CESAR BENGZON, QUERUBE MAKALINTAL, LINO M. PATAJO, JOSE LEUTERIO, ET AL., PETITIONERS, VS. HON. FRANKLIN N. DRILON IN HIS CAPACITY AS EXECUTIVE SECRETARY; HON. GUILLERMO CARAGUE…

The issue in this petition is the constitutionality of the veto
by the President of certain provisions in the General Appropriations Act for
the Fiscal Year 1992 relating to the payment of the adjusted pensions of
retired Justices of the Supreme Court and the Court of Appeals.

The petitioners are retired Justices of the Supreme Court and
Court of Appeals who are currently receiving monthly pensions under Republic Act
No. 910 as amended by Republic Act No. 1797. 
They filed the instant petition on their own behalf and in
representation of all other retired Justices of the Supreme Court and the Court
of Appeals similarly situated.

Named respondents are Hon. Franklin Drilon
the Executive Secretary, Hon. Guillermo Carague as
Secretary of the Department of Budget and Management, and Hon. Rosalina Cajucom, the Treasurer of the Philippines.  The respondents are sued in their official
capacities, being officials of the Executive Department involved in the
implementation of the release of funds appropriated in the Annual
Appropriations Law.

We treat the Comments of the Office of the Solicitor General
(OSG) as an Answer and decide the petition on its merits.

The factual backdrop of this case is as follows:

On June 20, 1953, Republic Act No. 910 was enacted to provide the
retirement pensions of Justices of the Supreme Court and of the Court of
Appeals who have rendered at least twenty (20) years service either in the
Judiciary or in any other branch of the Government or in both, having attained
the age of seventy (70) years or who resign by reason of incapacity to
discharge the duties of the office.  The
retired Justice shall receive during the residue of his natural life the salary
which he was receiving at the time of his retirement or resignation.

Republic Act No. 910 was amended by Republic Act No. 1797
(approved on June 21, 1957)
which provided that:

“Sec. 3-A In case the salary of Justices of the Supreme Court
or of the Court of Appeals is increased or decreased, such increased or
decreased salary shall, for purposes of this Act, be deemed to be the salary or
the retirement pension which a Justice who as of June twelve, nineteen hundred
fifty-four had ceased to be such to accept another position in the Government
or who retired was receiving at the time of his cessation in office.  Provided, that any benefits that have already
accrued prior to such increase or decrease shall not be affected thereby”.

Identical retirement benefits were also given to the members of
the Constitutional Commissions under Republic Act No. 1568, as amended by
Republic Act No. 3595.  On November 12, 1974, on the occasion
of the Armed Forces Loyalty Day, President Marcos signed Presidential Decree
578 which extended similar retirement benefits to the members of the Armed
Forces giving them also the automatic readjustment features of Republic Act No.
1797 and Republic Act No. 3595.

Two months later, however President Marcos issued Presidential
Decree 644 on January 25, 1975 repealing Section 3-A of Republic Act No. 1797
and Republic Act No. 3595 (amending Republic Act No. 1568 and Presidential
Decree No. 578) which authorized the adjustment of the pension of the retired
Justices of the Supreme Court, Court of Appeals, Chairman and members of the
Constitutional Commissions and the officers and enlisted members of the Armed
Forces to the prevailing rates of salaries.

Significantly, under Presidential Decree 1638 the automatic
readjustment of the retirement pension of officers and enlisted men was
subsequently restored by President Marcos. 
A later decree Presidential Decree 1909 was also issued providing for
the automatic readjustment of the pensions of members of the Armed Forces who
have retired prior to September 10,
1979.

While the adjustment of the retirement pensions for members of
the Armed Forces who number in the tens of thousands was restored, that of the
retired Justices of the Supreme Court and Court of Appeals who are only a
handful and fairly advanced in years, was not.

Realizing the unfairness of the discrimination against the
members of the Judiciary and the Constitutional Commissions, Congress approved
in 1990 a bill for the reenactment of the repealed provisions of Republic Act
No. 1797 and Republic Act No. 3595. 
Congress was under the impression that Presidential Decree 644 became
law after it was published in the Official Gazette on April 7, 1977. 
In the explanatory note of House Bill No. 16297 and Senate Bill No. 740,
the legislature saw the need to reenact Republic Act Nos. 1797 and 3595 to
restore said retirement pensions and privileges of the retired Justices and
members of the Constitutional Commissions in order to assure those serving in
the Supreme Court, Court of Appeals and Constitutional Commissions adequate old
age pensions even during the time when the purchasing power of the peso has
been diminished substantially by worldwide recession or inflation.  This is underscored by the fact that the petitioner
retired Chief Justice, a retired Associate Justice of the Supreme Court and the
retired Presiding Justice are presently receiving monthly pensions of
P3,333.33, P2,666.66 and P2,333.33 respectively.

