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G.R. No. 168771

July 25, 2012

ROBERTO DIPAD and SANDRA DIPAD, Petitioners, vs.

SPOUSES ROLANDO OLIVAN and BRIGIDA OLIVAN, and BRIGIDA OLIVAN, and RUBIO GUIJON MADRIGALLO, Respondents.

R E S O L U T I O N

SERENO, J.:

Before this Court is a Rule 45 Petition, seeking to review the 6 May 2005 Regional Trial (RTC) Decision in Special Civil Action No. RTC 2005-0032. In the Decision, the RTC dismissed petitioners’ Rule 65 Petition, which assailed the directive of Judge Marvel C. Clavecilla requiring Roberto Dipad to submit the latter’s Income Tax Returns (ITRs) for the years 2001 to 2003.

The pertinent facts are as follows:1

Due to a collision between the car of petitioner spouses Dipad and the passenger jeep owned by respondents, the former filed a civil action for damages before the sala of Municipal Trial Court (MTC) Judge Clavecilla.

During trial, Roberto Dipad mentioned in his direct testimony that because he was not able to make use of his vehicle for his buy-and-sell business, he suffered damages by way of lost income for three months amounting to P40,000.2 Then, during cross-examination, the defense required him to produce his personal copy of his ITRs for the years 2001, 2002 and 2003.3

Dipad vehemently objected on the ground of confidentiality of the ITRs. He also claimed that the demand therefor was incriminatory and in the nature of a fishing expedition.

By reason of the opposition, Judge Clavecilla suspended the trial and required petitioners to show their basis for invoking the confidentiality of the ITRs. After the parties submitted their respective Comments on the matter, the MTC in its 3 February 2005 Order required the production of the ITRs.

Aggrieved, the spouses Dipad filed a Motion for Reconsideration, which was denied by Judge Clavecilla. Thereafter, they instituted a Rule 65 Petition for Certiorari and Prohibition before the RTC, assailing the 3 February 2005 Order of the MTC for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction. In that Petition, they opposed Judge Clavecilla’s ruling in this wise:4

x x x The respondent Judge stated in his order dated February 3, 2005 (Annex "G") in Civil Case No. 11884 that the cited provision does not apply, stating that "what is being requested to be produced is plaintiffs’ copy of their tax returns for the years 2001 to 2003 x x x," thereby ordering the plaintiffs therein, now the petitioners, "to furnish defendants’ counsel within five (5)

days from receipt of this order copy of their income tax returns for the years 2001 to 2003, inclusive."

We beg to differ to such holding, because if a copy of a taxpayer’s return filed with the Bureau of Internal Revenue can be open to inspection only upon the order of the President of the Philippines, such provision presupposes the confidentiality of the document; and with more reason that the taxpayer cannot be compelled to yield his copy of the said document. (Emphasis in the original)

x x x

x x x

x x x

Thus, it is indubitable that compelling the petitioners to produce petitioner Roberto Dipad’s Income Tax Returns and furnish copies thereof to the private respondents would be violative of the provisions of the National Internal Revenue Code on the rule on confidentiality of Income Tax return as discussed above x x x. (Underscoring supplied)

In its 6 May 2005 Decision,5 the RTC dismissed the Rule 65 Petition for being an inappropriate remedy. According to the trial court, the errors committed by Judge Clavecilla were, if at all, mere errors of judgment correctible not by the extraordinary writ of certiorari, but by ordinary appeal.

Petitioners moved for reconsideration, but their motion was denied by the RTC.6

Hence, this appeal.

The issue presented in this case is straightforward. Petitioners insist that that the RTC committed reversible error in dismissing their Rule 65 Petition as an improper appeal, since grave abuse of discretion amounting to excess of jurisdiction was committed by MTC Judge Clavecilla when he required the production of their ITRs.7

In support of their claim and to prove the confidentiality of the ITRs they cite Section 71 of the National Internal Revenue Code, which reads:8

Section 71. Disposition of Income Tax Returns, Publication of Lists of Taxpayers and Filers — After the assessment shall have been made, as provided in this Title, the returns, together with any corrections thereof which may have been made by the Commissioner, shall be filed in the Office of the Commissioner and shall constitute public records and be open to inspection as such upon the order of the President of the Philippines, under rules and regulations to be prescribed by the Secretary of Finance, upon recommendation of the Commissioner.

The Commissioner may, in each year, cause to be prepared and published in any newspaper the lists containing the names and addresses of persons who have filed income tax returns.

They also quote from National Internal Revenue Code (2001) authored by Epifanio G. Gonzales and Celestina M. Robledo-Gonzales: 9

The general rule is that despite a court order, copies of the income tax returns cannot be furnished in view of the prohibition contained in Section 332 (now Section 286) of the Tax Code.

However, under Section 11 of Regulation 33 of the Department of Finance the Commissioner of Internal Revenue may furnish copies of income tax returns for use as evidence in court litigation "when the government of the Philippine Islands is interested in the result."

Thus, in the case of Cu Unjieng vs. Posadas, 58 Phil. 360, which involves the production of income tax returns in a criminal case, the Supreme Court held that copies of the returns can be furnished therein because a criminal case is a sort of a case in which, above all others, the government, as a corporate representative of all society, is highly and immediately interested.

But in a civil case where the government is not interested in the results, no income tax returns or tax census statements may be furnished the courts even if the production thereof is in obedience to the court order (see BIR Ruling No. 4, S. 1971).

RULING OF THE COURT

The appeal is lacking in merit.

Upon perusal of the reference, we find that petitioners inaccurately quoted the commentary.10 The portions they lifted from the annotation purport to explain Section 270 of the NIRC.11

The provision prohibits employees of the Bureau of Internal Revenue (BIR) from divulging the trade secrets of taxpayers. Section 270 obviously does not address the confidentiality of ITRs. Thus, petitioners cannot rely on the inappropriate provision, the Decisions including the cited Cu Unjieng v. Posadas,12 the rulings of the BIR, or issuances of the Department of Finance that apply that provision.

Furthermore, in contrast to the interpretation by petitioners of the commentary that ITRs cannot be divulged, their very reference characterizes Section 71 as an exception to the rule on the unlawful divulgence of trade secrets:13

Exceptions or acts which do not constitute unlawful divulgence of trade secrets. –

(a) Section 71 of the Tax Code makes income tax returns public records and opens them to inspection upon order of the President of the Philippines. x x x.

This Court then reminds the counsels of their duty of candor, fairness and good faith when they face the court. Canon 10.02 of the Code of Professional Responsibility instructs that a lawyer shall not knowingly misquote or misrepresent the contents of a paper; the language or the argument of opposing counsel, or the text of a decision or authority, or knowingly cite as law a provision already rendered inoperative by repeal or amendment; or assert as a fact that which has not been proved.

Nevertheless, we proceed to the contention of petitioners against the RTC’s dismissal of their Rule 65 Petition. In this regard, we stress that it is basic in our jurisdiction that a petition for certiorari under Rule 65 is not a mode of appeal.14 The remedy, which is narrow in scope,15 only corrects errors of jurisdiction.16 Thus, if the issue involves an error of judgment, the error is correctible by an appeal via a Rule 45 petition, and not by a writ of certiorari under Rule 65 of the Rules of Court.17

As defined in jurisprudence, errors of jurisdiction occur when the court exercises jurisdiction not conferred upon it by law.18 They may also occur when the court or tribunal, although it has jurisdiction, acts in excess of it or with grave abuse of discretion amounting to lack of jurisdiction.19

On the contrary, errors of judgment are those that the court may commit in the exercise of its jurisdiction.1âwphi1 They include errors of procedure or mistakes in the court’s findings20 based on a mistake of law or of fact.21

Here, it is patently clear that petitioners do not question whether the MTC has jurisdiction or authority to resolve the issue of confidentiality of ITRs. Rather, they assail the wisdom of the MTC’s very judgment and appreciation of the ITR as not confidential. Specifically, they claim that the ruling violated the provisions of the NIRC on the alleged rule on confidentiality of ITRs.

Based on the definitions above, we conclude similarly as the RTC that if there is an error to speak of the error relates only to a mistake in the application of law, and not to an error of jurisdiction or grave abuse of discretion amounting to excess of jurisdiction. The only error petitioners raise refers to Judge Clavecilla’s mistake of not applying Section 71, which allegedly prohibits the production of ITRs because of confidentiality. Certainly, as correctly posited by the court a quo, if every error committed by the trial court is subject to certiorari, trial would never come to an end, and the docket will be clogged ad infinitum.22

Therefore, given the issues raised by petitioners in their plea for the extraordinary writ of certiorari, the RTC did not grievously err in dismissing the Rule 65 Petition as an improper appeal. This ruling is only in keeping with the proper conduct of (xxx unread text) before the courts and the prompt administration of justice at every level of the judicial hierarchy.23

IN VIEW THEREOF, the assailed 6 May 2005 Decision of the Regional Trial Court in Special Civil Action No. RTC 2005-0032 is AFFIRMED. The 25 July 2005 Petition for Review filed by petitioners is hereby DENIED for lack of merit.

SO ORDERED.

MARIA LOURDES P.A. SERENO

Associate justice

G.R. No. 199082

September 18, 2012

JOSE MIGUEL T. ARROYO, Petitioner, vs.

DEPARTMENT OF JUSTICE; COMMISSION ON ELECTIONS; HON. LEILA DE LIMA, in her capacity as Secretary of the Department of Justice; HON. SIXTO BRILLANTES, .JR., in his capacity as Chairperson of the Commission on Elections; and the JOINT DOJ-COMELEC PRELIMINARY INVESTIGATION COMMITTEE and FACT-FINDING TEAM, Respondents.

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

G.R. No. 199085

BENJAMIN S. ABALOS, SR., Petitioner, vs.

HON. LEILA DE LIMA, in her capacity as Secretary of Justice; HON. SIXTO S. BRILLANTES, JR., in his capacity as COMELEC Chairperson; RENE V. SARMIENTO, LUCENITO N. TAGLE, ARMANDO V. VELASCO, ELIAS R. YUSOPH, CHRISTIAN ROBERT S. LIM AND AUGUSTO C. LAGMAN, in their capacity as COMELEC COMMISSIONERS; CLARO A. ARELLANO, GEOUGE C. DEE, JACINTO G. ANG, ROMEO B. FORTES AND MICHAEL D. VILLARET, in their capacity as CHAIRPERSON AND MEMBERS, RESPECTIVELY, OF THE JOINT DOJ-COMELEC PRELIMINARY INVESTIGATION COMMITEE ON THE 2004 AND 2007 ELECTION FRAUD, Respondents.

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

G.R. No.199118

GLORIA MACAPAGAL-ARROYO, Petitioner, vs.

COMMISSION ON ELECTIONS, represented by Chairperson Sixto S. Brillantes, Jr., DEPARTMENT OF JUSTICE, represented by Secretary Leila M. De Lima, JOINT DOJ- COMELEC PRELIMINARY INVESTIGATION COMMITTEE, SENATOR AQUILINO M. PIMENTEL III, and DOJ-COMELEC FACT FINDING TEAM, Respondents.

D E C I S I O N

PERALTA, J.:

The Court is vested with the constitutional mandate to resolve justiciable controversies by applying the rule of law with due deference to the right to due process, irrespective of the standing in society of the parties involved. It is an assurance that in this jurisdiction, the wheels of justice turn unimpeded by public opinion or clamor, but only for the ultimate end of giving each and every member of society his just due without distinction.

Before the Court are three (3) consolidated petitions and supplemental petitions for Certiorari and Prohibition under Rule 65 of the Rules of Court filed by Jose Miguel T. Arroyo (Mike Arroyo) in G.R. No. 199082, Benjamin S. Abalos, Sr. (Abalos) in G.R. No. 199085 and Gloria Macapagal

Arroyo (GMA) in G.R. No. 199118 assailing the following: (1) Commission on Elections (Comelec) Resolution No. 9266 "In the Matter of the Commission on Elections and Department of Justice Joint Investigation on the Alleged Election Offenses Committed during the 2004 and 2007 Elections Pursuant to Law"1 dated August 2, 2011; (2) Joint Order No. 001-2011 (Joint Order) "Creating and Constituting a Joint DOJ-Comelec Preliminary Investigation Committee [Joint Committee] and Fact-Finding Team on the 2004 and 2007 National Elections Electoral Fraud and

Manipulation Cases"2 dated August 15, 2011; (3) Rules of Procedure on the Conduct of Preliminary Investigation on the Alleged Election Fraud in the 2004 and 2007 National Elections (Joint Committee Rules of Procedure)3 dated August 23, 2011; and (4) Initial Report of the Fact- Finding Team dated October 20, 2011.4 The consolidated petitions and supplemental petitions likewise assail the validity of the proceedings undertaken pursuant to the aforesaid issuances.

The Antecedents

Acting on the discovery of alleged new evidence and the surfacing of new witnesses indicating the occurrence of massive electoral fraud and manipulation of election results in the 2004 and 2007 National Elections, on August 2, 2011, the Comelec issued Resolution No. 9266 approving the creation of a committee jointly with the Department of Justice (DOJ), which shall conduct preliminary investigation on the alleged election offenses and anomalies committed during the 2004 and 2007 elections.5

On August 4, 2011, the Secretary of Justice issued Department Order No. 6406 naming three (3) of its prosecutors to the Joint Committee.

On August 15, 2011, the Comelec and the DOJ issued Joint Order No. 001-2011 creating and constituting a Joint Committee and Fact-Finding Team on the 2004 and 2007 National Elections electoral fraud and manipulation cases. The Joint Committee and the Fact-Finding Team are composed of officials from the DOJ and the Comelec. Section 2 of the Joint Order lays down the mandate of the Joint Committee, to wit:

Section 2. Mandate. – The Committee shall conduct the necessary preliminary investigation on the basis of the evidence gathered and the charges recommended by the Fact-Finding Team created and referred to in Section 4 hereof. Resolutions finding probable cause for election offenses, defined and penalized under the Omnibus Election Code and other election laws shall be approved by the Comelec in accordance with the Comelec Rules of Procedure. For other offenses, or those not covered by the Omnibus Election Code and other election laws, the corresponding criminal information may be filed directly with the appropriate courts.7

The Fact-Finding Team,8 on the other hand, was created for the purpose of gathering real, documentary, and testimonial evidence which can be utilized in the preliminary investigation to be conducted by the Joint Committee. Its specific duties and functions as enumerated in Section 4 of the Joint Order are as follows:

a)Gather and document reports, intelligence information, and investigative leads from official as well as unofficial sources and informants;

b)Conduct interviews, record testimonies, take affidavits of witnesses, and collate material and relevant documentary evidence, such as, but not limited to, election documents used in the 2004 and 2007 national elections. For security reasons, or to protect the identities of informants, the Fact-Finding Team may conduct interviews or document testimonies discreetly;

c)Assess and evaluate affidavits already executed and other documentary evidence submitted or may be submitted to the Fact-Finding Team and/or Committee;

d)Identify the offenders, their offenses and the manner of their commission, individually or in conspiracy, and the provisions of election and general criminal laws violated, establish evidence for individual criminal and administrative liability and prosecution, and prepare the necessary documentation, such as complaints and charge sheets for the initiation of preliminary investigation proceedings against said individuals to be conducted by the Committee;

e)Regularly submit to the Committee, the Secretary of Justice and the Chairman of the Comelec periodic reports and recommendations, supported by real, testimonial and documentary evidence, which may then serve as the Committee’s basis for immediately commencing appropriate preliminary investigation proceedings, as provided under Section 6 of this Joint Order; and

f)Upon the termination of its investigation, make a full and final report to the Committee, the Secretary of Justice, and the Chairman of the Comelec.9

Pursuant to Section 710 of the Joint Order, on August 23, 2011, the Joint Committee promulgated its Rules of Procedure.

The members of the Fact-Finding Team unanimously agreed that the subject of the Initial Report would be the electoral fraud and manipulation of election results allegedly committed during the May 14, 2007 elections. Thus, in its Initial Report11 dated October 20, 2011, the Fact-Finding Team concluded that manipulation of the results in the May 14, 2007 senatorial elections in the provinces of North and South Cotabato and Maguindanao were indeed perpetrated.12 The Fact- Finding Team recommended that petitioner Abalos and ten (10) others13 be subjected to preliminary investigation for electoral sabotage for conspiring to manipulate the election results in North and South Cotabato. Twenty-six (26)14 persons, including petitioners GMA and Abalos, were likewise recommended for preliminary investigation for electoral sabotage for manipulating the election results in Maguindanao.15 Several persons were also recommended to be charged

administratively, while others,16 including petitioner Mike Arroyo, were recommended to be subjected to further investigation.17 The case resulting from the investigation of the Fact-Finding Team was docketed as DOJ-Comelec Case No. 001-2011.

Meanwhile, on October 17, 2011, Senator Aquilino Pimentel III (Senator Pimentel) filed a Complaint-Affidavit18 for Electoral Sabotage against petitioners and twelve others19 and several John Does and Jane Does. The case was docketed as DOJ-Comelec Case No. 002-2011.

On October 24, 2011, the Joint Committee issued two subpoenas against petitioners in DOJ- Comelec Case Nos. 001-2011 and 002-2011.20 On November 3, 2011, petitioners, through counsel, appeared before the Joint Committee.21 On that preliminary hearing, the Joint Committee consolidated the two DOJ-Comelec cases. Respondents therein were likewise ordered to submit their Counter-Affidavits by November 14, 2011.22

Thereafter, petitioners filed before the Court separate Petitions for Certiorari and Prohibition with Prayer for the Issuance of a Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction assailing the creation of the Joint Panel.23 The petitions were eventually consolidated.

On November 14, 2011, petitioner Mike Arroyo filed a Motion to Defer Proceedings24 before the Joint Committee, in view of the pendency of his petition before the Court. On the same day, petitioner GMA filed before the Joint Committee an Omnibus Motion Ad Cautelam25 to require Senator Pimentel to furnish her with documents referred to in his complaint-affidavit and for the production of election documents as basis for the charge of electoral sabotage. GMA contended that for the crime of electoral sabotage to be established, there is a need to present election documents allegedly tampered which resulted in the increase or decrease in the number of votes of local and national candidates.26 GMA prayed that she be allowed to file her counter-affidavit within ten (10) days from receipt of the requested documents.27 Petitioner Abalos, for his part, filed a Motion to Suspend Proceedings (Ex Abundante Ad Cautelam),28 in view of the pendency of his petition brought before the Court.

In an Order29 dated November 15, 2011, the Joint Committee denied the aforesaid motions of petitioners. GMA subsequently filed a motion for reconsideration.30

On November 16, 2011, the Joint Committee promulgated a Joint Resolution which was later indorsed to the Comelec.31 On November 18, 2011, after conducting a special session, the Comelec en banc issued a Resolution32 approving and adopting the Joint Resolution subject to modifications. The dispositive portion of the Comelec Resolution reads:

WHEREFORE, premises considered, the Resolution of the Joint DOJ-COMELEC Preliminary Investigation Committee in DOJ-COMELEC Case No. 001-2011 and DOJ-COMELEC Case No. 002-2011, upon the recommendation of the COMELEC’s own representatives in the Committee, is hereby APPROVED and ADOPTED, subject to the following MODIFICATIONS:

1. That information/s for the crime of ELECTORAL SABOTAGE under Section 42 (b) of R.A. 9369, amending Section 27 (b) of R.A. 6646, be filed against GLORIA

MACAPAGAL-ARROYO, BENJAMIN ABALOS, SR., LINTANG H. BEDOL, DATU ANDAL AMPATUAN, SR. and PETER REYES;

2.That the charges against MICHAEL C. ABAS, NICODEMO FERRER, REUBEN BASIAO, JAIME PAZ and NORIE K. UNAS be subjected to further investigation;

3.That the charges against JOSE MIGUEL T. ARROYO, BONG SERRANO, ALBERTO AGRA, ANDREI BON TAGUM, GABBY CLAUDIO, ROMY DAYDAY, JEREMY JAVIER, JOHN DOE a.k.a BUTCH, be DISMISSED for insufficiency of evidence to establish probable cause;

4.That the recommendation that ESTELITA B. ORBASE, ELIZA A. GASMIN, ELSA Z. ATINEN, SALIAO S. AMBA, MAGSAYSAY B. MOHAMAD, SALONGA K. EDZELA, RAGAH D. AYUNAN, SUSAN U. CANANBAN, RUSSAM H. MABANG, ASUNCION CORAZON P. RENIEDO, NENA A. ALID, MA. SUSAN L. ALBANO, ROHAIDA T. KHALID, ARAW M. CAO, JEEHAN S. NUR, ALICE A. LIM, NORIJEAN P. HANGKAL, CHRISTINA ROAN M. DALOPE, and MACEDA L. ABO be administratively charged be subjected to further review by this Commission to determine the appropriate charge/s that may be filed against them;

5.That the findings of lack of probable cause against LILIAN S. SUAN-RADAM and YOGIE G. MARTIRIZAR be REJECTED by reason of the pendency of their respective cases before the Regional Trial Court of Pasay (Branch 114) and this Commission for the same offense under consideration.

