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Manila Prince Hotel v. GSIS Ruling Summary

1. The Court dismissed the petition, ruling that Section 10, paragraph 2 of Article XII of the 1987 Constitution is self-executing and does not require implementing legislation. 2. The Court also ruled that the controlling shares of Manila Hotel Corporation form part of the Philippines' national patrimony. Manila Hotel has been an important part of Philippine history and culture for over 80 years. 3. Further, the Court found that GSIS is included in the definition of "State" and is therefore mandated to implement the Filipino preference policy under Section 10 when selling controlling shares of Manila Hotel Corporation. 4. The Court concluded that GSIS should give preference to the petitioner, a Filipino corporation, over the

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100% found this document useful (1 vote)
46 views8 pages

Manila Prince Hotel v. GSIS Ruling Summary

1. The Court dismissed the petition, ruling that Section 10, paragraph 2 of Article XII of the 1987 Constitution is self-executing and does not require implementing legislation. 2. The Court also ruled that the controlling shares of Manila Hotel Corporation form part of the Philippines' national patrimony. Manila Hotel has been an important part of Philippine history and culture for over 80 years. 3. Further, the Court found that GSIS is included in the definition of "State" and is therefore mandated to implement the Filipino preference policy under Section 10 when selling controlling shares of Manila Hotel Corporation. 4. The Court concluded that GSIS should give preference to the petitioner, a Filipino corporation, over the

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III. THE RULING its enforcement.

