Thursday, October 31, 2013

PHILCONSA vs. HON. SALVADOR ENRIQUEZ, G.R. No. 113105 August 19, 1994

Facts:
                House Bill No. 10900, the General Appropriation Bill of 1994 (GAB of 1994), was passed and approved by both houses of Congress on December 17, 1993. As passed, it imposed conditions and limitations on certain items of appropriations in the proposed budget previously submitted by the President. It also authorized members of Congress to propose and identify projects in the “pork barrels” allotted to them and to realign their respective operating budgets.
Pursuant to the procedure on the passage and enactment of bills as prescribed by the Constitution, Congress presented the said bill to the President for consideration and approval.
On December 30, 1993, the President signed the bill into law, and declared the same to have become Republic Act NO. 7663, entitled “AN ACT APPROPRIATING FUNDS FOR THE OPERATION OF THE GOVERNMENT OF THE PHILIPPINES FROM JANUARY ONE TO DECEMBER THIRTY ONE, NINETEEN HUNDRED AND NINETY-FOUR, AND FOR OTHER PURPOSES” (GAA of 1994). On the same day, the President delivered his Presidential Veto Message, specifying the provisions of the bill he vetoed and on which he imposed certain conditions, as follows:
1.        Provision on Debt Ceiling, on the ground that “this debt reduction scheme cannot be validly done through the 1994 GAA.” And that “appropriations for payment of public debt, whether foreign or domestic, are automatically appropriated pursuant to the Foreign Borrowing Act and Section 31 of P.D. No. 1177 as reiterated under Section 26, Chapter 4, Book VI of E.O. No. 292, the Administrative Code of 1987.
2.       Special provisions which authorize the use of income and the creation, operation and maintenance of revolving funds in the appropriation for State Universities and Colleges (SUC’s),
3.        Provision on 70% (administrative)/30% (contract) ratio for road maintenance.
4.       Special provision on the purchase by the AFP of medicines in compliance with the Generics Drugs Law (R.A. No. 6675).
5.       The President vetoed the underlined proviso in the appropriation for the modernization of the AFP of the Special Provision No. 2 on the “Use of Fund,” which requires the prior approval of the Congress for the release of the corresponding modernization funds, as well as the entire Special Provision No. 3 on the “Specific Prohibition” which states that the said Modernization Fund “shall not be used for payment of six (6) additional S-211 Trainer planes, 18 SF-260 Trainer planes and 150 armored personnel carriers”
6.       New provision authorizing the Chief of Staff to use savings in the AFP to augment pension and gratuity funds.
7.        Conditions on the appropriation for the Supreme Court, Ombudsman, COA, and CHR, the Congress.
Issue:
                whether or not the conditions imposed by the President in the items of the GAA of 1994: (a) for the Supreme Court, (b) Commission on Audit (COA), (c) Ombudsman, (d) Commission on Human Rights, (CHR), (e) Citizen Armed Forces Geographical Units (CAFGU’S) and (f) State Universities and Colleges (SUC’s) are constitutional; whether or not the veto of the special provision in the appropriation for debt service and the automatic appropriation of funds therefore is constitutional
Held:
                The veto power, while exercisable by the President, is actually a part of the legislative process. There is, therefore, sound basis to indulge in the presumption of validity of a veto. The burden shifts on those questioning the validity thereof to show that its use is a violation of the Constitution.
The vetoed provision on the debt servicing is clearly an attempt to repeal Section 31 of P.D. No. 1177 (Foreign Borrowing Act) and E.O. No. 292, and to reverse the debt payment policy. As held by the court in Gonzales, the repeal of these laws should be done in a separate law, not in the appropriations law.
In the veto of the provision relating to SUCs, there was no undue discrimination when the President vetoed said special provisions while allowing similar provisions in other government agencies. If some government agencies were allowed to use their income and maintain a revolving fund for that purpose, it is because these agencies have been enjoying such privilege before by virtue of the special laws authorizing such practices as exceptions to the “one-fund policy” (e.g., R.A. No. 4618 for the National Stud Farm, P.D. No. 902-A for the Securities and Exchange Commission; E.O. No. 359 for the Department of Budget and Management’s Procurement Service).
The veto of the second paragraph of Special Provision No. 2 of the item for the DPWH is unconstitutional. The Special Provision in question is not an inappropriate provision which can be the subject of a veto. It is not alien to the appropriation for road maintenance, and on the other hand, it specifies how the said item shall be expended — 70% by administrative and 30% by contract.
The Special Provision which requires that all purchases of medicines by the AFP should strictly comply with the formulary embodied in the National Drug Policy of the Department of Health is an “appropriate” provision. Being directly related to and inseparable from the appropriation item on purchases of medicines by the AFP, the special provision cannot be vetoed by the President without also vetoing the said item.
The requirement in Special Provision No. 2 on the “use of Fund” for the AFP modernization program that the President must submit all purchases of military equipment to Congress for its approval, is an exercise of the “congressional or legislative veto.” However the case at bench is not the proper occasion to resolve the issues of the validity of the legislative veto as provided in Special Provisions Nos. 2 and 3 because the issues at hand can be disposed of on other grounds. Therefore, being “inappropriate” provisions, Special Provisions Nos. 2 and 3 were properly vetoed.
Furthermore, Special Provision No. 3, prohibiting the use of the Modernization fund for payment of the trainer planes and armored personnel carriers, which have been contracted for by the AFP, is violative of the Constitutional prohibition on the passage of laws that impair the obligation of contracts (Art. III, Sec. 10), more so, contracts entered into by the Government itself. The veto of said special provision is therefore valid.
The Special Provision, which allows the Chief of Staff to use savings to augment the pension fund for the AFP being managed by the AFP Retirement and Separation Benefits System is violative of Sections 25(5) and 29(1) of the Article VI of the Constitution.
Regarding the deactivation of CAFGUS, we do not find anything in the language used in the challenged Special Provision that would imply that Congress intended to deny to the President the right to defer or reduce the spending, much less to deactivate 11,000 CAFGU members all at once in 1994. But even if such is the intention, the appropriation law is not the proper vehicle for such purpose. Such intention must be embodied and manifested in another law considering that it abrades the powers of the Commander-in-Chief and there are existing laws on the creation of the CAFGU’s to be amended.
On the conditions imposed by the President on certain provisions relating to appropriations to the Supreme Court, constitutional commissions, the NHA and the DPWH, there is less basis to complain when the President said that the expenditures shall be subject to guidelines he will issue. Until the guidelines are issued, it cannot be determined whether they are proper or inappropriate. Under the Faithful Execution Clause, the President has the power to take “necessary and proper steps” to carry into execution the law. These steps are the ones to be embodied in the guidelines.

