Umali vs.

COMELEC, 723 SCRA 170 (2014)

By: G-one T. Paisones

Salient Feature:
2016 Bar Examination; Question No. 3
Facts:
On July 11, 2011, the Sangguniang Panglungsod of Cabanatuan City passed Resolution No. 183-2011, requesting the
President to declare the conversion of Cabanatuan City from a component city of the province of Nueva Ecija into a
highly urbanized city (HUC). Acceding to the request, the President issued Presidential Proclamation No. 418, Series of
2012, proclaiming the City of Cabanatuan as an HUC subject to “ratification in a plebiscite by the qualified voters therein,
as provided for in Section 453 of the Local Government Code of 1991.”
Respondent COMELEC, acting on the proclamation, issued the assailed Minute Resolution No. 12-0797 which reads:
WHEREFORE, the Commission RESOLVED, as it hereby RESOLVES, that for purposes of the plebiscite for the
conversion of Cabanatuan City from component city to highly-urbanized city, only those registered residents of
Cabanatuan City should participate in the said plebiscite.

The COMELEC based this resolution on Sec. 453 of the Local Government Code of 1991 (LGC), citing conversion cases
involving Puerto Princesa City in Palawan, Tacloban City in Southern Leyte, and Lapu-Lapu City in Cebu, where only the
residents of the city proposed to be converted were allowed to vote in the corresponding plebiscite.

Petitioner Aurelio M. Umali, Governor of Nueva Ecija, filed a Verified Motion for Reconsideration, maintaining that the
proposed conversion in question will necessarily and directly affect the mother province of Nueva Ecija. His main
argument is that Section 453 of the LGC should be interpreted in conjunction with Sec. 10, Art. X of the Constitution. He
argues that while the conversion in question does not involve the creation of a new or the dissolution of an existing city,
the spirit of the Constitutional provision calls for the people of the LGU directly affected to vote in a plebiscite whenever
there is a material change in their rights and responsibilities. The phrase “qualified voters therein” used in Sec. 453 of the
LGC should then be interpreted to refer to the qualified voters of the units directly affected by the conversion and not just
those in the component city proposed to be upgraded. Petitioner Umali justified his position by enumerating the various
adverse effects of the Cabanatuan City’s conversion and how it will cause material change not only in the political and
economic rights of the city and its residents but also of the province as a whole.

On October 4, 2012, the COMELEC En Banc on October 16, 2012, in E.M No. 12-045 (PLEB), by a vote of 5-2
ruled in favor of respondent Vergara through the assailed Minute Resolution 12-0925.

Issue:
Whether the qualified registered voters of the entire province of Nueva Ecija or only those in Cabanatuan City can
participate in the plebiscite called for the conversion of Cabanatuan City from a component city into a Highly Urbanized
City (HUC).
Held:
 Entire province of Nueva Ecija
Ratio:
The upward conversion of a component city, in this case Cabanatuan City, into an HUC will come at a steep
price. It can be gleaned from the above-cited rule that the province will inevitably suffer a corresponding decrease in
territory brought about by Cabanatuan City’s gain of independence. With the city’s newfound autonomy, it will be free
from the oversight powers of the province, which, in effect, reduces the territorial jurisdiction of the latter. What once
formed part of Nueva Ecija will no longer be subject to supervision by the province. In more concrete terms, Nueva Ecija
stands to lose 282.75 sq. km. of its territorial jurisdiction with Cabanatuan City’s severance from its mother
province. This is equivalent to carving out almost 5% of Nueva Ecija’s 5,751.3 sq. km. area. This sufficiently satisfies the
requirement that the alteration be “substantial.”
G.R. No. 199439 : April 22, 2014

CITY OF GENERAL SANTOS, REPRESENTED BY ITS MAYOR, HON. DARLENE MAGNOLIA R.

ANTONIO-CUSTODIO, Petitioner, v. COMMISSION ON AUDIT, Respondent.

LEONEN, J.:
FACTS:

Then mayor of General Santos City, Pedro B. Acharon, Jr., issued Executive Order No. 40, series of 2008, creating
management teams pursuant to its organization development program. This was patterned after Executive Order No. 366
dated October 4, 2004 entitled Directing a Strategic Review of the Operations and Organizations of the Executive Branch
and Providing Options and Incentives for Government Employees who may be Affected by the Rationalization of the
Functions and Agencies of the Executive Branch and its implementing rules and regulations.

Mayor Pedro B. Acharon, Jr. declared the citys byword of Total Quality Service in his state of the city address in 2005.
This was followed by the conduct of a process and practice review for each department, section, and unit of the local
government. The product was an organization development masterplan adopted as Executive Order No. 13, series of
2009. This was followed by Resolution No. 004, series of 2009, requesting for the mayors support for GenSan SERVES,
an early retirement program to be proposed to the Sangguniang Panlungsod.

Consequently, Ordinance No. 08, series of 2009, was passed together with its implementing rules and regulations,
designed to entice those employees who were unproductive due to health reasons to avail of the incentives being offered
therein by way of early retirement package.

This contextual background in the passing of Ordinance No. 08, series of 2009, was not contested by respondent
Commission on Audit.

The ordinance, as amended, provides that qualified employees below sixty (60) years of age but not less than fifty (50)
years and sickly employees below fifty (50) years of age but not less than forty (40) years may avail of the incentives
under the program. In other words, the ordinance provides for separation benefits for sickly employees who have not yet
reached retirement age.

In a letter dated February 10, 2010, the citys audit team leader, through its supervising auditor, sent a query on the legality
of the ordinance to respondent Commission on Audits director for Regional Office No. XII, Cotabato City.

In his second indorsement dated March 15, 2010, respondent Commissions regional director agreed that the grant lacked
legal basis and was contrary to the Government Service Insurance System (GSIS) Act. He forwarded the matter to
respondent Commissions Office of General Counsel, Legal Services Sector, for a more authoritative opinion.

The Office of General Counsel issued COA-LSS Opinion No. 2010021 on March 25, 2010. The opinion explained that
Ordinance No. 08, series of 2009, partakes of a supplementary retirement benefit plan. In its view, Section 28, paragraph
(b) of Commonwealth Act No. 186, as amended, prohibits government agencies from establishing supplementary
retirement or pension plans from the time the Government Service Insurance System charter took effect while those plans
already existing when the charter was enacted were declared abolished.

In fine, since Ordinance No. 08 is in the nature of an ERP [Early Retirement Program] of the City Government of General
Santos, a law authorizing the same is a requisite for its validity. In the absence, however, of such law, the nullity of
Ordinance No. 08 becomes a necessary consequence.

Petitioner city, through then mayor, Pedro B. Acharon, Jr., filed a letter-reconsideration dated June 7, 2010. They
followed through with two letters addressed to respondent Commissions chairman dated July 26, 2010 and October 6,
2010, respectively, for the reconsideration of COA-LSS Opinion No. 2010-021.20
Respondent Commission on Audit treated these letters as an appeal. On January 20, 2011, it rendered its decision denying
the appeal and affirming COA-LSS Opinion No. 2010-021.21 It also denied reconsideration by resolution.

ISSUE: Whether respondent Commission on Audit committed grave abuse of discretion when it considered Ordinance No.
08, Series of 2009, in the nature of an early retirement program requiring a law for its validity.

HELD: This court has consistently held that findings of administrative agencies are generally respected, unless
found to have been tainted with unfairness that amounted to grave abuse of discretion:

REMEDIAL LAW: decision of administrative agencies; grave abuse of discretion

It is the general policy of the Court to sustain the decisions of administrative authorities, especially one which is
constitutionally-created not only on the basis of the doctrine of separation of powers but also for their presumed expertise
in the laws they are entrusted to enforce. Findings of administrative agencies are accorded not only respect but also
finality when the decision and order are not tainted with unfairness or arbitrariness that would amount to grave abuse of
discretion. It is only when the COA has acted without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, that this Court entertains a petition questioning its rulings.

There is grave abuse of discretion when there is an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law or to act in contemplation of law as when the judgment rendered is not based on law and evidence but on
caprice, whim and despotism.

We have ruled that not every error in the proceedings, or every erroneous conclusion of law or fact, constitutes grave
abuse of discretion. Grave abuse of discretion has been defined as follows:

By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction. Mere abuse of discretion is not enough. It must be grave abuse of discretion as when the power is exercised in
an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and so gross as to amount
to an evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.

POLITICAL LAW: local government code

Designing and implementing a local government units own organizational structure and staffing pattern also implies the
power to revise and reorganize. Without such power, local governments will lose the ability to adjust to the needs of its
constituents. Effective and efficient governmental services especially at the local government level require rational and
deliberate changes planned and executed in good faith from time to time.

This was implied in Province of Negros Occidental v. Commissioners, Commission on Audit. In that case, this court
declared as valid the ordinance passed by the province granting and releasing hospitalization and health care insurance
benefits to its officials and employees. This court held that Section 2 of Administrative Order No. 10354 requiring the
Presidents prior approval before the grant of any allowance or benefit is applicable only to offices under the executive
branch. Section 2 does not mention local government units, thus, the prohibition does not apply to them. This court then
referred to the policy of local autonomy as follows:

Thus, consistent with the state policy of local autonomy as guaranteed by the 1987 Constitution, under Section 25, Article
II and Section 2, Article X, and the Local Government Code of 1991, we declare that the grant and release of the
hospitalization and health care insurance benefits given to petitioners officials and employees were validly enacted
through an ordinance passed by petitioners Sangguniang Panlalawigan.

Local autonomy allows an interpretation of Sections 76 and 16 as granting petitioner city the authority to create its
organization development program.
Petitioner citys vision in 2005 of Total Quality Service for the improvement of the quality of services delivered by the city
to the delight of its internal and external customers58 is a matter within its discretion. It then conducted a process and
practice review for each and every unit within the city, resulting in the formulation of an organization development
masterplan adopted as Executive Order No. 13, series of 2009.

Resolution No. 004, series of 2009, was later passed requesting for the mayors support for GenSan SERVES. The third
preambular clause states that in order to transform the bureaucracy into an effective and results oriented structure,
redounding to improved governance, there is a need to entice employees aged 50-59 years old, to retire earlier than age 65
for them to enjoy their retirement while they are still healthy. Consequently, Ordinance No. 08, series of 2009, was passed
creating the GenSan SERVES program.

WHEREFORE, the petition is PARTIALLY GRANTED.

KASAMAKA-CANLUBANG, INC., REPRESENTED BY PABLITO M. EGILDO, PETITIONER, VS. LAGUNA
ESTATE DEVELOPMENT CORPORATION, RESPONDENT.

DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to reverse and set aside
the Decision[1] and Resolution,[2] dated June 27, 2011 and January 31, 2012, respectively, of the Court of Appeals (CA) in
CA-G.R. SP No. 110585.

The antecedents follow.

Respondent Laguna Estate Development Corporation (LEDC) filed a request with the Ministry of Agrarian Reform (now
Department of Agrarian Reform) for the conversion of ten (10) parcels of land consisting of an aggregate area of
216.7394 hectares located in the Province of Laguna from agricultural to residential land, pursuant to Republic Act (RA)
No. 3844, as amended by Presidential Decree (P.D.) No. 815.[3] On June 4, 1979, then Minister Conrado F. Estrella
issued an Order granting respondent's request provided that certain conditions are complied with, one of which was that
the development of the site shall commence within two (2) years from receipt of the order of conversion.[4]

On July 4, 2004, petitioner KASAMAKA-Canlubang, Inc. filed a petition with the Department of Agrarian Reform (DAR)
for the revocation of the conversion order, alleging that respondent failed to develop the subject parcels of land. [5] On
September 25, 2006, then DAR Secretary Nasser C. Pangandaman issued an Order partially revoking the coversion order
as to eight (8) out of the ten (10) parcels of land consisting of an aggregate area of 66.7394 hectares, all registered in the
name of Canlubang Sugar Estate.[6] The remaining two (2) parcels of land, each registered in the names of respondent
LEDC and Jose Yulo, Jr., were excluded from the revocation by virtue of a DAR Exemption Order issued on June 26,
1992, which removed said lands from the ambit of RA No. 6657, otherwise known as the Comprehensive Agrarian
Reform Law (CARL) of 1998.[7]

Respondent then filed a motion for reconsideration, alleging that the eight (8) parcels of land in question are likewise
outside the ambit of the CARL on the basis of zoning ordinances issued by the municipalities concerned reclassifying said
lands as non-agricultural.[8] On June 10, 2008, the DAR, through its Center for Land Use Policy, Planning and
Implementation (CLUPPI) Committee-A, field officials and personnel, and representatives of both respondent and
petitioner conducted an ocular inspection of the subject lands and found that out of the eight (8) parcels of land, two (2)
parcels of land, particularly Lot No. 2-C under TCT No. 82523 and Lot No. 1997-X-A under TCT No. T-82517, remained
undeveloped.[9] Despite this, however, the CLUPPI Committee-A declared that, with the exception of one (1) parcel of
land, specifically Lot No. 1-A-4 under TCT No. T-82586, respondent failed to substantially comply with the condition of
the conversion order to develop the eight (8) subject parcels of land. On August 8, 2008, DAR Secretary Pangandaman
issued an Order affirming his previous Order with the exception of the land under TCT No. T-82586, as concluded by the
CLUPPI Committee-A.[10]

Aggrieved, respondent filed an appeal with the Office of the President (OP), which granted the same in a Decision dated
March 23, 2009 and declared the remaining seven (7) parcels of land in question exempt from the coverage of the CARL
and reinstated the Conversion Order dated June 4, 1979.[11] The Motion for Reconsideration filed by petitioner was
further denied by said Office.[12]

On October 8, 2009, petitioner filed a Petition for Review with the CA alleging that the OP erred in approving
respondent's appeal in light of the findings of the DAR. On June 27, 2011, the CA dismissed the petition for lack of
merit. Petitioner's Motion for Reconsideration was, subsequently, denied in the CA Resolution dated January 31,
2012. Hence, this petition filed by petitioners raising the following issues:

I
THE HONORABLE COURT OF APPEALS X X X ERRED IN RULING THAT THE UNDEVELOPED AREAS OF
THE LANDHOLDINGS SUBJECT OF THE ESTRELLA CONVERSION ORDER DATED JUNE 4, 1979 COULD NO
LONGER BE CONSIDERED AGRICULTURAL LANDS.[13]

II

THE HONORABLE COURT OF APPEALS X X X FAILED TO CONSIDER THAT THE AFORESAID ESTRELLA
CONVERSION ORDER AND THE MUNICIPAL ZONING ORDINANCES AS CLAIMED BY [RESPONDENT]
RECLASSIFYING THE SUBJECT LANDHOLDING TO NON-AGRICULTURAL USES PRIOR TO THE PASSAGE
OF REPUBLIC ACT NO. 6657 DID NOT IPSO FACTO CHANGE THE NATURE OF EXISTING AGRICULTURAL
LANDS OR THE LEGAL RELATIONSHIP THEN EXISTING OVER SUCH LANDS.[14]

Petitioner contends that the CA failed to consider the findings of the DAR, through its ocular investigation, that there are
significant areas of the subject parcels of land which remain undeveloped. On the basis of said investigations, DAR
Secretary Pangandaman revoked the order of conversion pertaining to the seven (7) out of the ten (10) lands in
question. By claiming that the burden of proof shifted to the respondent, petitioner maintains that respondent failed to
overcome the same by proving substantial compliance with the conditions of the order of conversion.[15]

Petitioner further argues that the municipal zoning ordinances classifying the disputed lands to non-agricultural did not
change the nature and character of said lands from being agricultural, much less affect the legal relationship of the farmers
and workers of the Canlubang Sugar Estate then existing prior to the granting of the order of conversion and the passage
of the municipal zoning ordinances.[16]

We disagree.