President Aquino, however vetoed House Bill No. 16297 on July 11, 1990 on the ground that
according to her “it would erode the very foundation of the Government’s
collective effort to adhere faithfully to and enforce strictly the policy on
standardization of compensation as articulated in Republic Act No. 6758 known
as Compensation and Position Classification Act of 1989.” She further said
that “the Government should not grant distinct privileges to select group
of officials whose retirement benefits under existing laws already enjoy
preferential treatment over those of the vast majority of our civil service
servants”.

Prior to the instant petition, however, Retired Court of Appeals
Justices Manuel P. Barcelona, Juan P. Enriquez, Juan O. Reyes, Jr. and Guardson R. Lood filed a
letter/petition dated April 22, 1991
which we treated as Administrative Matter No. 91-8-225-CA.  The petitioners asked this Court for a
readjustment of their monthly pensions in accordance with Republic Act No.
1797.  They reasoned out that Presidential
Decree 644 repealing Republic Act No. 1797 did not become law as there was no
valid publication pursuant to Tañada v.
Tuvera, (136 SCRA 27 [1985] and 146 SCRA 446
[1986]).  Presidential Decree 644
promulgated on January 24, 1975
appeared for the first time only in the supplemental issue of the Official Gazette, (Vol. 74 No. 14) purportedly dated April 4, 1977 but published only on September 5, 1983.  Since Presidential Decree 644 has no binding
force and effect of law, it therefore did not repeal Republic Act No. 1797.

In a Resolution dated November
28, 1991 the Court acted favorably on the request.  The dispositive
portion reads as follows:

“WHEREFORE, the requests of retired Justices Manuel P.
Barcelona, Juan P. Enriquez, Juan O. Reyes and Guardson
Lood are GRANTED. 
It is hereby AUTHORIZED that their monthly pensions be adjusted and paid
on the basis of RA 1797 effective January
1, 1991 without prejudice to the payment of their pension
differentials corresponding to the previous years upon the availability of
funds for the purpose.”

Pursuant  to the above
resolution, Congress included in the General Appropriations Bill for Fiscal
Year 1992 certain appropriations for the Judiciary intended for the payment of
the adjusted pension rates due the retired Justices of the Supreme Court and
Court of Appeals.

The pertinent provisions in House Bill No. 34925 are as follows:

“XXVIII.  THE JUDICIARY

A.  Supreme Court of the Philippines and the Lower Courts.

“For general administration, administration of personnel
benefits, supervision of courts, adjudication of constitutional questions
appealed and other cases, operation and maintenance of the Judicial and Bar
Council in the Supreme Court, and the adjudication of regional court cases,
metropolitan court cases, municipal trial court cases in Cities, municipal
circuit court cases, municipal court cases, Shari’a
district court cases and Shari’a circuit court cases
as indicated hereunder….P2,095,651,000

x x
x                                     x
x x                             x x x

“Special Provisions.

“1.    
Augmentation of any Item in the Court’s Appropriations.  Any savings in the appropriation for the
Supreme Court and the Lower Courts may be utilized by the Chief Justice of the
Supreme Court to augment any item of the Court’s appropriations for:  (a) printing of decisions and publications of
Philippine Reports; (b) ‘commutable terminal leaves of Justices and other
personnel of the Supreme Court and payment of adjusted
pension rates to retired Justices entitled
thereto pursuant to Administrative Matter No.
91-8-225-C.A; (c) repair, maintenance, improvement, and other operating
expenses of the courts’ books and periodicals; (d) purchase, maintenance and
improvement of printing equipment; (e) necessary expenses for the employment of
temporary employees, contractual and casual employees, for judicial
administration; (f) maintenance and improvement of the Court’s Electronic Data
Processing (g) extraordinary expenses of the Chief Justice, attendance in
international conferences and conduct of training programs; (h) commutable
transportation and representation allowances and fringe benefits for Justices,
Clerks of Court, Court Administrator, Chief of-Offices and other Court
personnel in accordance with the rates prescribed by law; and (i) compensation of attorneys-de-oficio:  PROVIDED, that as mandated by LOI No. 489 any
increases in salary and allowances shall be subject to the usual procedures and
policies as provided for under P.D. No. 985 and other pertinent laws.” (page 1071, General Appropriations Act, FY 1992; Emphasis
supplied)

x x
x                                     x
x x                             x x x

“4. Payment of Adjusted Pension Rates to Retired
Justices.  The amount herein appropriated
for payment of pensions to retired judges and justices shall include the
payment of pensions at the adjusted rates to retired justices of the Supreme
Court entitled thereto pursuant to the ruling of the court in Administrative
Matter No. 91-8-225-C.A.  page 1071, General Appropriations Act, FY 1992).”

x x
x                                     x
x x                             x x x

Activities and Purposes

“1.  General
Administration and Support Services.

a. General administrative

services
………………………………… P43,515,000

b.  Payment of retirement gratuity of
national government

officials
and employees  ……… P206,717,000

c.  Payment of terminal leave benefits to
officials and

employees
entitled thereto ……………P 55,316,000

d.  Payment of pensions to retired judges
and justices entitled

 thereto ………. ………………..
P 22,500,000

(page 1071, General Appropriations Act, FY
1992)

“C.  COURT OF
APPEALS

“For general
administration, administration of personnel benefits and the adjudication of
appealed and other cases as indicated hereunder ……………..…………………….. P114,615,000

Special Provisions.