In the higher interest of justice and by reason of manifest attempts to frustrate the government’s right to prosecute and to obtain speedy disposition of the present case pending before the Commission, the Law Department and/or any COMELEC legal officers as may be authorized by this Commission is hereby ORDERED to IMMEDIATELY PREPARE and FILE the necessary Information/s before the appropriate court/s

SO ORDERED.33 (Emphasis supplied.)

On even date, pursuant to the above Resolution, the Comelec’s Law Department filed with the Regional Trial Court (RTC), Pasay City, an Information against petitioner GMA, Governor Andal Ampatuan, Sr., and Atty. Lintang H. Bedol, for violation of Section 42 (b)(3) of Republic Act (R.A.) No. 9369, amending Section 27 (b) of R.A. No. 6646, docketed as Criminal Case No. RPSY-11-04432-CR.34 The case was raffled to Branch 112 and the corresponding Warrant of Arrest was issued which was served on GMA on the same day.35

On November 18, 2011, petitioner GMA filed with the RTC an Urgent Omnibus Motion Ad Cautelam36 with leave to allow the Joint Committee to resolve the motion for reconsideration filed by GMA, to defer issuance of a warrant of arrest and a Hold Departure Order, and to proceed to judicial determination of probable cause. She, likewise, filed with the Comelec a Motion to Vacate Ad Cautelam37 praying that its Resolution be vacated for being null and void.

The RTC nonetheless issued a warrant for her arrest which was duly served. GMA thereafter filed a Motion for Bail which was granted.

Issues

In G.R. No. 199082, petitioner Arroyo relies on the following grounds:

A.THE CREATION OF THE JOINT COMMITTEE VIA THE JOINT ORDER IS AT WAR WITH THE DUE PROCESS AND EQUAL PROTECTION CLAUSE OF THE CONSTITUTION, HAVING BEEN CREATED WITH THE SOLE END IN VIEW OF INVESTIGATING AND PROSECUTING CERTAIN PERSONS AND INCIDENTS ONLY, SPECIFICALLY THOSE INVOLVING THE 2004 AND 2007 ELECTIONS TO THE EXCLUSION OF OTHERS, IN VIOLATION OF THE DOCTRINE IN BIRAOGO

V.TRUTH COMMISSION AND COMPANION CASE.

B.NO LAW OR RULE AUTHORIZES THE JOINT COMMITTEE TO CONDUCT PRELIMINARY INVESTIGATION.

C.THE CREATION OF THE JOINT COMMITTEE, WHICH FUSES THE COMMISSION ON ELECTIONS - A CONSTITUTIONALLY INDEPENDENT BODY - WITH THE DEPARTMENT OF JUSTICE – A POLITICAL AGENT OF THE EXECUTIVE – DEMOLISHES THE INDEPENDENCE OF THE COMMISSION ON ELECTIONS AS PROVIDED IN ARTICLE IX(A), SECTIONS 1 AND 2 AND IX(C) OF THE CONSTITUTION.

D.IN VIEW OF THE NUMEROUS AND PERSISTENT PUBLIC PRONOUNCEMENTS OF THE PRESIDENT, HIS SPOKESPERSONS, THE HEADS OF THE DOJ AND THE COMELEC, AND MEMBERS OF THE JOINT COMMITTEE THAT CASES SHOULD BE FILED AGAINST PETITIONER AND HIS FAMILY AND ALLEGED ASSOCIATES BY THE END OF 2011, THE PROCEEDINGS THEREOF SHOULD BE ENJOINED FOR BEING PERSECUTORY, PURSUANT TO ALLADO V. DIOKNO AND RELATED CASES.

E.THE CREATION AND CONSTITUTION OF THE JOINT COMMITTEE TRAMPLES UPON PETITIONER’S RIGHT TO A FAIR PROCEEDING BY AN INDEPENDENT AND IMPARTIAL TRIBUNAL.

F.THE COMELEC, AND SUBSEQUENTLY, THE RTC OF PASAY CITY, HAVE ASSUMED JURISDICTION OVER THE SUBJECT MATTER SOUGHT TO BE

INVESTIGATED BY THE JOINT COMMITTEE, TO THE EXCLUSION OF ANY BODY, INCLUDING THE JOINT COMMITTEE.38

In G.R. No. 199085, petitioner Abalos raises the following issues:

I.

DOES JOINT ORDER NO. 001-2011, CREATING THE JOINT DOJ-COMELEC FACT-FINDING TEAM AND PRELIMINARY INVESTIGATON COMMITTEE VIOLATE PETITIONER’S CONSTITUTIONAL RIGHT TO EQUAL PROTECTION OF THE LAW?

II.

DID THE CONDUCT AND PROCEEDINGS OF THE JOINT DOJ-COMELEC FACT- FINDING TEAM AND PRELIMINARY INVESTIGATION COMMITTEE VIOLATE PETITIONER’S CONSTITUTIONAL RIGHT TO DUE PROCESS OF LAW?

III.

DID THE DOJ AND COMELEC VIOLATE THE PRINCIPLE OF SEPARATION OF POWERS BY CREATING THE JOINT DOJ-COMELEC FACT-FINDING TEAM AND PRELIMINARY INVESTIGATION COMMITTEE WHICH ENCROACHED UPON THE POWERS OF THE LEGISLATURE AND THE REGIONAL TRIAL COURT?

IV.

DOES THE JOINT DOJ-COMELEC FACT-FINDING TEAM AND PRELIMINARY INVESTIGATION COMMITTEE HAVE THE POWER AND LEGAL AUTHORITY TO CONDUCT A PRELIMINARY INVESTIGATION OF THE SAME ELECTORAL SABOTAGE CASES WHICH THE COMELEC HAD ALREADY TAKEN COGNIZANCE OF?39

In G.R. No. 199118, petitioner GMA anchors her petition on the following grounds:

I. THE EXECUTIVE DEPARTMENT, THROUGH THE DOJ, OSTENSIBLY ACTING "JOINTLY" WITH THE COMELEC, HAS ACTED BEYOND THE LIMITS OF THE CONSTITUTION, IN THAT IT HAS COMPROMISED THE INDEPENDENCE OF THE COMELEC.

II. THE COMELEC HAS EFFECTIVELY ABDICATED ITS CONSTITUTIONAL MANDATE "TO INVESTIGATE AND, WHERE APPROPRIATE, PROSECUTE CASES OF VIOLATIONS OF ELECTION LAWS, INCLUDING ACTS OR OMISSIONS CONSTITUTING ELECTION FRAUDS, OFFENSES, AND MALPRACTICES" (ARTICLE IX-C, SECTION 26, 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES) IN FAVOR OF THE EXECUTIVE DEPARTMENT, ACTING THROUGH RESPONDENT JUSTICE SECRETARY DE LIMA.

III. DOJ-COMELEC JOINT ORDER NO. 001-2011 AND THE JOINT COMMITTEE RULES HAVE NOT BEEN PUBLISHED PURSUANT TO TAÑADA V. TUVERA, G.R. No. L-63915 (29 DECEMBER 1986). AFTER ALL, AS THE HONORABLE

COURT LIKEWISE DECLARED IN REPUBLIC V. PILIPINAS SHELL PETROLEUM CORPORATION, G.R. No. 173918 (08 APRIL 2008), (SIC)40

We deferred the resolution of petitioners’ Motion for the Issuance of a TRO and, instead, required the respondents to comment on the petitions.41

We likewise scheduled the consolidated cases for oral argument for which the parties were directed to limit their respective discussions to the following issues:

I. Whether or not Joint Order No. 001-2011 "Creating and Constituting a Joint DOJ-COMELEC Preliminary Investigation Committee and Fact-Finding Team on the 2004 and 2007 National Elections Electoral Fraud and Manipulation Cases" is constitutional in light of the following:

A.The due process clause of the 1987 Constitution

B.The equal protection clause of the 1987 Constitution

C.The principle of separation of powers

D.The independence of the COMELEC as a constitutional body

II. Whether or not the COMELEC has jurisdiction under the law to conduct preliminary investigation jointly with the DOJ.

A. Whether or not due process was observed by the Joint DOJ-COMELEC Fact-Finding Team and Preliminary Investigation Committee, and the COMELEC in the conduct of the preliminary investigation and approval of the Joint Panel’s Resolution.42

The Court, thereafter, required the parties to submit their respective Memoranda.43

The Court’s Ruling

Procedural Issues

Respondents claim that Mike Arroyo’s petition is moot and that of GMA is moot and academic. They explain that the Mike Arroyo petition presents no actual controversy that necessitates the exercise by the Court of its power of judicial review, considering that he was not among those indicted for electoral sabotage in the 2007 national elections as the Comelec dismissed the case against him for insufficiency of evidence.44 Anent the 2004 national elections, the Fact-Finding Team is yet to complete its investigation so Mike Arroyo’s apprehensions are merely speculative and anticipatory.45 As to the GMA petition, respondents aver that any judgment of the Court will have no practical legal effect because an Information has already been filed against her in Branch 112, RTC of Pasay City.46 With the filing of the Information, the RTC has already acquired jurisdiction over the case, including all issues relating to the constitutionality or legality of her preliminary investigation.47 Respondents also claim that the issues relating to the constitutionality and validity of the conduct of the preliminary investigation of GMA are best left

to the trial court, considering that it involves questions of fact.48 Respondents add that considering that the RTC has concurrent jurisdiction to determine a constitutional issue, it will be practical for the Court to allow the RTC to determine the constitutional issues in this case.49

We do not agree.

Mootness

It cannot be gainsaid that for a court to exercise its power of adjudication, there must be an actual case or controversy, that is, one which involves a conflict of legal rights, an assertion of opposite legal claims susceptible of judicial resolution.50 The case must not be moot or academic or based on extra-legal or other similar considerations not cognizable by a court of justice.51

A case becomes moot and academic when it ceases to present a justiciable controversy so that a declaration on the issue would be of no practical use or value.52 However, a case should not be dismissed simply because one of the issues raised therein had become moot and academic by the onset of a supervening event, whether intended or incidental, if there are other causes which need to be resolved after trial.53

Here, the consolidated cases are not rendered moot and academic by the promulgation of the Joint Resolution by the Joint Committee and the approval thereof by the Comelec. It must be recalled that the main issues in the three petitions before us are the constitutionality and legality of the creation of the Joint Committee and the Fact-Finding Team as well as the proceedings undertaken pursuant thereto. The assailed Joint Order specifically provides that the Joint Committee was created for purposes of investigating the alleged massive electoral fraud during the 2004 and 2007 national elections. However, in the Fact-Finding Team’s Initial Report, the team specifically agreed that the report would focus on the irregularities during the 2007 elections. Also, in its November 18, 2011 Resolution, the Comelec, while directing the filing of information against petitioners Abalos and GMA, ordered that further investigations be conducted against the other respondents therein. Apparently, the Fact-Finding Team’s and Joint

Committee’s respective mandates have not been fulfilled and they are, therefore, bound to continue discharging their duties set forth in the assailed Joint Order. Moreover, petitioners question the validity of the proceedings undertaken by the Fact-Finding Team and the Joint Committee leading to the filing of information, on constitutional grounds. We are not, therefore, barred from deciding on the petitions simply by the occurrence of the supervening events of filing an information and dismissal of the charges.

Jurisdiction over the validity of the conduct of the preliminary investigation

This is not the first time that the Court is confronted with the issue of jurisdiction to conduct preliminary investigation and at the same time with the propriety of the conduct of preliminary investigation. In Cojuangco, Jr. v. Presidential Commission on Good Government (PCGG),54 the Court resolved two issues, namely: (1) whether or not the PCGG has the power to conduct a preliminary investigation of the anti-graft and corruption cases filed by the Solicitor General

against Eduardo Conjuangco, Jr. and other respondents for the alleged misuse of coconut levy funds; and (2) on the assumption that it has jurisdiction to conduct such a preliminary investigation, whether or not its conduct constitutes a violation of petitioner’s right to due process and equal protection of the law.55 The Court decided these issues notwithstanding the fact that Informations had already been filed with the trial court.

In Allado v. Diokno,56 in a petition for certiorari assailing the propriety of the issuance of a warrant of arrest, the Court could not ignore the undue haste in the filing of the information and the inordinate interest of the government in filing the same. Thus, this Court took time to determine whether or not there was, indeed, probable cause to warrant the filing of information. This, notwithstanding the fact that information had been filed and a warrant of arrest had been issued. Petitioners therein came directly to this Court and sought relief to rectify the injustice that they suffered.

Hierarchy of courts

Neither can the petitions be dismissed solely because of violation of the principle of hierarchy of courts. This principle requires that recourse must first be made to the lower-ranked court exercising concurrent jurisdiction with a higher court.57 The Supreme Court has original jurisdiction over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. While this jurisdiction is shared with the Court of Appeals and the RTC, a direct invocation of this Court’s jurisdiction is allowed when there are special and important reasons therefor, clearly and especially set out in the petition, as in the present case.58 In the consolidated petitions, petitioners invoke exemption from the observance of the rule on hierarchy of courts in keeping with the Court’s duty to determine whether or not the other branches of government have kept themselves within the limits of the Constitution and the laws, and that they have not abused the discretion given to them.59

It is noteworthy that the consolidated petitions assail the constitutionality of issuances and resolutions of the DOJ and the Comelec. The general rule is that this Court shall exercise only appellate jurisdiction over cases involving the constitutionality of a statute, treaty or regulation.

However, such rule is subject to exception, that is, in circumstances where the Court believes that resolving the issue of constitutionality of a law or regulation at the first instance is of paramount importance and immediately affects the social, economic, and moral well-being of the people.60

This case falls within the exception. An expeditious resolution of the issues raised in the petitions is necessary. Besides, the Court has entertained a direct resort to the Court without the requisite motion for reconsideration filed below or without exhaustion of administrative remedies where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of the government or of the petitioners and when there is an alleged violation of due process, as in the present case.61 We apply the same relaxation of the Rules in the present case and, thus, entertain direct resort to this Court.

Substantive Issues

Bases for the Creation of the

Fact-Finding Team and Joint Committee

Section 2, Article IX-C of the 1987 Constitution enumerates the powers and functions of the Comelec. Paragraph (6) thereof vests in the Comelec the power to:

(6) File, upon a verified complaint, or on its own initiative, petitions in court for inclusion or exclusion of voters; investigate and, where appropriate, prosecute cases of violations of election laws, including acts or omissions constituting election frauds, offenses, and malpractices.

This was an important innovation introduced by the 1987 Constitution, because the above-quoted provision was not in the 1935 and 1973 Constitutions.62

The grant to the Comelec of the power to investigate and prosecute election offenses as an adjunct to the enforcement and administration of all election laws is intended to enable the Comelec to effectively insure to the people the free, orderly, and honest conduct of elections. The failure of the Comelec to exercise this power could result in the frustration of the true will of

the people and make a mere idle ceremony of the sacred right and duty of every qualified citizen to vote.63

The constitutional grant of prosecutorial power in the Comelec was reflected in Section 265 of Batas Pambansa Blg. 881, otherwise known as the Omnibus Election Code, to wit:

Section 265. Prosecution. The Commission shall, through its duly authorized legal officers, have the exclusive power to conduct preliminary investigation of all election offenses punishable under this Code, and to prosecute the same. The Commission may avail of the assistance of other prosecuting arms of the government: Provided, however, That in the event that the Commission fails to act on any complaint within four months from his filing, the complainant may file the complaint with the office of the fiscal [public prosecutor], or with the Ministry Department of Justice for proper investigation and prosecution, if warranted.

Under the above provision of law, the power to conduct preliminary investigation is vested exclusively with the Comelec. The latter, however, was given by the same provision of law the authority to avail itself of the assistance of other prosecuting arms of the government.64 Thus, under Section 2,65 Rule 34 of the Comelec Rules of Procedure, provincial and city prosecutors and their assistants are given continuing authority as deputies to conduct preliminary investigation of complaints involving election offenses under election laws and to prosecute the same. The complaints may be filed directly with them or may be indorsed to them by the petitioner or its duly authorized representatives.66

Thus, under the Omnibus Election Code, while the exclusive jurisdiction to conduct preliminary investigation had been lodged with the Comelec, the prosecutors had been conducting preliminary investigations pursuant to the continuing delegated authority given by the Comelec. The reason for this delegation of authority has been explained in Commission on Elections v. Español:67

The deputation of the Provincial and City Prosecutors is necessitated by the need for prompt investigation and dispensation of election cases as an indispensable part of the task of securing fine, orderly, honest, peaceful and credible elections. Enfeebled by lack of funds and the magnitude of its workload, the petitioner does not have a sufficient number of legal officers to conduct such investigation and to prosecute such cases.68

Moreover, as we acknowledged in People v. Basilla,69 the prompt and fair investigation and prosecution of election offenses committed before or in the course of nationwide elections would simply not be possible without the assistance of provincial and city fiscals prosecutors and their assistants and staff members, and of the state prosecutors of the DOJ.70

Section 265 of the Omnibus Election Code was amended by Section 43 of R.A. No. 9369,71 which reads:

Section 43. Section 265 of Batas Pambansa Blg. 881 is hereby amended to read as follows:

SEC. 265. Prosecution. – The Commission shall, through its duly authorized legal officers, have the power, concurrent with the other prosecuting arms of the government, to conduct preliminary investigation of all election offenses punishable under this Code, and to prosecute the same.72

As clearly set forth above, instead of a mere delegated authority, the other prosecuting arms of the government, such as the DOJ, now exercise concurrent jurisdiction with the Comelec to conduct preliminary investigation of all election offenses and to prosecute the same.

It is, therefore, not only the power but the duty of both the Comelec and the DOJ to perform any act necessary to ensure the prompt and fair investigation and prosecution of election offenses. Pursuant to the above constitutional and statutory provisions, and as will be explained further below, we find no impediment for the Comelec and the DOJ to create the Joint Committee and Fact-Finding Team for the purpose of conducting a thorough investigation of the alleged massive electoral fraud and the manipulation of election results in the 2004 and 2007 national elections relating in particular to the presidential and senatorial elections.73

Constitutionality of Joint-Order No. 001-2011

A. Equal Protection Clause

Petitioners claim that the creation of the Joint Committee and Fact-Finding Team is in violation of the equal protection clause of the Constitution because its sole purpose is the investigation and prosecution of certain persons and incidents. They argue that there is no substantial distinction between the allegations of massive electoral fraud in 2004 and 2007, on the one hand, and previous and subsequent national elections, on the other hand; and no substantial distinction between petitioners and the other persons or public officials who might have been involved in previous election offenses. They insist that the Joint Panel was created to target only the Arroyo Administration as well as public officials linked to the Arroyo Administration. To bolster their claim, petitioners explain that Joint Order No. 001-2011 is similar to Executive Order No. 1 (creating the Philippine Truth Commission) which this Court had already nullified for being

violative of the equal protection clause.

Respondents, however, refute the above contentions and argue that the wide array of the possible election offenses and broad spectrum of individuals who may have committed them, if any, immediately negate the assertion that the assailed orders are aimed only at the officials of the Arroyo Administration.

We agree with the respondents.

The equal protection clause is enshrined in Section 1, Article III of the Constitution which reads:

Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws.74

The concept of equal protection has been laid down in Biraogo v. Philippine Truth Commission of 2010:75

One of the basic principles on which this government was founded is that of the equality of right which is embodied in Section 1, Article III of the 1987 Constitution. The equal protection of the laws is embraced in the concept of due process, as every unfair discrimination offends the requirements of justice and fair play. It has been embodied in a separate clause, however, to provide for a more specific guaranty against any form of undue favoritism or hostility from the government. Arbitrariness in general may be challenged on the basis of the due process clause. But if the particular act assailed partakes of an unwarranted partiality or prejudice, the sharper weapon to cut it down is the equal protection clause.