Time and again, this Court has reiterated the well-established rule that findings of fact by the CA are accorded the highest
degree of respect, conclusive on the parties, which will generally not be disturbed on appeal.[17] Such findings are
likewise binding and conclusive on this Court. Moreover, under the Rules of Court and the 1997 Rules of Civil
Procedure, only questions of law may be raised in a petition for review on certiorari.[18] The jurisdiction of this Court is,
therefore, limited only to the review of errors of law allegedly committed by the CA.[19]

This rule, however, admits of certain exceptions, wherein this Court may alter, modify or even reverse the finding of the
CA, to wit:

(1) when the conclusion is a finding grounded entirely on speculation, surmises and conjectures; (2) when the inference
made is manifestly mistaken, absurd and impossible; (3) where there is a grave abuse of discretion; (4) when the judgment
is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in
making its findings, went beyond the issues of the case and the same is contrary to the admission of both appellant and
appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings of fact are conclusions
without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the respondents; and (10) when the findings of fact of the Court of
Appeals are premised on the supposed absence of evidence and contradicted by the evidence or record.[20]

In the case at hand, whether respondent complied with the condition imposed by the order of conversion is a question of
fact which necessitates an examination of the probative value of the evidence presented by the parties, their relation to
each other, and the probabilities of the situation.[21] But this Court is not a trier of facts. For this reason, We have held
that when the findings of the CA are supported by substantial evidence, they are conclusive on the parties. As shall be
explained below, We find no compelling reason to disturb the factual findings of the CA here. In the absence of any
showing that the present case falls under the aforementioned exceptions calling for a re-evaluation of evidence, We refrain
from disturbing the findings of fact by the CA.

In its Decision, the CA ruled that DAR Secretary Pangandaman, in arriving at his August 8, 2008 Order, merely relied on
the deliberation of the CLUPPI Committee, despite the inconsistency disclosed by said Committee's ocular inspection
report.[22] Such ocular inspection report stated that "out of the eight (8) parcels of land, Lot No. 2-c under TCT No. 82523
x x x and Lot No. 1997-X-A under TCT No. T-82517 x x x, remained undeveloped. In other words, six (6) out of the
eight (8) parcels of land have been developed. Yet the DAR Secretary issued an Order affirming his revocation of the
conversion of the subject lands with the exception of the lot under TCT No. T-82586.[23] Thus, DAR Secretary
Pangandaman effectively revoked seven (7) out of the eight (8) parcels of land, in stark contrast with the findings of the
ocular inspection report.[24] Had the DAR Secretary based his Order on the ocular report findings, the revocation should
have affected only two (2) out of the eight (8) parcels of land. Clearly, there is an inconsistency between the Order and
the ocular report. We, therefore, agree with the CA when it ruled that it cannot sustain the DAR Secretary's revocation
due to the fact that the same was based on inconsistent findings.

In addition, petitioner makes mention of an Order issued by the DAR on September 4, 1975 which requires an applicant
of a conversion order to develop the property converted within two (2) years.[25] Petitioner also cites an ocular inspection
conducted on June 27-29, 2005 as well as certain findings of the CLUPPI Committee, which states that a large portion of
the disputed lands herein remain to be developed. However, the CA maintained that petitioner failed to attach these
documents, along with other pertinent evidence, such as respondent's original site development plan vis-à-vis the level of
accomplishment or completion.[26] We believe that this failure of the petitioner to attach supporting evidence is fatal. The
petitioner, contrary to its assertion, had the burden to prove by substantial evidence, the allegations on which its complaint
was based.[27] However, in failing to submit convincing and satisfactory proof, petitioner failed to overcome the burden of
proving respondent's non-compliance with the conversion order.

It is worth mentioning that while respondent did not have the burden of proof, the Office of the President found that it had
presented satisfactory evidence showing that it, indeed, commenced development works on the properties, to wit:

In its Supplemental Motion for Partial Reconsideration dated April 23, 2007, respondent-appellant submitted documents
showing the developments in the remaining properties. Road networks already existed, and were intended for
subdivision projects. Even the Ocular Inspection Report dated June 10, 2008 confirmed the existence of improvements
over the remaining properties: "x x x Other lots have concrete roads, drainage, and electrification. x x x."

It is also notable that there were other activities being conducted on the remaining properties, which prompted
petitioner-appellee to seek issuance of a Cease and Desist Order x x x.

Such acts constitute activities leading to the further development of the remaining properties. After all, the fifth term
and condition of the Conversion Order dated June 4, 1979 was to commence the development of the site "within two (2)
years from receipt of the order of conversion." Out of the 216.7396 hectares approved for conversion into a
subdivision project by DAR in 1979, only 60.8374 hectares, more or less, remain to be developed. x x x It is common
knowledge that subdivision developments are usually undertaken in phases.

xxxx

x x x As the June 10, 2008 findings of the Ocular Inspection revealed, TCT No. T-82586 has been cancelled and was
already registered in the name of Fairway Villas Development Corporation; TCT Nos. T-82524, T-82579, T-82582, T-
82584, and T-82585 has been either conveyed or transferred to other persons or corporations as of 1977. These facts
bolster the contention that said properties are, indeed, excluded from CARP coverage. Having been converted into a
residential subdivision by virtue of the June 4, 1979 Order x x x, the remaining properties can no longer be subjected to
compulsory coverage. x x x.[28]

Thus, considering the insufficiency of evidence presented by the petitioner, the inconsistencies in the findings of the
DAR, and the satisfactory substantiations of the respondent, We find no reason to reverse the findings of the CA.

It bears stressing that the preceding discussion, notwithstanding, the disputed lands have already been removed from the
ambit of the CARL on the basis of zoning ordinances of the concerned municipalities reclassifying said lands as non-
agricultural, as noted by the Office of the President, viz.:

Moreover, current developments would show that the zoning classification where the remaining properties are situated is
within the Medium Density Residential Zone. Records reveal certifications in support of the remaining properties'
exclusion from CARP coverage, such as (1) Two Certificate of Zoning Classification dated October 18, 2006 issued by
the Mayor and Zoning Administrator of the City of Calamba for TCT No. T-82517; (2) Two Certifications of the
Municipal Planning and Development Coordinator for the Municipality of Cabuyao, Province of Laguna, both dated
October 16, 2006, for TCT Nos. 82523, 82524, 82579, 82582, 82584, 82585, and 82586; and (3) Certification from the
HLURB dated October 16, 2008 that Municipal Ordinance No. 110-54, Series of 1979 (Ordinance Adopting
Comprehensive Zoning Regulations for the Municipality of Calamba, Province of Laguna and Providing for the
Administration, Enforcement and Amendment Thereof and for the Repeal of all Ordinances in Conflict Therewith)
accepted by the Sangguniang Bayan of Cabuyao on November 3, 1979 was conditionally approved by the Human
Settlements Regulatory Commission (now HLURB) under Resolution No. 38-2 dated June 25, 1980.[29]

The power of the cities and municipalities, such as the Municipality of Calamba, to adopt zoning ordinances or
regulations converting lands into non-agricultural cannot be denied. In Buklod ng Magbubukid sa Lupaing Ramos, Inc. v.
E. M. Ramos and Sons, Inc.,[30] this Court recognized said power in the following manner:

Section 3 of R.A. No. 2264, otherwise known at the Local Autonomy Act, empowers a Municipal Council "to adopt
zoning and subdivision ordinances or regulations" for the municipality. Clearly, the law does not restrict the exercise of
the power through an ordinance. Therefore, granting that Resolution No. 27 is not an ordinance, it certainly is
a regulatory measure within the intendment or ambit of the word "regulation" under the provision. As a matter of
fact the same section declares that the power exists "(A)ny provision of law to the contrary notwithstanding. x x x."

xxxx

Section 3 (c), Chapter I of the CARL provides that a parcel of land reclassified for non-agricultural uses prior to June 15,
1988 shall no longer be considered agricultural land subject to CARP. The Court is now faced with the question of
whether Resolution No. 29-A of the Municipality of Dasmariñas dated July 9, 1972, which approved the subdivision of
the subject property for residential purposes, had also reclassified the same from agricultural to residential.

xxxx

It may, therefore, be reasonably presumed that when city and municipal boards and councils approved an ordinance
delineating an area or district in their cities or municipalities as residential, commercial, or industrial zone, pursuant to the
power granted to them under Section 3 of the Local Autonomy Act of 1959, they were, at the same time, reclassifying any
agricultural lands within the zone for non-agricultural use; hence, ensuring the implementation of and compliance with
their zoning ordinances. The logic and practicality behind such a presumption is more evident when considering the
approval by local legislative bodies of subdivision ordinances and regulations. The approval by city and municipal boards
and councils of an application for subdivision through an ordinance should already be understood to include approval of
the reclassification of the land, covered by said application, from agricultural to the intended non-agricultural
use. Otherwise, the approval of the subdivision application would serve no practical effect; for as long as the property
covered by the application remains classified as agricultural, it could not be subdivided and developed for non-agricultural
use.[31]

In view of the foregoing, this Court had, in multiple occasions, ruled that lands already classified as commercial,
industrial or residential before the effectivity of the CARL, or June 15, 1988, are outside the coverage
thereof.[32] In Natalia Realty, Inc. v. Department of Agrarian Reform,[33] for instance, we held that the DAR committed
grave abuse of discretion when it placed undeveloped portions of land intended for residential use under the ambit of the
CARL. Similarly, in Pasong Bayabas Farmers Association, Inc. v. Court of Appeals,[34] we nullified the decision of the
Department of Agrarian Reform Adjudication Board (DARAB) declaring the land in dispute as agricultural and, thus,
within the coverage of the CARL, when the same had already been reclassified as residential by several government
agencies prior to the effectivity of the law. We likewise held in Junio v. Garilao[35] that properties identified as zonal
areas not for agricultural use prior on June 15, 1988 are exempted from CARL coverage, even without confirmation or
clearance from the DAR.

Applying the doctrines cited above, it cannot be denied that the disputed lands are likewise outside the ambit of the
CARL. As mentioned previously, by virtue of zoning ordinances issued by the Municipality of Calamba, Laguna, as
accepted by the Sangguniang Bayan of Cabuyao and approved by the Human Settlements Regulatory Commission, the
subject lands were effectively converted into residential areas. These ordinances were issued and accepted in 1979 and
1980, or before the effectivity of the CARL which took effect on June 15, 1988. It necessarily follows, therefore, that the
properties herein can no longer be subject to compulsory coverage of the CARL.

Going now to petitioner's argument that the municipal zoning ordinances classifying the disputed lands to non-agricultural
did not ipso facto change the nature of said lands, much less affect the legal relationship of the farmers and workers of the
Canlubang Sugar Estate then existing prior to the granting of the order of conversion and the passage of the municipal
zoning ordinances.

In support of said argument, petitioner cites Co v. Intermediate Appellate Court,[36] wherein we ruled that:

A reading of Metro Manila Zoning Ordinance No. 81-01, series of 1981, does not disclose any provision converting
existing agricultural lands in the covered area into residential or light industrial. While it declared that after the passage of
the measure, the subject area shall be used only for residential or light industrial purposes, it is not provided therein that it
shall have a retroactive effect so as to discontinue all rights previously acquired over lands located within the zone which
are neither residential nor light industrial in nature. This simply means that, if we apply the general rule, as we must, the
ordinance should be given prospective application only. The further implication is that it should not change the nature of
existing agricultural lands in the area or the legal relationships existing over such lands, x x x.[37]

Consequently, according to petitioner, the nature of the subject lands herein remained agricultural despite the passage of
the municipal ordinances, which may not disturb the legal relationship of the farmers and workers of the Canlubang Sugar
Estate.

The CA, however, refused to entertain the aforementioned argument in holding that it was the first time petitioner raised
the same in its motion for reconsideration.[38] Nevertheless, even assuming that petitioner was able to timely raise the
issue, the same must necessarily fail. As correctly pointed out by the respondent, there are essential distinctions between
the facts in the Co case and the facts herein.

First, there exists an agricultural tenancy arrangement between the parties involved in the Co case. The land in question,
even prior to the municipal ordinance declaring that the same shall be used only for residential or light industrial purposes,
had already been subject to an agricultural lease wherein an agricultural tenant continued to cultivate the subject land
which was impliedly allowed by the landowner by accepting a share in the produce. In Ludo & Luym Development
Corporation v. Barreto,[39] we identified the following factors which indicate the existence of a tenancy relationship:

The issue of whether or not there exists a tenancy relationship between parties is best answered by law, specifically, The
Agricultural Tenancy Act of the Philippines which defines "agricultural tenancy" as:

… [T]he physical possession by a person of land devoted to agriculture belonging to, or legally possessed by, another for
the purpose of production through the labor of the former and of the members of his immediate farm household, in
consideration of which the former agrees to share the harvest with the latter, or to pay a price of certain, either in produce
or in money, or in both.
From the foregoing definition, the essential requisites of tenancy relationship are:

1. the parties are the landholder and the tenant;

2. the subject matter is agricultural land;
3. there is consent;
4. the purpose is agricultural production; and
5. there is consideration.
All of the above requisites are indispensable in order to create or establish tenancy relationship between the parties.
Inexorably, the absence of at least one requisite does not make the alleged tenant a de facto one for the simple reason that
unless an individual has established one's status as a de jure tenant, he is not entitled to security of tenure guaranteed by
agricultural tenancy laws. Conversely, one cannot be ejected from the agricultural landholding on grounds not provided
by law. x x x[40]

In the case at bar, however, no such arrangement exists. Apart from a mere statement that the lands in dispute was once
part of the vast portion of the Canlubang Sugar Estate, wherein a large number of farmworkers tilled the land, petitioner
did not present any supporting evidence that will show an indication of a leasehold arrangement.

In fact, Minister Estrella noted the following observation in his order of conversion:

The records show that the subject lands are not devoted to the production of palay and/or corn, unirrigated,
untenanted, and not covered by Operation Land Transfer Under P.D. 27, as per investigation conducted by the Agrarian
Reform Field Offices concerned. Further, the parcels of land x x x are found to be suitable for conversion to residential
subdivision and other urban purposes by the Ministry of Local Government and Community Development, and the
proposed conversion is also found by the Human Settlements Regulatory Commission to be consistent with its zoning
policies. (Emphasis supplied.)[41]

Had petitioner presented substantial evidence proving the existence of an agricultural tenancy arrangement, We could
have given probative value to petitioner's argument that municipal ordinances cannot affect nor discontinue legal rights
and relationships previously acquired over the lands herein.

