You are on page 1of 66

RA No. 386 G.R. No. L-65935 September 30, 1988 FILINVEST CREDIT CORPORATION, petitioner, vs.

THE INTERMEDIATE APPELLATE COURT and NESTOR B. SUGA JR., respondents. Labaguis, Loyola, Angara Law Offices for petitioner. Juan C. Navarro, Jr. for private respondent. SARMIENTO, J.: In this special civil action for certiorari, Filinvest Credit Corporation implores us to declare the nullity of the Decision 1 dated September 30, 1983 and the Resolution 2 dated December 16, 1983 of the Intermediate Appellate Courts 3 (now Court of Appeals) which were allegedly issued with grave abuse of discretion, amounting to lack of jurisdiction, or in excess of jurisdiction, and with patent denial of due process. 4 The facts as found by the trial court are as follows: 5 This is a case for damages filed by Nestor B. Sunga Jr., businessman and owner of the NBS Machineries Marketing and the NAP-NAP Transit. Plaintiff alleged that he purchased a passenger minibus Mazda from the Motor center, Inc. at Calasiao, Pangasinan on March 21, 1978 and for which he executed a promissory note (Exhibit "B") to cover the amount of P62,592.00 payable monthly in the amount of P2,608.00 for 24 months due and payable the 1st day of each month starting May 1, 1978 thru and inclusive of May 1, 1980. On the same date, however, a chattel mortgage was executed by him in favor of the Motor center, Inc. (Exhibit "A"). The Chattel Mortgage and Assignment was assigned to the Filinvest Credit Corporation with the conformity of the plaintiff. Nestor Sunga claimed that on October 21, 1978, the minibus was seized by two (2) employees of the defendant Filinvest Credit Corporation upon orders of the branch manager Mr. Gaspar de los Santos, without any receipt, who claimed that he was delinquent in the payments of his vehicle. The plaintiff reported the loss to the PC (Exhibit "Y") and after proper verification from the office of the Filinvest, the said vehicle was recovered from the Crisologo Compound which was later released by Rosario Fronda Assistant Manager of the Filinvest, and Arturo Balatbat as caretaker of the compound. The police blotter of the Integrated National Police of Dagupan City shows that Nestor Sunga and T/Sgt. Isidro Pascual of the 153rd PC Company sought the assistance of the Dagupan police and one Florence Onia of the Filinvest explained that the minibus was confiscated because the balance was already past due. After verification that his accounts are all in order, Florence Onia admitted it was their fault. The motor vehicle was returned to the plaintiff upon proper receipt.

After trial, the court a quo rendered its decision 6 the decretal portion of which reads: WHEREFORE, premises considered, this Court hereby renders judgment as follows, to wit: (1) ORDERING the defendant Filinvest Credit Corporation to pay the plaintiff Nestor Sunga Jr. the following damages, to wit: (a) Moral Damages P30,000.00 (b) Loss on Income of the minibus for three days 600.00 (c) Actual damages 500.00 (d) Litigation expenses 5,000.00 (e) Attorney's Fees 10,000.00 (2) And to pay the costs. SO ORDERED. Dissatisfied with the aforecited decision, the defendant (petitioner herein), interposed a timely appeal with the respondent court. On September 30, 1983, the latter promulgated its decision affirming in toto the decision of the trial court dated July 17, 1981, "except with regard to the moral damages which, under the circumstances of the accounting error incurred by Filinvest, is hereby increased from P30,000.00 to P50,000.00." 7 As the reconsideration of said decision proved futile in view of its denial by the respondent court in its resolution of December 16, 1983, the petitioners come to us thru this instant petition for certiorari under Rule 65 of the Rules of Court. The petitioner alleges the following errors: 8 It is a patent grave abuse of discretion amounting to lack of jurisdiction and a bare denial of petitioner's constitutional right to due process of law, when the respondent Court completely ignored the assigned errors in the petitioner's Brief upon which private respondent had joined issues with petitioner. In resolving the appeal before it thru matters and questions not raised at the trial or on appeal, by either of the parties, respondent Court exceeded its jurisdiction and acted with grave abuse of discretion. When the respondent Court granted private respondent MORAL DAMAGES in an exaggerated and unconscionable amount, respondent Court exceeded the bounds of its discretion, amounting to an absence or lack of jurisdiction. Respondent Court had NO authority to increase the award of DAMAGES to private respondent when the latter did not appeal the decision because private respondent considered the judgment (questioned by petitioner on appeal) as "perfect", "sound" and "wise" (at pp. 17 to 20, Brief for Appellee).

In relying upon a BILL pending before the Batasan Pambansa to buttress its judgment, the respondent Court acted contrary to law and jurisprudence, making of its judgment a NULLITY. The extensive citation and adherence by the respondent Court on (sic) its decision in the case of "Edilberto Rebosura, et al. versus Rogaciano Oropeza, CA-G.R. No. 63048-R, December 17, 1983" (which is nondoctrinal and under question in the Honorable Supreme Court) is not warranted in law and jurisprudence, and amounts to a grave abuse of discretion. The various assignments of error may be synthesized into the sole issues 9 of. Whether or not the respondent court a) in allegedly ignoring the various assigned errors in petitioners brief; b) in resolving issues not raised at the trial and on appeal; c) in increasing the amount of moral damages; and (d) in adhering to its decision in Edilberto Rebosura et al. vs. Rogaciano Oropeza, CA-G.R. No. 63048-R, as well as to Batasan Bill No. 3075, which is yet to be enacted into law, acted with grave abuse of discretion amounting to lack of jurisdiction. Contrary views are espoused by the parties in this case. Petitioner maintains that it was patent grave abuse of discretion amounting to lack of jurisdiction and a bare denial of the petitioner's constitutional right to due process of law, when the respondent court completely brushed aside the assigned errors in its brief. 10 It asserts that the constitutionality of the contractual stipulation between the parties embodied in the documents denominated as Promissory Note and Deed of Mortgage was not in issue in the court a quo and neither was the same raised on appea 11 and therefore should not have been passed upon based on the premise that the appellate court should not consider any error other than those assigned or specified. 12 Further, it submits that the controversy on appeal is capable of adjudication on other substantive grounds, without necessarily treading into constitutional questions. 13 It is also the petitioner's submission that the increase in the award of moral damages from the P30,000.00 adjudged by the trial court which was not appealed by respondent Sunga who felt that the award was "perfect," "sound," and "wise," to a "whopping P50,000.00" imposed by the respondent Intermediate Appellate Court (now Court of Appeals) amounted to a grave abuse of discretion. 14 Thus, the increase in the award which the respondent appellate court justified by the accounting error committed by the petitioner, should not be countenanced, as the same had no legal basis. 15 It rationalizes that the respondent court's invocation of a pending bill in the legislature, Batasan Bill 3075, to support its decision, is untenable. 16 Lastly, it deposits thatRebosura is riot on all fours with the case at bar and therefore adherence thereto was misplaced, 17 citing the following distinctions: 18 1) In Rebosura, there was unlawful entry while in this case, there was none; 2) in the former, the plaintiff did not breach the contract whereas in this case there is a finding by the court a quo of such violation; 3) in the former, the contract was denominated Deed of Sale with Reservation of Title, while in this case, the contracts referred to are the Promissory Note and Deed of Mortgage; 4) in the former, the defendant Oropeza was an unpaid seller while the plaintiff Rebosura was the buyer, whereas, in this case, the petitioner is the promissor-mortgagee while Sunga is the promissor-mortgagor; 5) in the former, there was no notice of delinquency and repossession, whereas, in this case, there is notice and demand; and 6) in the former, the contract was in fine print, whereas, in this case, it is not so. On the other side, the private respondent maintains that the respondent court did not abuse its discretion, stressing that a careful reading and understanding of the assailed decision would manifest that all assigned errors were resolved, citing portions of the decision which dealt specifically with each of the errors assigned. 19 He maintains that the

award of moral damages, impeached as exaggerated and unconscionable, is justified by the prayer in the appellee's (respondent Sunga's brief, to wit: FURTHER REMEDIES AND RELIEFS DEEMED JUST AND EQUITABLE UNDER AND WITHIN THE PREMISES ARE PRAYED FOR. 20 Lastly, the private respondent submits that the references to Batasan Bill No. 3075 and Rebosura were mere passing comments which did not in any way detract from the validity of the assailed decision. 21 After carefully considering and weighing all the arguments of both protagonists, we hold that the respondent court committed a grave abuse of discretion in increasing extravagantly the award of moral damages and in granting litigation expenses. In those respects, the petition is granted and to that extent the questioned decision is modified. There is no gainsaying that the plaintiff-appellee (respondent Sunga did not appeal from the decision of the courta quo which awarded him the sum of P30,000.00 by way of moral damages. "Well settled is the rule in this jurisdiction that whenever an appeal is taken in a civil case an appellee who has not himself appealed cannot obtain from the appellate court any affirmative relief other than the ones granted in the decision of the court below." 22 Verily the respondent court disregarded such a well settled rule when it increased the award for moral damages from P30,000.00 to P50,000.00, notwithstanding the fact that the private respondent did not appeal from the judgment of the trial court, an act indicative of grave abuse of discretion amounting to lack of jurisdiction. Certiorari lies when a court has acted without or in excess of jurisdiction or with grave abuse of discretion. 'without jurisdiction' means that the court acted with absolute want of jurisdiction. There is "excess of jurisdiction" where the court has jurisdiction but has transcended the same or acted without any statutory authority Leung Ben vs. O'Brien, 38 Phils., 182; Salvador Campos y CIA vs. Del Rosario, 41 Phil., 45). "Grave abuse of discretion" implies such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction (Abad Santos vs. Province of Tarlac, 38 Off. Gaz., 83.) or in other words, where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law. (Talavera-Luna vs. Nable, 38 Off. Gaz., 62). 23 Or, as held in the recent case of Robert Young vs. Julio A. Sulit, Jr., 24 "(F)or certiorari to lie, there must be capricious, arbitrary, and whimsical exercise of power, the very antithesis of the judicial prerogative in accordance with centuries of civil law and common law tradition." We had occasion to state that "there is no hard and fast rule in the determination of what would be a fair amount of moral damages, since each case must be governed by its own peculiar circumstances." 25 Be that as it may and in amplification of this generalization, we set the criterion that "in the case of moral damages, the yardstick should be that the "amount awarded should not be palpably and scandalously excessive" so as to indicate that it was the result of passion, prejudice or corruption on the part of the trial court ... . Moreover, the actual losses sustained by the aggrieved parties and the gravity of the injuries must be considered in arriving at reasonable levels ... ." 26 There is no dispute that the private respondent, a businessman and owner of the NBS Machineries Marketing and NAP-NAP Transit, is entitled to moral damages due to the

unwarranted seizure of the minibus Mazda, allegedly because he was delinquent in the payment of its monthly amortizations, which as stated above, turned out to be incorrect. 27 No doubt such intent tainted private respondent Sunga's reputation in the business community, thus causing him mental anguish, serious anxiety, besmirched reputation, wounded feelings, moral shock, and social humiliation. Considering, however, that respondent Sunga was dispossessed of his motor vehicle for barely three days, that is, from October 21, 1978 to October 23, 1978, possession of which was restored to him soon after the accounting errors were ironed out, we find that the award of moral damages even in the sum of P30,000.00 is excessive for it must be emphasized that "damages are not intended to enrich the complainant at the expense of a defendant. They are awarded only to enable the injured parties to obtain means, diversions or amusements that will serve to alleviate the moral sufferings the injured parties have undergone by reason of defendant's culpable action. In other words, the award of moral damages is aimed at a restoration within the limits of the possible, of the spiritual status quo ante; and therefore it must be proportionate to the suffering inflicted." 28 Moreover, "(M)oral damages though not incapable of pecuniary estimations, are in the category of an award designed to compensate the claimant for actual injury suffered and not to impose a penalty on the wrongdoer. 29 It behooves us therefore to reiterate the caveat to lower courts "to guard against the award of exorbitant damages that are way out of proportion to the environmental circumstances of a case and which time and again, this Court has reduced or eliminated. Judicial discretion granted to the courts in the assessment of damages must always be exercised with balanced restraints and measured objectivity. 30 We do not agree with private respondent's argument that the increase in the award of moral damages is justified by the prayer in its brief, to wit: FURTHER REMEDIES AND RELIEFS DEEMED JUST AND EQUITABLE UNDER AND WITHIN THE PREMISES ARE PRAYED FOR. Such statement is usually extant in practically all pleadings as a final statement; it is rhetorical flourish as it were and could not be a substitute for appeal as required by the rules for "the appellee cannot seek modification or reversal of the judgment or affirmative relief, unless he has also appealed therefrom." 31 With regard to the award of litigation expenses in the sum of P5,000.00, the same is hereby disallowed, there being no price for litigation. WHEREFORE, the petition is partially GRANTED. The award of moral damages is REDUCED to P10,000.00 and the grant of litigation expenses is ELIMINATED. The rest of the judgment is AFFIRMED. Without costs. SO ORDERED. Melencio-Herrera (Chairperson), Paras, and Regalado, JJ., concur. Padilla, J., took no part.

G.R. No. 110120 March 16, 1994 LAGUNA LAKE DEVELOPMENT AUTHORITY, petitioner, vs. COURT OF APPEALS, HON. MANUEL JN. SERAPIO, Presiding Judge RTC, Branch 127, Caloocan City, HON. MACARIO A. ASISTIO, JR., City Mayor of Caloocan and/or THE CITY GOVERNMENT OF CALOOCAN,respondents. Alberto N. Hidalgo and Ma. Teresa T. Oledan for petitioner. The City Legal Officer & Chief, Law Department for Mayor Macario A. Asistio, Jr. and the City Government of Caloocan. ROMERO, J.: The clash between the responsibility of the City Government of Caloocan to dispose off the 350 tons of garbage it collects daily and the growing concern and sensitivity to a pollutionfree environment of the residents of Barangay Camarin, Tala Estate, Caloocan City where these tons of garbage are dumped everyday is the hub of this controversy elevated by the protagonists to the Laguna Lake Development Authority (LLDA) for adjudication. The instant case stemmed from an earlier petition filed with this Court by Laguna Lake Development Authority (LLDA for short) docketed as G.R. No. 107542 against the City Government of Caloocan, et al. In the Resolution of November 10, 1992, this Court referred G.R. No. 107542 to the Court of Appeals for appropriate disposition. Docketed therein as CA-G.R. SP No. 29449, the Court of Appeals, in a decision 1 promulgated on January 29, 1993 ruled that the LLDA has no power and authority to issue a cease and desist order enjoining the dumping of garbage in Barangay Camarin, Tala Estate, Caloocan City. The LLDA now seeks, in this petition, a review of the decision of the Court of Appeals. The facts, as disclosed in the records, are undisputed. On March 8, 1991, the Task Force Camarin Dumpsite of Our Lady of Lourdes Parish, Barangay Camarin, Caloocan City, filed a letter-complaint 2 with the Laguna Lake Development Authority seeking to stop the operation of the 8.6-hectare open garbage dumpsite in Tala Estate, Barangay Camarin, Caloocan City due to its harmful effects on the health of the residents and the possibility of pollution of the water content of the surrounding area. On November 15, 1991, the LLDA conducted an on-site investigation, monitoring and test sampling of the leachate 3 that seeps from said dumpsite to the nearby creek which is a tributary of the Marilao River. The LLDA Legal and Technical personnel found that the City Government of Caloocan was maintaining an open dumpsite at the Camarin area without first securing an Environmental Compliance Certificate (ECC) from the Environmental Management Bureau (EMB) of the Department of Environment and Natural Resources, as required under Presidential Decree No. 1586, 4 and clearance from LLDA as required under Republic Act No. 4850, 5 as amended by Presidential Decree No. 813 and Executive Order No. 927, series of 1983. 6

After a public hearing conducted on December 4, 1991, the LLDA, acting on the complaint of Task Force Camarin Dumpsite, found that the water collected from the leachate and the receiving streams could considerably affect the quality, in turn, of the receiving waters since it indicates the presence of bacteria, other than coliform, which may have contaminated the sample during collection or handling. 7 On December 5, 1991, the LLDA issued a Cease and Desist Order 8 ordering the City Government of Caloocan, Metropolitan Manila Authority, their contractors, and other entities, to completely halt, stop and desist from dumping any form or kind of garbage and other waste matter at the Camarin dumpsite. The dumping operation was forthwith stopped by the City Government of Caloocan. However, sometime in August 1992 the dumping operation was resumed after a meeting held in July 1992 among the City Government of Caloocan, the representatives of Task Force Camarin Dumpsite and LLDA at the Office of Environmental Management Bureau Director Rodrigo U. Fuentes failed to settle the problem. After an investigation by its team of legal and technical personnel on August 14, 1992, the LLDA issued another order reiterating the December 5, 1991, order and issued an Alias Cease and Desist Order enjoining the City Government of Caloocan from continuing its dumping operations at the Camarin area. On September 25, 1992, the LLDA, with the assistance of the Philippine National Police, enforced its Alias Cease and Desist Order by prohibiting the entry of all garbage dump trucks into the Tala Estate, Camarin area being utilized as a dumpsite. Pending resolution of its motion for reconsideration earlier filed on September 17, 1992 with the LLDA, the City Government of Caloocan filed with the Regional Trial Court of Caloocan City an action for the declaration of nullity of the cease and desist order with prayer for the issuance of writ of injunction, docketed as Civil Case No. C-15598. In its complaint, the City Government of Caloocan sought to be declared as the sole authority empowered to promote the health and safety and enhance the right of the people in Caloocan City to a balanced ecology within its territorial jurisdiction. 9 On September 25, 1992, the Executive Judge of the Regional Trial Court of Caloocan City issued a temporary restraining order enjoining the LLDA from enforcing its cease and desist order. Subsequently, the case was raffled to the Regional Trial Court, Branch 126 of Caloocan which, at the time, was presided over by Judge Manuel Jn. Serapio of the Regional Trial Court, Branch 127, the pairing judge of the recently-retired presiding judge. The LLDA, for its part, filed on October 2, 1992 a motion to dismiss on the ground, among others, that under Republic Act No. 3931, as amended by Presidential Decree No. 984, otherwise known as the Pollution Control Law, the cease and desist order issued by it which is the subject matter of the complaint is reviewable both upon the law and the facts of the case by the Court of Appeals and not by the Regional Trial Court. 10 On October 12, 1992 Judge Manuel Jn. Serapio issued an order consolidating Civil Case No. C-15598 with Civil Case No. C-15580, an earlier case filed by the Task Force Camarin Dumpsite entitled "Fr. John Moran, et al. vs. Hon. Macario Asistio." The LLDA, however, maintained during the trial that the foregoing cases, being independent of each other, should have been treated separately.

On October 16, 1992, Judge Manuel Jn. Serapio, after hearing the motion to dismiss, issued in the consolidated cases an order 11 denying LLDA's motion to dismiss and granting the issuance of a writ of preliminary injunction enjoining the LLDA, its agent and all persons acting for and on its behalf, from enforcing or implementing its cease and desist order which prevents plaintiff City of Caloocan from dumping garbage at the Camarin dumpsite during the pendency of this case and/or until further orders of the court. On November 5, 1992, the LLDA filed a petition for certiorari, prohibition and injunction with prayer for restraining order with the Supreme Court, docketed as G.R. No. 107542, seeking to nullify the aforesaid order dated October 16, 1992 issued by the Regional Trial Court, Branch 127 of Caloocan City denying its motion to dismiss. The Court, acting on the petition, issued a Resolution 12 on November 10, 1992 referring the case to the Court of Appeals for proper disposition and at the same time, without giving due course to the petition, required the respondents to comment on the petition and file the same with the Court of Appeals within ten (10) days from notice. In the meantime, the Court issued a temporary restraining order, effective immediately and continuing until further orders from it, ordering the respondents: (1) Judge Manuel Jn. Serapio, Presiding Judge, Regional Trial Court, Branch 127, Caloocan City to cease and desist from exercising jurisdiction over the case for declaration of nullity of the cease and desist order issued by the Laguna Lake Development Authority (LLDA); and (2) City Mayor of Caloocan and/or the City Government of Caloocan to cease and desist from dumping its garbage at the Tala Estate, Barangay Camarin, Caloocan City. Respondents City Government of Caloocan and Mayor Macario A. Asistio, Jr. filed on November 12, 1992 a motion for reconsideration and/or to quash/recall the temporary restraining order and an urgent motion for reconsideration alleging that ". . . in view of the calamitous situation that would arise if the respondent city government fails to collect 350 tons of garbage daily for lack of dumpsite (i)t is therefore, imperative that the issue be resolved with dispatch or with sufficient leeway to allow the respondents to find alternative solutions to this garbage problem." On November 17, 1992, the Court issued a Resolution 13 directing the Court of Appeals to immediately set the case for hearing for the purpose of determining whether or not the temporary restraining order issued by the Court should be lifted and what conditions, if any, may be required if it is to be so lifted or whether the restraining order should be maintained or converted into a preliminary injunction. The Court of Appeals set the case for hearing on November 27, 1992, at 10:00 in the morning at the Hearing Room, 3rd Floor, New Building, Court of Appeals. 14 After the oral argument, a conference was set on December 8, 1992 at 10:00 o'clock in the morning where the Mayor of Caloocan City, the General Manager of LLDA, the Secretary of DENR or his duly authorized representative and the Secretary of DILG or his duly authorized representative were required to appear. It was agreed at the conference that the LLDA had until December 15, 1992 to finish its study and review of respondent's technical plan with respect to the dumping of its garbage and in the event of a rejection of respondent's technical plan or a failure of settlement, the parties will submit within 10 days from notice their respective memoranda on the merits of the case, after which the petition shall be deemed submitted for resolution.15 Notwithstanding such efforts, the parties failed to settle the dispute.

On April 30, 1993, the Court of Appeals promulgated its decision holding that: (1) the Regional Trial Court has no jurisdiction on appeal to try, hear and decide the action for annulment of LLDA's cease and desist order, including the issuance of a temporary restraining order and preliminary injunction in relation thereto, since appeal therefrom is within the exclusive and appellate jurisdiction of the Court of Appeals under Section 9, par. (3), of Batas Pambansa Blg. 129; and (2) the Laguna Lake Development Authority has no power and authority to issue a cease and desist order under its enabling law, Republic Act No. 4850, as amended by P.D. No. 813 and Executive Order No. 927, series of 1983. The Court of Appeals thus dismissed Civil Case No. 15598 and the preliminary injunction issued in the said case was set aside; the cease and desist order of LLDA was likewise set aside and the temporary restraining order enjoining the City Mayor of Caloocan and/or the City Government of Caloocan to cease and desist from dumping its garbage at the Tala Estate, Barangay Camarin, Caloocan City was lifted, subject, however, to the condition that any future dumping of garbage in said area, shall be in conformity with the procedure and protective works contained in the proposal attached to the records of this case and found on pages 152-160 of the Rollo, which was thereby adopted by reference and made an integral part of the decision, until the corresponding restraining and/or injunctive relief is granted by the proper Court upon LLDA's institution of the necessary legal proceedings. Hence, the Laguna Lake Development Authority filed the instant petition for review on certiorari, now docketed as G.R. No. 110120, with prayer that the temporary restraining order lifted by the Court of Appeals be re-issued until after final determination by this Court of the issue on the proper interpretation of the powers and authority of the LLDA under its enabling law. On July, 19, 1993, the Court issued a temporary restraining order 16 enjoining the City Mayor of Caloocan and/or the City Government of Caloocan to cease and desist from dumping its garbage at the Tala Estate, Barangay Camarin, Caloocan City, effective as of this date and containing until otherwise ordered by the Court. It is significant to note that while both parties in this case agree on the need to protect the environment and to maintain the ecological balance of the surrounding areas of the Camarin open dumpsite, the question as to which agency can lawfully exercise jurisdiction over the matter remains highly open to question. The City Government of Caloocan claims that it is within its power, as a local government unit, pursuant to the general welfare provision of the Local Government Code, 17 to determine the effects of the operation of the dumpsite on the ecological balance and to see that such balance is maintained. On the basis of said contention, it questioned, from the inception of the dispute before the Regional Trial Court of Caloocan City, the power and authority of the LLDA to issue a cease and desist order enjoining the dumping of garbage in the Barangay Camarin over which the City Government of Caloocan has territorial jurisdiction. The Court of Appeals sustained the position of the City of Caloocan on the theory that Section 7 of Presidential Decree No. 984, otherwise known as the Pollution Control law, authorizing the defunct National Pollution Control Commission to issue an ex-parte cease and desist order was not incorporated in Presidential Decree No. 813 nor in Executive Order No. 927, series of 1983. The Court of Appeals ruled that under Section 4, par. (d), of Republic Act No. 4850, as amended, the LLDA is instead required "to institute the necessary legal proceeding against any person who shall commence to implement or continue implementation of any

project, plan or program within the Laguna de Bay region without previous clearance from the Authority." The LLDA now assails, in this partition for review, the abovementioned ruling of the Court of Appeals, contending that, as an administrative agency which was granted regulatory and adjudicatory powers and functions by Republic Act No. 4850 and its amendatory laws, Presidential Decree No. 813 and Executive Order No. 927, series of 1983, it is invested with the power and authority to issue a cease and desist order pursuant to Section 4 par. (c), (d), (e), (f) and (g) of Executive Order No. 927 series of 1983 which provides, thus: Sec. 4. Additional Powers and Functions. The authority shall have the following powers and functions: xxx xxx xxx (c) Issue orders or decisions to compel compliance with the provisions of this Executive Order and its implementing rules and regulations only after proper notice and hearing. (d) Make, alter or modify orders requiring the discontinuance of pollution specifying the conditions and the time within which such discontinuance must be accomplished. (e) Issue, renew, or deny permits, under such conditions as it may determine to be reasonable, for the prevention and abatement of pollution, for the discharge of sewage, industrial waste, or for the installation or operation of sewage works and industrial disposal system or parts thereof. (f) After due notice and hearing, the Authority may also revoke, suspend or modify any permit issued under this Order whenever the same is necessary to prevent or abate pollution. (g) Deputize in writing or request assistance of appropriate government agencies or instrumentalities for the purpose of enforcing this Executive Order and its implementing rules and regulations and the orders and decisions of the Authority. The LLDA claims that the appellate court deliberately suppressed and totally disregarded the above provisions of Executive Order No. 927, series of 1983, which granted administrative quasi-judicial functions to LLDA on pollution abatement cases. In light of the relevant environmental protection laws cited which are applicable in this case, and the corresponding overlapping jurisdiction of government agencies implementing these laws, the resolution of the issue of whether or not the LLDA has the authority and power to issue an order which, in its nature and effect was injunctive, necessarily requires a determination of the threshold question: Does the Laguna Lake Development Authority, under its Charter and its amendatory laws, have the authority to entertain the complaint against the dumping of garbage in the open dumpsite in Barangay Camarin authorized by the City Government of Caloocan which is allegedly endangering the health, safety, and welfare of the residents therein and the sanitation and quality of the

water in the area brought about by exposure to pollution caused by such open garbage dumpsite? The matter of determining whether there is such pollution of the environment that requires control, if not prohibition, of the operation of a business establishment is essentially addressed to the Environmental Management Bureau (EMB) of the DENR which, by virtue of Section 16 of Executive Order No. 192, series of 1987, 18 has assumed the powers and functions of the defunct National Pollution Control Commission created under Republic Act No. 3931. Under said Executive Order, a Pollution Adjudication Board (PAB) under the Office of the DENR Secretary now assumes the powers and functions of the National Pollution Control Commission with respect to adjudication of pollution cases. 19 As a general rule, the adjudication of pollution cases generally pertains to the Pollution Adjudication Board (PAB), except in cases where the special law provides for another forum. It must be recognized in this regard that the LLDA, as a specialized administrative agency, is specifically mandated under Republic Act No. 4850 and its amendatory laws to carry out and make effective the declared national policy 20 of promoting and accelerating the development and balanced growth of the Laguna Lake area and the surrounding provinces of Rizal and Laguna and the cities of San Pablo, Manila, Pasay, Quezon and Caloocan 21 with due regard and adequate provisions for environmental management and control, preservation of the quality of human life and ecological systems, and the prevention of undue ecological disturbances, deterioration and pollution . Under such a broad grant and power and authority, the LLDA, by virtue of its special charter, obviously has the responsibility to protect the inhabitants of the Laguna Lake region from the deleterious effects of pollutants emanating from the discharge of wastes from the surrounding areas. In carrying out the aforementioned declared policy, the LLDA is mandated, among others, to pass upon and approve or disapprove all plans, programs, and projects proposed by local government offices/agencies within the region, public corporations, and private persons or enterprises where such plans, programs and/or projects are related to those of the LLDA for the development of the region. 22 In the instant case, when the complainant Task Force Camarin Dumpsite of Our Lady of Lourdes Parish, Barangay Camarin, Caloocan City, filed its letter-complaint before the LLDA, the latter's jurisdiction under its charter was validly invoked by complainant on the basis of its allegation that the open dumpsite project of the City Government of Caloocan in Barangay Camarin was undertaken without a clearance from the LLDA, as required under Section 4, par. (d), of Republic Act. No. 4850, as amended by P.D. No. 813 and Executive Order No. 927. While there is also an allegation that the said project was without an Environmental Compliance Certificate from the Environmental Management Bureau (EMB) of the DENR, the primary jurisdiction of the LLDA over this case was recognized by the Environmental Management Bureau of the DENR when the latter acted as intermediary at the meeting among the representatives of the City Government of Caloocan, Task Force Camarin Dumpsite and LLDA sometime in July 1992 to discuss the possibility of re-opening the open dumpsite. Having thus resolved the threshold question, the inquiry then narrows down to the following issue: Does the LLDA have the power and authority to issue a "cease and desist" order under Republic Act No. 4850 and its amendatory laws, on the basis of the facts presented in this case, enjoining the dumping of garbage in Tala Estate, Barangay Camarin, Caloocan City. The irresistible answer is in the affirmative.

The cease and desist order issued by the LLDA requiring the City Government of Caloocan to stop dumping its garbage in the Camarin open dumpsite found by the LLDA to have been done in violation of Republic Act No. 4850, as amended, and other relevant environment laws, 23 cannot be stamped as an unauthorized exercise by the LLDA of injunctive powers. By its express terms, Republic Act No. 4850, as amended by P.D. No. 813 and Executive Order No. 927, series of 1983, authorizes the LLDA to " make, alter or modify order requiring the discontinuance or pollution." 24 (Emphasis supplied) Section 4, par. (d) explicitly authorizes the LLDA to makewhatever order may be necessary in the exercise of its jurisdiction. To be sure, the LLDA was not expressly conferred the power "to issue and ex-parte cease and desist order" in a language, as suggested by the City Government of Caloocan, similar to the express grant to the defunct National Pollution Control Commission under Section 7 of P.D. No. 984 which, admittedly was not reproduced in P.D. No. 813 and E.O. No. 927, series of 1983. However, it would be a mistake to draw therefrom the conclusion that there is a denial of the power to issue the order in question when the power "to make, alter or modify orders requiring the discontinuance of pollution" is expressly and clearly bestowed upon the LLDA by Executive Order No. 927, series of 1983. Assuming arguendo that the authority to issue a "cease and desist order" were not expressly conferred by law, there is jurisprudence enough to the effect that the rule granting such authority need not necessarily be express.25 While it is a fundamental rule that an administrative agency has only such powers as are expressly granted to it by law, it is likewise a settled rule that an administrative agency has also such powers as are necessarily implied in the exercise of its express powers. 26 In the exercise, therefore, of its express powers under its charter as a regulatory and quasi-judicial body with respect to pollution cases in the Laguna Lake region, the authority of the LLDA to issue a "cease and desist order" is, perforce, implied. Otherwise, it may well be reduced to a "toothless" paper agency. In this connection, it must be noted that in Pollution Adjudication Board v. Court of Appeals, et al., 27 the Court ruled that the Pollution Adjudication Board (PAB) has the power to issue an ex-parte cease and desist order when there is prima facie evidence of an establishment exceeding the allowable standards set by the anti-pollution laws of the country. The ponente, Associate Justice Florentino P. Feliciano, declared: Ex parte cease and desist orders are permitted by law and regulations in situations like that here presented precisely because stopping the continuous discharge of pollutive and untreated effluents into the rivers and other inland waters of the Philippines cannot be made to wait until protracted litigation over the ultimate correctness or propriety of such orders has run its full course, including multiple and sequential appeals such as those which Solar has taken, which of course may take several years. The relevant pollution control statute and implementing regulations were enacted and promulgated in the exercise of that pervasive, sovereign power to protect the safety, health, and general welfare and comfort of the public, as well as the protection of plant and animal life, commonly designated as the police power. It is a constitutional commonplace that the ordinary requirements of procedural due process yield to the necessities of protecting vital public interests like those here involved, through the exercise of police power. . ..

The immediate response to the demands of "the necessities of protecting vital public interests" gives vitality to the statement on ecology embodied in the Declaration of Principles and State Policies or the 1987 Constitution. Article II, Section 16 which provides: The State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature. As a constitutionally guaranteed right of every person, it carries the correlative duty of nonimpairment. This is but in consonance with the declared policy of the state "to protect and promote the right to health of the people and instill health consciousness among them." 28 It is to be borne in mind that the Philippines is party to the Universal Declaration of Human Rights and the Alma Conference Declaration of 1978 which recognize health as a fundamental human right. 29 The issuance, therefore, of the cease and desist order by the LLDA, as a practical matter of procedure under the circumstances of the case, is a proper exercise of its power and authority under its charter and its amendatory laws. Had the cease and desist order issued by the LLDA been complied with by the City Government of Caloocan as it did in the first instance, no further legal steps would have been necessary. The charter of LLDA, Republic Act No. 4850, as amended, instead of conferring upon the LLDA the means of directly enforcing such orders, has provided under its Section 4 (d) the power to institute "necessary legal proceeding against any person who shall commence to implement or continue implementation of any project, plan or program within the Laguna de Bay region without previous clearance from the LLDA." Clearly, said provision was designed to invest the LLDA with sufficiently broad powers in the regulation of all projects initiated in the Laguna Lake region, whether by the government or the private sector, insofar as the implementation of these projects is concerned. It was meant to deal with cases which might possibly arise where decisions or orders issued pursuant to the exercise of such broad powers may not be obeyed, resulting in the thwarting of its laudabe objective. To meet such contingencies, then the writs of mandamus and injunction which are beyond the power of the LLDA to issue, may be sought from the proper courts. Insofar as the implementation of relevant anti-pollution laws in the Laguna Lake region and its surrounding provinces, cities and towns are concerned, the Court will not dwell further on the related issues raised which are more appropriately addressed to an administrative agency with the special knowledge and expertise of the LLDA. WHEREFORE, the petition is GRANTED. The temporary restraining order issued by the Court on July 19, 1993 enjoining the City Mayor of Caloocan and/or the City Government of Caloocan from dumping their garbage at the Tala Estate, Barangay Camarin, Caloocan City is hereby made permanent. SO ORDERED. Feliciano, Bidin, Melo and Vitug, JJ., concur.

G.R. Nos. L-66870-72 June 29, 1985 AGAPITO MAGBANUA, INENIAS MARTIZANO, CARLITO HERRERA, SR., PAQUITO LOPEZ, AND FRANCISCO HERRERA, petitioners, vs. HON. INTERMEDIATE APPELLATE COURT (SECOND SPECIAL CASES DIVISION), EDUARDO, BUTCH, DIEGO AND NENA All Surnamed PEREZ, respondents. Romulo A. Deles for petitioner. Jose Valmayor for respondents. ABAD SANTOS, J.: A joint decision was rendered in CAR Case Nos. 827, 828 and 829 of the defunct Court of Agrarian Relations stationed in San Carlos City (Negros Occidental) because the six plaintiffs who are the petitioners at bar all alleged that they are share tenants of the defendants; that the defendants diverted the free flow of water from their farm lots which caused portions of their landholdings to dry up to their great damage and prejudice: and that they were told by the defendants' overseer to vacate their respective areas for they could not plant palay any longer due to lack of water. They prayed that they be declared as leasehold tenants and that the defendants be ordered to pay attorney's fees and different kinds of damages. The trial court rendered judgment in favor of the plaintiffs as follows: WHEREFORE, coherent with the foregoing, this Court, in judgment, hereby: 1) Declares all the plaintiffs in the above-entitled cases to be maintained as agricultural lessees in peaceful cultivation in their respective landholdings; 2) Prohibits defendants from closing and/or disrupting the free flow of water supplying plaintiffs' landholdings; 3) Declares the Writ of Preliminary Injunction issued on February 23, 1982 to be permanent; 4) Orders plaintiffs to seek the assistance of the Ministry of Agrarian Reforms in the fixing of their lease rentals; 5) Orders the defendants to pay all the six plaintiffs in the aboveentitled cases individually moral and exemplary damages in the sum of TEN THOUSAND (P10,000.00) PESOS, each; 6) Orders the defendants to pay the attorney's fees in the amount of P5,000.00; and

7) Dismiss all other claims and counterclaims of the parties for lack of merit (Rollo, pp. 28-29.) The defendants appealed to the Intermediate Appellate Court which in turn rendered the following judgment: WHEREFORE, with the modification above indicated, deleting the award of moral and exemplary damages and attorney's fees, the decision appealed from is hereby AFFIRMED in all other respects, with costs against appellants. (Rollo, pp. 37-38.) In this petition, the prayer is for the reinstatement of the moral and exemplary damages and the attorney's fees which had been awarded by the trial court on the ground that the Intermediate Appellate Court committed a grave abuse of discretion in eliminating them. In awarding damages and attorney's fees, the trial court said: This Court has likewise noted the manifestation submitted by plaintiffs on June 3, 1982 wherein they have attached photographs of their driedup landholdings and wilted palay crops. The allegations in this pleading and the accompanying pictures were never rebutted by the defendants. In view of this circumstances, this Court holds the opinion that between the period of the inspection by the PC Team on February 24, 1982 and June 13, 1982 when plaintiffs' manifestation was filed, there has been complete closure of water supplying plaintiffs' landholdings which resulted to the drying up of the same that greatly hampered the healthy growth of the palay crop. This Court does not believe that the disruption of the water supply which led to the very poor harvest is due to the fault/negligence of the plaintiffs. Under the law, the landowner has an obligation to keep the tenant in the peaceful and continuous cultivation of his landholding. A disturbance of possession, such as the act complained of, is violative of the law. The Honorable Court of Appeals, thru Associate Justice Porfirio V. Sison, in June 23, 1982, promulgated a decision in the case of Buenaventura Garcia, plaintiff-appellant, vs. Eduardo Jalandoni, Salud Garcia and Chester Garcia, defendant-appellees, which ruling is relevant to the above-entitled cases when the said Honorable Court state: The law forbids the use of tenants like balls on a pool table, whacked and volleyed and pocketed at the whim and caprice of the player, or their positions placed on the auction block like slaves to be sold to the highest bidder. Such a calamitous situation erode wholehearted dedication to the soil; it is destructive of the system itself, as such an attitude

takes away the freedom the emancipated tenants won under the aegis of the New Republic. The plaintiff-appellant is entitled to moral damages in the sum of P5,000.00 and exemplary damages in the further sum of P5,000.00 to be paid by defendant Eduardo Jalandoni. Let this be a warning to those who flout the lofty purpose of the agrarian reform program. Plaintiffs have all their legal rights to protect their interests under the law in filing these cases, for what the defendants have done to them, and as such they are entitled attorney's fees. (Rollo, pp. 27-28.) Upon the other hand, in deleting the questioned award the Intermediate Appellate Court said: However, We are not inclined to sustain the award of moral and exemplary damages, as well as attorney's fees. There is no evidence showing that, in dealing with plaintiffs, defendants acted fraudulently or in bad faith. There is no showing either that attorney's fees are recoverable under Art: 2208, Civil Code. (Rollo, P. 37.) Under the facts of the case, the plaintiffs (now petitioners) are entitled to a measure of moral damages. Article 2219 of the Civil Code permits the award of moral damages for acts mentioned in Article 21 of the same code and the latter stipulates that: "Any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good customs or public policy shall compensate the latter for the damage." It appears that the petitioners were denied irrigation water for their farm lots in order to make them vacate their landholdings. The defendants violated the plaintiffs' rights and caused prejudice to the latter by the unjustified diversion of the water. The petitioners are also entitled to exemplary damages because the defendants acted in an oppressive manner. (See Art. 2232. Civil Code.) It follows from the foregoing that the petitioners are also entitled to attorney's fees but the size of the fees as well as the damages is subject to the sound discretion of the court. WHEREFORE, the petition is granted; the decision under review is modified and each of the plaintiffs is entitled to the following to be paid by the defendants jointly and severally: Moral damages P1,000.00 Exemplarly damages 500.00 Attorney's fees 1,000.00 P2,500.00 The costs shall be assessed against the private respondents.