From its very words the provision


Manila Prince Hotel v. GSIS, G.R. No. 122156, does not require any legislation to put it in
February 3, 1997 [The Court, voting 11-4, DISMISSED the operation. It is per se judicially enforceable. When
petition.] our Constitution mandates that [i]n the grant of
I. THE FACTS rights, privileges, and concessions covering national
1. YES, 10, paragraph 2, Article XII of economy and patrimony, the State shall give
Pursuant to the privatization program of the the 1987 Constitution is a self-executing provision preference to qualified Filipinos, it means just that -
Philippine Government, the GSIS sold in public and does not need implementing legislation to carry qualified Filipinos shall be preferred. And when our
auction its stake in ManilaHOTEL Corporation it into effect. Constitution declares that a right exists in certain
(MHC). Only 2 bidders participated: petitioner specified circumstances an action may be maintained
Manila Prince Hotel Corporation, a Filipino Sec. 10, second par., of Art XII is couched to enforce such right notwithstanding the absence of
corporation, which offered to buy 51% of the MHC in such a way as not to make it appear that it is non- any legislation on the subject; consequently, if there
or 15,300,000 shares at P41.58 per share, and self-executing but simply for purposes of style. But, is no statute especially enacted to enforce such
Renong Berhad, a Malaysian firm, with ITT- certainly, the legislature is not precluded from constitutional right, such right enforces itself by its
Sheraton as its hotel operator, which bid for the same enacting further laws to enforce the constitutional own inherent potency and puissance, and from which
number of shares at P44.00 per share, or P2.42 more provision so long as the contemplated statute squares all legislations must take their bearings. Where there
than the bid of petitioner. with the Constitution. Minor details may be left to is a right there is a remedy. Ubi jus ibi remedium.
the legislature without impairing the self-executing
Petitioner filed a petition before the nature of constitutional provisions.
Supreme Court to compel the GSIS to allow it to 2. YES, the controlling shares of
match the bid of Renong Berhad. It invoked theMANILA HOTEL Corporation form part of
the Filipino First Policy enshrined in 10, paragraph Respondents . . . argue that the non-self- our patrimony as a nation.
2, Article XII of the 1987 Constitution, which executing nature of Sec. 10, second par., of Art. XII
provides that in the grant of rights, privileges, and is implied from the tenor of the first and third In its plain and ordinary meaning, the
concessions covering the national economy and paragraphs of the same section which undoubtedly term patrimony pertains to heritage. When the
patrimony, the State shall give preference to are not self-executing. The argument is flawed. If Constitution speaks of national patrimony, it refers
qualified Filipinos. the first and third paragraphs are not self-executing not only to the natural resources of the Philippines,
because Congress is still to enact measures to as the Constitution could have very well used the
II. THE ISSUES encourage the formation and operation of enterprises term natural resources, but also to the cultural
fully owned by Filipinos, as in the first paragraph, heritage of the Filipinos.
1. Whether 10, paragraph 2, Article XII of the 1987 and the State still needs legislation to regulate and
Constitution is a self-executing provision and does exercise authority over foreign investments within its For more than eight (8) decadesMANILA
not need implementing legislation to carry it into national jurisdiction, as in the third paragraph, then a HOTEL has bore mute witness to the triumphs
effect; fortiori, by the same logic, the second paragraph can and failures, loves and frustrations of the Filipinos;
2. Assuming 10, paragraph 2, Article XII is self- only be self-executing as it does not by its language its existence is impressed with public interest; its
executing, whether the controlling shares of require any legislation in order to give preference to own historicity associated with our struggle for
theMANILA HOTEL Corporation form part of our qualified Filipinos in the grant of rights, privileges sovereignty, independence and nationhood. Verily,
patrimony as a nation; and concessions covering the national economy and Manila Hotel has become part of our national
3. Whether GSIS is included in the term State, hence, patrimony. A constitutional provision may be self- economy and patrimony. For sure, 51% of the
mandated to implement 10, paragraph 2, Article XII executing in one part and non-self-executing in equity of the MHC comes within the purview of the
of the Constitution; and another. constitutional shelter for it comprises the majority
4. Assuming GSIS is part of the State, whether it should and controlling stock, so that anyone who acquires or
give preference to the petitioner, a Filipino xxx. Sec. 10, second par., Art. XII of the owns the 51% will have actual control and
corporation, over Renong Berhad, a foreign 1987 Constitution is a mandatory, positive command management of theHOTEL . In this instance, 51%
corporation, in the sale of the controlling shares of which is complete in itself and which needs no of the MHC cannot be disassociated from the hotel
the Manila Hotel Corporation. further guidelines or implementing laws or rules for and the land on which the hotel edifice
stands. Consequently, we cannot sustain allowed to match the bid of the foreign entity. And
respondents claim that the Filipino First 4. YES, GSIS should give preference to if the Filipino matches the bid of a foreign firm the
Policy provision is not applicable since what is being the petitioner in the sale of the controlling shares award should go to the Filipino. It must be so if we
sold is only 51% of the outstanding shares of the of theMANILA HOTEL Corporation. are to give life and meaning to the Filipino First
corporation, not theHOTEL building nor the land Policy provision of the 1987 Constitution. For,
upon which the building stands. It should be stressed that while the while this may neither be expressly stated nor
Malaysian firm offered the higher bid it is not yet the contemplated in the bidding rules, the constitutional
3. YES, GSIS is included in the term winning bidder. The bidding rules expressly provide fiat is omnipresent to be simply disregarded. To
State, hence, it is mandated to implement 10, that the highest bidder shall only be declared the ignore it would be to sanction a perilous skirting of