Second, the Co case did not involve an order of conversion categorically declaring the land as converted for residential
use. As stated by petitioner, the zoning ordinance in the Co case does not unequivocally disclose any provision
converting the subject lands into residential or light industrial. Yet it is manifest, even from a plain reading of the order of
conversion in this case, that the respondent's application for converting the disputed lands from agricultural to residential
is granted.[42] As a consequence of such approval, the fact that the subject property is deemed zoned and reclassified as
residential upon compliance with the conditions imposed cannot be questioned. Petitioner cannot, therefore, rely on
the Co case given the fundamental differences of the same from the case at hand.

In view of the foregoing, we find no compelling reason to disturb the findings of the CA. As it correctly pointed out,
petitioner failed to sufficiently prove respondent's non-compliance with the condition provided by the conversion order to
commence the development of the subject lands herein. Petitioner further failed to refute the application of the rule that
lands already classified as commercial, industrial or residential before the effectivity of the CARL, or June 15, 1988, are
outside the coverage thereof. In the absence, therefore, of any convincing proof that the CA committed errors in its
appreciation of facts, this Court will refrain from disturbing the ruling of the same.

WHEREFORE, the instant petition is hereby DENIED. The Decision of the Court of Appeals, dated June 27, 2011, and
its Resolution dated January 31, 2012, in CA-G.R. SP No. 110585, which affirmed the Decision of the Office of the
President, dated March 23, 2009, are AFFIRMED.

SO ORDERED.
HOLY TRINITY REALTY v. VICTORIO DELA CRUZ, GR No. 200454, 2014-10-22
Facts:
Subject of the controversy is a parcel of land located in Brgy. Dakila, Malolos, Bulacan (Dakila property) registered in the
name of Freddie Santiago
The Dakila property used to be tenanted... but in August 1991, these tenants freely and voluntarily relinquished their
tenancy rights in favor of Santiago through their respective sinumpaang pahayag... in exchange for some financial
assistance and individual... homelots titled and distributed in their names... the petitioner purchased the remaining 208,050
square meters of the Dakila property from Santiago,[7] and later caused the transfer of the title to its name as well as
subdivided the Dakila property into six lots
The petitioner then developed the property by dumping filling materials on the topsoil, and by erecting a perimeter fence
and steel gate. It established its field office on the property.
the Sanggunian Bayan ng Malolos passed Municipal Resolution No. 16-98 reclassifying four of the six subdivided lots
Consequently, the Municipal Planning and Development Office (MPDO) of Malolos, Bulacan issued a Certificate of
Eligibility for Conversion (Certificate of Zoning Conformance),[11] as well as a Preliminary Approval and Locational
Clearance in favor of the... petitioner for its residential subdivision project on the Dakila property.
n Augus
On August 23, 1999, the petitioner purchased from Santiago another parcel of land with an area of 25,611 located in
Barangay Sumapang Matanda, Malolos, Bulacan (Sumapang Matanda property)
April 2006, a certain Silvino Manalad and the alleged heirs of Felix Surio wrote to the Provincial Agrarian Reform
Officer (PARO) of Bulacan to request an investigation of the sale of the Dakila property.[14] This was followed by the
letter request of
Sumapang Matanda Barangay Agrarian Reform Council (BARC) Chairman Numeriano L. Enriquez to place the Dakila
property within the coverage of Operation Land Transfer (OLT) pursuant to Presidential Decree No. 27,... The OIC-
Regional Director opined that the sale of the Dakila property was a prohibited transaction under Presidential Decree No.
27, Section 6 of Republic Act No. 6657[18] and DAR Administrative Order No. 1, Series of 1989; and that the petitioner
was... disqualified from acquiring land under Republic Act No. 6657 because it was a corporation.
Pending resolution of the Motion to Withdraw/Quash/Set Aside,... the Register of Deeds issued emancipation patents
(EPs) pursuant to the order of the OIC-Regional Director. The petitioner's titles were canceled and EPs were issued to the
respondents... on the petitioner's motion for reconsideration, the DAR Secretary said that the Dakila property was not
exempt from the coverage of Presidential Decree No. 27 and Republic Act No. 6657 because Municipal Resolution No.
16-98 did not change or reclassify but merely re-zoned... the Dakila property.
(OP) reversed the ruling of DAR Secretary Pangandaman upon its finding that the Dakila property had ceased to be
suitable for agriculture, and had been reclassified as residential land pursuant to Municipal Resolution No. 16-98... the CA
reversed and set aside the decision of the OP. It declared that prior to the effectivity of Republic Act No. 6657 on June 15,
1988 and even after the passage of Municipal Resolution No.
16-98 on March 4, 1998, the Dakila property was an agricultural land; that there was no valid reclassification
Issues:
Did the CA gravely err in limiting its decision to the issue of whether or not the Dakila property was subject to the
coverage of Republic Act No. 6657?
Was the Dakila property agricultural land within the coverage of Republic Act No. 6657 or Presidential Decree No. 27?
Was the issuance of the EPs pursuant to the August 16, 2006 order of the DAR Regional Office proper?
Ruling:
We reverse the CA, and reinstate the decision of the OP
The CA declared that the Dakila property as an agricultural land; and that there was no valid reclassification under
Municipal Resolution No. 16-98 because the law required an ordinance, not a resolution.
We agree in part with the CA.
Nonetheless,... the Dakila property was not an agricultural land subject to the coverage of Republic Act No. 6657 or
Presidential Decree No. 27.
Verily, the basic condition for land to be placed under the coverage of Republic Act No. 6657 is that it must either be
primarily devoted to or be suitable for agriculture.
Consequently, before land may be placed under the coverage of Republic Act No. 6657, two requisites must be met,
namely: (1) that the land must be devoted to agricultural activity; and (2) that the land must not be classified as mineral,
forest, residential, commercial or... industrial land.
Considering that the Dakila property has not been classified as mineral, forest, residential, commercial or industrial, the
second requisite is satisfied. For the first requisite to be met, however, there must be a showing that agricultural activity
is... undertaken on the property.
Here, no evidence was submitted to show that any agricultural activity like cultivation of the land, planting of crops,
growing of fruit trees,... and other farm activities and practices were... being performed on the Dakila property in order to
subject it to the coverage of Republic Act No. 6657.
Even if we supplemented the provisions of Presidential Decree No. 27, the outcome is still the same, because the Dakila
property was still not within the scope of the law. For land to be covered under Presidential Decree No. 27, it must be
devoted to rice or corn crops, and... there must be a system of share-crop or lease-tenancy obtaining therein. If either
requisite is absent, the land must be excluded.
ection 16. Procedure for Acquisition of Private Lands. - For purposes of acquisition of private lands, the following
procedures shall be follow
Section 16. Procedure for Acquisition of Private Lands. - For purposes of acquisition of private lands, the following
procedures shall be followed:
The unquestioned non-compliance with the procedures set by Republic Act No. 6657 and its relevant rules and regulations
further denied to the petitioner the exercise of its right of retention.[81] In doing so, the OIC-Regional Director
disregarded this... constitutionally guaranteed right. We cannot understate the value of the right of retention as the means
to mitigate the effects of compulsory land acquisition by balancing the rights of the landowner and the tenant and by
implementing the doctrine that social justice is not... meant to perpetrate an injustice against the landowner.
In fine, the order of the OIC-Regional Director was patently null and void. The denial of due process to the petitioner
sufficed to cast the impress of nullity on the official act thereby taken. A decision rendered without due process is void ab
initio and may be attacked... directly or collaterally.[83] All the resulting acts were also null and void. Consequently, the
EPs awarded to the respondents should be nullified.
Principles:
Land on which no agricultural activity is being conducted is not subject to the coverage of either Presidential Decree No.
27 or Republic Act No. 6657 (Comprehensive Agrarian Reform Law).
G.R. No. 191667, April 22, 2015
LAND BANK OF THE PHILIPPINES, Petitioner, v. EDUARDO M. CACAYURAN, Respondent,

MUNICIPALITY OF AGOO, LA UNION, Intervenor.

AMENDED DECISION
PERLAS-BERNABE, J.:
Before the Court are the following motions: (a) the Motion for Reconsideration1 dated May 22, 2013, filed by petitioner
Land Bank of the Philippines (LBP) assailing the Decision2 dated April 17, 2013 of the Court (April 17, 2013 Decision),
which upheld the Decision3 dated March 26, 2010 of the Court of Appeals (CA) in CA-G.R. CV. No. 89732 affirming
with modification the Decision4 dated April 10, 2007 of the Regional Trial Court of Agoo, La Union, Branch 31 in Civil
Case No. A-2473; (b) the Motion for Leave to Intervene with Pleading-in-Intervention Attached 5 dated July 8, 2013, filed
by the Municipality of Agoo, La Union (Municipality) praying that it be allowed to intervene in this case; and (c) the
Motion for Reconsideration-in-Intervention6 dated July 8, 2013, filed by the Municipality seeking that the Court set aside
its April 17, 2013 Decision and promulgate a new one in its stead dismissing the case (subject motions).
The Facts

The instant case arose from two (2) loans (Subject Loans) entered into by the Municipality with LBP in order to finance
the Redevelopment Plan of the Agoo Public Plaza (Public Plaza). Through Resolution Nos. 68-20057 and 139-
2005,8 the Sangguniang Bayan of the Municipality (Sangguniang Bayan) authorized its then-Mayor Eufranio Eriguel
(Mayor Eriguel) to enter into a P4,000,000.00-loan with LBP, the proceeds of which were used to construct ten (10)
kiosks at the Public Plaza. Around a year later, the SB issued Resolution Nos. 58-20069 and 128-2006,10 this time
authorizing Mayor Eriguel to obtain a P28,000,000.00-loan from LBP for the construction of a commercial center named
"Agoo People's Center" within the premises of the Public Plaza. In order to secure the Subject Loans, the Municipality
used as collateral, among others, a 2,323.75-square meter lot situated at the south eastern portion of the Public Plaza
(Plaza Lot).11

However, a group of residents, led by respondent Eduardo M. Cacayuran (Cacayuran), opposed the redevelopment of the
Public Plaza, as well as the funding therefor thru the Subject Loans, claiming that these were "highly irregular, violative
of the law, and detrimental to public interests, and will result to wanton desecration of the [Public Plaza]." 12 Further,
Cacayuran requested the municipal officers to furnish him with the various documents relating to the Public Plaza's
redevelopment, which, however, went unheeded.13 Thus, Cacayuran, invoking his right as a taxpayer, filed a
complaint14 against LBP and various officers of the Municipality, including Mayor Eriguel (but excluding the
Municipality itself as party-defendant), assailing the validity of the aforesaid loan agreements and praying that the
commercialization of the Public Plaza be enjoined.15

Initially, the municipal officers moved for the outright dismissal of the complaint, which was denied, thus constraining
them to file their respective answers. For its part, LBP asserted, inter alia, that Cacayuran did not have any cause of action
since he was not privy to the loan agreements entered into by LBP and the Municipality.16

During the pendency of the proceedings, the construction of the Agoo People's Center was completed. Later on,
the Sangguniang Bayan passed Municipal Ordinance No. 02-200717 declaring the area where such building stood as
patrimonial property of the Municipality.18
The RTC Ruling

In a Decision19 dated April 10, 2007, the RTC declared the Subject Loans null and void, finding that the resolutions
approving the procurement of the same were passed in a highly irregular manner and thus, ultra vires. As such, it
pronounced that the Municipality was not bound by the Subject Loans and that the municipal officers should, instead, be
held personally liable for the same. Further, it ruled that since the Plaza Lot is a property for public use, it cannot be used
as collateral for the Subject Loans.20

Aggrieved, LBP and the municipal officers appealed21 to the CA. However, the appeal of the municipal officers was
deemed abandoned and dismissed for their failure to file an appellants' brief despite due notice. 22 Thus, only LBP's appeal
was given due course by the CA.23
The CA Ruling

In a Decision24 dated March 26, 2010, the CA affirmed the ruling of the RTC, with modification excluding then-Vice
Mayor Antonio Eslao from personal liability arising from the Subject Loans. It held that: (a) Cacayuran had locus
standi to file the instant complaint, considering that he is a resident of the Municipality and the issue at hand involved
public interest of transcendental importance; (b) Resolution Nos. 68-2005, 138-2005, 58-2006, 126-2006 were invalidly
passed due to non-compliance with certain provisions of Republic Act No. 7160,25 otherwise known as the Local
Government Code of 1991 (LGC); (c) the Plaza Lot is property of public dominion, and thus, cannot be used as collateral;
and (d) the procurement of the Subject Loans were ultra vires acts for having been entered into without proper authority
and that the collaterals used therefor constituted improper disbursement of public funds.26

Dissatisfied, LBP filed a petition for review on certiorari27 before this Court.
Proceedings Before the Court

In a Decision28 dated April 17, 2013 the Court denied LBP's petition, and accordingly, affirmed the ruling of the CA.
Agreeing with the CA, the Court held that: (a) Cacayuran had legal standing to institute a taxpayer's suit;29 (b) Resolution
Nos. 68-2005, 139-2005, 58-2006, 126-2006 cannot be relied upon to validate the Subject Loans, as the LGC requires the
passing of an ordinance in order for any loan agreement to be valid;30 and (c) the procurement of the Subject Loans
are ultra vires acts of the municipal officers who approved the same, and thus, liability therefor shall devolve upon them.31

Undaunted, LBP moved for reconsideration, basically reiterating its earlier position that Cacayuran had no legal standing
to sue, and that Resolution Nos. 68-2005, 139-2005, 58-2006, and 126-2006 may be relied upon in validating the Subject
Loans.32

Meanwhile, the Municipality filed a Motion for Leave to Intervene with Pleading-In-Intervention Attached33 dated July 8,
2013 and a Motion for Reconsideration in-Intervention34 of even date, praying that it be included as a party-litigant to the
instant case. It contends that as a contracting party to the Subject Loans, it is an indispensable party to the action filed by
Cacayuran. As such, there cannot be any "real disposition" of the instant suit by reason of its exclusion from the same.

In opposition,35 Cacayuran maintains that LBP did not raise any new matter to warrant reconsideration of the April 17,
2013 Decision. Anent the Municipality's motion to intervene, Cacayuran insists that the Municipality is not a real party-in-
interest to the instant case as his complaint is against the municipal officers in their personal capacity for their ultra
vires acts which are not binding on the Municipality.

Finally, in its Comment on the Motion for Leave to Intervene and Motion for Reconsideration-in-Intervention36 dated
May 6, 2014, LBP agrees with the Municipality that the latter is an indispensable party to the instant case and as such,
should be included herein.
The Issue Before the Court

The core issue for the Court's resolution is whether or not the Municipality should be deemed as an indispensable party to
the instant case, and thus, be ordered impleaded herein.
The Court's Ruling
The Court rules in the affirmative.