SO ORDERED. Makasiar (Chairman) Aquino, Concepcion, Jr., Escolin and Cuevas JJ., concur.

In a broader sense, this petition bears upon the right of Filipinos to a balanced and healthful ecology which the petitioners dramatically associate with the twin concepts of "inter-generational responsibility" and "inter-generational justice." Specifically, it touches on the issue of whether the said petitioners have a cause of action to "prevent the misappropriation or impairment" of Philippine rainforests and "arrest the unabated hemorrhage of the country's vital life support systems and continued rape of Mother Earth." The controversy has its genesis in Civil Case No. 90-77 which was filed before Branch 66 (Makati, Metro Manila) of the Regional Trial Court (RTC), National Capital Judicial Region. The principal plaintiffs therein, now the principal petitioners, are all minors duly represented and joined by their respective parents. Impleaded as an additional plaintiff is the Philippine Ecological Network, Inc. (PENI), a domestic, non-stock and non-profit corporation organized for the purpose of, inter alia, engaging in concerted action geared for the protection of our environment and natural resources. The original defendant was the Honorable Fulgencio S. Factoran, Jr., then Secretary of the Department of Environment and Natural Resources (DENR). His substitution in this petition by the new Secretary, the Honorable Angel C. Alcala, was subsequently ordered upon proper motion by the petitioners. 1 The complaint2 was instituted as a taxpayers' class suit 3 and alleges that the plaintiffs "are all citizens of the Republic of the Philippines, taxpayers, and entitled to the full benefit, use and enjoyment of the natural resource treasure that is the country's virgin tropical forests." The same was filed for themselves and others who are equally concerned about the preservation of said resource but are "so numerous that it is impracticable to bring them all before the Court." The minors further asseverate that they "represent their generation as well as generations yet unborn." 4Consequently, it is prayed for that judgment be rendered: . . . ordering defendant, his agents, representatives and other persons acting in his behalf to (1) Cancel all existing timber license agreements in the country; (2) Cease and desist from receiving, accepting, processing, renewing or approving new timber license agreements. and granting the plaintiffs ". . . such other reliefs just and equitable under the premises." 5 The complaint starts off with the general averments that the Philippine archipelago of 7,100 islands has a land area of thirty million (30,000,000) hectares and is endowed with rich, lush and verdant rainforests in which varied, rare and unique species of flora and fauna may be found; these rainforests contain a genetic, biological and chemical pool which is irreplaceable; they are also the habitat of indigenous Philippine cultures which have existed, endured and flourished since time immemorial; scientific evidence reveals that in order to maintain a balanced and healthful ecology, the country's land area should be utilized on the basis of a ratio of fifty-four per cent (54%) for forest cover and forty-six per cent (46%) for agricultural, residential, industrial, commercial and other uses; the distortion and disturbance of this balance as a consequence of deforestation have resulted in a host of environmental tragedies, such as (a) water shortages resulting from drying up of the water table, otherwise known as the "aquifer," as well as of rivers, brooks and streams, (b) salinization of the water table as a result of the intrusion therein of salt water, incontrovertible examples of which may be found in the island of Cebu and the Municipality of Bacoor, Cavite, (c) massive erosion and the consequential loss of soil fertility and agricultural productivity, with the volume of soil eroded estimated at one

G.R. No. 101083 July 30, 1993 JUAN ANTONIO, ANNA ROSARIO and JOSE ALFONSO, all surnamed OPOSA, minors, and represented by their parents ANTONIO and RIZALINA OPOSA, ROBERTA NICOLE SADIUA, minor, represented by her parents CALVIN and ROBERTA SADIUA, CARLO, AMANDA SALUD and PATRISHA, all surnamed FLORES, minors and represented by their parents ENRICO and NIDA FLORES, GIANINA DITA R. FORTUN, minor, represented by her parents SIGRID and DOLORES FORTUN, GEORGE II and MA. CONCEPCION, all surnamed MISA, minors and represented by their parents GEORGE and MYRA MISA, BENJAMIN ALAN V. PESIGAN, minor, represented by his parents ANTONIO and ALICE PESIGAN, JOVIE MARIE ALFARO, minor, represented by her parents JOSE and MARIA VIOLETA ALFARO, MARIA CONCEPCION T. CASTRO, minor, represented by her parents FREDENIL and JANE CASTRO, JOHANNA DESAMPARADO, minor, represented by her parents JOSE and ANGELA DESAMPRADO, CARLO JOAQUIN T. NARVASA, minor, represented by his parents GREGORIO II and CRISTINE CHARITY NARVASA, MA. MARGARITA, JESUS IGNACIO, MA. ANGELA and MARIE GABRIELLE, all surnamed SAENZ, minors, represented by their parents ROBERTO and AURORA SAENZ, KRISTINE, MARY ELLEN, MAY, GOLDA MARTHE and DAVID IAN, all surnamed KING, minors, represented by their parents MARIO and HAYDEE KING, DAVID, FRANCISCO and THERESE VICTORIA, all surnamed ENDRIGA, minors, represented by their parents BALTAZAR and TERESITA ENDRIGA, JOSE MA. and REGINA MA., all surnamed ABAYA, minors, represented by their parents ANTONIO and MARICA ABAYA, MARILIN, MARIO, JR. and MARIETTE, all surnamed CARDAMA, minors, represented by their parents MARIO and LINA CARDAMA, CLARISSA, ANN MARIE, NAGEL, and IMEE LYN, all surnamed OPOSA, minors and represented by their parents RICARDO and MARISSA OPOSA, PHILIP JOSEPH, STEPHEN JOHN and ISAIAH JAMES, all surnamed QUIPIT, minors, represented by their parents JOSE MAX and VILMI QUIPIT, BUGHAW CIELO, CRISANTO, ANNA, DANIEL and FRANCISCO, all surnamed BIBAL, minors, represented by their parents FRANCISCO, JR. and MILAGROS BIBAL, and THE PHILIPPINE ECOLOGICAL NETWORK, INC., petitioners, vs. THE HONORABLE FULGENCIO S. FACTORAN, JR., in his capacity as the Secretary of the Department of Environment and Natural Resources, and THE HONORABLE ERIBERTO U. ROSARIO, Presiding Judge of the RTC, Makati, Branch 66, respondents. Oposa Law Office for petitioners. The Solicitor General for respondents. DAVIDE, JR., J.:

billion (1,000,000,000) cubic meters per annum approximately the size of the entire island of Catanduanes, (d) the endangering and extinction of the country's unique, rare and varied flora and fauna, (e) the disturbance and dislocation of cultural communities, including the disappearance of the Filipino's indigenous cultures, (f) the siltation of rivers and seabeds and consequential destruction of corals and other aquatic life leading to a critical reduction in marine resource productivity, (g) recurrent spells of drought as is presently experienced by the entire country, (h) increasing velocity of typhoon winds which result from the absence of windbreakers, (i) the floodings of lowlands and agricultural plains arising from the absence of the absorbent mechanism of forests, (j) the siltation and shortening of the lifespan of multi-billion peso dams constructed and operated for the purpose of supplying water for domestic uses, irrigation and the generation of electric power, and (k) the reduction of the earth's capacity to process carbon dioxide gases which has led to perplexing and catastrophic climatic changes such as the phenomenon of global warming, otherwise known as the "greenhouse effect." Plaintiffs further assert that the adverse and detrimental consequences of continued and deforestation are so capable of unquestionable demonstration that the same may be submitted as a matter of judicial notice. This notwithstanding, they expressed their intention to present expert witnesses as well as documentary, photographic and film evidence in the course of the trial. As their cause of action, they specifically allege that: CAUSE OF ACTION 7. Plaintiffs replead by reference the foregoing allegations. 8. Twenty-five (25) years ago, the Philippines had some sixteen (16) million hectares of rainforests constituting roughly 53% of the country's land mass. 9. Satellite images taken in 1987 reveal that there remained no more than 1.2 million hectares of said rainforests or four per cent (4.0%) of the country's land area. 10. More recent surveys reveal that a mere 850,000 hectares of virgin old-growth rainforests are left, barely 2.8% of the entire land mass of the Philippine archipelago and about 3.0 million hectares of immature and uneconomical secondary growth forests. 11. Public records reveal that the defendant's, predecessors have granted timber license agreements ('TLA's') to various corporations to cut the aggregate area of 3.89 million hectares for commercial logging purposes. A copy of the TLA holders and the corresponding areas covered is hereto attached as Annex "A". 12. At the present rate of deforestation, i.e. about 200,000 hectares per annum or 25 hectares per hour nighttime, Saturdays, Sundays and

holidays included the Philippines will be bereft of forest resources after the end of this ensuing decade, if not earlier. 13. The adverse effects, disastrous consequences, serious injury and irreparable damage of this continued trend of deforestation to the plaintiff minor's generation and to generations yet unborn are evident and incontrovertible. As a matter of fact, the environmental damages enumerated in paragraph 6 hereof are already being felt, experienced and suffered by the generation of plaintiff adults. 14. The continued allowance by defendant of TLA holders to cut and deforest the remaining forest stands will work great damage and irreparable injury to plaintiffs especially plaintiff minors and their successors who may never see, use, benefit from and enjoy this rare and unique natural resource treasure. This act of defendant constitutes a misappropriation and/or impairment of the natural resource property he holds in trust for the benefit of plaintiff minors and succeeding generations. 15. Plaintiffs have a clear and constitutional right to a balanced and healthful ecology and are entitled to protection by the State in its capacity as the parens patriae. 16. Plaintiff have exhausted all administrative remedies with the defendant's office. On March 2, 1990, plaintiffs served upon defendant a final demand to cancel all logging permits in the country. A copy of the plaintiffs' letter dated March 1, 1990 is hereto attached as Annex "B". 17. Defendant, however, fails and refuses to cancel the existing TLA's to the continuing serious damage and extreme prejudice of plaintiffs. 18. The continued failure and refusal by defendant to cancel the TLA's is an act violative of the rights of plaintiffs, especially plaintiff minors who may be left with a country that is desertified (sic), bare, barren and devoid of the wonderful flora, fauna and indigenous cultures which the Philippines had been abundantly blessed with. 19. Defendant's refusal to cancel the aforementioned TLA's is manifestly contrary to the public policy enunciated in the Philippine Environmental Policy which, in pertinent part, states that it is the policy of the State (a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive and enjoyable harmony with each other;

(b) to fulfill the social, economic and other requirements of present and future generations of Filipinos and; (c) to ensure the attainment of an environmental quality that is conductive to a life of dignity and well-being. (P.D. 1151, 6 June 1977) 20. Furthermore, defendant's continued refusal to cancel the aforementioned TLA's is contradictory to the Constitutional policy of the State to a. effect "a more equitable distribution of opportunities, income and wealth" and "make full and efficient use of natural resources (sic)." (Section 1, Article XII of the Constitution); b. "protect the nation's marine wealth." (Section 2, ibid); c. "conserve and promote the nation's cultural heritage and resources (sic)" (Section 14, Article XIV,id.); d. "protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature." (Section 16, Article II, id.) 21. Finally, defendant's act is contrary to the highest law of humankind the natural law and violative of plaintiffs' right to self-preservation and perpetuation. 22. There is no other plain, speedy and adequate remedy in law other than the instant action to arrest the unabated hemorrhage of the country's vital life support systems and continued rape of Mother Earth. 6 On 22 June 1990, the original defendant, Secretary Factoran, Jr., filed a Motion to Dismiss the complaint based on two (2) grounds, namely: (1) the plaintiffs have no cause of action against him and (2) the issue raised by the plaintiffs is a political question which properly pertains to the legislative or executive branches of Government. In their 12 July 1990 Opposition to the Motion, the petitioners maintain that (1) the complaint shows a clear and unmistakable cause of action, (2) the motion is dilatory and (3) the action presents a justiciable question as it involves the defendant's abuse of discretion. On 18 July 1991, respondent Judge issued an order granting the aforementioned motion to dismiss. 7 In the said order, not only was the defendant's claim that the complaint states no cause of action against him and that it raises a political question sustained, the respondent Judge further ruled that the granting of the relief prayed for would result in the impairment of contracts which is prohibited by the fundamental law of the land. Plaintiffs thus filed the instant special civil action for certiorari under Rule 65 of the Revised Rules of Court and ask this Court to rescind and set aside the dismissal order on the ground that the respondent Judge gravely abused his discretion in dismissing the

action. Again, the parents of the plaintiffs-minors not only represent their children, but have also joined the latter in this case. 8 On 14 May 1992, We resolved to give due course to the petition and required the parties to submit their respective Memoranda after the Office of the Solicitor General (OSG) filed a Comment in behalf of the respondents and the petitioners filed a reply thereto. Petitioners contend that the complaint clearly and unmistakably states a cause of action as it contains sufficient allegations concerning their right to a sound environment based on Articles 19, 20 and 21 of the Civil Code (Human Relations), Section 4 of Executive Order (E.O.) No. 192 creating the DENR, Section 3 of Presidential Decree (P.D.) No. 1151 (Philippine Environmental Policy), Section 16, Article II of the 1987 Constitution recognizing the right of the people to a balanced and healthful ecology, the concept of generational genocide in Criminal Law and the concept of man's inalienable right to selfpreservation and self-perpetuation embodied in natural law. Petitioners likewise rely on the respondent's correlative obligation per Section 4 of E.O. No. 192, to safeguard the people's right to a healthful environment. It is further claimed that the issue of the respondent Secretary's alleged grave abuse of discretion in granting Timber License Agreements (TLAs) to cover more areas for logging than what is available involves a judicial question. Anent the invocation by the respondent Judge of the Constitution's non-impairment clause, petitioners maintain that the same does not apply in this case because TLAs are not contracts. They likewise submit that even if TLAs may be considered protected by the said clause, it is well settled that they may still be revoked by the State when the public interest so requires. On the other hand, the respondents aver that the petitioners failed to allege in their complaint a specific legal right violated by the respondent Secretary for which any relief is provided by law. They see nothing in the complaint but vague and nebulous allegations concerning an "environmental right" which supposedly entitles the petitioners to the "protection by the state in its capacity as parens patriae." Such allegations, according to them, do not reveal a valid cause of action. They then reiterate the theory that the question of whether logging should be permitted in the country is a political question which should be properly addressed to the executive or legislative branches of Government. They therefore assert that the petitioners' resources is not to file an action to court, but to lobby before Congress for the passage of a bill that would ban logging totally. As to the matter of the cancellation of the TLAs, respondents submit that the same cannot be done by the State without due process of law. Once issued, a TLA remains effective for a certain period of time usually for twenty-five (25) years. During its effectivity, the same can neither be revised nor cancelled unless the holder has been found, after due notice and hearing, to have violated the terms of the agreement or other forestry laws and regulations. Petitioners' proposition to have all the TLAs indiscriminately cancelled without the requisite hearing would be violative of the requirements of due process. Before going any further, We must first focus on some procedural matters. Petitioners instituted Civil Case No. 90-777 as a class suit. The original defendant and the present respondents did not take issue with this matter. Nevertheless, We hereby rule that the said civil case is indeed a class suit. The subject matter of the complaint is of common and general interest not just to several, but to all citizens of the Philippines. Consequently,

since the parties are so numerous, it, becomes impracticable, if not totally impossible, to bring all of them before the court. We likewise declare that the plaintiffs therein are numerous and representative enough to ensure the full protection of all concerned interests. Hence, all the requisites for the filing of a valid class suit under Section 12, Rule 3 of the Revised Rules of Court are present both in the said civil case and in the instant petition, the latter being but an incident to the former. This case, however, has a special and novel element. Petitioners minors assert that they represent their generation as well as generations yet unborn. We find no difficulty in ruling that they can, for themselves, for others of their generation and for the succeeding generations, file a class suit. Their personality to sue in behalf of the succeeding generations can only be based on the concept of intergenerational responsibility insofar as the right to a balanced and healthful ecology is concerned. Such a right, as hereinafter expounded, considers the "rhythm and harmony of nature." Nature means the created world in its entirety. 9 Such rhythm and harmony indispensably include, inter alia, the judicious disposition, utilization, management, renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources to the end that their exploration, development and utilization be equitably accessible to the present as well as future generations. 10 Needless to say, every generation has a responsibility to the next to preserve that rhythm and harmony for the full enjoyment of a balanced and healthful ecology. Put a little differently, the minors' assertion of their right to a sound environment constitutes, at the same time, the performance of their obligation to ensure the protection of that right for the generations to come. The locus standi of the petitioners having thus been addressed, We shall now proceed to the merits of the petition. After a careful perusal of the complaint in question and a meticulous consideration and evaluation of the issues raised and arguments adduced by the parties, We do not hesitate to find for the petitioners and rule against the respondent Judge's challenged order for having been issued with grave abuse of discretion amounting to lack of jurisdiction. The pertinent portions of the said order reads as follows: xxx xxx xxx After a careful and circumspect evaluation of the Complaint, the Court cannot help but agree with the defendant. For although we believe that plaintiffs have but the noblest of all intentions, it (sic) fell short of alleging, with sufficient definiteness, a specific legal right they are seeking to enforce and protect, or a specific legal wrong they are seeking to prevent and redress (Sec. 1, Rule 2, RRC). Furthermore, the Court notes that the Complaint is replete with vague assumptions and vague conclusions based on unverified data. In fine, plaintiffs fail to state a cause of action in its Complaint against the herein defendant. Furthermore, the Court firmly believes that the matter before it, being impressed with political color and involving a matter of public policy, may not be taken cognizance of by this Court without doing violence to the sacred principle of "Separation of Powers" of the three (3) co-equal branches of the Government.

The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to cease and desist from receiving, accepting, processing, renewing or approving new timber license agreements. For to do otherwise would amount to "impairment of contracts" abhored ( sic) by the fundamental law. 11 We do not agree with the trial court's conclusions that the plaintiffs failed to allege with sufficient definiteness a specific legal right involved or a specific legal wrong committed, and that the complaint is replete with vague assumptions and conclusions based on unverified data. A reading of the complaint itself belies these conclusions. The complaint focuses on one specific fundamental legal right the right to a balanced and healthful ecology which, for the first time in our nation's constitutional history, is solemnly incorporated in the fundamental law. Section 16, Article II of the 1987 Constitution explicitly provides: Sec. 16. The State shall protect and advance the right of the people to a balanced and healthful ecology in accord with the rhythm and harmony of nature. This right unites with the right to health which is provided for in the preceding section of the same article: Sec. 15. The State shall protect and promote the right to health of the people and instill health consciousness among them. While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and State Policies and not under the Bill of Rights, it does not follow that it is less important than any of the civil and political rights enumerated in the latter. Such a right belongs to a different category of rights altogether for it concerns nothing less than self-preservation and self-perpetuation aptly and fittingly stressed by the petitioners the advancement of which may even be said to predate all governments and constitutions. As a matter of fact, these basic rights need not even be written in the Constitution for they are assumed to exist from the inception of humankind. If they are now explicitly mentioned in the fundamental charter, it is because of the well-founded fear of its framers that unless the rights to a balanced and healthful ecology and to health are mandated as state policies by the Constitution itself, thereby highlighting their continuing importance and imposing upon the state a solemn obligation to preserve the first and protect and advance the second, the day would not be too far when all else would be lost not only for the present generation, but also for those to come generations which stand to inherit nothing but parched earth incapable of sustaining life. The right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the environment. During the debates on this right in one of the plenary sessions of the 1986 Constitutional Commission, the following exchange transpired between Commissioner Wilfrido Villacorta and Commissioner Adolfo Azcuna who sponsored the section in question: MR. VILLACORTA:

Does this section mandate the State to provide sanctions against all forms of pollution air, water and noise pollution? MR. AZCUNA: Yes, Madam President. The right to healthful (sic) environment necessarily carries with it the correlative duty of not impairing the same and, therefore, sanctions may be provided for impairment of environmental balance. 12 The said right implies, among many other things, the judicious management and conservation of the country's forests. Without such forests, the ecological or environmental balance would be irreversiby disrupted. Conformably with the enunciated right to a balanced and healthful ecology and the right to health, as well as the other related provisions of the Constitution concerning the conservation, development and utilization of the country's natural resources, 13 then President Corazon C. Aquino promulgated on 10 June 1987 E.O. No. 192, 14Section 4 of which expressly mandates that the Department of Environment and Natural Resources "shall be the primary government agency responsible for the conservation, management, development and proper use of the country's environment and natural resources, specifically forest and grazing lands, mineral, resources, including those in reservation and watershed areas, and lands of the public domain, as well as the licensing and regulation of all natural resources as may be provided for by law in order to ensure equitable sharing of the benefits derived therefrom for the welfare of the present and future generations of Filipinos." Section 3 thereof makes the following statement of policy: Sec. 3. Declaration of Policy. It is hereby declared the policy of the State to ensure the sustainable use, development, management, renewal, and conservation of the country's forest, mineral, land, offshore areas and other natural resources, including the protection and enhancement of the quality of the environment, and equitable access of the different segments of the population to the development and the use of the country's natural resources, not only for the present generation but for future generations as well. It is also the policy of the state to recognize and apply a true value system including social and environmental cost implications relative to their utilization, development and conservation of our natural resources. This policy declaration is substantially re-stated it Title XIV, Book IV of the Administrative Code of 1987, 15specifically in Section 1 thereof which reads: Sec. 1. Declaration of Policy. (1) The State shall ensure, for the benefit of the Filipino people, the full exploration and development as well as the judicious disposition, utilization, management, renewal and conservation of the country's forest, mineral, land, waters, fisheries, wildlife, off-shore areas and other natural resources, consistent with the necessity of maintaining a sound ecological balance and protecting and

enhancing the quality of the environment and the objective of making the exploration, development and utilization of such natural resources equitably accessible to the different segments of the present as well as future generations. (2) The State shall likewise recognize and apply a true value system that takes into account social and environmental cost implications relative to the utilization, development and conservation of our natural resources. The above provision stresses "the necessity of maintaining a sound ecological balance and protecting and enhancing the quality of the environment." Section 2 of the same Title, on the other hand, specifically speaks of the mandate of the DENR; however, it makes particular reference to the fact of the agency's being subject to law and higher authority. Said section provides: Sec. 2. Mandate. (1) The Department of Environment and Natural Resources shall be primarily responsible for the implementation of the foregoing policy. (2) It shall, subject to law and higher authority, be in charge of carrying out the State's constitutional mandate to control and supervise the exploration, development, utilization, and conservation of the country's natural resources. Both E.O. NO. 192 and the Administrative Code of 1987 have set the objectives which will serve as the bases for policy formulation, and have defined the powers and functions of the DENR. It may, however, be recalled that even before the ratification of the 1987 Constitution, specific statutes already paid special attention to the "environmental right" of the present and future generations. On 6 June 1977, P.D. No. 1151 (Philippine Environmental Policy) and P.D. No. 1152 (Philippine Environment Code) were issued. The former "declared a continuing policy of the State (a) to create, develop, maintain and improve conditions under which man and nature can thrive in productive and enjoyable harmony with each other, (b) to fulfill the social, economic and other requirements of present and future generations of Filipinos, and (c) to insure the attainment of an environmental quality that is conducive to a life of dignity and well-being." 16 As its goal, it speaks of the "responsibilities of each generation as trustee and guardian of the environment for succeeding generations." 17The latter statute, on the other hand, gave flesh to the said policy. Thus, the right of the petitioners (and all those they represent) to a balanced and healthful ecology is as clear as the DENR's duty under its mandate and by virtue of its powers and functions under E.O. No. 192 and the Administrative Code of 1987 to protect and advance the said right. A denial or violation of that right by the other who has the corelative duty or obligation to respect or protect the same gives rise to a cause of action. Petitioners maintain that the granting of the TLAs, which they claim was done with grave abuse of discretion, violated their right to a balanced and healthful ecology; hence, the full protection thereof requires that no further TLAs should be renewed or granted.

A cause of action is defined as: . . . an act or omission of one party in violation of the legal right or rights of the other; and its essential elements are legal right of the plaintiff, correlative obligation of the defendant, and act or omission of the defendant in violation of said legal right. 18 It is settled in this jurisdiction that in a motion to dismiss based on the ground that the complaint fails to state a cause of action, 19 the question submitted to the court for resolution involves the sufficiency of the facts alleged in the complaint itself. No other matter should be considered; furthermore, the truth of falsity of the said allegations is beside the point for the truth thereof is deemed hypothetically admitted. The only issue to be resolved in such a case is: admitting such alleged facts to be true, may the court render a valid judgment in accordance with the prayer in the complaint? 20 In Militante vs. Edrosolano, 21 this Court laid down the rule that the judiciary should "exercise the utmost care and circumspection in passing upon a motion to dismiss on the ground of the absence thereof [cause of action] lest, by its failure to manifest a correct appreciation of the facts alleged and deemed hypothetically admitted, what the law grants or recognizes is effectively nullified. If that happens, there is a blot on the legal order. The law itself stands in disrepute." After careful examination of the petitioners' complaint, We find the statements under the introductory affirmative allegations, as well as the specific averments under the subheading CAUSE OF ACTION, to be adequate enough to show, prima facie, the claimed violation of their rights. On the basis thereof, they may thus be granted, wholly or partly, the reliefs prayed for. It bears stressing, however, that insofar as the cancellation of the TLAs is concerned, there is the need to implead, as party defendants, the grantees thereof for they are indispensable parties. The foregoing considered, Civil Case No. 90-777 be said to raise a political question. Policy formulation or determination by the executive or legislative branches of Government is not squarely put in issue. What is principally involved is the enforcement of a right vis-avis policies already formulated and expressed in legislation. It must, nonetheless, be emphasized that the political question doctrine is no longer, the insurmountable obstacle to the exercise of judicial power or the impenetrable shield that protects executive and legislative actions from judicial inquiry or review. The second paragraph of section 1, Article VIII of the Constitution states that: Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. Commenting on this provision in his book, Philippine Political Law, 22 Mr. Justice Isagani A. Cruz, a distinguished member of this Court, says: The first part of the authority represents the traditional concept of judicial power, involving the settlement of conflicting rights as conferred as law. The second part of the authority represents a broadening of judicial power to enable the courts of justice to review

what was before forbidden territory, to wit, the discretion of the political departments of the government. As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule upon even the wisdom of the decisions of the executive and the legislature and to declare their acts invalid for lack or excess of jurisdiction because tainted with grave abuse of discretion. The catch, of course, is the meaning of "grave abuse of discretion," which is a very elastic phrase that can expand or contract according to the disposition of the judiciary. In Daza vs. Singson, 23 Mr. Justice Cruz, now speaking for this Court, noted: In the case now before us, the jurisdictional objection becomes even less tenable and decisive. The reason is that, even if we were to assume that the issue presented before us was political in nature, we would still not be precluded from revolving it under the expanded jurisdiction conferred upon us that now covers, in proper cases, even the political question. Article VII, Section 1, of the Constitution clearly provides: . . . The last ground invoked by the trial court in dismissing the complaint is the nonimpairment of contracts clause found in the Constitution. The court a quo declared that: The Court is likewise of the impression that it cannot, no matter how we stretch our jurisdiction, grant the reliefs prayed for by the plaintiffs, i.e., to cancel all existing timber license agreements in the country and to cease and desist from receiving, accepting, processing, renewing or approving new timber license agreements. For to do otherwise would amount to "impairment of contracts" abhored ( sic) by the fundamental law. 24 We are not persuaded at all; on the contrary, We are amazed, if not shocked, by such a sweeping pronouncement. In the first place, the respondent Secretary did not, for obvious reasons, even invoke in his motion to dismiss the non-impairment clause. If he had done so, he would have acted with utmost infidelity to the Government by providing undue and unwarranted benefits and advantages to the timber license holders because he would have forever bound the Government to strictly respect the said licenses according to their terms and conditions regardless of changes in policy and the demands of public interest and welfare. He was aware that as correctly pointed out by the petitioners, into every timber license must be read Section 20 of the Forestry Reform Code (P.D. No. 705) which provides: . . . Provided, That when the national interest so requires, the President may amend, modify, replace or rescind any contract, concession, permit, licenses or any other form of privilege granted herein . . . Needless to say, all licenses may thus be revoked or rescinded by executive action. It is not a contract, property or a property right protested by the due process clause of the Constitution. In Tan vs. Director of Forestry, 25 this Court held:

. . . A timber license is an instrument by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. A timber license is not a contract within the purview of the due process clause; it is only a license or privilege, which can be validly withdrawn whenever dictated by public interest or public welfare as in this case. A license is merely a permit or privilege to do what otherwise would be unlawful, and is not a contract between the authority, federal, state, or municipal, granting it and the person to whom it is granted; neither is it property or a property right, nor does it create a vested right; nor is it taxation (37 C.J. 168). Thus, this Court held that the granting of license does not create irrevocable rights, neither is it property or property rights (People vs. Ong Tin, 54 O.G. 7576). We reiterated this pronouncement in Felipe Ysmael, Jr. & Co., Inc. vs. Deputy Executive Secretary: 26 . . . Timber licenses, permits and license agreements are the principal instruments by which the State regulates the utilization and disposition of forest resources to the end that public welfare is promoted. And it can hardly be gainsaid that they merely evidence a privilege granted by the State to qualified entities, and do not vest in the latter a permanent or irrevocable right to the particular concession area and the forest products therein. They may be validly amended, modified, replaced or rescinded by the Chief Executive when national interests so require. Thus, they are not deemed contracts within the purview of the due process of law clause [See Sections 3(ee) and 20 of Pres. Decree No. 705, as amended. Also, Tan v. Director of Forestry, G.R. No. L-24548, October 27, 1983, 125 SCRA 302]. Since timber licenses are not contracts, the non-impairment clause, which reads:

impairment of obligations of contract is limited by the exercise of the police power of the State, in the interest of public health, safety, moral and general welfare. The reason for this is emphatically set forth in Nebia vs. New York, 29 quoted in Philippine American Life Insurance Co. vs. Auditor General, 30 to wit: Under our form of government the use of property and the making of contracts are normally matters of private and not of public concern. The general rule is that both shall be free of governmental interference. But neither property rights nor contract rights are absolute; for government cannot exist if the citizen may at will use his property to the detriment of his fellows, or exercise his freedom of contract to work them harm. Equally fundamental with the private right is that of the public to regulate it in the common interest. In short, the non-impairment clause must yield to the police power of the state. 31 Finally, it is difficult to imagine, as the trial court did, how the non-impairment clause could apply with respect to the prayer to enjoin the respondent Secretary from receiving, accepting, processing, renewing or approving new timber licenses for, save in cases of renewal, no contract would have as of yet existed in the other instances. Moreover, with respect to renewal, the holder is not entitled to it as a matter of right. WHEREFORE, being impressed with merit, the instant Petition is hereby GRANTED, and the challenged Order of respondent Judge of 18 July 1991 dismissing Civil Case No. 90-777 is hereby set aside. The petitioners may therefore amend their complaint to implead as defendants the holders or grantees of the questioned timber license agreements. No pronouncement as to costs. SO ORDERED.

Sec. 10. No law impairing, the obligation of contracts shall be passed. 27 cannot be invoked. In the second place, even if it is to be assumed that the same are contracts, the instant case does not involve a law or even an executive issuance declaring the cancellation or modification of existing timber licenses. Hence, the non-impairment clause cannot as yet be invoked. Nevertheless, granting further that a law has actually been passed mandating cancellations or modifications, the same cannot still be stigmatized as a violation of the non-impairment clause. This is because by its very nature and purpose, such as law could have only been passed in the exercise of the police power of the state for the purpose of advancing the right of the people to a balanced and healthful ecology, promoting their health and enhancing the general welfare. In Abe vs. Foster Wheeler Corp. 28 this Court stated: The freedom of contract, under our system of government, is not meant to be absolute. The same is understood to be subject to reasonable legislative regulation aimed at the promotion of public health, moral, safety and welfare. In other words, the constitutional guaranty of nonCruz, Padilla, Bidin, Grio-Aquino, Regalado, Romero, Nocon, Bellosillo, Melo and Quiason, JJ., concur. Narvasa, C.J., Puno and Vitug, JJ., took no part.

