G.R. No.

L-2662 March 26, 1949

SHIGENORI KURODA, petitioner,

vs.
Major General RAFAEL JALANDONI, Brigadier General CALIXTO DUQUE, Colonel
MARGARITO TORALBA, Colonel IRENEO BUENCONSEJO, Colonel PEDRO TABUENA,
Major FEDERICO ARANAS, MELVILLE S. HUSSEY and ROBERT PORT, respondents.

Pedro Serran, Jose G. Lukban, and Liberato B. Cinco for petitioner.

Fred Ruiz Castro Federico Arenas Mariano Yengco, Jr., Ricardo A. Arcilla and S. Melville Hussey for
respondents.

MORAN, C.J.:

Shigenori Kuroda, formerly a Lieutenant-General of the Japanese Imperial Army and Commanding
General of the Japanese Imperial Forces in The Philippines during a period covering 19433 and 19444
who is now charged before a military Commission convened by the Chief of Staff of the Armed forces
of the Philippines with having unlawfully disregarded and failed "to discharge his duties as such
command, permitting them to commit brutal atrocities and other high crimes against noncombatant
civilians and prisoners of the Imperial Japanese Forces in violation of the laws and customs of war"
comes before this Court seeking to establish the illegality of Executive Order No. 68 of the President of
the Philippines: to enjoin and prohibit respondents Melville S. Hussey and Robert Port from
participating in the prosecution of petitioner's case before the Military Commission and to permanently
prohibit respondents from proceeding with the case of petitioners.

In support of his case petitioner tenders the following principal arguments.

First. "That Executive Order No. 68 is illegal on the ground that it violates not only the provision of
our constitutional law but also our local laws to say nothing of the fact (that) the Philippines is not a
signatory nor an adherent to the Hague Convention on Rules and Regulations covering Land Warfare
and therefore petitioners is charged of 'crimes' not based on law, national and international." Hence
petitioner argues "That in view off the fact that this commission has been empanelled by virtue of an
unconstitutional law an illegal order this commission is without jurisdiction to try herein petitioner."

Second. That the participation in the prosecution of the case against petitioner before the
Commission in behalf of the United State of America of attorneys Melville Hussey and Robert Port
who are not attorneys authorized by the Supreme Court to practice law in the Philippines is a
diminution of our personality as an independent state and their appointment as prosecutor are a
violation of our Constitution for the reason that they are not qualified to practice law in the Philippines.

Third. That Attorneys Hussey and Port have no personality as prosecution the United State not
being a party in interest in the case.

Executive Order No. 68, establishing a National War Crimes Office prescribing rule and regulation
governing the trial of accused war criminals, was issued by the President of the Philippines on the 29th
days of July, 1947 This Court holds that this order is valid and constitutional. Article 2 of our
Constitution provides in its section 3, that

1|Page
 The Philippines renounces war as an instrument of national policy and adopts the generally
accepted principles of international law as part of the of the nation.

In accordance with the generally accepted principle of international law of the present day including
the Hague Convention the Geneva Convention and significant precedents of international jurisprudence
established by the United Nation all those person military or civilian who have been guilty of planning
preparing or waging a war of aggression and of the commission of crimes and offenses consequential
and incidental thereto in violation of the laws and customs of war, of humanity and civilization are held
accountable therefor. Consequently in the promulgation and enforcement of Execution Order No. 68
the President of the Philippines has acted in conformity with the generally accepted and policies of
international law which are part of the our Constitution.

The promulgation of said executive order is an exercise by the President of his power as Commander in
chief of all our armed forces as upheld by this Court in the case of Yamashita vs. Styer (L-129, 42 Off.
Gaz., 664) 1 when we said

War is not ended simply because hostilities have ceased. After cessation of armed hostilities
incident of war may remain pending which should be disposed of as in time of war. An
importance incident to a conduct of war is the adoption of measure by the military command not
only to repel and defeat the enemies but to seize and subject to disciplinary measure those
enemies who in their attempt to thwart or impede our military effort have violated the law of
war. (Ex parte Quirin 317 U.S., 1; 63 Sup. Ct., 2.) Indeed the power to create a military
commission for the trial and punishment of war criminals is an aspect of waging war. And in the
language of a writer a military commission has jurisdiction so long as a technical state of war
continues. This includes the period of an armistice or military occupation up to the effective of a
treaty of peace and may extend beyond by treaty agreement. (Cowles Trial of War Criminals by
Military Tribunals, America Bar Association Journal June, 1944.)

Consequently, the President as Commander in Chief is fully empowered to consummate this unfinished
aspect of war namely the trial and punishment of war criminal through the issuance and enforcement of
Executive Order No. 68.

Petitioner argues that respondent Military Commission has no Jurisdiction to try petitioner for acts
committed in violation of the Hague Convention and the Geneva Convention because the Philippines is
not a signatory to the first and signed the second only in 1947. It cannot be denied that the rules and
regulation of the Hague and Geneva conventions form, part of and are wholly based on the generally
accepted principals of international law. In facts these rules and principles were accepted by the two
belligerent nation the United State and Japan who were signatories to the two Convention, Such rule
and principles therefore form part of the law of our nation even if the Philippines was not a signatory to
the conventions embodying them for our Constitution has been deliberately general and extensive in its
scope and is not confined to the recognition of rule and principle of international law as continued inn
treaties to which our government may have been or shall be a signatory.

Furthermore when the crimes charged against petitioner were allegedly committed the Philippines was
under the sovereignty of United States and thus we were equally bound together with the United States
and with Japan to the right and obligation contained in the treaties between the belligerent countries.
These rights and obligation were not erased by our assumption of full sovereignty. If at all our
emergency as a free state entitles us to enforce the right on our own of trying and punishing those who
2|Page
committed crimes against crimes against our people. In this connection it is well to remember what we
have said in the case of Laurel vs. Misa (76 Phil., 372):

. . . The change of our form government from Commonwealth to Republic does not affect the
prosecution of those charged with the crime of treason committed during then Commonwealth
because it is an offense against the same sovereign people. . . .

By the same token war crimes committed against our people and our government while we were a
Commonwealth are triable and punishable by our present Republic.

Petitioner challenges the participation of two American attorneys namely Melville S. Hussey and
Robert Port in the prosecution of his case on the ground that said attorney's are not qualified to practice
law in Philippines in accordance with our Rules of court and the appointment of said attorneys as
prosecutors is violative of our national sovereignty.

In the first place respondent Military Commission is a special military tribunal governed by a special
law and not by the Rules of court which govern ordinary civil court. It has already been shown that
Executive Order No. 68 which provides for the organization of such military commission is a valid and
constitutional law. There is nothing in said executive order which requires that counsel appearing
before said commission must be attorneys qualified to practice law in the Philippines in accordance
with the Rules of Court. In facts it is common in military tribunals that counsel for the parties are
usually military personnel who are neither attorneys nor even possessed of legal training.

Secondly the appointment of the two American attorneys is not violative of our nation sovereignty. It is
only fair and proper that United States, which has submitted the vindication of crimes against her
government and her people to a tribunal of our nation should be allowed representation in the trial of
those very crimes. If there has been any relinquishment of sovereignty it has not been by our
government but by the United State Government which has yielded to us the trial and punishment of
her enemies. The least that we could do in the spirit of comity is to allow them representation in said
trials.

Alleging that the United State is not a party in interest in the case petitioner challenges the personality
of attorneys Hussey and Port as prosecutors. It is of common knowledge that the United State and its
people have been equally if not more greatly aggrieved by the crimes with which petitioner stands
charged before the Military Commission. It can be considered a privilege for our Republic that a leader
nation should submit the vindication of the honor of its citizens and its government to a military
tribunal of our country.

The Military Commission having been convened by virtue of a valid law with jurisdiction over the
crimes charged which fall under the provisions of Executive Order No. 68, and having said petitioner
in its custody, this Court will not interfere with the due process of such Military commission.

For all the foregoing the petition is denied with costs de oficio.

3|Page
G.R. No. L-4352 September 28, 1951

VICTOR BOROVSKY, petitioner,

vs.
THE COMMISSIONER OF IMMIGRATION and THE DIRECTOR OF PRISONS, respondents.

TUASON, J.:

This is a second petition for habeas corpus filed by the petitioner with this Court, first having been
denied in a decision promulgated on June 30, 1949.

Victor A. Borovsky, the petitioner, claims to be a stateless citizen, born in Shanghai, China, of Russian
parentage. He came to the Philippines in 1936 and had resided therein ever since, if the period of his
detention be included.

On June 24, 1946, by order of the Commissioner of immigration of the Philippines the petitioner was
arrested for investigation as to his past activities. Following his arrest, a warrant for deportation was
issued by the Deportation Board, which is said to have been found him an undesirable alien, a vagrant
and habitual drunkard. The petitioner protests that he was not given a hearing, nor informed of the
charges preferred against him. This point however is unimportant in this proceeding.

In May, 1947, the petitioner was put on board a ship which took him to Shanghai, but he was not
allowed to land there because he was not a national of China and was not provided with an entry visa.
He was therefore brought back to Manila and was confined to the new Bilibid Prison in Muntinlupa
until December 8, 1947, when he was granted provisional release by the President through Secretary of
Justice for a period of six months. Before the expiration of that period, namely, on March 20, 1948, the
Commissioner of Immigration caused his rearrest and he has been in confinement in the above-
mentioned prison ever since.

In his return to the writ, the Solicitor General in behalf of the respondents alleges that the
Commissioner of Immigration "has availed of every opportunity presented to carry out the deportation
order as shown by the fact that when the petitioner was enjoying his provisional release after the
unsuccessful attempt to deport him to Shanghai, China, he was again re-arrested and flown to Cebu for
the purpose of placing him on board a Russian vessel which he has called at the port, with a view to
carrying out the deportation order issued against him, but said deportation was not carried out for the
reason that the captain of the said boat refused to take on board the herein petitioner on the ground that
he had no permission from the Russian government to take on board the petitioner." It is further alleged
that "the immigration officials have taken steps regarding the disposition of those foreigners subject to
deportation while awaiting availability of transportation or arrangements to the place where they may
be sent."

In this Court's majority decision on the first application it was observed that the applicant's detention
was temporary, and it was held that "temporary detention is a necessary step in the process of exclusion
or expulsion of undesirable aliens and that pending arrangements for his deportation, the Government
has the right to hold the undesirable alien under for a reasonable length of time." It took note of that
"this Government desires to expel the alien, and does not relish keeping him at the people's expense . . .
making efforts to carry out the decree of exclusion by the highest officer of the land." No period was
fixed within which the immigration authorities were to carry out the contemplated deportation beyond
4|Page
the statement that "The meaning of `reasonable time' depends upon the circumstances, specially the
difficulties of obtaining a passport, the availability of transportation, the diplomatic arrangements with
the governments concerned and the efforts displayed to send the deportee away," but the Court warned
that "under established precedents, too long a issuance of a writ of habeas corpus."

Mr. Justice Paras, now Chief Justice, Mr. Justice Feria, Mr. Justice Perfecto, and the writer of this
decision dissented. Mr. Justice Feria and Mr. Justice Perfecto voted for outright discharge of the
prisoner from custody. Mr. Justice Paras qualified his dissent by stating that he might agree "to a
further detention of the herein petitioner, provided that he be released if after six months, the
Government is still unable to deport him." This writer joined in the latter dissent but thought that two
months constituted reasonable time.

Over two years having elapsed since the decision aforesaid was promulgated, the Government has not
found ways and means of removing the petitioner out of the country, and none are insight, although, it
should be in justice to the deportation authorities, it was through no fault of theirs that no ship or
country would take the petitioner.

Aliens illegally staying in the Philippines have no right of asylum therein (Soewapadji vs. Wixon, Sept.
13, 1946, 157 F. ed., 289, 290), even if they are "stateless," which the petitioner claims to be. It is no
less true however, as impliedly stated in this court's decision, supra, and numerous American decisions,
that foreign nationals, not enemy, against whom no criminal charges have been formally made or
judicial order issued, may not indefinitely be kept in detention. The protection against deprivation of
liberty, without due process of law and except for crimes committed against the laws of the land is not
limited to Philippine citizens but extends to all residents, except enemy aliens, regardless of nationality.
Whether an alien who entered the country in violation of its immigration laws may be detained for as
long as the Government is unable to deport him, is beside the point and we need not decide. There is no
allegation that the petitioner's entry into the Philippines was not lawful; on the contrary, the inference
from the pleadings and the Deportation Board's findings is that he came to and lived in this country
under legal permit.

Moreover, by its Constitution (Art. II, sec. 3) the Philippines "adopts the generally accepted principles
of international law as part of the law of Nation." And in a resolution entitled "Universal Declaration of
Human Rights" and approved by the General Assembly of the United Nations of which the Philippines
is a member, at its plenary meeting on December 10, 1948, the right to life and liberty and all other
fundamental rights as applied to all human beings were proclaimed. lt was there resolved that "All
human beings are born free and equal in degree and rights" (Art. 1); that "Everyone is entitled to all the
rights and freedom set forth in this Declaration, without distinction of any kind, such as race, colour,
sex, language, religion, political or other opinion, nationality or social origin, property, birth, or other
status (Art. 2) ; that "Everyone has the right to an effective remedy by the competent national tribunals
for acts violating the fundamental rights granted him by the Constitution or by law" (Art. 8); that "No
one shall be subjected to arbitrary arrest, detention or exile" (Art. 9) etc.

In U. S. vs. Nichols, 47 Fed. Supp., 201, it was said that the court "has the power to release from
custody an alien who has been detained an unreasonably long period of time by the Department of
justice after it has become apparent that although a warrant for his deportation has been issued, the
warrant cannot be effectuated;" that "the theory on which the court is given the power to act is that the
warrant of deportation, not having been able to be executed, is functus officio and the alien is being
held without any authority of law." The decision cited several cases which, it said, settled the matter
5|Page
definitely in that jurisdiction, adding that the same result had been reached in innumerable case
elsewhere. The cases referred to were United States ex rel. Ross vs. Wallis, 2 Cir. 279 F. 401, 404;
Caranica vs. Nagle, 9 Cir., 28 F. 2d 955; Saksagansky vs. Weedin, 9 Cir., 53 F. 13, 16 last paragraph;
Ex parte Matthews, D.C.W.D. Wash., 277 F. 857; Moraitis vs. Delany, D.C. Md. Aug. 28, 1942, 46 F.
Supp. 425.

The most recent case, as far as we have been able to find, was that of Staniszewski vs. Watkins (1948)
80 Fed. Supp. 132, which is nearly foursquare with the case at hand. In that case a stateless person,
formerly a Polish national, resident in the United States since 1911 and many times serving as a
seaman on American vessels both in peace and in war, was ordered excluded from the United States
and detained at Ellis Island at the expense of the steamship company, when he returned from a voyage
on which he shipped from New York for one or more European ports and return to the United States.
The grounds for his exclusion were that he had no passport or immigration visa, and that in 1937 had
been convicted of perjury because in certain document's he represented himself to be an American
citizen. Upon his application for release on habeas corpus, the Court released him upon his own
recognizance. Judge Leibell, of the United States District, Court for the Southern District of New York,
said in part:

When the return to the writ of habeas corpus came before this court, I suggest that all interested
parties . . . make an effort to arrange to have the petitioner ship out some country that would
receive him a a resident. He is a native-born Pole but the Polish Consul has advises him in
writing that he is no longer a Polish subject. This Government does not claim that he is a Polish
citizen. His attorney says he is stateless. The Government is willing that he go back to the ship,
but if he were sent back aboard ship and sailed to the port (Cherbourg, France) from which he
last sailed to the United States he would probably be denied permission to land. There is no
other country that would take him, without proper documents.

It seems to me that this to me this is a genuine hardship case and that the petitioner should be
released from custody on proper terms . . .

What is to be done with the petitioner? the government has had him in custody almost seven
months and practically admits it has no place to send him out of this country. The steamship
company, which employed him as one of group sent to the ship by Union, with proper seaman's
papers issued by the United States Coast Guard, is paying $3.00 a day for petitioner's board at
Ellis Island. It is no fault of the steamship company that petitioner is an inadmissible alien as the
immigration officials describe him. . . .

I intend to sustain the writ of habeas corpus and order the release of the petitioner on his own
recognizance. he will be required to inform the immigration officials at Ellis Island by mail on
the mail. If the government does succeed in arranging for petitioner's deportation to a country
that will be ready to receive him as a resident, it may then advise the petitioner to that effect and
arrange for his deportation in the manner provided by law.

Although not binding upon this court as a precedent, the case aforecited offered a happy solution to the
quandary in which the parties here find themselves, solution which we think is sensible, sound and
compatible with law and the Constitution. For this reason, and since the Philippine law on immigration
was patterned after or copied from the American law and practice, we choose to follow and adopt the

6|Page
reasoning and conclusion in the Staniszewski decision with some modifications which, it is believed,
are in consonance with the prevailing conditions of peace and order in the Philippines.

It was said or insinuated at the hearing of the petition at bar, but not alleged in the return, that the
petitioner was engaged in subversive activities, and fear was expressed that he might join or aid the
disloyal elements if, allowed to be at large. Bearing in mind the Government's allegation in its answer
that "the herein petitioner was brought to the Philippines by the Japanese forces," and the fact that
Japan is no longer at war with the United States or the Philippines nor identified with the countries
allied against those nations, the possibility of the petitioner's entertaining or committing hostile acts
prejudicial to the interest and security of this country seems remote.

If we grant, for the sake of argument, that such a possibility exists, still the petitioner's unduly
prolonged detention would be unwarranted by law and the Constitution, if the only purpose of the
detention be to eliminate a danger that is by no means, actual, present, or uncontrollable. After all, the
Government is not impotent to deal with or prevent any threat by such measure as that just outlined.
The thought eloquently expressed by Mr. Justice Jackson of the United States Supreme Court in
connection with the application for bail of ten Communists convicted by a lower of advocacy of violent
overthrow of the United States Government is, in principle pertinent and may be availed of at this
juncture. Said the learned Jurist:

The Government's alternative contention is that defendants, by misbehavior after conviction,

have forfeited their claim to bail. Grave public danger is said to result from what they may be
expected to do, in addition to what they have done since their conviction. If I assume that
defendants are disposed to commit every opportune disloyal act helpful to Communist countries,
it is still difficult to reconcile with traditional American law the jailing of persons by the courts
because of anticipated but as yet uncommitted crimes. Imprisonment to protect society from
predicted but unconsummated offenses is so unprecedented in this country and so fraught with
danger of excesses and injustice that I am loath to resort to it, even as a discretionary judicial
technique to supplement conviction of such offenses as those of which defendants stand
convicted.

xxx xxx x x x1wphl.nt

But the right of every American to equal treatment before the law is wrapped up in the same
constitutional bundle with those of these Communists. If an anger or disgust with these
defendants we throw out the bundle, we also cast aside protection for the liberties of more
worthy critics who may be in opposition to the government of some future day.

xxx xxx xxx

If, however, I were to be wrong on an of these abstract or theoretical matters of principle, there
is a very practical aspect of this application which must not be overlooked or underestimated-
that is the disastrous effect on the reputation of American justice if I should now send these men
to jail and the full Court later decide that their conviction is invalid. All experiences with
litigation teaches that existence of a substantial question about a conviction implies a more than
negligible risk of reversal. Indeed this experience lies back of our rule permitting and practice of
allowing bail where such questions exist, to avoid the hazard of unjustifiably imprisoning
persons with consequent reproach to our system of justice. If that is prudent judicial practice in
7|Page
 the ordinary case, how much more important to avoid every chance of handing to the
Communist world such an ideological weapon as it would have if this country should imprison
this handful of Communist leaders on a conviction that our own highest Court would confess to
be illegal. Risks, of course, are involved in either granting or refusing bail. I am not naive
enough to underestimate the trouble making propensities of the defendants. But, with the
Department of Justice alert to the dangers, the worst they can accomplish in the short time it will
take to end the litigation is preferable to the possibility of national embarassment from a
celebrated case of unjustified imprisonment of Communist leaders. Under no circumstances
must we permit their symbolization of an evil force in the world to be hallowed and glorified by
any semblance of martyrdom. The way to avoid that risk is not to jail those men until it is finally
decided that they should stay jailed.

If that case is not comparable with ours on the issues presented, its underlying principle is of universal
application. In fact, its ratio decidendi applies with greater force to the present petition, since the right
of accused to bail pending appeal of his case, as in the case of the ten Communists, depends upon the
discretion of the court, whereas the right to be enlarged before formal charges are instituted is absolute.
As already noted, not only are there no charges pending against the petitioner, but the prospects of
bringing any against him are slim and remote.

Premises considered, the writ will issue commanding the respondents to release the petitioner from
custody upon these terms: The petitioner shall be placed under the surveillance of the immigration
authorities of their agents in such form and manner as my be deemed adequate to insure that he keep
peace and be available when the Government is ready to deport him. The surveillance shall be
reasonable and the question of reasonableness shall be submitted to this Court or to the Court of First
Instance of Manila for decision in case of abuse. He shall also put up a bond for the above purpose in
the amount of P5,000.00 with sufficient surety or sureties, which bond the Commissioner of
Immigration is authorized to exact by Section 40 of Commonwealth Act No. 613. No costs will be
charged.

G.R. No. L-4254 September 26, 1951

BORIS MEJOFF, petitioner,

vs.
THE DIRECTOR OF PRISONS, respondent.

TUASON, J.:

This is a second petition for habeas corpus by Boris Mejoff, the first having been denied in a decision
of this Court of July 30, 1949. The history of the petitioner's detention was thus briefly set forth in that
decision, written by Mr. Justice Bengzon:

The petitioner Boris Mejoff is an alien of Russian descent who was brought to this country from
Shanghai as a secret operative by the Japanese forces during the latter's regime in these Islands.
Upon liberation he was arrested as a Japanese spy, by U.S. Army Counter Intelligence Corps.
Later he was handed to theCommonwealth Government for disposition in accordance with
Commonwealth Act No. 682. Thereafter, the People's Court ordered his release. But the
8|Page
 deportation Board taking his case up, found that having no travel documents Mejoff was
illegally in this country, and consequently referred the matter to the immigration authorities.
After the corresponding investigation, the Board of commissioners of Immigration on April 5,
1948, declared that Mejoff had entered the Philippines illegally in 1944, without inspection and
admission by the immigration officials at a designation port of entry and, therefore, it ordered
that he be deported on the first available transportation to Russia. The petitioner was then under
custody, he having been arrested on March 18, 1948. In May 1948 he was transferred to the
Cebu Provincial Jail together with three other Russians to await the arrival of some Russian
vessels. In July and August of that year two boats of Russian nationality called at the Cebu Port.
But their masters refused to take petitioner and his companions alleging lack of authority to do
so. In October 1948 after repeated failures to ship this deportee abroad, the authorities removed
him to Bilibid Prison at Muntinglupa where he has been confined up to the present time,
inasmuch as the Commissioner of Immigration believes it is for the best interests of the country
to keep him under detention while arrangements for his departure are being made.

The Court held the petitioner's detention temporary and said that "temporary detention is a necessary
step in the process of exclusion or expulsion of undesirable aliens and that pending arrangements for
his deportation, the Government has the right to hold the undesirable alien under confinement for a
reasonable lenght of time." It took note of the fact, manifested by the Solicitor General's representative
in the course of the of the oral argumment, that "this Government desires to expel the alien, and does
not relish keeping him at the people's expense . . . making efforts to carry out the decree of exclusion
by the highest officer of the land." No period was fixed within which the immigration authorities
should carry out the contemplated deportation beyond the statement that "The meaning of 'reasonable
time' depends upon the circumstances, specially the difficulties of obtaining a passport, the availability
of transportation, the diplomatic arrangements with the governments concerned and the efforts
displayed to send the deportee away;" but the Court warned that "under established precedents, too
long a detention may justify the issuance of a writ of habeas corpus."

Mr. Justice Paras, now Chief Justice, Mr. Justice Feria, Mr. Justice Perfecto, and the writer of this
decision dissented. Mr. Justice Feria and Mr. Justice Perfecto voted for outright discharge of the
prisoner from custody. Mr. Justice Paras qualified his dissent by stating that he might agree "to further
detention of the herein petitioner, provided that he be released if after six months, the Government is
still unable to deport him." This writer joined in the latter dissent but thought that two months
constituted reasonable time.

Over two years having elapsed since the decision aforesaid was promulgated, the Government has not
found way and means of removing the petitioner out of the country, and none are in sight, although it
should be said in justice to the deportation authorities, it was through no fault of theirs that no ship or
country would take the petitioner.

Aliens illegally staying in the Philippines have no right of asylum therein (Sowapadji vs. Wixon, Sept.
18, 1946, 157 F. ed., 289, 290), even if they are "stateless," which the petitioner claims to be. It is no
less true however, as impliedly stated in this Court's decision, supra, that foreign nationals, not enemy
against whom no charge has been made other than that their permission to stay has expired, may not
indefinitely be kept in detention. The protection against deprivation of liberty without due process of
law and except for crimes committed against the laws of the land is not limited to Philippine citizens
but extends to all residents, except enemy aliens, regardless of nationality. Whether an alien who
entered the country in violation of its immigration laws may be detained for as long as the Government
9|Page
is unable to deport him, is a point we need not decide. The petitioner's entry into the Philippines was
not unlawful; he was brought by the armed and belligerent forces of a de facto government whose
decrees were law furing the occupation.

Moreover, by its Constitution (Art. II, Sec. 3) the Philippines "adopts the generally accepted principles
of international law as part of the law of Nation." And in a resolution entitled "Universal Declaration of
Human Rights" and approved by the General Assembly of the United Nations of which the Philippines
is a member, at its plenary meeting on December 10, 1948, the right to life and liberty and all other
fundamental rights as applied to all human beings were proclaimed. It was there resolved that "All
human beings are born free and equal in degree and rights" (Art. 1); that "Everyone is entitled to all the
rights and freedom set forth in this Declaration, without distinction of any kind, such as race, colour,
sex, language, religion, political or other opinion, nationality or social origin, property, birth, or other
status" (Art. 2): that "Every one has the right to an effective remedy by the competent national tribunals
for acts violating the fundamental rights granted him by the Constitution or by law" (Art. 8); that "No
one shall be subjected to arbitrary arrest, detention or exile" (Art. 9); etc.

In U. S. vs. Nichols, 47 Fed. Supp., 201, it was said that the court "has the power to release from
custody an alien who has been detained an unreasonably long period of time by the Department of
Justice after it has become apparent that although a warrant for his deportation has been issued, the
warrant can not be effectuated;" that "the theory on which the court is given the power to act is that the
warrant of deportation, not having been able to be executed, is functus officio and the alien is being
held without any authority of law." The decision cited several cases which, it said, settled the matter
definitely in that jurisdiction, adding that the same result had reached in innumerable cases elsewhere.
The cases referred to were United States ex rel. Ross vs. Wallis, 2 Cir. 279 F. 401, 404;
Caranica vs. Nagle, 9 Cir., 28 F. 2d 955; Saksagansky vs. Weedin, 9 Cir., 53 F. 2d 13, 16 last
paragraph; Ex parte Matthews, D.C.W.D. Wash., 277 F. 857; Moraitis vs. Delany, D.C. Md. Aug. 28,
1942, 46 F. Supp. 425.

The most recent case, as far as we have been able to find, was that of Staniszewski vs. Watkins (1948),
90 Fed. Supp., 132, which is nearly foursquare with the case at hand. In that case a stateless person,
formerly a Polish national, resident in the United States since 1911 and many times serving as a
seaman on American vessels both in peace and in war, was ordered excluded from the United States
and detained at Ellis Island at the expense of the steamship company, when he returned from a voyage
on which he had shipped from New York for one or more European ports and return to the United
States. The grounds for his exclusion were that he had no passport or immigration visa, and that in
1937 had been convicted of perjury because in certain documents he presented himself to be an
American citizen. Upon his application for release on habeas corpus, the Court released him upon his
own recognizance. Judge Leibell, of the United States District Court for the Southern District of New
York, said in part:

When the return to the writ of habeas corpus came before this court, I suggested that all
interested parties . . . make an effort to arrange to have the petitioner ship out of some country
that he would receive him as a resident. He is, a native-born Pole but the Polish Consul has
advised him in writing that he is no longer a Polish subject. This Government does not claim
that he is a Polish citizen. His attorney says he is a stateless. The Government is willing that he
go back to the ship, but if he were sent back aboard a ship and sailed to the Port (Cherbourg,
France) from which he last sailed to the United States, he would probably be denied permission
to land. There is no other country that would take him, without proper documents.
10 | P a g e
 It seems to me that this is a genuine hardship case and that the petitioner should be released from
custody on proper terms. . . .

What is to be done with the petitioner? The government has had him in custody almost seven
months and practically admits it has no place to send him out of this country. The steamship
company, which employed him as one of a group sent to the ship by the Union, with proper
seaman's papers issued by the United States Coast Guard, is paying $3 a day for petitioner's
board at Ellis Island. It is no fault of the steamship company that petitioner is an inadmissible
alien as the immigration officials describe him. . . .

I intend to sustain the writ of habeas corpus and order the release of the petitioner on his own
recognizance. He will be required to inform the immigration officials at Ellis Island by mail on
the 15th of each month, stating where he is employed and where he can be reached by mail. If
the government does succeed in arranging for petitioner's deportation to a country that will be
ready to receive him as a resident, it may then advise the petitioner to that effect and arrange for
his deportation in the manner provided by law.

Although not binding upon this Court as a precedent, the case aforecited affords a happy solution to the
quandry in which the parties here finds themselves, solution which we think is sensible, sound and
compatible with law and the Constitution. For this reason, and since the Philippine law on immigration
was patterned after or copied from the American law and practice, we choose to follow and adopt the
reasoning and conclusions in the Staniszewski decision with some modifications which, it is believed,
are in consonance with the prevailing conditions of peace and order in the Philippines.

It was said or insinuated at the hearing ofthe petition at bar, but not alleged in the return, that the
petitioner was engaged in subversive activities, and fear was expressed that he might join or aid the
disloyal elements if allowed to be at large. Bearing in mind the Government's allegation in its answer
that "the herein petitioner was brought to the Philippines by the Japanese forces," and the fact that
Japan is no longer at war with the United States or the Philippines nor identified with the countries
allied against these nations, the possibility of the petitioner's entertaining or committing hostile acts
prejudicial to the interest and security of this country seems remote.

If we grant, for the sake of argument, that such a possibility exists, still the petitioner's unduly
prolonged detention would be unwarranted by law and the Constitution, if the only purpose of the
detention be to eliminate a danger that is by no means actual, present, or uncontrolable. After all, the
Government is not impotent to deal with or prevent any threat by such measure as that just outlined.
The thought eloquently expressed by Mr. Justice Jackson of the United States Supreme Court in
connection with the appliccation for bail of ten Communists convicted by a lower court of advocacy of
violent overthrow of the United States Government is, in principle, pertinent and may be availed of at
this juncture. Said the learned Jurist:

The Governmet's alternative contention is that defendants, by misbehavior after conviction, have
forfeited their claim to bail. Grave public danger is said to result from what they may be
expected to do, in addition to what they have done since their conviction. If I assume that
defendants are disposed to commit every opportune disloyal to act helpful to Communist
countries, it is still difficult to reconcile with traditional American law the jailing of persons by
the courts because of anticipated but as yet uncommitted crimes. lmprisonment to protect society
from predicted but unconsummated offenses is so unprecedented in this country and so fraught
11 | P a g e
 with danger of excesses and injustice that I am loath to resort it, even as a discretionary judicial
technique to supplement conviction of such offenses as those of which defendants stand
convicted.

But the right of every American to equal treatment before the law is wrapped up in the same
constitutional bundle with those of these Communists. If an anger or disgust with these
defendants we throw out the bundle, we alsocast aside protection for the liberties of more
worthy critics who may be in opposition to the government of some future day.

xxx xxx x x x1wphl.nt

If, however, I were to be wrong on all of these abstract or theoretical matters of principle, there
is a very practical aspect of this application which must not be overlooked or underestimated
that is the disastrous effect on the reputation of American justice if I should now send these men
to jail and the full Court later decide that their conviction is invalid. All experience with
litigation teaches that existence of a substantial question about a conviction implies a more than
negligible risk of reversal. Indeed this experience lies back of our rule permitting and practice of
allowing bail where such questions exist, to avoid the hazard of unjustifiably imprisoning
persons with consequent reproach to our system of justice. If that is prudent judicial practice in
the ordinary case, how much more important to avoid every chance of handing to the
Communist world such an ideological weapon as it would have if this country should imprison
this handful of Communist leaders on a conviction that our highest Court would confess to be
illegal. Risks, of course, are involved in either granting or refusing bail. I am naive enough to
underestimate the troublemaking propensities of the defendants. But, with the Department of
Justice alert to the the dangers, the worst they can accomplish in the short time it will take to end
the litigation is preferable to the possibility of national embarrassment from a celebrated case of
unjustified imprisonment of Communist leaders. Under no circumstances must we permit their
symbolization of an evil force in the world to be hallowed and glorified by any semblance of
martyrdom. The way to avoid that risk is not to jail these men until it is finally decided that they
should stay jailed.

If that case is not comparable with ours on the issues presented, its underlying principle is of universal
application. In fact, its ratio decidendi applies with greater force to the present petition, since the right
of accused to bail pending apppeal of his case, as in the case of the ten Communists, depends upon the
discretion of the court, whereas the right to be enlarged before formal charges are instituted is absolute.
As already noted, not only are there no charges pending against the petitioner, but the prospects of
bringing any against him are slim and remote.

Premises considered, the writ will issue commanding the respondents to release the petitioner from
custody upon these terms: The petitioner shall be placed under the surveillance of the immigration
authorities or their agents in such form and manner as may be deemed adequate to insure that he keep
peace and be available when the Government is ready to deport him. The surveillance shall be
reasonable and the question of reasonableness shall be submitted to this Court or to the Court of First
Instance of Manila for decision in case of abuse. He shall also put up a bond for the above purpose in
the amount of P5,000 with sufficient surety or sureties, which bond the Commissioner of Immigration
is authorized to exact by section 40 of Commonwealth Act No. 613.

No costs will be charged.

12 | P a g e
G.R. No. L-7995 May 31, 1957

LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and
partnerships adversely affected. by Republic Act No. 1180, petitioner,
vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, City Treasurer
of Manila,respondents.

LABRADOR, J.:

I. The case and issue, in general

This Court has before it the delicate task of passing upon the validity and constitutionality of a
legislative enactment, fundamental and far-reaching in significance. The enactment poses questions of
due process, police power and equal protection of the laws. It also poses an important issue of fact, that
is whether the conditions which the disputed law purports to remedy really or actually exist.
Admittedly springing from a deep, militant, and positive nationalistic impulse, the law purports to
protect citizen and country from the alien retailer. Through it, and within the field of economy it
regulates, Congress attempts to translate national aspirations for economic independence and national
security, rooted in the drive and urge for national survival and welfare, into a concrete and tangible
measures designed to free the national retailer from the competing dominance of the alien, so that the
country and the nation may be free from a supposed economic dependence and bondage. Do the facts
and circumstances justify the enactment?

II. Pertinent provisions of Republic Act No. 1180

Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it nationalizes the
retail trade business. The main provisions of the Act are: (1) a prohibition against persons, not citizens
of the Philippines, and against associations, partnerships, or corporations the capital of which are not
wholly owned by citizens of the Philippines, from engaging directly or indirectly in the retail trade; (2)
an exception from the above prohibition in favor of aliens actually engaged in said business on May 15,
1954, who are allowed to continue to engaged therein, unless their licenses are forfeited in accordance
with the law, until their death or voluntary retirement in case of natural persons, and for ten years after
the approval of the Act or until the expiration of term in case of juridical persons; (3) an exception
therefrom in favor of citizens and juridical entities of the United States; (4) a provision for the
forfeiture of licenses (to engage in the retail business) for violation of the laws on nationalization,
control weights and measures and labor and other laws relating to trade, commerce and industry; (5) a
prohibition against the establishment or opening by aliens actually engaged in the retail business of
additional stores or branches of retail business, (6) a provision requiring aliens actually engaged in the
retail business to present for registration with the proper authorities a verified statement concerning
their businesses, giving, among other matters, the nature of the business, their assets and liabilities and
their offices and principal offices of judicial entities; and (7) a provision allowing the heirs of aliens
now engaged in the retail business who die, to continue such business for a period of six months for
purposes of liquidation.

III. Grounds upon which petition is based-Answer thereto

13 | P a g e
Petitioner, for and in his own behalf and on behalf of other alien residents corporations and
partnerships adversely affected by the provisions of Republic Act. No. 1180, brought this action to
obtain a judicial declaration that said Act is unconstitutional, and to enjoin the Secretary of Finance and
all other persons acting under him, particularly city and municipal treasurers, from enforcing its
provisions. Petitioner attacks the constitutionality of the Act, contending that: (1) it denies to alien
residents the equal protection of the laws and deprives of their liberty and property without due process
of law ; (2) the subject of the Act is not expressed or comprehended in the title thereof; (3) the Act
violates international and treaty obligations of the Republic of the Philippines; (4) the provisions of the
Act against the transmission by aliens of their retail business thru hereditary succession, and those
requiring 100% Filipino capitalization for a corporation or entity to entitle it to engage in the retail
business, violate the spirit of Sections 1 and 5, Article XIII and Section 8 of Article XIV of the
Constitution.

In answer, the Solicitor-General and the Fiscal of the City of Manila contend that: (1) the Act was
passed in the valid exercise of the police power of the State, which exercise is authorized in the
Constitution in the interest of national economic survival; (2) the Act has only one subject embraced in
the title; (3) no treaty or international obligations are infringed; (4) as regards hereditary succession,
only the form is affected but the value of the property is not impaired, and the institution of inheritance
is only of statutory origin.

IV. Preliminary consideration of legal principles involved

a. The police power.

There is no question that the Act was approved in the exercise of the police power, but petitioner
claims that its exercise in this instance is attended by a violation of the constitutional requirements of
due process and equal protection of the laws. But before proceeding to the consideration and resolution
of the ultimate issue involved, it would be well to bear in mind certain basic and fundamental, albeit
preliminary, considerations in the determination of the ever recurrent conflict between police power
and the guarantees of due process and equal protection of the laws. What is the scope of police power,
and how are the due process and equal protection clauses related to it? What is the province and power
of the legislature, and what is the function and duty of the courts? These consideration must be clearly
and correctly understood that their application to the facts of the case may be brought forth with clarity
and the issue accordingly resolved.

It has been said the police power is so far - reaching in scope, that it has become almost impossible to
limit its sweep. As it derives its existence from the very existence of the State itself, it does not need to
be expressed or defined in its scope; it is said to be co-extensive with self-protection and survival, and
as such it is the most positive and active of all governmental processes, the most essential, insistent and
illimitable. Especially is it so under a modern democratic framework where the demands of society and
of nations have multiplied to almost unimaginable proportions; the field and scope of police power has
become almost boundless, just as the fields of public interest and public welfare have become almost
all-embracing and have transcended human foresight. Otherwise stated, as we cannot foresee the needs
and demands of public interest and welfare in this constantly changing and progressive world, so we
cannot delimit beforehand the extent or scope of police power by which and through which the State
seeks to attain or achieve interest or welfare. So it is that Constitutions do not define the scope or extent
of the police power of the State; what they do is to set forth the limitations thereof. The most important
of these are the due process clause and the equal protection clause.
14 | P a g e
b. Limitations on police power.

