Background
Pursuit of Excellence
For 31 years now, Metrobank Foundation (MBFI) has advocated the fostering of excellence among Filipinos in various
sectors. By encouraging the adoption of and adherence to the highest standards of performance and conduct, it has
endeavored to bring out – and honor – the best in the Filipino. A pioneer program established through this advocacy is
the Metrobank Search for Outstanding Teachers. This is the Foundation's way of recognizing the professionalism,
competence, and dedication of educators nationwide, they being the pillars of the country's education system. As the
Foundation continues to grow, it has extended its programs to other key sectors, specifically, the Police through the
Search for the Country's Outstanding Policemen in Service, and the Armed Forces through the Search for The
Outstanding Philippine Soldiers. Similarly, the COPS and TOPS programs aim to recognize outstanding members of the
police force and the armed forces for their competence, professionalism, dedication to duty and commitment to
community service.
Through its excellence programs, the Foundation strives to encourage the members of key sectors in Philippine
society to become more productive, inspired and empowered citizens, believing that these initiatives would contribute
toward nation building as each one strives to deliver the best services to the Filipino public.
Reaching out to the Judiciary
It therefore comes as no surprise that Metrobank Foundation extended its reach to the judiciary by partnering with the
Philippine Judicial Academy of the Supreme Court to establish a Professorial Chair. In December 2002, MBFI sealed an
agreement with the PHILJA through a One Million Peso endowment fund. The Metrobank Professorial Chair intends to
assist the Academy in encouraging justices, other members of the judiciary, and the academe to author and publish
treatises, and introduce innovative concepts in designated areas of law to promote excellence and efficiency.
Since 2004, the Metrobank Foundation Professorial Chair has been awarded to seven Professors of the Academy,
including active and retired justices, and academic deans who conducted research on branches of the law relevant to
current issues faced by the country. The presentations of these research papers through the Professorial Lectures have
not only served as venues for the exchange of knowledge and increased awareness on Philippine law, but have also
been opportunities for other sectors to give their own insights and recommendations on the said legal issues.
This partnership reflects what Metrobank Foundation Chairman Dr. George S.K. Ty envisions: the promotion of
a culture of excellence among Filipinos. In gratitude for and appreciation of such a progressive partnership, the
Metrobank Foundation awarded the Partner in Empowering and Advocating Excellence (PEACE) Award to the
Philippine Judicial Academy during the Foundation's 30th Anniversary in January 2009.
Acknowledgment
The Supreme Court, Philippine Judicial Academy, and Metrobank
Foundation, Inc., gratefully acknowledge the valuable support of
the Arellano University School of Law, the Court of Appeals, the
Ateneo Professional Schools, and the University of the Philippines
College of Law for the Metrobank Foundation Professorial Lecture
Series by providing the fitting venues for the distinguished lectures
and giving all-out assistance for the successful conduct of the
activities.
Table of Contents
FOREWORD
CHIEF JUSTICE REYNATO S. PUNO
.......................................
i
PREFACE
PHILJA CHANCELLOR ADOLFO S. AZCUNA
.......................................
ii
MESSAGE
FOUNDING CHANCELLOR EMERITUS AMEURFINA A. MELENCIO HERRERA
....................................... iii
MESSAGE
METROBANK FOUNDATION, INC. CHAIRMAN GEORGE S.K. TY
....................................... iv
MESSAGE
METROBANK FOUNDATION, INC. PRESIDENT ANICETO M. SOBREPEÑA
.......................................
v
Injunction and its Related Problems
2004 PROFESSORIAL CHAIR LECTURE IN REMEDIAL LAW
....................................... 1
Hon. Oscar M. Herrera, Sr.
Retired Justice, Court of Appeals
Chair, Department of Remedial Law
Philippine Judicial Academy
Hon. Hilarion L. Aquino
Retired Justice, Court of Appeals
Chair, Department of Ethics and Judicial Conduct
Philippine Judicial Academy
On Amending the Constitution
2005 PROFESSORIAL CHAIR LECTURE IN CONSTITUTIONAL LAW
Hon. Vicente V. Mendoza
Retired Justice, Supreme Court
Professorial Lecturer, Philippine Judicial Academy
....................................... 65
Corporate Governance : Law and Jurisprudence
2006 PROFESSORIAL CHAIR LECTURE IN COMMERCIAL LAW
....................................... 83
Hon. Sixto C. Marella, Jr.
Associate Justice, Court of Appeals
Vice Chair, Department of Commercial Law
Philippine Judicial Academy
International Humanitarian Law
2007 PROFESSORIAL CHAIR LECTURE
IN INTERNATIONAL LAW AND HUMAN RIGHTS LAW
....................................... 137
Hon. Adolfo S. Azcuna
Associate Justice, Supreme Court
Special Professor, Philippine Judicial Academy
The Future of Environmental
Law and Governance
2008 PROFESSORIAL CHAIR LECTURE IN ENVIRONMENTAL LAW
....................................... 165
Dean Antonio G.M. La Viña
Dean, Ateneo School of Government
Member, Department of Constitutional Law
Philippine Judicial Academy
Law at its Margins: Questions of Identity,
Ancestral Domains, Indigenous Peoples
and the Diffusion of Law
2009 PROFESSORIAL CHAIR LECTURE IN CONSTITUTIONAL LAW
Dean Marvic M.V.F. Leonen
College of Law, University of the Philippines
Vice Chair, Department of Constitutional Law
Philippine Judicial Academy
....................................... 189
Foreword
FROM THE
CHIEF JUSTICE
T
he body of legal literature is in constant
flux, because of efforts to ensure that law
and jurisprudence respond and are
relevant to the issues being confronted at a given time.
Old laws are updated, new laws are developed,
jurisprudence becomes more detailed and complex for law is created to serve humanity, and not the other
way around.
Because of the perpetual evolution of the law, we
need a north star - sturdy guideposts, if you will, to lead
members of the bench, practitioners, and even law
students through this convoluted legal maze. We
began institutionalizing this within the Court though
the Philippine Judicial Academy (PHILJA), and we are
fortunate enough to have partners like the Metrobank
Foundation to assist us in inaugurating more programs
to take our vision of a well-informed Judiciary to
another level. The Metrobank Foundation, in
collaboration with the PHILJA, has established the
Professorial Chair, an annual endowment to encourage
our Corps of Professors to write and lecture on
innovative concepts and approaches in designated
areas of law to further enhance judicial education and
promote judicial excellence.
With this publication, we present to you seven
holders of the Professorial Chair through the years
2004 to 2009, namely: Justice Oscar M. Herrera and
Hilarion L. Aquino (Remedial Law), Justice Vicente V.
Mendoza (Constitutional Law), Justice Sixto C. Marella,
Jr. (Commercial Law), Associate Justice Adolfo S.
Azcuna (International and Human Rights Law), Dr.
Antonio GM La Viña (Environmental Law), and Dean
Marvic MVF Leonen (Constitutional Law). Our
profound appreciation goes to these fine legal minds
for generously imparting to us their analysis of
resonant issues in our community. This compilation of
lectures will no doubt be a significant contribution to
existing literature on the law.
Corresponding gratitude goes to the Metrobank
Foundation, for making all this possible, as well as the
universities and participants for their warm reception
of our lecturers. Finally, no part of this lecture series
and publication could have been within the realm of
possibility without the hard work poured into these
projects by the PHILJA staff.
It is with great honor that I present this
outstanding body of work to anyone interested to have
a better grasp of the law.
Mabuhay tayong lahat!
i
REYNATO S. PUNO
Chief Justice
Preface
FROM THE
PHILJA CHANCELLOR
T
his publication compiles the Metrobank
Foundation Professorial Lectures from
2004 to 2009, making it available to a
wider readership. The range of topics covered by the
lectures, from the environment to corporate
governance, from injunctions to indigenous peoples,
from constitutional amendments to the rules of war,
will surely be of interest if not of practical use to all.
As Chief Justice Reynato S. Puno retires from the
Supreme Court, the Philippine Judicial Academy and
the Metrobank Foundation present this set of lectures
as a tribute to his pursuit of excellence and realization
of justice in today’s world.
All the best.
March 30, 2010.
ADOLFO S. AZCUNA
Chancellor
Philippine Judicial Academy
ii
Message
FROM THE
FOUNDING CHANCELLOR EMERITUS
I
t feels great that we are now compiling
fo r p u b l i ca t i o n t h e M et r o b a n k
Foundation Professorial Chair Lectures
from 2004 to 2009, thanks to our partner the
Metrobank Foundation, Inc.
Being able to accomplish it has been PHILJA’s
long-standing objective in order that the scholarly
lectures, delivered in public forums before select
audiences by distinguished retired and incumbent
Justices and Deans of the Academe, may be preserved
for posterity.
That we are presenting the publication to Chief
Justice Reynato S. Puno prior to his retirement on 17
May 2010 is also significant, in recognition not only of
his enlightening Closing Remarks during the lectures
given in 2007, 2008, and 2009, but also, of his
invaluable support as a guru himself for the continuing
education of judges, and of his exemplary leadership
of the entire judiciary.
We express our profound gratitude to the
Metrobank Foundation, Inc. through its then
President, Mr. Placido L. Mapa, and its then Executive
Director, Mr. Aniceto M. Sobrepeña, for the
Memorandum of Agreement signed between us, as
early as 9 December 2002, to establish Professorial
Chairs in areas of law designated by the Academy,
which was accompanied by a generous endowment.
The purpose is not only to provide assistance to the
Academy to develop and enhance its programs in
judicial education but also to encourage its Corps of
Professors to “author and publish treatises
introducing innovative concepts in designated areas
of law and jurisprudence.”
Since then we have become staunch allies with
the Metrobank Foundation, Inc. now led by its
President, Mr. Aniceto M. Sobrepeña, which believes
with us in line with its corporate culture, that
continuing quality judicial education is at the heart of
fostering excellence in the Judiciary.
iii
AMEURFINA A. MELENCIO HERRERA
Founding Chancellor Emeritus
Philippine Judicial Academy
Message
FROM THE
METROBANK FOUNDATION, INC. CHAIRMAN
O
n behalf of the Metrobank Group, I wish to
extend my greetings to the Philippine
Judicial Academy of the Supreme Court
Metrobank Foundation Chair holders who authored
the researches in this publication.
For the past years, Metrobank Foundation has
had a very productive and meaningful partnership with
the Academy as we strive to achieve our mutual goal to
promote excellence among the members of the
judiciary. And through the establishment of the
Metrobank Foundation Professorial Chair Lectures, we
had hoped not only to empower our Chairholders but
also to bring the courts closer to the Filipino people to
foster better understanding and appreciation of the
This compilation of the six Professorial Chair
Lectures held over the years is another step towards
that direction. We hope that this publication serves as a
tool to enlighten our students, educators, advocates
and practitioners of the law on the vital policy issues
faced by our country. We can certainly do so much to
empower our people by giving them better access to
knowledge and information that will allow them to
make better choices and participate more
meaningfully in the affairs of the community.
I would also like to thank the Philippine Judicial
Academy for giving us the opportunity to be involved in
this project. We look forward to your continued
assistance in the future and hope that our productive
partnership will continue to endure.
Congratulations and mabuhay!
Dr. GEORGE S.K. TY
Chairman
Metrobank Foundation, Inc.
iv
Message
FROM THE
METROBANK FOUNDATION, INC. PRESIDENT
I
n 2002, the Metrobank Foundation
and the Philippine Judicial Academy
of the Supreme Court forged an
alliance with a common goal of
fostering excellence in the Judiciary. Concretized
with the establishment of the Metrobank
Foundation Professorial Chair Lectures, this
alliance envisions strengthening one of the key
pillars of our democracy, the Judiciary, through the
continuous education of our stakeholders in the
judicial system.
Gauging from the body of researches, treatises
and innovative concepts and approaches in the
designated areas of law authored by the
distinguished holders of the Metrobank
Foundation Professorial Chair Lectures featured in
this publication, we can truly say that we are well
on our way to meeting the vision of this
partnership.
We are truly proud to be part of this
worthwhile undertaking.
On behalf of the Metrobank Foundation, I wish
to congratulate all our professorial Chairholders for
authoring the treatises compiled in this publication
and for all their significant contributions to the
Academy to promote excellence in the Philippine
Judicial System. And as in the last three decades,
our programs would not have been as successful as
they have become if not for the support of our
partners in the government, the private sector, and
the academe. In this light, we thank the Philippine
Judicial Academy of the Supreme Court for their
continued assistance in making the Metrobank
Foundation Professorial Chair Lectures meaningful
and relevant to our stakeholders.
I hope that this compilation will not only serve
as a reminder of the Professorial Lectures held over
the years, but will also serve as a tool to deepen the
knowledge and understanding of our law
educators, students and practitioners. Likewise,
may this publication serve as a reference for our
policy and decision makers on the issues that need
to be strengthened and reformed in order for all of
us to have a stronger nation.
Again, congratulations and best wishes.
ANICETO M. SOBREPEÑA
President
Metrobank Foundation, Inc.
v
INJUNCTION AND ITS RELATED PROBLEMS
Justice Oscar M. Herrera, Sr. and Justice Hilarion L. Aquino
Holders, 2004 Metrobank Foundation Professorial Chair in Remedial Law
I. INTRODUCTION
One of the remedies and reliefs most frequently dealt with in Supreme Court decisions and resolutions is
injunction. Whether as an action or a provisional remedy, injunction continues to spawn genuinely
debatable issues.
There is no question that of the five provisional remedies under the Rules of Court, preliminary
injunction, including its sprout, the temporary restraining order, is the most availed of by litigants.
Unfortunately, judicial actions on application for this injunctive relief have been the cause of some nasty talks
– oftentimes without factual basis – against some members of the bench. Reacting to these pejorative
remarks, the Supreme Court, in a couple of times, has reminded judges to be more judicious and
circumspect in granting injunctive writs and warned them against their improvident issuance.
Up to now, there are some important problems regarding the court’s competence to issue writs of
injunction against some tribunals or public agencies or against certain official acts or government
undertakings. Debates in legal circles continue on the extent of these limitations upon judicial power.
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The authors of this paper submit their opinions on these problems and offer this work as their modest
contribution to the ever growing legal literature on the subject of injunction. Certainly, ours is not the last
word on the subject but if it can only excite lawyers, judges and legal academics to make a more thorough
and scholarly dissertation on this subject, then this humble work would have attained its objective.
II. INJUNCTION IN GENERAL
A. Origin and Nature
The writ of injunction has its origin in English procedural law. It was a writ issued by authority and under the
seal of a court of equity and, limited, as in other cases where equitable relief is sought, to cases where there is
no plain, adequate and complete remedy at law. To say that injunction is an equitable remedy is to cite
history as well as to suggest when it should issue. Because disgruntled litigants appealed to the king’s
conscience who in turn referred these appeals to Chancery, this office saw an increasing caseload, as well as
a growing resentment on the part of the common law judges who considered it as usurping their turf. This
political rivalry dictated greater circumspection on the part of the Chancery court – that had a less clear title
to exist and to act as a court. Thus, there arose the doctrine that where a remedy at law was available, the
strong arm of equity through injunction could not be successfully invoked. In cases before courts today, the
applicant will have to establish that he has no remedy at law to justify his prayer for injunctive relief. In
regard to judicial attitude, the controlling concern must not solely be the protection of the rights of the
applicant, for where their rights can be protected by some legal remedy, equity’s entry into the scene will be
unjustified (Fr. Aquino, Temporary Restraining Orders, Injunctive Reliefs and Government Projects,
Analysis and Proposals, citing John Dobbyn, Injunctions, Nutshell Series, 1974 Ed. 34-38).
Injunction cannot be granted while the rights of the parties are undetermined, except in extraordinary
cases where material and irreparable injury would result and where there is no adequate remedy in the
ordinary course of law. Dobbyn conveniently enumerates the remedies that the court will consider in
deciding whether or not there is adequate remedy: (1) money damages in an action in law; (2) replevin; (3)
quo warranto to test the legitimacy of an entity or the occupancy of an office; (4) criminal sanctions; (5)
administrative procedures (exhaustion of administrative remedies); (6) political processes – courts will not
interfere with injunction on affairs properly left to the political domain. Example: it will not stop by injunction
party nominations; and (7) police assistance or self-help: when simply asking for the aid of the police or selfhelp measures will suffice, injunction will not prosper (Ibid).
As a general rule, whether or not a court can enjoin is a question of the court’s jurisdiction, and this in
turn, will depend on the constitutionality or statutory provision defining the court’s jurisdiction. A recent
development has been legislation restricting the use of the remedy of injunction (42 AmJur 2nd, Injunctions,
Sec. 8).
B. Office of Injunction
The office of a writ of injunction, as its name indicates, is peculiarly preventive, and not a remedial one. It is
to restrain the wrongdoer, not to punish him after the wrong has been done, or to compel him to undo it.
Equity reserves its injunctive process for the protection of property or other rights against actual or
threatened injury of a substantial character which cannot be adequately remedied in a court of law.
The very function of an injunction is to furnish preventive relief against irreparable mischief or
injury and the remedy will not be awarded where it appears to the satisfaction of the court that the
injury complained of is not of such character. The mere assertion that the apprehended acts will
inflict irreparable injury will not be enough. The complaining party must allege and prove facts from
which the court can reasonably infer that such would be the result. (28 Am. Jur. 242-243)
Correspondingly, the foundation of jurisdiction to issue the writ of injunction rests on the probability
2
INJUNCTION AND ITS RELATED PROBLEMS
INJUNCTION AND ITS
RELATED PROBLEMS
of irreparable injury, inadequacy of pecuniary compensation and the prevention of the multiplicity of suits,
and where facts are not shown to bring the case within these conditions, the relief of injunction should be
refused (Golding v. Balatbat, 36 Phil. 941).
C. Classification of Injunction and Definition of Terms
In its customary usage, injunction is a judicial process operating in personam, and requiring a person to
whom it is directed to do or refrain from doing a particular thing (Gainsberg v. Dodge, 193 Art. 478, 101,
S.W. 2d 178, cited in Regalado, Remedial Law Compendium, Sixth Rev. Ed., Vol. 1, p. 637).
The bases of classification of injunction are: a) nature of the remedy, b) duration of effectivity, and c)
character of its command.
1. As to nature of the remedy, injunction may either be a main action or a provisional remedy.
Injunction as a main action is an ordinary civil action which seeks to enjoin an adverse party from
doing or continuing to do an act or acts or commanding the latter to do or perform an act for a limited
period or perpetually.
As a provisional remedy, injunction is issued during the pendency of a case and effective only
during such period ordering the adverse party to refrain from particular act or acts or commanding
him to do a particular act or acts.
2. As to duration of effectivity, it may be a permanent or final injunction or a preliminary
injunction.
A permanent or final injunction is one granted by the judgment which finally disposes of the
injunctive suit or any appropriate action. It forms part of the judgment on the merits and it can be
properly enforced only in the final judgment. In order to grant relief on the merits of the case by
perpetual injunction, it is not a prerequisite that a temporary injunction should have been applied for
and granted (43 C.J.S. 408).
On the other hand, a preliminary injunction is granted pendente lite and is effective only until final
judgment. The court, however, can state in its judgment that the preliminary injunction issued
earlier is made permanent.
3. As to character of its command, injunction may be prohibitory or mandatory.
A prohibitory injunction commands a person to refrain from a particular act. A mandatory injunction
is an extraordinary remedial process resorted to effectuate full and complete justice, and commands
the performance of some positive acts (43 C.J.S. 409).
There is a relief which is necessarily related and complementary to preliminary injunction which is
temporary restraining order.
Another relief is akin to preliminary injunction which is status quo order.
A temporary restraining order is an order intended only as a restraint on a party or tribunal until
the propriety of granting a preliminary injunction can be determined and it goes no further than to
preserve the status quo until that determination. It is not intended to operate as an injunction
pendente lite and should not in effect determine the issues involved before the parties can have their
day in court (Aquino v. Luntok, 184 SCRA 177).
A status quo order is one issued by the Supreme Court motu proprio on equitable considerations
which is more in the nature of a cease and desist order since it neither directs the doing or undoing of
acts as in the case of prohibitory or mandatory injunctive relief. A status quo order is intended to
maintain the last, actual, peaceable and uncontested state of things which preceded the controversy.
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Unlike a preliminary injunction or a temporary restraining order, a bond is not required in a status quo
order (Op. Cit., Regalado, p. 651).
D. Territorial Enforceability of Injunctive Writs
Section 21, Batas Pambansa (BP) Bilang (Blg) 129 specifically provides that writs of injunction of Regional
Trial Courts are enforceable only in the regions where they are respectively situated.
Obviously, writs issued by national courts like the Supreme Court, Court of Appeals, Sandiganbayan and
Court of Tax Appeals are enforceable nationwide.
Macailing v. Andrada, 31 SCRA 126, has introduced a qualification on the rule on territoriality of writs of
injunction issued by the Regional Trial Courts. This case explains that that rule applies only to injunctive or
prohibitory writs. Some constellations of facts justify a departure from the strict observance of the rule on
the territoriality of injunctive writs.
1. When the main point in controversy is whether the decision or issuance of a public officer is valid or
legal – which is a question of law – the court can issue an injunction which can be enforced against the
public officer holding office outside of the region of the issuing court. The High Court in Macailing
explained:
The doctrine invoked in support of the theory of non-jurisdiction (Castaño v. Lobingier, 7 Phil.
91; Acosta v. Alvendia, G.R. No. L-14598, Oct. 31, 1960; Samar Mining vs. Arnado, G.R. No. L17109, June 30, 1961, 2 SCRA 782) is inapplicable, in that those cases invoked petitions for
writs of injunction seeking to control the actions of courts or officers outside the territorial
jurisdiction of the respondent courts involved. Here the sole point in issue is whether the
decision of the respondent public officers was legally correct or not, and, without going into the
merits of the case, we see no cogent reason why this power of judicial review should be
confined to the courts of first instance of the locality where the offices of respondents are
maintained, to the exclusion of the courts of first instance in those localities where the plaintiffs
reside, and where the questioned decisions are being enforced. We therefore emphasized
that: It is easy to see that if the contested ruling of the court below is sustained, the same
would result not only in hardships to litigants of limited means, practically amounting to denial
of access to the courts, but would also unnecessarily encumber the Manila courts whose
dockets are already overburdened. Actually, since Ortua v. Singson Encarnacion, (59 Phil.
440), the power of provincial courts of first instance to review administrative decisions of
national officials, has been consistently recognized.
The foregoing doctrine was reiterated in Lianga Bay Logging Co., Inc. v. Lopez Enage, 152 SCRA 80,
93-95.
2. Even if the public officer issuing an order holds office outside the region of a court if the order is to be
enforced or implemented within the region of the court, the latter can issue a writ of injunction to
restrain the enforcement of said order.
The following pronouncement in Decano v. Edu, 99 SCRA 410, is instructive:
In seeking reversal of the trial court’s decision respondents make capital of the fact that the
petition for mandamus with injunction was filed in the Court of First Instance of Pangasinan
while respondent Edu holds office in Quezon City which, they claim, is beyond the territorial
jurisdiction of the said court. Respondents cite the long line of cases from the 1960 case of
Acosta v. Alvendia where this court, pursuant to Sec. 44(h) of the Judiciary Act, jointly or
alternatively with Sec. 4, Rule 65 of the Rules of Court and/or Section 2 of Rule 58, ruled that a
court of first instance has no jurisdiction to require or control the execution of an act committed
beyond the limits of its territorial jurisdiction. These cases invariably involved petitions for
writs of injunction seeking to control the actions of courts or officers outside the territorial
4
INJUNCTION AND ITS RELATED PROBLEMS
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jurisdiction of the respondent courts of first instance where said petitions had been filed. The
Acosta ruling of non-jurisdiction does not apply however to the facts and circumstances at bar.
Here petitioner seeks primarily the annulment of the dismissal order issued by respondent Edu,
mandamus and injunction being merely corollary remedies to the main relief sought, and what
is prayed to be enjoined, as in fact the trial court did enjoin by preliminary injunction, is the
implementation of the termination order against the petitioner. It is true that the orders of
dismissal were issued by respondent Edu, but it was to be implemented in Dagupan City.
Insofar, therefore, as respondent Edu is concerned, the order terminating the services of
respondent was accomplished and this he had done without authority, as earlier discussed.
The injunction in question, consequently, must be taken only to restrain the implementation of
respondent Edu’s order by his co-respondent whose official station at Dagupan City is within
the territorial boundaries of the trial court’s jurisdictional district.
Further, quoted in Edu is the doctrine in Director of the Bureau of Telecommunications v. Aligaen, 33
SCRA 368, pertinent portion of which reads
x x x In the case of Gonzales v. Secretary of Public Works, et. al., G.R. No. L-21988, September
30, 1966, 18 SCRA 296, wherein the only question raised was whether the Court of First
Instance of Davao has jurisdiction to entertain a case the main purpose of which was to
prevent the enforcement of a decision of the Secretary of Public Works who was in Manila, this
Court held that, inasmuch as the acts sought to be restrained were to be performed within the
territorial boundaries of the province of Davao, the Court of First Instance of Davao had
jurisdiction to hear and decide the case, and to issue the necessary injunction order. This
Gonzales case was an action for certiorari and prohibition with preliminary injunction and/or
preliminary mandatory injunction to prevent the demolition of Gonzales’ dam in Davao in
compliance with the order of the Secretary of Public Works.
III. INJUNCTION AS AN ACTION
A. Legal Bases of Action for Injunction
Procedural law does not expressly mention the term “action for injunction.” However, in this jurisdiction
as in the United States of America, this action has long been recognized as one of the most potent judicial
remedies against unlawful invasion of one’s rights.
There are, however, laws and rules impliedly recognizing an action for injunction. For example,
Article 26 of the Civil Code states that a person’s rights to privacy and to his dignity call for an action to
prevent or protect them from unlawful invasion – this action can be no other than an action for injunction.
Section 4, Rule 30, RC, mentions a judgment for injunction as one of those judgments which may not be
stayed by appeal. A judgment for injunction emanates from an action for injunction. Manila Banking
Corporation v. Court of Appeals, 187 SCRA 138, is one among many cases recognizing the remedy of
action for injunction.
Finally, Section 9, Rule 58, RC pertains to final injunction.
SEC. 9. When final injunction granted. – If after the trial of the action it appears that the
applicant is entitled to have the act or acts complained of permanently enjoined, the court shall grant
a final injunction perpetually restraining the party or person enjoined from the commission or
continuance of the act or acts or confirming the preliminary mandatory injunction.
B. Jurisdiction
Injunction as a main action is one whose subject is incapable of pecuniary estimation. Consequently, the
Regional Trial Courts have original and exclusive jurisdiction over it (Sec. 21, B.P. Blg. 129). It must be
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stressed that the Court of Appeals and the Supreme Court have no jurisdiction over original actions for
injunction.
C. Injunction and Other Actions, Distinguished
1. Injunction is distinguished from prohibition in that the former is an ordinary civil action while the latter
is a special civil action.
2. Injunction is usually directed to the parties to the case requiring them to refrain from an act which
invades substantial rights while prohibition is generally directed to a court commanding it to cease
from exercising jurisdiction to which it has no legal claim.
3. Injunction is differentiated from mandamus in that the former is an ordinary civil action and a
preventive remedy because it seeks to prevent future injury. On the other hand, mandamus is a
special civil action which is a remedial writ employed to redress past grievances (Moran, Comments
on the Rules of Court, rev. ed. 58 [1952]).
D. Important Jurisprudential Rules and Commentaries in Actions for Injunction
1. Real Party in Interest
"It is no wonder that lawyers and courts
In order to be entitled to injunction,
below the Supreme Court have been using
a complainant must be the real party
the grounds for preliminary injunction
in interest. This means that he has
and temporary restraining order
an actual and substantial interest in
interchangeably making the logical
the subject matter, as distinguished
distinction
of grounds for these injunctive
from one who has only a nominal
reliefs…
useless, if not confusing.”
interest having reference not merely
to the name in which the action was
brought but also to the facts as they
appear on record (43 C.J.S. 35). Interest within the meaning of injunctive reliefs means material
interest, an interest in issue, and to be effected by decree, as distinguished from a mere interest in the
question involved or mere incidental interest (Locsin v. Climaco, 26 SCRA 816).
2. Nature of Injury
Not every kind of injury can be the subject of an injunctive suit. It is a familiar principle that the
remedy is available only where the inquiry is actual or positive and substantial and is irremediable at
law. Nor equity will interfere by injunction where the damage suffered by the complainant is so small
and the right invaded is so unimportant as to make the case a trivial one. Moreover, equity will not
interfere to relieve against injuries which are fanciful, or which are not of such serious consequence as
to warrant judicial intervention. It must be material and actual injury, existing or presently
threatened, and not one that is theoretical or merely possible, or that is doubtful, eventual or
contingent (28 AmJur 221).
3. Strict Construal
A complaint for injunctive relief should be construed strictly against the pleader (43 C.J.S. 867).
4. Forum Shopping
An action for injunction is of course subject to the rule on forum shopping. There is, however, one
notable exception.
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Separate injunction suits may be filed for breach of mortgage contract with injunction to restrain
extrajudicial foreclosure proceedings of mortgaged properties located in different provinces without
violating the rule against forum shopping since injunction is enforceable only within the territorial
limits of the trial court, thus, the mortgagor is left without remedy as to the properties located outside
the jurisdiction of the issuing court unless an application for injunction is made with another court
which has jurisdiction over the latter court (Benguet Management Corporation v. Court of Appeals,
411 SCRA 347).
5. Multiplicity of Suits
An action for injunction may be instituted to prevent multiplicity of suits. When a party commences
an action for injunction, and the facts averred in the complaint would confer jurisdiction whatever
may be the defense, counterclaims or cross-claims which the defendant may cause to make,
whether of legal or equitable nature, our courts will proceed to determine the case whenever possible
to avoid multiplicity of suits between the same parties. Thus, the trial court can properly try and
determine an action for injunction and damages although it appears that the defendant has taken
possession of the land in question, in light of the pleadings and the evidence presented by the parties
(Santos v. De Leon, 60 Phil. 573).
The doctrine is founded on the theory of affording a speedy and efficient administration of justice,
at the same time, promoting the convenience of the parties. Also, it has been pointed out that if
successive suits could be brought to litigate the same questions between the same parties or their
privies as often as either should choose, remedial justice would often became a mere mockery (28
AmJur 246).
6. Factual Basis of Injunction
On what should a court resolve an application for an injunctive relief where there has been a change
on the condition which gave rise to the litigation? Putting it elsewise, should an injunctive suit stand
or fall upon the facts as they existed at the time the action was instituted or should the court consider
the subsequent changes or the abandonment of the acts complained of?
American jurisprudence on this point is enlightening. Generally speaking, it is the condition of
things at the time of the hearing of the suit, rather than that existing at its commencement, which is
material, and which furnishes the basis for relief. The court is not only authorized, but it is its duty, to
determine not merely whether the plaintiff was entitled to an injunction at the time he began the suit,
but whether the facts as they appear at the time of the hearing warrant such relief, and it may refuse
to grant an injunction where, since the commencement of the suit, conditions have so changed as to
render an injunction useless and of no effect if granted.
Injunctive relief will generally be refused where, before the final hearing, the plaintiff loses his
interest in or title to the subject matter sought to be protected, or where the act sought to be
restrained has been made lawful by statute or ordinance. This does not mean that the court should
deny injunctive relief in every case of material change or conditions or abandonment of acts
complained of, for circumstances may still exist which, even in the face of such a situation, would
justify the issuance of injunction as a matter of sound discretion (28 Am. Jur. 201).
E. Impropriety of an Action for Injunction
In a number of cases, the High Court struck down actions for injunction because under the
peculiar circumstances of these cases, injunction was not the proper remedy.
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1. Against Acts Already Done
It is a universal principle of law that an injunction will not issue to restrain the performance of an act
already done (Ramos v. Court of Appeals, 173 SCRA 550) for the simple reason that nothing more
can be done in reference thereto (Manila Railroad Company v. Yatco, 23 SCRA 735). An injunction
suit becomes moot and academic after the act sought to be enjoined has already been consummated
(PCIB v. NAMAWU-MIF, 115 SCRA 873; Romulo v. Yñiguez, 141 SCRA 263; Rivera v. Florendo, 144
SCRA 647; Zabat v. Court of Appeals, 338 SCRA 551). Thus, if the defendants are already in full
possession of the land in question at the time of the institution of the action for injunction to prevent
them from possessing said land, the action is obviously an exercise in futility (Zabat v. Court of
Appeals, 338 SCRA 551; See also Reyes v. Harty, 21 Phil. 422, 425; PCIB v. NAMAWU-MIF, 115
SCRA 873; Romulo v. Yñiguez, 141 SCRA 263; Rivera v. Florendo, 144 SCRA 643).
2. Against Final and Executory Decision
Is an injunction a proper remedy to stay the execution of a final and executory decision? Negative.
The only exception is if there is a showing that facts and circumstances exist which would render
execution unjust or inequitable, or that a change in the situation of the parties occurred. To disturb
the final and executory decision of the ERB in an injunction suit is to brazenly disregard the rule on
finality of judgments (Camarines Norte Electric Cooperative, Inc. v. Torres, 286 SCRA 666;
Philippine Sinter Corporation and PHIVIDEC Industrial Authority v. Cagayan Electric Power and Light
Co., Inc., 381 SCRA 582).
If injunction cannot disturb a final judgment, a minori can it affect a judgment which has already
been executed (Meneses v. Dinglasan, 81 Phil. 470).
3. Against Criminal Prosecution
As a general rule, injunction whether final or preliminary does not lie to restrain criminal prosecution.
The following are however the exceptions:
3.1.
To afford adequate protection of the constitutional rights of the accused (Hernandez v.
Albano, et al., 19 SCRA 95).
3.2.
When necessary for the orderly administration of justice or to avoid oppression or multiplicity
of actions (Dimayuga, et al., v. Fernandez, 43 Phil. 304, Hernandez v. Albano, supra, Fortun
v. Labang, 104 SCRA 607).
3.3.
Where there is a prejudicial question (De Leon v. Mabanag, 70 Phil. 202).
3.4.
When the acts of the officer are without or in excess of authority (Planas v. Gil. 67 Phil. 62).
3.5.
Where the prosecution is under an invalid law, ordinance or regulation (Young v. Rafferty, 33
Phil. 556, Yu Cong Eng v. Trinidad, 47 Phil. 385, 389).
3.6.
Where double jeopardy is clearly apparent (Sangalang v. People and Avendia, 109 Phil.
1140).
3.7.
Where the court has no jurisdiction over the offense (Lopez v. City Judge, 18 SCRA 616).
3.8.
Where it is a case of persecution rather than prosecution (Rustia v. Ocampo, CA G.R. No.
4760, March 25, 1960).
3.9.
Where the charges are manifestly false and motivated by lust or vengeance (Recto v.
Castelo, 18 LJ [1953], cited in Ranoa v. Alvendia, CA G.R. No. 30720-r, October 8, 1962, Cf.
Guingona v. City Fiscal of Manila, 128 SCRA 577).
3.10. When there is clearly no prima facie case against the accused and a motion to quash on that
ground has been denied (Salonga v. Cruz Pano, et al., 134 SCRA 438, cited in Paderanga v.
Drilon, 196 SCRA 86).
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3.11. Where the hearing of libel case was enjoined by permanent injunction after the Supreme
Court in a separate case found the communication alleged to be libelous as privileged and not
libelous (Ang v. Castro, 136, SCRA 453).
3.12. Where a traffic ordinance was found to be invalid (Primicias v. Municipality of Urdaneta, 93
SCRA 462).
Parenthetically, however, in the higher interest of justice, a preliminary injunction has been issued
by the Supreme Court to prevent threatened unlawful arrest of petitioners (Rodriguez v. Castelo,
G.R. No. L-6374, August 1, 1953; cited in Regalado, Remedial Law Compendium, p. 188, 1988 Ed.,
Brocka v. Enrile, et al., G.R. Nos. 69863-5, December 10, 1990, 192 SCRA 183).
4. Against the Political Departments of Government
Under the doctrine of separation of powers, courts have no jurisdiction to restrain Congress from
performing its constitutionally vested function to conduct investigations in aid of legislation and from
requiring respondent to appear and testify before it (Senate Blue Ribbon Committee v. Majaducon,
407 SCRA 356).
Obviously, a court cannot by the remedy of injunction, stop the political departments of
government from acting upon a matter involving a political question.
5. Against Courts of Equal Rank
A court may not interfere by injunction with the judgments or orders of another court of coordinate
and concurrent jurisdiction (Roldan v. Arca, 65 SCRA 336; Abiera v. Court of Appeals, 45 SCRA 314)
regardless of whether the action is ordinary or special civil action.
6. Against Quasi-Judicial Agencies of Equal Rank
Regional Trial Courts cannot issue a writ of injunction against quasi-judicial bodies of equal rank such
as the Social Security Commission, Securities and Exchange Commission, Bureau of Patents,
Trademarks and Technology Transfer, Commission on Elections or Workmen’s Compensation
Commission (Nocnoc v. Vera, 88 SCRA 529; Phil. Sinter Corp. and PHIVIDEC Industrial Authority v.
Cagayan Electric Power and Light Co., Inc., 381 SCRA 582).
IV. INJUNCTION AS A PROVISIONAL REMEDY
A. Preliminary Injunction in General
1. Definition
SEC. 1. Preliminary injunction defined; classes. – A preliminary injunction is an order granted
at any stage of an action or proceeding prior to the judgment or final order, requiring a party or a
court, agency or a person to refrain from a particular act or acts. It may also require the performance
of a particular act or acts, in which case it shall be known as a preliminary mandatory injunction.
2. Against Whom Writ of Preliminary Injunction may be Directed
A writ of preliminary injunction may be directed against: (a) a party; or (b) a court; or (c) an agency;
or (d) a person. Note that a non-party in the proceeding may be restrained by a writ of preliminary
injunction if his acts are involved in the proceeding.
3. Purpose
The purpose of a preliminary injunction is “to prevent threatened or continuous irremediable injury to
some of the parties before their claims can be thoroughly studied and adjudicated. Its sole aim is to
preserve the status quo until the merits of the case can be heard fully. Thus, it will be issued only
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upon a showing of a clear and unmistakable right that is violated. Moreover, an urgent necessity for
its issuance must be shown by the applicant (First Global Realty and Development Corp. v.
Christopher San Agustin, 377 SCRA 341. See also Tayag v. Lacson, 426 SCRA 282. See also Mabayo
v. Farms, Inc. v. Court of Appeals, 386 SCRA 110).
4. Distinctions Between Preliminary and Permanent Injunctions
4.1.
It is Section 1, Rule 58, that governs preliminary injunctions. It is Section 9 of the same rule
that treats of permanent injunctions.
4.2.
Permanent injunction results from passing completely on the merits of a case. Preliminary
injunction results from a preliminary assessment of facts and a balancing of equities (Urbanes
v. Court of Appeals, 355 SCRA 537).
4.3.
Preliminary injunction can be challenged by certiorari, but a judgment for a permanent
injunction should be the subject of an appeal (Regalado, 644).
5. Authority to Grant Preliminary injunction
5.1.
Section 2, Rule 58, Rule C provides that a preliminary injunction may be granted by the
court where the action or proceeding is pending. If the action or proceeding is pending in the
Court of Appeals or in the Supreme Court, it may be issued by said court or any member
thereof.
Construing this rule in relation to the Court of Appeals, the High Court held that while any
member of the Court of Appeals may issue preliminary injunction or temporary restraining
order, this power is exercised only in case of extreme urgency and in the tradition of the
Supreme Court, the Court en banc or division ratifies or confirms the act of the single justice at
the very next session of the Court (Heirs of the Late Justice Jose B.L. Reyes v. Court of
Appeals, 338 SCRA 282).
5.2.
Conformably with that construal, Rule IV of the 2002 Internal Rules of the Court of Appeals
provides:
SEC. 5. Action by a Justice. – All members of the Division shall act upon an application for a
temporary restraining order and writ of preliminary injunction. However, if the matter is of
extreme urgency, and a Justice is absent, the two other justices shall act upon the application.
If only the ponente is present, then he shall act alone upon the application. The action of the
two Justices or of the ponente shall however be submitted on the next working day to the
absent member or members of the Division for ratification, modification or recall.
SEC. 2. Action by the Presiding Justice. – When a petition involves an urgent matter, such
as an application for writ of habeas corpus or temporary restraining order, and there is no way
of convening the Raffle Committee or calling any of its members, the Presiding Justice may
conduct the raffle or act on the petition, subject to raffle on the next working day in accordance
with Rule III thereof.
6. When and on What Showing Preliminary Injunction is Granted
6.1.
The Rules
SEC. 3. Ground for issuance of preliminary injunction. – A preliminary injunction may
be granted when it is established:
(a) That the applicant is entitled to the relief demanded, and the whole or part of such relief
consists in restraining the commission or continuance of the act or acts complained of,
or in requiring the performance of an act or acts, either for a limited period or
perpetually;
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b) That the commission, continuance or non-performance of the act or acts
complained of during the litigation would probably work injustice to the applicant; or
c) That a party, court, agency or a person is doing, threatening, or is attempting to do, or
is procuring or suffering to be done, act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding, and tending to render the
judgment ineffectual.
Temporary restraining order is treated in Section 5, Rule 58, thus:
SEC. 5. Preliminary injunction not granted without notice; exception – No
preliminary injunction shall be granted without hearing and prior notice to the party or
person sought to be enjoined. If it shall appear from facts shown by affidavits or by the
verified application that great or irreparable injury would result to the applicant before
the matter can be heard on notice, the court to which the application for preliminary
injunction was made, may issue ex parte a temporary restraining order to be effective
only for a period of 20 days from service on the party or person sought to be enjoined,
except as herein provided. Within the said 20-day period, the court must order said
party or person to show cause, at a specified time and place, why the injunction should
not be granted, determine within the same period whether or not the preliminary
injunction shall be granted, and accordingly issue the corresponding order. (Corrected
by SC Res. dated February 12, 1998)
However, and subject to the provisions of the preceding sections, if the matter is of
extreme urgency and the applicant will suffer grave injustice and irreparable injury,
the executive judge of a multiple-sala court or the presiding judge of a single-sala
court may issue ex parte a temporary restraining order effective for only 72 hours from
issuance but he shall immediately comply with the provisions of the next preceding
section as to service of summons and the documents to be served therewith.
Thereafter, within the aforesaid 72 hours, the judge before whom the case is pending
shall conduct a summary hearing to determine whether the temporary restraining
order shall be extended until the application for preliminary injunction can be heard.
In no case shall the total period of effectivity of the temporary restraining order exceed
20 days, including the original seventy-two hours provided herein.
In the event that the application for preliminary injunction is denied or not resolved
within the said period, the temporary restraining order is deemed automatically
vacated. The effectivity of a temporary restraining order is not extendible without need
of any judicial declaration to that effect and no court shall have authority to extend or
renew the same on the same ground for which it was issued.
However, if issued by the Court of Appeals or a member thereof, the temporary
restraining order shall be effective for 60 days from service on the party or person
sought to be enjoined. A restraining order issued by the Supreme Court or a member
thereof shall be effective until further orders.
6.2.
Comments
a) Moran explains that subdivision (a) refers to instances in which the principal action or a
part thereof is for injunction, in which case preliminary injunction is proper.
Subdivision (b) pertains to actions for another cause but that preliminary injunction is
necessary in order to prevent further injuries to the rights which the plaintiff seeks to
enforce. And, subdivision (c) has reference to causes where preliminary injunction is
sought, because the act of the defendant may render the judgment for the plaintiff
ineffectual (Moran, op. cit, p. 63).
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b) Francisco has a different approach. He treats the enumeration in the above rule as
follows: a) injunction to restrain the commission or continuance of acts complained of; b)
injunction to restrain the commission or continuance of some acts complained of during
the litigation because they would probably work injustice to plaintiff; and c) injunction to
restrain commission of some acts in violation of plaintiff’s right and tending to render
judgment ineffective (Francisco, op. cit, pp. 204, 265 and 218).
c) In this paper we shall integrate the two approaches as we make our own comment:
From the text of Sections 3 and 5 of Rule 58, the following are the proper reglementary
combinations of the different types of injunctive reliefs and their respective grounds or
circumstances warranting their grant:
i) Preliminary injunction prayed for in an action for injunction to restrain the commission
on continuance of the acts complained of (Section 3-a), the proper ground is: the
applicant is entitled to the relief prayed for which is to restrain or command
the performance of the act or acts complained of.
ii) Preliminary injunction prayed for in an action other than action for injunction (Section
3-b), the proper ground is:
the commission or continuance of the acts
complained of during the litigation would probably work injustice to the
applicant.
iii) Preliminary injunction to restrain the commission of some acts in violation of
applicant’s right (Section 3-c), the proper ground is: the act or acts complained of
are violative of applicant’s right and tending to render judgment ineffectual.
iv) When there is an application for a temporary restraining order, the basis for its
issuance is that: great or irreparable injury would result to the applicant
before the application for a writ of preliminary injunction can be heard on
notice (Sec. 5, 1st par.)
v) When there is an application for a temporary restraining order with an allegation that
the matter is of extreme urgency, then the ground or circumstance which empowers
the Executive Judge to grant a temporary restraining order ex parte for a period of 72
hours is that: unless so granted the applicant will suffer a great injustice and
irreparable injury (Section 5, 2nd par.).
d) Specific examples may help in the proper use of the grounds or circumstances for the
issuance of the injunctive reliefs.
i) Main Action is Injunction
A police officer files an injunction with an application for a temporary restraining order
and preliminary injunction against the Chief Philippine National Police to enjoin the
latter from enforcing his order suspending him without giving him notice and a chance
to explain his side. The order of suspension was based only on the recommendation of
the commanding officer of the plaintiff who conducted an ex parte investigation.
The ground for the application for the temporary restraining order is: unless
granted, the plaintiff would suffer great or irreparable injury before the
application for preliminary injunction can be heard on notice. The ground for
the preliminary injunction is that the plaintiff is entitled to the relief prayed for
which is to stop the enforcement of the void order.
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ii) A mortgagor files an action for the annulment of the foreclosure proceeding and the
foreclosure sale of the mortgaged properties on the ground that he has already fully paid
the secured obligation to the mortgagee. The plaintiff-mortgagor applies for a
preliminary injunction to restrain the mortgagee from consolidating ownership over said
properties. The ground should be: the consolidation of ownership on the
defendant-mortgagee during the pendency of the case would probably work
injustice to the plaintiff.
iii) The respondent in an National Labor Relations Commission (NLRC) case filed a petition for
certiorari with the Court of Appeals impugning the decision of the former on the ground
that it was issued in excess of jurisdiction and with grave abuse of discretion because he
was denied his right to procedural due process. As a petitioner, he prays for a writ of
preliminary injunction to restrain pendente lite the NLRC from executing its final
judgment. The proper ground is: that the execution of the decision of the NLRC
would probably violate petitioner’s right and once the judgment is executed
and petitioner pays the private respondent the award, a judgment of the Court of
Appeals vacating the NLRC decision would, in a practical sense, be ineffective. (If
respondent who is a laborer shall have in the meantime spent the award he received, how
else can petitioner recover what he paid?)
iv) A graduating student filed an injunction against the school and another graduating student
to stop the school from proclaiming the latter during the commencement exercises as the
class valedictorian. The plaintiff has a pending complaint before the Commission on
Higher Education (CHED) against the school protesting the choice of the defendant
student as valedictorian and claiming that he (plaintiff) was the one entitled to such an
honor. This complaint is still pending.
The plaintiff in that injunction case prays for a temporary restraining order and a
preliminary injunction against the defendants. His ground for the temporary restraining
order should be: unless the school is restrained from proclaiming the defendant
student as class valedictorian before the court could resolve the application for
preliminary injunction, he would suffer great or irreparable injury.
v) A Regional Trial Court decision ejecting the defendant has become final. On motion, the
court issued a writ of execution and since defendant did not remove his house from the
land in question, on motion, the court ordered the demolition of the house.
Within the reglementary period, the defeated party filed a petition for annulment of
judgment with the Court of Appeals on the ground of extrinsic fraud and denial of his right
to due process of law. He also prayed for a temporary restraining order and preliminary
injunction to stop the demolition of his house.
His ground should be: that the immediate granting of the temporary restraining
order is justified by the very urgent nature of the relief prayed for and that
unless granted, he would suffer grave injustice and irreparable injury.
6.3.
Decisional Pronouncements have Modified or Amplified the Grounds for Preliminary
Injunction under Sections 3 and 5, Rule 58.
a) Notes
It is plain that under Section 3, Rule 58, the only requisites which may warrant the grant of
preliminary injunction are the following:
i) the right of the applicant is in ESSE (Sec. 3-a).
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ii) the acts of the person sought to be enjoined during the litigation WOULD PROBABLY
WORK INJUSTICE to the applicant (Sec. 3-b).
iii) the acts of those sought to be enjoined are PROBABLY IN VIOLATION OF THE RIGHTS OF
THE APPLICANT RESPECTING THE SUBJECT OF THE ACTION OR PROCEEDING AND
TENDING TO RENDER THE JUDGMENT INEFFECTUAL.
On the other hand, the grounds which may justify the granting of a temporary restraining
order under Section 5 of the same Rule are:
i) De Parte Issuance
Unless granted, GREAT OR IRREPARABLE INJURY WOULD RESULT to the applicant before
the court can resolve the application for preliminary injunction.
ii) Ex Parte
If the matter is of EXTREME URGENCY AND APPLICANT WILL SUFFER GRAVE INJUSTICE
AND IRREPARABLE INJURY.
b) Cases:
i) Hutchison Ports Philippines Ltd. v. Subic Bay Metropolitan Authority, 339 SCRA 434; and
Biñan Steel Corporation v. Court of Appeals, 391 SCRA 90 teach that the requisites of
preliminary injunction whether mandatory or prohibitory are the following:
(1) the applicant must have a clear and unmistakable right;
(2) there is a material and substantial invasion of such right; and
(3) there is an urgent need for the writ to prevent serious damage to the applicant.
Note: The need to prevent serious damage to the applicant is not a ground under Section
3, Rule 58.
ii) Olalia v. Hizon, 196 SCRA 665 pronounces that a preliminary injunction may be granted
when there is a showing that the act complained of must be stayed lest the movant suffer
irreparable injury or the final judgment granting the relief sought become ineffectual.
iii) Golding v. Balatbat, 36 Phil. 941 states that the very foundation of the jurisdiction to issue
writ of injunction rests in the possibility of irreparable injury, inadequacy of pecuniary
compensation and the prevention of the multiplicity of suits.
iv) UP v. Catungal, 272 SCRA 221, mentions irreparable injury as an element authorizing the
issuance of a writ of injunction.
Note: Irreparable injury is not a requisite or a ground which allows the granting of
preliminary injunction (See Sec. 3, Rule 58). It is a ground or a requisite for the issuance
of a temporary restraining order (See Sec. 5, Rule 38).
It is no wonder that lawyers and courts below the Supreme Court have been using the grounds for
preliminary injunction and temporary restraining order interchangeably making the logical
distinction of grounds for these injunctive reliefs under Sections 3 and 5 of Rule 58 useless, if not
confusing.
7. Explanation of the Different Types of Preliminary Injunction
7.1.
Preliminary Injunction to Restrain the Commission or Continuance of the Acts Complained of
Note that this type of preliminary injunction is one where the main action is injunction or one
which is not injunction but permanent injunction is prayed for. This preliminary injunction
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seeks to restrain an act which has not yet been committed or one which was already started
but still continuing.
For this kind of preliminary injunction to be issued, three requisites are required: (a) there
must be a right in esse; (b) the act against which injunction is to be directed is a violation of
such right; and (c) that there is an urgent necessity for the writ to prevent serious damage
(Buayan Cattle Co., Inc. v. Quintillan, 128 SCRA 276; Sales v. Securities and Exchange
Commission, 169 SCRA 109; National Power Corporation v. Vera, 170 SCRA 271; Searth
Commodities Corp. v. Court of Appeals, 207 SCRA 622; Saulog v. Court of Appeals, 262 SCRA
51; Arcega v. Court of Appeals, 275 SCRA 176; Philippine Sinter Corporation and PHIVIDEC
Industrial Authority v. Cagayan Electric Power and Light Co., Inc., 381 SCRA 582; and
Hutchison Ports Philippines Ltd. v. Subic Bay Metropolitan Authority, 339 SCRA 434). The
existence of such right must be clear and positive and it must call for judicial protection.
7.2.
Preliminary Injunction to Restrain Commission or Continuance of Some Acts Complained of
During the Litigation because They would Probably Work Injustice to Plaintiff
A preliminary injunction may be granted where the action is not for injunction but preliminary
injunction is necessary to restrain the commission of or continuance of the acts complained of
during the litigation because they would probably work injustice to the plaintiff.
An example is an action contesting the constitutionality of an administrative order of the
Land Transportation Office (LTO) requiring completion of secondary education as one of the
qualifications for drivers to secure their driver’s license. The plaintiff can pray for preliminary
injunction because the enforcement of the order pendente lite would probably work injustice
to him.
7.3.
Injunction to Restrain the Commission of Some Acts in Violation of Plaintiff’s Right and
Tending to Render Judgment Ineffective
The peculiarity of this type of preliminary injunction is that the commission of the acts
complained of during the pendency of the action would not only probably violate the rights of
the applicant but also tend to render whatever judgment favorable to the latter ineffectual.
Thus, in one case had no injunction been issued, petitioner would have rescinded the sale
and sold the property to other parties, and private respondents would have lost what they
have paid to petitioner and any right they may have acquired over the property even without
the benefit of a trial. The complaint of respondent spouses would have been rendered moot
and academic as the property would be in the possession of an innocent purchaser for value
and private respondents would be powerless to recover the same. Such situation cannot be
countenanced (Development Bank of the Phils. v. Court of Appeals, 344 SCRA 492).
8. Explanation of Requisites for Preliminary Injunction
8.1.
Requisites
a) Applicant’s right is in esse.
b) There should be a material and substantial evasion of such right.
c) There is an urgent need for the writ of preliminary injunction to prevent irreparable injury
to the applicant.
d) No other ordinary, speedy and adequate remedy exists to prevent the infliction of
irreparable injury.
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8.2.
Explanations
a) Applicant’s right is in esse.
Applicant’s right must be clear or unmistakable. This means that the right is actual, clear
and positive especially calling for judicial protection (Republic v. Villarama, 278 SCRA 736;
Buayan Cattle Co., Inc. v. Quintillan, 128 SCRA 276). An injunction will not issue to
protect a right not in esse and which may never arise or to restrain an act which does not
give rise to a cause of action.
Injunction, whether preliminary or final, is not designed to protect contingent or future
rights. An injunction will not issue to protect a right not in esse and which may never arise,
or to restrain an act which does not give rise to a cause of action. The complainant’s right or
title, moreover, must be clear and unquestioned, for equity, as a rule, will not take
cognizance of suits to establish title, and will not lend its preventive aid by injunction where
the complainant’s title or right is doubtful or disputed. The possibility of irreparable
damage, without proof of violation of an actual existing right, is no ground for an injunction
being mere damnum absque injuria (Ulang v. Court of Appeals, 225 SCRA 637; Arcega v.
Court of Appeals, 275 SCRA 176). This ruling is based on the doctrinal pronouncement in
an old case in which the Supreme Court held:
In directing the issuance of the writ of preliminary injunction, the respondent Judge
reasoned out that the private respondents ‘need full protection provided for by law
against irreparable damage that they may sustain by virtue of the closure order.’ In
this connection, it would suffice to state that the mere ‘Possibility of irreparable
damage, without proof of an actually existing right, is no ground for an injunction,
being a mere damnum absque injuria.’ (Wong Siu Tong v. Aquino, 92 Phil. 545).
In a pending probate proceeding, outside parties are claiming ownership over some
properties being claimed by the heirs of the decedent as parts of the estate of the latter.
The probate court cannot adjudicate ownership or determine title to the contested
properties. In such a situation, the heirs cannot ask for injunctive relief against the parties
claiming to be owners and who are in possession of said properties for even if there exist a
possibility of irreparable damage that the heirs may sustain with the continued possession
by the outside parties of said properties, that would not call for the issuance of the writ of
injunction. Such damage even it would happen would be damnum absque injuria (Heirs
of Eugenia Roxas v. Intermediate Appellate Court, 173 SCRA 581).
In Developer’s Group of Companies, Inc. v. Court of Appeals, 219 SCRA 715, despite
the fact that plaintiff’s claim to the protection of its service mark SHANGRI-LA is
registered, the Supreme Court refused to allow the injunction against the use of the name
SHANGRI-LA holding:
On the other hand, Shangri-La claims that it had instituted Inter Parties Case No. 3145
for Cancellation of Registration against Developers, on the ground of fraud, and applied for
registration of the service mark and logo in its name in Inter Parties Case No. 3529, to
protect its claimed rights to the said name and emblem. These cases were already
pending in 1988 before the Bureau of Patents when the complaint for infringement was
filed by Developers in the Regional Trial Court of Quezon City three years later.
The conflicting claims of the parties to the subject service mark and logo give us the
impression that the right claimed by plaintiffs as its basis for asking for injunctive relief is
far from clear. The prima facie validity of its registration has been put into serious question
by the above-stated cases filed by Shangri-La in the Bureau of Patents three years ahead
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of the complaint. While it is not required that Developer’s claimed right be conclusively
established at this stage, it is nevertheless necessary to show, at least tentatively, that it
exists and is not vitiated by any substantial challenge or contradiction, such as has been
made by the private respondent. In our view, the petitioner has failed to comply with this
requirement.
As for the alleged damages, we find that Developer has not adduced any evidence of
injury, either actual or imminent, resulting from the acts complained of against ShangriLa. There was no finding of the trial court affirming the claim for damages nor is there any
support for it in the record. In fact, the order dated July 2, 1991, did not state, much less
explain, the reasons for the issuance of the writ of preliminary injunction, simply saying
that it appeared “after hearing that plaintiff is entitled to the relief prayed for.” That was all.
But that was not enough.
Note, however, that there is an exception to the rule that preliminary injunction cannot
issue to prevent future wrong. In one exceptional case, the High Court upheld a
preliminary injunction issued by the trial court to prevent the husband from interfering
with the management of the wife of their conjugal or common property pending
designation of the administrator after the filing of a petition for legal separation
(Sabalones v. Court of Appeals, 230 SCRA 79). In another case, the same court sustained
a preliminary injunction to prevent a wrongful interference with contracts by strangers (Yu
v. Court of Appeals, 217 SCRA 328).
b) There must be a material and substantial invasion of such right (Viray v. Court of
Appeals, 191 SCRA 308; National Power Corp. v. Vera, 170 SCRA 721; Araneta v.
Gatmaitan, 101 Phil. 328).
The applicant should allege in his application for injunctive relief that his right in esse is in
serious danger of being violated or that there has already been a material and substantial
violation of such right. Mere allegations, however, are not enough. There must be
evidence presented showing the threat to invade the applicant’s right or that the person
against whom the writ is sought has already invaded such right.
The threat or attempt to violate applicant’s right must be serious and imminent.
c) There is an urgent need for a writ to prevent damage. The damage referred
hereto is called irreparable injury to the applicant.
Damages are irreparable within the meaning of the rule relative to the issuance of
injunction where there is no standard by which their amount can be measured with
reasonable accuracy (Crouch v. Central Labor Council of Portland, 83 ALR, 193). “An
irreparable injury which a court of equity will enjoin includes that degree of wrong of a
repeated and continuing kind which produces hurt, inconvenience, or damage that can be
estimated only by conjecture, and not by any accurate standard of measurement.”
(Phipps v. Rogue River Valley Canal Co., 7 ALR, 741). An irreparable injury to authorize an
injunction consists of “a serious charge of, or is destructive to the property it affects, either
physically or in the character in which it has been held and enjoined, or when the property
has some peculiar quality or use, so that its pecuniary value will not fairly recompense the
owner of the loss thereof (Dunker v. Field and Tub Club, 92 p., 502; Social Security
System v. Bayona, 5 SCRA 126, 130-131 [1962] cited in UP v. Catungal, 272 SCRA 221).
Injury is considered irreparable if it is of such constant and frequent recurrence that no
fair or reasonable redress can be had therefore in a court of law, or where there is no
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standard by which their amount can be measured with reasonable accuracy, that is, not
susceptible of mathematical computation (PVTA v. delos Angeles, 164 SCRA 543). It is
beyond possibility of repair or beyond possible compensation in damages.
A writ of injunction should never issue when an action for damages would adequately
compensate the injuries caused. The very foundation of the jurisdiction to issue the writ
of injunction rests in the possibility of irreparable injury, inadequacy of pecuniary
compensation and the prevention of the multiplicity of suits, and where facts are not
shown to bring the case within these conditions, the relief of injunction should be refused
(Golding v. Balatbat, 36 Phil. 941).
The injury the petitioner or suitor would suffer were the writ not to issue would be
IRREPARABLE. As ordinarily understood, an injury is irreparable, within the law of
injunction, where it is of such a character that a fair and reasonable redress may not be
had in a court of law, so that to refuse the injunction would be a denial of justice. In other
words, where, from the nature of the act, or from the circumstances surrounding the
person injured, or from the financial condition of the person committing it, it cannot be
readily, adequately, and completely compensated for with money (42 AmJur d,
Injunctions, s 49).
Damages are irreparable within the meaning of the rule relative to the issuance of
injunction where there is no standard by which their amount can be measured with
reasonable accuracy (Crouch v. Central Bank Council of Portland, 83 ALR, 193). An
irreparable injury which a court of equity will enjoin includes that degree of wrong of a
repeated and continuing kind which produce hurt, inconvenience, or damage that can be
estimated only by conjecture, and not by any accurate standard of measurement (Phipps
v. Rogue River Valley Canal Co., 7 ALR, 741). An irreparable injury to authorize an
injunction consists of “a serious charge of, or is destructive to the property it affects, either
physically or in the character in which it has been held and enjoined, or when the property
has some peculiar quality or use, so that its pecuniary value will not fairly recompense the
owner of the loss thereof (Dunker v. Field and Tub Club, 92, P., 502; Social Security
System v. Bayona, 5 SCRA 126, 130-132 [1962] cited in UP v. Catungal, 272 SCRA 221).
The Court has ruled that possible irreparable damage without proof of actual existing
right is not a ground for an injunction. Where the complainant’s right is doubtful or
disputed, injunction is not proper. Absent a clear legal right, the issuance of the injunctive
relief constitutes grave abuse of discretion (Manila International Airport Authority v.
Court of Appeals, 397 SCRA 348).
d) The remedy of injunction does not issue except upon condition, common to all
special remedies, that no other ordinary, speedy and adequate remedy exists
for avoiding or repairing the damage caused by the acts of the person sought to
be enjoined.
This requisite is generally common to all special remedies or so-called remedies in equity.
If there is another adequate and speedy remedy either in the judicial or administrative
fora, the application for preliminary injunction will be denied.
9. Cognate Doctrinal Pronouncements
9.1.
Special Jurisdiction of RTC over Agrarian Cases
The rulings in Vda. De Tangub v. Court of Appeals, 191 SCRA 885, and Quismundo v. Court of
Appeals, 201 SCRA 609, which trial court judges were directed to take note, stress that
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Regional Trial Courts have not been completely divested of jurisdiction over agrarian reform
matters. Section 56 of R.A. No. 6657 confers “special jurisdiction” on “Special Agrarian
Courts,” which are Regional Trial Courts designated by the Supreme Court – at least one (1)
branch within each province – to act as such. These Regional Trial Courts (qua Special
Agrarian Courts) have, according to Section 57 of the same law, original and exclusive
jurisdiction over: 1) “all petitions for the determination of just compensation under this x x x
Act.” Consequently, although the new rules speak of directly appealing the decision of
adjudicators to the RTCs sitting as Special Agrarian Courts, it is clear from Section 57 that the
original and exclusive jurisdiction to determine such cases is with 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 Section 57 and, therefore, would be void.
What adjudicators are empowered to do is only to determine in a preliminary manner the
reasonable compensation to be paid to landowners, leaving to the courts the ultimate power
to decide this question (Republic v. Court of Appeals, 263 SCRA 758).
9.2.
Limitations of DARAB’s Power
The DARAB has no power to try, hear and adjudicate a case involving a portion of school’s site
actually, directly and exclusively used and found by the school to be necessary for its purposes
(Central Mindanao University v. DARAB, 215 SCRA 86).
9.3.
The court in which the petition is filed, may grant such preliminary injunction as may be
necessary for the preservation of the rights of the parties, upon the filing by the petitioner of a
bond in favor of the adverse party, conditioned that if the petition is dismissed or the petitioner
fails on the trial of the case upon its merits, he will pay the adverse party all the damages and
costs that may be awarded to him by reason of the issuance of such injunction or the other
proceedings following the petition; but such injunction shall not operate to discharge or
extinguish any lien which the adverse party may have acquired upon the property of the
petitioner (Sec. 5, Rule 38).
9.4.
Courts should avoid issuing a writ of preliminary injunction which would in effect dispose of the
main case without trial.
The prevailing rule is that courts should avoid issuing a writ of preliminary injunction which
would in effect dispose of the main case without trial (Rivas v. Securities Exchange
Commission, 190 SCRA 295; Government Service Insurance System v. Florendo, 178 SCRA
76; Ortigas and Co. Ltd. Partnership v. Court of Appeals, 162 SCRA 165; Searth Commodities
Corp. v. Court of Appeals, 207 SCRA 622). Thus, if the lower court issued the desired writ to
enjoin the sale of the properties premised on the justification of the petitioners, the issuance
of the writ would be a virtual acceptance of their claim that the foreclosure sale is null and void
(See Ortigas and Co., Ltd. Partnership v. Court of Appeals, supra). There would in effect be a
prejudgment of the main case and a reversal of the rule on the burden of proof since it would
assume the proposition which the petitioners are inceptively bound to prove (Id.).
While the writ of preliminary mandatory injunction in effect grants the main prayer in the
complaint there is practically nothing left for the trial court to try except the plaintiff’s claim for
damages (Ortigas and Co. v. CA, supra).
Where a complaint for damages with injunction was filed against persons who claim to be
tenants, tillers or cultivators of the land and the plaintiffs manifested that they are willing to
leave the tenants undisturbed until their rights as such shall have been determined in the
proper forum, it was grave abuse of discretion of the trial court to deny the defendant’s prayer
for the issuance of a writ of preliminary injunction and instead ordered them not to cut
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plaintiffs’ plants in the lot, and to allow plaintiffs to harvest their seasonal crop. In effect, it
disposed of the main case without the requisite hearing on the evidence to be presented. The
denial order is, for all intents and purposes an adjudication on the merits of the case, in gross
violation of the constitutional mandate that a party shall have the right to be heard and to
present evidence (Bataclan v. Court of Appeals, 175 SCRA 764).
If there is no way for the court to resolve the application for preliminary injunction except
to substantially touch on the merits of the case, then it should deny the application and hear
the case on the merits.
9.5.
The object of a writ of injunction is to preserve the status quo which is the last actual
peaceable uncontested status that preceded the pending controversy (Rivas v. Securities and
Exchange Commission, supra, Bengzon v. Court of Appeals, 161 SCRA 745; Rodulfa v.
Alfonso, 76 Phil. 225). The last actual peaceable uncontested status that preceded the
controversy is that Development Bank of the Philippines (DBP) is the owner of the properties
in dispute, the petitioners having failed to redeem them and DBP having consolidated its title
thereto. As owner of these properties, DBP has every right to dispose of them. The issuance
of the writ would no doubt upset, not preserve, the status quo (Searth Commodities Corp. v.
Court of Appeals, supra).
10.Allegations and Findings
10.1. Allegations
It is essential that the application should make out applicant’s entitlement to the injunctive
relief prayed for. Thus, the application should clearly allege facts and circumstance showing
the existence of the requisites mentioned above. It must be stressed that an application for
injunctive relief is construed strictly against the pleader (Sales v. Securities and Exchange
Commission, 169 SCRA 109).
10.2. Findings
If the court is convinced of the merit of the application for injunctive relief, it must make
findings of fact showing the existence of said requisites.
The court must state its own findings of fact and cite the particular law to justify the grant
of preliminary injunction. Utmost care in this regard is demanded (UP v. Catungal, 272 SCRA
221).
In Manila International Airport Authority v. Court of Appeals, 397 SCRA 348, there were no
findings of fact or law in the assailed order indicating that any of the elements essential for the
grant of a preliminary injunction existed. The trial court alluded to hearings during which the
parties marked their respective exhibits and the trial court heard the oral arguments of
opposing counsels. However, it cannot be ascertained what evidence was formally offered
and presented by the parties and given weight and credence by the trial court. The Court held
that the basis for the trial court’s conclusion that K Services was entitled to a writ of
preliminary injunction is unclear.
The trial court stated that it issued the injunction to prevent irreparable loss that might be
caused to K Services. The trial court neglected to mention what right in esse of K Services, if
any, was in danger of being violated and required the protection of a preliminary injunction.
The trial court stated merely that K Services was servicing MIAA as a porterage contractor and
that a notice of termination was sent to K Services. Absent a preliminary finding by the trial
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court that K Services possessed the right to continue as MIAA’s concessionaire, MIAA’s
termination of K Services’ was not sufficient in itself to establish that there was an invasion of
K Services’ right.
“Considering the far-reaching effects of a writ of preliminary injunction, the trial court
should have exercised more prudence and judiciousness in its issuance of the injunction
order. We remind trial courts that while generally the grant of a writ of preliminary injunction
rests on the sound discretion of the court taking cognizance of the case, extreme caution
must be observed in the exercise of such discretion. The discretion of the court a quo
to grant an injunctive writ must be exercised based on the grounds and in the manner
provided by law.” Thus, the Court declared in Garcia v. Burgos, 291 SCRA 546, citing Olalia v.
Hizon, 196 SCRA 665.
11. Procedural Requirements in the Granting of Preliminary Injunction
11.1. Verified Complaint/Application
The complaint or the application should be verified. Without verification, the application for
preliminary injunction is patently insufficient in form and substance which warrants its
outright denial (Republic v. Villarama, 278 SCRA 736).
11.2. The application should show facts entitling the applicant to the relief demanded (already
discussed supra)
11.3. Notice
The following are instances when the rules require a notice upon the party or person sought to
be enjoined:
a) When an application for a writ of preliminary injunction or a temporary restraining
order is included in a complaint or any initiatory pleading, the case, if filed in multi-sala
court, shall be raffled only after notice and in the presence of the adverse party or the
person to be enjoined.
b) No preliminary injunction shall be granted without prior notice to the party or person
sought to be enjoined.
11.4. There is, however, a recognized exception to the requirement of a hearing. If the ground is
the insufficiency of the complaint and the same is apparent from the complaint itself,
preliminary injunction in such a circumstance may be refused outright, with or without notice
to the adverse party. In fact, under Section 6 of Rule 58, the court may also refuse an
injunction on other grounds on the basis of affidavits which may have been submitted by the
parties in connection with such application.
It would be different if there is a prima facie showing on the face of the motion of pleadings
that the grant of preliminary injunction may be proper, in which case notice to the opposing
party would be necessary since the grant of such writ on an ex parte proceeding is now
proscribed.
If there is a prima facie showing that preliminary injunction is proper, a hearing should be
conducted, since under such circumstance, only in cases of extreme urgency will the writ
issue prior to a final hearing. Such requirement for prior notice and hearing underscores the
necessity that a writ of preliminary injunction is to be dispensed with circumspection and both
sides should be heard whenever possible. But it does not follow that such a hearing is
indispensable where right at the outset the court is reasonably convinced that the writ will not
lie (Valley Trading Co. v. CFI, 171 SCRA 501).
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The High Court stressed the need for a hearing in the resolution of an application for
preliminary injunction. In the issuance of preliminary injunction, the courts are given
sufficient discretion to determine the necessity for the grant of the relief prayed for as it affects
the respective rights of the parties, with the caveat that extreme caution be observed in the
exercise of such discretion, it is with an equal degree of care and caution that courts ought to
proceed in the denial of the writ. It should not just summarily issue an order of denial without
an adequate hearing and judicious evaluation of the merits of the application. A perfunctory
and improvident action in this regard would be a denial of procedural due process and could
result in irreparable prejudice to a party (Bataclan v. Court of Appeals, 175 SCRA 764).
In trial courts, hearing may consist in either a proceeding in open court where parties
adduce their respective evidence or argue their respective positions, or, by the submission of
position papers or memoranda by the parties on the propriety or impropriety of granting the
injunctive relief.
Under Section 5 of Rule 58 of the 1997 Rules of Civil Procedure, “[n]o preliminary
injunction shall be granted without hearing and prior notice to the party or party sought to be
enjoined x x x” This does not mean, however, that all petitions for preliminary injunction must
undergo a trial-type hearing, it being hornbook doctrine that “a formal or trial-type hearing is
not at all times and in all instances essential to due process” (National Federation of Labor v.
NLRC, 283 SCRA 275). Due process means giving every contending party the opportunity to
be heard and the court to consider every piece of evidence presented in their favor (Ginete v.
Court of Appeals, 296 SCRA 38). In the instant case, there is no dispute that complainant was
given opportunity to be heard, having submitted his counter-affidavit and memorandum in
support of his position. Complainant cannot, thus, claim that he was denied due process by
respondent (Co v. Calimag, Jr., 334 SCRA 20).
Under the Internal Rules of the Court of Appeals:
SEC. 4. Hearing on Preliminary Injunction. – The requirement of a hearing on an
application for preliminary injunction is satisfied with the issuance by the Court of a
resolution served upon the party sought to be enjoined requiring him to comment on
said application within a period of not more than 10 days from notice. Said party may
attach to his comment documents which may show why the application for preliminary
injunction should be denied. The Court may require the party seeking the injunctive
relief to file his reply to the comment within five days from receipt of the latter.
If the party sought to be enjoined fails to file his comment as provided for in the
preceding paragraph, the Court may resolve the application on the basis of the petition
and its annexes.
The preceding paragraphs notwithstanding, the Court may, in its sound discretion, set
the application for a preliminary injunction for hearing during which the parties may
present their respective positions or submit evidence in support thereof (Rule VI,
IRCA).