G.R. No. 74816 March 17, 1987 ERNESTO R. RODRIGUEZ, JR., ERNESTO LL. RODRIGUEZ III, SACHA DEL ROSARIO, JOSE P. GENITO, ZENAIDA Z. RODRIGUEZ, and ENECERIO MONDIA, petitioners, vs. INTERMEDIATE APPELLATE COURT and DAYTONA CONSTRUCTION & DEVELOPMENT CORPORATION,respondents. Pelaez, Adriano & Gregorio Law Office for petitioners. Balgos & Perez Law Office for respondents. PARAS, J.: Before Us is a petition to review by certiorari 1) respondent court's decision which sets aside the order of default rendered by the trial court and 2) respondent court's resolution dated April 18, 1986 denying petitioners' (plaintiffs-appellees' therein) motion for extension of time to file motion for reconsideration of its decision. 1 The antecedent facts of the case are as follows: Plaintiffs (petitioners herein) filed on December 16, 1980, an action for abatement of a public nuisance with damages against defendant (private respondent herein). After being granted four (4) extensions of time to file an answer, defendant moved to dismiss the complaint on February 27, 1981 upon the ground that the lower court has no jurisdiction to hear the instant case and for lack of cause of action. However, the motion was denied by the court on April 3, 1981, a copy of which decision was received by the defendant on April 23, 1981. On May 5, 1981 defendant filed a motion for reconsideration which motion was denied on July 7, 1981. Instead of filing an answer, petitioner filed with Us in G.R. No. 57593, Daytona Construction & Development Corporation vs. Rodriguez, et al. a motion for extension of time to file a petition for review, but it never filed one, prompting Us to issue a resolution dated October 5, 1981 informing the parties and the trial court that no petition for review was filed within the period that expired on August 15, 1981. Upon motion of plaintiffs, the court declared the defendant in default on November 4, 1981, and authorized the plaintiffs to present evidence ex-parte. Upon learning of the said order, the defendant on November 9, 1981 filed a motion to set aside the order of default and a motion to admit answer with counterclaim which motions were denied by the lower court in an order dated November 23, 1981. On June 30, 1982, the court a quo rendered judgment for the plaintiffs and against defendant, its dispositive portion reading as follows: WHEREFORE, judgment is hereby rendered as follows: 1. Declaring the operation of the cement hatching plant of the defendant corporation as a nuisance and ordering its permanent closure;

2. Ordering the defendant to pay plaintiff Ernesto Rodriguez, Jr. the amount of P250,000.00 as moral damages and the amount of P5,000.00 as nominal damages; 3. Ordering the defendant to pay plaintiff Ernesto LL. Rodriguez III the amount of P200,000.00 as actual damages, the amount of P500,000.00 as moral damages and the amount of P5,000.00 as nominal damages; 4. Ordering the defendant to pay plaintiff SACHA del Rosario the amount of P20,000.00 as actual damages, the amount of P50,000.00 as moral damages and the amount of P5,000.00 as nominal damages; 5. Ordering the defendant to pay plaintiff Zenaida Z. Rodriguez the amount of P100,000.00 as actual damages, the amount of P100,000.00 as moral damages and the amount of P5,000.00 as nominal damages; and 6. Ordering the defendant to pay the plaintiffs the amount of P50,000.00 as attorney's fees, plus the costs of suit. SO ORDERED. (pp. 63-64, Record on Appeal) In an order dated July 9, 1982, the trial court upon motion of plaintiffs granted execution pending appeal it indeed appearing as alleged in the motion that the continued operation of the cement batching plant of the defendant poses a "great menace to the neighborhood, both in point of health and property." On July 23, 1982, defendant filed a petition for relief which was however denied by the lower court. On July 29, 1982, defendant filed a petition for injunction with the Intermediate Appellate Court which found the petition unmeritorious. 2 The appellate court promulgated on October 5, 1983, a decision denying due course to defendant's petition. Its motion for reconsideration having been denied by the Appellate Court, defendant went on appeal by certiorari to the Supreme Court (G.R. No. 66097) which, after the submission of plaintiffs' comment and defendant's reply thereto, denied its petition for lack of merit. The petition for injunction having been denied by both the IAC and this Court, defendant pursued the remedy of appeal in respondent IAC, assigning the following errors. I. THE TRIAL COURT ERRED WHEN IT DECLARED APPELLANT IN DEFAULT DESPITE THE FACT THAT ITS FAILURE TO FILE ITS ANSWER ON TIME WAS DUE SOLELY TO THE NEGLIGENCE OF ITS COUNSEL AND DESPITE THE FACT THAT THE MOTION TO DISMISS THAT IT HAD FILED COULD HAVE VERY WELL STOOD AS THE ANSWER OF THE APPELLANT. II. THE TRIAL COURT ERRED WHEN IT ASSUMED JURISDICTION OVER THE CASE AND WHEN IT RENDERED JUDGMENT BY

DEFAULT AGAINST THE APPELLANT ON GROUNDS AND/OR BASIS NOT ALLEGED IN THE COMPLAINT FILED AGAINST THE APPELLANT. III. THE TRIAL COURT ERRED WHEN IT DID NOT ALLOW RELIEF FROM JUDGMENT IN THE FACE OF THE REASONS PRESENTED TO IT AS BASIS FOR SUCH RELIEF. IV. THE TRIAL COURT ERRED WHEN DESPITE THE APPEAL HAVING BEEN DULY PERFECTED, IT DETAINED THE CASE WITH IT AND THEREAFTER, ISSUED AN ALIAS WRIT OF EXECUTION PENDING APPEAL WITHOUT APPROPRIATE PRIOR NOTICE TO THE APPELLANT. (pp. 1-2, Appellant's Brief) On March 21, 1986, respondent court promulgated its decision, the decretal portion of which is as follows: WHEREFORE, the Decision appealed from is hereby reversed and set aside and another one entered, remanding the case to the court of origin for further proceedings and thereafter, to render judgment accordingly. No pronouncement as to costs. Notice of respondent Court's decision was received by plaintiffs-appellees thru counsel on April 3, 1986. Plaintiffs filed on April 15, 1986 a motion for extension of 30 days from April 18, 1986 or up to May 18, 1986 to file a motion for reconsideration. However, on May 10, 1986, they filed a 24-page motion for reconsideration. Meanwhile, on April 23, 1986, defendant's opposition to the motion for extension and counter-motion to enter final judgment were received by plaintiffs. Plaintiffs countered with a reply filed April 29, 1986. (Annex "C-2") Plaintiffs' counsel was surprised to receive on April 24, 1986, respondent Court's resolution dated April 18, 1986, denying the motion for extension. Plaintiffs requested respondent Court to treat their aforesaid reply filed on April 29, 1986 as a motion for reconsideration of the said resolution of April 18, 1986, received by them on April 21, 1986, the request being contained in their opposition dated May 22, 1986, to defendant-appellant's motion to strike out the said opposition attached thereto as Annex C-3 " Neither the motion for reconsideration (converted from the reply filed on April 29, 1986) nor the motion for reconsideration of the decision itself was acted upon by respondent court. Hence this petition to review, petitioners alleging that "Respondent court's challenged resolution purporting to deny appellees' motion for extension of time to file a motion for reconsideration is a nullity because the decision inHabaluyas v. Japson case, 3 solely relied on by the said resolution has been made by the Supreme Court to operate prospectively and thereby rendered inapplicable to parties situated as petitioners are, in order precisely to spare them from unfair and unjust deprivation of their right to appeal." In Our resolution, promulgated May 30, 1986 in the Habaluyas case itself (G.R. No. 70895), We set aside the original judgment therein, thus:

However, the law and the Rules of Court do not expressly prohibit the filing of a motion for extension of time to file a motion for reconsideration of a final order or judgment. In the case of Gibbs vs. Court of First Instance (80 Phil. 160), the Court dismissed the petition for certiorari and ruled that the failure of defendant's attorney to file the petition to set aside the judgment within the reglementary period was due to excusable neglect, and, consequently, the record on appeal was allowed. The Court did not rule that the motion for extension of time to file a motion for new trial or reconsideration could not be granted. In the case of Roque vs. Gunigundo (Administrative Case No. 1684, March 30, 1979, 89 SCRA 178), a division of the Court cited the Gibbs decision to support a statement that a motion to extend the reglementary period for filing the motion for reconsideration is not authorized or is not in order. The Intermediate Appellate Court 4 is sharply divided on this issue. Appeals have been dismissed on the basis of the original decision in this case. After considering the able arguments of counsels for petitioners and respondents, the Court resolved that the interest of justice would be better served if the ruling in the original decision were applied prospectively from the time herein stated The reason is that it would be unfair to deprive parties of their fight to appeal simply because they availed themselves of a procedure which was not expressly prohibited or allowed by the law or the Rules. ... (pp. 3-4; Resolution dated May 30, 1986 in G.R. No. 70895; emphasis supplied) This Court further elucidated: 1). Beginning one month after the promulgation of this Resolution, the rule shall be strictly enforced that no motion for extension of time to file a motion petition for new trial or reconsideration may be filed with the Metropolitan or Municipal Trial Courts, the Regional Trial Courts, and the Intermediate Appellate Court. Such a motion may be filed only in cases pending with the Supreme Court as the court of last resort, which may in its sound discretion either grant or deny the extension requested. (p. 4, emphasis supplied) The above new rules are made effective no earlier than June 30, 1986. In the instant case, respondent Court's decision was received by plaintiffs on April 3, 1986. Plaintiffs or petitioners herein filed on April 15, 1986 a motion for extension of 30 days from April 18, 1986 or up to May 18, 1986 to file a motion for reconsideration. On May 10, 1986, plaintiffs filed their motion for reconsideration. Plaintiffs' motion for extension of time was not intended for delay but upon showing of good cause, to wit: "for lack of material time due to heavy pressure of work on the part of petitioners' counsel presently taking charge thereof, what is more the counsel handling this case was doing so for the first time in substitution of Atty. Emmanuel Pelaez, who was recently appointed Philippine Ambassador to the U.S"

It is clear therefore that petitioners' motion was based on good cause and was filed opportunely making the act of respondent Court unwarranted in denying petitioners' motion for extension of time to file its motion for reconsideration. Another important issue raised by the petitioners is that the "subject decision which purports to set aside the order of default rendered by the trial court is a nullity because respondent court arbitrarily ignored in grave abuse of discretion amounting to lack of jurisdiction 1) the conclusive effect of the trial court's final and unappealed order denying defendant's motion to set aside the default order," and 2) the res judicata effect of the appellate court's final judgment in the injunction case aforementioned upholding the trial court's order granting execution of its Judgment pending appeal and, necessarily, the default order as well 3) the law of the case effect of the appellate court's express ruling in the said injunction case sustaining the default order. Petitioners' contentions merit our consideration. It has been Our consistent ruling that a default order, being interlocutory, is not appealable but an order denying a motion or petition to set aside an order of default is not merely interlocutory but final and therefore immediately appealable. 5 Since the trial court's order of November 13, 1981, denying defendant's motion to set aside the order of default was appealable but was not appealed by defendant, the necessary conclusion is that the default order became final. Clearly therefore, respondent Court committed a grave abuse of discretion in disregarding the finality of the default order. The validity and finality of the default order was upheld by the judgment of the Appellate Court in the injunction case (which passed upon the merits of the issuance of an order of execution pending appeal) by virtue of the principle of res judicata and the doctrine re the law of the case. There is no question that there were good reasons for the trial court to issue the order of execution pending appeal. The order categorically stated that there was a need for the closure and stoppage of the operation of defendant's (Daytona Construction) cement batching plant because it posed "a great menace to the neighborhood both in point of health and property." The trial court thus stated: From the uncontroverted evidence presented by the plaintiffs, there is hardly any question that the cement dust coming from the batching plant of the defendant corporation is injurious to the health of the plaintiffs and other residents in the area. The noise, the vibration, the smoke and the odor generated by the day and night operation of the plant must indeed be causing them serious discomfort and untold miseries. Its operation therefore violates certain rights of the plaintiffs and causes them damage. It is thus a nuisance and its abatement justified. (Decision, p. 5; p. 90, Rollo) after taking into consideration evidence presented by plaintiffs (petitioners herein) as follows: The evidence shows that the defendant is a domestic corporation duly organized and existing under the laws of the Philippines with business

address of 252 Don Mariano Marcos Avenue (actually South Zuzuarregui Avenue), Quezon City. It was issued by the Quezon City government a business permit (Exhibit B) for the manufacture of road and building concrete materials such as concrete aggregates, with cement batching plant. Among the conditions set forth in the permit are that the said batching plant shall (1) institute measures to prevent dust emission during the manual charging of cement from bags to the receiving hopper of the bucket elevator of the batching plant; (2) remove all sediment deposit in the settling of tank for process water and proper maintenance should be observed at all times. While the original permit issued to the defendant stated that its operation at the place shall "not (be) beyond Dec. 31, 1979" (Exhibit B-2), it was somehow allowed to operate way beyond said period. Plaintiff Ernesto LL. Rodriguez Ill testified that he has three parcels of residential lots adjacent to the Daytona compound. He informed the Court that his property, with an area of 8,892 square meters has been over-run by effluence from the cement batching plant of the defendant. The sediment settled on the lots and all forms of vegetation have died as a result, and the land tremendously diminished in value. His three lots are located in a prime residential zone and each square meter in the area is easily valued at P500.00. While he would like to sell at least a part of his property, he finds no buyer because of its condition. It would cost him no less than P250,000.00 to be able to repair the damage done to his property, and since its present condition has been existing during the five years, he claimed that the interest on his loss would be about P5,000.00. He has agreed to his counsel's fee of P200,000.00. Zenaida Rodriguez testified that she owns a lot with an area of 1,500 square meters. Two thirds of this area has been damaged by the cement dust, emanating from the defendant's cement batching plant. The continous flow of cement dust into her property affected her deep well, their source of drinking water, and most of their fruit-bearing and ornamental trees dried up. She also said that she has had sleepless nights and became nervous as a result of the batching plant operation. Even her previous pedigreed poodles have been afflicted by all sorts of illnesses, many of them dying in the process. She claimed to have sustained damages amounting to P370,000.00. SACHA del Rosario testified that her house has to close its windows most of the time because of the dust pollution and her precious plants have been destroyed by the cement powder coming from the constant traffic of trucks and other vehicles carrying the product of the batching plant passing through her area. She claims damages amounting to more than P100,000.00. A chemical engineer, Alexander Cruz, said that the effluence deposited on the properties of Ernesto LL. Rodriguez III and Zenaida Rodriguez has a very high PH 11.8, and the soil is highly alkaline and cannot support plant life; that pollution coming from the batching plant can cause stomach disorder and skin problems; that the place of Ernesto LL. Rodriguez III is bare of grass and the trees are dying, (Exhibits J, J1 and J-2 and that there is also a high degree of calcium on the property in question.

Witness Guido L. Quiban a civil engineer, testified that on the basis of his examination of the property of Rodriguez I I I affected by the pollution, it would cost at least P250,000.00 for the excavation filling, concreting of canal and rental of equipment to repair it or restore it to its status quo ante. Lawyer Ernesto R. Rodriguez, Jr., the 70-year old father of both Ernesto Ill and Zenaida Z. Rodriguez, submitted a medical certificate that he had recently been taken ill with acute bronchial asthma, hypertension and atherosclerotic heart disease. (Exhibits L, L-1 to L-4). His physician, a specialist graduate from the University of London and connected with various hospitals in Manila, advised him against exposure to environmental allegens, specifically cement dust and pollution. He also submitted as exhibits various newspaper clippings (Exhibit M and excerpts from a book (Exhibits N and N-1 showing that pollution can irritate the eye, sear lungs and destroy vegetation, raise blood pressure, increase cholesterol levels, interfere with sleep, cause ulcer, trigger heart attacks and the like; that it is the common denominator of respiratory diseases, especially asthma chronic bronchitis, bronchial asthma and emphysema and that polluted air can develop abnormalities in lung function. Dr. Raul I. del Rosario, a neighboring physician, testified that he had treated several patients who traced their sickness to the pollution caused by defendant Daytona batching plant. He said that cement dust produces broncho-pulmonary obstructive diseases, broncho fibriotic lesions which may produce cardio pulmonary complications, and the people living in the neighborhood of the batching plant are the most susceptible to these diseases. He reported many cases of bronchial asthma in both children and adult who live in the vicinity of the cement batching plant and these cases have been intermittently admitted and discharged from the Quirino Labor Hospital where he presently works as a resident physician. He had intended to open a medical clinic at his residence but he could not do so because the washings from the cement mixers are dumped on the access road in front of his house and when these washings are dried up they pollute the neighborhood, rendering his intended medical clinic unfit and impractical for the treatment of patients, particularly those suffering from respiratory ailments. Another lawyer, Eliseo Alampay, Jr., who likewise resides a few meters away from the site of the Daytona batching plant, testified that the said plant is certainly injurious to the health; that the cement dust are agents of lung ailments, impair the growth of plants and even kill the birds in their cages; that it is a demonstrable nuisance because its uncontrolled engine noise and night long pounding prevent the neighborhood from being able to sleep soundly and peacefully. He told the court that there was a time when he felt like organizing the whole neighborhood into a demolition team to forcibly dismantle the entire Daytona plant because "the authorities concerned apparently have chosen to close their eyes and leave us to our miserable plight." He said that the homes in the community all look dirty and dusty because of the pollution that the batching plant of the defendant causes. (Decision in Injunction Case, AC-G.R. No. 14602-SP, pp. 10-14)

Anent the default order, the appellate court in the injunction case said: From the foregoing, it appears that petitioner was recreant in failing to file an answer after respondent judge denied its motion to dismiss the complaint. The motion to dismiss was denied in the order of the lower court under date of April 3, 1981, a copy of which was received by petitioner on April 23, 1981. A motion for reconsideration of the order of denial filed by petitioner on May 7, 1981 was denied by said court on July 7, 1981. Instead of filing an answer promptly, petitioner filed with the Supreme Court a motion for extension of time to file a petition for review, but it never filed one, prompting the Supreme Court to issue a resolution dated October 5, 1981 informing the parties that no petition for review was filed within the period that expired on August 15, 1981. Inspite of the Supreme Court's resolution, petitioner still failed to file any answer or pleading to arrest the running of the prescriptive period. It was only on July 23, 1982, when petitioner filed its Petition for Relief which was nine (9) months after the Supreme Court's resolution was issued. Petitioner's assertion in its Petition for Relief that the failure to file the answer was caused by "the unforseen sickness of its corporate secretary who has custody of the records necessary for the preparation of its defense" cannot be taken without much doubt and hesitation. Petitioner did not even point out who was the supposed corporate secretary or explain why the records were in the possession of the corporate secretary instead of the counsel handling the case. (Decision in Injunction case, p. 16; emphasis supplied) With reference to defendant's allegation that it thought that the period within which to answer (after its motion to dismiss had been denied) had been suspended by its having filed a petition for review before the Supreme Court, same is without merit. The circumstances of the case point to a deliberate desire to delay: the corporation, governed as it is by knowledgeable business executives, should have taken steps to prevent its being declared in default. The corporation waited six (6) months before verifying the status of the case: in the meantime it had been declared in default, a judgment by default had been rendered against it, execution was already pending before it woke up to file the case at hand. We agree with Justice Luis A. Javellana in his concurring opinion in the injunction case before the appellate court, thus: Petitioner's conduct here appears to me to be tainted with fraud and intended simply to delay the disposition of the case. When its motion to dismiss the complaint was denied, and its motion for reconsideration of that denial was, Unwise denied, it manifested its intention to elevate these orders to the Supreme Court on a petition for review. Yet, it did nothing to this end. The purpose of the ploy is obvious. Once it had announced its intention to go to the Supreme Court, it effectively suspended the proceedings in the trial court, or, at least, that was the effect. This enabled it to continue with its operations and it would have done so indefinitely if it had not been declared in-default and private respondents allowed to present their evidence. It is quite apparent that petitioner really had no intention of elevating the case to the Supreme Court otherwise, it would not have allowed the extended period given to it by the Supreme Court to lapse without filing the petition. Or, if it was in good faith, there it should have informed the trial court that it

was no longer pursuing its remedy in the Supreme Court after it had decided that it is no longer availing of such remedy. Instead, it concealed this fact from the trial court and the adverse party, and allowed matters to take their course. It was not until it received the adverse decision that it frantically sought to set things right I do not think that petitioner deserves any consideration for trifling with the administration of justice. (pp. 3-4; emphasis supplied) WHEREFORE, the assailed decision and resolution are hereby SET ASIDE, and a new judgment is hereby rendered REINSTATING the decision of the trial court with the modification that all awards for nominal damages are hereby eliminated. Costs against private respondent. SO ORDERED. Fernan (Chairman), Padilla and Cortes, JJ., concur. Bidin, J., took no part.

permit; b) Mayor's permit; c) Region III-Pollution of Environment and Natural Resources Anti-Pollution Permit; and of other document. At the requested conference on February 20, 1989, petitioner, through its representative, undertook to comply with respondent's request for the production of the required documents. In compliance with said undertaking, petitioner commenced to secure "Region III-Department of Environmental and Natural Resources Anti-Pollution Permit," although among the permits previously secured prior to the operation of petitioner's plant was a "Temporary Permit to Operate Air Pollution Installation" issued by the then National Pollution Control Commission (now Environmental Management Bureau) and is now at a stage where the Environmental Management Bureau is trying to determine the correct kind of anti-pollution devise to be installed as part of petitioner's request for the renewal of its permit. Petitioner's attention having been called to its lack of mayor's permit, it sent its representatives to the office of the mayor to secure the same but were not entertained. On April 6, 1989, without previous and reasonable notice upon petitioner, respondent acting mayor ordered the Municipality's station commander to padlock the premises of petitioner's plant, thus effectively causing the stoppage of its operation. Left with no recourse, petitioner instituted an action for certiorari, prohibition, mandamus with preliminary injunction against private respondent with the court a quo which is presided by the respondent judge. In its prayer for the issuance of a writ of preliminary mandatory injunction, it alleged therein that the closure order was issued in grave abuse of discretion. During the hearing of the application for the issuance of a writ of preliminary injunction on April 14, 1989, herein parties adduced their respective evidences. The respondent judge, April 19, 1989, found that petitioner is entitled to the issuance of the writ of preliminary mandatory injunction, hence, it ordered as follows: In view of the foregoing, upon petitioner's posting of a bond in the amount of P50,000.00 to answer for such damages that respondents may sustain should petitioner eventually be found not entitled to the injunctive relief hereby issued, let a PRELIMINARY MANDATORY INJUNCTION issue ordering the respondent Hon. Pablo N. Cruz, and other person acting in his behalf and stead to immediately revoke his closure order dated April 6, 1989, and allow petitioner to resume its normal business operations until after the instant case shall have been adjudicated on the merits without prejudice to the inherent power of the court to alter, modify or even revoke this order at any given time.

GENERAL ENVIRONMENT LAWS G.R. No. 94759 January 21, 1991 TECHNOLOGY DEVELOPERS, INC., petitioner, vs. COURT OF APPEALS, HON. NARCISO T. ATIENZA as Presiding Judge, Bulacan, RTC, and HON. VICENTE CRUZ, Acting Mayor and the MUNICIPALITY OF STA. MARIA, BULACAN, respondents. Diosdado P. Peralta for petitioner.

GANCAYCO, J.:p The authority of the local executive to protect the community from pollution is the center of this controversy. The antecedent facts are related in the appealed decision of the Court of Appeals as follows: Petitioner, a domestic private corporation engaged in the manufacture and export of charcoal briquette, received a letter dated February 16, 1989 from private respondent acting mayor Pablo N. Cruz, ordering the full cessation of the operation of the petitioner's plant located at Guyong, Sta. Maria, Bulacan, until further order. The letter likewise requested Plant Manager Mr. Armando Manese to bring with him to the office of the mayor on February 20, 1989 the following: a) Building

SO ORDERED. The writ of preliminary mandatory injunction was issued on April 28, 1989, upon petitioner's posting a bond in the amount of P50,000.00. Private respondent filed his motion for reconsideration dated May 3, 1989. Said motion for reconsideration was heard on May 30, 1989. Petitioner's counsel failed to appear and the hearing proceeded with the Provincial Prosecutor presenting his evidence. The following documents were submitted: a) Exhibit "A", Investigation report on the Technology Developers Inc., prepared by one Marivic Guina, and her conclusion and recommendation read: Due to the manufacturing process and nature of raw materials used, the fumes coming from the factory may contain particulate matters which are hazardous to the health of the people. As such, the company should cease operating until such a time that the proper air pollution device is installed and operational. b) Exhibits "B", "B-1", "B-2", three (3) sheets of coupon bond containing signatures of residents of Barangay Guyong, Sta. Maria, Bulacan; c) Exhibit "B-3", a letter addressed to Hon. Roberto Pagdanganan Governor of the Province of Bulacan, dated November 22, 1988, complaining about the smoke coming out of the chimney of the company while in operation. Reassessing all the evidence adduced, the lower court, on June 14, 1989, issued an order (a) setting aside the order dated April 28, 1989, which granted a Writ of Preliminary Mandatory Injunction, and (b) dissolving the writ consequently issued. A motion for reconsideration dated July 6, 1989 was filed by petitioner. Said motion drew an opposition dated July 19, 1989 from private respondent. Resolving the petitioner's motion for reconsideration, the respondent judge issued an order dated August 9, 1989, denying said motion for reconsideration. 1 Hence a petition for certiorari and prohibition with preliminary injunction was filed by petitioner in the Court of Appeals seeking to annul and set aside (a) the order issued by the trial court on June 14, 1989, setting aside the order dated April 28, 1989, and (b) the order of August 9, 1989, denying petitioner's motion for reconsideration of the order of June 14, 1989. In due course the petition was denied for lack of merit by the appellate court in a decision dated January 26, 1990. 2 A motion for reconsideration thereof filed by petitioner was denied on August 10, 1990.

Thus, the herein petition for review on certiorari filed with this Court. Six errors are alleged to have been committed by the appellate court which may be synthesized into the singular issue of whether or not the appellate court committed a grave abuse of discretion in rendering its question decision and resolution. The petition is devoid of merit. The well-known rule is that the matter of issuance of a writ of preliminary injunction is addressed to the sound judicial discretion of the trial court and its action shall not be disturbed on appeal unless it is demonstrated that it acted without jurisdiction or in excess of jurisdiction or otherwise, in grave abuse of its discretion. By the same token the court that issued such a preliminary relief may recall or dissolve the writ as the circumstances may warrant. To the mind of the Court the following circumstances militate against the maintenance of the writ of preliminary injunction sought by petitioner: 1. No mayor's permit had been secured. While it is true that the matter of determining whether there is a pollution of the environment that requires control if not prohibition of the operation of a business is essentially addressed to the then National Pollution Control Commission of the Ministry of Human Settlements, now the Environmental Management Bureau of the Department of Environment and Natural Resources, it must be recognized that the mayor of a town has as much responsibility to protect its inhabitants from pollution, and by virture of his police power, he may deny the application for a permit to operate a business or otherwise close the same unless appropriate measures are taken to control and/or avoid injury to the health of the residents of the community from the emissions in the operation of the business. 2. The Acting Mayor, in a letter of February 16, 1989, called the attention of petitioner to the pollution emitted by the fumes of its plant whose offensive odor "not only pollute the air in the locality but also affect the health of the residents in the area," so that petitioner was ordered to stop its operation until further orders and it was required to bring the following: (1) Building permit; (2) Mayor's permit; and (3) Region III-Department of Environment and Natural Resources Anti-Pollution permit. 3 3. This action of the Acting Mayor was in response to the complaint of the residents of Barangay Guyong, Sta. Maria, Bulacan, directed to the Provincial Governor through channels. 4 The alleged NBI finding that some of the signatures in the four-page petition were written by one person, 5 appears to be true in some instances, (particularly as among members of the same family), but on the whole the many signatures

appear to be written by different persons. The certification of the barrio captain of said barrio that he has not received any complaint on the matter 6 must be because the complaint was sent directly to the Governor through the Acting Mayor. 4. The closure order of the Acting Mayor was issued only after an investigation was made by Marivic Guina who in her report of December 8, 1988 observed that the fumes emitted by the plant of petitioner goes directly to the surrounding houses and that no proper air pollution device has been installed. 7 5. Petitioner failed to produce a building permit from the municipality of Sta. Maria, but instead presented a building permit issued by an official of Makati on March 6,1987. 8 6. While petitioner was able to present a temporary permit to operate by the then National Pollution Control Commission on December 15, 1987, the permit was good only up to May 25, 1988. 9 Petitioner had not exerted any effort to extend or validate its permit much less to install any device to control the pollution and prevent any hazard to the health of the residents of the community. All these factors justify the dissolution of the writ of preliminary injunction by the trial court and the appellate court correctly upheld the action of the lower court. Petitioner takes note of the plea of petitioner focusing on its huge investment in this dollarearning industry. It must be stressed however, that concomitant with the need to promote investment and contribute to the growth of the economy is the equally essential imperative of protecting the health, nay the very lives of the people, from the deleterious effect of the pollution of the environment. WHEREFORE, the petition is DENIED, with costs against petitioner. SO ORDERED. Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.

RELEVANT PROVISIONS IN CONSTITUTION G.R. No. 145328 March 23, 2006 EDUARDO F. HERNANDEZ, MA. ENCARBACION R. LEGASPI, JAIME BLANCO, JR., ENRIQUE BELO, CARLOS VIAPLANA, CARL FURER, VIVENCIO TINIO, MICHAEL BRIGGS, ROSA CARAM, FAUSTO PREYSLER, ROBERT KUA, GEORGE LEE, GUILLERMO LUCHANGCO, PETER DEE, LUISA MARQUEZ, ANGELITA LILLES, JUAN CARLOS, HOMER GO, AMADEO VALENZUELA, EMILIO CHING, ANTONIO CHAN, MURLI SABNANI, MARCOS ROCES, RAYMUNDO FELICIANO, NORMA GAFFUD, ALF HOLST, LOURDES P. ROQUE, MANUEL DY, RAUL FERNANDEZ, VICTORIA TENGCO, CHI MO CHENG, BARANGAY DASMARIAS, and HON. FRANCISCO B. IBAY, petitioners vs. NATIONAL POWER CORPORATION, respondent DECISION CHICO-NAZARIO, J.: Although Presidential Decree No. 1818 prohibits any court from issuing injunctions in cases involving infrastructure projects, the prohibition extends only to the issuance of injunctions or restraining orders against administrative acts in controversies involving facts or the exercise of discretion in technical cases. On issues clearly outside this dimension and involving questions of law, this Court declared that courts could not be prevented from exercising their power to restrain or prohibit administrative acts. 1 In such cases, let the hammer fall and let it fall hard. With health risks linked to exposure to electromagnetic radiation as their battle cry, petitioners, all residents of Dasmarias Village, are clamoring for the reversal of the decision2 dated 3 May 2000 of the Court of Appeals in CA-G.R. SP No. 57849 as well as the resolution dated 27 September 2000, denying their motion for reconsideration. The assailed decision3 of the Court of Appeals reversed the order of the Regional Trial Court of Makati, issuing a writ of preliminary injunction against respondent National Power Corporation (NAPOCOR) to stay the latter from energizing and transmitting high voltage electric current through its cables erected from Sucat, Paraaque to Araneta Ave., Quezon City. But, first, the facts: Sometime in 1996, NAPOCOR began the construction of 29 decagon-shaped steel poles or towers with a height of 53.4 meters to support overhead high tension cables in connection with its 230 Kilovolt Sucat-Araneta-Balintawak Power Transmission Project. Said transmission line passes through the Sergio Osmea, Sr. Highway (South Superhighway), the perimeter of Fort Bonifacio, and Dasmarias Village proximate to Tamarind Road, where petitioners homes are. Said project later proved to be petitioners bane of existence.

Alarmed by the sight of the towering steel towers, petitioners scoured the internet on the possible adverse effects that such a structure could cause to their health and well-being. Petitioners got hold of published articles and studies linking the incidence of a fecund of illnesses to exposure to electromagnetic fields. These illnesses range from cancer to leukemia. Petitioners left no stones unturned to address their malady. They aired this growing concern to the NAPOCOR, which conducted a series of meetings with them. NAPOCOR received flak from Representative Francis Joseph G. Escudero, who in his Privilege Speech dated 10 May 1999, denounced the cavalier manner with which Napocor ignored safety and consultation requirements in the questioned project. Petitioners brought their woes to the attention of Rep. Arnulfo Fuentebella, Chairman of the House Committee on Energy, wherein NAPOCOR was asked to shed light on the petitioners problem. In a letter dated 8 November 1999, Napocor President Federico Puno stated that NAPOCOR was still in the process of coming up with a "win-win" solution to the concerns of the Dasmarias Village and Forbes Park residents.4 In a letter dated 10 August 1999 addressed to Congressman Arnulfo P. Fuentebella, NAPOCORs President wrote: We have discussed the matter with the Dasmarias and Forbes residents and we have come up with four (4) options on how to address the problem, to wit: Option Cost Option 1: Transfer the line (proposal of Dasmarias/Forbes) to Lawton Avenue P 111.84 million

On 13 March 2000, Judge Francisco B. Ibay issued an order8 in Civil Case No. 00-352, which temporarily restrained the respondent from energizing and transmitting high voltage electric current through the said project. The pertinent portion of the said order reads: Acting on the plaintiffs "Urgent Omnibus Motion," it appearing that the subject area will be energized by midnight tonight based on a report taken from Representative Joker P. Arroyo by plaintiffs counsel, so as not to render moot and academic the instant case, as prayed for, defendant National Power Corporation is ordered to maintain the status quo and/or be enjoined from energizing and transmitting high voltage electric current through its cables for forty eight (48) hours starting 4 oclock in the afternoon today and ending 4 oclock in the afternoon of 15 March 2000.9 By order10 of 15 March 2000, the trial court extended the restraining order for 18 more days. NAPOCOR filed a Petition for Certiorari with Prayer for Temporary Restraining Order and Preliminary Injunction with the Court of Appeals assailing the above order by the trial court. Alluding to Presidential Decree No. 1818 (1981), "Prohibiting Courts from Issuing Restraining Orders or Preliminary Injunctions in Cases Involving Infrastructure and Natural Resource Development Projects of, and Public Utilities Operated by, the Government," particularly Sec. 1, NAPOCOR stalwartly sought the dismissal of the case on the ground of lack jurisdiction. Presidential Decree No. 1818 provides: Section 1. No Court in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction or preliminary mandatory injunction in any case, dispute, or controversy involving an infrastructure project, or a mining, fishery, forest or other natural resource development project of the government, or any public utility operated by the government, including among other public utilities for transport of the goods or commodities, stevedoring and arrastre contracts, to prohibit any person or persons, entity or government official from proceeding with or continuing the execution or implementation of any such project, or the operation of such public utility or pursuing any lawful activity necessary for such execution, implementation or operation. In the interregnum, by order dated 3 April 2000, the trial court ordered the issuance of a writ of preliminary injunction against NAPOCOR.11 The trial court articulated that an injunction was necessary to stay respondent NAPOCORs activation of its power lines due to the possible health risks posed to the petitioners. Asserting its jurisdiction over the case, the trial court was of the view that Presidential Decree No. 1818 and jurisprudence proscribing injunctions against infrastructure projects do not find application in the case at bar because of the health risks involved. The trial court, thus, enjoined the NAPOCOR from further preparing and installing high voltage cables to the steel pylons erected near petitioners homes and from energizing and transmitting high voltage electric current through said cables while the case is pending final adjudication, upon posting of the bond amounting to P5,000,000.00 executed to the effect that petitioners will pay all the damages the NAPOCOR may sustain by reason of the injunction if the Court should finally decide that the petitioners are not entitled thereto.12 In light of the foregoing order of the trial court, the petition which NAPOCOR filed with the Court of Appeals was later amended to include the prayer for the nullification and injunction of the Order dated 3 April 2000 of the trial court.

Option 2: Maintain 12 meters distance along P 77.60 million the village Option 3: Construct an underground line P 482.00 million Option 4: Reroute along C-5 and South Luzon P 1,018.83 million Expressway (combination of overhead and underground)5 Negotiations between petitioners and the NAPOCOR reached an impass, with petitioners vying for the relocation of the transmission lines to Fort Bonifacio on one hand, and the NAPOCOR insisting on a 12-meter easement widening, on the other.6 Thus, petitioners, on 9 March 2000 filed a Complaint 7 for Damages with Prayer for the Issuance of a Temporary Restraining Order and/or a Writ of Preliminary Injunction against NAPOCOR. Harping on the hazardous effects of exposure to electromagnetic radiation to the health and safety to themselves and their families, petitioners, through the instant case, sought what they had failed to achieve through amicable means with NAPOCOR and prayed, inter alia, for damages and the relocation of the transmission lines to Lawton Avenue, Fort Bonifacio.

In the challenged decision of 3 May 2000, the Court of Appeals reversed the trial courts order, with the following fallo: WHEREFORE, premises considered, the instant petition for certiorari is hereby GRANTED. The assailed orders of the respondent court, dated March 13, 2000 and April 3, 2000, are hereby REVERSED and SET ASIDE.13 In the Court of Appeals rationale, the proscription on injunctions against infrastructure projects of the government is clearly mandated by the above-quoted Section 1 of Presidential Decree No. 1818, as reiterated by the Supreme Court in its Circulars No. 2-91 and No. 13-93, dated 15 March 1991 and 5 March 1993, respectively. As their motion for reconsideration was met with similar lack of success, petitioners, in a last attempt at vindication, filed the present petition for review on the following arguments: I. Temporary restraining orders and preliminary injunctions were purposely designed to address matters of extreme urgency where there is probability of grave injustice and irreparable injury.14 II. The rule on preliminary injunction merely requires that unless restrained, the act complained of will probably work injustice to the applicant or probably violate his rights and tends to render the judgment ineffectual.15 (Emphasis in the original.) Fundamental to the resolution of the instant petition is the issue of whether or not the trial court may issue a temporary restraining order and preliminary injunction to enjoin the construction and operation of the 29 decagon-shaped steel poles or towers by the NAPOCOR, notwithstanding Presidential Decree No. 1818. Petitioners clutch on their stand that Presidential Decree No. 1818 could not be construed to apply to cases of extreme urgency as in the present case when no less than the rights of the petitioners to health and safety hangs on the balance. We find the petition to be imbued with merit. Presidential Decree No. 1818 was issued on 16 January 1981, prohibiting judges from issuing restraining orders against government infrastructure projects. In part, the decree says, "No court in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction or preliminary order, preliminary mandatory injunction in any case, dispute or controversy involving an infrastructure project ." Realizing the importance of this decree, this Tribunal had issued different circulars to implement this particular law. Presidential Decree No. 181816 prohibits courts from issuing injunctions against government infrastructure projects. In Garcia v. Burgos,17 Presidential Decree No. 1818 was held to prohibit courts from issuing an injunction against any infrastructure project in

order not to disrupt or hamper the pursuit of essential government projects or frustrate the economic development effort of the nation. While its sole provision would appear to encompass all cases involving the implementation of projects and contracts on infrastructure, natural resource development and public utilities, this rule, however, is not absolute as there are actually instances when Presidential Decree No. 1818 should not find application. In a spate of cases, this Court declared that although Presidential Decree No. 1818 prohibits any court from issuing injunctions in cases involving infrastructure projects, the prohibition extends only to the issuance of injunctions or restraining orders against administrative acts in controversies involving facts or the exercise of discretion in technical cases. On issues clearly outside this dimension and involving questions of law, this Court declared that courts could not be prevented from exercising their power to restrain or prohibit administrative acts. 18 In the case at bar, petitioners sought the issuance of a preliminary injunction on the ground that the NAPOCOR Project impinged on their right to health as enshrined in Article II, Section 15 of the 1987 Constitution, which provides: Sec. 15. The State shall protect and promote the right to health of the people and instill consciousness among them. To boot, petitioners, moreover, harp on respondents failure to conduct prio r consultation with them, as the community affected by the project, in stark violation of Section 27 of the Local Government Code which provides: "no project or program shall be implemented by government authorities unless the consultations mentioned are complied with, and prior approval of the Sanggunian concerned is observed." From the foregoing, whether there is a violation of petitioners constitutionally protected right to health and whether respondent NAPOCOR had indeed violated the Local Government Code provision on prior consultation with the affected communities are veritable questions of law that invested the trial court with jurisdiction to issue a TRO and subsequently, a preliminary injunction. As such, these questions of law divest the case from the protective mantle of Presidential Decree No. 1818. Moreover, the issuance by the trial court of a preliminary injunction finds legal support in Section 3 of Rule 58 of the Rules of Court which provides: Sec. 3. Grounds for issuance of preliminary injunction. - A preliminary injunction may be granted when it is established: (a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; (b) That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or (c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in

violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual. (3a) (Emphasis supplied.) The rule on preliminary injunction merely requires that unless restrained, the act complained of will probably violate his rights and tend to render the judgment ineffectual. Here, there is adequate evidence on record to justify the conclusion that the project of NAPOCOR probably imperils the health and safety of the petitioners so as to justify the issuance by the trial court of a writ of preliminary injunction. Petitioners adduced in evidence copies of studies linking the incidence of illnesses such as cancer and leukemia to exposure to electromagnetic fields. The records bear out, to boot, a copy of a brochure of NAPOCOR regarding its Quezon Power Project from which will be supplying NAPOCOR with the power which will pass through the towers subject of the controversy. The NAPOCOR brochure provides that because of the danger concomitant with high voltage power, Philippine laws mandate that the power lines should be located within safe distances from residences. And the Quezon Power Project mandates an easement of 20 meters to the right and 20 meters to the left which falls short of the 12meter easement that NAPOCOR was proposing to petitioners. Likewise on record, are copies of letters of Napocor President Federico Puno to Rep. Arnulfo Fuentebella, Chairman of the House Committee on Energy, stating updates on the negotiations being undertaken by the NAPOCOR and the Dasmarias Village and Forbes Park residents. Also on file is the Privilege Speech dated 10 May 1999 of Representative Francis Joseph G. Escudero, who denounced the cavalier manner with which Napocor ignored safety and consultation requirements in the questioned project. With a member of Congress denouncing the subject project of NAPOCOR because of the very same health and safety ills that petitioners now hew to in this petition, and with documents on record to show that NAPOCOR made representations to petitioners that they are looking into the possibility of relocating the project, added to the fact that there had been series of negotiations and meetings between petitioners and NAPOCOR as well as related agencies, there is ample indicia to suggest to the mind of the court that the health concerns of the petitioners are, at the very least, far from imaginary. Indeed, if there is no cause for concern, NAPOCOR would not have been stirred to come up with options to address the woes of petitioners, nor would Congressman Escudero have fired away those strong words of censure, assailing what to Congressman Escudero smacks of a "cavalier manner by which the NAPOCOR has responded to earnest pleas for a review of its practice of installing massive pylons supporting high tension cables in densely populated areas."19 True, the issue of whether or not the transmission lines are safe is essentially evidentiary in nature, and pertains to the very merits of the action below. In fact, petitioners recognize that the conclusiveness of their life, health and safety concerns still needs to be proved in the main case below and they are prepared to do so especially in the light of some studies cited by respondent that yield contrary results in a disputed subject. Despite the parties conflicting results of studies made on the issue, the possibility that the exposure to electromagnetic radiation causes cancer and other disorders is still, indeed, within the realm of scientific scale of probability.