Section 7, Rule 3 of the Rules of Court mandates that all indispensable parties should be joined in a suit, viz.:
SEC. 7. Compulsory joinder of indispensable parties. - Parties-in-interest without whom no final determination can be had
of an action shall be joined either as plaintiffs or defendants.

"An indispensable party is one whose interest will be affected by the court's action in the litigation, and without whom no
final determination of the case can be had. The party's interest in the subject matter of the suit and in the relief sought are
so inextricably intertwined with the other parties' that his legal presence as a party to the proceeding is an absolute
necessity. In his absence, there cannot be a resolution of the dispute of the parties before the court which is effective,
complete, or equitable."37 Thus, the absence of an indispensable party renders all subsequent actions of the court null and
void, for want of authority to act, not only as to the absent parties but even as to those present.38

Nevertheless, it must be stressed that the failure to implead any indispensable party to a suit does not necessarily result in
the outright dismissal of the complaint. In Heirs of Mesina v. Heirs of Fian, Sr.39 the Court definitively explained that in
instances of non-joinder of indispensable parties, the proper remedy is to implead them and not to dismiss the case:
The non-joinder of indispensable parties is not a ground for the dismissal of an action. At any stage of a judicial
proceeding and/or at such times as are just, parties may be added on the motion of a party or on the initiative of the
tribunal concerned. If the plaintiff refuses to implead an indispensable party despite the order of the court, that court may
dismiss the complaint for the plaintiffs failure to comply with the order. The remedy is to implead the non-party
claimed to be indispensable.40 (Emphases and underscoring supplied)

In this case, a judicious review of the records reveals that Cacayuran's complaint against LBP and the municipal officers
primarily prays that the commercialization of the Public Plaza be enjoined and also, that the Subject Loans be declared
null and void for having been unlawfully entered into by the said officers. However, Cacayuran failed to implead in his
complaint the Municipality, a real party-in-interest41 and an indispensable party that stands to be directly affected by any
judicial resolution on the case, considering that: (a) the contracting parties to the Subject Loans are LBP and the
Municipality; and (b) the Municipality owns the Public Plaza as well as the improvements constructed thereon, including
the Agoo People's Center. As the Municipality aptly points out:42
3. To recapitulate: The case had its beginnings in the two (2) Loans obtained by [the Municipality] from [LBP] and by
the Board Resolutions passed and adopted by the Sangguniang Bayan of Agoo, La Union, together with the Mayor and
Vice-Mayor of the Municipality.

xxxx

3d. The two (2) Loans were covered and evidenced by separate Loan Agreements and Mortgage/Assignment
Documents. The parties which entered into and executed the covering documents were [LBP] as lender and [the
Municipality] as borrower.

3e. When the construction was about 40% complete, [Cacayuran] as a taxpayer filed the case against the: (i) Mayor; (ii)
Vice-Mayor; and (iii) Ten (10) Members [of] the Sangguniang Bayan [of] Agoo, La Union, as defendants. [The
Municipality] was excluded, and was not impleaded as a defendant in the case.

xxxx

Indeed, [the Municipality! Ion whose lands stands and is found the Agoo Public Plaza, where the Kiosks and
Commercial Building were under construction and which constructions were sought to be restrained] stands to be
benefited or injured by the judgment in the case so filed or the party entitled to the avails of the case and is,
therefore, the real party-in-interest.

xxxx

3k. Without having to say so, the RTC dispositions as affirmed with modification by the CA Decision which, in
turn was affirmed by the SC Decision must not be binding upon [the Municipality], the real party-in-interest, the
indispensable party in fact, not impleaded as defendant in this case.43 (Emphases and underscoring supplied).

The Court observes that it is only now that the issue of the Municipality's exclusion from the instant case, despite its status
as an indispensable party, became apparent. This recent finding may be credited to the fact that the initial parties before
the Court, i.e., LBP and Cacayuran, have dissimilar interests from that of the Municipality, and, hence, had no incentive to
raise the issue of the latter's status as an indispensable party. On the one hand, Cacayuran's interest to the case is centered
on the declaration of nullity of the Subject Loans, as well as the enjoinment of the commercialization of the Public Plaza;
and on the other hand, LBP's interest to the case is anchored on its capacity as creditor to the Subject Loans. To the mind
of the Court, the municipal officers would have been in the best position to raise this issue; however, they were unable to
do so because their appeal before the CA was deemed abandoned for their failure to file an appellants' brief on time.

Be that as it may, the Court is not precluded from taking cognizance of the Municipality's status as an indispensable party
even at this stage of the proceedings. Indeed, the presence of indispensable parties is necessary to vest the court with
jurisdiction44 and, corollarily, the issue on jurisdiction may be raised at any stage of the proceedings.45 Thus, as it has now
come to the fore that any resolution of this case would not be possible and, hence, not attain any real finality due to the
non-joinder of the Municipality, the Court is constrained to set aside all subsequent actuations of the courts a quo in this
case, including that of the Court's, and remand the case all the way back to the RTC for the inclusion of all indispensable
parties to the case and its immediate disposition on the merits.46 With this, the propriety of the Municipality's present
intervention is now mooted.

WHEREFORE, the subject motions are PARTLY GRANTED. The Decision dated April 17, 2013 of the Court, which
upheld the Decision dated March 26, 2010 of the Court of Appeals in CA-G.R. CV. No. 89732 affirming with
modification the Decision dated April 10, 2007 of the Regional Trial Court of Agoo, La Union, Branch 31 in Civil Case
No. A-2473 is hereby SET ASIDE. Accordingly, the instant case is REMANDED to the court a quo, which is
hereby DIRECTED to order respondent Eduardo M. Cacayuran to implead all indispensable parties and
thereafter, PROCEED with the resolution of the case on the merits WITH DISPATCH.

SO ORDERED.
G.R. No. 159110 : December 10, 2013

VALENTINO L. LEGASPI, Petitioner, v. CITY OF CEBU, T.C. (TITO) SAYSON AND RICARDO
HAPITAN,Respondents.

FACTS:

On January 27, 1997 the Sangguniang Panlungsod of the City of Cebu enacted Ordinance No. 1664 to authorize the traffic
enforcers of Cebu City to immobilize any motor vehicle violating the parking restrictions and prohibitions defined in the
Traffic Code of Cebu City.

On July 29, 1997, Atty. Bienvenido Jaban (Jaban,Sr.) and his son Atty. Bienvenido Douglas Luke Bradbury Jaban
(Jaban,Jr.) brought suit in the RTC against the City of Cebu, then represented by Hon. Alvin Garcia, its City Mayor, the
Sangguniang Panlungsod of Cebu City and its Presiding Officer, Hon. Renato V. Osme, and the chairman and operatives
or officers of the City Traffic Operations Management (CITOM),seeking the declaration of Ordinance No. 1644 as
unconstitutional for being in violation of due process and for being contrary to law, and damages.

Their complaint alleged that on June 23, 1997, Jaban Sr. had properly parked his car in a paying parking area on Manalili
Street, Cebu City to get certain records and documents from his office and after less than 10 minutes, he had found his car
being immobilized by a steel clamp. His car was impounded for three days, and was informed at the office of the CITOM
that he had first to pay P4,200.00 as a fine to the City Treasurer of Cebu City for the release of his car but such imposition
the fine was without any court hearing and without due process of law. He was also compelled to payP1,500.00 (itemized
as P500.00 for the clamping andP1,000.00 for the violation) without any court hearing and final judgment;

That on May 19, 1997, Jaban, Jr. parked his car in a very secluded place where there was no sign prohibiting parking; that
his car was immobilized by CITOM operative and that he was compelled to pay the total sum ofP1,400.00 for the release
of his car without a court hearing and a final judgment rendered by a court of justice.

On August 11, 1997, Valentino Legaspi (Legaspi) likewise sued in the RTC the City of Cebu, demanded the delivery of
personal property, declaration of nullity of theTraffic Code of Cebu City, and damages.

He averred that on the morning of July 29, 1997, he had left his car occupying a portion of the sidewalk and the street
outside the gate of his house to make way for the vehicle of theanayexterminator, upon returning outside, his car was
towed by the group even if it was not obstructing the flow of traffic.

The cases were consolidated. The RTC rendered its decision declaring Ordinance No. 1664 as null and void

The City of Cebu and its co-defendants appealed to the CA. The CA reversed the decision of the RTC declaring the
Ordinance No. 1664 valid.

Upon the denial of their respective motions for reconsideration the Jabans and Legaspi came to the Court via separate
petitions for review on certiorari. The appeals were consolidated.

ISSUE: Whether or not Ordinance No. 1664 is valid and constitutional.

HELD: The Court of Appeals decision is sustained.

CONSTITUTIONAL LAW - Tests for a valid ordinance

In City of Manila v. Laguio, Jr., G.R. No. 118127, April 12, 2005the Court restates the tests of a valid ordinance thusly:

The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be valid, it
must not only be within the corporate powers of the local government unit to enact and must be passed according to the
procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the
Constitution or any statute; (2) must not be unfair or oppressive;(3) must not be partial or discriminatory; (4) must not
prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable.

As jurisprudence indicates, the tests are divided into the formal (i.e., whether the ordinance was enacted within the
corporate powers of the LGU, and whether it was passed in accordance with the procedure prescribed by law), and the
substantive (i.e., involving inherent merit, like the conformity of the ordinance with the limitations under the Constitution
and the statutes, as well as with the requirements of fairness and reason, and its consistency with public policy).

InMetropolitan Manila Development Authorityv. Bel-Air Village Association,Inc., G.R. No. 135962, March 27, 2000the
Court cogently observed that police power is lodged primarily in the National Legislature. It cannot be exercised by any
group or body of individuals not possessing legislative power. The National Legislature, however, may delegate this
power to the President and administrative boards as well as the lawmaking bodies of municipal corporations or local
government units. Once delegated, the agents can exercise only such legislative powers as are conferred on them by the
national lawmaking body. (emphasis supplied)

In the present case, delegated police power was exercised by the LGU of the City of Cebu.

The CA opined, and correctly so, that vesting cities like the City of Cebu with the legislative power to enact traffic rules
and regulations was expressly done through Section 458 of the LGC, and also generally by virtue of the General Welfare
Clause embodied in Section 16 of the LGC.

The police power granted to local government units must always be exercised with utmost observance of the rights of the
people to due process and equal protection of the law. Such power cannot be exercised whimsically, arbitrarily or
despotically as its exercise is subject to a qualification, limitation or restriction demanded by the respect and regard due to
the prescription of the fundamental law, particularly those forming part of the Bill of Rights. Individual rights, it bears
emphasis, may be adversely affected only to the extent that may fairly be required by the legitimate demands of public
interest or public welfare. Due process requires the intrinsic validity of the law in interfering with the rights of the person
to his life, liberty and property.

Judged according to the foregoing enunciation of the guaranty of due process of law, the contentions of the petitioners
cannot be sustained. Even under strict scrutiny review, Ordinance No. 1664 met the substantive tests of validity and
constitutionality by its conformity with the limitations under the Constitution and the statutes, as well as with the
requirements of fairness and reason, and its consistency with public policy.

The subject of Ordinance No. 1664 is to ensure "a smooth flow of vehicular traffic in all the streets in the City of Cebu at
all times".

To reiterate, the clamping of the illegally parked vehicles was a fair and reasonable way to enforce the ordinance against
its transgressors; otherwise, the transgressors would evade liability by simply driving away. DENIED.
CASE DIGEST: BOY SCOUTS OF THE PHILIPPINES v. COMMISSION ON AUDIT. G.R. No.177131; June 7,
2011.

FACTS: This case arose when the COA issued Resolution No. 99-011on August 19, 1999 ("the COA Resolution"), with
the subject "Defining the Commissions policy with respect to the audit of the Boy Scouts of the Philippines." In its
whereas clauses, the COA Resolution stated that the BSP was created as a public corporation under Commonwealth Act
No. 111, as amended by Presidential Decree No. 460 and Republic Act No. 7278; that in Boy Scouts of the Philippines v.
National Labor Relations Commission, the Supreme Court ruled that the BSP, as constituted under its charter, was a
"government-controlled corporation within the meaning of Article IX(B)(2)(1) of the Constitution"; and that "the BSP is
appropriately regarded as a government instrumentality under the 1987 Administrative Code." The COA Resolution also
cited its constitutional mandate under Section 2(1), Article IX (D).Finally, the COA Resolution reads:

NOW THEREFORE, in consideration of the foregoing premises, the COMMISSION PROPER HAS RESOLVED, AS IT
DOES HEREBY RESOLVE,to conduct an annual financial audit of the Boy Scouts of the Philippines in accordance with
generally accepted auditing standards, and express an opinion on whether the financial statements which include the
Balance Sheet, the Income Statement and the Statement of Cash Flows present fairly its financial position and results of
operations.

xxxx

BE IT RESOLVED FURTHERMORE, that for purposes of audit supervision,the Boy Scouts of the Philippines shall be
classified among the government corporations belonging to the Educational, Social, Scientific, Civic and Research
Sectorunder the Corporate Audit Office I, to be audited, similar to the subsidiary corporations, by employing the team
audit approach
ISSUE: Does COA have jurisdiction over BSP?

HELD: After looking at the legislative history of its amended charter and carefully studying the applicable laws and the
arguments of both parties, [the Supreme Court found] that the BSP is a public corporation and its funds are subject to the
COA's audit jurisdiction.

The BSP Charter (Commonwealth Act No. 111, approved on October 31, 1936), entitled "An Act to Create a Public
Corporation to be Known as the Boy Scouts of the Philippines, and to Define its Powers and Purposes" created the BSP as
a "public corporation"

There are three classes of juridical persons under Article 44 of the Civil Code and the BSP, as presently constituted under
Republic Act No. 7278,falls under the second classification.Article 44 reads:

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2)Other corporations,institutions and entities for public interest or purpose created by law; their personality begins as
soon as they have been constituted according to law;
(3) Corporations, partnerships and associations forprivate interest or purposeto which the law grants a juridical
personality, separate and distinct from that of each shareholder, partner or member.

The BSP, which is a corporation created for a public interest or purpose, is subject to the law creating it under Article 45
of the Civil Code, which provides:

Art. 45.Juridical persons mentioned in Nos. 1 and 2 of the preceding article are governed by the laws creating or
recognizing them.
Private corporations are regulated by laws of general application on the subject.

Partnerships and associations for private interest or purpose are governed by the provisions of this Code concerning
partnerships.

The purpose of the BSP as stated in its amended charter shows that it was created in order to implement a State policy
declared in Article II, Section 13 of the Constitution, which reads:

Section 13. The State recognizes the vital role of the youth in nation-building and shall promote and protect their physical,
moral, spiritual, intellectual, and social well-being. It shall inculcate in the youth patriotism and nationalism, and
encourage their involvement in public and civic affairs.

