Art. 8 sec.
4
Art 11 sec 2
Art 8 sec 5 (very important)
Art 6 sec 30
THE FACTUAL ANTECEDENTS
[1]
This issue has its roots in the June 8, 2010 Opinion issued by the Legal Services Sector, Office of the General
Counsel of the Commission on Audit (COA), which found that an underpayment amounting to P221,021.50 resulted
when five (5) retired Supreme Court justices purchased from the Supreme Court the personal properties assigned to
them during their incumbency in the Court.
The COA attributed this underpayment to the use by the Property Division of the Supreme Court of the wrong formula
in computing the appraisal value of the purchased vehicles. According to the COA, the Property Division erroneously
appraised the subject motor vehicles by applying Constitutional Fiscal Autonomy Group (CFAG) Joint Resolution No.
35 dated April 23, 1997 and its guidelines, in compliance with the Resolution of the Court En Banc dated March 23,
2004 in A.M. No. 03-1201,[3] when it should have applied the formula found in COA Memorandum No. 98-569-
A[4] dated August 5, 1998.
Recommendations of the Office of Administrative Services
In her Memorandum dated August 10, 2010, Atty. Candelaria recommended that the Court advise the COA to respect
the in-house computation based on the CFAG formula, noting that this was the first time that the COA questioned the
authority of the Court in using CFAG Joint Resolution No. 35 and its guidelines in the appraisal and disposal of
government property since these were issued in 1997.
More importantly, the Constitution itself grants the Judiciary fiscal autonomy in the handling of its budget and
resources. Full autonomy, among others,[6] contemplates the guarantee of full flexibility in the allocation and utilization
of the Judiciary’s resources, based on its own determination of what it needs.
OUR RULING
We find Atty. Candelaria’s recommendation to be well-taken.
The COA’s authority to conduct post-audit examinations on constitutional bodies granted fiscal autonomy is provided
under Section 2(1), Article IX-D of the 1987 Constitution, which states:
Section 2. (1) The Commission on Audit shall have the power, authority, and duty to examine, audit, and settle all
accounts pertaining to the revenue and receipts of, and expenditures or uses of funds and property, owned or held in
trust by, or pertaining to, the Government, or any of its subdivisions, agencies, or instrumentalities, including
government-owned or controlled corporations with original charters, and on a post-audit basis: (a) constitutional
bodies, commissions and offices that have been granted fiscal autonomy under this Constitution[.] [emphasis
ours]
This authority, however, must be read not only in light of the Court’s fiscal autonomy, but also in relation with the
constitutional provisions on judicial independence and the existing jurisprudence and Court rulings on these matters.
Separation of Powers and Judicial Independence
[8]
In Angara v. Electoral Commission, we explained the principle of separation of powers, as follows:
The separation of powers is a fundamental principle in our system of government. It obtains not through express
provision but by actual division in our Constitution. Each department of the government has exclusive cognizance of
matters within its jurisdiction, and is supreme within its own sphere. But it does not follow from the fact that the three
powers are to be kept separate and distinct that the Constitution intended them to be absolutely unrestrained and
independent of each other. The Constitution has provided for an elaborate system of checks and balances to secure
coordination in the workings of the various departments of the government. x x x And the judiciary in turn, with the
Supreme Court as the final arbiter, effectively checks the other departments in the exercise of its power to determine
the law, and hence to declare executive and legislative acts void if violative of the Constitution. [9]
Under the Judiciary’s unique circumstances, independence encompasses the idea that individual judges can freely
exercise their mandate to resolve justiciable disputes, while the judicial branch, as a whole, should work in the
discharge of its constitutional functions free of restraints and influence from the other branches, save only for those
imposed by the Constitution itself.[12] Thus, judicial independence can be “broken down into two distinct
concepts: decisional independence and institutional independence.”[13] Decisional independence “refers to a
judge’s ability to render decisions free from political or popular influence based solely on the individual facts and
applicable law.”[14] On the other hand, institutional independence “describes the separation of the judicial branch
from the executive and legislative branches of government.”[15] Simply put, institutional independence refers to the
“collective independence of the judiciary as a body."[16]
One concept is individual judicial independence, which focuses on each particular judge and seeks to insure his or
her ability to decide cases with autonomy within the constraints of the law. A judge has this kind of independence
when he can do his job without having to hear – or at least without having to take it seriously if he does hear –
criticisms of his personal morality and fitness for judicial office. The second concept is institutional judicial
independence. It focuses on the independence of the judiciary as a branch of government and protects judges as a
class.
The Constitution expressly prohibits Congress from depriving the Supreme Court of its jurisdiction, as enumerated in
Section 5, Article VII of the Constitution, or from passing a law that undermines the security of tenure of the members
of the judiciary.[19] The Constitution also mandates that the judiciary shall enjoy fiscal autonomy, [20] and grants the
Supreme Court administrative supervision over all courts and judicial personnel. Jurisprudence [21] has characterized
administrative supervision as exclusive, noting that only the Supreme Court can oversee the judges and court
personnel's compliance with all laws, rules and regulations. No other branch of government may intrude into this
power, without running afoul of the doctrine of separation of powers. [22]
The Constitution protects as well the salaries of the Justices and judges by prohibiting any decrease in their salary
during their continuance in office,[23] and ensures their security of tenure by providing that “Members of the Supreme
Court and judges of lower courts shall hold office during good behavior until they reach the age of seventy years or
become incapacitated to discharge the duties of their office.