According to a long line of decisions, equal protection simply requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. It requires public bodies and institutions to treat similarly-situated individuals in a similar manner. The purpose of the equal protection clause is to secure every person within a state's jurisdiction against intentional and arbitrary discrimination, whether occasioned by the express terms of a statute or by its improper execution through the state's duly-constituted authorities. In other words, the concept of equal justice under the law requires the state to govern impartially, and it may not draw distinctions between individuals solely on differences that are irrelevant to a legitimate governmental objective.76

Unlike the matter addressed by the Court’s ruling in Biraogo v. Philippine Truth Commission of 2010, Joint Order No. 001-2011 cannot be nullified on the ground that it singles out the officials of the Arroyo Administration and, therefore, it infringes the equal protection clause. The Philippine Truth Commission of 2010 was expressly created for the purpose of investigating alleged graft and corruption during the Arroyo Administration since Executive Order No. 177 specifically referred to the "previous administration"; while the Joint Committee was created for the purpose of conducting preliminary investigation of election offenses during the 2004 and 2007 elections. While GMA and Mike Arroyo were among those subjected to preliminary investigation, not all respondents therein were linked to GMA as there were public officers who

were investigated upon in connection with their acts in the performance of their official duties. Private individuals were also subjected to the investigation by the Joint Committee.

The equal protection guarantee exists to prevent undue favor or privilege. It is intended to eliminate discrimination and oppression based on inequality. Recognizing the existence of real differences among men, it does not demand absolute equality. It merely requires that all persons under like circumstances and conditions shall be treated alike both as to privileges conferred and liabilities enforced.78

We once held that the Office of the Ombudsman is granted virtually plenary investigatory powers by the Constitution and by law and thus may, for every particular investigation, whether commenced by complaint or on its own initiative, decide how best to pursue each investigation. Since the Office of the Ombudsman is granted such latitude, its varying treatment of similarly situated investigations cannot by itself be considered a violation of any of the parties’ rights to the equal protection of the laws.79 This same doctrine should likewise apply in the present case.

Thus, as the constitutional body granted with the broad power of enforcing and administering all laws and regulations relative to the conduct of an election, plebiscite, initiative, referendum and recall,80 and tasked to ensure free, orderly, honest, peaceful, and credible elections,81 the Comelec has the authority to determine how best to perform such constitutional mandate. Pursuant to this authority, the Comelec issues various resolutions prior to every local or national elections setting forth the guidelines to be observed in the conduct of the elections. This shows that every election is distinct and requires different guidelines in order to ensure that the rules are updated to respond to existing circumstances.

Moreover, as has been practiced in the past, complaints for violations of election laws may be filed either with the Comelec or with the DOJ. The Comelec may even initiate, motu proprio, complaints for election offenses.82

Pursuant to law and the Comelec’s own Rules, investigations may be conducted either by the Comelec itself through its law department or through the prosecutors of the DOJ. These varying procedures and treatment do not, however, mean that respondents are not treated alike. Thus, petitioners’ insistence of infringement of their constitutional right to equal protection of the law is misplaced.

B. Due Process

Petitioners claim that the Joint Panel does not possess the required cold neutrality of an impartial judge because it is all at once the evidence-gatherer, prosecutor and judge. They explain that since the Fact-Finding Team has found probable cause to subject them to preliminary investigation, it is impossible for the Joint Committee to arrive at an opposite conclusion. Petitioners likewise express doubts of any possibility that the Joint Committee will be fair and impartial to them as Secretary De Lima and Chairman Brillantes had repeatedly expressed prejudgment against petitioners through their statements captured by the media.

For their part, respondents contend that petitioners failed to present proof that the President of the Philippines, Secretary of Justice, and Chairman of the Comelec actually made the statements allegedly prejudging their case and in the context in which they interpreted them. They likewise contend that assuming that said statements were made, there was no showing that Secretary De Lima had tried to intervene in the investigation to influence its outcome nor was it proven that the Joint Committee itself had prejudged the case. Lastly, they point out that Joint Order No. 001-2011 created two bodies, the Fact-Finding Team and the Joint Committee, with their respective mandates. Hence, they cannot be considered as one.

We find for respondents.

It is settled that the conduct of preliminary investigation is, like court proceedings, subject to the requirements of both substantive and procedural due process.83 Preliminary investigation is considered as a judicial proceeding wherein the prosecutor or investigating officer, by the nature of his functions, acts as a quasi-judicial officer.84 The authority of a prosecutor or investigating officer duly empowered to preside over or to conduct a preliminary investigation is no less than that of a municipal judge or even an RTC Judge.85 Thus, as emphasized by the Court in Ladlad v. Velasco:86

x x x We cannot emphasize too strongly that prosecutors should not allow, and should avoid, giving the impression that their noble office is being used or prostituted, wittingly or unwittingly, for political ends, or other purposes alien to, or subversive of, the basic and fundamental objective of serving the interest of justice evenhandedly, without fear or favor to any and all litigants alike, whether rich or poor, weak or strong, powerless or mighty. Only by strict adherence to the established procedure may public's perception of the impartiality of the prosecutor be enhanced.87

In this case, as correctly pointed out by respondents, there was no showing that the statements claimed to have prejudged the case against petitioners were made by Secretary De Lima and Chairman Brillantes or were in the prejudicial context in which petitioners claimed the statements were made. A reading of the statements allegedly made by them reveals that they were just responding to hypothetical questions in the event that probable cause would eventually be found by the Joint Committee.

More importantly, there was no proof or even an allegation that the Joint Committee itself, tasked to conduct the requisite preliminary investigation against petitioners, made biased statements that would convey to the public that the members were favoring a particular party. Neither did the petitioners show that the President of the Philippines, the Secretary of Justice or the Chairman of the Comelec intervened in the conduct of the preliminary investigation or exerted undue pressure on their subordinates to tailor their decision with their public declarations and adhere to a pre-determined result.88 Moreover, insofar as the Comelec is concerned, it must be emphasized that the constitutional body is collegial. The act of the head of a collegial body cannot be considered as that of the entire body itself.89 In equating the alleged bias of the above- named officials with that of the Joint Committee, there would be no arm of the government credible enough to conduct a preliminary investigation.90

It must also be emphasized that Joint Order No. 001-2011 created two bodies, namely: (1) the Fact-Finding Team tasked to gather real, documentary and testimonial evidence which can be utilized in the preliminary investigation to be conducted by the Joint Committee; and (2) the Joint Committee mandated to conduct preliminary investigation. It is, therefore, inaccurate to say that there is only one body which acted as evidence-gatherer, prosecutor and judge.

C. Separation of powers

Petitioners claim that the Joint Panel is a new public office as shown by its composition, the creation of its own Rules of Procedure, and the source of funding for its operation. It is their position that the power of the DOJ to investigate the commission of crimes and the Comelec’s constitutional mandate to investigate and prosecute violations of election laws do not include the power to create a new public office in the guise of a joint committee. Thus, in creating the Joint Panel, the DOJ and the Comelec encroached upon the power of the Legislature to create public office.

Respondents dispute this and contend that the Joint Committee and Fact-Finding Team are not new public offices, but merely collaborations between two existing government agencies sharing concurrent jurisdiction. This is shown by the fact that the members of the Joint Panel are existing officers of the DOJ and the Comelec who exercise duties and functions that are already vested in them.

Again, we agree with respondents.

As clearly explained above, the Comelec is granted the power to investigate, and where appropriate, prosecute cases of election offenses. This is necessary in ensuring free, orderly, honest, peaceful and credible elections. On the other hand, the DOJ is mandated to administer the criminal justice system in accordance with the accepted processes thereof consisting in the investigation of the crimes, prosecution of offenders and administration of the correctional system.91 It is specifically empowered to "investigate the commission of crimes, prosecute offenders and administer the probation and correction system."92 Also, the provincial or city prosecutors and their assistants, as well as the national and regional state prosecutors, are specifically named as the officers authorized to conduct preliminary investigation.93 Recently, the Comelec, through its duly authorized legal offices, is given the power, concurrent with the other prosecuting arms of the government such as the DOJ, to conduct preliminary investigation of all election offenses.94

Undoubtedly, it is the Constitution, statutes, and the Rules of Court and not the assailed Joint Order which give the DOJ and the Comelec the power to conduct preliminary investigation. No new power is given to them by virtue of the assailed order. As to the members of the Joint Committee and Fact-Finding Team, they perform such functions that they already perform by virtue of their current positions as prosecutors of the DOJ and legal officers of the Comelec. Thus, in no way can we consider the Joint Committee as a new public office.

D. Independence of the Comelec

Petitioners claim that in creating the Joint Panel, the Comelec has effectively abdicated its constitutional mandate to investigate and, where appropriate, to prosecute cases of violation of election laws including acts or omissions constituting election frauds, offenses, and malpractices in favor of the Executive Department acting through the DOJ Secretary. Under the set- up, the Comelec personnel is placed under the supervision and control of the DOJ. The chairperson is a DOJ official. Thus, the Comelec has willingly surrendered its independence to the DOJ and has acceded to share its exercise of judgment and discretion with the Executive Branch.

We do not agree.

Section 1,95 Article IX-A of the 1987 Constitution expressly describes all the Constitutional Commissions as independent. Although essentially executive in nature, they are not under the control of the President of the Philippines in the discharge of their respective functions.96 The Constitution envisions a truly independent Comelec committed to ensure free, orderly, honest, peaceful, and credible elections and to serve as the guardian of the people’s sacred right of suffrage – the citizenry’s vital weapon in effecting a peaceful change of government and in achieving and promoting political stability.97

Prior to the amendment of Section 265 of the Omnibus Election Code, the Comelec had the exclusive authority to investigate and prosecute election offenses. In the discharge of this exclusive power, the Comelec was given the right to avail and, in fact, availed of the assistance of other prosecuting arms of the government such as the prosecutors of the DOJ. By virtue of this continuing authority, the state prosecutors and the provincial or city prosecutors were authorized to receive the complaint for election offense and delegate the conduct of investigation to any of their assistants. The investigating prosecutor, in turn, would make a recommendation either to dismiss the complaint or to file the information. This recommendation is subject to the approval of the state, provincial or city prosecutor, who himself may file the information with the proper court if he finds sufficient cause to do so, subject, however, to the accused’s right to appeal to the Comelec.98

Moreover, during the past national and local elections, the Comelec issued Resolutions99 requesting the Secretary of Justice to assign prosecutors as members of Special Task Forces to assist the Comelec in the investigation and prosecution of election offenses. These Special Task Forces were created because of the need for additional lawyers to handle the investigation and prosecution of election offenses.

Clearly, the Comelec recognizes the need to delegate to the prosecutors the power to conduct preliminary investigation. Otherwise, the prompt resolution of alleged election offenses will not be attained. This delegation of power, otherwise known as deputation, has long been recognized and, in fact, been utilized as an effective means of disposing of various election offense cases. Apparently, as mere deputies, the prosecutors played a vital role in the conduct of preliminary investigation, in the resolution of complaints filed before them, and in the filing of the informations with the proper court.

As pointed out by the Court in Barangay Association for National Advancement and Transparency (BANAT) Party-List v. Commission on Elections,100 the grant of exclusive power

to investigate and prosecute cases of election offenses to the Comelec was not by virtue of the Constitution but by the Omnibus Election Code which was eventually amended by Section 43 of R.A. 9369. Thus, the DOJ now conducts preliminary investigation of election offenses concurrently with the Comelec and no longer as mere deputies. If the prosecutors had been allowed to conduct preliminary investigation and file the necessary information by virtue only of a delegated authority, they now have better grounds to perform such function by virtue of the statutory grant of authority. If deputation was justified because of lack of funds and legal officers to ensure prompt and fair investigation and prosecution of election offenses, the same justification should be cited to justify the grant to the other prosecuting arms of the government of such concurrent jurisdiction.

In view of the foregoing disquisition, we find no impediment for the creation of a Joint Committee. While the composition of the Joint Committee and Fact-Finding Team is dominated by DOJ officials, it does not necessarily follow that the Comelec is inferior. Under the Joint Order, resolutions of the Joint Committee finding probable cause for election offenses shall still be approved by the Comelec in accordance with the Comelec Rules of Procedure. This shows that the Comelec, though it acts jointly with the DOJ, remains in control of the proceedings. In no way can we say that the Comelec has thereby abdicated its independence to the executive department.

The text and intent of the constitutional provision granting the Comelec the authority to investigate and prosecute election offenses is to give the Comelec all the necessary and incidental powers for it to achieve the objective of holding free, orderly, honest, peaceful, and credible elections.101 The Comelec should be allowed considerable latitude in devising means and methods that will insure the accomplishment of the great objective for which it was created.102 We may not agree fully with its choice of means, but unless these are clearly illegal or constitute gross abuse of discretion, this Court should not interfere.103 Thus, Comelec Resolution No. 9266, approving the creation of the Joint Committee and Fact-Finding Team, should be viewed not as an abdication of the constitutional body’s independence but as a means to fulfill its duty of ensuring the prompt investigation and prosecution of election offenses as an adjunct of its mandate of ensuring a free, orderly, honest, peaceful and credible elections.

Although it belongs to the executive department, as the agency tasked to investigate crimes, prosecute offenders, and administer the correctional system, the DOJ is likewise not barred from acting jointly with the Comelec. It must be emphasized that the DOJ and the Comelec exercise concurrent jurisdiction in conducting preliminary investigation of election offenses. The doctrine of concurrent jurisdiction means equal jurisdiction to deal with the same subject matter.104 Contrary to the contention of the petitioners, there is no prohibition on simultaneous exercise of power between two coordinate bodies. What is prohibited is the situation where one files a complaint against a respondent initially with one office (such as the Comelec) for preliminary investigation which was immediately acted upon by said office and the re-filing of substantially the same complaint with another office (such as the DOJ). The subsequent assumption of jurisdiction by the second office over the cases filed will not be allowed. Indeed, it is a settled rule that the body or agency that first takes cognizance of the complaint shall exercise jurisdiction to the exclusion of the others.105 As cogently held by the Court in Department of Justice v. Hon. Liwag:106

To allow the same complaint to be filed successively before two or more investigative bodies would promote multiplicity of proceedings. It would also cause undue difficulties to the respondent who would have to appear and defend his position before every agency or body where the same complaint was filed. This would lead hapless litigants at a loss as to where to appear and plead their cause or defense.

There is yet another undesirable consequence. There is the distinct possibility that the two bodies exercising jurisdiction at the same time would come up with conflicting resolutions regarding the guilt of the respondents.

Finally, the second investigation would entail an unnecessary expenditure of public funds, and the use of valuable and limited resources of Government, in a duplication of proceedings already started with the Ombudsman.107

None of these problems would likely arise in the present case. The Comelec and the DOJ themselves agreed that they would exercise their concurrent jurisdiction jointly. Although the preliminary investigation was conducted on the basis of two complaints – the initial report of the Fact-Finding Team and the complaint of Senator Pimentel – both complaints were filed with the Joint Committee. Consequently, the complaints were filed with and the preliminary investigation was conducted by only one investigative body. Thus, we find no reason to disallow the exercise of concurrent jurisdiction jointly by those given such authority. This is especially true in this case given the magnitude of the crimes allegedly committed by petitioners. The joint preliminary investigation also serves to maximize the resources and manpower of both the Comelec and the DOJ for the prompt disposition of the cases.

Citing the principle of concurrent jurisdiction, petitioners insist that the investigation conducted by the Comelec involving Radam and Martirizar bars the creation of the Joint Committee for purposes of conducting another preliminary investigation. In short, they claim that the exercise by the Comelec of its jurisdiction to investigate excludes other bodies such as the DOJ and the Joint Committee from taking cognizance of the case. Petitioners add that the investigation should have been conducted also by the Comelec as the 2007 cases of Radam and Martirizar include several John Does and Jane Does.

We do not agree.

While the Comelec conducted the preliminary investigation against Radam, Martirizar and other unidentified persons, it only pertains to election offenses allegedly committed in North and South Cotabato. On the other hand, the preliminary investigation conducted by the Joint Committee (involving GMA) pertains to election offenses supposedly committed in Maguindanao. More importantly, considering the broad power of the Comelec to choose the means of fulfilling its duty of ensuring the prompt investigation and prosecution of election offenses as discussed earlier, there is nothing wrong if the Comelec chooses to work jointly with the DOJ in the conduct of said investigation. To reiterate, in no way can we consider this as an act abdicating the independence of the Comelec.

Publication Requirement

In the conduct of preliminary investigation, the DOJ is governed by the Rules of Court, while the Comelec is governed by the 1993 Comelec Rules of Procedure. There is, therefore, no need to promulgate new Rules as may be complementary to the DOJ and Comelec Rules.

As earlier discussed, considering that Joint Order No. 001-2011 only enables the Comelec and the DOJ to exercise powers which are already vested in them by the Constitution and other existing laws, it need not be published for it to be valid and effective. A close examination of the Joint Committee’s Rules of Procedure, however, would show that its provisions affect the public. Specifically, the following provisions of the Rules either restrict the rights of or provide remedies to the affected parties, to wit: (1) Section 1 provides that "the Joint Committee will no longer entertain complaints from the public as soon as the Fact-Finding Team submits its final report, except for such complaints involving offenses mentioned in the Fact-Finding Team’s Final Report"; (2) Section 2 states that "the Joint Committee shall not entertain a Motion to Dismiss"; and (3) Section 5 provides that a Motion for Reconsideration may be availed of by the aggrieved parties against the Joint Committee’s Resolution. Consequently, publication of the Rules is necessary.

The publication requirement covers not only statutes but administrative regulations and issuances, as clearly outlined in Tañada v. Tuvera:108 effectivity, which shall begin fifteen days after publication unless a different effectivity date is fixed by the legislature. Covered by this rule are presidential decrees and executive orders promulgated by the President in the exercise of legislative powers whenever the same are validly delegated by the legislature or, at present, directly conferred by the Constitution. Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation. Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties.109

As opposed to Honasan II v. The Panel of Investigating Prosecutors of the Department of Justice,110 where the Court held that OMB-DOJ Joint Circular No. 95-001 is only an internal arrangement between the DOJ and the Office of the Ombudsman outlining the authority and responsibilities among prosecutors of both offices in the conduct of preliminary investigation, the assailed Joint Committee’s Rules of Procedure regulate not only the prosecutors of the DOJ and the Comelec but also the conduct and rights of persons, or the public in general. The publication requirement should, therefore, not be ignored.

Publication is a necessary component of procedural due process to give as wide publicity as possible so that all persons having an interest in the proceedings may be notified thereof.111 The requirement of publication is intended to satisfy the basic requirements of due process. It is imperative for it will be the height of injustice to punish or otherwise burden a citizen for the transgressions of a law or rule of which he had no notice whatsoever.112

Nevertheless, even if the Joint Committee’s Rules of Procedure is ineffective for lack of publication, the proceedings undertaken by the Joint Committee are not rendered null and void

for that reason, because the preliminary investigation was conducted by the Joint Committee pursuant to the procedures laid down in Rule 112 of the Rules on Criminal Procedure and the 1993 Comelec Rules of Procedure.

Validity of the Conduct of

Preliminary Investigation

In her Supplemental Petition,113 GMA outlines the incidents that took place after the filing of the instant petition, specifically the issuance by the Joint Committee of the Joint Resolution, the approval with modification of such resolution by the Comelec and the filing of information and the issuance of a warrant of arrest by the RTC. With these supervening events, GMA further assails the validity of the proceedings that took place based on the following additional grounds:

(1) the undue and unbelievable haste attending the Joint Committee’s conduct of the preliminary investigation, its resolution of the case, and its referral to and approval by the Comelec, taken in conjunction with the statements from the Office of the President, demonstrate a deliberate and reprehensible pattern of abuse of inalienable rights and a blatant disregard of the envisioned integrity and independence of the Comelec; (2) as it stands, the creation of the Joint Committee was for the singular purpose of railroading the proceedings in the prosecution of the petitioner and in flagrant violation of her right to due process and equal protection of the laws; (3) the proceedings of the Joint Committee cannot be considered impartial and fair, considering that respondents have acted as law enforcers, who conducted the criminal investigation, gathered evidence and thereafter ordered the filing of complaints, and at the same time authorized preliminary investigation based on the complaints they caused to be filed; (4) the Comelec became an instrument of oppression when it hastily approved the resolution of the Joint Committee even if two of its members were in no position to cast their votes as they admitted to not having yet read the voluminous records of the cases; and (5) flagrant and repeated violations of her right to due process at every stage of the proceedings demonstrate a deliberate attempt to single out petitioner through the creation of the Joint Committee.114

In their Supplement to the Consolidated Comment,115 respondents accuse petitioners of violating the rule against forum shopping. They contend that in filing the Supplemental Petition before the Court, the Urgent Omnibus Motion Ad Cautelam with the RTC, and the Motion to Vacate Ad Cautelam with the Comelec, GMA raises the common issue of whether or not the proceedings before the Joint Committee and the Comelec are null and void for violating the Constitution. Respondents likewise claim that the issues raised in the supplemental petition are factual which is beyond the power of this Court to decide.

