Jacot vs. Dal Jacot vs. Dal Petitioner Nestor Jacot assails the Resolution of COMELEC disqualifying him from running for the position of Vice-Mayor of Catarman, Camiguin, in the 14 May 2007 National and Local Elections, on the ground that he failed to make a personal renouncement of US citizenship. He was a natural born citizen of the Philippines, who became a naturalized citizen of the US on 13 December 1989. He sought to reacquire his Philippine citizenship under Republic Act No. 9225. ISSUE: Did Nestor Jacot effectively renounce his US citizenship so as to qualify him to run as a vice-mayor? HELD: No. It bears to emphasize that the oath of allegiance is a general requirement for all those who wish to run as candidates in Philippine elections; while the renunciation of foreign citizenship is an additional requisite only for those who have retained or reacquired Philippine citizenship under Republic Act No. 9225 and who seek elective public posts, considering their special circumstance of having more than one citizenship.

Sobejana-Condon v Comelec

Failure to renounce foreign citizenship in accordance with the exact tenor of Section 5(2) of Republic Act (R.A.) No. 9225 [Citizenship Retention and Re-Acquisition Act of 2003]renders a dual citizen ineligible to run for and thus hold any elective public office.”

Thus held the Supreme Court as it dismissed the petition for certiorari of the winning vice-mayoral candidate of Caba, La Union who was unseated after being disqualified on the ground that her personal declaration of renunciation of her Australian citizenship was not under oath as required by RA 9225.

In a 24-page decision penned by Justice Bienvenido L. Reyes, the Court En Banc affirmed in toto the assailed resolution of the Commission on Elections (COMELEC)en banc dated September 6, 2011 that affirmed the consolidated Decision dated October 22, 2010 of the Bauang, La Union Regional Trial Court (RTC), Branch 33 that had declared Teodora Sobejana-Condon disqualified and ineligible to her position as Caba, La Union Vice-Mayor.

The Court held that petitioner Sobejana-Condon was disqualified from running for elective office for failure to renounce her Australian citizenship under oath contrary to the exact mandate of Sec. 5(2) that the renunciation of foreign citizenship must be sworn before an officer authorized to administer oath.

“The language of the provision is plain and unambiguous. It expresses a single, definite, and sensible meaning and must thus be read literally. The foreign citizenship must be formally rejected through an affidavit duly sworn before an officer authorized to administer oath,” the Court held.

The Court further held that the petitioner’s act of running for public office does not suffice to serve as an effective renunciation of her Australian citizenship. While the Court has previously declared that the filing by a person with dual citizenship of a certificate of candidate is already considered a renunciation of foreign citizenship, such ruling was already adjudged superseded by the enactment of RA 9255 on August 29, 2003 which provides for the additional condition of a personal and sworn renunciation of foreign citizenship. It added that “the fact that petitioner won the elections can not cure the defect of her candidacy” since “garnering the most number of votes does not validate the election of a disqualified candidate because the application of the constitutional and statutory provisions on disqualification is not a matter of popularity.”

“[Petitioner] is yet to regain her political right to seek elective office. Unless she executes a sworn renunciation of her Australian citizenship, she is ineligible to run for and hold any elective office in the Philippines,” held the Court.

The Court also held that it cannot read the Australian Citizen Act of 1978 under which petitioner claim she deemed to have lost her Australian citizenship into RA 9225 as the Court would be “applying not what the legislative department

has deemed wise to require. To do so would be a brazen encroachment upon the sovereign will and power of the people of this Republic.”

Petitioner Sobejano-Condon was a natural-born Filipino citizen on August 8, 1944 but became a naturalized Australian citizen due to her marriage to one Kevin Thomas Condon on December 13, 1984. On December 2, 2005, she filed an application to re-acquire Philippine citizenship before the Philippine Embassy in Canberra, Australia pursuant to Sec. 3 of RA 9225, which was approved and she took her oath of allegiance to the Republic on December 5, 2005.

On September 18, 2006, petitioner filed an unsworn Declaration of Renunciation of Australian Citizenship before the Department of Immigration and Indigenous Affairs, Canberra, Australia, which in turn issued the order dated September 27, 2006 certifying that she has ceased to be an Australian citizen.

She ran for Mayor in her hometown of Caba, La Union in 2007 elections but lost her bid. She ran again and won in the May 2010 elections, this time for position of Vice-Mayor, and took her oath on May 13, 2010. However, private respondents Luis M. Bautista, et al., all registered voters of Caba, La Union, filed separate petitions for quo warranto questioning her eligibility before the RTC on the issue of her dual citizenship and that she failed to execute “a personal and sworn renunciation of any and all foreign citizenship before any public officer authorized to administer an oath.”