Evidently, the BSP, which was created by a special law to serve a public purpose in pursuit of a constitutional mandate,
comes within the class of "public corporations" defined by paragraph 2, Article 44 of the Civil Code and governed by the
law which creates it, pursuant to Article 45 of the same Code. DENIED.
664 Phil. 429

People vs Luis Morales

BRION, J.:
We review the petition for review on certiorari, filed by the People of the Philippines (the People), to assail the
Resolution[1] of the First Division of the Sandiganbayan in Criminal Case No. 27431, entitled "People of the Philippines
versus Luis J. Morales."

Background Facts

On June 13, 1991, then President Corazon Aquino issued Administrative Order No. 223 to commemorate the
100th anniversary of the declaration of Philippine Independence and thereby created the Committee for the National
Centennial Celebrations in 1998 (Committee).

In 1993, then President Fidel V. Ramos issued Executive Order No. 128 (EO 128), entitled "Reconstituting the
Committee for the Preparation of the National Centennial Celebrations in 1998." EO 128 renamed the Committee as the
"National Centennial Commission" (NCC). The mandate of the NCC was to "take charge of the nationwide preparations
for the National Celebration of the Philippine Centennial of the Declaration of Philippine Independence and the
Inauguration of the Malolos Congress."[2] The late Vice-President Salvador Laurel was appointed as NCC Chairman.

On March 10, 1996, the NCC and the Bases Conversion Development Authority (BCDA)[3] organized the Philippine
Centennial Expo '98 Corporation or Expocorp whose primary purpose was to operate, administer, manage and develop the
Philippine Centennial International Exposition 1998 (Expo `98).[4]

The Philippine Centennial project was marred by numerous allegations of anomalies, among them, the lack of public
biddings. In 1998, Senator Ana Dominique Coseteng delivered a privilege speech in the Senate denouncing these
anomalies. Because of this speech, the Senate Blue Ribbon Committee conducted an investigation on the Philippine
Centennial project. In 1999, then President Joseph Estrada created the Ad Hoc and Independent Citizen's Committee
(AHICC), also for the purpose of investigating these alleged anomalies. Both the Senate Blue Ribbon Committee and the
AHICC recommended to the Office of the Ombudsman that a more exhaustive investigation of the Philippine Centennial
project be conducted.

The investigation that followed resulted in the filing in 2001 of an Information[5] by the Ombudsman's Fact-Finding and
Investigation Bureau against respondent Luis J. Morales (Morales), the acting president of Expocorp at the time relevant
to the case. This Information served as basis for Criminal Case No. 27431 that we now consider.

The Information against Morales for violation of Section 3(e) of Republic Act (R.A.) No. 3019[6] reads:

That on or about September 6, 1997 or sometime prior or subsequent thereto in Pasig City, Philippines, and within the
jurisdiction of this Honorable Court, the above-named accused, a public officer, being then the Pres. of Expo Corporation,
Pasig City, a government corporation, and as such was issued one (1) Mercede[s] Benz, Model 1997-C230, bearing Serial
No. WDB202023-1F-602122, and Engine No. 111974-12-027093 for his official use, and while in the performance of his
official functions, acting thru evident bad faith and manifest partiality, did then and there willfully, unlawfully, and
criminally give unwarranted benefits to one Rodolfo M. Lejano by selling to him said Mercede[s] Benz through Newton
Motors, Inc. represented by its President Exequiel V. Mariano in the amount of Two Million Two Hundred Fifty
Thousand Pesos (P2,250,000.00), without the requisite public bidding nor approval of the Board of Directors of Expo
Corporation and thereafter failed to deposit the proceeds of the sale of the aforementioned vehicle to the account of Expo
Corporation, to the damage and prejudice of the Corporation and the public interest as well.[7]

In the proceedings before the Sandiganbayan, Morales moved for the dismissal of the case for lack of jurisdiction over his
person and over the offense charged. He alleged that Expocorp is a private corporation and that he is not a public
employee or official. He also alleged that the Sandiganbayan has no jurisdiction over his person or the offense charged as
he is a private individual who has not been charged jointly with other public officials or employees. He added that
Expocorp is not a government-owned or controlled corporation because it was not created by a special law, it did not have
an original charter, and a majority of Expocorp's capital stock is owned by private individuals. He claimed that he did not
receive any compensation from the government as defined in Section 2(a) of R.A. No. 3019, and the compensation he
received as Expocorp's acting president was paid from Expocorp's funds.[8]

In its comment to Expocorp's motion, the Office of the Special Prosecutor, representing the People, insisted that Expocorp
is a government-owned corporation since its articles of incorporation showed that of its ten listed subscribers, BCDA held
stocks valued at P99,999,100.00, while the stocks held by the rest of the subscribers had a total value of P900.00. The
People further argued, based on the Court's ruling in Salvador H. Laurel v. Aniano A. Desierto,[9] that NCC Chairman
Laurel was a public officer; thus, Morales was likewise a public officer since his appointment flowed from the former's
exercise of his authority as chairman of both NCC and Expocorp.

In his reply, Morales averred that upon Expocorp's incorporation, BCDA owned essentially all of Expocorp's stocks. Two
months after its incorporation, however, the Board of Directors of Expocorp issued a resolution declaring all its unissued
and unsubscribed shares open for subscription. Global Clark Assets Corporation (Global) subscribed to essentially all of
these unissued and unsubscribed shares; thus, Global became the majority owner with 55.16% of Expocorp's stocks, while
BCDA was left as minority stockholder with 44.84% of Expocorp's stocks. Morales also asserted that the ruling
in Laurel[10] applied exclusively to Chairman Laurel. Morales concluded that since Expocorp is a private corporation and
an entity distinct from NCC, he, as its president, is not a public officer.

The Sandiganbayan Resolution

The Sandiganbayan, after considering the arguments of the parties, ruled that the position of a president of a government-
owned or controlled corporation clearly falls within its jurisdiction. However, before Morales could be held accountable
as Expocorp's president, it must first be established that Expocorp is a government-owned or controlled corporation.

The Sandiganbayan explained in Laurel,[11] that the Court only held that Laurel is a public officer without ruling on
whether Expocorp is a private or a government-owned corporation. The Court also held that NCC performed executive
functions, hence, it was a public office; consequently, its chairman, Laurel, was a public officer. Morales, in the case at
bar, is being charged as president of Expocorp only and not as an NCC official.

In ruling that Expocorp is a private corporation, the Sandiganbayan stated that it was not created by a special law nor did
it have an original charter. It was organized under the Corporation Code and was registered with the Securities and
Exchange Commission. According to the Sandiganbayan, Expocorp could not derive its public character from the fact that
it was organized by the NCC. The Sandiganbayan ruled that applying the provisions of the Revised Administrative Code
of 1987, Expocorp is a private corporation because Global owns 55.16% of its stocks; hence, its officers and employees
are private individuals who are outside the jurisdiction of the Sandiganbayan. On this basis, the Sandiganbayan dismissed
the information against Morales.

The Sandiganbayan denied the motion the People subsequently filed;[12] hence, the present petition.
The Issues

The People submits the following grounds:

Expocorp was organized and created for the sole purpose of performing the executive functions of the National
(1) Centennial Commission and the sovereign functions of the government, and should be considered as a public
office.
Petitioner, as president of Expocorp, should rightfully be considered as a "public officer", falling under the
(2)
jurisdiction of the Sandigangayan.[13]
The Court's Ruling

We deny the petition for lack of merit.

The nature of Expocorp

The People submits that Expocorp was an extension of the NCC as provided in Expocorp's Articles of Incorporation,
specifically Section 2[14] which states Expocorp's primary purpose. It provides that Expocorp's primary purpose was to
establish and operate Expo '98 - an NCC project. The People stated in its petition, thus -

The position occupied by respondent as President of Expocorp stemmed from his appointment as such by NCC Chair and
Expocorp Chief Executive Officer Salvador H. Laurel. On the basis of such appointment, respondent served as the
government's representative and Laurel's alter ego in running the affairs of Expocorp. As held in the Laurel vs.
Desierto case, "even assuming that Expocorp is a private corporation, petitioner's position as Chief Executive officer
(CEO) of Expocorp arose from his Chairmanship of the NCC. Consequently, his acts or omissions as CEO of Expocorp
must be viewed in the light of his powers and functions as NCC Chair."

Having established that Expocorp, by extension, performed part of the sovereign functions delegated to the NCC, it
follows that respondent, as President of Expocorp, performed tasks that likewise fall within the contemplation of the
government's sovereign functions.[15]

We do not agree with the People.

Expocorp is a private corporation as found by the Sandiganbayan. It was not created by a special law but was
incorporated under the Corporation Code and was registered with the Securities and Exchange Commission.[16] It is also
not a government-owned or controlled corporation. Although BCDA, which owned 999,991 shares[17] of its shares, was
one of Expocorp's original incorporators, the Board of Directors of Expocorp allowed Global to buy 1,229,998 of its
unused and unsubscribed shares two months after its incorporation. With the BCDA as a minority stockholder, Expocorp
cannot be characterized as a government-owned or controlled corporation. In Dante V. Liban, et al. v. Richard J.
Gordon,[18] we pointedly said:

A government-owned or controlled corporation must be owned by the government, and in the case of a stock corporation,
at least a majority of its capital stock must be owned by the government.
The Sandiganbayan's Jurisdiction

Section 5, Article XIII of the 1973 Constitution defines the jurisdiction of the Sandiganbayan: [19]

Sec. 5. The [Batasang Pambansa] shall create a special court, to be known as Sandiganbayan, which shall have
jurisdiction over criminal and civil cases involving graft and corrupt practices and such other offenses committed by
public officers and employees, including those in government-owned or controlled corporations, in relation to their office
as may be determined by law.

R.A. No. 8249,[20] which amended Presidential Decree No. 1606,[21] delineated the jurisdiction of the Sandiganbayan as
follows:

Section 4. Section 4 of the same decree is hereby further amended to read as follows:

Sec. 4. Jurisdiction. -- The Sandiganbayan shall exercise exclusive original jurisdiction in all cases involving:

a. Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-graft and Corrupt Practices Act,
Republic Act No. 1379, and Chapter II, Section 2, Title VII, Book II of the Revised Penal Code, where one or more of the
accused are officials occupying the following positions in the government whether in a permanent, acting or interim
capacity, at the time of the commission of the offense:

(1) Officials of the executive branch occupying the positions of regional director and higher, otherwise classified as
Grade '27' and higher, of the Compensation and Position Classification Act of 1989 (Republic Act No. 6758), specifically
including:

(a) Provincial governors, vice-governors, members of the Sangguniang panlalawigan and provincial treasurers,
assessors, engineers and other provincial department heads;

(b) City mayors, vice-mayors, members of the sangguniang Panlungsod, city treasurers, assessors, engineers and other
city department heads;

(c ) Officials of the diplomatic service occupying the position of consul and higher;

(d) Philippine army and air force colonels, naval captains, and all officers of higher rank;

(e) Officers of the Philippine National Police while occupying the position of provincial director and those holding the
rank of senior superintendent or higher;

(f) City and provincial prosecutors and their assistants, and officials and prosecutors in the Office of the Ombudsman
and special prosecutor;

(g) Presidents, directors or trustees, or managers of government-owned or -controlled corporations, state universities or
educational institutions or foundations;

(2) Members of Congress and officials thereof classified as Grade '27' and up under the Compensation and Position
Classification Act of 1989;

(3) Members of the judiciary without prejudice to the provisions of the Constitution;
(4) Chairmen and members of Constitutional Commissions, without prejudice to the provisions of the Constitution; and

(5) All other national and local officials classified as Grade '27' and higher under the Compensation and Position
Classification Act of 1989.

b. Other offenses or felonies whether simple or complexed with other crimes committed by the public officials and
employees mentioned in subsection a of this section in relation to their office.

c. Civil and criminal cases filed pursuant to and in connection with Executive Order Nos. 1, 2, 14 and 14-A, issued in
1986. (Underlining supplied.)

Since Expocorp is a private corporation, not a government-owned or controlled corporation, Morales, as Expocorp's
president who now stands charged for violating Section 3(e) of R.A. No. 3019 in this capacity, is beyond the
Sandiganbayan's jurisdiction.

WHEREFORE, premises considered, the petition for review on certiorari is DISMISSED for lack of merit. The
Sandiganbayan's June 15, 2004 Resolution in Criminal Case No. 27431, entitled "People of the Philippines versus Luis J.
Morales," is AFFIRMED. No costs.