PHILCONSA v. PEDRO M. GIMENEZ G.R. No. L-23326 December 18, 1965

Facts:
                Philippine Constitution Association, Inc (PHILCONSA) assails the validity of RA 3836 insofar as the same allows retirement gratuity and commutation of vacation and sick leave to Senators and Representatives, and to the elective officials of both Houses (of Congress). The provision on retirement gratuity is an attempt to circumvent the Constitutional ban on increase of salaries of the members of Congress during their term of office, contrary to the provisions of Article VI, Section 14 of the Constitution. The same provision constitutes “selfish class legislation” because it allows members and officers of Congress to retire after twelve (12) years of service and gives them a gratuity equivalent to one year salary for every four years of service, which is not refundable in case of reinstatement or re election of the retiree, while all other officers and employees of the government can retire only after at least twenty (20) years of service and are given a gratuity which is only equivalent to one month salary for every year of service, which, in any case, cannot exceed 24 months. The provision on vacation and sick leave, commutable at the highest rate received, insofar as members of Congress are concerned, is another attempt of the legislator to further increase their compensation in violation of the Constitution.
The Solicitor General counter-argued alleging that the grant of retirement or pension benefits under Republic Act No. 3836 to the officers objected to by the petitioner does not constitute “forbidden compensation” within the meaning of Section 14 of Article VI of the Philippine Constitution. The law in question does not constitute class legislation. The payment of commutable vacation and sick leave benefits under the said Act is merely “in the nature of a basis for computing the gratuity due each retiring member” and, therefore, is not an indirect scheme to increase their salary.
Issue:
                whether Republic Act 3836 violates Section 14, Article VI, of the Constitution which reads as follows:
The senators and the Members of the House of Representatives shall, unless otherwise provided by law, receive an annual compensation of seven thousand two hundred pesos each, including per diems and other emoluments or allowances, and exclusive only of travelling expenses to and from their respective districts in the case of Members of the House of Representative and to and from their places of residence in the case of Senators, when attending sessions of the Congress. No increase in said compensation shall take effect until after the expiration of the full term of all the Members of the Senate and of the House of Representatives approving such increase. Until otherwise provided by law, the President of the Senate and the Speaker of the House of Representatives shall each receive an annual compensation of sixteen thousand pesos.
Held:
                Yes. When the Constitutional Convention first determined the compensation for the Members of Congress, the amount fixed by it was only P5,000.00 per annum but it embodies a special proviso which reads as follows: “No increase in said compensation shall take effect until after the expiration of the full term of all the members of the National Assembly elected subsequent to approval of such increase.” In other words, under the original constitutional provision regarding the power of the National Assembly to increase the salaries of its members, no increase would take effect until after the expiration of the full term of the members of the Assembly elected subsequent to the approval of such increase.
The Constitutional provision in the aforementioned Section 14, Article VI, includes in the term compensation “other emoluments”. This is the pivotal point on this fundamental question as to whether the retirement benefit as provided for in Republic Act 3836 fall within the purview of the term “other emoluments.”
Emolument is defined as the profit arising from office or employment; that which is received as compensation for services or which is annexed to the possession of an office, as salary, fees and perquisites.
It is evident that retirement benefit is a form or another species of emolument, because it is a part of compensation for services of one possessing any office.
Republic Act 3836 provides for an increase in the emoluments of Senators and Members of the House of Representatives, to take effect upon the approval of said Act, which was on June 22, 1963. Retirement benefits were immediately available thereunder, without awaiting the expiration of the full term of all the Members of the Senate and the House of Representatives approving such increase. Such provision clearly runs counter to the prohibition in Article VI, Section 14 of the Constitution. RA 3836 is therefore unconstitutional.