Equally important, we take judicial notice that the area alluded to as location of the NAPOCOR project is a fragile zone being proximate to local earthquake faults, particularly the Marikina fault, among other zones. This is not to mention the risks of falling structures caused by killer tornadoes and super typhoons, the Philippines, especially Central Luzon, being situated along the typhoon belt. Moreover, the Local Government Code, requires conference with the affected communities of a government project. NAPOCOR, palpably, made a shortcut to this requirement. In fact, there appears a lack of exhaustive feasibility studies on NAPOCORs part before making a go with the project on hand; otherwise, it should have anticipated the legal labyrinth it is now caught in. These are facts, which the trial court could not ignore, and form as sufficient basis to engender the cloud of doubt that the NAPOCOR project could, indeed, endanger the lives of the petitioners. A preliminary injunction is likewise justified prior to a final determination of the issues of whether or not NAPOCOR ignored safety and consultation requirements in the questioned project. Indeed, the court could, nay should, grant the writ of preliminary injunction if the purpose of the other party is to shield a wrongdoing. A ruling to the contrary would amount to an erosion of judicial discretion. After all, for a writ of preliminary injunction to be issued, the Rules do not require that the act complained of be in violation of the rights of the applicant. Indeed, what the Rules require is that the act complained of be probably in violation of the rights of the applicant. Under the Rules of Court, probability is enough basis for injunction to issue as a provisional remedy, which is different from injunction as a main action where one needs to establish absolute certainty as basis for a final and permanent injunction. Pending the final determination of the trial court on the main case for damages, of whether or not the NAPOCOR Project infringes on petitioners substantive right to health and pending determination of the question of whether there was non-observance of the priorconsultation proviso under the Local Government Code, it is prudent to preserve the status quo. In Phil. Ports Authority v. Cipres Stevedoring & Arrastre, Inc.,20 we held: A preliminary injunction is an order granted at any stage of an action prior to judgment of final order, requiring a party, court, agency, or person to refrain from a particular act or acts. It is a preservative remedy to ensure the protection of a partys substantive rights or interests pending the final judgment in the principal action. A plea for an injunctive writ lies upon the existence of a claimed emergency or extraordinary situation which should be avoided for otherwise, the outcome of a litigation would be useless as far as the party applying for the writ is concerned. At times referred to as the "Strong Arm of Equity," we have consistently ruled that there is no power the exercise of which is more delicate and which calls for greater circumspection than the issuance of an injunction. It should only be extended in cases of great injury where courts of law cannot afford an adequate or commensurate remedy in damages; "in cases of extreme urgency; where the right is very clear; where considerations of relative inconvenience bear strongly in complainants favor; where there is a willful and unlawful invasion of plaintiffs right against his protest and remonstrance, the injury being a continuing one, and where the effect of the mandatory injunction is rather to reestablish and maintain a preexisting continuing relation between the parties, recently and arbitrarily interrupted by the defendant, than to establish a new relation." (Emphasis supplied.)

What is more, contrary to respondents assertion, there is not a single syllable in the circulars issued by this Court enjoining the observance of Presidential Decree No. 1818, which altogether and absolutely, ties the hands of the courts from issuing a writ of preliminary injunction. What Circular 2-9121 dated 15 March 1991 seeks to enjoin is the indiscriminate issuance of court injunctions. The same holds for Circular 13-9322 dated 5 March 1993 and Circular 68-94.23 And, in Circular No. 7-99, judges are enjoined to observe utmost caution, prudence and judiciousness in the issuance of temporary restraining order and in the grant of writs of preliminary injunction to avoid any suspicion that its issuance or grant was for consideration other than the strict merits of the case.24 There is not a hint from the foregoing circulars suggesting an unbridled prohibition against the issuance of temporary restraining orders or preliminary injunctions. In sum, what Presidential Decree No. 1818 aims to avert is the untimely frustration of government infrastructure projects, particularly by provisional remedies, to the detriment of the greater good by disrupting the pursuit of essential government projects or frustrate the economic development effort of the nation. Presidential Decree No. 1818, however, was not meant to be a blanket prohibition so as to disregard the fundamental right to health, safety and well-being of a community guaranteed by the fundamental law of the land.25 Lest we be misconstrued, this decision does not undermine the purpose of the NAPOCOR project which is aimed towards the common good of the people. But, is the promotion of the general welfare at loggerheads with the preservation of the rule of law? We submit that it is not.26 In the present case, the far-reaching irreversible effects to human safety should be the primordial concerns over presumed economic benefits per se as alleged by the NAPOCOR. Not too long ago, the Court, in Metropolitan Manila Development Authority (MMDA) v. Bel-Air Village Association, Inc.,27 upheld the validity of the writ of preliminary injunction issued by the Court of Appeals enjoining the implementation of the Metropolitan Manila Development Authoritys proposed action of opening of the Neptune Street to public vehicular traffic. We were categorical Not infrequently, the government is tempted to take legal shortcuts to solve urgent problems of the people. But even when government is armed with the best of intention, we cannot allow it to run roughshod over the rule of law. Again, we let the hammer fall and fall hard on the illegal attempt of the MMDA to open for public use a private road in a private subdivision. While we hold that the general welfare should be promoted, we stress that it should not be achieved at the expense of the rule of law.28 In hindsight, if, after trial, it turns out that the health-related fears that petitioners cleave on to have adequate confirmation in fact and in law, the questioned project of NAPOCOR then suffers from a paucity of purpose, no matter how noble the purpose may be. For what use will modernization serve if it proves to be a scourge on an individuals fundamental right, not just to health and safety, but, ostensibly, to life preservation itself, in all of its desired quality? WHEREFORE, the petition is granted. The decision dated 3 May 2000 of the Court of Appeals in CA-G.R. SP No. 57849 is REVERSED as well as the resolution dated 27 September 2000. The Order dated 3 April 2000 of the Regional Trial Court of Makati in Civil Case No. 00-352 is hereby REINSTATED. No pronouncement as to costs

SO ORDERED.

G.R. No. L-72119 May 29, 1987 VALENTIN L. vs. CIVIL SERVICE COMMISSION, respondent. CORTES, J.: The fundamental right of the people to information on matters of public concern is invoked in this special civil action for mandamus instituted by petitioner Valentin L. Legaspi against the Civil Service Commission. The respondent had earlier denied Legaspi's request for information on the civil service eligibilities of certain persons employed as sanitarians in the Health Department of Cebu City. These government employees, Julian Sibonghanoy and Mariano Agas, had allegedly represented themselves as civil service eligibles who passed the civil service examinations for sanitarians. Claiming that his right to be informed of the eligibilities of Julian Sibonghanoy and Mariano Agas, is guaranteed by the Constitution, and that he has no other plain, speedy and adequate remedy to acquire the information, petitioner prays for the issuance of the extraordinary writ of mandamus to compel the respondent Commission to disclose said information. This is not the first tune that the writ of mandamus is sought to enforce the fundamental right to information. The same remedy was resorted to in the case of Tanada et. al. vs. Tuvera et. al., (G.R. No. L-63915, April 24,1985,136 SCRA 27) wherein the people's right to be informed under the 1973 Constitution (Article IV, Section 6) was invoked in order to compel the publication in the Official Gazette of various presidential decrees, letters of instructions and other presidential issuances. Prior to the recognition of the right in said Constitution the statutory right to information provided for in the Land Registration Act (Section 56, Act 496, as amended) was claimed by a newspaper editor in another mandamus proceeding, this time to demand access to the records of the Register of Deeds for the purpose of gathering data on real estate transactions involving aliens (Subido vs. Ozaeta, 80 Phil. 383 [1948]). The constitutional right to information on matters of public concern first gained recognition in the Bill of Rights, Article IV, of the 1973 Constitution, which states: Sec. 6. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, shall be afforded the citizen subject to such limitations as may be provided by law. The foregoing provision has been retained and the right therein provided amplified in Article III, Sec. 7 of the 1987 Constitution with the addition of the phrase, "as well as to government research data used as basis for policy development." The new provision reads: LEGASPI, petitioner,

The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis. for policy development, shall be afforded the citizen, subject to such stations as may be provided by law. These constitutional provisions are self-executing. They supply the rules by means of which the right to information may be enjoyed (Cooley, A Treatise on the Constitutional Limitations 167 [1927]) by guaranteeing the right and mandating the duty to afford access to sources of information. Hence, the fundamental right therein recognized may be asserted by the people upon the ratification of the constitution without need for any ancillary act of the Legislature. (Id. at, p. 165) What may be provided for by the Legislature are reasonable conditions and limitations upon the access to be afforded which must, of necessity, be consistent with the declared State policy of full public disclosure of all transactions involving public interest (Constitution, Art. 11, Sec. 28). However, it cannot be overemphasized that whatever limitation may be prescribed by the Legislature, the right and the duty under Art. III Sec. 7 have become operative and enforceable by virtue of the adoption of the New Charter. Therefore, the right may be properly invoked in a mandamus proceeding such as this one. The Solicitor General interposes procedural objections to Our giving due course to this Petition. He challenges the petitioner's standing to sue upon the ground that the latter does not possess any clear legal right to be informed of the civil service eligibilities of the government employees concerned. He calls attention to the alleged failure of the petitioner to show his actual interest in securing this particular information. He further argues that there is no ministerial duty on the part of the Commission to furnish the petitioner with the information he seeks. 1. To be given due course, a Petition for mandamus must have been instituted by a party aggrieved by the alleged inaction of any tribunal, corporation, board or person which unlawfully excludes said party from the enjoyment of a legal right. (Ant;-Chinese League of the Philippines vs. Felix, 77 Phil. 1012 [1947]). The petitioner in every case must therefore be an "aggrieved party" in the sense that he possesses a clear legal right to be enforced and a direct interest in the duty or act to be performed. In the case before Us, the respondent takes issue on the personality of the petitioner to bring this suit. It is asserted that, the instant Petition is bereft of any allegation of Legaspi's actual interest in the civil service eligibilities of Julian Sibonghanoy and Mariano Agas, At most there is a vague reference to an unnamed client in whose behalf he had allegedly acted when he made inquiries on the subject (Petition, Rollo, p. 3). But what is clear upon the face of the Petition is that the petitioner has firmly anchored his case upon the right of the people to information on matters of public concern, which, by its very nature, is a public right. It has been held that: * * * when the question is one of public right and the object of the mandamus is to procure the enforcement of a public duty, the people are regarded as the real party in interest and the relator at whose instigation the proceedings are instituted need not show that he has any legal or special interest in the result, it being sufficient to show that he is a citizen and as such interested in the execution of the laws * * *

(Tanada et. al. vs. Tuvera, et. al., G.R. No. L- 63915, April 24, 1985, 136 SCRA 27, 36). From the foregoing, it becomes apparent that when a mandamus proceeding involves the assertion of a public right, the requirement of personal interest is satisfied by the mere fact that the petitioner is a citizen, and therefore, part of the general "public" which possesses the right. The Court had opportunity to define the word "public" in the Subido case, supra, when it held that even those who have no direct or tangible interest in any real estate transaction are part of the "public" to whom "(a)ll records relating to registered lands in the Office of the Register of Deeds shall be open * * *" (Sec. 56, Act No. 496, as amended). In the words of the Court: * * * "Public" is a comprehensive, all-inclusive term. Properly construed, it embraces every person. To say that only those who have a present and existing interest of a pecuniary character in the particular information sought are given the right of inspection is to make an unwarranted distinction. *** (Subido vs. Ozaeta, supra at p. 387). The petitioner, being a citizen who, as such is clothed with personality to seek redress for the alleged obstruction of the exercise of the public right. We find no cogent reason to deny his standing to bring the present suit. 2. For every right of the people recognized as fundamental, there lies a corresponding duty on the part of those who govern, to respect and protect that right. That is the very essence of the Bill of Rights in a constitutional regime. Only governments operating under fundamental rules defining the limits of their power so as to shield individual rights against its arbitrary exercise can properly claim to be constitutional (Cooley, supra, at p. 5). Without a government's acceptance of the limitations imposed upon it by the Constitution in order to uphold individual liberties, without an acknowledgment on its part of those duties exacted by the rights pertaining to the citizens, the Bill of Rights becomes a sophistry, and liberty, the ultimate illusion. In recognizing the people's right to be informed, both the 1973 Constitution and the New Charter expressly mandate the duty of the State and its agents to afford access to official records, documents, papers and in addition, government research data used as basis for policy development, subject to such limitations as may be provided by law. The guarantee has been further enhanced in the New Constitution with the adoption of a policy of full public disclosure, this time "subject to reasonable conditions prescribed by law," in Article 11, Section 28 thereof, to wit: Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its transactions involving public interest. (Art. 11, Sec. 28). In the Tanada case, supra, the constitutional guarantee was bolstered by what this Court declared as an imperative duty of the government officials concerned to publish all important legislative acts and resolutions of a public nature as well as all executive orders and proclamations of general applicability. We granted mandamus in said case, and in the process, We found occasion to expound briefly on the nature of said duty:

* * * That duty must be enforced if the Constitutional right of the people to be informed on matters of public concern is to be given substance and reality. The law itself makes a list of what should be published in the Official Gazette. Such listing, to our mind, leaves respondents with no discretion whatsoever as to what must be in included or excluded from such publication. (Tanada v. Tuvera,supra, at 39). (Emphasis supplied). The absence of discretion on the part of government agencia es in allowing the examination of public records, specifically, the records in the Office of the Register of Deeds, is emphasized in Subido vs. Ozaeta, supra: Except, perhaps when it is clear that the purpose of the examination is unlawful, or sheer, idle curiosity, we do not believe it is the duty under the law of registration officers to concern themselves with the motives, reasons, and objects of the person seeking access to the records. It is not their prerogative to see that the information which the records contain is not flaunted before public gaze, or that scandal is not made of it. If it be wrong to publish the contents of the records, it is the legislature and not the officials having custody thereof which is called upon to devise a remedy. *** (Subido v. Ozaeta, supra at 388). (Emphasis supplied). It is clear from the foregoing pronouncements of this Court that government agencies are without discretion in refusing disclosure of, or access to, information of public concern. This is not to lose sight of the reasonable regulations which may be imposed by said agencies in custody of public records on the manner in which the right to information may be exercised by the public. In the Subido case, We recognized the authority of the Register of Deeds to regulate the manner in which persons desiring to do so, may inspect, examine or copy records relating to registered lands. However, the regulations which the Register of Deeds may promulgate are confined to: * * * prescribing the manner and hours of examination to the end that damage to or loss of, the records may be avoided, that undue interference with the duties of the custodian of the books and documents and other employees may be prevented, that the right of other persons entitled to make inspection may be insured * * * (Subido vs. Ozaeta, 80 Phil. 383, 387) Applying the Subido ruling by analogy, We recognized a similar authority in a municipal judge, to regulate the manner of inspection by the public of criminal docket records in the case of Baldoza vs. Dimaano (Adm. Matter No. 1120-MJ, May 5, 1976, 71 SCRA 14). Said administrative case was filed against the respondent judge for his alleged refusal to allow examination of the criminal docket records in his sala. Upon a finding by the Investigating Judge that the respondent had allowed the complainant to open and view the subject records, We absolved the respondent. In effect, We have also held that the rules and conditions imposed by him upon the manner of examining the public records were reasonable. In both the Subido and the Baldoza cases, We were emphatic in Our statement that the authority to regulate the manner of examining public records does not carry with it the power to prohibit. A distinction has to be made between the discretion to refuse outright the disclosure of or access to a particular information and the authority to regulate the manner in which the access is to be afforded. The first is a limitation upon the availability

of access to the information sought, which only the Legislature may impose (Art. III, Sec. 6, 1987 Constitution). The second pertains to the government agency charged with the custody of public records. Its authority to regulate access is to be exercised solely to the end that damage to, or loss of, public records may be avoided, undue interference with the duties of said agencies may be prevented, and more importantly, that the exercise of the same constitutional right by other persons shall be assured (Subido vs. Ozaetal supra). Thus, while the manner of examining public records may be subject to reasonable regulation by the government agency in custody thereof, the duty to disclose the information of public concern, and to afford access to public records cannot be discretionary on the part of said agencies. Certainly, its performance cannot be made contingent upon the discretion of such agencies. Otherwise, the enjoyment of the constitutional right may be rendered nugatory by any whimsical exercise of agency discretion. The constitutional duty, not being discretionary, its performance may be compelled by a writ of mandamus in a proper case. But what is a proper case for Mandamus to issue? In the case before Us, the public right to be enforced and the concomitant duty of the State are unequivocably set forth in the Constitution. The decisive question on the propriety of the issuance of the writ of mandamus in this case is, whether the information sought by the petitioner is within the ambit of the constitutional guarantee. 3. The incorporation in the Constitution of a guarantee of access to information of public concern is a recognition of the essentiality of the free flow of ideas and information in a democracy (Baldoza v. Dimaano, Adm. Matter No. 1120-MJ, May 5, 1976, 17 SCRA 14). In the same way that free discussion enables members of society to cope with the exigencies of their time (Thornhill vs. Alabama, 310 U.S. 88,102 [1939]), access to information of general interest aids the people in democratic decision-making (87 Harvard Law Review 1505 [1974]) by giving them a better perspective of the vital issues confronting the nation. But the constitutional guarantee to information on matters of public concern is not absolute. It does not open every door to any and all information. Under the Constitution, access to official records, papers, etc., are "subject to limitations as may be provided by law" (Art. III, Sec. 7, second sentence). The law may therefore exempt certain types of information from public scrutiny, such as those affecting national security (Journal No. 90, September 23, 1986, p. 10; and Journal No. 91, September 24, 1986, p. 32, 1986 Constitutional Commission). It follows that, in every case, the availability of access to a particular public record must be circumscribed by the nature of the information sought, i.e., (a) being of public concern or one that involves public interest, and, (b) not being exempted by law from the operation of the constitutional guarantee. The threshold question is, therefore, whether or not the information sought is of public interest or public concern. a. This question is first addressed to the government agency having custody of the desired information. However, as already discussed, this does not give the agency concerned any discretion to grant or deny access. In case of denial of access, the government agency has the burden of showing that the information requested is not of public concern, or, if it is of public concern, that the same has been exempted by law from the operation of the guarantee. To hold otherwise will serve to dilute the constitutional right. As aptly observed, ". . . the government is in an advantageous position to marshall and interpret arguments against release . . ." (87 Harvard Law Review 1511 [1974]). To safeguard the constitutional right, every denial of access by the government agency concerned is subject to review by the courts, and in the proper case, access may be compelled by a writ of Mandamus.

In determining whether or not a particular information is of public concern there is no rigid test which can be applied. "Public concern" like "public interest" is a term that eludes exact definition. Both terms embrace a broad spectrum of subjects which the public may want to know, either because these directly affect their lives, or simply because such matters naturally arouse the interest of an ordinary citizen. In the final analysis, it is for the courts to determine in a case by case basis whether the matter at issue is of interest or importance, as it relates to or affects the public. The public concern invoked in the case of Tanada v. Tuvera, supra, was the need for adequate notice to the public of the various laws which are to regulate the actions and conduct of citizens. In Subido vs. Ozaeta, supra,the public concern deemed covered by the statutory right was the knowledge of those real estate transactions which some believed to have been registered in violation of the Constitution. The information sought by the petitioner in this case is the truth of the claim of certain government employees that they are civil service eligibles for the positions to which they were appointed. The Constitution expressly declares as a State policy that: Appointments in the civil service shall be made only according to merit and fitness to be determined, as far as practicable, and except as to positions which are policy determining, primarily confidential or highly technical, by competitive examination. (Art. IX, B, Sec. 2.[2]). Public office being a public trust, [Const. Art. XI, Sec. 1] it is the legitimate concern of citizens to ensure that government positions requiring civil service eligibility are occupied only by persons who are eligibles. Public officers are at all times accountable to the people even as to their eligibilities for their respective positions. b. But then, it is not enough that the information sought is of public interest. For mandamus to lie in a given case, the information must not be among the species exempted by law from the operation of the constitutional guarantee. In the instant, case while refusing to confirm or deny the claims of eligibility, the respondent has failed to cite any provision in the Civil Service Law which would limit the petitioner's right to know who are, and who are not, civil service eligibles. We take judicial notice of the fact that the names of those who pass the civil service examinations, as in bar examinations and licensure examinations for various professions, are released to the public. Hence, there is nothing secret about one's civil service eligibility, if actually possessed. Petitioner's request is, therefore, neither unusual nor unreasonable. And when, as in this case, the government employees concerned claim to be civil service eligibles, the public, through any citizen, has a right to verify their professed eligibilities from the Civil Service Commission. The civil service eligibility of a sanitarian being of public concern, and in the absence of express limitations under the law upon access to the register of civil service eligibles for said position, the duty of the respondent Commission to confirm or deny the civil service eligibility of any person occupying the position becomes imperative. Mandamus, therefore lies. WHEREFORE, the Civil Service Commission is ordered to open its register of eligibles for the position of sanitarian, and to confirm or deny, the civil service eligibility of Julian

Sibonghanoy and Mariano Agas, for said position in the Health Department of Cebu City, as requested by the petitioner Valentin L. Legaspi. Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Gancayco, Padilla, Bidin and Sarmiento, JJ., concur. Feliciano, J., is on leave.

CLEAN AIR ACT (RA 8749) G.R. No. 164527 August 15, 2007

FRANCISCO I. CHAVEZ, Petitioner, vs. NATIONAL HOUSING AUTHORITY, R-II BUILDERS, INC., R-II HOLDINGS, INC., HARBOUR CENTRE PORT TERMINAL, INC., and MR. REGHIS ROMERO II, Respondents. DECISION VELASCO, JR., J.: In this Petition for Prohibition and Mandamus with Prayer for Temporary Restraining Order and/or Writ of Preliminary Injunction under Rule 65, petitioner, in his capacity as taxpayer, seeks: to declare NULL AND VOID the Joint Venture Agreement (JVA) dated March 9, 1993 between the National Housing Authority and R-II Builders, Inc. and the Smokey Mountain Development and Reclamation Project embodied therein; the subsequent amendments to the said JVA; and all other agreements signed and executed in relation thereto including, but not limited to the Smokey Mountain Asset Pool Agreement dated 26 September 1994 and the separate agreements for Phase I and Phase II of the Project as well as all other transactions which emanated therefrom, for being UNCONSTITUTIONAL and INVALID; to enjoin respondentsparticularly respondent NHAfrom further implementing and/or enforcing the said project and other agreements related thereto, and from further deriving and/or enjoying any rights, privileges and interest therefrom x x x; and to compel respondents to disclose all documents and information relating to the project including, but not limited to, any subsequent agreements with respect to the different phases of the project, the revisions over the original plan, the additional works incurred thereon, the current financial condition of respondent R-II Builders, Inc., and the transactions made respecting the project.1 The Facts

On March 1, 1988, then President Corazon C. Aquino issued Memorandum Order No. (MO) 1612 approving and directing the implementation of the Comprehensive and Integrated Metropolitan Manila Waste Management Plan (the Plan). The Metro Manila Commission, in coordination with various government agencies, was tasked as the lead agency to implement the Plan as formulated by the Presidential Task Force on Waste Management created by Memorandum Circular No. 39. A day after, on March 2, 1988, MO 161-A3 was issued, containing the guidelines which prescribed the functions and responsibilities of fifteen (15) various government departments and offices tasked to implement the Plan, namely: Department of Public Works and Highway (DPWH), Department of Health (DOH), Department of Environment and Natural Resources (DENR), Department of Transportation and Communication, Department of Budget and Management, National Economic and Development Authority (NEDA), Philippine Constabulary Integrated National Police, Philippine Information Agency and the Local Government Unit (referring to the City of Manila), Department of Social Welfare and Development, Presidential Commission for Urban Poor, National Housing Authority (NHA), Department of Labor and Employment, Department of Education, Culture and Sports (now Department of Education), and Presidential Management Staff. Specifically, respondent NHA was ordered to "conduct feasibility studies and develop lowcost housing projects at the dumpsite and absorb scavengers in NHA resettlement/lowcost housing projects."4 On the other hand, the DENR was tasked to "review and evaluate proposed projects under the Plan with regard to their environmental impact, conduct regular monitoring of activities of the Plan to ensure compliance with environmental standards and assist DOH in the conduct of the study on hospital waste management." 5 At the time MO 161-A was issued by President Aquino, Smokey Mountain was a wasteland in Balut, Tondo, Manila, where numerous Filipinos resided in subhuman conditions, collecting items that may have some monetary value from the garbage. The Smokey Mountain dumpsite is bounded on the north by the Estero Marala, on the south by the property of the National Government, on the east by the property of B and I Realty Co., and on the west by Radial Road 10 (R-10). Pursuant to MO 161-A, NHA prepared the feasibility studies of the Smokey Mountain lowcost housing project which resulted in the formulation of the "Smokey Mountain Development Plan and Reclamation of the Area Across R-10" or the Smokey Mountain Development and Reclamation Project (SMDRP; the Project). The Project aimed to convert the Smokey Mountain dumpsite into a habitable housing project, inclusive of the reclamation of the area across R-10, adjacent to the Smokey Mountain as the enabling component of the project.6 Once finalized, the Plan was submitted to President Aquino for her approval. On July 9, 1990, the Build-Operate-and-Transfer (BOT) Law (Republic Act No. [RA] 6957) was enacted.7 Its declared policy under Section 1 is "[t]o recognize the indispensable role of the private sector as the main engine for national growth and development and provide the most appropriate favorable incentives to mobilize private resources for the purpose." Sec. 3 authorized and empowered "[a]ll government infrastructure agencies, including government-owned and controlled corporations and local government units x x x to enter into contract with any duly pre-qualified private contractor for the financing, construction, operation and maintenance of any financially viable infrastructure facilities through the build-operate-transfer or build and transfer scheme." RA 6957 defined "build-and-transfer" scheme as "[a] contractual arrangement whereby the contractor undertakes the construction, including financing, of a given infrastructure

facility, and its turnover after the completion to the government agency or local government unit concerned which shall pay the contractor its total investment expended on the project, plus reasonable rate of return thereon." The last paragraph of Sec. 6 of the BOT Law provides that the repayment scheme in the case of "land reclamation or the building of industrial estates" may consist of "[t]he grant of a portion or percentage of the reclaimed land or industrial estate built, subject to the constitutional requirements with respect to the ownership of lands." On February 10, 1992, Joint Resolution No. 038 was passed by both houses of Congress. Sec. 1 of this resolution provided, among other things, that: Section 1. There is hereby approved the following national infrastructure projects for implementation under the provisions of Republic Act No. 6957 and its implementing rules and regulations: xxxx (d) Port infrastructure like piers, wharves, quays, storage handling, ferry service and related facilities; xxxx (k) Land reclamation, dredging and other related development facilities; (l) Industrial estates, regional industrial centers and export processing zones including steel mills, iron-making and petrochemical complexes and related infrastructure and utilities; xxxx (p) Environmental and solid waste management-related facilities such as collection equipment, composting plants, incinerators, landfill and tidal barriers, among others; and (q) Development of new townsites and communities and related facilities. This resolution complied with and conformed to Sec. 4 of the BOT Law requiring the approval of all national infrastructure projects by the Congress. On January 17, 1992, President Aquino proclaimed MO 415 9 approving and directing the implementation of the SMDRP. Secs. 3 and 4 of the Memorandum Order stated: Section 3. The National Housing Authority is hereby directed to implement the Smokey Mountain Development Plan and Reclamation of the Area Across R-10 through a private sector joint venture scheme at the least cost to the government. Section 4. The land area covered by the Smokey Mountain dumpsite is hereby conveyed to the National Housing Authority as well as the area to be reclaimed across R-10. (Emphasis supplied.)

In addition, the Public Estates Authority (PEA) was directed to assist in the evaluation of proposals regarding the technical feasibility of reclamation, while the DENR was directed to (1) facilitate titling of Smokey Mountain and of the area to be reclaimed and (2) assist in the technical evaluation of proposals regarding environmental impact statements.10 In the same MO 415, President Aquino created an Executive Committee (EXECOM) to oversee the implementation of the Plan, chaired by the National Capital Region-Cabinet Officer for Regional Development (NCR-CORD) with the heads of the NHA, City of Manila, DPWH, PEA, Philippine Ports Authority (PPA), DENR, and Development Bank of the Philippines (DBP) as members.11 The NEDA subsequently became a member of the EXECOM. Notably, in a September 2, 1994 Letter,12 PEA General Manager Amado Lagdameo approved the plans for the reclamation project prepared by the NHA. In conformity with Sec. 5 of MO 415, an inter-agency technical committee (TECHCOM) was created composed of the technical representatives of the EXECOM "[t]o assist the NHA in the evaluation of the project proposals, assist in the resolution of all issues and problems in the project to ensure that all aspects of the development from squatter relocation, waste management, reclamation, environmental protection, land and house construction meet governing regulation of the region and to facilitate the completion of the project."13 Subsequently, the TECHCOM put out the Public Notice and Notice to Pre-Qualify and Bid for the right to become NHAs joint venture partner in the implementation of the SMDRP. The notices were published in newspapers of general circulation on January 23 and 26 and February 1, 14, 16, and 23, 1992, respectively. Out of the thirteen (13) contractors who responded, only five (5) contractors fully complied with the required pre-qualification documents. Based on the evaluation of the pre-qualification documents, the EXECOM declared the New San Jose Builders, Inc. and R-II Builders, Inc. (RBI) as the top two contractors.14 Thereafter, the TECHCOM evaluated the bids (which include the Pre-feasibility Study and Financing Plan) of the top two (2) contractors in this manner: (1) The DBP, as financial advisor to the Project, evaluated their Financial Proposals; (2) The DPWH, PPA, PEA and NHA evaluated the Technical Proposals for the Housing Construction and Reclamation; (3) The DENR evaluated Technical Proposals on Waste Management and Disposal by conducting the Environmental Impact Analysis; and (4) The NHA and the City of Manila evaluated the socio-economic benefits presented by the proposals. On June 30, 1992, Fidel V. Ramos assumed the Office of the President (OP) of the Philippines. On August 31, 1992, the TECHCOM submitted its recommendation to the EXECOM to approve the R-II Builders, Inc. (RBI) proposal which garnered the highest score of 88.475%.

Subsequently, the EXECOM made a Project briefing to President Ramos. As a result, President Ramos issued Proclamation No. 3915 on September 9, 1992, which reads: WHEREAS, the National Housing Authority has presented a viable conceptual plan to convert the Smokey Mountain dumpsite into a habitable housing project, inclusive of the reclamation of the area across Road Radial 10 (R-10) adjacent to the Smokey Mountain as the enabling component of the project; xxxx These parcels of land of public domain are hereby placed under the administration and disposition of the National Housing Authority to develop, subdivide and dispose to qualified beneficiaries, as well as its development for mix land use (commercial/industrial) to provide employment opportunities to on-site families and additional areas for portrelated activities. In order to facilitate the early development of the area for disposition, the Department of Environment and Natural Resources, through the Lands and Management Bureau, is hereby directed to approve the boundary and subdivision survey and to issue a special patent and title in the name of the National Housing Authority, subject to final survey and private rights, if any there be. (Emphasis supplied.) On October 7, 1992, President Ramos authorized NHA to enter into a Joint Venture Agreement with RBI "[s]ubject to final review and approval of the Joint Venture Agreement by the Office of the President."16 On March 19, 1993, the NHA and RBI entered into a Joint Venture Agreement 17 (JVA) for the development of the Smokey Mountain dumpsite and the reclamation of the area across R-10 based on Presidential Decree No. (PD) 75718 which mandated NHA "[t]o undertake the physical and socio-economic upgrading and development of lands of the public domain identified for housing," MO 161-A which required NHA to conduct the feasibility studies and develop a low-cost housing project at the Smokey Mountain, and MO 415 as amended by MO 415-A which approved the Conceptual Plan for Smokey Mountain and creation of the EXECOM and TECHCOM. Under the JVA, the Project "involves the clearing of Smokey Mountain for eventual development into a low cost medium rise housing complex and industrial/commercial site with the reclamation of the area directly across [R-10] to act as the enabling component of the Project."19 The JVA covered a lot in Tondo, Manila with an area of two hundred twelve thousand two hundred thirty-four (212,234) square meters and another lot to be reclaimed also in Tondo with an area of four hundred thousand (400,000) square meters. The Scope of Work of RBI under Article II of the JVA is as follows: a) To fully finance all aspects of development of Smokey Mountain and reclamation of no more than 40 hectares of Manila Bay area across Radial Road 10. b) To immediately commence on the preparation of feasibility report and detailed engineering with emphasis to the expedient acquisition of the Environmental Clearance Certificate (ECC) from the DENR.

c) The construction activities will only commence after the acquisition of the ECC, and d) Final details of the contract, including construction, duration and delivery timetables, shall be based on the approved feasibility report and detailed engineering. Other obligations of RBI are as follows:

1. To own the temporary housing consisting of 3,500 units. 2. To own the cleared and fenced incinerator site consisting of 5 hectares situated at the Smokey Mountain area. 3. To own the 3,500 units of permanent housing to be constructed by [RBI] at the Smokey Mountain area to be awarded to qualified on site residents. 4. To own the Industrial Area site consisting of 3.2 hectares, and

2.02 The [RBI] shall develop the PROJECT based on the Final Report and Detailed Engineering as approved by the Office of the President. All costs and expenses for hiring technical personnel, date gathering, permits, licenses, appraisals, clearances, testing and similar undertaking shall be for the account of the [RBI]. 2.03 The [RBI] shall undertake the construction of 3,500 temporary housing units complete with basic amenities such as plumbing, electrical and sewerage facilities within the temporary housing project as staging area to temporarily house the squatter families from the Smokey Mountain while development is being undertaken. These temporary housing units shall be turned over to the [NHA] for disposition. 2.04 The [RBI] shall construct 3,500 medium rise low cost permanent housing units on the leveled Smokey Mountain complete with basic utilities and amenities, in accordance with the plans and specifications set forth in the Final Report approved by the [NHA]. Completed units ready for mortgage take out shall be turned over by the [RBI] to NHA on agreed schedule. 2.05 The [RBI] shall reclaim forty (40) hectares of Manila Bay area directly across [R-10] as contained in Proclamation No. 39 as the enabling component of the project and payment to the [RBI] as its asset share. 2.06 The [RBI] shall likewise furnish all labor materials and equipment necessary to complete all herein development works to be undertaken on a phase to phase basis in accordance with the work program stipulated therein. The profit sharing shall be based on the approved pre-feasibility report submitted to the EXECOM, viz: For the developer (RBI): 1. To own the forty (40) hectares of reclaimed land. 2. To own the commercial area at the Smokey Mountain area composed of 1.3 hectares, and 3. To own all the constructed units of medium rise low cost permanent housing units beyond the 3,500 units share of the [NHA]. For the NHA:

5. To own the open spaces, roads and facilities within the Smokey Mountain area. In the event of "extraordinary increase in labor, materials, fuel and non-recoverability of total project expenses,"20the OP, upon recommendation of the NHA, may approve a corresponding adjustment in the enabling component. The functions and responsibilities of RBI and NHA are as follows: For RBI: 4.01 Immediately commence on the preparation of the FINAL REPORT with emphasis to the expedient acquisition, with the assistance of the [NHA] of Environmental Compliance Certificate (ECC) from the Environmental Management Bureau (EMB) of the [DENR]. Construction shall only commence after the acquisition of the ECC. The Environment Compliance Certificate (ECC) shall form part of the FINAL REPORT. The FINAL REPORT shall provide the necessary subdivision and housing plans, detailed engineering and architectural drawings, technical specifications and other related and required documents relative to the Smokey Mountain area. With respect to the 40-hectare reclamation area, the [RBI] shall have the discretion to develop the same in a manner that it deems necessary to recover the [RBIs] investment, subject to environmental and zoning rules. 4.02 Finance the total project cost for land development, housing construction and reclamation of the PROJECT. 4.03 Warrant that all developments shall be in compliance with the requirements of the FINAL REPORT. 4.04 Provide all administrative resources for the submission of project accomplishment reports to the [NHA] for proper evaluation and supervision on the actual implementation. 4.05 Negotiate and secure, with the assistance of the [NHA] the grant of rights of way to the PROJECT, from the owners of the adjacent lots for access road, water, electrical power connections and drainage facilities.

4.06 Provide temporary field office and transportation vehicles (2 units), one (1) complete set of computer and one (1) unit electric typewriter for the [NHAs] field personnel to be charged to the PROJECT. For the NHA: 4.07 The [NHA] shall be responsible for the removal and relocation of all squatters within Smokey Mountain to the Temporary Housing Complex or to other areas prepared as relocation areas with the assistance of the [RBI]. The [RBI] shall be responsible in releasing the funds allocated and committed for relocation as detailed in the FINAL REPORT. 4.08 Assist the [RBI] and shall endorse granting of exemption fees in the acquisition of all necessary permits, licenses, appraisals, clearances and accreditations for the PROJECT subject to existing laws, rules and regulations. 4.09 The [NHA] shall inspect, evaluate and monitor all works at the Smokey Mountain and Reclamation Area while the land development and construction of housing units are in progress to determine whether the development and construction works are undertaken in accordance with the FINAL REPORT. If in its judgment, the PROJECT is not pursued in accordance with the FINAL REPORT, the [NHA] shall require the [RBI] to undertake necessary remedial works. All expenses, charges and penalties incurred for such remedial, if any, shall be for the account of the [RBI]. 4.10 The [NHA] shall assist the [RBI] in the complete electrification of the PROJECT. x x x 4.11 Handle the processing and documentation of all sales transactions related to its assets shares from the venture such as the 3,500 units of permanent housing and the allotted industrial area of 3.2 hectares. 4.12 All advances outside of project costs made by the [RBI] to the [NHA] shall be deducted from the proceeds due to the [NHA]. 4.13 The [NHA] shall be responsible for the acquisition of the Mother Title for the Smokey Mountain and Reclamation Area within 90 days upon submission of Survey returns to the Land Management Sector. The land titles to the 40-hectare reclaimed land, the 1.3 hectare commercial area at the Smokey Mountain area and the constructed units of medium-rise permanent housing units beyond the 3,500 units share of the [NHA] shall be issued in the name of the [RBI] upon completion of the project. However, the [RBI] shall have the authority to pre-sell its share as indicated in this agreement. The final details of the JVA, which will include the construction duration, costs, extent of reclamation, and delivery timetables, shall be based on the FINAL REPORT which will be contained in a Supplemental Agreement to be executed later by the parties. The JVA may be modified or revised by written agreement between the NHA and RBI specifying the clauses to be revised or modified and the corresponding amendments. If the Project is revoked or terminated by the Government through no fault of RBI or by mutual agreement, the Government shall compensate RBI for its actual expenses incurred

in the Project plus a reasonable rate of return not exceeding that stated in the feasibility study and in the contract as of the date of such revocation, cancellation, or termination on a schedule to be agreed upon by both parties. As a preliminary step in the project implementation, consultations and dialogues were conducted with the settlers of the Smokey Mountain Dumpsite Area. At the same time, DENR started processing the application for the Environmental Clearance Certificate (ECC) of the SMDRP. As a result however of the consultative dialogues, public hearings, the report on the on-site field conditions, the Environmental Impact Statement (EIS) published on April 29 and May 12, 1993 as required by the Environmental Management Bureau of DENR, the evaluation of the DENR, and the recommendations from other government agencies, it was discovered that design changes and additional work have to be undertaken to successfully implement the Project.21 Thus, on February 21, 1994, the parties entered into another agreement denominated as the Amended and Restated Joint Venture Agreement 22 (ARJVA) which delineated the different phases of the Project. Phase I of the Project involves the construction of temporary housing units for the current residents of the Smokey Mountain dumpsite, the clearing and leveling-off of the dumpsite, and the construction of medium-rise low-cost housing units at the cleared and leveled dumpsite.23 Phase II of the Project involves the construction of an incineration area for the on-site disposal of the garbage at the dumpsite.24 The enabling component or consideration for Phase I of the Project was increased from 40 hectares of reclaimed lands across R-10 to 79 hectares.25 The revision also provided for the enabling component for Phase II of 119 hectares of reclaimed lands contiguous to the 79 hectares of reclaimed lands for Phase I.26 Furthermore, the amended contract delineated the scope of works and the terms and conditions of Phases I and II, thus: The PROJECT shall consist of Phase I and Phase II. Phase I shall involve the following: a. the construction of 2,992 units of temporary housing for the affected residents while clearing and development of Smokey Mountain [are] being undertaken b. the clearing of Smokey Mountain and the subsequent construction of 3,520 units of medium rise housing and the development of the industrial/commercial site within the Smokey Mountain area c. the reclamation and development of a 79 hectare area directly across Radial Road 10 to serve as the enabling component of Phase I Phase II shall involve the following: a. the construction and operation of an incinerator plant that will conform to the emission standards of the DENR b. the reclamation and development of 119-hectare area contiguous to that to be reclaimed under Phase I to serve as the enabling component of Phase II.