The basic limitations of due process and equal protection are found in the following provisions of our
Constitution:

SECTION 1.(1) No person shall be deprived of life, liberty or property without due process of
law, nor any person be denied the equal protection of the laws. (Article III, Phil. Constitution)

These constitutional guarantees which embody the essence of individual liberty and freedom in
democracies, are not limited to citizens alone but are admittedly universal in their application, without
regard to any differences of race, of color, or of nationality. (Yick Wo vs. Hopkins, 30, L. ed. 220,
226.)

c. The, equal protection clause.

The equal protection of the law clause is against undue favor and individual or class privilege, as well
as hostile discrimination or the oppression of inequality. It is not intended to prohibit legislation, which
is limited either in the object to which it is directed or by territory within which is to operate. It does
not demand absolute equality among residents; it merely requires that all persons shall be treated
alike, under like circumstances and conditions both as to privileges conferred and liabilities enforced.
The equal protection clause is not infringed by legislation which applies only to those persons falling
within a specified class, if it applies alike to all persons within such class, and reasonable grounds
exists for making a distinction between those who fall within such class and those who do not. (2
Cooley, Constitutional Limitations, 824-825.)

d. The due process clause.

The due process clause has to do with the reasonableness of legislation enacted in pursuance of the
police power. Is there public interest, a public purpose; is public welfare involved? Is the Act
reasonably necessary for the accomplishment of the legislature's purpose; is it not unreasonable,
arbitrary or oppressive? Is there sufficient foundation or reason in connection with the matter involved;
or has there not been a capricious use of the legislative power? Can the aims conceived be achieved by
the means used, or is it not merely an unjustified interference with private interest? These are the
questions that we ask when the due process test is applied.

The conflict, therefore, between police power and the guarantees of due process and equal protection of
the laws is more apparent than real. Properly related, the power and the guarantees are supposed to
coexist. The balancing is the essence or, shall it be said, the indispensable means for the attainment of
legitimate aspirations of any democratic society. There can be no absolute power, whoever exercise it,
for that would be tyranny. Yet there can neither be absolute liberty, for that would mean license and
anarchy. So the State can deprive persons of life, liberty and property, provided there is due process of
law; and persons may be classified into classes and groups, provided everyone is given the equal
protection of the law. The test or standard, as always, is reason. The police power legislation must be
firmly grounded on public interest and welfare, and a reasonable relation must exist between purposes
and means. And if distinction and classification has been made, there must be a reasonable basis for
said distinction.

e. Legislative discretion not subject to judicial review.

15 | P a g e
Now, in this matter of equitable balancing, what is the proper place and role of the courts? It must not
be overlooked, in the first place, that the legislature, which is the constitutional repository of police
power and exercises the prerogative of determining the policy of the State, is by force of circumstances
primarily the judge of necessity, adequacy or reasonableness and wisdom, of any law promulgated in
the exercise of the police power, or of the measures adopted to implement the public policy or to
achieve public interest. On the other hand, courts, although zealous guardians of individual liberty and
right, have nevertheless evinced a reluctance to interfere with the exercise of the legislative prerogative.
They have done so early where there has been a clear, patent or palpable arbitrary and unreasonable
abuse of the legislative prerogative. Moreover, courts are not supposed to override legitimate policy,
and courts never inquire into the wisdom of the law.

V. Economic problems sought to be remedied

With the above considerations in mind, we will now proceed to delve directly into the issue involved. If
the disputed legislation were merely a regulation, as its title indicates, there would be no question that it
falls within the legitimate scope of legislative power. But it goes further and prohibits a group of
residents, the aliens, from engaging therein. The problem becomes more complex because its subject is
a common, trade or occupation, as old as society itself, which from the immemorial has always been
open to residents, irrespective of race, color or citizenship.

a. Importance of retail trade in the economy of the nation.

In a primitive economy where families produce all that they consume and consume all that they
produce, the dealer, of course, is unknown. But as group life develops and families begin to live in
communities producing more than what they consume and needing an infinite number of things they do
not produce, the dealer comes into existence. As villages develop into big communities and
specialization in production begins, the dealer's importance is enhanced. Under modern conditions and
standards of living, in which man's needs have multiplied and diversified to unlimited extents and
proportions, the retailer comes as essential as the producer, because thru him the infinite variety of
articles, goods and needed for daily life are placed within the easy reach of consumers. Retail dealers
perform the functions of capillaries in the human body, thru which all the needed food and supplies are
ministered to members of the communities comprising the nation.

There cannot be any question about the importance of the retailer in the life of the community. He
ministers to the resident's daily needs, food in all its increasing forms, and the various little gadgets and
things needed for home and daily life. He provides his customers around his store with the rice or corn,
the fish, the salt, the vinegar, the spices needed for the daily cooking. He has cloths to sell, even the
needle and the thread to sew them or darn the clothes that wear out. The retailer, therefore, from the
lowly peddler, the owner of a small sari-sari store, to the operator of a department store or, a
supermarket is so much a part of day-to-day existence.

b. The alien retailer's trait.

The alien retailer must have started plying his trades in this country in the bigger centers of population
(Time there was when he was unknown in provincial towns and villages). Slowly but gradually be
invaded towns and villages; now he predominates in the cities and big centers of population. He even
pioneers, in far away nooks where the beginnings of community life appear, ministering to the daily
needs of the residents and purchasing their agricultural produce for sale in the towns. It is an
16 | P a g e
undeniable fact that in many communities the alien has replaced the native retailer. He has shown in
this trade, industry without limit, and the patience and forbearance of a slave.

Derogatory epithets are hurled at him, but he laughs these off without murmur; insults of ill-bred and
insolent neighbors and customers are made in his face, but he heeds them not, and he forgets and
forgives. The community takes note of him, as he appears to be harmless and extremely useful.

c. Alleged alien control and dominance.

There is a general feeling on the part of the public, which appears to be true to fact, about the
controlling and dominant position that the alien retailer holds in the nation's economy. Food and other
essentials, clothing, almost all articles of daily life reach the residents mostly through him. In big cities
and centers of population he has acquired not only predominance, but apparent control over distribution
of almost all kinds of goods, such as lumber, hardware, textiles, groceries, drugs, sugar, flour, garlic,
and scores of other goods and articles. And were it not for some national corporations like the Naric,
the Namarco, the Facomas and the Acefa, his control over principal foods and products would easily
become full and complete.

Petitioner denies that there is alien predominance and control in the retail trade. In one breath it is said
that the fear is unfounded and the threat is imagined; in another, it is charged that the law is merely the
result of radicalism and pure and unabashed nationalism. Alienage, it is said, is not an element of
control; also so many unmanageable factors in the retail business make control virtually impossible.
The first argument which brings up an issue of fact merits serious consideration. The others are matters
of opinion within the exclusive competence of the legislature and beyond our prerogative to pass upon
and decide.

The best evidence are the statistics on the retail trade, which put down the figures in black and white.
Between the constitutional convention year (1935), when the fear of alien domination and control of
the retail trade already filled the minds of our leaders with fears and misgivings, and the year of the
enactment of the nationalization of the retail trade act (1954), official statistics unmistakably point out
to the ever-increasing dominance and control by the alien of the retail trade, as witness the following
tables:

Assets Gross Sales

Year and
No.- Per cent Per cent
Retailers Pesos Pesos
Establishments Distribution Distribution
Nationality
1941:
Filipino 106,671 200,323,138 55.82 174,181,924 51.74
..........
Chinese 15,356 118,348,692 32.98 148,813,239 44.21
...........
Others 1,646 40,187,090 11.20 13,630,239 4.05
............
1947:

17 | P a g e
 Filipino 111,107 208,658,946 65.05 279,583,333 57.03
..........
Chinese 13,774 106,156,218 33.56 205,701,134 41.96
...........
Others 354 8,761,260 .49 4,927,168 1.01
...........
1948: (Census)
Filipino 113,631 213,342,264 67.30 467,161,667 60.51
..........
Chinese 12,087 93,155,459 29.38 294,894,227 38.20
..........
Others 422 10,514,675 3.32 9,995,402 1.29
..........
1949:
Filipino 113,659 213,451,602 60.89 462,532,901 53.47
..........
Chinese 16,248 125,223,336 35.72 392,414,875 45.36
..........
Others 486 12,056,365 3.39 10,078,364 1.17
..........
1951:
Filipino 119,352 224,053,620 61.09 466,058,052 53.07
.........
Chinese 17,429 134,325,303 36.60 404,481,384 46.06
..........
Others 347 8,614,025 2.31 7,645,327 87
..........

AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT
Item Gross
Year and Retailer's
Assets Sales
Nationality
(Pesos) (Pesos)
1941:
Filipino 1,878 1,633
.............................................
Chinese 7,707 9,691
..............................................
18 | P a g e
 Others 24,415 8,281
...............................................
1947:
Filipino 1,878 2,516
.............................................
Chinese 7,707 14,934
...........................................
Others 24,749 13,919
..............................................
1948: (Census)
Filipino 1,878 4,111
.............................................
Chinese 7,707 24,398
.............................................
Others 24,916 23,686
..............................................
1949:
Filipino 1,878 4,069
.............................................
Chinese 7,707 24,152
..............................................
Others 24,807 20,737
..............................................
1951:
Filipino 1,877 3,905
.............................................
Chinese 7,707 33,207
.............................................
Others 24,824 22,033
...............................................

(Estimated Assets and Gross Sales of Retail Establishments, By Year and Nationality of
Owners, Benchmark: 1948 Census, issued by the Bureau of Census and Statistics, Department
of Commerce and Industry; pp. 18-19 of Answer.)

19 | P a g e
The above statistics do not include corporations and partnerships, while the figures on Filipino
establishments already include mere market vendors, whose capital is necessarily small..

The above figures reveal that in percentage distribution of assests and gross sales, alien participation
has steadily increased during the years. It is true, of course, that Filipinos have the edge in the number
of retailers, but aliens more than make up for the numerical gap through their assests and gross sales
which average between six and seven times those of the very many Filipino retailers. Numbers in
retailers, here, do not imply superiority; the alien invests more capital, buys and sells six to seven times
more, and gains much more. The same official report, pointing out to the known predominance of
foreign elements in the retail trade, remarks that the Filipino retailers were largely engaged in minor
retailer enterprises. As observed by respondents, the native investment is thinly spread, and the Filipino
retailer is practically helpless in matters of capital, credit, price and supply.

d. Alien control and threat, subject of apprehension in Constitutional convention.

It is this domination and control, which we believe has been sufficiently shown to exist, that is the
legislature's target in the enactment of the disputed nationalization would never have been adopted. The
framers of our Constitution also believed in the existence of this alien dominance and control when
they approved a resolution categorically declaring among other things, that "it is the sense of the
Convention that the public interest requires the nationalization of the retail trade; . . . ." (II Aruego, The
Framing of the Philippine Constitution, 662-663, quoted on page 67 of Petitioner.) That was twenty-
two years ago; and the events since then have not been either pleasant or comforting. Dean Sinco of the
University of the Philippines College of Law, commenting on the patrimony clause of the Preamble
opines that the fathers of our Constitution were merely translating the general preoccupation of
Filipinos "of the dangers from alien interests that had already brought under their control the
commercial and other economic activities of the country" (Sinco, Phil. Political Law, 10th ed., p. 114);
and analyzing the concern of the members of the constitutional convention for the economic life of the
citizens, in connection with the nationalistic provisions of the Constitution, he says:

But there has been a general feeling that alien dominance over the economic life of the country
is not desirable and that if such a situation should remain, political independence alone is no
guarantee to national stability and strength. Filipino private capital is not big enough to wrest
from alien hands the control of the national economy. Moreover, it is but of recent formation
and hence, largely inexperienced, timid and hesitant. Under such conditions, the government as
the instrumentality of the national will, has to step in and assume the initiative, if not the
leadership, in the struggle for the economic freedom of the nation in somewhat the same way
that it did in the crusade for political freedom. Thus . . . it (the Constitution) envisages an
organized movement for the protection of the nation not only against the possibilities of armed
invasion but also against its economic subjugation by alien interests in the economic field. (Phil.
Political Law by Sinco, 10th ed., p. 476.)

Belief in the existence of alien control and predominance is felt in other quarters. Filipino businessmen,
manufacturers and producers believe so; they fear the dangers coming from alien control, and they
express sentiments of economic independence. Witness thereto is Resolution No. 1, approved on July
18, 1953, of the Fifth National convention of Filipino Businessmen, and a similar resolution, approved
on March 20, 1954, of the Second National Convention of Manufacturers and Producers. The man in
the street also believes, and fears, alien predominance and control; so our newspapers, which have
editorially pointed out not only to control but to alien stranglehold. We, therefore, find alien
20 | P a g e
domination and control to be a fact, a reality proved by official statistics, and felt by all the sections and
groups that compose the Filipino community.

e. Dangers of alien control and dominance in retail.

But the dangers arising from alien participation in the retail trade does not seem to lie in the
predominance alone; there is a prevailing feeling that such predominance may truly endanger the
national interest. With ample capital, unity of purpose and action and thorough organization, alien
retailers and merchants can act in such complete unison and concert on such vital matters as the fixing
of prices, the determination of the amount of goods or articles to be made available in the market, and
even the choice of the goods or articles they would or would not patronize or distribute, that fears of
dislocation of the national economy and of the complete subservience of national economy and of the
consuming public are not entirely unfounded. Nationals, producers and consumers alike can be placed
completely at their mercy. This is easily illustrated. Suppose an article of daily use is desired to be
prescribed by the aliens, because the producer or importer does not offer them sufficient profits, or
because a new competing article offers bigger profits for its introduction. All that aliens would do is to
agree to refuse to sell the first article, eliminating it from their stocks, offering the new one as a
substitute. Hence, the producers or importers of the prescribed article, or its consumers, find the article
suddenly out of the prescribed article, or its consumers, find the article suddenly out of circulation.
Freedom of trade is thus curtailed and free enterprise correspondingly suppressed.

We can even go farther than theoretical illustrations to show the pernicious influences of alien
domination. Grave abuses have characterized the exercise of the retail trade by aliens. It is a fact within
judicial notice, which courts of justice may not properly overlook or ignore in the interests of truth and
justice, that there exists a general feeling on the part of the public that alien participation in the retail
trade has been attended by a pernicious and intolerable practices, the mention of a few of which would
suffice for our purposes; that at some time or other they have cornered the market of essential
commodities, like corn and rice, creating artificial scarcities to justify and enhance profits to
unreasonable proportions; that they have hoarded essential foods to the inconvenience and prejudice of
the consuming public, so much so that the Government has had to establish the National Rice and Corn
Corporation to save the public from their continuous hoarding practices and tendencies; that they have
violated price control laws, especially on foods and essential commodities, such that the legislature had
to enact a law (Sec. 9, Republic Act No. 1168), authorizing their immediate and automatic deportation
for price control convictions; that they have secret combinations among themselves to control prices,
cheating the operation of the law of supply and demand; that they have connived to boycott honest
merchants and traders who would not cater or yield to their demands, in unlawful restraint of freedom
of trade and enterprise. They are believed by the public to have evaded tax laws, smuggled goods and
money into and out of the land, violated import and export prohibitions, control laws and the like, in
derision and contempt of lawful authority. It is also believed that they have engaged in corrupting
public officials with fabulous bribes, indirectly causing the prevalence of graft and corruption in the
Government. As a matter of fact appeals to unscrupulous aliens have been made both by the
Government and by their own lawful diplomatic representatives, action which impliedly admits a
prevailing feeling about the existence of many of the above practices.

The circumstances above set forth create well founded fears that worse things may come in the future.
The present dominance of the alien retailer, especially in the big centers of population, therefore,
becomes a potential source of danger on occasions of war or other calamity. We do not have here in
this country isolated groups of harmless aliens retailing goods among nationals; what we have are well
21 | P a g e
organized and powerful groups that dominate the distribution of goods and commodities in the
communities and big centers of population. They owe no allegiance or loyalty to the State, and the
State cannot rely upon them in times of crisis or emergency. While the national holds his life, his
person and his property subject to the needs of his country, the alien may even become the potential
enemy of the State.

f. Law enacted in interest of national economic survival and security.

We are fully satisfied upon a consideration of all the facts and circumstances that the disputed law is
not the product of racial hostility, prejudice or discrimination, but the expression of the legitimate
desire and determination of the people, thru their authorized representatives, to free the nation from the
economic situation that has unfortunately been saddled upon it rightly or wrongly, to its disadvantage.
The law is clearly in the interest of the public, nay of the national security itself, and indisputably falls
within the scope of police power, thru which and by which the State insures its existence and security
and the supreme welfare of its citizens.

VI. The Equal Protection Limitation

a. Objections to alien participation in retail trade. The next question that now poses solution is, Does
the law deny the equal protection of the laws? As pointed out above, the mere fact of alienage is the
root and cause of the distinction between the alien and the national as a trader. The alien resident owes
allegiance to the country of his birth or his adopted country; his stay here is for personal convenience;
he is attracted by the lure of gain and profit. His aim or purpose of stay, we admit, is neither
illegitimate nor immoral, but he is naturally lacking in that spirit of loyalty and enthusiasm for this
country where he temporarily stays and makes his living, or of that spirit of regard, sympathy and
consideration for his Filipino customers as would prevent him from taking advantage of their weakness
and exploiting them. The faster he makes his pile, the earlier can the alien go back to his beloved
country and his beloved kin and countrymen. The experience of the country is that the alien retailer has
shown such utter disregard for his customers and the people on whom he makes his profit, that it has
been found necessary to adopt the legislation, radical as it may seem.

Another objection to the alien retailer in this country is that he never really makes a genuine
contribution to national income and wealth. He undoubtedly contributes to general distribution, but the
gains and profits he makes are not invested in industries that would help the country's economy and
increase national wealth. The alien's interest in this country being merely transient and temporary, it
would indeed be ill-advised to continue entrusting the very important function of retail distribution to
his hands.

The practices resorted to by aliens in the control of distribution, as already pointed out above, their
secret manipulations of stocks of commodities and prices, their utter disregard of the welfare of their
customers and of the ultimate happiness of the people of the nation of which they are mere guests,
which practices, manipulations and disregard do not attend the exercise of the trade by the nationals,
show the existence of real and actual, positive and fundamental differences between an alien and a
national which fully justify the legislative classification adopted in the retail trade measure. These
differences are certainly a valid reason for the State to prefer the national over the alien in the retail
trade. We would be doing violence to fact and reality were we to hold that no reason or ground for a
legitimate distinction can be found between one and the other.

22 | P a g e
b. Difference in alien aims and purposes sufficient basis for distinction.

The above objectionable characteristics of the exercise of the retail trade by the aliens, which are actual
and real, furnish sufficient grounds for legislative classification of retail traders into nationals and
aliens. Some may disagree with the wisdom of the legislature's classification. To this we answer, that
this is the prerogative of the law-making power. Since the Court finds that the classification is actual,
real and reasonable, and all persons of one class are treated alike, and as it cannot be said that the
classification is patently unreasonable and unfounded, it is in duty bound to declare that the legislature
acted within its legitimate prerogative and it can not declare that the act transcends the limit of equal
protection established by the Constitution.

Broadly speaking, the power of the legislature to make distinctions and classifications among persons
is not curtailed or denied by the equal protection of the laws clause. The legislative power admits of a
wide scope of discretion, and a law can be violative of the constitutional limitation only when the
classification is without reasonable basis. In addition to the authorities we have earlier cited, we can
also refer to the case of Linsey vs. Natural Carbonic Fas Co. (1911), 55 L. ed., 369, which clearly and
succinctly defined the application of equal protection clause to a law sought to be voided as contrary
thereto:

. . . . "1. The equal protection clause of the Fourteenth Amendment does not take from the state
the power to classify in the adoption of police laws, but admits of the exercise of the wide scope
of discretion in that regard, and avoids what is done only when it is without any reasonable
basis, and therefore is purely arbitrary. 2. A classification having some reasonable basis does not
offend against that clause merely because it is not made with mathematical nicety, or because in
practice it results in some inequality. 3. When the classification in such a law is called in
question, if any state of facts reasonably can be conceived that would sustain it, the existence of
that state of facts at the time the law was enacted must be assumed. 4. One who assails the
classification in such a law must carry the burden of showing that it does not rest upon any
reasonable basis but is essentially arbitrary."

c. Authorities recognizing citizenship as basis for classification.

The question as to whether or not citizenship is a legal and valid ground for classification has already
been affirmatively decided in this jurisdiction as well as in various courts in the United States. In the
case of Smith Bell & Co. vs. Natividad, 40 Phil. 136, where the validity of Act No. 2761 of the
Philippine Legislature was in issue, because of a condition therein limiting the ownership of vessels
engaged in coastwise trade to corporations formed by citizens of the Philippine Islands or the United
States, thus denying the right to aliens, it was held that the Philippine Legislature did not violate the
equal protection clause of the Philippine Bill of Rights. The legislature in enacting the law had as
ultimate purpose the encouragement of Philippine shipbuilding and the safety for these Islands from
foreign interlopers. We held that this was a valid exercise of the police power, and all presumptions are
in favor of its constitutionality. In substance, we held that the limitation of domestic ownership of
vessels engaged in coastwise trade to citizens of the Philippines does not violate the equal protection of
the law and due process or law clauses of the Philippine Bill of Rights. In rendering said decision we
quoted with approval the concurring opinion of Justice Johnson in the case of Gibbons vs. Ogden, 9
Wheat., I, as follows:

23 | P a g e
 "Licensing acts, in fact, in legislation, are universally restraining acts; as, for example, acts
licensing gaming houses, retailers of spirituous liquors, etc. The act, in this instance, is distinctly
of that character, and forms part of an extensive system, the object of which is to encourage
American shipping, and place them on an equal footing with the shipping of other nations.
Almost every commercial nation reserves to its own subjects a monopoly of its coasting trade;
and a countervailing privilege in favor of American shipping is contemplated, in the whole
legislation of the United States on this subject. It is not to give the vessel an American character,
that the license is granted; that effect has been correctly attributed to the act of her enrollment.
But it is to confer on her American privileges, as contra distinguished from foreign; and to
preserve the Government from fraud by foreigners; in surreptitiously intruding themselves into
the American commercial marine, as well as frauds upon the revenue in the trade coastwise, that
this whole system is projected."

The rule in general is as follows:

Aliens are under no special constitutional protection which forbids a classification otherwise
justified simply because the limitation of the class falls along the lines of nationality. That
would be requiring a higher degree of protection for aliens as a class than for similar classes
than for similar classes of American citizens. Broadly speaking, the difference in status between
citizens and aliens constitutes a basis for reasonable classification in the exercise of police
power. (2 Am., Jur. 468-469.)

In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the licensing of hawkers
and peddlers, which provided that no one can obtain a license unless he is, or has declared his intention,
to become a citizen of the United States, was held valid, for the following reason: It may seem wise to
the legislature to limit the business of those who are supposed to have regard for the welfare, good
order and happiness of the community, and the court cannot question this judgment and conclusion.
In Bloomfield vs. State, 99 N. E. 309 (Ohio, 1912), a statute which prevented certain persons, among
them aliens, from engaging in the traffic of liquors, was found not to be the result of race hatred, or in
hospitality, or a deliberate purpose to discriminate, but was based on the belief that an alien cannot be
sufficiently acquainted with "our institutions and our life as to enable him to appreciate the relation of
this particular business to our entire social fabric", and was not, therefore, invalid. In Ohio ex
rel. Clarke vs. Deckebach, 274 U. S. 392, 71 L. ed. 115 (1926), the U.S. Supreme Court had under
consideration an ordinance of the city of Cincinnati prohibiting the issuance of licenses (pools and
billiard rooms) to aliens. It held that plainly irrational discrimination against aliens is prohibited, but it
does not follow that alien race and allegiance may not bear in some instances such a relation to a
legitimate object of legislation as to be made the basis of permitted classification, and that it could not
state that the legislation is clearly wrong; and that latitude must be allowed for the legislative
appraisement of local conditions and for the legislative choice of methods for controlling an
apprehended evil. The case of State vs. Carrol, 124 N. E. 129 (Ohio, 1919) is a parallel case to the one
at bar. In Asakura vs. City of Seattle, 210 P. 30 (Washington, 1922), the business of pawn brooking was
considered as having tendencies injuring public interest, and limiting it to citizens is within the scope of
police power. A similar statute denying aliens the right to engage in auctioneering was also sustained
in Wright vs. May, L.R.A., 1915 P. 151 (Minnesota, 1914). So also in Anton vs. Van Winkle, 297 F. 340
(Oregon, 1924), the court said that aliens are judicially known to have different interests, knowledge,
attitude, psychology and loyalty, hence the prohibitions of issuance of licenses to them for the business
of pawnbroker, pool, billiard, card room, dance hall, is not an infringement of constitutional rights.
In Templar vs. Michigan State Board of Examiners, 90 N.W. 1058 (Michigan, 1902), a law prohibiting
24 | P a g e
the licensing of aliens as barbers was held void, but the reason for the decision was the court's findings
that the exercise of the business by the aliens does not in any way affect the morals, the health, or even
the convenience of the community. In Takahashi vs. Fish and Game Commission, 92 L. ed. 1479
(1947), a California statute banning the issuance of commercial fishing licenses to person ineligible to
citizenship was held void, because the law conflicts with Federal power over immigration, and because
there is no public interest in the mere claim of ownership of the waters and the fish in them, so there
was no adequate justification for the discrimination. It further added that the law was the outgrowth of
antagonism toward the persons of Japanese ancestry. However, two Justices dissented on the theory
that fishing rights have been treated traditionally as natural resources. In Fraser vs. McConway &
Tarley Co., 82 Fed. 257 (Pennsylvania, 1897), a state law which imposed a tax on every employer of
foreign-born unnaturalized male persons over 21 years of age, was declared void because the court
found that there was no reason for the classification and the tax was an arbitrary deduction from the
daily wage of an employee.

d. Authorities contra explained.

It is true that some decisions of the Federal court and of the State courts in the United States hold that
the distinction between aliens and citizens is not a valid ground for classification. But in this decision
the laws declared invalid were found to be either arbitrary, unreasonable or capricious, or were the
result or product of racial antagonism and hostility, and there was no question of public interest
involved or pursued. In Yu Cong Eng vs. Trinidad, 70 L. ed. 1059 (1925), the United States Supreme
Court declared invalid a Philippine law making unlawful the keeping of books of account in any
language other than English, Spanish or any other local dialect, but the main reasons for the decisions
are: (1) that if Chinese were driven out of business there would be no other system of distribution, and
(2) that the Chinese would fall prey to all kinds of fraud, because they would be deprived of their right
to be advised of their business and to direct its conduct. The real reason for the decision, therefore, is
the court's belief that no public benefit would be derived from the operations of the law and on the
other hand it would deprive Chinese of something indispensable for carrying on their business. In Yick
Wo vs. Hopkins, 30 L. ed 220 (1885) an ordinance conferring powers on officials to withhold consent
in the operation of laundries both as to persons and place, was declared invalid, but the court said that
the power granted was arbitrary, that there was no reason for the discrimination which attended the
administration and implementation of the law, and that the motive thereof was mere racial hostility.
In State vs. Montgomery, 47 A. 165 (Maine, 1900), a law prohibiting aliens to engage as hawkers and
peddlers was declared void, because the discrimination bore no reasonable and just relation to the act in
respect to which the classification was proposed.

The case at bar is radically different, and the facts make them so. As we already have said, aliens do
not naturally possess the sympathetic consideration and regard for the customers with whom they come
in daily contact, nor the patriotic desire to help bolster the nation's economy, except in so far as it
enhances their profit, nor the loyalty and allegiance which the national owes to the land. These
limitations on the qualifications of the aliens have been shown on many occasions and instances,
especially in times of crisis and emergency. We can do no better than borrow the language of Anton vs.
Van Winkle, 297 F. 340, 342, to drive home the reality and significance of the distinction between the
alien and the national, thus:

. . . . It may be judicially known, however, that alien coming into this country are without the
intimate knowledge of our laws, customs, and usages that our own people have. So it is likewise
known that certain classes of aliens are of different psychology from our fellow countrymen.
25 | P a g e
 Furthermore, it is natural and reasonable to suppose that the foreign born, whose allegiance is
first to their own country, and whose ideals of governmental environment and control have been
engendered and formed under entirely different regimes and political systems, have not the same
inspiration for the public weal, nor are they as well disposed toward the United States, as those
who by citizenship, are a part of the government itself. Further enlargement, is unnecessary. I
have said enough so that obviously it cannot be affirmed with absolute confidence that the
Legislature was without plausible reason for making the classification, and therefore appropriate
discriminations against aliens as it relates to the subject of legislation. . . . .

VII. The Due Process of Law Limitation.

a. Reasonability, the test of the limitation; determination by legislature decisive.

We now come to due process as a limitation on the exercise of the police power. It has been stated by
the highest authority in the United States that:

. . . . And the guaranty of due process, as has often been held, demands only that the law shall
not be unreasonable, arbitrary or capricious, and that the means selected shall have a real and
substantial relation to the subject sought to be attained. . . . .

xxx xxx xxx

So far as the requirement of due process is concerned and in the absence of other constitutional
restriction a state is free to adopt whatever economic policy may reasonably be deemed to
promote public welfare, and to enforce that policy by legislation adapted to its purpose. The
courts are without authority either to declare such policy, or, when it is declared by the
legislature, to override it. If the laws passed are seen to have a reasonable relation to a proper
legislative purpose, and are neither arbitrary nor discriminatory, the requirements of due process
are satisfied, and judicial determination to that effect renders a court functus officio. . . . (Nebbia
vs. New York, 78 L. ed. 940, 950, 957.)

Another authority states the principle thus:

. . . . Too much significance cannot be given to the word "reasonable" in considering the scope
of the police power in a constitutional sense, for the test used to determine the constitutionality
of the means employed by the legislature is to inquire whether the restriction it imposes on
rights secured to individuals by the Bill of Rights are unreasonable, and not whether it imposes
any restrictions on such rights. . . .

xxx xxx xxx

. . . . A statute to be within this power must also be reasonable in its operation upon the persons
whom it affects, must not be for the annoyance of a particular class, and must not be unduly
oppressive. (11 Am. Jur. Sec. 302., 1:1)- 1074-1075.)

In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:

26 | P a g e
 . . . . To justify the state in thus interposing its authority in behalf of the public, it must appear,
first, that the interests of the public generally, as distinguished from those of a particular class,
require such interference; and second, that the means are reasonably necessary for the
accomplishment of the purpose, and not unduly oppressive upon individuals. . . .

Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this test of
constitutionality:

In determining whether a given act of the Legislature, passed in the exercise of the police power
to regulate the operation of a business, is or is not constitutional, one of the first questions to be
considered by the court is whether the power as exercised has a sufficient foundation in reason
in connection with the matter involved, or is an arbitrary, oppressive, and capricious use of that
power, without substantial relation to the health, safety, morals, comfort, and general welfare of
the public.

b. Petitioner's argument considered.

Petitioner's main argument is that retail is a common, ordinary occupation, one of those privileges long
ago recognized as essential to the orderly pursuant of happiness by free men; that it is a gainful and
honest occupation and therefore beyond the power of the legislature to prohibit and penalized. This
arguments overlooks fact and reality and rests on an incorrect assumption and premise, i.e., that in this
country where the occupation is engaged in by petitioner, it has been so engaged by him, by the alien in
an honest creditable and unimpeachable manner, without harm or injury to the citizens and without
ultimate danger to their economic peace, tranquility and welfare. But the Legislature has found, as we
have also found and indicated, that the privilege has been so grossly abused by the alien, thru the
illegitimate use of pernicious designs and practices, that he now enjoys a monopolistic control of the
occupation and threatens a deadly stranglehold on the nation's economy endangering the national
security in times of crisis and emergency.

The real question at issue, therefore, is not that posed by petitioner, which overlooks and ignores the
facts and circumstances, but this, Is the exclusion in the future of aliens from the retail trade
unreasonable. Arbitrary capricious, taking into account the illegitimate and pernicious form and
manner in which the aliens have heretofore engaged therein? As thus correctly stated the answer is
clear. The law in question is deemed absolutely necessary to bring about the desired legislative
objective, i.e., to free national economy from alien control and dominance. It is not necessarily
unreasonable because it affects private rights and privileges (11 Am. Jur. pp. 1080-1081.) The test of
reasonableness of a law is the appropriateness or adequacy under all circumstances of the means
adopted to carry out its purpose into effect (Id.) Judged by this test, disputed legislation, which is not
merely reasonable but actually necessary, must be considered not to have infringed the constitutional
limitation of reasonableness.

The necessity of the law in question is explained in the explanatory note that accompanied the bill,
which later was enacted into law:

This bill proposes to regulate the retail business. Its purpose is to prevent persons who are not
citizens of the Philippines from having a strangle hold upon our economic life. If the persons
who control this vital artery of our economic life are the ones who owe no allegiance to this
Republic, who have no profound devotion to our free institutions, and who have no permanent
27 | P a g e
 stake in our people's welfare, we are not really the masters of our destiny. All aspects of our life,
even our national security, will be at the mercy of other people.

In seeking to accomplish the foregoing purpose, we do not propose to deprive persons who are
not citizens of the Philippines of their means of livelihood. While this bill seeks to take away
from the hands of persons who are not citizens of the Philippines a power that can be wielded to
paralyze all aspects of our national life and endanger our national security it respects existing
rights.

The approval of this bill is necessary for our national survival.

If political independence is a legitimate aspiration of a people, then economic independence is none the
less legitimate. Freedom and liberty are not real and positive if the people are subject to the economic
control and domination of others, especially if not of their own race or country. The removal and
eradication of the shackles of foreign economic control and domination, is one of the noblest motives
that a national legislature may pursue. It is impossible to conceive that legislation that seeks to bring it
about can infringe the constitutional limitation of due process. The attainment of a legitimate aspiration
of a people can never be beyond the limits of legislative authority.

c. Law expressly held by Constitutional Convention to be within the sphere of legislative action.

The framers of the Constitution could not have intended to impose the constitutional restrictions of due
process on the attainment of such a noble motive as freedom from economic control and domination,
thru the exercise of the police power. The fathers of the Constitution must have given to the legislature
full authority and power to enact legislation that would promote the supreme happiness of the people,
their freedom and liberty. On the precise issue now before us, they expressly made their voice clear;
they adopted a resolution expressing their belief that the legislation in question is within the scope of
the legislative power. Thus they declared the their Resolution:

That it is the sense of the Convention that the public interest requires the nationalization of retail
trade; but it abstain from approving the amendment introduced by the Delegate for Manila, Mr.
Araneta, and others on this matter because it is convinced that the National Assembly is
authorized to promulgate a law which limits to Filipino and American citizens the privilege to
engage in the retail trade. (11 Aruego, The Framing of the Philippine Constitution, quoted on
pages 66 and 67 of the Memorandum for the Petitioner.)

It would do well to refer to the nationalistic tendency manifested in various provisions of the
Constitution. Thus in the preamble, a principle objective is the conservation of the patrimony of the
nation and as corollary the provision limiting to citizens of the Philippines the exploitation,
development and utilization of its natural resources. And in Section 8 of Article XIV, it is provided that
"no franchise, certificate, or any other form of authorization for the operation of the public utility shall
be granted except to citizens of the Philippines." The nationalization of the retail trade is only a
continuance of the nationalistic protective policy laid down as a primary objective of the Constitution.
Can it be said that a law imbued with the same purpose and spirit underlying many of the provisions of
the Constitution is unreasonable, invalid and unconstitutional?

The seriousness of the Legislature's concern for the plight of the nationals as manifested in the approval
of the radical measures is, therefore, fully justified. It would have been recreant to its duties towards
28 | P a g e
the country and its people would it view the sorry plight of the nationals with the complacency and
refuse or neglect to adopt a remedy commensurate with the demands of public interest and national
survival. As the repository of the sovereign power of legislation, the Legislature was in duty bound to
face the problem and meet, through adequate measures, the danger and threat that alien domination of
retail trade poses to national economy.

d. Provisions of law not unreasonable.

A cursory study of the provisions of the law immediately reveals how tolerant, how reasonable the
Legislature has been. The law is made prospective and recognizes the right and privilege of those
already engaged in the occupation to continue therein during the rest of their lives; and similar
recognition of the right to continue is accorded associations of aliens. The right or privilege is denied to
those only upon conviction of certain offenses. In the deliberations of the Court on this case, attention
was called to the fact that the privilege should not have been denied to children and heirs of aliens now
engaged in the retail trade. Such provision would defeat the law itself, its aims and purposes. Beside,
the exercise of legislative discretion is not subject to judicial review. It is well settled that the Court
will not inquire into the motives of the Legislature, nor pass upon general matters of legislative
judgment. The Legislature is primarily the judge of the necessity of an enactment or of any of its
provisions, and every presumption is in favor of its validity, and though the Court may hold views
inconsistent with the wisdom of the law, it may not annul the legislation if not palpably in excess of the
legislative power. Furthermore, the test of the validity of a law attacked as a violation of due process, is
not its reasonableness, but its unreasonableness, and we find the provisions are not unreasonable. These
principles also answer various other arguments raised against the law, some of which are: that the law
does not promote general welfare; that thousands of aliens would be thrown out of employment; that
prices will increase because of the elimination of competition; that there is no need for the legislation;
that adequate replacement is problematical; that there may be general breakdown; that there would be
repercussions from foreigners; etc. Many of these arguments are directed against the supposed wisdom
of the law which lies solely within the legislative prerogative; they do not import invalidity.

VIII. Alleged defect in the title of the law

A subordinate ground or reason for the alleged invalidity of the law is the claim that the title thereof is
misleading or deceptive, as it conceals the real purpose of the bill which is to nationalize the retail
business and prohibit aliens from engaging therein. The constitutional provision which is claimed to be
violated in Section 21 (1) of Article VI, which reads:

No bill which may be enacted in the law shall embrace more than one subject which shall be
expressed in the title of the bill.

What the above provision prohibits is duplicity, that is, if its title completely fails to appraise the
legislators or the public of the nature, scope and consequences of the law or its operation (I Sutherland,
Statutory Construction, Sec. 1707, p. 297.) A cursory consideration of the title and the provisions of the
bill fails to show the presence of duplicity. It is true that the term "regulate" does not and may not
readily and at first glance convey the idea of "nationalization" and "prohibition", which terms express
the two main purposes and objectives of the law. But "regulate" is a broader term than either
prohibition or nationalization. Both of these have always been included within the term regulation.