SO ORDERED.
EMILIO GANCAYCO v. CITY GOVERNMENT OF QUEZON CITY, GR No. 177807, 2011-10-11
Facts:
In the early 1950s, retired Justice Emilio A. Gancayco bought a parcel of land located at
EDSA
,... Quezon City with an area of 375 square meters and covered by Transfer Certificate of Title (TCT) No. RT114558.
On 27 March 1956, the Quezon City Council issued Ordinance No. 2904, entitled "An Ordinance Requiring the
Construction of Arcades, for Commercial Buildings to be Constructed in Zones Designated as Business Zones in the
Zoning Plan of Quezon City, and Providing Penalties in
Violation Thereof."
Ordinance No. 2904 required the relevant property owner to construct an arcade with a width of 4.50 meters and height of
5.00 meters along EDSA, from the north side of Santolan Road to one lot after Liberty Avenue, and from one lot before
Central Boulevard to the Botocan... transmission line.
At the outset, it bears emphasis that at the time Ordinance No. 2904 was passed by the city council, there was yet no
building code passed by the national legislature.
In effect, property owners relinquish the use of the space for use as an arcade for pedestrians, instead of using it for their
own purposes.
The ordinance was amended several times. On 8 August 1960, properties located at the Quezon City-San Juan boundary
were exempted by Ordinance No. 60-4477 from the construction of arcades. This ordinance was further amended by
Ordinance No. 60-4513, extending the exemption to... commercial buildings from Balete Street to Seattle Street.
Ordinance No. 6603 dated 1 March 1966 meanwhile reduced the width of the arcades to three meters for buildings along
V. Luna Road, Central District, Quezon City.
The ordinance covered the property of Justice Gancayco.
Justice Gancayco sought the exemption of a two-storey building being constructed on his property from the application of
Ordinance No. 2904 that he be exempted from constructing an arcade on... his property.
the City Council acted favorably on Justice Gancayco's request and issued Resolution No. 7161, S-66, "subject to the
condition that upon notice by the City Engineer, the owner shall, within reasonable time, demolish the enclosure of said
arcade at his own... expense when public interest so demands."
Decades after,... the
MMDA... conducted operations to clear obstructions along the sidewalk of EDSA in Quezon City pursuant to Metro
Manila Council's (MMC) Resolution No. 02-28, Series of 2002.
The... resolution authorized the MMDA and local government units to "clear the sidewalks, streets, avenues, alleys,
bridges, parks and other public places in Metro Manila of all illegal structures and obstructions."
On 28 April 2003, the MMDA sent a notice of demolition to Justice Gancayco alleging that a portion of his building
violated the
Building Code... in relation to Ordinance No. 2904.
Justice Gancayco did not comply with the notice. Soon after the lapse of the fifteen (15) days, the MMDA proceeded to
demolish the party wall, or what was referred to as the "wing walls," of the ground floor structure.
On 29 May 2003, Justice Gancayco filed a Petition... with prayer for a temporary restraining order and/or writ of
preliminary injunction before the Regional Trial Court (RTC) of Quezon City,... seeking to prohibit the
MMDA and the City Government of Quezon City from demolishing his property.
The City Government of Quezon City claimed that the ordinance was a valid exercise of police power, regulating the use
of property in a business zone.
Similarly, the MMDA alleged that Justice Gancayco could not seek the nullification of an ordinance that he had already
violated, and that the ordinance enjoyed the presumption of constitutionality.
Issues:
WHETHER OR NOT JUSTICE GANCAYCO WAS ESTOPPED FROM ASSAILING THE VALIDITY OF
ORDINANCE NO. 2904
Ruling:
Justice Gancayco questioned the constitutionality of the ordinance on two grounds: (1) whether the ordinance "takes"
private property without due process of law and just compensation; and (2) whether the ordinance violates the equal
protection of rights because it... allowed exemptions from its application.
On the first ground, we find that Justice Gancayco may still question the constitutionality of the ordinance to determine
whether or not the ordinance constitutes a "taking" of private property without due process of law and just compensation.
It was only in 2003 when he was... allegedly deprived of his property when the MMDA demolished a portion of the
building. Because he was granted an exemption in 1966, there was no "taking" yet to speak of.
in Acebedo Optical Company, Inc. v. Court of Appeals,... we held:
It is therefore decisively clear that estoppel cannot apply in this case. The fact that petitioner acquiesced in the special
conditions imposed by the City Mayor in subject business permit does not preclude it from challenging the said
imposition, which is ultra... vires or beyond the ambit of authority of respondent City Mayor. Ultra vires acts or acts
which are clearly beyond the scope of one's authority are null and void and cannot be given any effect. The doctrine of
estoppel cannot operate to give effect to an act... which is otherwise null and void or ultra vires.
Anent the second ground, we find that Justice Gancayco may not question the ordinance on the ground of equal protection
when he also benefited from the exemption. It bears emphasis that Justice Gancayco himself requested for an exemption
from the application of the ordinance in
1965 and was eventually granted one. Moreover, he was still enjoying the exemption at the time of the demolition as there
was yet no valid notice from the city engineer. Thus, while the ordinance may be attacked with regard to its different
treatment of properties that appears... to be similarly situated, Justice Gancayco is not the proper person to do so.
Principles:
G.R. Nos. 174730-37 February 9, 2011
ROSALIO S. GALEOS, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. Nos. 174845-52
PAULINO S. ONG, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES, Respondent.
DECISION
VILLARAMA, JR., J.:
The consolidated petitions at bar seek to reverse and set aside the Decision1 promulgated on August 18, 2005 by the
Sandiganbayan convicting petitioners Paulino S. Ong (Ong) of eight counts and Rosalio S. Galeos (Galeos) of four counts
of falsification of public documents under Article 171, paragraph 4 of the Revised Penal Code, as amended.
The facts are as follows:
Ong was appointed Officer-in-Charge (OIC)-Mayor of the Municipality of Naga, Cebu on April 16, 1986. He was elected
Mayor of the same municipality in 1988 and served as such until 1998.2
On June 1, 1994, Ong extended permanent appointments to Galeos and Federico T. Rivera (Rivera) for the positions of
Construction and Maintenance Man and Plumber I, respectively, in the Office of the Municipal Engineer.3 Prior to their
permanent appointment, Galeos and Rivera were casual employees of the municipal government.
In their individual Statement of Assets, Liabilities and Net Worth (SALN) for the year 1993, Galeos answered "No" to the
question: "To the best of your knowledge, are you related within the fourth degree of consanguinity or of affinity to
anyone working in the government?" while Rivera indicated "n/a" on the space for the list of the names of relatives
referred to in the said query.4 The boxes for "Yes" and "No" to the said query were left in blank by Galeos in his 1994 and
1995 SALN.5 Rivera in his 1995 SALN answered "No" to the question on relatives in government.6 In their 1996 SALN,
both Galeos and Rivera also did not fill up the boxes indicating their answers to the same query.7 Ong’s signature appears
in all the foregoing documents as the person who administered the oath when Galeos and Rivera executed the foregoing
documents.
In a letter-certification dated June 1, 1994 addressed to Ms. Benita O. Santos, Regional Director, Civil Service
Commission (CSC), Regional Office 7, Cebu City, it was attested that:
This is to certify that pursuant to the provisions of R.A. 7160, otherwise known as the Local Government Code of 1991,
all restrictions/requirements relative to creation of positions, hiring and issuance of appointments, Section 325 on the
limitations for personal services in the total/supplemental appropriation of a local government unit; salary rates; abolition
and creation of positions, etc.; Section 76, organizational structure and staffing pattern; Section 79 on nepotism; Section
80, posting of vacancy and personnel selection board; Section 81 on compensation, etc. have been duly complied with in
the issuance of this appointment.
This is to certify further that the faithful observance of these restrictions/requirements was made in accordance with the
requirements of the Civil Service Commission before the appointment was submitted for review and action. 8 (Emphasis
supplied.)
The above certification was signed by Ong and HR Officer-Designate Editha C. Garcia.
On October 1, 1998, the members of the Sangguniang Bayan of Naga, Cebu filed a letter-complaint9 before the Office of
the Ombudsman (OMB)-Visayas against Ong (then incumbent Vice-Mayor of Naga), Galeos and Rivera for dishonesty,
nepotism, violation of the Code of Conduct and Ethical Standards for Public Officials and Employees and Anti-Graft and
Corrupt Practices Act, and for the crime of falsification of public documents.
On August 11, 2000, Ombudsman Aniano Desierto approved the recommendation of OIC-Deputy Ombudsman for the
Visayas that criminal charges be filed against Ong, Galeos and Rivera for falsification of public documents under Article
171 of the Revised Penal Code, as amended, in connection with the Certification dated June 1, 1994 issued by Ong and
the false statements in the 1993, 1995 and 1996 SALN of Rivera and the 1993, 1994, 1995 and 1996 SALN of Galeos.10
On August 16, 2000, the following Informations11 were filed against the petitioners:
Criminal Case No. 26181
That on or about the 14th day of February, 1994, in the Municipality of Naga, Province of Cebu, Philippines, and within
the jurisdiction of this Honorable Court, above-named [Paulino S. Ong and Rosalio S. Galeos] accused, public officers,
being the former Municipal Mayor and Construction and Maintenance Man of the Office of the Municipal Engineer,
Municipality of Naga, Cebu, in such capacity and committing the offense in relation to office, conniving and
confederating together and mutually helping with each other, with deliberate intent, with intent to falsify, did then and
there willfully, unlawfully and feloniously falsify a public document, consisting of a Sworn Statement of Assets and
Liabilities, Disclosure of Business Interests and Financial Connections and Identification of Relatives In the Government
Service, as of December 31, 1993, filed by accused Rosalio S. Galeos and subscribed and sworn to before accused Paulino
S. Ong, wherein accused made it appear therein that they are not related within the fourth degree of consanguinity or
affinity thereby making untruthful statements in a narration of facts, when in truth and in fact, accused very well k[n]ew
that they are related with each other, since accused Rosalio S. Galeos is related to accused Paulino S. Ong within the
fourth degree of consanguinity, the mother of accused Rosalio S. Galeos [being] the sister of the mother of accused
Paulino S. Ong.
CONTRARY TO LAW. (Emphasis supplied.)
Criminal Case No. 26182
That on or about the 15th day of February 1994, in the Municipality of Naga, Province of Cebu, Philippines, and within
the jurisdiction of this Honorable Court, above-named [Paulino S. Ong and Federico T. Rivera] accused, public officers,
being the former Municipal Mayor and Plumber I of the Office of the Municipal Engineer, Municipality of Naga, Cebu, in
such capacity and committing the offense in relation to office, conniving and confederating together and mutually helping
with each other, with deliberate intent, with intent to falsify, did then and there willfully, unlawfully and feloniously
falsify a public document, consisting of a Sworn Statement of Assets and Liabilities, Disclosure of Business Interests and
Financial Connections and Identification of Relatives In the Government Service as of December 31, 1993, filed by
accused Federico T. Rivera and subscribed and sworn to before accused Paulino S. Ong, wherein accused Federico T.
Rivera made it appear therein that he has no relatives within the fourth degree of consanguinity or affinity working in the
government, thereby making untruthful statements in a narration of facts, when in truth and in fact, as accused very well
knew that they are related with each other, since accused Federico T. Rivera is related to accused Paulino S. Ong within
the fourth degree of affinity, the mother of Federico T. Rivera’s wife being the sister of the mother of Paulino S. Ong.
CONTRARY TO LAW. (Emphasis supplied.)
Criminal Case No. 26183
That on or about the 1st day of February, 1996, in the Municipality of Naga, Province of Cebu, Philippines, and within the
jurisdiction of this Honorable Court, above-named [Paulino S. Ong and Rosalio S. Galeos] accused, public officers, being
the former Municipal Mayor and Construction and Maintenance Man of the Office of the Municipal Engineer,
Municipality of Naga, Cebu, in such capacity and committing the offense in relation to office, conniving and
confederating together and mutually helping with each other, with deliberate intent, with intent to falsify, did then and
there willfully, unlawfully and feloniously falsify a public document, consisting of a Sworn Statement of Assets and
Liabilities, Disclosure of Business Interests and Financial Connections and Identification of Relatives In the Government
Service, as of December 31, 1995, filed by accused Rosalio S. Galeos and subscribed and sworn to before accused Paulino
S. Ong, wherein accused made it appear therein that they are not related within the fourth degree of consanguinity or
affinity thereby making false statements in a narration of facts, when in truth and in fact, as accused very well k[n]ew that
they are related with each other, since accused Rosalio S. Galeos is related to accused Paulino S. Ong within the fourth
degree of consanguinity, the mother of accused Rosalio S. Galeos being the sister of the mother of accused Paulino S.
Ong.
CONTRARY TO LAW. (Emphasis supplied.)
Criminal Case No. 26184
That on or about the 1st day of February 1996, in the Municipality of Naga, Province of Cebu, Philippines, and within the
jurisdiction of this Honorable Court, above-named [Paulino S. Ong and Federico T. Rivera] accused, public officers,
being the former Municipal Mayor and Plumber I of the Office of the Municipal Engineer, Municipality of Naga, Cebu, in
such capacity and committing the offense in relation to office, conniving and confederating together and mutually helping
with each other, with deliberate intent, with intent to falsify, did then and there willfully, unlawfully and feloniously
falsify a public document, consisting of a Sworn Statement of Assets and Liabilities, Disclosure of Business Interests and
Financial Connections and Identification of Relatives In The Government Service, [a]s of December 31, 1995, filed by
accused Federico T. Rivera and subscribed and sworn to before accused Paulino S. Ong, wherein accused Federico
T. Rivera made it appear therein that he has no relatives within the fourth degree of consanguinity or affinity working in
the government, thereby making untruthful statements in a narration of facts, when in truth and in fact, as accused very
well knew that they are related with each other, since accused Federico T. Rivera is related to accused Paulino S. Ong
within the fourth degree of affinity, the mother of Federico T. Rivera’s wife being the sister of the mother of Paulino S.
Ong.
CONTRARY TO LAW. (Emphasis supplied.)
Criminal Case No. 26185
That on or about the 5th day of February 1997, in the Municipality of Naga, Province of Cebu, Philippines, and within the
jurisdiction of this Honorable Court, above-named [Paulino S. Ong and Federico T. Rivera] accused, public officers,
being the former Municipal Mayor and Plumber I of the Office of the Municipal Engineer, Municipality of Naga, Cebu, in
such capacity and committing the offense in relation to office, conniving and confederating together and mutually helping
with each other, with deliberate intent, with intent to falsify, did then and there willfully, unlawfully and feloniously
falsify a public document, consisting of a Sworn Statement of Assets and Liabilities, Disclosure of Business Interests and
Financial Connections and Identification of Relatives In The Government Service, [a]s of December 31, 1996, filed by
accused Federico T. Rivera and subscribed and sworn to before accused Paulino S. Ong, wherein accused Federico T.
Rivera made it appear therein that he has no relatives within the fourth degree of consanguinity or affinity working in the
government, thereby making untruthful statements in a narration of facts, when in truth and in fact, as accused very well
knew that they are related with each other, since accused Federico T. Rivera is related to accused Paulino S. Ong within
the fourth degree of affinity, the mother of Federico T. Rivera’s wife being the sister of the mother of Paulino S. Ong.
CONTRARY TO LAW. (Emphasis supplied.)
Criminal Case No. 26186
That on or about the 3rd day of March, 1995, in the Municipality of Naga, Province of Cebu, Philippines, and within the
jurisdiction of this Honorable Court, above-named [Paulino S. Ong and Rosalio S. Galeos] accused, public officers, being
the former Municipal Mayor and Construction and Maintenance Man of the Office of the Municipal Engineer,
Municipality of Naga, Cebu, in such capacity and committing the offense in relation to office, conniving and
confederating together and mutually helping with each other, with deliberate intent, with intent to falsify, did then and
there willfully, unlawfully and feloniously falsify a public document, consisting of a Sworn Statement of Assets and
Liabilities, Disclosure of Business Interests and Financial Connections and Identification of Relatives In the Government
Services, as of December 31, 1994, filed by accused Rosalio S. Galeos and subscribed and sworn to before accused