11.5. Bond
The court in which the petition is filed may grant such preliminary injunction as may be
necessary for the preservation of the rights of the parties, upon the filing by the petitioner of a
bond in favor of the adverse party, conditioned that if the petition is dismissed or the petitioner
fails on the trial of the case upon its merits, he will pay the adverse party all the damages and
costs that may be awarded to him by reason of the issuance of such injunction or the other
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proceedings following the petition; but such injunction shall not operate to discharge or
extinguish any lien which the adverse party may have acquired upon the property of the
petitioner (Sec. 5, Rule 38).
Explaining the need of a bond under the new rule even for the issuance of a temporary
restraining order, the Court said:
It is worthy to note that prior to the effectivity of the 1997 Rules of Civil Procedure, no
bond was required for the availment of a temporary restraining order. However, the
present Rules now regulate the issuance of temporary restraining orders, not only by
requiring a hearing, but also by imposing a bond on the applicant to prevent the abuse
of this relief by litigants. As explained by remedial law expert Justice Florenz D.
Regalado:
‘Under this amended section, a temporary restraining order has been elevated
to the same level as a preliminary injunction in the procedure, grounds and
requirements for its abstention. Specifically on the matter of the requisite
bond, the present requirement thereof not only for a preliminary injunction but
also for a restraining order, unless exempted therefrom by the court, puts to
rest a controversial policy which was either wittingly or unwittingly abused.
Heretofore, no bond was required for the issuance of a temporary restraining
order, except in labor cases brought to the Supreme Court on certiorari from a
decision of the National Labor Relations Commission where a monetary award
was granted, in which case the policy of the Supreme Court was to require a
bond equivalent to the monetary award or benefits granted as a condition for
the issuance of a temporary restraining order. The exemption from bond in
other cases, plus the fact that no hearing was required, made a temporary
restraining order a much sought relief for petitioners.’ (1 Regalado, Remedial
Law Compendium, Vol. 1, Sixth rev. ed., 650-651).
The temporary restraining order issued by respondent judge in Civil Case No. 2002-058
effectively enjoined the defendants therein, UMC and NICAD, from doing business as dealer
of Nissan vehicles in Northern Mindanao. It does not require deep thinking to realize the
losses that these companies will suffer if the court orders them to freeze operations. Not only
will they be deprived of potential earnings from sales but they will also have to expend for their
overhead even if they are not able to do business. Any fair judge would require the plaintiff in
such case to ensure compensation to the defendant if it is later found that the former is not
entitled to the injunction. But not respondent judge. He even rejected complainant’s motion
to fix the plaintiff’s bond in Civil Case No. 2002-058, although complainant, as defendant
therein, had clearly manifested its willingness to post a counterbond. We cannot consider
such error on the part of the respondent judge as mere error in judgment (Universal Motors
Corporation v. Rojas, 459 SCRA 14).
It is submitted that the court can exempt an applicant from filing a bond when a temporary
restraining order or a writ of preliminary injunction is issued. For one thing, if the applicant is
the government or any of its instrumentalities or agencies, bond is not required.
The court may exempt an applicant from filing a bond when no conceivable damage may
be inflicted upon the adverse party as a consequence of the issuance of a writ of preliminary
injunction. But this has to be explained by the court in its order. It was earlier shown that
damage is not really a requisite for the issuance of a writ of preliminary injunction. If it were
otherwise, the phrase: “Unless exempted by the court, x x x” would be rendered nugatory.
This is evident not only from the words of the rule but also from the cited commentary of
Justice Regalado.
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As a general rule, the filing of a bond is a mandatory requirement for the issuance of writ of
injunction (Siva v. Reyes, 83 Phil. 416; PAFLU v. Cloribel, 27 SCRA 465). The plaintiff should
sign the bond otherwise he may not be held responsible for the bond (Molina v. Somes, 24
Phil. 49).
It is required that the bond be accompanied by proper affidavits proving the sufficiency of
the sureties (Salva v. Palacios, G.R. No. L-4247, Minutes of February 20, 1951 cited in 3
Moran 1980 ed. 86).
The bond should be executed to the persons or party enjoined in an amount to be fixed by
the court. Its purpose is to indemnify the party or person enjoined of all damages he may
sustain by reason of the injunctive relief on temporary restraining order if the court should
finally decide that the applicant was not entitled thereto.
The court may, however, issue the writ of preliminary injunction effective immediately and
requiring the applicant to file the required bond with a reasonable time fixed by it (Active
Wood Products, Inc. v. Intermediate Appellate Court, 183 SCRA 671).
The court in which the petition is filed, may grant such preliminary injunction as may be
necessary for the preservation of the rights of the parties, upon the filing by the petitioner of a
bond in favor of the adverse party, conditioned that if the petition is dismissed or the
petitioner fails on the trial of the case upon its merits, he will pay the adverse party all the
damages and costs that may be awarded to him by reason of the issuance of such injunction
or the other proceedings following the petition; but such injunction shall not operate to
discharge or extinguish any lien which the adverse party may have acquired upon the
property of the petitioner. (Sec. 5, Rule 38)
B. Preliminary Injunction and Relevant Doctrinal Rules
1. Supreme Court’s Admonition to Judges
There seems to be a public perception – though baseless – that temporary restraining orders and
even writs of preliminary injunction are oftentimes issued by judges inappropriately. As a measure
to eliminate such a derogatory impression, the Supreme Court issued Administrative Circular No. 099, dated June 25, 1999, enjoining judges on the need for the exercise of utmost caution, prudence
and judiciousness in issuing said orders and writs.
2. Discretion in the Issuance of Writ of Preliminary Injunction
The issuance of a writ of preliminary injunction is addressed to the sound discretion of the court,
conditioned on the existence of a clear and positive right of the movant which should be protected. It
is an extraordinary peremptory remedy available only on the grounds expressly provided by law,
specifically Section 3 Rule 58 of the Rules of Court (Valley Trading Co., Inc. v. Court of First Instance
of Isabela, 171 SCRA 501). In the issuance thereof, the courts are given sufficient discretion to
determine the necessity for the grant of the relief prayed for as it affects the protective rights of the
parties with the caveat that extreme caution be observed in the exercise of such discretion
(Bataclan v. Court of Appeals, 175 SCRA 764). It is also a settled rule that the issuance of the writ of
preliminary injunction as an ancillary or preventive remedy to secure the rights of a party in a pending
case is entirely within the discretion of the court taking cognizance of the case, the only limitation
being that this discretion should be exercised based upon the grounds and in the manner provided by
law. The exercise of sound judicial discretion by the lower court in injunctive matters should not be
interfered with except in cases of manifest abuse (Detective and Protective Bureau, Inc. v. Cloribel,
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28 SCRA 255; Government Service Insurance System v. Florendo, 178 SCRA 76; Searth
Commodities Corp. v. Court of Appeals, 207 SCRA 622).
3. DAR and Preliminary Injunction
Before September 23, 2004, there had been an acrimonious debate on whether the courts below the
Supreme Court could issue a writ of injunction against the Department of Agrarian Reform (DAR) to
restrain any action it may take to implement the provisions of Republic Act (RA) No. 6657, otherwise
known as the Comprehensive Agrarian Reform Program (CARP). These debates morphed into mass
demonstrations, some of which were even marred by violence. This was indeed a big problem when
DAR issued a memorandum to its field officers to ignore writs of injunction issued by the courts
stopping them from implementing the provisions of said law.
The principal statutory basis of the DAR’s vehemence in defying said injunctive writs was Section
67 of R.A. No. 6657, which was the subject of SC Administrative Circulars Nos. 29-2002 and 382002. On the other hand, the lower courts held that if the principal issue raised in the case involves a
pure question of law like the constitutionality of a statute or regulation, then the court has jurisdiction
to issue an injunctive writ against DAR and its component units or officers.
This was precisely the meat of contention in Department of Agrarian Reform v. Cuenca, et al.,
G.R. No. 154112, September 23, 2004. In this case the High Court resolved the following issues:
1) Did the Regional Trial Court have jurisdiction over the case?
2) Did the Regional Trial Court violate Section 68 of R.A. No. 6657 when it granted the application
for preliminary injunction against the Municipal Agrarian Reform Officer (MARO)?
The Supreme Court ruled that the trial court did not have jurisdiction over the case nor the
competence to issue the writ of preliminary injunction. Said the Court:
A careful perusal of respondent’s Complaint shows that the principal averments and reliefs
prayed for refer – not to the ‘pure question of law’ spawned by the alleged unconstitutionality of
Executive Order No. 405 – but to the annulment of DAR’s Notice of Coverage. Clearly, the main
thrust of the allegations is the propriety of the Notice of Coverage.
xxxx
Plainly then, the propriety of the Notice relates to the implementation of the CARP, which is
under the quasi-judicial jurisdiction of the DAR. Thus, the DAR could not be ousted from its
authority by the simple expediency of appending an allegedly constitutional or legal dimension
to an issue that is clearly agrarian.
Having declared the RTCs to be without jurisdiction of the instant case, it follows that the RTC of
La Carlota City (Branch 63) was devoid of authority to issue the assailed Writ of Preliminary
Injunction. That Writ must perforce be stricken down as a nullity. Such nullity is particularly true
in the light of the express prohibitory provisions of the CARP and this Court’s Administrative
Circulars Nos. 29-2002 and 38-2002. These Circulars enjoin all trial judges to strictly observe
Section 68 of RA No. 6657, which reads:
SEC. 68. Immunity of Government Agencies from Undue Interference.
– No injunction, restraining order, prohibition or mandamus shall be issued by
the lower courts against the Department of Agriculture (DA), Department of
Agrarian Reform (DAR), the Department of Environment and Natural
Resources (DENR) and the Department of Justice (DOJ )in their
implementation of the Program.
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4. Action Questioning the Constitutionality of the Law and Writ of Injunction
The most recent decision of the Supreme Court and perhaps the definitive pronouncement on the
availability of the provisional remedy of injunction in an action questioning the constitutionality of the
law is Filipino Metals Corporation, et al. v. Secretary of the Department of Trade and Industry, et al.,
G.R. No. 157498, July 15, 2005. In this case, petitioners, which were manufacturers of various steel
products, filed a petition for declaratory relief and/or certiorari and prohibition seeking, inter alia, to
declare R.A. No. 8800 as unconstitutional.
Republic Act No. 8800 was an act intended to provide safeguard measures if a product is being
imported into the country in such quantities as would cause or threaten to cause serious injury to
domestic producers of like or directly competitive products.
The petitioners applied for a writ of preliminary injunction to restrain the respondents from
enforcing pendente lite said law. Finding a strong case of the unconstitutionality of the law, the trial
court granted a writ of preliminary injunction.
Not satisfied, respondents questioned said writ by way of certiorari with the Court of Appeals
which saw merit in said petition and accordingly set aside the order of the court a quo granting the
writ of preliminary injunction. The appellate court reasoned out:
Questions on the constitutionality of the law (do not) necessarily entitle the movant to have the
assailed law enjoined. It would seem that respondent judge acted with undue haste in issuing
the writ of preliminary injunction a quo, disregarding the well-settled presumption of validity
that laws enjoy. The private respondents’ projected loss in business is not the clear legible (sic)
right contemplated by the rules which shall be entitled to the protection of injunctive relief.
Aggrieved, petitioners raised the question to the Supreme Court which reversed the decision of
the Court of Appeals. The High Court held:
In the instant case, the acts complained of is the enforcement of R.A. No. 8800. Petitioners
pointed out that R.A. No. 8800 delegated the power to fix tariffs and imports directly to the
Secretary of the Department of Trade and Industry. Moreover, they showed that R.A. No. 8800
impairs Philippine treaty obligations under the WTO Agreements on Safeguards.
We have ruled that when the petitioner assailing a statute has made out a case of
unconstitutionality strong enough to overcome, in the mind of the judge, the presumption of
validity, in addition to a showing of a clear legal right to the remedy sought, the court should
issue a writ of preliminary injunction.
After a careful consideration of the submission by the parties, we are convinced that petitioners
herein have established a strong case for the unconstitutionality of R.A. No. 8800 sufficient for
the grant of a preliminary injunction. Note, however, that a writ of preliminary injunction is
issued merely to preserve the status quo ante. Its sole objective is to preserve the status quo
until the merits of the case can be heard fully. It is generally availed of to prevent actual or
threatened acts, until the merits of the case can be disposed of.
Respondents tenaciously argue that R.A. No. 8800 enjoys the presumption of validity and
constitutionality until proven otherwise. True, but for the purpose of issuing a provisional
remedy, strictly speaking, this contention lacks relevance. Obviously, a law need not be
declared unconstitutional first before a preliminary injunction against its enforcement, may be
granted. Needless to stress, the moment a law is nullified for being unconstitutional, it ceases
to exist. Thus, a writ of injunction would then become superfluous.
Only two requisites are necessary for a preliminary injunction to issue: (1) the existence of a
right to be protected and (2) the facts, against which the injunction is to be directed, violate said
right. While a clear showing of the right is necessary, its existence need not be conclusively
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established. In fact, the evidence required to justify the issuance of a writ of preliminary
injunction need not be conclusive or complete. The evidence need only give the court an idea of
the justification for the preliminary injunction, pending the decision of the case on the merits.
Thus, to be entitled to the writ, petitioners are only required to show that they have an
ostensible right to the final relief prayed for in their complaint.
In this case, petitioners demonstrated a clear right threatened by the questioned safeguard
measures. Being in a business heavily dependent on the importation of steel, they would be
severely damaged once safeguard measures are applied against steel imports. Petitioners
have shown, to the satisfaction of the trial court and this Court, that any increase in tariffs or
quantitative restriction on imports will force them to close down their respective businesses
and lay off their employees.
This, to us, is sufficient to entitle petitioners to a preliminary injunction. We thus hold that the
Court of Appeals erred in reversing the trial court order granting the writ of preliminary
injunction.
5. Preliminary Injunction and Equity
The Supreme Court has categorized injunction as the strong arm of equity that never ought to be
extended unless to a case of great injury where court law cannot afford an adequate or
commensurate remedy in damages.
Since injunction is the strong arm of equity, he who must apply for it must come with equity or
with clean hands. This is because among the maxims of equity are (1) he who seeks equity must do
equity, and (2) he who comes into equity must come with clean hands. The latter is a frequently
stated maxim which is also expressed in the principle that he who has done inequity shall not have
equity. It signifies that a litigant may be denied relief by a court of equity on the ground that his
conduct has been inequitable, unfair and dishonest, or fraudulent, or deceitful as to the controversy
in issue (UP v. Catungal, 272 SCRA 221).
Injunction, being the “strong arm of equity or a transcendent remedy,” should be used cautiously,
as it affects the respective rights of the parties, and only upon full conviction on the part of the court of
its extreme necessity may it be issued (Cleveland v. Martin, 218 III, 73; 75 NE 722 cited in Laureta,
Commentaries and Jurisprudence on Injunctions, p. 2 [1989 Ed.]). Its issuance rests entirely within
the discretion of the court taking cognizance of the case and is generally not interfered with except in
cases of manifest abuse (Government Service Insurance System v. Florendo, 178 SCRA 76;
Detective and Protective Bureau, Inc. v. Cloribel, 26 SCRA 255; Rodulfa v. Alfonso, 76 Phil. 225).
6. Preliminary Injunction and the Rule on Non-Interference with Court of Coordinate Jurisdiction
While an action for foreclosure of real estate mortgage was pending in one branch of a Regional Trial
Court, another branch of said court issued a writ of preliminary injunction over the subject of the
foreclosure proceeding. The High Court struck down the writ of preliminary injunction as having
been issued with grave abuse of discretion being a blatant disregard of the basic precept that no court
has the power to interfere by injunction with the judgments or orders of a co-equal and coordinate
court (Compania General de Tobacos de Filipinas v. Court of Appeals, 371 SCRA 95).
7. Preliminary Injunction and Forum Shopping
Applying for preliminary injunction in another court (Court of Appeals) after filing a case for the same
relief in the trial court (RTC Quezon City); constitutes forum shopping and a grave abuse of judicial
process (Biñan Steel Corporation v. Court of Appeals, 391 SCRA 90).
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8. Required Evidence in Preliminary Injunction
While the evidence to be submitted during the hearing on the motion for preliminary injunction need
not be conclusive or complete, the evidence needed being only a sampling and intended merely to
give the court an idea of the justification for the preliminary injunction pending the decision of the
case on the merits, still, said evidence must rest on solid grounds and not on mere hearsay or
unfounded fears (Syndicated Media Access Corp. v. Court of Appeals, 219 SCRA 794).
In another case, the Court held that while the evidence to be submitted at the hearing on the
motion for preliminary injunction need not be conclusive and complete, there must be a showing, at
least tentatively, of irreparable injury. As a preliminary injunction is intended to prevent irreparable
injury to the plaintiff, that possibility should be clearly established, if only provisionally, to justify the
restraint of the act complained against. Where no such injury is shown, the issuance of the
preliminary injunction, being utterly without basis, was held to be trained with grave abuse of
discretion that can be corrected on certiorari (Yu v. Court of Appeals, 217 SCRA 328).
The rule states that one essential requisite for the grant of the injunctive relief is that “applicant is
entitled to the relief demanded.” This means that, at the very least, the applicant must show to the
satisfaction of the court that there is a reasonable probability that real injury would occur if injunction
would not be granted. The writ then cannot be issued just to allay fears and apprehensions of
individuals – they must demonstrate to the court that acts against which they ask protection are not
only threatened but will, in all probability, be committed to their injury (Lorez v. Waldron, 96 Phil.
243, 250, 31 Pac. Rep. 54 cited in Francisco, op. cit., p. 206).
Before a writ of preliminary injunction may be issued, there must be a clear showing by the
complainant that there exists a right to be protected and that the acts against which to be directed
are violative of such right (National Power Corporation v. Vera, 170 SCRA 721).
In still another case, the Supreme Court held that a court should issue a writ of preliminary
injunction only when the petitioner assailing a statute or administrative order has made out a case of
unconstitutionality aside from showing a clear legal right to the remedy sought (Tablarin v.
Gutierrez, 152 SCRA 730).
9. Actions that the court may take on application for injunction or restraining order:
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9.1.
The application for injunction or restraining order may be denied, upon a showing of its
insufficiency.
9.2.
The injunction or restraining order may also be denied, or if granted, may be dissolved on
other grounds upon affidavits of the party or person enjoined, which may be opposed by the
applicant also by affidavits.
9.3.
It may further be denied, or, if granted, may be dissolved, if it appears after hearing that
although the applicant is entitled to the injunction or restraining order, the issuance or
continuance thereof, as the case may be, would cause irreparable damage to the party or
person enjoined while the applicant can be fully compensated for such damages as he may
suffer, and the former files a bond in an amount fixed by the court conditioned that he will pay
all damages which the applicant may suffer by the denial or the dissolution of the injunction or
restraining order.
9.4.
If it appears that the extent of the preliminary injunction or restraining order granted is too
great, it may (not “must”) be modified (Sec. 6, Rule 58).
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10. Penalty for refusal to comply or for violation of injunction: Preliminary Injunction and Equity
A writ of injunction duly issued must be obeyed, however erroneous, until a higher court overrules
such action (Rosario Textile Mills, Inc. v. Court of Appeals, 409 SCRA 515; citing Cagayan Valley
Enterprises v. Court of Appeals, 179 SCRA 218).
Under Section 1, Rule 71, if the contempt in the violation of a writ of injunction, temporary
restraining order or status quo order, the violation may also be ordered to make complete restitution
to the party injured by such violation of the property involved or such amount as may be alleged and
proved.
In his paper entitled “Temporary Restraining Orders, Injunctive Reliefs and Government Projects,
Analysis and Proposals,” Fr. Ranhilio C. Aquino, former Head of the Academic Affairs Office, PHILJA,
Supreme Court, provides some notes and guidelines for judges when acting upon applications for
preliminary injunction or temporary restraining order. The following discussion is lifted from his
work:
1. In what sense does the judge enjoy discretion relative to injunctive reliefs?
Rule 58, Section 3, itself sets forth the breadth of a judge’s discretion. A preliminary
injunction MAY be granted when any of the three enumerated grounds for the grant of the
relief are established to the satisfaction of the court. Any of the grounds may be
established, or perhaps, even all three. It will still not follow that the writ MUST
issue. It remains the rule that the court MAY enjoin.
There is then discretion in the sense that the rule does not say whether or not
injunction should issue when the conditions set are met.
2. Does a litigant have a right to injunctive relief?
Yes, insofar as the relief is necessary for the protection of his right to due process. When
the writ is unavailable and he is deprived of what is his, there is a violation of his right to due
process. While courts must therefore sparingly wield their equitable powers, they ‘should
not just summarily issue an order of denial without adequate hearing and judicious
evaluation of the merits of the application. A perfunctory improvident action in this regard
would be a denial of procedural due process’ (Regalado, 640).
‘The grace which the court may exercise in granting or denying an injunction
sometimes becomes a matter of right to a litigant, and when it is clear that the law cannot
give protection and relief, to which the complainant in equity is admittedly entitled, the
court can no more withhold its grace than the law can deny protection and relief if able to
give them’ (42 AmJur 2d, Injunctions, s. 25).
3. How does a judge bring these considerations to bear in resolving whether or not
to grant injunctive relief?
It is elementary jurisprudence that being a remedy in equity, an injunction will issue at the
discretion of the court, and in so exercising its discretion, the trial court must have regard
for the conflicting claims relative to an application, paying special attention to factual
determination. Absent showing of manifest abuse, appellate courts will not interfere with
this exercise of discretion (Urbanes v. Court of Appeals, 355 SCRA 537).
Among the questions a judge will want to ask himself, in resolving whether or not to
grant injunctive relief, will be the following:
a) Would the grant of the provisional relief in effect dispose of the main case
without trial? If a review of the pleadings shows that the core objective of the
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plaintiff is really to obtain the injunction relief prayed for, then once the court issues this
provisional relief, there is pretty much nothing left for the court to resolve after trial on
the merits. This also means that the plaintiff obtains what he prays for without having
to establish his right to what he prays for through the dynamics of a trial (cf. 1
Regalado, Remedial Law Compendium, 6th Ed., 639). Thus, where a foreclosure sale is
assailed and its annulment is sought, the prayer for a writ of preliminary mandatory
injunction should not be favorably acted on, as doing so would in effect be virtually
accepting the plaintiff’s claim that the sale was null and void (cf. 2 Feria and Noche, Civil
Procedure Annotated, 2001 Ed., 354-355).
b) How much irreparable injury does the plaintiff stand to suffer should relief
be denied and the plaintiff ultimately prevails? A mere showing that the
defendant does not stand to suffer any detriment should the writ issue is not sufficient
reason for its issuance. There may, however, be a case for the plaintiff’s prayer on
showing that the defendant stands to suffer no detriment, when the plaintiff does
should relief be denied.
c) What impact would granting the relief have on public interest? Quite
obviously, this consideration is singularly relevant when the party sought to be
enjoined is the government, or a government instrumentality relative to a government
project. Even when the defendant is a non-governmental entity, however, this can still
be a relevant consideration if the operations of such a private entity impact
considerably on society or the community. Ordering a factory, for example, to desist
from operating may impact considerably on employment.
4. What is the principal purpose of preliminary injunction?
disposition of lis mota!
No premature
The textbook answer is the preservation of the status quo, which is the ‘last, actual,
peaceable, uncontested status which precedes the pending controversy’ (Regalado, 638;
Noche and Feria, 322). Said otherwise, the preliminary injunction stays the defendant’s
hand from doing what he threatens to do or is posed to do so that the claim of the plaintiff
against the threatened action may be properly passed upon by the court. Even a
preliminary mandatory injunction has the same object. The later type of injunction should
not result in a conferral of a privilege or a bestowal of rights not enjoined in the “last, actual,
peaceable, uncontested status: preceding the controversy. In fact, the action a court
directs a party to perform under a writ of preliminary mandatory injunction must be one
that restores the last, actual, peaceable, uncontested status preceding the controversy”
(cf. Noche and Feria, 326).
It is then clear that the purpose of the relief is to keep things as they peaceably were so
that the court may pass upon the merits of a complaint. This being so, where the grant of
either prohibitory or mandatory injunction will result in a premature resolution of the case
– or will grant the principal objective of the parties – before merits can be passed upon, the
prayer for the relief will be properly denied (42 AmJur 2d, Injunctions, s. 13).
5. What MUST THE COURT FIND so that injunction may properly issue?
a) There must be a RIGHT to be protected. This is usually referred to as a right ‘in esse’
which, simply put, is a right already in existence. A right in esse is thus contrasted to
an inchoate right or a right in fieri.
b) This right will be VIOLATED by the threatened or imminent act, or, in the case where a
preliminary mandatory injunction is sought, has been violated by what must be
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undone (cf. Supreme Court – Philippine Judicial Academy – IDLI, Benchbook for Trial
Court Judges, 2-70).
c) There must be NO ADEQUATE REMEDY AT LAW. There are historical reasons for
this rule, but one good reason under the present state of the law is that the equitable
relief of injunction calls on the court to pass on claims and rejoinders even before it has
heard the entire case (James, Hazard and Leubsdorf, 277).
(1) Mere lack of a remedy at law will not necessarily justify injunction, for other factors
must be considered such as: irreparable injury, multiplicity of suits (Would
multiple actions at law be required to vindicate the right?) and other conditions
justifying recourse to equity.
(2) On the other hand, the mere existence of a legal remedy does not necessarily
defeat a prayer for injunction, because the remedy at law must be as adequate,
satisfactory and expeditious as the injunctive relief prayed for.
d) The injury the petitioner or suitor would suffer were the writ not to issue would be
IRREPARABLE. ‘As ordinarily understood, an injury is irreparable, within the law of
injunction, where it is of such a character that a fair and reasonable redress may not be
had in a court of law, so that to refuse the injunction would be a denial of justice. In
other words, where, from the nature of the act, or from the circumstances surrounding
the person injured, or from the financial condition of the person committing it, it
cannot be readily, adequately, and completely compensated for with money’ (42 Am
Jur d, Injunctions, s 49). In this regard, among the relevant considerations are:
(1) Most injuries to interests in land are considered serious. Historically, this owes to
the premium societies have always placed on real estate.
(2) If the respondent is insolvent, then the theoretical possibility of a remedy through
damages will not in fact be a practicable remedy available to the plaintiff. In this
case, enjoining the defendant may be reasonable.
(3) When the injury or damage that is threatened or posed is not susceptible of
pecuniary estimation, then there is a threat of irreparable injury or harm (Dobbyn,
129-131).
e) What is sought to be enjoined MUST NOT BE SIMPLY A CRIMINAL ACT. Put more
simply: Injunction will not lie to stop a person from committing a crime (Dobbyn, 57 et
seq.; 42 Am Jur 2d, Injunctions, s. 157).
(1) One reason is historical: Courts of equity were careful not to tread on the turf of
regular courts, and dealing with crime was a function of regular courts. Another
reason is practical: Courts would be besieged with suits for injunction were they
available to enjoin criminal activity. A third reason is jurisdictional: There is an
adequate remedy at law, and that is recourse to the law-enforcement agencies of
state, such as calling on the police
(2) Where the threatened criminal conduct, however, does transgress a clear and
unquestionable legal right of the suitor, injunction may issue.
f) What is sought to be restrained MUST NOT BE FREE SPEECH OR EXPRESSION.
No matter how potentially offensive, hurtful, or even libelous a threatened publication,
speech or form of expression may be, injunction will not lie to stop it (although
subsequently legal action may be taken to vindicate the rights of aggrieved parties).
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Injunctions against publication constitute ‘prior restraint’ that is repugnant to the
Constitution (1 Bernas, The Constitution of the Republic of the Philippines: A
Commentary, 1987 ed., 139; see also Cruz, Constitutional Law, 1998 ed., 197-198).
g) The Court’s order must be ENFORCEABLE AND PRACTICABLE. A court declines
from issuing useless, fruitless, pointless orders.
h) What must be enjoined must be SPECIFIC. The prayer must be reducible to a
directive that directs the defendant exactly what not to do or what to do.
i) The suitor in equity must COME WITH CLEAN HANDS. The remedy of injunction is a
protection principally of the interests of the court, so that it may adjudicate on the
merits of a case without being preempted precipitously by the defendant. When the
court finds that the petitioner has himself been guilty of some unfair dealing or
inequitable conduct, the relief should not be accorded him (Dobby, 97).
C. Preliminary Prohibitory Injunction
Most of the writs of preliminary injunction issued by courts are writs of preliminary prohibitory injunction.
This is the writ that enjoins a party, court, entity or person from doing a particular act.
1. Cases
1.1. Issue of maintaining injunction. – The propriety of the writ of injunction is an issue inseparable
from the issue of whether, in view of the developments and circumstances occurring after the
issuance of the injunction, the writ should be maintained or not (De Guzman v. Gatlabayan,
352 SCRA 264).
1.2. Grounds; no right to exclusive use of copyright and patent despite registration – Pursuant to
Section 1, Rule 58, 1997 Rules of Civil Procedure, a preliminary injunction order may be
granted only when the application for the issuance of the same shows facts entitling the
applicant to the relief demanded. This is the reason why the Supreme Court has ruled that it
must be shown that the invasion of the right sought to be protected is material and
substantial, that the right of complainant is clear and unmistakable, and, that there is an
urgent and paramount necessity for the writ to prevent serious damage. The petitioner’s
copyright and patent registration of the name and the container would not guarantee her the
right to the exclusive use of the same for the reason that they are not appropriate subjects of
the said intellectual rights. Consequently, preliminary injunction order cannot be issued for
the reason that the petitioner has not proven that she has a clear right over the said name and
container to the exclusion of others, not having proven that she has registered a trademark
thereto or used the same before anyone did.
The Court cannot likewise overlook the decision of the trial court in the case for final
injunction and damages. The dispositive portion of said decision held that the petitioner does
not have trademark rights on the name and container of the beauty cream product. The said
decision on the merits of the trial court rendered the issuance of the writ of a preliminary
injunction moot and academic notwithstanding the fact that the same has been appealed to
the Court of Appeals. The issuance of a final injunction renders any question on the
preliminary injunctive order moot and academic despite the fact that the decision granting a
final injunction is pending appeal. Conversely, a decision denying the applicant-plaintiff’s
right to a final injunction, although appealed, renders moot and academic any objection to the
prior dissolution of a writ of preliminary injunction.
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The Court of Appeals correctly denied the petitioner’s several motions for contempt of
court. There is nothing contemptuous about the advertisements complained of, which, as
regards the proceedings in CA-G.R. SP No. 27803, merely announced in plain and
straightforward language the promulgation of the assailed Decision of the appellate court.
Moreover, pursuant to Section 4 of Rule 39 of the Revised Rules of Civil Procedure, the said
decision nullifying the injunctive writ was immediately executory (Kho v. Court of Appeals,
379 SCRA 410).
1.3. When a civil case for forcible entry was pending on appeal before the Regional Trial Court, a
Special Patent was issued which covered the lot subject of the dispute and by virtue thereof,
an Original Certificate of Title in the name of NHA was issued. When petitioner moved for the
issuance of a writ of execution before the Municipal Trial Court in Cities, a certificate of title had
already been issued to NHA. In view of this intervening development, National Housing
Authority (NHA)A filed a complaint for quieting of tile before the Regional Trial Court of
Cagayan de Oro City. Thus, it was only proper of the Court of Appeals to direct the Regional
Trial Court where Civil Case No. 90-337 was pending, to grant the writ of preliminary
injunction to restrain the enforcement of the decision of the MTCC in Civil Case No. 11204, as
there was material change in the status of the parties with regard to the said land. Clearly, the
government, through the NHA, will be prejudiced by the impending enforcement of the
decision in Civil Case No. 11204, which directs the said agency to restore the members of
petitioners to their respective possession on portions of Lot No. 1982 (Cagayan de Oro City
Landless Residents Asso., Inc., v. Court of Appeals, 254 SCRA 220).
1.4. Usually, when an action is constituted assailing the constitutionality of a law or government
regulation, the petitioner prays for a temporary restraining order and preliminary prohibitory
injunction to restrain the enforcement of said law or regulation. In the recent case of Executive
Secretary v. Court of Appeals (G.R. No. 131719, May 25, 2004), the High Court enumerated
the requisites for entitlement of said injunctive relief. The applicant must establish:
a) that he would suffer irreparable harm unless the injunctive relief is granted;
b) that it is likely that he would succeed on the merits of the main action or that there are
sufficiently serious questions going to the merits and the balance of hardships tips
decidedly in favor of applicant’s cause.
The court stressed that the possible constitutionality of the law or regulation on its face
does not by itself justify an injunction against good faith attempts to enforce it unless there is
a showing of bad faith, harassment or any other unusual circumstances that would call for
equitable relief.
If the law is penal, neither the fear with chilling effect of the provisions thereof justifies
prohibiting the State whenever from enforcing them against those whom the State believes in
good faith to be liable under the law.
The court in which the petition is filed, may grant such preliminary injunction as may be
necessary for the preservation of the rights of the parties, upon the filing by the petitioner of a
bond in favor of the adverse party, conditioned that if the petition is dismissed or the petitioner
fails on the trial of the case upon its merits, he will pay the adverse party all the damages and
costs that may be awarded to him by reason of the issuance of such injunction or the other
proceedings following the petition; but such injunction shall not operate to discharge or
extinguish any lien which the adverse party may have acquired upon the property of the
petitioner (Sec. 5, Rule 38).
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D. Preliminary Mandatory Injunction
1. Cases
1.1. A writ of preliminary mandatory injunction does more than to maintain the status quo and
should not issue except: (1) in cases of extreme urgency; (2) where the right is clear; (3)
where considerations of relative convenience bear strongly in complainant’s favor; (4) where
there is a willful and unlawful invasion of plaintiff’s right against his protest and remonstrance;
(5) the injury being a continuing one (Alvaro v. Zapata, 118 SCRA 722); and (6) the effect is
to reestablish and maintain a pre-existing relationship recently and arbitrarily interrupted by
defendant than to establish a new relation (Dela Cruz v. Febreo, 82 SCRA 379; Pelejo v. CA,
117 SCRA 665; Rivera v. Florendo, 144 SCRA 643; Alvaro v. Zapata, 118 SCRA 722;
Hernandez v. Magat, 137 SCRA 787, PVTA v. Delos Angeles, 164 SCRA 543). Indeed, the
writ should not be denied the complainant when he makes out a clear case, free from doubt
and dispute (Capitol Medical Center v. Court of Appeals, 178 SCRA 493).
The Supreme Court gave the reason why the requisites of mandatory injunction are more
strict than those requisites of prohibitory injunction:
A mandatory injunction which commands the performance of some specific act is
regarded as of a more serious nature than a mere prohibitive injunction, the latter being
intended generally to maintain the status quo only. While our courts, being both of law and
equity, have jurisdiction to issue a mandatory writ, it has always been held that its issuance
would be justified only in clear cases; that it is generally improper to issue it before final
hearing because it tends to do more than maintain the status quo; that it should be issued
only where there is a willful and unlawful invasion of plaintiff’s right and that the latter’s case is
one free from doubt and dispute (National Marketing v. Cloribel, 22 SCRA 1033; Rivera v.
Florendo, supra).
2. Statutory Bases of Preliminary Mandatory Injunction and the Implementing Rules of Court
There are two articles in the Civil Code which are the bases for the grant of preliminary mandatory
injunction:
ART. 539. Every possessor has a right to be respected in his possession, and should he be disturbed
therein he shall be protected in or restored to said possession by the means established by the law
and the Rules of Court.
A possessor deprived of his possession through forcible entry may within 10 days from the filing of
the complaint present a motion to secure from the competent court, in the action for forcible entry, a
writ of preliminary injunction to restore him in his possession. The court shall decide the motion
within 30 days from the filing thereof:
ART. 1674. In ejectment cases where an appeal is taken, the remedy granted in Article 539,
second paragraph, shall also apply, if the higher court is satisfied that the lessee’s appeal is frivolous
or dilatory, or that the lessor’s appeal is prima facie meritorious. The period of 10 days referred to in
said article shall be counted from the time the appeal is perfected.
The Rules of Court implement the statutory rule on forcible entry in Sections 15 and 20, Rule 70.
SEC. 15. Preliminary injunction. – The court may grant preliminary injunction, in accordance
with the provisions of Rule 58 hereof, to prevent the defendant from committing further acts of
dispossession against the plaintiff.
A possessor deprived of his possession through forcible entry or unlawful detainer may, within
five days from the filing of the complaint, present a motion in the action for forcible entry or unlawful
detainer for the issuance of a writ of preliminary mandatory injunction to restore him in his
possession. The court shall decide the motion within 30 days from the filing thereof.
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SEC. 20. Preliminary mandatory injunction in case of appeal. – Upon motion of the
plaintiff, within 10 days from the perfection of the appeal to the Regional Trial Court, the latter
may issue a writ of preliminary mandatory injunction to restore the plaintiff in possession if the
court is satisfied that the defendant’s appeal is frivolous or dilatory, or that the appeal of the
plaintiff is prima facie meritorious.
3. Cases where Preliminary Mandatory Injunction was Held Improper.
A preliminary mandatory injunction to compel cohabitation of spouses (Arroyo v. Vasquez, 42 Phil.
54); to command cancellation of allotment (Levy Hermanos v. Lacson, 71 Phil. 94); to order the
release of goods pending hearing before the Commissioner of Customs (Commissioner of Customs v.
Cloribel, 19 SCRA 234).
4. Distinction between Status Quo in Preliminary Prohibitory Injunction and Preliminary Mandatory
Injunction
In a prohibitory injunction, the specific act sought to be enjoined has not yet been performed, and is
one alleged to be illegal, by the pleader. It is enjoined because it would cause irreparable injury if
allowed to be committed to the prejudice of the party asking for the issuance of the injunction. The
situation before the issuance of the prohibitory injunction is thus preserved in status quo. The status
quo to be restored in the case of a mandatory injunction is the situation in which the pleader is before
the act already committed and complained of (Feranil v. Arcilla, 88 SCRA 770).
E. Temporary Restraining Order
1. Concept
A temporary restraining order is an order restraining a party or a court or court officer to do or
continue the doing of something until the propriety of granting a preliminary injunction can be
determined by the court and it goes no further than to preserve the status quo until that
determination (Aquino v. Luntok 184 SCRA 177).
A temporary restraining order is generally granted without notice to the opposite party, and is
intended only as a restraint on him until the propriety of granting a temporary injunction can be
determined, and it goes no further than to preserve the status quo until that determination (The
Revised Rules of Court in the Philippines, Vol. VI-A by Vicente J. Francisco, 1972, pp. 184-185). Its
purpose is merely to suspend proceedings until there may be an opportunity to inquire whether any
injunction should be granted, and is not intended to operate as an injunction pendente lite, and
should not in effect determine the issues involved before the parties can have their day in court, or
give an advantage to either party by proceedings in the acquisition or alteration of property the right
to which is disputed while the hands of the other party are tied (Government Service Insurance
System v. Florendo, 178 SCRA 76).
2. Life Span
In the trial courts, a temporary restraining order has a life span of only 20 days from service on the
party or person sought to be enjoined. However, if the matter is of extreme urgency and the applicant
will suffer grave injustice and irreparable injury, the executive judge may issue ex parte a temporary
restraining order effective for 72 hours from issuance. The judge before whom the case is pending
shall conduct a summary hearing to determine whether the temporary restraining order shall be
extended until the application for preliminary injunction can be heard. In no case shall the total
period of effectivity of the temporary restraining order exceed 20 days, including the original 72 hours
provided therein (Sec. 5, Rule 58, RC).
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In the Court of Appeals, a temporary restraining order shall be effective for 60 days from service
on the party or person sought to be enjoined (Ibid).
A restraining order issued by the Supreme Court shall be effective until further orders (Ibid).
3. Procedural Guidelines in the Issuance of Temporary Restraining Order
3.1. No preliminary injunction shall be granted without hearing and prior notice to the party or
person sought to be enjoined.
3.2. If it shall appear from facts shown by affidavits or by the verified application that great or
irreparable injury would result to the applicant before the matter can be heard on notice, the
court to which the application for preliminary injunction was made, may issue a temporary
restraining order to be effective only for a period of 20 days from service on the party or person
sought to be enjoined, except as herein provided.
3.3. Procedure: When an application for a writ of preliminary injunction or a temporary restraining
order is included in a complaint or any initiatory pleading, the case, if filed in a multiple-sala
court, shall proceed as follows:
a) Verified application and bond for preliminary injunction or temporary restraining order;
b) Determination from facts shown by affidavits or by the verified application that great or
irreparable injury would result to the applicant before the matter can be heard on notice;
c) If the matter is of extreme urgency and the applicant will suffer grave injustice and
irreparable injury, the executive judge of a multiple-sala court or the presiding judge of a
single-sala court may issue ex parte a temporary restraining order effective for only 72
hours from issuance;
d) In either case, even if no TRO had been issued because there is no extreme urgency, the
case shall be raffled only after notice to and in the presence of the adverse party or the
person to be enjoined. In any event, such notice shall be preceded, or contemporaneously
accompanied, by service of summons, together with a copy of the complaint or initiatory
pleading and the applicant’s affidavit and bond, upon the adverse party in the Philippines.
However, (1) where the summons could not be served personally or by substituted
service despite diligent efforts, or (2) the adverse party is a resident of the Philippines
temporarily absent therefrom or is a nonresident thereof, the requirement of prior or
contemporaneous service of summons to precede the raffle, if filed in a multiple sala court,
shall not apply.
4. Classification of Temporary Restraining Order
4.1. As to How it is Applied For:
a) Application is made in the initiatory pleading
b) Application is made after the filing of the initiatory pleading
4.2. As to the Urgency of the Matter
a) The matter calling for a temporary restraining order is urgent
b) The matter calling for a temporary restraining order is extremely urgent
4.3. As to the Court where Application is Filed
a) In a single sala court
b) In a multiple-sala court
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5. Grounds for Temporary Restraining Order
5.1. Under Urgent Circumstances
“Great or irreparable injury would result to the applicant before the application for
preliminary injunction can be heard on notice.”
5.2. Under Extremely Urgent Circumstances
“Applicant will suffer grave injustice and irreparable injury.”
6. Procedural Rules
6.1. Application for a temporary restraining order is part of the Complaint or Initiatory pleading.
a) Filed in a single sala court
1. Under Urgent Circumstances
i) Within 24 hours of the receipt of the sheriff’s return of service, the judge should give
notice to all parties and conduct a summary hearing to determine whether a
temporary restraining order shall be issued or not.
2. Under Extremely Urgent Circumstances
i) The presiding judge may issue a temporary restraining order ex parte effective within
72 hours from issuance.
ii) Upon receipt of the sheriff’s return of service, the presiding judge shall give notice to all
parties and conduct the summary hearing to determine whether or not to extend the
effectivity of the temporary restraining order. (If extended, the total should not
exceed the 20 days including the original 72 hours.
b) Filed in multi-sala court
1. Under Urgent Circumstances
i) After service of summons and complaint has been made to the adverse party, or
contemporaneously after such service, the presiding judge should issue within 24
hours a notice to the adverse party on the person to be enjoined that the case shall be
raffled. In the presence of the adverse party or the person to be enjoined, the judge
should raffle the case.
ii) The records of the case shall immediately be sent to the court to which it was raffled,
which, in turn, shall immediately issue a notice to all parties for a summary hearing on
the application for a temporary restraining order.
iii) The court shall immediately resolve the application.
2. Under Extremely Urgent Circumstances
i) After the service of the summons and a copy of the complaint, or contemporaneously
thereto, the Executive Judge may issue a temporary restraining order ex parte
effective for 72 hours.
ii) The Executive Judge should immediately give notice to the parties for a raffle. In the
presence of the adverse party and the person to be enjoined, the Executive Judge shall
conduct the raffle.
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7. Cases on Temporary Restraining Order
7.1.
When parties are ordered to maintain the status quo in a temporary restraining order, but the
prevailing condition at the time of its issuance is already that resulting from acts of usurpation
by one of the parties, which acts of usurpation are clearly established in the pleadings, that
TRO amounts to a perpetuation of the injurious effects of such acts of usurpation; such a state
of things cannot clearly be allowed, for the office of the writ of injunction is to restrain the
wrongdoer, not to protect him (Buayan Cattle Co., Inc. v. Quintillan, supra; Villanueva v.
Court of Appeals, 259 SCRA 14).
7.2.
The unexplained failure of the judge after the ex parte issuance of a temporary restraining
order to thereafter conduct a hearing on the issuance of a writ of preliminary injunction within
the time prescribed (before the lapse of 72 hours) therefore constitutes grave abuse of judicial
authority and misconduct (Mendoza v. Judge Ubiadas, 417 SCRA 183).
7.3.
Where the temporary restraining order merely restrained respondent Sta. Clara and all its
agents and representatives from withdrawing and disposing of the plywood inventory in Sta.
Clara’s plant or warehouse until further orders from this Court. It does not carry with it the
right to seize property belonging to Sta. Clara or to keep the property seized in their
possession. The petitioners, by what they did, took the law into their own hands without
specific order from this Court, hence, the seizure made by them was void and illegal
even if the intention of petitioners was to prevent the alleged violation of the
temporary restraining order (Velasco, et al. v. Court of Appeals, 329 SCRA 392).
7.4.
A restraining order, like an injunction, operates upon a person and has no in rem effect to
invalidate an action done in contempt of a court order, except where by statutory
authorization the decree is so framed as to act in rem on property (Auyong Hian vs. Court of
Tax Appeals, 59 SCRA 110).
7.5.
Temporary restraining order of the Court of Appeals, disobeyed by a Regional Trial Judge. –
The trial judge committed grave abuse of discretion tantamount to lack or excess of her
jurisdiction in rendering a decision and the order denying reconsideration contrary to a
temporary restraining order issued by the Court of Appeals and affirmed by the Supreme
Court, enjoining her from rendering and promulgating any decision in the civil case pending
before her sala. The decision and the order are therefore annulled. No doubt respondent
judge knows her place in the judicial hierarchy but failed to observe it. Occupying as she does
a court lower in rank than the Court of Appeals, respondent judge owes respect to the latter
and should, of necessity, defer to the orders of the higher court. The appellate jurisdiction of a
higher court would be rendered meaningless if a lower court may, with impunity, disregard
and disobey it (China Banking Corporation v. Perello, 389 SCRA 241).
7.6.
While petitioner was undergoing administrative investigation before the Philippine Coconut
Authority Board, he filed a petition for certiorari, mandamus, and prohibition with the trial
court and prayed for a temporary restraining order to stop the said investigation. The High
Court rejected the application as premature and without basis because he failed to exhaust
administrative remedies (Garcia v. Court of Appeals, 358 SCRA 416).
The grant, denial or lifting of a restraining order does not in any way preempt the court’s
power to decide the issue in the main action which is the injunction suit (Anglo-Fil Trading
Corp. v. Lazaro, 124 SCRA 494).
7.7.
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A second temporary restraining order by the Court of Appeals after the expiration of the 20day (now 60-day) period is a patent nullity (Garbungco v. Court of Appeals, G.R. No. 78265,
January 20, 1990).
INJUNCTION AND ITS RELATED PROBLEMS
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RELATED PROBLEMS
What the Rules prohibit is the extension or renewal of the temporary restraining order on the
same ground for which it was issued. Another restraining order, may, therefore, be
issued provided it is not based on the same ground for which it was originally issued (Sec. 5
[3], Rule 58, RCP). Thus, if a new ground supervenes while the original period still subsists or
after it has terminated, which the court finds to be different from the original ground but
sufficient to warrant same restraint, it may renew the original restraining order or issue
another one, as the case may be, but also subject to the same limited periods of effectivity and
terms (Regalado, Remedial Law Compendium, Vol. I, Seventh Edition, p. 655).
7.8.
By the terms of Section 5, Rule 58 of the Rules of Court, as amended by B.P. Blg. 224, a
temporary restraining order cannot exist indefinitely; it has a lifetime of a nonextendible
period of 20 days and automatically expires on the twentieth day in trial courts and 60 days in
the Court of Appeals. No judicial declaration that it has expired is necessary (Golangco v.
Villanueva, 278 SCRA 414). This applies to the Court of Appeals (Paras v. Roura, June 29,
1988, 163 SCRA 1). The writ of preliminary injunction may, however, be issued even after 20
days (Aquino v. Luntok, 184 SCRA 177).
7.9.
The allegations in the complaints in three cases are insufficient to justify the issuance of a
temporary restraining order. As correctly pointed out by complainants, irreparable injury
does not have reference to the amount of damages that may be caused but rather to the
difficulty of measuring the damages inflicted. Administrative Circular No. 209-95, in clear
terms, requires that a grave and irreparable injury should exist, or may occur, to justify the
issuance of a temporary restraining order without a hearing. What is more, complainants
were in possession of the lands and the effect of the temporary restraining order was to
dispossess them of the land, if not to transfer possession thereof to the plaintiffs.
Respondent judge’s failure to comply with Administrative Circular No. 20-95 in issuing the
temporary restraining order constitutes grave abuse of authority prejudicial to the proper
administration of justice. But if complainants were in possession of the lands, it is those
seeking to oust them from possession of the lands who should be restrained rather than
complainants. In any event, this does not excuse the judge from his failure to ascertain the
factual basis for his issuance of the assailed temporary restraining order. Nor does it appear
that within 72 hours of the issuance of the temporary restraining order he called the parties
and heard them on the matter of injunction in order to minimize any possible prejudice to the
complainants. Respondent also abused his authority in granting the Motion to Deposit
Harvest of the plaintiffs on the same day and without notice of hearing addressed to the
complainants given not later than 10 days after the filing of the motion, as required in Rule 15,
Sections 4 and 5 of the Rules of Court.
F. Other Procedural Rules Governing Preliminary Injunction and Temporary Restraining Order.
1. Rule:
SEC. 6. Grounds for objection to, or for motion of dissolution of, injunction or restraining
order. – The application for injunction or restraining order may be denied, upon a showing of its
insufficiency. The injunction or restraining order may also be denied, or, if granted, may be dissolved
on other grounds upon affidavits of the party or person enjoined, which may be opposed by the
applicant also by affidavits. It may further be denied, or, if granted, may be dissolved, if it appears
after hearing that although the applicant is entitled to the injunction or restraining order, the issuance
or continuance thereof, as the case may be, would cause irreparable damage to the party or person
enjoined while the applicant can be fully compensated for such damages as he may suffer, and the
former files a bond in an amount fixed by the court conditioned that he will pay all damages which the
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applicant may suffer by the denial or the dissolution of the injunction or restraining order. If it appears
that the extent of the preliminary injunction or restraining order granted is too great, it may be
modified.
2. Summary of the Grounds
2.1. There is a showing that said injunctive relief was improvidently issued.
2.2. When the injunctive relief was granted and the court in its order granted the applicant a definite
period within which to file the bond and the bond is not filed within said period.
2.3. When it is established that:
a) The continuance of the preliminary injunction or temporary restraining order would cause
irreparable damage to the party or person enjoined while the applicant can be fully
compensated for such damages as he may suffer.
b) The person enjoined files a bond in an amount fixed by the court conditioned that he will pay
all damages which the applicant may suffer by the denial or dissolution of the injunction or
restraining order.
If it appears that the extent of the preliminary injunction or restraining order granted is
too great, it may be modified.
Note: The mere filing of counterbond does not necessarily warrant dissolution of the
injunctive relief. The matter is to be resolved in the sound discretion of the court. The
exception to that rule is when the party enjoined is the Bangko Sentral ng Pilipinas.
Section 29 of the Central Bank Act provides that “x x x the restraining order or injunction
shall be refused or if granted shall be dissolved upon filing by the Central Bank of a bond,
which shall be in the form of cash or Central Bank cashier’s check, in an amount twice the
amount of the bond of the petitioner or plaintiff conditioned that it will pay the damages
which the petitioner or plaintiff may suffer by the refusal or the dissolution of the injunction
x x x” (Central Bank, et al. v. Court of Appeals, G.R. No. 81846, March 10, 1988, En Banc,
Minute Resolution, Martinez, Summary of the Supreme Court Decision, 1988).
The language is plain and unequivocal, leaving no doubt that the court is under
obligation to dissolve the injunction once the counterbond in the required amount is posted.
Commenting on injunctions in general under Rule 58 of the Rules of Court, Chief Justice
Moran observed that “a wide latitude is given by the provision to the trial judge to grant,
refuse, continue, modify or dissolve the injunction as justice may require.” By contrast,
Section 29 of the Central Bank Act grants no similar discretion, being cast in a quite different
and peremptory tenor (Supra).
The word “shall” imports a mandatory sense as distinguished from the discretion that is
allowed by the use of the word “may.” Although this is not an absolute rule, the exception
does not apply in view of the urgency of the measure contemplated in Section 29 and the
adverse consequences that are sure to follow if the injunction is not lifted and the bank is
allowed to reopen (Supra).
Where pursuant to its authority under the Central Bank Act, the Central Bank Monetary
Board, by resolution placed the Manila Banking Corporation (Manila Bank) under
receivership after finding that the bank had become insolvent; the Manila Bank sued the
Central Bank and was able to secure an injunction against its enforcement, after posting a
P10 million bond. The Central Bank moved to lift the injunction and posted a P10 million
counterbond. The trial judge denied the motion. The Court of Appeals sustained the trial
court.
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The Supreme Court reversed the Court of Appeals and held that the applicable law is
Section 29 which plainly leaves no doubt that the court is under obligation to dissolve the
injunction once the counterbond in the required amount is posted, in view of the urgency of
the measure contemplated in said section and the adverse consequences that are sure to
follow if the injunction is not lifted and the bank is allowed to reopen. After its earlier closure
had been announced to the public, its depositors will be frantically pounding at its doors to
recover their money. A bank run is inevitable. The old management will be reinstated to
pursue the policies that made the bank insolvent in the first place. The purpose of
receivership will be frustrated. To guard against such eventualities, the law makes it
obligatory upon the court to dissolve the injunction once the required counterbond is posted
by the Central Bank (Central Bank, et al. v. Court of Appeals, et al., supra).
3. Service of Copies of Bond
3.1. Rule 58, RC states:
SEC. 7. Service of copies of bonds; effect of disapproval of same. – The party filing a bond
in accordance with the provisions of this Rule shall forthwith serve a copy of such bond on the
other party, who may except to the insufficiency of the bond, or of the surety or sureties
thereon. If the applicant’s bond is found to be insufficient in amount, or if the surety or sureties
thereon fail to justify, and a bond sufficient in amount with sufficient sureties approved after
justification is not filed forthwith, the injunction shall be dissolved. If the bond of the adverse
party is found to be insufficient in amount, or the surety or sureties thereon fail to justify a bond
sufficient in amount with sufficient sureties approved after justification is not filed forthwith, the
injunction shall be granted or restored, as the case may be.
Note that mere insufficiency of the bond is not a ground for dissolution (Phil. Virginia
Tobacco Adm. v. Angeles, 164 SCRA 543). The party filing the bond can file a bond sufficient in
amount with sufficient sureties duly justified to replace the bond found to be insufficient. It is
only when the party fails to file a replacement bond sufficient in all aspects may the court grant
the injunction or restore the injunction earlier dissolved.
4. Damages Upon the Bond
4.1. SEC. 8. Judgment to include damages against party and sureties. – At the trial, the
amount of damages to be awarded to either party, upon the bond of the adverse party, shall be
claimed, ascertained, and awarded under the same procedure prescribed in Section 20 of Rule
57.
4.2. Notes:
Unlike the counterbond in attachment which may be held liable only after final judgment, in an
injunction, the bond by either party must be claimed as in under Section 20 of Rule 57, that is
before final judgment.
Applying Section 20, Rule 57, in claim for damages against the bond in preliminary
injunction, the following rules should be applied: (a) the claim or application for damages must
be filed before the trial or before the perfection of the appeal; (b) the application shall set forth
the facts showing applicant’s right to damages and the awards thereof; (c) notice of said
application shall be served on the party who secured the preliminary injunction as well as his
surety or sureties; (d) there shall be hearing on the application for damages; and (e) the award
for damages shall be included in the judgment in the main case.
In appealed cases, if the judgment of the appellate court is favorable to the party against
whom the preliminary injunction was issued, he must claim damages sustained during the
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pendency of the appeal by filing an application in the appellate court. The party in whose favor a
preliminary injunction was issued and his surety or sureties should be notified of said application
before the finality of judgment. The appellate court may either hear the application or refer it to
the trial court for hearing and adjudication.
If the bond is insufficient to satisfy the damages awarded to the party against whom
preliminary injunction was given, can the latter go after the properties not exempt from
execution of the party who obtained the preliminary injunction?
There is an old doctrinal pronouncement of the High Court which, it is submitted is solidly
based on logic, answers that question on the negative. In Molina v. Somes, 24 Phil. 49, cited in
Pacis v. Commission of Elections, 29 SCRA 24, the Court held:
The assertion by some text writers and courts that the one who sues out an injunction
without legal cause is liable on the theory that he wrongfully induced or moved the court
to take the action which it did, is, in our judgment, without stable foundation. He who
obtains a thing by permission of the law, and by strict compliance with the law, ought not
to be held liable in any manner except that specified in the law under which he operates.
He ought not to be held for a trespass or other wrong, as they assert he may be in
replevin, etc. How can it be logically said that one who, acting in good faith, obtains an
injunction or property under a replevin in precisely the manner required by law has
committed a legal wrong against the person as to whom the law authorized him to obtain
the injunction? The law itself, by virtue of the conditions which it imposes, fully protects
the defendant against the evil effects of the injunction; and if the party securing the
injunction has performed all that the law requires of him as a condition precedent to
obtaining it, what more can be asked? In return for the restrictions of the injunction, the
defendant has been given certain legal rights against the plaintiff by way of an
undertaking which, by virtue of the law itself, fully compensates him for the change of
position. The bond is full compensation for the privileges which the plaintiff receives and
for those which the defendant loses. The law says so:
The statute asserts that the doing of certain things by the plaintiff shall be a
complete compensation to the defendant for that which the law requires him to
give up. If it is not complete compensation, then the law is unjust, in that it
requires the defendant to give up something for which he receives no
compensation. It is not to be presumed or believed that the legislature intended
to do such a thing, and it is not to be presumed or believed that it did it. But, even
if the law be unjust, an injustice of the law cannot be cured by an injustice to a
party. The giving of the undertaking legally equalizes the status of the two. To
put upon the plaintiff the additional burden of a trespass or other wrong would
destroy the legal equilibrium and produce an injustice (Molina v. Somes, 24 Phil.
49, cited in Pacis v. Commission on Elections, 29 SCRA 24).
But then, the last paragraph of Section 20 of Rule 57 (on preliminary attachment) which Section
8, Rule 58 (on preliminary injunction) requires to be followed in application for damages against
the bond in preliminary injunction, states:
SEC. 20. Claim for damages on account of improper, irregular or excessive
attachment. – An application for damages on account of improper, irregular or
excessive attachment must be filed before the trial or before appeal is perfected or
before the judgment becomes executory, with due notice to the attaching party and his
surety or sureties, setting forth the facts showing his right to damages and the amount
thereof. Such damages may be awarded only after proper hearing and shall be included
in the judgment on the main case.
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If the judgment of the appellate court be favorable to the party against whom the
attachment was issued, he must claim damages sustained during the pendency of the
appeal by filing an application in the appellate court, with notice to the party in whose
favor the attachment was issued or his surety or sureties, before the judgment of the
appellate court becomes executory. The appellate court may allow the application to be
heard and decided by the trial court.
Nothing herein contained shall prevent the party against whom the attachment was
issued from recovering in the same action the damages awarded to him from any
property of the attaching party not exempt from execution should the bond or deposit
given by the latter be insufficient or fail to fully satisfy the award.
G. Summary of the Concerns of the Different Participants in the Injunctive Relief Process
1. Concerns of the Applicant
1.1. The Application
The application for preliminary injunction with or without temporary restraining order may
be made as part of the initiatory pleading or by way of a motion filed after the institution of
the action. In both instances, the complaint or motion should be verified.
The application for preliminary injunction with or without temporary restraining order
may be made when the principal action is for injunction or for another action where one of
the reliefs prayed for is commanding the defendant or a court, agency or person to do
something or to refrain from doing something.
It is necessary that in the main action, the applicant must pray for some substantive
reliefs other than to procure a writ of preliminary injunction. If the only purpose of the action
is to procure a writ of preliminary injunction, the action will be dismissed.
1.2. It is very necessary that the initiatory pleading and the motion for preliminary injunction
with or without temporary restraining order should allege facts or circumstances making out
applicant’s entitlement to said reliefs. This means that applicant should allege the existence
of the basic requisites for preliminary injunction, which are: (1) the existence of applicant’s
right in esse; (2) the act against which the injunction is to be directed is a violation of such
right; and (3) there is an urgent necessity for the writ to prevent serious damage.
Applicant should further allege his willingness to post a bond in an amount which may be
fixed by the court.
1.3. When a temporary restraining order is prayed for, the applicant must, in addition to the
matters mentioned in the preceding paragraph, also allege that: (1) the matter for which a
temporary restraining order is being prayed for is urgent and unless immediately granted,
the applicant will suffer irreparable injury before the application for preliminary injunction
can be heard on notice; OR (2) the matter is of extreme urgency and unless a temporary
restraining order is immediately granted, the applicant will suffer grave injustice and
irreparable injury before the application for preliminary injunction can be heard on notice.
1.4. During the hearing, the applicant should adduce sampling evidence sufficient to show the
existence of the requisites for entitlement to said reliefs. Among others, there must be a
showing at least tentatively but clearly of irreparable injury. Though the required evidence
is called tentative, provisional or sampling, it must however rest on solid grounds and not on
mere hearsay or unfounded fears.
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When what is sought for is preliminary mandatory injunction, there must be convincing
evidence that there is a willful and unlawful invasion of applicant’s right and that said right is free
from doubt or dispute.
1.5. Upon receipt of the corresponding order, the applicant should post the bond in the amount fixed
by the court in said order.
2. Concerns of the party sought to be enjoined
2.1. He should be familiar with the following grounds for opposing the granting of writ of preliminary
injunction and/or temporary restraining order:
a) The complaint or the motion for preliminary injunction is not sufficient in form and
substance.
b) Applicant’s right sought to be protected is not clear or established, it being seriously
disputed; or the same is contingent or speculative.
c) The writ is unenforceable if the person sought to be enjoined or the act to be restrained is
outside the territorial jurisdiction of the court.
d) The damage which applicant allegedly suffered or will suffer is not irreparable.
e) No possible injustice would result to the applicant if injunctive relief is not granted.
f) Defendant’s act is not violative of plaintiff’s right.
g) Even if not enjoined, the act of the defendant would not render the judgment that may be
rendered ineffectual.
h) The main action was instituted for no other purpose than to obtain a preliminary injunction.
i) The injunctive relief will not preserve the status quo.
j) The act sought to be enjoined is already done or consummated.
k) What is being enjoined is a final and executory decision.
l) The applicant is a foreign corporation doing business in the Philippines without license.
m) An action for damages can very well compensate the injuries allegedly sustained by the
applicant.
n) The writ of injunction is issued against the administrative officer, tribunal or officers on their
official acts in violation of existing prohibitory laws.
o) Preliminary injunction is specifically prohibited by law against some official acts or
undertakings or against some governmental agencies as discussed supra.
p) The applicant comes to court with dirty hands.
2.2. If the court grants a temporary restraining order and/or writ of preliminary injunction over the
objection of the party sought to be enjoined, the latter can move for a reconsideration and if
denied, may elevate the matter on certiorari to the appropriate higher court.
2.3. The available grounds for a motion for reconsideration on certiorari include the following: (a)
the granting of the injunctive relief has practically disposed of the case; (b) the preliminary
injunction goes beyond the prayer of the complaint; (c) the evidence adduced by the applicant
to support his application for injunctive relief is inadequate; (d) the injunctive relief was issued
by the court without full compliance with the following requirements: (i) notice and hearing; (ii)
bond; and (iii) statement in the order granting the injunctive relief of the facts and the law upon
which such a relief has been granted.
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2.4. When a temporary restraining order and/or preliminary injunction is issued, the party injured
may move for its dissolution: (a) by affidavits showing the inequity or impropriety of the
issuance of the writ; or (b) by a showing that although the applicant is entitled to the writ, the
issuance thereof would cause the party enjoined irreparable injury while the applicant can be
fully compensated for such damages as he may suffer and the party enjoined files a bond as
provided for in Section 8, Rule 58, RC.
3. Concerns of the Court
3.1. Initially, the determination of whether it has jurisdiction over the main action.
3.2. Determination whether it has authority to issue the writ (considering the rule on territoriality of
the writ and the statutory and jurisprudential prohibition to issue writs against some entities or
acts).
3.3. Determination whether the initiatory pleading or the motion for an injunctive writ is sufficient in
form and substance: that is, whether there is sufficient allegation in the initiatory pleading or
motion for injunctive relief making out applicant’s entitlement for the injunctive relief being
prayed for.
3.4. Full compliance with the rules on notice, hearing and bond provided for in Sections 5 and 7, Rule
58.
3.5. Determination of the sufficiency of the sampling evidence of the applicant showing his
entitlement to said injunctive relief.
3.6. Presence of evidence establishing the existence of the ground for the grant of injunctive relief
does not make it obligatory to the court to issue said writ. It shall still exercise its sound
discretion whether to grant the writ or not, taking into consideration the highest interest of
justice.
3.7. Avoidance of resolving the application for injunctive relief in a manner that will virtually dispose
the case on the merits.
3.8. The injunctive relief should not go beyond what is prayed for in the complaint or in the
application.
3.9. Extra caution should be taken in granting preliminary mandatory injunction
3.10.If it grants preliminary injunction and/or temporary restraining order, the court must make a
finding of fact and a citation of the law indicating that all of the elements essential for the grant of
such relief exist.
V. STATUTORY PROHIBITIONS TO ISSUE WRITS OF INJUNCTION
A. Public Projects, Public Utilities and Financing Institutions
1. Definition of Terms
1.1. National Government Projects
These projects refer to all current and future national government infrastructure, engineering
works and service contracts, including projects undertaken by government-owned and
controlled corporations, all projects covered by R.A. No. 6957, as amended by R.A. No. 7718,
otherwise known as the Build-Operate-and-Transfer Law, and other related and necessary
activities such as site acquisition, supply and/or installation of equipment and materials,
implementation, construction, completion, operation, maintenance, improvement, repair and
rehabilitation, regardless of source of funding (Sec. 2, R.A. No. 8975).
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1.2. Service Contracts
These contracts refer to infrastructure contracts entered into by any department, office or
agency of the national government with private entities and non-government organizations for
services related or incidental to the functions and operations of the department, office or agency
concerned (Ibid).
1.3. Infrastructure Projects
Infrastructure projects means construction, improvement and rehabilitation of roads, and
bridges, railways, airports, seaports, communication facilities, irrigation, flood control and
drainage, water supply and sewage systems, share protection, power facilities, national
building, school buildings, hospital buildings, and other related construction projects that
form part of the government capital investment (Republic v. Silverio, 272 SCRA 280;
Letter of Instruction No. 1186, promulgated on January 13, 1982, 83 VLD 79; Philippine Ports
Authority v. Court of Appeals, 253 SCRA 212).
Note: Applying the principle of ejusdem generis, the various plants and installations of the
National Housing Corporation for its future expansion and for its staff and pilot housing
development (Presidential Proclamation No. 343), the housing, resettlement sites and other
uses necessary and related to an integrated social and economic development of the entire
estate and environs, x x x’ are ‘infrastructure projects’. The various plants and installations,
staff and pilot housing development projects, and resettlement sites related to an integrated
social and economic development of the entire estate are construction projects forming part of
the government capital investment, undertaken in compliance with the mandate of the
Constitution for the state to embark upon a continuing program of urban land reform and
housing envisioned to provide at affordable cost decent housing and basic services to the
unprivileged and homeless in urban centers and resettlement areas (Sec. 9, Article XIII, 1987
Constitution; National Housing Authority v. Allarde, 318 SCRA 22).
2. Public Infrastructure Projects
2.1. Republic Act No. 8975
This is an act to ensure the expeditious implementation and completion of infrastructure
projects by prohibiting lower courts from issuing temporary restraining orders, preliminary
injunctions or preliminary mandatory injunctions providing penalties for violation thereof and
for other purposes.
Note: R.A. No. 8975 repeals P.D. No. 605 and R.A. No. 7160 (Sec. 9, R.A. No. 8975)
2.2. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions and
Preliminary Mandatory Injunctions. – No court, except the Supreme Court, shall issue any
temporary restraining order, preliminary injunction or preliminary mandatory injunction
against the government, or any of its subdivisions, officials or any person or entity, whether
public or private acting under the government direction, to restrain, prohibit or compel the
following acts:
a) Acquisition, clearance and development of the right-of-way and/or site or location
national government project;
of any
b) Bidding or awarding of contract/project of the national government as defined under
Section 2 hereof;
c) Commencement, prosecution, execution, implementation, operation of any such contract
or project;
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d) Termination or rescission of any such contract/project; and
e) The undertaking or authorization of any other lawful activity necessary for such
contract/project.
This prohibition shall apply in all cases, disputes or controversies instituted by a private
party, including but not limited to cases filed by bidders involving such contract/project.
This prohibition shall not apply when the matter is of extreme urgency
involving a constitutional issue, such that unless a temporary restraining order is
issued, grave injustice and irreparable injury will arise. The applicant shall file a
bond, in an amount to be fixed by the court, which bond shall accrue in favor of the
government if the court should finally decide that the applicant was not entitled to the relief
sought.
If after due hearing the court finds that the award of the contract is null and void, the
court may, if appropriate under the circumstances, award the contract to the qualified and
winning bidder or order a rebidding of the same, without prejudice to any liability that the
guilty party may incur under existing laws (Sec. 3).
2.3. As a rule, direct recourse to the Supreme Court is not allowed unless there are special or
important grounds for the issuance of extraordinary writs (Uy v. Contreras, 237 SCRA 167).
In the case of Garcia v. Burgos, 291 SCRA 546, where pure questions of law were raised, the
Court, mindful of P.D. No. 1818, entertained a direct invocation of its jurisdiction to issue
extraordinary writs, realizing the serious consequences of delay in essential government
projects. So also, in Republic v. Silverio, 272 SCRA 280, a similar case involving government
projects, the Court took cognizance of an original action for Certiorari against a Regional Trial
Court.
Note: R.A. No. 8975 vests upon the Supreme Court exclusive jurisdiction to issue a temporary
restraining order and preliminary injunction against the government or any of its subdivisions,
officials or any person or entity involving certain acts.
However, the Supreme Court may designate trial courts to act as commissioners with the
sole function of receiving facts of the case involving acquisition clearance and development
of right-of-way for government infrastructure projects. The designated regional trial court
shall, within 30 days from the date of receipt of the referral, forward its findings of facts to the
Supreme Court for appropriate action (Sec. 5).
3. Certain Actions of the Department of Environment and Natural Resources
Presidential Decree No. 605 prohibits the granting of injunction against the issuance of concessions,
licenses and other permits by public administrative officers or bodies for the exploitation or
development of natural resources.
4. Public Utilities
Concession contracts involving a public utility (for the provision of coupon taxi services at the
international airport) enjoy the protective mantle of the decree. “The discretion to accept or reject a
bid and award contracts is vested in the government agencies entrusted with that function (Bureau
Veritas v. Office of the President, 205 SCRA 705).”
Furthermore, Section 1 of P.D. No. 1818 distinctly provides “[n]o court in the Philippines shall
have jurisdiction to issue any restraining order, preliminary injunction x x x in any case, dispute, or
controversy involving x x x any public utility operated by the government, including among other
public utilities for the transport of the goods or commodities x x x to prohibit any person or persons
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x x x from proceeding with, or continuing the execution or implementation of any such project, or the
operation of such public utility, or pursuing any lawful activity necessary for such execution,
implementation or operation.” The Court stressed that the provision expressly deprives courts of
jurisdiction to issue injunctive writs against the implementation or execution of contracts for the
operation of a public utility (G & S Transport Corporation v. Court of Appeals, 382 SCRA 262).
No injunction against private electric utility or rural electric cooperative exercising the right and
authority to disconnect electric service unless there is a prima facie evidence that the disconnection
was made with evident bad faith or grave abuse of authority, in which case, the injunction or TRO
shall be effective only upon the filing of a cash bond or cashier’s check equivalent to differential
billings; penalties and other charges or to the total value of the subject matter of the action. Such
injunction or restraining order shall automatically be refused, or, if granted, shall be dissolved upon
filing by the public utility of a counter bond similar in form and amount as that above required.
Whenever such injunction is granted, the court issuing it shall, within 10 days from issuing it,
submit to the Supreme Court setting forth in detail the grounds or reasons for its order (Sec. 9, R.A.
No. 7832; Calleja v. Santelices, 328 SCRA 61).
Note: The prohibitions under P.D. No. 605 and P.D. No. 1818 pertain to the issuance of injunction or
restraining order by courts against administrative acts or controversies involving facts or the exercise
of discretion in technical cases. However, on issues definitely outside of their dimension and
involving questions of law, like non-compliance with the rules on bidding, courts should not be
prevented by P.D. No. 605 from exercising their power to restrain or prohibit administrative acts. P.D.
No. 1818 was not intended to shield from judicial scrutiny irregularities committed by administrative
agencies (Malaga v. Penachos, 213 SCRA 516).
B. Other Agencies of Government
1. Ombudsman in Certain Cases –
No injunction can be issued against the Ombudsman to stop or delay his investigation of matters
falling within his jurisdiction. Section 14, R.A. No. 6770 provides that no writ of injunction shall be
issued by any court to delay an investigation being conducted by the Ombudsman under said Act
unless there is a prima facie evidence that the subject matter of the investigation is outside the
jurisdiction of the Office of the Ombudsman (Hagad v. Goza-Dadole, 251 SCRA 242) or, in conducting
the investigation, he is acting with grave abuse of discretion amounting to lack of jurisdiction (Olairez
v. Sandiganbayan, 398 SCRA 732).