We cannot dismiss the cases before us on the ground of forum shopping.

Forum shopping is the act of a party against whom an adverse judgment has been rendered in one forum, of seeking another and possibly favorable opinion in another forum other than by appeal or the special civil action of certiorari.116 There can also be forum shopping when a party institutes two or more suits in different courts, either simultaneously or successively, in order to ask the courts to rule on the same and related causes and/or to grant the same or substantially the same reliefs on the supposition that one or the other court would make a favorable disposition or increase a party’s chances of obtaining a favorable decision or action.117

Indeed, petitioner GMA filed a Supplemental Petition before the Court, an Urgent Omnibus Motion Ad Cautelam before the RTC, and a Motion to Vacate Ad Cautelam before the Comelec, emphasizing the unbelievable haste committed by the Joint Committee and the Comelec in disposing of the cases before them. However, a plain reading of the allegations in GMA’s motion before the RTC would show that GMA raised the issue of undue haste in issuing the Joint Resolution only in support of her prayer for the trial court to hold in abeyance the issuance of the warrant of arrest, considering that her motion for reconsideration of the denial of her motion to be furnished copies of documents was not yet acted upon by the Joint Committee. If at all the constitutional issue of violation of due process was raised, it was merely incidental. More importantly, GMA raised in her motion with the RTC the finding of probable cause as she sought the judicial determination of probable cause which is not an issue in the petitions before us. GMA’s ultimate prayer is actually for the court to defer the issuance of the warrant of arrest. Clearly, the reliefs sought in the RTC are different from the reliefs sought in this case. Thus, there is no forum shopping.

With respect to the Motion to Vacate Ad Cautelam filed with the Comelec, while the issues raised therein are substantially similar to the issues in the supplemental petition which, therefore, strictly speaking, warrants outright dismissal on the ground of forum shopping, we cannot do so in this case in light of the due process issues raised by GMA.118 It is worthy to note that the main issues in the present petitions are the constitutionality of the creation of the Joint Panel and the validity of the proceedings undertaken pursuant thereto for alleged violation of the constitutional right to due process. In questioning the propriety of the conduct of the preliminary investigation in her Supplemental Petition, GMA only raises her continuing objection to the exercise of jurisdiction of the Joint Committee and the Comelec. There is, therefore, no impediment for the Court to rule on the validity of the conduct of preliminary investigation.

In Uy v. Office of the Ombudsman,119 the Court explained the nature of preliminary investigation, to wit:

A preliminary investigation is held before an accused is placed on trial to secure the innocent against hasty, malicious, and oppressive prosecution; to protect him from an open and public accusation of a crime, as well as from the trouble, expenses, and anxiety of a public trial. It is also intended to protect the state from having to conduct useless and expensive trials. While the right is statutory rather than constitutional, it is a component of due process in administering criminal justice. The right to have a preliminary investigation conducted before being bound for trial and before being exposed to the risk of incarceration and penalty is not a mere formal or technical right; it is a substantive right. To deny the accused's claim to a preliminary investigation is to deprive him of the full measure of his right to due process.120

A preliminary investigation is the crucial sieve in the criminal justice system which spells for an individual the difference between months if not years of agonizing trial and possibly jail term, on the one hand, and peace of mind and liberty, on the other hand. Thus, we have characterized the right to a preliminary investigation as not a mere formal or technical right but a substantive one, forming part of due process in criminal justice.121

In a preliminary investigation, the Rules of Court guarantee the petitioners basic due process rights such as the right to be furnished a copy of the complaint, the affidavits, and other supporting documents, and the right to submit counter-affidavits, and other supporting documents in her defense.122 Admittedly, GMA received the notice requiring her to submit her counter-affidavit. Yet, she did not comply, allegedly because she could not prepare her counter- affidavit. She claimed that she was not furnished by Senator Pimentel pertinent documents that she needed to adequately prepare her counter-affidavit.

In her Omnibus Motion Ad Cautelam123 to require Senator Pimentel to furnish her with documents referred to in his complaint-affidavit and for production of election documents as basis for the charge of electoral sabotage, GMA prayed that the Joint Committee issue an Order directing the Fact-Finding Team and Senator Pimentel to furnish her with copies of the following documents:

a.Complaint-affidavit and other relevant documents of Senator Aquilino Pimentel III filed before the Commission on Elections against Attys. Lilia Suan-Radam and Yogie Martirizar, as well as the Informations filed in the Regional Trial Court of Pasay City, Branch 114 in Criminal Case Nos. R-PSU-11-03190-CR to R-PSU-11-03200-CR.

b.Records in the petitions filed by complainant Pimentel before the National Board of Canvassers, specifically in NBC Case Nos. 07-162, 07-168, 07-157, 07-159, 07-161 and 07-163.

c.Documents which served as basis in the allegations of "Significant findings specific to the protested municipalities in the Province of Maguindanao."

d.Documents which served as basis in the allegations of "Significant findings specific to the protested municipalities in the Province of Lanao del Norte."

e.Documents which served as basis in the allegations of "Significant findings specific to the protested municipalities in the Province of Shariff Kabunsuan."

f.Documents which served as basis in the allegations of "Significant findings specific to the protested municipalities in the Province of Lanao del Sur."

g.Documents which served as basis in the allegations of "Significant findings specific to the protested municipalities in the Province of Sulu."

h.Documents which served as basis in the allegations of "Significant findings specific to the protested municipalities in the Province of Basilan."

i.Documents which served as basis in the allegations of "Significant findings specific to the protested municipalities in the Province of Sultan Kudarat."124

GMA likewise requested the production of election documents used in the Provinces of South and North Cotabato and Maguindanao.125

The Joint Committee, however, denied GMA’s motion which carried with it the denial to extend the filing of her counter-affidavit. Consequently, the cases were submitted for resolution sans GMA’s and the other petitioners’ counter-affidavits. This, according to GMA, violates her right to due process of law.

We do not agree.

GMA’s insistence of her right to be furnished the above-enumerated documents is based on Section 3 (b), Rule 112 of the Rules on Criminal Procedure, which reads:

(b) x x x

The respondent shall have the right to examine the evidence submitted by the complainant which he may not have been furnished and to copy them at his expense. If the evidence is voluminous, the complainant may be required to specify those which he intends to present against the respondent, and these shall be made available for examination or copying by the respondent at his expense,

Objects as evidence need not be furnished a party but shall be made available for examination, copying or photographing at the expense of the requesting party.126

Section 6 (a), Rule 34 of the Comelec Rules of Procedure also grants the respondent such right of examination, to wit:

Sec. 6. Conduct of preliminary investigation. – (a) If on the basis of the complaint, affidavits and other supporting evidence, the investigating officer finds no ground to continue with the inquiry, he shall recommend the dismissal of the complaint and shall follow the procedure prescribed in Sec. 8 (c) of this Rule. Otherwise, he shall issue a subpoena to the respondent, attaching thereto a copy of the complaint, affidavits and other supporting documents giving said respondent ten (10) days from receipt within which to submit counter-affidavits and other supporting documents. The respondent shall have the right to examine all other evidence submitted by the complainant.127

Clearly from the above-quoted provisions, the subpoena issued against respondent therein should be accompanied by a copy of the complaint and the supporting affidavits and documents. GMA also has the right to examine documents but such right of examination is limited only to the documents or evidence submitted by the complainants (Senator Pimentel and the Fact-Finding Team) which she may not have been furnished and to copy them at her expense.

While it is true that Senator Pimentel referred to certain election documents which served as bases in the allegations of significant findings specific to the protested municipalities involved, there were no annexes or attachments to the complaint filed.128 As stated in the Joint Committee’s Order dated November 15, 2011 denying GMA’s Omnibus Motion Ad Cautelam, Senator Pimentel was ordered to furnish petitioners with all the supporting evidence129 However, Senator Pimentel manifested that he was adopting all the affidavits attached to the Fact-Finding Team’s Initial Report.130 Therefore, when GMA was furnished with the documents attached to

the Initial Report, she was already granted the right to examine as guaranteed by the Comelec Rules of Procedure and the Rules on Criminal Procedure. Those were the only documents submitted by the complainants to the Committee. If there are other documents that were referred to in Senator Pimentel’s complaint but were not submitted to the Joint Committee, the latter considered those documents unnecessary at that point (without foreclosing the relevance of other evidence that may later be presented during the trial)131 as the evidence submitted before it were considered adequate to find probable cause against her.132 Anyway, the failure of the complainant to submit documents supporting his allegations in the complaint may only weaken his claims and eventually works for the benefit of the respondent as these merely are allegations unsupported by independent evidence.

We must, however, emphasize at this point that during the preliminary investigation, the complainants are not obliged to prove their cause beyond reasonable doubt. It would be unfair to expect them to present the entire evidence needed to secure the conviction of the accused prior to the filing of information.133 A preliminary investigation is not the occasion for the full and exhaustive display of the parties’ respective evidence but the presentation only of such evidence as may engender a well-grounded belief that an offense has been committed and that the accused is probably guilty thereof and should be held for trial.134 Precisely there is a trial to allow the reception of evidence for the prosecution in support of the charge.135

With the denial of GMA’s motion to be furnished with and examine the documents referred to in Senator Pimentel’s complaint, GMA’s motion to extend the filing of her counter-affidavit and countervailing evidence was consequently denied. Indeed, considering the nature of the crime for which GMA was subjected to preliminary investigation and the documents attached to the complaint, it is incumbent upon the Joint Committee to afford her ample time to examine the documents submitted to the Joint Committee in order that she would be able to prepare her counter-affidavit. She cannot, however, insist to examine documents not in the possession and custody of the Joint Committee nor submitted by the complainants. Otherwise, it might cause undue and unnecessary delay in the disposition of the cases. This undue delay might result in the violation of the right to a speedy disposition of cases as enshrined in Section 16, Article III of the Constitution which states that "all persons shall have the right to a speedy disposition of their cases before all judicial, quasi-judicial, or administrative bodies." The constitutional right to speedy disposition of cases is not limited to the accused in criminal proceedings but extends to all parties in all cases, including civil and administrative cases, and in all proceedings, including judicial and quasi-judicial hearings.136 Any party to a case has the right to demand on all officials tasked with the administration of justice to expedite its disposition.137 Society has a particular interest in bringing swift prosecutions, and the society’s representatives are the ones who should protect that interest.138

Even assuming for the sake of argument that the denial of GMA’s motion to be furnished with and examine the documents referred to in Senator Pimentel’s complaint carried with it the denial to extend the filing of her counter-affidavit and other countervailing evidence rendering the preliminary investigation irregular, such irregularity would not divest the RTC of jurisdiction over the case and would not nullify the warrant of arrest issued in connection therewith, considering that Informations had already been filed against petitioners, except Mike Arroyo. This would only compel us to suspend the proceedings in the RTC and remand the case to the

Joint Committee so that GMA could submit her counter-affidavit and other countervailing evidence if she still opts to. However, to do so would hold back the progress of the case which is anathema to the accused’s right to speedy disposition of cases.

It is well settled that the absence or irregularity of preliminary investigation does not affect the court’s jurisdiction over the case. Nor does it impair the validity of the criminal information or render it defective. Dismissal is not the remedy.139 Neither is it a ground to quash the information or nullify the order of arrest issued against the accused or justify the release of the accused from detention.140 The proper course of action that should be taken is to hold in abeyance the proceedings upon such information and to remand the case for the conduct of preliminary investigation.141

In the landmark cases of Cojuangco, Jr. v. Presidential Commission on Good Government (PCGG)142 and Allado v. Diokno,143 we dismissed the criminal cases and set aside the informations and warrants of arrest. In Cojuangco, we dismissed the criminal case because the information was filed by the PCGG which we declared to be unauthorized to conduct the preliminary investigation and, consequently, file the information as it did not possess the cold neutrality of an impartial judge. In Allado, we set aside the warrant of arrest issued against petitioners therein and enjoined the trial court from proceeding further for lack of probable cause. For one, there was serious doubt on the reported death of the victim in that case since the corpus delicti had not been established nor had his remains been recovered;and based on the evidence submitted, there was nothing to incriminate petitioners therein. In this case, we cannot reach the same conclusion because the Information filed before the RTC of Pasay City was filed by the Comelec en banc which had the authority to file the information for electoral sabotage and because the presence or absence of probable cause is not an issue herein. As can be gleaned from their assignment of errors/issues, petitioners did not question the finding of probable cause in any of their supplemental petitions. It was only in GMA’s memorandum where she belatedly included a discussion on the "insufficiency" of the evidence supporting the finding of probable cause for the filing of the Information for electoral sabotage against her.144 A closer look at her arguments, however, would show that they were included only to highlight the necessity of examining the election documents GMA requested to see before she could file her counter- affidavit. At any rate, since GMA failed to submit her counter-affidavit and other countervailing evidence within the period required by the Joint Committee, we cannot excuse her from non- compliance.

There might have been overzealousness on the part of the Joint Committee in terminating the investigation, endorsing the Joint Resolution to the Comelec for approval, and in filing the information in court. However, speed in the conduct of proceedings by a judicial or quasi- judicial officer cannot per se be instantly attributed to an injudicious performance of functions.145 The orderly administration of justice remains the paramount consideration with particular regard to the peculiar circumstances of each case.146 To be sure, petitioners were given the opportunity to present countervailing evidence. Instead of complying with the Joint Committee’s directive, several motions were filed but were denied by the Joint Committee. Consequently, petitioners’ right to submit counter-affidavit and countervailing evidence was forfeited. Taking into account the constitutional right to speedy disposition of cases and following the procedures set forth in the Rules on Criminal Procedure and the Comelec Rules of Procedure, the Joint Committee

finally reached its conclusion and referred the case to the Comelec. The latter, in turn, performed its task and filed the information in court. Indeed, petitioners were given the opportunity to be heard. They even actively participated in the proceedings and in fact filed several motions before the Joint Committee. Consistent with the constitutional mandate of speedy disposition of cases, unnecessary delays should be avoided.

Finally, we take judicial notice that on February 23, 2012, GMA was already arraigned and entered a plea of "not guilty" to the charge against her and thereafter filed a Motion for Bail which has been granted. Considering that the constitutionality of the creation of the Joint Panel is sustained, the actions of the Joint Committee and Fact-Finding Team are valid and effective. As the information was filed by the Commission authorized to do so, its validity is sustained. Thus, we consider said entry of plea and the Petition for Bail waiver on the part of GMA of her right to submit counter-affidavit and countervailing evidence before the Joint Committee, and recognition of the validity of the information against her. Her act indicates that she opts to avail of judicial remedies instead of the executive remedy of going back to the Joint Committee for the submission of the counter-affidavit and countervailing evidence. Besides, as discussed earlier, the absence or irregularity of preliminary investigation does not affect the court’s jurisdiction over the case nor does it impair the validity of the criminal information or render it defective.

It must be stressed, however, that this supervening event does not render the cases before the Court moot and academic as the main issues raised by petitioners are the constitutionality of the creation of the Joint Committee and the Fact-Finding Team and the validity of the proceedings undertaken pursuant to their respective mandates.

The Court notes that the Joint Committee and the Comelec have not disposed of the cases of the other respondents subjects of the preliminary investigation as some of them were subjected to further investigation. In order to remove the cloud of doubt that pervades that petitioners are being singled out, it is to the best interest of all the parties concerned that the Joint Committee and the Comelec terminate the proceedings as to the other respondents therein and not make a piecemeal disposition of the cases.

A peripheral issue which nonetheless deserves our attention is the question about the credibility of the Comelec brought about by the alleged professional relationship between Comelec Chairman Brillantes on one hand and the complainant Senator Pimentel and Fernando Poe, Jr. (FPJ), GMA’s rival in the 2004 elections, on the other hand; and by the other Commissioners’147 reasons for their partial inhibition. To be sure, Chairman Brillantes’ relationship with FPJ and Senator Pimentel is not one of the grounds for the mandatory disqualification of a Commissioner. At its most expansive, it may be considered a ground for voluntary inhibition which is indeed discretionary as the same was primarily a matter of conscience and sound discretion on the part of the Commissioner judge based on his or her rational and logical assessment of the case.148 Bare allegations of bias and prejudice are not enough in the absence of clear and convincing evidence to overcome the presumption that a judge will undertake his noble role to dispense justice according to law and evidence without fear or favor.149 It being discretionary and since Commissioner Brillantes was in the best position to determine whether or not there was a need to inhibit from the case, his decision to participate in the proceedings, in view of higher interest of justice, equity and public interest, should be respected. While a party

has the right to seek the inhibition or disqualification of a judge (or prosecutor or Commissioner) who does not appear to be wholly free, disinterested, impartial, and independent in handling the case, this right must be weighed with his duty to decide cases without fear of repression.150

Indeed, in Javier v. Comelec,151 the Court set aside the Comelec’s decision against Javier when it was disclosed that one of the Commissioners who had decided the case was a law partner of Javier’s opponent and who had refused to excuse himself from hearing the case. Javier, however, is not applicable in this case. First, the cited case involves the Comelec’s exercise of its adjudicatory function as it was called upon to resolve the propriety of the proclamation of the winner in the May 1984 elections for Batasang Pambansa of Antique. Clearly, the grounds for inhibition/disqualification were applicable. Second, the case arose at the time where the purity of suffrage has been defiled and the popular will scorned through the confabulation of those in authority.152 In other words, the controversy arose at the time when the public confidence in the Comelec was practically nil because of its transparent bias in favor of the administration.153 Lastly, in determining the propriety of the decision rendered by the Comelec, the Court took into consideration not only the relationship (being former partners in the law firm) between private respondents therein, Arturo F. Pacificador, and then Comelec Commissioner Jaime Opinion (Commissioner Opinion) but also the general attitude of the Comelec toward the party in power at that time. Moreover, the questioned Comelec decision was rendered only by a division of the Comelec. The Court thus concluded in Javier that Commissioner Opinion’s refusal to inhibit himself divested the Comelec’s Second Division of the necessary vote for the questioned decision and rendered the proceedings null and void.154

On the contrary, the present case involves only the conduct of preliminary investigation and the questioned resolution is an act of the Comelec En Banc where all the Commissioners participated and more than a majority (even if Chairman Brillantes is excluded) voted in favor of the assailed Comelec resolution. Unlike in 1986, public confidence in the Comelec remains. The Commissioners have already taken their positions in light of the claim of "bias and partiality" and the causes of their partial inhibition. Their positions should be respected confident that in doing so, they had the end in view of ensuring that the credibility of the Commission is not seriously affected.

To recapitulate, we find and so hold that petitioners failed to establish any constitutional or legal impediment to the creation of the Joint DOJ-Comelec Preliminary Investigation Committee and Fact-Finding Team.

First, while GMA and Mike Arroyo were among those subjected to preliminary investigation, not all respondents therein were linked to GMA; thus, Joint Order No. 001-2011 does not violate the equal protection clause of the Constitution.

Second, the due process clause is likewise not infringed upon by the alleged prejudgment of the case as petitioners failed to prove that the Joint Panel itself showed such bias and partiality against them. Neither was it shown that the Justice Secretary herself actually intervened in the conduct of the preliminary investigation. More importantly, considering that the Comelec is a collegial body, the perceived prejudgment of Chairman Brillantes as head of the Comelec cannot be considered an act of the body itself.

Third, the assailed Joint Order did not create new offices because the Joint Committee and Fact- Finding Team perform functions that they already perform by virtue of the Constitution, the statutes, and the Rules of Court.1âwphi1

Fourth, in acting jointly with the DOJ, the Comelec cannot be considered to have abdicated its independence in favor of the executive branch of government. Resolution No. 9266 was validly issued by the Comelec as a means to fulfill its duty of ensuring the prompt investigation and prosecution of election offenses as an adjunct of its mandate of ensuring a free, orderly, honest, peaceful, and credible elections. The role of the DOJ in the conduct of preliminary investigation of election offenses has long been recognized by the Comelec because of its lack of funds and legal officers to conduct investigations and to prosecute such cases on its own. This is especially true after R.A. No. 9369 vested in the Comelec and the DOJ the concurrent jurisdiction to conduct preliminary investigation of all election offenses. While we uphold the validity of Comelec Resolution No. 9266 and Joint Order No. 001-2011, we declare the Joint Committee’s Rules of Procedure infirm for failure to comply with the publication requirement. Consequently, Rule 112 of the Rules on Criminal Procedure and the 1993 Comelec Rules of Procedure govern.