Paulino S. Ong, wherein accused made it appear therein that they are not related within the fourth degree of consanguinity
or affinity thereby making untruthful statements in a narration of facts, when in truth and in fact, as accused very well
k[n]ew that they are related with each other, since accused Rosalio S. Galeos is related to accused Paulino S. Ong, within
the fourth degree of consanguinity, the mother of accused Rosalio S. Galeos being the sister of the mother of accused
Paulino S. Ong.
CONTRARY TO LAW. (Emphasis supplied.)
Criminal Case No. 26187
That on or about the 11th day of March, 1997, in the Municipality of Naga, Province of Cebu, Philippines, and within the
jurisdiction of this Honorable Court, above-named [Paulino S. Ong and Rosalio S. Galeos] accused, public officers, being
the former Municipal Mayor and Construction and Maintenance Man of the Office of the Municipal Engineer,
Municipality of Naga, Cebu, in such capacity and committing the offense in relation to office, conniving and
confederating, together and mutually helping with each other, with deliberate intent, with intent to falsify, did then and
there willfully, unlawfully and feloniously falsify a public document, consisting of a Sworn Statement of Assets and
Liabilities, Disclosure of Business Interests and Financial Connections and Identification of Relatives In the Government
Service, as of December 31, 1996, filed by accused Rosalio S. Galeos and subscribed and sworn to before accused Paulino
S. Ong, wherein accused made it appear therein that they are not related within the fourth degree of consanguinity or
affinity thereby making untruthful statements in a narration of facts, when in truth and in fact, as accused very well
k[n]ew that they are related with each other, since accused Rosalio S. Galeos is related to accused Paulino S. Ong within
the fourth degree of consanguinity, the mother of accused Rosalio S. Galeos being the sister of the mother of accused
Paulino S. Ong.
CONTRARY TO LAW. (Emphasis supplied.)
Criminal Case No. 26188
That on or about the 1st day of June, 1994, at the Municipality of Naga, Province of Cebu, Philippines, and within the
jurisdiction of this Honorable Court, above-named accused, a public officer, being the former Mayor of the Municipality
of Naga, Cebu, in such capacity and committing the offense in relation to office, with deliberate intent, with intent to
falsify, did then and there willfully, unlawfully and feloniously falsify a public document, consisting of a Certification in
the form of a letter addressed to Mrs. Benita O. Santos, then Regional Director of the Civil Service Commission (CSC)-
Region VII, Cebu City dated June 1, 1994, a requirement in the approval of an appointment, certifying therein that there
was a faithful compliance of the requirement/restriction provided under the Civil Service Laws and Rules in the
appointment of Rosalio S. Galeos, as Construction and Maintenance Man of the Office of the Municipal Engineer, Naga,
Cebu, thereby making untruthful statements in a narration of facts, when in truth and in fact as accused very well knew
that the appointment of Rosalio S. Galeos was nepotic being made in violation of the Civil Service Rules and Laws on
Nepotism, as Rosalio S. Galeos is related to accused within the fourth degree of consanguinity, since the mother of
Rosalio S. Galeos is the sister of the mother of accused, which Certification caused the approval of the appointment of
Rosalio S. Galeos, to the detriment of public interest.
CONTRARY TO LAW. (Emphasis supplied.)
Criminal Case No. 26189
That on or about the 1st day of June, 1994, at the Municipality of Naga, Province of Cebu, Philippines, and within the
jurisdiction of this Honorable Court, above-named accused, a public officer, being the former Mayor of the Municipality
of Naga, Cebu, in such capacity and committing the offense in relation to office, with deliberate intent, with intent to
falsify, did then and there willfully, unlawfully and feloniously falsify a public document, consisting of a Certification in
the form of a letter addressed to Mrs. Benita O. Santos, then Regional Director of the Civil Service Commission (CSC),
Region VII, Cebu City, dated June 1, 1994, a requirement in the approval of an appointment, certifying therein that there
was a faithful compliance of the requirement/restriction provided under the Civil Service Laws and Rules in the
appointment of Federico T. Rivera, a Plumber I of the Office of the Municipal Engineer, Naga, Cebu, thereby making
untruthful statements in a narration of facts, when in truth and in fact as accused very well knew that the appointment of
Federico T. Rivera was nepotic being made in violation of the Civil Service Rules and Laws on Nepotism, as Federico T.
Rivera is related to accused within the fourth degree of affinity, since the mother of Federico T. Rivera’s wife is the sister
of the mother of accused, which certification caused the approval of the appointment of Federico T. Rivera, to the
detriment of public interest.
CONTRARY TO LAW. (Emphasis supplied.)
Under the Joint Stipulation of Facts submitted to the court a quo, the accused made the following admissions: (1) Ong was
the Municipal Mayor of Cebu at all times relevant to these cases; (2) Ong is related to Galeos, within the fourth degree of
consanguinity as his mother is the sister of Galeos’ mother, and to Rivera within the fourth degree of affinity as his
mother is the sister of the mother of Rivera’s wife; and (3) Galeos and Rivera were employed as Construction and
Maintenance Man and Plumber I, respectively, in the Municipal Government of Naga, Cebu at all times relevant to these
cases. Ong likewise admitted the genuineness and due execution of the documentary exhibits presented by the prosecutor
(copies of SALNs and Certification dated June 1, 1994) except for Exhibit "H" (Certification dated June 1, 1994 offered
by the prosecution as "allegedly supporting the appointment of Rosalio S. Galeos"12).13
As lone witness for the prosecution, Esperidion R. Canoneo testified that he has been a resident of Pangdan, Naga, Cebu
since 1930 and claimed to be friends with Ong, Galeos and Rivera. He knows the mother of Galeos, Pining Suarez or
Peñaranda Suarez. But when the prosecutor mentioned "Bining Suarez," Canoneo stated that Bining Suarez is the mother
of Galeos and that Bining Suarez is the same person as "Bernardita Suarez." Ong is related to Galeos because Ong’s
mother, Conchita Suarez, and Galeos’ mother, Bernardita Suarez, are sisters. As to Rivera, his wife Kensiana,14 is the
daughter of Mercedes Suarez who is also a sister of Conchita Suarez. He knew the Suarez sisters because they were the
neighbors of his grandmother whom he frequently visited when he was still studying.15
Both Galeos and Rivera testified that they only provided the entries in their SALN but did not personally fill up the forms
as these were already filled up by "people in the municipal hall" when they signed them.
Galeos, when shown his 1993 SALN,16 confirmed his signature thereon. When he was asked if he understood the question
"To the best of your knowledge, are you related within the fourth degree of consanguinity or affinity to anyone working in
the government?" he answered in the negative. He claimed that the "X" mark corresponding to the answer "No" to said
question, as well as the other entries in his SALN, were already filled up when he signed it. When shown his SALN for
the years 1994, 1995 and 1996, Galeos reiterated that they were already filled up and he was only made to sign them by an
employee of the municipal hall whom he only remembers by face. He also admitted that he carefully read the documents
and all the entries therein were explained to him before he affixed his signature on the document. However, when asked
whether he understands the term "fourth degree of consanguinity or affinity" stated in the SALNs, he answered in the
negative.17
Rivera testified that he was not aware that his wife was a close relative of the Municipal Mayor because when he asked
her, the latter told him that Ong was a distant relative of hers. Rivera added that it was not Ong who first appointed him as
a casual employee but Ong’s predecessor, Mayor Vicente Mendiola.18
On the part of Ong, he testified that at the time he was serving as Municipal Mayor of Naga, he did not know that he and
Galeos are relatives, as in fact there are several persons with the surname "Galeos" in the municipality. He signed Galeos’
1993 SALN when it was presented to him by Galeos at his office. There were many of them who brought such documents
and he would administer their oaths on what were written on their SALN, among them were Galeos and Rivera. He came
to know of the defect in the employment of Galeos when the case was filed by his "political enemy" in the Ombudsman
just after he was elected Vice-Mayor in 1998. As to Rivera, Ong claimed that he knows him as a casual employee of the
previous administration. As successor of the former mayor, he had to re-appoint these casual employees and he delegated
this matter to his subordinates. He maintained that his family was not very close to their other relatives because when he
was not yet Mayor, he was doing business in Cebu and Manila. When queried by the court if he had known his relatives
while he was campaigning considering that in the provinces even relatives within the 6th and 7th degree are still regarded
as close relatives especially among politicians, Ong insisted that his style of campaigning was based only on his
performance of duties and that he did not go from house to house. Ong admitted that he had been a resident of Naga, Cebu
since birth. He could no longer recall those SALN of most of the employees whose oaths he had administered. He
admitted that he was the one who appointed Galeos and Rivera to their permanent positions and signed their official
appointment (Civil Service Form No. 33) but he was not aware at that time that he was related to them. It was only after
the filing of the case that he came to know the wife of Rivera. As to the qualifications of these appointees, he no longer
inquired about it and their appointments were no longer submitted to the Selection Board. When the appointment forms
for Galeos and Rivera were brought to his office, the accompanying documents were attached thereto. Ong, however,
admitted that before the permanent appointment is approved by the CSC, he issues a certification to the effect that all
requirements of law and the CSC have been complied with.19
On August 18, 2005, the Sandiganbayan promulgated the assailed Decision convicting Ong, Galeos and Rivera, as
follows:
WHEREFORE, judgment is hereby rendered on the following:
In Criminal Case No. 26181, judgment is hereby rendered finding accused Paulino S. Ong and Rosalio S. Galeos
GUILTY beyond reasonable doubt of the crime of Falsification of Public Document as defined in and penalized by
Article 171 of the Revised Penal Code and, there being no modifying circumstances, are hereby sentenced to each suffer
an indeterminate penalty of imprisonment from TWO (2) YEARS, FOUR (4) MONTHS and ONE (1) DAY OF Prision
Correccional medium as the minimum penalty to EIGHT (8) YEARS and ONE (1) DAY of Prision Mayor medium as the
maximum penalty and to each pay a FINE of FIVE THOUSAND PESOS (P5,000.00).
In Criminal Case No. 26182, judgment is hereby rendered finding accused Paulino S. Ong and Federico T. Rivera
GUILTY beyond reasonable doubt of the crime of Falsification of Public Document as defined in and penalized by
Article 171 of the Revised Penal Code and, there being no modifying circumstances, are hereby sentenced to each suffer
an indeterminate penalty of imprisonment from TWO (2) YEARS, FOUR (4) MONTHS and ONE (1) DAY OF Prision
Correccional medium as the minimum penalty to EIGHT (8) YEARS and ONE (1) DAY of Prision Mayor medium as the
maximum penalty and to each pay a FINE of FIVE THOUSAND PESOS (P5,000.00).
In Criminal Case No. 26183, judgment is hereby rendered finding accused Paulino S. Ong and Rosalio S. Galeos
GUILTY beyond reasonable doubt of the crime of Falsification of Public Document as defined in and penalized by
Article 171 of the Revised Penal Code and, there being no modifying circumstances, are hereby sentenced to each suffer
an indeterminate penalty of imprisonment from TWO (2) YEARS, FOUR (4) MONTHS and ONE (1) DAY OF Prision
Correccional medium as the minimum penalty to EIGHT (8) YEARS and ONE (1) DAY of Prision Mayor medium as the
maximum penalty and to each pay a FINE of FIVE THOUSAND PESOS (P5,000.00).1auuphil
In Criminal Case No. 26184, judgment is hereby rendered finding accused Paulino S. Ong and Federico T. Rivera
GUILTY beyond reasonable doubt of the crime of Falsification of Public Document as defined in and penalized by
Article 171 of the Revised Penal Code and, there being no modifying circumstances, are hereby sentenced to each suffer
an indeterminate penalty of imprisonment from TWO (2) YEARS, FOUR (4) MONTHS and ONE (1) DAY OF Prision
Correccional medium as the minimum penalty to EIGHT (8) YEARS and ONE (1) DAY of Prision Mayor medium as the
maximum penalty and to each pay a FINE of FIVE THOUSAND PESOS (P5,000.00).
In Criminal Case No. 26185, judgment is hereby rendered finding accused Paulino S. Ong and Federico T. Rivera
GUILTY beyond reasonable doubt of the crime of Falsification of Public Document as defined in and penalized by
Article 171 of the Revised Penal Code and, there being no modifying circumstances, are hereby sentenced to each suffer
an indeterminate penalty of imprisonment from TWO (2) YEARS, FOUR (4) MONTHS and ONE (1) DAY OF Prision
Correccional medium as the minimum penalty to EIGHT (8) YEARS and ONE (1) DAY of Prision Mayor medium as the
maximum penalty and to each pay a FINE of FIVE THOUSAND PESOS (P5,000.00).
In Criminal Case No. 26186, judgment is hereby rendered finding accused Paulino S. Ong and Rosalio S. Galeos
GUILTY beyond reasonable doubt of the crime of Falsification of Public Document as defined in and penalized by
Article 171 of the Revised Penal Code and, there being no modifying circumstances, are hereby sentenced to each suffer
an indeterminate penalty of imprisonment from TWO (2) YEARS, FOUR (4) MONTHS and ONE (1) DAY OF Prision
Correccional medium as the minimum penalty to EIGHT (8) YEARS and ONE (1) DAY of Prision Mayor medium as the
maximum penalty and to each pay a FINE of FIVE THOUSAND PESOS (P5,000.00).
In Criminal Case No. 26187, judgment is hereby rendered finding accused Paulino S. Ong and Rosalio S. Galeos
GUILTY beyond reasonable doubt of the crime of Falsification of Public Document as defined in and penalized by
Article 171 of the Revised Penal Code and, there being no modifying circumstances, are hereby sentenced to each suffer
an indeterminate penalty of imprisonment from TWO (2) YEARS, FOUR (4) MONTHS, and ONE (1) DAY OF Prision
Correccional medium as the minimum penalty to EIGHT (8) YEARS and ONE (1) DAY of Prision Mayor medium as the
maximum penalty and to each pay a FINE of FIVE THOUSAND PESOS (P5,000.00).
In Criminal Case No. 26188, judgment is hereby rendered finding accused Paulino S. Ong NOT GUILTY for Violation of
Article 171 of the Revised Penal Code for failure of the Prosecution to prove his guilt beyond reasonable doubt; and
In Criminal Case No. 26189, judgment is hereby rendered finding accused Paulino S. Ong GUILTY beyond reasonable
doubt for Falsification of Public Document as defined in and penalized by Article 171 of the Revised Penal Code and,
there being no modifying circumstances, is hereby sentenced to suffer an indeterminate penalty of imprisonment from
TWO (2) YEARS, FOUR (4) MONTHS and ONE (1) DAY of Prision Correccional medium as the minimum penalty to
EIGHT (8) YEARS and ONE (1) DAY of Prision Mayor medium as the maximum penalty and to pay a FINE of FIVE
THOUSAND PESOS (P5,000.00).
SO ORDERED.20
In its Resolution21 dated August 28, 2006, the Sandiganbayan denied the motions for reconsideration of Ong and Galeos.
However, in view of the death of Rivera on August 22, 2003 before the promulgation of the decision, the cases (Criminal
Case Nos. 26182, 26184 and 26185) against him were dismissed.
In G.R. Nos. 174730-37, Galeos contends that the Sandiganbayan erred when:
1) . . . IT HELD THAT THE SUBJECT DOCUMENTARY EVIDENCE CONTAINED UNTRUTHFUL STATEMENTS
IN A NARRATION OF FACTS.
2) . . . IT DID NOT CONSIDER PETITIONER’S VALID DEFENSE OF GOOD FAITH AND LACK OF INTENT TO
COMMIT THE CRIMES IMPUTED.
3) . . . IT GAVE FULL CREDENCE TO THE TESTIMONY OF THE SOLE WITNESS FOR THE PROSECUTION.22
In support of his assigned errors, Galeos argues that he did not make untruthful or false statements in his SALN since a
"statement" requires a positive averment and thus silence or non-disclosure cannot be considered one. And even if they
are considered statements, Galeos contends that they were not made in a "narration of facts" and the least they could be
considered are "conclusions of law." He also argues that the prosecution failed to adduce any evidence to support the
finding that he was aware of their relationship at the time of the execution of the SALN. With the presence of good faith,
Galeos avers that the fourth element of the crime – the perversion of truth in the narration of facts was made with the
wrongful intent of injuring a third person – is missing. He also faults the Sandiganbayan for its heavy reliance on the
uncorroborated testimony of the prosecution’s sole witness despite the fact that there are aspects in his testimony that do
not inspire belief.
On the other hand, in G.R. Nos. 174845-52, Ong argues that the Sandiganbayan erred when:
(a)
. . . IT HELD THAT THE SUBJECT DOCUMENTARY EVIDENCE CONTAINED UNTRUTHFUL STATEMENTS
IN A NARRATION OF FACTS.
(b)
IN CRIMINAL CASES NOS. 26181-26187, [IT HELD] THAT A PERSON MERELY ADMINISTERING THE OATH
IN A DOCUMENT IS GUILTY OF THE CRIME OF FALSIFICATION BY MAKING UNTRUTHFUL STATEMENTS
IN A NARRATION OF FACTS.
(c)
. . . IN CRIMINAL CASE NO. 26189, … IT INFER[R]ED, DESPITE THE COMPLETE ABSENCE OF ANY
RELEVANT AND MATERIAL EVIDENCE, THAT RESPONDENT’S EXHIBIT "I" (OR PETITIONER’S EXHIBIT
"8") REFERS TO OR SUPPORTS THE APPOINTMENT OF FEDERICO T. RIVERA.23