Under the ARJVA, RBI shall construct 2,992 temporary housing units, a reduction from 3,500 units under the JVA.27 However, it was required to construct 3,520 medium-rise low-cost permanent housing units instead of 3,500 units under the JVA. There was a substantial change in the design of the permanent housing units such that a "loft shall be incorporated in each unit so as to increase the living space from 20 to 32 square meters. The additions and changes in the Original Project Component are as follows: ORIGINAL CHANGES/REVISIONS 1. TEMPORARY HOUSING Wood/Plywood, ga. 31 G.I. Concrete/Steel Frame Structure Sheet usable life of 3 years, gauge 26 G.I. roofing sheets future 12 SM floor area. use as permanent structures for factory and warehouses mixed 17 sm & 12 sm floor area. 2. MEDIUM RISE MASS HOUSING Box type precast Shelter Conventional and precast component 20 square meter concrete structures, 32 square floor area with 2.4 meter meter floor area with loft floor height; bare type, 160 units/ (sleeping quarter) 3.6 m. floor building. height, painted and improved architectural faade, 80 units/building. 3. MITIGATING MEASURES 3.1 For reclamation work Use of clean dredgefill material below the MLLW and SM material mixed with dredgefill above MLLW. a. 100% use of Smokey Mountain material as dredgefill Use of Steel Sheet Piles needed for longer depth of embedment. b. Concrete Sheet Piles short depth of embedment c. Silt removal approximately Need to remove more than 3.0 1.0 meter only meters of silt after sub-soil investigation.28 These material and substantial modifications served as justifications for the increase in the share of RBI from 40 hectares to 79 hectares of reclaimed land. Under the JVA, the specific costs of the Project were not stipulated but under the ARJVA, the stipulated cost for Phase I was pegged at six billion six hundred ninety-three million three hundred eighty-seven thousand three hundred sixtyfour pesos (PhP 6,693,387,364).

In his February 10, 1994 Memorandum, the Chairperson of the SMDRP EXECOM submitted the ARJVA for approval by the OP. After review of said agreement, the OP directed that certain terms and conditions of the ARJVA be further clarified or amended preparatory to its approval. Pursuant to the Presidents directive, the parties reached an agreem ent on the clarifications and amendments required to be made on the ARJVA. On August 11, 1994, the NHA and RBI executed an Amendment To the Amended and Restated Joint Venture Agreement (AARJVA)29 clarifying certain terms and condition of the ARJVA, which was submitted to President Ramos for approval, to wit: Phase II shall involve the following: a. the construction and operation of an incinerator plant that will conform to the emission standards of the DENR b. the reclamation and development of 119-hectare area contiguous to that to be reclaimed under Phase I to serve as the enabling component of Phase II, the exact size and configuration of which shall be approved by the SMDRP Committee30 Other substantial amendments are the following: 4. Paragraph 2.05 of Article II of the ARJVA is hereby amended to read as follows: 2.05. The DEVELOPER shall reclaim seventy nine (79) hectares of the Manila Bay area directly across Radial Road 10 (R-10) to serve as payment to the DEVELOPER as its asset share for Phase I and to develop such land into commercial area with port facilities; provided, that the port plan shall be integrated with the Philippine Port Authoritys North Harbor plan for the Manila Bay area and provided further, that the final reclamation and port plan for said reclaimed area shall be submitted for approval by the Public Estates Authority and the Philippine Ports Authority, respectively: provided finally, that subject to par. 2.02 above, actual reclamation work may commence upon approval of the final reclamation plan by the Public Estates Authority. xxxx 9. A new paragraph to be numbered 5.05 shall be added to Article V of the ARJVA, and shall read as follows: 5.05. In the event this Agreement is revoked, cancelled or terminated by the AUTHORITY through no fault of the DEVELOPER, the AUTHORITY shall compensate the DEVELOPER for the value of the completed portions of, and actual expenditures on the PROJECT plus a reasonable rate of return thereon, not exceeding that stated in the Cost Estimates of Items of Work previously approved by the SMDRP Executive Committee and the AUTHORITY and stated in this Agreement, as of the date of such revocation, cancellation, or termination, on a schedule to be agreed upon by the parties, provided that said completed portions of Phase I are in accordance with the approved FINAL REPORT.

Afterwards, President Ramos issued Proclamation No. 465 dated August 31, 199431 increasing the proposed area for reclamation across R-10 from 40 hectares to 79 hectares,32 to wit: NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines, by virtue of the powers vested in me by the law, and as recommended by the SMDRP Executive Committee, do hereby authorize the increase of the area of foreshore or submerged lands of Manila Bay to be reclaimed, as previously authorized under Proclamation No. 39 (s. 1992) and Memorandum Order No. 415 (s. 1992), from Four Hundred Thousand (400,000) square meters, more or less, to Seven Hundred Ninety Thousand (790,000) square meters, more or less. On September 1, 1994, pursuant to Proclamation No. 39, the DENR issued Special Patent No. 3591 conveying in favor of NHA an area of 211,975 square meters covering the Smokey Mountain Dumpsite. In its September 7, 1994 letter to the EXECOM, the OP through then Executive Secretary Teofisto T. Guingona, Jr., approved the ARJVA as amended by the AARJVA. On September 8, 1994, the DENR issued Special Patent 3592 pursuant to Proclamation No. 39, conveying in favor of NHA a 401,485-square meter area. On September 26, 1994, the NHA, RBI, Home Insurance and Guaranty Corporation (HIGC), now known as the Home Guaranty Corporation, and the Philippine National Bank (PNB)33 executed the Smokey Mountain Asset Pool Formation Trust Agreement (Asset Pool Agreement).34 Thereafter, a Guaranty Contract was entered into by NHA, RBI, and HIGC. On June 23, 1994, the Legislature passed the Clean Air The Act made the establishment of an incinerator illegal and effectively barred the implementation of the planned incinerator project under Phase II. Thus, the off-site disposal of the garbage at the Smokey Mountain became necessary.36 The land reclamation was completed in August 1996.37 Sometime later in 1996, pursuant likewise to Proclamation No. 39, the DENR issued Special Patent No. 3598 conveying in favor of NHA an additional 390,000 square meter area. During the actual construction and implementation of Phase I of the SMDRP, the InterAgency Technical Committee found and recommended to the EXECOM on December 17, 1997 that additional works were necessary for the completion and viability of the Project. The EXECOM approved the recommendation and so, NHA instructed RBI to implement the change orders or necessary works.38 Such necessary works comprised more than 25% of the original contract price and as a result, the Asset Pool incurred direct and indirect costs. Based on C1 12 A of the Implementing Rules and Regulations of PD 1594, a supplemental agreement is required for "all change orders and extra work orders, the total aggregate cost of which being more than twenty-five (25%) of the escalated original contract price." Act. 35

The EXECOM requested an opinion from the Department of Justice (DOJ) to determine whether a bidding was required for the change orders and/or necessary works. The DOJ, through DOJ Opinion Nos. 119 and 155 dated August 26, 1993 and November 12, 1993, opined that "a rebidding, pursuant to the aforequoted provisions of the implementing rules (referring to PD 1594) would not be necessary where the change orders inseparable from the original scope of the project, in which case, a negotiation with the incumbent contractor may be allowed." Thus, on February 19, 1998, the EXECOM issued a resolution directing NHA to enter into a supplemental agreement covering said necessary works. On March 20, 1998, the NHA and RBI entered into a Supplemental Agreement covering the aforementioned necessary works and submitted it to the President on March 24, 1998 for approval. Outgoing President Ramos decided to endorse the consideration of the Supplemental Agreement to incoming President Joseph E. Estrada. On June 30, 1998, Estrada became the 13th Philippine President. However, the approval of the Supplemental Agreement was unacted upon for five months. As a result, the utilities and the road networks were constructed to cover only the 79hectare original enabling component granted under the ARJVA. The 220-hectare extension of the 79-hectare area was no longer technically feasible. Moreover, the financial crises and unreliable real estate situation made it difficult to sell the remaining reclaimed lots. The devaluation of the peso and the increase in interest cost led to the substantial increase in the cost of reclamation. On August 1, 1998, the NHA granted RBIs request to suspend work on the SMDRP due to "the delay in the approval of the Supplemental Agreement, the consequent absence of an enabling component to cover the cost of the necessary works for the project, and the resulting inability to replenish the Asset Pool funds partially used for the completion of the necessary works."39 As of August 1, 1998 when the project was suspended, RBI had "already accomplished a portion of the necessary works and change orders which resulted in [RBI] and the Asset Pool incurring advances for direct and indirect cost which amount can no longer be covered by the 79-hectare enabling component under the ARJVA."40 Repeated demands were made by RBI in its own capacity and on behalf of the asset pool on NHA for payment for the advances for direct and indirect costs subject to NHA validation. In November 1998, President Estrada issued Memorandum Order No. 33 reconstituting the SMDRP EXECOM and further directed it to review the Supplemental Agreement and submit its recommendation on the completion of the SMDRP. The reconstituted EXECOM conducted a review of the project and recommended the amendment of the March 20, 1998 Supplemental Agreement "to make it more feasible and to identify and provide new sources of funds for the project and provide for a new enabling component to cover the payment for the necessary works that cannot be covered by the 79hectare enabling component under the ARJVA."41

The EXECOM passed Resolution Nos. 99-16-01 and 99-16-0242 which approved the modification of the Supplemental Agreement, to wit: a) Approval of 150 hectares additional reclamation in order to make the reclamation feasible as part of the enabling component. b) The conveyance of the 15-hectare NHA Vitas property (actually 17 hectares based on surveys) to the SMDRP Asset Pool. c) The inclusion in the total development cost of other additional, necessary and indispensable infrastructure works and the revision of the original cost stated in the Supplemental Agreement dated March 20, 1998 from PhP 2,953,984,941.40 to PhP 2,969,134,053.13. d) Revision in the sharing agreement between the parties. In the March 23, 2000 OP Memorandum, the EXECOM was authorized to proceed and complete the SMDRP subject to certain guidelines and directives. After the parties in the case at bar had complied with the March 23, 2000 Memorandum, the NHA November 9, 2000 Resolution No. 4323 approved "the conveyance of the 17hectare Vitas property in favor of the existing or a newly created Asset Pool of the project to be developed into a mixed commercial-industrial area, subject to certain conditions." On January 20, 2001, then President Estrada was considered resigned. On the same day, President Gloria M. Arroyo took her oath as the 14th President of the Philippines. As of February 28, 2001, "the estimated total project cost of the SMDRP has reached P8.65 billion comprising of P4.78 billion in direct cost and P3.87 billion in indirect cost,"43 subject to validation by the NHA. On August 28, 2001, NHA issued Resolution No. 4436 to pay for "the various necessary works/change orders to SMDRP, to effect the corresponding enabling component consisting of the conveyance of the NHAs Vitas Property and an additional 150 -hectare reclamation area" and to authorize the release by NHA of PhP 480 million "as advance to the project to make the Permanent Housing habitable, subject to reimbursement from the proceeds of the expanded enabling component."44 On November 19, 2001, the Amended Supplemental Agreement (ASA) was signed by the parties, and on February 28, 2002, the Housing and Urban Development Coordinating Council (HUDCC) submitted the agreement to the OP for approval. In the July 20, 2002 Cabinet Meeting, HUDCC was directed "to submit the works covered by the PhP 480 million [advance to the Project] and the ASA to public bidding." 45 On August 28, 2002, the HUDCC informed RBI of the decision of the Cabinet. In its September 2, 2002 letter to the HUDCC Chairman, RBI lamented the decision of the government "to bid out the remaining works under the ASA thereby unilaterally terminating the Project with RBI and all the agreements related thereto." RBI demanded the payment of just compensation "for all accomplishments and costs incurred in

developing the SMDRP plus a reasonable rate of return thereon pursuant to Section 5.05 of the ARJVA and Section 6.2 of the ASA."46 Consequently, the parties negotiated the terms of the termination of the JVA and other subsequent agreements. On August 27, 2003, the NHA and RBI executed a Memorandum of Agreement (MOA) whereby both parties agreed to terminate the JVA and other subsequent agreements, thus: 1. TERMINATION 1.1 In compliance with the Cabinet directive dated 30 July 2002 to submit the works covered by the P480 Million and the ASA to public bidding, the following agreements executed by and between the NHA and the DEVELOPER are hereby terminated, to wit: a. Joint Venture Agreement (JVA) dated 19 March 1993 b. Amended and Restated Joint Venture Agreement (ARJVA) dated 21 February 1994 c. Amendment and Restated Joint Venture Agreement dated 11 August 1994 d. Supplemental Agreement dated 24 March 1998 e. Amended Supplemental Agreement (ASA) dated 19 November 2001. xxxx 5. SETTLEMENT OF CLAIMS 5.1 Subject to the validation of the DEVELOPERs claims, the NHA hereby agrees to initially compensate the Developer for the abovementioned costs as follows: a. Direct payment to DEVELOPER of the amounts herein listed in the following manner: a.1 P250 Million in cash from the escrow account in accordance with Section 2 herewith; a.2 Conveyance of a 3 hectare portion of the Vitas Industrial area immediately after joint determination of the appraised value of the said property in accordance with the procedure herein set forth in the last paragraph of Section 5.3. For purposes of all payments to be made through conveyance of real properties, the parties shall secure from the NHA Board of Directors all documents necessary and sufficient to effect

the transfer of title over the properties to be conveyed to RBI, which documents shall be issued within a reasonable period. 5.2 Any unpaid balance of the DEVELOPERS claims determined after the validation process referred to in Section 4 hereof, may be paid in cash, bonds or through the conveyance of properties or any combination thereof. The manner, terms and conditions of payment of the balance shall be specified and agreed upon later within a period of three months from the time a substantial amount representing the unpaid balance has been validated pursuant hereto including, but not limited to the programming of quarterly cash payments to be sourced by the NHA from its budget for debt servicing, from its income or from any other sources. 5.3 In any case the unpaid balance is agreed to be paid, either partially or totally through conveyance of properties, the parties shall agree on which properties shall be subject to conveyance. The NHA and DEVELOPER hereby agree to determine the valuation of the properties to be conveyed by getting the average of the appraisals to be made by two (2) mutually acceptable independent appraisers. Meanwhile, respondent Harbour Centre Port Terminal, Inc. (HCPTI) entered into an agreement with the asset pool for the development and operations of a port in the Smokey Mountain Area which is a major component of SMDRP to provide a source of livelihood and employment for Smokey Mountain residents and spur economic growth. A Subscription Agreement was executed between the Asset Pool and HCPTI whereby the asset pool subscribed to 607 million common shares and 1,143 million preferred shares of HCPTI. The HCPTI preferred shares had a premium and penalty interest of 7.5% per annum and a mandatory redemption feature. The asset pool paid the subscription by conveying to HCPTI a 10-hectare land which it acquired from the NHA being a portion of the reclaimed land of the SMDRP. Corresponding certificates of titles were issued to HCPTI, namely: TCT Nos. 251355, 251356, 251357, and 251358. Due to HCPTIs failure to obtain a license to handle foreign containerized cargo from PPA, it suffered a net income loss of PhP 132,621,548 in 2002 and a net loss of PhP 15,540,063 in 2003. The Project Governing Board of the Asset Pool later conveyed by way of dacion en pago a number of HCPTI shares to RBI in lieu of cash payment for the latters work in SMDRP. On August 5, 2004, former Solicitor General Francisco I. Chavez, filed the instant petition which impleaded as respondents the NHA, RBI, R-II Holdings, Inc. (RHI), HCPTI, and Mr. Reghis Romero II, raising constitutional issues. The NHA reported that thirty-four (34) temporary housing structures and twenty-one (21) permanent housing structures had been turned over by respondent RBI. It claimed that 2,510 beneficiary-families belonging to the poorest of the poor had been transferred to their permanent homes and benefited from the Project. The Issues The grounds presented in the instant petition are: I

Neither respondent NHA nor respondent R-II builders may validly reclaim foreshore and submerged land because: 1. Respondent NHA and R-II builders were never granted any power and authority to reclaim lands of the public domain as this power is vested exclusively with the PEA. 2. Even assuming that respondents NHA and R-II builders were given the power and authority to reclaim foreshore and submerged land, they were never given the authority by the denr to do so. II Respondent R-II builders cannot acquire the reclaimed foreshore and submerged land areas because: 1. The reclaimed foreshore and submerged parcels of land are inalienable public lands which are beyond the commerce of man. 2. Assuming arguendo that the subject reclaimed foreshore and submerged parcels of land were already declared alienable lands of the public domain, respondent R-II builders still could not acquire the same because there was never any declaration that the said lands were no longer needed for public use. 3. Even assuming that the subject reclaimed lands are alienable and no longer needed for public use, respondent R-II builders still cannot acquire the same because there was never any law authorizing the sale thereof. 4. There was never any public bidding awarding ownership of the subject land to respondent R-II builders. 5. Assuming that all the requirements for a valid transfer of alienable public had been performed, respondent R-II Builders, being private corporation is nonetheless expresslyprohibited by the Philippine Constitution to acquire lands of the public domain. III Respondent harbour, being a private corporation whose majority stocks are owned and controlled by respondent Romeros Corporations R-II builders and R-II Holdings is disqualified from being a transferee of public land. IV Respondents must be compelled to disclose all information related to the smokey mountain development and reclamation project. The Courts Ruling

Before we delve into the substantive issues raised in this petition, we will first deal with several procedural matters raised by respondents. Whether petitioner has the requisite locus standi to file this case Respondents argue that petitioner Chavez has no legal standing to file the petition. Only a person who stands to be benefited or injured by the judgment in the suit or entitled to the avails of the suit can file a complaint or petition.47 Respondents claim that petitioner is not a proper party-in-interest as he was unable to show that "he has sustained or is in immediate or imminent danger of sustaining some direct and personal injury as a result of the execution and enforcement of the assailed contracts or agreements."48Moreover, they assert that not all government contracts can justify a taxpayers suit especially when no public funds were utilized in contravention of the Constitution or a law. We explicated in Chavez v. that in cases where issues of transcendental public importance are presented, there is no necessity to show that petitioner has experienced or is in actual danger of suffering direct and personal injury as the requisite injury is assumed. We find our ruling in Chavez v. PEA50 as conclusive authority on locus standi in the case at bar since the issues raised in this petition are averred to be in breach of the fair diffusion of the countrys natural resources and the constitutional right of a citizen to information which have been declared to be matters of transcendental public importance. Moreover, the pleadings especially those of respondents readily reveal that public funds have been indirectly utilized in the Project by means of Smokey Mountain Project Participation Certificates (SMPPCs) bought by some government agencies. Hence, petitioner, as a taxpayer, is a proper party to the instant petition before the court. Whether petitioners direct recourse to this Court was proper Respondents are one in asserting that petitioner circumvents the principle of hierarchy of courts in his petition. Judicial hierarchy was made clear in the case of People v. Cuaresma, thus: There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Courts original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy that is necessary to prevent inordinate demands upon the Courts time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over-crowding of the Courts docket.51 x x x The OSG claims that the jurisdiction over petitions for prohibition and mandamus is concurrent with other lower courts like the Regional Trial Courts and the Court of Appeals. Respondent NHA argues that the instant petition is misfiled because it does not introduce special and important reasons or exceptional and compelling circumstances to warrant direct recourse to this Court and that the lower courts are more equipped for factual issues PCGG49

since this Court is not a trier of facts. Respondents RBI and RHI question the filing of the petition as this Court should not be unduly burdened with "repetitions, invocation of jurisdiction over constitutional questions it had previously resolved and settled." In the light of existing jurisprudence, we find paucity of merit in respondents postulation. While direct recourse to this Court is generally frowned upon and discouraged, we have however ruled in Santiago v. Vasquez that such resort to us may be allowed in certain situations, wherein this Court ruled that petitions for certiorari, prohibition, or mandamus, though cognizable by other courts, may directly be filed with us if "the redress desired cannot be obtained in the appropriate courts or where exceptional compelling circumstances justify availment of a remedy within and calling for the exercise of [this Courts] primary jurisdiction."521avvphi1 The instant petition challenges the constitutionality and legality of the SMDRP involving several hectares of government land and hundreds of millions of funds of several government agencies. Moreover, serious constitutional challenges are made on the different aspects of the Project which allegedly affect the right of Filipinos to the distribution of natural resources in the country and the right to information of a citizen matters which have been considered to be of extraordinary significance and grave consequence to the public in general. These concerns in the instant action compel us to turn a blind eye to the judicial structure meant to provide an orderly dispensation of justice and consider the instant petition as a justified deviation from an established precept. Core factual matters undisputed Respondents next challenge the projected review by this Court of the alleged factual issues intertwined in the issues propounded by petitioner. They listed a copious number of questions seemingly factual in nature which would make this Court a trier of facts.53 We find the position of respondents bereft of merit. For one, we already gave due course to the instant petition in our January 18, 2005 Resolution.54 In said issuance, the parties were required to make clear and concise statements of established facts upon which our decision will be based. Secondly, we agree with petitioner that there is no necessity for us to make any factual findings since the facts needed to decide the instant petition are well established from the admissions of the parties in their pleadings55and those derived from the documents appended to said submissions. Indeed, the core facts which are the subject matter of the numerous issues raised in this petition are undisputed. Now we will tackle the issues that prop up the instant petition. Since petitioner has cited our decision in PEA as basis for his postulations in a number of issues, we first resolve the queryis PEA applicable to the case at bar? A juxtaposition of the facts in the two cases constrains the Court to rule in the negative.

The Court finds that PEA is not a binding precedent to the instant petition because the facts in said case are substantially different from the facts and circumstances in the case at bar, thus: (1) The reclamation project in PEA was undertaken through a JVA entered into between PEA and AMARI. The reclamation project in the instant NHA case was undertaken by the NHA, a national government agency in consultation with PEA and with the approval of two Philippine Presidents; (2) In PEA, AMARI and PEA executed a JVA to develop the Freedom Islands and reclaim submerged areas without public bidding on April 25, 1995. In the instant NHA case, the NHA and RBI executed a JVA after RBI was declared the winning bidder on August 31, 1992 as the JVA partner of the NHA in the SMDRP after compliance with the requisite public bidding. (3) In PEA, there was no law or presidential proclamation classifying the lands to be reclaimed as alienable and disposal lands of public domain. In this RBI case, MO 415 of former President Aquino and Proclamation No. 39 of then President Ramos, coupled with Special Patents Nos. 3591, 3592, and 3598, classified the reclaimed lands as alienable and disposable; (4) In PEA, the Chavez petition was filed before the amended JVA was executed by PEA and AMARI.1avvphi1 In this NHA case, the JVA and subsequent amendments were already substantially implemented. Subsequently, the Project was terminated through a MOA signed on August 27, 2003. Almost one year later on August 5, 2004, the Chavez petition was filed; (5) In PEA, AMARI was considered to be in bad faith as it signed the amended JVA after the Chavez petition was filed with the Court and after Senate Committee Report No. 560 was issued finding that the subject lands are inalienable lands of public domain. In the instant petition, RBI and other respondents are considered to have signed the agreements in good faith as the Project was terminated even before the Chavez petition was filed; (6) The PEA-AMARI JVA was executed as a result of direct negotiation between the parties and not in accordance with the BOT Law. The NHA-RBI JVA and subsequent amendments constitute a BOT contract governed by the BOT Law; and (7) In PEA, the lands to be reclaimed or already reclaimed were transferred to PEA, a government entity tasked to dispose of public lands under Executive Order No. (EO) 525.56 In the NHA case, the reclaimed lands were transferred to NHA, a government entity NOT tasked to dispose of public land and therefore said alienable lands were converted to patrimonial lands upon their transfer to NHA.57 Thus the PEA Decision58 cannot be considered an authority or precedent to the instant case. The principle of stare decisis59 has no application to the different factual setting of the instant case.

We will now dwell on the substantive issues raised by petitioner. After a perusal of the grounds raised in this petition, we find that most of these issues are moored on our PEA Decision which, as earlier discussed, has no application to the instant petition. For this reason alone, the petition can already be rejected. Nevertheless, on the premise of the applicability of said decision to the case at bar, we will proceed to resolve said issues. First Issue: Whether respondents NHA and RBI have been granted the power and authority to reclaim lands of the public domain as this power is vested exclusively in PEA as claimed by petitioner Petitioner contends that neither respondent NHA nor respondent RBI may validly reclaim foreshore and submerged land because they were not given any power and authority to reclaim lands of the public domain as this power was delegated by law to PEA. Asserting that existing laws did not empower the NHA and RBI to reclaim lands of public domain, the Public Estates Authority (PEA), petitioner claims, is "the primary authority for the reclamation of all foreshore and submerged lands of public domain," and relies on PEA where this Court held: Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government." The same section also states that "[A]ll reclamation projects shall be approved by the President upon recommendation of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity; x x x." Thus, under EO No. 525, in relation to PD No. 3-A and PD No. 1084, PEA became the primary implementing agency of the National Government to reclaim foreshore and submerged lands of the public domain. EO No. 525 recognized PEA as the government entity "to undertake the reclamation of lands and ensure their maximum utilization in promoting public welfare and interests." Since large portions of these reclaimed lands would obviously be needed for public service, there must be a formal declaration segregating reclaimed lands no longer needed for public service from those still needed for public service.60 In the Smokey Mountain Project, petitioner clarifies that the reclamation was not done by PEA or through a contract executed by PEA with another person or entity but by the NHA through an agreement with respondent RBI. Therefore, he concludes that the reclamation is null and void. Petitioners contention has no merit. EO 525 reads: Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government. All reclamation projects shall be approved by the President upon recommendation of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity; Provided, that, reclamation projects of any national government agency or entity authorized under its charter shall be undertaken in consultation with the PEA upon approval of the President. (Emphasis supplied.)

The aforequoted provision points to three (3) requisites for a legal and valid reclamation project, viz: (1) approval by the President; (2) favorable recommendation of PEA; and (3) undertaken by any of the following: a. by PEA

Moreover, President Ramos issued Proclamation No. 465 (s. 1994) which authorized the increase of the Reclamation Area from 40 hectares of foreshore and submerged land of the Manila Bay to 79 hectares. It speaks of the reclamation of 400,000 square meters, more or less, of the foreshore and submerged lands of Manila Bay adjoining R-10 as an enabling component of the SMDRP. As a result of Proclamations Nos. 39 and 465, Special Patent No. 3591 covering 211,975 square meters of Smokey Mountain, Special Patent No. 3592 covering 401,485 square meters of reclaimed land, and Special Patent No. 3598 covering another 390,000 square meters of reclaimed land were issued by the DENR. Thus, the first requirement of presidential imprimatur on the SMDRP has been satisfied.

b. by any person or entity pursuant to a contract it executed with PEA c. by the National Government agency or entity authorized under its charter to reclaim lands subject to consultation with PEA Without doubt, PEA under EO 525 was designated as the agency primarily responsible for integrating, directing, and coordinating all reclamation projects. Primarily means "mainly, principally, mostly, generally." Thus, not all reclamation projects fall under PEAs authority of supervision, integration, and coordination. The very charter of PEA, PD 1084,61 does not mention that PEA has the exclusive and sole power and authority to reclaim lands of public domain. EO 525 even reveals the exceptionreclamation projects by a national government agency or entity authorized by its charter to reclaim land. One example is EO 405 which authorized the Philippine Ports Authority (PPA) to reclaim and develop submerged areas for port related purposes. Under its charter, PD 857, PPA has the power "to reclaim, excavate, enclose or raise any of the lands" vested in it. Thus, while PEA under PD 1084 has the power to reclaim land and under EO 525 is primarily responsible for integrating, directing and coordinating reclamation projects, such authority is NOT exclusive and such power to reclaim may be granted or delegated to another government agency or entity or may even be undertaken by the National Government itself, PEA being only an agency and a part of the National Government. Let us apply the legal parameters of Sec. 1, EO 525 to the reclamation phase of SMDRP. After a scrutiny of the facts culled from the records, we find that the project met all the three (3) requirements, thus: 1. There was ample approval by the President of the Philippines; as a matter of fact, two Philippine Presidents approved the same, namely: Presidents Aquino and Ramos. President Aquino sanctioned the reclamation of both the SMDRP housing and commercialindustrial sites through MO 415 (s. 1992) which approved the SMDRP under Sec. 1 and directed NHA "x x x to implement the Smokey Mountain Development Plan and Reclamation of the Area across R-10 through a private sector joint venture scheme at the least cost to government" under Section 3. For his part, then President Ramos issued Proclamation No. 39 (s. 1992) which expressly reserved the Smokey Mountain Area and the Reclamation Area for a housing project and related commercial/industrial development. 2. The requisite favorable endorsement of the reclamation phase was impliedly granted by PEA. President Aquino saw to it that there was coordination of the project with PEA by designating its general manager as member of the EXECOM tasked to supervise the project implementation. The assignment was made in Sec. 2 of MO 415 which provides: Section 2. An Executive Committee is hereby created to oversee the implementation of the Plan, chaired by the NCR-CORD, with the heads of the following agencies as members: The National Housing Authority, the City of Manila, the Department of Public Works and Highways, the Public Estates Authority, the Philippine Ports Authority, the Department of Environment and Natural Resources and the Development Bank of the Philippines. (Emphasis supplied.) The favorable recommendation by PEA of the JVA and subsequent amendments were incorporated as part of the recommendations of the EXECOM created under MO 415. While there was no specific recommendation on the SMDRP emanating solely from PEA, we find that the approbation of the Project and the land reclamation as an essential component by the EXECOM of which PEA is a member, and its submission of the SMDRP and the agreements on the Project to the President for approval amply met the second requirement of EO 525. 3. The third element was also presentthe reclamation was undertaken either by PEA or any person or entity under contract with PEA or by the National Government agency or entity authorized under its charter to reclaim lands subject to consultation with PEA. It cannot be disputed that the reclamation phase was not done by PEA or any person or entity under contract with PEA. However, the reclamation was implemented by the NHA, a national government agency whose authority to reclaim lands under consultation with PEA is derived from its charterPD 727 and other pertinent lawsRA 727962 and RA 6957 as amended by RA 7718. While the authority of NHA to reclaim lands is challenged by petitioner, we find that the NHA had more than enough authority to do so under existing laws. While PD 757, the charter of NHA, does not explicitly mention "reclamation" in any of the listed powers of the agency, we rule that the NHA has an implied power to reclaim land as this is vital or incidental to effectively, logically, and successfully implement an urban land reform and housing program enunciated in Sec. 9 of Article XIII of the 1987 Constitution. Basic in administrative law is the doctrine that a government agency or office has express and implied powers based on its charter and other pertinent statutes. Express powers are those powers granted, allocated, and delegated to a government agency or office by express

provisions of law. On the other hand, implied powers are those that can be inferred or are implicit in the wordings of the law63 or conferred by necessary or fair implication in the enabling act.64 In Angara v. Electoral Commission, the Court clarified and stressed that when a general grant of power is conferred or duty enjoined, every particular power necessary for the exercise of the one or the performance of the other is also conferred by necessary implication.65 It was also explicated that when the statute does not specify the particular method to be followed or used by a government agency in the exercise of the power vested in it by law, said agency has the authority to adopt any reasonable method to carry out its functions.66 The power to reclaim on the part of the NHA is implicit from PD 757, RA 7279, MO 415, RA 6957, and PD 3-A,67viz: 1. NHAs power to reclaim derived from PD 757 provisions: a. Sec. 3 of PD 757 implies that reclamation may be resorted to in order to attain the goals of NHA: Section 3. Progress and Objectives. The Authority shall have the following purposes and objectives: xxxx b) To undertake housing, development, resettlement or other activities as would enhance the provision of housing to every Filipino; c) To harness and promote private participation in housing ventures in terms of capital expenditures, land, expertise, financing and other facilities for the sustained growth of the housing industry. (Emphasis supplied.) Land reclamation is an integral part of the development of resources for some of the housing requirements of the NHA. Private participation in housing projects may also take the form of land reclamation. b. Sec. 5 of PD 757 serves as proof that the NHA, as successor of the Tondo Foreshore Development Authority (TFDA), has the power to reclaim, thus: Section 5. Dissolution of Existing Housing Agencies. The People's Homesite and Housing Corporation (PHHC), the Presidential Assistant on Housing Resettlement Agency (PAHRA), the Tondo Foreshore Development Authority (TFDA), the Central Institute for the Training and Relocation of Urban Squatters (CITRUS), the Presidential Committee for Housing and Urban Resettlement (PRECHUR), Sapang Palay Development Committee, Inter-Agency Task Force to Undertake the Relocation of Families in Barrio Nabacaan, Villanueva, Misamis Oriental and all other existing government housing and resettlement agencies, task forces and ad-hoc committees, are hereby dissolved. Their powers and functions, balance of appropriations, records, assets, rights, and choses in action, are transferred to, vested in, and assumed by the Authority. x x x (Emphasis supplied.) PD 570 dated October 30, 1974 created the TFDA, which defined its objectives, powers, and functions. Sec. 2 provides:

Section 2. Objectives and Purposes. The Authority shall have the following purposes and objectives: a) To undertake all manner of activity, business or development projects for the establishment of harmonious, comprehensive, integrated and healthy living community in the Tondo Foreshoreland and its resettlement site; b) To undertake and promote the physical and socio-economic amelioration of the Tondo Foreshore residents in particular and the nation in general (Emphasis supplied.) The powers and functions are contained in Sec. 3, to wit: a) To develop and implement comprehensive and integrated urban renewal programs for the Tondo Foreshore and Dagat-dagatan lagoon and/or any other additional/alternative resettlement site and to formulate and enforce general and specific policies for its development which shall ensure reasonable degree of compliance with environmental standards. b) To prescribe guidelines and standards for the reservation, conservation and utilization of public lands covering the Tondo Foreshore land and its resettlement sites; c) To construct, acquire, own, lease, operate and maintain infrastructure facilities, housing complex, sites and services; d) To determine, regulate and supervise the establishment and operation of housing, sites, services and commercial and industrial complexes and any other enterprises to be constructed or established within the Tondo Foreshore and its resettlement sites; e) To undertake and develop, by itself or through joint ventures with other public or private entities, all or any of the different phases of development of the Tondo Foreshore land and its resettlement sites; f) To acquire and own property, property-rights and interests, and encumber or otherwise dispose of the same as it may deem appropriate (Emphasis supplied.) From the foregoing provisions, it is readily apparent that the TFDA has the explicit power to develop public lands covering the Tondo foreshore land and any other additional and alternative resettlement sites under letter b, Sec. 3 of PD 570. Since the additional and/or alternative sites adjacent to Tondo foreshore land cover foreshore and submerged areas, the reclamation of said areas is necessary in order to convert them into a comprehensive and integrated resettlement housing project for the slum dwellers and squatters of Tondo. Since the powers of TFDA were assumed by the NHA, then the NHA has the power to reclaim lands in the Tondo foreshore area which covers the 79-hectare land subject of Proclamations Nos. 39 and 465 and Special Patents Nos. 3592 and 3598. c. Sec. 6 of PD 757 delineates the functions and powers of the NHA which embrace the authority to reclaim land, thus:

Sec. 6. Powers and functions of the Authority.The Authority shall have the following powers and functions to be exercised by the Board in accordance with its established national human settlements plan prepared by the Human Settlements Commission: (a) Develop and implement the comprehensive and integrated housing program provided for in Section hereof; xxxx (c) Prescribe guidelines and standards for the reservation, conservation and utilization of public lands identified for housing and resettlement; xxxx (e) Develop and undertake housing development and/or resettlement projects through joint ventures or other arrangements with public and private entities; xxxx (k) Enter into contracts whenever necessary under such terms and conditions as it may deem proper and reasonable; (l) Acquire property rights and interests and encumber or otherwise dispose the same as it may deem appropriate; xxxx (s) Perform such other acts not inconsistent with this Decree, as may be necessary to effect the policies and objectives herein declared. (Emphasis supplied.) The NHAs authority to reclaim land can be inferred from the aforequoted provisions. It can make use of public lands under letter (c) of Sec. 6 which includes reclaimed land as site for its comprehensive and integrated housing projects under letter (a) which can be undertaken through joint ventures with private entities under letter (e). Taken together with letter (s) which authorizes NHA to perform such other activities "necessary to effect the policies and objectives" of PD 757, it is safe to conclude that the NHAs power to reclaim lands is a power that is implied from the exercise of its explicit powers under Sec. 6 in order to effectively accomplish its policies and objectives under Sec. 3 of its charter. Thus, the reclamation of land is an indispensable component for the development and construction of the SMDRP housing facilities. 2. NHAs implied power to reclaim land is enhanced by RA 7279. PD 757 identifies NHAs mandate to "[d]evelop and undertake housing development and/or resettlement projects through joint ventures or other arrangements with public and private entities." The power of the NHA to undertake reclamation of land can be inferred from Secs. 12 and 29 of RA 7279, which provide:

Section 12. Disposition of Lands for Socialized Housing.The National Housing Authority, with respect to lands belonging to the National Government, and the local government units with respect to other lands within their respective localities, shall coordinate with each other to formulate and make available various alternative schemes for the disposition of lands to the beneficiaries of the Program. These schemes shall not be limited to those involving transfer of ownership in fee simple but shall include lease, with option to purchase, usufruct or such other variations as the local government units or the National Housing Authority may deem most expedient in carrying out the purposes of this Act. xxxx Section 29. Resettlement.With two (2) years from the effectivity of this Act, the local government units, in coordination with the National Housing Authority, shall implement the relocation and resettlement of persons living in danger areas such as esteros, railroad tracks, garbage dumps, riverbanks, shorelines, waterways, and in other public places as sidewalks, roads, parks, and playgrounds. The local government unit, in coordination with the National Housing Authority, shall provide relocation or resettlement sites with basic services and facilities and access to employment and livelihood opportunities sufficient to meet the basic needs of the affected families. (Emphasis supplied.) Lands belonging to the National Government include foreshore and submerged lands which can be reclaimed to undertake housing development and resettlement projects. 3. MO 415 explains the undertaking of the NHA in SMDRP: WHEREAS, Memorandum Order No. 161-A mandated the National Housing Authority to conduct feasibility studies and develop low-cost housing projects at the dumpsites of Metro Manila; WHEREAS, the National Housing Authority has presented a viable Conceptual Plan to convert the Smokey Mountain dumpsite into a habitable housing project inclusive of the reclamation area across R-10 as enabling component of the Project; WHEREAS, the said Plan requires the coordinated and synchronized efforts of the City of Manila and other government agencies and instrumentalities to ensure effective and efficient implementation; WHEREAS, the government encourages private sector initiative in the implementation of its projects. (Emphasis supplied.) Proceeding from these "whereas" clauses, it is unequivocal that reclamation of land in the Smokey Mountain area is an essential and vital power of the NHA to effectively implement its avowed goal of developing low-cost housing units at the Smokey Mountain dumpsites. The interpretation made by no less than the President of the Philippines as Chief of the Executive Branch, of which the NHA is a part, must necessarily command respect and much weight and credit. 4. RA 6957 as amended by RA 7718the BOT Lawserves as an exception to PD 1084 and EO 525.