1.  Authority to Use
Savings.  Subject to the approval of the Chief
Justice of the Supreme Court in accordance with Section 25(5), Article VI of
the Constitution of the Republic of the Philippines, the Presiding Justice may
be authorized to use any savings in any item of the appropriation for the Court
of Appeals for purposes of:  (1)
improving its compound and facilities; and (2) for augmenting any deficiency in
any item of its appropriation including its extraordinary expenses and payment
of adjusted pension rates to retired justices
entitled thereto pursuant to Administrative Matter
No. 91-8-225-C.A. (page 1079, General Appropriations Act, FY
1992; Emphasis supplied)

2.  Payment of Adjusted
Pension Rates to Retired Justices.  The
amount herein appropriated for payment of pensions to retired judges and
justices shall include the payment of pensions at the adjusted rates to retired
justices of the Court of Appeals entitled thereto pursuant to the Ruling of the
Supreme Court in Administrative Matter No. 91-8-225-C.A.  (page 1079 General
Appropriations Act, FY 1992).

“XL.  GENERAL FUND
ADJUSTMENT

For general fund
adjustment for operational and special requirements as indicated

hereunder ..………
P500,000,000

x x
x                                     x
x x                             x x x

Special Provision

1.  Use of the Fund.  This fund shall be used for:

x x x                                     x
x x                             x x x

1.3.  Authorized overdrafts and/or valid unbooked obligations, including the payment of back
salaries and related personnel benefits arising from decision of competent
authority including the Supreme Court decision
in Administrative Matter No. 91-8-225-C.A.
and COA decision in No. 1704.” (page 1164, Gen. Appropriations Act, FY 1992; Emphasis
supplied)

On January 15, 1992, the President vetoed the underlined portions
of Section 1 and the entire Section 4 of the Special Provisions for the Supreme
Court of the Philippines and the Lower Courts (General Appropriations Act, FY
1992, page 1071) and the underlined portions of Section 1 and the entire
Section 2, of the Special Provisions for the Court of Appeals (page 1079) and
the underlined portions of Section 1.3 of Article XLV of the Special Provisions
of the General Fund Adjustments (page 1164, General Appropriations Act, FY
1992).

The reason given for the veto of said provisions is that
“the resolution of this Honorable Court in Administrative Matter No.
91-8-225-CA pursuant to which the foregoing appropriations for the payment of
the retired justices of the Supreme Court and the Court of Appeals have been enacted
effectively nullified the veto of the President of House Bill No. 16297, the
bill which provided for the automatic increase in the retirement pensions of
the Justices of the Supreme Court and the Court of Appeals and chairmen of the
Constitutional Commissions by re-enacting Republic Act No. 1797 and Republic
Act No. 3595.  The President’s veto of
the aforesaid provisions was further justified by reiterating the earlier
reasons for vetoing House Bill No. 16297: 
“they would erode the very foundation of our collective effort to adhere
faithfully to and enforce strictly the policy on standardization of
compensation.  We should not permit the
grant of distinct privileges to select group of officials whose retirement
pensions under existing laws already enjoy preferential treatment over those of
the vast majority of our civil servants.”

Hence, the instant petition filed by the petitioners with the
assertions that:

1)   The
subject veto is not an item veto;

2)   The veto
by the Executive is violative of the doctrine of separation
of powers;

3)   The veto
deprives the retired Justices of their rights to the pensions due them;

4)   The
questioned veto impairs the Fiscal Autonomy guaranteed by the Constitution.

Raising similar grounds, the petitioners
in AM-91-8-225-CA, brought to the attention of this Court that the veto
constitutes no legal obstacle to the continued payment of the adjusted pensions
pursuant to the Court’s resolution.

On February 14, 1992,
the Court resolved to consolidate Administrative Matter No. 91-8-225-CA with
G.R. No. 103524.

The petitioners’ contentions are well-taken.

I

It cannot be overstressed that in a constitutional government
such as ours, the rule of law must prevail. 
The Constitution is the basic and paramount law to which all other laws must
conform and to which all persons, including the highest official of this land,
must defer.  From this cardinal
postulate, it follows that the three branches of government must discharge
their respective functions within the limits of authority conferred by the
Constitution.  Under the principle of
separation of powers, neither Congress, the President, nor
the Judiciary may encroach on fields allocated to the other branches of
government.  The legislature is generally
limited to the enactment of laws, the executive to the enforcement of laws and
the judiciary to their interpretation and application to cases and
controversies.