paragraph 2, Article XII of the Constitution. winning bidder after it has negotiated and executed the basic law.
the necessary contracts, and secured the requisite
It is undisputed that the sale of 51% of the approvals. Since the Filipino First Policy provision
MHC could only be carried out with the prior of the Constitution bestows preference ERNESTO B. FRANCISCO, JR. vs. THE
approval of the State acting through respondent on qualified Filipinos the mere tending of the highest HOUSE OF REPRESENTATIVES
Committee on Privatization. [T]his fact alone makes bid is not an assurance that the highest bidder will be
the sale of the assets of respondents GSIS and MHC declared the winning bidder. Resultantly, FACTS:
a state action. In constitutional jurisprudence, the respondents are not bound to make the award yet, On July 22, 2002, the House of Representatives
acts of persons distinct from the government are nor are they under obligation to enter into one with adopted a Resolution, sponsored by Representative
considered state action covered by the the highest bidder. For in choosing the awardee Felix William D. Fuentebella, which directed the
Constitution (1) when the activity it engages in is a respondents are mandated to abide by the dictates of Committee on Justice "to conduct an investigation,
public function; (2) when the government is so the 1987 Constitution the provisions of which are in aid of legislation, on the manner of disbursements
significantly involved with the private actor as to presumed to be known to all the bidders and other and expenditures by the Chief Justice of the Supreme
make the government responsible for his action; and, interested parties. Court of the Judiciary Development Fund (JDF)."
(3) when the government has approved or authorized On June 2, 2003, former President Joseph E. Estrada
the action. It is evident that the act of respondent xxx xxx filed an impeachment complaint against Chief
GSIS in selling 51% of its share in respondent MHC xxx Justice Hilario G. Davide Jr. and seven Associate
comes under the second and third categories of Justices of this Court for "culpable violation of the
state action. Without doubt therefore the Paragraph V. J. 1 of the bidding rules Constitution, betrayal of the public trust and other
transaction, although entered into by respondent provides that [i]f for any reason the Highest Bidder high crimes." The complaint was endorsed by
GSIS, is in fact a transaction of the State and cannot be awarded the Block of Shares, GSIS may Representatives Rolex T. Suplico, Ronaldo B.
therefore subject to the constitutional command. offer this to other Qualified Bidders that have validly Zamora and Didagen Piang Dilangalen, and was
submitted bids provided that these Qualified Bidders referred to the House Committee. The House
When the Constitution addresses the State it are willing to match the highest bid in terms of price Committee on Justice ruled on October 13, 2003 that
refers not only to the people but also to the per share. Certainly, the constitutional mandate itself the first impeachment complaint was "sufficient in
government as elements of the State. After all, is reason enough not to award the block of shares form," but voted to dismiss the same on October 22,
government is composed of three (3) divisions of immediately to the foreign bidder notwithstanding its 2003 for being insufficient in substance. To date, the
power - legislative, executive and submission of a higher, or even the highest, bid. In Committee Report to this effect has not yet been sent
judicial. Accordingly, a constitutional mandate fact, we cannot conceive of a stronger reason than to the House in plenary in accordance with the said
directed to the State is correspondingly directed to the constitutional injunction itself. Section 3(2) of Article XI of the Constitution. Four
the three (3) branches of government. It is months and three weeks since the filing on June 2,
undeniable that in this case the subject constitutional In the instant case, where a foreign firm 2003 of the first complaint or on October 23, 2003, a
injunction is addressed among others to the submits the highest bid in a public bidding day after the House Committee on Justice voted to
Executive Department and respondent GSIS, a concerning the grant of rights, privileges and dismiss it, the second impeachment complaint was
government instrumentality deriving its authority concessions covering the national economy and filed with the Secretary General of the House by
from the State. patrimony, thereby exceeding the bid of a Filipino, Representatives Gilberto C. Teodoro, Jr. and Felix
there is no question that the Filipino will have to be William B. Fuentebella against Chief Justice Hilario
G. Davide, Jr., founded on the alleged results of the duty which cannot be abdicated by the mere specter further orders of the Court, upon the grounds, inter
legislative inquiry initiated by above-mentioned of this creature called the political question doctrine. alia, that said Presidential Decree has no force and
House Resolution. This second impeachment Chief Justice Concepcion hastened to clarify, effect as law because the calling of such plebiscite,
complaint was accompanied by a "Resolution of however, that Section 1, Article VIII was not the setting of guidelines for the conduct of the same,
Endorsement/Impeachment" signed by at least one- intended to do away with "truly political questions." the prescription of the ballots to be used and the
third (1/3) of all the Members of the House of From this clarification it is gathered that there are question to be answered by the voters, and the
Representatives. two species of political questions: (1) "truly political appropriation of public funds for the purpose, are, by
questions" and (2) those which "are not truly the Constitution, lodged exclusively in Congress
political questions." Truly political questions are and there is no proper submission to the people of
ISSUES: thus beyond judicial review, the reason for respect of said Proposed Constitution set for January 15, 1973,
1. Whether or not the filing of the second the doctrine of separation of powers to be there being no freedom of speech, press and
impeachment complaint against Chief Justice Hilario maintained. On the other hand, by virtue of Section assembly, and there being no sufficient time to
G. Davide, Jr. with the House of Representatives 1, Article VIII of the Constitution, courts can review inform the people of the contents thereof.
falls within the one year bar provided in the questions which are not truly political in nature. On December 23, the President announced the