Based on the provisions of the BOT Law and Implementing Rules and Regulations, it is unequivocal that all government infrastructure agencies like the NHA can undertake infrastructure or development projects using the contractual arrangements prescribed by the law, and land reclamation is one of the projects that can be resorted to in the BOT project implementation under the February 10, 1992 Joint Resolution No. 3 of the 8th Congress. From the foregoing considerations, we find that the NHA has ample implied authority to undertake reclamation projects. Even without an implied power to reclaim lands under NHAs charter, we rule that the authority granted to NHA, a national government agency, by the President under PD 3-A reinforced by EO 525 is more than sufficient statutory basis for the reclamation of lands under the SMDRP. PD 3-A is a law issued by then President Ferdinand E. Marcos under his martial law powers on September 23, 1972. It provided that "[t]he provisions of any law to the contrary notwithstanding, the reclamation of areas, underwater, whether foreshore or inland, shall be limited to the National Government or any person authorized by it under the proper contract." It repealed, in effect, RA 1899 which previously delegated the right to reclaim lands to municipalities and chartered cities and revested it to the National Government.68 Under PD 3-A, "national government" can only mean the Executive Branch headed by the President. It cannot refer to Congress as it was dissolved and abolished at the time of the issuance of PD 3-A on September 23, 1972. Moreover, the Executive Branch is the only implementing arm in the government with the equipment, manpower, expertise, and capability by the very nature of its assigned powers and functions to undertake reclamation projects. Thus, under PD 3-A, the Executive Branch through the President can implement reclamation of lands through any of its departments, agencies, or offices. Subsequently, on February 4, 1977, President Marcos issued PD 1084 creating the PEA, which was granted, among others, the power "to reclaim land, including foreshore and submerged areas by dredging, filling or other means or to acquire reclaimed lands." The PEAs power to reclaim is not however exclusive as can be gleaned from its charter, as the President retained his power under PD 3-A to designate another agency to reclaim lands. On February 14, 1979, EO 525 was issued. It granted PEA primary responsibility for integrating, directing, and coordinating reclamation projects for and on behalf of the National Government although other national government agencies can be designated by the President to reclaim lands in coordination with the PEA. Despite the issuance of EO 525, PD 3-A remained valid and subsisting. Thus, the National Government through the President still retained the power and control over all reclamation projects in the country. The power of the National Government through the President over reclamation of areas, that is, underwater whether foreshore or inland, was made clear in EO 54369 which took effect on June 24, 2006. Under EO 543, PEA was renamed the Philippine Reclamation Authority (PRA) and was granted the authority to approve reclamation projects, a power previously reposed in the President under EO 525. EO 543 reads: Section 1. The power of the President to approve reclamation projects is hereby delegated to the Philippine Reclamation Authority [formerly PEA], through its governing board,

subject to compliance with existing laws and rules and subject to the condition that reclamation contracts to be executed with any person or entity go through public bidding. Section 2. Nothing in the Order shall be construed as diminishing the Presidents authority to modify, amend or nullify PRAs action. Section 3. All executive issuances inconsistent with this Executive Order are hereby repealed or amended accordingly. (Emphasis supplied.) Sec. 2 of EO 543 strengthened the power of control and supervision of the President over reclamation of lands as s/he can modify, amend, or nullify the action of PEA (now PRA). From the foregoing issuances, we conclude that the Presidents delegation to NHA, a national government agency, to reclaim lands under the SMDRP, is legal and valid, firmly anchored on PD 3-A buttressed by EO 525 notwithstanding the absence of any specific grant of power under its charter, PD 757. Second Issue: Whether respondents NHA and RBI were given the power and authority by DENR to reclaim foreshore and submerged lands Petitioner Chavez puts forth the view that even if the NHA and RBI were granted the authority to reclaim, they were not authorized to do so by the DENR. Again, reliance is made on our ruling in PEA where it was held that the DENRs authority is necessary in order for the government to validly reclaim foreshore and submerged lands. In PEA, we expounded in this manner: As manager, conservator and overseer of the natural resources of the State, DENR exercises "supervision and control over alienable and disposable public lands." DENR also exercises "exclusive jurisdiction on the management and disposition of all lands of the public domain." Thus, DENR decides whether areas under water, like foreshore or submerged areas of Manila Bay, should be reclaimed or not. This means that PEA needs authorization from DENR before PEA can undertake reclamation projects in Manila Bay, or in any part of the country. DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain. Hence, DENR decides whether reclaimed lands of PEA should be classified as alienable under Sections 6 and 7 of CA No. 141. Once DENR decides that the reclaimed lands should be so classified, it then recommends to the President the issuance of a proclamation classifying the lands as alienable or disposable lands of the public domain open to disposition. We note that then DENR Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance with the Revised Administrative Code and Sections 6 and 7 of CA No. 141. In short, DENR is vested with the power to authorize the reclamation of areas under water, while PEA is vested with the power to undertake the physical reclamation of areas under water, whether directly or through private contractors. DENR is also empowered to classify

lands of the public domain into alienable or disposable lands subject to the approval of the President. On the other hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public domain.70 Despite our finding that PEA is not a precedent to the case at bar, we find after all that under existing laws, the NHA is still required to procure DENRs authorization before a reclamation project in Manila Bay or in any part of the Philippines can be undertaken. The requirement applies to PEA, NHA, or any other government agency or office granted with such power under the law. Notwithstanding the need for DENR permission, we nevertheless find petitioners position bereft of merit. The DENR is deemed to have granted the authority to reclaim in the Smokey Mountain Project for the following reasons: 1. Sec. 17, Art. VII of the Constitution provides that "the President shall have control of all executive departments, bureaus and offices." The President is assigned the task of seeing to it that all laws are faithfully executed. "Control," in administrative law, means "the power of an officer to alter, modify, nullify or set aside what a subordinate officer has done in the performance of his duties and to substitute the judgment of the former for that of the latter."71 As such, the President can exercise executive power motu proprio and can supplant the act or decision of a subordinate with the Presidents own. The DENR is a department in the executive branch under the President, and it is only an alter ego of the latter. Ordinarily the proposed action and the staff work are initially done by a department like the DENR and then submitted to the President for approval. However, there is nothing infirm or unconstitutional if the President decides on the implementation of a certain project or activity and requires said department to implement it. Such is a presidential prerogative as long as it involves the department or office authorized by law to supervise or execute the Project. Thus, as in this case, when the President approved and ordered the development of a housing project with the corresponding reclamation work, making DENR a member of the committee tasked to implement the project, the required authorization from the DENR to reclaim land can be deemed satisfied. It cannot be disputed that the ultimate power over alienable and disposable public lands is reposed in the President of the Philippines and not the DENR Secretary. To still require a DENR authorization on the Smokey Mountain when the President has already authorized and ordered the implementation of the Project would be a derogation of the powers of the President as the head of the executive branch. Otherwise, any department head can defy or oppose the implementation of a project approved by the head of the executive branch, which is patently illegal and unconstitutional. In Chavez v. Romulo, we stated that when a statute imposes a specific duty on the executive department, the President may act directly or order the said department to undertake an activity, thus: [A]t the apex of the entire executive officialdom is the President. Section 17, Article VII of the Constitution specifies [her] power as Chief executive departments, bureaus and offices. [She] shall ensure that the laws be faithfully executed. As Chief Executive, President Arroyo holds the steering wheel that controls the course of her government. She lays down policies in the execution of her plans and programs. Whatever policy she chooses, she has her

subordinates to implement them. In short, she has the power of control. Whenever a specific function is entrusted by law or regulation to her subordinate, she may act directly or merely direct the performance of a duty x x x. Such act is well within the prerogative of her office (emphasis supplied).72 Moreover, the power to order the reclamation of lands of public domain is reposed first in the Philippine President. The Revised Administrative Code of 1987 grants authority to the President to reserve lands of public domain for settlement for any specific purpose, thus: Section 14. Power to Reserve Lands of the Public and Private Domain of the Government. (1) The President shall have the power to reserve for settlement or public use, and for specific public purposes, any of the lands of the public domain, the use of which is not otherwise directed by law. The reserved land shall thereafter remain subject to the specific public purpose indicated until otherwise provided by law or proclamation. (Emphasis supplied.) President Aquino reserved the area of the Smokey Mountain dumpsite for settlement and issued MO 415 authorizing the implementation of the Smokey Mountain Development Project plus the reclamation of the area across R-10. Then President Ramos issued Proclamation No. 39 covering the 21-hectare dumpsite and the 40-hectare commercial/industrial area, and Proclamation No. 465 and MO 415 increasing the area of foreshore and submerged lands of Manila Bay to be reclaimed from 40 to 79 hectares. Having supervision and control over the DENR, both Presidents directly assumed and exercised the power granted by the Revised Administrative Code to the DENR Secretary to authorize the NHA to reclaim said lands. What can be done indirectly by the DENR can be done directly by the President. It would be absurd if the power of the President cannot be exercised simply because the head of a department in the executive branch has not acted favorably on a project already approved by the President. If such arrangement is allowed then the department head will become more powerful than the President. 2. Under Sec. 2 of MO 415, the DENR is one of the members of the EXECOM chaired by the NCR-CORD to oversee the implementation of the Project. The EXECOM was the one which recommended approval of the project plan and the joint venture agreements. Clearly, the DENR retained its power of supervision and control over the laws affected by the Project since it was tasked to "facilitate the titling of the Smokey Mountain and of the area to be reclaimed," which shows that it had tacitly given its authority to the NHA to undertake the reclamation. 3. Former DENR Secretary Angel C. Alcala issued Special Patents Nos. 3591 and 3592 while then Secretary Victor O. Ramos issued Special Patent No. 3598 that embraced the areas covered by the reclamation. These patents conveyed the lands to be reclaimed to the NHA and granted to said agency the administration and disposition of said lands for subdivision and disposition to qualified beneficiaries and for development for mix land use (commercial/industrial) "to provide employment opportunities to on-site families and additional areas for port related activities." Such grant of authority to administer and dispose of lands of public domain under the SMDRP is of course subject to the powers of the EXECOM of SMDRP, of which the DENR is a member. 4. The issuance of ECCs by the DENR for SMDRP is but an exercise of its power of supervision and control over the lands of public domain covered by the Project.

Based on these reasons, it is clear that the DENR, through its acts and issuances, has ratified and confirmed the reclamation of the subject lands for the purposes laid down in Proclamations Nos. 39 and 465. Third Issue: Whether respondent RBI can acquire reclaimed foreshore and submerged lands considered as inalienable and outside the commerce of man Petitioner postulates that respondent RBI cannot acquire the reclaimed foreshore and submerged areas as these are inalienable public lands beyond the commerce of man based on Art. 1409 of the Civil Code which provides: Article 1409. The following contracts are inexistent and void from the beginning: (1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy; xxxx (7) Those expressly prohibited or declared void by law. These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived. Secs. 2 and 3, Art. XII of the Constitution declare that all natural resources are owned by the State and they cannot be alienated except for alienable agricultural lands of the public domain. One of the States natural resources are lands of public domain which include reclaimed lands. Petitioner contends that for these reclaimed lands to be alienable, there must be a law or presidential proclamation officially classifying these reclaimed lands as alienable and disposable and open to disposition or concession. Absent such law or proclamation, the reclaimed lands cannot be the enabling component or consideration to be paid to RBI as these are beyond the commerce of man. We are not convinced of petitioners postulation. The reclaimed lands across R-10 were classified alienable and disposable lands of public domain of the State for the following reasons, viz: First, there were three (3) presidential proclamations classifying the reclaimed lands across R-10 as alienable or disposable hence open to disposition or concession, to wit: (1) MO 415 issued by President Aquino, of which Sec. 4 states that "[t]he land covered by the Smokey Mountain Dumpsite is hereby conveyed to the National Housing Authority as well as the area to be reclaimed across R-10."

The directive to transfer the lands once reclaimed to the NHA implicitly carries with it the declaration that said lands are alienable and disposable. Otherwise, the NHA cannot effectively use them in its housing and resettlement project. (2) Proclamation No. 39 issued by then President Ramos by which the reclaimed lands were conveyed to NHA for subdivision and disposition to qualified beneficiaries and for development into a mixed land use (commercial/industrial) to provide employment opportunities to on-site families and additional areas for port-related activities. Said directive carries with it the pronouncement that said lands have been transformed to alienable and disposable lands. Otherwise, there is no legal way to convey it to the beneficiaries. (3) Proclamation No. 465 likewise issued by President Ramos enlarged the reclaimed area to 79 hectares to be developed and disposed of in the implementation of the SMDRP. The authority put into the hands of the NHA to dispose of the reclaimed lands tacitly sustains the conversion to alienable and disposable lands. Secondly, Special Patents Nos. 3591, 3592, and 3598 issued by the DENR anchored on Proclamations Nos. 39 and 465 issued by President Ramos, without doubt, classified the reclaimed areas as alienable and disposable. Admittedly, it cannot be said that MO 415, Proclamations Nos. 39 and 465 are explicit declarations that the lands to be reclaimed are classified as alienable and disposable. We find however that such conclusion is derived and implicit from the authority given to the NHA to transfer the reclaimed lands to qualified beneficiaries. The query is, when did the declaration take effect? It did so only after the special patents covering the reclaimed areas were issued. It is only on such date that the reclaimed lands became alienable and disposable lands of the public domain. This is in line with the ruling in PEA where said issue was clarified and stressed: PD No. 1085, coupled with President Aquinos actual issuance of a special patent covering the Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as alienable or disposable lands of the public domain. PD No. 1085 and President Aquinos issuance of a land patent also constitute a declaration that the Freedom Islands are no longer needed for public service. The Freedom Islands are thus alienable or disposable lands of the public domain, open to disposition or concession to qualified parties.73 (Emphasis supplied.) Thus, MO 415 and Proclamations Nos. 39 and 465 cumulatively and jointly taken together with Special Patent Nos. 3591, 3592, and 3598 more than satisfy the requirement in PEA that "[t]here must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession (emphasis supplied)."74 Apropos the requisite law categorizing reclaimed land as alienable or disposable, we find that RA 6957 as amended by RA 7718 provides ample authority for the classification of reclaimed land in the SMDRP for the repayment scheme of the BOT project as alienable and disposable lands of public domain. Sec. 6 of RA 6957 as amended by RA 7718 provides:

For the financing, construction, operation and maintenance of any infrastructure projects undertaken through the build-operate-and transfer arrangement or any of its variations pursuant to the provisions of this Act, the project proponent x x x may likewise be repaid in the form of a share in the revenue of the project or other non-monetary payments, such as, but not limited to, the grant of a portion or percentage of the reclaimed land, subject to the constitutional requirements with respect to the ownership of the land. (Emphasis supplied.) While RA 6957 as modified by RA 7718 does not expressly declare that the reclaimed lands that shall serve as payment to the project proponent have become alienable and disposable lands and opened for disposition; nonetheless, this conclusion is necessarily implied, for how else can the land be used as the enabling component for the Project if such classification is not deemed made? It may be argued that the grant of authority to sell public lands, pursuant to PEA, does not convert alienable lands of public domain into private or patrimonial lands. We ruled in PEA that "alienable lands of public domain must be transferred to qualified private parties, or to government entities not tasked to dispose of public lands, before these lands can become private or patrimonial lands (emphasis supplied)."75 To lands reclaimed by PEA or through a contract with a private person or entity, such reclaimed lands still remain alienable lands of public domain which can be transferred only to Filipino citizens but not to a private corporation. This is because PEA under PD 1084 and EO 525 is tasked to hold and dispose of alienable lands of public domain and it is only when it is transferred to Filipino citizens that it becomes patrimonial property. On the other hand, the NHA is a government agency not tasked to dispose of public lands under its charter The Revised Administrative Code of 1987. The NHA is an "end-user agency" authorized by law to administer and dispose of reclaimed lands. The moment titles over reclaimed lands based on the special patents are transferred to the NHA by the Register of Deeds, they are automatically converted to patrimonial properties of the State which can be sold to Filipino citizens and private corporations, 60% of which are owned by Filipinos. The reason is obvious: if the reclaimed land is not converted to patrimonial land once transferred to NHA, then it would be useless to transfer it to the NHA since it cannot legally transfer or alienate lands of public domain. More importantly, it cannot attain its avowed purposes and goals since it can only transfer patrimonial lands to qualified beneficiaries and prospective buyers to raise funds for the SMDRP. From the foregoing considerations, we find that the 79-hectare reclaimed land has been declared alienable and disposable land of the public domain; and in the hands of NHA, it has been reclassified as patrimonial property. Petitioner, however, contends that the reclaimed lands were inexistent prior to the three (3) Presidential Acts (MO 415 and Proclamations Nos. 39 and 465) and hence, the declaration that such areas are alienable and disposable land of the public domain, citing PEA, has no legal basis. Petitioners contention is not well-taken. Petitioners sole reliance on Proclamations Nos. 39 and 465 without taking into consideration the special patents issued by the DENR demonstrates the inherent weakness of his proposition. As was ruled in PEA cited by petitioner himself, "PD No. 1085, coupled with President Aquinos actual issuance of a special patent covering the Freedom Islands is equivalent to an official proclamation classifying the Freedom islands as alienable or disposable lands of public domain." In a similar vein, the combined and collective effect of

Proclamations Nos. 39 and 465 with Special Patents Nos. 3592 and 3598 is tantamount to and can be considered to be an official declaration that the reclaimed lots are alienable or disposable lands of the public domain. The reclaimed lands covered by Special Patents Nos. 3591, 3592, and 3598, which evidence transfer of ownership of reclaimed lands to the NHA, are official acts of the DENR Secretary in the exercise of his power of supervision and control over alienable and disposable public lands and his exclusive jurisdiction over the management and disposition of all lands of public domain under the Revised Administrative Code of 1987. Special Patent No. 3592 speaks of the transfer of Lots 1 and 2, and RI-003901-000012-D with an area of 401,485 square meters based on the survey and technical description approved by the Bureau of Lands. Lastly, Special Patent No. 3598 was issued in favor of the NHA transferring to said agency a tract of land described in Plan RL-00-000013 with an area of 390,000 square meters based on the survey and technical descriptions approved by the Bureau of Lands. The conduct of the survey, the preparation of the survey plan, the computation of the technical description, and the processing and preparation of the special patent are matters within the technical area of expertise of administrative agencies like the DENR and the Land Management Bureau and are generally accorded not only respect but at times even finality.76 Preparation of special patents calls for technical examination and a specialized review of calculations and specific details which the courts are ill-equipped to undertake; hence, the latter defer to the administrative agency which is trained and knowledgeable on such matters.77 Subsequently, the special patents in the name of the NHA were submitted to the Register of Deeds of the City of Manila for registration, and corresponding certificates of titles over the reclaimed lots were issued based on said special patents. The issuance of certificates of titles in NHAs name automatically converts the reclaimed lands to patrimonial properties of the NHA. Otherwise, the lots would not be of use t o the NHAs housing projects or as payment to the BOT contractor as the enabling component of the BOT contract. The laws of the land have to be applied and interpreted depending on the changing conditions and times. Tempora mutantur et legis mutantur in illis (time changes and laws change with it). One such law that should be treated differently is the BOT Law (RA 6957) which brought about a novel way of implementing government contracts by allowing reclaimed land as part or full payment to the contractor of a government project to satisfy the huge financial requirements of the undertaking. The NHA holds the lands covered by Special Patents Nos. 3592 and 3598 solely for the purpose of the SMDRP undertaken by authority of the BOT Law and for disposition in accordance with said special law. The lands become alienable and disposable lands of public domain upon issuance of the special patents and become patrimonial properties of the Government from the time the titles are issued to the NHA. As early as 1999, this Court in Baguio v. Republic laid down the jurisprudence that: It is true that, once a patent is registered and the corresponding certificate of title is issued, the land covered by them ceases to be part of the public domain and becomes private property, and the Torrens Title issued pursuant to the patent becomes indefeasible upon the expiration of one year from the date of issuance of such patent.78 The doctrine was reiterated in Republic v. Heirs of Felipe Alijaga, Sr.,79 Heirs of Carlos Alcaraz v. Republic,80 and the more recent case of Doris Chiongbian-Oliva v. Republic of the Philippines.81 Thus, the 79-hectare reclaimed land became patrimonial property after

the issuance of certificates of titles to the NHA based on Special Patents Nos. 3592 and 3598. One last point. The ruling in PEA cannot even be applied retroactively to the lots covered by Special Patents Nos. 3592 (40 hectare reclaimed land) and 3598 (39-hectare reclaimed land). The reclamation of the land under SMDRP was completed in August 1996 while the PEA decision was rendered on July 9, 2002. In the meantime, subdivided lots forming parts of the reclaimed land were already sold to private corporations for value and separate titles issued to the buyers. The Project was terminated through a Memorandum of Agreement signed on August 27, 2003. The PEA decision became final through the November 11, 2003 Resolution. It is a settled precept that decisions of the Supreme Court can only be applied prospectively as they may prejudice vested rights if applied retroactively. In Benzonan v. Court of Appeals, the Court trenchantly elucidated the prospective application of its decisions based on considerations of equity and fair play, thus: At that time, the prevailing jurisprudence interpreting section 119 of R.A. 141 as amended was that enunciated in Monge and Tupas cited above. The petitioners Benzonan and respondent Pe and the DBP are bound by these decisions for pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the laws of the Constitution shall form a part of the legal system of the Philippines." But while our decisions form part of the law of the land, they are also subject to Article 4 of the Civil Code which provides that "laws shall have no retroactive effect unless the contrary is provided." This is expressed in the familiar legal maxim lex prospicit, non respicit, the law looks forward not backward. The rationale against retroactivity is easy to perceive. The retroactive application of a law usually divests rights that have already become vested or impairs the obligations of contract and hence, is unconstitutional. The same consideration underlies our rulings giving only prospective effect to decisions enunciating new doctrines. Thus, we emphasized in People v. Jabinal, 55 SCRA 607 [1974] "x x x when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively and should not apply to parties who had relied on the old doctrine and acted on the faith thereof.82 Fourth Issue: Whether respondent RBI can acquire reclaimed lands when there was no declaration that said lands are no longer needed for public use Petitioner Chavez avers that despite the declaration that the reclaimed areas are alienable lands of the public domain, still, the reclamation is flawed for there was never any declaration that said lands are no longer needed for public use. We are not moved by petitioners submission. Even if it is conceded that there was no explicit declaration that the lands are no longer needed for public use or public service, there was however an implicit executive declaration that the reclaimed areas R-10 are not necessary anymore for public use or public service when President Aquino through MO 415 conveyed the same to the NHA partly for housing

project and related commercial/industrial development intended for disposition to and enjoyment of certain beneficiaries and not the public in general and partly as enabling component to finance the project. President Ramos, in issuing Proclamation No. 39, declared, though indirectly, that the reclaimed lands of the Smokey Mountain project are no longer required for public use or service, thus: These parcels of land of public domain are hereby placed under the administration and disposition of the National Housing Authority to develop, subdivide and dispose to qualified beneficiaries, as well as its development for mix land use (commercial/industrial) to provide employment opportunities to on-site families and additional areas for port related activities. (Emphasis supplied.) While numerical count of the persons to be benefited is not the determinant whether the property is to be devoted to public use, the declaration in Proclamation No. 39 undeniably identifies only particular individuals as beneficiaries to whom the reclaimed lands can be sold, namelythe Smokey Mountain dwellers. The rest of the Filipinos are not qualified; hence, said lands are no longer essential for the use of the public in general. In addition, President Ramos issued on August 31, 1994 Proclamation No. 465 increasing the area to be reclaimed from forty (40) hectares to seventy-nine (79) hectares, elucidating that said lands are undoubtedly set aside for the beneficiaries of SMDRP and not the publicdeclaring the power of NHA to dispose of land to be reclaimed, thus: "The authority to administer, develop, or dispose lands identified and reserved by this Proclamation and Proclamation No. 39 (s.1992), in accordance with the SMDRP, as enhance, is vested with the NHA, subject to the provisions of existing laws." (Emphasis supplied.) MO 415 and Proclamations Nos. 39 and 465 are declarations that proclaimed the non-use of the reclaimed areas for public use or service as the Project cannot be successfully implemented without the withdrawal of said lands from public use or service. Certainly, the devotion of the reclaimed land to public use or service conflicts with the intended use of the Smokey Mountain areas for housing and employment of the Smokey Mountain scavengers and for financing the Project because the latter cannot be accomplished without abandoning the public use of the subject land. Without doubt, the presidential proclamations on SMDRP together with the issuance of the special patents had effectively removed the reclaimed lands from public use. More decisive and not in so many words is the ruling in PEA which we earlier cited, that "PD No. 1085 and President Aquinos issuance of a land p atent also constitute a declaration that the Freedom Islands are no longer needed for public service." Consequently, we ruled in that case that the reclaimed lands are "open to disposition or concession to qualified parties."83 In a similar vein, presidential Proclamations Nos. 39 and 465 jointly with the special patents have classified the reclaimed lands as alienable and disposable and open to disposition or concession as they would be devoted to units for Smokey Mountain beneficiaries. Hence, said lands are no longer intended for public use or service and shall form part of the patrimonial properties of the State under Art. 422 of the Civil Code. 84 As discussed a priori, the lands were classified as patrimonial properties of the NHA ready for disposition when the titles were registered in its name by the Register of Deeds.

Moreover, reclaimed lands that are made the enabling components of a BOT infrastructure project are necessarily reclassified as alienable and disposable lands under the BOT Law; otherwise, absurd and illogical consequences would naturally result. Undoubtedly, the BOT contract will not be accepted by the BOT contractor since there will be no consideration for its contractual obligations. Since reclaimed land will be conveyed to the contractor pursuant to the BOT Law, then there is an implied declaration that such land is no longer intended for public use or public service and, hence, considered patrimonial property of the State. Fifth Issue: Whether there is a law authorizing sale of reclaimed lands Petitioner next claims that RBI cannot acquire the reclaimed lands because there was no law authorizing their sale. He argues that unlike PEA, no legislative authority was granted to the NHA to sell reclaimed land. This position is misplaced. Petitioner relies on Sec. 60 of Commonwealth Act (CA) 141 to support his view that the NHA is not empowered by any law to sell reclaimed land, thus: Section 60. Any tract of land comprised under this title may be leased or sold, as the case may be, to any person, corporation or association authorized to purchase or lease public lands for agricultural purposes. The area of the land so leased or sold shall be such as shall, in the judgment of the Secretary of Agriculture and Natural Resources, be reasonably necessary for the purposes for which such sale or lease if requested and shall in no case exceed one hundred and forty-four hectares: Provided, however, That this limitation shall not apply to grants, donations, transfers, made to a province, municipality or branch or subdivision of the Government for the purposes deemed by said entities conducive to the public interest; but the land so granted donated or transferred to a province, municipality, or branch or subdivision of the Government shall not be alienated, encumbered, or otherwise disposed of in a manner affecting its title, except when authorized by Congress; Provided, further, That any person, corporation, association or partnership disqualified from purchasing public land for agricultural purposes under the provisions of this Act, may lease land included under this title suitable for industrial or residential purposes, but the lease granted shall only be valid while such land is used for the purposes referred to. (Emphasis supplied.) Reliance on said provision is incorrect as the same applies only to "a province, municipality or branch or subdivision of the Government." The NHA is not a government unit but a government corporation performing governmental and proprietary functions. In addition, PD 757 is clear that the NHA is empowered by law to transfer properties acquired by it under the law to other parties, thus: Section 6. Powers and functions of the Authority. The Authority shall have the following powers and functions to be exercised by the Boards in accordance with the established national human settlements plan prepared by the Human Settlements Commission: xxxx

(k) Enter into contracts whenever necessary under such terms and conditions as it may deem proper and reasonable; (l) Acquire property rights and interests, and encumber or otherwise dispose the same as it may deem appropriate (Emphasis supplied.) Letter (l) is emphatic that the NHA can acquire property rights and interests and encumber or otherwise dispose of them as it may deem appropriate. The transfer of the reclaimed lands by the National Government to the NHA for housing, commercial, and industrial purposes transformed them into patrimonial lands which are of course owned by the State in its private or proprietary capacity. Perforce, the NHA can sell the reclaimed lands to any Filipino citizen or qualified corporation. Sixth Issue: Whether the transfer of reclaimed lands to RBI was done by public bidding Petitioner also contends that there was no public bidding but an awarding of ownership of said reclaimed lands to RBI. Public bidding, he says, is required under Secs. 63 and 67 of CA 141 which read: Section 63. Whenever it is decided that lands covered by this chapter are not needed for public purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce for authority to dispose of the same. Upon receipt of such authority, the Director of Lands shall give notice by public advertisement in the same manner as in the case of leases or sales of agricultural public land, that the Government will lease or sell, as the case may be, the lots or blocks specified in the advertisement, for the purpose stated in the notice and subject to the conditions specified in this chapter. xxxx Section 67. The lease or sale shall be made through oral bidding; and adjudication shall be made to the highest bidder. However, where an applicant has made improvements on the land by virtue of a permit issued to him by competent authority, the sale or lease shall be made by sealed bidding as prescribed in section twenty-six of this Act, the provisions of which shall be applied whenever applicable. If all or part of the lots remain unleased or unsold, the Director of Lands shall from time to time announce in the Official Gazette or in any other newspapers of general circulation, the lease of sale of those lots, if necessary. He finds that the NHA and RBI violated Secs. 63 and 67 of CA 141, as the reclaimed lands were conveyed to RBI by negotiated contract and not by public bidding as required by law. This stand is devoid of merit. There is no doubt that respondent NHA conducted a public bidding of the right to become its joint venture partner in the Smokey Mountain Project. Notices or Invitations to Bid were published in the national dailies on January 23 and 26, 1992 and February 1, 14, 16, and 23, 1992. The bidding proper was done by the Bids and Awards Committee (BAC) on May 18, 1992. On August 31, 1992, the Inter-Agency Techcom made up of the NHA, PEA,

DPWH, PPA, DBP, and DENR opened the bids and evaluated them, resulting in the award of the contract to respondent RBI on October 7, 1992. On March 19, 1993, respondents NHA and RBI signed the JVA. On February 23, 1994, said JVA was amended and restated into the ARJVA. On August 11, 1994, the ARJVA was again amended. On September 7, 1994, the OP approved the ARJVA and the amendments to the ARJVA. From these factual settings, it cannot be gainsaid that there was full compliance with the laws and regulations governing public biddings involving a right, concession, or property of the government. Petitioner concedes that he does not question the public bidding on the right to be a joint venture partner of the NHA, but the absence of bidding in the sale of alienable and disposable lands of public domain pursuant to CA 141 as amended. Petitioners theory is incorrect. Secs. 63 and 67 of CA 141, as amended, are in point as they refer to government sale by the Director of Lands of alienable and disposable lands of public domain. This is not present in the case at bar. The lands reclaimed by and conveyed to the NHA are no longer lands of public domain. These lands became proprietary lands or patrimonial properties of the State upon transfer of the titles over the reclaimed lands to the NHA and hence outside the ambit of CA 141. The NHA can therefore legally transfer patrimonial land to RBI or to any other interested qualified buyer without any bidding conducted by the Director of Lands because the NHA, unlike PEA, is a government agency not tasked to sell lands of public domain. Hence, it can only hold patrimonial lands and can dispose of such lands by sale without need of public bidding. Petitioner likewise relies on Sec. 79 of PD 1445 which requires public bidding "when government property has become unserviceable for any cause or is no longer needed." It appears from the Handbook on Property and Supply Management System, Chapter 6, that reclaimed lands which have become patrimonial properties of the State, whose titles are conveyed to government agencies like the NHA, which it will use for its projects or programs, are not within the ambit of Sec. 79. We quote the determining factors in the Disposal of Unserviceable Property, thus: Determining Factors in the Disposal of Unserviceable Property

Reclaimed lands cannot be considered unserviceable properties. The reclaimed lands in question are very much needed by the NHA for the Smokey Mountain Project because without it, then the projects will not be successfully implemented. Since the reclaimed lands are not unserviceable properties and are very much needed by NHA, then Sec. 79 of PD 1445 does not apply. More importantly, Sec. 79 of PD 1445 cannot be applied to patrimonial properties like reclaimed lands transferred to a government agency like the NHA which has entered into a BOT contract with a private firm. The reason is obvious. If the patrimonial property will be subject to public bidding as the only way of disposing of said property, then Sec. 6 of RA 6957 on the repayment scheme is almost impossible or extremely difficult to implement considering the uncertainty of a winning bid during public auction. Moreover, the repayment scheme of a BOT contract may be in the form of non-monetary payment like the grant of a portion or percentage of reclaimed land. Even if the BOT partner participates in the public bidding, there is no assurance that he will win the bid and therefore the payment in kind as agreed to by the parties cannot be performed or the winning bid prize might be below the estimated valuation of the land. The only way to harmonize Sec. 79 of PD 1445 with Sec. 6 of RA 6957 is to consider Sec. 79 of PD 1445 as inapplicable to BOT contracts involving patrimonial lands. The law does not intend anything impossible (lex non intendit aliquid impossibile). Seventh Issue: Whether RBI, being a is barred by the Constitution to acquire lands of public domain private corporation,

Petitioner maintains that RBI, being a private corporation, is expressly prohibited by the 1987 Constitution from acquiring lands of public domain. Petitioners proposition has no legal mooring for the following reasons: 1. RA 6957 as amended by RA 7718 explicitly states that a contractor can be paid "a portion as percentage of the reclaimed land" subject to the constitutional requirement that only Filipino citizens or corporations with at least 60% Filipino equity can acquire the same. It cannot be denied that RBI is a private corporation, where Filipino citizens own at least 60% of the stocks. Thus, the transfer to RBI is valid and constitutional. 2. When Proclamations Nos. 39 and 465 were issued, inalienable lands covered by said proclamations were converted to alienable and disposable lands of public domain. When the titles to the reclaimed lands were transferred to the NHA, said alienable and disposable lands of public domain were automatically classified as lands of the private domain or patrimonial properties of the State because the NHA is an agency NOT tasked to dispose of alienable or disposable lands of public domain. The only way it can transfer the reclaimed land in conjunction with its projects and to attain its goals is when it is automatically converted to patrimonial properties of the State. Being patrimonial or private properties of the State, then it has the power to sell the same to any qualified person under the Constitution, Filipino citizens as private corporations, 60% of which is owned by Filipino citizens like RBI. 3. The NHA is an end-user entity such that when alienable lands of public domain are transferred to said agency, they are automatically classified as patrimonial properties. The NHA is similarly situated as BCDA which was

Property, which can no longer be repaired or reconditioned; Property whose maintenance costs of repair more than outweigh the benefits and services that will be derived from its continued use; Property that has become obsolete or outmoded because of changes in technology; Serviceable property that has been rendered unnecessary due to change in the agencys function or mandate; Unused supplies, materials and spare parts that were procured in excess of requirements; and Unused supplies and materials that [have] become dangerous to use because of long storage or use of which is determined to be hazardous.85

granted the authority to dispose of patrimonial lands of the government under RA 7227. The nature of the property holdings conveyed to BCDA is elucidated and stressed in the May 6, 2003 Resolution in Chavez v. PEA, thus: BCDA is an entirely different government entity. BCDA is authorized by law to sell specific government lands that have long been declared by presidential proclamations as military reservations for use by the different services of the armed forces under the Department of National Defense. BCDAs mandate is specific and limited in area, while PEAs mandate is general and national. BCDA holds government lands that have been granted to end-user government entitiesthe military services of the armed forces. In contrast, under Executive Order No. 525, PEA holds the reclaimed public lands, not as an end-user entity, but as the government agency "primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government." x x x Well-settled is the doctrine that public land granted to an end-user government agency for a specific public use may subsequently be withdrawn by Congress from public use and declared patrimonial property to be sold to private parties. R.A. No. 7227 creating the BCDA is a law that declares specific military reservations no longer needed for defense or military purposes and reclassifies such lands as patrimonial property for sale to private parties. Government owned lands, as long as they are patrimonial property, can be sold to private parties, whether Filipino citizens or qualified private corporations. Thus, the so-called Friar Lands acquired by the government under Act No. 1120 are patrimonial property which even private corporations can acquire by purchase. Likewise, reclaimed alienable lands of the public domain if sold or transferred to a public or municipal corporation for a monetary consideration become patrimonial property in the hands of the public or municipal corporation. Once converted to patrimonial property, the land may be sold by the public or municipal corporation to private parties, whether Filipino citizens or qualified private corporations.86 (Emphasis supplied.) The foregoing Resolution makes it clear that the SMDRP was a program adopted by the Government under Republic Act No. 6957 (An Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector, and For Other Purposes), as amended by RA 7718, which is a special law similar to RA 7227. Moreover, since the implementation was assigned to the NHA, an end-user agency under PD 757 and RA 7279, the reclaimed lands registered under the NHA are automatically classified as patrimonial lands ready for disposition to qualified beneficiaries. The foregoing reasons likewise apply to the contention of petitioner that HCPTI, being a private corporation, is disqualified from being a transferee of public land. What was transferred to HCPTI is a 10-hectare lot which is already classified as patrimonial property in the hands of the NHA. HCPTI, being a qualified corporation under the 1987 Constitution, the transfer of the subject lot to it is valid and constitutional. Eighth Issue: Whether respondents can be compelled to disclose all information related to the SMDRP Petitioner asserts his right to information on all documents such as contracts, reports, memoranda, and the like relative to SMDRP.