The Constitution expressly confers on the judiciary the power to
maintain inviolate what it decrees.  As
the guardian of the Constitution we cannot shirk the duty of seeing to it that
the officers in each branch of government do not go beyond their
constitutionally allocated boundaries and that the entire Government itself or
any of its branches does not violate the basic liberties of the people.  The essence of this judicial duty was
emphatically explained by Justice Laurel in the leading case of Angara v. Electoral Commission,
(63 Phil. 139 [1936]) to wit:

“The Constitution is a definition of the powers of
government.  Who is to determine the
nature, scope and extent of such powers? 
The Constitution itself has provided for the instrumentality of the
judiciary as the rational way.  And when
the judiciary mediates to allocate constitutional
boundaries, it does not assert any superiority
over the other department, it does not
in reality nullify or invalidate an act
of the legislature, but only asserts the
solemn and sacred obligation assigned to
it by the Constitution to determine conflicting claims
of authority under the Constitution and to establish for the parties in an
actual controversy the rights which that instrument secures and guarantees to
them.” (Emphasis supplied)

The act of the Executive in vetoing the particular provisions is
an exercise of a constitutionally vested power. 
But even as the Constitution grants the power, it also provides
limitations to its exercise.  The veto
power is not absolute.

The pertinent provision of the Constitution reads:

“The President shall have the power to veto any particular
item or items in an appropriation, revenue or tariff bill but the veto shall
not affect the item or items to which he does not object.” (Section 27(2),
Article VI, Constitution)

The OSG is correct when it states that the Executive must veto a
bill in its entirety or not at all.  He
or she cannot act like an editor crossing out specific lines, provisions, or
paragraphs in a bill that he or she dislikes. 
In the exercise of the veto power, it is generally all or nothing.  However, when it comes to appropriation,
revenue or tariff bills, the Administration needs the money to run the
machinery of government and it can not veto the entire bill even if it may
contain objectionable features.  The President
is, therefore, compelled to approve into law the entire bill, including its
undesirable parts.  It is for this reason
that the Constitution has wisely provided the “item veto power” to
avoid inexpedient riders being attached to an indispensable appropriation or
revenue measure.

The Constitution provides that only a particular item or items
may be vetoed.  The power to disapprove
any item or items in an appropriate bill does not grant the authority to veto a
part of an item and to approve the remaining portion of the same item.  (Gonzales v. Macaraig,
Jr., 191 SCRA 452, 464 [1990])

We distinguish an item from a provision in the following manner:

“The  terms item
and provision in budgetary legislation and practice are concededly
different.  An item in a bill
refers to the particulars, the details, the distinct and severable parts x x x of the bill (Bengzon, supra, at 916.) It is an indivisible sum of
money dedicated to a stated purpose (Commonwealth v. Dodson, 11 S.E., 2d 120,
124, 125, etc., 176 Va.
281).  The United States Supreme Court,
in the case of Bengzon v. Secretary
of Justice (299 U.S. 410, 414, 57 Ct 252, 81 L. Ed., 312)
declared ‘that an ‘item’ of an appropriation bill obviously means an item
which in itself is a specific appropriation of money, not some general provision
of law, which happens to be put into an appropriation
bill.’” (id. at page 465)

We regret having to state that misimpressions or unfortunately
wrong advice must have been the basis of the disputed veto.

The general fund adjustment is an item which appropriates P500,000,000.00 to enable the Government to meet certain
unavoidable obligations which may have been inadequately funded by the specific
items for the different branches, departments, bureaus, agencies, and offices
of the government.

The President did not veto this item.  What were vetoed were methods or systems
placed by Congress to insure that permanent and continuing obligations to
certain officials would be paid when they fell due.

An examination of the entire sections and the underlined portions
of the law which were vetoed will readily show that portions of the item have
been chopped up into vetoed and unvetoed parts.  Less than all of an item has been
vetoed.  Moreover, the vetoed portions
are not items.  They are provisions.

Thus, the augmentation of specific appropriations found
inadequate to pay retirement payments, by transferring savings from other items
of appropriation is a provision and not an item.  It gives power to the Chief Justice to
transfer funds from one item to another. 
There is no specific appropriation of money involved.

In the same manner, the provision which states that in compliance
with decisions of the Supreme Court and the Commission on Audit, funds still
undetermined in amount may be drawn from the general fund adjustment is not an
item.  It is the “general fund
adjustment” itself which is the item. 
This was not touched.  It was not
vetoed.

More ironic is the fact that misinformation led the Executive to
believe that the items in the 1992 Appropriations Act were being vetoed when,
in fact, the veto struck something else.

What were really vetoed are:

(1)  Republic Act No. 1797
enacted as early as June 21, 1957;
and

(2)  The Resolution of the
Supreme Court dated November 28, 1991
in Administrative Matter No. 91-8-225-CA.

We need no lengthy justifications or citations of authorities to
declare that no President may veto the provisions of a law enacted thirty-five
(35) years before his or her term of office. 
Neither may the President set aside or reverse a final and executory judgment of this Court through the exercise of
the veto power.

A few background facts may be reiterated to fully explain the
unhappy situation.

Republic Act No. 1797 provided for the adjustment of pensions of
retired Justices which privilege was extended to retired members of
Constitutional Commissions by Republic Act No. 3595.

On January 25, 1975,
President Marcos issued Presidential Decree No. 644 which repealed Republic
Acts 1797 and 3595.  Subsequently,
automatic readjustment of pensions for retired Armed Forces officers and men
was surreptitiously restored through Presidential Decree Nos. 1638 and 1909.