The RTC on October 22, 2010 ruled that petitioner’s failure to comply with sec. 5(2) of RA 9225 rendered her ineligible to run and hold public office. It also nullified her proclamation as winning candidate and declared the position of Vice-Mayor in Caba, La Union vacant. Sobejana-Condon appealed to the COMELEC and the poll body’s Second Division dismissed the same for failure to pay the docket fees within the prescribed period. On motion for reconsideration, the appeal was reinstated by the COMELEC en banc in its September 6, 2011 resolution. However, the COMELEC en banc,in the same resolution, concurred with the findings and conclusions of the RTC. Thus, it dismissed petitioner’s instant appeal for lack of merit and affirmed the October 22, 2010 decision of the RTC, as well as granted the Motion for Execution filed by private respondents.

The Court held also that the COMELEC en banc did not commit grave abuse of discretion when it proceeded to decide the substantive merits of the petitioner’s appeal after ruling for reinstatement. It held that an appeal may be simultaneously reinstated and definitively resolved by the COMELEC en banc in a resolution disposing of a motion for reconsideration pursuant to Sec. 3, Art. IX-C of the Constitution and Sec. 5(c), Rule 3 of the COMELEC Rules of Procedure.

The Court further held that the COMELEC en banc has the power to order discretionary execution of judgment which is expressly sanctioned by Section 1, Rule 41 of the COMELEC Rules of Procedure.

Citing Sec. 2, Rule 39 of the Rules of Court, the Court also held that execution pending appeal may be issued by an appellate court after the trial court has lost jurisdiction.

The Court held that private respondents are not estopped from questioning petitioner’s eligibility to hold public office pursuant to Sec. 253 of the Omnibus Election Code which allows the filing of quo warranto petition within 10 days after the proclamation of the election’s results, which was what private respondents did. (GR No. 198742, Sobejana-Condon v. COMELEC, August 10, 2012)

(BM No. 2112,In Re: Petition to Re-Acquire the Privilege to Practice Law in the Philippines, Epifanio B.

Muneses, Petitioner, July 24, 2012)

The Supreme Court En Banc has recently granted the petition of a lawyer to practice law in the

Philippines once again after losing the said privilege to practice law when he became a citizen of the

United States of America in 1981 and then re-acquiring his Philippine citizenship in 2006 pursuant

to RA 9225, the Citizenship Retention and Re-Acquisition Act of 2003.

The Court further directed the Office of the Bar Confidant (OBC) to draft the necessary guidelines

for the re-acquisition of the privilege to resume the practice of law for the guidance of the Bench

and the Bar.

In a six-page resolution penned by Justice Bienvenido L. Reyes, the Court unanimously held that

upon favorable recommendation from the OBC, Atty. Epifanio B. Muneses satisfactorily complied

with all the requirements sought by the OBC and met all the qualifications and none of the

disqualifications for membership in the Bar. In particular, he had submitted in compliance the

following: 1) Petition for Re-Acquisition of Philippine Citizenship; 2) Order (for Re-Acquisition of

Philippine Citizenship); 3) Oath of Allegiance to the Republic of the Philippines; 4) Certificate of

Re-Acquisition/Retention of Philippine Citizenship issued by the Bureau of Immigration, in lieu of

the Identification Certificate; 5) Certification dated May 19, 2010 of the IBP-Surigao City Chapter

attesting to his good moral character as well as his updated payment of annual membership dues; 6)

Professional Tax Receipt (PTR) for the year 2010; 7) Certificate of Compliance with the MCLE for

the 2nd compliance period; and 8) Certification dated December 5, 2008 of Atty. Gloria Estenzo-

Ramos, Coordinator, UC-MCLE Program, University of Cebu, College of Law attesting to his

compliance with the MCLE.

“The Court sees no bar to the petitioner’s resumption to the practice of law in the

Philippines,― the Court declared, subject to the condition that Atty. Muneses re-take the

Lawyer’s Oath and pay the appropriate fee.