Note, the exceptions provided for in the preceding paragraph are applicable against prosecution
of criminal cases conducted by the Ombudsman (Posadas v. Ombudsman, 341 SCRA 388; Venus v.
Desierto, 298 SCRA 196; Brocka v. Enrile, 192 SCRA 183).
The general rule which prohibits injunctions against actions of the Ombudsman in criminal cases
finds its rationale not only upon respect for the investigatory and prosecutory powers granted by the
Constitution to the Office of the Ombudsman but upon practicality as well. Otherwise, the functions
of the courts will be grievously hampered by innumerable petitions assailing the dismissal of
investigatory proceedings conducted by the Office of the Ombudsman with regard to complaints filed
before it, in much the same way that the courts would be extremely swamped if they would be
compelled to review the exercise of discretion on the part of the fiscals or prosecuting attorneys each
time they file information in court or dismiss a complaint by private complainant (Velasco v.
Casaclang, 294 SCRA 394).
2. Department of Agrarian Reform and Its Component Boards or Agencies on Matters Related to the
Implementation of Comprehensive Agrarian Reform Law.
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No restraining order or preliminary injunction against PARC (Presidential Agrarian Reform Council). –
No court in the Philippines shall have jurisdiction to issue any restraining order or writ of
preliminary injunction against PARC or any of its duly authorized or designated agencies in any case,
dispute or controversy arising from, necessary to, or in connection with the application,
implementation, enforcement, or interpretation of this Act and other pertinent laws on agrarian
reform (Sec. 55, CARL, 1988 ed.).
The foregoing provision has generated confusion and conflict of jurisdiction between the DAR and
trial courts prompting the Supreme Court to issue Administrative Circular No. 8-92 dated October 12,
1992. The Court reiterated to all trial court judges the need for a careful consideration of the proper
application of the Comprehensive Reform Law (R.A. No. 6657) to avoid conflict of jurisdiction with
the Department of Agrarian Reform Adjudication Boards. The trial court judges were directed to take
note of the rulings in Vda. de Tangub v. Court of Appeals, 191 SCRA 885, and Quismundo v. Court of
Appeals, 201 SCRA 609.
2.1. The PARAB has no jurisdiction on dispute not involving agricultural lands, like fishponds and
Prawn Farms (Romero v. Tan, 424 SCRA 108).
2.2. The jurisdiction of the PARAB is limited to agrarian disputes or controversies and other matters
or incidents involving the implementation of the Comprehensive Agrarian Reform (CARP) under
R.A. No. 6657, R.A. No. 3844 and other agrarian laws. Rule II, Section 1 of the Rules of
Procedure Governing Proceedings Before the DAR Adjudication Board and Different Regional
and Provincial Adjudicators. An agrarian dispute is defined as any controversy relating to
tenurial arrangements, whether leasehold, tenancy, stewardship or otherwise, over lands
devoted to agriculture, including disputes concerning farm workers associations or
representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange
terms or conditions of such tenurial arrangements (Romero v. Tan, 424 SCRA 108).
To constitute an agrarian dispute, there must be presence of the following requisites: (1)
the subject matter should be agricultural lands; (2) the purpose should be agricultural
production; and (3) there should be personal cultivation done by the tenants themselves. (See
Section 166 [2], [3], R.A. No. 3844). Note that Section 4 of R.A. No. 3844, as amended, states
that agricultural share tenancy throughout the country is declared contrary to public policy and
shall be automatically converted to agricultural leasehold upon the effectivity of the said
section.
Unless the requisite elements of agrarian tenancy concur in order to create a tenancy
relationship between the parties, the matter is not within the purview of tenancy under CARL.
The absence of one element makes an occupant of a parcel of land, or a cultivator thereof, or a
planter thereon outside the scope of CARL. Nor can such occupant, cultivator or planter be
classified as a de jure agricultural tenant for purposes of agrarian reform law. And unless a
person has established his status as a de jure tenant, he is not entitled to security of tenure nor
is he covered by the Land Reform Program of the Government under existing agrarian reform
laws (Caballes v. Department of Agrarian Reform, 168 SCRA 247, citing Tiongson v. Court of
Appeals, 130 SCRA 482).
Where petitioner’s action who purchased the lot in a tax delinquency sale is to recover
possession from respondents who claim ownership on the basis of emancipation patents, and,
there is no juridical tie or tenurial relationship between them, this does not involve an agrarian
dispute, but one for recovery of possession, jurisdiction is with the Regional Trial Courts (Arzaga
v. Copias, 400 SCRA 148).
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3. Assets Privatization Trust
Proclamation No. 50-A, Section 31-A prohibits the issuance of a writ of injunction against the Assets
Privatization Trust (Mantruste v. Court of Appeals, 179 SCRA 136).
4. Bureau of Internal Revenue in the Collection of Taxes
Under the Internal Revenue Code: Section 219. Injunction is not available to restrain collection of
tax. – No court shall have the authority to grant an injunction to restrain the collection of any national
internal revenue tax, fee, or charge imposed by this Code.
It has been the uniform holding of the court that no suit for enjoining the collection of a tax,
disputed or undisputed, can be brought, the remedy being to pay the tax first, formerly under protest
and now without need of protest, file the claim with the collector, and if he denies it, bring an action for
recovery against him (David v. Ramos, 90 Phil. 351; Sarasola v. Trinidad, 40 Phil. 252).
Exception:
Where there are special circumstances that bear the existence of irreparable injury (Churchill
and Tait v. Rafferty, 32 Phil. 580).
It is the Court of Tax Appeals that has exclusive jurisdiction to issue in proper cases, a writ of
preliminary jurisdiction to restrain a distraint and levy ordered by Bureau of Internal Revenue to
collect taxes (Castro v. Blaquero, 100 Phil. 981).
5. Anti-Money Laundering Council (AMLC)
Under R.A. No. 9160 otherwise known as the “Anti-Money Laundering Act of 2001,” no court shall
issue a temporary restraining order or preliminary injunction against any freeze order issued by the
AMLC except the Court of Appeals or the Supreme Court (Sec. 10).
C. Public Utilities
No injunction against private electric utility or rural electric cooperative exercising the right and authority
to disconnect electric service unless there is a prima facie evidence that the disconnection was made with
evident bad faith or grave abuse of authority, in which case, the injunction or TRO shall be effective only
upon the filing of a cash bond or cashier’s check equivalent to differential billings; penalties and other
charges or to the total value of the subject matter of the action. Such injunction or restraining order shall
automatically be refused or, if granted shall be dissolved upon filing by the public utility of a counter bond
similar in form and amount as that above required.
Whenever such injunction is granted the court issuing it shall, within 10 days from issuing it, submit to
the Supreme Court setting forth in detail the grounds or reasons for its order (Sec. 9, R.A. No. 7832;
Calleja v. Santelices, 328 SCRA 61).
VI. PROBLEMS IN INJUNCTION
There are a couple of problems in injunction which remain unsettled and debatable up to now. True, there
are decisions of the Supreme Court on these problems but in some instances they are substantially at
variance with one another. It will not do to just determine the ages of the decisions and pronounce the latest
as the controlling jurisprudence considering that these decisions were rendered by the High Court. Section
4(3) Article VIII of the Constitution provides that no doctrine or principle of law laid down by the court in a
decision rendered en banc or in division may be modified or reversed except by the court sitting en banc. In
effect, therefore, these clashing pronouncements of the divisions of the Supreme Court are all controlling –
and in that sense confusing.
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Two significant problems are immediately identifiable.
The writers of this paper respectfully submit that the Supreme Court make a definitive ruling on these
controversial matters on injunction either in its adjudicative authority or rule-making power.
A. Can regular courts issue a temporary restraining order or a writ of preliminary injunction to restrain a levy
on execution pursuant to a final judgment of the labor court on property claimed by a stranger to a labor
case?
1. Pertinent Laws and Doctrines
1.1. Section 16, Rule 39, Rules of Court
SEC. 16. Proceedings where property claimed by third person. – If the property
levied on is claimed by any person other than the judgment obligor or his agent, and such
person makes an affidavit of his title thereto or right to the possession thereof, stating the
grounds of such right or title, and serves the same upon the officer making the levy and a
copy thereof upon the judgment obligee, the officer shall not be bound to keep the property,
unless such judgment obligee, on demand of the officer, files a bond approved by the court
to indemnify the third-party claimant in a sum not less than the value of the property levied
on. In case of disagreement as to such value, the same shall be determined by the court
issuing the writ of execution. No claim for damages for the taking or keeping of the property
may be enforced against the bond unless the action therefor is filed within 120 days from
the date of the filing of the bond.
The officer shall not be liable for damages for the taking or keeping of the property, to
any third-party claimant if such bond is filed. Nothing herein contained shall prevent such
claimant or any third person from vindicating his claim to the property in a separate action,
or prevent the judgment obligee from claiming damages in the same or a separate action
against a third-party claimant who filed a frivolous or plainly spurious claim.
When the writ of execution is issued in favor of the Republic of the Philippines, or any
officer duly representing it, the filing of such bond shall not be required, and in case the
sheriff or levying officer is sued for damages as a result of the levy, he shall be represented
by the Solicitor General and if held liable therefor, the actual damages adjudged by the court
shall be paid by the National Treasurer out of such funds as may be appropriated for the
purpose.
1.2. Article 254, Labor Code
ART. 254. Injunction Prohibited. – No temporary or permanent injunction or restraining
order in any case involving or growing out of labor dispute shall be issued by any court or
entity, except as otherwise provided in Articles 218 and 264 of this Code.
Article 218(e) of the Labor Code expressly confers upon the NLRC the power to “enjoin
or restrain actual and threatened commission of any or all prohibited or unlawful acts, or to
require the performance of a particular act in any labor dispute which, if not restrained or
performed forthwith, may cause grave or irreparable damage to any party or render
ineffectual any decision in favor of such party x x x.
Article 264 of the same Code provides for another exception to the rule that no injunction
or restraining order can be issued in any case involving or growing out of labor disputes and
this is: when a labor organization or an employer engages in the “prohibited activities
enumerated therein.
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1.3. Section 2, Rule VI of the Manual of Instruction for Sheriffs of the NLRC
SEC. 2. Proceedings. – If property levied upon be claimed by any person other than the
losing party or his agent, such person shall make an affidavit of his title thereto or right to the
possession thereof, stating the grounds of such right or title and shall file the same with the
sheriff and copies thereof served upon the Labor Arbiter or proper officer issuing the writ and
upon the prevailing party. Upon receipt of the third party claim, all proceedings with respect
to the execution of the property subject of the third party claim shall automatically be
suspended and the Labor Arbiter or proper officer issuing the writ shall conduct a hearing
with due notice to all parties concerned and resolve the validity of the claim within 10
working days from receipt thereof and his decision is appealable to the Commission within
10 working days from notice, and the Commission shall likewise resolve the appeal within
the same period.
2. Cognate Doctrines
2.1. The Doctrine of the Innocent Bystander
Acts or activities of striking or picketing laborers or employees should not prejudice innocent
bystanders or those persons or establishments which have no industrial connection or having
interest totally foreign to the context of the labor dispute.
Thus, the right of the laborers or employees may be regulated at the instance of third parties
or “innocent bystanders” if it appears that the inevitable result of its exercise is to create an
impression that a labor dispute with which they have no connection or interest exists between
them and the picketing union or constitute an invasion of their rights.
In Philippine Association of Free Labor Unions (PAFLU) v. Cloribel, 27 SCRA 465, the Court
rules that the right to picket as a means of communicating the facts of a labor dispute is a part of
the freedom of speech guaranteed by the constitution. If peacefully carried out, it cannot be
curtailed even in the absence of employer-employee relationship.
The right is, however, not an absolute one. While peaceful picketing is entitled to
protection as an exercise of free speech, we believe the courts are not without
power to confine or localize the sphere of communication or the demonstration to
the parties to the labor dispute, including those with related interest, and to insulate
establishments or persons with no industrial connection or having interest totally
foreign to the context of the dispute. Thus the right may be regulated at the instance
of third parties or “innocent bystanders” if it appears that the inevitable result of its
exercise is to create an impression that a labor dispute with which they have no
connection or interest exists between them and the picketing union or constitute an
invasion of their rights.
Thus, an “innocent bystander,” who seeks to enjoin a labor strike, must satisfy the court that
aside from the grounds specified in Rule 58 of the Rules of Court, it is entirely different from,
without any connection whatsoever to, either party to the dispute, and therefore, its interests
are totally foreign to the context thereof (See also cases of Liwayway Publications, Inc. v.
Permanent Concrete Workers Union, 108 SCRA 161 and MSF Tire and Rubber, Inc. v. Court of
Appeals and Philtread Tire Workers’ Union, 311 SCRA 784).
2.2. Principle of Judicial Stability
No court has authority to interfere by injunction with the judgment or orders of another court of
coordinate jurisdiction. This principle is applicable to regulatory commission or quasi-judicial
bodies of equal rank with the Regional Trial Court. These courts cannot interfere with the order
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of a regulatory commission which is a co-equal body (National Electrical Administration v.
Mendoza, 138 SCRA 632; Pineda v. Lantin, 6 SCRA 757; Philippine Pacific Fishing Co. v. Luna,
112 SCRA 604) or to judgments or final orders of labor courts, otherwise this will in effect curtail
the power vested by law upon industrial labor agency. (Kaisahan ng mga Magsasaka sa La
Campana v. Sarmiento, 133 SCRA 220).
3. Cases Answering the Question in the Negative
3.1. National Mines & Allied Workers’ Union v. Vera, 133 SCRA 259, 268, November 19, 1984,
Second Division, J. Cuevas.
In this case, the NLRC rendered a decision in NLRC Case No. RB-IV-3322-75 in favor of the labor
union and against employer-corporation requiring the latter to pay the former a sum of money.
The decision having become final and executory, the NLRC issued a writ of execution. The
sheriff levied upon properties and set the auction sale on a certain date which were claimed by
Manila Banking Corporation and Philippine Commercial and Industrial Bank. These banks
asserted that prior to the rendition of the NLRC decision, they acquired said properties in
foreclosure proceedings. In fact, the labor union filed an action to annul the foreclosure
proceedings including the auction sale which was still pending at the time this present case
reached the Supreme Court.
On account of the projected sale, the banks filed an action denominated injunction with
preliminary injunction against the labor union and the sheriff praying that a temporary
restraining order and then a preliminary injunction be granted to stop the auction sale and after
trial to make the injunction permanent. After due proceeding, the court issued a temporary
restraining order stopping the auction sale. The labor union filed a motion to dismiss the
complaint on the ground that the court had no jurisdiction to issue an injunction to stop the
execution of the judgment of the NLRC.
The lower court denied the motion to dismiss and the labor union elevated the matter to the
Supreme Court contending that under Article 254 of the Labor Code, the lower court has no
jurisdiction to entertain the injunction case.
The issue is whether the lower court has jurisdiction over the injunction case filed by the
banks against the labor union and the sheriff.
The High Court ruled:
‘Petitioners’ reliance on the provision of Article 254 of the New Labor Code (hereon earlier
quoted) which prohibits injunctions or restraining orders in any case involving or growing
out of a ‘labor dispute’ is not well-taken. This has no application to the case at bar. Civil
Case No. 2749 is one which neither ‘involves’ nor has ‘grown out’ of a labor dispute. x x x
The private respondents are not parties to the said NLRC case. Civil Case No. 2749 does
not put an issue either of the fact or validity of the proceeding in the NLRC case nor the
decision therein rendered, much less, the writ of execution issued thereunder. It does not
seek to enjoin the execution of the decision against the properties of the judgment debtor.
What is sought to be tried in Civil Case No. 2749 is whether the NLRC’s decision and writ of
execution above-mentioned, shall be permitted to be satisfied against properties of
private respondents, and not of the judgment debtor named in the NLRC decision and
writ of execution. Such a recourse is allowed under the provision of Section 17, Rule 39 of
the Rules of Court (Santos v. Sibug, 104 SCRA 520).
To sustain petitioners’ theory will inevitably lead to disastrous consequences and lend
judicial imprimatur to deprivation of propriety without due process. Simply because a writ of
execution was issued by the NLRC does not authorize the sheriff implementing the same to levy
on anybody’s property. To deny the victim of the wrongful levy, the recourse such as that
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availed of by the herein private respondents, under the pretext that no court of general
jurisdiction can interfere with the writ of execution issued in a labor dispute, will be sanctioning a
greater evil than that sought to be avoided by the Labor Code provision in question. Certainly,
that could not have been the intendment of the law creating the NLRC. For well-settled is the
rule that the power of the court to execute its judgment extends only over properties
unquestionably belonging to the judgment debtor (Special Services Corporation v. Centro La
Paz, 121 SCRA 748).
3.2. Santos v. Bayhon, 199 SCRA 525, July 23, 1991, First Division, J. Griño-Aquino.
4. Cases Answering the Question in the Affirmative
4.1. Guimoc v. Rosales, 201 SCRA 468, September 9, 1991, First Division, J. Griño-Aquino.
In a decision of the NLRC which had already become final, a writ of execution was issued
commanding the sheriff to levy on execution upon the properties of the judgment debtor for the
satisfaction of the award in favor of the judgment creditors. The sheriff levied upon several
properties and set the auction sale on a certain date, three days before the scheduled sale.
A third-party claim over several properties levied upon was filed by GESCOR with the
concerned Labor Arbiter. After hearing, the Labor Arbiter denied the third-party claim.
Accordingly, the sheriff re-set the auction sale on a later date. GESCOR filed a petition for
Prohibition, Certiorari, Annulment of Judgment and Quashal of Levy with Preliminary
Prohibitory Injunction in the Regional Trial Court. Acting upon the application of an injunctive
relief, the Regional Trial Court issued a temporary restraining order enjoining the sheriff and
defendants from selling at public auction the properties being claimed by GESCOR. Respondent
Labor Arbiter and judgment creditor field a motion to dismiss the petition on the ground of the
court’s lack of jurisdiction. After due proceeding, the Regional Trial Court denied the motion to
dismiss.
Hence, the petition for certiorari to review and annul said order.
The Supreme Court identified the issue as:
“The sole issue in this case is whether a civil court may interfere by injunction with the
execution of a final and executory judgment of the NLRC.”
In granting the writ of certiorari, the Supreme Court ruled that Article 254 of the Labor Code
explicitly prohibits the issuance of an injunction in labor cases.
Section 2, Rule VII of the Manual of Instructions for Sheriffs of the NLRC, which prescribes
the procedure of property levied upon to satisfy a final judgment of the NLRC is claimed by any
third person (other than its losing party or his agent), should be followed. This rule provides
that the third person should file his third-party claim upon the sheriff furnishing a copy thereof to
the Labor Arbiter.
The Labor Arbiter conducts a hearing and this resolves the third-party claim. The resolution
of the Labor Arbiter is appealable to the NLRC.
In this case, GESCOR filed a third-party claim and when it received the resolution of the
Labor Arbiter denying the claim, it wrongly instituted a petition for certiorari, etc. with the
Regional Trial Court. The proper recourse of GESCOR should have been to appeal the resolution
of the Labor Arbiter to the NLRC pursuant to said Manual of Instructions. Consequently, in
denying the motion to dismiss the petition for certiorari, et al. the Regional Trial Court gravely
abused its jurisdiction.
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In filing the third-party claim with the NLRC, GESCOR submitted itself to the jurisdiction of
the NLRC which exercised it through the Labor Arbiter by issuing the resolution denying the
third-party claim. Jurisdiction, once acquired, is not lost upon the instance of the parties but
continues until the case is terminated (Gimenez v. Nazareno, 160 SCRA 1).
The Supreme Court cited earlier jurisprudence to fortify its conclusion:
The NLRC has the authority to look into the correctness of the execution of its decision
(Medado v. Court of Appeals, 185 SCRA 80).
Whatever irregularities that attended the issuance of the alias writ of execution should be
referred to the same administrative tribunal which rendered the decision. Despite finality
of the decision of the Secretary of Labor, he, not the regular courts, retained control over its
execution and implementation (Pucan v. Bengzon, 155 SCRA 692).
4.2. Deltaventures Resources, Inc. v. Cabato, 327 SCRA 521, March 9, 2000, J. Quisumbing.
In Deltaventures Resources, Inc. v. Cabato, 327 SCRA 521, the court held that the complaint
was in effect a motion to quash the writ of execution of a decision rendered in a case properly
within the jurisdiction of the Labor Arbiter, to wit: Illegal Dismissal and Unfair Labor Practice.
Considering the factual setting, it is then logical to conclude that the subject matter of the thirdparty claim is but an incident of the labor case, a matter beyond the jurisdiction of regional trial
courts. Petitioner failed to realize that by filing its third-party claim with the deputy sheriff, it
submitted itself to the jurisdiction of the Commission acting through the Labor Arbiter. It failed
to perceive the fact that what it is really controverting is the decision of the Labor Arbiter and not
the act of the deputy sheriff in executing said order issued as a consequence of said decision
rendered. The court further held that:
The broad powers granted to the Labor Arbiter and to the National Labor Relations
Commission by Articles 217, 218 and 224 of the Labor Code can only be interpreted as vesting
in them jurisdiction over incidents arising from, in connection with or relating to labor disputes,
as the controversy under consideration, to the exclusion of the regular courts.
Moreover, it must be noted that the Labor Code in Article 254 explicitly prohibits issuance of
a temporary or permanent injunction or restraining order in any case involving or growing out of
labor disputes by any court or other entity (except as otherwise provided in Articles 218 and
264). As correctly observed by the court a quo, the main issue and the subject of the amended
complaint for injunction are questions interwoven with the execution of the Commission’s
decision. No doubt the aforecited prohibition in Article 254 is applicable.
4.3. Nova v. Dames, 355 SCRA 483, March 18, 2001.
In Nova v. Dames, 355 SCRA 483, the court in holding RTC Judge Dames guilty of gross
ignorance of the law for issuing a TRO restraining the NLRC Sheriff from conducting the
scheduled public auction of real property which allegedly is conjugal property of the petitioners
who are not judgment debtors in the labor case, did not refer to the NLRC Sheriff’s Manual but
held that regular courts have no jurisdiction to hear and decide questions which arise and are
incidental to the enforcement of decisions, orders or awards rendered in labor cases by
appropriate officers and tribunals of the Department of Labor and Employment. Corollarily, any
controversy in the execution of the judgment shall be referred to the tribunal which issued the
writ of execution since it has the inherent power to control its own processes in order to enforce
its judgments and orders.
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5. Submission of Justice Oscar M. Herrera
The doctrinal pronouncements of the Supreme Court in National Mines & Allied Workers’ Union v.
Vera and Santos v. Bayhon express more accurately the state of law on the question of whether
regular courts are authorized to issue injunction writs against enforcement of decisions of the labor
courts.
5.1. Preliminary Matters
a)
The Nature of a Labor Court
A labor court is definitely a quasi-judicial agency with limited jurisdiction. It can deal only
with labor cases. This is explicit in R.A. No. 6715 which states that not every claim of an
employee against an employer is cognizable by the labor arbiter. This law which amended
the jurisdiction of the labor arbiter did not overturn earlier decisions of the court drawing a
line between cases that are within the jurisdiction of the labor arbiter and those cognizable
by the regular court (Georg Grotjahn GMBH & Co. v. Isnani, 235 SCRA 216). Thus a labor
court can deal only with labor cases.
b)
Test to Determine whether a Dispute is Labor or Civil
When the claim to the principal relief sought is to be resolved by the general civil law, the
dispute is civil and belongs to the jurisdiction of the regular courts. On the other hand,
when the dispute is to be resolved by the provisions of the labor code or labor statutes or
the collective bargaining agreement of the parties, then the dispute is labor and belongs to
the labor courts which has the required expertise on labor management relations, or wage
structures and other terms and conditions of the employment (San Miguel Corporation v.
National Labor Relations Commission, 161 SCRA 719, citing Molave Motor Sales, Inc. v.
Laron, 129 SCRA 485; Singapore Airlines v. Paño, 122 SCRA 671, and Medina v. CastroBartolome, 116 SCRA 597; See also Basaya, Jr. v. Militante, 156 SCRA 299 ]1987]).
5.2. In the question being resolved, it is given that the properties levied upon execution by the labor
sheriff to satisfy the final decision of the labor court are claimed by third persons – not parties to
the labor cases. Therefore, the third-party claims of the non-parties were cases that did not
involve or grow out of a labor dispute.
But more than that, the third-party claims of the strangers to the labor cases did not put on
issue the regularity of the proceedings in the labor court nor the correctness or propriety of the
decisions rendered therein nor the validity and enforceability of the writs of execution issued by
the labor court in the labor cases, hence, the third-party claims did not involve nor grow out of
the labor disputes.
5.3. The issuance of a TRO or an injunction issued by the regular court against the enforcement of a
decision of the labor court against a stranger to the case is not an interference with the labor
court’s decision (National Mines & Allied Workers’ Union v. Vera, 133 SCRA 259).
The proper action “referred to in Section 16 Rule 39 is and should be an entirely separate
and distinct action from that in which execution has issued, if instituted by a stranger” (Ong v.
Tating, 149 SCRA 265, citing Bayer Philippines, Inc. v. Agana, 63 SCRA 355 (in turn citing Manila
Herald Publishing, Co., Inc. v. Ramos, 88 Phil. 94; Polaris Marketing Corp. v. Plan, 69 SCRA 93;
Lorenzana v. Cayetano, 78 SCRA 485; Arabay v. Salvador, 82 SCRA 138; Roque v. Court of
Appeals, 93 SCRA 540; Estonina v. Court of Appeals, 266 SCRA 627; Ong v. Tating, 149 SCRA
265, cited in Estonina v. Court of Appeals, 266 SCRA 627). Consequently, the court may issue a
writ of preliminary injunction against the sheriff enjoining him from proceeding with the
execution sale (Ong v. Tating, supra). Upon the other hand, if the claim of impropriety on the
part of the sheriff in the execution proceedings is made by a party to the action, not a stranger
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thereto, any relief therefrom may be applied for with, and obtained from, only in the executing
court; and this is true even if a new party has been impleaded in the suit (Ong v. Tating, supra,
at p. 279, italics supplied, citing Rejuso v. Estipona, 72 SCRA 509).
Such an independent action filed with the court other than the one which issued the writ of
execution cannot be considered as an encroachment upon the jurisdiction of a co-equal court.
While it is true that property in custody of the law may not be interfered with, without the
permission of the proper court, this rule is confined to cases where the property belongs to the
defendant or one in which the defendant has proprietary interests. But when the Sheriff acting
beyond the bounds of his office seizes a stranger’s property, the rule does not apply and
interference with his custody is not interference with another court’s custody. (Estonina v.
Court of Appeals, 266 SCRA 627) Thus, a Caloocan court can enjoin the sheriff form selling
properties he levied upon to satisfy the judgment of CFI of Manila, filed by a third-party claimant
(Arabay v. Salvador, 82 SCRA 138).
5.4. The foundation of the decision in Guimoc, which was in effect adopted in Deltaventures
Resources and Dames, is that:
Whatever irregularities that attended the issuance of the alias writ of execution should be
referred to the same tribunal which rendered the decision. Despite finality of the decision
of the Minister of Labor, he, and not the regular courts, retained control over its execution
and implementation.
It should be pointed out that in relying on the above-quoted principle, the High Court in
Guimoc, Deltaventures and Dames cited as its anchor Pucan v. Benzon. Significantly, Pucan
does not involve a third-party claim but the same parties in the labor dispute. Clearly, Pucan is
inapposite and if it has any relevance to the question for resolution, it is its support for the
proposition that when there is no labor dispute between the parties, it is the regular courts that
has jurisdiction. It further decreed that in determining whether or not the regular court may
validly exercise its jurisdiction it must be determined whether acts complained of arose out of,
or are connected or interwoven with the cases which fall within the exclusive jurisdiction of the
labor arbiter or the NLRC.
Moreover, in Bayer Philippines, Inc. v. Agana, 63 SCRA 355, the Supreme Court
enumerated the doctrine that the claim of ownership of a third party over properties levied upon
for execution of a judgment presents no issue for determination by the court issuing the writ of
execution when a property levied upon by the sheriff pursuant to a writ of execution is claimed
by a third party in a sworn statement of ownership thereof, as prescribed by the rules on which
different adjudication arises.
In resumé, the rule that whatever irregularities that attended the issuance of the alias writ of
execution should be referred to the same administrative tribunal which rendered the decision
has no application when a stranger to the labor case is involved.
5.5. Remedy Under the NLRC Sheriff’s Manual Does not Bar a Third-Party Claimant to Avail of Other
Remedies under the Rules of Court
Pursuant to Article 218(a) of the Labor Code, as amended, the NLRC was authorized to
promulgate the Manual of Instructions for Sheriffs of the NLRC.
The mandate of the NLRC is clear: to promulgate a Manual of Instructions for Sheriff to
carry out the purposes of the Labor Code. That authority is necessarily circumscribed by the
special and limited jurisdiction of the NLRC to labor disputes and those cases involving or
growing out of labor disputes. It cannot extend to matters which are purely civil in nature such
as the resolution of disputes on ownership.
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Jurisdiction is conferred by law. The jurisdiction of the NLRC and labor arbiters is conferred
by the Labor Code. The labor courts therefore cannot exercise any jurisdiction not conferred
upon them by the Labor Code or other statutes. The NLRC cannot vest upon itself any
competence or authority not provided for in the law by the simple expedience of promulgating a
manual for labor sheriffs.
The Labor Code specifically limits the jurisdiction of the labor courts to labor disputes and
those cases involving or growing out of labor disputes. To construe Section 2 of the Manual of
Instruction for Sheriffs of the NLRC as foreclosing a third-party claimant to properties levied on
execution by the labor sheriff for the satisfaction of a final judgment in a labor case the availment
of remedies of a third-party claimant under Section 16, Rule 39, RC – as what Guimoc v. Rosales
did – is to recognize that the Manual can be the basis of the jurisdiction of the labor courts.
5.6. Remedies of a Third-Party Claimant under Section 16, Rule 39, RC
Under Section 16, Rule 39, if a property levied on execution is claimed by a third person, the
available remedies are:
a)
execute an affidavit stating his claim of ownership or right to the possession of said
property and serve the same upon the sheriff;
b)
institute an independent action to vindicate his claim to the property.
Explaining these remedies, the High Court in Sy v. Discaya, 181 SCRA 378 said:
“a. A third person whose property was seized by a sheriff to answer for the obligation of
the judgment debtor may invoke the supervisory power of the court which
authorized such execution. Upon due application by the third person and after
summary hearing, the court may command that the property be released from the
mistaken levy and restored to the rightful owner or possession. What said court can
do in these instances, however, is limited to a determination of whether the
sheriff has acted rightly or wrongly in the performance of his duties in the
execution of judgment, more specifically, if he has indeed taken hold of property not
belonging to the judgment debtor. The court does not and cannot pass upon the
question of title of the property, with any character of finality. It can treat of the
matter only insofar as may be necessary to decide if the sheriff has acted correctly or
not. It can require the sheriff to restore the property to the claimant’s possession if
warranted by the evidence.
However, if the claimant’s proofs do not persuade the court of the validity of his
title or right of possession thereto, the claim will be denied.
b. Independent of the above-stated recourse, a third-party claimant may also avail
himself of the remedy known as ‘terceria,’ provided for in Section 17, (now 16) Rule
39, by serving on the officer making the levy an affidavit of his title and a copy
thereof upon the judgment creditor. The officer shall not be bound to keep the
property, unless such judgment creditor or his agent, on demand of the officer,
indemnifies the officer against such claim by a bond in a sum not greater than the
value of the property levied on. An action for damages may be brought against the
sheriff within 120 days from the filing of the bond.
c.
58
The aforesaid remedies are nevertheless without prejudice to ‘any proper action’
that a third-party claimant may deem suitable to vindicate ‘his claim to the property.’
Such a ‘proper action’ is, obviously, entirely distinct from that explicitly prescribed in
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Section 16 of Rule 39, which is an action for damages brought by a third-party
claimant against the officer within 120 days from the date of the filing of the bond for
the taking or keeping of the property subject of the terceria.”
The remedies abovementioned are cumulative and may be resorted to by a thirdparty claimant independent of or separately from and without need of availing of the others.
If a third-party claimant opted to file a proper action to vindicate his claim of ownership, he
must institute an action, distinct and separate from that in which the judgment is being
enforced, with the court of competent jurisdiction even before or without need of filing a
claim in the court which issued the writ, the latter not being a condition sine qua non for the
former. In such proper action, the validity and sufficiency of the title of the third-party
claimant will be resolved and a writ of preliminary injunction against the sheriff may be
issued (Supra).
5.7. Yupangco Cotton Mills, Inc. v. Court of Appeals, 373 SCRA 451, January 16, 2002 – the
Pertinent Provisions of the Manual of Instructions to Labor Sheriffs and the Rules of Court
Finally, Yupangco Cotton Mills, Inc. v. Court of Appeals, 373 SCRA 451, upheld the authority of
the regular courts to restrain enforcement of decisions of the labor arbiter or National Labor
Relations Commission where the Sheriff of the NLRC levied upon the properties of petitioner as
a consequence of the decision rendered by the said Commission in a labor case, despite the fact
that the petitioner was not a party in the labor case.
The Court (First Division of the Supreme Court speaking thru Justice Pardo with the
concurrence of Chief Justice Davide, Jr., Puno, Kapunan and Santiago J.J.) held as follows:
x x x a third party whose property has been levied upon by a sheriff to enforce a decision
against a judgment debtor is afforded with several alternative remedies to protect his
interests. The third party may avail himself of alternative remedies cumulatively, and
one will not preclude the third party from availing himself of the other alternative
remedies in the event he failed in the remedy first availed of.
Thus, a third party may avail himself of the following alternative remedies:
a) File a third-party claim with the sheriff of the Labor Arbiter, and
b) If the third-party claim is denied, the third party may appeal the denial to the
NLRC.
Even if a third-party claim was denied, a third party may still file a proper action with a
competent court to recover ownership of the property illegally seized by the sheriff. Quoting
Section 17 (now 16), Rule 39, Revised Rules of Court, (Section 17 [now 16]. Proceedings
where property claimed by third person. – If property claimed by any person other than the
judgment debtor or his agent, and such person makes an affidavit of his title thereto or right to
the possession thereof, stating the ground of such right or title, and serve the same upon the
officer making the levy, and a copy thereof upon the judgment creditor, the officer shall not be
bound to keep the property, unless such judgment creditor or his agent, on demand of the
officer, indemnify the officer against such claim by a bond in a sum not greater than the value of
the property levied on. In case of disagreement as to such value the same shall be determined
by the court issuing the writ of execution.
“The officer is not liable for damages, for the taking or keeping of the property, to any thirdparty claimant unless a claim is made by the latter and unless an action for damages is brought
by him against the officer within 120 days from the date of the filing of the bond. But nothing
herein contained shall prevent such claimant or any third person from vindicating his claim to
the property by any proper action.
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“When the party in whose favor the writ of execution runs, is the Republic of the Philippines,
or any officer duly representing it, the filing of such bond shall not be required, and in case the
sheriff or levying officer is sued for damages as a result of the levy, he shall be represented by
the Solicitor General and if held liable therefore, the actual damages adjudged by the court shall
be paid by the National Treasurer out of such funds as may be appropriated for the purpose” and
Sy v. Discaya, which quoted Ong v. Tating holding that a third person whose property was
seized by a sheriff to answer for the obligation of a judgment debtor may invoke the supervisory
power of the court which authorized such execution. Upon due application by the third person
and after summary hearing, the court may command that the property be released from the
mistaken levy and restored to the rightful owner or processor. What said court does in these
instances, however, is limited to a determination of whether the sheriff has acted rightly or
wrongly in the performance of his duties in the execution of judgment, more specifically, if he
has indeed taken hold of property not belonging to the judgment debtor. The court does not
and cannot pass upon the question of title to the property, with any character of finality. It can
treat of the matter only insofar as may be necessary to decide if the sheriff has acted correctly or
not. It can require the sheriff to restore the property to the claimant’s possession if warranted
by the evidence. However, if the claimant’s proof does not persuade the court of the validity of
his title or right of possession thereto, the claim will be denied.
The Court reiterated Santos v. Bayhon (Supra), upholding the issuance of a temporary
restraining order against Labor Arbiter Diosana and the NLRC Sheriff from issuing a certificate of
sale over the levied property holding that:
x x x The power of the NLRC to execute its judgments extends only to properties
unquestionably belonging to the judgment debtor (Special Services Corp. v. Centro La
Paz, 121 SCRA 748).
The general rule that no court has the power to interfere by injunction with the
judgments or decrees of another court with concurrent or coordinate jurisdiction
possessing equal power to grant injunctive relief, applies only when no third-party
claimant is involved (Traders Royal Bank v. Intermediate Appellate Court, 133 SCRA
141). When a third party, or a stranger to the action, asserts a claim over the
property levied upon, the claimant may vindicate his claim by an independent
action in the proper civil court which may stop the execution of the judgment
on property not belonging to the judgment debtor. (Emphasis ours)
A separate civil action for recovery of ownership of the property would not
constitute interference with the powers or processes of the Arbiter and the
NLRC which rendered the judgment to enforce and execute upon the levied
properties. The property levied upon being that of a stranger is not subject to
levy. Thus, a separate action for recovery, upon a claim and prima facie
showing of ownership by the petitioner, cannot be considered as
interference.
The Yupangco decision appears to have laid to rest the authority of the regular courts to
issue a writ of preliminary injunction to restrain the enforcement of a decision of the Labor
Arbiter or the National Labor Relations Commission by giving an affirmative answer to the
question.
B. The Problem of Injunctive Relief in Regard to Government Projects
The question is: What is the extent of the statutory prohibition against courts lower than the Supreme
Court from issuing temporary restraining orders or writs of preliminary injunctions on government
projects?
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There are essentially three laws involved in this question: Presidential Decree No. 605, Presidential
Decree No. 1818 and R.A. No. 8975. Presidential Decree No. 605 prohibited the issuance of injunction in
regard to concessions, licenses and other permits issued by public administrative offices or bodies for the
exploitation of natural resources. Presidential Decree No. 1818 superseded by assimilation Presidential
Decree No. 605. Presidential Decree No. 1818 prohibited the issuance of restraining orders or
injunctions in cases involving infrastructure and natural resources development projects of, and public
utilities operated by the government.
Section 1 of P.D. No. 1818 divested all courts of the Philippines of the jurisdiction ‘to issue any
restraining order, preliminary injunction, or preliminary mandatory injunction in any case, dispute, or
controversy involving an infrastructure project, or a mining, fishery, forest or other natural resource
development project of the government, or any utility operated by the government x x x’. Courts were
not to issue injunctions to prohibit any person or persons, entity or governmental official from
proceeding with, or continuing the execution or implementation of any such project, or the operation of
such public utility, or pursuing any lawful activity necessary for such execution, implementation or
operation.
Republic Act No. 8975 approved on November 7, 2000 which substantially repealed P.D. No. 1818
prohibits all courts except the Supreme Court from issuing a temporary restraining order, preliminary
injunction or preliminary mandatory injunction against government in regard to the : (a) acquisition,
clearance and development of the right-of-way and/or site or location of any national government
project; (b) bidding or awarding of contract/project of the national government as defined under Section
2 hereof; (c) commencement, prosecution, execution, implementation, operation of any such contract
or project; (d) termination or rescission of any such contract/project; and (e) the undertaking or
authorization of any other lawful activity necessary for such contract/project.
There is however the saving clause: “This prohibition shall not apply when the matter is of extreme
urgency involving a constitutional issue, such that unless a temporary restraining order is issued, grave
injustice and irreparable injury will arise.” Note that the exemptive phrase “grave injustice and
irreparable injury” is further qualified with “matter of extreme urgency involving a constitutional issue.”
To answer the question about the extent of the statutory prohibition in the issuance of temporary
restraining orders or writs of preliminary injunctions in cases involving government projects and the
others enumerated above, it is necessary to revisit the pertinent cases on the subject.
1. Datiles v. Sucaldito, 186 SCRA 704
The issue in this case was whether injunction would be against the conduct of an investigation by
an administrative body of a case which matter was also before a regular court in apparent
violation of P.D. No. 605.
In resolving that issue, the High Court ruled:
We now look into P.D. No. 605. Its evident purpose is to prevent the substitution of judicial
judgments for those of public administrative officials in disputes involving the disposition or
utilization of natural resources of the country. The decree seeks to leave to
administrative agencies the authority to decide controversies involving
licenses, permits, patents or public grants in connection with natural resources,
obviously because of the expertise of such administrative officials in dealing
with such problems.
xxxx
As to the prohibition dictated by P.D. No. 605, the same pertains to the issuance by courts of
injunctions or restraining orders against administrative acts on controversies which
involves facts or exercise of discretion in technical cases, because to allow courts to judge
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these matters could disturb the smooth functioning of the administrative machinery. But on
issues definitely outside of this dimension and involving questions of law, courts are
not prevented by P.D. No. 605 from exercising their power to restrain or prohibit
administrative acts.
2. Malaga v. Penachos, 213 SCRA 516
This case is about the action of the involved the bidding committee of the Iloilo College of
Fisheries, a state institution, and therefore within the protective mantle of P.D. No. 1818. On a
showing of irregularities in the bidding process, the lower court issued a temporary restraining
order. However, it later denied the application for a writ of preliminary injunction. The actions of
the lower court were finally challenged in the Supreme Court.
The Supreme Court ruled that the prohibition of P.D. No. 1818 applied only to administrative
acts in controversies involving facts or the exercise of discretion in a technical sense. The reason
for this prohibition is to allow the administrative machinery to run unhampered by undue judicial
interference.
In this case, the Court found that irregularities had tainted the acts of the bids committee and
so the case then did not arise from discretionary acts nor did it involve technical matters. In fact,
the Court felt that the prohibition in P.D. No. 1818 was being invoked as a shield against judicial
inquiry of wrongdoing.
Hence, the challenged restraining order was not improperly issued by the respondent judge
and the writ of preliminary injunction should not have been denied.
3. Malayan Integrated Industries v. Court of Appeals, 213 SCRA 640
In this case, the Court ruled that a reclamation project is an infrastructure within the
contemplation of P.D. No. 1818. This holding was reiterated in Garcia v. Burgos, 291 SCRA 546.
4. Philippine Ports Authority v. Court of Appeals, 253 SCRA 212
This case had to do with the project of setting up floating bulk terminal facilities at the South
Harbor of the Port of Manila. The Philippine Ports Authority had entered into a contract with the
Manila Floating Silo Corporation. The Court reiterated its position that the prohibition in P.D. No.
1818 applies to “controversies involving facts or the exercise of discretion in a technical sense,”
consistent with the ratiocination that the primary purpose of the prohibition is to allow the
administrative body to run its statutorily assigned affairs. Entering into a contract for the
construction of a floating grains terminal, the Court held, was an exercise of discretion with which
the courts would not interfere. However, the Court went on to cite instances when the prohibition
of P.D. No. 1818 should not find application: first, when there is a clear grave abuse of discretion
on the part of the government authority or private person being enjoined; second, where the
effect of the non-issuance of an injunction or a restraining order would be to stave off
implementation of a government project.
5. Caguioa v. Laviña (345 SCRA 49) was a disciplinary case against a judge who had issued a
restraining order in what the Supreme Court considered to be a direct violation of P.D. No. 1818.
The contract had to do with the construction of the NAIA II Terminal, and the contracting parties
were the Philippine Government and a consortium consisting of BF Corporation and Tokyu
Corporation. The two were however unable to agree on the division of labor and the scope of
work, and BF commenced suit for specific performance, including in its prayer a petition for a
temporary restraining order and injunctive relief. These, the respondent conceded. The Court
found the judge administratively liable for a direct contravention of P.D. No. 1818. It insisted that
the prohibition applies, whatever or whoever may be sought to be enjoined: natural or juridical
person, private or public entity, government or private citizen. It underscores the rationale of the
prohibition: preventing delay of essential government projects.
62
INJUNCTION AND ITS RELATED PROBLEMS
INJUNCTION AND ITS
RELATED PROBLEMS
By way of conclusion, the general rule is that courts lower than the Supreme Court are
prohibited from issuing a temporary restraining order and writ of preliminary injunction in cases
involving infrastructure and natural resources development projects of, and public utilities
operated by the government and specifically, (a) acquisition, clearance and development of the
right-of-way and/or site or location of any national government project; (b) bidding or awarding
of contract/project of the national government as defined under Section 2 hereof; (c)
commencement, prosecution, execution, implementation, operation of any such contract or
project; (d) termination or rescission of any such contract/project; and (e) the undertaking or
authorization of any other lawful activity necessary for such contract/project.
The exceptions to the general rule are:
1. In a matter of extreme urgency involving a constitutional issue such that unless a
temporary restraining order is issued, grave injustice and irreparable injury will arise;
2. When there is a clear grave abuse of discretion on the part of the government authority or
private person being enjoined;
3. When the effect of the non-issuance of an injunction or a restraining order would be to
stave off implementation of a government project;
4. When the case did not arise from discretionary acts of an administrative body nor does it
involve technical matters;
5. When the administrative body’s acts are tainted with irregularity and non-issuance of the
temporary restraining order or writ of preliminary injunction would cause grave injustice
or irreparable injury upon the applicant of said reliefs.
When any of the foregoing facts and circumstances are present, the courts lower than the
Supreme Court can issue a restraining order or a writ of preliminary injunction.
o0o0o
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63
ON AMENDING THE CONSTITUTION
Justice Vicente V. Mendoza
Holder, 2005 Metrobank Foundation Professorial Chair
in Constitutional Law
A pervasive theme in constitutional law is continuity
and change. What has been said of law in general
applies with greater reason to constitutional law in
particular: it must be stable but it cannot stand still.
No one has articulated the basic dilemma with greater
force and cogency than Alfred North Whitehead who,
in his study of symbolism, said:
It is the first step in sociological wisdom to
recognize that the major advances in
civilization are processes which all but
wreck the societies in which they occur –
like unto an arrow in the hand of a child.
The art of a free society consists first in the
maintenance of the symbolic code; and
secondly in fearlessness of revision, to
secure that the code serves those purposes
which satisfy an enlightened reason. Those
societies which cannot combine reverence
to their symbols with freedom of revision,
must ultimately decay either from anarchy,
or from slow atrophy of a life stifled by
1
useless shadows.
Formal and Informal Ways
of Changing the Constitution
Actually, there are two ways by which the Constitution
may be changed: formally, as provided in Article
XVII, and informally through judicial interpretation.
The latter takes place whenever the Supreme Court
interprets the broad and open-ended provisions of the
Constitution in the decision of specific cases and
controversies.
I would like to discuss this point briefly before
going to the formal ways of amending and revising the
Constitution to which I will devote the rest of this
lecture.
By its very nature as the fundamental law, the
Constitution, in contrast to ordinary statute, cannot
be too detailed without running the risk of becoming
obsolete. Of necessity, as Marshall said in the famous
case of McCulloch v. Maryland,2
_____________________________________________________________
1.
ALFRED NORTH WHITEHEAD, SYMBOLISM, ITS MEANING AND EFFECT 88 (1927), quoted
in PAUL A. FREUND, THE SUPREME COURT OF THE UNITED STATES 176 (1961).
2.
4 Wheat. (17 U.S.) 316, 4 L.Ed. 579 (1819).
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its nature x x x requires that only its great outlines should be marked, its important objects designated,
and the minor ingredients which compose those objects be deduced from the nature of the objects
themselves.” The agency for “deducing the important objects” – for filling the interstices with details
and adjusting the Constitution to the concerns of modern society – is the Supreme Court. Its decisions
applying and interpreting the laws or the Constitution, by virtue of Article 8 of the Civil Code, “form part
of the legal system of the Philippines.” Indeed, as Chief Justice Hughes once said, “[we] live under the
constitution, but the constitution is what the judges say it is.
Unlike its interpretations of the provisions of statutes, which may be changed or overridden by Congress, the
Court’s interpretations of the Constitution cannot be superseded by Congress.3 For example, in Perfecto v.
Meer,4 the Supreme Court construed Article VIII, Section 9 of the 1935 Constitution, which provided that the
salaries of judges “shall not be diminished during their continuance in office,” as exempting their salaries
from taxation. A law subsequently passed by Congress, declaring that “no salary whenever received by any
public officer x x x shall be considered exempt from taxation” and that “payment of income tax shall not be
considered a diminution of his compensation,” was struck down by the Court in Endencia v. David 5 on the
ground that in the exposition of the Constitution, the Supreme Court is paramount. The final resolution of the
question came when the ruling in these cases was abrogated by the 1973 Constitution which provided that
“No salary or any form of emolument of any public officer or employee, including constitutional officers, shall
be exempt from the payment of income tax.”6 The present Constitution does not contain a similar provision,
but neither does it reenact the provision of the 1935 Constitution that members of the judiciary “shall receive
such compensation as may be fixed by law, which shall not be diminished during their continuance in office.”7
What its Article VIII, Section 10 says is that the salaries of members of the judiciary “shall not be decreased.”
In Nitafan v. Commissioner of Internal Revenue,8 it was held that by changing the word “diminished” to
“decreased,” the present Constitution clearly intended to overrule the doctrine of Perfecto and Endencia.
In contrast, a ruling of the Court that a teacher was neither a “person in authority” nor an “agent of a
person in authority” within the meaning of Article 148 of the Revised Penal Code9 was subsequently
superseded by a legislative amendment declaring teachers to be “persons in authority,” and the Court,
doing the legislative will, later applied the amended law by holding a school superintendent to be a person in
authority.10
Thus, only if the Supreme Court reconsiders its decision, or its membership is changed, or its ruling is
overruled by constitutional amendment can the gloss placed by it on the Constitution be changed.
Otherwise, because of its power of interpretation, the Supreme Court functions as a veritable continuous
constitutional convention, informally changing the Constitution without altering a single word of it. To be
_________________________________________________________________________________________________________________________
3.
Dickerson v. United States, 530 U.S. 428, 147 L.Ed.2d 405 (2000).
4.
85 Phil. 552 (1950)
5.
93 Phil. 696 (1953).
6.
1973 CONST.
7.
1935 CONST. ART. VIII, Sec. 9.
8.
152 SCRA 284 (1987).
9.
People v. Mendoza, 59 Phil. 163 (1933).
ART.
XV, Sec. 6.
10. People v. Benitez, 73 Phil. 671 (1942).
66
ON AMENDING THE CONSTITUTION
ON AMENDING
THE CONSTITUTION
constitutional convention, informally changing the Constitution without altering a single word of it. To be
sure, contemporaneous interpretations of the provisions of the Constitution by the other departments of the
government, particularly the Executive Department, constitute informal amendments of the fundamental
law, but nothing is more decisive upon our understanding of what the Constitution is than judicial
interpretations.
So much for the informal ways of changing the Constitution. I now turn to the formal methods by which it
may be changed.
The amendment clause is an essential part of any written constitution for two reasons. One, is that the
more definite and rigid the provisions of a constitution are – thus precluding interpretation by the courts –
the greater is the need for such a clause. Two, is that the clause serves as a safety valve against violent
change or even revolution by providing a procedure for orderly change. “The formal amendment process,”
as Professor Dellinger has written, “represents a domestication of the right to revolution.”11
Constitutional change may be formally made either by amendment or by revision.
Amendment Distinguished from Revision
Article XVII of the Constitution provides:
AMENDMENT OR REVISION
SECTION 1. Any amendment to, or revision of, this Constitution may be proposed by:
(1) The Congress, upon the vote of three-fourths of all its Members; or
(2) A constitutional convention.
SEC. 2. Amendments to this Constitution may likewise be directly proposed by the people through
initiative upon a petition of at least 12 per centum of the total number of registered voters, of which
every legislative district must be represented by at least three per centum of the registered voters
therein. No amendment under this section shall be authorized within five years following the
ratification of this Constitution nor oftener than once every five years thereafter.
The Congress shall provide for the implementation of the exercise of this right.
SEC. 3. The Congress may, by a vote of two-thirds of all its Members, call a constitutional convention,
or by a majority vote of all its Members, submit to the electorate the question of calling such a
convention.
SEC. 4. Any amendment to, or revision of, this Constitution under Section 1 hereof shall be valid when
ratified by a majority of the votes cast in a plebiscite which shall be held not earlier than 60 days nor
later than 90 days after the approval of such amendment or revision.
Any amendment under Section 2 hereof shall be valid when ratified by a majority of the votes cast
in a plebiscite which shall be held not earlier than 60 days nor later than 90 days after the certification
by the Commission on Elections of the sufficiency of the petition.
_________________________________________________________________________________________________________________________
11. Walter Dellinger, Legitimacy of Constitutional Change: Rethinking the Amendment Process, 97 HARV. L.
REV.
386, 431 (1983).
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By providing both for its amendment and for its revision, the Constitution renders moot the long standing
debate whether it may radically be altered or whether it may only be changed so long as its basic design is
retained. What then is an amendment and what is a revision? The Constitution’s framers adopted12 the
distinction between amendment and revision in the concurring opinion of Justice Antonio in the
Ratification Cases (Javellana v. Executive Secretary),13 in which he stated:
x x x Revision may involve the rewriting of the whole constitution. The act of amending a constitution on
other hand, envisages a change of only specific provisions. The intention of an act to amend is not the
change of the entire constitution but only the improvement of specific parts of the existing constitution
or the addition of provisions deemed essential as a consequence of changed conditions or the
elimination of parts already considered obsolete or unresponsive to the needs of the times.
But, while a constituent assembly and a constitutional convention are vested with the power to propose
amendments and/or revisions to the Constitution, the people can only propose amendments by means
of initiative. In sponsoring what is now Article XVII of the Constitution, Commissioner Suarez explained
that, in giving the people the power to propose changes in the Constitution, the Committee on
Amendments and Transitory Provisions, of which he was the chair, deliberately limited the grant to
14
amendments.
The distinction between amendment and revision owes much to Dean Sinco’s book on Political Law in
which he wrote:
Strictly speaking, the act of revising a constitution
involves alterations of different portions of the
“Otherwise, because of its power
entire document. It may result in the rewriting
of interpretation, the Supreme
either of the whole constitution, or the greater
Court functions as a veritable
portion of it, or perhaps only some of its important
continuous constitutional
provisions. But whatever may be the results the
convention, informally changing
revision may produce, the
factor
that
the Constitution without altering
characterizes it as an act of revision is the original
a single word of it.”
intention and plan authorized to be carried out.
That intention and plan must contemplate a
consideration of all the provisions
of the
constitution to determine which should be altered or suppressed or whether the whole document
should be replaced with an entirely new one.
The act of amending a constitution, on the other hand, envisages a change of only a few specific
provisions. The intention of an act to amend is not to consider the advisability of changing the entire
constitution or of considering that possibility. The intention is to improve specific parts of the existing
constitution or to add to it provisions deemed essential on account of changed conditions or to suppress
15
portions of it that seem obsolete, or dangerous, or misleading in their effect.
_________________________________________________________________________________________________________________________
12. 1 RECORD OF THE CONSTITUTIONAL COMMISSION 372 (July 8, 1986) (hereafter cited as RECORD).
13. 50 SCRA 30, 361, 367 (1973).
14. 1 RECORD 372 (July 8, 1986); Santiago v. Comelec, 270 SCRA 106 (1997).
th
15. VICENTE G. SINCO, PHILIPPINE POLITICAL LAW, PRINCIPLES AND CONCEPTS 46 (11 ed., 1962).
68
ON AMENDING THE CONSTITUTION
ON AMENDING
THE CONSTITUTION
Amendments and Revision of Previous Constitutions
The 1935 Constitution was twice amended: in 1940 and again in 1947. The 1940 amendments wrought
three changes in the fundamental document: (1) changing the term of office of the President and the Vice
President from six years, with no reelection in the case of the President, to four years with allowance, in the
case of the President, for reelection provided the total number of years he served in office did not exceed
eight consecutive years;16 (2) replacing the unicameral National Assembly with a bicameral Congress
composed of a Senate and a House of Representatives;17 (3) and creating an independent Commission on
Elections.18 The 1935 Constitution was amended a second time in 1947 to grant American citizens and
corporations owned by them equal rights with Filipinos in the disposition, exploitation, development and
utilization of the natural resources, as well as the operation of public utilities in the Philippines.
In 1960, worsening economic conditions reinforced a strong sentiment that the 1935 Constitution was
not responsive to the demands of the nation and led to its revision. Indeed, Philippine society was in ferment
and martial law had to be declared on September 21, 1972. Amidst violent demonstrations, the
Constitutional Convention called by Congress met in inaugural session on June 1, 1971 and continued
working until November 30, 1972, when it approved the draft of a revised constitution. The proposed
constitution was then submitted to the people and approved by them in citizens’ assemblies held throughout
the country. This became the 1973 Constitution.
In lieu of the presidential system, the 1973 Constitution established a parliamentary form of
government. In 1976, it was amended principally to give then President Marcos lawmaking powers that he
could exercise “whenever in his judgment there was a grave emergency or threat or imminence thereof, or
whenever the x x x National Assembly fails or is unable to act adequately on any matter for any reason that in
his judgment requires immediate action.” This is the well-known Amendment 6.
Stages in the Amendment Process
The amendment and revision of the Constitution comprehend two distinct, but related, stages: one, the
making of proposals, and two, the ratification of the proposals. Proposals may be made by Congress,
sitting as a constituent assembly, by a constitutional convention, or by 12 percent of the registered voters in
the preceding election. On the other hand, in order that proposals for amendments or revisions may be valid,
they must be ratified by the people in a plebiscite.
The Constitution thus follows the general pattern of constitution-making around the world of having
separate agencies for proposing amendments or revisions and for ratifying the proposals. The Constitution
of the United States, for example, provides for (1) the making of proposals either by two-thirds vote of both
houses of Congress or by a constitutional convention called by Congress upon petition of two-thirds of the
states, and (2) the ratification of the proposed amendments either by the legislatures of three-fourths of the
states or by conventions in three-fourths of the states.
On the other hand, the French Constitution of 1946 provides for its revision by resolution of the National
Assembly and for approval of the revision by a three-fifths vote of the Parliament. If the majority vote is less
than three-fifth, the proposed revisions must be submitted to the people for approval in a referendum.
Similarly, the 1946 Japanese Constitution provides that amendments must be proposed by the votes of
at least two-thirds of each house of the Diet and then submitted to the people for ratification by a majority of
the votes cast in the election.
_________________________________________________________________________________________________________________________
16. CONST. ART. VII, SECS. 4-5.
17. Id., ART. VI, SEC. 1.
18. Id., ART. X.
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Is ratification by the people of proposed amendments or revisions essential to their validity or coming
into force? Noting that only 17 out of 48 state constitutions in the United States require popular ratification,
Dean Sinco observes that “unless popular ratification is expressly provided in the constitution itself, the
practice of submitting to the people for ratification has not become part of the unwritten law of the United
States.” He adds, however, that in those cases where a constitution has been put into effect without popular
ratification, “the approval of the people was inferred from acts of acquiescence to the constitution
manifested by the organization of the government and the observance of its provisions by the public officials
elected or appointed under it.”19 In other words, formal ratification is required only if expressly provided for in
the existing constitution. Otherwise, ratification may be implied from the acquiescence of the people to the
constitution.
In the Ratification Cases (Javellana v. Executive Secretary),20 petitions for prohibition were filed to stop
executive officials from enforcing the 1973 Constitution on the ground that it had not been validly ratified in
accordance with the 1935 Constitution. The Constitution had been submitted to the people through citizens’
assemblies in which they were asked whether they “approve[d] of the new Constitution.” Six Justices,21
representing a majority, held that the Constitution had not been validly ratified, because Article XV, Section 1
of the 1935 Constitution required that constitutional amendments should be submitted to the people “at an
election.” On the other hand, four Justices22 contended that whether the Constitution had come into force
and effect was a political question, that Article XV applied only to the amendment of the Constitution and not
its revision, and that in any event there was substantial compliance with the amendment procedure of the
1935 Constitution. However, on the question whether the petitions brought to enjoin executive officials from
enforcing the Constitution should be granted, two23 of the six Justices, who held that the Constitution had not
been validly ratified, joined the four who held that it had been, and the new majority then voted to dismiss
the petitions for prohibition. The two argued that whether the Constitution had come into force and effect
despite the fact that it had not been validly ratified was a political question which required consideration of
other factors “not judicial [but] beyond the competence of this Court [to resolve].” The Court then declared:
“This being the vote of the majority, there is no further judicial obstacle to the new Constitution being in force
and effect.”24
Who May Propose Amendments or Revisions?
Under the Constitution, amendments or revisions may be proposed by (1) Congress acting as a constituent
assembly, (2) a constitutional convention called for the purpose, or (3) the people by means of initiative.
1. Congress as a Constituent Assembly
Article XVII, Section 1(1) provides that constitutional amendments or revisions may be proposed by
“Congress, upon the vote of three-fourths of all its Members.” But it is silent on how the vote of threefourths “of all its Members” shall be determined. The question is, how may Congress, sitting as a
constituent assembly, propose amendments or revisions to the Constitution? The question arises
because Congress is composed of two houses. Can it do so in the same way it enacts ordinary legislation,
with its two houses sitting separately and voting separately? Or, should the two houses meet in joint
session
and, if so, should they vote jointly or separately?
_________________________________________________________________________________________________________________________
19. SINCO, supra note 15, at 49-50
20.
50 SCRA 30 (1973)
.
21. Concepcion, C.J., Makalintal, Zaldivar, Castro, Fernando, and Teehankee, JJ.
22. Barredo, Makasiar, Antonio, and Esguerra, JJ.
23. Makalintal and Castro, JJ.
24. For an analysis of the voting in these cases, see Vicente V. Mendoza, Annotation, Judicial Review of the Effectivity of the New
Constitution and the Political Question Doctrine, 50 SCRA 393 (1973).
70
ON AMENDING THE CONSTITUTION
ON AMENDING
THE CONSTITUTION
One interpretation of the amendment clause is that put forth by the Speaker of the House of
Representatives, and it is to the effect that “three-fourths of all its Members” means three-fourths of all
the members of the House and of the Senate taken together, so that, as there are at present 236
Representatives and 23 Senators, or a total of 259 members, the vote required is three-fourths of 259 or
194. Under this view, it does not matter if all the 194 votes cast in favor of a proposed amendment or
revision come from the House nor if all the members of the Senate object. However, the constitutional
provision in question speaks of the vote of “three-fourths of all [the] Members [of Congress].” As
Congress is composed of two houses, it is obvious that the House of Representatives alone cannot act as
a constituent assembly.
The opposite interpretation of Article XVII, Section 1 (1) is that advanced by the Senate. According to
this view, Congress can propose amendments or revisions to the Constitution in the same manner it
enacts ordinary legislation. This means that a resolution proposing an amendment or revision of the
Constitution may be passed by the vote of at least three-fourths of a house and if concurred in by the vote
of at least three-fourths of all the members of the one house, the proposal is deemed approved and may
then be submitted for ratification in a plebiscite.
This interpretation calls for two observations. First, it reduces the amendment process to the
category of ordinary legislative process. “Legislated Cha-Cha,” as The Philippine Star appropriately
called the Senate position.25 This interpretation blithely ignores the fact that ours is intended to be a rigid
constitution, which means that it cannot be amended by the ordinary process of legislation. Second, the
Senate interpretation is inconsistent with the pattern of other provisions of the Constitution, an analysis
of which suggests that, when performing non-legislative functions, the two houses of Congress must
meet in joint session. Thus, in the following cases, the two houses are required to meet in joint session
and, with the exception of the third case, to vote separately:
(1) When Congress declares the existence of a state of war.26
(2) When it confirms the President’s nomination of a member of the Senate or of the House to be Vice
President of the Philippines in the event of vacancy in that office.27
(3) When it decides whether to revoke the President’s proclamation of martial law or suspension of
the privilege of the writ of habeas corpus.28
(4) When it sits as a board to canvass the votes for President and Vice President and declare the
winners, or to break a tie between candidates receiving the highest number of votes for the same
position.29
_________________________________________________________________________________________________________________________
25. Legislated Cha-cha Eyed, THE PHILIPPINE STAR, May 18, 2006, at 1.
26. ART. VI, SEC. 23 (1): “(a) The Congress, by a vote of two-thirds of both Houses in joint session assembled, voting separately shall have the sole
power to declare the existence of a state of war.”
27. ART. VII, SEC. 9: “Whenever there is a vacancy in the Office of the Vice President during the term for which he was elected, the President shall nominate a
Vice President from among the Members of the Senate and the House of Representatives who shall assume office upon confirmation of a majority vote of
all the Members of both Houses of the Congress, voting separately.”
28. ART. VII, SEC. 18: “The Congress, voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such
proclamation or suspension which revocation shall not be set aside by the President.”
29. ART. VII, SEC. 4: “Upon receipt of the certificates of canvass, the President of the Senate shall, not later than 30 days after the day of election, open all
the certificates in the presence of the Senate and the House of Representatives in joint public session, and the Congress, upon determination of the
authenticity and due execution thereof in the manner provided by law, canvass the votes.
“The person having the highest number of votes shall be proclaimed elected, but in case two or more shall have an equal and highest number of
votes, one of them shall forthwith be chosen by the vote of a majority of all the Members of the Congress voting separately.”
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(5) In determining whether the President, who has declared himself unable to discharge the duties of
his office and later desires to resume office but his cabinet objects, is now fit to discharge the
powers and functions of his office. 30
There is no reason why the same requirement should not be observed in determining the manner of
sitting and voting of the two houses when Congress acts as a constituent assembly. Indeed, in such a case, it
has been held that “Senators and members of the House of Representatives act, not as members of
Congress, but component elements of a constituent assembly.”31 At the same time, by requiring that the two
houses vote separately, the Senate is protected against being outvoted due to its small size compared to the
House of Representatives. Moreover, there is an advantage to be gained by requiring Senators and
Representatives to meet in joint session, for then they can discuss together and argue face to face.
On the other hand, where Congress is legislating, the two houses are required to sit and vote separately.
This is clear even in the case of Article VI, Section 28 (4), which provides that “No law granting any tax
exemption shall be passed without the concurrence of a majority of all the Members of the Congress.” That
this provision refers to lawmaking is inferable from the use of the phrase “with the concurrence of” instead of
the phrase “by the vote of.” “With the concurrence of” implies that, as in other cases of lawmaking, the two
houses must sit separately and after one house has passed the tax measure, it must pass it to the other
house for concurrence. In contrast, it is reasonable to construe the language of Article XVII, Section 1(1)
that Congress may propose any amendment or revision of the Constitution “upon the vote of three-fourths
of all its members” to mean that the two houses of Congress must meet in joint session.
Additional light on what procedure the Constitutional Commission would have adopted had its attention
been called to the problem is thrown by the history of the amendment clause. The amendment clause of the
present Constitution was copied from the corresponding provision of the 1973 Constitution, which provided
for a unicameral legislative body. This provision reads:
ARTICLE XVI
AMENDMENT
SECTION 1. (1) Any amendment to, or revision of, this Constitution may be proposed by the
Batasang Pambansa upon a vote of three-fourths of all its Members or by a
constitutional convention.
(2) The Batasang Pambansa may, by a vote of two-thirds of all its Members, call a
constitutional convention or, by a majority vote of all its Members, submit the
question of calling such a convention to the electorate in an election.
________________________________________________________________________________________________________________________
30. ART. VII, SEC. 11: “If the Congress, within 10 days after receipt of the last written declaration, or, if not in session, within 12 days after it is required to
assemble, determines by a two-thirds vote of both Houses, voting separately, that the President is unable to discharge the powers and duties of his
office, the Vice President shall act as President; otherwise the President shall continue exercising the powers and duties of his office.”
31. Gonzales v. Comelec, 21 SCRA 774, 785 (1967); Tolentino v. Comelec, 41 SCRA 702, 714 (1971) (emphasis added) .
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SEC. 2. Any amendment to, or revision of this Constitution shall be valid when ratified by a
majority of the votes cast in a plebiscite which shall be held not later than three months after the
approval of such amendment or revision.
The assumption was that the legislative body to be adopted would also be unicameral. In fact, the
Committee on the Legislative Department unanimously voted to adopt a unicameral National Assembly.32
However, when the question of a unicameral National Assembly or a bicameral Congress was put to a vote
before the plenary session of the Commission, the proponents of bicameralism won by a narrow vote of 23 to
22.33 Accordingly, the draft articles on the Legislative and on the Executive departments were amended to
reflect this fact by requiring that when performing non-legislative functions, the two houses of Congress
must sit in joint session but vote separately. Undoubtedly, they were patterned after Article XV of the 1935
Constitution which read:
ARTICLE XV
AMENDMENTS
SEC. 1. The Congress, in joint session assembled, by a vote of three-fourths of all the Members of the
Senate and of the House of Representatives voting separately, may propose amendments to this
Constitution or call a convention for that purpose. Such amendments shall be valid as part of this
Constitution when approved by a majority of the votes cast at an election at which the amendments
are submitted to the people for their ratification.
Somehow, however, the draft of amendment clause, which had earlier been adopted on July 9, 1986,34
was forgotten, with the result that it was not adjusted to the bicameral character of Congress.
It is unlikely that the Constitution’s framers would have provided differently had they not overlooked the
amendment clause. Indeed, when this clause was still being discussed, the following meaningful exchange
took place between Commissioner Suarez, the chair of the Committee on Amendments and Transitory
Provisions, and Commissioner Regalado:
MR. REGALADO. I also notice that both Sections 1 and 2 are premised on the anticipation that the
Commission, not only the Committee, will opt for a unicameral body. In the event
that a bicameral legislative body will carry the day, has the Committee prepared
contingency proposals or resolutions?
MR. SUAREZ.
Yes, in that situation, we would provide to include the words IN JOINT SESSION
ASSEMBLED.
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32. 2 RECORD 41-43 (July 21, 1986).
33. Id. at 69.
34. 1 RECORD 412 (July 9, 1986).
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MR. REGALADO. But still maintaining the same number of votes?
MR. SUAREZ.
The Commissioner is right.
MR. REGALADO. Thank you.35
The understanding then was that, in the event a bicameral legislative body was adopted, the draft
amendment clause would be adjusted by providing that when exercising its constituent power, Congress
should do so “in joint session assembled.” The event took place, but the draft amendment clause was not
changed accordingly. It seems that for once Homer nodded!
I now come to the second method of amending or revising the Constitution.
2. Constitutional Convention
Whether to amend or revise the Constitution directly, or to call a constitutional convention for this
purpose, or to refer the question of calling a convention to the electorate is a matter which lies solely
within the discretion of Congress. The courts will not interfere with the exercise of such discretion.36 For
that matter, Congress may even call a constitutional convention and at the same time propose
amendments to the Constitution in connection with the convention it is calling. For example, on March
16, 1967, Congress passed three resolutions. By Resolution No. l, it proposed to amend the 1935
Constitution by increasing the number of seats in the House of Representatives from 160 to 180. This
was to be used as the basis for the apportionment of the seats in the constitutional convention at twice
the number of the seats thus increased. By Resolution No. 2, it called a constitutional convention to be
held on the second Tuesday of November 1971. By Resolution No. 3, it proposed the amendment of the
Constitution to enable its members to run for the constitutional convention without forfeiting their seats.
Then Congress by law provided for the submission of Resolutions 1 and 2 to the people in the general
elections of November 14, 1967. In Gonzales v. Comelec,37 it was contended that, having called a
constitutional convention, “[it was better] to let the whole thing be submitted to the convention.” While
conceding the force of the argument, the Court nonetheless abstained form judging on the ground that
the matter involved “the wisdom of the action taken by Congress, not its authority to take it.”38
a. Procedure for Calling a Constitutional Convention
In discussing the manner of sitting and voting of the two houses of Congress whenever it acts as a
constituent assembly, structural and textual arguments were summoned in support of the view
that the House of Representatives and the Senate are required to meet in joint session and to
vote separately. The same observations39 apply, mutatis mutandis, to the procedure for calling a
constitutional convention. For like Article XVII, Section 1(1), beyond stating that “The Congress
_________________________________________________________________________________________________________________________
35. Id. at 375.
36. Del Rosario v. Comelec, 35 SCRA 367 (1970).
37. 21 SCRA 774 (1967).
38. Id. at 795 (emphasis in original).
39. Supra pp. 14-22.
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ON AMENDING THE CONSTITUTION
ON AMENDING
THE CONSTITUTION
may, by a vote of two–thirds of all its Members, call a constitutional convention or, by a majority of the
vote of all its Members, submit to the electorate the question of calling such a convention,”40 Article
XVII, Section 3 of the Constitution does not say anything else. It is submitted that, as in acting as a
constituent assembly, the two houses of Congress must likewise sit together but vote separately in
considering a resolution calling a convention or referring the question of calling one to the people for
resolution.
b. Powers of a Constitutional Convention
In considering the powers of a constitutional convention, a distinction must be made between what
it can propose by way of amendment or revision of the Constitution and what it can do. Can
Congress specify the agenda of a constitutional convention? It is relevant to discuss the theories
underlying the existence of constitutional conventions in relation to the legislatures which call them
into being.
The first theory, known as the theory of legislative control, considers a constitutional
convention as subordinate to the legislature. In Wood’s Appeal,41 a Pennsylvania case, it was said that
“law is the highest expression of a people’s sovereignty x x x. The right of the people to restrain their
delegates by law cannot be denied, unless the power to call a convention by law, and the right of selfprotection be also denied.” Very much the opposite of this view is the theory of conventional
sovereignty which considers a constitutional convention as the alter ego of the people which cannot
be limited by the legislature. In Sproule v. Fredericks,42 the Mississippi Supreme Court described a
constitutional convention as “the highest legislative body known to freemen in a representative
government. It is supreme in its sphere. It wields the powers of sovereignty, especially delegated to
it, for the purpose and the occasion, by the whole electoral body, for the good of the whole
commonwealth. The sole limitation upon its powers is that no change in the form of government shall
be done or attempted.” The third theory, the theory of co-equality, posits a middle view that a
constitutional convention, when called into being, becomes a coordinate branch of government.