29 | P a g e
 Under the title of an act to "regulate", the sale of intoxicating liquors, the Legislature may
prohibit the sale of intoxicating liquors. (Sweet vs. City of Wabash, 41 Ind., 7; quoted in page
41 of Answer.)

Within the meaning of the Constitution requiring that the subject of every act of the Legislature
shall be stated in the tale, the title to regulate the sale of intoxicating liquors, etc." sufficiently
expresses the subject of an actprohibiting the sale of such liquors to minors and to persons in the
habit of getting intoxicated; such matters being properly included within the subject of
regulating the sale. (Williams vs. State, 48 Ind. 306, 308, quoted in p. 42 of Answer.)

The word "regulate" is of broad import, and necessarily implies some degree of restraint and
prohibition of acts usually done in connection with the thing to be regulated. While word
regulate does not ordinarily convey meaning of prohibit, there is no absolute reason why it
should not have such meaning when used in delegating police power in connection with a thing
the best or only efficacious regulation of which involves suppression. (State vs. Morton, 162 So.
718, 182 La. 887, quoted in p. 42 of Answer.)

The general rule is for the use of general terms in the title of a bill; it has also been said that the title
need not be an index to the entire contents of the law (I Sutherland, Statutory Construction, See. 4803,
p. 345.) The above rule was followed the title of the Act in question adopted the more general term
"regulate" instead of "nationalize" or "prohibit". Furthermore, the law also contains other rules for the
regulation of the retail trade which may not be included in the terms "nationalization" or "prohibition";
so were the title changed from "regulate" to "nationalize" or "prohibit", there would have been many
provisions not falling within the scope of the title which would have made the Act invalid. The use of
the term "regulate", therefore, is in accord with the principle governing the drafting of statutes, under
which a simple or general term should be adopted in the title, which would include all other provisions
found in the body of the Act.

One purpose of the constitutional directive that the subject of a bill should be embraced in its title is to
apprise the legislators of the purposes, the nature and scope of its provisions, and prevent the enactment
into law of matters which have received the notice, action and study of the legislators or of the public.
In the case at bar it cannot be claimed that the legislators have been appraised of the nature of the law,
especially the nationalization and the prohibition provisions. The legislators took active interest in the
discussion of the law, and a great many of the persons affected by the prohibitions in the law conducted
a campaign against its approval. It cannot be claimed, therefore, that the reasons for declaring the law
invalid ever existed. The objection must therefore, be overruled.

IX. Alleged violation of international treaties and obligations

Another subordinate argument against the validity of the law is the supposed violation thereby of the
Charter of the United Nations and of the Declaration of the Human Rights adopted by the United
Nations General Assembly. We find no merit in the Nations Charter imposes no strict or legal
obligations regarding the rights and freedom of their subjects (Hans Kelsen, The Law of the United
Nations, 1951 ed. pp. 29-32), and the Declaration of Human Rights contains nothing more than a mere
recommendation or a common standard of achievement for all peoples and all nations (Id. p. 39.) That
such is the import of the United Nations Charter aid of the Declaration of Human Rights can be
inferred the fact that members of the United Nations Organizations, such as Norway and Denmark,

30 | P a g e
prohibit foreigners from engaging in retail trade, and in most nations of the world laws against
foreigners engaged in domestic trade are adopted.

The Treaty of Amity between the Republic of the Philippines and the Republic of China of April 18,
1947 is also claimed to be violated by the law in question. All that the treaty guarantees is equality of
treatment to the Chinese nationals "upon the same terms as the nationals of any other country." But the
nationals of China are not discriminating against because nationals of all other countries, except those
of the United States, who are granted special rights by the Constitution, are all prohibited from
engaging in the retail trade. But even supposing that the law infringes upon the said treaty, the treaty is
always subject to qualification or amendment by a subsequent law (U. S. vs. Thompson, 258, Fed. 257,
260), and the same may never curtail or restrict the scope of the police power of the State (plaston vs.
Pennsylvania, 58 L. ed. 539.)

X. Conclusion

Resuming what we have set forth above we hold that the disputed law was enacted to remedy a real
actual threat and danger to national economy posed by alien dominance and control of the retail
business and free citizens and country from dominance and control; that the enactment clearly falls
within the scope of the police power of the State, thru which and by which it protects its own
personality and insures its security and future; that the law does not violate the equal protection clause
of the Constitution because sufficient grounds exist for the distinction between alien and citizen in the
exercise of the occupation regulated, nor the due process of law clause, because the law is prospective
in operation and recognizes the privilege of aliens already engaged in the occupation and reasonably
protects their privilege; that the wisdom and efficacy of the law to carry out its objectives appear to us
to be plainly evident as a matter of fact it seems not only appropriate but actually necessary and
that in any case such matter falls within the prerogative of the Legislature, with whose power and
discretion the Judicial department of the Government may not interfere; that the provisions of the law
are clearly embraced in the title, and this suffers from no duplicity and has not misled the legislators or
the segment of the population affected; and that it cannot be said to be void for supposed conflict with
treaty obligations because no treaty has actually been entered into on the subject and the police power
may not be curtailed or surrendered by any treaty or any other conventional agreement.

Some members of the Court are of the opinion that the radical effects of the law could have been made
less harsh in its impact on the aliens. Thus it is stated that the more time should have been given in the
law for the liquidation of existing businesses when the time comes for them to close. Our legal duty,
however, is merely to determine if the law falls within the scope of legislative authority and does not
transcend the limitations of due process and equal protection guaranteed in the Constitution. Remedies
against the harshness of the law should be addressed to the Legislature; they are beyond our power and
jurisdiction.

The petition is hereby denied, with costs against petitioner.

31 | P a g e
G.R. No. L-554 April 9, 1948

HAW PIA, plaintiff-appellant,

vs.
THE CHINA BANKING CORPORATION, defendant-appellee.

FERIA, J.:

Plaintiff-appellant instituted this action in the Court of First Instance of Manila against the defendant-
appellee, China Banking Corporation, to compel the latter to execute a deed of cancellation of the
mortgage on the property described in the complaint, and to deliver to the said plaintiff the Transfer
Certificate of Title No. 47634 of the Register of Deeds of Manila, with the mortgage annotated therein
already cancelled, as well as to pay the plaintiff the sum of P1,000.00 for damages as attorney's fees
and to pay the costs of the suit. The cause of action is that the plaintiff's indebtedness to the China
Banking Corporation in the sum of P5,103.35 by way of overdraft in current account payable on
demand together with its interests, has been completely paid, on different occasions, from October 7,
1942, to August 29, 1944, to the defendant Bank China Banking Corporation through the defendant
Bank of Taiwan, Ltd., that was appointed by the Japanese Military authorities as liquidator of the China
Banking Corporation.

Upon having been served with summons the defendant-appellee China Banking Corporation made a
demand from the plaintiff-appellant for the payment of the sum of P5,103.35 with interests
representing the debt of the said appellant, and in the answer it set up a counter claim against the
plaintiff-appellant demanding the payment, within 90 days from the latter to the former by way of
overdraft together with its interests at the rate of 9 additional sum of P1,500 as attorney's fees and the
costs of the suits.

After the hearing of the case, the trial court rendered a decision holding that, as there was no evidence
presented to show that the defendant China Banking Corporation had authorized the Bank of Taiwan,
Ltd., to accept the payment of the plaintiff's debt to the said defendant, and said Bank of Taiwan, as an
agency of the Japanese invading army, was not authorized under the international law to liquidate the
business of the China Banking Corporation, the payment has not extinguished the indebtedness of the
plaintiff to the said defendant under article 1162 of the Civil Code. The court absolved the defendant
China Banking Corporation from the complaint of the plaintiff, and sentenced the latter to pay the
former the sum of P5,103.35 with interests within the period of 90 days from and after the above
mentioned Executive Order No. 32 had been repealed or set aside, and ordered that, if the plaintiff
failed to pay it within the said period, the property mortgaged shall be sold at public auction and the
proceeds of the sale applied to the payment of said obligations. The plaintiff appealed from the decision
to this Court.

The appellant's assignments of error may be reduced to two, to wit: First, whether or not the Japanese
Military Administration had authority to order the liquidation or winding up of the business of
defendant-appellee China Banking Corporation, and to appoint the Bank of Taiwan liquidator
authorized as such to accept the payment by the plaintiff-appellant to said defendant-appellee; and
second, whether or not such payment by the plaintiff-appellant has extinguished her obligation to said
defendant-appellee.

32 | P a g e
(1) As to the first question, we are Japanese military opinion, and therefore hold, that the Japanese
military authorities had power, under the international law, to order the liquidation of the China
Banking Corporation and to appoint and authorize the Bank of Taiwan as liquidator to accept the
payment in question, because such liquidation is not confiscation of the properties of the bank appellee,
but a mere sequestration of its assets which required the liquidation or winding up of the business of
said bank. All the arguments to the contrary in support of the decision appealed from the predicated
upon the erroneous assumption that the liquidation or winding up of the affairs of the China Banking
Corporation, in order to determine its liabilities and net assets to be sequestrated or controlled, was an
act of confiscation or appropriation of private property contrary to Article 46, section III of the Hague
Regulations of 1907.

The provisions of the Hague Regulations, section III, on Military Authority over Hostile Territory,
which is a part of the Hague Convention respecting the laws and customs of war on land, are intended
to serve as general rule of conduct for the belligerents in their relations with each other and with the
inhabitants, but as it had not been found possible then to concert regulations covering all the
circumstances which occur in practice, and on the other hand it could not have been intended by the
High Contracting Parties that the unforeseen cases should, in the absence of a written undertaking, be
left to the arbitrary judgment of military commanders, it was agreed that "Until a complete code of the
laws of war has been issued, the High Contracting Parties deem it expedient to declare that in cases not
included in the Regulations adopted by them, the inhabitants and the belligerents remain under the
protection and the rule of the principles of international law, as they result for the usages established
among civilized peoples, from the laws of humanity, and the dictates of public conscience."

Before the Hague Convention, it was the usage or practice to allow or permit the confiscation or
appropriation by the belligerent occupant not only of public but also of private property of the enemy in
a territory occupied by the belligerent hostile army; and as such usage or practice was allowed,
a fortiori, any other act short of confiscation was necessarily permitted. Section III of the Hague
Regulations only prohibits the confiscation of private property, article 53 provides that cash funds, and
property liable to requisition and all other movable property belonging to the State susceptible of
military use or operation, may be confiscated or taken possession of as a booty and utilized for the
benefit of the invader's government (II Oppenheim, 8th ed. section 137; 320 & 321, War Department;
Basic Field Manual, Rules of Land Warfare FM 27-10). The belligerents in their effort to control
enemy property within their jurisdiction or in territories occupied by their armed forces in order to
avoid their use in aid of the enemy and to increase their own resources, after the Hague Convention and
specially during the first World War, had to resort to such measures of prevention which do not amount
to a straight confiscation, as freezing, blocking, placing under custody and sequestrating the enemy
private property. Such acts are recognized as not repugnant to the Hague Regulations by well-known
writers on International Law, and are authorized in the Army and Navy Manual of Military
Government and Civil Affairs not only of the United States, but also in tries, as well as in the Trading
with the Enemy Acts of said countries.

Hyde in his International Law chiefly as interpreted and applied by the United States, Vol. 3, 6th ed., p.
1727, has the following to say:

In examining the efforts of a belligerent to control in various ways property within its domain
that has such a connection with nationals of the enemy that it may be fairly regarded as enemy
property, it is important to inquire whether the attempt is made to appropriate property without
compensation, divesting him not only of title, but also of any right or interest in what is taken,
33 | P a g e
 without prospect of reimbursement, or whether those efforts constitute an assumption of control
which, regardless of any transfer of title, is not designated to produce such a deprivation. The
character of the belligerent acts in the two situations is not identical. To refer to both as
confiscatory is not productive of clearness of thought, unless a loose and broad signification be
attached to the term "confiscation." The point to be noted is that a belligerent may in fact
deprive an alien enemy owner of property by process that are into essentially confiscatory, even
though the taking and retention may cause him severe loss and hardship. Recourse to such non-
confiscatory retentions or deprivations has marked the conduct of belligerents since the
beginning of the World War in 1914. They may perhaps be appropriately referred to as
sequestrations. The propriety of what they have involved is, therefore, hardly discernible by
reference to objections directed against confiscatory action as such, and must be tested by other
means or standards.

A belligerent may fairly endeavor to prevent enemy property of any kind within its territory (or
elsewhere within its reach) from being so employed as to afford direct military aid to its foe.
Measures of prevention may, in a particular case, assume a confiscatory aspect. In such a
situation the question may arise whether those aspect. In such a situation the question may arise
whether those measures are, nevertheless, excusable. It is believed that they may be, and that
they are not invariably unlawful despite the absence of efforts to compensate the owners.

And in the footnote of the same page, said author adds:

This analysis differs sharply from that of those who would regard almost all uncompensated
deprivations of property as essentially confiscatory, and as, therefore, internationally illegal
because of the further assumption or conclusion that confiscatory action must inevitably be so
regarded. Belligerent States have not, however, generally acted on such a theory. They have in
fact proceeded, especially since 1914, to exercise varying degrees of control over vast amounts
of enemy private property by strictly non-confiscatory processes from which they have felt no
sense of legal obligation to abstain. In so doing they have been creative of relatively fresh
practices which logic has ordained and war-terminating treaties have sanctioned. Thus it
happens that proper estimation of the place of confiscation of enemy private property in the law
of nations has become of less importance than formerly, because both of the reluctance of States
and notably of the United States to have recourse to it, and of their preference for no-
confiscatory measures exemplified in sequestrations as a desirable and sufficient means of
utilizing such property.

And Oppenheim in his International Law, Vol. 2, 6th ed., by Lauterpacht, says:

But the desire to eliminate the financial and commercial influence of the enemy, and other
motives, presently led in most States to exceptional war measures against the businesses and
property of enemies, which though not confiscation, implicated great loss and injury. Sometimes
these measures stopped short of divesting the enemy ownership of the property; but in other
cases the businesses or property were liquidated, and were represented at the close of hostilities
by nothing else than the proceeds of their realization, often enough out of all proportion to their
value. In the Trading with the Enemy Act, 1939, provisions was made for the appointment of
custodians of enemy property in order to prevent the payment of money to enemies and preserve
enemy property in contemplation of arrangements to be made at the conclusion of peace.

34 | P a g e
 The readjustment of rights of private property on land was provided for by the Treaties of Peace.
The general principles underlying their complicated arrangements were that the validity of all
completed war measures was reciprocally confirmed; but that while uncompleted liquidations on
the territories of the Central Powers were to be discontinued, and the subjects of the victorious
Powers were to receive compensation for the loss or damage inflicted on their property by the
emergency war measures, the property of subjects of the vanquished Powers on the territories of
the Allied and Associated Powers might be retained and liquidated, and the owner was to look
for compensation to his own State. The proceeds of the realization of such property were not to
be handed over to him, or to his State, but were to be credited to his State as payment on account
of the sums payable by it under the treaties.

In paragraph 143 (p. 313) of the same work, Oppenheim states that "Private personal property which
does not consist of war materials or means of transport serviceable for military operations may not be
as a rule seized". It is obvious that the word "seized" used therein signifies "confiscated" in view of the
above quoted paragraph, and therefore when Oppenheim says, in footnote to said passage, "Nor may
the occupant liquidate the business of enemy subject in occupied territories," he means "confiscate" by
the word "liquidate".

Ernest K. Feildchenfeld in his "The International Economic Law of Belligerent Occupation (1942)"
supports the foregoing conclusion of Hyde, when he says that "According to Article 46 of the Hague
Regulations, private property must be respected and cannot be confiscated. This rule affords protection
against the loss of property, through outright confiscation, but not against losses under lawful
requisition, contribution, seizure, fines, taxes, and expropriation" (Par. 208, p. 51). And later on the
adds: "A complete nationalization of a corporation for the benefit of the occupant could not be anything
but a permanent measure involving final effects beyond the duration of the occupation. There is no
military need for it because the same practical results can be achieved by temporary sequestration,"
(par. 385, p. 107).

Martin Domke in his Trading with the Enemy in World War II, pp. 4 and 5, speaking of Warfare on
Economic and military fronts, says that "Freezing Control is but one phase of the present war effort; it
is but one weapon on the total war which is now being waged on both economic and military fronts.
Coupled with Freezing Control as a part of this nation's program of economic warfare are to be found
export control, the promulgation of a Black List, censorship, seizure of enemy-owned property, and
financial and lend-lease aid to allied and friendly nations. As to Japan, no official information is
available as yet on steps taken by the Japanese Government. As a Commentary of April 11, 1942,
points out, the Japanese Trading with the Enemy legislation enacted during the last war against
Germany might throw some light on the views adopted by Japan in this matter."

The sequestration or liquidation of enemy banks in occupied territories is authorized expressly by the
United States Army and Navy Manual of Military Government and Civil Affairs F.M. 2710 OPNAV
50-E-3, which, mandatory and controlling upon the theatre commanders of the U. S. forces in said
territories, provides in its paragraph 12 the following:

Functions of Civil Affairs Officers. In the occupation of such territories for a considerable
period of time, the civil affairs officers will in most cases be concerned with the following and
other activities:

35 | P a g e
 1. MONEY AND BANKING. Closing, if necessary and guarding of banks, bank funds, safe
deposit boxes, securities and records; providing interim banking and credit needs; liquidation;
reorganization, and reopening of banks at appropriate times; regulations and supervisions of
credit cooperatives and other financial agencies and organizations; execution of policies on
currency fixed by higher authority, such as the designation of types of currency to be used and
rates of exchange supervision of the issue and use of all types of money and credit; declaration
of debt moratoria; prevention of financial transactions with enemy occupied territory.

The civil affairs officers are concerned, that is, entrusted with the performance of the functions
enumerated above, when so directed by the chief commander of the occupant military forces.

Not only the United States Army and Navy Manual of Military Government and Civil Affairs but
similar manuals of other countries authorize the liquidation or impounding of the assets of enemy
banks or the freezing, blocking and impounding of enemy properties in the occupied hostile territories
without violating article 46 or other articles of the Hague Regulations. They do not amount to an
outright confiscation of private property, and were put into effect by the Allied Army in the occupied
hostile territories in Europe during World War II.

The Combined Chiefs of Staff, in their Directive of May 31, 1943, on Military Government in Sicily,
Italy, addressed to the Supreme Allied Commander, Mediterranean Theater, ordered: "(h) An Allied
Military Financial Agency under the control of the Military Government shall be established with such
sub-agencies as considered necessary," "(i) Military authorities on occupying an area shall immediately
take the following steps: '(1) All financial institutions and banks shall be closed and put under the
custody of the military forces'," (2) a general moratorium shall be declared. (j) ... all papers of value,
foreign securities, gold and foreign currencies shall be impounded with receipts granted to recognized
owners. (k) "The Allied Military Financial Agency or any appointed agency by the MG will take into
immediate custody all foreign securities and currencies, holding of gold, national funds and holding of
Fascist organizations for deposit." (Appendix on American Military Government, its Organization and
Policies, by Hajo Holborn, 1947, pp. 116, 117.)

The Combined Directive of April 28, 1944, for Military government in Germany Prior to Defeat or
Surrender, provided that the Allied Forces "Upon entering the area of Germany will take the following
steps and put into effect only such further financial measures as they deem necessary from a strictly
military standpoint. (b) "Banks should be placed under such control as deemed necessary by them in
order that adequate facilities or military needs may be provided and to insure that instructions and
regulations issued by the military authorities will be fully complied with." (c) "Pending determination
of future disposition, all gold, foreign currencies, foreign securities, accounts in financial institutions,
credits, valuable papers, and all similar assets held by or on behalf of the following, will be impounded
or blocked and will be used or otherwise dealt with only as permitted under licenses or other
instructions which you may issue: (1) German national state, provincial and local governments and
agencies and instrumentalities thereof." (4) "Nazi party organizations including the party formations,
affiliates and supervised associations, and the officials, leading members and supporters thereof; and
(5) Persons under detention or other types of custody by Allied Military authorities and other persons
whose activities are hostile to the interest of military government" (Holborn, supra, p. 141)

In the Allied Directive of June 27, 1945, to the Commander in Chief of the United States forces of
occupation regarding the military government of Austria, the Commanding General of the United
States forces of occupation in Austria, serving as United States members of the Allied Council of the
36 | P a g e
Allied Commission for Austria, was authorized, subject to agreed policies of the Allied Council to
close banks, insurance companies, and other financial institutions for a period long enough to introduce
satisfactory control to ascertain their cash position and to issue instructions for the determination of
accounts and assets to be blocked under paragraph 55 which authorized him to impound or block all
gold, silver, currencies, securities accounts in financial institutions, credits, valuable papers, and all
other assets falling within the following categories; a. Property owned or controlled, directly or
indirectly, in whole or in part, by any of the following: (1) the governments, nationals or residents of
the German Reich, Italy, Bulgaria, Rumania, Hungary, Finland and Japan, including those of territories
occupied by them; (3) the Nazi Party, its formations, affiliated associations and supervised
organizations, its officials, leading members and supporters; (4) all organizations, clubs and other
associations prohibited or dissolved by military government; (5) absentee owners, including United
nations and neutral governments; (7) persons subject to arrest under the provisions of paragraph 7, and
all other persons specified by military government by inclusion in lists or otherwise, (Holborn, supra,
p. 192).

On the other hand, the provisions of the Trading with the Enemy Acts enacted by the United States and
almost all the principal nations since the first World War, including England, Germany, France and
other European countries, as well as Japan, confirms that the assets of enemy corporations, specially
banks incorporated under the laws of the country at war with the occupant and doing business in the
occupied territory, may be legally sequestered, and the business thereof wound up or liquidated. Such
sequestration or seizure of the properties is not an act for the confiscation of enemy property, but for
the conservation of it, subject to further disposition by treaty between the belligerents at the end of the
war. Section 12 of the Trading with the Enemy Act of the United States provides that "after the end of
the war any claim of enemy or ally of an enemy to any money or other property received and held by
the Alien Custodian or deposited in the United States Treasury, shall be settled as Congress shall
direct."

The purpose of such sequestration is well expounded in the Annual Report of the Office of the Alien
Custodian for a period from March 11, 1943 to June 30, 1943. "In the absence of effective measures of
control, enemy-owned property can be used to further the interest of the enemy and to impede our own
war effort. All enemy-controlled assets can be used to finance propaganda, epionage, and sabotage in
this country or in countries friendly to our cause. They can be used to acquire stocks of strategic
materials and supplies ... use to the enemy, they will be diverted from our own war effort.

The national safety requires the prohibition of all unlicensed communication, direct or indirect, with
enemy and enemy-owned territories. To the extent that this prohibition is effective, the residents of
such territory are prevented from exercising the rights and responsibilities of ownership over property
located in the United States. Meanwhile, decisions affecting the utilization of such property must be
made and carried out. Houses must be maintained and rents collected; payments of principal and
interest on mortgages must be made for the account of foreign debtors and foreign creditors; stranded
stocks of material and equipment must be sold; patents must be licensed, business enterprises must be
operated and liquidated, and foreign interest must be represented in court actions. The number of
decisions to be made in connection with property is in fact multiplied by a state of war, which requires
that productive resources be shifted from one use to another so as to conform with the requirements of
a war economy."

The defendant-appellee, China Banking Corporation, comes within the meaning of the word "enemy"
as used in the Trading with Enemy Act of civilized countries, because not only it was controlled by
37 | P a g e
Japan's enemies, but it was, besides, incorporated under the laws of a country with which Japan was at
war.

Section 2 (1) of the Trading with the Enemy Act of Great Britain provides that the expression "enemy"
means: "any body of persons (whether corporate or incorporate) carrying on business in any place, if
and so long as the body is controlled by a person who, under this section, is an "enemy". The control
test has also been expressly adopted in the French Trading with the Enemy Act. The Italian Act regards
as enemies "legal persons when enemy subject have any prevalent interest whatever in them." The
Decree of the Dutch Government-in-exile of June 7, 1940, also adopted the control test by including in
the term enemy subjects "legal persons in which interest of an enemy state or enemy subjects are
predominantly involved." (Domke Trading with the Enemy Act, pp. 127-130.)

In the United States, the Trading with the Enemy Act has not adopted the control theory. But section 2-
a of the said Act says that the word enemy shall be deemed to mean any "corporation incorporated
within such territory of any nation with which the United States is at war." And the same definition is
given to the word "enemy" by the Trading with the Enemy Act of the above-named countries. The
British Act in Section 2 (1) defines as enemy "any body of persons constituted or incorporated in or
under the laws of a state at war with his Majesty," it being immaterial that they are under the control of
allied or neutral stockholders. Similarly the French Act regards as enemies, corporations incorporated
in conformity with the laws of an enemy state. The decree of the Dutch Government-in-exile on June 7,
1940, considers as enemies legal persons "organized or existing according to or governed by the law of
an enemy state." The German Act of January 15, 1940, I section 3 (1) 3, deems enemies all
corporations, "the original personality of which is based on the laws of an enemy state." The Italian Act
of 1938, section 5, regards corporation as enemies if they are of enemy nationality under the law of the
enemy state. So too the Japanese Act, Chapter 1, No. 25, deems enemies "all corporations belonging to
enemy countries." (See Martin Domke, Trading with the Enemy Act in World War II, pp. 120-122.)

Section 3-A of the Trading with the Enemy Act of the United Kingdom of September 5, 1939, as
amended up to April 1, 1943, provides that "Where and business is being carried in the United
Kingdom by, on behalf of, or under the jurisdiction of, persons all or any of whom are enemies or
enemy subjects or appear to the Board of Trade to be associated with enemies, the Board of Trade may,
if they think it expedient so to do, make ...;" (b) and order (hereinafter in this section referred to as a
winding up orders) requiring the business to be wound up;" and section 14 (c) of the same Act (that
obviously makes it applicable to enemy territories occupied by the United Kingdoms armed forces)
provides that "His Majesty may by order in council direct that the provisions of this Act other than this
section shall extend, with such exceptions, adaptations and modifications, if any, as may be prescribed
by or under the order ... (to the extent of His Majesty's jurisdiction therein) to any of the country or
territory being a foreign country or territory, in which for the time being His Majesty has jurisdiction."
(The Trading with the Enemy Act in World War II, p. 481, by Martin Domke.)

Section 5 (b) of the Trading with the Enemy Act of the United States provides that "during the time of
war or during any period in which national emergencies declared by the President, the President may
under any agency that he may designate or otherwise under such rule and regulation as he may
prescribe," and "any property or interest of any foreign country or national thereof shall vest, when, as,
and upon the terms, directed by the President, in such agency or person as may be designated from time
to time by the President, and upon such terms and conditions as the President may prescribe, such
interest or property shall be held, used, administered, liquidated, etc." and section 6 (e) of the same Act
provides that "any payment, ... of money or property made to the alien property custodian hereunder
38 | P a g e
shall be a full acquittance and discharge for all purposes of the obligation of the person making the
same to the extent of same. .. and shall, in any case of payment to the alien, property custodian of any
debt or obligation owed to an enemy or ally of enemy, deliver up any notes, bonds, or other evidences
of indebtedness or obligation, ... with like effect as if he or they, respectively, were duly appointed by
the enemy or ally of enemy, creditor, or obligee."

It is evident that the Trading with the Enemy Act of the United States, like that of the United Kingdom
or Great Britain above quoted, and those of other countries, may be applied and enforced in a hostile
territory occupied by the United States armed forces, because section 2 of said Act provides "That the
words 'United States', as used herein, shall be deemed to mean all land and water, continental or
insular, in any way within the jurisdiction of the United States or occupied by the military or naval
forces thereof." After the liberation of the Philippines during World War II, properties belonging to
Japanese Nationals located in this country were taken possession of by the Alien Property Custodian
appointed by the President of the United States under the Trading with the Enemy Act, because,
although the Philippines was not a territory or within the jurisdiction or national domain of the United
States, it was then occupied by the military and naval forces thereof.

Of course it is obvious that the obligations assumed by the United States, in applying the Trading with
the Enemy Act of the United States to properties within her national domain, is different and distinct
from those arising from the application thereof to enemy properties located within the hostile territory
occupied by her armed forces. In the first case, Congress is untramelled and free to authorize the
seizure, use, or appropriation of such properties without and compensation to the owners, for although
section 2 of the Trading with the Enemy Act provides that "at the end of the war any claim of an enemy
or of an ally of enemy to any money or other property received and held by the alien property custodian
or deposited in the United States Treasury shall be settled by Congress," the owners of the properties
seized within the national domain of the United States are not entitled to demand its release or
compensation for its seizure, but what could ultimately come back to them, might be secured, not as a
matter of right, but as matter of either grace to the vanquished or exacted by the victor, for the case is to
be governed by the domestic laws of the United States, and not by the Hague Regulations or
International Law (U.S. vs. Chemical Foundation Inc., 272 U.S. 1; United States vs. S.S. White Dental
Manufacturing Company, 274 U.S., 402). While in the latter case, when the properties are sequestered
in a hostile occupied territory by the armed forces of the United States, Congress can not legally refuse
to credit the compensation for them to the States of the owners as payment on the account of the sums
payable by said States under treaties, and the owners have to look for compensation to their States,
otherwise, they would violate article 46 of the Hague Regulations or their pledge of good faith implied
in the act of sequestering or taking control of such properties.

It is to be presumed that Japan, in sequestering and liquidating the China Banking Corporation, must
have acted in accordance, either with her own Manual of the Army and Navy and Civil Affairs, or with
her Trading with the Enemy Act, and even if not, it being permitted to the Allied Nations, specially the
United states and England, to sequestrate, impound, and block enemy properties found within their own
domain or in enemy territories occupied during the war by their armed forces, and it not being contrary
to the Hague regulations or international law, Japan had also the right to do the same in the Philippines
by virtue of the international law principle that "what is permitted to one belligerent is also allowed to
the other."

Taking into consideration the acts of the Japanese Military Administration in treating the private
properties of the so-called enemy banks, it appears evident that Japan did not intend to confiscate or
39 | P a g e
appropriate the assets of said banks or the debts due them from their debtors, and thus violate article 46
or any other article of the Hague Regulations. It is true that as to private personal properties of the
enemy, freezing, blocking, or impounding thereof is sufficient for the purpose of preventing their being
used in aid of the enemy; but with regard to the funds of commercial banks like the so-called enemy
banks, it was impossible or impracticable to attain the purpose for which the freezing, blocking or
impounding are intended, without liquidating the said banks and collecting the loans given by then to
the hundreds if not thousands or persons scattered over the Islands. Without doing so, their assets or
money loaned to so many persons can not properly be impounded or blocked, in order to prevent their
being used in aid to the enemy through the intervention of their very debtors, and successfully wage
economic as well as military war.

That the liquidation or winding up of the business of the China Banking Corporation and other enemy
banks did not constitute a confiscation or appropriation of their properties or of the debts due them
from their debtors, but a mere sequestration of their assets during the duration of the war for the
purposes already stated, is evidenced conclusively by the following uncontroverted facts set forth in the
briefs of both parties and amici curiae:

(1) Out of the sum of about P34,000,000 collected from the debtors by the liquidator Bank of Taiwan,
the latter paid out to the depositors or creditors of the same bank about P9,000,000; and its common
sense that this last amount should not have been disbursed or taken out of the said amount of about
P34,000,000 had it been the intention of the Japanese Military Administration to confiscate this amount
collected by the Bank of Taiwan.

(2) The members of Chinese Associations were permitted to withdraw from their deposits with the
China Banking Corporation a considerable amount of money which was paid out of the sum collected
from the debtors of said bank, in order that they may pay the contribution legally exacted from them by
the military occupant in accordance with article 51 of the Hague Regulations. And this showed the
intention of the belligerent occupant not to confiscate the bank's assets and to act, at least in this
respect, in accordance with said Regulations; because otherwise the Japanese Military Administration
could have properly required the Chinese to pay the contribution out of their own funds, without
diminishing or reducing the amounts collected by the Bank of Taiwan from the debtors of the China
Bank.

(3) The collection of the aforementioned debts from the bank's debtors, as well as the payment of
withdrawal by the depositors, were regularly entered into the books of said Banks, so that after
liberation they could easily determine the respective amounts and the persons who had made the
payments, which enabled all said banks to re-open and continue their business; and the regular keeping
of said books would have been unnecessary or useless, were it the intention of the military occupant to
close definitely the enemy banks and appropriate all their resources.

(4) There was absolutely no reason for confiscating the funds of the banks collected from their debtors,
because by sequestrating or impounding their assets or funds after the latter had been collected from
their debtors, the principal purpose of preventing the possible use of the funds of the banks in aid of
Japan's enemy was completely accomplished. Absolutely no other benefit could be derived by Japan
from confiscating or appropriating the payments made in Japanese war military notes to the enemy
banks by their debtors, because the Japanese Government could have them at will without cost, except
that of the ink, paper and labor necessary for printing and issuing them.

40 | P a g e
(5) The annual Report, 31st December, 1945, of the Chartered Bank of India, Australia, and China (pp.
11-12), which had a branch in Manila liquidated by Japanese Military authorities as one of enemy
banks, clearly shows that the liquidation of said branch was a mere sequestration, impounding or
control of its assets, and not a confiscation or appropriation thereof during the occupation by the
Japanese. It says that during the enemy occupation the cash balance of our Branches were seized, their
assets realized and repayment of varying amounts, but up to 100 per cent in one Branch at least, made
to depositors. Said report reads, in its pertinent part, as follows:

I informed you, when commenting upon the Balance Sheet figures for the year ending 31st
December, 1942, that we had reason to believe that accounts of some of our occupied Branches
had been partly or wholly liquidated, and that the liquidation of such accounts would ultimately
bring about shrinkage in both Assets and Liabilities in the Balance Sheet figures. The
information now in our possession and the various changes in the Balance Sheet figures to
which I have referred to above, confirm the correctness of this statement, for during the enemy
occupation the cash balances of our Branches were seized, their assets realized where possible,
and repayment of varying amounts, but up to 100 per cent in one Branch at least, made to
depositors. Even so, the business of the offices of the Bank which remained under our own
control throughout the war was steadily increased and has offset to a great extent decreases
brought about by the partial liquidation of Branches which were in Japanese control. (Emphasis
supplied.)

It is obvious that the fact that Japanese Military authorities failed to pay the enemy banks the balance
of the money collected by the Bank of Taiwan from the debtors of the said banks, did not and could not
change the sequestration or impounding by them of the bank's assets during the war, into an outright
confiscation or appropriation thereof. Aside from the fact that it was physically impossible for the
Japanese Military authorities to do so because they were forcibly driven out of the Philippines or
annihilated by the forces of liberation, following the readjustment of rights of private property on land
seized by the enemy provided by the Treaty of Versailles and other peace treaties entered into at the
close of the first World War, the general principles underlying such arrangements are that the owners
of properties seized, sequestrated or impounded who are nationals of the victorious belligerent are
entitled to receive compensation for the loss or damage inflicted on their property by the emergency
war measures taken by the enemy, through their respective States or Governments who may officially
intervene and demand the payment of he claim on behalf of their nationals (VI Hackworth Digest of
International Law, pages 232, 233; 11 Oppenheim, sixth edition, page 263). Naturally, as the Japanese
war notes were issued as legal tender for payment of all kinds at par with the Philippine peso, by the
Japanese Imperial Government, which in its proclamations of January 3, 1942, and February 1, 1942,
"takes full responsibility for their usage having the correct amount to back them up" (See said
Proclamations and their official explanation, O.T. IMA, Vol, 1, pp. 39, 40), Japan is bound to
indemnify the aggrieved banks for the loss or damage on their property, in terms of Philippine pesos or
U.S. dollars at the rate of one dollar for two pesos.

(2) The second question is, we may say, corollary of the first. It having been shown above that the
Japanese Military Forces had power to sequestrate and impound the assets or funds of the China
Banking Corporation, and for that purpose to liquidate it by collecting the debts due to said bank from
its debtors, and paying its creditors, and therefore to appoint the Bank of Taiwan as liquidator with the
consequent authority to make the collection, it follows evidently that the payments by the debtors to the
Bank of Taiwan of their debts to the China Banking Corporation have extinguished their obligation to
the latter. Said payments were made to a person, the Bank of Taiwan, authorized to receive them in the
41 | P a g e
name of the bank creditor under article 1162, of the Civil Code. Because it is evident the words "a
person authorized to receive it," as used therein, means not only a person authorized by the same
creditor, but also a person authorized by law to do so, such as guardian, executor or administrator of
estate of a deceased, and assignee or liquidator of a partnership or corporation, as well as any other
who may be authorized to do so by law (Manresa, Civil Code, 4th ed. p. 254.)

The fact that the money with which that debts have been paid were Japanese war notes doe not affect
the validity of the payments. The provision of article 1170 of our Civil Code to the effect that "payment
of debts of money must be made in the species stipulated and if it not to deliver such specie in silver or
gold coins which is legal tender," in not applicable to the present case, because the contract between the
parties was to pay Philippine pesos and not some specifically defined species of money. The Philippine
peso and half-pesos including the Philippine Treasury Certificate was and is legal tender in the
Philippines under section 612 of the Administrative Code, as amended by Act No. 4199. As well stated
by the Supreme Court of the United States in Knox vs. Lee and Parker (Legal Tender Cases, 12 Wall.,
457-681, 20 Law. ed., 287). "The expectation of the creditor and the anticipation of the debtor may
have been that the contract would be discharged by the payment of coined metals, but neither the
expectation of one party to the contract, respecting its fruits, nor the anticipation of the other,
constitutes its obligation. There is a well-recognized distinction between the expectation of the parties
to a contract and the duty imposed by it. Aspdin vs. Austin, 5 Ad. & Bl. (N.S.) 671; Dunn vs.
Sayles, Ibid. 685; Coffin vs. Landis, 46 Pa. 426. Were it not so, the expectation of results would be
always equivalent to a binding engagement that they should follow. But the obligation of contract to
pay money is to pay that which the law shall recognize as money when the payment is made. If there is
anything settled by decision it is this, and we do not understand it to be controverted." (Knox vs.
Exchange Bank of Virginia, 12 Wall., 457; 20 U.S. Supreme Court Reports, 20 L. ed., 287, 311.) In
said case it was held that the legal tender for payment of debts contracted before and after their passage
were not inappropriate for carrying into execution the legitimate purpose of the Government. And this
Court, in Rogers vs. Smith Bell (10 Phil., 319), held that "A debt of 12,000 pesos created in 1876 can
now (1908) be paid by 12,000 of the Philippine pesos authorized by the Act of Congress of March 2,
1903, although at the time the loan was made which created the debt, the creditor delivered to the
debtor 12,000 pesos in gold coin."

The power of the military governments established in occupied enemy territory to issue military
currency in the exercise of their governmental power has never been seriously questioned. Such power
is based, not only on the occupant's general power to maintain law and order recognized in article 43 of
the Hague Regulations (Feilchenfeld of Belligerent Occupation, paragraph 6), but on military necessity
as shown by the history of the use of money or currency in wars.

