new rule on service of summons on foreign juridical entities.

AM. No. 11-3-6-SC

AMENDMENT OF SECTION 12, RULE 14 •
OF THE RULES OF COURT ON SERVICE UPON
FOREIGN PRIVATE JURIDICAL ENTITY
Section 12, Rule 14 of the Rules of Court is hereby amended to read
as follows:

"SEC. 12. Service upon foreign private juridical entity. —
When the defendant is a foreign private juridical entity which
has transacted business in the Philippines, service may be made
on its resident agent designated in accordance with law for that
purpose, or, i f there be no such agent, on the government
official designated by law to that effect, or on any of its officers
or agents within the Philippines.

If the foreign private juridical entity is not registered in
the Philippines or has no resident agent, service may, with leave
of court, be effected out of the Philippines through any of the
following means:

a) B y personal service coursed through the
appropriate court in the foreign country with the
assistance of the Department of Foreign Affairs;

b) B y publication once in a newspaper of general
circulation in the country where the defendant may be
found and by serving a copy of the summons and the
court order by-registered mail at the last known address
of the defendant;

c) B y facsimile or any recognized electronic
means that could generate proof of service; or

d) B y such other means as the court may in its
discretion direct."

This rule shall take effect fifteen (15) days after publication in a
newspaper of general circulation in the Philippines.

March 15, 2011