Under this theory, a convention owes its existence to the legislature but it cannot be controlled nor
interfered within its work by the legislature.43
Which theory should we follow in the Philippines? If the theory of legislative control is applied, it is
obvious that Congress can set limits on the powers of a constitutional convention and its agenda. On
the other hand, if it is the theory of conventional sovereignty, Congress ould have no power to do so
since under this theory the powers of a constitutional convention are considered sovereign in
character.
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40. CONST. ART. XVII, SEC. 4.
41. 75 Pa. 59 (1874).
42. 11 So. 472 (1892). See also Dickson v. State, 20 So. 841 (1896).
43. See Tolentino v. Comelec, 41 SCRA 702, 734, 735-737 (1971) (Fernando, J., concurring).
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Early text writers44 expressed preference for the third theory of co-equality. One of them,
Professor Fernando, after becoming Justice Fernando, concurred in a ruling of the Court that whether
a convention can submit partial amendments for ratification is a judicial question. For him, “the view
that commends itself for acceptance is that the legislature and constitutional convention alike are
coordinate, there being no superiority of one over the other.”45 Hence, as acts of Congress are subject
to judicial review, so are those of a constitutional convention. He thus rejected the contention of the
respondents that the 1971 Constitutional Convention was a body sovereign not subject to the
jurisdiction of the Supreme Court.
But, while not a sovereign body, neither is a constitutional convention subordinate to the
existing departments of the government. In the Plebiscite Cases (Planas v. Comelec),46 Justice
Fernando said in a separate opinion that the 1971 Constitutional Convention could even
appropriate money for the holding of a plebiscite at which its proposals could be submitted to the
people for ratification in the event Congress failed to do so. Otherwise, he said, “a legislative body,
the appropriating arm of the government, could conceivably make use of such authority to
compel the Convention to submit to its wishes on pain of being rendered financially distraught.”
Indeed, implicit in the rulings in the cases is the adoption by the Supreme Court of the theory of
co-equality and the rejection of the theories of legislative control and conventional sovereignty.
Consistent with this theory, the following have been held to be powers of a constitutional convention:
(1) The power to adopt a different ideology. This view was expressed by the Court in Del Rosario v.
Comelec,47 in which it was stated:
Whether the Constitutional Convention will only propose amendments to the Constitution
or entirely overhaul the present Constitution and propose an entirely new Constitution
based on an ideology foreign to the democratic system, is of no moment; because the
same will be submitted to the people for ratification. Once ratified by the sovereign people,
there can be no debate about the validity of the new Constitution.
(2) The power to provide for a transition government.
In Benner v. Porter 48 it was held:
The conventions being the fountain of all political power, from which flowed that which was
embodied in the organic law, were of course competent to prescribe the laws and appoint
the officers under the constitution by means whereof the government could be put into
immediate operation and thus avoid an interregnum that must have intervened if left to an
_________________________________________________________________________________________________________________________
44. E.g., SINCO, supra note 15, at 26; 1 LORENZO M. TAÑADA & ENRIQUE M. FERNANDO, CONSTITUTION OF THE PHILIPPINES 9-10 (4th ed. 1952).
45. Tolentino v. Comelec, 41 SCRA at 737.
46. 49 SCRA 105, 156 (1973) (concurring and dissenting).
47. 35 SCRA at 369.
48. 9 How. 235, 13 L.Ed. 119 (1850).
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ON AMENDING THE CONSTITUTION
ON AMENDING
THE CONSTITUTION
organization according to the provisions of that instrument. This was accomplished by a
few lines, adopting the machinery of the territorial government for the time being and until
superseded by the agency and authority of the constitution itself.
c. What the Convention Can Do and Cannot Do
A constitutional convention has the power to adopt rules for its own governance, the
election of its officers, and the procedure for its deliberations and to determine the
election, returns, and qualifications of its members.49 But, being the creation of the
Constitution, it cannot act contrary to such constitution. For instance, it cannot deprive
anyone of life, liberty or property or deny him due process or any constitutional right.50 On
the other hand, it can propose anything, including a different ideology for the country.
After all, its proposals are subject to the approval of the people in a plebiscite.
I now come to the third method of amending the Constitution.
3. Popular Initiative
Apparently as a bow to people power which brought about its adoption in 1987, the present Constitution
provides for a system of initiative whereby the people (electorate) may directly propose amendments to
the Constitution.51 This method was proposed in the Constitutional Commission by Commissioner Blas
Ople. As something untried, however, the Constitutional Commission limited popular initiatives to
amendments, in contrast to the power of a constituent assembly or a constitutional convention not only
to amend but also to revise the fundamental law. In addition, the Constitutional Commission left the
implementation of this right to Congress and limited its exercise by the people to once every five years.
Hence, in Santiago v. Comelec,52 the Supreme Court held that without an enabling law to implement
the provisions on popular initiative, the Commission on Elections cannot entertain any petition for
initiative and that, if it does, it would be acting in excess of its jurisdiction. There was unanimity on this
point. The Court split 8 to 6 on the question whether R.A. No. 6735, which prescribed a system of
initiative and referendum, applied to initiatives on constitutional amendments in view of the vagueness
of some of its provisions regarding the conduct of initiatives and other details. While the Constitution is
referred to in its statement of policy and requirements for petitions for initiative, its subtitles mention
only “National Initiative and Referendum” and “Local Initiative and Referendum.” On the other hand, the
dissenters, while acknowledging the poor draftsmanship of the law, thought that it was sufficiently clear
that its provisions applied to constitutional amendments. Indeed, some provisions of the statute under
the subtitle “National Initiative and Referendum” clearly refer to constitutional amendments.
As matters now stand, pending the amendment of R.A. No. 6735 to make it applicable to
constitutional amendments or pending the enactment of a new statute, popular initiative, as a mode of
amending the Constitution, cannot be availed of.
________________________________________________________________________________________________________________________
49. SINCO, supra note 15, at 57.
50. Del Rosario v. Comelec, 35 SCRA at 369; Tolentino v. Comelec, 41 SCRA at 716.
51. The Constitution likewise provides for initiative and for referendum on laws and local ordinances. See ART. VI, SEC. 32 and ART. X, SEC. 3.
52. 270 SCRA 106 (1997).
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Ratification in Plebiscites
Thus far I have been discussing methods of amending or revising the Constitution, namely, by Congress as a
constituent assembly, by a constitutional convention, and by the people by means of initiative. The proposed
amendments or revisions become valid upon their ratification by the people in a plebiscite. In the case of
amendments or revisions proposed by a constituent assembly or a constitutional convention, the plebiscite
must be held not earlier than 60 nor later than 90 days from the date of approval of the amendments or
revisions. In the case of amendments proposed by popular initiative, the plebiscite must be held within the
same period counted from the time the Commission on Elections certifies the petition for initiative to be
sufficient.
Doctrine of Proper Submission
In submitting proposed amendments or revisions for ratification, certain standards must be observed. In his
separate opinion in Gonzales v. Comelec,53 Justice Sanchez contended that constitutional amendments
cannot be submitted to the people for ratification in a national election. Although the majority disagreed with
him regarding this matter, they concurred with him that there must be “fair submission” to ensure the
“intelligent consent or rejection” of proposed amendments or revision by the people. Thus was born what is
now known as the “doctrine of fair submission.”
The following have been held to be required by the doctrine of fair submission:
(1) Sufficient time must be given to the electorate to familiarize themselves with proposed amendments
or revisions. In Gonzales, a period of eight months was considered by the Supreme Court to be
sufficient. By now requiring that plebiscites for the ratification of proposed amendments and/or
revisions must be held not earlier than 60 nor more than 90 days, the Constitution in effect sets a
shorter period of from two to three months for voter information.
(2) Proposals for amendments or revisions of the Constitution must all be submitted in a single plebiscite
after the convention has finished its task and adjourned. Partial amendments of the Constitution are
not allowed. Hence, in Tolentino v. Comelec,54 it was held that the 1971 Constitutional Convention
could not submit in advance of other proposals an amendment to reduce the voting age from 21 to 18
and to drop the ability to read and write as qualifications to vote because, unless all proposed
amendments were submitted, the electorate would have no “frame of reference.”
Plebiscite
The present Constitution further requires that proposed amendments as well as revisions must be submitted
for ratification in a “plebiscite.” This means a special election held solely for the purpose of ratifying
constitutional amendments and/or revisions. In contrast, the 1935 Constitution provided that “amendments
shall be valid as part of this Constitution when approved by a majority of the votes cast at an election at which
the amendments are submitted to the people for their ratification.” Accordingly, it was held in Gonzales v.
Comelec55 that proposed amendments to the 1935 Constitution could be submitted in a regular election of
public officials. By now requiring that proposed amendments and revisions must be submitted for approval of
the people in a plebiscite, the present Constitution appears to have changed the ruling in Gonzales concerning
this question.
________________________________________________________________________________________________________________________
53. 21 SCRA at 813.
54. 41 SCRA 702 (1971).
55. 21 SCRA 774 (1967).
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ON AMENDING THE CONSTITUTION
ON AMENDING
THE CONSTITUTION
Effective Date
Constitutional amendments and revisions take effect upon their ratification. This is understood to mean the
date the plebiscite is held. For example, in De Leon v. Esguerra,56 the issue was whether the present
Constitution took effect on February 2, 1987, the date the plebiscite was held, or on February 11, 1987, the
date when President Aquino proclaimed its ratification. It was held that the Constitution took effect on
February 2, 1987, the date of the plebiscite, because the subsequent canvass of the votes by the Comelec on
February 7, 1987, was merely a “mathematical confirmation of what was done during the date of the
plebiscite,” while the proclamation by the President on February 11, 1987 that the Constitution had been
duly ratified and that it had thereby become effective was merely a confirmation of the adoption of the
Constitution by the people “when they cast their votes on the date of the plebiscite.”
Accordingly, in the case of the Commonwealth Constitution, the date of effectiveness of its main provisions
is May 14, 1935. The 1940 amendments took effect on December 2, 1940. On the other hand, the 1973
Constitution took effect on January 17, 1973, which was the date a majority of the votes were cast in citizens’
assemblies in favor of the Constitution.
The proclamation of the results of the plebiscite and the announcement of the date of effectiveness of the
Constitution or of any amendment or revision thereof by the President complete the process of constitutional
change. It remains to account for the agency supervising the process.
Comelec Supervision of the Amendment Process
The enforcement and administration of laws concerning “election, plebiscite, initiative, referendum, and recall”
is vested by the Constitution in the Commission on Elections.57 As already noted, proposed constitutional
amendments and/or revisions have to be submitted to the people for ratification in a plebiscite and become
effective only when approved by the majority of the votes cast in such plebiscite.58 The conduct of the plebiscite
and certification of the results thereof is the function of the Comelec. In addition, if a constitutional convention
is called, the election of delegates is conducted and the proclamation of the winners is made by the Comelec. In
the event of a dispute concerning the outcome of the plebiscite, the decision of the Comelec on this matter is
subject to review on certiorari by the Supreme Court.59
On the other hand, with respect to initiatives to amend the Constitution, the certification of the number of
registered voters in the preceding election and the determination of the sufficiency of a petition for initiative,
e.g., whether it is supported by the signatures of at least 12 percent of the total number of registered voters in
the last election, of which three percent must be those of registered voters in each legislative district, are the
functions of the Comelec.60
Judicial Review and the Amendment Process
One of the chief merits of judicial review is its capacity to legitimate. In the following cases, the Supreme
Court has served as a guarantor of the legitimacy of the amendment process and ultimately of the
government formed under it.
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56. 153 SCRA 602, 607 (1987) (Teehankee, J., concurring).
57. CONST. ART. IX, C, SEC. 2(1).
58. Id., ART. XVII, SEC. 4.
59. Cf. id., ART. IX, C, SEC. 2(2).
60. CONST. ART. XVII, SEC. 2.
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In Gonzales v. Comelec,61 the Court passed upon (a) whether proposed amendments can be submitted for
ratification in a general election of public officials, and (b) whether the submission of proposed amendments for
ratification eight months after their adoption is sufficient for the purpose of informing voters. In Tolentino v.
Comelec62 it passed upon the question of whether piecemeal amendments to the Constitution can be
submitted for ratification by the people, while in Santiago v. Comelec63 it considered the question of whether a
petition for initiative filed was adequate. On the other hand, in the Ratification Cases (Javellana v. Executive
Secretary),64 the Court held that whether a new constitution had been validly ratified was a judicial, not a
political, question. But, though it ruled in Javellana that the ratification of the 1973 Constitution by the citizens’
assemblies was invalid, it nonetheless dismissed the suits brought to enjoin enforcement of the new
Constitution, holding that whether the new Constitution had come into force and effect as a result of popular
acquiescence was a political question. It then declared that with its dismissal of the suits, there was no longer
any “judicial obstacle to the new Constitution being considered in force and effect.”
Javellana is similar in some respects to the case of Mabanag v. Lopez Vito,65 in which the Court, 26 years
earlier, had likewise been confronted with a claim of a co-equal branch of government that a proposed
amendment to the 1935 Constitution had been validly adopted. The proposed amendment would grant parity
rights to American citizens and to enterprises owned by them to explore and exploit the natural resources of
this country and to operate public utilities. The Court refused to look into allegations that the votes in both
houses of Congress was short of the required number, because some members of the opposition in both
chambers had been illegally prevented from taking their seats and excluded from the computation. Indeed, it
was shown that out of 24 Senators, only 16 voted in favor of the proposed amendment, because three
Senators belonging to the opposition had been suspended after the opening session on account of alleged
irregularities in their election. On the other hand, in the House the requisite three-fourths vote was not
obtained either as only 68 representatives voted “yes,” while 18 voted “no.” Eight Representatives were not
counted in the voting, having been suspended after the opening session of the House of Representatives, also
because of alleged irregularities in their election. It was admitted that, if the three Senators and eight
Representatives who had been suspended were counted, the votes in favor of the proposed amendment would
be short of the necessary three-fourths vote of both houses of Congress. However, the Court ruled that a
proposal to amend the Constitution was a “highly political function” committed to Congress by the Constitution
and therefore not subject to judicial review.
In Gonzales v. Comelec, the Court, through Chief Justice Concepcion, said that the force of Mabanag “had
been weakened” by later cases in which it dismissed the claims of the parties that the issues were political and
beyond the power of the courts to decide. The Court did not say that Mabanag was no longer controlling, but
only that its force “had been weakened.” For indeed none of the cases cited by the Court involved an aspect of
the amendment process. In the first case cited, Suanes v. Chief Accountant of the Senate,66 the Court held that
employees of the Senate Electoral Tribunal were not subject to the supervision of the Senate President but of
the Tribunal. In the second case, Avelino v. Cuenco,67 the Court, after initially refusing to decide whether there
was a quorum in the Senate during which the Senate President was removed, was later persuaded to take a
hand because of the brewing constitutional crisis. In the third one, Tañada v. Cuenco,68 the Court nullified the
designation made by the majority party of two as its members to fill vacancies reserved for the minority party in
the Senate Electoral Tribunal, because of the failure of the latter party to name its representatives. And in the
fourth case, Macias v. Comelec,69 the Court invalidated a legislative malapportionment of seats in the House of
Representatives.
_________________________________________________________________________________________________________________________
61. 21 SCRA 774 (1967).
62.
41 SCRA 702 (1971).
63.
270 SCRA 106 (1997).
64. 50 SCRA 30 (1973).
65. 78 Phil. 1 (1947).
66. 81 Phil. 818 (1948).
67. 83 Phil. 17 (1949).
68. 103 Phil. 1051 (1957).
69. 3 SCRA 1 (1961).
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Javellana is a reminder that the ghost of Mabanag has not been completely laid to rest. Hence, should a
case arise in the future similar to Javellana v. Executive Secretary, in which the President had proclaimed
that a new constitution had come into force and effect by reason of popular acquiescence, a claim which is
disputed by parties in a case because of irregularities in its ratification, or should a case arise similar to
Mabanag v. Lopez Vito, in which Congress had certified that a resolution proposing a constitutional
amendment had been passed by the requisite number of votes but this is disputed in a case, would judicial
review be available for the settlement of the dispute? That, it seems to me, is a question that is still with us.
o0o0o
OPEN FORUM
In the Open Forum, Justice Mendoza clarified when the
Supreme Court can, at the earliest, entertain questions on
the validity of the different formal ways to amend the
Constitution. With respect to popular initiative (cha-cha),
this is after the Commission on Elections (COMELEC)
entertains, should it entertain, a petition for popular
initiative or demands such a petition, then one or the other
party may go to the Court for appropriate resolution. With
respect to constitutional assembly (con-ass), a citizen’s suit
may be brought before the Court (a) after the Senate or
House of Representatives passes a Resolution adopting the
other House’s procedure on how Congress, sitting as a
constituent assembly, proposes amendments to the
Constitution; or (b) when the House of Representatives
adopts a resolution that constitutional amendments be
proposed through the ordinary method of legislation. With
respect to constitutional convention (con-con), the same
procedure with respect to con-ass applies to the calling of a
constitutional convention, because here the two houses are
assembled in joint session and vote separately on the
question whether to go on a constitutional convention or
refer the question to the people for final resolution.
To the question that, since the proponents of cha-cha
would want to shift from presidential to parliamentary,
would such be an amendment or a revision, Justice Mendoza
said the difference lies in whether such would re-orient the
basic philosophy of the Constitution. If it does, even if it
involves changing only a sentence, then it is a revision. In
the subsequent question Justice Mendoza said that although
he said two or three years ago that he is in favor of a
parliamentary system of government, he is against the
procedure being advocated by Congress to adopt such a
system.
Later in the Forum, Justice Vicente V. Mendoza said that
a citizen should be able to question any move to amend the
Constitution, as long as specific actions have been taken by
appropriate government agencies that would warrant the
exercise of judicial review. For cha-cha, a citizen can bring an
action to protest the validity of such a petition when it is
brought before the COMELEC. For con-ass, a citizen can
bring an action to protest the resolution of either of the two
Houses when both agree on a particular procedure to
propose amendments to which the citizen does not agree.
For con-con, a citizen can bring an action to protest the
procedure on the calling of the same. The citizen’s suit is
grounded on certiorari, on grave abuse of discretion, under
Article 8, Section 1 of the Constitution; while for con-ass this
is based on Article 9, paragraph A, Section 7 thereof.
On the question regarding the possibility of an act being
declared illegal because it violates the spirit of the preamble,
Justice Mendoza said that the preamble has never been
regarded as an essential part of the Constitution. It sets the
tone for the entire Constitution, but it is not resorted to by
the courts in interpreting other provisions of the
Constitution. Only three are conventionally considered as
essential parts of the Constitution – the bill of rights, the
amendment process, and the structure of government.
On the question why the Supreme Court did not declare
Republic Act No. 6735 as unconstitutional but merely
insufficient or incomplete, Justice Mendoza said that it is well
within the Supreme Court to do so, when it said that the law
does not apply to popular initiatives on the Constitutions, it
being limited to initiatives on national statutes and local
legislation. Later in the Forum, Justice Mendoza clarified that
popular initiative is limited to amendment only, as is clear in
the text of Section 2, Article XVII of the Constitution.
To the question that, since the Constitution mandated
Congress to pass a law to implement the right of the people
to propose amendments through initiatives, and since the
Court did not find Republic Act No. 6735 sufficient, what
would then be the people’s remedy, Justice Mendoza said
the remedy is political – they should prod their congressmen
and senators to pass a law, or amend the law to make it
applicable to constitutional amendments.
Justice Mendoza then explained his vote in Santiago v.
COMELEC (he was among the dissenters), and why up to
this day the ruling in the said case still stands. He also said
that he is not in favor of reconsidering the decision, one, on
the basis of stare decisis, and two; it did not involve an
interpretation of the Constitution.
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CORPORATE GOVERNANCE:
LAW AND JURISPRUDENCE
Justice Sixto C. Marella, Jr.
Holder, 2006 Metrobank Foundation Professorial Chair
in Commercial Law
INTRODUCTION
Since the close of the middle ages, our economic life
has been molded by private enterprise based on
individual ownership of property. The owner has
rights of enjoyment, possession, and disposition
subject to no limitation except those imposed by law.
The right is personal and with it comes the spiritual
value of ownership representing as it does an
extension of his personality. Physical property can be
shaped by its owner in a manner which could bring
him direct satisfaction apart from the income it yields
in the more concrete form.
The industrial revolution and increase of trading
activities resulted in a bigger economy. Changes have
to be made for that economy to work. Individual
ownership of private property gradually developed
into different types of collective enterprise. In the
United Kingdom, merchants formed through
contracts, without the aid of charter or statute,
unincorporated joint stock companies with
transferable shares.1 In the United States, special
legislations creating particular corporations were
enacted. This induced the undemocratic practice of
log-rolling for special favors.
In consequence,
general incorporation laws were enacted and
incorporation through special acts was prohibited by
state constitutions.2 The State of New York appears to
be the pioneer by enacting, in 1811, a general
incorporation law open to all applicants for certain
specified manufacturing industries.
Of these collective enterprises, the corporation
evolved to be popular worldwide and still is today
because of its distinct ability to acquire and maintain
resources efficiently and permanently. Persons who
contributed capital may change but the capital
remains with the corporation. Other attractions are
(a) a fairly accepted norm of rules of the organization
hence, easily predictable; (b) the system in the
financial markets easily fits the mechanics in the
issuance of shares of stock and transfer; (c) those
who contribute money as capital can decide on
changes in the management in extreme cases; (d)
capacity to transfer holdings; and (e) limited liability
of persons who provided capital.
_____________________________________________________________
1.
Ballantine on Corporations, 1946 ed., p. 33-35.
2.
Ibid., p. 37.
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The principle of “separation of ownership and control” is distinct to corporations. Control of the affairs of
the corporation is not exercised by the persons who provided the capital, but by a smaller group elected by
them. A corporate shareholder owns a stock certificate, but this piece of paper does not accord him the
rights and responsibilities traditionally associated with ownership. Berle and Means observed that, “Most
important of all, the position of ownership has changed from an active to that of a passive agent. In place of
actual physical properties over which the owner could exercise direction and for which he was responsible,
the owner now holds a piece of paper representing a set of rights and expectations with respect to an
enterprise. But over the enterprise and over the physical property – the instruments of production – in
which he has an interest, the owner has little control. At the same time he bears no responsibility with
respect to the enterprise or its physical property.”
A. Profile of the Present Corporations
Corporations which interact with our daily lives are very different from the corporations which operated in
the previous generation. Corporations before have a notably large block of individual shareholders.
Aggrupations are either family or ethnically influenced, and the persons responsible for steering its business
affairs held huge stakes to support their stewardship. Their profitability invariably lies on ownership of
physical assets be they real property, manufacturing plant, building or other means of production.
The structure of the present corporations and consequence of their activities on the society where they
3
operate changed radically. The comment of Mr. Justice Brandeis in Louis Liggett Co. v. Lee is very descriptive:
Through size, the corporation once merely an efficient tool employed by individuals in the conduct of
private business, has become an institution – an institution which has brought such concentration of
economic power that so-called private corporations are sometimes able to dominate the State. The
typical business corporation of the last century, owned by a small group of individuals, managed by
their owners, and limited in size by their personal wealth, is being supplanted by huge concerns in
which the lives of tens or hundreds of employees and the property of tens or hundreds of thousand
investors are subjected, through the corporate mechanism, to the control of a few men. Ownership
has been separated from control, and the separation has removed many checks which formerly
operated to curb the misuse of wealth and power.
The most notable change in the present day corporation is the entry of the factor of “human element,” as
an integral part of the corporate setup. Corporations before rely on ownership or control of the means of
production, in their physical state, for the attainment of business goals. This is no longer necessary,
particularly in corporations providing services and those engaged in information technology. The knowledge
and capability alone of the corporator can be sufficient for the corporation to thrive in the business it chooses to
engage in and even emerge as a dominant player.
Equally notable is the use of shares of stock as vehicles of investment giving rise to the increase in
participation of “institutional investors” in corporations, and their growing influence.
Institutional investors are those who manage private and state pension funds, investment companies,
insurance companies, bank trusts and foundations. Their role in corporate governance cannot be
underestimated because they are normally knowledgeable in business and the size of their holdings are
invariably sufficient, hence, their decisions can affect the corporation and its stakeholders. They are, however
fiduciaries. They look at corporate governance only for protection and enhancement of their investment. In
short, they are primarily after share value, and their first move, in the event of adverse development, is to exit
and transfer shares. Such transfer may appear to be an innocent stock transaction, but when it involves
transfer of power, the equation changes.
_____________________________________________________________________________
3.
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CORPORATE GOVERNANCE
In the present corporate setup, there are “many owners” of the corporation that it makes little sense to
consider any one of them an “owner” in the context of an individual with an economic interest in being informed
about, and involved, in corporate affairs. The splitting of ownership between a legal title holder, the trustee and
beneficial owners, trust beneficiaries of all kinds, including pensioners and mutual fund participants, has
created a welter of separate interests. The relationships between fiduciary and beneficiary are usually
stipulated by a specific governing law. Trustees can be individuals or special purpose corporations,
beneficiaries can be individuals or classes of individuals, whose identities may not be known for many years.
The consequence of a bigger capital is more number of shares and with the wider distribution thereof,
particularly in a vibrant stock market, shareholders’ ability to perform what James Willard Heist has called
the “legendary function” of monitoring has been substantially eroded. Where the number of shareholders
are in several thousands, holding only a minimal percentage, the incentive and ability of each shareholder to
gather information and monitor effectively is reduced. This situation led Mr. Justice Brandeis to declare:
To my mind there is no such thing as an innocent purchaser of stocks. It is entirely contrary, not only to
our laws but to what ought to be our whole attitude toward investments, that the person who has a
chance of profit by going into an enterprise, or the chance of getting a larger return than he could get on
a perfectly safe mortgage or bond – that he should have the chance of gain without any responsibility.
The idea of such persons being innocent in the sense of not letting them take the consequences of their
acts is, to my mind, highly immoral and is bound to work out, if pursued, in very evil results to the
community.
He may be innocent in fact, but socially he cannot be held innocent. He accepts the benefits of a
system. It is his business and his obligation to see that those who represent him carry out a policy
which is consistent with the public welfare. If he fails in that, so far as a stockholder fails in producing a
result, that stockholder must be held absolutely responsible, except so far as it shall affirmatively
appear that the stockholder endeavored to produce different results and was overridden by a majority.
x x x That they have personally selected gentlemen or given their proxies to select gentlemen of high
standing in the community, is not sufficient to relieve them from responsibility.
The wide distribution of stock, instead of being a blessing, constitutes, to my mind, one of the
gravest dangers to the community. It is absentee landlordism of the worst kind.
B. Purpose of this Paper
James Wolfenson, former President of the World Bank once said:
Strong corporate governance produces good social progress. Good corporate governance can make a
difference by broadening ownership and reducing concentration of power within societies. It bolsters
capital markets and stimulates innovation. It fosters longer term foreign direct investment, reduces
volatility and deters capital flight.
There are two purposes for this paper. First, to provide adequate guidelines to stockholders, directors
and corporate managers in the hope that conflicts will be avoided. Second, to revisit the laws on corporate
governance, determine their adequacy and propose changes, if needed.
Focus is made on the interrelationship of the structure of ownership in relation to corporate governance.
Lately, there has been a renewed interest on the topic of corporate governance particularly on the aspect
of good practices. To raise investor confidence, develop capital market and help achieve high sustained
growth for the corporate sector and the economy, the Securities and Exchange Commission (SEC)
4
promulgated the Code of Corporate Governance which took effect on May 15, 2002.
_____________________________________________________________________________
4.
Please see Appendix “A”.
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C. Governing Laws
The governing laws on corporate governance are:
(a) Corporation Code
(b) Civil Code, Articles 1868 to 1932, on Agency; Articles 1431 to 1439 on Estoppel
(c) Code of Commerce
(d) General Banking Law of 2000, for banks and other corporations under the Bangko Sentral ng Pilipinas
(e) Presidential Decree No. 902-A
(f) Presidential Decree No. 1653
(g) The Securities Regulation Code (R.A. No. 8799)
(h) Interim Rules of Procedure Governing Intra-Corporate Controversies.
D. Features of Laws on Corporate Governance
Laws on corporate governance have the following features:
1. Management and control are separate from ownership
This simply means that while the assets of the corporation are acquired through the funds contributed
by the shareholders through subscription or purchase of share of stock, they do not manage the use
and control of corporate assets. It is done by the board of directors. The nature of the proprietary right
is transformed from active to passive. In place of actual physical possession, the owner only holds a set
of rights and expectation with respect to an enterprise. In the same vein, he bears no responsibility
with respect to the enterprise or for the preservation of the corporate property.
2. Uniformity of the rules irrespective of the size of assets or capital
The rules on corporate governance set forth in the Corporation Code and related laws apply to all
corporations regardless of the size of capital or assets.
3. Centralized form of governance
The law provides for only one Board of Directors in a corporation which shall have exclusive control
and management of its business and property. Individual directors do not exercise corporate powers
and are not agents of the corporation. Shareholders, likewise, are not agents of the corporation and
cannot bind it, unlike in a partnership where each partner can bind the partnership even without the
knowledge of the others.
4. Existence of a system of checks and balances
The Corporation Code allocated powers to the stockholders, Board of Directors and corporate officers
and in the discharge of their allocated powers, they are autonomous. However, to prevent abuses,
checks and balances were put in place. Thus, to discipline an erring director, stockholders were given
the power of removal. Likewise, there is the right of inspection. Also, a stockholder aggrieved by the
act of the Board of Directors who acted fraudulently is allowed by law to institute a derivative suit for
redress of grievances or to protect the interests of the corporation.
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CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
5. Majority rule applies
Any person who buys stock in a corporation is considered to have parted with his personal right or
privilege to regulate the disposition of his property which he has invested in the capital stock of the
corporation and surrendered it to the will of the majority of the shareholders of the corporation.5
6. Qualified freedom from court interference
So long as the stockholders, Board of Directors and officers act within the scope of their authority and
absent any fraud or bad faith, courts cannot substitute their judgment as against the judgment of the
corporate officers or directors. Issues of whether additional risks can be undertaken or that more
income would have been realized by the corporation are business matters absolutely within the
domain of the corporate directors and officers.
7. Immunity of directors and officers from liability
So long as the corporate officers and directors act within the
scope of their authority they may not be held personally liable
even if the corporation suffers damage provided there is no
bad faith or negligence on their part.
“The most notable change
in the present day corporation
is the entry of the factor
of human element,
as an integral part
of the corporate setup.”
8. Potential liability even in case of lack of affirmative act
Generally, affirmative acts of the stockholders or Board of Directors are needed to constitute a valid
corporate act. In some cases where third parties were led to believe that such corporate act in fact
exists although in reality, it does not, the corporation can be held liable, pursuant to the law on
estoppel.
9. Corporate governance is on the individual
The fundamental relationship among individuals as the primordial component of a corporation is
recognized by the Corporation Code which provided that “no corporation can be organized unless
formed by any number of natural persons, not less than five but not more than 15, all of legal age and
a majority of whom are residents of the Philippines.6
While a state grant is indispensable, it is not sufficient to create a corporate entity. It must
presuppose the intention and consent among those who will form the corporation, and the existence
in fact of group upon whom the grant is to be conferred. Once granted, separate juridical personality
is acquired. It does not however mean that the persons who constitute the corporation are
themselves creatures of the State. Singly or collectively they maintain their inherent rights, which
they can assert in pursuing their business through the corporation.7 It is these individuals who
participate in corporate governance.
E. Entities Involved in Corporate Governance
Corporate governance refers to the management and administration of the affairs of a corporation from the
point of view of: (a) State, as the source of the primary franchise; (b) those who compose the corporation,
meaning
the stockholders, board of directors and officers; and (c) those who directly transact with it
_____________________________________________________________________________
5.
Gokongwei v. SEC, No. L-45911, April 11, 1979.
6.
CORPORATION CODE, Sec. 10.
7.
Bache & Co. (Phil), Inc. v. Ruiz, No. L-32409, February 27, 1971.
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including non-contracting parties whose rights or property derive benefit or suffer injury due to a corporate
act.
The organizational framework envisioned by the law for a corporation involves three groups, on whom
the rights and obligations pertaining to corporate governance are vested. They are the stockholders, board
of directors and officers.
The model adopted by the Corporation Code for corporate governance hews closely with traditional
rules of political accountability, where shareholders were seen as electors, board of directors as elected
representatives, proxy solicitation as election campaigns, corporate charters and bylaws as constitutions.
Underpinning the corporate democracy is the principle of “one share one vote.”
The Supreme Court recognized this when it said that:
Any person “who buys stock in a corporation does so with the knowledge that its affairs are
dominated by a majority of the stockholders and that he impliedly contracts that the will of the
majority shall govern in all matters within the limits of the act of incorporation and lawfully enacted
by-laws and not forbidden by law.”8 (Emphasis supplied)
While the law recognizes the majority rule, once a decision is made by one group on a matter which it can
dispose independently, it is binding on the other and will suffice to create a legal effect.
Some authors look at corporate governance by the three groups from a hierarchical point of view, with
the stockholders, being considered as the fundamental source of authority, followed by the board of
directors. The officers execute the decisions of the two groups.
It is submitted that looking at corporate governance as an issue of hierarchy could be problematical, not
only because it can foment inter-group conflict, but for the pragmatic reason that it is far from the practice of
merchants.
Management has the expertise, infrastructure and time to run and control the corporation. They
manage the day-to-day affairs of the corporation and are sometimes bound to act on the basis of unclear
policies and directions. Besides, the corporate officers are the first to appreciate developments in the
market and are expected to act accordingly. The board of directors, on the other hand, is not, as a matter of
practice, involved intimately in running the day-to-day affairs of the corporation. Stockholders participate
only on fundamental changes in the corporation.
The better approach it appears, is to consider each group designated by law as the sole authority to
perform a particular act, independent of the other and its act pursuant to the allocated power shall be given
legal recognition. Any action on the same matter by the other group shall, at most, be considered as
advisory or recommendatory.
PART I. BOARD OF DIRECTORS
The theory of the corporation is that the stockholders may have all the profits but shall turn over the
management of the enterprise to the representatives or agents called directors. The stockholder whose
capital contribution was used to acquire properties of the corporation surrenders his right to control the use
of the said properties. Thus, the concept of separation of management from ownership.
Among the three groups entitled to participate in corporate governance, the board of directors has the
broadest participation. The law states “unless otherwise provided in this (Corporation) Code, the corporate
_____________________________________________________________________________
8.
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CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
powers of all corporations formed under this (Corporation) Code shall be exercised, all business conducted
and all property of such corporations controlled and held by the board of directors.”9
The board of directors therefore, is the governing body of the corporate affairs. The extent of the
authority of the Board, as recognized by law, is set forth in Montelibano v. Bacolod Murcia Milling Co.10 that:
They [directors] hold such office charged with the duty to act for the corporation according to their best
judgment, and in so doing they cannot be controlled in the reasonable exercise and performance of
such duty. Whether the business of a corporation should be operated at a loss during a business
depression, or closed down at a smaller loss, is a purely business and economic problem to be
determined by the directors of the corporation, and not by the court. It is a well-known rule of law that
questions of policy or of management are left solely to the honest decision of officers and directors of a
corporation, and the court is without authority to substitute its judgment for the judgment of the Board
of directors; the board is the business manager of the corporation, and so long as it acts in good faith its
orders are not reviewable by the courts.
In the discharge of its responsibility, no limitations are set except: (a) those imposed by the statute,
articles of incorporation or bylaws; (b) where the law requires concurrence by the stockholders, such should
be obtained for the validity of the act; and (c) powers which the corporation cannot exercise. Thus, the
Board of Directors has no authority to make or authorize contracts or do other acts which are beyond the
powers conferred upon the corporation by its charter.11 Nor can they be given such authority by consent of
the stockholders.12
There are two schools of thought on the nature and source of power of the board of directors over
corporate affairs.
Angeles v. Santos13 held that “The board of directors of a corporation is a creation of the stockholders and
controls and directs the affairs of the corporation by delegation of the stockholders. But the board of
directors, or majority thereof, in drawing themselves the powers of the corporation, occupies a position of
trusteeship in relation to the minority of the stock in the sense that the board should exercise good faith,
care and diligence in the administration of the affairs of the corporation and should protect not only the
affairs of the majority but also those of the minority of the stock.”
Contrast the foregoing to Ramirez v. The Orientalist Co.14 that “the functions of the stockholders of a
corporation are of limited nature. The theory of a corporation is that the stockholders may have all the
profits but shall turn over complete management of the enterprise to their representatives and agents,
called directors. Accordingly, there is little for the stockholders to do beyond electing directors, making
bylaws and exercising special powers defined by law. Contracts between a corporation and third persons
must be made by the directors and not by the stockholders. The corporation, in such matters, is
represented by the former and not by the latter.”
From the facts of the two cited cases, there is no inconsistency. Ramirez v. The Orientalist Co. is an action
for collection of sum of money arising out of the dishonor of drafts, duly accepted by the President of the
company, whose authority to represent the corporation was put in issue. The underlying transaction is the
sale of film rights, and no issue was raised as to whether the business transaction entered into by the
President is authorized by its charter. Angeles v. Santos on the other hand involves a complaint for breach
of trust of the directors who represent the majority shareholders, refusal to convene a stockholders’
meeting and dissipation of corporate assets.
_____________________________________________________________________________
9.
CORPORATION CODE, Sec. 10.
10. G.R. No. L-15092, May 18, 1962.
11. 2 Fletcher 399
12. Ibid.
13. G.R. No. 43413, August 31, 1937.
14. G.R. No. 11897, September 24, 1918.
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To determine therefore, the nature and source of power of the board of directors, reference should be
made to the powers vested by law on every corporation15 found in Section 36 of the Corporation Code in
relation to Section 23. Thus, where the act to be performed involves the conduct of business or control of
property, the nature and source of power of the board of directors is statutory.
A. Composition of the Board of Directors
In stock corporations, directors should not be less than five or more than 15 who are stockholders of record
of the corporation. In ordinary non-stock corporations, the board of trustees may be more than 15 in
number unless otherwise provided in the articles of incorporation or bylaws with term of office of one-third of
their number expiring each year. In non-stock educational corporations, it shall not be less than five nor
more than 15 provided that the number should be in multiples of 5 with the term of office of one-fifth of their
number expiring every year.
The only instance when the number of directors can exceed 15 is in case of merger or consolidation of
banks, but the maximum is set at 21.16
It can happen that stockholders may elect a number less than the maximum required in the articles of
incorporation, like electing only 10 where the maximum allowed is 15. So long as the number of directors
elected are sufficient to constitute a quorum, the Board can proceed to transact business. But, if the act
intended to be done requires a bigger number of votes and the number of directors elected cannot meet the
required number, the intended act cannot be done.
B. Qualification of a Director or Trustee
Only individuals can be elected to the board of directors or trustees. Corporate stockholders or corporate
members cannot be elected director or trustee because of the requirement under Section 26 of the
Corporation Code that directors or trustees cannot attend or vote at board meetings by proxy. Corporations
act through the board of directors who must designate an individual to execute its decision. Thus, the latter
is, for all intents and purposes, a proxy. In addition, the shares are owned by the corporation not the
representative hence, there is no compliance with Section 23 of the Corporation Code of ownership of at
least one share of stock.17
Every director must own at least one share of the capital stock of the corporation of which he is a director,
which share shall stand in his name on the books of the corporation.18 No person shall be elected trustee
unless
he is a member of the corporation.19
_____________________________________________________________________________
15. SEC. 36. Corporate powers and capacity. – Every corporation incorporated under this Code has the power and capacity to sue and be sued in its
corporate name;
1.
Of succession by its corporate name for the period of time stated in the articles of incorporation and the certificate of incorporation;
2.
To adopt and use a corporate seal;
3.
To amend its articles of incorporation in accordance with the provisions of this Code;
4.
To adopt bylaws, not contrary to law, morals, or public policy, and to amend or repeal the same in accordance with this Code;
5.
In case of stock corporations, to issue or sell stocks to subscribers and to sell treasury stocks in accordance with the provisions of this Code; and to
admit members to the corporation if it be a non-stock corporation;
6.
To purchase, receive, take or grant, hold, convey, sell, lease, pledge, mortgage and otherwise deal with such real and personal property, including
securities and bonds of other corporations, as the transaction of the lawful business of the corporation may reasonably and necessarily require,
subject to the limitations prescribed by law and the Constitution;
7.
8.
To enter into merger or consolidation with other corporations as provided in this Code;
To make reasonable donations, including those for the public welfare or for hospital, charitable, cultural, scientific, civic, or similar purposes:
Provided, That no corporation, domestic or foreign, shall give donations in aid of any political party or candidate or for purposes of partisan political
9.
activity;
To establish pension, retirement, and other plans for the benefit of its directors, trustees, officers and employees; and
10. To exercise such other powers as may be essential or necessary to carry out its purpose or purposes as stated in the articles of incorporation.
16. The General Banking Laws of 2000 Sec. 10.
17. SEC Opinion, January 2, 1986.
18. CORPORATION CODE, Sec. 23.
19. CORPORATION CODE, Sec. 92.
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On the requirement of stock ownership, the general rule is that the person who holds legal title to the
stock as shown in the books of the corporation is qualified although some other person may be the beneficial
owner. Ownership of the qualifying share need only be on a nominal capacity, hence a person to whom one
qualifying share was transferred for the purpose of electing him as director, is eligible. In case there are
restrictions on the transfer, i.e., right of first refusal, the SEC says, the restriction will not apply if the purpose
is to qualify the transferee as director.
Ownership of the qualifying share should continue during his tenure as director. Should he cease for any
reason, he forfeits his office as director. This includes transfer pursuant20 to a voting trust agreement.
Subsequent acquisition of shares does not reinvest him with title to his former office.
As a general rule, there is no citizenship requirement demanded of the Board of Directors but where the
law requires a specific number to be Filipino citizens or the Constitution or law limits membership to the
Filipino citizens, the same should be complied with.
A majority of the directors or trustees must however be residents of the Philippines.
Additional qualifications to be elected as directors of the corporation may be prescribed in the bylaws21
but their qualification may not be modified if such modification is in conflict with the qualifications prescribed
by the Corporation Code. For corporations engaged in the businesses herein below specified, the law
requires, in addition to those provided in Section 23 of the Code, the following:
•
rural banks,22 and registered investment companies,23 every member of the board of directors shall
be a citizen of the Philippines.
•
domestic air carriers, the directing head and two-thirds or more of the board of directors and other
managing officers shall be citizens of the Philippines.24
•
investment houses, a majority of the members of the board must be Filipino citizens and no director
must be a director of any bank unless authorized by the Monetary Board.25
•
mass media management is limited to citizens of the Philippines or to corporations and/or
associations wholly owned and managed by Filipino citizens.26
•
commercial telecommunications, the governing body shall in all cases be controlled by citizens of the
Philippines.27
•
educational institution control and administration shall be vested in citizens of the Philippines.28
Disqualified are persons convicted by final judgment of an offense punishable by imprisonment of more
than six years or for violating the Corporation Code committed within five years prior to the date of election.
Electing an individual who suffers from a disqualification and his subsequent participation in the
meetings of the Board will not automatically result in nullity of the action of the Board. The corporation will
be bound, particularly to third persons who have no knowledge of the lack of qualification of the particular
director. Should the corporation suffer damage for reasons attributable to the ineligibility of the director
concerned, he can be liable for damages.
_____________________________________________________________________________
20. Lee v. Court of Appeals, G.R. No. 93695, February 4, 1992.
21. CORPORATION CODE, Sec. 47(5).
22. Rural Banks Act of 1992 (R.A. No. 7353), Sec. 5.
23. Investment Co. Act (R.A. No. 2629), Sec. 15.
24. R.A. No. 776, Secs. 3 [r(c)] and 12.
25. P.D. No. 129, Secs. 5 and 6.
26. CONSTITUTION, Art XVI, 1987, Sec. 11(1). .
27. CONSTITUTION, Art. XV, 1973, Sec. 7 (2).
28. CONSTITUTION, Art. XV, 1973, Sec. 8 (7
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C. Manner of Election; Cumulative Voting
At all elections of directors or trustees, there must be present, either in person or by representative
authorized to act by written proxy, the owners of the majority of the outstanding capital stock, or if there be
no capital stock, a majority of the members entitled to vote. The election must be by ballot if requested by
any voting stockholder or member. In stock corporation, every stockholder entitled to vote shall have the
right to vote in person or by proxy the number of shares of stock standing, at the time fixed in the bylaws, in
his own name on the books of the corporation, or where the bylaws are silent, at the time of the election;
and said stockholder may vote such number of shares for as many persons as there are directors to be
elected or he may cumulate said shares and give one candidate as many votes as the number of directors to
be elected multiplied by the number of his shares shall equal, or he may distribute them on the same
principle among as many candidates as he shall see fit: Provided, That the total number of votes cast by him
shall not exceed the number of shares owned by him as shown in the books of the corporation multiplied by
the whole number of directors to be elected: Provided, however, That no delinquent stock shall be voted.
Unless otherwise provided in the articles of incorporation or in the bylaws, members of corporations which
have no capital stock may cast as many votes as there are trustees to be elected but may not cast more than
one vote for one candidate. Candidates receiving the highest number of votes shall be declared elected.
Any meeting of the stockholders or members called for an election may adjourn from day to day or from time
to time but not sine die or indefinitely if, for any reason, no election is held, or if there are not present or
represented by proxy, at the meeting, the owners of a majority of the outstanding capital stock, or if there be
no capital stock, a majority of the members entitled to vote.29
The foregoing is termed “cumulative voting.” Through this method, a stockholder can maximize the
number of votes he can give to a particular candidate. This is designed to aid the minority elect a director.
Any provision of the articles of incorporation which has tendency to restrict or suppress the rule of
cumulative voting is void. In case of non-stock corporation, the right of the members of any class or classes
to vote may be limited, broadened or denied to the extent specified in the articles of incorporation or the
bylaws, and unless so limited, broadened or denied, each member, regardless of class, shall be entitled to
one vote.30 Unless otherwise provided in the articles of incorporation or the bylaws, a member may vote by
proxy in accordance with the provisions of this Code.31 Voting by mail or other similar means by members of
non-stock corporations may be authorized by the bylaws of non-stock corporations with the approval of, and
under such conditions which may be prescribed, the Securities and Exchange Commission.32
D. Term of Office
A director shall serve for one year and until his successor is elected and has qualified. In the event no new
board is elected and qualified after the original one year term, the existing board if it still constitutes a
quorum can transact business. This is conformably with the “holdover” principle.33 To comply, there must
be failure of election. Not holding an election is not equivalent to failure of election. Thus, if the Board of
Directors decide to defer the election, the holdover principle will not apply.
While the law recognizes the holdover principle, a seat in the board is never permanent34 as it could be
against the provisions of Sections 28 and 29 of the Corporation Code which require election.
_____________________________________________________________________________
29. CORPORATION CODE, Sec. 24
30. CORPORATION CODE, Sec. 89.
31. Ibid.
32. Ibid.
33. Detective and Protective Bureau Inc. v. Cloribel, G.R. No. L-23428, November 29, 1968.
34. Grace Christian High School v. Court of Appeals, G.R. No. 108905, October 23, 1997.
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E. Vacancy in the Board
Vacancy in the Board may be by reason of resignation, death, cessation as stockholder, expiration of term or
removal. In the first three instances, the vacancy may be filled by the vote of at least a majority of the
remaining directors or trustees if still constituting a quorum. If the number of directors remaining do not
constitute a quorum, the vacancy must be filled by the stockholders in a regular or a special meeting called
for the purpose. A director who is elected to fill the vacancy shall serve only for the unexpired term of his
predecessor.
In case the vacancy is by reason of an increase in the number of directors, the same shall be filled by the
stockholder in an election during a regular or special meeting called for the purpose or in the same meeting
authorizing the increase in number of directors if so stated in the notice of meeting.35
Where the vacancy is due to removal of a director, the same shall be filled by electing the replacement in
the same meeting called for the purpose of removing a director or at any regular or special meeting called for
the purpose.
F. Removal
A director may be removed from office by a vote of the stockholders holding or representing two-thirds of the
outstanding capital stock, or if the corporation be a non-stock corporation, by a vote of two-thirds of the
members entitled to vote. Provided, that such removal shall take place either at a regular meeting of the
corporation or at a special meeting called for the purpose, and in either case, after prior notice to
stockholders or members of the corporation of the intention to propose such removal at the meeting.
Removal may be with or without cause except directors who were elected as a result of the exercise of
cumulative voting privilege in which event removal shall be for cause only.36 A special meeting of the
stockholders or members of a corporation for the purpose of removal of directors or trustees, or any of them,
must be called by the secretary on order of the president or on the written demand of the stockholders
representing or holding at least a majority of the outstanding capital stock, or, if it be a non-stock
corporation, on the written demand of a majority of the members entitled to vote. Should the secretary fail
or refuse to call the special meeting upon such demand or fail or refuse to give the notice, or if there is no
secretary, the call for the meeting may be addressed directly to the stockholders or members by any
stockholder or member of the corporation signing the demand.
Removal of a director may be with or without cause as expressly provided in the Corporation Code,
except directors who were elected because of the exercise of right to cumulate votes, in which event removal
must be for cause.37 This merely formalized the ruling in Government v. Agoncillo38 that as the law does not
specify causes for removal nor even require that removal should be for sufficient cause or reasons, a director
may be removed by the prescribed vote, even without cause.
The incumbent directors cannot be removed by merely electing new directors39 because the law says
that removal from office can only be done by a vote of stockholders representing at least two-thirds of the
subscribed capital stock. Moreover, the law requires prior notice of the intention to propose removal.
_____________________________________________________________________________
35. CORPORATION CODE, Sec. 29.
36. CORPORATION CODE, Sec. 28.
37. Ibid.
38. G.R. No. 27225, April 1, 1927
39. Roxas v. de la Rosa, G.R. No. 26555, November 16, 1926.
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The Corporation Code does not confer expressly upon the courts the power to remove a director or
trustee or any appointed officer of a corporation on the ground of mismanagement of its affairs, neglect, or
other cause.40 The power of removal is in the corporation itself. The reason for this rule is that if the courts
were given such power then there should be no reason why the courts should not also be given the power to
designate the one to fill the office, which should be substituting the judgment of the court for that of the
stockholders or members.
There are abundant authorities, however, which hold that if the court has acquired jurisdiction to appoint
a receiver because of the mismanagement of the directors, they may thereafter be removed and others
appointed in their place by the court in the exercise of its equity jurisdiction.41 But where the properties and
assets of the corporation are amply protected by the appointment of a receiver, such removal is unnecessary
and unwarranted in view of the provisions of Section 28 prescribing the manner of removal of directors or
trustees.
G. Independent Directors
An independent director means a person other than an officer or employee of a corporation, its parent or
subsidiaries or any other individual having a relationship with the corporation which would interfere with the
exercise of independent judgment in carrying out the responsibilities of a director.
All companies are encouraged to have independent directors,42 but banks or any corporation with a class
of equity securities listed for trading on an Exchange or with assets in excess of Fifty Million Pesos
(P50,000,000) and having 200 or more holders, at least of 200 of which are holding at least 100 shares of a
class of its equity securities or which has sold a class of equity securities to the public pursuant to an effective
registration statement in compliance with Section 12 of the Securities Regulations Code,43 such as issuers of
registered securities, public companies and those subject to secondary licenses from the SEC, are required
to have at least two independent directors or at least 20 percent of its board size, whichever is the lesser.
They may choose to have more independent directors.44 Stock exchange should have three and an
independent Director-President.
To qualify as an independent director, he shall have at least one share of stock of the corporation; is a
college graduate and if not, must have been engaged or exposed to the business of the corporation for at
least five years; possesses integrity and probity; and is assiduous.
Disqualified are persons (a) convicted of any crime involving the purchase or sale of securities or those
arising out of the person’s conduct as an underwriter, broker, dealer, investment company, investment
adviser, principal distributor, mutual fund dealer, future commission merchant, commodity trading adviser
or floor broker and any criminal arising out of his relationship with a bank, quasi-bank, trust company,
investment house or as an affiliated persons of any of them; (b) any person who, by reason of any
misconduct, after hearing or trial, is permanently or temporarily enjoined by order, judgment or decree of
the Securities and Exchange Commission or any court of other administrative body of competent jurisdiction
from: (i) acting as an underwriter, broker, dealer, investment adviser, principal distributor, mutual fund
dealer, futures commission merchant, commodity trading advisor, or a floor broker, (ii) acting as a director or
officer of a bank, quasi-bank, trust company, investment house, investment company or an affiliated person
of any of them; (iii) engaging in or continuing any conduct or practice in connection with any such activity or
willfully violating laws governing securities, and banking activities.
_____________________________________________________________________________
40. Angeles v. Santos, supra.
41. Ibid.
42. SEC Memorandum Circular No. 16, Series of 2002.
43. General Banking Laws of 2000, Sec. 15.
44. Ibid.
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Such disqualification shall also apply when such person is currently subject to an effective order of the
Securities and Exchange Commission or any court or other administrative body refusing, revoking or
suspending any registration, license or permit issued under the Corporation Code, Securities Regulation
Code, or any other law administered by the Commission or Bangko Sentral ng Pilipinas, or otherwise
restrained to engage in any activity involving currently subject to an effective order of self-regulatory
organization suspending or expelling him from membership or participation or from associating with a
member or participant of the organization; (c) any person finally convicted judicially or administratively of
an offense involving moral turpitude, fraud, embezzlement, theft, estafa, counterfeiting, misappropriation,
forgery, bribery, false oath, perjury or other fraudulent act or transgressions; (d) any person finally found by
the Commission or a court or other administrative body to have willfully violated, or willfully aided, abetted,
counseled, induced or procured the violation of, any provision of the Securities Regulation Code, the
Corporation Code, or any other law administered by the Securities and Exchange Commission or Bangko
Sentral ng Pilipinas, or any rule, regulation or order of the Securities and Exchange Commission or Bangko
Sentral ng Pilipinas, or who has filed a materially false or misleading application, report or registration
statement required by the Securities and Exchange Commission, or any rule, regulation or order of the
Securities and Exchange Commission; (e) any person judicially declared to be insolvent; (f) any person
finally found guilty by a foreign court or equivalent financial regulatory authority of acts, violations or
misconduct similar to any of the acts, violations or misconduct listed in paragraphs (a) to (e) hereof; (g) any
affiliated person who is ineligible, by reason of paragraphs (a) to (e) hereof to serve or act in the capacities
listed in those paragraphs; (h) conviction by final judgment of an offense punishable by imprisonment for a
period exceeding six years, or a violation of the Corporation Code committed within five years prior to the
date of his election or appointment.
Nomination of independent directors shall be in accordance with the following rules:
a. The Nomination Committee shall have at least three members, one of whom is an independent
director. It shall promulgate the guidelines or criteria to govern the conduct of the nomination. The
same shall be properly disclosed in the company’s information or proxy statement or such other
reports required to be submitted to the Securities and Exchange Commission. The members of the
Nomination Committee of the Exchange shall be cleared by the Securities and Exchange
Commission.
b. Nomination of independent director(s) shall be conducted by the Committee prior to a stockholders’
meeting. All recommendations shall be signed by the nominating stockholders together with the
acceptance and conformity by the would-be nominees.
c. The Nomination Committee shall pre-screen the qualifications and prepare a final list of all candidates
and put in place screening policies and parameters to enable it to effectively review the qualifications
of the nominees for independent director/s.
d. After the nomination, the Nomination Committee shall prepare a Final List of Candidates which shall
contain all the information about all the nominees for independent directors which list shall be made
available to the Securities and Exchange Commission and to all stockholders through the filing and
distribution of the Information Statement or Proxy Statement or in such other reports the company is
required to submit to the Securities and Exchange Commission. The name of the person or group of
persons who recommended the nomination of the independent director shall be identified in such
report including any relationship with nominee.
e. Only nominees whose names appear on the Final List of Candidates shall be eligible for election as
Independent Director(s). No other nomination shall be entertained after the Final List of Candidates
shall have been prepared. No further nomination shall be entertained or allowed on the floor during
the actual annual stockholders’/memberships’ meeting.
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Election shall follow the following procedure:
(i)
Except as those required under this Circular and subject to pertinent existing laws, rules and
regulations of the Securities and Exchange Commission, the conduct of the election of
independent director(s) shall be made in accordance with the standard election procedures of
the company or its bylaws.
(ii)
It shall be the responsibility of the Chairman of the Meeting to inform all stockholders in
attendance of the mandatory requirement of electing independent director/s. He shall ensure
that an independent director/s are elected during the stockholders’ meeting.
(iii) Specific slot(s) for independent directors shall not be filled by unqualified nominees.
(iv) In case of failure of election for independent director(s), the Chairman of the Meeting shall call a
separate election during the same meeting to fill the vacancy.
(v)
The covered companies shall amend its bylaws in accordance with the foregoing requirements
as soon as practicable.
H. Requirements for the Acts of Board of Directors to be Considered as a Corporate Act
The power to administer corporate affairs is granted by law to the board of directors, not to the individual
members thereof, hence the general rule is that directors must act as a body in a meeting called pursuant to
law or the corporation’s bylaws. The law presumes that they will act only after discussion and deliberation of
the matters before them and the stockholders are entitled to no less otherwise. Any action taken without
the formalities required by law may be questioned by any objecting director or shareholder.45 Individual
directors, as such, have no power to perform a corporate act.
I. Holding of Meeting
Meetings of directors and trustees may either be regular or special.46 Regular meetings of the Board shall be
held monthly unless the bylaws provide otherwise. Special meetings can be held at anytime upon the call of
the President or as provided in the bylaws. Meetings of directors or trustees of corporations may be held
anywhere in or outside of the Philippines unless the bylaws provides otherwise.47
Notice of regular or special meeting indicating the date, time and place of the meeting must be sent to
every director or trustee at least one day prior to the scheduled meeting unless otherwise provided by the
bylaws. A director or trustee may waive this requirement either expressly or impliedly.
The rule is different in closed corporations which requires that a director who fails to receive notice of
meeting must object in writing as soon as he discovers it. Otherwise, an action taken therein is deemed
ratified.48
J. Mode of Attendance of Directors
A director or trustee should attend meetings of the board personally and cannot be represented by a proxy.
The reason is, each was elected by the stockholders or members on the basis of his personal qualifications
and capabilities with full expectation that he will discharge his duties and functions personally. The General
_____________________________________________________________________________
45. Lopez Realty Inc. v. Fontedra, G.R. No. 76801, August 11, 1995.
46. CORPORATION CODE, Sec. 49.
47. Ibid., Sec. 53.
48. Ibid., Sec. 101.
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Banking Law of 200049 and the SEC has allowed50 board meetings to be conducted through electronic
medium such as, but not limited to teleconferencing and video conferencing but the following, to safeguard
the integrity of the meeting, were imposed:
(1) The notice of meeting required to be sent by the Corporate Secretary, should include (a) inquiry on
whether the director will attend physically or through tele/videoconferencing; (b) contact
number(s) of the Secretary and office staff whom the director may call to notify and state whether
he shall be physically present or attend through tele/videoconferencing; (c) agenda of the meeting;
(d) all documents to be discussed in the meeting, including attachments, shall be numbered and
duly marked by the Secretary in such a way that all the directors, physically or electronically present
can follow, refer to the documents and participate in the meeting.
(2) In the absence of an arrangement, it is presumed that the directors will physically attend the Board
meeting.
Conduct of the meeting shall be in accordance with the following:
At the start of the scheduled meeting, a roll call shall be made by the Secretary. Every director and
participant shall state, for the record, the following:
a. Full name
b. Location
c. For those attending through tele/videoconferencing, he/she shall:
i.
confirm that he/she can completely and can hear the others who can likewise clearly hear
him/her at the other line;
ii. state whether he has received the agenda and all the materials for the meeting;
iii. specify type of device used.
Thereafter, the Secretary shall confirm and note the contact numbers being used by the directors and
participants not physically present. After the roll call, the Secretary may certify the existence of a quorum.
(3) All participants shall identify
“Strong corporate governance produces good social progress.
themselves for the record,
Good corporate governance can make a difference by broadening
before speaking and must
ownership
and reducing concentration of power within societies.
clearly hear or see each other
It
bolsters
capital markets and stimulates innovation. It fosters
in the course of the meeting.
longer term foreign direct investment, reduces volatility
If a person fails to identify
and deters capital flight.”
himself, the Secretary shall
James Wolfensonaaaaaaaaaa
quickly state the identity of
Former
President, World Bank
the last speaker.
If the
person speaking is not
physically present and the Secretary is not certain of the identity of the speaker, the Secretary must
inquire to elicit a confirmation or correction.
(4) If a motion is objected to and there is a need to vote and divide the Board, the Secretary should call
the roll and note the vote of each director who should identify himself.
(5) If a statement of a director/participant in the meeting via tele/video conferencing is interrupted or
garbled, the Secretary shall request for a repeat or reiteration, and if need be, the Secretary shall
repeat
what he heard the director/participant was saying for confirmation or correction.
_____________________________________________________________________________
49. Op. cit. Sec. 15, General Banking Law of 2000.
50. SEC Memorandum Circular No. 15, Series of 2001.
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The Secretary bears the responsibility of safeguarding the integrity of the meeting through
teleconferencing or videoconferencing, and he or she must secure good equipment and facilities, record
the proceedings, prepare the minutes, store for safekeeping and mark the tape recordings or electronic
recording mechanism as part of the records of the corporation. The minutes should be signed by all
directors who attended the meeting personally or through electronic medium.
K. Place of Meeting
In the absence of a specific provision in the bylaws, the Board may meet anywhere in places even outside the
Philippines.
L. Quorum
In the absence of a specific provision on quorum requirement in the articles of incorporation, quorum shall
be majority of the number of directors stated in the articles of incorporation. Section 25 of the Corporation
Code allows the articles of incorporation to provide for a greater but not a lesser number to constitute a
quorum. Where the statute or bylaws provide for an extraordinary majority vote to approve a corporate act,
the quorum needed should be equivalent to the minimum required number of votes who must act
unanimously.
M. Agenda
The matters to be taken up in the meeting should be stated in an agenda included in the notice of meeting. It
has been the practice to include in the agenda usually as the last item for consideration undescribed or a
specified topic termed as “other matters.” This is authorized and practical considering the infrequency of
meetings. It should be construed to matters which are routine and ordinary. Extraordinary matters not
mentioned in the agenda cannot be validly acted upon against the objection of a director. However, if all
directors are present and agree to take up extraordinary matters, the validity thereof cannot be impugned.
N. Effect of Non-Compliance with Requirement of Meeting
While the law expects directors and trustees to meet and counsel each other and that decisions are made
after consultation at a meeting attended by at least a quorum, non-compliance thereto does not
automatically result in the nullity of an act. Ramirez v. The Orientalist51 held that “the fact that the power to
make corporate contracts is vested in the Board of Directors does not signify that a formal vote must always
be taken before contractual liability can be fixed upon a corporation; for the Board can create liability, like an
individual, by other means other than a formal expression of will. The law recognizes extraordinary
situations or conditions to justify validity. The defect being formal, is subject to ratification which relates
back to the time of the execution of the contract and is equivalent to original authority.”52 In the following
instances, acts done without the formalities of a meeting were held valid and binding on the corporation:
•
when the directors themselves are the only shareholders, it is certainly reasonable to hold that action
taken by all of them informally and without a meeting is corporation action.53
_____________________________________________________________________________
51. Supra.
52. The Board of Liquidators v. Heirs of Maximo Kalaw, No. L-18805, August 14, 1967.
53. Stevens, 660. See also Ballantine, 125; 2 Fletcher 177; and Zamboanga Transportation Co. v. Bachrach Motor Co., infra.
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•
a transaction carried out in the name of the corporation and with the approval of all of its shareholders
has been held binding upon the corporation even though the transaction was within the scope of the
director’s authority and even though no formal action has been taken by the board. The assent may
be expressly given or may be inferred from conduct.54
•
there are many cases which hold that where a single shareholder owns substantially all the shares of
stock he may bind the corporation by his acts without resolution of the board of directors. This is
based on disregard of separate corporate entity, but may better be explained as a liberalized agency
doctrine and a dispensing with the formalities of usual corporate procedure where they can serve no
useful purpose.55
•
ratification by vote or acquiescence, upon full disclosure of the circumstances, is generally held
effective to validate irregular or voidable acts of the directors.56
O. Duties of a Director
The general guidelines to be observed by a director in the discharge of his duties are provided in Section
31 of the Corporation Code that:
Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the
corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or
acquire any personal or pecuniary interest in conflict with their duty as such directors or trustees shall
be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its
stockholders or members and other persons.
From the foregoing, opinion writers conclude that a director has the triple duty to the corporation of
(a) obedience; (b) diligence; and (c) loyalty.
The duty to observe obedience simply means that a director will direct the affairs of the corporation
only in accordance with a purpose for which it was organized and discharge his functions within the
confines of his authority as director. This is corollary to the ultra vires doctrine. Thus, where the
directors transact business outside of the scope provided in the purpose with resulting loss to the
corporation, they may be held liable for the loss.
The duty of diligence requires that directors shall manage the corporate affairs with reasonable
diligence, care and prudence. The Code of Corporate Governance approved by the SEC in its Resolution
No. 135, Series of 2002, dated April 4, 2002, set forth the duties, functions and responsibilities of the
Board.
To ensure good governance of the corporation, the Board should establish the corporation’s vision
and mission, strategic objectives, policies and procedures that may guide and direct the activities of the
company and the means to attain the same as well as the mechanism for monitoring management’s
performance. While the management of the day-to-day affairs of the institution is the responsibility of
the management team, the Board is, however, responsible for monitoring and overseeing management
action.57
To insure a high standard of best practice for the company and its stakeholders, the Board should
conduct itself with utmost honesty and integrity in the discharge of its duties, functions and
responsibilities which include, among others, the following:
i.
Install a process of selection to ensure a mix of competent directors, each of whom can add value and
contribute independent judgment to the formulation of sound corporate strategies and policies.
Select and appoint the CEO and other senior officers, who must have the motivation, integrity,
_____________________________________________________________________________
54. Stevens, 660-661.
55. Ballantine, 126.
56. Ibid.
57. CODE OF CORPORATE GOVERNANCE, p. 6(a).
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competence and professionalism at a very high level. Adopt a professional development program
for employees and officers, and succession planning for senior management.
ii.
Determine the corporation’s purpose and value as well as strategies and general policies to ensure
that it survives and thrives despite financial crises and its assets and reputation are adequately
protected. Provide sound written policies and strategic guidelines to the corporation that will help
decide on major capital expenditures. Determine important policies that bear on the character of
the corporation with a view towards ensuring its long term viability and strength. It must periodically
evaluate and monitor implementation of such strategies and policies, business plans and operating
budgets as well as management’s over-all performance to ensure optimum results.
iii. Ensure that the corporation complies with all relevant laws, regulations and codes of best business
practices.
iv. Identify the corporation’s major and other stakeholders and formulate a clear policy on
communicating or relating with them accurately, effectively and sufficiently. There must be an
accounting rendered to them regularly in order to serve their legitimate interests.
Likewise, an investor relations program that reaches out to all shareholders and fully informs
them of corporate activities should be developed. As a best practice, the chief financial officer or
CEO should have oversight of this program and should actively participate in public activities.
v.
Adopt a system of internal checks and balances, which may be applied in the first instance to the
Board. A regular review of the effectiveness of such system must be conducted so that the decisionmaking capability and the integrity of corporate operations and reporting systems are maintained at
a high level at all times.
vi. Endeavor to provide appropriate technology and systems rating to account for available resources
to ensure a position of a strong and meaningful competitor. Identify key risk areas and key
performance indicators and monitor these factors with due diligence.
vii. Constitute an Audit and Compliance Committee.
viii. Properly discharge Board functions by meeting regularly. Independent views during Board meetings
should be given due consideration and all such meetings should be duly minuted.
ix. Keep Board authority within the powers of the institution as prescribed in the articles of
incorporation, bylaws and in existing laws, rules and regulation. Conduct and maintain the affairs of
the institution within the scope of its authority as prescribed in its charter and in existing laws, rules
and regulations.58
The specific duties and responsibilities of a director were likewise set forth to be:
i.
To conduct fair business transactions with the corporation and to ensure that personal interest does
not bias Board decisions. The basic principle to be observed is that a director should not use his
position to make profit or to acquire benefit or advantage for himself and/or his related interests. He
should avoid situations that may compromise his impartiality. If an actual or potential conflict of
interest should arise on the part of directors or senior executives, it should be fully disclosed and the
concerned director should not participate in the decision making. A director who has a continuing
conflict of interest of a material nature should consider resigning.
ii.
To devote time and attention necessary to properly discharge his duties and responsibilities. A
director should devote sufficient time to familiarize himself with the institution’s business. He should
be constantly aware of the institution’s condition and be knowledgeable enough to contribute
_____________________________________________________________________________
58. Ibid., par. 6(h).
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meaningfully to the Board’s work. He should attend and actively participate in Board and committee
meetings, request and review meeting materials, ask questions, and request explanations.
iii. To act judiciously. Before deciding on any matter brought before the Board of directors, every
director should thoroughly evaluate the issues, ask questions and seek clarifications when
necessary.
iv. To exercise independent judgment. A director should view each problem or situation objectively.
When a disagreement with others occurs, he should carefully evaluate the situation and state his
position. He should not be afraid to take a position even though it might be unpopular. Corollarily, he
should support plans and ideas that he thinks are beneficial to the corporation.
v.
To have a working knowledge of the statutory and regulatory requirements affecting the
corporation, including the contents of its articles of incorporation and bylaws, the requirements of
the Commission, and where applicable, the requirements of other regulatory agencies. A director
should also keep himself informed of industry developments and business trends in order to
safeguard the corporation’s competitiveness.
vi. To observe confidentiality. A director should observe the confidentiality of non-public information
acquired by reason of his position as director. He should not disclose any information to any other
person without the authority of the Board.
vii. To ensure the continuing soundness, effectiveness and adequacy of the company’s control
environment.
Where a director, by virtue of his office, acquires for himself a business opportunity which should belong
to the corporation, thereby obtaining profits to the prejudice of such corporation, he must account to the
latter for all such profits by refunding the same, unless his act has been ratified by a vote of the stockholders
owning or representing at least two-thirds of the outstanding capital stock. This provision shall be
applicable, notwithstanding the fact that the director risked his own funds in the venture.59
A contract of the corporation with one or more of its directors or trustees or officers is voidable, at the
option of such corporation, unless all the following conditions are present –
•
The presence of such director or trustee in the board meeting in which the contract was approved
was not necessary to constitute a quorum for such meeting;
•
The vote of such director or trustee was not necessary for the approval of the contract;
•
The contract is fair and reasonable under the circumstances; and
•
In case of an officer, the contract has been previously authorized by the board of directors.60
Contracts between corporations with interlocking directors shall not be invalidated on that ground
alone61 and so long as there is no fraud and the transaction is attended with fairness and reasonableness.
As regards creditors of the corporation, directors cannot be personally liable to them for the inefficient
management of a solvent corporation. But, when the corporation becomes insolvent, the director will be
deemed trustees of the creditors and should manage its assets with strict regard to the latter’s interest. And
if they are themselves creditors, they will not be permitted to secure to themselves a personal advantage
over other creditors.62
_____________________________________________________________________________
59. CORPORATION CODE, Sec. 34.
60. CORPORATION CODE, Sec. 32.
61. Ibid. Sec. 33.
62. Campos, Comments, Notes and Selected Cases, 1981 ed. p. 544.
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PART II. STOCKHOLDERS
A. Stockholders Defined
Stockholders entitled to participate in corporate governance are those holding shares of stocks standing in
their names in the Stock and Transfer Book. Those holding common stocks without restrictions on the right
to vote have broader participation compared to those whose right to vote is restricted. The latter
participates in a limited manner. Under no instance can a person who, by reason of prestige, experience, or
knowledge, be given special treatment, and extended honorary membership, and thus be allowed to
participate in corporate governance. An honorary membership in a business corporation is an incongruity
and finds no sanction within the law or custom.63
B. Classification of Stockholders’ Rights
The rights of stockholders have been classified as (a) right to the control and management of corporate
affairs; (b) proprietary rights; and (c) remedial rights.64
Right to the control and management of corporate affairs include (i) to vote on matters pertaining to
fundamental matters of the corporation and elect directors; (ii) to inspect corporate books; (iii) to transfer or
dispose of fully paid shares; (iv) to file a derivative suit; (v) to initiate the convening of a special stockholders’
meeting in case of absence of authorized person to call or even if present, failure or refusal to call.
Proprietary rights refer to (i) issuance of stock certificate and be registered as a stockholder; (ii) receive
dividends; (iii) receive corporate assets in case of dissolution; (iv) transfer shares; (v) pre-emption.
Remedial rights are (a) to seek appraisal of corporate assets leading to withdrawal from the corporation;
(b) to have the corporation voluntarily dissolved; and (c) to initiate individual, representative or derivative
suit.
In some instances, as will be shown, proprietary rights can be used to exercise right of control and
management.
C. Nature of the Right to Vote
The essence of a corporation is the provision that whatever may be the classification of shares to be issued by
the corporation, there shall always be a class or series of shares which provides complete voting rights. The
law adds that no shares may be deprived of the right to vote except those classified as preferred or
redeemable shares. Except as otherwise provided by the articles of incorporation and stated in the
certificate of stock, each share shall be equal in all respects to every other share.65 For purposes of ensuring
compliance with constitutional or legal requirements, a corporation may classify its shares. Thus, a
corporation engaged in exploitation of natural resources may issue non-voting shares eligible for acquisition
by non-Filipinos to ensure compliance with the percentage of citizenship requirement of ownership of
shares.66
The right to vote is the legal and natural consequence of ownership of shares of stock. It is personal to
the stockholder and may be limited, broadened, or denied to the extent specified in the articles of
incorporation or bylaws. Unless so limited, broadened or denied, each member, regardless of class shall be
entitled to vote on the basis of one share one vote. Giving certain shares the privilege of more than one vote
is
not allowed.67
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63. Wolfson v. Manila Stock Exchange, G.R. No. 47411, June 27, 1941.