It was the impression that Presidential Decree No. 644 had
reduced the pensions of Justices and Constitutional Commissioners which led
Congress to restore the repealed provisions through House Bill No. 16297 in
1990.  When her finance and budget
advisers gave the wrong information that the questioned provisions in the 1992
General Appropriations Act were simply an attempt to overcome her earlier 1990
veto, she issued the veto now challenged in this petition.

It turns out, however, that P. D. No. 644 never became valid
law.  If P. D. No. 644 was not law, it
follows that Rep. Act No. 1797 was not repealed and continues to be effective
up to the present.  In the same way that
it was enforced from 1957 to 1975, so should it be enforced today.

House Bill No. 16297 was superfluous as it tried to restore
benefits which were never taken away validly. 
The veto of House Bill No. 16297 in 1990 did not also produce any
effect.  Both were based on erroneous and
non-existent premises.

From the foregoing discussion, it can be seen that when the
President vetoed certain provisions of the 1992 General Appropriations Act, she
was actually vetoing Republic Act No. 1797 which, of course, is beyond her
power to accomplish.

Presidential Decree No. 644 which purportedly repealed Republic
Act No. 1797 never achieved that purpose because it was not properly
published.  It never became a law.

The case of Tañada v. Tuvera (136 SCRA 27 [1985] and 146 SCRA 446 [1986])
specifically requires that “all laws shall immediately upon their approval
or as soon thereafter as possible, be published in full in the Official
Gazette, to become effective only after fifteen days from their publication, or
on another date specified by the legislature, in accordance with Article 2 of
the Civil Code”.  This was the
Court’s answer to the petition of Senator Lorenzo Tañada
and other opposition leaders who challenged the validity of Marcos’ decrees
which, while never published, were being enforced.  Secret decrees are anathema in a free
society.

In support of their request, the petitioners in Administrative
Matter No. 91-8-225-CA secured a certification from Director Lucita C. Sanchez of the National Printing Office that the April 4,1977
Supplement to the Official Gazette was published only on September 5, 1983 and officially released on September 29, 1983.

On the issue of whether or not Presidential Decree 644 became
law, the Court has already categorically spoken in a definitive ruling on the
matter, to wit:

x x
x                                     x
x x                                        x
x x

“PD 644 was promulgated by President Marcos on January 24, 1975, but was not
immediately or soon thereafter published although preceding and subsequent
decrees were duly published in the Official Gazette.  It now appears that it was intended as a
secret decree “NOT FOR PUBLICATION” as the notation on the face of
the original copy thereof plainly indicated (Annex B).  It is also clear that the decree was
published in the back­dated Supplement only after it was challenged in the Tanada Case as among the presidential decrees that had not
become effective for lack of the required publication.  The petition was filed on May 7, 1983, four months before the
actual publication of the decree.

It took more than eight years to publish the decree after its
promulgation in 1975.  Moreover, the
publication was made in bad faith insofar as it purported to show that it was
done in 1977 when the now demonstrated fact is that the April 4, 1977 supplement was actually published
and released only in September 1983.  The
belated publication was obviously intended to refute the petitioner’s claim in
the Tanada Case and to support the Solicitor
General’s submission that the petition had become moot and academic.

xxx                                        xxx                                           xxx

xxx                                        xxx                                           xxx

We agree that PD 644 never became a law because it was not validly
published and that, consequently, it did not have the effect of repealing RA
1797.  The requesting justices (including
Justice Lood, whose request for the upgrading of his
pension was denied on January 15, 1991)
are therefore entitled to be paid their monthly pensions on the basis of the
latter measure, which remains unchanged to date.”

The Supreme Court has spoken and it has
done so with finality, logically and rightly so as to assure stability in legal
relations, and avoid confusion.  (see Ver v. Quetullo,
163 SCRA 80 [1988]) Like other decisions of this Court, the ruling and
principles set out in the Court resolution constitute binding precedent.  (Bulig-Bulig
Kita Kamaganak Association, et al. v. Sulpicio Lines, Inc. and Regional Trial Court, etc.
G.R. 84750, 16 May 89, En Banc, Minute Resolution)

The challenged veto has far-reaching implications which the Court
can not countenance as they undermine the principle of separation of
powers.  The Executive has no authority
to set aside and overrule a decision of the Supreme Court.

We must emphasize that the Supreme Court did not enact Rep. Act
No. 1797.  It is not within its powers to
pass laws in the first place.  Its duty
is confined to interpreting or defining what the law is and whether or not it
violates a provision of the Constitution.

As early as 1953, Congress passed a law providing for retirement
pensions to retired Justices of the Supreme Court and the Court of
Appeals.  This law was amended by
Republic Act 1797 in 1957.  Funds
necessary to pay the retirement pensions under these statutes are deemed
automatically appropriated every year.