Ong similarly argues that the subject SALN do not contain any untruthful statements containing a narration of facts and
that there was no wrongful intent of injuring a third person at the time of the execution of the documents. He contends that
he cannot be held liable for falsification for merely administering the oath in a document since it is not among the legal
obligations of an officer administering the oath to certify the truthfulness and/or veracity of the contents of the document.
Neither can he be made liable for falsification regarding the letter-certification he issued since there was no evidence
adduced that it was made to support Rivera’s appointment.
In the Joint Memorandum filed by the Ombudsman through the Office of the Special Prosecutor of the Sandiganbayan, it
was pointed out that Galeos categorically admitted during his testimony that before affixing his signature on the subject
SALN, he carefully read its contents and the entries therein have been explained to him. Moreover, the admission made
by Ong during the pre-trial under the joint stipulation of facts indicated no qualification at all that he became aware of his
relationship with Galeos and Rivera only after the execution of the subject documents. The defense of lack of knowledge
of a particular fact in issue, being a state of mind and therefore self-serving, it can be legally assumed that the admission
of that particular fact without qualification reckons from the time the imputed act, to which the particular fact relates, was
committed. As to mistaken reliance on the testimony of prosecution witness, the analysis and findings in the assailed
decision do not show that such testimony was even taken into consideration in arriving at the conviction of petitioners.24
With respect to Ong’s liability as conspirator in the execution of the SALN containing untruthful statements, the Special
Prosecutor argues that as a general rule, it is not the duty of the administering officer to ascertain the truth of the
statements found in a document. The reason for this is that the administering officer has no way of knowing if the facts
stated therein are indeed truthful. However, when the facts laid out in the document directly involves the administering
officer, then he has an opportunity to know of their truth or falsity. When an administering officer nevertheless
administers the oath despite the false contents of the document, which are known to him to be false, he is liable, not
because he violated his duty as an administering officer, but because he participated in the falsification of a document. 25
After a thorough review, we find the petitions unmeritorious.
Petitioners were charged with falsification of public document under Article 171, paragraph 4 of the Revised Penal Code,
as amended, which states:
Art. 171. Falsification by public officer, employee or notary or ecclesiastic minister. — The penalty of prision mayor and
a fine not to exceed 5,000 pesos shall be imposed upon any public officer, employee, or notary who, taking advantage of
his official position, shall falsify a document by committing any of the following acts:
1. Counterfeiting or imitating any handwriting, signature or rubric;
2. Causing it to appear that persons have participated in any act or proceeding when they did not in fact so participate;
3. Attributing to persons who have participated in an act or proceeding statements other than those in fact made by them;
4. Making untruthful statements in a narration of facts;
x x x x (Emphasis and italics supplied.)
The elements of falsification in the above provision are as follows:
(a) the offender makes in a public document untruthful statements in a narration of facts;
(b) he has a legal obligation to disclose the truth of the facts narrated by him; and
(c) the facts narrated by him are absolutely false.26
In addition to the afore-cited elements, it must also be proven that the public officer or employee had taken advantage of
his official position in making the falsification. In falsification of public document, the offender is considered to have
taken advantage of his official position when (1) he has the duty to make or prepare or otherwise to intervene in the
preparation of a document; or (2) he has the official custody of the document which he falsifies.27 Likewise, in
falsification of public or official documents, it is not necessary that there be present the idea of gain or the intent to injure
a third person because in the falsification of a public document, what is punished is the violation of the public faith and
the destruction of the truth as therein solemnly proclaimed.28
Falsification of Public Document
by making untruthful statements
concerning relatives in the
government service
All the elements of falsification of public documents by making untruthful statements have been established by the
prosecution.
Petitioners argue that the statements "they are not related within the fourth civil degree of consanguinity or affinity" and
"that Section 79 of the Local Government Code has been complied with in the issuance of the appointments" are not a
narration of facts but a conclusion of law, as both require the application of the rules on relationship under the law of
succession. Thus, they cite People v. Tugbang29 where it was held that "a statement expressing an erroneous conclusion of
law cannot be considered a falsification." Likewise, in People v. Yanza,30 it was held that when defendant certified that
she was eligible for the position, she practically wrote a conclusion of law, which turned out to be incorrect or erroneous;
hence, she may not be declared guilty of falsification because the law violated pertains to narration of facts.
We disagree.
A conclusion of law is a determination by a judge or ruling authority regarding the law that applies in a particular case. It
is opposed to a finding of fact, which interprets the factual circumstances to which the law is to be applied.31 A narration
of facts is merely an account or description of the particulars of an event or occurrence.32 We have held that a certification
by accused officials in the Statement of Time Elapsed and Work Accomplished qualifies as a narration of facts as
contemplated under Article 171 (4) of the Revised Penal Code, as it consisted not only of figures and numbers but also
words were used therein giving an account of the status of the flood control project.33
In this case, the required disclosure or identification of relatives "within the fourth civil degree of consanguinity or
affinity" in the SALN involves merely a description of such relationship; it does not call for an application of law in a
particular set of facts. On the other hand, Articles 963 to 967 of the Civil Code simply explain the concept of proximity of
relationship and what constitute direct and collateral lines in relation to the rules on succession. The question of whether
or not persons are related to each other by consanguinity or affinity within the fourth degree is one of fact. Contrary to
petitioners’ assertion, statements concerning relationship may be proved as to its truth or falsity, and thus do not amount
to expression of opinion. When a government employee is required to disclose his relatives in the government service,
such information elicited therefore qualifies as a narration of facts contemplated under Article 171 (4) of the Revised
Penal Code, as amended. Further, it bears to stress that the untruthful statements on relationship have no relevance to the
employee’s eligibility for the position but pertains rather to prohibition or restriction imposed by law on the appointing
power.
Since petitioner Galeos answered "No" to the question in his 1993 SALN if he has relatives in the government service
within the fourth degree of consanguinity, he made an untruthful statement therein as in fact he was related to Ong, who
was then the municipal mayor, within the fourth degree of consanguinity, he and Ong being first cousins (their mothers
are sisters). As to his 1994, 1995 and 1996 SALN, Galeos left in blank the boxes for the answer to the similar query. In
Dela Cruz v. Mudlong,34 it was held that one is guilty of falsification in the accomplishment of his information and
personal data sheet if he withholds material facts which would have affected the approval of his appointment and/or
promotion to a government position. By withholding information on his relative/s in the government service as required in
the SALN, Galeos was guilty of falsification considering that the disclosure of such relationship with then Municipal
Mayor Ong would have resulted in the disapproval of his permanent appointment pursuant to Article 168 (j)
(Appointments), Rule XXII of the Rules and Regulations Implementing the Local Government Code of 1991 (R.A. No.
7160), which provides:
No person shall be appointed in the local government career service if he is related within the fourth civil degree of
consanguinity or affinity to the appointing power or recommending authority.
Section 7 (e), Rule V of the Implementing Rules of Book V, Executive Order No. 292 otherwise known as
the Administrative Code of 1987, provides that the CSC shall disapprove the appointment of a person who "has been
issued such appointment in violation of existing Civil Service Law, rules and regulations." Among the prohibited
appointments enumerated in CSC Memorandum Circular No. 38, series of 1993 are appointments in the LGUs of persons
who are related to the appointing or recommending authority within the fourth civil degree of consanguinity.35
The Omnibus Rules on Appointments and Other Personnel Actions (CSC Memorandum Circular No. 40, series of 1998
dated December 14, 1998) contain a similar prohibition under Rule XIII, Section 9:
SEC. 9. No appointment in the national, provincial, city or municipal governments or any branch or instrumentality
thereof, including government owned or controlled corporations with original charters shall be made in favor of a relative
of the appointing or recommending authority, or of the chief of the bureau or office or of the person exercising immediate
supervision over the appointee.
Unless otherwise provided by law, the word "relative" and the members of the family referred to are those related within
the third degree either of consanguinity or of affinity.
In the local government career service, the prohibition extends to the relatives of the appointing or recommending
authority, within the fourth civil degree of consanguinity or affinity.
xxxx
The nepotism rule covers all kinds of appointments whether original, promotional, transfer and reemployment regardless
of status including casuals and contractuals except consultants. (Emphasis supplied.)
The second element is likewise present. "Legal obligation" means that there is a law requiring the disclosure of the truth
of the facts narrated.36 Permanent employees employed by local government units are required to file the following: (a)
sworn statement of assets, liabilities and net worth (SALN); (b) lists of relatives within the fourth civil degree of
consanguinity or affinity in government service; (c) financial and business interests; and (d) personal data sheets as
required by law.37 A similar requirement is imposed by Section 8 (B) of Republic Act No. 6713 otherwise known as the
Code of Conduct and Ethical Standards for Public Officials and Employees, thus:
(B) Identification and disclosure of relatives38. – It shall be the duty of every public official or employee to identify and
disclose to the best of his knowledge and information, his relatives in the Government in the form, manner and frequency
prescribed by the Civil Service Commission.
Section 11 of the same law penalizes the violation of the above provision, either with imprisonment or fine, and, in the
discretion of the court of competent jurisdiction, disqualification to hold public office. Such violation if proven in a proper
administrative proceeding shall also be sufficient cause for removal or dismissal of a public official or employee, even if
no criminal prosecution is instituted against him.
The evidence on record clearly showed that Galeos’ negative answer reflected in his SALN is absolutely false. During the
trial, both Ong and Galeos admitted the fact that they are first cousins but denied having knowledge of such relationship at
the time the subject documents were executed. The Sandiganbayan correctly rejected their defense of being unaware that
they are related within the fourth degree of consanguinity. Given the Filipino cultural trait of valuing strong kinship and
extended family ties, it was unlikely for Galeos who had been working for several years in the municipal government, not
to have known of his close blood relation to Ong who was a prominent public figure having ran and won in the local
elections four times (three terms as Mayor and as Vice-Mayor in the 1998 elections), after serving as OIC Mayor of the
same municipality in 1986 until 1988.
The same thing can be said of Ong, whose unbelievable claim that he had no knowledge that a first cousin (Galeos) was
working in the municipal government and appointed by him to a permanent position during his incumbency, was correctly
disregarded by the Sandiganbayan. It was simply unthinkable that as a resident of Naga, Cebu since birth and a politician
at that, he was all the time unaware that he himself appointed to permanent positions the son of his mother’s sister
(Galeos) and the husband of his first cousin (Rivera). Indeed, the reality of local politics and Filipino culture renders his
defense of good faith (lack of knowledge of their relationship) unavailing. Despite his knowledge of the falsity of the
statement in the subject SALN, Ong still administered the oath to Galeos and Rivera who made the false statement under
oath. The Sandiganbayan thus did not err in finding that Ong connived with Galeos and Rivera in making it appear in their
SALN that they have no relative within the fourth degree of consanguinity/affinity in the government service.
Conspiracy need not be shown by direct proof of an agreement of the parties to commit the crime,39 as it can be inferred
from the acts of the accused which clearly manifest a concurrence of wills, a common intent or design to commit a
crime.40 In this case, Ong administered the oaths to Galeos and Rivera in the subject SALN not just once, but three times,
a clear manifestation that he concurred with the making of the untruthful statement therein concerning relatives in the
government service.
Falsification by making
untruthful statements
in the Certification re:
compliance with the
prohibition on nepotism
As chief executive and the proper appointing authority, Ong is deemed to have issued the certification recommending to
the CSC approval of Galeos’ appointment although he admitted only the authenticity and due execution of Exhibit "I".
Since Ong was duty bound to observe the prohibition on nepotistic appointments, his certification stating compliance with
Section 7941 of R.A. No. 7160 constitutes a solemn affirmation of the fact that the appointee is not related to him within
the fourth civil degree of consanguinity or affinity. Having executed the certification despite his knowledge that he and
Rivera were related to each other within the fourth degree of affinity, as in fact Rivera was his cousin-in-law because the
mother of Rivera’s wife is the sister of Ong’s mother, Ong was guilty of falsification of public document by making
untruthful statement in a narration of facts. He also took advantage of his official position as the appointing authority who,
under the Civil Service rules, is required to issue such certification.
The importance of the certification submitted to the CSC by the proper appointing authority in the local government unit,
regarding compliance with the prohibition against nepotism under R.A. No. 7160 cannot be overemphasized. Under
Section 67, Book V, Chapter 10 of the Administrative Code of 1987, a head of office or appointing official who issues an
appointment or employs any person in violation of Civil Service Law and Rules or who commits fraud, deceit or
intentional misrepresentation of material facts concerning other civil service matters, or anyone who violates, refuses or
neglects to comply with any of such provisions or rules, may be held criminally liable. In Civil Service Commission v.
Dacoycoy,42 we held that mere issuance of appointment in favor of a relative within the third degree of consanguinity or
affinity is sufficient to constitute a violation of the law. Although herein petitioners were prosecuted for the criminal
offense of falsification of public document, it becomes obvious that the requirement of disclosure of relationship to the
appointing power in the local government units simply aims to ensure strict enforcement of the prohibition against
nepotism.1avvphil
Relevant then is our pronouncement in Dacoycoy:
Nepotism is one pernicious evil impeding the civil service and the efficiency of its personnel. In Debulgado, we stressed
that "[T]the basic purpose or objective of the prohibition against nepotism also strongly indicates that the prohibition was
intended to be a comprehensive one." "The Court was unwilling to restrict and limit the scope of the prohibition which is
textually very broad and comprehensive." If not within the exceptions, it is a form of corruption that must be nipped in the
bud or abated whenever or wherever it raises its ugly head. As we said in an earlier case "what we need now is not only to
punish the wrongdoers or reward the ‘outstanding’ civil servants, but also to plug the hidden gaps and potholes of
corruption as well as to insist on strict compliance with existing legal procedures in order to abate any occasion for graft
or circumvention of the law."43 (Emphasis supplied.)
The prosecution having established with moral certainty the guilt of petitioners for falsification of public documents under
Article 171 (4) of the Revised Penal Code, as amended, we find no legal ground to reverse petitioners’ conviction.
WHEREFORE, the petitions are DENIED. The Decision dated August 18, 2005 of the Sandiganbayan in Criminal Case
Nos. 26181-26187 and 26189 is AFFIRMED.
With costs against the petitioners.
SO ORDERED.