Fifth, petitioners were given the opportunity to be heard. They were furnished a copy of the complaint, the affidavits, and other supporting documents submitted to the Joint Committee and they were required to submit their counter-affidavit and countervailing evidence. As to petitioners Mike Arroyo and Abalos, the pendency of the cases before the Court does not automatically suspend the proceedings before the Joint Committee nor excuse them from their failure to file the required counter-affidavits. With the foregoing disquisitions, we find no reason to nullify the proceedings undertaken by the Joint Committee and the Comelec in the electoral sabotage cases against petitioners.

WHEREFORE, premises considered, the petitions and supplemental petitions are DISMISSED. Comelec Resolution No. 9266 dated August 2, 2011, Joint Order No. 001-2011 dated August 15, 2011, and the Fact-Finding Team’s Initial Report dated October 20, 2011, are declared VALID. However, the Rules of Procedure on the Conduct of Preliminary Investigation on the Alleged Election Fraud in the 2004 and 2007 National Elections is declared INEFFECTIVE for lack of publication.

In view of the constitutionality of the Joint Panel and the proceedings having been conducted in accordance with Rule 112 of the Rules on Criminal Procedure and Rule 34 of the Comelec Rules of Procedure, the conduct of the preliminary investigation is hereby declared VALID.

Let the proceedings in the Regional Trial Court of Pasay City, Branch 112, where the criminal cases for electoral sabotage against petitioners GMA and Abalos are pending, proceed with dispatch.

SO ORDERED.

DIOSDADO M. PERALTA

Associate Justice

WE CONCUR:

MARIA LOURDES P. A. SERENO

Chief Justice

G.R. No. 190336

June 27, 2012

LAND BANK OF THE PHILIPPINES (including its MANAGER, VALUATION AND LANDOWNERS COMPENSATION OFFICE [now AGRARIAN OPERATIONS CENTER X], Cagayan de Oro City), Petitioner,

vs.

PAZ O. MONTALVAN, joined by her husband, JESUS J. MONTALVAN, Respondents.

D E C I S I O N

SERENO, J.:

Before the Court is a Rule 45 Petition filed by petitioner Land Bank of the Philippines (LBP) questioning the 18 March 2009 Decision and 23 October 2009 Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 75279-MIN, which affirmed with modification the award of just compensation granted to the landowners, respondents Paz O. Montalvan and Jesus J. Montalvan, by the Regional Trial Court (RTC) of Ozamis City, Branch 15 in CAR Case No. 8.

The factual circumstances of the case, as recounted by the Special Agrarian Court (SAC)1 and the CA,2 are without much controversy and may be summarized as follows:

Respondents Paz O. Montalvan and Jesus J. Montalvan are spouses and registered owners of parcels of land situated in Balintonga (formerly Monterico) Aloran, Misamis Occidental. The said property is covered by Transfer Certificate of Title Nos. (TCTs) T-285 and T-294 with an area of approximately 162.9669 hectares. On 12 September 1989, they voluntarily offered to sell the entire property to the Government under the Comprehensive Agrarian Reform Program (CARP).

In reply to the voluntary offer to sell (VOS) of respondents, the Department of Agrarian Reform (DAR), through its Regional Office (Region 10) in Cagayan de Oro City, informed them that it was focusing only on 147.6913 hectares of the entire 162.9669-hectare land. After conducting a field investigation report on the chosen portion, which it reduced further to only 72 hectares out of the 147.6913 hectares that it would be acquiring (the expropriated portion), the DAR found that the remaining 75.6913-hectare land (the excluded portion) was not suitable for agriculture.3 Thereafter, the DAR Regional Office sent a Notice of Land Valuation, by which it offered to pay

respondents the amount of P 510,768.72 for the expropriated portion of their property, including improvements thereon.

Respondents raised their objections to the valuation and argued that "the coconut trees alone, if converted to coco lumber bring a net value of at least P 35,000 per hectare, and the offer was for only P 30,000 per hectare, or less than the actual value of the land and the coconuts on it."4 (Emphasis supplied.)

However, the DAR explained that it could only acquire the 72 hectares of the expropriated portion, because the excluded portion was above an 18% slope or was undeveloped, which made it exempt from CARP coverage. The DAR likewise noted the rejection by respondents of its valuation and stated that the matter had been referred to the DAR Adjudication Board (DARAB) for administrative summary proceedings to determine the compensation for the expropriated portion.

On 07 February 1992, without any action forthcoming from the DARAB, respondents directly filed a separate Complaint with the RTC, acting as a SAC, for the latter to fix the just compensation for the expropriated portion of their agricultural lands. Petitioner LBP moved to dismiss respondents’ Complaint on the ground that the proceedings for the valuation of the lands were still pending with the DARAB.

In its Order dated 30 March 1992, the SAC denied the Motion to Dismiss. It likewise denied the subsequent Motion for Reconsideration filed by petitioner LBP. Hence, the latter duly filed its Answer and raised, as an affirmative defense, respondents’ failure to exhaust administrative remedies before resorting to the Complaint for just compensation before the SAC.

Significantly, while the cases in the DARAB and the SAC were still pending, the DAR on 03 September 1992 caused the partial cancellation of TCT No. T-285 in the name of respondents. A new title (TCT No. T-11696) in the name of the Republic of the Philippines was issued covering the entire 147.6913 hectares. Nevertheless, petitioner LBP made no deposit in favor of respondents Montalvan as just compensation for the entire land. During the trial in the SAC, Engr. Jose Montalvan, the son of respondents, testified that the DAR had indeed acquired both the expropriated and the excluded portions of his parents’ lands. These portions, previously titled under TCT No. T-285, were acquired by the DAR, even if the investigation and valuations conducted by the latter and petitioner LBP were limited only to the 72-hectare expropriated portion.

In its Decision dated 12 October 1992, the DARAB ruled on the referral with respect to the disputed valuation and upheld the DAR’s earlier valuation of P 510,768.72 for the 72-hectare expropriated land.5 On 21 January 1993, the DARAB issued a Certification that confirmed that no appeal was filed from its Decision, which, hence, became final and executory.

Citing the recent DARAB Decision and Certification, petitioner LBP moved, for a second time, for the dismissal of respondents’ Complaint in the SAC. Yet, the SAC rejected petitioner’s plea and again denied its second Motion to Dismiss.6

In the Order dated 11 October 1995, the SAC directed petitioner LBP to revaluate the property using the guidelines in the recently amended DAR Administrative Orders.7 Hence, petitioner bank submitted a revaluation of the expropriated portion and offered P 1,020,010.66 as just compensation. Despite the increase in petitioner’s earlier offer, respondents Montalvan rejected it.

Considering the impasse, the SAC constituted an independent panel of commissioners8 to evaluate and assess the property, a move that was not opposed by petitioner LBP. On 30 May 2001, the panel of commissioners submitted a Commissioners’ Report dated 12 January 2000,9 in which they agreed that the fair market value of the 72-hectare expropriated property of respondents was P 50,000 per hectare, or a total of P 3,600,000.

After the submission of the Commissioners’ Report, petitioner LBP reassessed the land and offered to pay respondents P 26,210.75 per hectare, or a total of P 1,887,174.12 for the expropriated portion.10 However, this latest valuation offer was again rejected by respondents Montalvan.

Thereafter, petitioner LBP raised its objections to the Commissioners’ Report and alleged that the commissioners were all selected by respondents Montalvan, thus making their findings as to the market value of the expropriated portion self-serving.

The SAC favored the valuations made by the Panel of Commissioners over the 72-hectare expropriated portion and even directed petitioner LBP to also pay respondents Montalvan for the 75.6913-hectare excluded lands, all titled in the name of the Republic, in its Decision dated 15 March 2002, which disposed as follows:

WHEREFORE, in light of the foregoing considerations, judgment is hereby rendered ordering the Department of Agrarian Reform to acquire plaintiffs’ 162.9669 hectares of land embraced in TCT No. T-285 and TCT No. T-294, subject to retention, if qualified; and ordering Land Bank to pay for and as just compensation for the 72 hectares at P 50,000.00 per hectare and at P 35,000.00 per hectare for the rest of the areas; and to pay the costs.11

Acting on the Notice of Appeal filed by petitioner LBP,12 the CA issued the questioned 18 March 2009 Decision and affirmed the award of just compensation to respondents Montalvan, but deleted the payment of costs, as follows:

WHEREFORE, the Decision dated March 15, 2002 of the Regional Trial Court, Branch 15 of Ozamis City, acting as a Special Agrarian Court, appealed from is AFFIRMED with the modification that since the DAR actually acquired way back September 3, 1992 plaintiffs land known as Lot 1-Psu 53883 containing 147.6913 hectares covered by TCT No. T-285 previously in the name of the plaintiffs and now covered by TCT No. T-11696 in the name of the Republic of the Philippines, the defendant Land Bank of the Philippines is hereby Ordered to pay just compensation for the same at Fifty thousand pesos (P 50,000.00) per hectare for the 72 hectares and at Thirty-five thousand pesos (P 35,000.00) per hectare for the rest of the area of 75.6913 hectares, and that the payment of costs is deleted.13

Petitioner LBP partially moved for the reconsideration of the assailed CA Decision. It argued that only the 72-hectare expropriated property was subject to CARP, but not the excluded property, which was allegedly outside the jurisdiction of the SAC. Moreover, it argued that the award of P 35,000 per hectare for the 75.6913-hectare excluded portion had no factual and legal bases. However, the appellate court remained unconvinced and denied the Motion for Reconsideration.14

Hence, the instant Rule 45 Petition filed by petitioner LBP.

ISSUES

A.Considering the pendency of the DARAB proceedings, whether respondents Montalvan’s filing with the SAC of a Petition for judicial determination of just compensation was premature and in violation of the rule on the exhaustion of administrative remedies.

B.Whether the Court has authority to review the determination made by the SAC with respect to the amount of just compensation.

C.Whether petitioner LBP can be directed to pay just compensation for the 75.6913- hectare excluded portion, which is now titled in the name of the Republic of the Philippines, even if these lands are not suitable for agricultural purposes.

OUR RULING

Finding no merit in the arguments raised by petitioner LBP, the Court denies the instant Rule 45 Petition. However, the third issue with respect to the just compensation for the excluded portion of respondents Montalvan’s lands deserves some consideration.

With respect to the first issue, petitioner LBP argues that respondents’ filing with the SAC of a separate Complaint for the determination of just compensation was premature and in violation of the doctrine of exhaustion of administrative remedies. Petitioner reasoned that the revaluation proceedings in the DARAB following respondents’ rejection of the initial DAR offer were still pending. The line of reasoning employed by petitioner is not novel and has since been discredited by jurisprudential precedents.

The SAC has been statutorily determined to have original and exclusive jurisdiction over all petitions for the determination of just compensation due to landowners under the CARP.15 This legal principle has been upheld in a number of this Court’s decisions and has passed into the province of established doctrine in agrarian reform jurisprudence.16 In fact, this Court has sustained the exclusive authority of the SAC over the DARAB, even in instances when no administrative proceedings were conducted in the DARAB.17

In LBP v. CA,18 the Court affirmed the jurisdiction of the SAC (RTC-Cabanatuan City, Branch 23) in determining the just compensation due to Marcia E. Ramos for her expropriated ricelands, even though the proceedings in the DARAB were still continuing at the time she resorted to the

direct filing of a Complaint with the SAC. This doctrine was reiterated in LBP v. Celada,19 in which Leonila P. Celada was permitted to file a petition for judicial determination of just compensation with the SAC (RTC-Tagbilaran City), even if the summary administrative proceedings in the DARAB (Region VII-Cebu City) had just been initiated. It was not an error for the SAC to assume jurisdiction over the issue of just compensation despite the pendency of the DARAB proceedings, as thus ruled by the Court:

We do not agree with petitioner’s submission that the SAC erred in assuming jurisdiction over respondent’s petition for determination of just compensation despite the pendency of the administrative proceedings before the DARAB. In Land Bank of the Philippines v. Court of Appeals, the landowner filed an action for determination of just compensation without waiting for the completion of the DARAB’s re-evaluation of the land. The Court nonetheless held therein that the SAC acquired jurisdiction over the action for the following reason:

It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has "original and exclusive jurisdiction over all petitions for the determination of just compensation to landowners." This "original and exclusive" jurisdiction of the RTC would be undermined if the DAR would vest in administrative officials original jurisdiction in compensation cases and make the RTC an appellate court for the review of administrative decisions. Thus, although the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Sec. 57 that the original and exclusive jurisdiction to determine such cases is in the RTCs. Any effort to transfer such jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into appellate jurisdiction would be contrary to Sec. 57 and therefore would be void. Thus, direct resort to the SAC by private respondent is valid.

It would be well to emphasize that the taking of property under R.A. No. 6657 is an exercise of the power of eminent domain by the State. The valuation of property or determination of just compensation in eminent domain proceedings is essentially a judicial function which is vested with the courts and not with administrative agencies. Consequently, the SAC properly took cognizance of respondent’s petition for determination of just compensation.20 (Emphasis supplied.)

These judicial precedents are directly applicable to the case at bar. That the DARAB proceedings are still pending is not a fatal defect that will oust the SAC from its original and exclusive jurisdiction over a petition for judicial determination of just compensation in an agrarian reform case. The DAR referral of the issue of valuation to the DARAB will not prevent respondents from asserting in the SAC their rights as landowners, especially since the function of fixing the award of just compensation is properly lodged with the trial court and is not an administrative undertaking.21

Neither can respondents’ failure to file a motion for reconsideration or an appeal from the Decision of the DARAB be considered as a grave and serious violation of the doctrine of exhaustion of administrative remedies. Such reasoning would ultimately deprive the SAC of the authority to hear and decide the matter of just compensation.

There is no inherent inconsistency between (a) the primary jurisdiction of the DAR to determine and adjudicate agrarian reform matters and exclusive original jurisdiction over all questions involving the implementation of agrarian reform, including those of just compensation; and (b) the original and exclusive jurisdiction of the SAC over all petitions for the determination of just compensation. "The first refers to administrative proceedings, while the second refers to judicial proceedings."22 The jurisdiction of the SAC is not any less "original and exclusive," because the question is first passed upon by the DAR; as the judicial proceedings are not a continuation of the administrative determination.23 In LBP v. Escandor,24 the Court further made the following distinctions:

It is settled that the determination of just compensation is a judicial function. The DAR’s land valuation is only preliminary and is not, by any means, final and conclusive upon the landowner or any other interested party. In the exercise of their functions, the courts still have the final say on what the amount of just compensation will be.

Although the DAR is vested with primary jurisdiction under the Comprehensive Agrarian Reform Law (CARL) of 1988 to determine in a preliminary manner the reasonable compensation for lands taken under the CARP, such determination is subject to challenge in the courts. The CARL vests in the RTCs, sitting as SACs, original and exclusive jurisdiction over all petitions for the determination of just compensation. This means that the RTCs do not exercise mere appellate jurisdiction over just compensation disputes.

We have held that the jurisdiction of the RTCs is not any less "original and exclusive" because the question is first passed upon by the DAR. The proceedings before the RTC are not a continuation of the administrative determination. Indeed, although the law may provide that the decision of the DAR is final and unappealable, still a resort to the courts cannot be foreclosed on the theory that courts are the guarantors of the legality of administrative action.25 (Emphasis supplied.)

Applied to the instant case, the mere fact that landowners, respondents herein, failed to avail themselves of a motion for reconsideration or of an appeal from an adverse Decision of the DARAB will not affect the jurisdiction of the SAC, which had already been exercising authority over the case prior to that adverse ruling. Not being a continuation of the administrative proceedings, the pending Complaint filed by respondents Montalvan in the judicial courts will not be foreclosed by the DARAB’s Decision.

As regards the second issue of the amount of just compensation awarded to respondents by the SAC for the 72-hectare expropriated agricultural lands, petitioner LBP again fails to convince the Court. Petitioner asks us to evaluate the SAC-appointed Panel of Commissioners’ evidentiary basis for determining the value of respondents’ property. In effect, petitioner bank is praying for the resolution of a question of fact, which is improper in the instant Rule 45 Petition. This Court is not a trier of facts; it is not its function to reexamine the SAC’s factual findings, which were supported by the report of the independent Panel of Commissioners and were duly affirmed by the appellate court.26 Absent any allegation of irregularity or grave abuse of discretion, the factual findings of the lower courts, if substantiated by the Commissioners’ Report, are perforce binding and conclusive on this Court and will no longer be disturbed. Hence, the judicial

determination of the value of the expropriated portion amounting to P 50,000 per hectare is affirmed.

We now come to the third and final issue surrounding the appellate court’s ruling, which directed the DAR and petitioner LBP to pay just compensation for the excluded portion of the lands of respondents Montalvan.

To recall, when respondents Montalvan voluntarily offered to sell their property, the DAR Regional Office selected only 72 hectares as suitable for agriculture and subject to the payment of just compensation. It, however, showed no interest in acquiring under the CARP the 75.6913 hectares. A legal difficulty, however, arose before this Court when the DAR caused the transfer of the title to the entire 147.6913-hectare land, and yet offered to pay just compensation only for the expropriated, and not for the excluded, portion.

Clearly, it was a mistake on the part of the Republic to transfer the title of respondents Montalvan over the entire 147.6913-hectare land. In its Field Investigation Report, the DAR established its intent to acquire only 72 hectares, which was suitable for agricultural purposes under the CARP. But instead of dividing the lands and issuing two titles over the two portions (one, subject of the CARP; and the other, excluded therefrom), the DAR simply caused the transfer of the entire title to the name of the Republic, without distinction between the expropriated and the excluded portions.

Hence, the DAR unjustly enriched itself when it appropriated the entire 147.6913-hectare real property of respondents Montalvan, because the entire lot was decidedly beyond the area it had intended to subject to agrarian reform under the VOS arrangement. Even the Field Investigation Report issued by the DAR found that the excluded portion together with the five-hectare retention limit was not to be the subject of agrarian reform expropriation. Under the Civil Code,27 there is unjust enrichment when a person retains the property of another without just or legal ground and against the fundamental principles of justice, equity and good conscience.28 Hence, although the Court affirms the award of just compensation for the expropriated portion owned by respondents, the Republic cannot hold on to the excluded portion consisting of 75.6913 hectares, despite both portions being included under one new title issued in its favor.

The consequence of our finding of unjust and improper titling of the entire property by the Republic is that the title over the excluded portion shall be returned or transferred back to respondents Montalvan, with damages. The costs of the cancellation of the present title and the issuance of two new titles over the divided portions of the property (the expropriated portion to be retained by the Republic under the VOS arrangement in the CARP, and the excluded portion to revert to respondents) shall be borne by DAR, without prejudice to the right of respondents to seek damages in a proper court.

The reason for this is that DAR cannot be compelled to purchase an entire property offered under a VOS scheme, especially when some portions are unsuitable for agriculture. In LBP v. Wycoco,29 we ruled thus:

Anent the third issue, the DAR cannot be compelled to purchase the entire property voluntarily offered by Wycoco.1âwphi1 The power to determine whether a parcel of land may come within the coverage of the Comprehensive Agrarian Reform Program is essentially lodged with the DAR. That Wycoco will suffer damages by the DAR’s non-acquisition of the approximately 10 hectare portion of the entire land which was found to be not suitable for agriculture is no justification to compel DAR to acquire the whole area.30

The discretion to choose which among the lands submitted under a VOS scheme to be subject of agrarian reform coverage lies with the DAR. In this case, after its experts had examined the properties offered by respondents Montalvan, the DAR identified only the 72-hectare expropriated portion as suitable under the CARP for agricultural purposes. Both the SAC and the CA exceeded their jurisdiction when they resolved to substitute the discretion given to the DAR and ordered that even the excluded portion be subject to agrarian reform expropriation, even if found to be unsuitable for agricultural purposes.

In addition, the failure of the lower courts to receive and hear evidence of the values of the excluded portions further highlights the lack of factual and legal bases for the payment of just compensation. The SAC ordered the DAR and petitioner LBP to pay P 35,000 per hectare for the excluded portion.31 However, no factual basis was offered to sustain this specific rate of payment, except for the self-serving claims of respondents Montalvan, who rejected the DAR’s initial valuation and cited the presence of coconut trees as justification for demanding an increase in the offer.32 Indeed, the Commissioners’ Report was specifically limited to the expropriated portion and made no findings on the value of the excluded portion.33

The transfer of the title to the entire property, which was beyond the scope of the agrarian reform expropriation proceedings in the DARAB and the SAC, nevertheless entitles respondents – as landowners – to claim damages for having been deprived of the use and possession of the excluded portion.