As early as the year 1122, during the siege of Tyre, Doge Micheli paid his troops in leather money
which he promised to redeem when he returned to Venice (Del Mar, Money and Civilization, 26), and
when Frederick II besieged Milan he also used leather money to pay his troops, as well as in payment
of wages (id. 33). When the French forces occupied the Ruhr in 1923, they finished the printing of
some Reichsbank notes in process and issued them. (Nussbaum, Money in the Law, note 6, 158-59.)
The British during the Boer War issued receipts for requisitioned goods and made such receipts readily
negotiable, an arrangement very similar to the issuance of currency (Spaight, War Rights on Land,
396). During the American Revolution, the Continental Congress issued currency even before the
issuance of the Declaration of Independence, when the territory controlled by Congress was held in
military occupation against the then legitimate government. (Dewey, Financial History of the United
States, 37-38; Morrison and Commager, Growth of the American Republic, 207; Nussbaum, op.
42 | P a g e
cit. supra note, 6, 172-173.) The Confederacy issued its own currency in Confederate territory
(Thorington vs. Smith, 8 Wall., 1) and also in northern areas occupied from time to time during the
war. (Spaight, op. cit. supra, note 19, 392.) The Japanese issued special occupation currency in Korea
and Manchuria during the Russo-Japanese War of 1905. (Takahashi, International Law Applied to
Russo-Japanese War, 1908, 260-61; Spaight, op. cit. note 19,397; Ariga, La Guerre Rossu-Japanese,
1908, 450 et seq.) The British also issued currency notes redeemable in Sterling in London at a fixed
rate of exchange, in their occupation of Archangel during and after the first World War. (White,
Currency of the Great War, 66; League of Nations, Currency After the War, 100.)

During the World War II, the Germans had been using a variety of occupation currencies as legal
tenders on a large scale, the currency initially used in most occupied areas being the Reichskroditkassa
mark, a paper currency printed in German and denominated in German monetary units, which
circulated side by side with the local currency at decreased rate of exchange. And the Allies have
introduced notes as legal currency in Sicily, Germany, and Austria. The Combined Directive of the
combined Chief of Staffs to the Supreme Allied Commander issued on June 24, 1943, directed that the
task forces of the U.S. will use, besides regular U.S. coins, yellow seal dollars, and the forces of Great
Britain will use besides British coins, British Military Notes (BMA), to supplement the local lire
currency then in use (Hajo Holborn, American Military Government, 1947, pp. 115-116). The
Combined directive for Military Government in Germany, prior to defeat or surrender, of April 28,
1944, directed the United States, British and other Allied Forces to use Allied military mark and
Reichsmark currency in circulation in Germany as legal tender and the Allied Military Marks will be
interchangeable with the Reichsmark currency at the rate of Allied Mark for Reichsmark; and that in
the event adequate supplies of them were not available, the United States forces will use Yellow seal
dollars and the British forces will use British Military Authority (BMN) notes. (Holborn, op. cit. supra,
p. 140.) And the American Directive on the Military Government of Austria of June 27, 1945, ordered
that the United States forces and other Allied forces within Austria will use only Allied Military
Schillings for pay of troops and other military requirements, declaring it legal tender in Austria
interchangeably with Reichsmarks at a rate of one Allied military schilling for one Reichsmarks.
(Holborn, op. cit. supra, p. 192.)

In the above cited case of Thorington vs. Smith, the Supreme Court of the United States said:

. . . While the war lasted, however, they had a certain contingent value, and were used as money
in nearly all business transactions of many millions of people. They must be regarded, therefore,
as a currency, imposed on the community by irresistible force.

It seems to follows as a necessary consequence from this actual supremacy of the insurgent
government, as a belligerent, within the territory where it circulated, and from the necessity of
civil obedience on the part of all who remained in it, that this currency must be considered in
courts of law in the same light as it has been issued by a foreign government, temporarily
occupying a part of the territory of the United States."

According to Feilchenfeld in his book "The International Economic Law of Belligerent Occupation,"
the occupant in exercising his powers in regard to money and currency, may adopt one of the following
methods according to circumstances: (1) When the coverage of the currency of the territory occupied
has become inadequate as found in several Balkan countries during the War of 1914-18, and "the local
currency continues to be used, an occupant may reorganize the national currency by appropriate
methods, such as the creation of new types and supplies of coverage" (paragraph 272). (2) The
43 | P a g e
occupant may, and not infrequently, use his own currency, in the occupied region. But this method may
be found inconvenient if the coverage for their national currency had already become inadequate, and
for that reason authorities are afraid of exposing it to additional strain, and for that reason an occupant
may not replace the local currency by his own currency for all currency for all purposes, and enforce its
use not only for his own payment but also for payments among inhabitants (paragraph 285). (3) Where
the regional currency has become inadequate and it is deemed inadvisable by the occupant to expose
his own currency to further strain, new types of money may be created by the occupant. Such new
currency may have anew name and may be issued by institution created for that purpose (paragraph
296). This last method was the one adopted by Japan in this country, because the coverage of the
Philippine Treasury Certificate of the territory occupied had become inadequate, for most if not all of
the said coverage had been taken to the United States and many millions of silver pesos were buried or
thrown into the sea near Corregidor, and Japan did not want to use her national currency, and expose it
to additional strains.

But be that as it may, whatever might have been the intrinsic or extrinsic worth of the Japanese war-
notes which the Bank of Taiwan has received as full satisfaction of the obligations of the appellee's
debtors to it, is of no consequence in the present case. As we have already stated, the Japanese war-
notes were issued as legal tender at par with the Philippine peso, and guaranteed by Japanese
Government "which takes full responsibility for their usage having the correct amount to back them up
(Proclamation of January 3, 1942). Now that the outcome of the war has turned against Japan, the
enemy banks have the right to demand from Japan, through their States or Governments, payments or
compensation in Philippine peso or U.S. dollars as the case may be, for the loss or damage inflicted on
the property by the emergency war measure taken by the enemy. If Japan had won the war of were the
victor, the property or money of said banks sequestrated or impounded by her might be retained by
Japan and credited to the respective State of which the owners of said banks were nationals, as a
payment on the account of the sums payable by them as indemnity under the treaties, and the said
owners were to look for compensation in Philippine pesos or U.S. dollars to their respective States.
(Treaty of Versailles and other peace treaties entered at the close of the first world war; VI Hackworth
Digest of International Law, p. 232.) And if they cannot et any or sufficient compensation either from
the enemy or from their States, because of their insolvency or impossibility to pay, they have naturally
to suffer, as everyone else, the losses incident to all wars.

In view of all the foregoing, the judgement appealed from is reversed, and the defendant-appellee is
sentenced to execute the deed of cancellation of mortgage of the property described in the complaint,
and to deliver to the plaintiff-appellant the Transfer Certificate of Title No. 47634 of the Register of
Deeds in Manila with the annotation of mortgage therein already cancelled, without pronouncement as
to costs. So ordered.

44 | P a g e
G.R. No. 76607 February 26, 1990

UNITED STATES OF AMERICA, FREDERICK M. SMOUSE AND YVONNE

REEVES, petitioners,
vs.
HON. ELIODORO B. GUINTO, Presiding Judge, Branch LVII, Regional Trial Court, Angeles
City, ROBERTO T. VALENCIA, EMERENCIANA C. TANGLAO, AND PABLO C. DEL
PILAR, respondents.

G.R. No. 79470 February 26, 1990

UNITED STATES OF AMERICA, ANTHONY LAMACHIA, T/SGT. USAF, WILFREDO

BELSA, PETER ORASCION AND ROSE CARTALLA, petitioners,
vs.
HON. RODOLFO D. RODRIGO, as Presiding Judge of Branch 7, Regional Trial Court
(BAGUIO CITY), La Trinidad, Benguet and FABIAN GENOVE, respondents.

G.R. No. 80018 February 26, 1990

UNITED STATES OF AMERICA, TOMI J. KINGI, DARREL D. DYE and STEVEN F.

BOSTICK, petitioners,
vs.
HON. JOSEFINA D. CEBALLOS, As Presiding Judge, Regional Trial Court, Branch 66, Capas,
Tarlac, and LUIS BAUTISTA, respondents.

G.R. No. 80258 February 26, 1990

UNITED STATES OF AMERICA, MAJOR GENERAL MICHAEL P. C. CARNS, AIC

ERNEST E. RIVENBURGH, AIC ROBIN BLEVINS, SGT. NOEL A. GONZALES, SGT.
THOMAS MITCHELL, SGT. WAYNE L. BENJAMIN, ET AL., petitioners,
vs.
HON. CONCEPCION S. ALARCON VERGARA, as Presiding Judge, Branch 62 REGIONAL
TRIAL COURT, Angeles City, and RICKY SANCHEZ, FREDDIE SANCHEZ AKA FREDDIE
RIVERA, EDWIN MARIANO, AKA JESSIE DOLORES SANGALANG, ET AL., respondents.

Luna, Sison & Manas Law Office for petitioners.

CRUZ, J.:

These cases have been consolidated because they all involve the doctrine of state immunity. The
United States of America was not impleaded in the complaints below but has moved to dismiss on
the ground that they are in effect suits against it to which it has not consented. It is now
contesting the denial of its motions by the respondent judges.

45 | P a g e
In G.R. No. 76607, the private respondents are suing several officers of the U.S. Air Force
stationed in Clark Air Base in connection with the bidding conducted by them for contracts for
barber services in the said base.

On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange, U.S.
Air Force, solicited bids for such contracts through its contracting officer, James F. Shaw.
Among those who submitted their bids were private respondents Roberto T. Valencia,
Emerenciana C. Tanglao, and Pablo C. del Pilar. Valencia had been a concessionaire inside
Clark for 34 years; del Pilar for 12 years; and Tanglao for 50 years.

The bidding was won by Ramon Dizon, over the objection of the private respondents, who
claimed that he had made a bid for four facilities, including the Civil Engineering Area, which
was not included in the invitation to bid.

The private respondents complained to the Philippine Area Exchange (PHAX). The latter,
through its representatives, petitioners Yvonne Reeves and Frederic M. Smouse explained that
the Civil Engineering concession had not been awarded to Dizon as a result of the February 24,
1986 solicitation. Dizon was already operating this concession, then known as the NCO club
concession, and the expiration of the contract had been extended from June 30, 1986 to August
31, 1986. They further explained that the solicitation of the CE barbershop would be available
only by the end of June and the private respondents would be notified.

On June 30, 1986, the private respondents filed a complaint in the court below to compel PHAX
and the individual petitioners to cancel the award to defendant Dizon, to conduct a rebidding for
the barbershop concessions and to allow the private respondents by a writ of preliminary
injunction to continue operating the concessions pending litigation. 1

Upon the filing of the complaint, the respondent court issued an ex parte order directing the
individual petitioners to maintain the status quo.

On July 22, 1986, the petitioners filed a motion to dismiss and opposition to the petition for
preliminary injunction on the ground that the action was in effect a suit against the United States
of America, which had not waived its non-suability. The individual defendants, as official
employees of the U.S. Air Force, were also immune from suit.

On the same date, July 22, 1986, the trial court denied the application for a writ of preliminary
injunction.

On October 10, 1988, the trial court denied the petitioners' motion to dismiss, holding in part as
follows:

From the pleadings thus far presented to this Court by the parties, the Court's
attention is called by the relationship between the plaintiffs as well as the
defendants, including the US Government, in that prior to the bidding or
solicitation in question, there was a binding contract between the plaintiffs as well as
the defendants, including the US Government. By virtue of said contract of
concession it is the Court's understanding that neither the US Government nor the
herein principal defendants would become the employer/s of the plaintiffs but that
46 | P a g e
 the latter are the employers themselves of the barbers, etc. with the employer, the
plaintiffs herein, remitting the stipulated percentage of commissions to the
Philippine Area Exchange. The same circumstance would become in effect when the
Philippine Area Exchange opened for bidding or solicitation the questioned barber
shop concessions. To this extent, therefore, indeed a commercial transaction has
been entered, and for purposes of the said solicitation, would necessarily be entered
between the plaintiffs as well as the defendants.

The Court, further, is of the view that Article XVIII of the RP-US Bases Agreement
does not cover such kind of services falling under the concessionaireship, such as a
barber shop concession. 2

On December 11, 1986, following the filing of the herein petition for certiorari and prohibition with
preliminary injunction, we issued a temporary restraining order against further proceedings in the court
below. 3

In G.R. No. 79470, Fabian Genove filed a complaint for damages against petitioners Anthony
Lamachia, Wilfredo Belsa, Rose Cartalla and Peter Orascion for his dismissal as cook in the U.S. Air
Force Recreation Center at the John Hay Air Station in Baguio City. It had been ascertained after
investigation, from the testimony of Belsa Cartalla and Orascion, that Genove had poured urine into the
soup stock used in cooking the vegetables served to the club customers. Lamachia, as club manager,
suspended him and thereafter referred the case to a board of arbitrators conformably to the collective
bargaining agreement between the Center and its employees. The board unanimously found him guilty
and recommended his dismissal. This was effected on March 5, 1986, by Col. David C. Kimball,
Commander of the 3rd Combat Support Group, PACAF Clark Air Force Base. Genove's reaction was
to file Ms complaint in the Regional Trial Court of Baguio City against the individual petitioners. 4

On March 13, 1987, the defendants, joined by the United States of America, moved to dismiss the
complaint, alleging that Lamachia, as an officer of the U.S. Air Force stationed at John Hay Air
Station, was immune from suit for the acts done by him in his official capacity. They argued that the
suit was in effect against the United States, which had not given its consent to be sued.

This motion was denied by the respondent judge on June 4, 1987, in an order which read in part:

It is the understanding of the Court, based on the allegations of the complaint which
have been hypothetically admitted by defendants upon the filing of their motion to
dismiss that although defendants acted initially in their official capacities, their going
beyond what their functions called for brought them out of the protective mantle of
whatever immunities they may have had in the beginning. Thus, the allegation that the
acts complained of were illegal, done. with extreme bad faith and with pre-conceived
sinister plan to harass and finally dismiss the plaintiff, gains significance. 5

The petitioners then came to this Court seeking certiorari and prohibition with preliminary injunction.

In G.R. No. 80018, Luis Bautista, who was employed as a barracks boy in Camp O' Donnell, an
extension of Clark Air Base, was arrested following a buy-bust operation conducted by the individual
petitioners herein, namely, Tomi J. King, Darrel D. Dye and Stephen F. Bostick, officers of the U.S.
Air Force and special agents of the Air Force Office of Special Investigators (AFOSI). On the basis of
47 | P a g e
the sworn statements made by them, an information for violation of R.A. 6425, otherwise known as the
Dangerous Drugs Act, was filed against Bautista in the Regional Trial Court of Tarlac. The above-
named officers testified against him at his trial. As a result of the filing of the charge, Bautista was
dismissed from his employment. He then filed a complaint for damages against the individual
petitioners herein claiming that it was because of their acts that he was removed. 6

During the period for filing of the answer, Mariano Y. Navarro a special counsel assigned to the
International Law Division, Office of the Staff Judge Advocate of Clark Air Base, entered a special
appearance for the defendants and moved for an extension within which to file an "answer and/or other
pleadings." His reason was that the Attorney General of the United States had not yet designated
counsel to represent the defendants, who were being sued for their official acts. Within the extended
period, the defendants, without the assistance of counsel or authority from the U.S. Department of
Justice, filed their answer. They alleged therein as affirmative defenses that they had only done their
duty in the enforcement of the laws of the Philippines inside the American bases pursuant to the RP-US
Military Bases Agreement.

On May 7, 1987, the law firm of Luna, Sison and Manas, having been retained to represent the
defendants, filed with leave of court a motion to withdraw the answer and dismiss the complaint. The
ground invoked was that the defendants were acting in their official capacity when they did the acts
complained of and that the complaint against them was in effect a suit against the United States without
its consent.

The motion was denied by the respondent judge in his order dated September 11, 1987, which held that
the claimed immunity under the Military Bases Agreement covered only criminal and not civil cases.
Moreover, the defendants had come under the jurisdiction of the court when they submitted their
answer.7

Following the filing of the herein petition for certiorari and prohibition with preliminary injunction, we
issued on October 14, 1987, a temporary restraining order. 8

In G.R. No. 80258, a complaint for damages was filed by the private respondents against the herein
petitioners (except the United States of America), for injuries allegedly sustained by the plaintiffs as a
result of the acts of the defendants. 9 There is a conflict of factual allegations here. According to the
plaintiffs, the defendants beat them up, handcuffed them and unleashed dogs on them which bit them in
several parts of their bodies and caused extensive injuries to them. The defendants deny this and claim
the plaintiffs were arrested for theft and were bitten by the dogs because they were struggling and
resisting arrest, The defendants stress that the dogs were called off and the plaintiffs were immediately
taken to the medical center for treatment of their wounds.

In a motion to dismiss the complaint, the United States of America and the individually named
defendants argued that the suit was in effect a suit against the United States, which had not given its
consent to be sued. The defendants were also immune from suit under the RP-US Bases Treaty for acts
done by them in the performance of their official functions.

The motion to dismiss was denied by the trial court in its order dated August 10, 1987, reading in part
as follows:

48 | P a g e
 The defendants certainly cannot correctly argue that they are immune from suit. The
allegations, of the complaint which is sought to be dismissed, had to be hypothetically
admitted and whatever ground the defendants may have, had to be ventilated during the
trial of the case on the merits. The complaint alleged criminal acts against the
individually-named defendants and from the nature of said acts it could not be said that
they are Acts of State, for which immunity should be invoked. If the Filipinos themselves
are duty bound to respect, obey and submit themselves to the laws of the country, with
more reason, the members of the United States Armed Forces who are being treated as
guests of this country should respect, obey and submit themselves to its laws. 10

and so was the motion for reconsideration. The defendants submitted their answer as required but
subsequently filed their petition for certiorari and prohibition with preliminary injunction with this
Court. We issued a temporary restraining order on October 27, 1987. 11

II

The rule that a state may not be sued without its consent, now expressed in Article XVI, Section 3, of
the 1987 Constitution, is one of the generally accepted principles of international law that we have
adopted as part of the law of our land under Article II, Section 2. This latter provision merely reiterates
a policy earlier embodied in the 1935 and 1973 Constitutions and also intended to manifest our resolve
to abide by the rules of the international community.

Even without such affirmation, we would still be bound by the generally accepted principles of
international law under the doctrine of incorporation. Under this doctrine, as accepted by the majority
of states, such principles are deemed incorporated in the law of every civilized state as a condition and
consequence of its membership in the society of nations. Upon its admission to such society, the state is
automatically obligated to comply with these principles in its relations with other states.

As applied to the local state, the doctrine of state immunity is based on the justification given by Justice
Holmes that "there can be no legal right against the authority which makes the law on which the right
depends." 12 There are other practical reasons for the enforcement of the doctrine. In the case of the
foreign state sought to be impleaded in the local jurisdiction, the added inhibition is expressed in the
maxim par in parem, non habet imperium. All states are sovereign equals and cannot assert jurisdiction
over one another. A contrary disposition would, in the language of a celebrated case, "unduly vex the
peace of nations." 13

While the doctrine appears to prohibit only suits against the state without its consent, it is also
applicable to complaints filed against officials of the state for acts allegedly performed by them in the
discharge of their duties. The rule is that if the judgment against such officials will require the state
itself to perform an affirmative act to satisfy the same, such as the appropriation of the amount needed
to pay the damages awarded against them, the suit must be regarded as against the state itself although
it has not been formally impleaded. 14 In such a situation, the state may move to dismiss the complaint
on the ground that it has been filed without its consent.

The doctrine is sometimes derisively called "the royal prerogative of dishonesty" because of the
privilege it grants the state to defeat any legitimate claim against it by simply invoking its non-
suability. That is hardly fair, at least in democratic societies, for the state is not an unfeeling tyrant
unmoved by the valid claims of its citizens. In fact, the doctrine is not absolute and does not say the
49 | P a g e
state may not be sued under any circumstance. On the contrary, the rule says that the state may not be
sued without its consent, which clearly imports that it may be sued if it consents.

The consent of the state to be sued may be manifested expressly or impliedly. Express consent may be
embodied in a general law or a special law. Consent is implied when the state enters into a contract or it
itself commences litigation.

The general law waiving the immunity of the state from suit is found in Act No. 3083, under which the
Philippine government "consents and submits to be sued upon any moneyed claim involving liability
arising from contract, express or implied, which could serve as a basis of civil action between private
parties." In Merritt v. Government of the Philippine Islands, 15 a special law was passed to enable a
person to sue the government for an alleged tort. When the government enters into a contract, it is
deemed to have descended to the level of the other contracting party and divested of its sovereign
immunity from suit with its implied consent. 16 Waiver is also implied when the government files a
complaint, thus opening itself to a counterclaim. 17

The above rules are subject to qualification. Express consent is effected only by the will of the
legislature through the medium of a duly enacted statute. 18 We have held that not all contracts entered
into by the government will operate as a waiver of its non-suability; distinction must be made between
its sovereign and proprietary acts. 19 As for the filing of a complaint by the government, suability will
result only where the government is claiming affirmative relief from the defendant. 20

In the case of the United States of America, the customary rule of international law on state immunity
is expressed with more specificity in the RP-US Bases Treaty. Article III thereof provides as follows:

It is mutually agreed that the United States shall have the rights, power and authority
within the bases which are necessary for the establishment, use, operation and defense
thereof or appropriate for the control thereof and all the rights, power and authority
within the limits of the territorial waters and air space adjacent to, or in the vicinity of,
the bases which are necessary to provide access to them or appropriate for their control.

The petitioners also rely heavily on Baer v. Tizon, 21 along with several other decisions, to support their
position that they are not suable in the cases below, the United States not having waived its sovereign
immunity from suit. It is emphasized that in Baer, the Court held:

The invocation of the doctrine of immunity from suit of a foreign state without its
consent is appropriate. More specifically, insofar as alien armed forces is concerned, the
starting point is Raquiza v. Bradford, a 1945 decision. In dismissing a habeas corpus
petition for the release of petitioners confined by American army authorities, Justice
Hilado speaking for the Court, cited Coleman v. Tennessee, where it was explicitly
declared: 'It is well settled that a foreign army, permitted to march through a friendly
country or to be stationed in it, by permission of its government or sovereign, is exempt
from the civil and criminal jurisdiction of the place.' Two years later, in Tubb and
Tedrow v. Griess, this Court relied on the ruling in Raquiza v. Bradford and cited in
support thereof excerpts from the works of the following authoritative writers: Vattel,
Wheaton, Hall, Lawrence, Oppenheim, Westlake, Hyde, and McNair and Lauterpacht.
Accuracy demands the clarification that after the conclusion of the Philippine-American
Military Bases Agreement, the treaty provisions should control on such matter, the
50 | P a g e
 assumption being that there was a manifestation of the submission to jurisdiction on the
part of the foreign power whenever appropriate. More to the point is Syquia v. Almeda
Lopez, where plaintiffs as lessors sued the Commanding General of the United States
Army in the Philippines, seeking the restoration to them of the apartment buildings they
owned leased to the United States armed forces stationed in the Manila area. A motion to
dismiss on the ground of non-suability was filed and upheld by respondent Judge. The
matter was taken to this Court in a mandamus proceeding. It failed. It was the ruling that
respondent Judge acted correctly considering that the 4 action must be considered as one
against the U.S. Government. The opinion of Justice Montemayor continued: 'It is clear
that the courts of the Philippines including the Municipal Court of Manila have no
jurisdiction over the present case for unlawful detainer. The question of lack of
jurisdiction was raised and interposed at the very beginning of the action. The U.S.
Government has not given its consent to the filing of this suit which is essentially against
her, though not in name. Moreover, this is not only a case of a citizen filing a suit against
his own Government without the latter's consent but it is of a citizen firing an action
against a foreign government without said government's consent, which renders more
obvious the lack of jurisdiction of the courts of his country. The principles of law behind
this rule are so elementary and of such general acceptance that we deem it unnecessary to
cite authorities in support thereof then came Marvel Building Corporation v. Philippine
War Damage Commission, where respondent, a United States Agency established to
compensate damages suffered by the Philippines during World War II was held as falling
within the above doctrine as the suit against it would eventually be a charge against or
financial liability of the United States Government because ... , the Commission has no
funds of its own for the purpose of paying money judgments.' The Syquia ruling was
again explicitly relied upon in Marquez Lim v. Nelson, involving a complaint for the
recovery of a motor launch, plus damages, the special defense interposed being 'that the
vessel belonged to the United States Government, that the defendants merely acted as
agents of said Government, and that the United States Government is therefore the real
party in interest.' So it was in Philippine Alien Property Administration v. Castelo, where
it was held that a suit against Alien Property Custodian and the Attorney General of the
United States involving vested property under the Trading with the Enemy Act is in
substance a suit against the United States. To the same effect is Parreno v. McGranery,
as the following excerpt from the opinion of justice Tuazon clearly shows: 'It is a widely
accepted principle of international law, which is made a part of the law of the land
(Article II, Section 3 of the Constitution), that a foreign state may not be brought to suit
before the courts of another state or its own courts without its consent.' Finally, there
is Johnson v. Turner, an appeal by the defendant, then Commanding General, Philippine
Command (Air Force, with office at Clark Field) from a decision ordering the return to
plaintiff of the confiscated military payment certificates known as scrip money. In
reversing the lower court decision, this Tribunal, through Justice Montemayor, relied
on Syquia v. Almeda Lopez, explaining why it could not be sustained.

It bears stressing at this point that the above observations do not confer on the United States of
America a blanket immunity for all acts done by it or its agents in the Philippines. Neither may the
other petitioners claim that they are also insulated from suit in this country merely because they have
acted as agents of the United States in the discharge of their official functions.

51 | P a g e
There is no question that the United States of America, like any other state, will be deemed to have
impliedly waived its non-suability if it has entered into a contract in its proprietary or private capacity.
It is only when the contract involves its sovereign or governmental capacity that no such waiver may be
implied. This was our ruling in UnitedStates of America v. Ruiz, 22 where the transaction in question
dealt with the improvement of the wharves in the naval installation at Subic Bay. As this was a clearly
governmental function, we held that the contract did not operate to divest the United States of its
sovereign immunity from suit. In the words of Justice Vicente Abad Santos:

The traditional rule of immunity exempts a State from being sued in the courts of another
State without its consent or waiver. This rule is a necessary consequence of the principles
of independence and equality of States. However, the rules of International Law are not
petrified; they are constantly developing and evolving. And because the activities of
states have multiplied, it has been necessary to distinguish them between sovereign
and governmental acts (jure imperii) and private, commercial and proprietary acts (jure
gestionis). The result is that State immunity now extends only to acts jure imperii The
restrictive application of State immunity is now the rule in the United States, the United
kingdom and other states in Western Europe.

xxx xxx xxx

The restrictive application of State immunity is proper only when the proceedings arise
out of commercial transactions of the foreign sovereign, its commercial activities or
economic affairs. Stated differently, a State may be said to have descended to the level of
an individual and can thus be deemed to have tacitly given its consent to be sued only
when it enters into business contracts. It does not apply where the contract relates to the
exercise of its sovereign functions. In this case the projects are an integral part of the
naval base which is devoted to the defense of both the United States and the Philippines,
indisputably a function of the government of the highest order; they are not utilized for
nor dedicated to commercial or business purposes.

The other petitioners in the cases before us all aver they have acted in the discharge of their official
functions as officers or agents of the United States. However, this is a matter of evidence. The charges
against them may not be summarily dismissed on their mere assertion that their acts are imputable to
the United States of America, which has not given its consent to be sued. In fact, the defendants are
sought to be held answerable for personal torts in which the United States itself is not involved. If
found liable, they and they alone must satisfy the judgment.

In Festejo v. Fernando, 23 a bureau director, acting without any authority whatsoever, appropriated
private land and converted it into public irrigation ditches. Sued for the value of the lots invalidly taken
by him, he moved to dismiss the complaint on the ground that the suit was in effect against the
Philippine government, which had not given its consent to be sued. This Court sustained the denial of
the motion and held that the doctrine of state immunity was not applicable. The director was being sued
in his private capacity for a personal tort.

With these considerations in mind, we now proceed to resolve the cases at hand.

52 | P a g e
III

It is clear from a study of the records of G.R. No. 80018 that the individually-named petitioners therein
were acting in the exercise of their official functions when they conducted the buy-bust operation
against the complainant and thereafter testified against him at his trial. The said petitioners were in fact
connected with the Air Force Office of Special Investigators and were charged precisely with the
function of preventing the distribution, possession and use of prohibited drugs and prosecuting those
guilty of such acts. It cannot for a moment be imagined that they were acting in their private or
unofficial capacity when they apprehended and later testified against the complainant. It follows that
for discharging their duties as agents of the United States, they cannot be directly impleaded for acts
imputable to their principal, which has not given its consent to be sued. As we observed in Sanders v.
Veridiano: 24

Given the official character of the above-described letters, we have to conclude that the
petitioners were, legally speaking, being sued as officers of the United States
government. As they have acted on behalf of that government, and within the scope of
their authority, it is that government, and not the petitioners personally, that is responsible
for their acts.

The private respondent invokes Article 2180 of the Civil Code which holds the government liable if it
acts through a special agent. The argument, it would seem, is premised on the ground that since the
officers are designated "special agents," the United States government should be liable for their torts.

There seems to be a failure to distinguish between suability and liability and a misconception that the
two terms are synonymous. Suability depends on the consent of the state to be sued, liability on the
applicable law and the established facts. The circumstance that a state is suable does not necessarily
mean that it is liable; on the other hand, it can never be held liable if it does not first consent to be sued.
Liability is not conceded by the mere fact that the state has allowed itself to be sued. When the state
does waive its sovereign immunity, it is only giving the plaintiff the chance to prove, if it can, that the
defendant is liable.

The said article establishes a rule of liability, not suability. The government may be held liable under
this rule only if it first allows itself to be sued through any of the accepted forms of consent.

Moreover, the agent performing his regular functions is not a special agent even if he is so
denominated, as in the case at bar. No less important, the said provision appears to regulate only the
relations of the local state with its inhabitants and, hence, applies only to the Philippine government
and not to foreign governments impleaded in our courts.

We reject the conclusion of the trial court that the answer filed by the special counsel of the Office of
the Sheriff Judge Advocate of Clark Air Base was a submission by the United States government to its
jurisdiction. As we noted in Republic v. Purisima, 25 express waiver of immunity cannot be made by a
mere counsel of the government but must be effected through a duly-enacted statute. Neither does such
answer come under the implied forms of consent as earlier discussed.

But even as we are certain that the individual petitioners in G.R. No. 80018 were acting in the
discharge of their official functions, we hesitate to make the same conclusion in G.R. No. 80258. The
contradictory factual allegations in this case deserve in our view a closer study of what actually
53 | P a g e
happened to the plaintiffs. The record is too meager to indicate if the defendants were really
discharging their official duties or had actually exceeded their authority when the incident in question
occurred. Lacking this information, this Court cannot directly decide this case. The needed inquiry
must first be made by the lower court so it may assess and resolve the conflicting claims of the parties
on the basis of the evidence that has yet to be presented at the trial. Only after it shall have determined
in what capacity the petitioners were acting at the time of the incident in question will this Court
determine, if still necessary, if the doctrine of state immunity is applicable.

In G.R. No. 79470, private respondent Genove was employed as a cook in the Main Club located at the
U.S. Air Force Recreation Center, also known as the Open Mess Complex, at John Hay Air Station. As
manager of this complex, petitioner Lamachia is responsible for eleven diversified activities generating
an annual income of $2 million. Under his executive management are three service restaurants, a
cafeteria, a bakery, a Class VI store, a coffee and pantry shop, a main cashier cage, an administrative
office, and a decentralized warehouse which maintains a stock level of $200,000.00 per month in resale
items. He supervises 167 employees, one of whom was Genove, with whom the United States
government has concluded a collective bargaining agreement.

From these circumstances, the Court can assume that the restaurant services offered at the John Hay
Air Station partake of the nature of a business enterprise undertaken by the United States government
in its proprietary capacity. Such services are not extended to the American servicemen for free as a
perquisite of membership in the Armed Forces of the United States. Neither does it appear that they are
exclusively offered to these servicemen; on the contrary, it is well known that they are available to the
general public as well, including the tourists in Baguio City, many of whom make it a point to visit
John Hay for this reason. All persons availing themselves of this facility pay for the privilege like all
other customers as in ordinary restaurants. Although the prices are concededly reasonable and
relatively low, such services are undoubtedly operated for profit, as a commercial and not a
governmental activity.

The consequence of this finding is that the petitioners cannot invoke the doctrine of state immunity to
justify the dismissal of the damage suit against them by Genove. Such defense will not prosper even if
it be established that they were acting as agents of the United States when they investigated and later
dismissed Genove. For that matter, not even the United States government itself can claim such
immunity. The reason is that by entering into the employment contract with Genove in the discharge of
its proprietary functions, it impliedly divested itself of its sovereign immunity from suit.

But these considerations notwithstanding, we hold that the complaint against the petitioners in the court
below must still be dismissed. While suable, the petitioners are nevertheless not liable. It is obvious
that the claim for damages cannot be allowed on the strength of the evidence before us, which we have
carefully examined.

The dismissal of the private respondent was decided upon only after a thorough investigation where it
was established beyond doubt that he had polluted the soup stock with urine. The investigation, in fact,
did not stop there. Despite the definitive finding of Genove's guilt, the case was still referred to the
board of arbitrators provided for in the collective bargaining agreement. This board unanimously
affirmed the findings of the investigators and recommended Genove's dismissal. There was nothing
arbitrary about the proceedings. The petitioners acted quite properly in terminating the private
respondent's employment for his unbelievably nauseating act. It is surprising that he should still have
the temerity to file his complaint for damages after committing his utterly disgusting offense.
54 | P a g e
Concerning G.R. No. 76607, we also find that the barbershops subject of the concessions granted by
the United States government are commercial enterprises operated by private person's. They are not
agencies of the United States Armed Forces nor are their facilities demandable as a matter of right by
the American servicemen. These establishments provide for the grooming needs of their customers and
offer not only the basic haircut and shave (as required in most military organizations) but such other
amenities as shampoo, massage, manicure and other similar indulgences. And all for a fee.
Interestingly, one of the concessionaires, private respondent Valencia, was even sent abroad to improve
his tonsorial business, presumably for the benefit of his customers. No less significantly, if not more so,
all the barbershop concessionaires are under the terms of their contracts, required to remit to the United
States government fixed commissions in consideration of the exclusive concessions granted to them in
their respective areas.

This being the case, the petitioners cannot plead any immunity from the complaint filed by the private
respondents in the court below. The contracts in question being decidedly commercial, the conclusion
reached in the United States of America v. Ruiz case cannot be applied here.

The Court would have directly resolved the claims against the defendants as we have done in G.R. No.
79470, except for the paucity of the record in the case at hand. The evidence of the alleged irregularity
in the grant of the barbershop concessions is not before us. This means that, as in G.R. No. 80258, the
respondent court will have to receive that evidence first, so it can later determine on the basis thereof if
the plaintiffs are entitled to the relief they seek. Accordingly, this case must also be remanded to the
court below for further proceedings.

IV

There are a number of other cases now pending before us which also involve the question of the
immunity of the United States from the jurisdiction of the Philippines. This is cause for regret, indeed,
as they mar the traditional friendship between two countries long allied in the cause of democracy. It is
hoped that the so-called "irritants" in their relations will be resolved in a spirit of mutual
accommodation and respect, without the inconvenience and asperity of litigation and always with
justice to both parties.

WHEREFORE, after considering all the above premises, the Court hereby renders judgment as
follows:

1. In G.R. No. 76607, the petition is DISMISSED and the respondent judge is directed to
proceed with the hearing and decision of Civil Case No. 4772. The temporary restraining
order dated December 11, 1986, is LIFTED.

2. In G.R. No. 79470, the petition is GRANTED and Civil Case No. 829-R(298) is
DISMISSED.

3. In G.R. No. 80018, the petition is GRANTED and Civil Case No. 115-C-87 is
DISMISSED. The temporary restraining order dated October 14, 1987, is made
permanent.

55 | P a g e
 4. In G.R. No. 80258, the petition is DISMISSED and the respondent court is directed to
proceed with the hearing and decision of Civil Case No. 4996. The temporary restraining
order dated October 27, 1987, is LIFTED.

All without any pronouncement as to costs.

SO ORDERED.

G.R. No. 173034 October 9, 2007

PHARMACEUTICAL AND HEALTH CARE ASSOCIATION OF THE

PHILIPPINES, petitioner,
vs.
HEALTH SECRETARY FRANCISCO T. DUQUE III; HEALTH UNDER SECRETARIES DR.
ETHELYN P. NIETO, DR. MARGARITA M. GALON, ATTY. ALEXANDER A. PADILLA, &
DR. JADE F. DEL MUNDO; and ASSISTANT SECRETARIES DR. MARIO C.
VILLAVERDE, DR. DAVID J. LOZADA, AND DR. NEMESIO T. GAKO,respondents.

DECISION

AUSTRIA-MARTINEZ, J.:

The Court and all parties involved are in agreement that the best nourishment for an infant is mother's
milk. There is nothing greater than for a mother to nurture her beloved child straight from her bosom.
The ideal is, of course, for each and every Filipino child to enjoy the unequaled benefits of breastmilk.
But how should this end be attained?

Before the Court is a petition for certiorari under Rule 65 of the Rules of Court, seeking to nullify
Administrative Order (A.O.) No. 2006-0012 entitled, Revised Implementing Rules and Regulations of
Executive Order No. 51, Otherwise Known as The "Milk Code," Relevant International Agreements,
Penalizing Violations Thereof, and for Other Purposes (RIRR). Petitioner posits that the RIRR is not
valid as it contains provisions that are not constitutional and go beyond the law it is supposed to
implement.

Named as respondents are the Health Secretary, Undersecretaries, and Assistant Secretaries of the
Department of Health (DOH). For purposes of herein petition, the DOH is deemed impleaded as a co-
respondent since respondents issued the questioned RIRR in their capacity as officials of said executive
agency.1

Executive Order No. 51 (Milk Code) was issued by President Corazon Aquino on October 28, 1986 by
virtue of the legislative powers granted to the president under the Freedom Constitution. One of the
preambular clauses of the Milk Code states that the law seeks to give effect to Article 112 of the
International Code of Marketing of Breastmilk Substitutes (ICMBS), a code adopted by the World
Health Assembly (WHA) in 1981. From 1982 to 2006, the WHA adopted several Resolutions to the
effect that breastfeeding should be supported, promoted and protected, hence, it should be ensured that
nutrition and health claims are not permitted for breastmilk substitutes.
56 | P a g e
In 1990, the Philippines ratified the International Convention on the Rights of the Child. Article 24 of
said instrument provides that State Parties should take appropriate measures to diminish infant and
child mortality, and ensure that all segments of society, specially parents and children, are informed of
the advantages of breastfeeding.

On May 15, 2006, the DOH issued herein assailed RIRR which was to take effect on July 7, 2006.