64. Ballantine, p. 375.
65. CORPORATION CODE, Sec. 6.
66. Ibid., Section 89.
67. Ibid., Sec. 24.
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Non-voting shares are allowed by law to vote in the following instances:
(a) amendment of the articles of incorporation;
(b) adoption and amendment of bylaws;
(c) sale, lease, exchange, mortgage, pledge or other disposition of all or substantially
corporate property;
all of the
(d) incurring, creating or increasing bonded indebtedness;
(e) increase or decrease of capital stock;
(f) merger or consolidation of the corporation with another corporation or other corporations;
(g) investment of corporate funds in another corporation or business in accordance with the
Corporation Code;
(h) dissolution of the corporation.68
In a non-stock corporation, the right of the member of any class to vote may be limited, broadened or
denied to the extent specified in the articles of incorporation or bylaws. Unless so limited, broadened or
denied each member regardless of class shall be entitled to one vote. Further, the right of a member to vote
by proxy may be taken away by the articles of incorporation or in the bylaws.69 Voting by mail or other
similar means may be authorized by the bylaws and under such conditions which may be prescribed by the
SEC.70
This right to vote is invariably exercised in a meeting called for the purpose which may either be regular
or special voting. Voting is always based on the number of shares represented71 and not on the number of
shareholders present. Such shares to be voted upon must always be part of the issued and outstanding
shares of the corporation.
It is not necessary that the shares are fully paid. Holders of subscribed shares, not fully paid, are entitled
to vote, provided the shares have not been declared delinquent by the Board of Directors.72
As a matter of business practice, stock ownership is not the only aim of persons investing in
corporations. To maximize benefits from the shareholdings, a shareholder normally utilizes his interest in
the corporation to advance his other interests. Thus, he may pledge his shares as security for a loan to
enhance his financial resources or enter into corporate combinations to ensure that policies and practices
needed to maintain and enhance the profitability of the business of the corporation will be maintained. A
stockholder, therefore, can pledge his shares or enter into voting trust agreement. In these cases, the
following rules will apply:
•
executors, administrators, receivers and other legal representatives duly appointed by the court
may attend and vote on behalf of the stockholders or members without need of a written proxy.73
•
shares owned by two or more persons require the consent of all co-owners to be voted upon, unless
there is a written proxy signed by all co-owners authorizing one or some of them to vote such
shares. For shares issued to two or more persons under an “and/or” arrangement any of the
named shareholders can exercise the right to vote, or appoint a proxy.74
•
if the shares are subject of a voting trust agreement, the trustee shall vote.
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68. CORPORATION CODE, Sec. 6.
69. CORPORATION CODE, Sec. 89.
70. Ibid.
71. Ibid.
72. CORPORATION CODE, Sec. 72.
73. Ibid., Sec. 55.
74. CORPORATION CODE, Sec. 56.
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•
if the shares are pledged or mortgaged, the rights of the stockholder shall continue to be exercised
by the pledgor or mortgagor unless he gives the pledgee or mortgagee the privilege to exercise said
rights. It shall however appear in writing and should be registered with the corporation.
Shares sequestered pursuant to Executive Order No. 1 shall be voted upon by the registered stockholder,
not the government or the Presidential Commission on Good Government.
A transferee of the shares cannot vote it if the transfer is not registered in the books of the corporation.75
In case of non-stock corporations, each member has only one vote unless the bylaws provide for right to
cumulate.
Treasury shares which refer to those re-acquired by the issuing corporation have no voting rights.
To challenge the exercise of right to vote, proper proceedings should be commenced;76 and in the
absence of fraud, any action at such meeting cannot be collaterally attacked on account of such
participation.
The right to vote is not a mere passive right, like right to receive dividends.77 It provides the shareholders
direct participation in corporate governance because this gives them the opportunity to select the persons
who will manage and operate the corporation. It is a way of ensuring that the individuals who will manage
the affairs of the corporation pursue the kind of business envisioned by them when they contributed their
capital and at the same time provide their reasonable assurance that profits will be obtained in the process.
This will likewise assure them that the persons in whose hands the affairs of the corporation are entrusted,
will do so prudently, honestly and efficiently.
Control Devices
The desire and design of a majority of the stockholders of a private corporation to control its management
and operation is legitimate per se, and is in fact the universal practice in the business world. Fletcher’s
Cyclopedia of the Law of Private Corporations is authority for the statement “that stockholders who own a
majority of the stock of a corporation may elect themselves directors or appoint themselves its agents, or
form and carry into effect policies of management as freely as if the business were their own, and so long as
they act honestly, and do not devote the corporate assets or business to their own private gain or to the
prejudice of other stockholders, no one can question their acts, which are surely intra vires.”78
It is not in violation of any rule or principle of law nor contrary to public policy for stockholders who own a
majority of the stock of a corporation to cause its affairs to be managed in such a way as they may think best
calculated to further the ends of the corporation, and for this purpose, to appoint one or more proxies who
shall vote in such a way as will carry out their plan. Nor is it against public policy or unlawful per se for
stockholders to agree or combine for the election of directors or other officers, so as to secure or retain
control of the corporation, at least where the object is to carry out a particular policy with a view to promote
the best interests of all of the stockholders, and the agreement is fair to all the stockholders alike. And they
may do this either by themselves or through their proxies, or they may unite in the appointment of a single
proxy to effect their purpose.
The “one share one vote” rule resulted in limiting the opportunity of minority stockholders to participate
in corporate governance. The extent of control by stockholders of the corporate officers is proportional to
the number of shares a stockholder owns. The means available to minority shareholders to ensure that the
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75. CORPORATION CODE, Sec. 63.
76. Price v. Martin, G.R. No. 37281, November 10, 1933.
77. Cojuangco v. Roxas, supra.
78. Alejandrino v. de Leon, G.R. No. 49043, December 1943.
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CORPORATE GOVERNANCE
corporation will not assume risks, not otherwise considered by them when they delivered their capital
contribution, is insufficient. The power to manage and control the business and property of the corporation
is vested exclusively on the Board of Directors, hence, whoever is able to elect a majority of the directors
would control the affairs of the corporation. Any stockholder or group of stockholders interested in
influencing the business of the corporation is expected to adopt ways to elect a director.
To remedy, the law allows shareholders to enter into agreements providing for the manner of voting
termed by corporate law practitioners as “control devices.”
The test according to the weight of authority, of the validity and legality of agreements providing for the
manner of voting depend upon the objects sought to be attained and the acts done pursuant thereto. Of
course, such combinations or agreements are invalid if in contravention of statutes providing that no proxy
shall be voted on after a certain length of time from its date, or if they operate as an illegal restraint on the
alienation of the shares of stock.
1. Proxy
The proxy device is a development which necessarily accompanied the increase in the size and
geographical dispersion of corporate membership. Without this device, the inability of the
stockholders or members to attend meetings in person might make it impossible to secure the
quorum necessary to take corporate action.79
Proxy is essentially a form of agency governed by the Civil Code for the specific purpose of
representing a stockholder in the meeting of the stockholders of a particular corporation. A person
may act as proxy for one or several stockholders or members. It is always revocable even if
stipulated to be irrevocable, unless it is “coupled with interests,” as where the proxy parted with value
or incurred liability at the stockholders’ request. A continuing proxy must be for a period not
exceeding five years at any one time otherwise it shall not be valid after such period. The proxy must
act strictly in accordance with instructions given to him by the stockholder. To be valid and
enforceable, the proxy must be in writing signed by the stockholder or member and filed before the
scheduled meeting with the Corporate Secretary.80 No particular form is required unless prescribed
by the bylaws.
In the absence of a specific date for submission provided for in the bylaws, the corporation cannot
fix the deadline because the law says that when no deadline or period of filing or submission of the
proxies is provided in the bylaws, they may be filed anytime before the scheduled meetings.81
In stock corporations, the appointment of proxy is purely personal and an incident of ownership.
Bylaw provisions prohibiting the use of proxy by shareholders is contrary to law, hence void.
Restrictions may however be imposed, provided they do not conflict with the law and are not unjust,
unreasonable and oppressive so as to result in disenfranchisement. Thus, the bylaws may provide as
additional requirement, acknowledgment before a notary public82 or a deadline for the submission of
proxies before the scheduled meeting, or that no proxy shall be valid or voted on after a certain length
of time from the date specified, or that no person shall vote at any meeting by virtue of any proxy
executed within a certain period of time prior to such meeting, or that no such proxy shall be used at
more than one annual meeting of the corporation.
In non-stock corporations, the right to vote by proxy may be denied to members but they should
be provided in the articles of incorporation or bylaws.
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79. Agbayani, Commentaries and Jurisprudence on the Commercial Laws of the Phil., Vol. III, 1996 ed. p. 546.
80. CORPORATION CODE, Sec. 58.
81. SEC Opinion, July 15, 1997.
82. Campos, Corporation Code, Comments Notes and Selected Cases, p. 352.
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2. Voting Trust Agreement
One or more stockholders of a stock corporation may create a voting trust for the purpose of conferring
upon a trustee or trustees the right to vote and other rights pertaining to the share for a period not
exceeding five years at any one time: Provided, That in the case of a voting trust specifically required as
a condition in a loan agreement, said voting trust may be for a period exceeding five years but shall
automatically expire upon full payment of the loan.
A voting trust agreement must be in writing, notarized, and shall specify the terms and conditions
thereof. A certified copy of such agreement shall be filed with the corporation and with the Securities and
Exchange Commission; otherwise, said agreement is ineffective and unenforceable. The certificate or
certificates of stock covered by the voting trust agreement shall be cancelled and new ones shall be
issued in the name of the trustee or trustees stating that they are issued pursuant to said agreement. In
the books of the corporation, it shall be noted that the transfer in the name of the trustee or trustees is
made pursuant to said voting trust agreement.
The trustee or trustees shall execute and deliver to the transferors voting trust certificates, which
shall be transferable in the same manner and with the same effect as certificates of stock.
The voting trust agreement filed with the corporation shall be subject to examination by any
stockholder of the corporation in the same manner as any other corporate book or record: Provided,
That both the transferor and the trustee or trustees may exercise the right of inspection of all corporate
books and records in accordance with the provisions of this Corporation Code.
Any other stockholder may transfer his shares to the same trustee or trustees upon the terms and
conditions stated in the voting trust agreement, and thereupon shall be bound by all the provisions of
said agreement.
No voting trust agreement shall be entered into for the purpose of circumventing the law against
monopolies and illegal combinations in restraint of trade or used for purposes of fraud.
Unless expressly renewed, all rights granted in a voting trust agreement shall automatically expire at
the end of the agreed period, and the voting trust certificates as well as the certificates of stock in the
name of the trustee or trustees shall thereby be deemed cancelled and new certificates of stock shall be
reissued in the name of the transferors.
The voting trustee or trustees may vote by proxy unless the agreement provides otherwise.83
A voting trust agreement involves complete surrender by the shareholder of his voting right to
another. Commentators call the arrangement as one intended to make the proxy device irrevocable.
The stockholder remains the beneficial owner of the shares but legal title is with the trustee, thus real
ownership of the shares is separated from the voting right. The power of the shareholders to change the
management during the term of the agreement is thus removed.84 Under the prevailing view, a voting
trust should have a legitimate business purpose to promote the best interests of the corporation, or to
protect the legitimate interests of the corporation. It is therefore not considered valid if it exists only for
the benefit of the trustee without any obligation to perform any useful service for the protection of the
stockholders or creditors of the corporation. Neither would it be valid if the purpose is to restrict the
powers of directors. Ballantine lists some purposes which have been regarded as legitimate: (i) to
assist financing, to procure loans, and to protect bondholders and preferred shareholders; (ii) to aid in
_____________________________________________________________________________
83. CORPORATION CODE, Sec. 59.
84. Lee v. Court of Appeals, G.R. No. L-93695, February 4, 1992.
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CORPORATE GOVERNANCE
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reorganization plans and adjustments with creditors in times of great financial stress; or (iii) to
accomplish some definite plan or policy for the benefit of the corporation and for this purpose, to assure
stability and continuity of management.85
The trustee being the registered owner of the shares, can be voted as director.
3. Pooling Agreement
Two or more shareholders may agree that in the exercise of their voting rights, their shares shall be voted
in the manner agreed upon, usually in relation to election of directors, either specifying the name of the
director to be voted upon or that the shares covered by the agreement shall be voted as a unit in
accordance with the procedure agreed upon. In short, the shares held by them shall be voted as one. In
such case, shareholders remain to be the registered owners of their shares with the right to vote. The
validity of this arrangement has been upheld, provided, they do not limit the discretion of the board of
directors in the management of corporate affairs or work fraud against the stockholders who are not
parties thereto. An agreement that the directors once elected must vote for certain persons as officers
would be void since the choice of officers is vested by law in the board of directors.86
In close corporations, the rules87 are:
•
Agreements by and among stockholders executed before the formation and organization of a
close corporation, signed by all stockholders, shall survive the incorporation of such corporation
and shall continue to be valid and binding between and among such stockholders, if such be their
intent, to the extent that such agreements are not inconsistent with the articles of incorporation,
irrespective of whether the provisions of such agreements are contained, except those required
by law to be embodied, in said articles of incorporation.
•
An agreement between two or more stockholders, if in writing and signed by the parties thereto,
may provide that in exercising any voting rights, the shares held by them shall be voted as therein
provided, or as they may agree, or as determined in accordance with a procedure agreed upon by
them.
•
No provision in any written agreement signed by the stockholders, relating to any phase of the
corporate affairs, shall be invalidated as between the parties on the ground that its effect is to
make them partners among themselves.
•
A written agreement among some or all of the stockholders in a close corporation shall not be
invalidated on the ground that it so relates to the conduct of the business and affairs of the
corporation as to restrict or interfere with the discretion or powers of the board of directors:
Provided, That such agreement shall impose on the stockholders who are parties thereto the
liabilities for managerial acts imposed by the Corporation Code on directors.
•
To the extent that the stockholders are actively engaged in the management or operation of the
business and affairs of a close corporation, the stockholders shall be held to strict fiduciary duties
to each other and among themselves. Said stockholders shall be personally liable for corporate
torts unless the corporation has obtained reasonably adequate liability insurance.
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85. Ballantine, pp. 427-428.
86. Campos, Corporation Code, Comments, Notes and Selected Cases, p. 403.
87. CORPORATION CODE, Sec. 100.
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4. Classification of Shares
This is another form of a control device done by dividing the shares of stock into classes or series of
shares, or both, any of which classes or series of shares may have such rights, privileges or
restrictions as may be stated in the articles of incorporation, provided, that no share may be deprived
of voting rights except those classified and issued as “preferred” or redeemable shares, unless
otherwise provided in the Corporation Code.88
Shares of stock, when classified and issued distinctly as voting and non-voting, can give rise to an
eventuality where the corporate affairs can be controlled by the owners of the majority of the voting
shares, which majority may only be a minority in the total number of shares, voting and non-voting,
issued and outstanding. Control depends not on the amount of investment but on number of voting
shares owned.
D. Right to Inspect and to Examine Corporate Records
The right of a stockholder to vote can be effectively discharged only if he has full knowledge of the affairs of
the corporation. It also serves to assist him to protect his individual rights from the acts of the Board of
Directors and officers. Some authors are of opinion that the right to information is founded on the fact that a
stockholder has an inchoate right over the corporate assets which is entitled to protection. It is an incident of
ownership of corporate property whether this ownership or interests is termed as equitable ownership,
beneficial ownership or quasi-ownership, the justification is self protection.89 This right is not affected by the
sequestration of the shares involved.90
Ballantine classifies the right of inspection of stockholders as a remedial right in that it may be resorted to
by any dissatisfied stockholder as a preliminary step to seek immediate remedies against abuses committed
by management. It can also be utilized as an effective tool of corporate governance because it serves as a
deterrent. Knowledge of management of free scrutiny by stockholders will discourage them from doing an
illegal or unjust act.
Gokongwei v. Securities and Exchange Commission91 held that:
x x x the right (to inspect) is given to him as such and must be exercised by him with respect to his
interest as a stockholder and for some purpose germane thereto or in the interest of the corporation.
In other words, the inspection has to be germane to the petitioner’s interest as a stockholder, and has
to be proper and lawful in character and not inimical to the interest of the corporation.
Records subject to inspection are those every corporation must keep and carefully preserve as
mandated by law.92 These are records of all business transactions, minutes of all meetings of stockholders
or members or of the Board of Directors or trustees wherein details of the time and place of the holding of a
meeting, authority therefor, notice given, nature of the meeting whether regular or special, and if special, its
object, those present and absent and every act done or ordered done at the meeting. Records of all business
transactions is a very broad definition and would include those required by Section 3393 of the Code of
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88. CORPORATION CODE, Sec. 6.
89. Gokongwei v. SEC, supra.
90. PCGG v. Africa, G.R. No. L-85597, January 9, 1992.
91. Supra.
92. CORPORATION CODE, Sec. 74.
93. Section 33 provides: The merchants shall necessarily keep: 1. A book of inventories and balances; 2. A journal; 3. A ledger; 4. A book or books for copies
of letters and telegrams; 5. Other books which may be required by special laws.
Associations and companies shall also keep a book or books of minutes, in which shall be entered all resolutions referring to the progress and operations
of the entities, approved at regular meetings or at those of managing boards..
108
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Commerce to be kept by merchants, to include financial statements, income tax returns, vouchers, receipts,
contracts and all papers pertaining to such contracts.94
As regards the purpose of inspection, the law as presently worded makes the purpose material. It says
that it shall be a defense to any action for damages for refusing right of inspection, that the person
demanding to examine and copy excerpts from the records has improperly used information secured
through any prior examination of the records or minutes of such corporation or of any other corporation or
was not acting in good faith or for a legitimate purpose in making his demand.95
The term “legitimate purpose” is to be considered as one which is germane to the interest of the
stockholder as such and not contrary to the interests of the corporation.96
The right to examine the books of the corporation must be exercised in good faith, for specific and honest
purpose and not to gratify curiosity or for speculative or vexatious purposes.97
An issue has been raised on whether the right of inspection could be used to advance a stockholder’s
social and political beliefs. In the United States this was answered in the negative.98
In Pardo v. Hercules Lumber Co.,99 the Board of Directors approved a resolution giving notice to the
shareholders that the books of the company are at their disposition from the 15th to 25th of the same month
for examination. This was done pursuant to the corporation’s bylaw provision that “Every shareholder may
examine the books of the company and other documents pertaining to the same upon the days which the
board of directors shall annually fix.” This was held as an undue restriction and declared invalid.
The right to inspect is considered personal but a stockholder may be aided by an expert and counsel so as
to make an intelligent inspection.100
The limitations on the exercise of this right, are:
a) the right of inspection should be exercised at reasonable hours and on business days;
b) the person demanding the right to examine and copy excerpts of records and means has not
improperly used any information, secured through any previous examination of the records of the
corporation or any other corporation;
c) the stockholder shall set forth the reasons and purposes for which he desires such inspection;101 and
d) where the law provides that access to records by specific persons is not allowed as in Secrecy of Bank
Deposits Act, the same must be observed.
The burden of proof to show that the action of the stockholder in seeking examination of the corporate
records was moved by an ill-motived design is on the corporation or its officer.102
Dean Cesar Villanueva in his Philippine Corporate Law, held that the purpose of inspection should be
limited to the following:
a) to ascertain whether the corporation is being mismanaged;
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94.
SEC Opinion, January 27, 1975.
95.
CORPORATION CODE, Sec. 14.
96.
Campos, Corporation Code, Comments Notes and Selected Cases, p. 551 citing Gokongwei v. SEC, G.R. L-45011.
97.
Grey v. Insular Lumber, No. L-45144, April 3, 1939.
98.
State ex rel Pittsbury v. Honeywell, Inc. 191 Alw 2d 406 (1971).
99.
G.R. No. 22442, August 1, 1924.
100. Villanueva, Philippine Corporate Law, 2002 ed. p. 501.
101. Gonzales v. PNB, G.R. No. L-33320, May 30, 1983.
102. Republic v. Sandiganbayan, G.R. Nos. 88809 and 88858, July 10, 1991.
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b) to ascertain the financial condition of the corporation;
c) to ascertain the value of shares of stocks for sale or investment;
d) to obtain a mailing list of shareholders to solicit proxies or influence voting, in anticipation of
shareholders’ meeting.103
Purposes which may warrant denial of the right of inspection for being improper, are:
a) to obtain information as to business secrets or to assist and reveal business secrets;
b) to secure business “prospects” or investment of advertising lists, as where the shareholder seeks the
list of shareholders for the purpose of selling to an advertising agency;
c) to find technical defects in corporate transactions in order to bring “nuisance” or “strike suits” for
purpose of blackmail or extortion;
d) to obtain information intended to be published so as to embarrass the company business, depress
the value of its assets, and cause loss to stockholders or where the purpose is to create
demoralization and dissension among the shareholders and by depressing the value of shares, be
able to deal with them profitably, at their expense.104
Gokongwei, Jr. v. Securities and Exchange Commission105 held that the right of a shareholder to examine
is not limited to the corporation where he owns shares of stock but extends to the records of a wholly owned
foreign subsidiary company. A situation where the records of the subsidiary company are kept outside the
Philippines calls for a different rule because the laws of the country where the records of the subsidiary
company are kept would have to be observed. Besides, judicial process cannot be given extraterritorial
effect.
Invented formula or process for manufacturing products, not generally known, proven to be useful may
be denied access to a stockholder.106
E. Right to Transfer Shares
Some authors classify this as proprietary right but it can be an instrument of corporate governance because
the right to transfer shares carries the power to shift control of the corporation. In some sophisticated
capital markets, this right is used to depress share prices, as a signal for the entry of other investors with the
expectation that sufficient shares will be acquired to enable the new group to take over management and
control of the corporation. It is also used to express displeasure of the manner business is conducted by the
board or management.
Inherent in stock ownership is the right to transfer and dispose some or all of the shareholdings. Like the
right to vote, this cannot be restricted except in a very limited way, e.g., right of first refusal. Even the motive
for disposing cannot be questioned.
Transfer of share is done by endorsement of the certificate and delivery. It may also be done through a
simple bill of sale or through other modes of disposition according to civil law. In case transfer is by donation,
the form for personal property shall be used because shares are treated as personal property.107
To be valid and binding on third persons, the transfer should be recorded in the books of the corporation.
No shares of stock against which the corporation holds any unpaid claim shall be transferred in the books of
the
corporation.108
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103. Villanueva, Philippine Corporate Law, pp. 505-506.
104. Ibid.
105. Supra.
106. W.G. Philpotts v. Phil. Manufacturing Corp., G.R. No. 15568, November 8, 1919.
107. CIVIL CODE, Article 417 (2).
108. CORPORATION CODE, Sec. 63.
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For unpaid shares, no registration of transfer can be effected because unpaid shares are not entitled to
the issuance of a stock certificate, hence no endorsement can be made. It is not necessary that there has
been a previous call by the board of directors for payment of the balance. The restriction covers even part of
the unpaid subscribed shares in view of the indivisible nature of the subscription. From the practical
viewpoint, it would be difficult to determine whether or not the partial payments made should be applied as
full payment for the corresponding number of shares or as proportional payment to each and all of the entire
number of subscribed shares. Sale of the entire unpaid shares is however allowed.109 The corporation may
agree to record the transfer, but no certificate will be issued to the transferee.
On the matter of restrictions, Fleischer v. Botica Nolasco Co.110 said:
As a general rule, the bylaws of a corporation are valid if they are reasonable and calculated to carry into
effect the objects of the corporation, and are not contradictory to the general policy of the laws of the
land. (Supreme Commandery of the Knights of the Golden Rule v. Ainsworth, 71 Ala., 436; 46 Am.
Rep., 332)
On the other hand, it is equally well-settled that bylaws of a corporation must be reasonable and for
a corporate purpose, and always within the charter limits. They must always be strictly subordinate to
the constitution and the general laws of the land. They must not infringe the policy of the state, nor be
hostile to public welfare (46 Am. Rep., 332.) They must not disturb vested rights or impair the
obligation of a contract, take away or abridge the substantial rights of stockholder or member, affect
rights of property or create obligations unknown to the law. (People’s Home Savings Bank v. Superior
Court, 104 Cal., 649; 43 Am. St. Rep., 147; Ireland v. Globe Milling Co., 79 Am. St. Rep., 769.)
The validity of the bylaw of a corporation is purely a question of law. (South Florida Railroad Co. v.
Rhodes, 25 Fla., 40.)
Restrictions on transferability of shares may however be imposed without abating the concept of shares
of stock as personal property, because ownership of a share of stock also creates a contractual relationship
between the corporation and shareholder.
Restrictions must be reasonable and the SEC set the guidelines in determining the reasonableness of
restrictions, viz:
a) the restrictions shall not be more onerous than granting the existing stockholders or the corporation
the option to purchase the shares of the transferring stockholder with such reasonable terms,
conditions or period stated therein;
b) a restriction clause is not valid and enforceable if it absolutely prohibits the sale or transfer of stock
without the consent of the existing stockholders, as this would violate the general law on free
alienability of shares of stock;
c) reasonable option period may range from 30 to 60 days or even more, depending on the
circumstances surrounding the case; and
d) after the option period has expired, the stockholder is free to sell his shares of stock to anyone.111
In close corporations, restrictions may extend to personal qualifications of the stockholder.
The Code requires that the restriction on transfer of shares appear in the articles of incorporation, in the
bylaws and in the certificate of stock, otherwise they cannot bind a purchaser in good faith. The implication
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109. SEC Opinion, October 9, 1995
110. G.R. No. 23241, March 14, 1925.
111. SEC Opinion, June 8, 1995.
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is that a restriction may be binding on the corporation and the stockholders even if it appears only in the
articles of incorporation or only in the bylaws, as these are both binding on all stockholders anyway. If the
stock certificate conspicuously shows the restriction, the purchaser or transferee is conclusively presumed
to have notice of the restriction, provided this appears in the articles of incorporation. He cannot prove that
he acted in good faith. If it appears in the certificate, but not conspicuously, then although he may be
presumed to have notice of the restriction, he can prove the contrary. Where a conclusive presumption of
notice arises, the corporation may, at its option, refuse to register the transfer, unless all the stockholders
have consented to the transfer, or the articles of incorporation have been amended in accordance with law.
In any case, the transferee retains his right against the transferor to rescind the transaction to recover under
any warranty.112
If the restriction is not stated in the articles nor in the bylaws but appears in a private agreement of the
stockholders, it should be binding among them although it cannot affect anybody else who was not a party to
the contract. On the other hand, although the restriction may already appear in both the articles and the
bylaws, it would be wise for the stockholders to embody it in a stock agreement. The restriction may be
done away with by amendment of the articles of incorporation and the bylaws, which needs only the vote of
two-thirds of the stocks. On the other hand, a stockholders’ agreement will be binding on all the
stockholders parties to it and cannot be changed against the objection of even only one of them.113
In non-stock corporations, a member cannot transfer his rights as such, unless the articles of
incorporation or bylaws provide otherwise. This is so because membership is personal.114
F. The Right to Initiate Derivative Suits
Derivative suits are actions filed in court by a stockholder or group of stockholders irrespective of number of
shares held115 in cases where “directors are guilty of breach of trust, not of mere error of judgment or abuse
of discretion and intra corporate remedy is futile or useless, done for the benefit of the corporation to bring
about redress of the wrong inflicted directly upon the corporation and indirectly upon the stockholders.”116
There is no express provision in the Corporation Code on derivative suits but the right of the stockholder to
initiate it has long been recognized by courts of common law, founded on equity. There are various theories
to explain the grant of this right.
One theory merely explains the suit as an exceptional method of procedure in order to give a remedy for
a corporate wrong affecting the shareholders indirectly which would otherwise escape redress, perhaps by
the fraud of the wrongdoers themselves.117
Another theory is that “the right of the stockholder to sue exists because of special injury to him for which
he is otherwise without redress.” This idea that the plaintiff sues because of the special indirect damage to
himself as a shareholder by the wrong to the corporation and its assets is not an adequate explanation of the
basis of the shareholders’ suit.118
It has been held in Pascual v. Del Saz Orozco,119 that it became gradually apparent that frequently the
corporation was helpless to institute the suit. It was found where the guilty parties themselves control the
directors and also a majority of the stock, that the corporation was in their power, was unable to institute suit,
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112. Campos, Corporation Code, Comments, Notes and Selected Cases, pp. 857-858.
113. Ibid.
114. CORPORATION CODE, Sec. 90.
115. Republic v. Cuaderno, G.R. No 22399, March 20, 1967.
116. Bitong v. Court of Appeals, G.R. No. L-123553, July 13, 1998.
117. Agbayani, Commercial Laws of the Philippines, Vol. I 1996 ed. p. 559 .
118. Ibid.
119. No. 5174, March 17, 1911.
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and that the minority of the stockholders were being defrauded of their rights and were without remedy.
The time came when the minority of the stockholders of the defrauded corporation – the corporation itself
being controlled by guilty parties were given a standing in court for the purpose of taking up the cause of the
corporation, and in its name and stead, of bringing the guilty parties to account.120
For the action to prosper, it is necessary to show that the aggrieved party is the corporation and the cause
is the willful act of the director or officer, resulting in damage or prejudice. Further, the following must be
shown:
•
the stockholder or member bringing the suit must have exhausted his remedies within the
corporation; i.e., he has made a demand on the directors or trustees and the latter failed or refused to
do so. This demand however is not necessary where it would be futile to make it, as where the
majority of the directors or trustees are guilty of the wrong complained of.121
•
the stockholder or member must have been one at the time the transaction or act complained of took
place, unless such transaction or act continues and is injurious122 to the stockholder. In one case, the
Supreme Court has allowed a derivative suit brought by the heirs of the stockholder during whose
lifetime the transaction took place.
•
any benefit recovered by the stockholder or member as a result of the derivative suit, whether by final
judgment, by judicial compromise or by extrajudicial settlement, must be accounted for to the
corporation, who is the real party in interest.
•
if the suit is successful, the stockholder prosecuting the suit is entitled to reimbursement from the
corporation for the reasonable expenses of litigation, including attorney’s fees.
Derivative suit is to be distinguished from personal suit of a stockholder, available when, for example, the
right to inspect corporate records is denied, and brings an action in his name. A class suit is also different
because it refers to suits involving a class of shareholders whose rights as such are violated, such as where
holders of preferred shares are not given the preferential treatment they are entitled to.
The shareholder must, however, sue in good faith for the company and not as the representative or
puppet of a rival company.123
In one case,124 derivative suit was held improper where plaintiffs who were minority stockholders sued
the principal officer of the corporation for damages due to mismanagement and misuse of corporate assets
and the relief prayed is for plaintiffs to be paid the value of their respective participation in the said assets.
On the matter of bringing in the corporation as a party plaintiff or defendant, the prevailing rule125 is, it
should be made a party. It will bar future actions based on the same act because of res judicata.
In the prosecution of the derivative suit, the corporation is not allowed to be an active party. It has no
control over the suit against the real defendants. It is required to adopt a neutral or passive role with only a
limited power to defend itself, while its volunteer representative conduct for its benefit the litigation which its
management has failed or refused to bring. It need not answer or take any steps in the proceedings nor can
it assume the status of co-plaintiff. The plaintiff has the right of control.126 It is improper to use corporate
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120. Ibid.
121. Everett v. Asia Banking Corp., G.R. No. 25241, November 3, 1926.
122. Bitong v. Court of Appeals, supra; see also Denison vs. Beyersdorffer, G.R. No. 47821, April 25, 1941.
123. Ballantine, p. 354.
124. Evangelista v. Santos, No. L-1721, May 19, 1950.
125. Republic v. Cuaderno, G.R. No. 22399, March 20, 1967.
126. Ballantine, p. 367.
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funds to give financial aid or to assist the defense of directors, officers or other defendants. The plaintiff
shareholder is entitled to a fair opportunity to prosecute the lawsuit without having the resources of the
corporation turned against him.127
Worthy of note is Reyes v. Tan128 where the appointment of a receiver in a derivative suit was allowed.
An interesting issue in derivative suits is whether it is proper in an action against a third person, where
the board of directors, in the exercise of its judgment, decides not to sue. In the United States, this issue was
disposed of in the manner as follows:
A corporation’s right to sue is correlative to its right not to sue. Unless an equitable basis for
intervention be shown, an individual stockholder has no more right to challenge by a derivative suit a
decision of the board not to sue a third person than to so challenge any other decision of the board.
However, where the complaint alleges and it is proved that the directors acted in bad faith, dishonestly
or in breach of trust, or were under the control of the wrongdoers, then a derivative suit against a third
129
person may be given due course.
If the suit is successful, any monetary award for the injury caused to the corporation shall inure to the
corporation, not to the stockholder who brought the action. He is, however, entitled to recover costs of
litigation including attorney’s fees.
G. Right of Pre-emption
The right of pre-emption is directly related to corporate governance because it concerns the opportunity to
maintain the same level of influence in terms of voting power or reduce it. In some cases, it may directly
affect control of the corporation.
From the economic point of view, the right is termed as “right to invest capital.” When the corporation has
exhibited profitability or higher returns than the stockholder could get as compared to the open market,
stockholders should be given the priority of investing thereon.
All shareholders shall have the priority in subscribing to all issues or disposition of shares of any class in
proportion to their respective shareholders. The articles of incorporation may however deny them the
right.130
The right may not however be exercised with respect to shares issued in compliance with laws requiring
stock offering or minimum stock of the public or to shares issued in good faith with the approval of the
stockholders representing two-thirds of the outstanding capital stock in exchange for property needed for
corporate purpose or in payment of previously contracted debt.131
Even if the preemptive right does not exist, either because the issue comes within the exceptions in
Section 39 of the Corporation Code or because it is denied or limited in the articles of incorporation, an issue
of shares may still be objectionable if the directors have acted in breach of trust and the primary purpose is to
perpetuate or shift control of the corporation, or to “freeze out” a minority interest. On the other hand,
although the preemptive right does not exist or has been denied, the corporation may just the same decide
to offer the shares to the existing shareholders as a matter of policy.
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127. Ibid.
128. G.R. No. L-16982, September 30, 1961.
129. Campos, Corporation Code, Comments, Notes and Selected Cases, pp. 576-577, citing Swanson v. Traer, 249 F. 24. 854.
130. CORPORATION CODE, Sec. 39.
131. Ibid.
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It is to be noted that any prior waiver or denial of the preemptive right must appear in the articles of
incorporation, and not in an ordinary waiver agreement. But if all the stockholders unanimously agree to
such a waiver, although for some reason no amendment to the articles is made, then none can complain
since all of them would be bound by their agreement to waive. On the other hand, an agreement to waive
approved by stockholders representing only two-thirds of the outstanding capital stock without any
amendment of the articles, cannot have any binding effect on any stockholder who did not sign the waiver
and he can demand his preemptive right. Failure to exercise the preemptive right would be a waiver of the
same. The stockholders must however be given a reasonable time within which to exercise said right.
H. Acts of Stockholders when Considered as Corporate Acts
A stockholder’s right to vote can only be exercised in a meeting which is either regular or special. To hold a
meeting, the following should be observed:
1. Notice. – Written notice of regular meetings, shall be sent to all stockholders or members of record at
least two weeks prior to the meeting unless a different period is required by the bylaws. The notice
shall state time, place and purpose of the meeting. Special meetings shall be held at anytime deemed
necessary or as provided in the bylaws provided that at least one week written notice shall be sent to
all stockholders or members, unless otherwise provided in the bylaws.132
The bylaws may either shorten or extend the time required by the Code for giving notice. Failure
to give the same would, as a rule, render any resolution made therein voidable at the instance of an
absent stockholder who was not notified of the meeting.
Should a stockholder or member attend the meeting despite want of notice, he will be deemed to
have impliedly waived the requirement.
If all the stockholders or members are present or duly represented at the meeting, and no
objection was timely raised on the absence of notice, it will be valid even if no notice was sent in
accordance with the law or with the bylaws. It amounts to waiver.
A stockholder who attends a meeting is exercising a personal right as an owner of stocks of the
corporation and is not rendering services to anyone but to himself. He is therefore not entitled to per
diem for such attendance. And unlike a member of the board of directors, a stockholder may appoint
a proxy in his stead whose vote will be as effective as if he was personally present.
In the following instances, the purpose of the meeting should be stated in the notice to
stockholders:
•
approval and issuance of stock dividends;
•
increase or diminish capital stock, or incur, create, or increase any bonded indebtedness;
•
authority to invest corporate funds for purposes other than those stated in the articles of
incorporation;
•
sale, lease, exchange or disposition of all or substantially all of corporate property;
• removal of directors;
•
voluntary dissolution of the corporation;
•
amendment, repeal or adoption of new bylaws;
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132. CORPORATION CODE, Sec. 50.
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•
approval of management contracts with another corporation;
•
filling vacancies in the board of directors or trustees;
•
ratification of corporate contract with a director;
•
extension or shortening of corporate term;
•
fixing the issued value of no par value shares.
2. Date of Meeting. – Regular meetings of stockholders shall be held annually on any date in April of
every year as determined by the board of directors or trustees unless the bylaws fixed a different
date.133 Special meetings can be held anytime but the procedure for calling a meeting provided in the
bylaws should be observed. In the absence of a specific provision, any stockholder can petition the
SEC pursuant to Section 50 of the Corporation Code for the holding of a special meeting of
stockholders.
Where the corporation held several unsuccessful attempts to hold a meeting or it would be
impossible for the corporation to get the required quorum of stockholders necessary to transact
business they may petition for appointment of a management committee to administer its affairs.134
3. Place of Meeting. – Stockholders’ or members’ meetings, whether regular or special, shall be held in
the city or municipality where the principal office of the corporation is located, and if practicable, in
the principal office of the corporation. If the articles of incorporation simply states that the principal
office is Metro Manila, the meeting can be held in any city within Metro Manila. Metro Manila for
purposes of said Section 51 shall be considered a city or municipality.
Non-stock corporations may hold their regular and special meetings at any place even outside the
place where the principal office of the corporation is located, so long as prior notice is sent to all
members and that the venue is within the Philippines.
4. Quorum and Vote. – The requirement of existence of quorum is complied with if stockholders who
own majority of the outstanding shares entitled to vote attend in person or by proxy. In some cases,
the Corporation Code requires a vote of more than the majority and in those instances, the
attendance required to constitute a quorum must at least be equivalent to the required number of
votes who must then vote unanimously to approve a particular proposal. As regards the number of
votes needed to arrive at a valid act, the nature of the resolution will have to be considered.
In other cases where the law does not specify the number of votes needed to approve a proposed
act, the bylaws may provide a lesser number of shareholders to constitute a quorum. Similarly, the
bylaws may provide voting by mail or other similar means.
The instances when the law requires a different number of votes to approve a corporate act are:
•
issuance of stock dividends – not less than two-thirds of the outstanding capital stock;
•
increase or diminution of capital stock – two-thirds of the outstanding capital stock;
•
incurring, creating or increasing bonded indebtedness – two-thirds of the outstanding capital
stock in case of stock corporations or two-thirds of the members in case of non- stock
corporations;
•
investment of corporate funds in any other corporation – not less than two-thirds of the
outstanding capital stock;
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133. CORPORATION CODE. Section 50,
134. SEC Opinion, July 10, 1998.
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•
amendment of the articles of incorporation – two-thirds of members, if a non-stock
corporation, or at least two-thirds of the outstanding capital stock, if a stock corporation;
•
adoption of the bylaws – a majority of all outstanding capital stock, if a stock corporation, or
majority of the members, if a non-stock corporation;
•
amendment, repeal or adoption of new bylaws – majority of the subscribed capital stock if a
stock corporation or majority of the members, if a non-stock corporation;
•
delegation to the board of the power to amend, repeal, or a new bylaws – two-thirds of the
outstanding capital stock, if a stock corporation or two-thirds of the members, if non-stock;
•
revocation of the delegated powers – a majority of the outstanding capital stock or a majority
of the members in non-stock corporation;
•
election of directors – majority of outstanding capital stock, or if there be no capital stock, a
majority of the members entitled to vote;
•
removal of directors or trustees – two-thirds of the outstanding capital stock, or if a non-stock
corporation, by a vote of two-thirds of the members entitled to vote;
•
sale, or disposition of all or substantially all of the assets of a corporation – two-thirds of the
outstanding capital stock, or in case of non-stock corporation, by the vote of at least twothirds of the members;
•
voluntary dissolution – two-thirds of the outstanding capital stock;
•
grant of compensation to directors – majority of the outstanding capital stock;
•
ratification of a corporate contract with a director or trustee – at least two-thirds of the
outstanding capital stock or of two-thirds of the members in a meeting;
•
ratification of extension or shortening of the corporate term – at least two-thirds of the
outstanding capital stock or by at least two-thirds of the members in case of non-stock
corporation;
•
approval of management contracts with another corporation – the majority of the
outstanding capital stock, or by at least a majority of the members in the case of a non-stock
corporation;
•
ratification of merger or consolidation – at least two-thirds of the outstanding capital stock or
of two-thirds of the members of each of the constituent corporations.
5. Proper and Orderly Conduct of Meeting Required for Validity
The meeting shall be conducted by the proper persons, with fairness and good faith towards all who
are entitled to take part, and in such a way as to enable them to express their vote upon questions
coming before the meeting.135 The ordinary parliamentary usages, practice and rules of order apply.
In one case, the refusal of the presiding officer to heed the motion of a stockholder for a division of the
house on a matter lawfully brought in the meeting for the reason on the business specified in the
notice could be taken up was held whimsical and capricious.136
Stockholders present and participating in a lawful meeting, cannot without justifiable reasons,
break the quorum by withdrawing therefrom and defeat the election of those directors elected by the
majority.137
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135. 5 Fletcher p. 64.
136. Johnston, et al., v. Johnston, 61 O.G. No. 39, 6160 (1965) (CA.).
137. Ibid., p. 85 citing Hexter v. Columbia Banking Co., 16 Del. Ch. 263, 145 Att. 115.
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PART III. CORPORATE OFFICERS
The frequently asked questions in the market place are – who has the ultimate responsibility for the
corporation? Who is genuinely responsible for its affairs? And, who should have control, management or
board? Legally, the board has the responsibility for the corporation and is therefore the primary source of
power insofar as the business and property of the corporation is concerned. It is in practice that problems
arise. Management has the expertise, infrastructure and time to run the corporation. As expressed earlier,
within their spheres of allocated power, the board and officers exercise plenary power to bind the
corporation, hence, the balance to be sought is one which allows both bodies to obtain effective control
without diminishing the initiative and motivation of either. This helps avoid friction, hence, the need to
clearly understand the definition or concept of “corporate officer” and his authority to bind the corporation.
Further, there is a need to identify the corporate officers who are hired on the basis of the exercise by the
board of directors of its business judgment and be removed on the same authority, hence not covered by the
security of tenure rules of the labor laws and those who are not. No clear formula is provided by law. Also,
there is a need to identify the officers mentioned in Section 31 of the Corporation Code who can be held liable
for assenting to patently unlawful acts or are guilty of gross negligence or bad faith or involves himself in a
conflict of interest situation. Non-officers are not bound by the duties of loyalty or diligence to the
corporation.
A. Corporate Officers Defined.
Distinguished from Corporate Employees
From a broad perspective, all officers of the corporation are its employees, but only those so mentioned by
the Corporation Code and bylaws to be corporate officers are considered as such. The two terms are not
interchangeable. In PSBA v. Leaño,138 it was held that the relationship of a person to a corporation, whether
as an officer or as an agent or employee, is not determined by the nature of services performed, but by the
incidents of the relationship as they actually exist. It would appear therefore that the manner of creation of
the officer position is controlling.
The Corporation Code specifically names three officers which the corporation must have –President,
Secretary and Treasurer. Section 25 of the Corporation Code states that the board of directors shall also
elect “such other officers as may be provided for in the bylaws.” It has been the practice of most corporations
to provide in the bylaws a definition of officers, normally couched by identifying specific officers, followed by
the general term “and such other officers, as are deemed necessary to discharge the responsibilities as the
Board may deem fit.”
Gurrea v. Lezama139 decided under the old Corporation Law ruled that officers of a corporation are those
who are “given that character either by the Corporation Law or by its bylaws. The rest can be considered
merely as employees or subordinate officials.”
Tabang v. NLRC140 held:
The president, vice president, secretary and treasurer are commonly regarded as the
principal or executive officers of a corporation, and modern corporation statutes usually
designate them as the officers of the corporation. However, other offices are sometimes
created by the charter or bylaws of a corporation, or the board of directors may be empowered
under the bylaws of a corporation to create additional offices as may be necessary.
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138. G.R. No. L-58468, February 24, 1984.
139. G.R. No. L-10556, April 30, 1958.
140. G.R. No. 121143, January 21, 1997.
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A noted commentator 141 on corporate law said:
Section 25 of the Corporation Code defines a position to be an officer position as may be
provided for in the bylaws,” and seems to imply that an officership position becomes
such only when the bylaws so provide them, and would rule out creation of the position
by virtue of a bylaw enabling provision. This position seems sensible because an
enabling provision in the bylaw does not really create a power that was not with the
Board of Directors; even without such enabling bylaw provision, the Board of any
corporation is always considered to have the power to appoint “officers” as part of the
corporate powers under Section 23 of the Corporation Code, and therefore, when any
such position is created it would be an “employee” position that would be governed by
the provisions of the Labor Code.
The employment of an enabling clause in the bylaws to create an “officer” position
could also lead to absurd ends where by simply providing for such clause in the bylaws of
the corporation, the Board of Directors are able to periodically and by means of
resolution “create and appoint” officers to any position in the organization, who would
not be protected by the security tenure clause.
In Tabang v. NLRC, the office involved is that of the Medical Director which was characterized as
an officer position in the bylaws. The ruling as aforequoted is therefore an obiter dictum.
Two or more positions may be held simultaneously by the same person, except that no one shall
act as president and secretary or as president and treasurer at the same time.142
B. Qualifications
Considering that an officer must act with legal effect, he must be a person of majority age. The
president is required to be a member of the board of directors. The secretary should be a Filipino
citizen and a resident of the Philippines.
C. Necessity of Election
All corporate officers must be elected by the board of directors. Because of requirement of election,
it will appear therefore that giving the president a term more than the period provided by law for him
to serve as director is invalid because it will deprive future members of the board of directors of
exercising their judgment on who to elect as president. Holdover may be allowed where no successor
has been elected due to justifiable or valid reasons.
The election of successor of the corporate officers after the expiration of their term does not
constitute dismissal because the matter of whom to elect is a prerogative that belongs to the board.
D. Removal
The power to elect corporate officers being vested by the board, the power of removal must be necessarily
exercised by it. Stockholders have no power to remove corporate officers such being a management matter.
In non-stock corporations however, if the officers are elected by the members, the power to remove them is
vested in the latter. In instances where the term of an officer is not based on contract or in the bylaws, he
may be removed anytime with or without cause at the pleasure of the board. The power should not however
be exercised in bad faith or in such manner as to cause injustice.
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141. Villanueva, Philippines Corporate Law, 2002 ed. p. 347.
142 CORPORATION CODE, Sec. 25.
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E. Kinds of Power or Authority of Corporate Officers
Corporate officers are agents of the corporation for purposes prescribed by the bylaws or board of directors
in exercise of its power to administer and manage the business and property of the Corporation or the coofficer pursuant to his assigned authority. As such, the powers exercised by them are (a) express, (b)
incidental, (c) inherent, (d) apparent and (e) those arising out of custom, usage or emergency.143
Express authority includes those directly conferred upon him by statute, charter, bylaws, resolutions, or
other acts of the board of directors and sometimes by acts of other officers other than the directors of the
corporation.144 Thus, where the bylaws provide that the president, not the chairman of the board shall
preside in the meetings of the board, it will have to be complied with.
His authority may also be implied as to encompass all such incidental authority if necessary and proper
for the discharge of the principal authority expressly conferred on him. Every delegation of authority,
whether general or special, carries with it, unless the contrary be expressed, implied authority to do all those
acts, naturally and ordinarily done in such case, which are reasonably necessary and proper to be done in
order to carry into effect the main authority conferred.145 Thus, an officer entrusted with the general
management and control of the business of the corporation has the implied authority to enter into an
employment contract for the realization of the corporate business.
His authority may also be inherent, 146 which means one emanating from or may be said to go with the
office although not sanctioned by express authority.
Apparent or ostensible authority includes those although not actually granted, the principal knowingly
permits the agent to exercise or which he holds out as being possessed. If a private corporation intentionally
or negligently clothes its officers or agents with apparent powers to perform acts for it, the corporation will be
estopped to deny that such apparent authority is real, as to innocent third persons dealing in good faith with
such officers or agents147 as in cases where in the usual course of business of the corporation, the latter was
elected to act in its behalf in such a way as to lead third persons dealing with him in assuming that he is doing
an act within the scope of his authority. This is likewise termed as authority by estoppel.
The Board of Liquidators v. Kalaw 148 is authority that a power of a corporate officer can be drawn from
general practice, custom, policy or usage. Thus, where the practice of the corporation has been to allow its
general manager to negotiate and execute contracts in copra trading activities for and on the corporation’s
behalf without prior approval of the board, it was held that the board itself, by its acts and through
acquiescence, practically laid aside the requirement of prior approval provided in the bylaws.
The existence of apparent authority may be ascertained “through (1) general manner in which the
corporation holds out an officer or agent as having the power to act or, in other words, the apparent authority
to act in general, with which it clothes him; or (2) the acquiescence in his acts of a particular nature, with
actual or constructive knowledge thereof, whether within or beyond the scope of his ordinary powers. It
requires presentation of evidence of similar act(s) executed either in its favor or in favor of other parties. It is
not the quantity of similar acts which establishes apparent authority, but the vesting of a corporate officer
with the power to bind the corporation.149
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143. Agbayani, Commentaries and Jurisprudence on Commercial Laws of the Philippines, 1996 ed., p. 217.
144. Bayer-Roxas v. CA, G.R. No. 100866, July 14, 1992.
145. Citibank v. Chua, G.R. No. 102300, March 17, 1993.
146. Ibid.
147. Francisco v. GSIS, G.R. L-18287, March 30, 1963.
148. Supra.
149. People’s Air Cargo and Warehousing Company, Inc. v. Court of Appeals, G.R. No. 117847, October 7, 1998.
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F. Concept of de facto officers
It can happen that a person discharges the duties and powers of a particular office but his title to the office is
not valid either for lack of qualification, defect in the process of election or appointment or some other legal
flaw. They are classified as de facto officers. For them to be recognized as such, it is necessary that (a) there
is a legally constituted office; (b) the de facto officer is holding the office under some appearance or color of
right; and (c) he is actually exercising the functions and performing the duties thereof.
Should the foregoing concur, the officer may exercise all the powers of a de jure officer so as to bind all
persons who acquiesce in their management and direction and they may continue to exercise these powers
in such binding manner until they are, through proper legal steps, removed from office and replaced by other
legally constituted officers. Should an issue be raised on the legality of their position, the de facto officer may
legally perform such act as within the scope of the business of the corporation as are necessary to keep its
machinery in motion.
Note that de facto officers who were found to be acting in good faith were declared to be entitled to the
emoluments of office including salary, fees and other compensation attached to the office until they vacate
the same.150
Insofar as third persons are concerned, contracts entered into and acts of de facto officers acting within
the scope of their authority are binding on the corporation similar to those done by de jure officers.
APPENDIX A
SEC MEMORANDUM CIRCULAR NO. 2
SERIES OF 2002
CODE OF CORPORATE GOVERNANCE
In accordance with the State’s policy to actively promote corporate governance reforms aimed to raise
investor confidence, develop capital market and help achieve high sustained growth for the corporate sector
and the economy, the Commission, in its Resolution No. 135, Series of 2002 dated April 04, 2002, aproved
the promulgation and implementation of this Code, which shall be applicable to corporations whose
securities are registered or listed, corporations which are grantees of permits/licenses and secondary
franchise from the Commission and public companies. This Code also applies to branches or subsidiaries of
foreign corporations operating in the Philippines whose securities are registered or listed.
I. Definitions
A. Board of Directors – refers to the collegial body that exercises the corporate powers of all corporations
formed under the Corporation Code. It conducts all business and controls or holds all property of
such corporations.
B. Corporate Governance – refers to a system whereby shareholders, creditors and other stakeholders
of a corporation ensure that management enhances the value of the corporation as it competes in an
increasingly global marketplace.
C. Independent Director – refers to a person other than an officer or employee of the corporation, its
parent or subsidiaries, or any other individual having any relationship with the corporation, which
_____________________________________________________________________________
150. Cojuangco v. PCGG, G.R. No. 91925, April 16, 1991.
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would interfere with the exercise of independent judgment in carrying out the responsibilities of a
director. This means that apart from the directors’ fees and shareholdings, he should be independent
of management and free from any business or other relationship which could materially interfere
with the exercise of his independent judgment.
D. Public Company – refers to any corporation with a class of equity securities listed in an Exchange or
with assets in excess of Fifty Million Pesos (P50,000,000) and having 200 or more stockholders each
holding at least 100 shares of a class or its securities.
E. Management – refers to the body given the authority to implement the policies determined by the
Board in directing the course/business activity/ies of the corporation.
F. Executive Director – refers to a director who is at the same time appointed to head a department/unit
within the corporate organization.
G. Non-executive director – refers to a Board member with non-executive functions.
H. Non-audit work – refers to other services offered by the external auditor to a corporation that are not
directly related and relevant to its statutory audit function. Examples include accounting, payroll,
bookkeeping, reconciliation, computer project management, data processing or information
technology outsourcing services, internal auditing, and services that may compromise the
independence and objectivity of the external audit.
I. Internal control – refers to the process effected by a company’s Board of Directors, management and
other personnel, designed to provide reasonable assurance regarding the achievement of objectives
in the effectiveness and efficiency of operations, the reliability of financial reporting, and compliance
with applicable laws, regulations, and internal policies.
J. Internal control environment – refers to the framework under which internal controls are developed,
implemented, alone or in concert with other policies or procedures, to manage and control a
particular risk or business activity, or a combination of risks or business activities, to which the
company is exposed.
K. Internal auditing – refers to an independent, objective assurance and consulting activity designed to
add value and improve an organization’s operations. It helps an organization accomplish its
objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness
of risk management, control, and governance processes.
L. Internal audit department – refers to a department, division, team of consultants, or other
practitioner(s) that provide independent, objective assurance and consulting services designed to
add value and improve an organization’s operations.
M. Chief Audit Executive – refers to the top position within the organization responsible for internal audit
activities. In a traditional internal audit activity, this would be the internal audit director. In the case
where internal audit activities are obtained from outside service providers, the chief audit executive
is the person responsible for overseeing the service contract and the overall quality assurance of
these activities, and follow-up of engagement results. The term also includes such titles as general
auditor, chief internal auditor, and inspector general.
N. Independence – refers to that environment which allows the person to carry out his/her work freely
and objectively.
O. Objectivity – refers to unbiased mental attitude that requires the person to carry out his/her work in
such a manner that he/she has an honest belief in his/her work product and that no significant quality
compromises are made. Objectivity requires the person not to subordinate his/her judgment to that
of others.
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P. Standards for the Professional Practice of Internal Auditing (SPPIA) – refers to the criteria by which
the operations of an internal auditing department are evaluated and measured. They are intended
to represent the practice of internal auditing as it should be, provide a framework for performing and
promoting a broad range of value-added internal audit activities and foster improved organizational
processes and operations.
II. The Board Governance
The Board of Directors (Board) is primarily responsible for the governance of the corporation. It needs to be
structured so that it provides an independent check on management. As such, it is vitally important that a
number of board members be independent from management.
1. Composition of the Board
The Board shall be composed of at least five but not more than 15 members elected by shareholders.
Public companies shall have at least two independent directors or such independent directors shall
constitute at least 20 percent of the members of such Board, whichever is the lesser. All other
companies are encouraged to have independent directors as well.
The Board may include a balance of executive and non-executive directors (including
independent non-executives), having a clear division of responsibilities such that no individual or
small group of individuals can dominate the Board’s decision making.
The non-executive directors should be of sufficient qualification, stature and number to carry
significant weight in the Board’s decisions. Non-executive directors considered by the Board to be
independent shall be identified in the annual report.
2. Multiple Board Seats
The Board may consider guidelines on the number of directorships for its members. The optimum
number is related to the capacity of a director to perform his duties diligently in general. The Chief
Executive Officer and other executive directors may submit themselves to a low indicative limit on
membership in other corporate Boards. The same low limit may apply to independent, nonexecutive directors who serve as full-time executives in other corporations. In any case, the capacity
of directors to serve with diligence shall not be compromised.
3. The Chairman and the Chief Executive Officer
The roles of the Chairman and the Chief Executive Officer (CEO) may be separate to ensure an
appropriate balance of power, increased accountability and greater capacity of the Board for
independent decision-making. The company shall disclose the relationship between the Chairman
and the CEO upon their election.
Where both positions of the Chairman and CEO are unified, there is clearly one leader to provide a
single vision and mission. In this instance, checks and balances should be clearly provided to help
ensure that independent, outside views, perspectives, and judgments are given proper hearing in
the Board.
The Chairman’s responsibilities may include:
a. schedules meetings to enable the Board to performs its duties responsibly while not interfering
with the flow of the company’s operations;
b. prepares meeting agenda in consultation with the CEO;
c. exercises control over quality, quantity and timeliness of the flow of information between
Management and the Board; and
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d. assists in ensuring compliance with company’s guidelines on corporate governance.
The responsibilities set out in the above guidelines may pertain only to the Chairman’s role in
respect to the Board proceedings. It should not be taken as a comprehensive list of all the duties and
responsibilities of a Chairman.
4. Qualifications of Directors
Every director shall own at least one share of the capital stock of the corporation of which he is a
director, which share shall stand in his name in the books of the corporation.
The Board may provide for additional qualifications of a director such as, but not limited to, the
following:
a. Educational attainment
b. Adequate competency and understanding of business
c. Age requirement
d. Integrity/probity
e. Assiduousness.
5. Disqualification of Directors
The following shall be grounds for the disqualification of a director:
a. Any person who has been finally convicted by a competent judicial or administrative body of the
following: (i) any crime involving the purchase or sale of securities, e.g., proprietary or nonproprietary membership certificate, commodity futures contract, or interest in a common trust
fund, pre-need plan, pension plan or life plan; (ii) any crime arising out of the person’s conduct as
an underwriter, broker, dealer, investment company, investment adviser, principal distributor,
mutual fund dealer, futures commission merchant, commodity trading advisor, floor broker; and
(iii) any crime arising out of his relationship with a bank, quasi-bank, trust company, investment
house or as an affiliated person of any of them.
b. Any person who, by reason of any misconduct, after hearing or trial, is permanently or
temporarily enjoined by order, judgment or decree of the Commission or any court or other
administrative body of competent jurisdiction from: (i) acting as an underwriter, broker, dealer,
investment adviser, principal distributor, mutual fund dealer, futures commission merchant,
commodity trading advisor, or a floor broker; (ii) acting as a director or officer of a bank, quasibank, trust company, investment house, investment company or an affiliated person of any of
them; (iii) engaging in or continuing any conduct or practice in connection with any such activity
or willfully violating laws governing securities, and banking activities. Such disqualification shall
also apply when such person is currently subject to an effective order of the Commission or any
court or other administrative body refusing, revoking or suspending any registration, license or
permit issued under the Corporation Code, Securities Regulation Code, or any law administered
by the Commission or Bangko Sentral ng Pilipinas, or under any rule or regulation promulgated
by the Commission or Bangko Sentral ng Pilipinas, or otherwise restrained to engage in
any activity involving securities and banking. Such person is also disqualified when he is
currently subject to an effective order of a self-regulatory organization suspending or
expelling him from membership or participation or from associating with a member or
participant of the organization.
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c. Any person finally convicted judicially or administratively of an offense involving moral turpitude,
fraud, embezzlement, theft, estafa, counterfeiting, misappropriation, forgery, bribery, false oath,
perjury or other fraudulent act or transgressions.
d. Any person finally found by the Commission or a court or other administrative body to have
willfully violated, or willfully aided, abetted, counseled, induced or procured the violation of, any
provision of the Securities Regulation Code, the Corporation Code, or any other law administered
by the Commission or Bangko Sentral ng Pilipinas, or any rule, regulation or order of the
Commission or Bangko Sentral ng Pilipinas, or who has filed a materially false or misleading
application, report or registration, statement required by the Commission, or any rule, regulation
or order of the Commission.
e. Any person judicially declared to be insolvent.
f.
Any person finally found guilty by a foreign court or equivalent financial regulatory authority of
acts, violations or misconduct similar to any of the acts, violations or misconduct listed in
paragraphs (a) to (e) hereof.
g. Any affiliated person who is ineligible, by reason of paragraphs (a) to (e) hereof to serve or act in
the capacities listed in those paragraphs.
h. Conviction by final judgment of an offense punishable by imprisonment for a period exceeding six
years, or a violation of the Corporation Code, committed within five years prior to the date of his
election or appointment.
The Board may also provide for the temporary disqualification of a director for the following reasons:
a. Refusal to fully disclose the extent of his business interests as required under the Securities
Regulation Code and its Implementing Rules and Regulations .This disqualification shall be in
effect as long as his refusal persists.
b. Absence or non-participation for whatever reason/s for more than 50 percent of all meetings,
both regular and special, of the Board of Directors during his incumbency, or any 12 month period
during said incumbency. This disqualification applies for purposes of the succeeding election.
c. Dismissal/termination from directorship in another listed corporation for cause.
This
disqualification shall be in effect until he has cleared himself of any involvement in the alleged
irregularity.
d. Being under preventive suspension by the corporation.
e. If the independent director becomes an officer or employee of the same corporation he shall be
automatically disqualified from being an independent director.
f.
If the beneficial security ownership of an independent director in the company or in its related
companies shall exceed the 10 percent limit.
g. Conviction that has not yet become final referred to in the grounds for the disqualification of
directors.
6. Duties, Functions and Responsibilities
It is the Board’s responsibilities to foster the long-term success of the corporation and secure its
sustained competitiveness in a manner consistent with its fiduciary responsibility, which it should
exercise in the best interest of the corporation and its shareholders.
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a. General Responsibility
A director’s office is one of trust and confidence. He should act in the best interest of the
corporation in a manner characterized by transparency, accountability and fairness. He should
exercise leadership, prudence and integrity in directing the corporation towards sustained
progress over the long term.
A director assumes certain responsibilities to different
constituencies or stakeholders, who have the right to expect that the institution is being run in a
prudent and sound manner.
To ensure good governance of the corporation, the Board should establish the corporation’s
vision and mission, strategic objectives, policies and procedures that may guide and direct the
activities of the company and the means to attain the same as well as the mechanism for
monitoring management’s performance. While the management of the day-to-day affairs of the
institution is the responsibility of the management team, the Board is, however responsible for
monitoring and overseeing management action.
b. Duties and Functions
To insure a high standard of best practice for the company and its stakeholders, the Board should
conduct itself with utmost honesty and integrity in the discharge of its duties, functions and
responsibilities which include, among others, the following:
i.
Install a process of selection to ensure a mix of competent directors, each of whom can add
value and contribute independent judgment to the formulation of sound corporate strategies
and policies. Select and appoint the CEO and other senior officers, who must have the
motivation, integrity, competence and professionalism at a very high level. Adopt a
professional development program.
ii. Determine the corporation’s purpose and value as well as strategies and general policies to
ensure that it survives and thrives despite financial crises and its assets and reputation are
adequately protected. Provide sound written policies and strategic guidelines to the
corporation that will help decide on major capital expenditures. Determine important policies
that bear on the character of the corporation with a view towards ensuring its long-term
viability and strength. It must periodically evaluate and monitor implementation of such
strategies and policies, business plans and operating budgets as well as management’s overall performance to ensure optimum results.
iii. Ensure that the corporation complies with all relevant laws, regulations and codes of best
business practices.
iv. Identify the corporation’s major and other stakeholders and formulate a clear policy on
communicating or relating with them accurately, effectively and sufficiently. There must be
an accounting rendered to them regularly in order to serve their legitimate interests.
Likewise, an investor relations program that reaches out to all shareholders and fully
informs them of corporate activities should be developed. As a best practice, the chief
financial officer or CEO should have oversight of this program and should actively participate
in public activities.
v. Adopt a system of internal checks and balances, which may be applied in the first instance to
the Board. A regular review of the effectiveness of such system must be conducted so that
the decision-making capability and the integrity of corporate operations and reporting
systems are maintained at a high level at all times.
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vi. Endeavor to provide appropriate technology and systems rating to account for available
resources to ensure a position of a strong and meaningful competitor. Identify key risk areas
and key performance indicators and monitor these factors with due diligence.
vii. Constitute an Audit and Compliance Committee.
viii.Properly discharge Board functions by meeting regularly. Independent views during Board
meetings should be given due consideration and all such meetings should be duly minuted.
ix. Keep Board authority within the powers of the institution as prescribed in the articles of
incorporation, bylaws and in existing laws, rules and regulation. Conduct and maintain the
affairs of the institution within the scope of its authority as prescribed in its charter and in
existing laws, rules and regulations.
c. Specific Duties and Responsibilities of a Director
i.
To conduct fair business transactions with the corporation and to ensure that personal interest
does not bias Board decisions. The basic principle to be observed is that a director should not
use his position to make profit or to acquire benefit or advantage for himself and/or his related
interests. He should avoid situations that may compromise his impartiality. If an actual or
potential conflict of interest should arise on the part of directors or senior executives, it should
be fully disclosed and the concerned director should not participate in the decision making. A
director who has a continuing conflict of interest of a material nature should consider
resigning.
ii. To devote time and attention necessary to properly discharge his duties and responsibilities.
A director should devote sufficient time to familiarize himself with the institution’s business.
He should be constantly aware of the institution’s condition and be knowledgeable enough to
contribute meaningfully to the Board’s work. He should attend and actively participate in
Board and committee meetings, request and review meeting materials, ask questions, and
request explanations.
iii. To act judiciously. Before deciding on any matter brought before the Board of Directors, every
director should thoroughly evaluate the issues, ask questions and seek clarifications when
necessary.
iv. To exercise independent judgment. A director should view each problem/situation
objectively. When a disagreement with others occurs, he should carefully evaluate the
situation and state his position. He should not be afraid to take a position even though it might
be unpopular. Corollarily, he should support plans and ideas that he thinks are beneficial to
the corporation.
v. To have a working knowledge of the statutory and regulatory requirements affecting the
corporation, including the contents of its articles of incorporation and bylaws, the
requirements of the Commission, and where applicable, the requirements of other regulatory
agencies. A director should also keep himself informed of industry developments and
business trends in order to safeguard the corporation’s competitiveness.
vi. To observe confidentiality. A director should observe the confidentiality of non-public
information acquired by reason of his position as director. He should not disclose any
information to any other person without the authority of the Board.
vii. To ensure the continuing soundness, effectiveness and adequacy of the company’s control
environment.
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d. Internal Control Responsibilities of the Board
The control environment is composed of: (a) the Board which ensures that the company is
appropriately and effectively managed and controlled, (b) a management that actively manages
and operates the company in a sound and prudent manner, (c) the organizational and procedural
controls supported by an effective management information system and risk management
reporting system, and (d) the independent audit mechanisms to monitor the adequacy and
effectiveness of the organization’s governance, operations, information systems, to include
reliability and integrity of financial and operational information, effectiveness and efficiency of
operations, safeguarding of assets, and compliance with laws, rules, regulations, and contracts.
i.
The minimum internal control mechanisms for the Board’s oversight responsibility may
include:
•
Defining the duties and responsibilities of the CEO;
•
Selecting or approving an individual with appropriate ability, integrity, experience to fill the
CEO role;
•
Reviewing proposed senior management appointments;
•
Ensuring the selection, appointment and retention of qualified and competent
management;
•
Reviewing the company’s personnel and human resource policies and sufficiency, conflict
of interest situations, changes in the compensation plan for employees and officers and
management succession plan.
ii. The minimum internal control mechanisms for management’s operational responsibility
would center on the CEO being ultimately accountable for the company’s organizational and
procedural controls.
iii. The scope and particulars of system of effective organizational and procedural controls may
differ among companies depending on factors such as: the nature and complexity of business
and the business culture; the volume, size and complexity of transactions; the degree of risk;
the degree of centralization and delegation of authority; the extent and effectiveness of
information technology; and the extent of regulatory compliance.
iv. Each company may have in place an independent audit function through which the company’s
Board, senior management, and stockholders may be provided with reasonable assurance
that its key organizational and procedural controls are effective, appropriate, and complied
with. The Board may appoint a chief audit executive to carry out the audit function, and may
require the chief audit executive to report to a level within the organization that allows the
internal audit activity to fulfill its responsibilities.
7. Board Meetings and Quorum Requirement
Members of the Board should attend regular and special meetings of the Board in person. In view of
modern technology, however, attendance at Board meetings through teleconference may be
allowed.
An independent director should always be in attendance. However, the absence of an
independent director may not affect the quorum requirements if he is duly notified of the meeting but
deliberately and without justifiable cause fails to attend the meeting. Justifiable causes may only
include grave illness or death of immediate family and serious accidents.
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To monitor compliance with the above requirement, corporations may, at the end of every fiscal
year, provide the Commission with a sworn certification that the foregoing requirement has been
complied with. The said certification may be submitted with the company’s current report (SEC Form
17-1) or on a separate filing.
8. Remuneration of the Members of the Board and Officers
Levels of remuneration shall be sufficient to attract and retain the directors, if any, and officers
needed to run the company successfully. Corporations, however, should avoid paying more than
what is necessary for this purpose. A proportion of executive directors’ remuneration may be
structured so as to link rewards to corporate and individual performance.
Corporations may establish a formal and transparent procedure for developing a policy on
executive remuneration and for fixing the remuneration packages of individual directors, if any, and
officers. No director should be involved in deciding his or her own remuneration.
The corporations’ annual reports, information and proxy statements shall include a clear, concise
and understandable disclosure of all plan and non-plan compensation awarded to, earned by, paid to,
or estimated to be paid to, directly or indirectly to all individuals serving as the CEO or acting in a
similar capacity during the last completed fiscal year, regardless of the compensation level and the
corporation’s four most highly compensated executive officers other than the CEO who were serving
as executive officers at the end of the last completed year.
To protect the funds of the corporation, the Commission may regulate the payment by the
corporation to directors and officers of compensation, allowance, fees and fringe benefits in very
exceptional cases, e.g., when a corporation is under receivership or rehabilitation.
9. Board Committees
The Board shall constitute Committees in aid of good corporate governance.
A. The Audit Committee shall be composed of at least three Board members, preferably with
accounting and finance background, one of whom shall be an independent director and another
should have related audit experience. It shall have the following specific functions:
a. Provide oversight over the senior management’s activities in managing credit, market,
liquidity, operational, legal and other risks of the corporation. This function shall include
receiving from senior management periodic information on risk exposures and risk
management activities. However, in consideration of the risk profile of the corporation, the
Board may constitute a separate Risk Management Committee to focus on carrying out this
oversight role over risk management;
b. Provide oversight of the corporation’s internal and external auditors;
c. Review and approve audit scope and frequency, and the annual internal audit plan;
d. Discuss with the external auditor before the audit commences the nature and scope of the
audit, and ensure coordination where more than one audit firm is involved;
e. Responsible for the setting up of an internal audit department and consider the appointment
of an internal auditor as well as an independent external auditor, the audit fee and any
question of resignation or dismissal;
f.
Monitor and evaluate the adequacy and effectiveness of the
system;
corporation’s internal control
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g. Receive and review reports of internal and external auditors and regulatory agencies, where
applicable, and ensure that management is taking appropriate corrective actions, in a timely
manner, in addressing control and compliance functions with regulatory agencies;
h. Review the quarterly, half-year and annual financial statements before submission to the
Board, focusing particularly on:
i.
•
Any change/s in accounting policies and practices
•
Major judgmental areas
•
Significant adjustments resulting from the audit
•
Going concern assumption
•
Compliance with accounting standards
•
Compliance with tax, legal, and stock exchange requirements;
Responsible for coordinating, monitoring and facilitating compliance with existing laws, rules
and regulations. It may also constitute a Compliance Unit for this purpose;
j. Evaluate and determine non-audit work by external auditor and keep under review the nonaudit fees paid to the external auditor both in relation to their significance to the auditor and in
relation to the company’s total expenditure on consultancy. The non-audit work should be
disclosed in the annual report;
k. Establish and identify the reporting line of the chief audit executive so that the reporting level
allows the internal audit activity to fulfill its responsibilities. The chief audit executive shall
report directly to the Audit Committee functionally. The Audit Committee shall ensure that
the internal auditors shall have free and full access to all the company’s records, properties
and personnel relevant to the internal audit activity and that the internal audit activity should
be free from interference in determining the scope of internal auditing examinations,
performing work, and communicating results, and shall provide a venue for the Audit
Committee to review and approve the annual internal audit plan.
The Chairman of this committee should be an independent director. He should be responsible
for inculcating in the minds of the Board members the importance of management
responsibilities in maintaining a sound system of internal control and the Board’s oversight
responsibility.
For Philippine branches or subsidiaries of foreign corporations covered by this Code, the local
audit head for such entities should be independent of the Philippine operations and should report
to the regional or corporate headquarters.
B. The Board may also constitute the following committees:
a. The Nomination Committee, which may be composed of at least three members, one of
whom should be an independent director, may review and evaluate the qualification of all
persons nominated to the Board as well as those nominated to other positions requiring
appointment by the Board; and provide assessment on the Board’s effectiveness in directing
the process of renewing and replacing Board members.
b. The Compensation or Remuneration Committee may be composed of at least three
members, one of whom should be an independent director. It may establish a formal and
transparent procedure for developing a policy on executive remuneration and for fixing the
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remuneration packages of corporate officers and directors; and provide oversight over
remuneration of senior management and other key personnel ensuring that compensation is
consistent with the corporation’s culture, strategy and control environment.
10. The Corporate Secretary
The Corporate Secretary, who must be a Filipino, is an officer of the corporation. Perfection in
performance and no surprises are expected of him. Likewise, his loyalty to the mission, vision and
specific business objectives of the corporate entity come with his duties.