A government agency’s prolonged occupation of private property without the benefit of expropriation proceedings entitles the landowner to damages.34 Temperate or moderate damages may be recovered when the court finds that some pecuniary loss has been suffered, but its amount cannot be proved with certainty from the nature of the case.35 These damages may be allowed when the court is convinced that the aggrieved party suffered some pecuniary loss but, from the nature of the case, definite proof of that pecuniary loss cannot be adduced.36 When the court is convinced that there has been such a loss, the judge is empowered to calculate moderate

damages, rather than let the complainant suffer without redress from the defendant’s wrongful act.37

In the instant case, the DAR violated the property rights of respondent landowners when it caused the titling of the entire land to encompass even the 75.6913-hectare excluded portion. This invasion of proprietary rights, which is imputable to the Republic, deserves redress. However, the form of that redress is limited in this case to damages arising from the erroneous titling of the property. It cannot extend to the point where the Republic would be compelled to acquire the excluded portion, beyond the coverage of the CARP, and pay just compensation for

land ill-suited for agricultural purposes, as prayed for by respondents and ordered by the courts below.

WHEREFORE, the Petition for Review on Certiorari dated 08 January 2010 filed by petitioner Landbank of the Philippines is PARTIALLY GRANTED. Accordingly, the 18 March 2009 Decision and 23 October 2009 Resolution of the Court of Appeals in CA-G.R. CV No. 75279- MIN are PARTIALLY MODIFIED, as follows:

a.Petitioner LBP is directed to pay respondents Paz O. Montalvan and Jesus J. Montalvan just compensation for their 72-hectare land previously covered by Transfer Certificate of Title No. T-285 and expropriated under the Comprehensive Agrarian Reform Program on 03 September 1992 at the rate of P 50,000 per hectare, or a total of P 3,600,000.

b.Transfer Certificate of Title No. T-11696 covering the 147.6913-hectare land in the name of the Republic of the Philippines is CANCELLED, and the Republic is ORDERED to cause the issuance of two new titles over the same property, one covering 72 hectares in favor of the Republic; and another covering the remaining portion of 75.6913 hectares in favor of respondents Montalvan, with the costs of the transfer to be against the Republic.

c.Respondents Montalvan are hereby recognized to have the right to seek damages for the wrongful titling of the land described in paragraph (b) hereof in an appropriate proceeding.

SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice

G.R. No. 159508

August 29, 2012

JUAN B. BANEZ, JR., Petitioner, vs.

HON. CRISANTO C. CONCEPCION, IN HIS CAPACITY AS THE PRESIDING JUDGE OF THE RTC-BULACAN, MALOLOS CITY, AND THE ESTATE OF THE LATE RODRIGO GOMEZ, REPRESENTED BY ITS ADMINISTRATRIX, TSUI YUK YING,

Respondents.

D E C I S I O N

BERSAMIN, J.:

The petitioner has directly come to the Court via petition for certiorari1 filed on September 4, 2003 to assail the orders dated March 24, 2003 (reversing an earlier order issued on February 18, 2003 granting his motion to dismiss on the ground of the action being already barred by prescription, and reinstating the action),2 April 21, 2003 (denying his motion for reconsideration),3and August 19, 2003 (denying his second motion for reconsideration and ordering him to file his answer within 10 days from notice despite the principal defendant not having been yet validly served with summons and copy of the complaint),4 all issued by the Regional Trial Court (RTC), Branch 12, in Malolos City in Civil Case No. 722-M-2002,5 an action for the recovery of ownership and possession. He alleges that respondent Presiding Judge thereby acted with grave abuse of discretion amounting to lack or excess of jurisdiction.

Antecedents

The present controversy started almost four decades ago when Leodegario B. Ramos (Ramos), one of the defendants in Civil Case No. 722-M-2002, discovered that a parcel of land with an area of 1,233 square meters, more or less, which was a portion of a bigger tract of land with an area of 3,054 square meters, more or less, located in Meycauayan, Bulacan that he had adjudicated solely to himself upon his mother’s death on November 16, 1982 had been earlier transferred by his mother to one Ricardo Asuncion, who had, in turn, sold it to the late Rodrigo Gomez.

On February 1, 1990, Ramos, alleging that Gomez had induced him to sell the 1,233 square meters to Gomez on the understanding that Gomez would settle Ramos’ obligation to three other persons, commenced in the RTC in Valenzuela an action against Gomez, also known as Domingo Ng Lim, seeking the rescission of their contract of sale and the payment of damages, docketed as Civil Case No. 3287-V-90 entitled Leodegario B. Ramos v. Rodrigo Gomez, a.k.a. Domingo Ng Lim.6

On October 9, 1990, before the Valenzuela RTC could decide Civil Case No. 3287-V-90 on the merits, Ramos and Gomez entered into a compromise agreement.7 The RTC approved their compromise agreement through its decision rendered on the same date.8

The petitioner, being then the counsel of Ramos in Civil Case No. 3287-V-90, assisted Ramos in entering into the compromise agreement "to finally terminate this case." The terms and conditions of the compromise agreement were as follows:

COME NOW, the Parties, assisted by their respective counsels, and before this Honorable Court, most respectfully submit this COMPROMISE AGREEMENT for approval, as to finally terminate this case, the terms and conditions of which being as follows:

1. That out of the total area of Three Thousand and Fifty Four (3,054) sq. m., more or less, covered by formerly O.C.T. No. P-2492 (M), Registry of Deeds of Bulacan, known as Lot No. 6821, Cad-337 Lot 4020-E, Csd-04-001618-D, and now by the Reconstituted Transfer Certificate of Title No. T-10179-P (M) defendant shall cause survey of said property, at its own expense, to segregate the area of One Thousand Two Hundred

Thirty-Three, (1,233) sq. m. more or less, to take along lines two (2) to three (3), then to four (4) and up to five (5) of said plan, Csd-04-001618-D;

2.That upon completion of the technical survey and plan, defendant shall cause the registration of the Deed of Absolute Sale executed by plaintiff over the 1,233 sq. m. in his favor and that defendant shall deliver the survey and plan pertaining to the 1,821 sq, m. to the plaintiff with both parties defraying the cost of registration and titling over their respective shares;

3.That to carry out the foregoing, plaintiff shall entrust the Owner’s Duplicate of said TCT No. T-10179-P (M), Registry of Deeds of Meycauayan, Bulacan, to the defendant, upon approval of this COMPROMISE AGREEMENT by the Court;

4.That upon the approval of this Compromise Agreement plaintiff shall execute a Deed of Absolute Sale in favor of defendant over the 1,233 sq. m. surveyed and segregated from the 1,821 sq. m. which should remain with the plaintiff and to be titled in his name;

5.That plaintiff obligates himself to return his loan obligation to the defendant, in the principal sum of P 80,000.00 plus P 20,000.00 for the use thereof, and an additional sum of P 10,000.00 in the concept of attorney’s fees, which sums shall be guaranteed by a post-dated check, in the amount of P 110,000.00 in plaintiff’s name with his prior endorsement, drawn and issued by plaintiff’s counsel, for a period of Sixty (60) days from October 9, 1990;

6.That in the event the check issued pursuant to paragraph 5 hereof, is dishonored for any reason whatsoever, upon presentment for payment, then this Compromise Agreement, shall be considered null and void and of no effect whatsoever;

7.That upon faithful compliance with the terms and conditions of this COMPROMISE AGREEMENT and the Decision based thereon, the parties hereto shall have respectively waived, conceded and abandoned all claims and rights of action of whatever kind or nature, against each other over the subject property.

WHEREFORE, premises considered, the parties hereto hereby jointly and severally pray before this Honorable Court to approve this COMPROMISE AGREEMENT and thereupon render its Decision based thereon terminating the case.

One of the stipulations of the compromise agreement was for Ramos to execute a deed of absolute sale in favor of Gomez respecting the parcel of land with an area of 1,233 square meters, and covered by Transfer Certificate of Title (TCT) No. T-13005 P(M) in the name of Ramos.9 Another stipulation was for the petitioner to issue post-dated checks totaling P 110,000.00 to guarantee the payment by Ramos of his monetary obligations towards Gomez as stated in the compromise agreement broken down as follows: (a) P 80,000.00 as Ramos’ loan obligation to Gomez; (b) P 20,000.00 for the use of the loan; and (c) P 10,000.00 as attorney’s fees. Of these amounts, only P 80,000.00 was ultimately paid to Gomez, because the petitioner’s

check dated April 23, 1991 for the balance of P 30,000.00 was dishonored for insufficiency of funds.

Gomez meanwhile died on November 7, 1990. He was survived by his wife Tsui Yuk Ying and their minor children (collectively to be referred to as the Estate of Gomez). The Estate of Gomez sued Ramos and the petitioner for specific performance in the RTC in Caloocan City to recover the balance of P 30,000.00 (Civil Case No. C-15750). On February 28, 1994, however, Civil Case No. C-15750 was amicably settled through a compromise agreement, whereby the petitioner directly bound himself to pay to the Estate of Gomez P 10,000.00 on or before March 15, 1994; P 10,000.00 on or before April 15, 1994; and P 10,000.00 on or before May 15, 1994.

The Estate of Gomez performed the obligations of Gomez under the first paragraph of the compromise agreement of October 9, 1990 by causing the survey of the bigger tract of land containing an area of 3,054 square meters, more or less, in order to segregate the area of 1,233 square meters that should be transferred by Ramos to Gomez in accordance with Ramos’ undertaking under the second paragraph of the compromise agreement of October 9, 1990. But Ramos failed to cause the registration of the deed of absolute sale pursuant to the second paragraph of the compromise agreement of October 9, 1990 despite the Estate of Gomez having already complied with Gomez’s undertaking to deliver the approved survey plan and to shoulder the expenses for that purpose. Nor did Ramos deliver to the Estate of Gomez the owner’s duplicate copy of TCT No. T-10179 P(M) of the Registry of Deeds of Meycauayan, Bulacan, as stipulated under the third paragraph of the compromise agreement of October 9, 1990. Instead, Ramos and the petitioner caused to be registered the 1,233 square meter portion in Ramos’s name under TCT No. T-13005-P(M) of the Registry of Deeds of Meycauayan, Bulacan.

Accordingly, on July 6, 1995, the Estate of Gomez brought a complaint for specific performance against Ramos and the petitioner in the RTC in Valenzuela (Civil Case No. 4679-V-95)10 in order to recover the 1,233 square meter lot. However, the Valenzuela RTC dismissed the complaint on April 1, 1996 upon the motion of Ramos and the petitioner on the ground of improper venue because the objective was to recover the ownership and possession of realty situated in Meycauayan, Bulacan, and because the proper recourse was to enforce the judgment by compromise Agreement rendered on October 9, 1990 through a motion for execution.

The Estate of Gomez appealed the order of dismissal to the Court of Appeals (CA), which ruled on July 24, 2001 to affirm the Valenzuela RTC and to dismiss the appeal (CA-G.R. CV No. 54231).

On September 20, 2002, the Estate of Gomez commenced Civil Case No. 722-M-2002 in the Valenzuela RTC, ostensibly to revive the judgment by compromise rendered on October 9, 1990 in Civil Case No. 3287-V-90, praying that Ramos be ordered to execute the deed of absolute sale covering the 1,233 square meter lot pursuant to the fourth stipulation of the compromise agreement of October 9, 1990. The petitioner was impleaded as a party-defendant because of his having guaranteed the performance by Ramos of his obligation and for having actively participated in the transaction.

On January 8, 2003, the petitioner moved for the dismissal of Civil Case No. 722-M-2002, alleging that the action was already barred by res judicata and by prescription; that he was not a real party-in-interest; and that the amount he had guaranteed with his personal check had already been paid by Ramos with his own money.11

Initially, on February 18, 2003,12 the RTC granted the petitioner’s motion to dismiss, finding that the right of action had already prescribed due to more than 12 years having elapsed from the approval of the compromise agreement on October 9, 1990, citing Article 1143 (3) of the Civil Code (which provides a 10-year period within which a right of action based upon a judgment must be brought from).

On March 24, 2003,13 however, the RTC reversed itself upon motion of the Estate of Gomez and set aside its order of February 18, 2003. The RTC reinstated Civil Case No. 722-M-2002, holding that the filing of the complaint for specific performance on July 6, 1995 in the Valenzuela RTC (Civil Case No. 4679-V-95) had interrupted the prescriptive period pursuant to Article 1155 of the Civil Code.

The petitioner sought reconsideration, but the RTC denied his motion for that purpose on April 21, 2003.

On May 12, 2003, the petitioner filed a second motion for reconsideration, maintaining that the Estate of Gomez’s right of action had already prescribed; and that the judgment by compromise of October 9, 1990 had already settled the entire controversy between the parties.

On August 19, 2003,14 the RTC denied the second motion for reconsideration for lack of merit.

Hence, this special civil action for certiorari commenced on September 4, 2003 directly in this Court.

Issues

The petitioner insists that:

xxx the lower court acted with grave abuse of discretion, amounting to lack of, or in excess of jurisdiction, when, after having correctly ordered the dismissal of the case below, on the ground of prescription under Art. 1144, par. 3, of the Civil Code, it reconsidered and set aside the same, on the factually baseless and legally untenable Motion for Reconsideration of Private Respondent, insisting, with grave abuse of discretion, if not bordering on ignorance of law, and too afraid to face reality, that it is Art. 1155 of the same code, as invoked by Private Respondents, that applies, and required herein petitioner to file his answer, despite petitioner’s first Motion for Reconsideration, which it treated as a mere scrap of paper, yet, at the same [sic] again it insisted that Article 1155 of the Civil Code should apply, and, thereafter when, with like, if not greater grave abuse of discretion, amounting to lack, or in excess of jurisdiction, it again denied petitioner’s Second Motion for Reconsideration for lack of merit, and giving petitioner a non-extendible period of ten 10 days from notice, to file his answer.15

In his reply to the Estate of Gomez’s comment,16 the petitioner elucidated as follows:

1)Whether or not, the Honorable public respondent Judge gravely abused his discretion, amounting to lack of, or in excess of jurisdiction, when, after ordered the dismissal of Civil Case No. 722-M-2002, as prescription has set in, under Art. 1143 of the Civil Code, he set aside and reconsidered his said Order, on motion of plaintiff, by thereafter denied petitioner’s Motion for Reconsideration, and Second Motion for Reconsideration, insisting, despite his being presumed to know the law, that the said action is not barred by prescription, under Art. 1145 of the Civil Code;

2)Whether or not, the present pending action, Civil Case No. 722-M-2002, before Branch 12 of the Regional Trial Court of Malolos, Bulacan, is barred, and should be ordered be dismissed, on the ground of prescription, under the law and the rules, and applicable jurisprudence.

3)Whether or not, the same action may be dismissed on other valid grounds.17

The petitioner submits that Civil Case No. 722-M-2002 was one for the revival of the judgment upon a compromise agreement rendered in Civil Case No. 3287-V-90 that attained finality on October 9, 1990; that considering that an action for revival must be filed within 10 years from the date of finality, pursuant to Article 1144 of the Civil Code,18 in relation to Section 6, Rule 39 of the Rules of Court,19 Civil Case No. 722-M-2002 was already barred by prescription, having been filed beyond the 10-year prescriptive period; that the RTC gravely abused its discretion in reinstating the complaint despite prescription having already set in; that the dismissal of Civil Case No. 722-M-2002 was proper also because the judgment had already been fully satisfied; that the claim relative to the 1,233 square meter lot under the compromise agreement had been waived, abandoned, or otherwise extinguished on account of the failure of the Estate of Gomez’s counsel to move for the issuance of a writ of execution; and that the Estate of Gomez could not rely upon the pendency and effects of the appeal from the action for specific performance after its dismissal had been affirmed by the CA on grounds of improper venue, the plaintiff’s lack of personality, and improper remedy (due to the proper remedy being by execution of the judgment).

The Estate of Gomez countered that the filing on July 6, 1995 of the action for specific performance in the RTC in Valenzuela stopped the running of the prescriptive period; that the period commenced to run again after the CA dismissed that action on July 24, 2001; that the total elapsed period was only five years and 11 months; and that the action for the revival of judgment filed on September 20, 2002 was within the period of 10 years to enforce a final and executory judgment by action.

Ruling

We dismiss the petition for certiorari.

The orders that the petitioner seeks to challenge and to annul are the orders denying his motion to dismiss. It is settled, however, that an order denying a motion to dismiss, being merely interlocutory, cannot be the basis of a petition for certiorari. An interlocutory order is not the

proper subject of a certiorari challenge by virtue of its not terminating the proceedings in which it is issued. To allow such order to be the subject of review by certiorari not only delays the administration of justice, but also unduly burdens the courts.20

But a petition for certiorari may be filed to assail an interlocutory order if it is issued without jurisdiction, or with excess of jurisdiction, or in grave abuse of discretion amounting to lack or excess of jurisdiction. This is because as to such order there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law. Rule 65 of the Rules of Court expressly recognizes the exception by providing as follows:

Section 1. Petition for certiorari. — When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. (1a)

The exception does not apply to this challenge. The petitioner has not demonstrated how the assailed orders could have been issued without jurisdiction, or with excess of jurisdiction, or in grave abuse of discretion amounting to lack or excess of jurisdiction. Nor has he convinced us that he had no plain, speedy, and adequate remedy in the ordinary course of law. In fact and in law, he has, like filing his answer and going to pre-trial and trial. In the end, should he still have the need to seek the review of the decision of the RTC, he could also even appeal the denial of the motion to dismiss. That, in reality, was his proper remedy in the ordinary course of law.

Yet another reason to dismiss the petition for certiorari exists. Although the Court, the CA and the RTC have concurrence of jurisdiction to issue writs of certiorari, the petitioner had no unrestrained freedom to choose which among the several courts might his petition for certiorari be filed in. In other words, he must observe the hierarchy of courts, the policy in relation to which has been explicitly defined in Section 4 of Rule 65 concerning the petitions for the extraordinary writs of certiorari, prohibition and mandamus, to wit:

Section 4. When and where petition filed. - The petition shall be filed not later than sixty (60) days from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is timely filed, whether such motion is required or not, the sixty (60) day period shall be counted from notice of the denial of the said motion.

The petition shall be filed in the Supreme Court or, if it relates to the acts or omissions of a lower court or of a corporation, board, officer or person, in the Regional Trial Court exercising jurisdiction over the territorial area as defined by the Supreme Court. It may also be filed in the Court of Appeals whether or not the same is in the aid of its appellate jurisdiction, or in the

Sandiganbayan if it is in aid of its appellate jurisdiction. If it involves the acts or omissions of a quasi-judicial agency, unless otherwise provided by law or these rules, the petition shall be filed in and cognizable only by the Court of Appeals.

No extension of time to file the petition shall be granted except for compelling reason and in no case exceeding fifteen (15) days. (4a)21 (Emphasis supplied)

Accordingly, his direct filing of the petition for certiorari in this Court instead of in the CA should be disallowed considering that he did not present in the petition any special and compelling reasons to support his choice of this Court as the forum.