Thus, Congress  included in
the General Appropriations Act of 1992, provisions identifying funds and
savings which may be used to pay the adjusted pensions pursuant to the Supreme
Court Resolution.  As long as retirement
laws remain in the statute book, there is an existing obligation on the part of
the government to pay the adjusted pension rate pursuant to RA 1797 and
AM-91-8-225-CA.

Neither may the veto power of the President be exercised as a
means of repealing RA 1797.  This is
arrogating unto the Presidency legislative powers which are beyond its authority.  The President has no power to enact or amend
statutes promulgated by her predecessors much less to repeal existing
laws.  The President’s power is merely to
execute the laws as passed by Congress.

II

There is a matter of greater consequence arising from this
petition.  The attempt to use the veto
power to set aside a Resolution of this Court and to deprive retirees of
benefits given them by Rep. Act No. 1797 trenches upon the constitutional grant
of fiscal autonomy to the Judiciary.

Sec. 3 Art.  VIII mandates that:

“Sec. 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.”

We can not overstress the importance of and the need for an
independent judiciary.  The Court has on
various past occasions explained the significance of judicial
independence.  In the case of De la
Llana v. Alba (112 SCRA 294
[1982]), it ruled:

“It is a cardinal rule of faith of our constitutional regime
that it is the people who are endowed with rights, to secure which a government
is instituted.  Acting as it does through
public officials, it has to grant them either
expressly or implicitly certain powers. 
These they exercise not for their own benefit but for the body
politic.  x x x

“A public office is a public trust.  That is more than a moral adjuration.  It is a legal imperative.  The law may vest in a public official certain
rights.  It does so to enable them to
perform his functions and fulfill his responsibilities more efficiently.  x x x It is an added guarantee that justices and judges can
administer justice undeterred by any fear of reprisal or untoward
consequence.  Their judgments then are
even more likely to be inspired solely by their knowledge of the law and the
dictates of their conscience, free from the corrupting influence of base or
unworthy motives.  The independence of
which they are assured is impressed with a significance transcending that of a
purely personal right.” (At pp. 338-339)

The exercise of the veto power in this case may be traced back to
the efforts of the Department of Budget and Management (DBM) to ignore or
overlook the plain mandate of the Constitution on fiscal autonomy.  The OSG Comment reflects the same truncated
view of the provision.

We have repeatedly in the past few years called the attention of
DBM that not only does it allocate less than one percent (1%) of the national
budget annually for the 22,769 Justices, Judges, and court personnel all over
the country but it also examines with a fine-toothed comb how we spend the
funds appropriated by Congress based on DBM recommendations.

The gist of our position papers and arguments before Congress is as
follows:

“The DBM requires the Supreme Court, the Constitutional
Commissions, and the Ombudsman to submit budget proposals in accordance with
parameters it establishes.  DBM evaluates
the proposals, asks each agency to defend its proposals during DBM budget
hearings, submits its own version of the proposals to Congress without
informing the agency of major alterations and mutilations inflicted on their
proposals, and expects each agency to defend in Congress proposals not of the
agency’s making.

After the general appropriations bill is passed by Congress and
signed into law by the President, the tight and officious control by DBM
continues.  For the release of
appropriated funds, the Judiciary, Constitutional Commissions, and Ombudsman
are instructed through ‘guidelines’, how to prepare Work and Financial Plans
and requests for monthly allotments.  The
DBM evaluates and approves these plans and requests and on the basis of its
approval authorizes the release of allotments with corresponding notices of
cash allocation.  These notices specify
the maximum withdrawals each month which the Supreme Court, the Commissions,
and the Ombudsman may make from the servicing government bank.  The above agencies are also required to
submit to DBM monthly, quarterly, and year-end budget accountability reports to
indicate their performance, physical and financial operations, and income.

The DBM reserves to itself the power to review the accountability
reports and, when importuned for needed funds, to release additional allotments
to the agency.  Since DBM always
prunes the budget proposals to below subsistence levels and since emergency
situations usually occur during the fiscal year, the Chief Justice, Chairmen of
the Commissions, and Ombudsman are compelled to make
pilgrimages to DBM for additional funds to tide their respective agencies over
the emergency.”

What is fiscal autonomy?

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. 
In the interest of comity and cooperation, the Supreme Court,
Constitutional Commissions, and the Ombudsman have so far limited their
objections to constant reminders.  We now
agree with the petitioners that this grant of autonomy should cease to be a
meaningless provision.

In the case at bar, the veto of these specific provisions in the
General Appropriations Act is tantamount to dictating to the Judiciary how its
funds should be utilized, which is clearly repugnant to fiscal autonomy.  The freedom of the Chief Justice to make
adjustments in the utilization of the funds appropriated for the expenditures
of the judiciary, including the use of any savings from any particular item to
cover deficits or shortages in other items of the judiciary is withheld.  Pursuant to the Constitutional mandate, the
Judiciary must enjoy freedom in the disposition of the funds allocated to it in
the appropriations law.  It knows its
priorities just as it is aware of the fiscal restraints.  The Chief Justice must be given a free hand
on how to augment appropriations where augmentation is needed.