The Court reiterated that Filipino citizenship is a continuing requirement for the practice of law, loss

of which means the termination of one’s membership in the Bar and the privilege to engage in

the practice of law. “Thus, a Filipino lawyer who becomes a citizen of another country but later

re-acquires his Philippine citizenship under RA 9225 remains to be a member of the Philippine

Bar,― it added. It also noted that the right to resume the practice of law, however, is not

automatic and Section 5 of RA 9225 states that a person who “intends to practice his profession

in the Philippines must apply with the proper authority for the license or permit to engage in such

practice.―

Detailed Digest of Gamboa vs. Finance Secretary, G.R. No. 176579, June 28, 2011

WILSON P. GAMBOA vs. FINANCE SECRETARY TEVES

G.R. No. 176579, promulgated June 28, 2011

X-----------------------------------------------------------------------------X

D E C I S I O N

CARPIO, J.:

I. THE FACTS

This is a petition to nullify the sale of shares of stock of Philippine Telecommunications

Investment Corporation (PTIC) by the government of the Republic of the Philippines, acting through

the Inter-Agency Privatization Council (IPC), to Metro Pacific Assets Holdings, Inc. (MPAH), an

affiliate of First Pacific Company Limited (First Pacific), a Hong Kong-based investment

management and holding company and a shareholder of the Philippine Long Distance Telephone

Company (PLDT).

The petitioner questioned the sale on the ground that it also involved an indirect sale of 12

million shares (or about 6.3 percent of the outstanding common shares) of PLDT owned by PTIC to

First Pacific. With the this sale, First Pacific’s common shareholdings in PLDT increased from 30.7

percent to 37 percent, thereby increasing the total common shareholdings of foreigners in PLDT to

about 81.47%. This, according to the petitioner, violates Section 11, Article XII of the 1987 Philippine

Constitution which limits foreign ownership of the capital of a public utility to not more than 40%.

II. THE ISSUE

Does the term “capital” in Section 11, Article XII of the Constitution refer to the total common

shares only, or to the total outstanding capital stock (combined total of common and non-voting

preferred shares) of PLDT, a public utility?

III. THE RULING

[The Court partly granted the petition and held that the term “capital” in Section 11, Article XII

of the Constitution refers only to shares of stock entitled to vote in the election of directors of a public

utility, or in the instant case, to the total common shares of PLDT.]

Section 11, Article XII (National Economy and Patrimony) of the 1987 Constitution mandates

the Filipinization of public utilities, to wit:

Section 11. No franchise, certificate, or any other form of authorization for the operation of

a public utility shall be granted except to citizens of the Philippines or to corporations or

associations organized under the laws of the Philippines, at least sixty per centum of whose

capital is owned by such citizens; nor shall such franchise, certificate, or authorization be exclusive in

character or for a longer period than fifty years. Neither shall any such franchise or right be granted

except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress

when the common good so requires. The State shall encourage equity participation in public utilities by

the general public. The participation of foreign investors in the governing body of any public utility

enterprise shall be limited to their proportionate share in its capital, and all the executive and managing

officers of such corporation or association must be citizens of the Philippines. (Emphasis supplied)

The term “capital” in Section 11, Article XII of the Constitution refers only to shares of stock

entitled to vote in the election of directors, and thus in the present case only to common shares, and

not to the total outstanding capital stock comprising both common and non-voting preferred shares

[of PLDT].

xxx xxx xxx

Indisputably, one of the rights of a stockholder is the right to participate in the control or

management of the corporation. This is exercised through his vote in the election of directors

because it is the board of directors that controls or manages the corporation. In the absence of

provisions in the articles of incorporation denying voting rights to preferred shares, preferred shares

have the same voting rights as common shares. However, preferred shareholders are often

excluded from any control, that is, deprived of the right to vote in the election of directors and on

other matters, on the theory that the preferred shareholders are merely investors in the corporation

for income in the same manner as bondholders. xxx.

Considering that common shares have voting rights which translate to control, as opposed to

preferred shares which usually have no voting rights, the term “capital” in Section 11, Article XII of

the Constitution refers only to common shares. However, if the preferred shares also have the right

to vote in the election of directors, then the term “capital” shall include such preferred shares

because the right to participate in the control or management of the corporation is exercised through

the right to vote in the election of directors. In short, the term “capital” in Section 11, Article XII of the

Constitution refers only to shares of stock that can vote in the election of directors.

xxx xxx xxx

Mere legal title is insufficient to meet the 60 percent Filipino-owned “capital” required in the

Constitution. Full beneficial ownership of 60 percent of the outstanding capital stock, coupled with 60

percent of the voting rights, is required. The legal and beneficial ownership of 60 percent of the

outstanding capital stock must rest in the hands of Filipino nationals in accordance with the

constitutional mandate. Otherwise, the corporation is “considered as non-Philippine national[s].”

xxx xxx xxx

To construe broadly the term “capital” as the total outstanding capital stock, including both

common and non-voting preferred shares, grossly contravenes the intent and letter of the

Constitution that the “State shall develop a self-reliant and independent national economy effectively

controlled by Filipinos.” A broad definition unjustifiably disregards who owns the all-important voting

stock, which necessarily equates to control of the public utility.