Like the CEO, he should work and deal fairly and objectively with all the constituencies of the
corporation, namely, the Board, management, stockholders and other stakeholders. As such, he
should be someone his colleagues and these constituencies can turn to, trust and confide with on a
regular basis.
He should have the administrative skills of the chief administrative officer of the corporation and
the interpersonal skills of the chief human resources officer. If the Corporate Secretary is not the
general counsel, then he must have the legal skills of a chief legal officer. He must also have the
financial and accounting skills of a chief financial officer, and lastly the vision and decisiveness of the
CEO.
Since there are different individuals on top of various corporate activities, the Corporate
Secretary should be fully informed and be part of the scheduling process of the different activities.
As to agendas, he should have the schedule thereof at least for the current year and should put the
Board on notice before every meeting. It is a very important discipline to get the Board to think
ahead. He should serve as an adviser to directors’ responsibilities and obligations.
The Corporate Secretary should make sure that directors have before them everything that they
need to make an informed decision, it is covered by a business judgment that can be arrived at by
the members acting in good faith with the assistance of the Corporate Secretary who should review
carefully the information presented to the directors at the time they are to make a decision.
III. Supply Information
In order to fulfill their responsibilities, Board members should be provided with complete, adequate and
timely information prior to Board meetings on an ongoing basis.
Management should have an obligation to supply the Board with complete adequate information in a
timely manner. Reliance purely on what is volunteered by Management is unlikely to be enough in all
circumstances and further inquiries may be required if the particular director is to fulfill his or her duties
properly. Hence, the Board may have separate and independent access to the company’s senior
management.
The information may include the background or explanatory information relating to matters to be
brought before the Board, copies of disclosure documents, budgets, forecasts and monthly internal financial
statements. With respect to the budget, any variance between the projections and actual results should
also be disclosed and explained.
Directors should also have a separate and independent access to the Corporate Secretary. The role of
the Corporate Secretary should be clearly defined and should include responsibility for ensuring that Board
procedures are being followed and that applicable rules and regulations are complied with. The Corporate
Secretary should attend all Board meetings.
The Board should have a procedure for a director, either individually or as a group, in the furtherance of
their duties, to take independent professional advice, if necessary, at the corporation’s expense.
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IV. Accountability and Audit
1. The Board is primarily accountable to the shareholders and Management is primarily accountable to
the Board. The Board should provide the shareholders with a balanced and understandable
assessment of the corporation’s performance, position and prospects on a quarterly basis. The
Management should provide all members of the Board with a balanced and understandable account
of the corporation’s performance, position and prospects on a monthly basis. This responsibility
should extend to interim and other price-sensitive public reports and reports to regulators (if
required). It should be primarily responsible in making financial reporting and internal control in
accordance with the following guidelines:
a. Present a balanced and understandable assessment of the company’s position and prospects.
The Board’s responsibility to present a balanced and understandable assessment should extend
to interim and other price-sensitive public reports and reports to regulator as well as to
information required to be presented by statutory requirements;
b. Explain their responsibility for preparing the accounts, for which there should be a statement by
the auditors about their reporting responsibilities;
c. Report that the business is a going concern, with supporting assumptions or qualifications, if
necessary;
d. Maintain a sound system of internal control to safeguard stakeholders’ investment and the
company’s assets;
e. Based on the approved audit plans, scope and frequency of audits, ensure that internal audit
examinations cover, at least, the evaluation of adequacy and effectiveness of controls
encompassing the organization’s governance, operations, information systems, to include
reliability and integrity of financial and operational information, effectiveness and efficiency of
operations, safeguarding of assets, and compliance with laws, rules, regulations, and contracts;
f.
Require the chief audit executive to render to the Audit Committee and senior management an
annual report on the internal audit department’s activity, purpose, authority, responsibility and
performance relative to the audit plans and strategies approved by the Audit Committee of the
Board. Such annual report should include significant risk exposures and control issues,
corporate governance issues, and other matters needed or requested by the Board and senior
management. The chief audit executive’s annual report shall likewise be made available to the
stockholders of the company. Internal auditors shall report that their activities are “conducted in
accordance with the Standards for the Professional Practice of Internal Auditing.” Otherwise, the
chief audit executive shall disclose to the Board and senior management that it has not yet
achieved full compliance with the standards for the professional practice of internal auditing.
2. Selection/Appointment, Resignation, Dismissal or Cessation of Service of External Auditor
The Board, through the Audit Committee, shall recommend to the stockholders a duly accredited
external auditor who shall undertake an independent audit and shall provide an objective assurance
on the way in which financial statements shall have been prepared and presented. Such external
auditor cannot at the same time provide the service of an internal auditor to the same client. Other
non-audit work should not be in conflict with the functions of the external auditor.
The external auditor should be rotated every five years or earlier or the handling partner shall be
changed.
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The reason/s for the resignation, dismissal or cessation from service and the date thereof of an
external auditor shall be reported in the company’s annual and current reports. Said report shall
include a discussion of any disagreement with said former external auditor on any matter of
accounting principles or practices, financial statement disclosure or auditing scope or procedure,
which if not resolved to the satisfaction of the former auditor, would have cause making reference to
the subject matter of the disagreement in connection with its report.
If an external auditor believes that the statements made in an annual report, information
statement or proxy statement filed during his engagement are incorrect or incomplete, he shall also
present his views in said reports.
V. Stockholders’ Rights and Protection of Minority Stockholders’ Interests
The Board shall be committed to respect the following rights of the stockholders:
1. Voting Right
Shareholders have the right to elect, remove and replace directors and vote on certain corporate acts
in accordance with the Corporation Code.
The Code mandates the use of cumulative voting in the election of directors. Although directors
may be removed with or without cause, the Code prohibits removal without cause if it will deny
minority shareholders representation in the Board. Removal of directors requires an affirmative vote
of two-thirds of the outstanding capital.
2. Pre-emptive Right
All stockholders have pre-emptive rights, unless there is a specific denial of this right in the articles of
incorporation or an amendment thereto. They shall have the right to subscribe to the capital stock of
the corporation. The Articles of Incorporation may lay down the specific rights and powers of
shareholders with respect to the particular shares they hold, all of which are protected by law so long
as they are not in conflict with the Corporation Code.
3. Power of Inspection
The Corporation Code mandates corporations to allow shareholders to inspect corporate books and
records including minutes of Board meetings and stock registries in accordance with the Corporation
Code and to provide them an annual report, including financial statements without cost or
restrictions.
4. Right to Information
The Shareholders shall be provided, upon request, with periodic reports which disclose personal and
professional information about the director and officers and certain other matters such as their
holding of the company’s shares, dealings with the company, relationships among directors and key
officers, and the aggregate compensation of directors and officers.
The Information
Statement/Proxy Statement where these are found must be distributed to the shareholders before
annual general meetings and in the Registration Statement and Prospectus in case of registration of
shares for public offering with the Commission.
The minority shareholders should be granted the right to propose the holding of a meeting, and
the right to propose items in the agenda of the meeting, provided the items are for legitimate
business purposes.
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The minority shareholders should have access to any and all information relating to matters for
which the management is accountable for and to those relating to matters for which the
management should include such information and, if not included, then the minority shareholders
can propose to include such matters in the agenda of stockholders’ meeting, being within the
definition of “legitimate purposes.”
5. Right to Dividends
Shareholders have the right to receive dividends subject to the discretion of the Board. However, the
Commission may direct the corporation to declare dividends when its retained earnings is in excess of
100 percent of its paid-in capital stock, except: a) when justified by definite corporate expansion
projects or programs approved by the Board, or b) when the corporation is prohibited under any loan
agreement with any financial institution or creditor, whether local or foreign, from declaring dividends
without its consent, and such consent has not been secured; or c) when it can be clearly shown that
such retention is necessary under special circumstances obtaining in the corporation, such as when
there is a need for special reserve for probable contingencies.
6. Appraisal Right
The Corporation Code allows the exercise of the shareholders’ appraisal rights under the following
circumstance:
a. In case any amendment to the articles of incorporation has the effect of changing or
restricting the rights of any stockholders or class of shares, or of authorizing preferences in
any respect superior to those of outstanding shares of any class, or of extending or shortening
the term of corporate existence;
b. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of all or
substantially all of the corporate property and assets as provided in the Corporation Code;
and
c. In case of merger or consolidation.
It is the duty of the directors to promote shareholder rights, remove impediments to the exercise
of shareholders rights and allow possibilities to seek redress for violation of their rights. They shall
encourage the exercise of shareholders’ voting rights and the solution of collective action problems
through appropriate mechanisms. They shall be instrumental in removing excessive costs and other
administrative or practical impediments to shareholders participating in meetings and/or voting in
person. The directors shall pave the way for the electronic filing and distribution of shareholder
information necessary to make informed decisions subject to legal constraints.
VI. Evaluation Systems
The management may establish a performance evaluation system to measure the performance of the
Board and top-level management of the corporation.
The establishment of such evaluation system, including the features thereof, may be disclosed in the
company’s annual report (SEC Form 17-A).
VII. Disclosure and Transparency
A dominant theme in all issues related to corporate governance is the vital importance of disclosure. The
more transparent the internal workings of the company and cash flows, the more difficult it will be for
management and controlling shareholders to misappropriate company assets or mismanage the company.
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The most basic and all-encompassing disclosure requirement is that all material information, i.e.,
anything that could potentially affect share price, should be publicly disclosed. Such information would
include earnings results, acquisition or disposal of assets, board changes, related party transactions,
shareholdings of directors and changes to ownership. Other information that should always be disclosed
includes remuneration (including stock options) of all directors and senior management corporate strategy,
and off balance sheet transactions. All disclosed information should be released via the approved stock
exchange procedure for company announcements as well as through the annual report.
The Board shall therefore, commit at all times to full disclosure of material information dealings. It shall
cause the filing of all required information for the interest of the stakeholders.
VIII. Commitment to Corporate Governance
Corporations shall promulgate and adopt its corporate governance rules and principles in accordance with
this Code. Said rules shall be in manual form and available as reference by the directors. It shall be
submitted to the Commission, which shall evaluate the same and their compliance with this Code taking into
account the size and nature of business. The said manual shall be available for inspection by any
stockholder of the corporation at reasonable hours on business days. The Chairman of the Board shall be
specifically tasked with the responsibility of ensuring adherence to the corporate governance code and
practices.
Unless mandated by law, other corporations are likewise encouraged to observe this Circular in the
absence of any mandated corporate governance rules adopted by other agencies.
IX. Administrative Sanction
Failure to adopt a manual of corporate governance as specified therein shall subject a corporation, after due
notice and hearing, to a penalty of One Hundred Thousand Pesos (P100,000).
X. Transitory Provision
All corporations affected by this Code shall submit their manual by July 1, 2002, to be effective January 1,
2003. A model manual will be drafted by the Commission and will be available by May 15, 2002, in the SEC
web page.
XI. Effective Date
This Memorandum Circular shall take effect after 15 days from publication in a newspaper of general
circulation.
April 5, 2002.
Mandaluyong City, Philippines.
(Sgd.) LILIA R. BAUTISTA
Chairperson
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INTERNATIONAL HUMANITARIAN LAW:
A FIELD GUIDE TO THE BASICS
Justice Adolfo S. Azcuna
Holder, 2007 Metrobank Foundation Professorial Chair
in International and Human Rights Law
1. Definition, Concept and Nature
International Humanitarian Law (IHL) are the laws of
armed conflict. It used to be called the laws of war.
It regulates the conduct of actual conflict (jus in
bello) as distinguished from laws providing for the
instances of the lawful resort to force (jus ad bellum).
It is a functional and utilitarian body of laws, not
just humanitarian.1
It is part of International Criminal Law and deals
with breaches of international rules on the laws of
armed conflict entailing the personal liability of the
individuals concerned, as opposed to the
responsibility of the State which is covered by Public
International Law proper.
2. Sources of IHL
The sources of IHL are statutory rules (treaties) and
customary rules developed by States to regulate
conflicts among them (customs or State practices).
The customary rules developed during the last 150
years have been largely committed to treaty form. The
first IHL Treaty was in 1864 – The Red Cross
Convention.
The rules are of two kinds: (a) Rules for the
protection of people injured, such soldiers and
prisoners of war, often referred to as Geneva law;
and, (b) Rules regulating the Actual Conduct of
Warfare, known as The Hague law.
The two kinds of rules have now merged.2
3. Advantage
The advantage of these rules lies in their being
utilitarian. If you do not kill my soldiers, I won’t kill
yours. They live to fight another day.3
_____________________________________________________________
1.
Notes, Prof. Averil McDonald, Asser Institute, February 2, 2007.
2.
Id.
3.
Id.
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4. Applicability
The rules apply to both International Armed Conflict (IAC) and Non-International Armed Conflict (NIAC).
Violators of IHL in a NIAC are liable under International Law. Note: There is a UN Draft of Customary
International Law on War Crimes in a NIAC (1993/4).
There is, however, no enforcement regime in IHL.
If the perpetrator goes to a country like Spain, he could be indicted there.4 Another country may,
however, not indict him.
5. Regulation of NIAC
The first law to regulate NIAC was adopted in 1949. The rules are found in Common Article 3 of the Geneva
Conventions.
The 1977 Additional Protocol II was ratified by the Philippines. This has the force of an International
Treaty agreeing to the application of IHL to NIAC.
Furthermore, customary rules also apply.5
6. Some Conventional or Treaty Sources of IHL
The main ones are:
The 1899 and 1907 Hague Conventions and Regulations.
The Four Geneva Conventions of 1949.
The Additional Protocols I and II of 1977 that supplement, fill gaps in, the Geneva Conventions.
(The Philippines and the U.S. are not parties to Additional Protocol I).
The 1954 Cultural Property Convention and its 2000 Optional Protocol.
The 1980 Conventional Weapons Convention and its Five Protocols:
I.
Non-detectable fragments
II.
Mines and booby traps
III. Incendiary Weapons
IV.
Blinding laser weapons (1995)
V.
Explosive remnants of war (2005) [methodology for cleaning]6
Additional Protocol III of 2005 – concerning the introduction of a new emblem – The Red Crystal
Red Crystal
White Background
The International Committee of the Red Cross is still the name of the organization.
It is a war crime to attack someone wearing this emblem.
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4.
Id.
5.
Id.
6.
See Gerhard Werle, PRINCIPLE OF INTERNATIONAL CRIMINAL LAW, 1125 and 1126.
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Land mines are regulated but, unfortunately, not banned. An attempt to ban land mines totally, for being
an indiscriminate weapon, failed. There is a Land Mines Treaty (1997) that regulates its use.
7. IHL Complemented by Disarmament Treaties
1972 Biological Weapons
1993 Chemical Weapons
1997 Land Mines Treaty
Re: Nuclear weapons – There is an Advisory Opinion of the International Court of Justice (ICJ) on the legality
of its possession.
8. Principles of IHL
a. Military Necessity – First principle.
unnecessary suffering.
Distortion/ Proportionality – against superfluous, unfair and
b. Humanity – As much as there is room for it — Distortion/Precaution, Martens Clause.
Necessity also accompanies humanity.
Certain things are so humane they would never be necessary.
9. Combatants
Lawful (the term does not occur in the law).
Unlawful
a. Can be lawful combatant behaving unlawfully
b. Unprivileged combatants – rebels
c. Civilians:
•
innocent
•
taking part in a conflict?
Members of the AF parties to the conflict.
Even lawful combatants can behave unlawfully, e.g., not wearing uniforms; failing to distinguish
themselves, especially in relation to war in terror – special forces.
Warfare is not clean.
The issue is how many? Too many in relation to your military objectives. Collateral damage.
Military objective:
Nature
Location
Purpose
Use
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You are allowed to kill combatants anytime even if they are asleep.
Soldiers on furlough? No. Not taking part in hostility.
Territory of conflict/zone of combat.
10. Application of I.H.L.
An armed conflict exists when two or more States fight each other (jus ad bellum).
Protocol I. People fighting against colonial domination, alien occupation and against racist regimes in
the exercise of their right to self-determination. (Article 1[4], Prot. I). e.g., Palestinians, East Timor under
Indonesia.
Wars of self-determination
IAC
–
NIAC –
minimum threshold
Req. Territorial Control –
A responsible command exercising control over part of its territory to enable them to carry out
substantial and concerted military operations and implement this Protocol.
Not applicable to internal disturbances/riots.
Part of a continuum of violence.
Principle of non-reciprocity.
Apply rules during an armed conflict regardless of whether the other party does so or not.
Advantage lies in expectation of reciprocity. Principle of Mutual Advantage.
Protocol II applies only when the rebels show their willingness to apply the law.
Territorial Control
For Protocol II – potential to become the new power.
– holding territory like a State.
11. Summary of Historical Development of IHL
Prof. Gerhard Werle in his work “Principles of International Criminal Law,” sums up the developments of IHL
thus:
The laws of war were first codified in military manuals in the 19th century. Of particular significance
was the so-called Lieber Code for the armed forces of the United States of America. In 1863,
German-American law professor Franz Lieber (1800-1872), by order of the American President
Abraham Lincoln, prepared guidelines on armed conflict for the US Army. They were declared to be
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binding during the American Civil War. The Lieber Code’s 158 articles contained rules of conduct for
the American military that, among other things, addressed treatment of prisoners and prohibited
attacks on hospitals and cultural property.
On the international level, too, early efforts were made
to codify and further develop the laws of war. Influenced
by the terrible suffering of soldiers wounded in the battle of
Solferino between an Austrian and a French-Sardinian
army (1859), Henry Dunant of Switzerland worked to
found the International Committee of the Red Cross. In
1864, the first Geneva Convention was adopted. This
agreement forms the cornerstone of the so-called “law of
Geneva,” the primary purpose of which is to protect
persons not or no longer taking part in hostilities.
“In sum, murder, extermination,
torture, rape, political, racial,
or religious persecution and other
inhumane acts reach the threshold
of crimes against humanity only
if they are a part of a practice.”
The most important rules applicable today under the law of Geneva were established by the four
Geneva Conventions of 1949 and the two Additional Protocols of 1977. Geneva Convention I
protects the sick and wounded in armed forces in wartime and further developed the Geneva
Agreement of 1864, which had been revised in 1906 and 1929. Geneva Convention II further
developed Hague Convention X (1907); it regulates the protection of the sick and wounded in
warfare at sea. Geneva Convention III regulates the status and protection of prisoners of war, and
goes beyond the 1929 Geneva Convention for the protection of prisoners of war. Geneva Convention
IV for the first time comprehensively codified the protection of civilians in wartime.
The four Conventions contain some congruent provisions. The introductory article common to all
four instruments regulates the Conventions’ applicability to international armed conflict. Common
Article 3 contains minimum standards for non-international armed conflict, especially civil wars. It is
also known as a “convention in miniature.” For the first time, it established rules that were also
binding for these types of armed conflicts.
In 1977 Additional Protocols to the Geneva Convention aimed to adapt international
humanitarian law to changing circumstances and new forms of conflict. Additional Protocol I
regulates the protection of persons in international armed conflict, which now also includes wars of
national liberation in exercise of the right of self-determination of peoples. It includes additional
groups within the protective scope of international law and takes account of new developments in
warfare. Additional Protocol II expands the provisions of Common Article 3 of the Geneva
Conventions of 1949 and establishes comprehensive regulations for non-international armed
conflicts.
The so-called law of The Hague emerged alongside the law of Geneva. Intended mainly to protect
soldiers, it prohibits means and methods of warfare that are particularly atrocious and dangerous.
The starting point for this development was the St. Petersburg Declaration of 1868, in which the
parties pledged to refrain from employing certain ammunition that was particularly devastating for
soldiers. The preamble of St. Petersburg Declaration was especially groundbreaking. The parties
determined that the only legitimate object which States should endeavor to accomplish during war is
to weaken the military forces of the enemy. The St. Petersburg Declaration was followed, at the
invitation of Czar Alexander II of Russia, by conferences in Brussels (1874) and The Hague (1899 and
1907).
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The most important outcome of these conferences was The Hague Regulations of 1899 and 1907,
which adopted comprehensive rules regarding permissible methods of warfare. The treaty parties
recognized that “[t]he right of belligerents to adopt means of injuring the enemy is not unlimited.
This statement stood in contrast to the traditional view that anything was permitted in war that would
contribute to victory, and was thus a decisive step in the development of international humanitarian
law. The provisions on means and methods of warfare were subsequently adapted to developments
in warfare, for example in the Gas Protocol of 1925, adopted in response to the devastating effect of
the use of poison gas in World War I, which reinforced the already-existing prohibition on the use of
poison gas. The Hague Regulations and the other rules on means and methods of warfare are
termed “the law of The Hague.”
The law of The Hague was expanded after World War II and adapted to new developments. Of
note are the Convention for the Protection of Cultural Property in the Event of an Armed Conflict of 14
May 1954, the Convention on the Prohibition of the Development, Production and Stockpiling of
Bacteriological (Biological) and Toxin Weapons and on their Destruction of 10 April 1972, the
Convention on Prohibitions or Restrictions on the Use of Certain Conventional Weapons which may
be Deemed to be Excessively Injurious or to have Indiscriminate Effects, adopted on 10 October
1980, and its four protocols, the Convention on the Prohibition of the Use, Stockpiling, Production and
Transfer of Anti-Personnel Mines and on their Destruction, of 18 September 1997, and the
Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical
Weapons and on their Destruction of 13 January 1993. The titles of these Conventions themselves
provide a sense of the subjects they regulate.
The fundamental separation into the law of Geneva and the law of The Hague continues to this
day, despite growing substantive similarities and overlaps.
IHL has largely attained the character of customary international law. This was established for
the law of The Hague by the Nuremberg Tribunal. The customary law status of the provisions of the
Geneva Convention is also beyond question. The most important regulations in IHL thus apply
independently of the treaty obligations of parties taking in hostilities, so that even if a state were to
withdraw from the Geneva Convention, it would not be freed from its obligations to protect the
wounded, prisoners of war, civilians, etc.
In addition, customary IHL exists that is not codified in the Conventions. This is recognized in the
Martens Clause, adopted in the preamble to Hague Convention IV in 1907 and named for Professor
Friedrich von Martens, the delegate of Czar Nicholas II. Under its terms, even if an act of war is not
expressly forbidden by an international treaty, it is not necessarily permitted. Rather, “civilians and
combatants remain under the protection and authority of the principles of international law derived
from established custom, from the principles of humanity and from the dictates of public conscience.”
In summary, international humanitarian law can be reduced to a few basic principles. Only
combatants, especially members of the armed forces, are authorized to undertake belligerent
activity. As long as they behave according to the rules of international humanitarian law, they cannot
be held accountable by the parties for participating in armed conflict. As a rule, only combatants may
be the targets of attack. No one who is not or is no longer participating in armed conflict because of
wounding, illness, shipwreck or prisoner of war status is a legitimate target of attack, and such people
must be protected. When attacks on legitimate targets cause incidental consequences for protected
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persons, these must be limited to the extent possible. If an attack would lead to disproportionate
incidental consequences, it may not be carried out. When engaging in a legitimate attack, parties
must refrain from using means and methods that would cause unnecessary suffering.
12. The Core Crimes
The core crimes in IHL are genocide, crimes against humanity, war crimes and aggression. The last one,
however, is still awaiting a procedure on its definition before it can be enforced.
These core crimes are specified in the Statutes of the International Criminal Court (or the Rome Statute
for an ICC) which describes them as the most serious crimes of concern to the international community as a
whole. These crimes are within the jurisdiction of the ICC.
Although the Philippines has signed but not yet ratified the Rome Statute establishing the ICC, the ICC
Statutes and definitions of the core crimes are authoritative statements for us since they are practically lifted
from customary international law sources and from the Geneva Conventions of 1949 and other treaties to
which we are parties.
The ICC Statute, then, defines genocide in Article 6 as follows:
ARTICLE 6
GENOCIDE
For the purpose of this Statute, “genocide” means any of the following acts committed with intent to
destroy, in whole or in part, a national, ethnical, racial or religious group, as such:
(a) Killing members of the group;
(b) Causing serious bodily or mental harm to members of the group;
(c) Deliberately inflicting on the group conditions of life calculated to bring about its physical
destruction in whole or in part;
(d) Imposing measures intended to prevent births within the group;
(e) Forcibly transferring children of the group to another group.
Article 7 deals with crimes against humanity, thus:
ARTICLE 7
CRIMES AGAINST HUMANITY
1. For the purpose of this Statute, “crime against humanity” means any of the following acts when
committed as part of a widespread or systematic attack directed against any civilian population,
with knowledge of the attack:
a) Murder;
b) Extermination;
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c) Enslavement;
d) Deportation or forcible transfer of population;
e) Imprisonment or other severe deprivation of physical liberty in violation of fundamental rules
of international law;
f) Torture;
g) Rape, sexual slavery, enforced prostitution, forced pregnancy, enforced sterilization, or any
other form of sexual violence of comparable gravity;
h) Persecution against any identifiable group or collectivity on political, racial, national, ethnic,
cultural, religious, gender as defined in paragraph 3, or other grounds that are universally
recognized as impermissible under international law, in connection with any act referred to in
this paragraph or any crime within the jurisdiction of the Court;
i)
Enforced disappearance of persons;
j) The crime of apartheid;
k) Other inhumane acts of a similar character intentionally causing great suffering, or serious
injury to body or to mental or physical health.
2. For the purpose of paragraph 1:
a) “Attack directed against any civilian population” means a course of conduct involving the
multiple commission of acts referred to in paragraph 1 against any civilian population,
pursuant to or in furtherance of a State or organizational policy to commit such attack;
b) “Extermination” includes the intentional infliction of conditions of life, among others the
deprivation of access to food and medicine, calculated to bring about the destruction of part of
a population;
c) “Enslavement” means the exercise of any or all of the powers attaching to the right of the
ownership over a person and includes the exercise of such power in the course of trafficking in
persons, in particular women and children;
d) “Deportation or forcible transfer of population” means forced displacement of the persons
concerned by expulsion or other coercive acts from the area in which they are lawfully
present, without grounds permitted under international law;
e) “Torture” means the intentional infliction of severe pain or suffering, whether physical or
mental, upon a person in the custody or under the control of the accused; except that torture
shall not include pain or suffering arising only from, inherent in or incidental to, lawful
sanctions;
f) “Forced pregnancy” means the unlawful confinement of a woman forcibly made pregnant,
with the intent of affecting the ethnic composition of any population or carrying out other
grave violations of international law. This definition shall not in any way be interpreted as
affecting national laws relating to pregnancy;
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g) “Persecution” means the intentional and severe deprivation of fundamental rights contrary
to international law by reason of the identity of the group or collectivity;
h) “The crime of apartheid” means inhumane acts of a character similar to those referred to in
paragraph 1, committed in the context of an institutionalized regime of systematic
oppression and domination by one racial group over any other racial group or groups and
committed with the intention of maintaining that regime;
i)
“Enforced disappearance of persons” means the arrest, detention or abduction of persons
by, or with the authorization, support or acquiescence of a State or a political organization,
followed by a refusal to acknowledge that deprivation of freedom or to give information on
the fate or whereabouts of those persons, with the intention of removing them from the
protection of the law for a prolonged period of time.
3. For the purpose of this Statute, it is understood that the term “gender” refers to the two sexes,
male and female, within the context of society. The term “gender” does not indicate any
meaning different from the above.
And Article 8 treats of War Crimes, thus:
ARTICLE 8
WAR CRIMES
1. The Court shall have jurisdiction in respect of war crimes in particular when committed as part of a
plan or policy or as part of a large-scale commission of such crimes.
2. For the purpose of this Statute, “war crimes” means:
a) Grave breaches of the Geneva Conventions of 12 August 1949, namely, any of the following
acts against persons or property protected under the provisions of the relevant Geneva
Convention:
(i)
Willful killing;
(ii)
Torture or inhuman treatment, including biological experiments;
(iii)
Willfully causing great suffering, or serious injury to body or health;
(iv)
Extensive destruction and appropriation of property, not justified by military
necessity and carried out unlawfully and wantonly;
(v)
Compelling a prisoner of war or other protected person to serve in the forces of a
hostile Power;
(vi)
Willfully depriving a prisoner of war or other protected person of the rights to fair and
regular trial;
(vii)
Unlawful deportation or transfer or unlawful confinement;
(viii) Taking of hostages.
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b)
Other serious violations of the laws and customs applicable in international armed conflict,
within the established framework of international law, namely, any of the following acts:
(i)
Intentionally directing attacks against the civilian population as such or against
individual civilians not taking direct part in hostilities;
(ii)
Intentionally directing attacks against civilian objects, that is objects which are not
military objectives;
(iii)
Intentionally directing attacks against personnel, installations, material, units or
vehicles involved in a humanitarian assistance or peacekeeping mission in accordance
with the Charter of the United Nations, as long as they are entitled to the protection
given to civilians or civilian objects under the international law of armed conflict;
(iv)
Intentionally launching an attack in the knowledge that such attack will cause
incidental loss of life or injury to civilians or damage to civilian objects or widespread,
long-term and severe damage to the natural environment which would be clearly
excessive in relation to the concrete and direct overall military advantage anticipated;
(v)
Attacking or bombarding, by whatever means, towns, villages, dwellings or buildings
which are undefended and which are not military objectives;
(vi)
Killing or wounding a combatant who, having laid down his arms or having no longer
means of defense, has surrendered at discretion;
(vii) Making improper use of a flag of truce, of the flag of the military insignia and uniform of
the enemy or of the United Nations, as well as of the distinctive emblems of the Geneva
Conventions, resulting in death or serious personal injury;
(viii) The transfer, directly or indirectly, by the Occupying Power of parts of its own civilian
population into the territory it occupies, or the deportation or transfer of all or parts of
the population of the occupied territory within or outside this territory;
(ix)
Intentionally directing attacks against buildings dedicated to religion, education, art,
science or charitable purposes, historic monuments, hospitals and places where the
sick and wounded are collected, provided they are not military;
(x)
Subjecting persons who are in the power of an adverse party to physical mutilation or
to medical or scientific experiments of any kind which are neither justified by the
medical, dental or hospital treatment of the person concerned nor carried out in his or
her interest, and which cause death to or seriously endanger the health of such person
or persons;
(xi)
Killing or wounding treacherously individuals belonging to the hostile nation or army;
(xii) Declaring that no quarter will be given;
(xiii) Destroying or seizing the enemy’s property unless such destruction or seizure be
imperatively demanded by the necessity of war;
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(xiv)
Declaring abolished, suspended or inadmissible in a court of law the rights and actions
of the nationals of the hostile party;
(xv)
Compelling the nationals of the hostile party to take part in the operations of war
directed against their own country, even if they were in the belligerent’s service before
the commencement of the war;
(xvi)
Pillaging a town or place, even when taken by assault;
(xvii) Employing poison or poisoned weapons;
(xviii) Employing asphyxiating, poisonous or other gases, and all analogous liquids,
materials or devices;
(xix)
Employing bullets which expand or flatten easily in the human body, such as bullets
with a hard envelope which does not entirely cover the core or is pierced with incisions;
(xx)
Employing weapons, projectiles and material and methods or warfare which are of a
nature to cause superfluous injury or unnecessary suffering or which are inherently
indiscriminate in violation of the international law of armed conflict, provided that such
weapons, projectiles and material and methods of warfare are the subject of a
comprehensive prohibition and are included in an annex to this Statute, by an
amendment in accordance with the relevant provisions set forth in Articles 121 and
123;
(xxi)
Committing outrages upon personal dignity, in particular humiliating and degrading
treatment;
(xxii) Committing rape, sexual slavery, enforced prostitution, forced pregnancy, as defined
in Article 7, paragraph 2 (f), enforced sterilization, or any other form of sexual violence
also constituting a grave breach of the Geneva Conventions;
(xxiii) Utilizing the presence of a civilian or other protected person to render certain points,
areas or military forces immune from military operations;
(xxiv) Intentionally directing attacks against buildings, materials, medical units and
transport, and personnel using the distinctive emblems of the Geneva Conventions in
conformity with international law;
(xxv) Intentionally using starvation of civilians as a method of warfare by depriving them of
the objects indispensable to their survival, including willfully impeding relief supplies
as provided for under the Geneva Conventions;
(xxvi) Conscripting or enlisting children under the age of 15 years into the national armed
forces or using them to participate actively in hostilities
c) In the case of an armed conflict not of an international character, serious violations of Article 3
common to the four Geneva Conventions of 12 August 1949, namely, any of the following acts
committed against persons taking no active part in the hostilities, including members of
armed forces who have laid down their arms and those placed hors de combat by sickness,
wounds, detention or any other cause:
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(i)
Violence to life and person, in particular murder of all kinds, mutilation, cruel treatment
and torture;
(ii)
Committing outrages upon personal dignity, in particular humiliating and degrading
treatment;
(iii)
Taking of hostages;
(iv)
The passing of sentences and the carrying out of executions without previous
judgment pronounced by a regularly constituted court, affording all judicial
guarantees which are generally recognized as indispensable.
d) Paragraph 2(c) applies to armed conflicts not of an international character and thus does not
apply to situations of internal disturbances and tensions, such as riots, isolated and sporadic
acts of violence or other acts of a similar nature.
e) Other serious violations of the laws and customs applicable in armed conflicts not of an
international character, within the established framework of international law, namely, any of
the following acts:
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(i)
Intentionally directing attacks against the civilian population as such or against
individual civilians not taking direct part in hostilities;
(ii)
Intentionally directing attacks against buildings, material, medical units and
transport, and personnel using the distinctive emblems of the Geneva Conventions in
conformity with international law;
(iii)
Intentionally directing attacks against personnel, installations, material, units or
vehicles involved in a humanitarian assistance or peacekeeping mission in accordance
with the Charter of the United Nations, as long as they are entitled to the protection
given to civilians or civilian objects under the international law of armed conflict;
(iv)
Internationally directing attacks against buildings dedicated to religion, education, art,
science or charitable purposes, historic monuments, hospitals and places where the
sick and wounded are collected, provided they are not military objectives;
(v)
Pillaging a town or place, even when taken by assault;
(vi)
Committing rape, sexual slavery, enforced prostitution, forced pregnancy, as defined
in Article 7, paragraph 2 (f), enforced sterilization, and any other form of sexual
violence also constituting a serious violation of article 3 common to the four Geneva
Conventions;
(vii)
Conscripting or enlisting children under the age of fifteen years into armed forces or
groups or using them to participate actively in hostilities;
(viii)
Ordering the displacement of the civilian population for reasons related to the conflict,
unless the security of the civilians involved or imperative military reasons so demand;
(ix)
Killing or wounding treacherously a combatant adversary;
(x)
Declaring that no quarter will be given;
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(xi)
Subjecting persons who are in the power of another party to the conflict to physical
mutilation or to medical or scientific experiments of any kind which are neither justified
by the medical, dental or hospital treatment of the person concerned nor carried out in
his or her interest, and which cause death to or seriously endanger the health of such
person or persons;
(xii)
Destroying or seizing the property of an adversary unless such destruction or seizure
be imperatively demanded by the necessities of the conflict.
f) Paragraph 2 (e) applies to armed conflicts not of an international character and thus does not
apply to situations of internal disturbances and tensions, such as riots, isolated and sporadic
acts of violence or other acts of a similar nature. It applies to armed conflicts that take place in
the territory of a State when there is protracted armed conflict between governmental
authorities and organized armed groups or between such groups.
3. Nothing in paragraph 2 (c) and (e) shall affect the responsibility of a Government to maintain or
re-establish law and order in the State or to defend the unity and territorial integrity of the State,
by all legitimate means.
From Cassese,7 we have the following commentaries on these core crimes:
WAR CRIMES
War crimes are serious violations of customary or treaty rules belonging to the international humanitarian
law of armed conflict. As stated by the Appeals Chamber of the International Criminal Tribunal for the
former Yugoslavia (ICTY) in Tadic (Interlocutory Appeal): (i) War crimes must consist of a ‘serious
infringement’ of an international rule, that is to say ‘must constitute a breach of a rule protecting important
values, and the breach must involve grave consequences for the victim;’ (ii) the rule violated must either
belong to the corpus of customary law or be part of an applicable treaty; (iii) ‘the violation must entail, under
customary or conventional law, the individual criminal responsibility of the person breaching the rule;’ in
other words, the conduct constituting a serious breach of international law must be criminalized.
The Appeals Chamber gave the following example of a non-serious violation: ‘the fact of a combatant
simply appropriating a loaf of bread in an occupied village’ would not amount to such a breach, ‘although it
may be regarded as falling foul of the basic principle laid down in Article 46(1) of the (1907) Hague
Regulations [on Land Warfare] (and the corresponding rule of customary international law) whereby
“private property must be respected” by any army occupying an enemy territory.’
War crimes may be perpetrated in the course of either international or internal armed conflicts, that is,
civil wars or large-scale and protracted armed clashes breaking out within a sovereign State. Traditionally
war crimes were held to embrace only violations of international rules regulating war proper, that is
international armed conflicts and not civil wars. Particularly after the ICTY Appeals Chamber decision in
Tadic (Interlocutory Appeal), it is now widely accepted that serious infringements of customary or applicable
treaty law on internal armed conflicts must also be regarded as amounting to war crimes proper. Article
8(2)(c-f) of the ICC Statute confirms this new trend.
_________________________________________________________________________________________________________________________
7.
Antonio Cassese, INTERNATIONAL CRIMINAL LAW, 2003 ed.
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War crimes are thus serious violations of the international humanitarian law of armed conflict, a vast
body of substantive rules comprising what are traditionally called ‘the law of The Hague’ and ‘the law of
Geneva.’
The Hague set of rules includes many provisions of The Hague Conventions of 1899 or 1907 on
international warfare. These rules provide for the various categories of lawful combatants, and regulate
both combat actions (means and methods of warfare) and the treatment of persons who do not take part in
armed hostilities (civilians, wounded, and the sick) or no longer take part in them (chiefly prisoners of war).
The so-called ‘law of Geneva’ comprises the various Geneva Conventions (at present the four Conventions of
1949 plus the two Additional Protocols of 1977), and is essentially designed to regulate the treatment of
persons who do not, or no longer, take part in the armed conflict. However, the Third Geneva Convention of
1949 also regulates the various classes of lawful combatants, thereby updating The Hague rules; in addition
the First Additional Protocol of 1977 to some extent updates those rules of The Hague law which deal with
means and methods of combat, for the sake of sparing civilians as far as possible from armed hostilities. It is
thus clear that the traditional distinction between the two sets of rules is fading away; even assuming it has
not become obsolete. Its purpose now is largely descriptive.
War crimes may be perpetrated by military personnel against enemy servicemen or civilians, or by
civilians against either members of the enemy armed forces or enemy civilians (for instance, in occupied
territory). Conversely, crimes committed by servicemen against their own military (whatever their
nationality) do not constitute war crimes, as clarified in Pilz by the Dutch Special Court of Cassation as well as
in Motosuke, by a Temporary Court Martial of the Netherlands East Indies, at Amboina. Such offences may
nonetheless fall within the ambit of the military law of the relevant belligerent.
THE NEED FOR A LINK BETWEEN THE OFFENCE AND
AN (INTERNATIONAL OR INTERNAL) ARMED CONFLICT
Criminal offences, to amount to war crimes, must also have a link with an international or internal armed
conflict. Many courts, chiefly the ICTY and the International Criminal Tribunal for Rwanda (ICTR), have
restated this proposition, which can be easily deduced from the whole body of the international
humanitarian law of armed conflict. This applies in particular to offences committed by civilians, although
courts have also required the link or nexus with an armed conflict in the case of crimes perpetrated by
members of the military. (In this respect a case worth mentioning is Lehnigk and Schuster, decided by the
Italian Court of Assize of S. Maria Capua Vetere in 1994).
Special attention should be paid to crimes committed by civilians against other civilians. They may
constitute war crimes, provided there is a link or connection between the offence and the armed conflict. If
such a link is absent, the breach does not amount to a war crime, but simply constitutes an ‘ordinary’
criminal offence under the law applicable in the relevant territory.
ESTABLISHING WHETHER A SERIOUS VIOLATION OF
INTERNATIONAL HUMANITARIAN LAW HAS BEEN CRIMINALIZED
As pointed out above, in order for a serious violation of international humanitarian law to become a war
crime, it is necessary that the violation be criminalized.
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These points having been established, several situations need to be distinguished. First, it may be that a
violation has been consistently considered a war crime by national or international courts (this is, for
example, true of the most blatant violations, such as unlawfully killing prisoners of war or innocent civilians,
shelling hospitals, refusing quarter, killing shipwrecked or wounded persons, and so on). The existence of
war crimes cases on a particular matter may sometimes be considered sufficient for holding the breach to be
a war crime. However, strictly speaking, the existence of a few (possibly isolated) war crime cases may
not be enough. It would be better if it were possible to show that the breach is considered a war
crime under customary international law, in which case there would have to be widespread evidence
that States customarily prosecute such breaches as war crimes and that they do so because they
believe themselves to be acting under a binding rule of international law (opinio juris).
A second possible instance is that a breach is termed a war crime by the Statute of an international
tribunal. In this case, even if the breach has never been brought before a national or international tribunal, it
may be justifiably be regarded as a war crime – or, at least, as a war crime falling under the jurisdiction of that
international tribunal.
A third, and more difficult, category is when the case law and statutes of international tribunals are
absent or silent on the matter. In such a case, how is one to determine whether violating a prohibition of
international humanitarian law amounts to a war crime? In light of the case law (see List and others
[Hostages case], John G. Schultz, Tadic [Interlocutory Appea], and Bláskic) and the general principles of
international criminal law, one is entitled, in seeking an answer to the question, to examine: (i) military
manuals, (ii) the national legislation of States belonging to the major legal systems of the world, or, if these
elements are lacking, (iii) the general principles of criminal justice common to nations of the world, as set out
in international instruments, acts, resolutions and the like; and (iv) the legislation and judicial practice of the
State to which the accused belongs or on whose territory the crime has allegedly been committed.
It was the Appeals Chamber of the ICTY that best addressed the issue under discussion, in Tadic
(Interlocutory Appeal). The question in dispute was whether the accused could be held criminally liable for
breaches of international humanitarian law allegedly committed in an internal armed conflict; in other
words, whether he could be held responsible for the war crimes perpetrated in a civil war. The Appeals
Chamber first considered whether there were customary rules of international humanitarian law governing
internal armed conflicts, and answered in the affirmative. It then asked itself whether violations of those
rules could entail individual criminal responsibility. For this purpose, the Court examined national cases,
military manuals, national legislation, and resolutions of the UN Security Council. It concluded in the
affirmative and then added that in the case at issue this conclusion was fully warranted ‘from the point of
view of substantive justice and equity,’ because violations of international humanitarian law in internal
armed conflicts were punished as criminal offences in the countries concerned, that is both the old Socialist
Federal Republic of Yugoslavia and in Bosnia and Herzegovina; as the Court noted, ‘Nationals of the former
Yugoslavia as well as, at present, those of Bosnia-Herzegovina were therefore aware, or should have been
aware, that they were amenable to the jurisdiction of their national criminal courts in cases of violation of
international humanitarian law.’
An ICTY Trial Chamber returned to the question in Bláskic. The defence contended that violations of
common Article 3 of the four 1949 Geneva Conventions (on internal armed conflict) did not entail criminal
liability. The Trial Chamber dismissed this contention by noting, first, that those violations were envisaged in
Article 3 of the ICTY Statute, conferring jurisdiction on the Tribunal, and secondly, that the criminal code of
Yugoslavia, taken over in 1992 as the criminal code of Bosnia and Herzegovina (the place where the alleged
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offences had been committed), provided that war crimes committed either in international or in internal
armed conflicts involved the criminal liability of the perpetrator.
War crimes can be classified under different headings. The following classification is based on some
objective criteria, and may prove useful, although of course it only serves descriptive purposes: (i) war
crimes committed in international armed conflicts (that is, between two or more States, or between
a State and a national liberation movement, pursuant to Article 1(4) of the First Additional Protocol of
1977), and (ii) war crimes perpetrated in internal armed conflicts (that is, large-scale armed hostilities,
other than internal disturbances and tensions, or riots or isolated or sporadic acts of armed violence,
between State authorities and rebels, or between two or more organized armed groups within a State).
Both classes include the following:
1. Crimes committed against persons not taking part, or no longer taking part, in armed hostilities. In
practice by far the most numerous crimes are committed against civilians, or armed resistance
movements in occupied territory, and include sexual violence against women. In particular, they are
perpetrated against persons detained in internment or concentration camps. They are also
committed against prisoners of war.
In the case of international armed conflicts, these crimes are termed ‘grave breaches’ against one
of the ‘protected persons’ (wounded, shipwrecked persons, prisoners of war, civilians on the territory
of the Detaining Power or subject to the belligerent occupation of an Occupying Power) or ‘protected
objects’ provided for in the 1949 Geneva Conventions as well as the First Additional Protocol. These
Conventions stipulate that ‘grave breaches’ of the same Conventions are also subject to ‘universal
jurisdiction.’ Grave breaches are defined in the following provisions: Articles 50, 51, 130, and 147 of
the First, Second, Third, and Fourth Geneva Conventions, respectively, as well as in Article 85 of the
First Additional Protocol. They include willful killing, torture or inhuman treatment, including
biological experiments, willfully causing great suffering or serious injury to body or health, extensive
destruction and appropriation of property, not justified by military necessity and carried out
unlawfully and wantonly.
In the case of internal armed conflict, the same violations are prohibited and may amount to a war
crime if they are serious, but may not be termed ‘grave breaches.’ In this connection, reference
should be made to Article 3 common to the four 1949 Geneva Conventions, Additional Protocol II
(especially Article 4 thereof), as well as Article 4 of the ICTR Statute.
2. Crimes against enemy combatants or civilians, committed by resorting to prohibited methods of
warfare.
Examples include intentionally directing attacks against the civilian population in the combat area
or individual civilians in the combat area not taking part in hostilities; committing acts or threats of
violence the primary purpose of which is to spread terror among the civilian population; intentionally
launching an indiscriminate attack affecting the civilian population or civilian objects in the
knowledge that such attack will cause excessive loss of life, injury to civilians, or damage to civilian
objects; intentionally making non-defended localities or demilitarized zones the object of attack;
intentionally making a person the object of attack in the knowledge that he is hors de combat;
intentionally attacking medical buildings, material, medical units and transport, and personnel;
intentionally using starvation of civilians as a method of warfare by depriving civilians of objects
indispensable to their survival, including willfully impeding relief supplies; intentionally launching an
attack in the knowledge that such attack will cause widespread, long-term, and severe damage to
the natural environment; utilizing the presence of civilians or other protected persons with a view to
rendering certain points, areas, or military forces immune from military operations; declaring that no
quarter will be given, that is, that enemy combatants will be killed and not taken prisoner.
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3. Crimes against enemy combatants and civilians, involving the use of prohibited means of warfare.
Examples include employing weapons, projectiles, and materials which are of a nature to cause
superfluous injury or unnecessary suffering; employing poison or poisoned weapons, or
asphyxiating, poisonous, or other gases, and all analogous liquids, materials, or devices; using
chemical or bacteriological weapons; employing expanding bullets or weapons, the primary effect of
which is to injure by fragments not detectable by X-rays, or blinding laser weapons (according to the
definition of the 1995 Protocol IV to the Convention on Prohibitions or Restrictions on the Use of
Certain Conventional Weapons which may be Deemed to be Excessively Injurious or to Have
Indiscriminate Effects, adopted at Geneva on 10 October 1980, the latter are ‘laser weapons
specially designed, as their sole combat function or as one of their combat functions, to cause
permanent blindness to un-enhanced vision, that is to the naked eye or to the eye with corrective
eyesight devices’); employing booby-traps or land mines indiscriminately, that is, in such a way as to
hit both combatants and civilians alike, or anti-personnel mines which are not detectable; employing
napalm and other incendiary weapons in a manner prohibited by the 1980 Protocol III to the
aforementioned Convention (for instance, by making a military objective ‘located within a
concentration of civilians the object of attack by air-delivered incendiary weapons’).
4. Crimes against specially protected persons and objects (such as medical personnel units or
transport, personnel participating in relief actions, humanitarian organizations such as Red Cross, or
Red Crescent, or Red Lion and Sun units, UN personnel belonging to peace-keeping missions, etc.).
5. Crimes consisting of improperly using protected signs and emblems (such as a flag of truce; the
distinctive emblems of the Red Cross, or Red Crescent, or Red Lion and Sun; perfidious use of a
national flag or of military uniform and insignia, etc.).
CRIME AGAINST HUMANITY
THE NOTION
Under general international law the category of crimes against humanity is sweeping but sufficiently welldefined. It covers actions that share a set of common features:
1. They are particularly odious offences in that they constitute a serious attack on human dignity or a
grave humiliation or degradation of one or more human beings.
2. They are not isolated or sporadic events, but are part either of a governmental policy, or of a
widespread or systematic practice of atrocities tolerated, condoned, or acquiesced in by a
government or a de facto authority. Clearly, it is required that a single crime be an instance of a
repetition of similar crimes or be part of a string of such crimes (widespread practice), or that it be the
manifestation of a policy or a plan drawn up, or inspired by, State authorities or by the leading officials
of a de facto state-like organization, or of an organized political group (systematic practice).
3. They are prohibited and may consequently be punished regardless of whether they are perpetrated
in time of war or peace. While in 1945 a link or nexus with an armed conflict was required, at present
customary law no longer attaches any importance to such requirement.
4. The victims of the crime may be civilians or, in case of crimes committed during armed conflict,
persons who do not take part (or no longer take part) in armed hostilities, as well as, under
customary international law (but not under the Statute of the ICTY, ICTR, and the ICC), enemy
combatants.
In sum, murder, extermination, torture, rape, political, racial, or religious persecution and other
inhumane acts reach the threshold of crimes against humanity only if they are a part of a practice.
At present, the following classes of offences make up crimes against humanity:
1. Murder, that is, intentional killing, whether or not premeditated.
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2. Extermination, that is, mass or large-scale killing, as well as ‘the intentional infliction of conditions of
life, inter alia the deprivation of access to food and medicine, calculated to bring about the destruction
of part of a population’ (Article 7(2)(b) of the ICC Statute).
The ICTR has defined the notion of extermination in a few cases: Akayesu, Kambanda,
Kayishema and Ruzindana, Rutaganda, Musema. The ICTR has held that the requisite elements of
the offence are as follows: (i) the accused or his subordinate participated in the killing of certain
named or described persons: (ii) the act or omission was unlawful and intentional; (iii) the unlawful
act or omission must be part of a widespread or systematic attack; and (iv) the attack must be
against the civilian population. This definition does not seem to be satisfactory, for it is loose and does
not indicate the unique objective features of the crime.
A Chamber of the ICTY offered a better definition in Krstic, it held that:
For the crime of extermination to be established, in addition to the general requirements for a
crime against humanity, there must be evidence that a particular population was targeted and
that its members were killed or otherwise subjected to conditions of life calculated to bring about
the destruction of a numerically significant part of the population.
The Trial Chamber also specified that ‘In accordance with the Tadic (Appeal) judgment, x x x it is
unnecessary that the victims were discriminated against for political, social or religious grounds.’
In the same case the Trial Chamber found that the accused was guilty of extermination, as
follows:
Although there is evidence that a small number of killings in Potocari [in the Srebrenica enclave]
and afterwards involved women, children and elderly, virtually all of the persons killed in the
aftermath of the fall of Srebrenica were Bosnian Muslim males of military age. The screening
process at Potocari, the gathering of those men at detention sites, their transportation to
execution sites, the opportunistic killings of members of the column along the Bratunac-Milici
road as they were apprehended, demonstrate beyond any doubt that all of the military-aged
Bosnian Muslim males that were captured or fell otherwise in the hands of the Serb forces were
systematically executed. The result was that the majority of the military aged Bosnian Muslim
males who fled Srebrenica in July 1995 were killed. A crime of extermination was committed at
Srebrenica.
It is submitted that one ought not to exclude from this class of crimes extermination carried out by
groups of terrorists for the purpose of spreading terror. (Of course, the necessary condition that the
terrorist attack exterminating a group of persons be part of a widespread or systematic attack, must
be fulfilled.)
3. Enslavement. This notion was gradually elaborated upon by case law, notably by two US Military
Tribunals sitting at Nuremberg, in the Milch case and in Pohl and others (at 970), and then refined by a
Trial Chamber of the ICTY in Kunarac and others. According to the ICC Statute, which crystallizes a
nascent notion, enslavement ‘means the exercise of any or all of the powers attaching to the right of
ownership over a person and includes the exercise of such power in the course of trafficking in
persons, in particular women and children’ (Article 7(2)(c) ).
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4. Deportation or forcible transfer of population, that is the ‘forced displacement of the persons
concerned by expulsion or other coercive acts from the area which they are lawfully present, without
grounds permitted under international law’ (Article 7(2)(d) ).
A Trial Chamber of the ICTY emphasized in Krstic that:
Both deportation and forcible transfer relate to involuntary and unlawful evacuation of individuals
from the territory in which they reside. Yet the two are not synonymous in customary
international law. Deportation presumes transfer beyond State borders, whereas forcible transfer
relates to displacement within a State.
In that case the Trial Chamber found that, on 12-13 July 1995, about 25,000 Bosnian Muslim
civilians were forcibly bussed outside the enclave of Srebrenica to the territory under Bosnian Muslim
control, always within the same State (Bosnia and Herzegovina). The transfer was compulsory and
was carried out ‘in furtherance of a well-organized policy whose purpose was to expel the Bosnian
Muslim population from the enclave’. The Chamber concluded that the civilians transported from
Srebrenica were not subjected to deportation but to forcible transfer, a crime against humanity.
5. Imprisonment or other severe deprivation of physical liberty in violation of fundamental rules of
international law.
A Trial Chamber of the ICTY, in Kordic and Cerkez, was the first international court to offer a definition
of imprisonment. It held that imprisonment as a crime against humanity must ‘be understood as
arbitrary imprisonment, that is to say, the deprivation of liberty of the individual without due process
of law, as part of a widespread or systematic attack directed against a civilian population.’
6. Torture, that is ‘the intentional infliction of severe pain or suffering, whether physical or mental, upon
a person in the custody or under the control of the accused’, except when pain or suffering is inherent
in or incidental to lawful sanctions (Article 7(2)(e) of the ICC Statute).
In Delalic and others Trial Chamber II of the ICTY noted that the definition of torture contained in the
1984 Torture Convention was broader than, and included, that laid down in the 1975 Declaration of the
United Nations General Assembly and in the 1985 Inter-American Convention, and considered it to
reflect a consensus which the Trial Chamber regarded as ‘representative of customary international law.’
Another Trial Chamber of the ICTY, ruling in Furundzija, shared that conclusion, although on different
legal grounds. It held that, as shown by the broad convergence of international instruments and
international jurisprudence, there was general acceptance of the main elements contained in the
definition set out in Article 1 of the Torture Convention. It considered, however, that some specific
elements pertained to torture as considered from the specific viewpoint of international criminal law
relating to armed conflicts. It held that torture as a crime committed in an armed conflict must contain
the following elements:
(i)
it consists of the infliction, by act or omission, of severe pain or suffering, whether physical or
mental; in addition,
(ii)
this act or omission must be intentional;
(iii) it must aim at obtaining information or a confession, or at punishing, intimidating,
humiliating or coercing the victim or a third person, or at discriminating, on any ground, against
the victim or a third person;
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(iv) it must be linked to an armed conflict; and
(v)
at least one or the persons involved in the torture process must be a public official or must at any
rate act in a non-private capacity, e.g., as a de facto organ of a State or any other authoritywielding entity.
The Trial Chamber went on to note the following:
As is apparent from this enumeration of criteria, the Trial Chamber considers that among the possible
purposes of torture one must also include that of humiliating the victim. This proposition is warranted
by the general spirit of international humanitarian law: the primary purpose of this body of law is to
safeguard human dignity. The proposition is also supported by some general provisions of such
important international treaties as the Geneva Conventions and Additional Protocols, which
consistently aim at protecting persons not taking part, or no longer taking part, in the hostilities from
‘outrages upon personal dignity.’ The notion of humiliation is, in any event close to the notion of
initimidation, which is explicitly referred to in the Torture Convention’s definition of torture.
Subsequently, in Kunarac and others, another Trial Chamber of the ICTY broadened that
definition. Starting from the correct assumption that one ought to distinguish between the definition
of torture under international human rights law and that applicable under international criminal law,
the Trial Chamber held among other things that ‘the presence of a State official or of any other
authority-wielding person in the torture process is not necessary for the offence to be regarded as
torture under international humanitarian law.’ Another Trial Chamber shared this view in Kvoèka and
others.
7. Sexual violence. This class of offence includes: (i) rape, a category of crime that was not defined in
international law until a Trial Chamber of the ICTR set out a rather terse definition in Akayesu (rape is
‘a physical invasion of a sexual nature, committed under circumstances which are coercive,’ taken up
by a Trial Chamber of the ICTY in Delaliè and others. Subsequently two ICTY Trial Chambers delivered
important judgments, respectively in Furundžija and Kunarac and others; (ii) sexual slavery; (iii)
enforced prostitution; (iv) forced pregnancy, namely ‘the unlawful confinement of a woman forcibly
made pregnant, with the intent of affecting the ethnic composition of any population or carrying out
other grave violations of international law’ (Article 7(2)(f) of the Rome Statute for an ICC); (v)
enforced sterilizations; and (vi) any other form of sexual violence of comparable gravity.
8. Persecution against any identifiable group of collectivity on political, racial, national ethnic, cultural,
religious, gender, or other grounds, that are universally recognized as impermissible under
international law; persecution ‘means the intentional and severe deprivation of fundamental rights
contrary to international law by reason of the identity of the group or collectivity’ (Article 7(2)(g) of
the Rome Statute for an ICC).
A Trial Chamber of the ICTY propounded an elaborate definition of this crime in Kupreškiæ and
others.
The Trial Chamber found that in the case at issue the defendants were guilty of persecution. It
found that ‘the “deliberate and systematic killing of Bosnian Muslim civilians” as well as their
“organized detention and expulsion from Ahmici [the village where the crimes were committed]” can
constitute persecution. This is because these acts qualify as murder, imprisonment, and deportation,
which are explicitly mentioned in the Statute under Article 5’ (§629). The Trial Chamber also found
that the comprehensive destruction of Bosnian Muslim homes and property constituted ‘a gross or
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blatant denial of fundamental human rights’, and, being committed on discriminatory grounds,
amounted to persecution (§§630-1).
9. Enforced disappearance of persons, namely ‘the arrest, detention or abduction of persons by, or with
the authorization, support or acquiescence of, a State or a political organization, followed by a refusal
to acknowledge that deprivation of freedom or to give information on the fate or whereabouts of
those persons, with the intention of removing them from the protection of the law for a prolonged
period of time’ (Article 7(2)(i) of the Rome Statute for an ICC). It may be noted that with respect to
this crime the ICC Statute has not codified existing customary law but contributed to the
crystallization of a nascent rule, evolved primarily out of treaty law (that is, the numerous treaties on
human rights prohibiting various acts falling under this heading) as well as the case law of the InterAmerican Commission and Court of Human Rights, in addition to a number of UN General Assembly
resolutions. These various strands have gradually contributed to the formation of a customary rule
prohibiting enforced disappearance of persons. The ICC Statute has upheld and codified the
criminalization of this conduct.
10. Other inhumane acts of a similar character and gravity, intentionally causing great suffering, or
serious injury to body or to mental or physical health. This notion, harking back to Article 6(c) of the
Nuremberg Statute, and subsequently interpreted in such cases as Ternek has been restated in
Article 7(1)(k) of the ICC Statute, which to a large extent codifies and in some respects develops
customary international law.
In Kupreškic and others an ICTY Trial Chamber dwelt on the interpretation of this loose clause.
GENOCIDE
THE NOTION
Genocide, that is, the intentional killing, destruction, or extermination of groups or members of a group as
such, was first envisaged merely as a sub-category of crimes against humanity.
Genocide acquired autonomous significance as a specific crime in 1948, when the UN GA adopted the
Genocide Convention. The Convention has numerous merits. Among other things, (i) it sets out a careful
definition of the crime; (ii) it punishes other acts connected with genocide (conspiracy, complicity, etc.); (iii)
prohibits genocide regardless of whether it is perpetrated in time of war or peace; (iv) considers genocide
both as a crime involving the criminal responsibility of the perpetrator (and other participants), and as an
international delinquency entailing the responsibility of the State whose authorities engage, or otherwise
participate, in the commission of genocide (this international wrongful act may be the subject of an
international dispute and in any case entails all the consequences of international wrongdoings).
The definition of genocide does not embrace cultural genocide (that is, the destruction of the language
and culture of a group). Similarly, genocide does not encompass the extermination of a group on political
grounds.
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THE OBJECTIVE ELEMENT OF THE CRIME
Article IV of the Genocide Convention, and the corresponding rule of customary law, clearly define the
conduct that may amount to genocide: (i) Killing members (hence more than one member) of a national or
ethnical, racial, or religious group; (ii) causing serious bodily or mental harm to members of the group; (iii)
deliberately inflicting on the group conditions of life calculated to bring about its physical destruction in whole
or in part; (iv) imposing measures intended to prevent birth within the group; or (v) forcibly transferring
children of the group to another group.
The importance of Akayesu in particular needs to be stressed. In this case, an ICTR Trial Chamber not
only emphasized that genocide is the most grave international crime or, as it put it, ‘the crime of crimes,’ but
also, and more importantly, made a significant contribution to the elaboration of the notion of genocide,
elucidating a number of points that deserve to be briefly underlined.
The Trial Chamber set out a definition of ‘group.’ In its view, this word, in the provisions on genocide,
refers only to ‘stable groups,’ constituted in a permanent fashion and membership of which is determined by
birth, with the exclusion of the more ‘mobile’ groups which one joins through individual voluntary
commitment, such as political and economic groups. Therefore, a common criterion in the four types of
groups protected by the Genocide Convention is that membership in such groups would seem to be normally
challengeable by its members, who belong to it automatically, by birth, in a continuous and often
irremediable manner.
According to the Trial Chamber, the groups protected against genocide should not be limited to the four
groups envisaged in the relevant rules, but – in order to respect the intention of the drafters of the Genocide
Convention, who clearly intended to protect any identifiable group – should include ‘any stable and
permanent group.’ This proposition without further elaboration appears unconvincing, given that the
framers of the Convention, as clearly expressed in the text of that instrument, evinced an intention to protect
only the four groups explicitly indicated there. The Chamber then propounded a definition of each of the four
groups envisaged in the relevant rules. It defined ‘national groups’ as ‘a collection of people who are
perceived to share a legal bond of common citizenship, coupled with reciprocity of rights and duties,’ an
‘ethnic group’ as ‘a group whose members share a common language or culture,’ a ‘racial group’ as a group
‘based on the hereditary physical traits often identified with a geographical region, irrespective of linguistic,
cultural, national or religious factors,’ and a ‘religious group’ as a group ‘whose members share the same
religion, denomination or mode of worship.’
It should be noted that in the particular case of the genocide of Tutsis by Hutus in Rwanda, the question of
how to identify a protected group played a major role. Indeed, these two groups shared language, religion,
and culture, lived in the same areas and in addition there was a high rate of mixed marriages. The ICTR, in
Akayesu solved the problem by noting that:
In Rwanda, in 1994, the Tutsi constituted a group referred to as ‘ethnic’ in official classifications. Thus,
the identity cards at the time included a reference to ‘ubwoko’ in Kinyarwnda or ‘ethnie’ (ethnic group) in
French which, depending on the case, referred to the designation Hutu or Tutsi, for example x x x [In
addition] all the Rwandan witnesses who appeared before it [the Trial Chamber] invariably answered
spontaneously and without hesitation the questions of the Prosecutor regarding their ethnic identity.
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It would thus seem that for the Trial Chamber the question of whether or not a multitude of persons made
up a group protected by the rules against genocide was primarily a question of fact: the court had to
establish whether (i) those persons were in fact treated as belonging to one of such group, and in addition (ii)
they considered themselves as belonging to one of such groups.
The various classes of action falling under genocide were to a large extent spelled out in Akayesu. The
Trial Chamber advanced a definition of each of the various forms of conduct constituting the actus reus of
genocide, namely: (i) killing members of the group (‘killing’ must be interpreted as ‘murder,’ i.e. voluntary or
intentional killing; (ii) causing serious bodily or mental harm (these terms ‘do not necessarily mean that the
harm is permanent and irremediable;’ (iii) deliberately inflicting on the group conditions of life calculated to
bring about its physical destruction (in the view of the Trial Chamber, this expression includes among other
things, ‘subjecting a group of people to a subsistence diet, systematic expulsion from homes and the
reduction of essential medical services below minimum requirements [s]; (iv) imposing measures intended
to prevent births within the group (these measures would consist of ‘sexual mutilation, the practice of
sterilization, forced birth control [and the] separation of the sexes and prohibition of marriages;’ (v) in
addition, the measures at issue may be not only physical but also mental, and may include forcibly
transferring children of the group to another group.
Another interesting problem relating to actus reus is whether genocide may also include the killing, with
the required intent, of only one single member of a protected group. In Akayesu the Trial Chamber, when
dealing with the constituent elements of genocide, held the view that there may be genocide even if one of
the acts prohibited by the relevant rules on this matter is committed ‘against one’ member of a group.
Arguably this broad interpretation is not consistent with the text of the norms on genocide, which speak
instead of ‘members of a group.’
THE SUBJECTIVE ELEMENT OF THE CRIME
The mental or subjective requirement for genocide as a crime involving international criminal liability is
provided for in Article II, paragraph 1 of the Genocide Convention (and in the corresponding customary
rule): the ‘intent to destroy, in whole or in part, a national, ethnical, racial or religious group.’
ARTICLE 6 OF THE ICC STATUTE
Article 6 reproduces word for word Article II of the Genocide Convention and the corresponding customary
rule. In contrast, Article III of the Convention (and the corresponding customary rule) on responsibility for
forms of participation in the crime other than perpetration, namely conspiracy, incitement, attempt, and
complicity, have not been taken up in the provision on genocide, either because the notion has not been
accepted by the Rome Diplomatic Conference (as was the case with conspiracy, a concept that has not found
the support of all the civil law countries present at Rome), or because the relevant notion is laid down in
general terms (i.e., in terms applicable to other crimes as well) in other provisions of the ICC Statute: this
applies to incitement (at present envisaged in Article 25 (3) (e) ), attempt (which is provided for in Article 25
(3) (f), and complicity (which is contemplated in Article 25 (3) (c) and (d).
It follows that in at least one respect there is an inconsistency between customary international law and
the Rome Statute. The former prohibits and makes punishable ‘conspiracy to commit genocide;’ that is, an
inchoate crime consisting of the planning and organizing of genocide not necessarily followed by the
perpetration of the crime, whereas Article 6 does not contain a similar prohibition.
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It should be noted that in the process of drafting Article 6, it was suggested in the Working Group of the
Preparatory Committee in February 1997 that “the reference to `intent to destroy in whole or in part x x x a
group as such’ was understood to refer to the specific intention to destroy more than a small number of
individuals who are members of a group.” This suggestion was aptly assailed by two commentators, who
noted that nothing in the Genocide Convention could justify such a restrictive interpretation and that in
addition, international practice belied this interpretation, for ‘successful counts or prosecutions of crimes
against humanity, of which genocide is a species, have involved relatively small numbers of victims.’ It would
seem that the customary international rule, as codified in Article 6, does not require that the victims of
genocide be numerous. The only thing that can be clearly inferred from the rule is that genocide cannot be
held to occur when there is only one victim. However, as long as the other requisite elements are present,
the killing or commission of the other enumerated offences against more than one person may amount to
genocide.
Finally, one should note a further view put forth with regard to the mens rea element of genocide.
According to the proponent of this view, the ICC Statute ‘appears to allow’ that ‘genocide may be committed
with a lower level of mens rea’ than the very high intent requirement mentioned above, for it ‘contemplates
[in Article 28, on command responsibility] liability of commanders for genocide committed by their
subordinates even if they have no real knowledge of the crime. It may be objected to on the ground that this
could be true only with regard to the case where the superior knows that genocide is about to be
perpetrated, or is being committed, and deliberately refrains from forestalling the crime or stopping it.
Indeed in this case the superior may be equated to a co-perpetrator or at least an aider and abettor. Instead,
one could not accuse a superior of genocide (as a co-perpetrator or an accomplice) when the superior fails to
punish the subordinates who have engaged in genocide, or, although he has information that should enable
him to conclude that genocide is being committed or may be committed, fails to act, in breach of his
supervisory obligations [see Article 28 (1) (a) and (2) (a) of the ICC Statute.] In these cases the superior
would be guilty of a different offence: intentional, reckless, or negligent breach of his supervisory duties. It
follows that, with regard to such cases, it would not be correct to assert that he should be held responsible for
genocide although with a subjective element lower than specific intent.
13. Relevance for Philippine Courts
A. Jurisdiction
States exercise jurisdiction or the power to prosecute and punish alleged perpetrators of international
crimes on the basis of three principles: Territoriality (the offense was perpetrated on the State’s territory),
passive nationality (the victim is a national of the prosecuting State), or active nationality (the perpetrator is
a national of the prosecuting State).
Recently, the universality principle has emerged empowering any State in cases of international crimes,
subject in some cases to the presence of the alleged offender in the territory of the prosecuting State.
Pursuant to the principle of universal jurisdiction, covering grave breaches of the 1949 Geneva
Conventions, the Philippines is not only granted the power to prosecute and try the accused, but also obliged
to do so, or alternatively, to extradite the defendant to a State concerned (the rule of aut prosequi aut
dedere). This is expressly true in cases of IAC but is now believed to apply equally to core crimes in NIAC.
Since the Philippines does not permit arraignment in absencia, the presence of the accused in the
Philippines is a condition for initiating criminal proceedings.8 The practice internationally, moreover, is to
defer to the territorial or the national State, should such State initiate proceedings, or to allow such States
first opportunity to do so.
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8.
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Furthermore, some States are reluctant to assume universal jurisdiction, in the absence of national
legislation criminalizing the offenses concerned and explicitly vesting jurisdiction on the national courts over
them.
A bill is pending in the Philippine Senate that seeks precisely such nationalization of the core crimes but in
my view this is not necessary because of our incorporation clause in our Constitution9 that makes treaties
part of our laws and the adoption clause therein that makes generally accepted principles of international law
part of the laws of the land.10
Should the Philippines decide to take cognizance of a prosecution for a core crime, a number of general
principles will come into play.
B. Principle of Legality
The principle of legality states that there is no crime if no law makes it a crime (nullum crimen sine lege) and
also that there is no penalty if no law provides for it (nulla poena sine lege).
For the Philippines, this principle is satisfied by the application of customary international law recognizing
the existence of core crimes and penalizing them and also due to the provisions of the four Geneva
Conventions of 1949, to which we are a signatory, specifying grave breaches of international law which cover
the core crimes of genocide, crimes against humanity and war crimes, and additional Protocol II which
applies these rules to NIAC.
C. The Rule on Immunity
There are two kinds of immunities recognized under customary international law: Functional (ratione
materiae) and personal (ratione personae). The first grants immunity to an official or functionary of a State
for an official act. It is the State who is liable. The immunity lasts even after leaving office. The second
covers private and official acts done before and while in office, but lasts only while the official holds office.
In IHL, for core crimes, there is no immunity under the first kind. The perpetrator is liable in every case
for core crimes even if done in an official capacity. IHL, however, recognizes immunity of the second kind,
while the official holds office, but he may be prosecuted once he leaves office. The ICC, however, does not
recognize any immunity at all by express provision of its Statute, and the ICTY and the ICTR have tended to
follow this in practice.
The Philippine courts would probably apply the customary rules on immunity and not the strict exclusion
of the ICC and international tribunals.
D. The Principle of Superior Liability
Otherwise known as the principle of command responsibility, this rule holds commanders or superior officers
liable for core crimes in IHL if:
1) They exercise effective command, control or authority over the perpetrators;
2) The superior knew, or had information which should have enabled him to conclude on the
circumstances at the time that crimes were being committed or had been committed, or should have
known the same, and consciously disregarded such information;
3) He failed to take the action necessary to prevent or repress the crimes, thereby breaching his duty to
prevent or suppress crimes by his subordinates.
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9.
PHILIPPINE CONSTITUTION, Art. VII, Sec. 21.
10. PHILIPPINE CONSTITUTION, Art. II, Sec. 2.
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It also applies where the commander subsequently finds out that such crimes were committed by his
subordinates and he fails to take any action to punish the perpetrators.
The principle is well-recognized in the rules governing conduct of the armed forces and is contained in
their manuals as it is in our Articles of War. It is also embodied in the ICC Statute and is probably part of
customary international law. Recently, bills have been filed in Congress providing for statutory basis and
definitions of command responsibility by military or police commanders.
As stated earlier, the superior is liable for a different offense, namely, failure to exercise supervisory
duties, unless he is otherwise personally a participant in the core crime.
E. Prescription
In IHL, there is no prescription for liabilities for core crimes. This is called the principle of non-caducity of
liability for international crimes. The act or omission must still be criminal at the time of the offense, at least
under customary international law.
F. Mens Rea / Subjective Element
IHL requires in all the offenses that it criminalizes the subjective element of mens rea or specific criminal
intent. This could mean that, for instance, in genocide, there is not merely intent to murder but also the
special intent of doing so to wipe out, in whole or in part, a national, ethnical, racial or religious group.
Similarly, negligence may be a form of mens rea, provided it amounts to recklessness or dolus eventualis
(conscious disregard of known substantial risk of the evil resulting from the act or omission) or at least
culpable negligence, i.e., actor was aware of the risks vis-à-vis known standards of diligence but thought
they would not materialize due to measures he took (culpa gravis) as distinguished from simple negligence
as in driving and killing two pedestrians (Schultz). Mistake of fact or law are only mitigating circumstances
but the perpetrator is still liable.
G. Sentencing
IHL does not prescribe the sentence to be imposed on the perpetrator if convicted. The ICC provides for
imprisonment of not more than 30 years or in exceptional cases, life imprisonment, but death penalty is
impliedly excluded.