Furthermore, in the case of Gonzales v. Macaraig (191 SCRA 452 [1990]), the Court upheld the
authority of the President and other key officials to augment any item or any
appropriation from savings in the interest of expediency and efficiency.  The Court stated that:

“There should be no question, therefore, that statutory
authority has, in fact, been granted. 
And once given, the heads of the different branches of the Government
and those of the Constitutional Commissions are afforded considerable
flexibility in the use of public funds and resources (Demetria
v. Alba, supra).  The doctrine of
separation of powers is in no way endangered because the transfer is made
within a department (or branch of government) and not from one department
(branch) to another.”

The Constitution, particularly Article VI Section 25(5) also
provides:

“Sec. 25.  (5) No law shall be passed authorizing any
transfer of appropriations; however, the President, the President of the
Senate, the Speaker of the House of Representatives, the Chief Justice of the
Supreme Court, and the heads of Constitutional Commissions may, by law, be
authorized to augment any item in the general appropriations law for their
respective offices from savings in other items of their respective
appropriations.”

In the instant case, the vetoed provisions which relate to the
use of savings for augmenting items for the payment of the pension
differentials, among others, are clearly in consonance with the abovestated pronouncements of the Court.  The veto impairs the power of the Chief
Justice to augment other items in the Judiciary’s appropriation, in
contravention of the constitutional provision on “fiscal autonomy”.

III

Finally, it can not be denied that the retired Justices have a
vested right to the accrued pensions due them pursuant to RA 1797.

The right to a public pension is of statutory origin and statutes
dealing with pensions have been enacted by practically all the states in the United
States (State ex rel.
Murray v. Riley, 44 Del
505, 62 A2d 236), and presumably in most countries of the world.  Statutory provisions for the support of
Judges or Justices on retirement are founded on services rendered to the
state.  Where a judge has complied with
the statutory prerequisite for retirement with pay, his right to retire and
draw salary becomes vested and may not, thereafter, be revoked or
impaired.  (Gay v. Whitehurst 44 So ad
430)

Thus, in the Philippines, a number of retirement laws have been
enacted, the purpose of which is to entice competent men and women to enter the
government service and to permit them to retire therefrom
with relative security, not only those who have retained their vigor but, more
so, those who have been incapacitated by illness or accident.  (In re: 
Amount of the Monthly Pension of Judges and Justices Starting From the
Sixth Year of their Retirement and After the Expiration of the Initial
Five-year Period of Retirement, (190 SCRA 315 [1990])

As early as 1953, Rep. Act No. 910 was enacted to grant pensions
to retired Justices of the Supreme Court and Court of Appeals.

This was amended by RA 1797 which provided for an automatic
adjustment of the pension rates.  Through
the years, laws were enacted and jurisprudence expounded to afford retirees
better benefits.

P. D. No. 1438, for one, was promulgated on June 10, 1978
amending RA 910 providing that the lump sum of 5 years gratuity to which the
retired Justices of the Supreme Court and Court of Appeals were entitled was to
be computed on the basis of the highest monthly aggregate of transportation,
living and representation allowances each Justice was receiving on the date of
his resignation.  The Supreme Court in a
resolution dated October 4, 1990,
stated that this law on gratuities covers the monthly pensions of retired
Judges and Justices which should include the highest monthly aggregate of
transportation, living and representation allowances the retiree was receiving
on the date of retirement.  (In Re:  Amount of the Monthly Pension of Judges and
Justices, supra)

The rationale behind the veto which implies that Justices and
Constitutional officers are unduly favored is, again, a misimpression.

Immediately, we can state that retired Armed Forces officers and enlisted
men number in the tens of thousands while retired Justices are so few
they can be immediately identified. 
Justices retire at age 70 while military men retire at a much younger
age – some retired Generals left the military at age 50 or earlier.  Yet, the benefits in Rep. Act No. 1797 are
made to apply equally to both groups. 
Any ideas arising from an alleged violation of the equal protection
clause should first be directed to retirees in the military or civil service
where the reason for the retirement provision is not based on indubitable and
constitutionally sanctioned grounds, not to a handful of retired Justices whose
retirement pensions are founded on constitutional reasons.

The provisions regarding retirement pensions of Justices arise
from the package of protections given by the Constitution to guarantee and
preserve the independence of the Judiciary.

The Constitution expressly vests the power of judicial review in
this Court.  Any institution given the
power to declare, in proper cases, that acts of both the President and Congress
are unconstitutional needs a high degree of independence in the exercise of its
functions.  Our jurisdiction may not be
reduced by Congress.  Neither may it be
increased without our advice and concurrence. 
Justices may not be removed until they reach age 70 except through
impeachment.  All courts and court
personnel are under the administrative supervision of the Supreme Court.  The President may not appoint any Judge or
Justice unless he or she has been nominated by the Judicial and Bar Council
which, in turn, is under the Supreme Court’s supervision.  Our salaries may not be decreased during our
continuance in office.  We cannot be
designated to any agency performing administrative or quasi-judicial
functions.  We are specifically given
fiscal autonomy.  The Judiciary is not
only independent of, but also co-equal and coordinate
with the Executive and Legislative Departments. 
(Article VIII and Section 30, Article VI, Constitution)

Any argument which seeks to remove special privileges given by
law to former Justices of this Court on the ground that there should be no
“grant of distinct privileges” or “preferential treatment”
to retired Justices ignores these provisions of the Constitution and, in
effect, asks that these Constitutional provisions on special protections for
the Judiciary be repealed.  The integrity
of our entire constitutional system is premised to a large extent on the
independence of the Judiciary.  All these
provisions are intended to preserve that independence.  So are the laws on retirement benefits of
Justices.