The Court must enjoin the observance of the policy on the hierarchy of courts, and now affirms that the policy is not to be ignored without serious consequences. The strictness of the policy is designed to shield the Court from having to deal with causes that are also well within the competence of the lower courts, and thus leave time to the Court to deal with the more fundamental and more essential tasks that the Constitution has assigned to it. The Court may act on petitions for the extraordinary writs of certiorari, prohibition and mandamus only when absolutely necessary or when serious and important reasons exist to justify an exception to the policy. This was why the Court stressed in Vergara, Sr. v. Suelto:22

xxx. The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by the fundamental charter and immemorial tradition. It cannot and should not be burdened with the task of dealing with causes in the first instance. Its original jurisdiction to issue the so-called extraordinary writs should be exercised only where absolutely necessary or where serious and important reasons exist therefor. Hence, that jurisdiction should generally be exercised relative to actions or proceedings before the Court of Appeals, or before constitutional or other tribunals, bodies or agencies whose acts for some reason or another are not controllable by the Court of Appeals. Where the issuance of an extraordinary writ is also within the competence of the Court of Appeals or a Regional Trial Court, it is in either of these courts that the specific action for the writ’s procurement must be presented. This is and should continue to be the policy in this regard, a policy that courts and lawyers must strictly observe. (Emphasis supplied)

In People v. Cuaresma,23 the Court has also amplified the need for strict adherence to the policy of hierarchy of courts. There, noting "a growing tendency on the part of litigants and lawyers to have their applications for the so-called extraordinary writs, and sometimes even their appeals, passed upon and adjudicated directly and immediately by the highest tribunal of the land," the Court has cautioned lawyers and litigants against taking a direct resort to the highest tribunal, viz:

xxx. This Court’s original jurisdiction to issue writs of certiorari (as well as prohibition, mandamus, quo warranto, habeas corpus and injunction) is not exclusive. It is shared by this Court with Regional Trial Courts x x x, which may issue the writ, enforceable in any part of their respective regions. It is also shared by this Court, and by the Regional Trial Court, with the Court of Appeals x x x, although prior to the effectivity of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence to issue the extraordinary writs was restricted to those "in aid of its

appellate jurisdiction." This concurrence of jurisdiction is not, however, to be taken as according to parties seeking any of the writs an absolute, unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the Regional Trial Court, and those against the latter, with the Court of Appeals. A direct invocation of the Supreme Court's original jurisdiction to issue these writs should be allowed only when there are special and important reasons therefor, clearly and specifically set out in the petition. This is established policy. It is a policy that is necessary to prevent inordinate demands upon the Court’s time and attention which are better devoted to those matters within its exclusive jurisdiction, and to prevent further over- crowding of the Court's docket. Indeed, the removal of the restriction on the jurisdiction of the Court of Appeals in this regard, supra— resulting from the deletion of the qualifying phrase, "in aid of its appellate jurisdiction" — was evidently intended precisely to relieve this Court pro tanto of the burden of dealing with applications for the extraordinary writs which, but for the expansion of the Appellate Court corresponding jurisdiction, would have had to be filed with it.

xxxx

The Court therefore closes this decision with the declaration for the information and evidence of all concerned, that it will not only continue to enforce the policy, but will require a more strict observance thereof. (Emphasis supplied)

There being no special, important or compelling reason that justified the direct filing of the petition for certiorari in this Court in violation of the policy on hierarchy of courts, its outright dismissal is unavoidable.

Still, even granting that the petition for certiorari might be directly filed in this Court, its dismissal must also follow because its consideration and resolution would unavoidably demand the consideration and evaluation of evidentiary matters. The Court is not a trier of facts, and cannot accept the petition for certiorari for that reason.

Although commenced ostensibly for the recovery of possession and ownership of real property, Civil Case No. 722-M-2002 was really an action to revive the judgment by compromise dated October 9, 1990 because the ultimate outcome would be no other than to order the execution of the judgment by compromise. Indeed, it has been held that "there is no substantial difference between an action expressly called one for revival of judgment and an action for recovery of property under a right adjudged under and evidenced by a final judgment."24 In addition, the parties themselves have treated the complaint in Civil Case No. 722-M-2002 as one for revival. Accordingly, the parties should be fully heard on their respective claims like in any other independent action.1âwphi1

The petitioner’s defense of prescription to bar Civil Case No. 722-M-2002 presents another evidentiary concern. Article 1144 of the Civil Code requires, indeed, that an action to revive a judgment must be brought before it is barred by prescription, which was ten years from the

accrual of the right of action.25 It is clear, however, that such a defense could not be determined in the hearing of the petitioner’s motion to dismiss considering that the complaint did not show on its face that the period to bring the action to revive had already lapsed. An allegation of prescription, as the Court put it in Pineda v. Heirs of Eliseo Guevara,26 "can effectively be used in a motion to dismiss only when the complaint on its face shows that indeed the action has already prescribed, [o]therwise, the issue of prescription is one involving evidentiary matters requiring a full blown trial on the merits and cannot be determined in a mere motion to dismiss."

At any rate, the mere lapse of the period per se did not render the judgment stale within the context of the law on prescription, for events that effectively suspended the running of the period of limitation might have intervened. In other words, the Estate of Gomez was not precluded from showing such events, if any. The Court recognized this possibility of suspension in Lancita v. Magbanua:27

In computing the time limited for suing out of an execution, although there is authority to the contrary, the general rule is that there should not be included the time when execution is stayed, either by agreement of the parties for a definite time, by injunction, by the taking of an appeal or writ of error so as to operate as a supersedeas, by the death of a party or otherwise. Any interruption or delay occasioned by the debtor will extend the time within which the writ may be issued without scire facias.

Verily, the need to prove the existence or non-existence of significant matters, like supervening events, in order to show either that Civil Case No. 722-M-2002 was batTed by prescription or not was present and undeniable. Moreover, the petitioner himself raised factual issues in his motion to dismiss, like his averment of full payment or discharge of the obligation of Ramos and the waiver or abandonment of rights under the compromise agreement. The proof thereon cannot be received in certiorari proceedings before the Court, but should be established in the RTC.

WHEREFORE, the Court DISMISSES the petition for certiorari; and DIRECTS the petitioner to pay the cost of suit.

SO ORDERED

LUCAS P. BERSAMIN

Associate Justice

G.R. No. 172438 July 4, 2012

METROPOLITAN CEBU WATER DISTRICT, Petitioner, vs.

MACTAN ROCK INDUSTRIES, INC., Respondent.

D E C I S I O N

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 assailing the February 20, 2006 Decision1 and the March 30, 2006 Resolution2 of the Court of Appeals (CA) in CA–G.R. CEB SP. No. 00623.

THE FACTS

Petitioner Metropolitan Cebu Water District (MCWD) is a government-owned and controlled corporation (GOCC) created pursuant to Presidential Decree (PD) No. 198,3 as amended, with its principal office address at the MCWD Building, Magallanes corner Lapu-Lapu Streets, Cebu City.4 It is mandated to supply water within its service area in the cities of Cebu, Talisay, Mandaue, and Lapu-Lapu and the municipalities of Compostela, Liloan, Consolacion, and Cordova in the Province of Cebu.5

Respondent Metro Rock Industries, Inc. (MRII) is a domestic corporation with principal office address at the 2nd Level of the Waterfront Cebu Hotel and Casino, Lahug, Cebu City.6

On May 19, 1997, MCWD entered into a Water Supply Contract7 (the Contract) with MRII wherein it was agreed that the latter would supply MCWD with potable water, in accordance with the World Health Organization (WHO) standard or the Philippine national standard, with a minimum guaranteed annual volume.8

On March 15, 2004, MRII filed a Complaint9 against MCWD with the Construction Industry Arbitration Commission (CIAC), citing the arbitration clause (Clause 18)10 of the Contract. The case was docketed as CIAC Case No. 12-2004. In the said complaint, MRII sought the reformation of Clause 17 of the Contract, or the Price Escalation/De-Escalation Clause, in order to include Capital Cost Recovery in the price escalation formula, and to have such revised formula applied from 1996 when the bidding was conducted, instead of from the first day when MRII started selling water to MCWD. It also sought the payment of the unpaid price escalation/adjustment, and the payment of unpaid variation/extra work order and interest/cost of money up to December 31, 2003.11

On May 7, 2002, MCWD filed its Answer12 dated April 27, 2004, which included a motion to dismiss the complaint on the ground that the CIAC had no jurisdiction over the case, as the Contract was not one for construction or infrastructure.

The CIAC thereafter issued an order13 denying MCWD’s motion to dismiss, and calling the parties to a preliminary conference for the review and signing of the Terms of Reference.14

MCWD, thus, filed a petition for certiorari15 under Rule 65 with the CA, questioning the jurisdiction of the CIAC. The petition was docketed as CA-G.R. SP. No. 85579 (First Petition).

Meanwhile, the CIAC proceeded with the preliminary conference scheduled on June 10 and July 22, 2004 which MWCD opted not to attend. MRII and the CIAC both signed the Terms of Reference. Pursuant to the Terms of Reference and the CIAC Order dated July 22, 2004, MRII submitted its documentary evidence and affidavits of its witnesses.16

On August 27, 2004, MRII submitted its Formal Offer of Evidence and its memorandum of arguments in the form of a proposed/draft decision. MCWD did not attend the hearings. It did not submit evidence other than those annexed to its Answer. Neither did it file a formal offer of evidence, or a memorandum of legal arguments.17

Decision of the CIAC

The CIAC promulgated its Decision18 on April 14, 2005, the dispositive portion of which reads:

WHEREFORE[,] premises considered, judgment is hereby rendered as follows:

1. Ordering the reformation of Clause 17 of the Water Supply Contract to read:

17[.] Price Escalation and/or De-Escalation shall be based on the parametric formula:

17.1 Power Rate Price Adjustment/Power Cost Adjustment

Current Power Rate - Base Power Rate

x 30% of base selling price of water

Base Power Rate

17.2 Consumer Price Index (CPI) Adjustment/Operating Cost Adjustment:

Current CPI – Base CPI

x 40% of base selling price of water

Base CPI

17.3 Capital Cost Recovery Adjustment:

Current Peso to Base Peso to US$

US$ Exchange Rate – Exchange Rate

x 30% of base selling price of water

Base Peso to US $ Exchange Rate

Price escalation shall be reckoned from January 1999 when the water was first delivered by Mactan Rock Industries, Inc. to the MCWD facilities in Mactan. The base CPI, base US$ Exchange Rate and the Base Power Rate shall be the prevailing rate in January

1999, while the Base Selling Price of water shall mean the 1996 rate per cubic meter of water as provided for in the Water Supply Contract.

2.Ordering Respondent Metropolitan Cebu Water District to pay Claimant, Mactan Rock Industries, Inc[.] under the reformed Clause 17 of the Water Supply Contract, the net amount of Php12,126,296.70 plus legal interest of six percent (6%) per annum from the (sic) March 15, 2004, the date of filling (sic) of the case with the Construction Industry Arbitration Commission, the rate increased to twelve percent (12%) per annum from the date the herein Decision have (sic) become final and executory until the foregoing amounts shall have been fully paid[.]

3.Claimant Mactan Rock Industries, Inc. and Metropolitan Cebu Water District shall share equally the cost of arbitration.

SO ORDERED.19

Decision of the CA in CA-G.R. SP No. 85579 - Petition for certiorari under Rule 65 with the Court of Appeals questioning the jurisdiction of the CIAC

Meanwhile, on October 28, 2005, the CA in its decision20 in the First Petition upheld the jurisdiction of the CIAC over the case. The CA held that when parties agree to settle their disputes arising from or connected with construction contracts, the CIAC acquires primary jurisdiction.21 Citing Philrock Inc. v. Construction Industry Arbitration Commission,22 the CA stated that the CIAC may resolve not only the merits of such controversies, but may also award damages, interest, attorney’s fees, and expenses of litigation, when appropriate.23

Second, the CA held that the claims in question fall under the jurisdiction of the CIAC. Thus:

Xxx Section 4 of Executive Order No. 1008, otherwise known as the Construction Industry Arbitration Law delineates CIAC’s jurisdiction as "original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines, whether the disputes arise before or after the completion of the contract, or after abandonment thereof." Moreover, Section 5 (k) of Republic Act No. 9184 otherwise known as [the] Government Procurement Reform Act expressly defines "infrastructure project" as including "water supply[,]" construction, rehabilitation[,] demolition, repair, restoration and maintenance.

Consistent with the above-mentioned policy of encouraging alternative dispute resolution methods, courts should liberally construe arbitration clauses. Provided such clause is susceptible of an interpretation that covers the asserted dispute, an order to arbitrate should be granted. Any doubt should be resolved in favor of arbitration. It is to be highlighted that the dispute in the case at bar arose from the parties’ incongruent positions with regard to clause 17 of the Water Supply Contract[,] specifically the price escalation/adjustment. The instant case involves technical discrepancies that are better left to an arbitral body that has expertise in those areas. Nevertheless, in any event, the inclusion of an arbitration clause in a contract does not ipso facto

divest the courts of jurisdiction to pass upon the findings of arbitral bodies, because the awards are still judicially reviewable under certain conditions.24 (Citations omitted.)

MCWD’s motion for reconsideration of the decision in the First Petition was still pending when it filed the petition for review25 under Rule 43 (Second Petition) appealing the decision of the CIAC. The motion for reconsideration was eventually denied in a Resolution26 dated May 3, 2006. MCWD did not appeal from the denial of the motion. It, thus, became final and executory.27

Decision of the CA in CA-G.R. CEB SP. No. 00623 – Petition for review under Rule 43 appealing the decision of the CIAC

Aggrieved by the CIAC Decision, MCWD filed a petition for review under Rule 43 with the CA which was docketed as CA-G.R. CEB SP. No. 00623.

The CA, however, dismissed the petition in its Decision dated February 20, 2006. The Court therein stated that the issue of jurisdiction had already been resolved by the 18th Division in the First Petition, where the CA upheld the jurisdiction of the CIAC over Arbitration Case No. 12- 2004.

Citing jurisprudence, the CA also ruled that there being an arbitration clause in the Contract, the action for reformation of contract instituted by MRII in this case fell squarely within the jurisdiction of the CIAC, not the courts. In relation to this, the CA noted that the present rule is that courts will look with favor upon amicable agreements to settle disputes through arbitration, and will only interfere with great reluctance to anticipate or nullify the action of the arbitrator. MCWD being a signatory and a party to the Water Supply Contract, it cannot escape its obligation under the arbitration clause. 28

The CA also held that the CIAC did not err in finding that the Water Supply Contract is clear on the matter of the reckoning period for the computation of the escalation cost from January 9, 1999, or the first day of delivery of water. Moreover, the CA found that the CIAC did not err in ruling that the contract be reformed to include Capital Cost Recovery in the parametric formula for price escalation. Neither did it err in holding that the Capital Cost Recovery shall be 30% of the Base Selling Price of water as a consequence of the reformation of Clause 17.

Finally, the CA stressed that "factual findings of administrative agencies which are deemed to have acquired expertise in matters within their respective jurisdictions are generally accorded not only respect but even finality when supported by substantial evidence."29

MCWD filed a motion for reconsideration but it was denied in the CA Resolution dated March 30, 2006.

Thus, this petition.

ISSUES

MCWD raises the following issues in its petition for review:

MAY THE CONSTRUCTION INDUSTRY [ARBITRATION] COMMISSION EXERCISE JURISDICTION OVER DISPUTES ARISING FROM A WATER SUPPLY CONTRACT?

MAY A PARTY, WHO IS A SIGNATORY TO THE WATER SUPPLY CONTRACT[,] IN EFFECT SUBMITTING ITSELF TO THE JURISDICTION OF THE CONSTRUCTION INDUSTRY ARBITRATION COMMISSION, QUESTION THE JURISDICTION OF [THE] CIAC?

DOES THE CONSTRUCTION INDUSTRY ARBITRATION COMMISSION HAVE THE (SIC) JURISDICTION OVER A COMPLAINT PRAYING FOR A REFORMATION OF A WATER SUPPLY CONTRACT?

MAY THE COURT OF APPEALS REFUSE TO RENDER A [SIC] JUDGMENT ON AN ISSUE BECAUSE THIS HAS BEEN ALREADY SETTLED IN A DECISION RENDERED BY ANOTHER DIVISION OF THE COURT OF APPEALS IN A PETITION FOR CERTIORARI, EVEN IF THE SAID DECISION HAS NOT YET BEEN (SIC) FINAL DUE TO A TIMELY FILING OF A MOTION FOR RECONSIDERATION?30

RULING OF THE COURT

Creation of the CIAC

The Construction Industry Arbitration Commission (CIAC) was created in 1985 under Executive Order (E.O.) No. 1008 (Creating an Arbitration Machinery for the Philippine Construction Industry), in recognition of the need to establish an arbitral machinery that would expeditiously settle construction industry disputes. The prompt resolution of problems arising from, or connected to, the construction industry was considered necessary and vital for the fulfillment of national development goals, as the construction industry provided employment to a large

segment of the national labor force, and was a leading contributor to the gross national product.

31

Under Section 4 of E.O. No. 1008, the CIAC’s jurisdiction was specifically delineated as follows:

SECTION 4. Jurisdiction - The CIAC shall have original and exclusive jurisdiction over disputes arising from, or connected with, contracts entered into by parties involved in construction in the Philippines, whether the disputes arise before or after the completion of the contract, or after the abandonment or breach thereof. These disputes may involve government or private contracts. For the Board to acquire jurisdiction, the parties to a dispute must agree to submit the same to voluntary arbitration.

The jurisdiction of the CIAC may include but is not limited to violation of specifications for materials and workmanship; violation of the terms of agreement; interpretation and/or application of contractual provisions; amount of damages and penalties; commencement time and delays; maintenance and defects; payment default of employer or contractor and changes in contract cost.

Excluded from the coverage of this law are disputes arising from employer-employee relationships which shall continue to be covered by the Labor Code of the Philippines. (Underscoring supplied)

The jurisdiction of the CIAC as a quasi-judicial body is confined to construction disputes,32 that is, those arising from, or connected to, contracts involving "all on-site works on buildings or altering structures from land clearance through completion including excavation, erection and assembly and installation of components and equipment."33 The CIAC has jurisdiction over all such disputes whether the dispute arises before or after the completion of the contract.34

Whether the CIAC has jurisdiction over the dispute

As earlier stated, following the denial of its motion to dismiss by CIAC, MCWD filed the First Petition with the CA, which decided in favor of MRII and upheld the jurisdiction of the CIAC.

Not being in conformity, MCWD filed a motion for reconsideration.

While the said motion was pending with the CA, MCWD filed the Second Petition with the same court. Eventually, the motion was denied, and MCWD never appealed the case. Thus, the decision of the CA in the First Petition became final and executory.

The question now is whether such final and executory decision is binding such that courts are generally precluded from passing judgment on the issue of jurisdiction in the present petition.

The Court finds in the affirmative.

This Court has held time and again that a final and executory judgment, no matter how erroneous, cannot be changed, even by this Court. Nothing is more settled in law than that once a judgment attains finality, it thereby becomes immutable and unalterable. It may no longer be modified in any respect, even if such modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the court rendering it or by the highest court of the land.35

In its Decision in the First Petition, the CA affirmed the arbitral body’s finding in CIAC Case No. 12-2004 that the case was within its jurisdiction. Such decision having become final, it is beyond the jurisdiction of this Court, or any court or body, for that matter, to review or modify, even supposing for the sake of argument, that it is indeed erroneous.

Also, the parties apparently characterized the Contract as one involving construction, as its arbitration clause specifically refers disputes, controversies or claims arising out of or relating to

the Contract or the breach, termination or validity thereof, if the same cannot be settled amicably, to an arbitration tribunal, in accordance with E.O. No. 1008, or the Construction Industry Arbitration Law:

V. DISPUTES AND JURISDICTION:

18. Any dispute, controversy or claim arising out of or relating to this contract or the breach, termination or invalidity thereof, if the same cannot be settled amicably, may be submitted for arbitration to an Arbitration Tribunal in accordance with Executive Order No. 1008 dated 4 February 1985, otherwise known as the Construction Industry Arbitration Law and the place of arbitration shall be the City of Cebu, Philippines, otherwise said dispute or controversy arising out of the contract or breach thereof shall be submitted to the court of law having jurisdiction thereof in the city where MCWD is located.36

Had the parties been of the mutual understanding that the Contract was not of construction, they could have instead referred the matter to arbitration citing Republic Act (R.A.) No. 876, or The Arbitration Law. Having been passed into law in 1953, the said statute was already in existence at the time the contract was entered into, and could have been applied to arbitration proceedings other than those specifically within the arbitral jurisdiction of the CIAC.

Whether the CA erred in refusing to render judgment on the issue of jurisdiction ___________

On a related matter, MWCD also raises the issue of whether the 19th Division of the CA, Cebu City, erred in refusing to render judgment on the issue of jurisdiction raised in the Second Petition on the ground that it had already been settled by the 18th Division in its decision in the First Petition, even if the 18th Division decision had not yet become final due to a timely filing of a motion for reconsideration.

The Court rules in the negative.

The 19th Division was correct in refusing to render judgment on the issue of jurisdiction as, at that time, the issue was still pending before another division of the CA.

Litis pendentia is predicated on the principle that a party should not be allowed to vex another more than once regarding the same subject matter and for the same cause of action. It is founded on the public policy that the same subject matter should not be the subject of controversy in courts more than once, in order that possible conflicting judgments may be avoided for the sake of the stability of the rights and status of persons, and also to avoid the costs and expenses incident to numerous suits. 37

With the two petitions then pending before the CA, all the elements of litis pendentia were present, that is, identity of the parties in the two actions, substantial identity in the causes of action and in the reliefs sought by the parties, and identity between the two actions such that any judgment that may be rendered in one case, regardless of which party is successful, would amount to res judicata in the other.38

In both cases, MCWD was the petitioner and MRII, the respondent. Although they differ in form, in essence, the two cases involved a common issue, that is, MCWD’s challenge to the jurisdiction of the CIAC over the arbitration proceedings arising from the Water Supply Contract between the petitioner and respondent.