Constitution. postponement of the plebiscite for the ratification or
rejection of the Proposed Constitution and
2. Whether the resolution thereof is a political Ratification / Political vs. Justiciable Question - temporarily suspending the effects of Proclamation
question has resulted in a political crisis. Javellana v. Executive Secretary, 50 SCRA 33 No. 1081 for purposes of free and open debate on the
proposed Constitution.
The Court deemed it fit to refrain, for the time being,
HELD: Javellana vs. The Executive Secretary 50 SCRA 30 from deciding the aforementioned cases, for neither
1. Having concluded that the initiation takes place by Ponente: Chief Justice Roberto Concepcion the date nor the conditions under which said
the act of filing of the impeachment complaint and The Facts: plebiscite would be held were known or announced
referral to the House Committee on Justice, the The Plebiscite Case officially.
initial action taken thereon, the meaning of Section 3 A Convention to propose amendments to the In the afternoon of January 12, 1973, the petitioners
(5) of Article XI becomes clear. Once an Constitution of the Philippines was approved on in Case G.R. No. L-35948 filed an urgent
impeachment complaint has been initiated in the August 24, 1970 and began to perform its functions motion, praying that said case be decided as soon
foregoing manner, another may not be filed against on June 1, 1971. On September 21, 1972, the as possible, preferably not later than January 15,
the same official within a one year period following President issued Proclamation No. 1081 placing the 1973.
Article XI, Section 3(5) of the Constitution. In fine, entire Philippines under Martial Law. The Court issued a resolution requiring the
considering that the first impeachment complaint, On November 29, 1972, the 1971 Constitutional respondents in said three (3) cases to comment on
was filed by former President Estrada against Chief Convention approved its Proposed Constitution of said urgent motion and manifestation, not later
Justice Hilario G. Davide, Jr., along with seven the Republic of the Philippines. The next than Tuesday noon, January 16, 1973 and set the
associate justices of this Court, on June 2, 2003 and day,President Marcos issued Presidential Decree motion for hearing on January 17, 1973, at 9:30
referred to the House Committee on Justice on No. 73, submitting to the Filipino people for a.m.
August 5, 2003, the second impeachment complaint ratification or rejection the Constitution of the While the case was being heard, the President issued
filed by Representatives Gilberto C. Teodoro, Jr. and Republic of the Philippines proposed by the 1971 Proclamation No. 1102.
Felix William Fuentebella against the Chief Justice Constitutional Convention, and appropriating funds ANNOUNCING THE RATIFICATION BY THE
on October 23, 2003 violates the constitutional therefor, as well as setting the plebiscite for said FILIPINO PEOPLE OF THE CONSTITUTION
prohibition against the initiation of impeachment ratification or rejection of the Proposed Constitution PROPOSED BY THE 1971 CONSTITUTIONAL
proceedings against the same impeachable officer on January 15, 1973. CONVENTION
within a one-year period. On December 7, 1972, Charito Planas filed a case Citizens Assemblies were created in barrios, in
against the Commission on Elections, the Treasurer municipalities and in districts/wards in chartered
[Link] the foregoing record of the proceedings of of the Philippines and the Auditor General, to enjoin cities. The said Citizens Assemblies were established
the 1986 Constitutional Commission, it is clear that said respondents or their agents from implementing to broaden the base of citizen participation in the
judicial power is not only a power; it is also a duty, a Presidential Decree No. 73, in any manner, until democratic process and to afford ample opportunity
for the citizenry to express their views on important members of the court (Justices Makalintal, Castro, judicial obstacle to the new Constitution being
national issues. Barredo, Makasiar, Antonio and Esguerra) voted to considered in force and effect.
The Ratification Case dismiss the petition. Concepcion, together Justices
On January 20, 1973, Josue Javellana filed Case Zaldivar, Fernando and Teehankee, voted to grant
G.R. No. L-36142, as a Filipino citizen, and a the relief being sought, thus upholding the 1973 Kilosbayan vs. Morato (G.R. No. 118910. July
qualified and registered voter and as a class suit, Constitution. 17, 1995)
for himself, and in behalf of all citizens and voters 1. The Court held that the issue is political and
similarly situated against the Executive Secretary beyond the ambit of judicial inquiry.
and the Secretaries of National Defense, Justice and 2. Court held that the Constitution proposed FACTS:
Finance, to restrain said respondents and their by the 1971 Constitutional Convention was
subordinates or agents from implementing any of the not validly ratified in accordance with [T]his suit was filed seeking to declare the ELA
provisions of the propose Constitution not found in Article XV, section 1 of the 1935 invalid on the ground that it is substantially the same
the present Constitution referring to that of 1935. Constitution, which provides only one way as the Contract of Lease nullified in the first case
Javellana alleged that the President ordered the for ratification, i.e., in an election or [decision in G.R. No. 113375 (Kilosbayan,
immediate implementation of the New Constitution, plebiscite held in accordance with law and Incorporated v. Guingona, 232 SCRA 110 (1994))
thru his Cabinet, and that the latter are acting without participated in only by qualified and duly invalidating the Contract of Lease between the
or in excess of jurisdiction in implementing the said registered voters. However, it is conceded Philippine Charity Sweepstakes Office (PCSO) and
proposed Constitution. He construed that the that the doctrine stated in some American the Philippine Gaming Management Corp. (PGMC)].
President is without authority to create the Citizens decisions to the effect that independently of Petitioners maintain (1) that the Equipment Lease
Assemblies; to approve the proposed the validity of the ratification, a new Agreement (ELA) is a different lease contract with
Constitution; proclaim the ratification; and that the Constitution once accepted acquiesced in by none of the vestiges of a joint venture which were
election held to ratify the proposed Constitution was the people must be accorded recognition by found in the Contract of Lease nullified in the prior