We shall illustrate the glaring anomaly in giving a broad definition to the term “capital.” Let us

assume that a corporation has 100 common shares owned by foreigners and 1,000,000 non-voting

preferred shares owned by Filipinos, with both classes of share having a par value of one peso

(P1.00) per share. Under the broad definition of the term “capital,” such corporation would be

considered compliant with the 40 percent constitutional limit on foreign equity of public utilities since

the overwhelming majority, or more than 99.999 percent, of the total outstanding capital stock is

Filipino owned. This is obviously absurd.

In the example given, only the foreigners holding the common shares have voting rights in

the election of directors, even if they hold only 100 shares. The foreigners, with a minuscule equity of

less than 0.001 percent, exercise control over the public utility. On the other hand, the Filipinos,

holding more than 99.999 percent of the equity, cannot vote in the election of directors and hence,

have no control over the public utility. This starkly circumvents the intent of the framers of the

Constitution, as well as the clear language of the Constitution, to place the control of public utilities in

the hands of Filipinos. It also renders illusory the State policy of an independent national

economy effectively controlled by Filipinos.

The example given is not theoretical but can be found in the real world, and in fact exists in

the present case.

xxx xxx xxx

[O]nly holders of common shares can vote in the election of directors [of PLDT], meaning

only common shareholders exercise control over PLDT. Conversely, holders of preferred shares,

who have no voting rights in the election of directors, do not have any control over PLDT. In fact,

under PLDT’s Articles of Incorporation, holders of common shares have voting rights for all

purposes, while holders of preferred shares have no voting right for any purpose whatsoever.

It must be stressed, and respondents do not dispute, that foreigners hold a majority of the

common shares of PLDT. In fact, based on PLDT’s 2010 General Information Sheet (GIS), which is

a document required to be submitted annually to the Securities and Exchange

Commission, foreigners hold 120,046,690 common shares of PLDT whereas Filipinos hold only

66,750,622 common shares. In other words, foreigners hold 64.27% of the total number of PLDT’s

common shares, while Filipinos hold only 35.73%. Since holding a majority of the common shares

equates to control, it is clear that foreigners exercise control over PLDT. Such amount of control

unmistakably exceeds the allowable 40 percent limit on foreign ownership of public utilities expressly

mandated in Section 11, Article XII of the Constitution.

As shown in PLDT’s 2010 GIS, as submitted to the SEC, the par value of PLDT common

shares is P5.00 per share, whereas the par value of preferred shares is P10.00 per share. In other

words, preferred shares have twice the par value of common shares but cannot elect directors and

have only 1/70 of the dividends of common shares. Moreover, 99.44% of the preferred shares are

owned by Filipinos while foreigners own only a minuscule 0.56% of the preferred shares. Worse,

preferred shares constitute 77.85% of the authorized capital stock of PLDT while common shares

constitute only 22.15%. This undeniably shows that beneficial interest in PLDT is not with the non-

voting preferred shares but with the common shares, blatantly violating the constitutional

requirement of 60 percent Filipino control and Filipino beneficial ownership in a public utility.

The legal and beneficial ownership of 60 percent of the outstanding capital stock must rest in

the hands of Filipinos in accordance with the constitutional mandate. Full beneficial ownership of 60

percent of the outstanding capital stock, coupled with 60 percent of the voting rights, is

constitutionally required for the State’s grant of authority to operate a public utility. The undisputed

fact that the PLDT preferred shares, 99.44% owned by Filipinos, are non-voting and earn only 1/70

of the dividends that PLDT common shares earn, grossly violates the constitutional requirement of

60 percent Filipino control and Filipino beneficial ownership of a public utility.

In short, Filipinos hold less than 60 percent of the voting stock, and earn less than 60 percent

of the dividends, of PLDT. This directly contravenes the express command in Section 11, Article XII

of the Constitution that “[n]o franchise, certificate, or any other form of authorization for the operation

of a public utility shall be granted except to x x x corporations x x x organized under the laws of the

Philippines, at least sixty per centum of whose capital is owned by such citizens x x x.”