To determine whether there is identity of the rights asserted and reliefs prayed for, grounded on the same facts and bases, the following tests may be utilized: (1) whether the same evidence would support and sustain both the first and the second causes of action, also known as the "same evidence" test; or (2) whether the defenses in one case may be used to substantiate the complaint in the other.39 Also fundamental is the test of determining whether the cause of action in the second case existed at the time of the filing of the first case.40

In the First Petition, MCWD argued that the CIAC’s issuance of its Order41 dated May 28, 2004 was tainted with grave abuse of discretion amounting to excess or lack of jurisdiction. Thus, MCWD stated in its prayer:

WHEREFORE, in light of the premises laid down, petitioner most respectfully prays:

1.Upon the filing of this Petition, a Writ of Preliminary Injunction or restraining order be issued forthwith, enjoining the respondent from proceeding with the hearing of the case until further orders from the Honorable Court of Appeals;

2.After consideration, petitioner also prays that the Order dated May 28, 2004, denying petitioner’s motion to dismiss be declared without force and effect;

3.Petitioner also prays that the Construction Industry Arbitration Commission be barred from hearing the case filed by Mactan Rock Industries, Inc., private respondent herein.

Other measures of relief, which are just and equitable under the foregoing premise are also prayed for.42

The Second Petition, on the other hand, raised the following issues:

a.Whether or not the Arbitral Tribunal of CIAC gravely erred in taking and exercising jurisdiction over the complaint filed by the respondent;

b.Whether or not the Arbitral Tribunal of CIAC gravely erred in reforming Clause 17 of the Contract;

c.Whether or not the same tribunal gravely committed an error in considering Capital

Cost Recovery Adjustment in awarding in favor of the complainant, when the same is extraneous to the provisions of the contract;43

Thus, it prayed:

WHEREFORE, PREMISES CONSIDERED, it is most respectfully prayed of the Honorable Court that a Judgment be issued reversing the findings of the Arbitral Tribunal of the Construction Industry Arbitration Commission in its Decision dated April 14, 2005, as far as the order of reformation of the water supply contract and in granting the monetary award.

It is further prayed that the decision rendered by the Arbitral Tribunal be declared invalid for want of jurisdiction to arbitrate and to order the reformation of the water supply contract;

It is also prayed that the decision awarding money to the respondent be strike (sic) down as erroneous and without legal basis for lack of jurisdiction by the Arbitral Tribunal, which rendered the Decision.

It is also prayed that a Temporary Restraining Order and a Writ of Preliminary Injunction be issued at the outset, ordering the stay of execution pending the resolution of the issues raised in the Petition.

Other measures of relief, which are just and equitable, are also prayed for.44

In both cases, the parties also necessarily relied on the same laws and arguments in support of their respective positions on the matter of jurisdiction.

In the First Petition, in support of its argument, that the CIAC had no jurisdiction to arbitrate the causes of action raised by MRII, MCWD cited the portions of the Contract on the obligations of the water supplier, E.O. No. 1008 (specifically Section 4 on jurisdiction), the Rules of Procedure Governing Construction Arbitration (Section 1, Article III). It also alleged that in issuing the order denying its motion to dismiss, the CIAC misread the provisions of LOI No. 1186 and R.A. No. 9184 on the definition of an infrastructure project.45

MRII, however, opined that the CIAC had jurisdiction over the complaint and, therefore, correctly denied petitioner’s motion to dismiss. MRII argued that certiorari was not a proper remedy in case of denial of a motion to dismiss and that the claims fell squarely under CIAC’s original and exclusive jurisdiction. MRII, in support of its position, cited Section 1 of LOI No. 1186 and Section 5(k) of R.A. No. 9184. MRII further proposed that, as shown by MCWD’s pro- forma Water Supply Contract, Specifications, Invitation to Submit Proposal, Pre-Bid Conference minutes, Addendum No. 1, and MRII’s Technical and Financial Proposals, the undertaking contemplated by the parties is one of infrastructure and of works, rather than one of supply or mere services.46

In the Second Petition, in support of the issue of jurisdiction, MCWD again relied on Section 4 of E.O. No. 1008 and Section 1, Article III of the Rules of Procedure Governing Construction Arbitration. It also brought to fore the alleged faulty conclusion of MRII that a water supply contract is subsumed under the definition of an infrastructure project under LOI 1186.47

In its Comment, MRII reiterated and adopted its arguments before the CIAC, and insisted that the undertaking contemplated by the parties was one of infrastructure and of works, as distinguished from "mere supply from off-the-shelf or from mere services."48 Section 1 of LOI

No. 1186, to define "infrastructure" and Section 5(k) of R.A. No. 9184 to include "water supply," were again cited. In support of its arguments, MRII cited anew MCWD’s pro-forma Water Supply Contract, Specifications (in its Invitation to Submit Proposal), pronouncements at the Pre-Bid Conference, Addendum No. 1, and MRII’s Technical and Financial Proposals. MRII further extensively reproduced the content of the joint affidavit of Messrs. Antonio P. Tompar and Lito R. Maderazo, MRII’s President/CEO and Financial Manager, respectively.49

Given that the same arguments were raised on the matter of CIAC jurisdiction, the parties thus relied on substantially the same evidence in both petitions. MCWD annexed to both petitions copies of the Water Supply Contract, the complaint filed by MRII with the CIAC, and its Answer to the said complaint. On the other hand, MRII presented Addendum No. 1 to the Water Supply Contract and its Technical and Financial Proposals.

Moreover, the first cause of action in the Second Petition, that is, the CIAC’s having assumed jurisdiction, allegedly unlawfully, over the dispute arising from the Water Supply Contract, obviously existed at the time the First Petition was filed, as the latter case dealt with the jurisdiction of the CIAC over the complaint filed.

Finally, any judgment that may be rendered in the First Petition on the matter of whether the CIAC has jurisdiction over the arbitration proceedings, regardless of which party was successful, would amount to res judicata in the Second Petition, insofar as the issue of jurisdiction is concerned. In fact, what MCWD should have done was to appeal to the Court after the denial of its motion for reconsideration in the First Petition. For not having done so, the decision therein became final and, therefore, immutable.

Thus, following the above discussion, the 19th Division was correct in refusing to render judgment on the issue of jurisdiction in the Second Petition.

Whether the CIAC had jurisdiction to order the reformation of the Water Supply Contract

The jurisdiction of courts and quasi-judicial bodies is determined by the Constitution and the law.50 It cannot be fixed by the will of the parties to the dispute, nor can it be expanded or diminished by stipulation or agreement. 51 The text of Section 4 of E.O. No. 1008 is broad enough to cover any dispute arising from, or connected with, construction contracts, whether these involve mere contractual money claims or execution of the works. This jurisdiction cannot be altered by stipulations restricting the nature of construction disputes, appointing another arbitral body, or making that body’s decision final and binding.52

Thus, unless specifically excluded, all incidents and matters relating to construction contracts are deemed to be within the jurisdiction of the CIAC. Based on the previously cited provision outlining the CIAC’s jurisdiction, it is clear that with regard to contracts over which it has jurisdiction, the only matters that have been excluded by law are disputes arising from employer- employee relationships, which continue to be governed by the Labor Code of the Philippines. Moreover, this is consistent with the policy against split jurisdiction.

In fact, in National Irrigation Administration v. Court of Appeals,53 it was held that the CIAC had jurisdiction over the dispute, and not the contract. Therefore, even if the contract preceded the existence of the CIAC, since the dispute arose when the CIAC had already been constituted, the arbitral board was exercising current, and not retroactive, jurisdiction. In the same case, it was held that as long as the parties agree to submit to voluntary arbitration, regardless of what forum they may choose, their agreement will fall within the jurisdiction of the CIAC, such that, even if they specifically choose another forum, the parties will not be precluded from electing to submit their dispute to the CIAC because this right has been vested upon each party by law.

This is consistent with the principle that when an administrative agency or body is conferred quasi-judicial functions, all controversies relating to the subject matter pertaining to its specialization are deemed to be included within its jurisdiction since the law does not sanction a split of jurisdiction, as stated in Peña v. Government Service Insurance System.54

In Peña, the Court held that although the complaint for specific performance, annulment of mortgage, and damages filed by the petitioner against the respondent included title to, possession of, or interest in, real estate, it was well within the jurisdiction of the Housing and Land Use Regulatory Board (HLURB), a quasi-judicial body, as it involved a claim against the subdivision developer, Queen’s Row Subdivision, Inc., as well as the Government Service Insurance System

(GSIS).

This case was later cited in Badillo v. Court of Appeals,55 where the Court concluded that the HLURB had jurisdiction over complaints for annulment of title. The Court also held that courts will not determine a controversy where the issues for resolution demand the exercise of sound administrative discretion, such as that of the HLURB, the sole regulatory body for housing and land development. It was further pointed out that the extent to which an administrative agency may exercise its powers depends on the provisions of the statute creating such agency.

The ponencia further quoted from C.T. Torres Enterprises, Inc. v. Hibionada:56

The argument that only courts of justice can adjudicate claims resoluble under the provisions of the Civil Code is out of step with the fast-changing times. There are hundreds of administrative bodies now performing this function by virtue of a valid authorization from the legislature. This quasi-judicial function, as it is called, is exercised by them as an incident of the principal power entrusted to them of regulating certain activities falling under their particular expertise.

In the Solid Homes case for example the Court affirmed the competence of the Housing and Land Use Regulatory Board to award damages although this is an essentially judicial power exercisable ordinarily only by the courts of justice. This departure from the traditional allocation of governmental powers is justified by expediency, or the need of the government to respond swiftly and competently to the pressing problems of the modern world.

In Bagunu v. Spouses Aggabao,57 the Court ruled that the RTC must defer the exercise of its jurisdiction on related issues involving the same subject matter properly within its jurisdiction, such as the distinct cause of action for reformation of contracts involving the same property, since the DENR assumed jurisdiction over the lot in question, pursuant to its mandate.

In National Housing Authority v. First United Constructors Corporation,58 the Court held that there was no basis for the exclusion of claims for business losses from the jurisdiction of the CIAC because E.O. No. 1008 "excludes from the coverage of the law only those disputes arising from employer-employee relationships which are covered by the Labor Code, conveying an intention to encompass a broad range of arbitrable issues within the jurisdiction of CIAC."59 Section 4 provides that "(t)he jurisdiction of the CIAC may include but is not limited to x x x," underscoring the expansive character of the CIAC’s jurisdiction. Very clearly, the CIAC has jurisdiction over a broad range of issues and claims arising from construction disputes, including but not limited to claims for unrealized profits and opportunity or business losses. What E.O. No. 1008 emphatically excludes is only disputes arising from employer-employee relationships.60

Where the law does not delineate, neither should we. Neither the provisions of the Civil Code on reformation of contracts nor the law creating the CIAC exclude the reformation of contracts from its jurisdiction. Jurisprudence further dictates that the grant of jurisdiction over related and incidental matters is implied by law. Therefore, because the CIAC has been held to have jurisdiction over the Contract, it follows that it has jurisdiction to order the reformation of the Contract as well.

Whether MCWD can validly refuse to participate in the arbitration proceedings

In light of the finality of the CA decision on the matter of jurisdiction, the only remaining issue to be disposed of is whether the CIAC could proceed with the case even if the MCWD refused to participate in the arbitration proceedings.

The Court rules in the affirmative. Though one party can refuse to participate in the arbitration proceedings, this cannot prevent the CIAC from proceeding with the case and issuing an award in favor of one of the parties.

Section 4.2 of the Revised Rules of Procedure Governing Construction Arbitration (CIAC Rules) specifically provides that where the jurisdiction of the CIAC is properly invoked by the filing of a Request for Arbitration in accordance with CIAC Rules, the failure of a respondent to appear, which amounts to refusal to arbitrate, will not stay the proceedings, notwithstanding the absence of the respondent or the lack of participation of such party. In such cases, the CIAC is mandated to appoint the arbitrator/s in accordance with the Rules, and the arbitration proceedings shall continue. The award shall then be made after receiving the evidence of the claimant.

In such a case, all is not lost for the party who did not participate. Even after failing to appear, a respondent is still given the opportunity, under the CIAC Rules, to have the proceedings reopened and be allowed to present evidence, although with the qualification that this is done before an award is issued:

4.2.1 In the event that, before award, the Respondent who had not earlier questioned the jurisdiction of the Tribunal, appears and offers to present his evidence, the Arbitral Tribunal may, for reasons that justifies (sic) the failure to appear, reopen the proceedings, require him to file his answer with or without counterclaims, pay the fees, where required under these Rules, and allow him to present his evidence, with limited right to cross examine witnesses already in

the discretion of the Tribunal. Evidence already admitted shall remain. The Tribunal shall decide the effect of such controverting evidence presented by the Respondent on evidence already admitted prior to such belated appearance.

Thus, under the CIAC Rules, even without the participation of one of the parties in the proceedings, the CIAC is still required to proceed with the hearing of the construction dispute.61

This Court has held that the CIAC has jurisdiction over a dispute arising from a construction contract even though only one of the parties requested for arbitration.62 In fact, in Philrock, Inc. v. Construction Industry Arbitration Commission,63 the Court held that the CIAC retained jurisdiction even if both parties had withdrawn their consent to arbitrate.

In this case, there being a valid arbitration clause mutually stipulated by the parties, they are both contractually bound to settle their dispute

through arbitration before the CIAC. MCWD refused to participate, but this should not affect the authority of the CIAC to conduct the proceedings, and, thereafter, issue an arbitral award.

Now, with the CIAC decision being questioned by MCWD, the Court takes a cursory reading of the said decision. It reveals that the conclusions arrived at by CIAC are supported by facts and the law. Article 1359 of the Civil Code states that when there has been a meeting of the minds of the parties to a contract, but their true intention is not expressed in the instrument purporting to embody the agreement by reason of mistake, fraud, inequitable conduct or accident, one of the parties may ask for the reformation of the instrument to the end that such true intention may be expressed. The CIAC, in this case, found that the parametric formula for price escalation reflected in the Water Supply Contract involved two items: Power Rate Price Adjustment (30% of the base selling price of water) and Consumer Price Index Adjustment (40% of the base selling price of water). The remaining 30% of the selling price of water, which should have been for Capital Cost Recovery, was inadvertently left out in this parametric formula. Thus, the Contract should be reformed accordingly to reflect the intention of the parties to include in the price escalation formula the Capital Cost Recovery Adjustment. These conclusions were affirmed by the CA in the assailed decision of February 20, 2006.

As noted by MCWD in its reply, however, the dispositive portion of the CIAC decision reforming the price escalation formula is inconsistent with what was stated in the body of the decision. The formula contained in the body of the decision is as follows:

PRICE ADJUSTMENT COMPUTATION

Based on Reformed Clause 17 of the Water Supply Contract

1. Power Cost Adjustment:

xxx

Current Power Rate – Base Power Rate x 30% of Base Selling Price of water

Base Power Rate

xxx

2. Operating Cost Adjustment - Local

xxx

Current CPI – Base CPI

x 30% of 40% of Base Selling Price of Water

Base CPI

xxx

3. Operating Cost Adjustment – Foreign

xxx

Current Forex – Base Forex

x 70% of 40% of Base Selling Price of Water

Base Forex

xxx

4. Capital Cost Adjustment – Local

xxx

Current CPI – Base CPI

x 30% of 30% of Base Selling Price of Water

Base CPI

xxx

5. Capital Cost Adjustment – Foreign

xxx

Current Forex – Base Forex

x 70% of 30% of Base Selling Price of Water

Base Forex

xxx64

The dispositive portion of the decision, however, reads:

WHEREFORE[,] premises considered, judgment is hereby rendered as follows:

1. Ordering the reformation of Clause 17 of the Water Supply Contract to read:

17[.] Price Escalation and/or De-Escalation shall be based on the parametric formula:

17.1 Power Rate Price Adjustment/Power Cost Adjustment

Current Power Rate – Base Power Rate

x 30% of Base Selling Price of water

Base Power Rate

17.2 Consumer Price Index (CPI) Adjustment/Operatiing (sic) Cost Adjustment:

Current CPI – Base CPI

x 40% of Base Selling Price of Water

Base CPI

17.3 Capital Cost Recovery Adjustment:

Current Peso to Base Peso to US$

US$ Exchange Rate – Exchange Rate

x 30% of base selling price of water

Base Peso to US $ Exchange Rate

The general rule is that where there is a conflict between the fallo, or the dispositive part, and the body of the decision or order, the fallo prevails on the theory that the fallo is the final order and becomes the subject of execution, while the body of the decision merely contains the reasons or conclusions of the court ordering nothing. However, where one can clearly and unquestionably conclude from the body of the decision that there was a mistake in the dispositive portion, the body of the decision will prevail.65

Following the reasoning of the CIAC in this case, there are three components to price adjustment: (1) Power Cost Adjustment (30% of the base selling price of water); (2) Operating Cost Adjustment (40% of the base selling price of water); and (3) Capital Cost Adjustment (30% of the base selling price of water).

In turn, the second component—Operating Cost Adjustment—is computed based on Local Operating Cost Adjustment (30%), and Foreign Operating Cost Adjustment (70%).

Capital Cost Adjustment, on the other hand, is composed of Local Capital Cost Adjustment (30%), and Foreign Capital Cost Adjustment (70%).

This is consistent with the formula set forth in the body of the CIAC decision. If the formula in the dispositive portion were to be followed, Operating Cost Adjustment would be computed with the Local Operating Cost Adjustment representing the entire 40% of the base selling price of water instead of just 30% of the Operating Cost Adjustment. Moreover, if the Capital Cost Recovery Adjustment were to be computed based solely on Foreign Capital Cost Recovery Adjustment, it would represent the entire 30% of the base selling price of water, and not just 70% of the Capital Cost Recovery Adjustment. The omission of the marked portions of the formula as stated in the body of the CIAC decision represents substantial changes to the formula for price escalation. It is thus clear that the formula as stated in the body of the decision should govern.

WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in C.A.-G.R. CEB SP. No. 00623 are AFFIRMED with the modification that the formula for the computation of the Capital Cost Recovery Adjustment in the fallo of the CIAC decision should be amended to read as follows:

WHEREFORE, premises considered, judgment is hereby rendered as follows:

1.Ordering the reformation of Clause 17 of the Water Supply Contract to read:

17.Price Escalation and/or De-Escalation shall be based on the parametric formula:

17.1. Power Rate Price Adjustment/Power Cost Adjustment

Current Power Rate - Base Power Rate

Base Power Rate x 30% of base selling price of water

17.2 Consumer Price Index (CPI) Adjustment/Operating Cost Adjustment:

Current CPI – Base CPI

x 30% of 40% of base selling price of water

Base CPI

17.3 Capital Cost Recovery Adjustment: Current Peso to Base Peso to US$

US$ Exchange Rate – Exchange Rate

x 70% of 30% of base selling price of water

Base Peso to US $ Exchange Rate

Price escalation shall be reckoned from January 1999 when the water was first delivered by Mactan Rock Industries, Inc.1awp++i1 to the MCWD facilities in Mactan. The base CPI, base US$ Exchange Rate and the Base Power Rate shall be the prevailing rate in January 1999, while the Base Selling Price of water shall mean the 1996 rate per cubic meter of water as provided for in the Water Supply Contract.

2.Ordering Respondent Metropolitan Cebu Water District to pay Claimant, Mactan Rock Industries, Inc. under the reformed Clause 17 of the Water Supply Contract, the net amount of Php12,126,296.70 plus legal interest of six percent (6%) per annum from March 15, 2004, the date of filing of the case with the Construction Industry Arbitration Commission, and twelve percent (12%) per annum from the date this Decision becomes final and executory, until the foregoing amounts shall have been fully paid.

3.Claimant Mactan Rock Industries, Inc. and Metropolitan Cebu Water District shall share the cost of arbitration equally.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

WE CONCUR:

PRESBITERO J. VELASCO, JR.

Associate Justice

Chairperson

DIOSDADO M. PERALTA

BIENVENIDO L. REYES*

Associate Justice

Associate Justice

ESTELA M. PERLAS-BERNABE

Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

PRESBITERO J. VELASCO, JR.

Associate Justice

Chairperson, Third Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO

Senior Associate Justice

(Per Section 12, R.A. No. 296, The Judiciary Act of 1948, as amended)

Xxx