not a free election, hence null and void. the Court. case; (2) that the ELA did not have to be submitted
The Issue: to a public bidding because it fell within the
1. Is the issue of the validity of Proclamation 3. On the fourth question, 6 justices voted to exception provided in E.O. No. 301, 1 (e); (3) that
No. 1102 a justiciable, or political and DISMISS the petition. Justice Makalintal the power to determine whether the ELA is
therefore non-justiciable, question? and Castro so voted on the strength of their advantageous to the government is vested in the
2. Has the Constitution proposed by the 1971 view that The effectivity of the said Board of Directors of the PCSO; (4) that for lack of
Constitutional Convention been ratified Constitution, in the final analysis, is the funds the PCSO cannot purchase its own on-line
validly (with substantial, if not strict, basic and ultimate question posed by these lottery equipment and has had to enter into a lease
compliance) conformably to the applicable cases to resolve which considerations other contract; (5) that what petitioners are actually
constitutional and statutory provisions? than judicial, and therefore beyond the seeking in this suit is to further their moral crusade
3. Has the aforementioned proposed competence of this Court, are relevant and and political agenda, using the Court as their forum.
Constitution acquiesced in (with or without unavoidable.
valid ratification) by the people? ISSUE:
(acquiesced permission given by silence 4. On the fifth question of whether the new
or passiveness. Acceptance or agreement by Constitution of 1973 is in force: Whether or not the ELA between the Philippine
keeping quiet or by not making objections.) Charity Sweepstakes Office and the Philippine
4. Are petitioners entitled to relief? ACCORDINGLY, by virtue of the majority of six Gaming Management Corp. is invalid.
5. Is the aforementioned proposed (6) votes of Justices Makalintal, Castro, Barredo,
Constitution in force? Makasiar, Antonio and Esguerra with the four (4)
HELD:
dissenting votes of the Chief Justice and Justices
Decision and Ratio: Zaldivar, Fernando and Teehankee, all the
The court was severely divided on the issues raised aforementioned cases are hereby dismissed. This NO. Petition for prohibition, review and/or
in the petition but when the crucial question of being the vote of the majority, there is no further injunction was dismissed. Pertinent to the issue, the
whether the petitioners are entitled to relief, six SC held:
xxx PCSO concluded with the PGMC, is I am constrained to respectfully dissent from the
disadvantageous to the government. majority opinion premised on the constitutional and
(3) that the ELA is valid as a lease contract under the procedural doctrines posed and interpreted in tandem
Civil Code and is not contrary to the charter of the SEPARATE OPINIONS: therein. I also regret that I have to impose on the
Philippine Charity Sweepstakes Office; majority with this virtual turno en contra when I
could have indicated my disaccord by just joining
PADILLA, concurring
Mr. Justice Davide in his commendably objective
(4) that under 1(A) of its charter (R.A. 1169), the
Philippine Charity Sweepstakes Office has authority presentation of the minority position. I feel,
I join the majority in voting for the dismissal of the however, that certain views that have been advanced
to enter into a contract for the holding of an on-line petition in this case. require a rejoinder lest they lapse into the realm of
lottery, whether alone or in association, collaboration
unanimous precedents.
or joint venture with another party, so long as it
As to whether or not the ELA is grossly
itselfholds or conducts such lottery; and disadvantageous to the government, it should be DAVIDE, dissenting
stressed that the matter involves, basically, a policy
(5) That the Equipment Lease Agreement (ELA) in determination by the executive branch which this
question did not have to be submitted to public I register a dissenting vote.
Court should not ordinarily reverse or substitute with
bidding as a condition for its validity. its own judgment, in keeping with the time honored
doctrine of separation of powers. I am disturbed by the sudden reversal of our rulings
RATIO: in Kilosbayan, Inc., et al. vs. Guingona, et
al. (hereinafter referred to as the first lotto case)
VITUG, concurring
regarding the application or interpretation of the
E.O. No. 301, 1 applies only to contracts for the
exception clause in paragraph B, Section 1 of the
purchase of supplies, materials and equipment. It I most humbly reiterate the separate opinion I have Charter of the PCSO (R.A.. No. 1169), as amended
does not refer to contracts of lease of equipment like made in Kilosbayan, Inc., et al., vs. Teofisto
the ELA. The provisions on lease are found in 6 by B.P. Blg. 442, and on the issue of locus standi of
Guingona, Sr., etc., et al. (G.R. No. 113375, the petitioners to question the contract of lease
and 7 but they refer to the lease of privately-owned promulgated on 05 May 1994). involving the on-line lottery system entered into
buildings or spaces for government use or of
between the Philippine Charity Sweepstakes Office
government-owned buildings or spaces for private
Back to the core of the petition, however, the matter (PCSO) and the Philippine Gaming Management
use, and these provisions do not require public of the legal standing of petitioners in their suit
bidding. It is thus difficult to see how E.O. No. 301 Corporation (PGMC). Such reversal upsets the
assailing the subject-contract appears to me, both salutary doctrines of the law of the case, res judicata,
can be applied to the ELA when the only feature of
under substantive law and the rules of procedure, to and stare decisis. It puts to jeopardy the faith and
the ELA that may be thought of as close to a contract
still be an insuperable issue. I have gone over confidence of the people, specially the lawyers and
of purchase and sale is the option to buy given to the
carefully the pleadings submitted in G.R. No. litigants, in the certainty and stability of the
PCSO. An option to buy is not of course a contract 118910, and I regret my inability to see anything pronouncements of this Court. It opens the
of purchase and sale. new that can convince me to depart from the view I floodgates to endless litigations for re-examination
have expressed on it in G.R. No. 113375. of such pronouncements and weakens this Courts
Indeed the question is not whether compared with judicial and moral authority to demand from lower
the former joint venture agreement the present lease courts obedience thereto and to impose sanctions for