Fiscal Autonomy
One of the most important aspects of judicial independence is the constitutional grant of fiscal autonomy. Just as the
Executive may not prevent a judge from discharging his or her judicial duty (for example, by physically preventing a
court from holding its hearings) and just as the Legislature may not enact laws removing all jurisdiction from courts,
[26]
the courts may not be obstructed from their freedom to use or dispose of their funds for purposes germane to
judicial functions.
Section 3. The Judiciary shall enjoy fiscal autonomy. Appropriations for the Judiciary may not be reduced by the
legislature below the amount appropriated for the previous year and, after approval, shall be automatically and
regularly released.
As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service Commission, the
Commission on Audit, the Commission on Elections, and the Office of the Ombudsman contemplates a guarantee of
full flexibility to allocate and utilize their resources with the wisdom and dispatch that their needs require. It
recognizes the power and authority to levy, assess and collect fees, fix rates of compensation not exceeding the
highest rates authorized by law for compensation and pay plans of the government and allocate and disburse such
sums as may be provided by law or prescribed by them in the course of the discharge of their functions.
Fiscal autonomy means freedom from outside control. If the Supreme Court says it needs 100 typewriters but
DBM rules we need only 10 typewriters and sends its recommendations to Congress without even informing us, the
autonomy given by the Constitution becomes an empty and illusory platitude.
The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility
needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the
manner the independent constitutional offices allocate and utilize the funds appropriated for their operations
is anathema to fiscal autonomy and violative not only of the express mandate of the Constitution but
especially as regards the Supreme Court, of the independence and separation of powers upon which the
entire fabric of our constitutional system is based.
Application to the Present Case
The Judiciary’s fiscal autonomy is realized through the actions of the Chief Justice, as its head, and of the Supreme
Court En Banc, in the exercise of administrative control and supervision of the courts and its personnel. As the
Court En Banc’s Resolution (dated March 23, 2004) in A.M. No. 03-12 01 reflects, the fiscal autonomy of the
Judiciary serves as the basis in allowing the sale of the Judiciary’s properties to retiring Justices of the Supreme
Court and the appellate courts:
WHEREAS, by the constitutional mandate of fiscal autonomy as defined in Bengzon v. Drilon (G.R. No. 103524, 15
April 1992, 208 SCRA 133, 150) the Judiciary has “full flexibility to allocate and utilize (its) resources with the wisdom
and dispatch that (its) needs require”;
WHEREAS, the long-established tradition and practice of Justices or Members of appellate courts of purchasing for
sentimental reasons at retirement government properties they used during their tenure has been recognized as a
privilege enjoyed only by such government officials; and
WHEREAS, the exercise of such privilege needs regulation to the end that respect for sentiments that a retiring
Justice attaches to properties he or she officially used during his or her tenure should be in consonance with the need
for restraint in the utilization and disposition of government resources.
By way of a long standing tradition, partly based on the intention to reward long and faithful service, the sale to the
retired Justices of specifically designated properties that they used during their incumbency has been recognized
both as a privilege and a benefit. This has become an established practice within the Judiciary that even the COA has
[32]
previously recognized. The En Banc Resolution also deems the grant of the privilege as a form of additional
retirement benefit that the Court can grant its officials and employees in the exercise of its power of administrative
supervision. Under this administrative authority, the Court has the power to administer the Judiciary’s internal affairs,
and this includes the authority to handle and manage the retirement applications and entitlements of its personnel as
[33]
provided by law and by its own grants.
Thus, under the guarantees of the Judiciary’s fiscal autonomy and its independence, the Chief Justice and the
Court En Banc determine and decide the who, what, where, when and how of the privileges and benefits they extend
to justices, judges, court officials and court personnel within the parameters of the Court’s granted power; they
determine the terms, conditions and restrictions of the grant as grantor.
In the context of the grant now in issue, the use of the formula provided in CFAG Joint Resolution No. 35 is a part of
the Court’s exercise of its discretionary authority to determine the manner the granted retirement privileges and
benefits can be availed of. Any kind of interference on how these retirement privileges and benefits are exercised and
availed of, not only violates the fiscal autonomy and independence of the Judiciary, but also encroaches upon the
constitutional duty and privilege of the Chief Justice and the Supreme Court En Banc to manage the Judiciary’s own
affairs.
This provision clearly recognizes that the Chief Justice, as the head of the Judiciary, possesses the full and sole
authority and responsibility to divest and dispose of the properties and assets of the Judiciary; as Head of Office, he
determines the manner and the conditions of disposition, which in this case relate to a benefit. As the usual practice
of the Court, this authority is exercised by the Chief Justice in consultation with the Court En Banc. However, whether
exercised by the Chief Justice or by the Supreme Court En Banc, the grant of such authority and discretion is
unequivocal and leaves no room for interpretations and insertions.
ACCORDINGLY, premises considered, the in-house computation of the appraisal value made by the Property
Division, Office of Administrative Services, of the properties purchased by the retired Chief Justice and Associate
Justices of the Supreme Court, based on CFAG Joint Resolution No. 35 dated April 23, 1997, as directed under the
Court Resolution dated March 23, 2004 in A.M. No. 03-12-01, is CONFIRMED to be legal and valid. Let the
Commission on Audit be accordingly advised of this Resolution for its guidance.