One last point.

The Office of the Solicitor General argues
that:

“xxx
Moreover, by granting these benefits to retired Justices implies that
public funds, raised from taxes on other citizens, will be paid off to select
individuals who are already leading private lives and have ceased performing
public service.  Said the United States
Supreme Court, speaking through Mr. Justice Miller:  ‘To lay with one hand
the power of the government on the
property of the citizen, and with the
other to bestow upon favored individuals
… is nonetheless a robbery because it
is done under the forms of law
x x x.’ (Law Association v.
Topeka, 20 Wall 655)” (Comment, p. 16)

The above arguments are not only specious, impolite and
offensive; they certainly are unbecoming of an Office whose top officials are
supposed to be, under their charter, learned in the law.

Chief Justice Cesar Bengzon and Chief
Justice Querube Makalintal,
Justices J.B.L. Reyes, Cecilia Munoz Palma, Efren Plana, Vicente Abad Santos, and,
in fact, all retired Justices of the Supreme Court and the Court of Appeals may
no longer be in the active service. 
Still, the Solicitor General and all lawyers under him who represent the
Government before the two courts and whose predecessors themselves appeared
before these retirees, should show some continuing esteem and good manners toward
these Justices who are now in the evening of their years.

All that the retirees ask is
to be given the benefits granted by
law.  To characterize them as
engaging in “robbery” is intemperate, abrasive, and disrepectful more so because the argument is unfounded.

If the Comment is characteristic of OSG pleadings today, then we
are sorry to state that the then quality of research in that institution has
severely deteriorated.

In the first place, the citation of the case is wrong.  The title is not LAW Association
v. Topeka but Citizen’s Savings and Loan
Association of Cleveland, Ohio v. Topeka
City, (20 Wall. 655; 87 U.S.
729; 22 Law. Ed. 455 [1874].  Second, the case involves the validity of a
statute authorizing cities and counties to issue bonds for the purpose of
building bridges, waterpower, and other public works to aid private railroads
improve their services.  The law was
declared void on the ground that the right of a municipality to impose a tax
cannot be used for private interests.

The case was decided in 1874. 
The world has turned over more than 40,000 times since that ancient
period.  Public use is now equated with
public interest.  Public money may now be
used for slum clearance, low-cost housing, squatter
resettlement, urban and agrarian reform where only private persons are the
immediate beneficiaries.  What was
“robbery” in 1874 is now called “social justice.” There is
nothing about retirement benefits in the cited case.  Obviously, the OSG lawyers cited from an old
textbook or encyclopedia which could not even spell “loan”
correctly.  Good lawyers are expected to
go to primary sources and to use only relevant citations.

The Court has been deluged with letters and petitions by former
colleagues in the Judiciary requesting adjustments in their pensions Just so they would be able to cope with the everyday living
expenses not to mention the high cost of medical bills that old age
entails.  As Justice Cruz aptly stated in
Teodoro J. Santiago v. COA,
(G.R. No. 92284, July 12, 1991):

“Retirement laws should be interpreted liberally in favor of
the retiree because their intention is to provide for his sustenance, and
hopefully even comfort, when he no longer has the stamina to continue earning
his livelihood.  After devoting the best
years of his life to the public service, he deserves the appreciation of a
grateful government as best concretely expressed in a generous retirement
gratuity commensurate with the value and length of his services.  That generosity is the least he should expect
now that his work is done and his youth is gone.  Even as he feels the weariness in his bones
and glimpses the approach of the lengthening shadows, he should be able to
luxuriate in the thought that he did his task well, and was rewarded for
it.”

For as long as these retired Justices are entitled under laws
which continue to be effective, the government can not deprive them of their
vested right to the payment of their pensions.

WHEREFORE, the petition is hereby GRANTED.  The questioned veto is SET ASIDE as illegal
and unconstitutional.  The vetoed
provisions of the 1992 Appropriations Act are declared valid and
subsisting.  The respondents are ordered
to automatically and regularly release pursuant to the grant of fiscal autonomy
the funds appropriated for the subject pensions as well as the other
appropriations for the Judiciary.  The
resolution in Administrative Matter No. 91-8-225-CA dated November 28, 1991 is likewise ordered to be
implemented as promulgated.

SO ORDERED.

Narvasa, C.J., Melencio-Herrera,
Cruz, Paras, Feliciano, Padilla, Bidin,
Griño-Aquino, Medialdea, Regalado, Davide, Jr., Romero, and Nocon, JJ., concur.

Bellosillo, J., on leave.