FELICIANO, dissenting
contract is [more] advantageous to the their opposite conduct.
government. The question is whether under the
circumstances, the ELA is the most advantageous With very great respect, it is submitted that the
contract that could be obtained compared with above conclusion has been merely assumed rather
than demonstrated and that what is in fact before this Oposa vs. Factoran, Jr.
similar lease agreements which the PCSO could have
Court does not adequately support such conclusion. 224 SCRA 782
made with other parties. Petitioners have not shown
July 1993
that more favorable terms could have been obtained
by the PCSO or that at any rate the ELA, which the REGALADO, dissenting
FACTS:
Plaintiffs, who are minors represented by their private entities of the sector involved in the case at On the eve of the promulgation of the Bondoc
parents, alleged that the then DENR Secretary bar, to wit:
decision, Congressman Camasura received a letter
Fulgencio Factoran, Jr.s continued approval of the
Timber License Agreements (TLAs) to numerous Neither petitioners nor the Court has identified the informing him that he was already expelled from the
commercial logging companies to cut and deforest particular provisions of the Philippine Environment
LDP for allegedly helping to organize the Partido
the remaining forests of the country will work great Code which give rise to a specific legal right which
damage and injury to the plaintiffs and their petitioners are seeking to enforce. Pilipino of Eduardo Cojuangco and for allegedly
successors. Defendant, through the Office of the
inviting LDP members in Davao Del Sur to join said
Solicitor General (OSG), avers that the plaintiffs Justice Feliciano further stated that the Court in the
failed to state a specific right violated by the case at bar in effect made Sections 15 and 16 of political party. On the day of the promulgation of the
defendant and that the question of whether logging Article 2 of the 1987 Constitution to be self-
decision, the Chairman of HRET received a letter
should be permitted in the country is a political executing and judicially enforceable even in its
question and cannot be tried in the Courts. The RTC present form, and that these implications are too informing the Tribunal that on the basis of the letter
of Makati, Branch 66, granted defendants motion to large and far reaching in nature ever to be hinted in
from the LDP, the House of Representatives decided
dismiss. this instant case.
to withdraw the nomination and rescind the election
ISSUE: Bondoc vs. Pineda 201 SCRA 792 of Congressman Camasura to the HRET.
Whether or not the case at bar subject to the judicial FACTS:
power of the Court
ISSUE:
COURT RULING: In the elections held on May 11, 1987, Marciano
Whether or not the House of
Being impressed with merit, the Supreme Court Pineda of the LDP and Emigdio Bondoc of the NP
Representatives, at the request of the dominant
granted the petition and set aside the Order of the were candidates for the position of Representative
RTC which dismissed the case. political party therein, may change that partys
for the Fourth District of Pampanga. Pineda was
representation in the HRET to thwart the
The case at bar is subject to judicial review by the proclaimed winner. Bondoc filed a protest in the
Court. Justice Davide, Jr. precisely identified in his promulgation of a decision freely reached by the
opinion the requisites for a case to be subjected for House of Representatives Electoral Tribunal
tribunal in an election contest pending therein.
the judicial review by the Court. According to him, (HRET), which is composed of 9 members, 3 of
the subject matter of the complaint is of common
interest, making this civil case a class suit and whom are Justices of the SC and the remaining 6 are
proving the existence of an actual controversy. He members of the House of Representatives (5 RULING:
strengthens this conclusion by citing in the decision
Section 1, Article 7 of the 1987 Constitution. members belong to the LDP and 1 member is from The purpose of the constitutional convention
the NP). Thereafter, a decision had been reached in creating the Electoral Commission was to provide an
Although concurring in the result, Justice Feliciano
penned his separate opinions on a number of topics which Bondoc won over Pineda. Congressman independent and impartial tribunal for the
pointed by Justice Davide, Jr. in this Court decision. Camasura of the LDP voted with the SC Justices and determination of contests to legislative office, devoid
Justice Feliciano said that the concept of the word
class is too broad to cover the plaintiffs and their Congressman Cerilles of the NP to proclaim Bondoc of partisan consideration.
representatives alone, and that the Court may be the winner of the contest.
deemed recognizing anyones right to file action as
against both the public administrative agency and the As judges, the members of the tribunal must be non-
partisan. They must discharge their functions with
complete detachment, impartiality and independence disloyalty, short of proof that he has formally On Dec. 9, 1935, the Electoral Commission adopted
even independence from the political party to which affiliated with another. a resolution (No. 6) stating that last day for filing of
they belong. Hence, disloyalty to party and breach of protests is on Dec. 9. Angara contended that the
party discipline are not valid grounds for the Constitution confers exclusive jurisdiction upon
Angara vs. Electoral Commission 63 Phil 139
expulsion of a member of the tribunal. In expelling the Electoral Commission solely as regards the
DOCTRINE OF SUPREMACY OF THE
Congressman Camasura from the HRET for having merits of contested elections to the National
CONSTITUTION
cast a conscience vote in favor of Bondoc, based Assembly and the Supreme Court therefore has no
strictly on the result of the examination and jurisdiction to hear the case.
FACTS:
appreciation of the ballots and the recount of the
votes by the tribunal, the House of Representatives ISSUES:
In the elections of Sept. 17, 1935, petitioner Jose A.
committed a grave abuse of discretion, an injustice
Whether or not the Supreme Court has jurisdiction
Angara and the respondents Pedro Ynsua, Miguel
and a violation of the Constitution. Its resolution of
over the Electoral Commission and the subject
Castillo, and Dionisio Mayor were candidates for the
expulsion against Congressman Camasura is,
matter of the controversy upon the foregoing related
position of members of the National Assembly for
therefore, null and void.
facts, and in the affirmative,
the first district of Tayabas.