The court is, therefore, given much leeway in fixing the sentence, taking into account the severity of the
offense and other relevant circumstances.
o0o0o
OPEN FORUM
In the Open Forum, Justice Azcuna, in response to the
question, what is the probability of a Philippine military
commander being indicted in the International Criminal
Court for extrajudicial killings in the Philippines, given that
Article 28 of the Rome Statute makes a commander or
superior liable for crimes committed by subordinates, and
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that Darfur has been referred to the International Criminal
Court even if Sudan is not a state party, answered that there
are three triggering mechanisms for the jurisdiction of the
International Criminal Court (ICC). One is if you, or the
state, are a party to the Rome Statute then you have
jurisdiction over your nationals. Another is where the state
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itself submits its nationals to the jurisdiction of the court
which was done by Congo, including two other instances;
and the other is when the Security Council refers a case to
the International Criminal Court. So if the Security Council
refers a case involving a Philippine General to the ICC then
(the latter) will have jurisdiction. That is a triggering
mechanism.
Justice Azcuna then shared with the audience that the
Congo and the Rwanda cases are supposedly to be tried
soon in the ICC. There has been no trial yet. Justice Azcuna
said that, as it has been raised in an article, the challenge for
the ICC is unless they hold trials they might become
irrelevant or the interest in that court might fade, according
to that article.
On the premise that the very basic principle of IHL
provides for the prohibition of the use of weapons which
cause superfluous injury or unnecessary suffering, and that
the use or possession of weapons such as nuclear weapons
bring about indiscriminate effects, a violation of IHL, it was
asked whether it can be concluded that the non-existence of
international law rules prohibiting these types of weapons
makes IHL, or at least its principles, futile or useless. Justice
Azcuna said that indeed, the IHL provides that no
unnecessary suffering should be caused, but then because
of the principle of legality this has to be made into specific
provisions, e.g., Article 8 specifies what types of bullets
should not be used. Nuclear weapons are not so specifically
banned. The law lags behind reality and it is the business of
lawyers to see to it that law catches up with reality. Nuclear
weapons will have to be placed in a separate category.
To the question, whether treaties penalizing core crimes
be published first as required by the Civil Code before they
can be effective in the Philippines or before anyone can be
penalized for the commission of such international crime,
Justice Azcuna said this is not necessary for core crimes,
since they are considered crimes even before they are even
codified in international codes and treaties. The requirement
that criminal law must be in writing does not apply to
customary international law. What is required is that it must
really be part of customary law. It must be proven that, even
though it is not written, it is commonly regarded as a crime.
To prove that it is such is difficult, which is why the ICC
Statute took the trouble of writing down in detail what these
crimes are. There is no need to similarly adopt a Philippine
statute that also incorporates this in writing because of the
incorporation clause, and because the country is a party to
the Geneva Conventions, which also detail these crimes.
Regarding the status of terrorism as an international
crime, whether it is considered universally prosecutable and
whether there are grounds to justify the extraterritorial
abduction of suspected terrorists, Justice Azcuna said that
terrorism as a separate international crime is not yet
accepted. There is a disagreement as to whether it is
subject to mandatory jurisdiction. The authors believe that it
is not and it has to fall either under crimes against humanity
or war crimes. For terrorism to fall under a separate
category requires a treaty. In the armed conflict in the
Philippines, the participants know that if they commit core
crimes under the Geneva Convention they will be liable so
they should refrain from doing these. But their alternative is
to do what is not a core crime but one that would fall under
the Human Security Act. The problem is when they blow up
a stockpile of the armed forces, that is not only terrorism
under the Human Security Act, it is also a violation of the
core crimes.
A question was raised whether the obligation to
prosecute or extradite, the aut dedere aut prosequi
principle, justifies a state party to a conflict to
extraterritorially arrest or apprehend and render an
individual suspected of committing a war crime from a third
state, which is not a party to the conflict. For example, a
member of the NPA is found in Malaysia, and Malaysia fails to
prosecute and extradite this individual, is the Philippines
justified based on the doctrine to apprehend that individual
from Malaysia and render him back to the Philippines?
Justice Azcuna said the principle is applicable – Malaysia is
obligated to try or extradite, assuming the Philippines made
a request for extradition, but the Philippines cannot send its
agents to Malaysia and forcibly abduct the person to its
jurisdiction. Under that principle, that would be a violation of
the territorial integrity and sovereignty of Malaysia,
although this was done in the Eichmann case; Israel did that
against Argentina, but there was a violation of international
law and Israel apologized, and the apology was accepted.
To the question, whether the doctrine of male captus
bene detentus, that an individual although illegally
apprehended from a third state could still be legally tried in
the apprehending state, is still applicable to this day, Justice
Azcuna said it is still valid. The doctrine was applied in the
Noriega case. This is against the principle that the end does
not justify the means, but IHL is a functional and practical
branch of law. It will punish you for the male captus. The
apprehending party will have to answer for the male captus;
sometimes an apology is sufficient, sometimes a more
severe penalty will be forthcoming. But once a person is
held, he can be tried; but abduction is not a defense to
question jurisdiction.
Since the country is a signatory to the Rome Statute, the
following questions were raised, whether we violate pacta
sunt servanda if we fail or refuse to ratify, and whether it is a
reasonable consequence to consider the Philippines bound.
Justice Azcuna replied in the negative and clarified that the
principle of pacta sunt servanda applies only to ratified
treaties. But there is an obligation of the state party that
signs the treaty before ratifying it, to seriously study the
treaty for purposes of ratifying it or not, and not to
deliberately violate the provisions of the treaty while in the
process of studying it. So that is an interim kind of binding
effect even if we have not yet ratified a treaty but we had
already signed.
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THE FUTURE OF ENVIRONMENTAL
LAW AND GOVERNANCE
Dr. Antonio G.M. La Viña
Holder, 2008 Metrobank Foundation Professorial Chair
in Environmental Law
Chief Justice Reynato S. Puno, Justice Ameurfina
Melencio Herrera, Chancellor of the Philippine Judicial
Academy, Justice Consuelo Ynares-Santiago,
Honorable Justices of the Supreme Court and the
Court of Appeals, Metrobank Foundation President
Aniceto Sobrepeña and his colleagues from the
Foundation, Honorable Judges, Dean Marvic Leonen,
Professor Gwen de Vera, and my colleagues in both
U.P. and Ateneo, fellow lawyers, co-workers in the
environmental movement, students, my wife and my
sons, Friends, Ladies and Gentlemen, Good
afternoon.
It is with mixed feelings that I come before you
today to deliver this Fifth Metrobank Foundation
Professorial Chair Lecture of the Philippine Judicial
Academy. I must admit that I panicked when I first
read the invitation from Justice Melencio Herrera to do
this lecture. I knew that I would be speaking before a
formidable audience, with no less than the Chief
Justice of our country present. It is not just the fact
that he presides over the judicial and legal profession
that intimidates me; as a student of Justice Puno’s
jurisprudence, I have always admired the rigor,
scholarship, and imagination that has characterized
his opinions. For my words to be scrutinized by such
an intellect, as well as by the brilliant minds of his
colleagues in the Court and in the Judiciary, and by my
own colleagues in the legal profession, governance
field and the environmental movement, is indeed a
scary proposition. Having such a distinguished panel
is also daunting although I am comforted that with all
of them I have personal ties – my good friend, Tony
Oposa, the path-breaking environmental lawyer,
certainly the most famous and celebrated among us;
Prof. Ron Gutierrez of Ateneo Law School and
Executive Director of ULAN (Upholding Life and
Nature); and Ms. Allelu De Jesus who is the current
Chairperson of the U.P. Paralegal Volunteers
Organization of which I was a member 20 years ago.
The panel represents a generation of present and
prospective environmental lawyers who will have to
respond to the challenges of tomorrow.
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Unfortunately or perhaps fortunately for me, saying no to Justice Melencio Herrera is not an option. Like
many of you here today, I always say yes when Justice Herrera asks me to do something. Nearly 20 years
ago, when I was doing my doctorate in Yale, Justice Melencio Herrera, as Chairman of the Malcolm Trust
Fund, approved a generous grant that enabled me and my family to stay longer in New Haven so I could
finish my dissertation on climate change. But more than this personal debt, I always say yes to Justice
Melencio Herrera because whatever it is she asks us to do, whether it is a training to be conducted, a research
to be completed, or a lecture to be delivered, Justice Herrera is asking us to do it for the good of the country.
And how can anyone refuse that?
Together then with a little fear and trembling, I am also full of gratitude for the chance to speak to you this
afternoon. First, I am thankful that so many of you are here today. As a coping strategy for my nervousness,
I have invited my family, my students in both U.P. and Ateneo, at least three generations of environmental
lawyers and scientists that I worked with or I mentored to come here today. In many ways, my professional
1
success is an outcome of the solidarity that we shared. More importantly, I am grateful to Justice Melencio
Herrera, the Philippine Judicial Academy and the Metrobank Foundation for an opportunity to think through
the present and future challenges we face in the area of environmental law and governance and to share
these thoughts with all of you.
I feel very strongly and passionately about the need to confront these challenges and so, conquering my
insecurities, I will now begin my lecture: “The Future of Environmental Law and Governance.”
The choice of the title of the lecture is not accidental. My objective this afternoon is straightforward: to
identify the challenges posed by environmental issues to the Philippines in the next 25 years and to propose
practical approaches, using legal and governance tools, to address them. But why focus on the future? We
have enough environmental problems today that we cannot even solve properly. But that is precisely the
point. The reason why our problems are always outrunning and overwhelming solutions and efforts is that
we are always placing catch up and clean up. Even if we pour resources into dealing with them, make our
laws stricter, and mobilize more people, environmental problems continue to increase exponentially.
To illustrate, let me share with you what is happening to our forests and in particular in the Sierra Madre
where one of the very few remaining tropical rainforests of the Philippines remain.
You are familiar with the facts. In less than a century, we have lost 90 percent of our forests, and probably
thousands of unique species of life along with it that the world will never know. At the height of commercial
logging in the 60s and 70s, our natural resources seemed inexhaustible. But by the 1980s and early 1990s,
we knew we were in trouble. In the ground-breaking case of Oposa v. Factoran, the Supreme Court took
notice of this and liberalized standing in environmental cases. In that case, one of the most cited
environmental cases worldwide by both legal scholars and judicial authorities, former Chief Justice Davide
eloquently justified why Article II, Section 16 of the 1987 Constitution was self-executory:
While the right to a balanced and healthful ecology is to be found under the Declaration of Principles and
State Policies and not under the Bill of Rights, it does not follow that it is less important than any of the
civil and political rights enumerated in the latter. Such a right belongs to a different category of rights
altogether for it concerns nothing less than self-preservation and self-perpetuation aptly and fittingly
stressed by the petitioners the advancement of which may even be said to predate all governments and
constitutions. As a matter of fact, these basic rights need not even be written in the Constitution
for they are assumed to exist from the inception of humankind. If they are now explicitly
mentioned in the fundamental charter, it is because of the well-founded fear of its framers that
unless the rights to a balanced and healthful ecology and to health are mandated as state
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For this particular lecture, I am especially grateful to three colleagues: Atty. Vice Yu who is based at the South Centre in Geneva with whom I have worked with
on globalization issues; and Attys. James Kho and Jose Florante Pamfilo who, in recent years, are my closest collaborators in environmental governance. I
am also grateful to my colleagues at the Manila Observatory who have been my co-workers in the field of climate change.
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policies by the Constitution itself, thereby highlighting their continuing importance and imposing upon
the state a solemn obligation to preserve the first and protect and advance the second, the day would
not be too far when all else would be lost not only for the present generation, but also for those to come
– generations which stand to inherit nothing but parched earth incapable of sustaining life. The right to
a balanced and healthful ecology carries with it the correlative duty to refrain from impairing the
2
environment.
Justice Florentino Feliciano, while raising questions about the doctrines laid down by the Court in that
case, was more concise but no less eloquent, in explaining his vote to grant the Petition: because, according
to Justice Feliciano, “the protection of the environment, including the forest cover of our territory, is of
extreme importance to the country.”3
The Oposa case was a good case for the environment but did it accomplish what it was supposed to do –
prevent deforestation? Fifteen years have passed since that decision, the minor Oposa is now a first year law
student in the College of Law and was my student as an undergraduate in Ateneo de Manila; and since the
case was decided in 1994, the Philippines has lost more of our forests. Although only a few Timber License
Agreements are left, with the last to expire by 2009, the systematic assault on our forests is still happening
today, with the Sierra Madre a center of action, with most of that logging activity now illegal but no less
destructive. The excuse for the illegal logging is that it benefits poor people, giving them livelihood that they
otherwise do not have.
Trees or people? This is how the deforestation issue is often framed but is this in fact the right framing?
Certainly, logging interests have used this argument through the years, using the poverty of our people as
an excuse for rent-seeking behavior. In fact, there is no evidence that the share of the poor, especially the
workers and the communities that live in these forests, in the wealth produced by our forests, have been
significant. There is no evidence as well that the share of local governments and the national government in
this wealth has been substantial compared to the total wealth created. What is sad, as I will elaborate in
awhile, is that we are repeating the same pattern in the use of our mineral resources.
New ways are difficult at the beginning. As the Bible says, you cannot put new wine into old wineskins or
else the wineskins break, the wine is spilled, and the wineskins are ruined. That is what we have been trying
to do about logging and deforestation and reforestation and as long as we continue to do that, the results will
be the same. We need to think ahead of the problem, think forward, and think tomorrow to find the right
solution.
I am not saying that we are hopeless against present problems or that we should just ignore them. But I
think you would agree with me that it would also make sense to think forward to the future, understand well
what we have to face and plan ahead so that finally our solution will outrun the problem. This lecture is
however not about predicting what tomorrow could bring; after all I am a lawyer, and not a prophet. Instead
of analyzing in the abstract what the future could bring, I will proceed by dealing with concrete issues we
already face today, challenges that will escalate and become even bigger in the next two decades.
For today’s lecture, I propose to tackle three different and difficult future challenges:
(1) How we should address the negative environmental and social impacts of economic globalization
brought about by the liberalization of trade and investment;
(2) What we should do to confront climate change, the most serious global environmental problem
which will definitely impact the Philippines in a big way; and finally,
_____________________________________________________________________________
2.
Oposa, et al. v. Factoran, et al. G.R. No. 101083 (1993).
3.
Ibid.
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(3) What we need to put into place to make sure that we are really able to implement environmental
laws and policies, including judgments ordered by our courts.
I will describe the challenge as we face it today and how I think each challenge will evolve through time. I
will also describe how we are currently addressing each of these issues and conclude that our present
approaches are inadequate. I will then propose legal and policy solutions that we might want to explore so
the future would see an operational code of environmental law and governance that is truly effective.
MANAGING THE IMPACTS OF GLOBALIZATION
The world today is marked by the increasing economic interdependence of peoples and nations due to evergreater flows of goods, services, and information. In recent years the World Trade Organization (WTO), of
which the Philippines became a founding member on December 14, 1994, has contributed to these flows by
overseeing and administering international rules designed to progressively lower trade barriers.4
Each WTO Member, including the Philippines, is required to “ensure the conformity of its laws,
regulations and administrative procedures with its obligations” under the various WTO agreements. Since
1994, various administrations had cited the Philippines’ planned WTO accession and its engagement in
globalization, among other rationales, as justification for economy- and natural resource managementrelated legislative policy changes, including attempts to amend the 1987 Philippine Constitution, and these
efforts continue to this day. A large number of laws have since been enacted to directly or indirectly
implement WTO treaty obligations in virtually all sectors of the Philippine economy. Among others, the
country’s mining and forest laws have been changed, or their regulations revised, to promote natural
resource exports.5
The Challenge of Mining
The push to favor resource extraction and export is evident in the enactment of Republic Act No. 7942, also
known as the Philippine Mining Act of 1995. The Act sought to promote economic growth by making the
Philippines a major source of mineral commodities and inviting the participation of foreign investors. It set
up a regulatory and institutional framework for the entry and operation of large-scale commercial mining
enterprises, and it increased the financial incentives for investment. It gave investors virtually exclusive and
monopolistic rights over the mineral and other natural resources located within the mining area. And, in
effect, it directed that priority should be given to mining corporations and other private interests, rather than
to resident local communities, when granting rights to mineral extraction, land tenure, and site access,
because only such interests have the technical and financial resources that are required to receive priority
under the law.6
Immediately after the law’s enactment, more than 100 foreign and local mining firms, including the
major global corporations, applied for mining exploration and development rights in the Philippines. After
the Marcopper mine-tailing incidents in Marinduque and because of the legal uncertainty around the
constitutionality of the Mining Act, there was a hiatus in mining investments. But in recent years, because of
the rise in mineral prices and because of the 2004 decision of the Supreme Court in La Bugal v. Ramos7 which
ruled that the Mining Act was constitutional, mining investments and activity are again in an upswing.
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4.
See Antonio La Viña and Vicente Paolo Yu, CBNRM and the Future: The Impact and Challenge of Global Change on Philippine Natural Resources Policy, Paper
presented at the Ninth Biennial Conference of the International Association for the Study of Common Property (IASCP), Victoria Falls, Zimbabwe, 17-21 June
2002, Online at http://www.cbnrm.net/pdf/lavina_a_001_philippinescbnrm.pdf.
5.
Ibid.
6.
Ibid.
7.
G.R. No. 127882, La Bugal B’laan Tribal Association, et al. v. Ramos, et al. (2004).
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Of interest in particular, not just in the Philippines but worldwide, is the aggressive entry of Chinese
companies in the mining industry, a result of the raw material needs demanded by the unprecedented
economic growth of China.
The impact of mining is overwhelming, pervasive and wide-ranging. The industry cuts across practically
all facets of the nation’s life (political, economic, social and environmental).8 Its importance cannot be
overlooked. With the Philippine government’s aggressive promotion of mining as a driver for economic
growth, however, came a huge divide between stakeholders who hold divergent views with respect to
mining. On one side, there are those who believe strongly and sincerely that mining is good for the country
because of the economic benefits that it brings. Those in this group also believe that, with proper regulation
and putting into place the right incentives, sustainable mining is possible. On the other side of this divide are
those who are completely against large-scale commercial mining as an economic activity. They see mining
as an inherently destructive activity and point to the bad environmental legacy of the mining industry,
including recent mines such as the La Fayette mine in Rapu-Rapu island in Bicol, as proof that “sustainable
mining” is in fact a contradiction in terms.
My own view is in the middle of these two opposites. I think
that for a highly mineralized country like the Philippines, it would
be a mistake not to consider and pursue the development of our
mineral resources. During the 1980s, the Philippines ranked
among the top 10 producers of gold, copper, nickel, and
chromites.9 In 2000, the Philippines ranked second only to
Indonesia in terms of prospective minerals and resources.10 But
we should also bear in mind that together with being highly
mineralized, our country has four characteristics that make
mining challenging:
“In less than a century,
we have lost 90 percent of our
forests, and probably
thousands of unique species of
life along with it that the world
will never know.”
• Our population density is one of the highest in the world; with nearly a hundred million people fighting
for just 30 million hectares of land; and when you factor in what is inhabitable, in 2003, our
population density was approximately 270 people per square kilometer.11 This means mining will
have to compete with other equally or more important land uses – forestry, agriculture, settlements,
to name a few.
•
We are a mega-biodiversity rich country, one of the top 20 in the world. The patchwork of isolated
islands, the tropical location of the country, and the once extensive areas of rainforest have resulted
in high species diversity in some groups of organisms and a very high level of endemism. The
Philippines has among the highest rates of discovery in the world with 16 new species of mammals
discovered in the last 10 years. At the very least, one-third of the more than 9,250 vascular plant
species native to the Philippines are endemic.12 And recently, the Verde Island Passage south of
Manila has been described as the “centre of the centre” of the world’s marine biodiversity.
•
The Philippines is faced with many environmental challenges. While biodiversity-rich, we are known
as one of the biodiversity hotspots where biological diversity is under constant threat due to
unsustainable resource use practices, overexploitation, population pressure, poverty and other
factors.
_____________________________________________________________________________
8.
M. Miranda, A. La Viña, et al., Mining and Critical Ecosystems: Mapping the Risks, World Resources Institute, Washington DC (2003).
9.
Environmental Science for Social Change (ESSC). Mining Revisited: Can an Understanding of Perspectives Help? Quezon City, Philippines (1999).
10.
Kuo, et al., 2000. “The Mineral Industries of Asia and the Pacific.” Minerals Yearbook: 2000. Washington, DC: United States Geological Survey (USGS).
11.
Miranda, et al, supra note 9.
12.
Miranda, M., et al. All That Glitters is Not Gold: Balancing Conservation and Development in Venezuela’s Frontier Forests. Washington, D.C.: World Resources Institute
(1998).
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•
Finally, mining in the Philippines will have to be done in the context of poverty and social conflict. High
poverty rates, especially in rural areas, are a major human development challenge in the Philippines.
In 2000, approximately 45 percent of the population was living on less than US$2 per day and the
rural poverty rate was estimated at 37 percent.13 Our experience of uneven creation and distribution
of wealth and power has led to social upheaval and, in some cases as in Mindanao, in violent conflict.14
In sum, the re-emergence of mining as a major industry favored by global economic integration is
accompanied by serious environmental and social challenges to the Philippines. How should we respond?
What strategies can we employ? How can environmental law help?
Community-Based Natural Resource Management
This is where the truism that the key to the future is in the past in fact holds. In my view, the response to
the challenge of economic globalization lies in a tested approach of the past that we must evolve and adapt
to meet the new issues of the future. This approach is Community-Based Natural Resource Management
(CBNRM) which emphasizes the fundamental role of local communities in determining their own fate and
allows them to become effective and empowered economic and political actors.15 A genuine and effective
implementation of CBNRM can bring social and economic assistance to sectors likely to be adversely affected
by global economic integration. CBNRM enables local and indigenous communities to respond to this
change in ways that maximize their long-term economic benefits while minimizing potential losses. In
effect, CBNRM can be an effective economic and social safety net.16
An effective CBNRM policy recognizes that local community ownership and control of the resource base is
key for ensuring economic equity and environmental sustainability. 17 Empirical evidence from many
countries shows that communities are often skeptical of government programs if they provide only limited
tenure over local natural resources. CBNRM incorporates community norms for access and use of local
resources, doing so in ways that conserve the resources rather than maximizing their extraction. These
community norms had typically evolved through long-term relationships between the communities and the
natural resources upon which they depended. Consequently, community members tend to consider
community-based resource rights more legitimate than externally-imposed State-granted measures such
as Torrens land titles, logging permits, and mineral concessions and agreements. Hence, the determination
and enforcement of rights, including resolution of disputes over them, should be communal matters rather
than the responsibility of State agencies.
The Philippines should employ the following CBNRM principles in addressing the challenges posed by
globalization, as in the case of mining:18
•
Transparency and information access – CBNRM calls for full community access to information
about policies and regulations, and full transparency in their generation.
•
Community consent – CBNRM advocates the principle of “free and prior informed consent,” which
is now enshrined in the Indigenous Peoples Rights Act of 1997.
_____________________________________________________________________________
13. World Bank, Philippines Poverty Assessment, Volume 1: Main Report. Washington, D.C.: Poverty Reduction and Economic Management Unit, East Asia
and Pacific Region (2001).
14. See J. Pamfilo, A. La Viña, et al, Mapping Out Conflicts in Mining Areas: Drawing Lessons and Seeking Spaces for Building Principled Consensus Towards
Effective Mining Governance (2008).
15. See La Viña and Yu, supra note 5.
16. Ibid.
17. For a discussion of the basic concepts, see World Resources Institute, World Resources 2005: The Wealth of the Poor, Managing Ecosystems to Fight
Poverty, Washington DC (2005); See also Owen J. Lynch and Kirk Talbott, Balancing Acts: Community-based Forest Management and National.
18. See La Viña and Yu, supra note 5, for a full discussion of these principles.
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•
State power devolution – CBNRM advocates giving local communities a primary role as natural
resource managers, considering them capable of making good economic decisions regarding these
resources.
•
Economic equity and environmental sustainability – CBNRM promotes equity and
sustainability in ways that enable local communities to integrate themselves into the global market
economy on their own terms.
International and Domestic Legal Implications of CBNRM
Although the WTO system of global trade militates against overly trade-restrictive policy, to some degree it
recognizes that countries must develop policies consistent with their environmental needs. This recognition
provides a degree of leeway for employing CBNRM as a means of protecting local and indigenous
communities from the pressures of globalization, effectively channeling those pressures toward the
economic sectors that can best adapt. Such deviations from the WTO general principles are supported by
various provisions of GATT 1994, particularly Articles XX(b) and (g), which allow countries to adopt or
enforce measures which, though inconsistent with normal trade obligations, are “necessary to protect
human, animal or plant life or health” or which relate to the conservation of exhaustible natural resources.
The only limitation to these measures is that they must not be applied “in a manner which would constitute a
means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a
disguised restriction on international trade.” In other words, as long as its principles are employed for
legitimate purposes, rather than as a method of unfairly restricting trade, the use of CBNRM for the
conservation of biodiversity and cultural diversity may be justified under GATT Article XX, at least to a limited
extent.
Other annexes to the WTO Agreement similarly provide limited opportunities to impose trade-restrictive
or trade-discriminatory measures for non-trade considerations. These include sanitary and phytosanitary
measures (such as public and environmental health and safety), the provision of public and private CBNRMrelated services (for example, through community organizing, environmental and natural resources
protection and management, and product marketing and management), and investment restrictions in
CBNRM priority areas (including investments in mining and forestry).
It should be interesting to note that it appears now that the original fear that the WTO dispute system
might not be sympathetic to environmental concerns was misplaced. Decisions from the Appellate Body of
the WTO have shown ample sensitivity to environmental concerns.19 It is interesting to note that in the
environmental jurisprudence of the WTO Appellate Body, one can see clearly the thinking of our very own
Justice Feliciano who has become a hero to many environmental lawyers and activists who have followed the
evolution of this jurisprudence.
Philippine constitutional law provides even stronger safeguards. The 1987 Philippine Constitution,
especially Articles II, XII, XIII, and XIV, calls for a “Filipino First” trade and economic policy. The Philippine
Supreme Court upheld these principles in the Manila Prince Hotel and WTO ratification cases, indicating that
the State should provide safeguards for disadvantaged sectors, thereby enabling Filipinos to compete
effectively in globally interdependent markets. Only if implemented with such safeguards can the WTO
Agreements be consistent with the Philippine Constitution.
“Filipino First” principles have also been expressed in economic legislation such as Republic Act No. 7844,
the Export Development Act of 1994; Republic Act No. 7900, the High-Value Crops Development Act of
1995; and Republic Act No. 8800, the Safeguard Measures Act of 2000. These acts effectively aim to
promote Filipino competitiveness in the global economy while providing safeguards and other measures
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19. See WTO Shrimp-Turtles, 1998, WTO Beef Hormones, 1998; WTO Japan Varietals, 1999; WTO GMOs, 2006.
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that would boost domestic productive capacity and the ability to minimize and adjust to external market
shocks. The expressed legislative intent of these laws can best be implemented through the adoption and
implementation of a broad-based, cross-sectoral CBNRM policy.
CBNRM need not be restricted to mining. It can certainly be applied to forestry and other natural
resources. Indeed, in 1995, through Executive Order No. 263 (1995), the national government adopted
community-based forest management as the national strategy for managing the country’s forest resources.
Republic Act No. 8425, the Social Reform and Poverty Alleviation Act of 1998, provides a statutory basis for
broadening CBNRM to non-forest resource sectors. The Act stipulates that the government’s social reform
agenda must “address the existing inequities in the ownership, distribution, management and control over
natural resources and man-made resources from which [people] earn a living or increase the fruits of their
labor. Finally, the Indigenous Peoples Rights Act of 1997 (IPRA), Republic Act No. 8371 can provide a
statutory basis for the initial application of CBNRM policies to ancestral domains.”
Pro-CBNRM laws and policies will be useless unless they are implemented, and implementation is not
solely the domain of State actors. It rests also on the communities’ ability to assert their rights against
competing interests. Effective assertion depends in turn on the existence of a strong, organized, and
empowered community. Global economic, environmental, and technological change certainly presents
serious threats to empowerment, but it can also provide impetus for community organization and selfassertion. The consistent and effective implementation of CBNRM can provide the essential social safety
nets and safeguards, enabling a more effective and ultimately more productive response to the pressures
arising from global economic integration.
Should La Bugal be revisited?
Let me end this segment of my lecture by asking the provocative question on whether it is time to revisit the
La Bugal doctrine. By the way, before I present my views on this case, let me make a disclosure. The
“Ramos” in this case used to be my boss in the DENR where I was Undersecretary for Legal Affairs. In fact, it
was my legal team, and under my direction, that worked with the Mines and Geo-Sciences Bureau to draft
the implementing rules and regulations for the Mining Act, including the rules on the FTAAs and the fiscal
regime that would govern these agreements. Because of my position, I ordinarily would have taken the lead
for the department to work with the Solicitor General in defending the Financial and Technical Assistance
Agreements being assailed by the La Bugal petition. But let me make a second disclosure: before I joined the
DENR in 1996, I was a co-founder, with Dean Marvic Leonen and other colleagues, of the Legal Rights and
Natural Resources Center (LRC), one of the petitioners in the case. And before I joined the DENR, I was
research director of LRC. Following my own understanding of the rules on conflict of interest, I voluntarily
inhibited myself from handling the case and passed it on to my best mining lawyer, Atty. Cecile Dalupan.
For the reasons above and in the context of this forum, I do not think that it is appropriate for me to
criticize La Bugal or to second guess the Court on its reasoning when it upheld the constitutional validity of
the Mining Act of 1995, in particular the provisions allowing the President to enter into FTAAs. However what
I think we should all ask, both academically and legally, in appropriate cases that hopefully would be filed
before the Court in the future, is whether or nor the rationale articulated by Chief Justice Artemio Panganiban
in La Bugal can in fact be empirically validated. Let me quote from the concluding portion of the esteemed
Chief Justice’s opinion:
Whether we consider the near term or take the longer view, we cannot overemphasize the need for an
appropriate balancing of interests and needs — the need to develop our stagnating mining
industry and extract what NEDA Secretary Romulo Neri estimates is some US$840 billion (approx.
P47.04 trillion) worth of mineral wealth lying hidden in the ground, in order to jumpstart our floundering
economy on the one hand, and on the other, the need to enhance our nationalistic aspirations, protect
our indigenous communities, and prevent irreversible ecological damage.
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This Court cannot but be mindful that any decision rendered in this case will ultimately impact not
only the cultural communities which lodged the instant Petition, and not only the larger community of
the Filipino people now struggling to survive amidst a fiscal/budgetary deficit, ever increasing prices of
fuel, food, and essential commodities and services, the shrinking value of the local currency, and a
government hamstrung in its delivery of basic services by a severe lack of resources, but also countless
future generations of Filipinos.
For this latter group of Filipinos yet to be born, their eventual access to education, health care and
basic services, their overall level of well-being, the very shape of their lives are even now being
determined and affected partly by the policies and directions being adopted and implemented by
government today. And in part by the Resolution rendered by this Court today.
Verily, the mineral wealth and natural resources of this country are meant to benefit not merely a
select group of people living in the areas locally affected by mining activities, but the entire Filipino
nation, present and future, to whom the mineral wealth really belong.
I agree with all of these declarations but I will, as an academic, raise two fundamental questions:
• Does the Mining Act as currently implemented, with the fiscal regime that has now further
evolved and looking at actual existing mining activities (including the environmental impacts of
the first new mine under the Mining Act of 1995, La Fayette in Rapu-Rapu island) and the new
contracts being entered into, in fact appropriately balance the interests and needs between
development and environment, between industry and communities, and between the present
and the future?
• Is the country – and by that I mean the national government, the local governments, and the
communities directly affected by mining – really benefiting from the mining operations already
going on? Where is the revenue actually going and ultimately how is it being used?
In raising these questions, I am mindful that generally the Judiciary accord the political branches of
government wide respect in the appreciation of facts and broad discretion in policy. However, as I will
elaborate in the last part of this lecture, the future of environmental law and governance will challenge the
courts to be more proactive and engaged in monitoring the execution of their decisions because otherwise,
as the case of the original Oposa v. Factoran case illustrate, courts could realize that their brave and eloquent
decisions have not, in the end, made a difference for our environment and for our people. Indeed for an
international environmental lawyer like me, a frequent embarrassing moment whenever I am abroad is
when fellow lawyers and legal scholars find out that I am a Filipino. Immediately, they would ask me about
the Oposa case and they would praise our Supreme Court. And then they would say – “your forests and
environment must be in great shape.” It is humbling being asked such a question again and again.
RESPONDING TO CLIMATE CHANGE
Climate change represents the most serious, most pervasive environmental threat that the world faces. In
climate change, we find a convergence of humanity’s improvident past, its difficult present, and its uncertain
future brewing into one of the world’s biggest challenges: a “perfect storm.”20 The issues are not merely
scientific; climate change spans political, social, and economic dimensions, crosses national boundaries,
and will reach beyond the present generation. It will aggravate the complex problems of development that
we struggle with today like poverty, food security, and water availability that threaten to ignite large-scale
political and social upheavals.
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20. This section is based and borrows text from a lecture delivered by the author in collaboration with colleagues from the Manila Observatory. See Jose
Ramon T. Villarin, Ma. Antonia Y. Loyzaga, Antonio G.M. La Viña, et al., In the eye of the Perfect Storm: What the Philippines should do about Climate
Change, SC Johnson Lecture on Environmental leadership, Ateneo de Manila University (2008).
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The Philippines will not be spared from climate change. These are the impacts that are predicted for us:21
•
Weather: Climate change will influence Philippine weather in terms of changes in temperature,
rainfall, and tropical cyclone activity. This, in turn, will cause impacts on various sectors including
agriculture, forestry, and water resources.
•
Sea level rise: Another impact is the accelerated rise in sea level. As the oceans expand due to
warming, and as mountain glaciers and polar ice melt and drain into the oceans, some islands and
many coastal areas are in danger of being inundated with the rising waters. Sea-level rise due to
thermal expansion is a threat to this country, given its archipelagic nature and long stretches of
coastline. Rising sea levels may contaminate groundwater sources and expose communities to
harsh storm surges. Sea-level rise will increase the risk of flooding and storm damage.
•
Agriculture: Various sectors in the Philippines will be affected by the changes in climate. In
agriculture, the country is expected to experience dry days that are drier and wet days that are
wetter, which may result in poorer crop production, storage, and distribution since changes in the
timing and volume of rain are critical. In addition, a CO2 rise favors crops, but weeds are more
likely to proliferate simultaneously, thereby necessitating the development of new crop varieties
or herbicides.
•
Forests: Moist forests will shrink and turn to dry forests (Lasco, et al, 2007). Biodiversity loss will
be aggravated since global warming will raise the risk of floods, worsening degradation and
species loss. Marine resources will be affected as well, since warmer waters induce coral
bleaching which eventually leads to declining fish populations.
•
Energy: Roughly 20 percent of total power supply in the Philippines comes from hydro-electric
sources. Changes in the patterns, volume and geographic distribution of rainfall threaten to
increase and perpetuate intensified reliance on imported coal and oil. As discussed earlier, rainfall
is increasing over the Visayas and decreasing in Luzon and Mindanao. This trend points to
implications on the hydropower generation of the country, since the country’s major dams are
located in Luzon and Mindanao.
•
Health: There are also health implications due to a warmer and wetter environment. Prolonged
periods of high temperature and water impounding due to sudden heavy downpours serve as
ideal breeding conditions for disease vectors such as Aedes and Anopheles mosquito for dengue
fever and malaria.
•
Floods and Water: Severe flooding on the extreme can totally rewrite the contours of the land.
Water shortages due to drought, salt-water intrusion, or floods will influence decision-making on
investments in engineering and infrastructure.
•
Conflict: Political conflicts and civil unrest may intensify due to the impact of food and water
constraints on areas already experiencing socio-economic pressures due to a historical clash of
cultures.
•
Displacement: climate-related disasters, coupled with geo-physical hazard-related disasters
(such as landslides or rain-induced lahar flows), increase the risk to vulnerable populations.
Thus, more displacement will result in the necessary relocation of communities and rehabilitation
of the affected areas (Manila Observatory, 2007).
_____________________________________________________________________________
21. Ibid.
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The Global Response to Climate Change
Climate change, as a global problem, presents a challenge that is characterized by the irrelevance of national
boundaries both in terms of its causes and the required solutions. It requires the definitive manifestation of
the interdependence of nations and the adoption of a global framework. Negotiations and lengthy
discussions led to the creation of the United Nations Framework Convention on Climate Change (UNFCCC)
which main objective is the:
stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent
dangerous anthropogenic interference with the climate system. Such a level should be achieved within
a time frame sufficient to allow ecosystems to adapt naturally to climate change, to insure that food
production is not threatened, and to enable economic development to proceed in a sustainable
manner.
The adoption of the Kyoto Protocol on Climate Change in 2007 was an important landmark for the global
response to climate change. Its principal feature is that it sets binding targets for industrialized countries for
reducing GHG emissions by an average of 5 percent against 1990 levels which these countries should
achieve within the commitment period of 2008-2012. It established individual legally binding targets for
them to reduce their greenhouse gas emissions. Although the United States did not ratify the Kyoto
Protocol, it entered into force on February 16, 2005. As of April 2008, a total of 178 countries have ratified the
agreement.
Last December 2007, meeting in Bali, Indonesia, the Parties to the Convention launched a two-year
negotiating process which aims to secure a new climate agreement by 2009. The negotiations will stand on
four basic approaches. 22
•
Mitigation. Industrialized countries are expected to cut their emissions by as much as 40 percent
by 2020, while developing countries are expected to pursue more climate-friendly development
strategies.
•
Adaptation. This important issue is now finally part of the agenda, after decades of being
disregarded and ignored in the negotiations.
•
Financing. A key feature of the Bali deal is the commitment from the developed countries to
operationalize financing for adaptation and mitigation to assist developing countries.
•
Technology. The fourth approach is aimed at helping poorer nations cut their emissions through
the transfer of technology.
The Role of the Philippines
The Philippines is playing a crucial role in the ongoing climate negotiations, having been a major player at the
very start while serving as the main spokesperson for the Group of 77 (G77) and China. The Philippines was
instrumental in obtaining the major agreement in Kyoto where the country chaired key negotiations that
included the debates on Land Use, Land Use Change, and Forestry (LULUCF) and today, Philippine
negotiators continue to play a vital role in the negotiations launched in Bali for long-term cooperation and to
serve as spokespersons for G77 and China. The challenge for the Philippines is how to translate this political
role into concrete benefits for the country. For that to happen, we have to be clear about what we want to do
about climate change in the Philippines.23
_____________________________________________________________________________
22. Ibid.
23. Ibid.
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Progress has been made in terms of the institutional arrangements in the Philippines in addressing
climate change but the present situation requires a comprehensive strategy that will enable the country to
effectively chart a more sustainable future. The establishment of a clear institutional mechanism by which
the challenge of climate change can be addressed is necessary. Ambiguities in the government institutions
tasked to deal with climate change issues must be eliminated and there is an imperative to establish a longterm and authoritative government institution that will be in charge of climate change. The highest priority
however is to adopt and implement a strategic framework which should guide the Philippine response to
climate change.24
An Integrated Adaptation-Mitigation Framework
Mitigation and adaptation are not mutually exclusive, so the most effective way that these strategies can be
maximized in the context of Philippine development is to integrate mitigation with adaptation. Together
with colleagues from the Manila Observatory, I propose a framework that builds on mitigation measures as
part of adaptation, and vice-versa. Such a framework will provide the necessary mechanisms by which
policies, science, markets, capacity building and information are able to respond to the realities of climate
change and ensure that the core objective of the UNFCCC as articulated in Article 2 are attained.25
Mitigation strategies in the Philippine context provide opportunities for enhancing development and
boosting the adaptation capacity of communities. Adaptation is as much a development concern as
mitigation. With the context of global-scale shifts in the climate system, development can only succeed with
adaptation integrated into the process.26
In sum, the Philippines should adopt an integrated adaptation-mitigation framework that identifies core
strategies, establishes clear responsibilities between and among sectors, and provides a clear picture of the
interdependence between mitigation and adaptation efforts. In a recent lecture, a number of us proposed a
framework summarized in Figure 1.27
The framework identifies four main factors for the successful implementation of adaptation and
mitigation strategies to address the impacts of climate change on the natural environment and the socioeconomic development paths of humans. First is the development of science-based climate policies.
Second is the use of market-based mechanisms to attract the use of cost-effective technologies and options
to address climate change. Third is the importance of research and development in order to come up with
better strategies to combat the impacts of climate change. The last factor is the importance of effective
capacity development and information awareness campaigns. The authors have identified the relevant
sectors needed for each of the factors.28
_____________________________________________________________________________
24. Ibid.
25. See McGray, H., A. Hammill, & R. Bradley (2007). Weathering the Storm: Options for Framing Adaptation and Development. WRI (World Resources
Institute) Report. Washington, D.C.: WRI.
26. Ibid.
27. Ibid.
28. See Villarin, et. al., supra note 20.
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Integrated Adaptation-Mitigation
Framework
CLIMATE POLICIES
(NATIONAL GOVERNMENT, UNFCCC)
Mitigation
GHG emissions
and Climate
Change Impacts
A
A
da
pt
a
n
io
at
pt
da
CAPACITY
BUILDING
&
INFORMATION
AWARENESS
Adaptation
tio
n
Socio-economic
Development
Factors
Natural Environment
and Ecosystems
RESEARCH
&
DEVELOPMENT
(Academe and Research
Organization)
(LGUs, Communities,
Individuals, Civil Society,
Media)
MARKET-BASED INSTRUMENTS
(Business and Civil Society)
Figure 1. Proposed Integrated Adaptation-Mitigation Framework for the Philippines
In the final analysis, an integrated Adaptation-Mitigation framework is based on sustainable
development. As defined by the Brundtland Commission in 1987, sustainable development is development
that meets the needs of the present without compromising the ability of future generations to meet their
own needs.29 Addressing climate change means pursuing such an agenda that simultaneously addresses
poverty while protecting the environment. An integrated Adaptation-Mitigation framework is consistent
with this because it would allow for the identification of “no regrets” options that can serve best the longterm interests of the country. Fortunately, many response measures to climate change move towards
achieving other important objectives, including infrastructure goals, disaster risk reduction and mitigation
objectives, food security concerns, energy development and independence, and biodiversity conservation.30
Climate change is a complex problem that requires a multitude of solutions. At the core of the multitude
of solutions is sustainable development. As the country has made substantial progress in institutionalizing
laws and policies that aim to promote sustainable development, the Philippine predicament and challenge
lies chiefly in serious gaps and deficits in implementation. Indeed, at the heart of the solutions to climate
change is good governance. Good governance requires designing, adapting, and implementing a coherent
approach to climate change. An integrated Adaptation-Mitigation framework is responsive to the realities of
the nation, reflects the needs of its people, and empowers all sectors of society to act. This is a modest but
essential step forward.31
_____________________________________________________________________________
29. World Commission on Environment and Development, Our Common Future (1987).
30. See Villarin, et. al., supra note 20.
31. Ibid.
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IMPLEMENTING ENVIRONMENTAL LAWS AND POLICIES
One of the biggest contradictions that environmental practitioners immediately perceive about the
Philippines is that, in contrast to the sorry state of our environment and natural resources, the country’s
environmental policy framework is formidable and robust. How can our environment be in so bad a shape
when we had all the laws and policies in place to prevent that from happening? Or do we have these laws and
policies because in fact we are already in bad shape and therefore we need them?
Our newer environmental laws are an example of this contradiction. Considered world-class and hailed
as landmark legislation are the Clean Air Act (1999), the Ecological Solid Waste Management Act (2000),
and the Clean Water Act (2004). These laws have been lauded for laying down a comprehensive framework
for air quality, solid waste and water quality management, respectively, in the place of piece-meal legislation
that previously governed these matters. They are characterized by the emphasis they place on:
(a)
multi-sectoral cooperation (e.g., institutionalization of national and local multi-sectoral governing
boards);
(b) information-based policy-making (e.g., preparation of national and local management frameworks
and plans based on status reports);
(c)
the use of market-based instruments (e.g., emission or waste water charge system, environmental
guarantee funds) and the role of business and industry;
(d)
the role of local government units (LGUs); and
(e)
public participation (e.g., provisions on public hearings in the preparation of plans, citizen suits).
Indeed, these are great laws. But in my view, we will not be able to implement these laws until we
actually address the institutional and governance aspects of environmental protection.
Rethinking the Institutional Framework32
The country’s main environmental institution is the Department of Environment and Natural Resources
(DENR). It was created in 1987 by Executive Order No. 192, which consolidated several government
agencies performing environmental functions. The DENR is primarily responsible for the conservation,
management, development and proper use of the country’s environment and natural resources, specifically
forest and grazing lands, mineral resources, and lands of the public domain, as well as the licensing and
regulation of all natural resources.
Apart from the DENR, there are other national government agencies involved in environmental
management. The major ones include the Department of Agriculture (DA) and its Bureau of Fisheries and
Aquatic Resources (BFAR), Department of Energy (DOE), Department of Health (DOH), National
Commission on Indigenous Peoples (NCIP),33 National Water Resources Board (NWRB), National Power
Corporation (NAPOCOR), and Philippine National Oil Corporation (PNOC) (the last two, in connection with
watershed areas and reservations supporting hydroelectric power generation and geothermal fields,
respectively). Moreover, even agencies not traditionally associated with environmental functions, such as
the Department of Trade and Industry (DTI), Department of Transportation and Communication (DOTC)
and Department of Public Works and Highways (DPWH), have been given environmental management roles
under the Clean Air Act and Clean Water Act.
_____________________________________________________________________________
32. This section is based on a study of the author commissioned by the World Bank. See Antonio La Viña, Re-thinking Philippine Environmental Institutions:
Do we need to reallocate mandates, powers, and functions? (2008).
33. Very recently, the NCIP was transferred from the Department of Agrarian Reform (DAR) to the DENR, by virtue of Executive Order No. 726 issued on May
23, 2008. The implications of this transfer will be discussed below. Although such transfer has been postponed for six months and the NCIP is now
attached to the Office of the President, the intent is to still transfer NCIP to the DENR.
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Given the country’s poor fiscal position, limited financial resources is a problem that the DENR and other
agencies with environmental management functions share with the rest of the bureaucracy. To address the
environmental sector’s financial needs despite this limitation, reforms are necessary in both demand and
supply sides.34
On the demand side, the government may want to consider streamlining the bureaucracy to free up a
portion of the budget devoted to personnel services, which can instead be used for needed capital outlays
and development expenditures. The government may also consider dispensing with some functions and
processes that add little value to environmental management. An example of this is the continued conduct
of environmental impact assessment for projects whose environmental impacts are already well-known and
to which routine control measures can simply be applied. In this case, an option would be to tighten the EIA
screening process.35
The government may also choose to focus on selected priority programs, or priority areas to ensure
impact, or start with tasks that can be completed despite limited resources.36 For instance, special focus
could be given to hotspots or key areas where enforcement is weakest or most needed (e.g., Tawi-Tawi), or
to areas where there are still relatively abundant resources to save or conserve (e.g., Sierra Madre).37
On the supply side, there is a need to adopt innovative ways to generate more financial resources. This
may include: (a) increasing the use of environmental user fees; (b) encouraging private sector investments
in environmental management.
Resolving Overlaps and Moving Towards Integrated Management
The current institutional setup is characterized by two features: fragmentation and overlaps.38 Efforts at
improving inter-agency coordination (e.g., institutionalization of PAMBs, Airshed Governing Boards, the
NSWMC and local Solid Waste Management Boards, and water quality management boards) have been
initiated and are laudable. However, these continue to reflect sector-based planning and management. That
is, following these mechanisms, in any given locality, protected area management, air quality management
and solid waste management would remain to be treated as separate concerns. The same is true for water
quality management, coastal resource management and other concerns.
Sector-based planning is flawed in that it fails to take into consideration trade-offs in the use of
resources, and tends to give rise to inter-sectoral conflicts. Integrated, spatially-based management has
been offered as an alternative to this. Under this scheme, management units are organized around a critical
resource following ecosystem boundaries. This has already been done in several areas, such as the Laguna
Lake region and the Agno River Basin. To do this on a national scale, comprehensive land and water use
planning must be done, and the basic planning and management units must be identified. In doing so,
overlaps between planning and management units must be avoided. The organizational structure, powers
and functions of the body that will run the planning and management unit must be carefully considered. It
must have adequate powers to ensure self-sustainability. It must be multi-sectoral and LGUs must be given
a central role in it. There must also be adequate mechanisms for public participation, and transparency and
accountability in decision-making.39
_____________________________________________________________________________
34. See La Viña, supra note 32.
35. World Bank and Asian Development Bank, The Philippine Environmental Impact Statement System: Framework, Implementation, Performances and
Challenges (2007).
36.
World Bank, Governance of Natural Resources in the Philippines: Lessons from the Past, Directions for the Future (2003).
37.
See La Viña, supra note 32.
38. Ibid.
39. Ibid.
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Strengthening and Expanding the Role of Local Governments
Pursuant to the policy of decentralization, the Local Government Code of 1991 (Republic Act No. 7160)
devolved numerous functions – including environmental management functions – to local government units
(LGUs). Substantial environmental law-making powers were also delegated to local legislative bodies.40
Furthermore, the Code requires all national agencies and offices to conduct periodic consultations with
appropriate local government units, non-governmental and people’s organizations, and other concerned
sectors of the community before any project or program is implemented in their respective jurisdictions. No
project or program shall be implemented by government authorities unless the consultations are complied
with, and prior approval of the local legislative council concerned is obtained. Under the Code, local
governments may appoint an Environment and Natural Resources Officer.
The powers and mandates granted under the Code were further affirmed and reinforced by various laws.
These include: (a) the Small-Scale Mining Act; (b) the NIPAS Act; (c) the Mining Act; (d) the Fisheries Code;
(e) the Clean Air Act; (f) the Ecological Solid Waste Management Act; and (g) the Clean Water Act.
Various experiences in the forestry, fisheries and solid waste management sectors have shown that local
governments can be effective environmental managers, provided enabling conditions are present. First,
they must be made to realize the value of the environment and natural resources, and assisted in
formulating their vision for environmental management in their locality. Second, they must be given the
space that would allow them a sense of ownership over environmental initiatives. Part of this would entail
clarifying the boundaries between responsibilities of the national government and LGUs. Third, the DENR
must be on hand to render technical assistance. Fourth, networking and knowledge sharing among LGUs
should be facilitated (e.g., conduct of study tours to LGUs with good environmental programs). Fifth, the
formation of broad-based partnerships with communities and community groups and the business sector
should be encouraged.41
As to budgetary constraints, LGUs may consider tapping into their share in the utilization of natural
wealth, using private sector financing, maximizing user fees and establishing social enterprises (e.g., ecotourism). LGUs can also tap into local taxes and revenues generated from natural resource use (e.g., quarry
taxes) which, in the case of some localities like the province of Pampanga, can be quite substantial in
amount. Delays have been noted in the release to LGUs’ share in natural wealth utilization. Automatic
release or even direct payment of these shares to the LGUs should be reconsidered.42
Finally, the role of LGU should be strengthened by removing DENR control over functions that have
previously been devolved. At present, the DENR remains to have “control and supervision” over certain
functions devolved to LGUs, namely, the implementation of community-based forestry projects, pollution
control law, small-scale mining law and other laws on the protection of the environment. Control implies that
the DENR may substitute its own judgment for that of the LGU, and supersede LGU actions. In these
respects, DENR intervention should be limited to supervision, only to ensure that LGU action conform to
existing laws and policies and are not in excess of jurisdiction or performed with grave abuse of discretion.
In addition, devolving other functions not previously devolved, subject to a readiness criterion. Further
devolution can be done on a phased approach by starting with LGUs that are ready, i.e., willing to assume
additional responsibilities, allocate sufficient human and financial resources, and be accountable for ENR
management.43 Functions that can be devolved may include the administration of the EIS System, largescale mining and other matters where the impacts and usual concerns raised are primarily local in scope.
_____________________________________________________________________________
40. See Secs. 447, 458 and 468 of the LOCAL GOVERNMENT CODE.
41. Ibid.
42. Ibid.
43. World Bank, Natural Resources Governance: Way Forward Action Plan (2005).
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All the former and present officials of the DENR interviewed for a World Bank study I recently did
generally supported strengthening the role of LGUs. For example, former Secretary Elisea Gozun
encourages such capacity building programs and raised the idea of finding a role for the Leagues of Cities,
Provinces, and other LGU aggrupations. Those supporting a greater environmental role for local
governments emphasized though that devolution is not possible for all activities, particularly those that
transcend local borders and have broader impact.44
Re-defining the Role of the DENR
The DENR needs to be re-defined in two important ways: (1) taking from the agency its utilization promotion
functions and (2) shifting from being “doer” to being an “enabler.”45
The apparent contradiction in the DENR’s role as protector of the environment and promoter of NR
utilization has been observed. It should be noted, as former Secretaries Fulgencio Factoran and Victor
Ramos have affirmed in interviews with this author, that this contradiction was intended. The utilization and
protection mandates were given to one Department and to one Secretary so that there would be a balancing
of development and environmental interests. Former Secretary Factoran recalled that the Brundtland
Commission (also known as the World Commission on Environment and Development) report entitled Our
Common Future in fact provided the basis and rationale of the creation of the DENR. Nevertheless, the
tensions persist and various proposals have been put forward to remedy this situation. These include
splitting the department into two – a Department of Environment and a Department of Natural Resources –
or creating an independent National Environmental Protection Agency.46
It is my view that splitting the DENR into two must be avoided because this will only result in two weaker
agencies. Whatever option is taken, it should be emphasized that environmental protection must continue
to be lodged in a cabinet-level body, for several reasons.47 First, effective enforcement requires a high degree
of political commitment to environmental protection, and cabinet rank can be a symbol of this commitment.
Second, other government agencies are often direct or indirect agents of environmental harm. Cabinet
status will allow the head of the environmental protection agency to confront the other agencies from a
position of equal strength. Third, this can be a means to maintain the agency’s political independence.
Finally, cabinet level agencies may have greater success in competing for financial resources essential to
build capacity for effective enforcement.48
The enhanced role of LGUs and the movement towards integrated, spatially-based management require
a corresponding shift in the role of the DENR.49 Under this set-up, the DENR’s main role would be as a
catalyst, coordinator and convenor. As such, its tasks would include:
•
formulation of national-level policies;
•
coordination work for the integrated, multi-sectoral planning and management bodies;
•
building the capacity of, and providing technical services to, the aforementioned bodies and LGUs;
•
supervision of LGU-devolved functions; and,
_____________________________________________________________________________
44. See La Viña, supra note 32.
45. Ibid.
46.
Interviews with Atty. Fulgencio Factoran and Victor O. Ramos, Former Secretaries of Environment, Department of Environment and Natural Resources,
26 September 2008.
47.
See La Viña, supra note 32.
48.
Karen Shih, Effective Governance Structures. Unpublished (2004).
49. See La Viña, supra note 32.
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•
administration of phased devolution process.
It would continue, however, to perform regulatory functions for activities that have not been devolved.
The Role of Citizens: Implementing the Access Principles
Principle 10 of the Rio Declaration on Environment and Development calls for public access at the national
level to environmental information; access to public participation in decision making; and, public access to
judicial and administrative proceedings in environmental matters.50 As assessed in a recent initiative, there
is much work we still need to do to implement these access principles.51
There is a bill pending in Congress for a Freedom of Information Act. But while the proposed law will
facilitate the assertion of the people’s right to information, it will have little impact in the ENR sector unless
monitoring, data gathering and data storage capability is improved. The DENR needs to put in place an
information and communications technology program that would integrate information scattered among
different agencies. Setting up a system should be placed on top of the DENR’s priorities.52
While the legal framework for public participation is already strong, one glaring flaw is the absence of an
effective mechanism to enforce compliance with the requirements set by law.53 Deterrents and speedy
remedies against non-compliance with public participation requirements need to be put in place. This may
come in the form of administrative imposition of penalties against non-complying officials, and
administrative nullification of acts which did not pass through the required processes.
Citizens and citizens’ organizations have been successful in advocating for the passage of progressive
environmental laws. This advocacy must be carried on to exact greater accountability in the implementation
and enforcement of laws. Citizens’ organizations should continue, if not intensify, critical engagement with
government. 54
There are also existing legal tools that citizens can avail themselves of to compel the government to
perform its duties. The Clean Air Act and the Ecological Solid Waste Management Act contain provisions
allowing citizen suits in case of government’s failure to implement their mandate. Also, the Office of the
Ombudsman has created a Task Force for Environmental Concerns to address complaints against national
and local officials for non-compliance with environmental laws. Participation of citizens in law enforcement
must also be encouraged.
While many NGOs, POs, other community groups and environmental law practitioners have expressed
interest in or are already currently engaged in environmental law enforcement, their inability to prosecute
criminal actions constitute a barrier to effective enforcement. Save for provisions of the Clean Air Act and
Ecological Solid Waste Management Act on citizen suits, there is no legal recognition of citizens’ right to bring
actions for violations of environmental laws. Hence, in some cases where citizens have been instrumental in
apprehending environmental law violators, the latter are able to escape conviction given the scarcity or
inability of government prosecutors. Accordingly, rules of procedure allowing prosecution of environmental
law violations by environmental law organizations or practitioners need to be crafted by the Supreme
Court.55
_____________________________________________________________________________
50. World Resources Institute, World Resources 2002-2004: Decisions for the Earth, Balance, Voice and Power, Washington D.C. (2003).
51. The Access Initiative-Philippines. Independent Assessment on Access to Information on Environmental Matters. Unpublished (2007).
52.
See La Viña, supra note 32.
53. The Access Initiative-Philippines, Case Studies on Public Participation in Decision-Making on Environmental Matters. Unpublished (2006).
54.
See La Viña, supra note 32.
55. Ibid.
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The Role of the Judiciary and Quasi-Judicial Agencies
The judiciary influences environmental management through its power of judicial review. Judicial review is
defined as the power to settle actual controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack
or excess of jurisdiction on the part of any branch or instrumentality of the government (Constitution, Article
VIII, Section 1). Specifically, courts:
•
adjudicate “conflicts and violations that arise out of the implementation or enforcement of laws
dealing with the use of natural resources and impact of human activities on public health and the
ecosystem;”56 and
•
decide on the just apportionment of limited resources.57
In 1993, the Supreme Court designated special courts to handle violations of the Revised Forestry Code.
This was in response to the number of violations of forestry laws. (Melencio Herrera, 2007). Very recently, on
January 28, 2008, the Supreme Court designated 84 branches of first-level courts and 31 branches of
second-level courts (or a total of 115 courts) as special Environmental Courts, with jurisdiction to try and
decide violations of environmental laws.58 This was done based on an inventory and assessment of pending
environmental cases. The objective is to improve efficiency in the administration of justice, and to provide
greater access to environmental justice, by having these courts in places where environmental violations
were shown to be most frequent, and providing judges with specialized skills and knowledge relevant to the
cases prevalent in their area.
Environmental cases pending at the time of the issuance of the Court’s Administrative Order were
required to be transferred to the special courts, except those civil cases where pre-trial had commenced and
criminal cases where the accused had already been arraigned, which remained in the branches where they
were originally assigned. New environmental cases shall be assigned (or raffled, in case of localities where
more than one environmental court has been designated) to the special courts. The special courts, however,
continue to handle criminal, civil and other cases.
Recently, a consultative workshop for the environmental courts59 was conducted by the Philippine
Judicial Academy among judges, prosecutors, environmental law enforcers and practitioners for the
purpose of gathering suggestions on improving access to environmental justice. Recommendations
gathered during the workshop include the following:
(a) Training for judges on the technical aspects of environmental cases, and developments in
environmental law and jurisprudence;
(b) Promulgation of rules to govern the disposition of harassment suits filed against law enforcers
and citizens in retaliation for environmental law enforcement;
(c)
Promulgation of rules exempting all environmental cases filed as citizen suits from docket and
other lawful fees, and from the injunction bond requirement, where an application for injunction
is made; and
(d) Requiring the Integrated Bar of the Philippines to have a deputized special prosecutor for
environmental cases in every chapter under the organization’s legal aid program.
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56. Consuelo Ynares-Santiago, Framework for Strengthening Environmental Adjudication in the Philippines, Paper presented at Asian Justices Forum on the
Environment, Manila, July 6-7, 2007.
57. Hilario G. Davide, Jr., The Role of Courts in Environmental Protection, PHILJA Judicial Journal, Volume 6, Issue No. 20, April-June 2004.
58. Moreover, all single sala first- and second-level courts are considered special courts for this purpose.
59. Multi-Sectoral Consultative Workshop on the Manual and Training Design for Green Courts, July 16-18, 2008, The Pearl Manila Hotel, Manila.
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The low number of cases being filed in courts despite the huge number of violations suggests that other
pillars of justice, namely, law enforcement and prosecution, need to be strengthened as well. In the same
consultative workshop referred to above, the following recommendations intended for environmental law
enforcement agencies were also gathered:
(a)
Development of a guidebook for prosecutors on environmental cases;
(b)
Designation of environmental prosecutors, and deputation of additional special prosecutors
(from environmental law enforcement agencies and environmental law organizations);
(c)
Conduct of trainings and provision of reference materials to prosecutors on technical matters
usually involved in environmental cases;
(d) Considering that lack of technical services and facilities often serve as a bar to the filing of cases
for environmental crimes, the establishment of a system for accreditation of private individuals
and laboratories to conduct tests and/or provide certifications needed in specific environmental
cases.
We are in an exciting time in terms of the evolution of the role of the judiciary in the protection of the
environment. The creation of Green Courts is a positive development. However, this is only an initial step
as there are still a number of measures needed to make these courts fully functional and more effective.
These include: (a) an enhanced training program for environmental court judges; and (b) amendment of
procedural and evidentiary rules that appear to be inappropriate for environmental cases given their
peculiar nature. Indeed, it might be time for the Supreme Court to consider drafting and issuing a Rule of
Court specifically for environmental cases. According to Justice Ynares-Santiago, speaking at the Asian
Justices Forum on the Environment held here in Manila last year:
Environmental cases have features that differentiate them from ordinary civil and criminal cases.
Treating them differently does not mean giving special favors or giving bias to environmental causes.
Instead, it is recognition that the nature of environmental cases makes it difficult for injured parties to
find redress. The special rules only try to correct the situation to balance the playing field.60
Foremost I think of the issues that the Court may want to address in drafting an environmental rule is the
challenge of executing court judgments in environmental cases. Should the Court continue to be a passive
actor and refrain from taking steps to monitor and ensure that its decisions are implemented? Or should it be
more active in making sure that the environmental problems being dealt with is in fact addressed and
solved. Should it actually retain continuing jurisdiction over environmental cases until such time it is satisfied
that the environmental outcomes mandated by our laws are going to be achieved? Should it supervise,
directly or through the lower courts or through other bodies, the implementation of its environmental orders
such as it has done in the case of the Pandacan oil depots where it has ordered the oil companies61 to relocate
their facilities within a reasonable period of time?
Fourteen years ago, when I had the honor of delivering the Malcolm Constitutional Law Lecture here in
this same auditorium, I was skeptical of the role of the judiciary in environmental cases.62 Today, invoking my
academic freedom to change my mind and informed now by the weight of experience, it is clear to me that
courts, and that includes the highest court of the land, have to be actively involved and engaged in
environmental cases. In my view, many environmental disputes involve issues of transcendental
importance and their resolution requires the balancing of primordial economic and political interests. If
enabled and capacitated, the courts are in the best position to do this balancing and in making sure that their
judgments are in fact executed.
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60. See Ynares-Santiago, supra note 57.
61. Social Justice Society, et al. v. Atienza, Jr., G.R. No. 156052, February 13, 2008
62. Antonio G.M. La Viña, The Right to a Sound and Balanced Ecology: The Odyssey of a Constitutional Policy, Philippine Law Journal, Manila 1994.
184
THE FUTURE OF ENVIRONMENTAL LAW AND GOVERNANCE
THE FUTURE OF
ENVIRONMENTAL LAW
AND GOVERNANCE
CONCLUSION
In this lecture, I have looked at the environmental problems posed by globalization using mining as an
illustration. I have articulated what we need to do to address the issue of climate change. In both cases,
there are solutions and strategies that we could use to achieve good environmental and social outcomes. But
these will not be realized until we reform our institutional framework and our governance institutions. We
must rethink the concept of the DENR and evolve it into a catalyst of capacity, a convenor of institutions and
stakeholders, and devolving much more significant environmental functions and powers to local
governments. I also concluded that a new rule of court for environmental cases might be appropriate. Finally
but not the least, I have emphasized that the role of the judiciary is critical to make sure that environmental
laws and policies are actually implemented.
It will be a challenge to do all of this. Indeed, an appreciation of what lies ahead in terms of environmental
challenges is sobering. Perfect storms are ahead of us. If we do not think ahead and think of solutions now for
tomorrow’s environmental challenges, we are doomed to be overcome and overwhelmed by them. But if we
start now, if we begin preparing now to address these challenges – whether it is the environmental outcomes
of globalization, the grave and serious impacts of climate change, or the likely increase in our governance
and implementation deficits – the generations that follow us, those who will inherit this beautiful country of
ours, will have a fair chance to meet their needs and to build a prosperous and just nation that is, in the
magnificent and grand words of the 1987 Constitution, “in accordance with the rhythm and harmony of
nature.”
o0o0o
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REACTIONS
Reactor:
Atty. Ronaldo G. Gutierrez
Executive Director
Upholding Life and Nature (ULAN)
There is a disconnect between the state of our
Environmental Law (EL) and the Philippine environment.
We have some of the best laws but we are also up high in
the list of countries with the worst environmental record.
However, I am not one to give in to despair. In this room
right now are Dean La Viña, Dean Leonen and Prof.
Oposa, three of the brightest stars in the galaxy of
International Environmental Law.
The crux of today’s lecture is that the future hinges on
what we do in the present, and the list of prescriptions
Dean La Viña gave us is neither short nor easy. But it is
also important to mention that much of the mess that we
have today is a direct legacy of actions in the past, which
we may be in danger of repeating today. Many of the
problems – many of which are structural – have yet to be
undone.
There is a lot of good that comes with globalization,
and there is also a lot of bad. Right now, the extent of the
melamine poisoning is a direct offshoot of globalization.
With regard to law, as rapid as the developments are in
national and international law to facilitate these complex
transactions, our rules remain archaic as to running after
culprits of environmental human-induced disasters. We
still cannot pierce the layers of Cayman Islands-created
entities to shield themselves from liability.
And even if we do, the present evidentiary
requirements give new meaning to the word “burden” in
burden of proof. As articulated by Justice Consuelo
Ynares-Santiago, we need a new set of rules. We do not
need to reinvent the wheel. We have the principle of
strict product liability in Consumer Torts, which we can
use to create strict environmental liability.
Finally, we heard of predictions on the adverse
impact of climate change on sea level, agriculture,
forests, energy, health, floods and water, conflict and
displacement. These are all actually happening right now
not with climate change, but with mining. But the cost is
worth the benefit especially if you are not the one bearing
it.
All told, there is a perfect storm brewing ahead of us,
if not already upon us. It bears stressing that the whole
concept of governance is not only about government
agencies and units. It is about people, as if people
mattered. We need policies that are pro-people.
186
THE FUTURE OF ENVIRONMENTAL LAW AND GOVERNANCE
Reactor:
Ms. Allelu De Jesus
Presiding Officer
Paralegal Volunteers Organization
Environmental issues are overarching issues that cut
across the different sectors of the society, and that it is
imperative that the latter are engaged and involved in
addressing the environmental issues. However, as
pointed out by Prof. La Viña, the Philippines is confronted
with other issues which cause environmental issues to be
relegated to the sidelines. Although we have wonderfully
crafted laws, there is also a problem in implementing
these laws. This highlights the importance of education
and consciousness-raising activities. There is a need to
provide venues for education and training of the entire
population, to make the threat of the destruction of the
environment and the exhaustion of the country’s natural
resources real to the people.
Getting communities involved in environmental
protection as well as in the sustainable use of natural
resources is a promising mechanism. But this will only
work if communities are made aware of their stakes in this
and if they are properly equipped with the knowledge,
skills, and competencies to carry out their role in the
implementation of environmental laws and measures.
LAW AT ITS MARGINS:
QUESTIONS OF IDENTITY, ANCESTRAL DOMAINS,
INDIGENOUS PEOPLES AND THE DIFFUSION OF LAW
Dean Marvic M.V.F. Leonen
Holder, 2009 Metrobank Foundation Professorial Chair
in Constitutional Law
“In the little world in which children have their
existence, there is nothing so finely perceived and
finely felt as injustice.”
Pip in Charles Dickens’
GREAT EXPECTATIONS
“Law, rather than a mere technical add-on to a
morally (or immorally) finished society, is, along of
course with a whole range of other cultural realities
from the symbolics of faith to the means of
production, an active part of it.”
Clifford Geertz........
LOCAL KNOWLEDGE
A STANDPOINT
Most law students encounter an epiphany during
their second year in law school. At about this time,
they start to realize that the study of law is not
what they had expected it to be. Most of it is
doctrinal rather than about justice. The rigors of
legal education require them to rehearse
arguments that are self-reflexive and often devoid
of context. At least, that was how I felt in 1984
when I was a second year law student.
Those were difficult political times. Benigno
Aquino had just been assassinated. People were
on the streets. Human rights violations were
being openly reported.
Human rights
organizations were in the thick of their
advocacies. And, we were inside the College of
Law pondering on cases that seemed to have little
relevance, then. I had a suspicion that the study
of law was important – but there had to be a better
way to do it. Fortunately, my rebellious streak
found some venues. I helped in restructuring a
student organization now known as the Paralegal
Volunteer Organization. And then, I enrolled in
Agrarian Reform Law and in Philippine Indigenous
Law.
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Philippine Indigenous Law1 then was a strange subject. An American, Dr. Owen Lynch, taught it. Later
on, I learned that even its title was contradictory: Philippine law is certainly not indigenous law. To this day,
my encounters with what we have officially called “indigenous peoples”2 are framed by the introductory
lecture in that class.
On the blackboard he wrote two sentences. One:
Not everything that is foreign is bad. Two: Not
everything that is indigenous is good. The statements
were provocative. I immediately identified with their
descriptive value. The origins of ideas do not by
themselves provide the best basis for their
evaluation. But, its normative suggestion was most
disturbing. How then do we determine whether we
should privilege the indigenous over the foreign or
vice versa?
“…an invitation to theorize on the role
of the judiciary in the context of law
forced into its margins: as it is
challenged by questions of our own
indigenous identities and voices whose
narratives do not find shelter in much
of our jurisprudence or in the
jurisprudence which we copy.”
Then he went on to explain the scope of the subject. We were informed that we were not going to learn
the customary laws of the various indigenous groups in the Philippines. He was not an expert in that subject.
The College of Law was not the right place to study these laws. Furthermore, the concept of customary law3
had to be disrobed of its antique character. Even customary law is more dynamic than as would be implied
by the stereotypical lessons in history or anthropology.
Rather, he said that the subject had a challenge for its problematique. How do we, as legal professionals
crafting, creating, implementing and constituting official law, accommodate / integrate/ deal with a plurality
of norms in multicultural or multi-ethnic states like the Republic of the Philippines?
That subject inspired me and perhaps framed my subsequent choices. Even while we were taking the
bar examinations in 1988, my classmate Augusto Gatmaytan and I sat together to think about the formation
of a public interest law group that would do nothing except to attend to the legal and policy challenges of
peoples in the upland. Then we invited Antonio G. M. La Viña and Antoinette G. Royo to help us brainstorm.
In December of 1987, we formed the Legal Rights and Natural Resources Center Inc., had it registered with
the Securities and Exchange Commission and received a grant of $30,000 from the Ford Foundation to
operate for one year. It is still in operation today.
It was through that organization that we reached quite a number of indigenous peoples groups in the
Philippines. We sat in various indigenous councils, dealt with various issues relating to identity even within
heterogenous communities, debated on gender identities in tribal settings, encountered various armies on
field, survived many near-death experiences and reached the Supreme Court in various cases.
Those experiences earned me an invitation to teach Philippine Indigenous Law in this College. Later, I
was brought in to the regular faculty to also teach remedial law and constitutional law. Dean Merlin M.
Magallona appointed me to my first administrative job and then to the Office of Legal Aid of this College.
After 21 years I find myself in the office which I now inhabit, speaking before the academic arm of the most
important of all legal institutions on a topic which a few decades ago was not even at the margins of legal
consciousness in the Philippines.
_____________________________________________________________________________
190
1.
Law 132 (3 units): “An introduction to legal anthropology with an emphasis on indigenous Philippine Custom Laws and their relevance to the national
order. The course also examines national laws and policies affecting the national cultural communities,” Law Bulletin, U.P. College of Law.
2.
Throughout this article, “indigenous peoples” is always in the plural form to emphasize the existence of many communities, societies and identities
represented by this label.
3.
Other terms are perhaps more appropriate. The Journal of Legal Pluralism and Unofficial Law interchange folk law, customary law, received law.
LAW AT ITS MARGINS
LAW AT ITS MARGINS
I open with this personal statement not merely to acknowledge how times have changed but also to
clarify my standpoint. I am not a member of any of the ethnolinguistic groups which the National
Commission on Indigenous Peoples (NCIP) regard as “indigenous.” To be counted as one by some of the
communities that I have served and grown to respect is definitely an honor. I am rather an Ilocano, a lawyer,
a law professor, an advocate. I do not speak with their voice. I do not represent them. But, I wish to use this
privilege generously created by the Metrobank Foundation and the Philippine Judicial Academy to sketch the
basic contours of an issue which I think should lead us to rethink our collective narrative as a nation and as
one people. It is also an invitation to theorize on the role of the judiciary in the context of law forced into its
margins: as it is challenged by questions of our own indigenous identities and voices whose narratives do not
find shelter in much of our jurisprudence or in the jurisprudence which we copy.