GAUDENCIO RAYO vs. COURT OF FIRST INSTANCE OF BULACAN G.R. No. L-55273-83 December 19, 1981

FACTS: At the height of the infamous typhoon "Kading", the respondent opened simultaneously all the three floodgates of the Angat Dam which resulted in a sudden, precipitate and simultaneous opening of said floodgates several towns in Bulacan were inundated. The petitioners filed for damages against the respondent corporation.

Petitioners opposed the prayer of the respondents forn dismissal of the case and contended that the respondent corporation is merely performing a propriety functions and that under its own organic act, it can sue and be sued in court.

ISSUE: W/N the respondent performs governmental functions with respect to the management and operation of the Angat Dam.

W/N the power of the respondent to sue and be sued under its organic charter includes the power to be sued for tort.

HELD: The government has organized a private corporation, put money in it and has allowed it to sue and be sued in any court under its charter.

As a government owned and controlled corporation, it has a personality of its own, distinct and separate from that of the government. Moreover, the charter provision that it can sue and be sued in any court.

REPUBLIC OF INDONESIA vs. JAMES VINZON [G.R. No. 154705. June 26, 2003]

FACTS: Petitioner Vinzon entered into a Maintenance Agreement with respondent. The maintenance agreement includes the following specific equipments: air conditioning units, generator sets, electrical facilities, water heaters and water motor pumps. The agreement shall be effective for 4 years.

The new Minister Counsellor allegedly found respondent's work and services unsatisfactory and not in compliance with the standards set in the Agreement. The respondent terminated the agreement with the respondent. The latter claim that it was unlawful and arbitrary. Respondent filed a Motion to Dismiss alleging that the Republic of Indonesia, as a foreign state, has sovereign immunity from suit and cannot be sued as party-defendant in the Philippines.

ISSUE: W/N the CA erred in sustaining the trial court's decision that petitioners have waived their immunity from suit by using as its basis the provision in the Maintenance Agreement.

HELD: The mere entering into a contract by a foreign state with a private party cannot be construed as the ultimate test of whether or not it is an act juri imperii or juri gestionis. Such act is only the start of the inquiry. There is no dispute that the establishment of a diplomatic mission is an act juri imperii. The state may enter into contracts with private entities to maintain the premises, furnishings and equipment of the embassy. The Republic of Indonesia is acting in pursuit of a sovereign activity when it entered into a contract with the respondent. The maintenance agreement was entered into by the Republic of Indonesia in the discharge of its governmental functions. It cannot be deemed to have waived its immunity from suit.

Tuesday, October 29, 2013

VICTORIA AMIGABLE vs. NICOLAS CUENCA G.R. No. L-26400 February 29, 1972

FACTS: Victoria Amigable is the is the registered owner of a lot which, without prior expropriation proceedings or negotiated sale, was used by the government. Amigable's counsel wrote the President of the Philippines requesting payment of the portion of her lot which had been expropriated by the government.

Amigable later filed a case against Cuenca, the Commissioner of Public Highways, for recovery of ownership and possession of the said lot. She also sought payment for comlensatory damages, moral damages and attorney's fees.

The defendant said that the case was premature, barred by prescription, and the government did not give its consent to be sued.

ISSUE: W/N the appellant may properly sue the government.

HELD: Where the government takes away property from a private landowner for public use without going through the legal process of expropriation or negotiated sale, the aggrieved party may properly maintain a suit against the government without violating the doctrine of governmental immunity from suit.

The doctrine of immunity from suit cannot serve as an instrument for perpetrating an injustice to a citizen. The only relief available is for the government to make due compensation which it could and should have done years ago. To determine just compensation of the land, the basis should be the price or value at the time of the taking.
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