Another reason for the nullity of the expulsion


RULING:
On Oct. 7, 1935, the provincial board of canvassers
resolution of the House of Representatives is that it
proclaimed Angara as member-elect of the National
violates Congressman Camasuras right to security In the case at bar, here is then presented an actual
Assembly and on Nov. 15, 1935, he took his oath of
of tenure. Members of the HRET, as sole judge of controversy involving as it does a conflict of a grave
office.
congressional election contests, are entitled to constitutional nature between the National Assembly
security of tenure just as members of the Judiciary on one hand, and the Electoral Commission on the
On Dec. 3, 1935, the National Assembly passed
enjoy security of tenure under the Constitution. other. Although the Electoral Commission may not
Resolution No. 8, which in effect, fixed the last
Therefore, membership in the HRET may not be be interfered with, when and while acting within the
date to file election protests.
terminated except for a just cause, such as, the limits of its authority, it does not follow that it is
On Dec. 8, 1935, Ynsua filed before
expiration of the members congressional term of beyond the reach of the constitutional mechanism
the Electoral Commission a "Motion of Protest"
office, his death, permanent disability, resignation adopted by the people and that it is not subject to
against Angara and praying, among other things, that
from the political party he represents in the tribunal, constitutional restrictions. The Electoral Commission
Ynsua be named/declared elected Member of the
formal affiliation with another political party or is not a separate department of the government, and
National Assembly or that the election of said
removal for other valid cause. A member may not be even if it were, conflicting claims of authority under
position be nullified.
expelled by the House of Representatives for party the fundamental law between departmental powers
and agencies of the government are necessarily
determined by the judiciary in justiciable and It appears that on Dec. 9, 1935, filing of protests within such time as the rules of the
appropriate cases. the Electoral Commission met for the first time and Electoral Commission might prescribe.
approved a resolution fixing said date as the last day
The court has jurisdiction over for the filing of election protests. When, therefore, The petition for a writ of prohibition against the
the Electoral Commission and the subject matter of the National Assembly passed its resolution of Dec. electoral commission is hereby denied, with cost
the present controversy for the purpose of 3, 1935, confirming the election of the petitioner to against the petitioner.
determining the character, scope, and extent of the the National Assembly, the Electoral Commission
constitutional grant to the Electoral Commission as had not yet met; neither does it appear that said body
"the sole judge of all contests relating to the election, had actually been organized.
returns, and qualifications of the members of the
National Assembly." While there might have been good reason for the
legislative practice of confirmation of the election of
The Electoral Commission was created to transfer in members of the legislature at the time the power to
its totality all the powers previously exercised by the decide election contests was still lodged in the
legislature in matters pertaining to contested legislature, confirmation alone by the legislature
elections of its members, to an independent and cannot be construed as depriving
impartial tribunal. The express lodging of that power the Electoral Commission of the
in the Electoral Commission is an implied denial in authority incidental to its constitutional power to be
the exercise of that power by the National Assembly. "the sole judge of all contests...", to fix the time for
And thus, it is as effective a restriction upon the the filing of said election protests.
legislative power as an express prohibition in the
Constitution. The Electoral Commission was acting within the
legitimate exercise of its constitutional prerogative in
Therefore, the incidental power to promulgate such assuming to take cognizance of the protest filed by
rules necessary for the proper exercise of its the respondent, Pedro Ynsua against the election of
exclusive power to judge all contests relating to the the herein petitioner, Jose A. Angara, and that the
election, returns, and qualifications of members of resolution of the National Assembly on Dec. 3, 1935,
the National Assembly, must be deemed by cannot in any manner toll the time for filing protest
necessary implication to have been lodged also in against the election, returns, and qualifications of the
the Electoral Commission. members of the National Assembly, nor prevent the