To repeat, (1) foreigners own 64.27% of the common shares of PLDT, which class of shares

exercises the sole right to vote in the election of directors, and thus exercise control over PLDT; (2)

Filipinos own only 35.73% of PLDT’s common shares, constituting a minority of the voting stock, and

thus do not exercise control over PLDT; (3) preferred shares, 99.44% owned by Filipinos, have no

voting rights; (4) preferred shares earn only 1/70 of the dividends that common shares earn; (5)

preferred shares have twice the par value of common shares; and (6) preferred shares constitute

77.85% of the authorized capital stock of PLDT and common shares only 22.15%. This kind of

ownership and control of a public utility is a mockery of the Constitution.

Incidentally, the fact that PLDT common shares with a par value of P5.00 have a current

stock market value of P2,328.00 per share, while PLDT preferred shares with a par value of P10.00

per share have a current stock market value ranging from only P10.92 to P11.06 per share, is a

glaring confirmation by the market that control and beneficial ownership of PLDT rest with the

common shares, not with the preferred shares.

xxx xxx xxx

WHEREFORE, we PARTLY GRANT the petition and rule that the term “capital” in Section

11, Article XII of the 1987 Constitution refers only to shares of stock entitled to vote in the election of

directors, and thus in the present case only to common shares, and not to the total outstanding

capital stock (common and non-voting preferred shares). Respondent Chairperson of the Securities

and Exchange Commission is DIRECTED to apply this definition of the term “capital” in determining

the extent of allowable foreign ownership in respondent Philippine Long Distance Telephone

Company, and if there is a violation of Section 11, Article XII of the Constitution, to impose the

appropriate sanctions under the law.

TOLENTINO VS. THE SECRETARY OF FINANCE Case Digest ARTURO M. TOLENTINO VS. THE SECRETARY OF FINANCE and THE COMMISSIONER OF INTERNAL REVENUE 1994 Aug 25 G.R. No. 115455 235 SCRA 630 FACTS: The valued-added tax (VAT) is levied on the sale, barter or exchange of goods and properties as well as on the sale or exchange of services. It is equivalent to 10% of the gross selling price or gross value in money of goods or properties sold, bartered or exchanged or of the gross receipts from the sale or exchange of services. Republic Act No. 7716 seeks to widen the tax base of the existing VAT system and enhance its administration by amending the National Internal Revenue Code. The Chamber of Real Estate and Builders Association (CREBA) contends that the imposition of VAT on sales and leases by virtue of contracts entered into prior to the effectivity of the law would violate the constitutional provision of “non-impairment of contracts.” ISSUE: Whether R.A. No. 7716 is unconstitutional on ground that it violates the contract clause under Art. III, sec 10 of the Bill of Rights. RULING: No. The Supreme Court the contention of CREBA, that the imposition of the VAT on the sales and leases of real estate by virtue of contracts entered into prior to the effectivity of the law would violate the constitutional provision of non-impairment of contracts, is only slightly less abstract but nonetheless hypothetical. It is enough to say that the parties to a contract cannot, through the exercise of prophetic discernment, fetter the exercise of the taxing power of the State. For not only are existing laws read into contracts in order to fix obligations as between parties, but the reservation of essential attributes of sovereign power is also read into contracts as a basic postulate of the legal order. The policy of protecting contracts against impairment presupposes the maintenance of a government which retains adequate authority to secure the peace and good order of society. In truth, the Contract Clause has never been thought as a limitation on the exercise of the State's power of taxation save only where a tax exemption has been granted for a valid consideration. Such is not the case of PAL in G.R. No. 115852, and the Court does not understand it to make this claim. Rather, its position, as discussed above, is that the removal of its tax exemption cannot be made by a general, but only by a specific, law. Further, the Supreme Court held the validity of Republic Act No. 7716 in its formal and substantive aspects as this has been raised in the various cases before it. To sum up, the Court holds: (1) That the procedural requirements of the Constitution have been complied with by Congress in the enactment of the statute; (2) That judicial inquiry whether the formal requirements for the enactment of statutes - beyond those prescribed by the Constitution - have been observed is precluded by the principle of separation of powers;

(3) That the law does not abridge freedom of speech, expression or the press, nor interfere with the free exercise of religion, nor deny to any of the parties the right to an education; and (4) That, in view of the absence of a factual foundation of record, claims that the law is regressive, oppressive and confiscatory and that it violates vested rights protected under the Contract Clause are prematurely raised and do not justify the grant of prospective relief by writ of prohibition. WHEREFORE, the petitions are DISMISSED.