I will not, in this lecture, rehearse the argument that our statutes are not enough.4 It is the judiciary and
the judicial academy in attendance today and I would think that what we should be talking about is the
extent of the concept we now know as judicial discretion. I am a firm believer of the idea that a judicial
decision which concludes with inaction simply because there is no statute is a betrayal of the court’s
institutional functions. In every case where the controversy is real, it is the duty of judges and justices to
make a decision.
But decisions do more than simply interpret the constitution or the law. Judicial decisions have a
powerful constitutive function and nowhere is this more apparent than in the history of the legal concept of
“indigenous peoples” and “ancestral domains.”
This lecture should be an invitation to discuss in more detail the interplay of law and our social realities.
Specifically, within this short period of time we should inhabit relationships between law and culture.
Consciously, I will not positivist. There will be no effort to make Langdellian5 sense of a string of doctrines
relating to the subject of today’s discussion.
I adopt for purposes of today’s argument, Naomi Mezey’s provisional way of defining culture: that is, “as
a set of shared signifying practices that are always in the making and always up for grabs.”6 In this way we
can clearly see how law integrates with culture. Law “partly generates the signs and symbols – the
signifying forms – with which difference is constituted among meanings.”7 Law is, in Clifford Geertz account,
one “distinctive manner of imagining the real.”8 Courts clarify these signs and symbols mainly through the
texts of its jurisprudence.
It is through this process that I have been told that while I, male, non-speaking Ilocano lawyer, born and
raised in Baguio City and resident now of Diliman, am not part of the indigenous peoples of this republic.
Why that is so is part of the subject of today’s discussion. Why that should be good for those who have been
considered as non-christian/ national minority/ tribal or indigenous peoples is also the gist of today’s
discussion.
Of course, these meanings of who I am as defined by constitution, law and jurisprudence will still be
contested in the various localities of my social realities. This is what I would mean when we point to the
diffusion of law.9 The Supreme Court pronounces, society adapts, and in the fog of this relationship people
find meanings and go about their individual and collective lives. This causes some dissonance between the
collective
intentions of the courts and life as truly lived by our peoples.
_____________________________________________________________________________
4.
See Marvic M.V.F. Leonen, “Indigenous Peoples Rights Act: Will the Legal Reality Bring Us to a More Progressive Level of Political Discourse?” 9 Philippine
Natural Resources Law Journal, No. 1, 7-45 (1998).
5.
Christopher Columbus Langdell, Treatise on the Law on Contracts (1853), has been credited with the idea that law should be approached as a science. I
do not follow this tradition
6.
Naomy Mezey, Law as Culture in Austin Sarat and Jonathan Simon, eds., Cultural Analysis, Cultural Studies, and the Law, 37, 39 (2003)
7.
Naomy Mezey, at 43 citing Rosemary J. Coombe, “Contingent Articulations: A Critical Cultural Studies of Law,” in Austin Sarat and Thomas Kearns, eds.,
Law in the Domains of Culture (1998).
8.
Clifford Geertz, Local Knowledge: Further Essays in Interpretative Anthropology 184 (1983).
9.
See Westbrook and Twinning’s article, See David A. Westbrook, “Theorizing the Diffusion of Law: Conceptual Difficulties, Unstable Imaginations and the
Effort to Think Gracefully Nonetheless,” 47 Harvard International L. J. No. 2, 489 (2006) and William Twinning, “The Diffusion of Law: A Global
Perspective.”
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Implicitly, I argue that courts should develop sensitivities to the effect of its choices of law, its
interpretations, and the language it uses to justify those interpretations. I am aware that the court’s
legitimacy is dependent on assuring its various publics some level of neutrality and objectivity. Neutrality
can be assured by procedure. Objectivity on the other hand, is not necessarily exogenous, but its
assurances come with adherence to legal text, experience and the reasonable expectations of the bench,
bar, and the public as to what the law should be and how it is interpreted. Reasonable expectations include a
modicum of expertise in relation to law as our language.
OUR PROBLEM
The depth of our answer as to who are indigenous peoples and why we should recognize their identity and
the rights associated with them will become relevant in three types of problems.
First, there are questions that relate to decisions on resource rights. Specifically it will take the following
legal form: do indigenous peoples own not only the rights to the surface of the land but also to the resources
above and more importantly under it?
Second, there are questions that relate to governance. Do indigenous peoples within ancestral domains
have the constitutional prerogative to exercise all aspects of governance including the prescription and
enforcement of crimes based on their customary law?
Third, there are questions that relate to the manner in which we organize our personal and family
relations. This will take various legal forms such as: Are our personal laws especially those that govern
marriage and family unconstitutionally restrictive of the individual and collective rights of indigenous
peoples?
Allow me to elaborate on these three problems.
The Court was evenly split in the case of Cruz versus National Commission on Indigenous Peoples.
There, a fundamental issue raised was whether the Indigenous Peoples Rights Act (R.A. No. 8371) was
unconstitutional because it violated the provisions of Article XII, Section 2 of the Constitution. To recall, that
provision states that “All lands of the public domain, waters, minerals, coal, petroleum, and other mineral
oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State.” 10 It prescribes the various ways that the state can enter into contracts
with private entities. It also authorizes the state to directly utilize these natural resources.
On the other hand, the same Constitution provides in Article XII, Section 5, for the concept of ancestral
domains. Hence, in the second paragraph it mentions that “The Congress may provide for the applicability
of customary laws governing property rights and relations in determining the ownership and extent of
ancestral domain.” 11 We note textually, that there is a distinction between ancestral land mentioned in the
first paragraph of Section 5. Also, that the earlier constitution referred to ancestral land solely – not
ancestral domain. The question is whether there is judicial significance to the concept of ancestral domains
as opposed to ancestral land. It can also be framed as whether ancestral domains demand a treatment of
“resources” different from the traditional way we signify natural resources as consisting of land, timber,
minerals, waters and even potential sources of energy.
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10. ART. XII, SEC. 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests
or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural
resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the
State. The State may directly undertake such activities, or it may enter into co-production, joint venture, or production-sharing agreements with Filipino
citizens, or corporations or associations at least 60 per centum of whose capital is owned by such citizens. Such agreements may be for a period not
exceeding 25 years, renewable for not more than 25 years, and under such terms and conditions as may be provided by law. In cases of water rights for
irrigation, water supply, fisheries, or industrial uses other than the development of water power, beneficial use may be the measure and limit of the grant.
11. ART. XII, SEC. 5. The State, subject to the provisions of this Constitution and national development policies and programs, shall protect the rights of
indigenous cultural communities to their ancestral lands to ensure their economic, social, and cultural well-being.
The Congress may provide for the applicability of customary laws governing property rights and relations in determining the ownership and extent of
ancestral domain.
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LAW AT ITS MARGINS
LAW AT ITS MARGINS
This becomes more interesting if we take into consideration the meanings of Article II, Section 22,
together with Article XIII, Section 16, and even of Article III, Section 1, of the Constitution.
At this point, I am not referring to the precedent created in Cariño v. Insular Government, but rather
another case similar to that of Cruz v. NCIP12 and perhaps occasioned by a mining claim within an area
recognized as ancestral domain.
Cariño v. Insular Government13 should be taken in its context.14 It consists of two significant ratio
decidendi which, to my mind, have become close to being canonical.15 The first is summed up with this
phrase:
x x x When as far back as testimony or memory goes, the land has been held by individuals under a
claim of private ownership, it will be presumed to have been held in the same way from before the
Spanish conquest, and never to have been public land. 16
From my perspective, the case was unique not because it involved an Ibaloi 17 but because the case is
definitive for all peoples who have perfected their ownership rights through what civil law now refers to as
“extraordinary acquisitive prescription.”18 Parenthetically, it also clarifies that the myth of the regalian
doctrine was of Spanish origins and did not carry on to the next sovereign.
The other doctrine in Cariño, more often cited, was that the paper title does not create ownership but
rather only evidences it.
Of course, there is the ambiguous provision in the Indigenous Peoples’ Rights Act that states that
indigenous peoples have the “right to claim natural resources.”19 This can imply, as it did for a few of the
justices in Cruz v. NCIP, that the right of indigenous peoples is still ripe for perfection and is not per se that of
ownership.20
This approach however might beg the question we just asked. Are ancestral domain rights of indigenous
peoples constitutionally protected? Should it have that level of importance?
The next problem relates to governance. Does the recognition of ancestral domains and customary law
constitutionally entail acknowledgement of the necessity of a level of governance over these domains? Put
in more precise terms so the judicial handle can be clearer, is Section 72 of Republic Act No. 8371 valid?21
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12. Cruz et al. v. NCIP, G.R. No. 135385, December 6, 2000.
13.
41 Phil. 935 (1909).
14. Leonen, Legal Myths and Engaging the Rhetoric, supra note 6 where the argument relating to Cariño had been rehearsed.
15. See for instance J. M. Balkin and Sanford Levinson, “Canons of Constitutional Law,” 111 Harv.L. Rev. 963, 970 (1998) they discuss on the concept of
canonicity and argue that that depends on how the concept is used.
16. Cariño v. Insular Government, at 941.
17. Although the case was titled in the name of Mateo Cariño, the descendants of his family argue that the land actually belonged to his wife Bayona.
18. See II Tolentino, Civil Code of the Philippines.
19. See Republic Act No. 8371 or the Indigenous Peoples Rights Act, Section 7 (a) “Right of Ownership. — The right to claim ownership over lands, bodies of
water traditionally and actually occupied by ICCs/IPs, sacred places, traditional hunting and fishing grounds, and all improvements made by them at any
time within the domains,” see Leonen [paper on IPRA in Philippine Natural Resources L. J. (1998)].
20. See per Puno J. Cruz v. NCIP (2000) supra note 12.
21. SEC. 72. Punishable Acts and Applicable Penalties. — Any person who commits violation of any of the provisions of this Act, such as, but not limited
to, unauthorized and/or unlawful intrusion upon any ancestral lands or domains as stated in Section 10, Chapter III, or shall commit any of the prohibited
acts mentioned in Sections 21 and 24, Chapter V, Section 33, Chapter VI hereof, shall be punished in accordance with the customary laws of the ICCs/IPs
concerned: Provided, That no such penalty shall be cruel, degrading or inhuman punishment: Provided, further, That neither shall the death penalty or
excessive fines be imposed. This provision shall be without prejudice to the right of any ICCs/IPs to avail of the protection of existing laws. In which case,
any person who violates any provision of this Act shall, upon conviction, be punished by imprisonment of not less than nine (9) months but not more than
12 years or a fine of not less than One Hundred Thousand Pesos (P100,000) nor more than Five Hundred Thousand Pesos (P500,000) or both such fine
and imprisonment upon the discretion of the court. In addition, he shall be obliged to pay to the ICCs/IPs concerned whatever damage may have been
suffered by the latter as a consequence of the unlawful act.
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This Section provides that any “unauthorized and/or unlawful intrusion upon any ancestral lands or
domains” or a violation of the prohibited acts of discrimination shall “be punished in accordance with the
customary laws of the ICCs/IPs concerned.” There is a proviso however that “no such penalty shall be cruel,
degrading or inhuman.” Indigenous peoples may however choose to avail of national law in which case a
penalty is prescribed.
This provision does not clarify what the penalties should be but rather refers back to customary law.
Customary law in turn is defined by the Indigenous Peoples’ Rights Act as referring “to a body of written
and/or unwritten rules, usages, customs and practices traditionally and continually recognized, accepted
and observed by respective ICCs/IPs.”22 How far in terms of creating exceptions to the fundamental tenets
of governance as traditionally understood, can we go to recognize the identities of Indigenous Peoples?
The third type of problem relates to the definition of our personal and family rights. They invite scrutiny
as to the relationship of cultural concepts of family and genealogy with those that we currently see in our
laws. Perhaps to sharpen the controversy, a legal question might be whether Article 36 of the family code,
which limits the declaration of nullity of marriage only on the basis of psychological incapacity when applied
to specific indigenous communities, would be unconstitutional.
The B’laan, an ethnic group that are usually found in Southern Mindanao, practice a form of polygamy
that is regulated by their customary norms. Only a very small minority embraced Islam.
This court has been felicitous with respect to the exercise of religious freedoms. Thus in Estrada v
Escritor,23 the court did not find that a court employee who remarried without availing of the judicial process
of annulment or declaration of nullity was not considered to have committed immorality within the meaning
of our civil service rules. This is notwithstanding provisions of the civil code. The court took note of an
approach which it called “benevolent neutrality,” i.e., the desire to protect religious exercise from the state’s
intrusive behavior. The Court also created an exception in Ebranilag v. Division Superintendent24 against the
seeming universal requirement to salute the flag and stand at attention while singing the national anthem
for Jehovah’s witnesses.
Should the approach of creating exceptions on the ground of basic constitutional rights also apply to
indigenous groups qua indigenous groups? If it does not, what would be the basic difference between the
right to one’s exercise of one’s faith and one’s right to participate in a specific culture?
THE APPROACH:
ADDRESSING THE CONSEQUENCE OF ESSENTIALIZED IDENTITIES
His name was Cayat. He had only one name and he was languishing in the Baguio City jail.25 His crime was
drinking A-1-1-1 gin after an hour proscribed by Act No. 1639.26 Had he not been Ibaloi, he would not have
been convicted of violating this provision.
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22. Republic Act No. 8371, Sec. 3 (f). The provision requires that the normative practice be both (a) traditionally and (b) continuously practiced. For an
explanation of its effects, see Leonen (PHILNAJUR article).
23. A.M. No. P-02-1651, June 22, 2006 and August 4, 2003.
24. 219 SCRA 256, G.R. Nos. 95770 and 95887 (1993).
25. The penalty according to section 3 of Act No. 1639 was a fine of two hundred pesos or imprisonment of not more than six months at the discretion of the
court.
26. Sec. 2 of Act No. 1639 read: “It shall be unlawful for any native of the Philippine Islands who is a member of a non-Christian tribe within the meaning of
Act Numbered Thirteen Hundred and Ninety-Seven, to buy, receive, have in his possession, or drink any ardent spirits, ale, beer, wine, or intoxicating
liquors of any kind, other than the so-called native wines and liquors which the members of such tribes have been accustomed themselves to make prior
to the passage of this Act, except as provided in Section One hereof; and it shall be the duty of any police officer or other duly authorized agent of the
Insular or any provincial, municipal or township government to seize and forthwith destroy any such liquors found unlawfully in the possession of any
member of a non-Christian tribe.”
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Fortunately for him, an enterprising young lawyer eager to earn his reputation discovered him. The
lawyer was also Ibaloi and his name was Sinai Cariño Hamada.27 He filed a Petition for Habeas Corpus and his
argument was simple. The law was null and void because it unconstitutionally infringed on the fundamental
right of the accused to equal protection of the law.
People v. Cayat is considered today as a landmark case. It ruled:
It is an established principle of constitutional law that the guaranty of the equal protection of the laws is
not violated by a legislation based on reasonable classification. And the classification, to be reasonable,
(1) must rest on substantial distinctions; (2) must be germane to the purposes of the law; (3) must not
be limited to existing conditions only; and (4) must apply equally to all members of the same class.
(Borgnis v. Falk Co., 133 N. W., 209; Lindsley v. Natural Carbonic Gas Co., 220 U.S., 61; 55 Law. ed.,
369; Rubi v. Provincial Board of Mindoro, 39 Phil., 660; People and Hongkong & Shanghai Banking
Corporation v. Vera and Cu Unjieng, 37 Off. Gaz., 187.)
Then proceeding further to explain that the act was valid:
Act No. 1639 satisfies these requirements. The classification rests on real or substantial, not merely
imaginary or whimsical, distinctions. It is not based upon “accident of birth or parentage,” as counsel for
the appellant asserts, but upon the degree of civilization and culture. “The term ‘non-Christian tribes’
refers, not to religious belief, but, in a way, to the geographical area, and, more directly, to natives of the
Philippine Islands of a low grade of civilization, usually living in tribal relationship apart from settled
communities.” (Rubi v. Provincial Board of Mindoro, supra.) This distinction is unquestionably
reasonable, for the Act was intended to meet the peculiar conditions existing in the non-Christian
tribes. The exceptional cases of certain members thereof who at present have reached a position of
cultural equality with their Christian brothers, cannot affect the reasonableness of the classification
thus established.
That it is germane to the purposes of law cannot be doubted. The prohibition “to buy, receive, have
in his possession, or drink any ardent spirits, ale, beer, wine, or intoxicating liquors of any kind, other
than the so-called native wines and liquors which the members of such tribes have been accustomed
themselves to make prior to the passage of this Act,” is unquestionably designed to insure peace and
order in and among the non-Christian tribes. It has been the sad experience of the past, as the
observations of the lower court disclose, that the free use of highly intoxicating liquors by the nonChristian tribes have often resulted in lawlessness and crimes, thereby hampering the efforts of the
28
government to raise their standard of life and civilization.”
To understand the basis for classifying the identity of indigenous peoples as “non-christian tribes” we
need to refer back to the case of Rubi v. Provincial Board of Mindoro.29
Spanish colonizers labeled us as indios. But more than indios, we were the infieles and the feroces
(pagans) as opposed to those who were binyag (baptized). The feroces also came to refer to groups that
were not subdued by their army. But to many of our ancestors, they were Ibaloi, Kankana-ey, Bontok,
Isneg, Tagbanua, Palawanon, Higaonon, Aromanon Manobo, Bagobo, Subanen and many other labels. Of
course, the binyag also were truly Ilocano, Tagalog, Bicolano and also other colorful labels.
None of the feroces participated in the Treaty of Paris of 1898, the agreement to cede Spanish
sovereignty over the archipelago to the Americans. By 1903, American colonial administrators created a
Bureau of Non-Christian Tribes following the suggestions of the Philippine Commissioner (later Secretary of
the Deparment of Interior) Dean Worcester. Dr. Owen Lynch chronicles this era and referred to this process
of labeling as “minoritization” fundamental in the policy of colonization and disenfranchisement of the early
American Colonial period.
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27. U.P. Law Class of 1937. Sinai Hamada later on founded the Baguio Midland Courier. He also wrote Tanabata’s Wife, a short story which National Artist
Francisco Arcellana would later refer to as the finest love story ever written.
28. People v. Cayat, G.R. No. 45987, May 5, 1939.
29. G.R. No. 14078, March 7, 1919, per Malcolm J.
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By 1957, more enlightened legislators pursued a policy that led to the creation of the Bureau of National
Integration (BNI). During martial law, the agency became the Philippine Agency for National Minorities
(PANAMIN) of Martial Law. This metamorphosed as the Office of Southern Cultural Communities (OSCC)
and the Office of Northern Cultural Communities (ONCC) produced as a result of the Provisional Freedom
Constitution of 1986. What we now refer to as indigenous peoples were once the non-christian tribes,
national minorities, tribal minorities, and indigenous cultural communities.
Rubi v. Provincial Board of Mindoro, penned by no less than Justice George Malcolm, the first Dean of the
College of Law of the UP, reveals the reasons for these labels. Claiming protection from the due process
clause, Rubi, a Mangyan from Mindoro, filed an original petition for habeas corpus against the provincial
government to prevent them from proceeding to forcibly place their communities in civil reservations. The
Provincial Government relied on legislation that allowed them to do this for “non-christian tribes.” Many of
the Mangyans however, at that time, were already Christianized.
After reviewing their colonial history in the Philippines and the efforts of colonial administrators, the
Supreme Court declared:
In resumé, therefore, the Legislature and the Judiciary, inferentially, and different executive officials,
specifically, join in the proposition that the term “non-Christian” refers, not to religious belief, but, in a
way, to geographical area, and, more directly, to natives of the Philippine Islands of a low grade of
civilization, usually living in tribal relationship apart from settled communities. (emphasis provided)
Justifying the denial of habeas corpus petition, the eminent jurist emphasized:
x x x Segregation really constitutes protection for the Manguianes x x x Theoretically, one may assert
that all men are created free and equal. Practically, we know that the axiom is not precisely accurate.
The Manguianes, for instance, are not free, as civilized men are free, and they are not the equals of their
more fortunate brothers. True, indeed, they are citizens, with many but not all the rights which
citizenship implies. And true, indeed, they are Filipinos. But just as surely, the Manguianes are citizens
of a low degree of intelligence, and Filipinos who are a drag upon the progress of the State. (emphasis
ours)
Constitutional law professors face a dilemma whenever these cases are discussed in our classrooms.
With People v. Cayat, many stop at distilling the four questions which are relevant to determining whether
specific fact templates transgress the equal protection clause. People v. Cayat is still cited in many cases
involving equal protection. Few go further to question the validity of the application of these tests.
To allude that an entire group has a low level of intelligence simply on the basis of their ethnicity simply
cannot be right. Assuming this to be abhorrently true, to equate the Mangyans with their complex levels of
societies with the Ibaloi, with their own peculiar forms of governance and customs is also not right. It is not
as accurate as saying that there are many more things in common between the Ilocano and the Tagalog.
And finally, even if all these are morally acceptable, to say that the proper governmental response would be
to segregate them or to incarcerate them should they not follow the colonizer’s rules smacks of a civilization
with a warped sense of freedom. It has as much effect as simply prescribing the whip.
These cases lead us to inescapable conclusions. The difference between non-christian tribes and who
were christian, the difference between those who belonged to national cultural minorities and those in the
majority was based on an interpretation of who they are, i.e., the essential characteristics of their person and
their culture that is judicially salient. The determination of the essence of their identity was therefore
originally judicially constructed and imposed.
That it was the venerable Justice George Malcolm that penned the decision in Rubi v. Provincial Board for
me is significant. Meanings of legal terms are always contested territory. They are not negotiated with
those who are subject to it but rather by the actors that have the appropriate status to be in that forum: i.e.,
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the lawyers and the judges. Too often, the arguments of those affected do not become salient often because
it has to be drawn from the values and meanings congealed in legal texts.
The irony in People v. Cayat is even more pronounced. If it was Atty. Sinai Cariño Hamada who drank
non-native wine instead of Cayat, he would have also been imprisoned. But, Sinai Cariño Hamada was a
graduate of journalism and law in the University of the Philippines. He was also a pioneer fictionalist.
National Artist Francisco Arcellana in a preface to his collected short stories called him one of the greatest
love story writers. This is hardly someone who is “x x x of a low degree of intelligence, and x x x a drag upon
the progress of the State.”
What the court accomplished in both Cayat and Rubi was to essentialize and then generalize an identity.
Essentialism is a central mode of representation. Diana Fuss says that essentialism:
x x x is most commonly understood as a belief in the real, true essence of things, the invariable and fixed
properties which define the ‘whatness’ of a given entity x x x. Importantly, essentialism is typically
defined in opposition to difference x x x. The opposition is a helpful one in that it reminds us that a
complex system of cultural, social, psychical, and historical differences, and not a set of preexistent
human essences, position and constitute the subject. However, the binary articulation of essentialism
and difference can also be restrictive, even obfuscating, in that it allows us to ignore or deny the
30
differences within essentialism.
Not only did the court essentialize, it did so by choosing a characteristic that was not realistically salient
but truly imagined. Certainly, there was no effort to empirically verify whether all those who belonged to
that category had “a low level of intelligence.” Neither had there been efforts to determine verifiable
measures of being a “drag upon society.”
We must remember that culture and law interact with each other. Hence:
To recognize that law has meaning-making power, then, is to see that social practices are not logically
separable from the laws that shape them and that social practices are unintelligible apart from the legal
norms that give rise to them. Therefore, if one were to talk about the relationship between culture and
law, it would certainly be right to say that it is always dynamic, interactive, and dialectical – law is both a
producer of culture and an object of culture. Put generally, law shapes individual and group identity,
social practices, and the meaning of cultural symbols, but all of those things (culture in its myriad
manifestations) also shape law by changing what is socially desirable, politically feasible, legally
legitimate. As Pierre Bourdieu puts it, “law is the quintessential form of ‘active’ discourse, able by its
own operations to produce effects. It would not be excessive to say that it creates the social world, but
only if we remember that it is this world which first creates the law. 31
The essentialist approach to defining identities within cultures in Rubi v. Provincial Board resulted in the
coerced segregation of the Mangyans and the incarceration of Cayat. More importantly, in law, this also
created the distinction between them and us. Never mind if the them consists of about 110 ethnolinguistic
groups and that within each group there could be varieties of subcultures and nuances of governance.
Never mind if the us consisted of peoples like Ilocanos, Tagalogs, Bicolanos, Cebuanos who had no
commonality except that we had assimilated or adapted to the laws and ways of our earlier colonizers
relatively easier.
The choice of the alleged characteristic of peoples that would be given salience is also important. Legal
categories always congeal perspective and value. In the creation of a minority culture, it was the superiority
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30. Dianna Fuss, Essentially Speaking, xi-xii (1989).
31. Mezey, Law as Culture, citing Clifford Geertz, Local Knowledge: Further Essays in Interpretative Anthropology, 184 (1983), Sarat and Kearns, “The
Cultural Lifes of Law,” in Law in the Domains of Culture, 10n at 10, Pierre Bourdieu,”The Force of Law: Toward a Sociology of the Juridical Field,” 38
Hastings L. J. 814, 839 (1987).
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of the culture of the colonizer and the valorization of all that came from them which was important.
Conversely, because in the eyes of the law they were inferior, many of those who were unfortunately
lumped in this category would later on act that part.
Iris Marion Young, following other authors,32 calls this process cultural imperialism.
To experience cultural imperialism means to experience how the dominant meanings of a society render the
particular perspective of one’s own group invisible at the same time as they stereotype one’s group and make it
out as the Other.
Cultural imperialism involves the universalization of a dominant group’s experience and culture, and its
establishment as the norm. Some groups have exclusive or primary access to what Nancy Fraser calls the
means of interpretation and communication in a society. As a consequence, the dominant cultural products of
the society, that is, those most widely disseminated, express the experience, values, goals, and achievements
of these groups. Often without noticing they do so, the dominant groups project their own experience as
representative of humanity as such. Cultural products also express the dominant group’s perspective on and
interpretation of events and elements in the society, including other groups in the society, insofar as they attain
cultural status at all.
xxxx
The culturally dominated undergo a paradoxical oppression, in that they are both marked out by
stereotypes and at the same time rendered invisible. As remarkable, deviant beings, the culturally imperialized
are stamped with essence. The stereotypes confine them to a nature which is often attached in some way to
their bodies, and which thus cannot easily be denied. These stereotypes so permeate the society that they are
not noticed as contestable. Just as everyone knows that the earth goes around the sun, so everyone knows
that gay people are promiscuous, that Indians are alcoholics, and that women are good with children. White
males, on the other hand, insofar as they escape group marking, can be individuals.33
Thus, essentialism is necessary for both oppression34 and domination.35 Full political participation is the
negation of oppression and domination.
Given the constructed nature of these identities, the question we now turn to is whether these
distinctions should still be accepted and whether these distinctions are still fundamentally the same if we call
them “indigenous peoples.”36
Identity is still essential even though it is a vexed term.
At the level of metaphysics and relating to one’s personal identity it is the sense of “one’s sense of worth
and its persistence.”37 It is at this level subjective and may have references to individual or collective
references to what is deemed to be meaningful and authentic.
Traditional doctrines of equality imply that each human being must be allowed to be able to assert her/his
rational choices just because she or he is a human being. On the other hand, given current realities, equality
and social justice might require some level of a politics of recognition. Here lies the classic debate relating to
the recognition of group rights. The resolution of these points of view can perhaps determine how
indigenous peoples can be defined and to what extent their rights and prerogatives will be different from
other citizens within a given state.
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32. Lugones and Spelman (1983) in Iris Marion Young, Justice and the Politics of Difference, 58.
33. Iris Marion Young, Justice and the Politics of Difference, ibid.
34. “Oppresion consists in systematic institutional processes which prevent some people from learning and using satisfying and expansive skills in socially
recognized settings, or institutionalized social processes which inhibit people’s ability to play and communicate with others or to express their feelings
and perspective on social life in contexts where others can listen.” Iris Marion Young, Justice and the Politics of Difference, 38.
35. “Domination consists in institutional conditions which inhibit people from participating in determining their actions or the conditions of their actions.
Persons live within structures of domination if other persons or groups can determine without reciprocation the conditions of their action, either directly
or by virtue of the structural consequences of their actions. Thorough social and political democracy is the opposite of domination.” Young, Justice and the
Politics of Difference, 38.
36. Iris Marion Young, Justice and the Politics of Difference, 58-59.
37. See Taylor, Charles. Sources of the Self: The Making of the Modern Identity (Cambridge, MA: Harvard University Press, 1989).
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Much of the discussion regarding the defense of minority cultural rights within the context of liberalism
stems from the work of Will Kymlicka. Kymlicka rejects the individual atomistic level of liberal democracy
based on interest and instead reasserts the role of national and cultural communities in the construction of
individual identity. He asserts that cultural survival should be seen not only as a collective good in itself but
more importantly necessary to assure individual autonomy. He argues that this should translate into a
system of limited self-government which he calls “multilateral citizenship.”38
Kymlicka justifies state recognition of special rights and protections for minority groups on the basis of
his concept of liberal neutrality. Support for individual rights must assume that all persons situate
themselves within shared social and cultural contexts.39
It is this social and cultural community which provides the roles and narratives enabling individuals to
develop or construct themselves and make sense of their place in the world, as well as their view of the
good life, and their shared moral and political principles. In order for the state to maintain neutrality
and to treat all citizens equally, state policy must ensure that all citizens have access to a range of
available options from which to choose their ‘plan of life.’ Moreover, the critical evaluation and selection
of life plans is essential to autonomous agency, and self respect, to which all are entitled, depends upon
feeling that one’s life plan is worth carrying out. x x x the range of options essential to the free choice
and legitimization of ends is provided and determined by cultural membership.40
From his view, individuals are not however determined by their social affiliation. Rather, as individuals
they choose and deliberate between ends which are already socially constructed. He argues that individuals
may still be autonomous agents but they are only as autonomous given the social contexts, cultures and
environments they find themselves in. It may also be these social contexts, cultures and environments
which provide them with the limits of their imaginations for their own life’s goals.41
There is also substantial critique to this position among those who take the liberal standpoint.
The strongest arguments are twofold.42 First, there is the liberal anxiety that the price of recognition of
group rights may be the violation or erosion of basic individual rights and liberties. The second is the fear that
encouraging people and community loyalty to ethnic, racial or religious groups and the identities that it may
foster threatens graver moral and political identity among citizens essential to maintain a stable democracy
and hence human dignity.
Although not of the liberal tradition, Iris Marion Young and Nancy Fraser arrive at the same conclusion as
Kymlicka. They agree that recognition of special group rights is essential to foster more participative
discussion. But, they do so because they believe that group identity is itself a social good and that any
pretension of universal citizenship only privileges dominant political views.
With regard to the view that all citizens should take a general view that transcends particular interests,
perspectives and experiences, Young therefore protests:
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38. See Katherine Smits, “Liberalism’s Identity Problem,” 35 Polity No. 3, 347, 348 (2003) citing Will Kymlicka, Multicultural Citizenship: A Liberal Theory of
Minority Rights (Oxford: Oxford University Press, 1995).
39. Smits, Liberalism’s Identity Problem, supra at 349 citing Will Kymlicka, Liberalism, Community and Culture (Oxford: Oxford University Press, 1989), 2.
40. Smits, Liberalism’s Identity Problem, supra at 349.
41. Smits, Liberalism’s Identity Problem, supra at 349 to 350 citing Kymlicka, Multicultural Citizenship, Chapter 5 emphasizing importance of culture to
freedom. This is similar to the argument about the use of culture as “both the meaning and values which arise among distinctive social groups and classes
x x x through which they ‘handle’ and respond to the conditions of existence; and as the lived traditions and practices through which those
‘understandings’ are expressed and in which they are embodied.” Stuart Hall, “Cultural Studies: Two Paradigms,” cited in Naomi Mezey, Law as Culture.
42. See for instance Gerald Doppelt, Liberalism and Illiberalism: Illiberal Cultures and Group Rights: A Critique of Multiculturalism in Kymlicka, Taylor, and
Nussbaum, 12 J. Contemp. Legal Issues 661 (2002).
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But such an impartial general perspective is a myth. People necessarily and properly consider public
issues in terms influenced by their situated experience and perception of social relations. Different
social groups have different needs, cultures, histories, experiences, and perceptions of social relations
which influence their interpretation of the meaning and consequences of policy proposals and influence
the form of their political reasoning. These differences in political interpretation are not merely or even
primarily a result of differing or conflicting interests, for groups have differing interpretations even
when they seek to promote justice and not merely their own self-regarding ends. In a society where
some groups are privileged while others are oppressed, insisting that as citizens persons should leave
behind their particular affiliations and experiences to adopt a general point of view serves only to
reinforce that privilege; for the perspectives and interests of the privileged will tend to dominate this
43
unified public, marginalizing or silencing those of other groups.
Young argues that there is a difference between plurality and privatization. Plurality in public life should
assume that different groups, with their own perspectives and experiences, could understand as well as
dialogue with other individuals and groups to do the same. Privatization on the other hand, which is the
process of relegating into the private domain not deserving of public and political discussion, causes
oppression and domination.44 She therefore argues for repolitization of differences and valorizes plurality.
Nowhere is the necessity for recognition of group rights more salient than in the relationship of
indigenous peoples to their ancestral territories.
Following the more dominant view of property taught in our law schools, ownership is defined in our laws
by Articles 427 and 428 of our Civil Code. Ownership is understood as either: “x x x the independent and
general power of a person over a thing for purposes recognized by law and within the limits established
thereby,” or “a relation in private law by virtue of which a thing pertaining to one person is completely
subjected to his will in everything not prohibited by public law or the concurrence with the rights of another.”
Moreover, ownership is said to have the attributes of jus utendi, fruendi, abutendi, disponendi et vindicandi.45
One therefore is said to own a piece of land when he exercises, to the exclusion of all others, the rights to use,
enjoy its fruits and alienate or dispose of it in any manner not prohibited by law.
Among indigenous, unwesternized or unhispanicized Philippine population, there are differing concepts
of ownership. An attempt at a synthesis is as follows:
x x x ’Ownership’ more accurately applies to the tribal right to use the land or to territorial control.
Ownership is tantamount to work. If one ceases to work, he loses his claim to ownership. At best, the
people consider themselves as “secondary owners” or stewards of the land, since the beings of the
spirit world are considered as the true and primary or reciprocal owners of the land. . .”Property” usually
applies only to the things which involve labor, or the things produced from labor x x x ”Communal” as a
description of man-land relationship carries with it extra connotations that the land is used by anybody,
but actually, is limited only to the recognized members of the tribe, and is a collective right to freely use
the particular territory x x x. There is also the concept of “trusteeship” since not only the present
generation, but also the future ones, possess the right to the land.
This concept found its way to the present Section 5 of the Indigenous Peoples’ Rights Act (IPRA).46
In December 2000, the Supreme Court rendered its ruling in Cruz v. NCIP. Challenged was the
constitutionality of the Indigenous Peoples’ Rights Act fundamentally because it violated what allegedly was
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43. Iris Marion Young, “Polity and Group Difference: A Critique of the Ideal of Universal Citizenship,” 99 Ethics No. 2, 250, 257 (1999).
44. Young, Justice and the Politics of Difference.
45. II Tolentino, CIVIL CODE.
46. R.A. No. 8371, Sec. 5. Indigenous Concept of Ownership. – Indigenous concept of ownership sustains the view that ancestral and all resources
found therein shall serve as the material bases of their cultural integrity. The indigenous concept of ownership generally holds that ancestral domains are
the ICC’s/IP’s private but community property which belongs to all generations and therefore cannot be sold, disposed or destroyed. It likewise covers
sustainable traditional resource rights.”
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a fundamental precept with respect to our natural resources, that is jura regalia or the regalian doctrine.
The court was evenly divided. Seven of 14 voted to dismiss the Petition. The other seven wanted portions of
the law declared as unconstitutional. By constitutional fiat and because of the presumption of
constitutionality, the challenge failed.
Of significance, however, is the characterization of indigenous peoples in the ponencia of various
justices. The dominant view was that:
Indigenous peoples share distinctive traits that set them apart from the Filipino mainstream. They are
non-Christians. They live in less accessible, marginal, mostly upland areas. They have a system of selfgovernment not dependent upon the laws of the central administration of the Republic of the
Philippines. They follow ways of life and customs that are perceived as different from those of the rest of
the population. The kind of response the indigenous peoples chose to deal with colonial threat worked
well to their advantage by making it difficult for Western concepts and religion to erode their customs
and traditions. The “infieles societies” which had become peripheral to colonial administration,
represented, from a cultural perspective, a much older base of archipelagic culture. The political
systems were still structured on the patriarchal and kinship-oriented arrangement of power and
authority. The economic activities were governed by the concepts of an ancient communalism and
mutual help. The social structure which emphasized division of labor and distinction of functions, not
status, was maintained. The cultural styles and forms of life portraying the varieties of social courtesies
and ecological adjustments were kept constantly vibrant.
Land is the central element of the indigenous peoples’ existence. There is no traditional concept of
permanent, individual, land ownership. Among the Igorots, ownership of land more accurately applies
to the tribal right to use the land or to territorial control. The people are the secondary owners or
stewards of the land and that if a member of the tribe ceases to work, he loses his claim of ownership,
and the land reverts to the beings of the spirit world who are its true and primary owners. Under the
concept of “trusteeship,” the right to possess the land does not only belong to the present generation
47
but the future ones as well.
These statements certainly is a sea change of perspective of indigenous peoples from the idea of the
community of “low level of intelligence” reified in Rubi v. Provincial Board. However, there are still dangers to
this way of essentializing indigenous peoples’ rights to their territory. The concept of indigenous peoples in
relation to their ancestral territories is dynamic.
Current literature challenges the notion that it is possible to generalize tenurial arrangements for specific
cultures.48 There is growing recognition that indigenous tenure systems change through time. Also, the
notion that individual ownership of certain portions of ancestral territory only came through colonialism, in
some communities, are now being challenged.49
The Banwaons of Balit, San Luis, Agusan del Sur understand that while their entire territory belongs to
their community, they consider their internal boundaries as fluid and subject to negotiation with others even
to the extent of including outsiders who have acquired legitimate claims through hard work. Within their
territories, individual claims may prevail.50
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47. Cruz v. NCIP, supra per Puno J., December 6, 2000. The court was divided 7 to 7.
48. Royo, Antoinette and Bennagen, Ponciano, MAPPING THE EARTH, MAPPING LIFE (LRCKSK: 2000).
49. See for instance Zialcita, Fernando N., “Land Tenure among Non-Hispanized Filipinos”, in Peralta, Jesus T., ed., REFLECTIONS ON PHILIPPINE CULTURE
AND SOCIETY: FESTSCHRIFT IN HONOR OF WILLIAM HENRY SCOTT (Ateneo de Manila Press: 2001) 107-132. Zialcita challenges the notions presented
in staple “progressive” history textbooks like Constantino, Renato, THE PHILIPPINES: A PAST REVISITED (TALA Publishing: 1975) and Ofreneo, Rene E,
CAPITALISM IN PHILIPPINE AGRICULTURE (Foundation for Nationalist Studies: 1980).
50. Gatmaytan, Augusto B., “Mapmaker: Mythmaker,” in Royo, Antoinette and Bennagen, Ponciano, MAPPING THE EARTH, MAPPING LIFE (LRCKSK:2000)
64.
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In 1979, Shlegel wrote about Tirurays in Figel, a village in Mindanao.51 He observed that the rights to
possession by this indigenous community were conditioned on their ability to make the land productive.
Failure to do so would allow the area devoted to agriculture to be reoccupied by other individuals within their
village. Within their swidden farms therefore, they were more concerned with making the lands productive
rather than establishing individual (private) ownership over the land. However, in 1981, the same author
saw that the introduction of the plow created the condition to induce individual ownership of the land rather
than simply exclusive rights to use property.52 Permanent fields require more investments and energy thus
fostering a more permanent relationship to the land.
Kaingin or swidden farming53 is generally a method of cultivation that uses fire, cutting tools and sticks.
After clearing a patch through fire and cutting within a forest, the farmer punches holes on the ground and
buries seeds. The method relies heavily on rain and is fertilized by the ashes of the forest and the remains of
the plants and harvest of the last cultivation. Although productive, it does not last long. The area is then left
to fallow for periods from 10 to 20 years within which the soil and the forest regenerate. A new cycle of
cultivation and fallow may follow on the original patch.
The ecological viability of swidden agriculture among indigenous peoples has been amply
demonstrated.54 However, these studies were undertaken of communities where population densities were
lower, forests still abundant and the migrant intrusion sparse and controlled.55 It is therefore difficult to
make sweeping conclusions as whether this type of cultivation causes forest denudation or assists in
regeneration. Definitely however, the shift in cultivation technology adds pressure in a community’s
rethinking of tenure rights.
The Calamian Tagbanwa of Coron filed the first formal ancestral domain claim over “ancestral waters” or
their teeb ang surublien. The tenurial system of the Calamanian Tagbanwa are different from the Tagbanwa
of mainland Palawan. Distinct from many land-based indigenous groups, dependence for traditional
livelihood over marine resources also exists among the Badjaos of Basilan and Sulu, the Molbog of Balabac,
Palawan, the Agta of Northeastern Luzon, and the Ati of Boracay.
It is not possible, on a national scale, to generalize the content of tenurial arrangements corresponding
to unique communities of specific ethnolinguistic groups. It is only within specific communities that it is
possible to understand their existing tenurial systems and also the processes through which these systems
change.
Categories related to indigenous peoples can never be neat. The discomfort of the lawyer in dealing with
these nuances to the simple legal concept of ancestral domains or indigenous peoples is almost
understandable. But, it is certainly a discomfort that must be endured. In failing to rigorously understand the
effect of our worn legal categories, we participate in creating what Marion Young refers to as Othering. We
have to be careful in making identities official and asymmetrical. Thus:
Where the social relation of the groups is one of privilege and oppression, this attribution of Otherness is
asymmetrical. While the privileged group is defined as active human subject, inferiorised social groups
are objectified, substantialised, reduced to a nature or essence.
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51. Schlegel, Stuart, TIRURAY SUBSISTENCE: FROM SHIFTING CULTIVATION TO PLOW AGRICULTURE (Ateneo de Manila Press: 1979) 29 cited also in
Zialcita, Fernando N., “Land Tenure among Non-Hispanized Filipinos.” “Private” in this quotation actually means “individual.”
52. Shlegel, Stuart, “Tiruray Gardens: From Use Right to Private Ownership,” 9 Phil. Quarterly of Culture and Society, No. 1, 5-8 (1981).
53. Alternatively referred to also as “slash and burn” or shifting cultivation.
54. See for instance Conklin, Harold C, HANUNOO AGRICULTURE: A REPORT ON AN INTEGRAL SYSTEM OF SHIFTING CULTIVATION IN THE PHILIPPINES
(FAO: 1957).
55. See Gatmaytan, Augusto B., “Peoples: A View of Indigenous Peoples of the Philippines,” unpublished Policy Paper of LRCKSK, 17 (1999).
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Whereas the privileged groups are neutral, exhibit free, spontaneous and weighty subjectivity, the
dominated groups are marked with an essence, imprisoned in a given set of possibilities x x x Group
differences as otherness thus usually generates dichotomies of mind and body, reason-emotion,
civilized and primitive, developed and underdeveloped.56
In our desire to acknowledge the group rights of a whole category of “indigenous peoples” therefore,
we may, without nuance and without contribution from them, participate in their further marginalization.
OPENINGS IN OUR CONSTITUTION
The present language in our Constitution compels us to deal with identity and all its complexities.
Full participation is enshrined in two important provisions in the constitution. Article II, Section 1,
assures that “x x x sovereignty resides in the people and all governmental authority emanates from them.”
In a departure from the 1973 constitution it characterizes the Philippines as “a democratic” as well as a
republican State.” There is nothing in this provision that discriminates in the treatment of peoples. It does
not suggest the rugged, atomistic, individualism of libertarians.
The Constitution however assures group participation. Article XIII, Section 16 guarantees that “x x x the
right of the people and their organizations to effective and reasonable participation at all levels of social,
political, and economic decision making shall not be abridged.” More specifically, in Article II, Section 22, it
assures that the state “recognizes and promotes the rights of indigenous cultural communities within the
framework of national unity and development.”
These provisions can be read to assure recognition of the rights of indigenous peoples from the rationale
provided by Kymlicka as well as that from Young or Fraser.
The more pressing problem however is how indigenous peoples are defined in the IPRA.
Section 3 (h) of the Indigenous Peoples’ Rights Act (IPRA) defines “indigenous cultural communities/
indigenous peoples.”57
The term indigenous peoples refers to “a group of people” or “homogenous societies.” The distinction
recognizes situations where communities have intermarried or partially allowed entry to some extent nonnatives.
The provision suggests that fundamental mode of determining who indigenous peoples are “selfascription and ascription by others.” Self-ascription is an important qualifier and one that can be
determining. It should be a first tier and its implications should be the subject of conscious and deliberate
judicial interpretation.
There is an important difference between the concept of associations58 and groups.59 A person’s relation
with an association is voluntary. S/he chooses to join this collective or if her or his membership has already
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56. Young, Iris Marion, “Together in Difference: Transforming the Logic of Group Political Conflict,” in Kymlicka, Will, THE RIGHTS OF MINORITY CULTURES
(Oxford: 1999), 158.
57. The provision states: “x x x a group of people or homogenous societies identified by self-ascription and ascription by others, who have continuously lived
as organized community on communally bounded and defined territory, and who have, under claims of ownership since time immemorial, occupied,
possessed and utilized such territories, sharing common bonds of language, customs, traditions and other distinctive cultural traits, or who have,
through resistance to political social and cultural inroads of colonization, non-indigenous religions and cultures, become historically differentiated from
the majority of Filipinos. ICCs/IPs shall likewise include peoples who are regarded as indigenous on account of their descent from the populations which
inhabited the country, at the time of conquest or colonization, or at the time of inroads of non-indigenous religions and cultures, or the establishment of
present state boundaries, who retain some or all of their own social, economic, cultural and political institutions, but who may have been displaced from
their traditional domains or who may have resettled outside their ancestral domains.”
58. Association is used here in its loose sense and not in terms of its definition in the bill of rights.
59. I borrow from the distinction of association and group in Iris Marion Young, Justice and the Politics of Difference 44 and 45 as well as the various
conceptions in writings on the politics of identity.
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been predetermined for him or her, s/he still chooses to stay. The person’s identity and self-worth are prior
to the existence of an association and is relatively more autonomous from it.
Unlike associations, groups constitute individuals. Thus:
A person’s particular sense of history, affinity, and separateness, even the person’s mode of reasoning,
evaluating, and expressing feeling are constituted partly by her or his group affinities. This does not
mean that persons have no individual styles, or are unable to transcend or reject a group identity. Nor
60
does it preclude persons from having many aspects that are independent of these group identities.
In a way, the identities we belong to define some choices for us but does not necessarily predetermine
what it is to do. This is different from a view that we are independent, rugged and atomized individuals.
One of the main contributions of poststructuralist philosophy has been to expose as illusory this
metaphysic of a united self-making subjectivity, which posits the subject as an autonomous origin or an
underlying substance to which attributes of gender, nationality, family role, intellectual disposition, and
so on might attach. Conceiving the subject in this fashion implies conceiving consciousness as outside
61
of and prior to language and the context of social interaction, which the subject enters.
We are however constituted by our different identities and our choices are not coextensive only with one
of them. Thus the identity male Kankana-ey is constituted differently from a female Kankana-ey. So are
those who are lawyers-Kankana-ey different from those who are farmers-Kankana-ey. But they have some
things in common as Kankana-ey.
But standing alone, therefore, self-ascription is important and should be given salience. But, it will not
make full judicial sense. Individuals or communities wanting to make use of the special rights provided in the
law would simply claim to be “indigenous” thereby defeating the very spirit behind the recognition of these
identities.
What matters would be the parameters of the second requirement: “ascription by others.” Others here
can mean those within the same community hence assuring some form of collectivity. Or, it can mean
outsiders. The law presents three possible criteria for ascription by outsiders.
The first criterion acknowledges relationship to territory and the uniqueness of the group’s culture.
Indigenous peoples are those:
x x x who have continuously lived as organized community on communally bounded and defined
territory, and who have, under claims of ownership since time immemorial, occupied, possessed and
utilized such territories, sharing common bonds of language, customs, traditions and other distinctive
cultural traits x x x 62
The second criterion acknowledges distinction through resistance to inroads of both colonization and
non-indigenous religions and cultures. Thus:
or who have, through resistance to political social and cultural inroads of colonization, non-indigenous
63
religions and cultures, become historically differentiated from the majority of Filipinos.
_____________________________________________________________________________
60. Young, Justice and the Politics of Difference, 45. Young also explains that Habermas prescribes a theory of communicative action to challenge the
philosophy of consciousness which locates intentional egos as the ontological origins of social relations.
61. Young, Justice and the Politics of Difference, 45.
62. Comes from Cariño v. Insular Government, 41 Phil. 935, 212 U.S. 449 (1909) where the US Supreme Court recognized ownership of the Ibaloi Mateo
Cariño stating that “x x x When as far back as testimony goes, the land has been held by individuals under a claim of private ownership, it will be
presumed to have been held in the same way from before the Spanish conquest, and never to have been public land.”
63. Comes from ILO Convention No. 107 and 169.
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The third criterion traces physical origins of communities and acknowledges distinctions in cultural traits.
Thus:
x x x peoples who are regarded as indigenous on account of their descent from the populations which
inhabited the country, at the time of conquest or colonization, or at the time of inroads of nonindigenous religions and cultures, or the establishment of present state boundaries, who retain some or
all of their own social, economic, cultural and political institutions, but who may have been displaced
64
from their traditional domains or who may have resettled outside their ancestral domains.
Any of these three criteria would suffice to make ascription by others that a “group of people” or a
“homogenous society” would be considered as an indigenous community valid.
Nothing in the law clarifies which criterion should be dominant. Definitely, they could not be taken
together. This constitutes the first level of ambiguity. Interpretation of open-ended terms within each of the
criteria constitutes the second level of ambiguity.
The existence of three different sets of criteria reveals three different choices of substantive
characteristics of indigenous peoples’ groups to privilege.
The first criterion requires time immemorial relationship to territory and therefore excludes indigenous
groups that have migrated or are no longer fully dependent on natural resources. It is therefore biased
towards a conception of indigenous groups which remain rural. It even excludes acceptance of individuals
or groups that have embraced “cosmopolitarianism.”65
The second criterion privileges “differentiation from the majority of Filipinos.” Thus, it requires definition
of norms for the “majority” against which indigenous peoples need to be measured. In a subtler way it
therefore preserves the stereotyped dichotomy of “minority” and “majority.”
The third criterion presents the most ambiguity. It emphasizes retention of “some or all of their own
social, economic, cultural and political institutions.” It however excludes relationship to territory and is not
clear with respect to the relationship of the retained institutions to that of “majority of Filipinos.” It is perhaps
this criterion that is being used in the current controversy relating to the Bangsa Moro Juridical Entity.
Administrative interpretation adds further complications.
Following the tradition of earlier agencies and the possible interpretations of the provisions of the new
law, the National Commission on Indigenous Peoples (NCIP)66 persists in categorizing indigenous groups by
identifying ethnolinguistic groupings.67
The category of indigenous peoples based on ethnolinguistic affiliation misses on the other nuances of
individual and group identity.
First, the categories as well as the statistics are class and gender blind.68
For instance, while many households of indigenous peoples are still very dependent on agriculture, the
listing by NCIP do not reveal the exact relationship of indigenous peoples’ households to agricultural
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64. Based on the proposed definition of Jose Martinez-Cobo, Former Rapporteur, UN Subcommission on the Prevention of Discrimination against Minorities,
as adopted in the Draft UN Declaration for Indigenous Peoples.
65. See for instance Waldron, Jeremy, “Minority Cultures and the Cosmopolitarian Alternative,” in Will Kymlicka, THE RIGHTS OF MINORITY CULTURES
(1997), 93.
66. The principal executing agency attached to the Office of the President created by the Indigenous Peoples’ Rights Act (Rep. Act No. 8371).
67. 110 ethnolinguistic groups therefore belong to its official category of indigenous peoples. NCIP believes that indigenous peoples constitute 17 percent of
the total population occupying about five million hectares of a total of 30 million hectares of land area. NCIP however admits that they have no way at
present to validate the population figures. Nor is it believable that their estimate of total land area occupied has been empirically verified. Depending on
how one defines who indigenous peoples are as well as what it means for them to possess or occupy land, the figures could be larger.
68. There are no available statistics that could reveal these more useful categories.
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production or use or development of natural resources. NCIP cannot validate the claim that in Northern
Mindanao indigenous groups (Lumads) are becoming farmworkers rather than owner cultivators69 or the
causes of this phenomenon. They do not differentiate between the farmer-gardeners among the Kankanaey and the tenant farmers of Ifugao peoples in their rice terraces. They also have no capability to validate
the claim that while some indigenous peoples have diversified their marketable crops, many have retained
traditional methods for staple crops (e.g., rice and corn).
Categorizing indigenous peoples based on ethnolinguistic affiliation also fails to capture the differences
among groups which have had a greater possibility for upward mobility and those that are still especially
economically vulnerable. For instance, indigenous communities in the northern Cordillera have greater
possibilities of succeeding through education as compared with groups in Palawan and Mindoro. Thus, it is
more likely that there would be a lawyer from most of the groups in the Cordillera than from the Batak of
Palawan or any of the Mangyan groups in Mindoro.
Neither is the government sensitive to making distinctions among indigenous groups or among
communities within ethnolinguistic groups in so far as their dependence on natural resources are concerned
(e.g., forest dependent v. non-forest dependent, small-scale miners, those dependent on tourism, et al.).
More importantly, statistics for indigenous peoples’ groups do not identify the number of women within
the population and fail to distinguish roles that they have taken within communities in general.
Second, some of the categories which are based on language fail to make distinctions within groups.
The Subanen is considered as one ethnolinguistic group. However, the reality is that this classification is
comprised of a number of communities speaking different dialects and occupying territory in northwestern
Mindanao which stretches from the Zamboanga peninsula to Misamis Oriental. They share in many
customary political structures, such as multilevel timuay (village leader) but differ in details regarding their
customary laws. The Kalinga peoples are grouped into ili (villages) some of which are binodnan areas or
areas that still use the bodong (peace pact) negotiated through their pangat (peace pact holder). A minority
of the villages, however, do not have this institution either because it has not been used or had not been
present customarily.
Significantly, categorizing based on ethnolinguistic affiliation fails to capture the discussions and debate
within communities regarding the use of customary law, their relationship to outsider’s culture, the role of
local government institutions vis-à-vis their own customary political units, et al. The cultures of almost all
indigenous communities in the Philippines are open to interactions with outsiders. In fact, it is possible to
identify many customary norms in some of them which pertain to rules governing treatment of “aliens.”
Their various histories also show a great deal of trade and other forms of contact with other indigenous
groups even those coming outside the Philippines. As a result, cultures have been dynamic. They have
evolved in various ways as a result of interaction with outsiders and changes in the economic, political and
social system outside their communities.
Third, the unreasonable distinction between Muslim indigenous peoples and non-Muslim indigenous
peoples persists.
Many members of communities within specific ethnolinguistic affiliations have embraced Islam as a
religion. Identification dominantly based on the political agenda of Muslim collectivities is largely due to a
common history of discrimination and oppression because they were a minority religion. Traditionally,
however, government agencies dealt with Muslim groups as Muslim groups with no reference to ethnicity or
indigenity. The intersection of religion and indigenity therefore is not satisfactorily handled in the law nor in
its implementation.
_____________________________________________________________________________
69. Discussion with Datu Tony Lumadnong (Higaonon), Cagayan de Oro, March 2003.
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Defining indigenous peoples by ethnolinguistic affiliation therefore is of the same kind of essentialism as
that pronounced in Rubi and Cayat.
BACK TO OUR PROBLEM
Indigenous peoples rights are constitutional rights. They are to be recognized because it is a fundamental
element of democratic participation and social justice. Rather than a temporary means to correct a
historical injustice, it is a permanent measure that assures plurality. Plurality is essential if we are true to the
constitutional mandates of democracy and participation.
Categories of indigenous peoples, however, cannot be defined wholesale and without reference to their
corresponding rights. Hence, time immemorial possession as a community is relevant to defining their
ancestral domains. The existence of legal pluralism in a community especially the working of unofficial law is
suggestive of a recognition of the ability to have some level of autonomy.
Thus, ancestral domains should be different from ancestral land. Full participation should mean that
indigenous communities should have veto power, as private citizens, over natural resource extractive
decisions. Governance will not necessarily inure to ethnolinguistic groups, but to communities that still have
a strong sense of indigenous governance rivaling that of the national government. In this sense, we should
remain open to the plurality suggested by the Bangsa Moro. And, if we are true to our recognition of peoples,
cultural exceptions must constitutionally exist for some indigenous groups in relation to their personal and
family laws. This is a matter of constitutional protection and the absence of a law constitutes a continuing
violation of the tenets of full participation mandated by the constitution.
A FINAL NOTE
Law stands at its margins whenever its universalist and generalist aspirations are contested by the
stark realities of particularity and difference. If it fails to adjust, the meanings of these laws – and
therefore their social practice – can cause injustice.
But, as we have discussed, dealing with identity and culture can never come in neat packages.
They always come in incomplete and tentative solutions each one bringing in a host of their own
problems. Law and its intepretation are adapted and adapt to social realities. Intentions diffuse
within the fog of everyday life.
We need to continue to expand our imaginings of law and, as important, what we do exactly when
we say we do law. It cannot be that we simply remain positivists: slaves of the echoes coming from
another jurisdiction. Judges must become more self-conscious, become more sensitive to what our
society really is. And maybe, just maybe, we see the manifest injustice that those who become mere
subjects of the law – definitely not the actors – endure. It is our duty to theorize and convince.
Judges declare meanings. These meanings are negotiated. And these meanings, like for the nonchristian tribe/tribal filipino/ national minority or indigenous person, partake of social reality.
Our sensitivity to manifest injustice should stoke our passion. As Hume would say, every reason,
no matter how theoretical, is always the slave of passion.
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REACTIONS
Reactor:
Dr. Antonio G.M. La Viña
Member
PHILJA Constitutional Law Department
Dean, Ateneo School of Government
Dean Leonen and I have been intellectual and political
collaborators on indigenous peoples’ issues for more than
20 years. I will always remember that day when Dean
Leonen asked me to co-found with him, Gus Gatmaytan,
and Nonette Royo, the Legal Rights and Natural
Resources Center (LRC). He was two years ahead of me
in the UP College of Law, was about to take the bar, and
the only things we had in common was that we were both
members of the UP Paralegals and students of Prof. Owen
Lynch in Philippine Indigenous Law. I too had the same
epiphany that Dean Leonen shared in his lecture. I too
owe Prof. Owen Lynch an immense intellectual,
professional and personal debt. And so when Dean
Leonen invited me to co-found LRC, I readily agreed. For
me that was fortuitous because my work with LRC, which
began with defending indigenous peoples’ territory from
development aggression, ended up with my becoming an
environmental lawyer which continues to define my work
as a legal and governance practitioner. And for that, I
have Dean Leonen to thank.
But I am sure that our long collaboration is not the
reason why Dean Leonen chose me to be a reactor to his
lecture. Nobody is more secure than Dean Leonen,
particularly in the topic he has chosen. I would like to
think that I was chosen as a reactor because he thought I
could give a different perspective to the same issues. As
some of you know, after ten years of working together in
LRC with Dean Leonen, then President Fidel V. Ramos
appointed me as Undersecretary of the DENR in 1996
and because of that, by necessity, acquired a different
standpoint on indigenous peoples’ rights.
As the chief legal official in the DENR, I had to
supervise the recognition of more than a million hectares
of ancestral lands and domains. This was under orders of
President Ramos who appointed my boss, Secretary
Victor Ramos, as Indigenous Peoples champion in the
social reform agenda. Secretary Ramos assigned me to
execute this order with the guidance that I should make
sure that no lawsuits would be filed against us as it was
too risky at that time, without an enabling law yet and
having only the constitutional provisions, for a case to
reach the Supreme Court. I had to mediate hundreds of
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disputes involving indigenous peoples, national
agencies, local governments, upland settlers, logging
companies and mining companies. This experience
made me see the same issues not only from a legal
perspective but also from a governance, a practical and
administrative perspective. In addition to this
implementation standpoint, because of the negotiation
work I had to do for the government and because of the
years I spent working for a Washington DC think tank, I
also acquired an international perspective to the issue of
indigenous peoples’ issues.
It is from this dual perspective that I comment on
Dean Leonen’s lecture.
First, let me say that, even after our many years of
intellectual collaboration, I was still taken aback by the
honesty and originality with which Dean Leonen
approaches indigenous peoples’ rights and ancestral
domains. After playing such a critical role in putting these
issues at the center of national law and policy, Dean
Leonen is clearly not happy with where we are – with the
state of both legislation (the Indigenous Peoples’ Rights
Act) and the jurisprudence (Cruz v. NCIP) and challenges
us to continue to work to make the law on indigenous
peoples’ rights nearer to the ideal and demands of social
justice. On this point I completely agree with him and
make his words mine.
I do agree with Dean Leonen’s conclusion that it is
imperative to avoid essentialism. Indeed, essentialism –
reducing indigenous peoples to preconceived notions – is
harmful. As Dean Leonen notes, essentialism is
necessary for both oppression and domination. Its
opposite is full political participation which is the negation
of oppression and domination. I agree that until you have
such participation, no amount of tinkering with law and
policy and, IPRA is considered world class, no judicial
precedent as wise as Cariño v. Insular Government, is
enough to enable social justice. But what is the role of a
good law like IPRA or good jurisprudence by the highest
court?
It is here where I probably diverge a little with Dean
Leonen. My own experience is that the evolution of the
law on indigenous peoples and ancestral domains ending
with IPRA made and makes a difference for those who
were and are in the frontlines of governance.
For example, the implementation of FPIC in mining
illustrates the value as well as the limits of requiring
LAW AT ITS MARGINS
companies to obtain the consent first of indigenous
peoples because they can operate in their territory. This
has led to a cultural change in mining companies, for
better or worse, mining companies hire not only
engineers or geologists; they now hire anthropologists
and community organizers. Certainly, communities who
used to have no standing now have a place at the table.
On the other hand, where the FPIC requirement is seen
as merely an administrative requirement to be hurdled
by the company or agencies like the DENR or the NCIP,
expectations are raised but not fulfilled and can become a
source of greater social conflict.
Another example I would make is the value of IPRA to
the Bangsa Moro problem that Dean Leonen analyzes in
his lecture. Since the Supreme Court came out with its
decision in North Cotabato v. GRP, enjoining the
government from signing the MOA-AD with the MILF, I
have made my local government, constitutional law and
legal history classes simulate the oral arguments in the
Supreme Court as well as what we imagine would be the
internal deliberations of the Court. In these exercises, I
challenged my students to think on what would be a
constitutionally valid offer to the MILF. Always, the
solution is in finding openings that the IPRA, the Local
Government Code and international human rights norms
provide so that an offer can be made that would
withstand constitutional scrutiny.
From an international perspective, it is not an
exaggeration to say that our experience in the Philippines
has been instructive to other countries, considered even
a model by some. If you look at the United Nations
Declaration on the Rights of Indigenous Peoples
(UNDRIP), one sees the influence, even origin, of many
concepts in IPRA. Our concept of Free Prior and Informed
Consent (FPIC), for example, is enshrined in UNDRIP and
other countries have followed in enacting similar rules.
When I was asked to chair these negotiations, I
decided that the first step for an agreement was to agree
on environmental safeguards to make sure that REDD
would be effective. Central among these safeguards is
the protection of indigenous peoples’ rights, including
their FPIC. Aside from my own bias as an Indigenous
Peoples’ lawyer and the mandate of the Philippine
government because of IPRA and the constitutional
provisions on a sound environment and IP rights, I was
convinced that the recognition of IP rights is a condition
for success, that if IPs do not cooperate, REDD would not
succeed as a carbon sink strategy. I expected a big fight
with many countries opposing the prominence I gave to
indigenous peoples rights. To my surprise, no such fight
erupted. There are legal language issues that we have to
resolve, because with 200 countries involved there are
many legal cultures to contend with, but there is no moral
or political debate on recognizing IP rights. What a long
way from when I first began negotiating this issue in the
1990s.
To end, let me summarize – I agree with everything
Dean Leonen posits – but diverge a little in the practical
consequences of how our law on indigenous peoples and
ancestral domains have evolved. Because of my
operational and implementation perspective, I am kinder
in my judgment on the state of our law and jurisprudence
on Indigenous Peoples. Following the maxim that the
enemy of the good is the perfect, I propose that this
evolution of law and policy has not been perfect but in the
end it has been good. I do hope that this evolution will
continue in the same direction in the next decade, and
that finally, irrevocably, assisted by the wisdom of
analysis such as Dean Leonen’s, law and justice finally
become synonymous and those at the margins of law
move to the center.
Are these just theoretical gains in law and policy
without practical implications internationally? Not really.
Currently, as a lead negotiator for the Philippines in the
ongoing climate change negotiations that hopefully will
result in a new agreement in Copenhagen this December,
I am chairing the Reducing Emissions from Degradation
and Deforestation (REDD) negotiations. These
negotiations are about how to conserve forests as carbon
sinks and how developing countries, like the Philippines,
should be compensated for this. People are talking about
billions of dollars in forest projects under a REDD
mechanism.
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Reactor:
Professor Merlin M. Magallona
Member, PHILJA International
& Human Rights Law Department
Professor, U.P. College of Law
Allow me to transport the problem of identity of
indigenous peoples to a larger frame of normative
paradigm, to lend a historical sense to our discussion.
Reminding us of cultural imperialism and
ecclesiastical domination in People v. Cayat and the Rubi
case, Francisco de Vittoria, a pioneer in international law
studies, was of the mind that Spain’s subjugation of the
infidels in the colonial territories, together with the
annexation of their territories, was a just war, based as it
was, on the right to spread Christianity. Wheaton, a wellknown publicist in international law and public law, was of
the view that “public law, with few exceptions, has always
been and remains limited to the civilized and Christian
peoples of Europe or to peoples of European origin.”
In 1928, the Permanent Court of International
Justice rendered judgment in the Eastern Greenland
case. Its remark on the legal implications of the downfall
of the early Norwegian settlements in Greenland, as a
result of the native Eskimo resistance, is instructive. The
Court observed that:
Conquest only operates as a cause of the
loss of sovereignty where there is a war
between two states, and by reason of the
defeat of one of them sovereignty over
the territory passes from the loser to the
victorious State. The principle does not
apply in the case where a settlement has
been established in a distant country and
its inhabitants are massacred by
aboriginal population.
This view implies that the Eskimo victory could not
affect Norway’s effective occupation and never gave the
native Eskimos legal capacity to acquire territorial
sovereignty over Eastern Greenland as against Norway’s
claim over the same territory. The Eskimos did not have
the benefit of recognition as a State and so it could not
have legitimately gone to war in the legal sense. Even as
the Eskimos exterminated all the early Norwegian
settlers occupying their lands, international law told them
they were not engaged in conquest under international
law at the time that gave them sovereign rights over the
disputed territory.
This decision is noteworthy if only for our recollection
that at the end of the 19th century the Philippine
revolutionary forces which had already expelled the
Spanish colonial/authority from virtually the entire
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Philippine territory – indeed the entire Filipino nation they
represented – were subjected to the Eskimo treatment
by the United States. The American and Spanish forces
had to stage a mock battle in Intramuros to dramatize
their concept that the war was between two powers. In
the ensuing Paris Conference that produced the Treaty of
Paris, the Filipino revolutionary forces under Aguinaldo
were called the Tagal rebels who were considered as
contingents of the US troops.
In the broad historical frame, the Filipino people
epitomizes the status of the indigenous community.
Internalized into Philippine law, identity may in fact
be considered as a problem of a deeper layer. Even in the
context of the Leonen lecture, it may present the
question of personality in law. Is the community or its
individual members characterized as full-fledged
persons in law? If at all, what legal dimension becomes
the measure of that personality as its defining legal
status?
The Leonen lecture gives us a broad range of defining
factors as given in the Indigenous Peoples’ Rights Act
itself – which is largely taken from Indigenous and Tribal
Peoples Convention – and some published studies. If we
are to draw a unified paradigm out of these normative
expressions from varying sources, they may prove to be
short of how the indigenous community defines itself, if
we are to comply with the principle of self-identification
as required by the Indigenous and Tribal Peoples
Convention.
This problem may be illustrated through reference to
Procrustes described in Greek mythology. Procrustes
was the owner of a lodging house for travelers he
victimized. He welcomed both short men and tall men,
without so much regard to the sizes of his beds. As to
lodgers who were too long for his beds, he would cut off
part of their extremities in order that they would fit the
short beds. Thus, we have the phenomenon of a
Procrustean bed. I have the apprehension that the
indigenous community as a historico-social reality may
have undergone the Procrustean treatment in order that
they may be forcibly accommodated into the short
conceptual beds under the law. We may be confronted
with a situation of two contradictory entities, namely, on
one hand, the indigenous community in living reality as
known and experienced by that community itself and, on
the other, the indigenous community as a concept in the
law as an abstraction formed by forces external to that
community. In which case, the indigenous community is
engaged in an encounter with no less than the politicosocial forces that control the legislative and enforcement
apparatus of the State, which include forces of political
discrimination and ecclesiastical domination.
LAW AT ITS MARGINS
The legal status of the rights of the indigenous
community under the present normative order came late
in the 20th century. The Indigenous Peoples, Rights Act
was enacted in 1997. This pertains to the period in
history when the indigenous community suffered
dissipation and was in a state of dissolution, producing
broader penumbral areas as what remains of its
indigenousness.
What I think serves the positive
identification of indigenousness – one that upholds the
aboriginal integrity of the indigenous community – is
Hegel’s formula of Volksgeist. This Hegelian concept
brings out the essential need for integration of all aspects
of culture in a broad sense. As opposed to fragmentation
of the way of life of the indigenous community, such as
the process of individuation of that community, Hegel
shows that the whole is essential prior to its parts. His
formula spells out the meaning of the individual’s life in
the collective bond of the community and proclaimed in
Article 3 of the United Nations Declaration on the Rights
of Indigenous Peoples of September 1997, thus,
“Indigenous peoples have the right to selfdetermination. By virtue of that right they freely
determine their political status and freely pursue their
economic, social and cultural development.”
The codification of the status of the indigenous
community comes too late in historical time – when it has
absorbed all the civilizing impact of westernization, at the
time when it has emerged as a modernized indigenous
community.
Is it conceivable to achieve the enactment of a law
respecting the integrity of the indigenous community,
without retaining their customs law? The general
orientation of Philippine law negates the application of
customs as an operative legal norm. It sets aside the
normative system of rules other than the national law
rooted and developed along Western legal system.
Article 11 of the Civil Code provides that “Customs which
are contrary to law, public order or public policy shall not
be countenanced.” A custom is treated as a foreign “law”
characterized merely as a fact. Article 12 of the Civil
Code requires that “A custom must be proved as a fact,
according to the law of evidence”. While special
definitions of customary law exist, this is diluted by strong
elements of the national law, which obviously holds
supremacy over customs. Customary law becomes
merely a pensioner of national law.
An existing methodology has the effect of defining
“indigenous people” in abstract form based on what
national policy makers think of the elements of
indigenousness. The problems pertaining to the nature
or character of the indigenous community is dealt with
not by reference to that community as a sociocultural reality but in the abstract sense of its nature
as enacted into law. The normative abstraction prevails
over the living reality of the community’s
indigenousness. How much of the real character of the
community is enacted into national law — which may be
in conflict with customary law – remains a problem, and
how much of the enacted character of the community is
enforced becomes another layer of problem.
What may be referred to as the indigenous
community in the early decades of the 20th century, may
not be the same reality that we have fifty years later. The
state of the indigenous community now is a far cry from
the conditions of its existence in those early decades.
The inroads of western culture with its legal apparatus,
together with the demands of Christian civilizations, have
such a disintegrating impact on the character of the
community. The strong currents of individuation
beginning with the influence of Roman law down to
contemporary international law on human rights have a
decisive effect of dissolving the collective bond that is the
essence of the community. The pervasive penetration of
Christianity into the constituents of the community has
supplanted the core of collective life. The collective
spiritual virtues of the community derived from earthly
animism or natural “religion” had been derogated by the
Christian salvation of the individual soul. The essential
element of present international human rights law and
the system of national rights in the western world is that
an individual as such has inherent, inalienable rights. It
is as an individual, not as a member of a tribe or
community, that a person enjoys the protection of his
rights.
In this context, the interpretation of Article 27 of the
International Covenant on Civil and Political Rights
becomes relevant. It provides:
In those States in which ethnic, religious
or linguistic minorities exist, persons
belonging to such minorities shall not be
denied the right, in community with the
other members of their group, to enjoy
their own culture, to profess and practice
their own religion, or to use their own
language.
Primarily, the members of the community are
individuated for purposes of legal protection. This
protection is separated from that of the indigenous
community as such, which is treated somewhere else.
As a beneficiary of individual rights, the status of a person
as such is reinforced by the principle of nondiscrimination which applies to him as an individual
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member of the community with respect to all human
rights recognized by this Covenant, and not to the
community itself which as community is not the
beneficiary of such human rights. Article 2 of the
Covenant provides: “Each State Party to the present
Covenant undertakes to respect and to ensure to all
individuals within its territory and subject to its
jurisdiction the rights recognized in the present
Convention, without discrimination of any kind, such as
race, colour, sex, language, religion, political or other
opinion, national or social origin, property, birth or other
status.”
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Finally, on the system of republican government, the
Constitution provides that “The Philippines is a
democratic and republican state.” How does the
indigenous community figure in this system of
representation? Its members are represented in
Congress not as members of the indigenous community
but as citizens like any other citizen. In the event that a
person belonging to an indigenous community is elected
to represent a congressional district, he represents the
people in that district as his constituents; he does not
represent the members of his indigenous community as
such.