Common questions

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The Supreme Court addressed the issue by considering the historical and cultural significance of the Manila Hotel, determining that its controlling shares are indeed part of the national patrimony. The Court pointed out that patrimony includes not only natural resources but also cultural heritage. Hence, the controlling shares of Manila Hotel were considered under the purview of the constitutional protection afforded by the Filipino First Policy, reinforcing that qualified Filipinos should be given preference .

The Supreme Court dismissed the petition by Manila Prince Hotel based on the interpretation that while §10, paragraph 2, Article XII of the Constitution is self-executing, the highest bid does not automatically entitle the bidder to win without considering the Filipino First Policy. However, the Court noted the preference for qualified Filipinos does not preclude foreign participation entirely. The bid process outlined that the highest bid needed further negotiation and approval, making the provision self-executing but the execution conditioned upon constitutional compliance .

The Supreme Court interpreted patrimony beyond natural resources to include cultural and historical elements tied to national identity. For the Manila Hotel, its historical significance as a witness to key national events added to its patrimony status. The broader implication for constitutional law is recognizing that patrimony can encompass entities of cultural importance, thus extending the scope of constitutional protection under nationalism and identity doctrines .

The decision in Manila Prince Hotel sets a precedent that state-owned enterprises undergoing privatization must consider the Filipino First Policy, giving preference to Filipino buyers where there is a viable bid parallel to foreign interests. This precedent implies that privatizations have to be conditioned not just on financial bids but also on historical, cultural, and patrimonial considerations, ensuring the preservation and prioritization of Filipino economic sovereignty in strategic sectors .

The Court's reasoning established GSIS's role by interpreting GSIS's actions as state transactions. The Court highlighted that since the sale required the Committee on Privatization's approval, GSIS's actions constituted 'state action.' Thus, GSIS, through its involvement, acts as an instrumentality of the state, subject to constitutional directives like the Filipino First Policy. This establishes a broader interpretation where government-affiliated entities must align privatisation activities with constitutional mandates, illustrating the depth of state control and oversight prescribed within constitutional jurisprudence .

The Supreme Court interpreted 'qualified Filipinos' within the context of the Filipino First Policy to mean Filipinos who are deemed fit and capable of undertaking the entrusted economic responsibilities. This inclusive definition ensured the policy's focus on promoting Filipino ownership and control over significant national enterprises. In the Manila Prince Hotel case, this interpretation reinforced the judicial emphasis on giving preference where Filipinos present equal, if not superior, capacity compared to foreign bidders, though without explicitly discounting the participation of the latter altogether .

The constitutional principle at issue was the 'Filipino First Policy' enshrined in Section 10, paragraph 2, Article XII of the 1987 Constitution, which mandates the State to give preference to qualified Filipinos in the grant of rights, privileges, and concessions covering national economy and patrimony. The Supreme Court interpreted this provision as self-executing, meaning it does not require additional legislation to take effect. The Court ruled that the provision is a complete, positive command that mandates preference for Filipinos, thereby not needing further guidelines for enforcement .

The Supreme Court rejected the argument that the Filipino First Policy was not applicable because only 51% of the outstanding shares, not the building or land itself, were being sold. The Court reasoned that controlling shares form part of national patrimony as they confer actual control and management. Therefore, the controlling interest in the hotel could not be disassociated from the property itself, thus falling under the constitutional protection for national patrimony .

The Supreme Court reconciled foreign investment needs with constitutional mandates by asserting that while the Filipino First Policy is self-executing and mandates preference for Filipinos, it does not discount foreign investments altogether. Instead, foreign offers are considered where they align with national interests, provided they do not supersede the preference for qualified Filipinos. This balance allows for foreign participation in economic activities while prioritizing Filipino ownership in key enterprises under specified scenarios .

The Supreme Court determined GSIS as part of the 'State' under the Filipino First Policy by assessing whether the sale of the shares was a 'state action.' It concluded that GSIS's actions fell within state action parameters because the sale required state approval through the Committee on Privatization, and the government was significantly involved in the transaction, making the sale a transaction of the State and thus subject to constitutional mandates .

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