However, on June 28, 2006, petitioner, representing its members that are manufacturers of breastmilk
substitutes, filed the present Petition for Certiorari and Prohibition with Prayer for the Issuance of a
Temporary Restraining Order (TRO) or Writ of Preliminary Injunction.

The main issue raised in the petition is whether respondents officers of the DOH acted without or in
excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and
in violation of the provisions of the Constitution in promulgating the RIRR.3

On August 15, 2006, the Court issued a Resolution granting a TRO enjoining respondents from
implementing the questioned RIRR.

After the Comment and Reply had been filed, the Court set the case for oral arguments on June 19,
2007. The Court issued an Advisory (Guidance for Oral Arguments) dated June 5, 2007, to wit:

The Court hereby sets the following issues:

1. Whether or not petitioner is a real party-in-interest;

2. Whether Administrative Order No. 2006-0012 or the Revised Implementing Rules and
Regulations (RIRR) issued by the Department of Health (DOH) is not constitutional;

2.1 Whether the RIRR is in accord with the provisions of Executive Order No. 51 (Milk Code);

2.2 Whether pertinent international agreements1 entered into by the Philippines are part of the
law of the land and may be implemented by the DOH through the RIRR; If in the affirmative,
whether the RIRR is in accord with the international agreements;

2.3 Whether Sections 4, 5(w), 22, 32, 47, and 52 of the RIRR violate the due process clause and
are in restraint of trade; and

2.4 Whether Section 13 of the RIRR on Total Effect provides sufficient standards.

_____________

1 (1) United Nations Convention on the Rights of the Child; (2) the WHO and Unicef "2002
Global Strategy on Infant and Young Child Feeding;" and (3) various World Health Assembly
(WHA) Resolutions.

The parties filed their respective memoranda.

The petition is partly imbued with merit.

57 | P a g e
On the issue of petitioner's standing

With regard to the issue of whether petitioner may prosecute this case as the real party-in-interest, the
Court adopts the view enunciated in Executive Secretary v. Court of Appeals,4 to wit:

The modern view is that an association has standing to complain of injuries to its members. This
view fuses the legal identity of an association with that of its members. An association has
standing to file suit for its workers despite its lack of direct interest if its members are
affected by the action. An organization has standing to assert the concerns of its
constituents.

xxxx

x x x We note that, under its Articles of Incorporation, the respondent was organized x x x to act
as the representative of any individual, company, entity or association on matters related to the
manpower recruitment industry, and to perform other acts and activities necessary to accomplish
the purposes embodied therein. The respondent is, thus, the appropriate party to assert the
rights of its members, because it and its members are in every practical sense identical. x x
x The respondent [association] is but the medium through which its individual members
seek to make more effective the expression of their voices and the redress of their
grievances. 5 (Emphasis supplied)

which was reasserted in Purok Bagong Silang Association, Inc. v. Yuipco,6 where the Court ruled that
an association has the legal personality to represent its members because the results of the case will
affect their vital interests.7

Herein petitioner's Amended Articles of Incorporation contains a similar provision just like in
Executive Secretary, that the association is formed "to represent directly or through approved
representatives the pharmaceutical and health care industry before the Philippine Government and any
of its agencies, the medical professions and the general public."8 Thus, as an organization, petitioner
definitely has an interest in fulfilling its avowed purpose of representing members who are part of the
pharmaceutical and health care industry. Petitioner is duly authorized9 to take the appropriate course of
action to bring to the attention of government agencies and the courts any grievance suffered by its
members which are directly affected by the RIRR. Petitioner, which is mandated by its Amended
Articles of Incorporation to represent the entire industry, would be remiss in its duties if it fails to act
on governmental action that would affect any of its industry members, no matter how few or numerous
they are. Hence, petitioner, whose legal identity is deemed fused with its members, should be
considered as a real party-in-interest which stands to be benefited or injured by any judgment in the
present action.

On the constitutionality of the provisions of the RIRR

First, the Court will determine if pertinent international instruments adverted to by respondents are part
of the law of the land.

Petitioner assails the RIRR for allegedly going beyond the provisions of the Milk Code, thereby
amending and expanding the coverage of said law. The defense of the DOH is that the RIRR
implements not only the Milk Code but also various international instruments10 regarding infant and
58 | P a g e
young child nutrition. It is respondents' position that said international instruments are deemed part of
the law of the land and therefore the DOH may implement them through the RIRR.

The Court notes that the following international instruments invoked by respondents, namely: (1) The
United Nations Convention on the Rights of the Child; (2) The International Covenant on Economic,
Social and Cultural Rights; and (3) the Convention on the Elimination of All Forms of Discrimination
Against Women, only provide in general terms that steps must be taken by State Parties to diminish
infant and child mortality and inform society of the advantages of breastfeeding, ensure the health and
well-being of families, and ensure that women are provided with services and nutrition in connection
with pregnancy and lactation. Said instruments do not contain specific provisions regarding the use or
marketing of breastmilk substitutes.

The international instruments that do have specific provisions regarding breastmilk substitutes are the
ICMBS and various WHA Resolutions.

Under the 1987 Constitution, international law can become part of the sphere of domestic law either
by transformation or incorporation.11 The transformation method requires that an international law
be transformed into a domestic law through a constitutional mechanism such as local legislation. The
incorporation method applies when, by mere constitutional declaration, international law is deemed to
have the force of domestic law.12

Treaties become part of the law of the land through transformation pursuant to Article VII, Section 21
of the Constitution which provides that "[n]o treaty or international agreement shall be valid and
effective unless concurred in by at least two-thirds of all the members of the Senate." Thus, treaties or
conventional international law must go through a process prescribed by the Constitution for it to be
transformed into municipal law that can be applied to domestic conflicts.13

The ICMBS and WHA Resolutions are not treaties as they have not been concurred in by at least two-
thirds of all members of the Senate as required under Section 21, Article VII of the 1987 Constitution.

However, the ICMBS which was adopted by the WHA in 1981 had been transformed into domestic
law through local legislation, the Milk Code. Consequently, it is the Milk Code that has the force and
effect of law in this jurisdiction and not the ICMBS per se.

The Milk Code is almost a verbatim reproduction of the ICMBS, but it is well to emphasize at this
point that the Code did not adopt the provision in the ICMBS absolutely prohibiting advertising or
other forms of promotion to the general public of products within the scope of the ICMBS. Instead, the
Milk Code expressly provides that advertising, promotion, or other marketing materials may be
allowed if such materials are duly authorized and approved by the Inter-Agency Committee
(IAC).

On the other hand, Section 2, Article II of the 1987 Constitution, to wit:

SECTION 2. The Philippines renounces war as an instrument of national policy, adopts the
generally accepted principles of international law as part of the law of the land and adheres to
the policy of peace, equality, justice, freedom, cooperation and amity with all nations.
(Emphasis supplied)

59 | P a g e
embodies the incorporation method.14

In Mijares v. Ranada,15 the Court held thus:

[G]enerally accepted principles of international law, by virtue of the incorporation clause of the
Constitution, form part of the laws of the land even if they do not derive from treaty obligations.
The classical formulation in international law sees those customary rules accepted as
binding result from the combination [of] two elements: the established, widespread, and
consistent practice on the part of States; and a psychological element known as the opinion
juris sive necessitates (opinion as to law or necessity). Implicit in the latter element is a belief
that the practice in question is rendered obligatory by the existence of a rule of law requiring
it.16 (Emphasis supplied)

"Generally accepted principles of international law" refers to norms of general or customary

international law which are binding on all states,17 i.e., renunciation of war as an instrument of national
policy, the principle of sovereign immunity,18 a person's right to life, liberty and due
process,19 and pacta sunt servanda,20 among others. The concept of "generally accepted principles of
law" has also been depicted in this wise:

Some legal scholars and judges look upon certain "general principles of law" as a primary source of
international law because they have the "character of jus rationale" and are "valid through all
kinds of human societies."(Judge Tanaka in his dissenting opinion in the 1966 South West Africa
Case, 1966 I.C.J. 296). O'Connell holds that certain priniciples are part of international law
because they are "basic to legal systems generally" and hence part of the jus gentium. These
principles, he believes, are established by a process of reasoning based on the common identity of all
legal systems. If there should be doubt or disagreement, one must look to state practice and determine
whether the municipal law principle provides a just and acceptable solution. x x x 21 (Emphasis
supplied)

Fr. Joaquin G. Bernas defines customary international law as follows:

Custom or customary international law means "a general and consistent practice of states
followed by them from a sense of legal obligation [opinio juris]." (Restatement) This statement
contains the two basic elements of custom: the material factor, that is, how states behave,
and the psychological or subjective factor, that is, why they behave the way they do.

xxxx

The initial factor for determining the existence of custom is the actual behavior of states. This
includes several elements: duration, consistency, and generality of the practice of states.

The required duration can be either short or long. x x x

xxxx

Duration therefore is not the most important element. More important is the consistency and the
generality of the practice. x x x

60 | P a g e
 xxxx

Once the existence of state practice has been established, it becomes necessary to determine why
states behave the way they do. Do states behave the way they do because they consider it
obligatory to behave thus or do they do it only as a matter of courtesy? Opinio juris, or the
belief that a certain form of behavior is obligatory, is what makes practice an international
rule. Without it, practice is not law.22(Underscoring and Emphasis supplied)

Clearly, customary international law is deemed incorporated into our domestic system.23

WHA Resolutions have not been embodied in any local legislation. Have they attained the status of
customary law and should they then be deemed incorporated as part of the law of the land?

The World Health Organization (WHO) is one of the international specialized agencies allied with the
United Nations (UN) by virtue of Article 57,24 in relation to Article 6325 of the UN Charter. Under the
1946 WHO Constitution, it is the WHA which determines the policies of the WHO,26 and has the
power to adopt regulations concerning "advertising and labeling of biological, pharmaceutical and
similar products moving in international commerce,"27and to "make recommendations to members with
respect to any matter within the competence of the Organization."28 The legal effect of its regulations,
as opposed to recommendations, is quite different.

Regulations, along with conventions and agreements, duly adopted by the WHA bind member
states thus:

Article 19. The Health Assembly shall have authority to adopt conventions or agreements with
respect to any matter within the competence of the Organization. A two-thirds vote of the Health
Assembly shall be required for the adoption of such conventions or agreements, which shall
come into force for each Member when accepted by it in accordance with its constitutional
processes.

Article 20. Each Member undertakes that it will, within eighteen months after the adoption by
the Health Assembly of a convention or agreement, take action relative to the acceptance of
such convention or agreement. Each Member shall notify the Director-General of the action
taken, and if it does not accept such convention or agreement within the time limit, it will
furnish a statement of the reasons for non-acceptance. In case of acceptance, each Member
agrees to make an annual report to the Director-General in accordance with Chapter XIV.

Article 21. The Health Assembly shall have authority to adopt regulations concerning: (a)
sanitary and quarantine requirements and other procedures designed to prevent the international
spread of disease; (b) nomenclatures with respect to diseases, causes of death and public health
practices; (c) standards with respect to diagnostic procedures for international use; (d) standards
with respect to the safety, purity and potency of biological, pharmaceutical and similar products
moving in international commerce; (e) advertising and labeling of biological, pharmaceutical
and similar products moving in international commerce.

Article 22. Regulations adopted pursuant to Article 21 shall come into force for all
Members after due notice has been given of their adoption by the Health Assembly except for

61 | P a g e
 such Members as may notify the Director-General of rejection or reservations within the period
stated in the notice. (Emphasis supplied)

On the other hand, under Article 23, recommendations of the WHA do not come into force for
members, in the same way that conventions or agreements under Article 19 and regulations under
Article 21 come into force. Article 23 of the WHO Constitution reads:

Article 23. The Health Assembly shall have authority to make recommendations to Members
with respect to any matter within the competence of the Organization. (Emphasis supplied)

The absence of a provision in Article 23 of any mechanism by which the recommendation would come
into force for member states is conspicuous.

The former Senior Legal Officer of WHO, Sami Shubber, stated that WHA recommendations are
generally not binding, but they "carry moral and political weight, as they constitute the judgment on a
health issue of the collective membership of the highest international body in the field of
health."29 Even the ICMBS itself was adopted as a mere recommendation, as WHA Resolution No.
34.22 states:

"The Thirty-Fourth World Health Assembly x x x adopts, in the sense of Article 23 of the
Constitution, the International Code of Marketing of Breastmilk Substitutes annexed to the
present resolution." (Emphasis supplied)

The Introduction to the ICMBS also reads as follows:

In January 1981, the Executive Board of the World Health Organization at its sixty-seventh
session, considered the fourth draft of the code, endorsed it, and unanimously recommended to
the Thirty-fourth World Health Assembly the text of a resolution by which it would adopt the
code in the form of a recommendation rather than a regulation. x x x (Emphasis supplied)

The legal value of WHA Resolutions as recommendations is summarized in Article 62 of the WHO
Constitution, to wit:

Art. 62. Each member shall report annually on the action taken with respect to recommendations
made to it by the Organization, and with respect to conventions, agreements and regulations.

Apparently, the WHA Resolution adopting the ICMBS and subsequent WHA Resolutions urging
member states to implement the ICMBS are merely recommendatory and legally non-binding. Thus,
unlike what has been done with the ICMBS whereby the legislature enacted most of the
provisions into law which is the Milk Code, the subsequent WHA Resolutions,30 specifically
providing for exclusive breastfeeding from 0-6 months, continued breastfeeding up to 24 months,
and absolutely prohibiting advertisements and promotions of breastmilk substitutes, have not
been adopted as a domestic law.

It is propounded that WHA Resolutions may constitute "soft law" or non-binding norms, principles and
practices that influence state behavior.31

62 | P a g e
"Soft law" does not fall into any of the categories of international law set forth in Article 38, Chapter
III of the 1946 Statute of the International Court of Justice.32 It is, however, an expression of non-
binding norms, principles, and practices that influence state behavior.33 Certain declarations and
resolutions of the UN General Assembly fall under this category.34 The most notable is the UN
Declaration of Human Rights, which this Court has enforced in various cases, specifically, Government
of Hongkong Special Administrative Region v. Olalia,35 Mejoff v. Director of Prisons,36 Mijares v.
Raada37 and Shangri-la International Hotel Management, Ltd. v. Developers Group of Companies,
Inc..38

The World Intellectual Property Organization (WIPO), a specialized agency attached to the UN with
the mandate to promote and protect intellectual property worldwide, has resorted to soft law as a rapid
means of norm creation, in order "to reflect and respond to the changing needs and demands of its
constituents."39 Other international organizations which have resorted to soft law include the
International Labor Organization and the Food and Agriculture Organization (in the form of the Codex
Alimentarius).40

WHO has resorted to soft law. This was most evident at the time of the Severe Acute Respiratory
Syndrome (SARS) and Avian flu outbreaks.

Although the IHR Resolution does not create new international law binding on WHO
member states, it provides an excellent example of the power of "soft law" in international
relations. International lawyers typically distinguish binding rules of international law-"hard
law"-from non-binding norms, principles, and practices that influence state behavior-"soft
law." WHO has during its existence generated many soft law norms, creating a "soft law
regime" in international governance for public health.

The "soft law" SARS and IHR Resolutions represent significant steps in laying the political
groundwork for improved international cooperation on infectious diseases. These resolutions
clearly define WHO member states' normative duty to cooperate fully with other countries and
with WHO in connection with infectious disease surveillance and response to outbreaks.

This duty is neither binding nor enforceable, but, in the wake of the SARS epidemic, the duty
is powerful politically for two reasons. First, the SARS outbreak has taught the lesson that
participating in, and enhancing, international cooperation on infectious disease controls is in a
country's self-interest x x x if this warning is heeded, the "soft law" in the SARS and IHR
Resolution could inform the development of general and consistent state practice on infectious
disease surveillance and outbreak response, perhaps crystallizing eventually into customary
international law on infectious disease prevention and control.41

In the Philippines, the executive department implemented certain measures recommended by WHO to
address the outbreaks of SARS and Avian flu by issuing Executive Order (E.O.) No. 201 on April 26,
2003 and E.O. No. 280 on February 2, 2004, delegating to various departments broad powers to close
down schools/establishments, conduct health surveillance and monitoring, and ban importation of
poultry and agricultural products.

It must be emphasized that even under such an international emergency, the duty of a state to
implement the IHR Resolution was still considered not binding or enforceable, although said
resolutions had great political influence.
63 | P a g e
As previously discussed, for an international rule to be considered as customary law, it must be
established that such rule is being followed by states because they consider it obligatory to comply
with such rules (opinio juris). Respondents have not presented any evidence to prove that the WHA
Resolutions, although signed by most of the member states, were in fact enforced or practiced by at
least a majority of the member states; neither have respondents proven that any compliance by member
states with said WHA Resolutions was obligatory in nature.

Respondents failed to establish that the provisions of pertinent WHA Resolutions are customary
international law that may be deemed part of the law of the land.

Consequently, legislation is necessary to transform the provisions of the WHA Resolutions into
domestic law. The provisions of the WHA Resolutions cannot be considered as part of the law of
the land that can be implemented by executive agencies without the need of a law enacted by the
legislature.

Second, the Court will determine whether the DOH may implement the provisions of the WHA
Resolutions by virtue of its powers and functions under the Revised Administrative Code even in the
absence of a domestic law.

Section 3, Chapter 1, Title IX of the Revised Administrative Code of 1987 provides that the DOH
shall define the national health policy and implement a national health plan within the framework of
the government's general policies and plans, and issue orders and regulations concerning the
implementation of established health policies.

It is crucial to ascertain whether the absolute prohibition on advertising and other forms of promotion
of breastmilk substitutes provided in some WHA Resolutions has been adopted as part of the national
health policy.

Respondents submit that the national policy on infant and young child feeding is embodied in A.O. No.
2005-0014, dated May 23, 2005. Basically, the Administrative Order declared the following policy
guidelines: (1) ideal breastfeeding practices, such as early initiation of breastfeeding, exclusive
breastfeeding for the first six months, extended breastfeeding up to two years and beyond; (2)
appropriate complementary feeding, which is to start at age six months; (3) micronutrient
supplementation; (4) universal salt iodization; (5) the exercise of other feeding options; and (6) feeding
in exceptionally difficult circumstances. Indeed, the primacy of breastfeeding for children is
emphasized as a national health policy. However, nowhere in A.O. No. 2005-0014 is it declared that
as part of such health policy, the advertisement or promotion of breastmilk substitutes should be
absolutely prohibited.

The national policy of protection, promotion and support of breastfeeding cannot automatically be
equated with a total ban on advertising for breastmilk substitutes.

In view of the enactment of the Milk Code which does not contain a total ban on the advertising and
promotion of breastmilk substitutes, but instead, specifically creates an IAC which will regulate said
advertising and promotion, it follows that a total ban policy could be implemented only pursuant to a
law amending the Milk Code passed by the constitutionally authorized branch of government, the
legislature.

64 | P a g e
Thus, only the provisions of the Milk Code, but not those of subsequent WHA Resolutions, can be
validly implemented by the DOH through the subject RIRR.

Third, the Court will now determine whether the provisions of the RIRR are in accordance with those
of the Milk Code.

In support of its claim that the RIRR is inconsistent with the Milk Code, petitioner alleges the
following:

1. The Milk Code limits its coverage to children 0-12 months old, but the RIRR extended its
coverage to "young children" or those from ages two years old and beyond:

MILK CODE RIRR

WHEREAS, in order to ensure that safe Section 2. Purpose These Revised
and adequate nutrition for infants is Rules and Regulations are hereby
provided, there is a need to protect and promulgated to ensure the provision of
promote breastfeeding and to inform the safe and adequate nutrition for infants and
public about the proper use of breastmilk young children by the promotion,
substitutes and supplements and related protection and support of breastfeeding
products through adequate, consistent and and by ensuring the proper use of
objective information and appropriate breastmilk substitutes, breastmilk
regulation of the marketing and supplements and related products when
distribution of the said substitutes, these are medically indicated and only
supplements and related products; when necessary, on the basis of adequate
information and through appropriate
SECTION 4(e). "Infant" means a person marketing and distribution.
falling within the age bracket of 0-12
months. Section 5(ff). "Young Child" means a
person from the age of more than twelve
(12) months up to the age of three (3)
years (36 months).

2. The Milk Code recognizes that infant formula may be a proper and possible substitute for
breastmilk in certain instances; but the RIRR provides "exclusive breastfeeding for infants from
0-6 months" and declares that "there is no substitute nor replacement for breastmilk":

MILK CODE RIRR

WHEREAS, in order to ensure that safe Section 4. Declaration of Principles
and adequate nutrition for infants is The following are the underlying
provided, there is a need to protect and principles from which the revised rules
promote breastfeeding and to inform the and regulations are premised upon:
public about the proper use of breastmilk
substitutes and supplements and related a. Exclusive breastfeeding is for
products through adequate, consistent and infants from 0 to six (6) months.
objective information and appropriate
regulation of the marketing and b. There is no substitute or
replacement for breastmilk.

65 | P a g e
 distribution of the said substitutes,
supplements and related products;

3. The Milk Code only regulates and does not impose unreasonable requirements for advertising
and promotion; RIRR imposes an absolute ban on such activities for breastmilk substitutes
intended for infants from 0-24 months old or beyond, and forbids the use of health and
nutritional claims. Section 13 of the RIRR, which provides for a "total effect" in the promotion
of products within the scope of the Code, is vague:

MILK CODE RIRR

SECTION 6. The General Public and Section 4. Declaration of Principles
Mothers. The following are the underlying
principles from which the revised rules
(a) No advertising, promotion or other and regulations are premised upon:
marketing materials, whether written,
audio or visual, for products within the xxxx
scope of this Code shall be printed,
published, distributed, exhibited and f. Advertising, promotions, or sponsor-
broadcast unless such materials are duly ships of infant formula, breastmilk
authorized and approved by an inter- substitutes and other related products are
agency committee created herein pursuant prohibited.
to the applicable standards provided for in
this Code. Section 11. Prohibition No
advertising, promotions, sponsorships, or
marketing materials and activities for
breastmilk substitutes intended for infants
and young children up to twenty-four (24)
months, shall be allowed, because they
tend to convey or give subliminal
messages or impressions that undermine
breastmilk and breastfeeding or otherwise
exaggerate breastmilk substitutes and/or
replacements, as well as related products
covered within the scope of this Code.

Section 13. "Total Effect" - Promotion

of products within the scope of this Code
must be objective and should not equate
or make the product appear to be as good
or equal to breastmilk or breastfeeding in
the advertising concept. It must not in any
case undermine breastmilk or
breastfeeding. The "total effect" should
not directly or indirectly suggest that
buying their product would produce
better individuals, or resulting in greater
love, intelligence, ability, harmony or in

66 | P a g e

4. The RIRR imposes additional labeling requirements not found in the Milk Code:
MILK CODE
SECTION 10. Containers/Label.
(a) Containers and/or labels shall be
designed to provide the necessary
information about the appropriate use of
67 | P a g e
any manner bring better health to the
baby or other such exaggerated and
unsubstantiated claim.
Section 15. Content of Materials. - The
following shall not be included in
advertising, promotional and marketing
materials:
a. Texts, pictures, illustrations or
information which discourage or tend to
undermine the benefits or superiority of
breastfeeding or which idealize the use of
breastmilk substitutes and milk
supplements. In this connection, no
pictures of babies and children together
with their mothers, fathers, siblings,
grandparents, other relatives or caregivers
(or yayas) shall be used in any
advertisements for infant formula and
breastmilk supplements;
b. The term "humanized," "maternalized,"
"close to mother's milk" or similar words
in describing breastmilk substitutes or
milk supplements;
c. Pictures or texts that idealize the use of
infant and milk formula.
Section 16. All health and nutrition
claims for products within the scope of
the Code are absolutely prohibited. For
this purpose, any phrase or words that
connotes to increase emotional,
intellectual abilities of the infant and
young child and other like phrases shall
not be allowed.
RIRR
Section 26. Content Each
container/label shall contain such
message, in both Filipino and English
languages, and which message cannot be
 the products, and in such a way as not to readily separated therefrom, relative the
discourage breastfeeding. following points:

(b) Each container shall have a clear, (a) The words or phrase "Important
conspicuous and easily readable and Notice" or "Government Warning" or
understandable message in Pilipino or their equivalent;
English printed on it, or on a label, which
message can not readily become (b) A statement of the superiority of
separated from it, and which shall include breastfeeding;
the following points:
(c) A statement that there is no substitute
(i) the words "Important Notice" or their for breastmilk;
equivalent;
(d) A statement that the product shall be
(ii) a statement of the superiority of used only on the advice of a health
breastfeeding; worker as to the need for its use and the
proper methods of use;
(iii) a statement that the product shall be
used only on the advice of a health (e) Instructions for appropriate prepara-
worker as to the need for its use and the tion, and a warning against the health
proper methods of use; and hazards of inappropriate preparation; and

(iv) instructions for appropriate (f) The health hazards of unnecessary or

preparation, and a warning against the
health hazards of inappropriate
preparation.
improper use of infant formula and other
related products including information
that powdered infant formula may contain
pathogenic microorganisms and must be
prepared and used appropriately.

5. The Milk Code allows dissemination of information on infant formula to health professionals;
the RIRR totally prohibits such activity:

MILK CODE RIRR

SECTION 7. Health Care System. Section 22. No manufacturer, distributor,
or representatives of products covered by
(b) No facility of the health care system the Code shall be allowed to conduct or
shall be used for the purpose of be involved in any activity on
promoting infant formula or other breastfeeding promotion, education and
products within the scope of this production of Information, Education and
Code. This Code does not, however, Communication (IEC) materials on
preclude the dissemination of information breastfeeding, holding of or participating
to health professionals as provided in as speakers in classes or seminars for
Section 8(b). women and children activities and to
avoid the use of these venues to market
SECTION 8. Health Workers. - their brands or company names.

(b) Information provided by SECTION 16. All health and nutrition

manufacturers and distributors to health claims for products within the scope of
68 | P a g e
 professionals regarding products within
the scope of this Code shall be restricted
to scientific and factual matters and such
information shall not imply or create a
belief that bottle-feeding is equivalent or
superior to breastfeeding. It shall also
include the information specified in
Section 5(b).
6. The Milk Code permits milk manufacturers and distributors to extend assistance in research
and continuing education of health professionals; RIRR absolutely forbids the same.
MILK CODE
SECTION 8. Health Workers
(e) Manufacturers and distributors of
products within the scope of this
Code may assist in the research,
scholarships and continuing education, of
health professionals, in accordance with
the rules and regulations promulgated by
the Ministry of Health.
69 | P a g e
the Code are absolutely prohibited. For
this purpose, any phrase or words that
connotes to increase emotional,
intellectual abilities of the infant and
young child and other like phrases shall
not be allowed.
RIRR
Section 4. Declaration of Principles
The following are the underlying
principles from which the revised rules
and regulations are premised upon:
i. Milk companies, and their
representatives, should not form part of
any policymaking body or entity in
relation to the advancement of
breasfeeding.
SECTION 22. No manufacturer,
distributor, or representatives of products
covered by the Code shall be allowed to
conduct or be involved in any activity on
breastfeeding promotion, education and
production of Information, Education and
Communication (IEC) materials on
breastfeeding, holding of or participating
as speakers in classes or seminars for
women and children activitiesand to
avoid the use of these venues to market
their brands or company names.
SECTION 32. Primary Responsibility
of Health Workers - It is the primary
responsibility of the health workers to
promote, protect and support
breastfeeding and appropriate infant and
young child feeding. Part of this
responsibility is to continuously update
their knowledge and skills on
breastfeeding. No assistance, support,
 logistics or training from milk companies
shall be permitted.

7. The Milk Code regulates the giving of donations; RIRR absolutely prohibits it.

MILK CODE RIRR

SECTION 6. The General Public and Section 51. Donations Within the Scope
Mothers. of This Code - Donations of products,
materials, defined and covered under the
(f) Nothing herein contained shall prevent Milk Code and these implementing rules
donations from manufacturers and and regulations, shall be strictly
distributors of products within the scope prohibited.
of this Code upon request by or with the
approval of the Ministry of Health. Section 52. Other Donations By Milk
Companies Not Covered by this Code. -
Donations of products, equipments, and
the like, not otherwise falling within the
scope of this Code or these Rules, given
by milk companies and their agents,
representatives, whether in kind or in
cash, may only be coursed through the
Inter Agency Committee (IAC), which
shall determine whether such donation be
accepted or otherwise.

8. The RIRR provides for administrative sanctions not imposed by the Milk Code.

MILK CODE RIRR

Section 46. Administrative Sanctions.
The following administrative sanctions
shall be imposed upon any person,
juridical or natural, found to have
violated the provisions of the Code and
its implementing Rules and Regulations:

a) 1st violation Warning;

b) 2nd violation Administrative fine of a

minimum of Ten Thousand (P10,000.00)
to Fifty Thousand (P50,000.00) Pesos,
depending on the gravity and extent of
the violation, including the recall of the
offending product;

c) 3rd violation Administrative Fine of a

minimum of Sixty Thousand
(P60,000.00) to One Hundred Fifty

70 | P a g e
 Thousand (P150,000.00) Pesos,
depending on the gravity and extent of
the violation, and in addition thereto, the
recall of the offending product, and
suspension of the Certificate of Product
Registration (CPR);

d) 4th violation Administrative Fine of a

minimum of Two Hundred Thousand
(P200,000.00) to Five Hundred
(P500,000.00) Thousand Pesos,
depending on the gravity and extent of
the violation; and in addition thereto, the
recall of the product, revocation of the
CPR, suspension of the License to
Operate (LTO) for one year;

e) 5th and succeeding repeated violations

Administrative Fine of One Million
(P1,000,000.00) Pesos, the recall of the
offending product, cancellation of the
CPR, revocation of the License to
Operate (LTO) of the company
concerned, including the blacklisting of
the company to be furnished the
Department of Budget and Management
(DBM) and the Department of Trade and
Industry (DTI);

f) An additional penalty of Two Thou-

sand Five Hundred (P2,500.00) Pesos per
day shall be made for every day the
violation continues after having received
the order from the IAC or other such
appropriate body, notifying and
penalizing the company for the infraction.

For purposes of determining whether or

not there is "repeated" violation, each
product violation belonging or owned by
a company, including those of their
subsidiaries, are deemed to be violations
of the concerned milk company and shall
not be based on the specific violating
product alone.

9. The RIRR provides for repeal of existing laws to the contrary.

71 | P a g e
The Court shall resolve the merits of the allegations of petitioner seriatim.

1. Petitioner is mistaken in its claim that the Milk Code's coverage is limited only to children 0-12
months old. Section 3 of the Milk Code states:

SECTION 3. Scope of the Code The Code applies to the marketing, and practices related
thereto, of the following products: breastmilk substitutes, including infant formula; other milk
products, foods and beverages, including bottle-fed complementary foods, when marketed or
otherwise represented to be suitable, with or without modification, for use as a partial or total
replacement of breastmilk; feeding bottles and teats. It also applies to their quality and
availability, and to information concerning their use.

Clearly, the coverage of the Milk Code is not dependent on the age of the child but on the kind of
product being marketed to the public. The law treats infant formula, bottle-fed complementary food,
and breastmilk substitute as separate and distinct product categories.

Section 4(h) of the Milk Code defines infant formula as "a breastmilk substitute x x x to satisfy the
normal nutritional requirements of infants up to between four to six months of age, and adapted to their
physiological characteristics"; while under Section 4(b), bottle-fed complementary food refers to "any
food, whether manufactured or locally prepared, suitable as a complement to breastmilk or infant
formula, when either becomes insufficient to satisfy the nutritional requirements of the infant." An
infant under Section 4(e) is a person falling within the age bracket 0-12 months. It is the nourishment
of this group of infants or children aged 0-12 months that is sought to be promoted and protected by the
Milk Code.

But there is another target group. Breastmilk substitute is defined under Section 4(a) as "any food being
marketed or otherwise presented as a partial or total replacement for breastmilk, whether or not suitable
for that purpose." This section conspicuously lacks reference to any particular age-group of
children. Hence, the provision of the Milk Code cannot be considered exclusive for children aged
0-12 months. In other words, breastmilk substitutes may also be intended for young children more than
12 months of age. Therefore, by regulating breastmilk substitutes, the Milk Code also intends to protect
and promote the nourishment of children more than 12 months old.

Evidently, as long as what is being marketed falls within the scope of the Milk Code as provided in
Section 3, then it can be subject to regulation pursuant to said law, even if the product is to be used by
children aged over 12 months.

There is, therefore, nothing objectionable with Sections 242 and 5(ff)43 of the RIRR.

2. It is also incorrect for petitioner to say that the RIRR, unlike the Milk Code, does not recognize that
breastmilk substitutes may be a proper and possible substitute for breastmilk.

The entirety of the RIRR, not merely truncated portions thereof, must be considered and construed
together. As held in De Luna v. Pascual,44 "[t]he particular words, clauses and phrases in the Rule
should not be studied as detached and isolated expressions, but the whole and every part thereof must
be considered in fixing the meaning of any of its parts and in order to produce a harmonious whole."

72 | P a g e
Section 7 of the RIRR provides that "when medically indicated and only when necessary, the use of
breastmilk substitutes is proper if based on complete and updated information." Section 8 of the
RIRR also states that information and educational materials should include information on the proper
use of infant formula when the use thereof is needed.

Hence, the RIRR, just like the Milk Code, also recognizes that in certain cases, the use of
breastmilk substitutes may be proper.

3. The Court shall ascertain the merits of allegations 345 and 446 together as they are interlinked with
each other.

To resolve the question of whether the labeling requirements and advertising regulations under the
RIRR are valid, it is important to deal first with the nature, purpose, and depth of the regulatory powers
of the DOH, as defined in general under the 1987 Administrative Code,47 and as delegated in particular
under the Milk Code.

Health is a legitimate subject matter for regulation by the DOH (and certain other administrative
agencies) in exercise of police powers delegated to it. The sheer span of jurisprudence on that matter
precludes the need to further discuss it..48 However, health information, particularly advertising
materials on apparently non-toxic products like breastmilk substitutes and supplements, is a relatively
new area for regulation by the DOH.49

As early as the 1917 Revised Administrative Code of the Philippine Islands,50 health information was
already within the ambit of the regulatory powers of the predecessor of DOH.51 Section 938 thereof
charged it with the duty to protect the health of the people, and vested it with such powers as "(g) the
dissemination of hygienic information among the people and especially the inculcation of knowledge
as to the proper care of infants and the methods of preventing and combating dangerous
communicable diseases."

Seventy years later, the 1987 Administrative Code tasked respondent DOH to carry out the state policy
pronounced under Section 15, Article II of the 1987 Constitution, which is "to protect and promote the
right to health of the people and instill health consciousness among them."52 To that end, it was
granted under Section 3 of the Administrative Code the power to "(6) propagate health information
and educate the population on important health, medical and environmental matters which have health
implications."53

When it comes to information regarding nutrition of infants and young children, however, the Milk
Code specifically delegated to the Ministry of Health (hereinafter referred to as DOH) the power to
ensure that there is adequate, consistent and objective information on breastfeeding and use of
breastmilk substitutes, supplements and related products; and the power to control such information.
These are expressly provided for in Sections 12 and 5(a), to wit:

SECTION 12. Implementation and Monitoring

xxxx

73 | P a g e
 (b) The Ministry of Health shall be principally responsible for the implementation and
enforcement of the provisions of this Code. For this purpose, the Ministry of Health shall have
the following powers and functions:

(1) To promulgate such rules and regulations as are necessary or proper for the
implementation of this Code and the accomplishment of its purposes and objectives.

xxxx

(4) To exercise such other powers and functions as may be necessary for or incidental to
the attainment of the purposes and objectives of this Code.

SECTION 5. Information and Education

(a) The government shall ensure that objective and consistent information is provided on infant
feeding, for use by families and those involved in the field of infant nutrition. This responsibility
shall cover the planning, provision, design and dissemination of information, and
the control thereof, on infant nutrition. (Emphasis supplied)

Further, DOH is authorized by the Milk Code to control the content of any information on
breastmilk vis--visbreastmilk substitutes, supplement and related products, in the following manner:

SECTION 5. x x x

(b) Informational and educational materials, whether written, audio, or visual, dealing with the
feeding of infants and intended to reach pregnant women and mothers of infants, shall include
clear information on all the following points: (1) the benefits and superiority of breastfeeding;
(2) maternal nutrition, and the preparation for and maintenance of breastfeeding; (3) the negative
effect on breastfeeding of introducing partial bottlefeeding; (4) the difficulty of reversing the
decision not to breastfeed; and (5) where needed, the proper use of infant formula, whether
manufactured industrially or home-prepared. When such materials contain information about
the use of infant formula, they shall include the social and financial implications of its use;
the health hazards of inappropriate foods or feeding methods; and, in particular, the health
hazards of unnecessary or improper use of infant formula and other breastmilk substitutes.
Such materials shall not use any picture or text which may idealize the use of breastmilk
substitutes.

SECTION 8. Health Workers

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding

products within the scope of this Code shall be restricted to scientific and factual matters,
and such information shall not imply or create a belief that bottlefeeding is equivalent or
superior to breastfeeding. It shall also include the information specified in Section 5(b).

SECTION 10. Containers/Label

74 | P a g e
 (a) Containers and/or labels shall be designed to provide the necessary information about the
appropriate use of the products, and in such a way as not to discourage breastfeeding.

xxxx

(d) The term "humanized," "maternalized" or similar terms shall not be used. (Emphasis
supplied)

The DOH is also authorized to control the purpose of the information and to whom such information
may be disseminated under Sections 6 through 9 of the Milk Code54 to ensure that the information that
would reach pregnant women, mothers of infants, and health professionals and workers in the health
care system is restricted to scientific and factual matters and shall not imply or create a belief that
bottlefeeding is equivalent or superior to breastfeeding.

It bears emphasis, however, that the DOH's power under the Milk Code to control information
regarding breastmilk vis-a-vis breastmilk substitutes is not absolute as the power to control does not
encompass the power to absolutely prohibit the advertising, marketing, and promotion of breastmilk
substitutes.

The following are the provisions of the Milk Code that unequivocally indicate that the control over
information given to the DOH is not absolute and that absolute prohibition is not contemplated by the
Code:

a) Section 2 which requires adequate information and appropriate marketing and distribution of
breastmilk substitutes, to wit:

SECTION 2. Aim of the Code The aim of the Code is to contribute to the provision of
safe and adequate nutrition for infants by the protection and promotion of breastfeeding
and by ensuring the proper use of breastmilk substitutes and breastmilk supplements
when these are necessary, on the basis of adequate information and through appropriate
marketing and distribution.

b) Section 3 which specifically states that the Code applies to the marketing of and practices
related to breastmilk substitutes, including infant formula, and to information concerning their
use;

c) Section 5(a) which provides that the government shall ensure that objective and consistent
information is provided on infant feeding;

d) Section 5(b) which provides that written, audio or visual informational and educational
materials shall not use any picture or text which may idealize the use of breastmilk substitutes
and should include information on the health hazards of unnecessary or improper use of said
product;

e) Section 6(a) in relation to Section 12(a) which creates and empowers the IAC to review and
examine advertising, promotion, and other marketing materials;

75 | P a g e
 f) Section 8(b) which states that milk companies may provide information to health
professionals but such information should be restricted to factual and scientific matters and shall
not imply or create a belief that bottlefeeding is equivalent or superior to breastfeeding; and

g) Section 10 which provides that containers or labels should not contain information that would
discourage breastfeeding and idealize the use of infant formula.