Petitioner asserts that matters relative to the SMDRP have not been disclosed to the public like the current stage of the Project, the present financial capacity of RBI, the complete list of investors in the asset pool, the exact amount of investments in the asset pool and other similar important information regarding the Project. He prays that respondents be compelled to disclose all information regarding the SMDRP and furnish him with originals or at least certified true copies of all relevant documents relating to the said project including, but not limited to, the original JVA, ARJVA, AARJVA, and the Asset Pool Agreement. This relief must be granted. The right of the Filipino people to information on matters of public concern is enshrined in the 1987 Constitution, thus: ARTICLE II xxxx SEC. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its transactions involving public interest. ARTICLE III SEC. 7. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law. In Valmonte v. Belmonte, Jr., this Court explicated this way: [A]n essential element of these freedoms is to keep open a continuing dialogue or process of communication between the government and the people. It is in the interest of the State that the channels for free political discussion be maintained to the end that the government may perceive and be responsive to the peoples will. Yet, this open dialogue can be effective only to the extent that the citizenry is informed and thus able to formulate its will intelligently. Only when the participants in the discussion are aware of the issues and have access to information relating thereto can such bear fruit.87 In PEA, this Court elucidated the rationale behind the right to information: These twin provisions of the Constitution seek to promote transparency in policy-making and in the operations of the government, as well as provide the people sufficient information to exercise effectively other constitutional rights. These twin provisions are essential to the exercise of freedom of expression. If the government does not disclose its official acts, transactions and decisions to citizens, whatever citizens say, even if expressed without any restraint, will be speculative and amount to nothing. These twin provisions are also essential to hold public officials "at all times x x x accountable to the people," for unless citizens have the proper information, they cannot hold public officials accountable

for anything. Armed with the right information, citizens can participate in public discussions leading to the formulation of government policies and their effective implementation. An informed citizenry is essential to the existence and proper functioning of any democracy.88 Sec. 28, Art. II compels the State and its agencies to fully disclose "all of its transactions involving public interest." Thus, the government agencies, without need of demand from anyone, must bring into public view all the steps and negotiations leading to the consummation of the transaction and the contents of the perfected contract. 89Such information must pertain to "definite propositions of the government," meaning official recommendations or final positions reached on the different matters subject of negotiation. The government agency, however, need not disclose "intra-agency or inter-agency recommendations or communications during the stage when common assertions are still in the process of being formulated or are in the exploratory stage." The limitation also covers privileged communication like information on military and diplomatic secrets; information affecting national security; information on investigations of crimes by law enforcement agencies before the prosecution of the accused; information on foreign relations, intelligence, and other classified information. It is unfortunate, however, that after almost twenty (20) years from birth of the 1987 Constitution, there is still no enabling law that provides the mechanics for the compulsory duty of government agencies to disclose information on government transactions. Hopefully, the desired enabling law will finally see the light of day if and when Congress decides to approve the proposed "Freedom of Access to Information Act." In the meantime, it would suffice that government agencies post on their bulletin boards the documents incorporating the information on the steps and negotiations that produced the agreements and the agreements themselves, and if finances permit, to upload said information on their respective websites for easy access by interested parties. Without any law or regulation governing the right to disclose information, the NHA or any of the respondents cannot be faulted if they were not able to disclose information relative to the SMDRP to the public in general. The other aspect of the peoples right to know apart from the duty to disclose is the duty to allow access to information on matters of public concern under Sec. 7, Art. III of the Constitution. The gateway to information opens to the public the following: (1) official records; (2) documents and papers pertaining to official acts, transactions, or decisions; and (3) government research data used as a basis for policy development. Thus, the duty to disclose information should be differentiated from the duty to permit access to information. There is no need to demand from the government agency disclosure of information as this is mandatory under the Constitution; failing that, legal remedies are available. On the other hand, the interested party must first request or even demand that he be allowed access to documents and papers in the particular agency. A request or demand is required; otherwise, the government office or agency will not know of the desire of the interested party to gain access to such papers and what papers are needed. The duty to disclose covers only transactions involving public interest, while the duty to allow access has a broader scope of information which embraces not only transactions involving public interest, but any matter contained in official communications and public documents of the government agency. We find that although petitioner did not make any demand on the NHA to allow access to information, we treat the petition as a written request or demand. We order the NHA to allow petitioner access to its official records, documents, and papers relating to official

acts, transactions, and decisions that are relevant to the said JVA and subsequent agreements relative to the SMDRP. Ninth Issue: Whether the operative fact doctrine applies to the instant petition Petitioner postulates that the "operative fact" doctrine is inapplicable to the present case because it is an equitable doctrine which could not be used to countenance an inequitable result that is contrary to its proper office. On the other hand, the petitioner Solicitor General argues that the existence of the various agreements implementing the SMDRP is an operative fact that can no longer be disturbed or simply ignored, citing Rieta v. People of the Philippines.90 The argument of the Solicitor General is meritorious. The "operative fact" doctrine is embodied in De Agbayani v. Court of Appeals, wherein it is stated that a legislative or executive act, prior to its being declared as unconstitutional by the courts, is valid and must be complied with, thus: As the new Civil Code puts it: "When the courts declare a law to be inconsistent with the Constitution, the former shall be void and the latter shall govern. Administrative or executive acts, orders and regulations shall be valid only when they are not contrary to the laws of the Constitution." It is understandable why it should be so, the Constitution being supreme and paramount. Any legislative or executive act contrary to its terms cannot survive. Such a view has support in logic and possesses the merit of simplicity. It may not however be sufficiently realistic. It does not admit of doubt that prior to the declaration of nullity such challenged legislative or executive act must have been in force and had to be complied with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to obedience and respect. Parties may have acted under it and may have changed their positions. What could be more fitting than that in a subsequent litigation regard be had to what has been done while such legislative or executive act was in operation and presumed to be valid in all respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact must be reckoned with. This is merely to reflect awareness that precisely because the judiciary is the governmental organ which has the final say on whether or not a legislative or executive measure is valid, a period of time may have elapsed before it can exercise the power of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its quality of fairness and justice then, if there be no recognition of what had transpired prior to such adjudication. In the language of an American Supreme Court decision: "The actual existence of a statute, prior to such a determination [of unconstitutionality], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects, with respect to particular relations, individual and corporate, and particular conduct, private and official." This language has been quoted with approval in a resolution in Araneta v. Hill and the decision in Manila Motor Co., Inc. v. Flores. An even more recent instance is the opinion of Justice Zaldivar speaking for the Court in Fernandez v. Cuerva and Co.91 (Emphasis supplied.)

This doctrine was reiterated in the more recent case of City of Makati v. Civil Service Commission, wherein we ruled that: Moreover, we certainly cannot nullify the City Governments order of suspension, as we have no reason to do so, much less retroactively apply such nullification to deprive private respondent of a compelling and valid reason for not filing the leave application. For as we have held, a void act though in law a mere scrap of paper nonetheless confers legitimacy upon past acts or omissions done in reliance thereof. Consequently, the existence of a statute or executive order prior to its being adjudged void is an operative fact to which legal consequences are attached. It would indeed be ghastly unfair to prevent private respondent from relying upon the order of suspension in lieu of a formal leave application.92 (Emphasis supplied.) The principle was further explicated in the case of Rieta v. People of the Philippines, thus: In similar situations in the past this Court had taken the pragmatic and realistic course set forth in Chicot County Drainage District vs. Baxter Bank to wit: The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the challenged decree. x x x It is quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to [the determination of its invalidity], is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects with respect to particular conduct, private and official. Questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. These questions are among the most difficult of those which have engaged the attention of courts, state and federal, and it is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified. In the May 6, 2003 Resolution in Chavez v. PEA,93 we ruled that De Agbayani94 is not applicable to the case considering that the prevailing law did not authorize private corporations from owning land. The prevailing law at the time was the 1935 Constitution as no statute dealt with the same issue. In the instant case, RA 6957 was the prevailing law at the time that the joint venture agreement was signed. RA 6957, entitled "An Act Authorizing The Financing, Construction, Operation And Maintenance Of Infrastructure Projects By The Private Sector And For Other Purposes," which was passed by Congress on July 24, 1989, allows repayment to the private contractor of reclaimed lands.95 Such law was relied upon by respondents, along with the above-mentioned executive issuances in pushing through with the Project. The existence of such law and issuances is an "operative fact" to which legal consequences have attached. This Court is constrained to give legal effect to the acts done in consonance with such executive and legislative acts; to do otherwise would work patent injustice on respondents. Further, in the May 6, 2003 Resolution in Chavez v. PEA, we ruled that in certain cases, the transfer of land, although illegal or unconstitutional, will not be invalidated on

considerations of equity and social justice. However, in that case, we did not apply the same considering that PEA, respondent in said case, was not entitled to equity principles there being bad faith on its part, thus: There are, moreover, special circumstances that disqualify Amari from invoking equity principles. Amari cannot claim good faith because even before Amari signed the Amended JVA on March 30, 1999, petitioner had already filed the instant case on April 27, 1998 questioning precisely the qualification of Amari to acquire the Freedom Islands. Even before the filing of this petition, two Senate Committees had already approved on September 16, 1997 Senate Committee Report No. 560. This Report concluded, after a wellpublicized investigation into PEAs sale of the Freedom Islands to Amari, that the Freedom Islands are inalienable lands of the public domain. Thus, Amari signed the Amended JVA knowing and assuming all the attendant risks, including the annulment of the Amended JVA.96 Such indicia of bad faith are not present in the instant case. When the ruling in PEA was rendered by this Court on July 9, 2002, the JVAs were all executed. Furthermore, when petitioner filed the instant case against respondents on August 5, 2004, the JVAs were already terminated by virtue of the MOA between the NHA and RBI. The respondents had no reason to think that their agreements were unconstitutional or even questionable, as in fact, the concurrent acts of the executive department lent validity to the implementation of the Project. The SMDRP agreements have produced vested rights in favor of the slum dwellers, the buyers of reclaimed land who were issued titles over said land, and the agencies and investors who made investments in the project or who bought SMPPCs. These properties and rights cannot be disturbed or questioned after the passage of around ten (10) years from the start of the SMDRP implementation. Evidently, the "operative fact" principle has set in. The titles to the lands in the hands of the buyers can no longer be invalidated. The Courts Dispositions Based on the issues raised in this petition, we find that the March 19, 1993 JVA between NHA and RBI and the SMDRP embodied in the JVA, the subsequent amendments to the JVA and all other agreements signed and executed in relation to it, including, but not limited to, the September 26, 1994 Smokey Mountain Asset Pool Agreement and the agreement on Phase I of the Project as well as all other transactions which emanated from the Project, have been shown to be valid, legal, and constitutional. Phase II has been struck down by the Clean Air Act. With regard to the prayer for prohibition, enjoining respondents particularly respondent NHA from further implementing and/or enforcing the said Project and other agreements related to it, and from further deriving and/or enjoying any rights, privileges and interest from the Project, we find the same prayer meritless. Sec. 2 of Rule 65 of the 1997 Rules of Civil Procedure provides: Sec. 2. Petition for prohibition.When the proceedings of any tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that

judgment be rendered commanding the respondent to desist from further proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice may require. It has not been shown that the NHA exercised judicial or quasi-judicial functions in relation to the SMDRP and the agreements relative to it. Likewise, it has not been shown what ministerial functions the NHA has with regard to the SMDRP. A ministerial duty is one which is so clear and specific as to leave no room for the exercise of discretion in its performance. It is a duty which an officer performs in a given state of facts in a prescribed manner in obedience to the mandate of legal authority, without regard to the exercise of his/her own judgment upon the propriety of the act done.97 Whatever is left to be done in relation to the August 27, 2003 MOA, terminating the JVA and other related agreements, certainly does not involve ministerial functions of the NHA but instead requires exercise of judgment. In fact, Item No. 4 of the MOA terminating the JVAs provides for validation of the developers (RBIs) claims arising from the termination of the SMDRP through the various government agencies.98 Such validation requires the exercise of discretion. In addition, prohibition does not lie against the NHA in view of petitioners failure to avail and exhaust all administrative remedies. Clear is the rule that prohibition is only available when there is no adequate remedy in the ordinary course of law. More importantly, prohibition does not lie to restrain an act which is already a fait accompli. The "operative fact" doctrine protecting vested rights bars the grant of the writ of prohibition to the case at bar. It should be remembered that petitioner was the Solicitor General at the time SMDRP was formulated and implemented. He had the opportunity to question the SMDRP and the agreements on it, but he did not. The moment to challenge the Project had passed. On the prayer for a writ of mandamus, petitioner asks the Court to compel respondents to disclose all documents and information relating to the project, including, but not limited to, any subsequent agreements with respect to the different phases of the Project, the revisions of the original plan, the additional works incurred on the Project, the current financial condition of respondent RBI, and the transactions made with respect to the project. We earlier ruled that petitioner will be allowed access to official records relative to the SMDRP. That would be adequate relief to satisfy petitioners ri ght to the information gateway. WHEREFORE, the petition is partially granted. The prayer for a writ of prohibition is DENIED for lack of merit. The prayer for a writ of mandamus is GRANTED. Respondent NHA is ordered to allow access to petitioner to all public documents and official records relative to the SMDRP including, but not limited to, the March 19, 1993 JVA between the NHA and RBI and subsequent agreements related to the JVA, the revisions over the original plan, and the additional works incurred on and the transactions made with respect to the Project. No costs.

SO ORDERED.

G.R. No. 163663

June 30, 2006

GREATER METROPOLITAN MANILA SOLID WASTE MANAGEMENT COMMITTEE and the METROPOLITAN MANILA DEVELOPMENT AUTHORITY, Petitioners, vs. JANCOM ENVIRONMENTAL CORPORATION and JANCOM INTERNATIONAL DEVELOPMENT PROJECTS PTY. LIMITED OF AUSTRALIA, Respondents. DECISION CARPIO MORALES, J.: The present petition for review on certiorari challenges the Decision1 dated December 19, 2003 and Resolution2dated May 11, 2004 of the Court of Appeals (CA) 3 in CA-G.R. SP No. 78752 which denied the petition for certiorari filed by herein petitioners Greater Metropolitan Manila Solid Waste Management Committee (GMMSWMC) and the Metropolitan Manila Development Authority (MMDA) and their Motion for Reconsideration, respectively. In 1994, Presidential Memorandum Order No. 202 was issued by then President Fidel V. Ramos creating an Executive Committee to oversee and develop waste-to-energy projects for the waste disposal sites in San Mateo, Rizal and Carmona, Cavite under the BuildOperate-Transfer (BOT) scheme. Respondent Jancom International Development Projects Pty. Limited of Australia (Jancom International) was one of the bidders for the San Mateo Waste Disposal Site. It subsequently entered into a partnership with Asea Brown Boveri under the firm name JANCOM Environmental Corporation (JANCOM), its co-respondent. On February 12, 1997, the above-said Executive Committee approved the recommendation of the Pre-qualification, Bids and Awards Committee to declare JANCOM as the sole complying bidder for the San Mateo Waste Disposal Site. On December 19, 1997, a Contract for the BOT Implementation of the Solid Waste Management Project for the San Mateo, Rizal Waste Disposal Site4 (the contract) was entered into by the Republic of the Philippines, represented by the Presidential Task Force on Solid Waste Management through then Department of Environment and Natural Resources Secretary Victor Ramos, then Cabinet Office for Regional Development-National Capital Region Chairman Dionisio dela Serna, and then MMDA Chairman Prospero Oreta on one hand, and JANCOM represented by its Chief Executive Officer Jorge Mora Aisa and its Chairman Jay Alparslan, on the other. On March 5, 1998, the contract was submitted for approval to President Ramos who subsequently endorsed it to then incoming President Joseph E. Estrada.

Owing to the clamor of the residents of Rizal, the Estrada administration ordered the closure of the San Mateo landfill. Petitioner GMMSWMC thereupon adopted a Resolution not to pursue the contract with JANCOM, citing as reasons therefor the passage of Republic Act 8749, otherwise known as the Clean Air Act of 1999, the non-availability of the San Mateo site, and costly tipping fees.5 The Board of Directors of Jancom International thereafter adopted on January 4, 2000 a Resolution6 authorizing Atty. Manuel Molina to act as legal counsel for respondents and "determine and file such legal action as deemed necessary before the Philippine courts in any manner he may deem appropriate" against petitioners. The Board of Directors of JANCOM also adopted a Resolution 7 on February 7, 2000 granting Atty. Molina similar authorization to file legal action as may be necessary to protect its interest with respect to the contract. On March 14, 2000, respondents filed a petition for certiorari8 with the Regional Trial Court (RTC) of Pasig City where it was docketed as Special Civil Action No. 1955, to declare the GMMSWMC Resolution and the acts of the MMDA calling for bids for and authorizing the forging of a new contract for the Metro Manila waste management as illegal, unconstitutional and void and to enjoin petitioners from implementing the Resolution and making another award in lieu thereof. By of May 29, 2000, Branch 68 of the Pasig City RTC found in favor of respondents.10 Petitioners thereupon assailed the RTC Decision via petition for certiorari11 with prayer for a temporary restraining order with the CA, docketed as CA-G.R. SP No. 59021. By Decision12 of November 13, 2000, the CA denied the petition for lack of merit and affirmed in toto the May 29, 2000 RTC Decision. Petitioners Motion for Reconsideration was denied, prompting them to file a petition for review before this Court, docketed as G.R. No. 147465. By Decision13 of January 30, 2002 and Resolution14 of April 10, 2002, this Court affirmed the November 13, 2001 CA Decision and declared the contract valid and perfected, albeit ineffective and unimplementable pending approval by the President. JANCOM and the MMDA later purportedly entered into negotiations to modify certain provisions of the contract which were embodied in a draft Amended Agreement15 dated June 2002. The draft Amended Agreement bore no signature of the parties. Respondents, through Atty. Molina, subsequently filed before Branch 68 of the Pasig City RTC an Omnibus Motion16 dated July 29, 2002 praying that: (1) an alias writ of execution be issued prohibiting and enjoining petitioners and their representatives from calling for, accepting, evaluating, approving, awarding, negotiating or implementing all bids, awards and contracts involving other Metro Manila waste management projects intended to be pursued or which are already being pursued; (2) the MMDA, through its Chairman Bayani F. Fernando, be directed to immediately forward and recommend the approval of the Amended Agreement to President Gloria Macapagal Arroyo; (3) Chairman Fernando be ordered to personally appear before the court and explain his acts and public pronouncements which are in direct violation and gross defiance of the final and executory Decision9

May 29, 2000 RTC Decision; (4) the Executive Secretary and the Cabinet Secretaries of the departments-members of the National Solid Waste Management Commission be directed "to submit the contract within 30 days from notice to the President for signature and approval and if the latter chooses not to sign or approve the contract, the Executive Secretary be made to show cause therefor;" and (5) petitioners be directed to comply with and submit their written compliance with their obligations specifically directed under the provisions of Article 18, paragraphs 18.1, 18.1.1 (a), (b), (c) and (d) of the contract within 30 days from notice.17 To the Omnibus Motion petitioners filed their Opposition 18 which merited JANCOMs Reply19 filed on August 19, 2002. On August 21, 2002, Atty. Simeon M. Magdamit, on behalf of Jancom International, filed before the RTC an Entry of Special Appearance and Manifestation with Motion to Reject the Pending Omnibus Motion20 alleging that: (1) the Omnibus Motion was never approved by Jancom International; (2) the Omnibus Motion was initiated by lawyers whose services had already been terminated, hence, were unauthorized to represent it; and (3) the agreed judicial venue for dispute resolution relative to the implementation of the contract is the International Court of Arbitration in the United Kingdom pursuant to Article 16.121 of said contract. In the meantime, on November 3, 2002, the MMDA forwarded the contract to the Office of the President for appropriate action,22 together with MMDA Resolution No. 02-1823 dated June 26, 2002, "Recommending to her Excellency the President of the Republic of the Philippines to Disapprove the Contract Entered Into by the Executive Committee of the Presidential Task Force on Waste Management with Jancom Environmental Corporation and for Other Purposes." By Order24 of November 18, 2002, the RTC noted the above-stated Entry of Special Appearance of Atty. Magdamit for Jancom International and denied the Motion to Reject Pending Omnibus Motion for lack of merit. Jancom International filed on December 9, 2002 a Motion for Reconsideration25 which was denied for lack of merit by Order26 of January 8, 2003. Petitioners and respondents then filed their Memoranda27 on May 23, 2003 and May 26, 2003, respectively. By Order28 of June 11, 2003, the RTC granted respondents Omnibus Motion in part. The dispositive portion of the Order reads, quoted verbatim: WHEREFORE, in view of the foregoing, let an Alias Writ of Execution immediately issue and the Clerk of Court and Ex-Oficio Sheriff or any o[f] her Deputies is directed to implement the same within sixty (60) days from receipt thereof. Thus, any and all such bids or contracts entered into by respondent MMDA with third parties covering the waste disposal and management within the Metro Manila after August 14, 2000 are hereby declared NULL and VOID. Respondents are henceforth enjoined and prohibited, with a stern warning, from entering into any such contract with any third party whether directly or indirectly, in violation of the contractual rights of petitioner JANCOM under the BOT Contract Award, consistent with the Supreme Courts Decision of January 30, 2002.

Respondent MMDA is hereby directed to SUBMIT the Amended Agreement concluded by petitioners with the previous MMDA officials, or in its discretion if it finds [it] more advantageous to the government, to require petitioners to make adjustments in the Contract in accordance with existing environmental laws and other relevant concerns, and thereafter forward the Amended Agreement for signature and approval by the President of the Philippines. The concerned respondents are hereby further directed to comply fully and in good faith with its institutional obligations or undertakings as provided in Article 18 of the BOT Contract. Let a copy of this Order be furnished the Office of the Clerk of Court and the Commission on Audit for its information and guidance. SO ORDERED.29 (Emphasis in the original) On June 23, 2003 the RTC issued an Alias Writ of Execution30 reading: WHEREAS, on May 29, 2000, a Decision was rendered by this Court in the above-entitled case, the pertinent portions of which is [sic] hereunder quoted as follows: WHEREFORE, in view of the foregoing, the Court hereby renders judgment in favor of petitioners JANCOM ENVIRONMENTAL CORP and JANCOM INTERNATIONAL DEVELOPMENT PROJECTS PTY., LIMITED OF AUSTRALIAS [sic], and against respondents GREATER METROPOLITAN MANILA SOLID WASTE MANAGEMENT COMM., and HON. ROBERTO N. AVENTAJADO, in his capacity as Chairman of the said Committee, METRO MANILA DEVELOPMENT AUTHORITY and HON. JEJOMAR C. BINAY, in his capacity as Chairman of said Authority, declaring the Resolution of respondent Greater Metropolitan Manila Solid Waste Management Committee disregarding petitioners BOT Award Contract and calling for bids for and authorizing a new contract for the Metro Manila waste management ILLEGAL an[d] VOID. Moreover, respondents and their agents are hereby PROHIBITED and ENJOINED from implementing the aforesaid Resolution and disregarding petitioners BOT Award Contract and from making another award in its place. Let it be emphasized that this Court is not preventing or stopping the government from implementing infrastructure projects as it is aware of the proscription under PD 1818. On the contrary, the Court is paving the way for the necessary and modern solution to the perennial garbage problem that has been the major headache of the government and in the process would serve to attract more investors in the country. SO ORDERED. WHEREAS, on August 7, 2000, petitioners through counsel filed a "Motion for Execution" which the Court GRANTED in its Order dated August 14, 2000; WHEREAS, as a consequence thereof, a Writ of Execution was issued on August 14, 2000 and was duly served upon respondents as per Sheriffs Return dated August 27, 2000; WHEREAS, ON July 29, 2002, petitioners through counsel filed an "Omnibus Motion," praying, among others, for the issuance of an Alias Writ of Execution which the Court

GRANTED in its Order dated June 11, 2003, the dispositive portion of which reads as follows: WHEREFORE, in view of the foregoing, let an Alias Writ of Execution immediately issue and the Clerk of Court and Ex-Oficio Sheriff or any of her Deputies is directed to implement the same within sixty (60) days from receipt thereof. Thus, any and all such bids or contracts entered into by respondent MMDA [with] third parties covering the waste disposal and management within the Metro Manila after August 14, 2000 are hereby declared NULL and VOID. Respondents are henceforth enjoined and prohibited, with a stern warning, from entering into any such contract with any third party whether directly or indirectly, in violation of the contractual rights of petitioner Jancom under the BOT Contract Award, consistent with the Supreme Courts Decision of January 30, 2002. Respondent MMDA is hereby directed to SUBMIT the Amended Agreement concluded by petitioners with the previous MMDA officials, or in its discretion if it finds [it] more advantageous to the government, to require petitioners to make adjustments in the Contract in accordance with existing environmental laws and other relevant concerns, and thereafter forward the Amended Agreement for signature and approval by the President of the Philippines. The concerned respondents are hereby further directed to comply fully and in good faith with its institutional obligations or undertakings as provided in Article 18 of the BOT Contract. Let a copy of this Order be furnished the Office of the Clerk of Court and the Commission on Audit for its information and guidance. SO ORDERED. x x x x (Emphasis in the original) By letter31 of August 15, 2003, Chairman Fernando advised Sheriff Alejandro Q. Loquinario of the Office of the Clerk of Court and Ex-Oficio Sheriff, Pasig City RTC that: 1. MMDA has not entered into a new contract for solid waste management in lieu of JANCOMs Contract. 2. JANCOMs Contract has been referred to the Office of the President for appropriate action. 3. Without the implemented.32 Presidents approval, JANCOMs Contract cannot be

Petitioners later challenged the RTC June 11, 2003 Order via petition for certiorari 33 with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction before the CA. They subsequently filed an Amended Petition 34 on September 26, 2003. To the Amended Petition JANCOM filed on October 8, 2003 its Comment 35 after which petitioners filed their Reply36 on November 24, 2003.

By the challenged Decision of December 19, 2003, the CA denied the petition and affirmed the June 11, 2003 RTC Order in this wise: The Supreme Court ruled that the Jancom contract has the force of law and the parties must abide in good faith by their respective contractual commitments. It is precisely this pronouncement that the alias writ of execution issued by respondent judge seeks to enforce. x x x xxxx The fact that the Jancom contract has been declared unimplementable without the Presidents signature, would not excuse petitioners failure to comply with their undertakings under Article 18 of the contract. x x x xxxx Petitioners complain that respondent judge focused only on requiring them to perform their supposed obligations under Article 18 of the contract when private respondents are also required thereunder to post a Performance Security acceptable to the Republic in the amount allowed in the BOT Law. Petitioners complaint is not justified. x x x xxxx It cannot x x x be said that respondent judge had been unfair or one-sided in directing only petitioners to fulfill their own obligations under Article 18 of the Jancom contract. Compliance with private respondents obligations under the contract had not yet become due. xxxx There is no debate that the trial courts Decision has attained finality. Once a judgment becomes final and executory, the prevailing party can have it executed as a matter of right and the granting of execution becomes a mandatory or ministerial duty of the court. After a judgment has become final and executory, vested rights are acquired by the winning party. Just as the losing party has the right to file an appeal within the prescribed period, so also the winning party has the correlative right to enjoy the finality of the resolution of the case. It is true that the ministerial duty of the court to order the execution of a final and executory judgment admits of exceptions as (a) where it becomes imperative in the higher interest of justice to direct the suspension of its execution; or (b) whenever it is necessary to accomplish the aims of justice; or (c) when certain facts and circumstances transpired after the judgment became final which could render the execution of the judgment unjust. Petitioners have not shown that any of these exceptions exists to prevent the mandatory execution of the trial courts Decision.37 (Italics in the original) Petitioners Motion for Reconsideration38 having been denied by the CA by Resolution of May 11, 2004, the present petition for review39 was filed on July 12, 2004 positing that: THE COURT OF APPEALS GRAVELY ERRED IN UPHOLDING THE LOWER COURT AND IN DISREGARDING THE FOLLOWING PROPOSITIONS:

I THE SUBJECT CONTRACT IS INEFFECTIVE AND UNIMPLEMENTABLE UNTIL AND UNLESS IT IS APPROVED BY THE PRESIDENT. II THE SUBJECT CONTRACT ONLY COVERS THE DISPOSITION OF 3,000 TONS OF SOLID WASTE A DAY. III THE ALLEGED AMENDED AGREEMENT IS ONLY A DRAFT OR PROPOSAL SUBMITTED BY RESPONDENTS. IV RESPONDENTS MUST ALSO BE MADE TO COMPLY WITH THEIR CONTRACTUAL COMMITMENTS.40 (Underscoring supplied) JANCOM filed on September 20, 2004 its Comment 41 on the petition to which petitioners filed their Reply42 on January 28, 2005. On May 4, 2005, Jancom International filed its Comment,43 reiterating its position that it did not authorize the filing before the RTC by Atty. Molina of the July 29, 2002 Omnibus Motion that impleaded it as party-movant. On July 7, 2005, petitioners filed their Reply44 to Jancom Internationals Comment. Petitioners argue that since the contract remains unsigned by the President, it cannot yet be executed. Ergo, they conclude, the proceedings which resulted in the issuance of an alias writ of execution "ran afoul of the [January 30, 2002] decision of [the Supreme] Court in G.R. No. 147465."45 Petitioners go on to argue that since the contract covers only 3,000 tons of garbage per day while Metro Manila generates at least 6,000 tons of solid waste a day, MMDA may properly bid out the other 3,000 tons of solid waste to other interested groups or entities. Petitioners moreover argue that the alleged Amended Agreement concluded supposedly between JANCOM and former MMDA Chairman Benjamin Abalos is a mere scrap of paper, a mere draft or proposal submitted by JANCOM to the MMDA, no agreement on which was reached by the parties; and at all events, express authority ought to have first been accorded the MMDA to conclude such an amended agreement with JANCOM, the original contract having been concluded between the Republic of the Philippines and JANCOM. Finally, petitioners argue that respondents should also be required to perform their commitments pursuant to Article 1846 of the contract.

The petition is impressed with merit in light of the following considerations. Section 1, Rule 39 of the Rules of Court provides: SECTION 1. Execution upon judgments or final orders. Execution shall issue as a matter of right, on motion, upon a judgment or order that disposes of the action or proceeding upon the expiration of the period to appeal therefrom if no appeal has been duly perfected. If the appeal has been duly perfected and finally resolved, the execution may forthwith be applied for in the court of origin, on motion of the judgment obligee, submitting therewith certified true copies of the judgment or judgments or final order or orders sought to be enforced and of the entry thereof, with notice to the adverse party. The appellate court may, on motion in the same case, when the interest of justice so requires, direct the court of origin to issue the writ of execution. Once a judgment becomes final, it is basic that the prevailing party is entitled as a matter of right to a writ of execution the issuance of which is the trial courts ministerial duty, compellable by mandamus.47 There are instances, however, when an error may be committed in the course of execution proceedings prejudicial to the rights of a party. These instances call for correction by a superior court, as where: 1) the writ of execution varies the judgment; 2) there has been a change in the situation of the parties making execution inequitable or unjust; 3) execution is sought to be enforced against property exempt from execution; 4) it appears that the controversy has never been submitted to the judgment of the court; 5) the terms of the judgment are not clear enough and there remains room for interpretation thereof; or 6) it appears that the writ of execution has been improvidently issued, or that it is defective in substance, or is issued against the wrong party, or that the judgment debt has been paid or otherwise satisfied, or the writ was issued without authority.48 (Emphasis and Underscoring supplied) That a writ of execution must conform to the judgment which is to be executed, substantially to every essential particular thereof,49 it is settled. It may not thus vary the terms of the judgment it seeks to enforce,50 nor go beyond its terms. Where the execution is not in harmony with the judgment which gives it life and exceeds it, it has no validity.51 This Courts January 30, 2002 Decision in G.R. No. 147465 held:

We, therefore, hold that the Court of Appeals did not err when it declared the existence of a valid and perfected contract between the Republic of the Philippines and JANCOM. There being a perfected contract, MMDA cannot revoke or renounce the same without the consent of the other. From the moment of perfection, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage, and law (Article 1315, Civil Code). The contract has the force of law between the parties and they are expected to abide in good faith by their respective contractual commitments, not weasel out of them. Just as nobody can be forced to enter into a contract, in the same manner, once a contract is entered into, no party can renounce it unilaterally or without the consent of the other. It is a general principle of law that no one may be permitted to change his mind or disavow and go back upon his own acts, or to proceed contrary thereto, to the prejudice of the other party. Nonetheless, it has to be repeated that although the contract is a perfected one, it is still ineffective or unimplementable until and unless it is approved by the President.52 (Emphasis and Underscoring supplied) This Courts April 10, 2002 Resolution also in G.R. No. 147465 moreover held: x x x The only question before the Court is whether or not there is a valid and perfected contract between the parties. As to the necessity, expediency, and wisdom of the contract, these are outside the realm of judicial adjudication. These considerations are primarily and exclusively a matter for the President to decide. While the Court recognizes that the garbage problem is a matter of grave public concern, it can only declare that the contract in question is a valid and perfected one between the parties, but the same is still ineffective or unimplementable until and unless it is approved by the President, the contract itself providing that such approval by the President is necessary for its effectivity.53 (Emphasis and Underscoring supplied) Article 19 of the contract provides: Article 19. Effectivity. This Contract shall become effective upon approval by the President of the Republic of [the] Philippines pursuant to existing Laws subject to condition precedent in Article 18. This Contract shall remain in full force and effect for twenty five (25) years subject to renewal for another twenty five (25) years from the date of Effectivity. Such renewal will be subject to mutual agreement of the parties and approval by the [P]resident of the Republic of [the] Philippines. (Emphasis and underscoring supplied) In issuing the alias writ of execution, the trial court in effect ordered the enforcement of the contract despite this Courts unequivocal pronouncement that albeit valid and perfected, the contract shall become effective only upon approval by the President. Indubitably, the alias writ of execution varied the tenor of this Courts judgment, went against essential portions and exceeded the terms thereof. x x x a lower court is without supervisory jurisdiction to interpret or to reverse the judgment of the higher court x x x. A judge of a lower court cannot enforce different decrees than those rendered by the superior court. x x x The inferior court is bound by the decree as the law of the case, and must carry it into execution according to the mandate. They cannot vary it, or examine it for any other purpose than execution, or give any other or further relief, or review it upon any matter

decided on appeal for error apparent, or intermeddle with it, further than to settle so much as has been remanded. x x x54 The execution directed by the trial court being out of harmony with the judgment, legal implications cannot save it from being found to be fatally defective.55 Notably, while the trial court ratiocinated that it issued on June 23, 2003 the alias writ "to set into motion the legal mechanism for Presidential approval and signature,"56 it failed to take due consideration of the fact that during the pendency of the Omnibus Motion, the contract had earlier been forwarded for appropriate action on November 3, 2002 by Chairman Fernando to the Office of the President, with recommendation for its disapproval, which fact the trial court had been duly informed of through pleadings and open court manifestations.57 Additionally, it bears noting that the June 11, 2003 Order of the trial court is likewise indisputably defective in substance for having directed the submission of the draft Amended Agreement to the President. The appellate court, in affirming the June 11, 2003 Order of the trial court, overlooked the fact that the Amended Agreement was unsigned by the parties and it instead speculated and rationalized that the submission thereof to the President would at all events solve the mounting garbage problem in Metro Manila: We find that the submission of the Amended Agreement to the President will break the impasse now existing between the parties which has effectively halted the governments efforts to address Metro Manilas mounting garbage problem. x x x As long as petitioners refuse to deal with private respondents, the Metro Manila garbage problem will only continue to worsen. x x x That the Amended Agreement could have well been negotiated, if not concluded between private respondents and the former MMDA administration, is not far-fetched. Petitioners do not dispute that the President had referred the Jancom contract to then MMDA Chairman Benjamin Abalos for recommendation. Petitioners also do not dispute that private respondents negotiated with the MMDA for the amendment of the contract. Besides, the Amended Agreement does not veer away from the original Jancom contract. x x x58 lawphil.net The Amended Agreement was, as petitioners correctly allege, merely a draft document containing the proposals of JANCOM, subject to the approval of the MMDA. As earlier stated, it was not signed by the parties.59 The original contract itself provides in Article 17.6 that it "may not be amended except by a written [c]ontractsigned by the parties."60 It is elementary that, being consensual, a contract is perfected by mere consent. 61 The essence of consent is the conformity of the parties to the terms of the contract, the acceptance by one of the offer made by the other;62 it is the concurrence of the minds of the parties on the object and the cause which shall constitute the contract. 63Where there is

merely an offer by one party without acceptance by the other, there is no consent and the contract does not come into existence.64 As distinguished from the original contract in which this Court held in G.R. No. 147465: x x x the signing and execution of the contract by the parties clearly show that, as between the parties, there was concurrence of offer and acceptance with respect to the material details of the contract, thereby giving rise to the perfection of the contract. The execution and signing of the contract is not disputed by the parties x x x,65 the parties did not, with respect to the Amended Agreement, get past the negotiation stage. No meeting of minds was established. While there was an initial offer made, there was no acceptance. Even JANCOM President Alfonso G. Tuzon conceded, by letter66 of June 17, 2002 to Chairman Fernando, that the Amended Agreement was a mere proposal: Apropos to all these, we are seeking an urgent EXECUTIVE SESSION on your best time and venue. We can thresh up major points to establish a common perspective based on data and merit. We are optimistic you shall then consider with confidence the proposed Amended Contract which incorporates the adjustments we committed to as stated and earlier submitted to your Office during the incumbency of your predecessor, for evaluation and appropriate action by NEDA in compliance with the BOT Law and Article 18.1.1 of our contract.67 While respondents aver that an acceptance was made, they have not proffered any proof. While indeed the MMDA, by a letter68 issued by then MMDA General Manager Jaime Paz, requested then Secretary of Justice Hernando B. Perez for his legal opinion on the draft Amended Agreement, nowhere in the letter is there any statement indicating that the MMDA, or the Republic of the Philippines for that matter, had approved respondents proposals embodied in the said draft agreement. The pertinent portions of the letter read: Attention: HON. HERNANDO B. PEREZ Secretary Subject: Request for Opinion Regarding the Compromise Offer of Jancom Environmental Corporation for the Municipal Solid Waste Management of Metro Manila Dear Secretary Perez: This is to respectfully request for an opinion from your Honorable Office regarding the Compromise Proposal offered by JANCOM Environmental Corporation ("JANCOM") in relation to its Contract for the BOT Implementation of the Waste Management Project for the San Mateo, Rizal Waste Disposal Site dated 19 December 1997 (hereinafter referred to as the BOT Contract for brevity) with the Republic of the Philippines.

xxxx x x x this representation is requesting your Honorable Office to render a legal opinion on the following: Does the offer of JANCOM to temporarily set aside the waste-to-energy plant and implement only the other two major components of the BOT Contract amount to a novation of the BOT Contract, and therefore necessitating a re-bidding? If the same does not amount to a novation, by what authority may Jancom set aside temporarily a major component of the BOT Contract? x x x x69 Only an absolute or unqualified acceptance of a definite offer manifests the consent necessary to perfect a contract.70 If at all, the MMDA letter only shows that the parties had not gone beyond the preparation stage, which is the period from the start of the negotiations until the moment just before the agreement of the parties.71Obviously, other material considerations still remained before the Amended Agreement could be perfected. At any time prior to the perfection of a contract, unaccepted offers and proposals remain as such and cannot be considered as binding commitments.72 Respecting petitioners argument that respondents should be directed to comply with their commitments under Article 18 of the contract, this Court is not convinced. Article 18.2.1 of the contract provides: 18.2.1 The BOT COMPANY hereby undertakes to provide the following within 2 months from execution of this Contract as an effective document: a) sufficient proof of the actual equity contributions from the proposed shareholders of the BOT COMPANY in a total amount not less than PHP 500,000,000 in accordance with the BOT Law and the implementing rules and regulations;1avvphil.net b) sufficient proof of financial commitment from a lending institution sufficient to cover total project cost in accordance with the BOT Law and the implementing rules and regulations; c) to support its obligation under this Contract, the BOT COMPANY shall submit a security bond to the CLIENT in accordance with the form and amount required under the BOT Law. (Underscoring supplied) As this Court held in G.R. No. 147465: As clearly stated in Article 18, JANCOM undertook to comply with the stated conditions within 2 months from execution of the Contract as an effective document. Since the President of the Philippines has not yet affixed his signature on the contract, the same has not yet become an effective document. Thus, the two-month period within which JANCOM should comply with the conditions has not yet started to run. x x x73 (Underscoring supplied)

A final point. The argument raised against the authority of Atty. Molina to file respondents Omnibus Motion before the RTC does not lie. Representation continues until the court dispenses with the services of counsel in accordance with Section 26, Rule 138 of the Rules of Court.74 No substitution of counsel of record is allowed unless the following essential requisites concur: (1) there must be a written request for substitution; (2) it must be filed with the written consent of the client; (3) it must be with the written consent of the attorney to be substituted; and (4) in case the consent of the attorney to be substituted cannot be obtained, there must be at least a proof of notice that the motion for substitution was served on him in the manner prescribed by the Rules of Court.75 In the case at bar, there is no showing that there was a valid substitution of counsel at the time Atty. Molina filed the Omnibus Motion on July 29, 2002 before the RTC, nor that he had priorly filed a Withdrawal of Appearance. He thus continued to enjoy the presumption of authority granted to him by respondents. While clients undoubtedly have the right to terminate their relations with their counsel and effect a substitution or change at any stage of the proceedings, the exercise of such right is subject to compliance with the prescribed requirements. Otherwise, no substitution can be effective and the counsel who last appeared in the case before the substitution became effective shall still be responsible for the conduct of the case.76 The rule is intended to ensure the orderly disposition of cases.77 In the absence then of compliance with the essential requirements for valid substitution of the counsel of record, Atty. Molina enjoys the presumption of authority granted to him by respondents. In light of the foregoing disquisition, a discussion of the other matters raised by petitioners has been rendered unnecessary. WHEREFORE, the petition is GRANTED. The Decision dated December 19, 2003 and Resolution dated May 11, 2004 of the Court of Appeals in CA-G.R. SP No. 78752 are REVERSED and SET ASIDE. The June 11, 2003 Order of the Regional Trial Court of Pasig, Branch 68 in SCA No. 1955 is declared NULL and VOID. SO ORDERED.