It is in this context that the Court now examines the assailed provisions of the RIRR regarding labeling
and advertising.

Sections 1355 on "total effect" and 2656 of Rule VII of the RIRR contain some labeling requirements,
specifically: a) that there be a statement that there is no substitute to breastmilk; and b) that there be a
statement that powdered infant formula may contain pathogenic microorganisms and must be prepared
and used appropriately. Section 1657of the RIRR prohibits all health and nutrition claims for products
within the scope of the Milk Code, such as claims of increased emotional and intellectual abilities of
the infant and young child.

These requirements and limitations are consistent with the provisions of Section 8 of the Milk Code, to
wit:

SECTION 8. Health workers -

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding

products within the scope of this Code shall be restricted to scientific and factual matters, and
such information shall notimply or create a belief that bottlefeeding is equivalent or superior to
breastfeeding. It shall also include the information specified in Section 5.58 (Emphasis supplied)

and Section 10(d)59 which bars the use on containers and labels of the terms "humanized,"
"maternalized," or similar terms.

These provisions of the Milk Code expressly forbid information that would imply or create a belief that
there is any milk product equivalent to breastmilk or which is humanized or maternalized, as such
information would be inconsistent with the superiority of breastfeeding.

It may be argued that Section 8 of the Milk Code refers only to information given to health workers
regarding breastmilk substitutes, not to containers and labels thereof. However, such restrictive
application of Section 8(b) will result in the absurd situation in which milk companies and distributors
are forbidden to claim to health workers that their products are substitutes or equivalents of breastmilk,
and yet be allowed to display on the containers and labels of their products the exact opposite message.
That askewed interpretation of the Milk Code is precisely what Section 5(a) thereof seeks to avoid by
mandating that all information regarding breastmilk vis-a-vis breastmilk substitutes be consistent, at
the same time giving the government control over planning, provision, design, and dissemination of
information on infant feeding.

Thus, Section 26(c) of the RIRR which requires containers and labels to state that the product offered is
not a substitute for breastmilk, is a reasonable means of enforcing Section 8(b) of the Milk Code and

76 | P a g e
deterring circumvention of the protection and promotion of breastfeeding as embodied in Section 260 of
the Milk Code.

Section 26(f)61 of the RIRR is an equally reasonable labeling requirement. It implements Section 5(b)
of the Milk Code which reads:

SECTION 5. x x x

xxxx

(b) Informational and educational materials, whether written, audio, or visual, dealing with the
feeding of infants and intended to reach pregnant women and mothers of infants, shall include
clear information on all the following points: x x x (5) where needed, the proper use of infant
formula, whether manufactured industrially or home-prepared. When such materials contain
information about the use of infant formula, they shall include the social and financial
implications of its use; the health hazards of inappropriate foods or feeding methods; and, in
particular, the health hazards of unnecessary or improper use of infant formula and other
breastmilk substitutes. Such materials shall not use any picture or text which may idealize the
use of breastmilk substitutes. (Emphasis supplied)

The label of a product contains information about said product intended for the buyers thereof. The
buyers of breastmilk substitutes are mothers of infants, and Section 26 of the RIRR merely adds a fair
warning about the likelihood of pathogenic microorganisms being present in infant formula and other
related products when these are prepared and used inappropriately.

Petitioners counsel has admitted during the hearing on June 19, 2007 that formula milk is prone to
contaminations and there is as yet no technology that allows production of powdered infant formula
that eliminates all forms of contamination.62

Ineluctably, the requirement under Section 26(f) of the RIRR for the label to contain the message
regarding health hazards including the possibility of contamination with pathogenic microorganisms is
in accordance with Section 5(b) of the Milk Code.

The authority of DOH to control information regarding breastmilk vis-a-vis breastmilk substitutes and
supplements and related products cannot be questioned. It is its intervention into the area of
advertising, promotion, and marketing that is being assailed by petitioner.

In furtherance of Section 6(a) of the Milk Code, to wit:

SECTION 6. The General Public and Mothers.

(a) No advertising, promotion or other marketing materials, whether written, audio or visual, for
products within the scope of this Code shall be printed, published, distributed, exhibited and
broadcast unless such materials are duly authorized and approved by an inter-agency committee
created herein pursuant to the applicable standards provided for in this Code.

the Milk Code invested regulatory authority over advertising, promotional and marketing materials to
an IAC, thus:

77 | P a g e
 SECTION 12. Implementation and Monitoring -

(a) For purposes of Section 6(a) of this Code, an inter-agency committee composed of the
following members is hereby created:

Minister of Health ------------------ Chairman

-
Minister of Trade and Industry ------------------ Member
-
Minister of Justice ------------------ Member
-
Minister of Social Services and ------------------ Member
Development -

The members may designate their duly authorized representative to every meeting of the
Committee.

The Committee shall have the following powers and functions:

(1) To review and examine all advertising. promotion or other marketing materials,
whether written, audio or visual, on products within the scope of this Code;

(2) To approve or disapprove, delete objectionable portions from and prohibit the
printing, publication, distribution, exhibition and broadcast of, all advertising promotion
or other marketing materials, whether written, audio or visual, on products within the
scope of this Code;

(3) To prescribe the internal and operational procedure for the exercise of its powers and
functions as well as the performance of its duties and responsibilities; and

(4) To promulgate such rules and regulations as are necessary or proper for the
implementation of Section 6(a) of this Code. x x x (Emphasis supplied)

However, Section 11 of the RIRR, to wit:

SECTION 11. Prohibition No advertising, promotions, sponsorships, or marketing materials

and activities for breastmilk substitutes intended for infants and young children up to twenty-
four (24) months, shall be allowed, because they tend to convey or give subliminal messages or
impressions that undermine breastmilk and breastfeeding or otherwise exaggerate breastmilk
substitutes and/or replacements, as well as related products covered within the scope of this
Code.

prohibits advertising, promotions, sponsorships or marketing materials and activities for breastmilk
substitutes in line with the RIRRs declaration of principle under Section 4(f), to wit:

SECTION 4. Declaration of Principles

78 | P a g e
 xxxx

(f) Advertising, promotions, or sponsorships of infant formula, breastmilk substitutes and other
related products are prohibited.

The DOH, through its co-respondents, evidently arrogated to itself not only the regulatory authority
given to the IAC but also imposed absolute prohibition on advertising, promotion, and marketing.

Yet, oddly enough, Section 12 of the RIRR reiterated the requirement of the Milk Code in Section 6
thereof for prior approval by IAC of all advertising, marketing and promotional materials prior to
dissemination.

Even respondents, through the OSG, acknowledged the authority of IAC, and repeatedly insisted,
during the oral arguments on June 19, 2007, that the prohibition under Section 11 is not actually
operational, viz:

SOLICITOR GENERAL DEVANADERA:

xxxx

x x x Now, the crux of the matter that is being questioned by Petitioner is whether or not there is
an absolute prohibition on advertising making AO 2006-12 unconstitutional. We maintained that
what AO 2006-12 provides is not an absolute prohibition because Section 11 while it states and
it is entitled prohibition it states that no advertising, promotion, sponsorship or marketing
materials and activities for breast milk substitutes intended for infants and young children up to
24 months shall be allowed because this is the standard they tend to convey or give subliminal
messages or impression undermine that breastmilk or breastfeeding x x x.

We have to read Section 11 together with the other Sections because the other Section, Section
12, provides for the inter agency committee that is empowered to process and evaluate all the
advertising and promotion materials.

xxxx

What AO 2006-12, what it does, it does not prohibit the sale and manufacture, it simply
regulates the advertisement and the promotions of breastfeeding milk substitutes.

xxxx

Now, the prohibition on advertising, Your Honor, must be taken together with the provision on
the Inter-Agency Committee that processes and evaluates because there may be some
information dissemination that are straight forward information dissemination. What the AO
2006 is trying to prevent is any material that will undermine the practice of breastfeeding, Your
Honor.

xxxx

ASSOCIATE JUSTICE SANTIAGO:

79 | P a g e
 Madam Solicitor General, under the Milk Code, which body has authority or power to
promulgate Rules and Regulations regarding the Advertising, Promotion and Marketing of
Breastmilk Substitutes?

SOLICITOR GENERAL DEVANADERA:

Your Honor, please, it is provided that the Inter-Agency Committee, Your Honor.

xxxx

ASSOCIATE JUSTICE SANTIAGO:

x x x Don't you think that the Department of Health overstepped its rule making authority when
it totally banned advertising and promotion under Section 11 prescribed the total effect rule as
well as the content of materials under Section 13 and 15 of the rules and regulations?

SOLICITOR GENERAL DEVANADERA:

Your Honor, please, first we would like to stress that there is no total absolute ban. Second, the
Inter-Agency Committee is under the Department of Health, Your Honor.

xxxx

ASSOCIATE JUSTICE NAZARIO:

x x x Did I hear you correctly, Madam Solicitor, that there is no absolute ban on advertising of
breastmilk substitutes in the Revised Rules?

SOLICITOR GENERAL DEVANADERA:

Yes, your Honor.

ASSOCIATE JUSTICE NAZARIO:

But, would you nevertheless agree that there is an absolute ban on advertising of breastmilk
substitutes intended for children two (2) years old and younger?

SOLICITOR GENERAL DEVANADERA:

It's not an absolute ban, Your Honor, because we have the Inter-Agency Committee that can
evaluate some advertising and promotional materials, subject to the standards that we have
stated earlier, which are- they should not undermine breastfeeding, Your Honor.

xxxx

x x x Section 11, while it is titled Prohibition, it must be taken in relation with the other
Sections, particularly 12 and 13 and 15, Your Honor, because it is recognized that the Inter-
Agency Committee has that power to evaluate promotional materials, Your Honor.

80 | P a g e
 ASSOCIATE JUSTICE NAZARIO:

So in short, will you please clarify there's no absolute ban on advertisement regarding milk
substitute regarding infants two (2) years below?

SOLICITOR GENERAL DEVANADERA:

We can proudly say that the general rule is that there is a prohibition, however, we take
exceptions and standards have been set. One of which is that, the Inter-Agency Committee can
allow if the advertising and promotions will not undermine breastmilk and breastfeeding, Your
Honor.63

Sections 11 and 4(f) of the RIRR are clearly violative of the Milk Code.

However, although it is the IAC which is authorized to promulgate rules and regulations for the
approval or rejection of advertising, promotional, or other marketing materials under Section 12(a) of
the Milk Code, said provision must be related to Section 6 thereof which in turn provides that the rules
and regulations must be "pursuant to the applicable standards provided for in this Code." Said standards
are set forth in Sections 5(b), 8(b), and 10 of the Code, which, at the risk of being repetitious, and for
easy reference, are quoted hereunder:

SECTION 5. Information and Education

xxxx

(b) Informational and educational materials, whether written, audio, or visual, dealing with the
feeding of infants and intended to reach pregnant women and mothers of infants, shall include
clear information on all the following points: (1) the benefits and superiority of breastfeeding;
(2) maternal nutrition, and the preparation for and maintenance of breastfeeding; (3) the negative
effect on breastfeeding of introducing partial bottlefeeding; (4) the difficulty of reversing the
decision not to breastfeed; and (5) where needed, the proper use of infant formula, whether
manufactured industrially or home-prepared. When such materials contain information about the
use of infant formula, they shall include the social and financial implications of its use; the
health hazards of inappropriate foods of feeding methods; and, in particular, the health hazards
of unnecessary or improper use of infant formula and other breastmilk substitutes. Such
materials shall not use any picture or text which may idealize the use of breastmilk substitutes.

xxxx

SECTION 8. Health Workers.

xxxx

(b) Information provided by manufacturers and distributors to health professionals regarding

products within the scope of this Code shall be restricted to scientific and factual matters and
such information shall not imply or create a belief that bottle feeding is equivalent or superior to
breastfeeding. It shall also include the information specified in Section 5(b).

81 | P a g e
 xxxx

SECTION 10. Containers/Label

(a) Containers and/or labels shall be designed to provide the necessary information about the
appropriate use of the products, and in such a way as not to discourage breastfeeding.

(b) Each container shall have a clear, conspicuous and easily readable and understandable
message in Pilipino or English printed on it, or on a label, which message can not readily
become separated from it, and which shall include the following points:

(i) the words "Important Notice" or their equivalent;

(ii) a statement of the superiority of breastfeeding;

(iii) a statement that the product shall be used only on the advice of a health worker as to
the need for its use and the proper methods of use; and

(iv) instructions for appropriate preparation, and a warning against the health hazards of
inappropriate preparation.

Section 12(b) of the Milk Code designates the DOH as the principal implementing agency for the
enforcement of the provisions of the Code. In relation to such responsibility of the DOH, Section 5(a)
of the Milk Code states that:

SECTION 5. Information and Education

(a) The government shall ensure that objective and consistent information is provided on infant
feeding, for use by families and those involved in the field of infant nutrition. This responsibility
shall cover the planning, provision, design and dissemination of information, and the control
thereof, on infant nutrition. (Emphasis supplied)

Thus, the DOH has the significant responsibility to translate into operational terms the standards
set forth in Sections 5, 8, and 10 of the Milk Code, by which the IAC shall screen advertising,
promotional, or other marketing materials.

It is pursuant to such responsibility that the DOH correctly provided for Section 13 in the RIRR which
reads as follows:

SECTION 13. "Total Effect" - Promotion of products within the scope of this Code must be
objective and should not equate or make the product appear to be as good or equal to breastmilk
or breastfeeding in the advertising concept. It must not in any case undermine breastmilk or
breastfeeding. The "total effect" should not directly or indirectly suggest that buying their
product would produce better individuals, or resulting in greater love, intelligence, ability,
harmony or in any manner bring better health to the baby or other such exaggerated and
unsubstantiated claim.

82 | P a g e
Such standards bind the IAC in formulating its rules and regulations on advertising, promotion, and
marketing. Through that single provision, the DOH exercises control over the information content of
advertising, promotional and marketing materials on breastmilk vis-a-vis breastmilk substitutes,
supplements and other related products. It also sets a viable standard against which the IAC may screen
such materials before they are made public.

In Equi-Asia Placement, Inc. vs. Department of Foreign Affairs,64 the Court held:

x x x [T]his Court had, in the past, accepted as sufficient standards the following: "public
interest," "justice and equity," "public convenience and welfare," and "simplicity, economy and
welfare."65

In this case, correct information as to infant feeding and nutrition is infused with public interest and
welfare.

4. With regard to activities for dissemination of information to health professionals, the Court also
finds that there is no inconsistency between the provisions of the Milk Code and the RIRR. Section
7(b)66 of the Milk Code, in relation to Section 8(b)67 of the same Code, allows dissemination of
information to health professionals but such information is restricted to scientific and factual
matters.

Contrary to petitioner's claim, Section 22 of the RIRR does not prohibit the giving of information to
health professionals on scientific and factual matters. What it prohibits is the involvement of the
manufacturer and distributor of the products covered by the Code in activities for the promotion,
education and production of Information, Education and Communication (IEC) materials regarding
breastfeeding that are intended for women and children. Said provision cannot be construed to
encompass even the dissemination of information to health professionals, as restricted by the Milk
Code.

5. Next, petitioner alleges that Section 8(e)68 of the Milk Code permits milk manufacturers and
distributors to extend assistance in research and in the continuing education of health professionals,
while Sections 22 and 32 of the RIRR absolutely forbid the same. Petitioner also assails Section
4(i)69 of the RIRR prohibiting milk manufacturers' and distributors' participation in any policymaking
body in relation to the advancement of breastfeeding.

Section 4(i) of the RIRR provides that milk companies and their representatives should not form part of
any policymaking body or entity in relation to the advancement of breastfeeding. The Court finds
nothing in said provisions which contravenes the Milk Code. Note that under Section 12(b) of the Milk
Code, it is the DOH which shall be principally responsible for the implementation and enforcement
of the provisions of said Code. It is entirely up to the DOH to decide which entities to call upon or
allow to be part of policymaking bodies on breastfeeding. Therefore, the RIRR's prohibition on milk
companies participation in any policymaking body in relation to the advancement of breastfeeding is
in accord with the Milk Code.

Petitioner is also mistaken in arguing that Section 22 of the RIRR prohibits milk companies from
giving reasearch assistance and continuing education to health professionals. Section 2270 of the RIRR
does not pertain to research assistance to or the continuing education of health professionals;
rather, it deals with breastfeeding promotion and education for women and children. Nothing in
83 | P a g e
Section 22 of the RIRR prohibits milk companies from giving assistance for research or continuing
education to health professionals; hence, petitioner's argument against this particular provision must be
struck down.

It is Sections 971 and 1072 of the RIRR which govern research assistance. Said sections of the RIRR
provide that research assistance for health workers and researchers may be allowed upon
approval of an ethics committee, and with certain disclosure requirements imposed on the milk
company and on the recipient of the research award.

The Milk Code endows the DOH with the power to determine how such research or educational
assistance may be given by milk companies or under what conditions health workers may accept the
assistance. Thus, Sections 9 and 10 of the RIRR imposing limitations on the kind of research done or
extent of assistance given by milk companies are completely in accord with the Milk Code.

Petitioner complains that Section 3273 of the RIRR prohibits milk companies from giving assistance,
support, logistics or training to health workers. This provision is within the prerogative given to the
DOH under Section 8(e)74of the Milk Code, which provides that manufacturers and distributors of
breastmilk substitutes may assist in researches, scholarships and the continuing education, of health
professionals in accordance with the rules and regulations promulgated by the Ministry of Health, now
DOH.

6. As to the RIRR's prohibition on donations, said provisions are also consistent with the Milk Code.
Section 6(f) of the Milk Code provides that donations may be made by manufacturers and distributors
of breastmilk substitutes upon the request or with the approval of the DOH. The law does not
proscribe the refusal of donations. The Milk Code leaves it purely to the discretion of the DOH whether
to request or accept such donations. The DOH then appropriately exercised its discretion through
Section 5175 of the RIRR which sets forth its policy not to request or approve donations from
manufacturers and distributors of breastmilk substitutes.

It was within the discretion of the DOH when it provided in Section 52 of the RIRR that any donation
from milk companies not covered by the Code should be coursed through the IAC which shall
determine whether such donation should be accepted or refused. As reasoned out by respondents, the
DOH is not mandated by the Milk Code to accept donations. For that matter, no person or entity can be
forced to accept a donation. There is, therefore, no real inconsistency between the RIRR and the law
because the Milk Code does not prohibit the DOH from refusing donations.

7. With regard to Section 46 of the RIRR providing for administrative sanctions that are not found in
the Milk Code, the Court upholds petitioner's objection thereto.

Respondent's reliance on Civil Aeronautics Board v. Philippine Air Lines, Inc.76 is misplaced. The
glaring difference in said case and the present case before the Court is that, in the Civil Aeronautics
Board, the Civil Aeronautics Administration (CAA) was expressly granted by the law (R.A. No. 776)
the power to impose fines and civil penalties, while the Civil Aeronautics Board (CAB) was granted
by the same law the power to review on appeal the order or decision of the CAA and to determine
whether to impose, remit, mitigate, increase or compromise such fine and civil penalties. Thus, the
Court upheld the CAB's Resolution imposing administrative fines.

84 | P a g e
In a more recent case, Perez v. LPG Refillers Association of the Philippines, Inc.,77 the Court upheld
the Department of Energy (DOE) Circular No. 2000-06-10
implementing Batas Pambansa (B.P.) Blg. 33. The circular provided for fines for the commission of
prohibited acts. The Court found that nothing in the circular contravened the law because the DOE was
expressly authorized by B.P. Blg. 33 and R.A. No. 7638 to impose fines or penalties.

In the present case, neither the Milk Code nor the Revised Administrative Code grants the DOH the
authority to fix or impose administrative fines. Thus, without any express grant of power to fix or
impose such fines, the DOH cannot provide for those fines in the RIRR. In this regard, the DOH again
exceeded its authority by providing for such fines or sanctions in Section 46 of the RIRR. Said
provision is, therefore, null and void.

The DOH is not left without any means to enforce its rules and regulations. Section 12(b) (3) of the
Milk Code authorizes the DOH to "cause the prosecution of the violators of this Code and other
pertinent laws on products covered by this Code." Section 13 of the Milk Code provides for the
penalties to be imposed on violators of the provision of the Milk Code or the rules and regulations
issued pursuant to it, to wit:

SECTION 13. Sanctions

(a) Any person who violates the provisions of this Code or the rules and regulations issued
pursuant to this Code shall, upon conviction, be punished by a penalty of two (2) months to
one (1) year imprisonment or a fine of not less than One Thousand Pesos (P1,000.00) nor more
than Thirty Thousand Pesos (P30,000.00) or both. Should the offense be committed by a
juridical person, the chairman of the Board of Directors, the president, general manager, or the
partners and/or the persons directly responsible therefor, shall be penalized.

(b) Any license, permit or authority issued by any government agency to any health worker,
distributor, manufacturer, or marketing firm or personnel for the practice of their profession or
occupation, or for the pursuit of their business, may, upon recommendation of the Ministry of
Health, be suspended or revoked in the event of repeated violations of this Code, or of the rules
and regulations issued pursuant to this Code. (Emphasis supplied)

8. Petitioners claim that Section 57 of the RIRR repeals existing laws that are contrary to the RIRR is
frivolous.

Section 57 reads:

SECTION 57. Repealing Clause - All orders, issuances, and rules and regulations or parts
thereof inconsistent with these revised rules and implementing regulations are hereby repealed
or modified accordingly.

Section 57 of the RIRR does not provide for the repeal of laws but only orders, issuances and rules and
regulations. Thus, said provision is valid as it is within the DOH's rule-making power.

An administrative agency like respondent possesses quasi-legislative or rule-making power or the

power to make rules and regulations which results in delegated legislation that is within the confines of
the granting statute and the Constitution, and subject to the doctrine of non-delegability and

85 | P a g e
separability of powers.78 Such express grant of rule-making power necessarily includes the power to
amend, revise, alter, or repeal the same.79 This is to allow administrative agencies flexibility in
formulating and adjusting the details and manner by which they are to implement the provisions of a
law,80 in order to make it more responsive to the times. Hence, it is a standard provision in
administrative rules that prior issuances of administrative agencies that are inconsistent therewith are
declared repealed or modified.

In fine, only Sections 4(f), 11 and 46 are ultra vires, beyond the authority of the DOH to promulgate
and in contravention of the Milk Code and, therefore, null and void. The rest of the provisions of the
RIRR are in consonance with the Milk Code.

Lastly, petitioner makes a "catch-all" allegation that:

x x x [T]he questioned RIRR sought to be implemented by the Respondents is unnecessary and

oppressive, and is offensive to the due process clause of the Constitution, insofar as the
same is in restraint of trade and because a provision therein is inadequate to provide the public
with a comprehensible basis to determine whether or not they have committed a
violation.81 (Emphasis supplied)

Petitioner refers to Sections 4(f),82 4(i),83 5(w),84 11,85 22,86 32,87 46,88 and 5289 as the provisions that
suppress the trade of milk and, thus, violate the due process clause of the Constitution.

The framers of the constitution were well aware that trade must be subjected to some form of
regulation for the public good. Public interest must be upheld over business interests.90 In Pest
Management Association of the Philippines v. Fertilizer and Pesticide Authority,91 it was held thus:

x x x Furthermore, as held in Association of Philippine Coconut Desiccators v. Philippine

Coconut Authority, despite the fact that "our present Constitution enshrines free enterprise
as a policy, it nonetheless reserves to the government the power to intervene whenever
necessary to promote the general welfare." There can be no question that the unregulated use
or proliferation of pesticides would be hazardous to our environment. Thus, in the aforecited
case, the Court declared that "free enterprise does not call for removal of protective
regulations." x x x It must be clearly explained and proven by competent evidence just
exactly how such protective regulation would result in the restraint of trade. [Emphasis and
underscoring supplied]

In this case, petitioner failed to show that the proscription of milk manufacturers participation in any
policymaking body (Section 4(i)), classes and seminars for women and children (Section 22); the
giving of assistance, support and logistics or training (Section 32); and the giving of donations (Section
52) would unreasonably hamper the trade of breastmilk substitutes. Petitioner has not established that
the proscribed activities are indispensable to the trade of breastmilk substitutes. Petitioner failed to
demonstrate that the aforementioned provisions of the RIRR are unreasonable and oppressive for being
in restraint of trade.

Petitioner also failed to convince the Court that Section 5(w) of the RIRR is unreasonable and
oppressive. Said section provides for the definition of the term "milk company," to wit:

86 | P a g e
 SECTION 5 x x x. (w) "Milk Company" shall refer to the owner, manufacturer, distributor of
infant formula, follow-up milk, milk formula, milk supplement, breastmilk substitute or
replacement, or by any other description of such nature, including their representatives who
promote or otherwise advance their commercial interests in marketing those products;

On the other hand, Section 4 of the Milk Code provides:

(d) "Distributor" means a person, corporation or any other entity in the public or private sector
engaged in the business (whether directly or indirectly) of marketing at the wholesale or retail
level a product within the scope of this Code. A "primary distributor" is a manufacturer's sales
agent, representative, national distributor or broker.

xxxx

(j) "Manufacturer" means a corporation or other entity in the public or private sector engaged in
the business or function (whether directly or indirectly or through an agent or and entity
controlled by or under contract with it) of manufacturing a products within the scope of this
Code.

Notably, the definition in the RIRR merely merged together under the term "milk company" the entities
defined separately under the Milk Code as "distributor" and "manufacturer." The RIRR also
enumerated in Section 5(w) the products manufactured or distributed by an entity that would qualify it
as a "milk company," whereas in the Milk Code, what is used is the phrase "products within the scope
of this Code." Those are the only differences between the definitions given in the Milk Code and the
definition as re-stated in the RIRR.

Since all the regulatory provisions under the Milk Code apply equally to both manufacturers and
distributors, the Court sees no harm in the RIRR providing for just one term to encompass both entities.
The definition of "milk company" in the RIRR and the definitions of "distributor" and "manufacturer"
provided for under the Milk Code are practically the same.

The Court is not convinced that the definition of "milk company" provided in the RIRR would bring
about any change in the treatment or regulation of "distributors" and "manufacturers" of breastmilk
substitutes, as defined under the Milk Code.

Except Sections 4(f), 11 and 46, the rest of the provisions of the RIRR are in consonance with the
objective, purpose and intent of the Milk Code, constituting reasonable regulation of an industry which
affects public health and welfare and, as such, the rest of the RIRR do not constitute illegal restraint of
trade nor are they violative of the due process clause of the Constitution.

WHEREFORE, the petition is PARTIALLY GRANTED. Sections 4(f), 11 and 46 of Administrative

Order No. 2006-0012 dated May 12, 2006 are declared NULL and VOID for being ultra vires. The
Department of Health and respondents are PROHIBITED from implementing said provisions.

The Temporary Restraining Order issued on August 15, 2006 is LIFTED insofar as the rest of the
provisions of Administrative Order No. 2006-0012 is concerned.

SO ORDERED.

87 | P a g e
G.R. No. 104768 July 21, 2003

REPUBLIC OF THE PHILIPPINES, Petitioner,

vs.
SANDIGANBAYAN, MAJOR GENERAL JOSEPHUS Q. RAMAS and ELIZABETH
DIMAANO, Respondents.

DECISION

CARPIO, J.:

The Case

Before this Court is a petition for review on certiorari seeking to set aside the Resolutions of the
Sandiganbayan (First Division)1 dated 18 November 1991 and 25 March 1992 in Civil Case No. 0037.
The first Resolution dismissed petitioners Amended Complaint and ordered the return of the
confiscated items to respondent Elizabeth Dimaano, while the second Resolution denied petitioners
Motion for Reconsideration. Petitioner prays for the grant of the reliefs sought in its Amended
Complaint, or in the alternative, for the remand of this case to the Sandiganbayan (First Division) for
further proceedings allowing petitioner to complete the presentation of its evidence.

Antecedent Facts

Immediately upon her assumption to office following the successful EDSA Revolution, then President
Corazon C. Aquino issued Executive Order No. 1 ("EO No. 1") creating the Presidential Commission
on Good Government ("PCGG"). EO No. 1 primarily tasked the PCGG to recover all ill-gotten wealth
of former President Ferdinand E. Marcos, his immediate family, relatives, subordinates and close
associates. EO No. 1 vested the PCGG with the power "(a) to conduct investigation as may be
necessary in order to accomplish and carry out the purposes of this order" and the power "(h) to
promulgate such rules and regulations as may be necessary to carry out the purpose of this order."
Accordingly, the PCGG, through its then Chairman Jovito R. Salonga, created an AFP Anti-Graft
Board ("AFP Board") tasked to investigate reports of unexplained wealth and corrupt practices by AFP
personnel, whether in the active service or retired.2

Based on its mandate, the AFP Board investigated various reports of alleged unexplained wealth of
respondent Major General Josephus Q. Ramas ("Ramas"). On 27 July 1987, the AFP Board issued a
Resolution on its findings and recommendation on the reported unexplained wealth of Ramas. The
relevant part of the Resolution reads:

III. FINDINGS and EVALUATION:

Evidence in the record showed that respondent is the owner of a house and lot located at 15-Yakan St.,
La Vista, Quezon City. He is also the owner of a house and lot located in Cebu City. The lot has an
area of 3,327 square meters.

The value of the property located in Quezon City may be estimated modestly at 700,000.00.
88 | P a g e
The equipment/items and communication facilities which were found in the premises of Elizabeth
Dimaano and were confiscated by elements of the PC Command of Batangas were all covered by
invoice receipt in the name of CAPT. EFREN SALIDO, RSO Command Coy, MSC, PA. These items
could not have been in the possession of Elizabeth Dimaano if not given for her use by respondent
Commanding General of the Philippine Army.

Aside from the military equipment/items and communications equipment, the raiding team was also
able to confiscate money in the amount of 2,870,000.00 and $50,000 US Dollars in the house of
Elizabeth Dimaano on 3 March 1986.

Affidavits of members of the Military Security Unit, Military Security Command, Philippine Army,
stationed at Camp Eldridge, Los Baos, Laguna, disclosed that Elizabeth Dimaano is the mistress of
respondent. That respondent usually goes and stays and sleeps in the alleged house of Elizabeth
Dimaano in Barangay Tengga, Itaas, Batangas City and when he arrives, Elizabeth Dimaano embraces
and kisses respondent. That on February 25, 1986, a person who rode in a car went to the residence of
Elizabeth Dimaano with four (4) attache cases filled with money and owned by MGen Ramas.

Sworn statement in the record disclosed also that Elizabeth Dimaano had no visible means of income
and is supported by respondent for she was formerly a mere secretary.

Taking in toto the evidence, Elizabeth Dimaano could not have used the military equipment/items
seized in her house on March 3, 1986 without the consent of respondent, he being the Commanding
General of the Philippine Army. It is also impossible for Elizabeth Dimaano to claim that she owns the
2,870,000.00 and $50,000 US Dollars for she had no visible source of income.

This money was never declared in the Statement of Assets and Liabilities of respondent. There was an
intention to cover the existence of these money because these are all ill-gotten and unexplained wealth.
Were it not for the affidavits of the members of the Military Security Unit assigned at Camp Eldridge,
Los Baos, Laguna, the existence and ownership of these money would have never been known.

The Statement of Assets and Liabilities of respondent were also submitted for scrutiny and analysis by
the Boards consultant. Although the amount of 2,870,000.00 and $50,000 US Dollars were not
included, still it was disclosed that respondent has an unexplained wealth of 104,134. 60.

IV. CONCLUSION:

In view of the foregoing, the Board finds that a prima facie case exists against respondent for ill-gotten
and unexplained wealth in the amount of 2,974,134.00 and $50,000 US Dollars.

V. RECOMMENDATION:

Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be prosecuted and tried for
violation of RA 3019, as amended, otherwise known as "Anti-Graft and Corrupt Practices Act" and RA
1379, as amended, otherwise known as "The Act for the Forfeiture of Unlawfully Acquired Property."3

Thus, on 1 August 1987, the PCGG filed a petition for forfeiture under Republic Act No. 1379 ("RA
No. 1379") 4against Ramas.

89 | P a g e
Before Ramas could answer the petition, then Solicitor General Francisco I. Chavez filed an Amended
Complaint naming the Republic of the Philippines ("petitioner"), represented by the PCGG, as plaintiff
and Ramas as defendant. The Amended Complaint also impleaded Elizabeth Dimaano ("Dimaano") as
co-defendant.

The Amended Complaint alleged that Ramas was the Commanding General of the Philippine Army
until 1986. On the other hand, Dimaano was a confidential agent of the Military Security Unit,
Philippine Army, assigned as a clerk-typist at the office of Ramas from 1 January 1978 to February
1979. The Amended Complaint further alleged that Ramas "acquired funds, assets and properties
manifestly out of proportion to his salary as an army officer and his other income from legitimately
acquired property by taking undue advantage of his public office and/or using his power, authority and
influence as such officer of the Armed Forces of the Philippines and as a subordinate and close
associate of the deposed President Ferdinand Marcos."5

The Amended Complaint also alleged that the AFP Board, after a previous inquiry, found reasonable
ground to believe that respondents have violated RA No. 1379.6 The Amended Complaint prayed for,
among others, the forfeiture of respondents properties, funds and equipment in favor of the State.

Ramas filed an Answer with Special and/or Affirmative Defenses and Compulsory Counterclaim to the
Amended Complaint. In his Answer, Ramas contended that his property consisted only of a residential
house at La Vista Subdivision, Quezon City, valued at 700,000, which was not out of proportion to
his salary and other legitimate income. He denied ownership of any mansion in Cebu City and the cash,
communications equipment and other items confiscated from the house of Dimaano.

Dimaano filed her own Answer to the Amended Complaint. Admitting her employment as a clerk-
typist in the office of Ramas from January-November 1978 only, Dimaano claimed ownership of the
monies, communications equipment, jewelry and land titles taken from her house by the Philippine
Constabulary raiding team.

After termination of the pre-trial,7 the court set the case for trial on the merits on 9-11 November 1988.

On 9 November 1988, petitioner asked for a deferment of the hearing due to its lack of preparation for
trial and the absence of witnesses and vital documents to support its case. The court reset the hearing to
17 and 18 April 1989.

On 13 April 1989, petitioner filed a motion for leave to amend the complaint in order "to charge the
delinquent properties with being subject to forfeiture as having been unlawfully acquired by defendant
Dimaano alone x x x."8

Nevertheless, in an order dated 17 April 1989, the Sandiganbayan proceeded with petitioners
presentation of evidence on the ground that the motion for leave to amend complaint did not state when
petitioner would file the amended complaint. The Sandiganbayan further stated that the subject matter
of the amended complaint was on its face vague and not related to the existing complaint. The
Sandiganbayan also held that due to the time that the case had been pending in court, petitioner should
proceed to present its evidence.

After presenting only three witnesses, petitioner asked for a postponement of the trial.

90 | P a g e
On 28 September 1989, during the continuation of the trial, petitioner manifested its inability to
proceed to trial because of the absence of other witnesses or lack of further evidence to present.
Instead, petitioner reiterated its motion to amend the complaint to conform to the evidence already
presented or to change the averments to show that Dimaano alone unlawfully acquired the monies or
properties subject of the forfeiture.

The Sandiganbayan noted that petitioner had already delayed the case for over a year mainly because of
its many postponements. Moreover, petitioner would want the case to revert to its preliminary stage
when in fact the case had long been ready for trial. The Sandiganbayan ordered petitioner to prepare for
presentation of its additional evidence, if any.

During the trial on 23 March 1990, petitioner again admitted its inability to present further evidence.
Giving petitioner one more chance to present further evidence or to amend the complaint to conform to
its evidence, the Sandiganbayan reset the trial to 18 May 1990. The Sandiganbayan, however, hinted
that the re-setting was without prejudice to any action that private respondents might take under the
circumstances.

However, on 18 May 1990, petitioner again expressed its inability to proceed to trial because it had no
further evidence to present. Again, in the interest of justice, the Sandiganbayan granted petitioner 60
days within which to file an appropriate pleading. The Sandiganbayan, however, warned petitioner that
failure to act would constrain the court to take drastic action.

Private respondents then filed their motions to dismiss based on Republic v. Migrino.9 The Court held
in Migrino that the PCGG does not have jurisdiction to investigate and prosecute military officers by
reason of mere position held without a showing that they are "subordinates" of former President
Marcos.

On 18 November 1991, the Sandiganbayan rendered a resolution, the dispositive portion of which
states:

WHEREFORE, judgment is hereby rendered dismissing the Amended Complaint, without

pronouncement as to costs. The counterclaims are likewise dismissed for lack of merit, but the
confiscated sum of money, communications equipment, jewelry and land titles are ordered returned to
Elizabeth Dimaano.

The records of this case are hereby remanded and referred to the Hon. Ombudsman, who has primary
jurisdiction over the forfeiture cases under R.A. No. 1379, for such appropriate action as the evidence
warrants. This case is also referred to the Commissioner of the Bureau of Internal Revenue for a
determination of any tax liability of respondent Elizabeth Dimaano in connection herewith.

SO ORDERED.

On 4 December 1991, petitioner filed its Motion for Reconsideration.

In answer to the Motion for Reconsideration, private respondents filed a Joint Comment/Opposition to
which petitioner filed its Reply on 10 January 1992.

On 25 March 1992, the Sandiganbayan rendered a Resolution denying the Motion for Reconsideration.

91 | P a g e
Ruling of the Sandiganbayan

The Sandiganbayan dismissed the Amended Complaint on the following grounds:

(1.) The actions taken by the PCGG are not in accordance with the rulings of the Supreme Court
in Cruz, Jr. v. Sandiganbayan10 and Republic v. Migrino11 which involve the same issues.

(2.) No previous inquiry similar to preliminary investigations in criminal cases was conducted
against Ramas and Dimaano.

(3.) The evidence adduced against Ramas does not constitute a prima facie case against him.

(4.) There was an illegal search and seizure of the items confiscated.

The Issues

Petitioner raises the following issues:

A. RESPONDENT COURT SERIOUSLY ERRED IN CONCLUDING THAT PETITIONERS

EVIDENCE CANNOT MAKE A CASE FOR FORFEITURE AND THAT THERE WAS NO
SHOWING OF CONSPIRACY, COLLUSION OR RELATIONSHIP BY CONSANGUINITY
OR AFFINITY BY AND BETWEEN RESPONDENT RAMAS AND RESPONDENT
DIMAANO NOTWITHSTANDING THE FACT THAT SUCH CONCLUSIONS WERE
CLEARLY UNFOUNDED AND PREMATURE, HAVING BEEN RENDERED PRIOR TO
THE COMPLETION OF THE PRESENTATION OF THE EVIDENCE OF THE
PETITIONER.

B. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE ACTIONS

TAKEN BY THE PETITIONER, INCLUDING THE FILING OF THE ORIGINAL
COMPLAINT AND THE AMENDED COMPLAINT, SHOULD BE STRUCK OUT IN LINE
WITH THE RULINGS OF THE SUPREME COURT IN CRUZ, JR. v. SANDIGANBAYAN,
194 SCRA 474 AND REPUBLIC v. MIGRINO, 189 SCRA 289, NOTWITHSTANDING THE
FACT THAT:

1. The cases of Cruz, Jr. v. Sandiganbayan, supra, and Republic v. Migrino, supra, are
clearly not applicable to this case;

2. Any procedural defect in the institution of the complaint in Civil Case No. 0037 was
cured and/or waived by respondents with the filing of their respective answers with
counterclaim; and

3. The separate motions to dismiss were evidently improper considering that they were
filed after commencement of the presentation of the evidence of the petitioner and even
before the latter was allowed to formally offer its evidence and rest its case;

C. RESPONDENT COURT SERIOUSLY ERRED IN HOLDING THAT THE ARTICLES

AND THINGS SUCH AS SUMS OF MONEY, COMMUNICATIONS EQUIPMENT,
JEWELRY AND LAND TITLES CONFISCATED FROM THE HOUSE OF RESPONDENT

92 | P a g e
 DIMAANO WERE ILLEGALLY SEIZED AND THEREFORE EXCLUDED AS
EVIDENCE.12

The Courts Ruling

First Issue: PCGGs Jurisdiction to Investigate Private Respondents

This case involves a revisiting of an old issue already decided by this Court in Cruz, Jr. v.
Sandiganbayan13 and Republic v. Migrino.14

The primary issue for resolution is whether the PCGG has the jurisdiction to investigate and cause the
filing of a forfeiture petition against Ramas and Dimaano for unexplained wealth under RA No. 1379.

We hold that PCGG has no such jurisdiction.

The PCGG created the AFP Board to investigate the unexplained wealth and corrupt practices of AFP
personnel, whether in the active service or retired.15 The PCGG tasked the AFP Board to make the
necessary recommendations to appropriate government agencies on the action to be taken based on its
findings.16 The PCGG gave this task to the AFP Board pursuant to the PCGGs power under Section 3
of EO No. 1 "to conduct investigation as may be necessary in order to accomplish and to carry out the
purposes of this order." EO No. 1 gave the PCGG specific responsibilities, to wit:

SEC. 2. The Commission shall be charged with the task of assisting the President in regard to the
following matters:

(a) The recovery of all ill-gotten wealth accumulated by former President Ferdinand E. Marcos, his
immediate family, relatives, subordinates and close associates, whether located in the Philippines or
abroad, including the takeover and sequestration of all business enterprises and entities owned or
controlled by them, during his administration, directly or through nominees, by taking undue advantage
of their public office and/ or using their powers, authority, influence, connections or relationship.

(b) The investigation of such cases of graft and corruption as the President may assign to the
Commission from time to time.

x x x.

The PCGG, through the AFP Board, can only investigate the unexplained wealth and corrupt practices
of AFP personnel who fall under either of the two categories mentioned in Section 2 of EO No. 1.
These are: (1) AFP personnel who have accumulated ill-gotten wealth during the administration of
former President Marcos by being the latters immediate family, relative, subordinate or close
associate, taking undue advantage of their public office or using their powers, influence x x x;17 or (2)
AFP personnel involved in other cases of graft and corruption provided the President assigns their
cases to the PCGG.18

Petitioner, however, does not claim that the President assigned Ramas case to the PCGG. Therefore,
Ramas case should fall under the first category of AFP personnel before the PCGG could exercise its
jurisdiction over him. Petitioner argues that Ramas was undoubtedly a subordinate of former President
Marcos because of his position as the Commanding General of the Philippine Army. Petitioner claims

93 | P a g e
that Ramas position enabled him to receive orders directly from his commander-in-chief, undeniably
making him a subordinate of former President Marcos.

We hold that Ramas was not a "subordinate" of former President Marcos in the sense contemplated
under EO No. 1 and its amendments.

Mere position held by a military officer does not automatically make him a "subordinate" as this term
is used in EO Nos. 1, 2, 14 and 14-A absent a showing that he enjoyed close association with former
President Marcos. Migrino discussed this issue in this wise:

A close reading of EO No. 1 and related executive orders will readily show what is contemplated
within the term subordinate. The Whereas Clauses of EO No. 1 express the urgent need to recover the
ill-gotten wealth amassed by former President Ferdinand E. Marcos, his immediate family, relatives,
and close associates both here and abroad.

EO No. 2 freezes all assets and properties in the Philippines in which former President Marcos and/or
his wife, Mrs. Imelda Marcos, their close relatives, subordinates, business associates, dummies, agents,
or nominees have any interest or participation.

Applying the rule in statutory construction known as ejusdem generis that is-

[W]here general words follow an enumeration of persons or things by words of a particular and
specific meaning, such general words are not to be construed in their widest extent, but are to be held
as applying only to persons or things of the same kind or class as those specifically mentioned [Smith,
Bell & Co, Ltd. vs. Register of Deeds of Davao, 96 Phil. 53, 58, citing Black on Interpretation of Laws,
2nd Ed., 203].

[T]he term "subordinate" as used in EO Nos. 1 & 2 refers to one who enjoys a close association with
former President Marcos and/or his wife, similar to the immediate family member, relative, and close
associate in EO No. 1 and the close relative, business associate, dummy, agent, or nominee in EO No.
2.

xxx

It does not suffice, as in this case, that the respondent is or was a government official or employee
during the administration of former President Marcos. There must be a prima facie showing that the
respondent unlawfully accumulated wealth by virtue of his close association or relation with former
Pres. Marcos and/or his wife. (Emphasis supplied)

Ramas position alone as Commanding General of the Philippine Army with the rank of Major
General19 does not suffice to make him a "subordinate" of former President Marcos for purposes of EO
No. 1 and its amendments. The PCGG has to provide a prima facie showing that Ramas was a close
associate of former President Marcos, in the same manner that business associates, dummies, agents or
nominees of former President Marcos were close to him. Such close association is manifested either by
Ramas complicity with former President Marcos in the accumulation of ill-gotten wealth by the
deposed President or by former President Marcos acquiescence in Ramas own accumulation of ill-
gotten wealth if any.

94 | P a g e
This, the PCGG failed to do.

Petitioners attempt to differentiate the instant case from Migrino does not convince us. Petitioner
argues that unlike in Migrino, the AFP Board Resolution in the instant case states that the AFP Board
conducted the investigation pursuant to EO Nos. 1, 2, 14 and 14-A in relation to RA No. 1379.
Petitioner asserts that there is a presumption that the PCGG was acting within its jurisdiction of
investigating crony-related cases of graft and corruption and that Ramas was truly a subordinate of the
former President. However, the same AFP Board Resolution belies this contention. Although the
Resolution begins with such statement, it ends with the following recommendation:

V. RECOMMENDATION:

Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be prosecuted and tried for
violation of RA 3019, as amended, otherwise known as "Anti-Graft and Corrupt Practices Act" and RA
1379, as amended, otherwise known as "The Act for the Forfeiture of Unlawfully Acquired
Property."20

Thus, although the PCGG sought to investigate and prosecute private respondents under EO Nos. 1, 2,
14 and 14-A, the result yielded a finding of violation of Republic Acts Nos. 3019 and 1379 without any
relation to EO Nos. 1, 2, 14 and 14-A. This absence of relation to EO No. 1 and its amendments proves
fatal to petitioners case. EO No. 1 created the PCGG for a specific and limited purpose, and
necessarily its powers must be construed to address such specific and limited purpose.

Moreover, the resolution of the AFP Board and even the Amended Complaint do not show that the
properties Ramas allegedly owned were accumulated by him in his capacity as a "subordinate" of his
commander-in-chief. Petitioner merely enumerated the properties Ramas allegedly owned and
suggested that these properties were disproportionate to his salary and other legitimate income without
showing that Ramas amassed them because of his close association with former President Marcos.
Petitioner, in fact, admits that the AFP Board resolution does not contain a finding that Ramas
accumulated his wealth because of his close association with former President Marcos, thus:

10. While it is true that the resolution of the Anti-Graft Board of the New Armed Forces of the
Philippines did not categorically find a prima facie evidence showing that respondent Ramas
unlawfully accumulated wealth by virtue of his close association or relation with former
President Marcos and/or his wife, it is submitted that such omission was not fatal. The resolution
of the Anti-Graft Board should be read in the context of the law creating the same and the objective of
the investigation which was, as stated in the above, pursuant to Republic Act Nos. 3019 and 1379 in
relation to Executive Order Nos. 1, 2, 14 and 14-a;21 (Emphasis supplied)

Such omission is fatal. Petitioner forgets that it is precisely a prima facie showing that the ill-gotten
wealth was accumulated by a "subordinate" of former President Marcos that vests jurisdiction on
PCGG. EO No. 122 clearly premises the creation of the PCGG on the urgent need to recover all ill-
gotten wealth amassed by former President Marcos, his immediate family, relatives, subordinates and
close associates. Therefore, to say that such omission was not fatal is clearly contrary to the intent
behind the creation of the PCGG.

In Cruz, Jr. v. Sandiganbayan,23 the Court outlined the cases that fall under the jurisdiction of the
PCGG pursuant to EO Nos. 1, 2,24 14,25 14-A:26
95 | P a g e
A careful reading of Sections 2(a) and 3 of Executive Order No. 1 in relation with Sections 1, 2 and 3
of Executive Order No. 14, shows what the authority of the respondent PCGG to investigate and
prosecute covers:

(a) the investigation and prosecution of the civil action for the recovery of ill-gotten wealth
under Republic Act No. 1379, accumulated by former President Marcos, his immediate family,
relatives, subordinates and close associates, whether located in the Philippines or abroad,
including the take-over or sequestration of all business enterprises and entities owned or
controlled by them, during his administration, directly or through his nominees, by taking undue
advantage of their public office and/or using their powers, authority and influence, connections
or relationships; and

(b) the investigation and prosecution of such offenses committed in the acquisition of said ill-
gotten wealth as contemplated under Section 2(a) of Executive Order No. 1.

However, other violations of the Anti-Graft and Corrupt Practices Act not otherwise falling
under the foregoing categories, require a previous authority of the President for the respondent
PCGG to investigate and prosecute in accordance with Section 2 (b) of Executive Order No. 1.
Otherwise, jurisdiction over such cases is vested in the Ombudsman and other duly authorized
investigating agencies such as the provincial and city prosecutors, their assistants, the Chief State
Prosecutor and his assistants and the state prosecutors. (Emphasis supplied)

The proper government agencies, and not the PCGG, should investigate and prosecute forfeiture
petitions not falling under EO No. 1 and its amendments. The preliminary investigation of unexplained
wealth amassed on or before 25 February 1986 falls under the jurisdiction of the Ombudsman, while
the authority to file the corresponding forfeiture petition rests with the Solicitor General.27 The
Ombudsman Act or Republic Act No. 6770 ("RA No. 6770") vests in the Ombudsman the power to
conduct preliminary investigation and to file forfeiture proceedings involving unexplained wealth
amassed after 25 February 1986.28

After the pronouncements of the Court in Cruz, the PCGG still pursued this case despite the absence of
a prima facie finding that Ramas was a "subordinate" of former President Marcos. The petition for
forfeiture filed with the Sandiganbayan should be dismissed for lack of authority by the PCGG to
investigate respondents since there is no prima facie showing that EO No. 1 and its amendments apply
to respondents. The AFP Board Resolution and even the Amended Complaint state that there are
violations of RA Nos. 3019 and 1379. Thus, the PCGG should have recommended Ramas case to the
Ombudsman who has jurisdiction to conduct the preliminary investigation of ordinary unexplained
wealth and graft cases. As stated in Migrino:

[But] in view of the patent lack of authority of the PCGG to investigate and cause the prosecution of
private respondent for violation of Rep. Acts Nos. 3019 and 1379, the PCGG must also be enjoined
from proceeding with the case, without prejudice to any action that may be taken by the proper
prosecutory agency. The rule of law mandates that an agency of government be allowed to exercise
only the powers granted to it.

Petitioners argument that private respondents have waived any defect in the filing of the forfeiture
petition by submitting their respective Answers with counterclaim deserves no merit as well.

96 | P a g e
Petitioner has no jurisdiction over private respondents. Thus, there is no jurisdiction to waive in the
first place. The PCGG cannot exercise investigative or prosecutorial powers never granted to it.
PCGGs powers are specific and limited. Unless given additional assignment by the President, PCGGs
sole task is only to recover the ill-gotten wealth of the Marcoses, their relatives and cronies.29 Without
these elements, the PCGG cannot claim jurisdiction over a case.

Private respondents questioned the authority and jurisdiction of the PCGG to investigate and prosecute
their cases by filing their Motion to Dismiss as soon as they learned of the pronouncement of the Court
in Migrino. This case was decided on 30 August 1990, which explains why private respondents only
filed their Motion to Dismiss on 8 October 1990. Nevertheless, we have held that the parties may raise
lack of jurisdiction at any stage of the proceeding.30 Thus, we hold that there was no waiver of
jurisdiction in this case. Jurisdiction is vested by law and not by the parties to an action.31

Consequently, the petition should be dismissed for lack of jurisdiction by the PCGG to conduct the
preliminary investigation. The Ombudsman may still conduct the proper preliminary investigation for
violation of RA No. 1379, and if warranted, the Solicitor General may file the forfeiture petition with
the Sandiganbayan.32 The right of the State to forfeit unexplained wealth under RA No. 1379 is not
subject to prescription, laches or estoppel.33

Second Issue: Propriety of Dismissal of Case

Before Completion of Presentation of Evidence

Petitioner also contends that the Sandiganbayan erred in dismissing the case before completion of the
presentation of petitioners evidence.

We disagree.

Based on the findings of the Sandiganbayan and the records of this case, we find that petitioner has
only itself to blame for non-completion of the presentation of its evidence. First, this case has been
pending for four years before the Sandiganbayan dismissed it. Petitioner filed its Amended Complaint
on 11 August 1987, and only began to present its evidence on 17 April 1989. Petitioner had almost two
years to prepare its evidence. However, despite this sufficient time, petitioner still delayed the
presentation of the rest of its evidence by filing numerous motions for postponements and extensions.
Even before the date set for the presentation of its evidence, petitioner filed, on 13 April 1989, a
Motion for Leave to Amend the Complaint.34 The motion sought "to charge the delinquent properties
(which comprise most of petitioners evidence) with being subject to forfeiture as having been
unlawfully acquired by defendant Dimaano alone x x x."

The Sandiganbayan, however, refused to defer the presentation of petitioners evidence since petitioner
did not state when it would file the amended complaint. On 18 April 1989, the Sandiganbayan set the
continuation of the presentation of evidence on 28-29 September and 9-11 October 1989, giving
petitioner ample time to prepare its evidence. Still, on 28 September 1989, petitioner manifested its
inability to proceed with the presentation of its evidence. The Sandiganbayan issued an Order
expressing its view on the matter, to wit:

The Court has gone through extended inquiry and a narration of the above events because this case has
been ready for trial for over a year and much of the delay hereon has been due to the inability of the
government to produce on scheduled dates for pre-trial and for trial documents and witnesses, allegedly
97 | P a g e
upon the failure of the military to supply them for the preparation of the presentation of evidence
thereon. Of equal interest is the fact that this Court has been held to task in public about its alleged
failure to move cases such as this one beyond the preliminary stage, when, in view of the developments
such as those of today, this Court is now faced with a situation where a case already in progress will
revert back to the preliminary stage, despite a five-month pause where appropriate action could have
been undertaken by the plaintiff Republic.35

On 9 October 1989, the PCGG manifested in court that it was conducting a preliminary investigation
on the unexplained wealth of private respondents as mandated by RA No. 1379.36 The PCGG prayed
for an additional four months to conduct the preliminary investigation. The Sandiganbayan granted this
request and scheduled the presentation of evidence on 26-29 March 1990. However, on the scheduled
date, petitioner failed to inform the court of the result of the preliminary investigation the PCGG
supposedly conducted. Again, the Sandiganbayan gave petitioner until 18 May 1990 to continue with
the presentation of its evidence and to inform the court of "what lies ahead insofar as the status of the
case is concerned x x x."37 Still on the date set, petitioner failed to present its evidence. Finally, on 11
July 1990, petitioner filed its Re-Amended Complaint.38 The Sandiganbayan correctly observed that a
case already pending for years would revert to its preliminary stage if the court were to accept the Re-
Amended Complaint.

Based on these circumstances, obviously petitioner has only itself to blame for failure to complete the
presentation of its evidence. The Sandiganbayan gave petitioner more than sufficient time to finish the
presentation of its evidence. The Sandiganbayan overlooked petitioners delays and yet petitioner
ended the long-string of delays with the filing of a Re-Amended Complaint, which would only prolong
even more the disposition of the case.

Moreover, the pronouncements of the Court in Migrino and Cruz prompted the Sandiganbayan to
dismiss the case since the PCGG has no jurisdiction to investigate and prosecute the case against
private respondents. This alone would have been sufficient legal basis for the Sandiganbayan to dismiss
the forfeiture case against private respondents.

Thus, we hold that the Sandiganbayan did not err in dismissing the case before completion of the
presentation of petitioners evidence.

Third Issue: Legality of the Search and Seizure

Petitioner claims that the Sandiganbayan erred in declaring the properties confiscated from Dimaanos
house as illegally seized and therefore inadmissible in evidence. This issue bears a significant effect on
petitioners case since these properties comprise most of petitioners evidence against private
respondents. Petitioner will not have much evidence to support its case against private respondents if
these properties are inadmissible in evidence.

On 3 March 1986, the Constabulary raiding team served at Dimaanos residence a search warrant
captioned "Illegal Possession of Firearms and Ammunition." Dimaano was not present during the raid
but Dimaanos cousins witnessed the raid. The raiding team seized the items detailed in the seizure
receipt together with other items not included in the search warrant. The raiding team seized these
items: one baby armalite rifle with two magazines; 40 rounds of 5.56 ammunition; one pistol, caliber
.45; communications equipment, cash consisting of 2,870,000 and US$50,000, jewelry, and land
titles.
98 | P a g e
Petitioner wants the Court to take judicial notice that the raiding team conducted the search and seizure
"on March 3, 1986 or five days after the successful EDSA revolution."39 Petitioner argues that a
revolutionary government was operative at that time by virtue of Proclamation No. 1 announcing that
President Aquino and Vice President Laurel were "taking power in the name and by the will of the
Filipino people."40 Petitioner asserts that the revolutionary government effectively withheld the
operation of the 1973 Constitution which guaranteed private respondents exclusionary right.

Moreover, petitioner argues that the exclusionary right arising from an illegal search applies only
beginning 2 February 1987, the date of ratification of the 1987 Constitution. Petitioner contends that all
rights under the Bill of Rights had already reverted to its embryonic stage at the time of the search.
Therefore, the government may confiscate the monies and items taken from Dimaano and use the same
in evidence against her since at the time of their seizure, private respondents did not enjoy any
constitutional right.

Petitioner is partly right in its arguments.

The EDSA Revolution took place on 23-25 February 1986. As succinctly stated in President Aquinos
Proclamation No. 3 dated 25 March 1986, the EDSA Revolution was "done in defiance of the
provisions of the 1973 Constitution."41 The resulting government was indisputably a revolutionary
government bound by no constitution or legal limitations except treaty obligations that the
revolutionary government, as the de jure government in the Philippines, assumed under international
law.

The correct issues are: (1) whether the revolutionary government was bound by the Bill of Rights of the
1973 Constitution during the interregnum, that is, after the actual and effective take-over of power by
the revolutionary government following the cessation of resistance by loyalist forces up to 24 March
1986 (immediately before the adoption of the Provisional Constitution); and (2) whether the protection
accorded to individuals under the International Covenant on Civil and Political Rights ("Covenant")
and the Universal Declaration of Human Rights ("Declaration") remained in effect during the
interregnum.

We hold that the Bill of Rights under the 1973 Constitution was not operative during the interregnum.
However, we rule that the protection accorded to individuals under the Covenant and the Declaration
remained in effect during the interregnum.

During the interregnum, the directives and orders of the revolutionary government were the supreme
law because no constitution limited the extent and scope of such directives and orders. With the
abrogation of the 1973 Constitution by the successful revolution, there was no municipal law higher
than the directives and orders of the revolutionary government. Thus, during the interregnum, a person
could not invoke any exclusionary right under a Bill of Rights because there was neither a constitution
nor a Bill of Rights during the interregnum. As the Court explained in Letter of Associate Justice
Reynato S. Puno:42

A revolution has been defined as "the complete overthrow of the established government in any
country or state by those who were previously subject to it" or as "a sudden, radical and fundamental
change in the government or political system, usually effected with violence or at least some acts of
violence." In Kelsen's book, General Theory of Law and State, it is defined as that which "occurs

99 | P a g e
whenever the legal order of a community is nullified and replaced by a new order . . . a way not
prescribed by the first order itself."

It was through the February 1986 revolution, a relatively peaceful one, and more popularly known as
the "people power revolution" that the Filipino people tore themselves away from an existing regime.
This revolution also saw the unprecedented rise to power of the Aquino government.

From the natural law point of view, the right of revolution has been defined as "an inherent right of a
people to cast out their rulers, change their policy or effect radical reforms in their system of
government or institutions by force or a general uprising when the legal and constitutional methods of
making such change have proved inadequate or are so obstructed as to be unavailable." It has been said
that "the locus of positive law-making power lies with the people of the state" and from there is derived
"the right of the people to abolish, to reform and to alter any existing form of government without
regard to the existing constitution."

xxx

It is widely known that Mrs. Aquinos rise to the presidency was not due to constitutional processes;
in fact, it was achieved in violation of the provisions of the 1973 Constitution as a Batasang
Pambansa resolution had earlier declared Mr. Marcos as the winner in the 1986 presidential
election. Thus it can be said that the organization of Mrs. Aquinos Government which was met by
little resistance and her control of the state evidenced by the appointment of the Cabinet and other key
officers of the administration, the departure of the Marcos Cabinet officials, revamp of the Judiciary
and the Military signaled the point where the legal system then in effect, had ceased to be obeyed by
the Filipino. (Emphasis supplied)

To hold that the Bill of Rights under the 1973 Constitution remained operative during the interregnum
would render void all sequestration orders issued by the Philippine Commission on Good Government
("PCGG") before the adoption of the Freedom Constitution. The sequestration orders, which direct the
freezing and even the take-over of private property by mere executive issuance without judicial action,
would violate the due process and search and seizure clauses of the Bill of Rights.

During the interregnum, the government in power was concededly a revolutionary government bound
by no constitution. No one could validly question the sequestration orders as violative of the Bill of
Rights because there was no Bill of Rights during the interregnum. However, upon the adoption of the
Freedom Constitution, the sequestered companies assailed the sequestration orders as contrary to the
Bill of Rights of the Freedom Constitution.

In Bataan Shipyard & Engineering Co. Inc. vs. Presidential Commission on Good
Government,43 petitioner Baseco, while conceding there was no Bill of Rights during the interregnum,
questioned the continued validity of the sequestration orders upon adoption of the Freedom
Constitution in view of the due process clause in its Bill of Rights. The Court ruled that the Freedom
Constitution, and later the 1987 Constitution, expressly recognized the validity of sequestration orders,
thus:

If any doubt should still persist in the face of the foregoing considerations as to the validity and
propriety of sequestration, freeze and takeover orders, it should be dispelled by the fact that these
particular remedies and the authority of the PCGG to issue them have received constitutional
100 | P a g e
approbation and sanction. As already mentioned, the Provisional or "Freedom" Constitution recognizes
the power and duty of the President to enact "measures to achieve the mandate of the people to . . .
(r)ecover ill-gotten properties amassed by the leaders and supporters of the previous regime and protect
the interest of the people through orders of sequestration or freezing of assets or accounts." And as also
already adverted to, Section 26, Article XVIII of the 1987 Constitution treats of, and ratifies the
"authority to issue sequestration or freeze orders under Proclamation No. 3 dated March 25, 1986."

The framers of both the Freedom Constitution and the 1987 Constitution were fully aware that the
sequestration orders would clash with the Bill of Rights. Thus, the framers of both constitutions had to
include specific language recognizing the validity of the sequestration orders. The following discourse
by Commissioner Joaquin G. Bernas during the deliberations of the Constitutional Commission is
instructive:

FR. BERNAS: Madam President, there is something schizophrenic about the arguments in defense of
the present amendment.

For instance, I have carefully studied Minister Salongas lecture in the Gregorio Araneta University
Foundation, of which all of us have been given a copy. On the one hand, he argues that everything the
Commission is doing is traditionally legal. This is repeated by Commissioner Romulo also. Minister
Salonga spends a major portion of his lecture developing that argument. On the other hand, almost as
an afterthought, he says that in the end what matters are the results and not the legal niceties, thus
suggesting that the PCGG should be allowed to make some legal shortcuts, another word for niceties or
exceptions.

Now, if everything the PCGG is doing is legal, why is it asking the CONCOM for special protection?
The answer is clear. What they are doing will not stand the test of ordinary due process, hence they are
asking for protection, for exceptions. Grandes malos, grandes remedios, fine, as the saying stands, but
let us not say grandes malos, grande y malos remedios. That is not an allowable extrapolation. Hence,
we should not give the exceptions asked for, and let me elaborate and give three reasons:

First, the whole point of the February Revolution and of the work of the CONCOM is to hasten
constitutional normalization. Very much at the heart of the constitutional normalization is the full
effectivity of the Bill of Rights. We cannot, in one breath, ask for constitutional normalization and at
the same time ask for a temporary halt to the full functioning of what is at the heart of
constitutionalism. That would be hypocritical; that would be a repetition of Marcosian protestation of
due process and rule of law. The New Society word for that is "backsliding." It is tragic when we begin
to backslide even before we get there.

Second, this is really a corollary of the first. Habits tend to become ingrained. The committee report
asks for extraordinary exceptions from the Bill of Rights for six months after the convening of
Congress, and Congress may even extend this longer.

Good deeds repeated ripen into virtue; bad deeds repeated become vice. What the committee report is
asking for is that we should allow the new government to acquire the vice of disregarding the Bill of
Rights.

101 | P a g e
Vices, once they become ingrained, become difficult to shed. The practitioners of the vice begin to
think that they have a vested right to its practice, and they will fight tooth and nail to keep the
franchise. That would be an unhealthy way of consolidating the gains of a democratic revolution.

Third, the argument that what matters are the results and not the legal niceties is an argument that is
very disturbing. When it comes from a staunch Christian like Commissioner Salonga, a Minister, and
repeated verbatim by another staunch Christian like Commissioner Tingson, it becomes doubly
disturbing and even discombobulating. The argument makes the PCGG an auctioneer, placing the Bill
of Rights on the auction block. If the price is right, the search and seizure clause will be sold. "Open
your Swiss bank account to us and we will award you the search and seizure clause. You can keep it in
your private safe."

Alternatively, the argument looks on the present government as hostage to the hoarders of hidden
wealth. The hoarders will release the hidden health if the ransom price is paid and the ransom price is
the Bill of Rights, specifically the due process in the search and seizure clauses. So, there is something
positively revolving about either argument. The Bill of Rights is not for sale to the highest bidder nor
can it be used to ransom captive dollars. This nation will survive and grow strong, only if it would
become convinced of the values enshrined in the Constitution of a price that is beyond monetary
estimation.

For these reasons, the honorable course for the Constitutional Commission is to delete all of Section 8
of the committee report and allow the new Constitution to take effect in full vigor. If Section 8 is
deleted, the PCGG has two options. First, it can pursue the Salonga and the Romulo argument that
what the PCGG has been doing has been completely within the pale of the law. If sustained, the PCGG
can go on and should be able to go on, even without the support of Section 8. If not sustained, however,
the PCGG has only one honorable option, it must bow to the majesty of the Bill of Rights.

The PCGG extrapolation of the law is defended by staunch Christians. Let me conclude with what
another Christian replied when asked to toy around with the law. From his prison cell, Thomas More
said, "I'll give the devil benefit of law for my nations safety sake." I ask the Commission to give the
devil benefit of law for our nations sake. And we should delete Section 8.

Thank you, Madam President. (Emphasis supplied)

Despite the impassioned plea by Commissioner Bernas against the amendment excepting sequestration
orders from the Bill of Rights, the Constitutional Commission still adopted the amendment as Section
26,44 Article XVIII of the 1987 Constitution. The framers of the Constitution were fully aware that
absent Section 26, sequestration orders would not stand the test of due process under the Bill of Rights.

Thus, to rule that the Bill of Rights of the 1973 Constitution remained in force during the interregnum,
absent a constitutional provision excepting sequestration orders from such Bill of Rights, would clearly
render all sequestration orders void during the interregnum. Nevertheless, even during the interregnum
the Filipino people continued to enjoy, under the Covenant and the Declaration, almost the same rights
found in the Bill of Rights of the 1973 Constitution.

The revolutionary government, after installing itself as the de jure government, assumed responsibility
for the States good faith compliance with the Covenant to which the Philippines is a signatory. Article
2(1) of the Covenant requires each signatory State "to respect and to ensure to all individuals within its
102 | P a g e
territory and subject to its jurisdiction the rights45 recognized in the present Covenant." Under Article
17(1) of the Covenant, the revolutionary government had the duty to insure that "[n]o one shall be
subjected to arbitrary or unlawful interference with his privacy, family, home or correspondence."

The Declaration, to which the Philippines is also a signatory, provides in its Article 17(2) that "[n]o one
shall be arbitrarily deprived of his property." Although the signatories to the Declaration did not intend
it as a legally binding document, being only a declaration, the Court has interpreted the Declaration as
part of the generally accepted principles of international law and binding on the State.46 Thus, the
revolutionary government was also obligated under international law to observe the rights47 of
individuals under the Declaration.

The revolutionary government did not repudiate the Covenant or the Declaration during the
interregnum. Whether the revolutionary government could have repudiated all its obligations under the
Covenant or the Declaration is another matter and is not the issue here. Suffice it to say that the Court
considers the Declaration as part of customary international law, and that Filipinos as human beings are
proper subjects of the rules of international law laid down in the Covenant. The fact is the
revolutionary government did not repudiate the Covenant or the Declaration in the same way it
repudiated the 1973 Constitution. As the de jure government, the revolutionary government could not
escape responsibility for the States good faith compliance with its treaty obligations under
international law.

It was only upon the adoption of the Provisional Constitution on 25 March 1986 that the directives and
orders of the revolutionary government became subject to a higher municipal law that, if contravened,
rendered such directives and orders void. The Provisional Constitution adopted verbatim the Bill of
Rights of the 1973 Constitution.48 The Provisional Constitution served as a self-limitation by the
revolutionary government to avoid abuses of the absolute powers entrusted to it by the people.

During the interregnum when no constitution or Bill of Rights existed, directives and orders issued by
government officers were valid so long as these officers did not exceed the authority granted them by
the revolutionary government. The directives and orders should not have also violated the Covenant or
the Declaration. In this case, the revolutionary government presumptively sanctioned the warrant since
the revolutionary government did not repudiate it. The warrant, issued by a judge upon proper
application, specified the items to be searched and seized. The warrant is thus valid with respect to the
items specifically described in the warrant.

However, the Constabulary raiding team seized items not included in the warrant. As admitted by
petitioners witnesses, the raiding team confiscated items not included in the warrant, thus:

Direct Examination of Capt. Rodolfo Sebastian

AJ AMORES

Q. According to the search warrant, you are supposed to seize only for weapons. What else, aside from
the weapons, were seized from the house of Miss Elizabeth Dimaano?

A. The communications equipment, money in Philippine currency and US dollars, some jewelries, land
titles, sir.

103 | P a g e
Q. Now, the search warrant speaks only of weapons to be seized from the house of Elizabeth Dimaano.
Do you know the reason why your team also seized other properties not mentioned in said search
warrant?

A. During the conversation right after the conduct of said raid, I was informed that the reason why they
also brought the other items not included in the search warrant was because the money and other
jewelries were contained in attach cases and cartons with markings "Sony Trinitron", and I think three
(3) vaults or steel safes. Believing that the attach cases and the steel safes were containing firearms,
they forced open these containers only to find out that they contained money.

xxx

Q. You said you found money instead of weapons, do you know the reason why your team seized this
money instead of weapons?

A. I think the overall team leader and the other two officers assisting him decided to bring along also
the money because at that time it was already dark and they felt most secured if they will bring that
because they might be suspected also of taking money out of those items, your Honor.49

Cross-examination

Atty. Banaag

Q. Were you present when the search warrant in connection with this case was applied before the
Municipal Trial Court of Batangas, Branch 1?

A. Yes, sir.

Q. And the search warrant applied for by you was for the search and seizure of five (5) baby armalite
rifles M-16 and five (5) boxes of ammunition?

A. Yes, sir.

xxx

AJ AMORES

Q. Before you applied for a search warrant, did you conduct surveillance in the house of Miss Elizabeth
Dimaano?

A. The Intelligence Operatives conducted surveillance together with the MSU elements, your Honor.

Q. And this party believed there were weapons deposited in the house of Miss Elizabeth Dimaano?

A. Yes, your Honor.

Q. And they so swore before the Municipal Trial Judge?

A. Yes, your Honor.

104 | P a g e
Q. But they did not mention to you, the applicant for the search warrant, any other properties or
contraband which could be found in the residence of Miss Elizabeth Dimaano?

A. They just gave us still unconfirmed report about some hidden items, for instance, the
communications equipment and money. However, I did not include that in the application for search
warrant considering that we have not established concrete evidence about that. So when

Q. So that when you applied for search warrant, you had reason to believe that only weapons were in
the house of Miss Elizabeth Dimaano?

A. Yes, your Honor.50

xxx

Q. You stated that a .45 caliber pistol was seized along with one armalite rifle M-16 and how many
ammunition?

A. Forty, sir.

Q. And this became the subject of your complaint with the issuing Court, with the fiscals office who
charged Elizabeth Dimaano for Illegal Possession of Firearms and Ammunition?

A. Yes, sir.

Q. Do you know what happened to that case?

A. I think it was dismissed, sir.

Q. In the fiscals office?

A. Yes, sir.

Q. Because the armalite rifle you seized, as well as the .45 caliber pistol had a Memorandum Receipt in
the name of Felino Melegrito, is that not correct?

A. I think that was the reason, sir.

Q. There were other articles seized which were not included in the search warrant, like for instance,
jewelries. Why did you seize the jewelries?

A. I think it was the decision of the overall team leader and his assistant to bring along also the
jewelries and other items, sir. I do not really know where it was taken but they brought along also these
articles. I do not really know their reason for bringing the same, but I just learned that these were taken
because they might get lost if they will just leave this behind.

xxx

Q. How about the money seized by your raiding team, they were not also included in the search
warrant?
105 | P a g e
A. Yes sir, but I believe they were also taken considering that the money was discovered to be
contained in attach cases.1wphi1 These attach cases were suspected to be containing pistols or other
high powered firearms, but in the course of the search the contents turned out to be money. So the team
leader also decided to take this considering that they believed that if they will just leave the money
behind, it might get lost also.

Q. That holds true also with respect to the other articles that were seized by your raiding team, like
Transfer Certificates of Title of lands?

A. Yes, sir. I think they were contained in one of the vaults that were opened.51

It is obvious from the testimony of Captain Sebastian that the warrant did not include the monies,
communications equipment, jewelry and land titles that the raiding team confiscated. The search
warrant did not particularly describe these items and the raiding team confiscated them on its own
authority. The raiding team had no legal basis to seize these items without showing that these items
could be the subject of warrantless search and seizure.52 Clearly, the raiding team exceeded its authority
when it seized these items.

The seizure of these items was therefore void, and unless these items are contraband per se,53 and they
are not, they must be returned to the person from whom the raiding seized them. However, we do not
declare that such person is the lawful owner of these items, merely that the search and seizure warrant
could not be used as basis to seize and withhold these items from the possessor. We thus hold that these
items should be returned immediately to Dimaano.

WHEREFORE, the petition for certiorari is DISMISSED. The questioned Resolutions of the
Sandiganbayan dated 18 November 1991 and 25 March 1992 in Civil Case No. 0037, remanding the
records of this case to the Ombudsman for such appropriate action as the evidence may warrant, and
referring this case to the Commissioner of the Bureau of Internal Revenue for a determination of any
tax liability of respondent Elizabeth Dimaano, are AFFIRMED.

SO ORDERED.

G.R. Nos. 184461-62 May 31, 2011

LT. COL. ROGELIO BOAC, LT. COL. FELIPE ANOTADO AND LT. FRANCIS
MIRABELLE SAMSON, Petitioners,
vs.
ERLINDA T. CADAPAN AND CONCEPCION E. EMPEO, Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 184495

ERLINDA T. CADAPAN AND CONCEPCION E. EMPEO, Petitioners,

vs.
GEN. HERMOGENES ESPERON, P/DIR.GEN. AVELINO RAZON, (RET.) GEN. ROMEO
106 | P a g e
TOLENTINO, (RET.) GEN. JOVITO PALPARAN, LT. COL. ROGELIO BOAC, LT. COL.
FELIPE ANOTADO, ET AL., Respondents.

x - - - - - - - - - - - - - - - - - - - - - - -x

G.R. No. 187109

ERLINDA T. CADAPAN AND CONCEPCION E. EMPEO, Petitioners,

vs.
GLORIA MACAPAGAL-ARROYO, GEN. HERMOGENES ESPERON, P/DIR.GEN.
AVELINO RAZON, (RET.) GEN. ROMEO TOLENTINO, (RET.) GEN. JOVITO PALPARAN,
LT. COL. ROGELIO BOAC, LT. COL. FELIPE ANOTADO, DONALD CAIGAS, A.K.A.
ALAN OR ALVIN, ARNEL ENRIQUEZ AND LT. FRANCIS MIRABELLE
SAMSON, Respondents.

DECISION

CARPIO MORALES, J.:

At 2:00 a.m. of June 26, 2006, armed men abducted Sherlyn Cadapan (Sherlyn), Karen Empeo
(Karen) and Manuel Merino (Merino) from a house in San Miguel, Hagonoy, Bulacan. The three were
herded onto a jeep bearing license plate RTF 597 that sped towards an undisclosed location.

Having thereafter heard nothing from Sherlyn, Karen and Merino, their respective families scoured
nearby police precincts and military camps in the hope of finding them but the same yielded nothing.

On July 17, 2006, spouses Asher and Erlinda Cadapan and Concepcion Empeo filed a petition for
habeas corpus1before the Court, docketed as G.R. No. 173228, impleading then Generals Romeo
Tolentino and Jovito Palparan (Gen. Palparan), Lt. Col. Rogelio Boac (Lt. Col. Boac), Arnel Enriquez
and Lt. Francis Mirabelle Samson (Lt. Mirabelle) as respondents. By Resolution of July 19, 2006,2 the
Court issued a writ of habeas corpus, returnable to the Presiding Justice of the Court of Appeals.

The habeas corpus petition was docketed at the appellate court as CA-G.R. SP No. 95303.

By Return of the Writ dated July 21, 2006,3 the respondents in the habeas corpus petition denied that
Sherlyn, Karen and Merino are in the custody of the military. To the Return were attached affidavits
from the respondents, except Enriquez, who all attested that they do not know Sherlyn, Karen and
Merino; that they had inquired from their subordinates about the reported abduction and disappearance
of the three but their inquiry yielded nothing; and that the military does not own nor possess a stainless
steel jeep with plate number RTF 597. Also appended to the Return was a certification from the Land
Transportation Office (LTO) that plate number RTF 597 had not yet been manufactured as of July 26,
2006.

Trial thereupon ensued at the appellate court.

Witness Wilfredo Ramos, owner of the house where the three were abducted, recounted that on June
26, 2006, while he was inside his house in Hagonoy, he witnessed armed men wearing bonnets abduct

107 | P a g e
Sherlyn and Karen from his house and also abduct Merino on their way out; and that tied and
blindfolded, the three were boarded on a jeep and taken towards Iba in Hagonoy.4

Witness Alberto Ramirez (Ramirez) recalled that on June 28, 2006, while he was sleeping in his house,
he was awakened by Merino who, in the company of a group of unidentified armed men, repaired to
his house; that onboard a stainless jeep bearing plate number RTF 597, he (Ramirez) was taken to a
place in Mercado, Hagonoy and was asked by one Enriquez if he knew "Sierra," "Tanya," "Vincent"
and "Lisa"; and that Enriquez described the appearance of two ladies which matched those of Sherlyn
and Karen, whom he was familiar with as the two had previously slept in his house.5

Another witness, Oscar Leuterio, who was himself previously abducted by armed men and detained for
five months, testified that when he was detained in Fort Magsaysay in Nueva Ecija, he saw two women
fitting the descriptions of Sherlyn and Karen, and also saw Merino, his kumpare.6

Lt. Col. Boac, the then commander of Task Force Malolos, a special operations team tasked to
neutralize the intelligence network of communists and other armed groups, declared that he conducted
an inquiry on the abduction of Sherlyn, Karen and Merino but his subordinates denied knowledge
thereof.7

While he denied having received any order from Gen. Palparan to investigate the disappearance of
Sherlyn, Karen and Merino, his assistance in locating the missing persons was sought by the mayor of
Hagonoy.

Major Dominador Dingle, the then division adjutant of the Philippine Armys 7th Infantry Division in
Fort Magsaysay, denied that a certain Arnel Enriquez is a member of his infantry as in fact his name
did not appear in the roster of troops.8

Roberto Se, a supervisor of the Equipment, Plate Number and Supply Units of the LTO, denied that his
office manufactured and issued a plate number bearing number RTF 597.9

On rebuttal, Lt. Mirabelle, Lt. Col. Boac and Gen. Palparan took the witness stand as hostile witnesses.

Lt. Mirabelle testified that she did not receive any report on the abduction of Sherlyn, Karen and
Merino nor any order to investigate the matter. And she denied knowing anything about the abduction
of Ramirez nor who were Ka Tanya or Ka Lisa.10

Gen. Palparan testified that during a debate in a televised program, he mentioned the names of Ka Lisa
and Ka Tanya as the ones involved in revolutionary tax activities; and that he ordered Lt. Col. Boac to
conduct an investigation on the disappearance of Sherlyn, Karen and Merino.11 When pressed to
elaborate, he stated: "I said that I got the report that it stated that it was Ka Tanya and Ka Lisa that, I
mean, that incident happened in Hagonoy, Bulacan was the abduction of Ka Lisa and Ka Tanya, Your
Honor, and another one. That was the report coming from the people in the area."12

By Decision of March 29, 2007,13 the Court of Appeals dismissed the habeas corpus petition in this
wise:

As Sherlyn Cadapan, Karen Empeo and Manuel Merino are indeed missing, the present petition for
habeas corpus is not the appropriate remedy since the main office or function of the habeas corpus is to

108 | P a g e
inquire into the legality of ones detention which presupposes that respondents have actual custody of
the persons subject of the petition. The reason therefor is that the courts have limited powers, means
and resources to conduct an investigation. x x x.

It being the situation, the proper remedy is not a habeas corpus proceeding but criminal proceedings by
initiating criminal suit for abduction or kidnapping as a crime punishable by law. In the case of
Martinez v. Mendoza, supra, the Supreme Court restated the doctrine that habeas corpus may not be
used as a means of obtaining evidence on the whereabouts of a person, or as a means of finding out
who has specifically abducted or caused the disappearance of a certain person. (emphasis and
underscoring supplied)

Thus the appellate court disposed:

WHEREFORE, the petition for habeas corpus is hereby DISMISSED, there being no strong evidence
that the missing persons are in the custody of the respondents.

The Court, however, further resolves to refer the case to the Commission on Human Rights, the
National Bureau of Investigation and the Philippine National Police for separate investigations and
appropriate actions as may be warranted by their findings and to furnish the Court with their separate
reports on the outcome of their investigations and the actions taken thereon.

Let copies of this decision be furnished the Commission on Human Rights, the National Bureau of
Investigation and the Philippine National Police for their appropriate actions.

SO ORDERED. (emphasis and underscoring supplied)

Petitioners in CA-G.R. SP No. 95303 moved for a reconsideration of the appellate courts decision.
They also moved to present newly discovered evidence consisting of the testimonies of Adoracion
Paulino, Sherlyns mother-in-law who was allegedly threatened by soldiers; and Raymond Manalo who
allegedly met Sherlyn, Karen and Merino in the course of his detention at a military camp.

During the pendency of the motion for reconsideration in CA-G.R. SP No. 95303, Erlinda Cadapan and
Concepcion Empeo filed before this Court a Petition for Writ of Amparo14 With Prayers for
Inspection of Place and Production of Documents dated October 24, 2007, docketed as G.R. No.
179994. The petition impleaded the same respondents in the habeas corpus petition, with the addition
of then President Gloria Macapagal-Arroyo, then Armed Forces of the Phil. (AFP) Chief of Staff
Hermogenes Esperon Jr., then Phil. National Police (PNP) Chief Gen. Avelino Razon (Gen. Razon), Lt.
Col. Felipe Anotado (Lt. Col. Anotado) and Donald Caigas.

Then President Arroyo was eventually dropped as respondent in light of her immunity from suit while
in office.

Petitioners in G.R. No. 179994 also prayed that they be allowed to inspect the detention areas of the
following places:

1. 7th Infantry Division at Fort Magsaysay, Laur, Nueva Ecija

2. 24th Infantry Batallion at Limay, Bataan

109 | P a g e
 3. Army Detachment inside Valmocina Farm, Pinaod, San Ildefonso, Bulacan

4. Camp Tecson, San Miguel, Bulacan

5. The Resthouse of Donald Caigas alias Allan or Alvin of the 24th Infantry Batallion at
Barangay Banog, Bolinao, Pangasinan

6. 56th Infantry Batallion Headquarters at Iba, Hagonoy, Bulacan

7. Army Detachment at Barangay Mercado, Hagonoy, Bulacan

8. Beach House [at] Iba, Zambales used as a safehouse with a retired military personnel as a
caretaker;

By Resolution of October 25, 2007, the Court issued in G.R. No. 179994 a writ of amparo returnable to
the Special Former Eleventh Division of the appellate court, and ordered the consolidation of the
amparo petition with the pending habeas corpus petition.

Docketed as CA-G.R. SP No. 002, respondents in the amparo case, through the Solicitor General, filed
their Return of the Writ on November 6, 2007.15 In the Return, Gen. Palparan, Lt. Col. Boac and Lt.
Mirabelle reiterated their earlier narrations in the habeas corpus case.

Gen. Hermogenes Esperon Jr. stated in the Return that he immediately caused to investigate and verify
the identities of the missing persons and was aware of the earlier decision of the appellate court
ordering the police, the Commission on Human Rights and the National Bureau of Investigation to take
further action on the matter.16

Lt. Col. Felipe Anotado, the then battalion commander of the 24th Infantry Battalion based in Balanga
City, Bataan, denied any involvement in the abduction. While the 24th Infantry Battalion detachment
was reported to be a detention site of the missing persons, Lt. Col. Anotado claimed that he found no
untoward incident when he visited said detachment. He also claimed that there was no report of the
death of Merino per his inquiry with the local police.17

Police Director General Avelino Razon narrated that he ordered the compilation of pertinent records,
papers and other documents of the PNP on the abduction of the three, and that the police exhausted all
possible actions available under the circumstances.18

In addition to the witnesses already presented in the habeas corpus case, petitioners called on
Adoracion Paulino and Raymond Manalo to testify during the trial.

Adoracion Paulino recalled that her daughter-in-law Sherlyn showed up at home on April 11, 2007,
accompanied by two men and three women whom she believed were soldiers. She averred that she did
not report the incident to the police nor inform Sherlyns mother about the visit.19

Raymond Manalo (Manalo) claimed that he met the three abducted persons when he was illegally
detained by military men in Camp Tecson in San Miguel, Bulacan. His group was later taken to a camp
in Limay, Bataan. He recalled that Lt. Col. Anotado was the one who interrogated him while in
detention.20

110 | P a g e
In his Sinumpaang Salaysay,21 Manalo recounted:

xxxx

59. Saan ka dinala mula sa Sapang?

Pagkalipas ng humigit kumulang 3 buwan sa Sapang, dinala ako sa Camp Tecson sa ilalim ng 24th IB.

xxxx

Sa loob ng barracks ko nakilala si Sherlyn Cadapan, isang estudyante ng UP.

Ipinapalinis din sa akin ang loob ng barracks. Sa isang kwarto sa loob ng barracks, may nakita akong
babae na nakakadena[.] Noong una, pinagbawalan akong makipag-usap sa kanya. Sa ikatlo o ikaapat na
araw, nakausap ko yung babaeng nagngangalang Sherlyn. Binigyan ko siya ng pagkain. Sinabi niya sa
akin na dinukot si[ya] sa Hagonoy, Bulacan at matindi ang tortyur na dinaranas niya. Sabi niya gusto
niyang umuwi at makasama ang kanyang magulang. Umiiyak siya. Sabi niya sa akin ang buong
pangalan niya ay Sherlyn Cadapan, mula sa Laguna. Sa araw tinatanggal ang kanyang kadena at
inuutusan si Sherlyn na maglaba.

x x x x.

61. Sino ang mga nakilala mo sa Camp Tecson?

Dito sa Camp Tecson naming nakilala si Allan Alvin (maya-maya nalaman naming na siya pala si
Donald Caigas), ng 24th IB, na tinatawag na master o commander ng kanyang mga tauhan.

Pagkalipas ng 2 araw matapos dalhin si Reynaldo sa Camp Tecson dumating sina Karen
Empeo at Manuel Merinona mga bihag din. Inilagay si Karen at Manuel sa kwarto ni Allan[.] Kami
naman ni Reynaldo ay nasa katabing kwarto, kasama si Sherlyn.

xxxx

62. x x x x

Kaming mga lalake (ako, si Reynaldo at si Manuel) ay ginawang utusan, habang sina Sherlyn at Karen
ay ginawang labandera.

Si Sherlyn ang pinahirapan nina Mickey, Donald at Billy. Sabi ni Sherlyn sa akin na siyay ginahasa.

xxxx

63. x x x x

xxxx

Kaming lima (ako, si Reynaldo, si Sherlyn, si Karen at si [Merino]) ang dinala sa Limay. Sinakay ako,
si Reynaldo, si Sherlyn at si [Merino] sa isang stainless na jeep. Si Karen ay isinakay sa itim na
sasakyan ni Donald Caigas. x x x x
111 | P a g e
xxxx

66. Saan pa kayo dinala mula sa Limay, Bataan?

Mula sa Limay, kaming 5 (ako, si Reynaldo, si Sherlyn, Si Karen at si Manuel) ay dinala sa isang
safehouse sa Zambales, tabi ng dagat. x x x x (underscoring supplied; italics and emphasis in the
original)

On rebuttal, Lt. Col. Anotado and Col. Eduardo Boyles Davalan were called to the witness stand.

Lt. Col. Anotado denied seeing or meeting Manalo. He posited that Manalo recognized him because he
was very active in conducting lectures in Bataan and even appeared on television regarding an incident
involving the 24th Infantry Batallion. He contended that it was impossible for Manalo, Sherlyn, Karen
and Merino to be detained in the Limay detachment which had no detention area.

Col. Eduardo Boyles Davalan, the then chief of staff of the First Scout Ranger Regiment in Camp
Tecson, testified that the camp is not a detention facility, nor does it conduct military operations as it
only serves as a training facility for scout rangers. He averred that his regiment does not have any
command relation with either the 7th Infantry Division or the 24th Infantry Battalion.22

By Decision of September 17, 2008,23 the appellate court granted the Motion for Reconsideration in
CA-G.R. SP No. 95303 (the habeas corpus case) and ordered the immediate release of Sherlyn, Karen
and Merino in CA-G.R. SP No. 00002 (the amparo case). Thus it disposed:

WHEREFORE, in CA-G.R. SP NO. 95303 (Habeas Corpus case), the Motion for Reconsideration is
GRANTED.

Accordingly, in both CA-G.R. SP NO. 95303 (Habeas Corpus case) and in CA-G.R. SP NO. 00002
(Amparo case), the respondents are thereby ordered to immediately RELEASE, or cause the release,
from detention the persons of Sher[lyn] Cadapan, Karen Empeo and Manuel Merino.

Respondent Director General Avelino Razon is hereby ordered to resume [the] PNPs unfinished
investigation so that the truth will be fully ascertained and appropriate charges filed against those truly
responsible.

SO ORDERED.

In reconsidering its earlier Decision in the habeas corpus case, the appellate court relied heavily on the
testimony of Manalo in this wise:

With the additional testimony of Raymond Manalo, the petitioners have been able to convincingly
prove the fact of their detention by some elements in the military. His testimony is a first hand account
that military and civilian personnel under the 7th Infantry Division were responsible for the abduction
of Sherlyn Cadapan, Karen Empeo and Manuel Merino. He also confirmed the claim of Oscar
Leuterio that the latter was detained in Fort Magsaysay. It was there where he (Leuterio) saw Manuel
Merino.

112 | P a g e
His testimony that Leuterio saw Manuel Merino in Fort Magsaysay may be hearsay but not with
respect to his meeting with, and talking to, the three desaparecidos. His testimony on those points was
no hearsay. Raymond Manalo saw the three with his very own eyes as they were detained and tortured
together. In fact, he claimed to be a witness to the burning of Manuel Merino. In the absence of
confirmatory proof, however, the Court will presume that he is still alive.

The testimony of Raymond Manalo can no longer be ignored and brushed aside. His narration and
those of the earlier witnesses, taken together, constitute more than substantial evidence warranting an
order that the three be released from detention if they are not being held for a lawful cause. They may
be moved from place to place but still they are considered under detention and custody of the
respondents.

His testimony was clear, consistent and convincing. x x x.

xxxx

The additional testimonies of Lt. Col. Felipe Anotado and Col. Eduardo Boyles Davalan were of no
help either. Again, their averments were the same negative ones which cannot prevail over those of
Raymond Manalo. Indeed, Camp Tecson has been utilized as a training camp for army scout rangers.
Even Raymond Manalo noticed it but the camps use for purposes other than training cannot be
discounted.

xxxx

In view of the foregoing, there is now a clear and credible evidence that the three missing persons,
[Sherlyn, Karen and Merino], are being detained in military camps and bases under the 7th Infantry
Division. Being not held for a lawful cause, they should be immediately released from detention. (italic
in the original; emphasis and underscoring supplied)

Meanwhile, in the amparo case, the appellate court deemed it a superfluity to issue any inspection order
or production order in light of the release order. As it earlier ruled in the habeas corpus case, it found
that the three detainees right to life, liberty and security was being violated, hence, the need to
immediately release them, or cause their release. The appellate court went on to direct the PNP to
proceed further with its investigation since there were enough leads as indicated in the records to
ascertain the truth and file the appropriate charges against those responsible for the abduction and
detention of the three.

Lt. Col. Rogelio Boac, et al. challenged before this Court, via petition for review, the September 17,
2008 Decision of the appellate court. This was docketed as G.R. Nos. 184461-62, the first above-
captioned case- subject of the present Decision.

Erlinda Cadapan and Concepcion Empeo, on the other hand, filed their own petition for review also
challenging the same September 17, 2008 Decision of the appellate court only insofar as the amparo
aspect is concerned. Their petition, docketed as G.R. No. 179994, was redocketed as G.R. No. 184495,
the second above-captioned case.

By Resolution of June 15, 2010, the Court ordered the consolidation of G.R. No. 184495 with G.R.
Nos. 1844461-62.24

113 | P a g e
Meanwhile, Erlinda Cadapan and Concepcion Empeo filed before the appellate court a Motion to Cite
Respondents in Contempt of Court for failure of the respondents in the amparo and habeas corpus cases
to comply with the directive of the appellate court to immediately release the three missing persons. By
Resolution of March 5, 2009,25 the appellate court denied the motion, ratiocinating thus:

While the Court, in the dispositive portion, ordered the respondents "to immediately RELEASE, or
cause the release, from detention the persons of Sherlyn Cadapan, Karen Empeo and Manuel
Merino," the decision is not ipso facto executory. The use of the term "immediately" does not mean
that that it is automatically executory. There is nothing in the Rule on the Writ of Amparo which states
that a decision rendered is immediately executory. x x x.

Neither did the decision become final and executory considering that both parties questioned the
Decision/Resolution before the Supreme Court. x x x.

Besides, the Court has no basis. The petitioners did not file a motion for execution pending
appeal under Section 2 of Rule 39. There being no motion, the Court could not have issued, and did not
issue, a writ of execution. x x x. (underscoring supplied)

Via a petition for certiorari filed on March 30, 2009 before this Court, Erlinda Cadapan and
Concepcion Empeo challenged the appellate courts March 5, 2009 Resolution denying their motion
to cite respondents in contempt. The petition was docketed as G.R. No. 187109, the last above-
captioned case subject of the present Decision.

Only Lt. Col. Anotado and Lt. Mirabelle remained of the original respondents in the amparo and
habeas corpus cases as the other respondents had retired from government service.26 The AFP has
denied that Arnel Enriquez was a member of the Philippine Army.27 The whereabouts of Donald
Caigas remain unknown.28

In G.R. Nos. 184461-62, petitioners posit as follows:

THE COURT OF APPEALS GROSSLY MISAPPRECIATED THE VALUE OF THE

TESTIMONY OF RAYMOND MANALO.

II

THE PETITION[S] FOR HABEAS CORPUS AND WRIT OF AMPARO SHOULD BE

DISMISSED BECAUSE RESPONDENTS FAILED TO PROVE BY THE REQUIRED
QUANTUM OF EVIDENCE THAT PETITIONERS HAVE SHERLYN CADAPAN, KAREN
EMPEO AND MANUEL MERINO ARE IN THEIR CUSTODY.

III

PETITIONERS DENIALS PER SE SHOULD NOT HAVE BEEN TAKEN AGAINST THEM
BECAUSE THEY DID NOT REALLY HAVE ANY INVOLVEMENT IN THE ALLEGED
ABDUCTION; MOREOVER, THE SUPPOSED INCONSISTENCIES IN THEIR
TESTIMONIES ARE ON POINTS IRRELEVANT TO THE PETITION.

114 | P a g e
 IV

THE DISPOSITIVE PORTION OF THE ASSAILED DECISION IS VAGUE AND

INCONGRUENT WITH THE FINDINGS OF THE COURT OF APPEALS.

THE COURT OF APPEALS IGNORED AND FAILED TO RULE UPON THE FATAL
PROCEDURAL INFIRMITIES IN THE PETITION FOR WRIT OF AMPARO.29

In G.R. No. 184495, petitioners posit as follows:

5. The Court of Appeals erred in not granting the Interim Relief for Inspection of Places;

6. The Court of Appeals erred in not granting the Interim Relief for Production of Documents;

7. The Court of Appeals erred in not finding that the Police Director Gen. Avelino Razon did not
make extraordinary diligence in investigating the enforced disappearance of the aggrieved
parties

8. The Court of Appeals erred in not finding that this was not the command coming from the
highest echelon of powers of the Armed Forces of the Philippines, Philippine Army and the
Seventh Infantry Division of the Philippine Army to enforcibly disappear [sic] the aggrieved
parties

9. The Court of Appeals erred in dropping President Gloria Macapagal Arroyo as party
respondent in this case;

10. The Court of Appeals erred in not finding that President Gloria Macapagal Arroyo had
command responsibility in the enforced disappearance and continued detention of the three
aggrieved parties

11. The Court of Appeals erred in not finding that the Armed Forces Chief of Staff then
Hermogenes Esperon and the Present Chief of Staff as having command responsibility in the
enforced disappearance and continued detention of the three aggrieved parties30

In G.R. No. 187109, petitioners raise the following issues:

[1] Whether the decision in the Court of Appeals has become final and executory[.]

[2] Whetherthere is a need to file a motion for execution in a Habeas Corpus decision or in an
Amparo decision[.]

[3] Whetheran appeal can stay the decision of a Habeas Corpus [case] [or] an Amparo
case[.]31

Essentially, the consolidated petitions present three primary issues, viz: a) whether the testimony of
Raymond Manalo is credible; b) whether the chief of the AFP, the commanding general of the
Philippine Army, as well as the heads of the concerned units had command responsibility over the
115 | P a g e
abduction and detention of Sherlyn, Karen and Merino; and c) whether there is a need to file a motion
for execution to cause the release of the aggrieved parties.

G.R. Nos. 184461-62

Petitioners Lt. Col. Boac, et al. contend that the appellate court erred in giving full credence to the
testimony of Manalo who could not even accurately describe the structures of Camp Tecson where he
claimed to have been detained along with Sherlyn, Karen and Merino. They underscore that Camp
Tecson is not under the jurisdiction of the 24th Infantry Batallion and that Manalos testimony is
incredible and full of inconsistencies.32

In Secretary of National Defense v. Manalo,33 an original petition for Prohibition, Injunction and
Temporary Restraining Order which was treated as a petition under the Amparo Rule, said Rule having
taken effect during the pendency of the petition, the Court ruled on the truthfulness and veracity of the
personal account of Manalo which included his encounter with Sherlyn, Kara and Merino while on
detention. Thus it held:

We affirm the factual findings of the appellate court, largely based on respondent Raymond Manalos
affidavit and testimony, viz:

x x x x.

We reject the claim of petitioners that respondent Raymond Manalos statements were not corroborated
by other independent and credible pieces of evidence. Raymonds affidavit and testimony were
corroborated by the affidavit of respondent Reynaldo Manalo. The testimony and medical reports
prepared by forensic specialist Dr. Molino, and the pictures of the scars left by the physical injuries
inflicted on respondents, also corroborate respondents accounts of the torture they endured while in
detention. Respondent Raymond Manalos familiarity with the facilities in Fort Magsaysay such as the
"DTU," as shown in his testimony and confirmed by Lt. Col. Jimenez to be the "Division Training
Unit," firms up respondents story that they were detained for some time in said military facility.
(citations omitted; emphasis and underscoring supplied)

On Manalos having allegedly encountered Sherlyn, Karen and Merino while on detention, the Court in
the immediately cited case synthesized his tale as follows:

The next day, Raymonds chains were removed and he was ordered to clean outside the barracks. It
was then he learned that he was in a detachment of the Rangers. There were many soldiers, hundreds of
them were training. He was also ordered to clean inside the barracks. In one of the rooms therein, he
met Sherlyn Cadapan from Laguna.She told him that she was a student of the University of the
Philippines and was abducted in Hagonoy, Bulacan. She confided that she had been subjected to severe
torture and raped. She was crying and longing to go home and be with her parents. During the day, her
chains were removed and she was made to do the laundry.

After a week, Reynaldo was also brought to Camp Tecson. Two days from his arrival, two other
captives, Karen Empeo and Manuel Merino, arrived. Karen and Manuel were put in the room with
"Allan" whose name they later came to know as Donald Caigas, called "master" or "commander" by his
men in the 24th Infantry Battalion. Raymond and Reynaldo were put in the adjoining room. At times,
Raymond and Reynaldo were threatened, and Reynaldo was beaten up. In the daytime, their chains
116 | P a g e
were removed, but were put back on at night. They were threatened that if they escaped, their families
would all be killed.

On or about October 6, 2006, Hilario arrived in Camp Tecson. He told the detainees that they should be
thankful they were still alive and should continue along their "renewed life." Before the hearing of
November 6 or 8, 2006, respondents were brought to their parents to instruct them not to attend the
hearing. However, their parents had already left for Manila. Respondents were brought back to Camp
Tecson. They stayed in that camp from September 2006 to November 2006, and Raymond was
instructed to continue using the name "Oscar" and holding himself out as a military trainee. He got
acquainted with soldiers of the 24th Infantry Battalion whose names and descriptions he stated in his
affidavit.

On November 22, 2006, respondents, along with Sherlyn, Karen, and Manuel, were transferred to a
camp of the 24th Infantry Battalion in Limay, Bataan. There were many huts in the camp. They stayed
in that camp until May 8, 2007. Some soldiers of the battalion stayed with them. While there, battalion
soldiers whom Raymond knew as "Mar" and "Billy" beat him up and hit him in the stomach with their
guns. Sherlyn and Karen also suffered enormous torture in the camp. They were all made to clean,
cook, and help in raising livestock.

Raymond recalled that when "Operation Lubog" was launched, Caigas and some other soldiers brought
him and Manuel with them to take and kill all sympathizers of the NPA. They were brought to
Barangay Bayan-bayanan, Bataan where he witnessed the killing of an old man doing kaingin. The
soldiers said he was killed because he had a son who was a member of the NPA and he coddled NPA
members in his house. Another time, in another "Operation Lubog," Raymond was brought to
Barangay Orion in a house where NPA men stayed. When they arrived, only the old man of the house
who was sick was there. They spared him and killed only his son right before Raymonds eyes.

From Limay, Raymond, Reynaldo, Sherlyn, Karen, and Manuel were transferred to Zambales, in a
safehouse near the sea. Caigas and some of his men stayed with them. A retired army soldier was in
charge of the house. Like in Limay, the five detainees were made to do errands and chores. They stayed
in Zambales from May 8 or 9, 2007 until June 2007.

In June 2007, Caigas brought the five back to the camp in Limay. Raymond, Reynaldo, and Manuel
were tasked to bring food to detainees brought to the camp. Raymond narrated what he witnessed and
experienced in the camp, viz:

x x x x.34 (emphasis and underscoring supplied)

The Court takes judicial notice of its Decision in the just cited Secretary of National Defense v.
Manalo35 which assessed the account of Manalo to be a candid and forthright narrative of his and his
brother Reynaldos abduction by the military in 2006; and of the corroborative testimonies, in the same
case, of Manalos brother Reynaldo and a forensic specialist, as well as Manalos graphic description
of the detention area. There is thus no compelling reason for the Court, in the present case, to disturb its
appreciation in Manalos testimony. The outright denial of petitioners Lt. Col. Boac, et al. thus
crumbles.

Petitioners go on to point out that the assailed Decision of the appellate court is "vague and incongruent
with [its] findings" for, so they contend, while the appellate court referred to the perpetrators as
117 | P a g e
"misguided and self-righteous civilian and military elements of the 7th Infantry Division," it failed to
identify who these perpetrators are. Moreover, petitioners assert that Donald Caigas and Arnel
Enriquez are not members of the AFP. They furthermore point out that their co-petitioners Generals
Esperon, Tolentino and Palparan have already retired from the service and thus have no more control of
any military camp or base in the country.36

There is nothing vague and/or incongruent about the categorical order of the appellate court for
petitioners to release Sherlyn, Karen and Merino. In its discourse, the appellate court merely referred to
"a few misguided self-righteous people who resort to the extrajudicial process of neutralizing those
who disagree with the countrys democratic system of government." Nowhere did it specifically refer
to the members of the 7th Infantry Division as the "misguided self-righteous" ones.

Petitioners finally point out that the parents of Sherlyn and Karen do not have the requisite standing to
file the amparo petition on behalf of Merino. They call attention to the fact that in the amparo petition,
the parents of Sherlyn and Karen merely indicated that they were "concerned with Manuel Merino" as
basis for filing the petition on his behalf.37

Section 2 of the Rule on the Writ of Amparo38 provides:

The petition may be filed by the aggrieved party or by any qualified person or entity in the following
order:

(a) Any member of the immediate family, namely: the spouse, children and parents of the
aggrieved party;

(b) Any ascendant, descendant or collateral relative of the aggrieved party within the fourth civil
degree of consanguinity or affinity, in default of those mentioned in the preceding paragraph; or

(c) Any concerned citizen, organization, association or institution, if there is no known member
of the immediate family or relative of the aggrieved party.

Indeed, the parents of Sherlyn and Karen failed to allege that there were no known members of the
immediate family or relatives of Merino. The exclusive and successive order mandated by the above-
quoted provision must be followed. The order of priority is not without reason"to prevent the
indiscriminate and groundless filing of petitions for amparo which may even prejudice the right to life,
liberty or security of the aggrieved party."39

The Court notes that the parents of Sherlyn and Karen also filed the petition for habeas corpus on
Merinos behalf. No objection was raised therein for, in a habeas corpus proceeding, any person may
apply for the writ on behalf of the aggrieved party.40

It is thus only with respect to the amparo petition that the parents of Sherlyn and Karen are precluded
from filing the application on Merinos behalf as they are not authorized parties under the Rule.

G.R. No. 184495

118 | P a g e
Preliminarily, the Court finds the appellate courts dismissal of the petitions against then President
Arroyo well-taken, owing to her immunity from suit at the time the habeas corpus and amparo petitions
were filed.41

Settled is the doctrine that the President, during his tenure of office or actual incumbency, may not be
sued in any civil or criminal case, and there is no need to provide for it in the Constitution or law. It
will degrade the dignity of the high office of the President, the Head of State, if he can be dragged into
court litigations while serving as such. Furthermore, it is important that he be freed from any form of
harassment, hindrance or distraction to enable him to fully attend to the performance of his official
duties and functions. Unlike the legislative and judicial branch, only one constitutes the executive
branch and anything which impairs his usefulness in the discharge of the many great and important
duties imposed upon him by the Constitution necessarily impairs the operation of the Government. x x
x 42

Parenthetically, the petitions are bereft of any allegation that then President Arroyo permitted,
condoned or performed any wrongdoing against the three missing persons.

On the issue of whether a military commander may be held liable for the acts of his subordinates in an
amparo proceeding, a brief discussion of the concept of command responsibility and its application
insofar as amparo cases already decided by the Court is in order.

Rubrico v. Macapagal Arroyo43 expounded on the concept of command responsibility as follows:

The evolution of the command responsibility doctrine finds its context in the development of laws of
war and armed combats. According to Fr. Bernas, "command responsibility," in its simplest terms,
means the "responsibility of commanders for crimes committed by subordinate members of the armed
forces or other persons subject to their control in international wars or domestic conflict." In this sense,
command responsibility is properly a form of criminal complicity. The Hague Conventions of 1907
adopted the doctrine of command responsibility, foreshadowing the present-day precept of holding a
superior accountable for the atrocities committed by his subordinates should he be remiss in his duty of
control over them. As then formulated, command responsibility is "an omission mode of individual
criminal liability," whereby the superior is made responsible for crimes committed by his
subordinates for failing to prevent or punish the perpetrators (as opposed to crimes he ordered).
(citations omitted; emphasis in the original; underscoring supplied)44

It bears stressing that command responsibility is properly a form of criminal complicity,45 and thus a
substantive rule that points to criminal or administrative liability.

An amparo proceeding is not criminal in nature nor does it ascertain the criminal liability of individuals
or entities involved. Neither does it partake of a civil or administrative suit.46 Rather, it is a remedial
measure designed to direct specified courses of action to government agencies to safeguard the
constitutional right to life, liberty and security of aggrieved individuals.47

Thus Razon Jr. v. Tagitis 48 enlightens:

[An amparo proceeding] does nor determine guilt nor pinpoint criminal culpability for the
disappearance [threats thereof or extrajudicial killings]; it determines responsibility, or at least

119 | P a g e
accountability, for the enforced disappearancefor purposes of imposing the appropriate remedies to
address the disappearance49 (emphasis and underscoring supplied)

Further, Tagitis defines what constitutes "responsibility" and "accountability," viz:

x x x. Responsibility refers to the extent the actors have been established by substantial evidence to
have participated in whatever way, by action or omission, in an enforced disappearance, as a measure
of the remedies this Court shall craft, among them, the directive to file the appropriate criminal and
civil cases against the responsible parties in the proper courts. Accountability, on the other hand, refers
to the measure of remedies that should be addressed to those who exhibited involvement in the
enforced disappearance without bringing the level of their complicity to the level of responsibility
defined above; or who are imputed with knowledge relating to the enforced disappearance and who
carry the burden of disclosure; or those who carry, but have failed to discharge, the burden of
extraordinary diligence in the investigation of the enforced disappearance. In all these cases, the
issuance of the Writ of Amparo is justified by our primary goal of addressing the disappearance, so that
the life of the victim is preserved and his liberty and security are restored.50 (emphasis in the original;
underscoring supplied)

Rubrico categorically denies the application of command responsibility in amparo cases to determine
criminal liability.51 The Court maintains its adherence to this pronouncement as far as amparo cases are
concerned.

Rubrico, however, recognizes a preliminary yet limited application of command responsibility in

amparo cases to instances of determining the responsible or accountable individuals or entities that are
duty-bound to abate any transgression on the life, liberty or security of the aggrieved party.

If command responsibility were to be invoked and applied to these proceedings, it should, at most, be
only to determine the author who, at the first instance, is accountable for, and has the duty to address,
the disappearance and harassments complained of, so as to enable the Court to devise remedial
measures that may be appropriate under the premises to protect rights covered by the writ of amparo.
As intimated earlier, however, the determination should not be pursued to fix criminal liability on
respondents preparatory to criminal prosecution, or as a prelude to administrative disciplinary
proceedings under existing administrative issuances, if there be any.52 (emphasis and underscoring
supplied)

In other words, command responsibility may be loosely applied in amparo cases in order to identify
those accountable individuals that have the power to effectively implement whatever processes an
amparo court would issue.53 In such application, the amparo court does not impute criminal
responsibility but merely pinpoint the superiors it considers to be in the best position to protect the
rights of the aggrieved party.

Such identification of the responsible and accountable superiors may well be a preliminary
determination of criminal liability which, of course, is still subject to further investigation by the
appropriate government agency.

Relatedly, the legislature came up with Republic Act No. 985154 (RA 9851) to include command
responsibility as a form of criminal complicity in crimes against international humanitarian law,
genocide and other crimes.55 RA 9851 is thus the substantive law that definitively imputes criminal
120 | P a g e
liability to those superiors who, despite their position, still fail to take all necessary and reasonable
measures within their power to prevent or repress the commission of illegal acts or to submit these
matters to the competent authorities for investigation and prosecution.

The Court finds that the appellate court erred when it did not specifically name the respondents that it
found to be responsible for the abduction and continued detention of Sherlyn, Karen and Merino. For,
from the records, it appears that the responsible and accountable individuals are Lt. Col. Anotado, Lt.
Mirabelle, Gen. Palparan, Lt. Col. Boac, Arnel Enriquez and Donald Caigas. They should thus be made
to comply with the September 17, 2008 Decision of the appellate court to IMMEDIATELY RELEASE
Sherlyn, Karen and Merino.

The petitions against Generals Esperon, Razon and Tolentino should be dismissed for lack of merit as
there is no showing that they were even remotely accountable and responsible for the abduction and
continued detention of Sherlyn, Karen and Merino.

G.R. No. 187109.

Contrary to the ruling of the appellate court, there is no need to file a motion for execution for an
amparo or habeas corpus decision. Since the right to life, liberty and security of a person is at stake, the
proceedings should not be delayed and execution of any decision thereon must be expedited as soon as
possible since any form of delay, even for a day, may jeopardize the very rights that these writs seek to
immediately protect.

The Solicitor Generals argument that the Rules of Court supplement the Rule on the Writ of Amparo
is misplaced. The Rules of Court only find suppletory application in an amparo proceeding if the Rules
strengthen, rather than weaken, the procedural efficacy of the writ. As it is, the Rule dispenses with
dilatory motions in view of the urgency in securing the life, liberty or security of the aggrieved party.
Suffice it to state that a motion for execution is inconsistent with the extraordinary and expeditious
remedy being offered by an amparo proceeding.

In fine, the appellate court erred in ruling that its directive to immediately release Sherlyn, Karen and
Merino was not automatically executory. For that would defeat the very purpose of having summary
proceedings56 in amparo petitions. Summary proceedings, it bears emphasis, are immediately executory
without prejudice to further appeals that may be taken therefrom.57

WHEREFORE, in light of the foregoing discussions, the Court renders the following judgment:

1. The Petitions in G.R. Nos. 184461-62 and G.R. No. 184495 are DISMISSED. The Decision
of the Court of Appeals dated September 17, 2008 is AFFIRMED with modification in that
respondents in G.R. No. 184495, namely Lt. Col. Felipe Anotado, Lt. Francis Mirabelle
Samson, Gen. Jovito Palparan, Lt. Col. Rogelio Boac, Arnel Enriquez and Donald Caigas are
ordered to immediately release Sherlyn Cadapan, Karen Empeo and Manuel Merino from
detention.

The petitions against Generals Esperon, Razon and Tolentino are DISMISSED.

2. The petition in G.R. No. 187109 is GRANTED. The named respondents are directed to
forthwith comply with the September 17, 2008 Decision of the appellate court. Owing to the

121 | P a g e
 retirement and/or reassignment to other places of assignment of some of the respondents herein
and in G.R. No. 184495, the incumbent commanding general of the 7th Infantry Division and
the incumbent battalion commander of the 24th Infantry Battalion, both of the Philippine Army,
are enjoined to fully ensure the release of Sherlyn Cadapan, Karen Empeo and Manuel Merino
from detention.1awphi1

Respondents Lt. Col. Felipe Anotado, Lt. Francis Mirabelle Samson, Gen. Jovito Palparan, Lt.
Col. Rogelio Boac, Arnel Enriquez and Donald Caigas shall remain personally impleaded in the
petitions to answer for any responsibilities and/or accountabilities they may have incurred
during their incumbencies.

Let copies of this Decision and the records of these cases be furnished the Department of Justice
(DOJ), the Philippine National Police (PNP) and the Armed Forces of the Philippines (AFP) for further
investigation to determine the respective criminal and administrative liabilities of respondents.

All the present petitions are REMANDED to the Court of Appeals for appropriate action, directed at
monitoring of the DOJ, PNP and AFP investigations and the validation of their results.

SO ORDERED.

122 | P a g e