G.R. No. 158290

October 23, 2006

HILARION M. HENARES, JR., VICTOR C. AGUSTIN, ALFREDO L. HENARES, DANIEL L. HENARES, ENRIQUE BELO HENARES, and CRISTINA BELO HENARES, petitioners, vs. LAND TRANSPORTATION FRANCHISING AND REGULATORY BOARD and DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, respondents.

RESOLUTION QUISUMBING, J.: Petitioners challenge this Court to issue a writ of mandamus commanding respondents Land Transportation Franchising and Regulatory Board (LTFRB) and the Department of Transportation and Communications (DOTC) to require public utility vehicles (PUVs) to use compressed natural gas (CNG) as alternative fuel. Citing statistics from the Metro Manila Transportation and Traffic Situation Study of 1996,1 the Environmental Management Bureau (EMB) of the National Capital Region,2 a study of the Asian Development Bank,3 the Manila Observatory4 and the Department of Environment and Natural Resources5 (DENR) on the high growth and low turnover in vehicle ownership in the Philippines, including diesel-powered vehicles, two-stroke engine powered motorcycles and their concomitant emission of air pollutants, petitioners attempt to present a compelling case for judicial action against the bane of air pollution and related environmental hazards. Petitioners allege that the particulate matters (PM) complex mixtures of dust, dirt, smoke, and liquid droplets, varying in sizes and compositions emitted into the air from various engine combustions have caused detrimental effects on health, productivity, infrastructure and the overall quality of life. Petitioners particularly cite the effects of certain fuel emissions from engine combustion when these react to other pollutants. For instance, petitioners aver, with hydrocarbons, oxide of nitrogen (NOx) creates smog; with sulfur dioxide, it creates acid rain; and with ammonia, moisture and other compounds, it reacts to form nitric acid and harmful nitrates. Fuel emissions also cause retardation and leaf bleaching in plants. According to petitioner, another emission, carbon monoxide (CO), when not completely burned but emitted into the atmosphere and then inhaled can disrupt the necessary oxygen in blood. With prolonged exposure, CO affects the nervous system and can be lethal to people with weak hearts.6 Petitioners add that although much of the new power generated in the country will use natural gas while a number of oil and coal-fired fuel stations are being phased-out, still with the projected doubling of power generation over the next 10 years, and with the continuing high demand for motor vehicles, the energy and transport sectors are likely to remain the major sources of harmful emissions. Petitioners refer us to the study of the Philippine Environment Monitor 20027, stating that in four of the country's major cities, Metro Manila, Davao, Cebu and Baguio, the exposure to PM10, a finer PM which can penetrate deep into the lungs causing serious health problems, is estimated at over US$430 million.8 The study also reports that the emissions of PMs have caused the following: Over 2,000 people die prematurely. This loss is valued at about US$140 million. Over 9,000 people suffer from chronic bronchitis, which is valued at about US$120 million. Nearly 51 million cases of respiratory symptom days in Metro Manila (averaging twice a year in Davao and Cebu, and five to six times in Metro Manila and Baguio), costs about US$170 million. This is a 70 percent increase, over a decade, when compared with the findings of a similar study done in 1992 for Metro Manila, which reported 33 million cases.9

Petitioners likewise cite the University of the Philippines' studies in 1990-91 and 1994 showing that vehicular emissions in Metro Manila have resulted to the prevalence of chronic obstructive pulmonary diseases (COPD); that pulmonary tuberculosis is highest among jeepney drivers; and there is a 4.8 to 27.5 percent prevalence of respiratory symptoms among school children and 15.8 to 40.6 percent among child vendors. The studies also revealed that the children in Metro Manila showed more compromised pulmonary function than their rural counterparts. Petitioners infer that these are mostly due to the emissions of PUVs. To counter the aforementioned detrimental effects of emissions from PUVs, petitioners propose the use of CNG. According to petitioners, CNG is a natural gas comprised mostly of methane which although containing small amounts of propane and butane,10 is colorless and odorless and considered the cleanest fossil fuel because it produces much less pollutants than coal and petroleum; produces up to 90 percent less CO compared to gasoline and diesel fuel; reduces NOx emissions by 50 percent and cuts hydrocarbon emissions by half; emits 60 percent less PMs; and releases virtually no sulfur dioxide. Although, according to petitioners, the only drawback of CNG is that it produces more methane, one of the gases blamed for global warming.11 Asserting their right to clean air, petitioners contend that the bases for their petition for a writ of mandamus to order the LTFRB to require PUVs to use CNG as an alternative fuel, lie in Section 16,12 Article II of the 1987 Constitution, our ruling in Oposa v. Factoran, Jr.,13 and Section 414 of Republic Act No. 8749 otherwise known as the "Philippine Clean Air Act of 1999." Meantime, following a subsequent motion, the Court granted petitioners' motion to implead the Department of Transportation and Communications (DOTC) as additional respondent. In his Comment for respondents LTFRB and DOTC, the Solicitor General, cites Section 3, Rule 65 of the Revised Rules of Court and explains that the writ of mandamus is not the correct remedy since the writ may be issued only to command a tribunal, corporation, board or person to do an act that is required to be done, when he or it unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, there being no other plain, speedy and adequate remedy in the ordinary course of law.15 Further citing existing jurisprudence, the Solicitor General explains that in contrast to a discretionary act, a ministerial act, which a mandamus is, is one in which an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to a mandate of legal authority, without regard to or the exercise of his own judgment upon the propriety or impropriety of an act done. The Solicitor General also notes that nothing in Rep. Act No. 8749 that petitioners invoke, prohibits the use of gasoline and diesel by owners of motor vehicles. Sadly too, according to the Solicitor General, Rep. Act No. 8749 does not even mention the existence of CNG as alternative fuel and avers that unless this law is amended to provide CNG as alternative fuel for PUVs, the respondents cannot propose that PUVs use CNG as alternative fuel. The Solicitor General also adds that it is the DENR that is tasked to implement Rep. Act No. 8749 and not the LTFRB nor the DOTC. Moreover, he says, it is the Department of Energy (DOE), under Section 2616 of Rep. Act No. 8749, that is required to set the specifications for all types of fuel and fuel-related products to improve fuel compositions for improved efficiency and reduced emissions. He adds that under Section 2117 of the cited

Republic Act, the DOTC is limited to implementing the emission standards for motor vehicles, and the herein respondents cannot alter, change or modify the emission standards. The Solicitor General opines that the Court should declare the instant petition for mandamus without merit. Petitioners, in their Reply, insist that the respondents possess the administrative and regulatory powers to implement measures in accordance with the policies and principles mandated by Rep. Act No. 8749, specifically Section 218 and Section 21.19 Petitioners state that under these laws and with all the available information provided by the DOE on the benefits of CNG, respondents cannot ignore the existence of CNG, and their failure to recognize CNG and compel its use by PUVs as alternative fuel while air pollution brought about by the emissions of gasoline and diesel endanger the environment and the people, is tantamount to neglect in the performance of a duty which the law enjoins. Lastly, petitioners aver that other than the writ applied for, they have no other plain, speedy and adequate remedy in the ordinary course of law. Petitioners insist that the writ in fact should be issued pursuant to the very same Section 3, Rule 65 of the Revised Rules of Court that the Solicitor General invokes. In their Memorandum, petitioners phrase the issues before us as follows: I. WHETHER OR NOT THE PETITIONERS HAVE THE PERSONALITY TO BRING THE PRESENT ACTION II. WHETHER OR NOT THE PRESENT ACTION IS SUPPORTED BY LAW III. WHETHER OR NOT THE RESPONDENT IS THE AGENCY RESPONSIBLE TO IMPLEMENT THE SUGGESTED ALTERNATIVE OF REQUIRING PUBLIC UTILITY VEHICLES TO USE COMPRESSED NATURAL GAS (CNG) IV. WHETHER OR NOT THE RESPONDENT CAN BE COMPELLED TO REQUIRE PUBLIC UTILITY VEHICLES TO USE COMPRESSED NATURAL GAS THROUGH A WRIT OF MANDAMUS20 Briefly put, the issues are two-fold. First, Do petitioners have legal personality to bring this petition before us? Second, Should mandamus issue against respondents to compel PUVs to use CNG as alternative fuel? According to petitioners, Section 16,21 Article II of the 1987 Constitution is the policy statement that bestows on the people the right to breathe clean air in a healthy environment. This policy is enunciated in Oposa.22 The implementation of this policy is articulated in Rep. Act No. 8749. These, according to petitioners, are the bases for their standing to file the instant petition. They aver that when there is an omission by the government to safeguard a right, in this case their right to clean air, then, the citizens can resort to and exhaust all remedies to challenge this omission by the government. This, they say, is embodied in Section 423 of Rep. Act No. 8749. Petitioners insist that since it is the LTFRB and the DOTC that are the government agencies clothed with power to regulate and control motor vehicles, particularly PUVs, and with the same agencies' awareness and knowledge that the PUVs emit dangerous levels of

air pollutants, then, the responsibility to see that these are curbed falls under respondents' functions and a writ of mandamus should issue against them. The Solicitor General, for his part, reiterates his position that the respondent government agencies, the DOTC and the LTFRB, are not in a position to compel the PUVs to use CNG as alternative fuel. The Solicitor General explains that the function of the DOTC is limited to implementing the emission standards set forth in Rep. Act No. 8749 and the said law only goes as far as setting the maximum limit for the emission of vehicles, but it does not recognize CNG as alternative engine fuel. The Solicitor General avers that the petition should be addressed to Congress for it to come up with a policy that would compel the use of CNG as alternative fuel. Patently, this Court is being asked to resolve issues that are not only procedural. Petitioners challenge this Court to decide if what petitioners propose could be done through a less circuitous, speedy and unchartered course in an issue that Chief Justice Hilario G. Davide, Jr. in his ponencia in the Oposa case,24 describes as "inter-generational responsibility" and "inter-generational justice." Now, as to petitioners' standing. There is no dispute that petitioners have standing to bring their case before this Court. Even respondents do not question their standing. This petition focuses on one fundamental legal right of petitioners, their right to clean air. Moreover, as held previously, a party's standing before this Court is a procedural technicality which may, in the exercise of the Court's discretion, be set aside in view of the importance of the issue raised. We brush aside this issue of technicality under the principle of the transcendental importance to the public, especially so if these cases demand that they be settled promptly. Undeniably, the right to clean air not only is an issue of paramount importance to petitioners for it concerns the air they breathe, but it is also impressed with public interest. The consequences of the counter-productive and retrogressive effects of a neglected environment due to emissions of motor vehicles immeasurably affect the well-being of petitioners. On these considerations, the legal standing of the petitioners deserves recognition. Our next concern is whether the writ of mandamus is the proper remedy, and if the writ could issue against respondents. Under Section 3, Rule 65 of the Rules of Court, mandamus lies under any of the following cases: (1) against any tribunal which unlawfully neglects the performance of an act which the law specifically enjoins as a duty; (2) in case any corporation, board or person unlawfully neglects the performance of an act which the law enjoins as a duty resulting from an office, trust, or station; and (3) in case any tribunal, corporation, board or person unlawfully excludes another from the use and enjoyment of a right or office to which such other is legally entitled; and there is no other plain, speedy, and adequate remedy in the ordinary course of law. In University of San Agustin, Inc. v. Court of Appeals,25 we said, It is settled that mandamus is employed to compel the performance, when refused, of a ministerial duty, this being its main objective. It does not lie to require anyone to fulfill contractual obligations or to compel a course of conduct, nor to control or review the exercise of discretion. On the part of the petitioner, it is essential to the issuance of a writ of

mandamus that he should have a clear legal rightto the thing demanded and it must be the imperative duty of the respondent to perform the act required. It never issues in doubtful cases. While it may not be necessary that the duty be absolutely expressed, it must however, be clear. The writ will not issue to compel an official to do anything which is not his duty to do or which is his duty not to do, or give to the applicant anything to which he is not entitled by law. The writ neither confers powers nor imposes duties. It is simply a command to exercise a power already possessed and to perform a duty already imposed. (Emphasis supplied.) In this petition the legal right which is sought to be recognized and enforced hinges on a constitutional and a statutory policy already articulated in operational terms, e.g. in Rep. Act No. 8749, the Philippine Clean Air Act of 1999. Paragraph (a), Section 21 of the Act specifically provides that when PUVs are concerned, the responsibility of implementing the policy falls on respondent DOTC. It provides as follows: SEC 21. Pollution from Motor Vehicles. - a) The DOTC shall implement the emission standards for motor vehicles set pursuant to and as provided in this Act. To further improve the emission standards, the Department [DENR] shall review, revise and publish the standards every two (2) years, or as the need arises. It shall consider the maximum limits for all major pollutants to ensure substantial improvement in air quality for the health, safety and welfare of the general public. Paragraph (b) states: b) The Department [DENR] in collaboration with the DOTC, DTI and LGUs, shall develop an action plan for the control and management of air pollution from motor vehicles consistent with the Integrated Air Quality Framework . . . . (Emphasis supplied.) There is no dispute that under the Clean Air Act it is the DENR that is tasked to set the emission standards for fuel use and the task of developing an action plan. As far as motor vehicles are concerned, it devolves upon the DOTC and the line agency whose mandate is to oversee that motor vehicles prepare an action plan and implement the emission standards for motor vehicles, namely the LTFRB. In Oposa26 we said, the right to a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the environment. We also said, it is clearly the duty of the responsible government agencies to advance the said right. Petitioners invoke the provisions of the Constitution and the Clean Air Act in their prayer for issuance of a writ of mandamus commanding the respondents to require PUVs to use CNG as an alternative fuel. Although both are general mandates that do not specifically enjoin the use of any kind of fuel, particularly the use of CNG, there is an executive order implementing a program on the use of CNG by public vehicles. Executive Order No. 290, entitledImplementing the Natural Gas Vehicle Program for Public Transport (NGVPPT) , took effect on February 24, 2004. The program recognized, among others, natural gas as a clean burning alternative fuel for vehicle which has the potential to produce substantially lower pollutants; and the Malampaya Gas-to-Power Project as representing the beginning of the natural gas industry of the Philippines. Paragraph 1.2, Section 1 of E.O. No. 290 cites

as one of its objectives, the use of CNG as a clean alternative fuel for transport. Furthermore, one of the components of the program is the development of CNG refueling stations and all related facilities in strategic locations in the country to serve the needs of CNG-powered PUVs. Section 3 of E.O. No. 290, consistent with E.O. No. 66, series of 2002, designated the DOE as the lead agency (a) in developing the natural gas industry of the country with the DENR, through the EMB and (b) in formulating emission standards for CNG. Most significantly, par. 4.5, Section 4 tasks the DOTC, working with the DOE, to develop an implementation plan for "a gradual shift to CNG fuel utilization in PUVs and promote NGVs [natural gas vehicles] in Metro Manila and Luzon through the issuance of directives/orders providing preferential franchises in present day major routes and exclusive franchises to NGVs in newly opened routes" A thorough reading of the executive order assures us that implementation for a cleaner environment is being addressed. To a certain extent, the instant petition had been mooted by the issuance of E.O. No. 290. Regrettably, however, the plain, speedy and adequate remedy herein sought by petitioners, i.e., a writ of mandamus commanding the respondents to require PUVs to use CNG, is unavailing. Mandamus is available only to compel the doing of an act specifically enjoined by law as a duty. Here, there is no law that mandates the respondents LTFRB and the DOTC to order owners of motor vehicles to use CNG. At most the LTFRB has been tasked by E.O. No. 290 in par. 4.5 (ii), Section 4 "to grant preferential and exclusive Certificates of Public Convenience (CPC) or franchises to operators of NGVs based on the results of the DOTC surveys." Further, mandamus will not generally lie from one branch of government to a coordinate branch, for the obvious reason that neither is inferior to the other.27 The need for future changes in both legislation and its implementation cannot be preempted by orders from this Court, especially when what is prayed for is procedurally infirm. Besides, comity with and courtesy to a coequal branch dictate that we give sufficient time and leeway for the coequal branches to address by themselves the environmental problems raised in this petition. In the same manner that we have associated the fundamental right to a balanced and healthful ecology with the twin concepts of "inter-generational responsibility" and "intergenerational justice" in Oposa,28 where we upheld the right of future Filipinos to prevent the destruction of the rainforests, so do we recognize, in this petition, the right of petitioners and the future generation to clean air. In Oposa we said that if the right to a balanced and healthful ecology is now explicitly found in the Constitution even if the right is "assumed to exist from the inception of humankind, it is because of the well-founded fear of its framers [of the Constitution] that unless the rights to a balanced and healthful ecology and to health are mandated as state policies by the Constitution itself, thereby highlighting their continuing importance and imposing upon the state a solemn obligation to preserve the first and protect and advance the second, the day would not be too far when all else would be lost not only for the present generation, but also for those to come. . ."29 It is the firm belief of this Court that in this case, it is timely to reaffirm the premium we have placed on the protection of the environment in the landmark case of Oposa. Yet, as serious as the statistics are on air pollution, with the present fuels deemed toxic as they are to the environment, as fatal as these pollutants are to the health of the citizens, and urgently requiring resort to drastic measures to reduce air pollutants emitted by motor vehicles, we must admit in particular that petitioners are unable to pinpoint the law that imposes an indubitable legal duty on respondents that will justify a grant of the writ of mandamus compelling the use of CNG for public utility vehicles. It appears to us that more properly, the legislature should provide first the specific statutory remedy to the complex

environmental problems bared by herein petitioners before any judicial recourse by mandamus is taken. WHEREFORE, the petition for the issuance of a writ of mandamus is DISMISSED for lack of merit. SO ORDERED.

November 12, 1998, SSS Branch Manager Elnora Montenegro and Senior Physicians Corazon Bondoc and Annabelle Bonifacio recommended the denial of petitioners claim on the ground that Adenocarcinoma of the Lungs (Cancer of the Lungs) had no causal relationship with Juanchos job as a route salesman.6 Petitioners motion for reconsideration was denied. Hence, petitioner brought the case to the Employees Compensation Commission (ECC), which affirmed the decision of the SSS. In its Decision7 dated October 7, 1999, the ECC relied upon the Quality Assurance Medical Report prepared by Dr. Ma. Victoria M. Abesamis for the SSS stating that Juanchos exposure to smog and dust is not associated with the development of lung cancer.8 Petitioner elevated the case to the Court of Appeals arguing that Juanchos route as a salesman exposed him to all kinds of pollutants, not to mention the daily hazards and fatigue that came with his tasks. She pointed out that the SSS and the ECC disregarded Juanchos medical history and the fact that the risk of contracting Juanchos ailment was increased by the nature of his work.9 In its Comment, ECC averred that the presumption of compensability and the theory of aggravation prevalent under the Workmen s Compensation Act have been abandoned. Under the implementing rules of P.D. 626, as amended, for the sickness and the resulting disability or death to be compensable, the sickness must be the result of an occupational disease listed under Annex A of the Rules with the conditions set therein satisfied, otherwise, proof must be shown that the risk of contracting the disease is increased by the working conditions. The ECC argued that neither condition is present in Juanchos case since lung cancer is not an occupational disease nor is the risk of contracting lung cancer increased by Juanchos working conditions.10 The SSS joined the arguments of the ECC and added that petitioner was not able to present substantial evidence to overcome the conclusion reached by the SSS that Juanchos cause of death was not work-connected.11 In her Reply, petitioner cited the raison dtre for the passage of Republic Act No. 8749, otherwise known as the Clean Air Act. Petitioner stated that the Act provides for a comprehensive pollution control policy that mainly concentrates on the prohibition of leaded gasoline due to its scientifically proven deleterious effect on the health of individuals.12 Petitioner likewise attached a clipping from the newspaper Manila Standard13 containing a report stating that if the present level of diesel exhaust continues, the pollution could be expected to cause more than 125,000 cases of lung cancer in 70 years. On April 12, 2000, the Court of Appeals affirmed the decision of the ECC, stating that the factual findings of quasi-judicial agencies, such as the ECC, if supported by substantial evidence, are entitled to great respect in view of their expertise in their respective fields.14 Petitioners Motion for Reconsideration15 was denied for lack of merit.16 Hence, this petition for review on certiorari, raising the lone issue: WHETHER OR NOT THE DECISION OF THE HONORABLE COURT OF APPEALS DENYING PETITIONERS CLAIM UNDER P.D. 626, AS AMENDED, IS IN ACCORDANCE WITH THE RULES ON EMPLOYEES COMPENSATION AND EXISTING JURISPRUDENCE. Petitioner claims that the judgment of the Court of Appeals was premised upon a misapprehension of the relevant facts of the case at bar. She anchors her petition on the fact that while the cause of her husband Juanchos death was Adenocarcinoma of the lungs, he nonetheless suffered from two listed occupational diseases, namely pulmonary

G.R. No. 146360

May 20, 2004 SALALIMA, petitioner, and SOCIAL SECURITY

AZUCENA O. vs. EMPLOYEES COMPENSATION COMMISSION SYSTEM, respondents. DECISION YNARES-SANTIAGO, J.:

Before us is a petition for review on certiorari of the Decision1 of the Court of Appeals dated April 12, 2000 as well as its Resolution dated December 6, 2000, which affirmed the Employees Compensation Commissions denial of petitioners claim for compensation benefits resulting from the death of her husband, Juancho Salalima, under Presidential Decree No. 626, as amended. Petitioners husband, Juancho S. Salalima, was employed for twenty -nine years as a route helper and subsequently as route salesman for the Meycauayan Plant of Coca-Cola Bottlers Phils., Incorporated. In 1989, during an annual company medical examination, Juancho was diagnosed with minimal pulmonary tuberculosis.2His illness remained stationary until October 1994 when Juancho was confined at the Manila Doctors Hospital to undergo section biopsy. His biopsy revealed that he had "Adenocarcinoma, poorly differentiated, metastatic".3Consequently, he underwent chemotherapy at the Makati Medical Center. On February 1, 1995, he was found to be suffering from pneumonia.4 On February 14, 1995, he was confined at the Makati Medical Center. He died two days later on February 16, 1995 due to "Adenocarcinoma of the Lungs with widespread metastasis to Neck, Brain, Peritoneal Cavity, Paracaval Lymph Nodes, Abscen; Acute Renal Failure; Septicemia; Upper Gastrointestinal Bleeding".5 A claim for compensation benefits under P.D. 626 as amended was filed by his surviving wife, Azucena, petitioner herein, with the Social Security System (SSS). In a report dated

tuberculosis and pneumonia, prior to his untimely demise, which she insists justifies her claim for death benefits. We find merit in the petition. P.D. No. 62617 amended Title II of Book IV on the ECC and State Insurance Fund of the Labor Code. Under the provisions of the law as amended, for the sickness and resulting disability or death to be compensable, the claimant must prove that: (a) the sickness must be the result of an occupational disease listed under Annex "A" of the Rules on Employees Compensation, or (b) the risk of contracting the disease was increased by the claimants working conditions.18 This means that if the illness or disease that caused the death of the member is not included in the said Annex "A," then his heirs are entitled to compensation only if it can be proven that the risk of contracting the illness or disease was increased by the members working conditions. Under the present law, Adenocarcinoma of the lungs (cancer of the lungs) which was the immediate cause of Juanchos death as stated in his death certificate, while listed as an occupational disease, is compensable only among vinyl chloride workers and plastic workers.19 This, however, would not automatically bar petitioners claim for as long as she could prove that Juanchos risk of contracting the disease was increased by the latters working conditions.20 In the case at bar, there are two conflicting medical reports on the correlation between Juanchos work as a route salesman and the illness he suffered which was the immediate cause of his demise. Dr. Pablo S. Santos, Coca-Colas Head of Medical Services, stated in his report that while Juanchos job does not expose him to any chemical material used within the plant, consideration must be given to smog and dust as factors in the development of his lung cancer.21 On the other hand, Dr. Ma. Victoria M. Abesamis of the Social Security System declared in her report that Juanchos exposure to smog and dust is not associated with the development of lung cancer.22 According to medical experts, Adenocarcinoma of the lungs is one of the four major histologic varieties of bronchogenic carcinoma, the characterization being based upon the cell types that compose the carcinoma. Bronchogenic carcinoma, more commonly known as lung cancer, is the term used to designate nearly all types of malignant lung tumors. Medical books list the etiology of lung cancers as follows: cigarette smoking, occupational exposure, air pollution, and other factors such as preexisting lung damage and genetic influences.23 We agree with petitioner that the respondent government agencies failed to take into consideration Juanchos medical history in their assessment of the claim for benefits filed by petitioner. For a considerable stretch of Juanchos stay at Coca -Cola, he was found to be suffering from pulmonary tuberculosis. Several months before his demise, he was diagnosed with Adenocarcinoma of the lungs. A little over two weeks before his death, Juancho was afflicted with pneumonia. The obvious deduction is that Juancho, from the time he acquired pulmonary tuberculosis until his passing away, was predisposed to varied lung diseases. It is worth noting that tuberculosis is most commonly confused with carcinoma of the lung because the highest incidence of both diseases is in the upper lobe of the lungs and in older men. The symptoms of both diseases include loss of weight, chronic cough, blood-streaked sputum and mild fever.24 Likewise, numerous studies indicate that scars within the lungs

and diffuse pulmonary fibrosis are associated with a slightly increased incidence of lung cancer.25 Tuberculosis is a disease characterized by lesions in the lungs as well as tuberculous scars.26 Thus, in light of Juanchos continued exposure to detrimental work environment and constant fatigue, the possibility that Juanchos Adenocarcinoma of the lungs developed from the worsening of his pulmonary tuberculosis is not remote. The degree of proof required under P.D. No. 626 is merely substantial evidence, which means, "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." What the law requires is a reasonable work-connection and not a direct causal relation. It is enough that the hypothesis on which the workmen's claim is based is probable. Medical opinion to the contrary can be disregarded especially where there is some basis in the facts for inferring a work-connection. Probability, not certainty, is the touchstone.27 In Juanchos case, we believe that this probability exists. Juanchos job required long hours on the streets as well as his carrying of cases of soft drinks during sales calls. The combination of fatigue and the pollutants that abound in his work environment verily contributed to the worsening of his already weak respiratory system. His continuous exposure to these factors may have led to the development of his cancer of the lungs. It escapes reason as well as ones sense of equity that Juanchos heirs should now be denied compensation (death) benefits for the sole reason that his illness immediately before he died was not compensable in his line of work. The picture becomes more absurd when we consider that had Juancho died a few years earlier, when the diagnosis on him revealed only pulmonary tuberculosis, his heirs would not perhaps be going through this arduous path to claim their benefits. Denying petitioners claim is tantamount to punishing them for Juanchos death of a graver illness. P.D. 626, as amended, is said to have abandoned the presumption of compensability and the theory of aggravation prevalent under the Workmens Compensation Act. Despite such abandonment, however, the present law has not ceased to be an employees compensation law or a social legislation; hence, the liberality of the law in favor of the working man and woman still prevails, and the official agency charged by law to implement the constitutional guarantee of social justice should adopt a liberal attitude in favor of the employee in deciding claims for compensability, especially in light of the compassionate policy towards labor which the 1987 Constitution vivifies and enhances.28 WHEREFORE, in view of the foregoing, the petition for review on certiorari is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP No. 56174 dated April 12, 2000 is REVERSED and SET ASIDE. The Social Security System is ordered to pay petitioner Azucena Salalimas claim for death benefits under the Employees Compensation Act. SO ORDERED.

G.R. No. 156052

March 7, 2007

SOCIAL JUSTICE SOCIETY (SJS), VLADIMIR ALARIQUE T. CABIGAO, and BONIFACIO S. TUMBOKON,Petitioners, vs. HON. JOSE L. ATIENZA, JR., in his capacity as Mayor of the City of Manila, Respondent.

DECISION CORONA, J.: In this original petition for mandamus,1 petitioners Social Justice Society (SJS), Vladimir Alarique T. Cabigao and Bonifacio S. Tumbokon seek to compel respondent Hon. Jose L. Atienza, Jr., mayor of the City of Manila, to enforce Ordinance No. 8027. The antecedents are as follows. On November 20, 2001, the Sangguniang Panlungsod of Manila enacted Ordinance No. 8027.2 Respondent mayor approved the ordinance on November 28, 2001.3 It became effective on December 28, 2001, after its publication.4 Ordinance No. 8027 was enacted pursuant to the police power delegated to local government units, a principle described as the power inherent in a government to enact laws, within constitutional limits, to promote the order, safety, health, morals and general welfare of the society.5 This is evident from Sections 1 and 3 thereof which state: SECTION 1. For the purpose of promoting sound urban planning and ensuring health, public safety, and general welfare of the residents of Pandacan and Sta. Ana as well as its adjoining areas, the land use of [those] portions of land bounded by the Pasig River in the north, PNR Railroad Track in the east, Beata St. in the south, Palumpong St. in the southwest, and Estero de Pancacan in the west[,] PNR Railroad in the northwest area, Estero de Pandacan in the [n]ortheast, Pasig River in the southeast and Dr. M.L. Carreon in the southwest. The area of Punta, Sta. Ana bounded by the Pasig River, Marcelino Obrero St., Mayo 28 St., and F. Manalo Street, are hereby reclassified from Industrial II to Commercial I. xxx xxx xxx SEC. 3. Owners or operators of industries and other businesses, the operation of which are no longer permitted under Section 1 hereof, are hereby given a period of six (6) months from the date of effectivity of this Ordinance within which to cease and desist from the operation of businesses which are hereby in consequence, disallowed. Ordinance No. 8027 reclassified the area described therein from industrial to commercial and directed the owners and operators of businesses disallowed under Section 1 to cease and desist from operating their businesses within six months from the date of effectivity of the ordinance. Among the businesses situated in the area are the so-called "Pandacan Terminals" of the oil companies Caltex (Philippines), Inc., Petron Corporation and Pilipinas Shell Petroleum Corporation. However, on June 26, 2002, the City of Manila and the Department of Energy (DOE) entered into a memorandum of understanding (MOU)6 with the oil companies in which they agreed that "the scaling down of the Pandacan Terminals [was] the most viable and practicable option." Under the MOU, the oil companies agreed to perform the following: Section 1. - Consistent with the objectives stated above, the OIL COMPANIES shall, upon signing of this MOU, undertake a program to scale down the Pandacan Terminals which

shall include, among others, the immediate removal/decommissioning process of TWENTY EIGHT (28) tanks starting with the LPG spheres and the commencing of works for the creation of safety buffer and green zones surrounding the Pandacan Terminals. xxx Section 2. Consistent with the scale-down program mentioned above, the OIL COMPANIES shall establish joint operations and management, including the operation of common, integrated and/or shared facilities, consistent with international and domestic technical, safety, environmental and economic considerations and standards. Consequently, the joint operations of the OIL COMPANIES in the Pandacan Terminals shall be limited to the common and integrated areas/facilities. A separate agreement covering the commercial and operational terms and conditions of the joint operations, shall be entered into by the OIL COMPANIES. Section 3. - The development and maintenance of the safety and green buffer zones mentioned therein, which shall be taken from the properties of the OIL COMPANIES and not from the surrounding communities, shall be the sole responsibility of the OIL COMPANIES. The City of Manila and the DOE, on the other hand, committed to do the following: Section 1. - The City Mayor shall endorse to the City Council this MOU for its appropriate action with the view of implementing the spirit and intent thereof. Section 2. - The City Mayor and the DOE shall, consistent with the spirit and intent of this MOU, enable the OIL COMPANIES to continuously operate in compliance with legal requirements, within the limited area resulting from the joint operations and the scale down program. Section 3. - The DOE and the City Mayor shall monitor the OIL COMPANIES compliance with the provisions of this MOU. Section 4. - The CITY OF MANILA and the national government shall protect the safety buffer and green zones and shall exert all efforts at preventing future occupation or encroachment into these areas by illegal settlers and other unauthorized parties. The Sangguniang Panlungsod ratified the MOU in Resolution No. 97.7 In the same resolution, the Sangguniandeclared that the MOU was effective only for a period of six months starting July 25, 2002.8 Thereafter, on January 30, 2003, the Sanggunian adopted Resolution No. 139 extending the validity of Resolution No. 97 to April 30, 2003 and authorizing Mayor Atienza to issue special business permits to the oil companies. Resolution No. 13, s. 2003 also called for a reassessment of the ordinance.10 Meanwhile, petitioners filed this original action for mandamus on December 4, 2002 praying that Mayor Atienza be compelled to enforce Ordinance No. 8027 and order the immediate removal of the terminals of the oil companies.11 The issues raised by petitioners are as follows: 1. whether respondent has the mandatory legal duty to enforce Ordinance No. 8027 and order the removal of the Pandacan Terminals, and

2. whether the June 26, 2002 MOU and the resolutions ratifying it can amend or repeal Ordinance No. 8027.12 Petitioners contend that respondent has the mandatory legal duty, under Section 455 (b) (2) of the Local Government Code (RA 7160),13 to enforce Ordinance No. 8027 and order the removal of the Pandacan Terminals of the oil companies. Instead, he has allowed them to stay. Respondents defense is that Ordinance No. 8027 has been superseded by the MOU and the resolutions.14However, he also confusingly argues that the ordinance and MOU are not inconsistent with each other and that the latter has not amended the former. He insists that the ordinance remains valid and in full force and effect and that the MOU did not in any way prevent him from enforcing and implementing it. He maintains that the MOU should be considered as a mere guideline for its full implementation.15 Under Rule 65, Section 316 of the Rules of Court, a petition for mandamus may be filed when any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust or station. Mandamus is an extraordinary writ that is employed to compel the performance, when refused, of a ministerial duty that is already imposed on the respondent and there is no other plain, speedy and adequate remedy in the ordinary course of law. The petitioner should have a well-defined, clear and certain legal right to the performance of the act and it must be the clear and imperative duty of respondent to do the act required to be done.17 Mandamus will not issue to enforce a right, or to compel compliance with a duty, which is questionable or over which a substantial doubt exists. The principal function of the writ of mandamus is to command and to expedite, not to inquire and to adjudicate; thus, it is neither the office nor the aim of the writ to secure a legal right but to implement that which is already established. Unless the right to the relief sought is unclouded, mandamus will not issue.18 To support the assertion that petitioners have a clear legal right to the enforcement of the ordinance, petitioner SJS states that it is a political party registered with the Commission on Elections and has its offices in Manila. It claims to have many members who are residents of Manila. The other petitioners, Cabigao and Tumbokon, are allegedly residents of Manila. We need not belabor this point. We have ruled in previous cases that when a mandamus proceeding concerns a public right and its object is to compel a public duty, the people who are interested in the execution of the laws are regarded as the real parties in interest and they need not show any specific interest.19 Besides, as residents of Manila, petitioners have a direct interest in the enforcement of the citys ordinances. Respondent never questioned the right of petitioners to institute this proceeding. On the other hand, the Local Government Code imposes upon respondent the duty, as city mayor, to "enforce all laws and ordinances relative to the governance of the city.">20 One of these is Ordinance No. 8027. As the chief executive of the city, he has the duty to enforce Ordinance No. 8027 as long as it has not been repealed by theSanggunian or annulled by the courts.21 He has no other choice. It is his ministerial duty to do so. In Dimaporo v. Mitra, Jr.,22 we stated the reason for this:

These officers cannot refuse to perform their duty on the ground of an alleged invalidity of the statute imposing the duty. The reason for this is obvious. It might seriously hinder the transaction of public business if these officers were to be permitted in all cases to question the constitutionality of statutes and ordinances imposing duties upon them and which have not judicially been declared unconstitutional. Officers of the government from the highest to the lowest are creatures of the law and are bound to obey it.23 The question now is whether the MOU entered into by respondent with the oil companies and the subsequent resolutions passed by the Sanggunian have made the respondents duty to enforce Ordinance No. 8027 doubtful, unclear or uncertain. This is also connected to the second issue raised by petitioners, that is, whether the MOU and Resolution Nos. 97, s. 2002 and 13, s. 2003 of the Sanggunian can amend or repeal Ordinance No. 8027. We need not resolve this issue. Assuming that the terms of the MOU were inconsistent with Ordinance No. 8027, the resolutions which ratified it and made it binding on the City of Manila expressly gave it full force and effect only until April 30, 2003. Thus, at present, there is nothing that legally hinders respondent from enforcing Ordinance No. 8027.24 Ordinance No. 8027 was enacted right after the Philippines, along with the rest of the world, witnessed the horror of the September 11, 2001 attack on the Twin Towers of the World Trade Center in New York City. The objective of the ordinance is to protect the residents of Manila from the catastrophic devastation that will surely occur in case of a terrorist attack25 on the Pandacan Terminals. No reason exists why such a protective measure should be delayed. WHEREFORE, the petition is hereby GRANTED. Respondent Hon. Jose L. Atienza, Jr., as mayor of the City of Manila, is directed to immediately enforce Ordinance No. 8027.
SO ORDERED.

You might also like