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Republic of the Philippines Supreme Court Manila SECOND DIVISION DUMAGUETE CATHEDRAL G.R. No. 182722 CREDIT COOPERATIVE [DCCCO], Represented by Present: Felicidad L. Ruiz, its General Manager, CARPIO, J., Chairperson, Petitioner, BRION, DEL CASTILLO, -versus- ABAD, and PEREZ, JJ. COMMISSIONER OF INTERNAL REVENUE, Promulgated: Respondent. January 22, 2010 x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x D E C I S I O N DEL CASTILLO, J.: The clashing interests of the State and the taxpayers are again pitted against each other. Two basic principles, the States inherent power of taxation and its declared policy of fostering the creation and growth of cooperatives come into play. However, the one that embodies the spirit of the law and the true intent of the legislature prevails. This Petition for Review on Certiorari under Section 11 of Republic Act (RA) No. 9282, [1] in relation to Rule 45 of the Rules of Court, seeks to set aside the December 18, 2007 Decision [2] of the Court of Tax Appeals (CTA), ordering petitioner to pay deficiency withholding taxes on interest from savings and time deposits of its members for taxable years 1999 and 2000, pursuant to

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Republic of thePhilippinesSupreme CourtManilaSECOND DIVISIONDUMAGUETE CATHEDRALG.R. No. 182722

CREDIT COOPERATIVE

[DCCCO], Represented byPresent:

Felicidad L. Ruiz, its General

Manager,CARPIO,J.,Chairperson,

Petitioner,BRION,

DELCASTILLO,

-versus-ABAD,and

PEREZ,JJ.

COMMISSIONER OF

INTERNAL REVENUE,Promulgated:

Respondent.January 22, 2010

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - xD E C I S I O NDELCASTILLO,J.:The clashing interests of the State and the taxpayers are again pitted against each other.Two basic principles, the States inherent power of taxation and its declared policy of fostering the creation and growth of cooperatives come into play.However, the one that embodies the spirit of the law and the true intent of the legislature prevails.This Petition for Review onCertiorariunder Section 11 of Republic Act (RA) No. 9282,[1]in relation to Rule 45 of the Rules of Court, seeks to set aside the December 18, 2007 Decision[2]of the Court of Tax Appeals (CTA), ordering petitioner to pay deficiency withholding taxes on interest from savings and time deposits of its members for taxable years 1999 and 2000, pursuant to Section 24(B)(1) of the National Internal Revenue Code of 1997 (NIRC), as well as the delinquency interest of 20% per annum under Section 249(C) of the same Code.It also assails theApril 11, 2008Resolution[3]denying petitioners Motion for Reconsideration.Factual AntecedentsPetitioner Dumaguete Cathedral Credit Cooperative (DCCCO) is a credit cooperative duly registered with and regulated by the Cooperative Development Authority (CDA).[4]It was established on February 17, 1968[5]with the following objectives and purposes: (1) to increase the income and purchasing power of the members; (2) to pool the resources of the members by encouraging savings and promoting thrift to mobilize capital formation for development activities; and (3) to extend loans to members for provident and productive purposes.[6]It has the power (1) to draw, make, accept, endorse, guarantee, execute, and issue promissory notes, mortgages, bills of exchange, drafts, warrants, certificates and all kinds of obligations and instruments in connection with and in furtherance of its business operations; and (2) to issue bonds, debentures, and other obligations; to contract indebtedness; and to secure the same with a mortgage or deed of trust, or pledge or lien on any or all of its real and personal properties.[7]On November 27, 2001, the Bureau of Internal Revenue (BIR) Operations Group Deputy Commissioner, Lilian B. Hefti, issued Letters of Authority Nos. 63222 and 63223, authorizing BIR Officers Tomas Rambuyon and Tarcisio Cubillan of Revenue Region No. 12, Bacolod City, to examine petitioners books of accounts and other accounting records for all internal revenue taxes for the taxable years 1999 and 2000.[8]Proceedings before the BIR Regional OfficeOnJune 26, 2002, petitioner received two Pre-Assessment Notices for deficiency withholding taxes for taxable years 1999 and 2000 which were protested by petitioner onJuly 23, 2002.[9]Thereafter, onOctober 16, 2002, petitioner received two other Pre-Assessment Notices for deficiency withholding taxes also for taxable years 1999 and 2000.[10]The deficiency withholding taxes cover the payments of the honorarium of the Board of Directors, security and janitorial services, legal and professional fees, and interest on savings and time deposits of its members.OnOctober 22, 2002, petitioner informed BIR Regional Director Sonia L. Flores that it would only pay the deficiency withholding taxes corresponding to the honorarium of the Board of Directors, security and janitorial services, legal and professional fees for the year 1999 in the amount ofP87,977.86, excluding penalties and interest.[11]In another letter dated November 8, 2002, petitioner also informed the BIR Assistant Regional Director, Rogelio B. Zambarrano, that it would pay the withholding taxes due on the honorarium andper diemsof the Board of Directors, security and janitorial services, commissions and legal & professional fees for the year 2000 in the amount ofP119,889.37, excluding penalties and interest, and that it would avail of the Voluntary Assessment and Abatement Program (VAAP) of the BIR under Revenue Regulations No. 17-2002.[12]On November 29, 2002, petitioner availed of the VAAP and paid the amounts ofP105,574.62 andP143,867.24[13]corresponding to the withholding taxes on the payments for the compensation, honorarium of the Board of Directors, security and janitorial services, and legal and professional services, for the years 1999 and 2000, respectively.OnApril 24, 2003, petitioner received from the BIR Regional Director, Sonia L. Flores, Letters of Demand Nos. 00027-2003 and 00026-2003, with attached Transcripts of Assessment and Audit Results/Assessment Notices, ordering petitioner to pay the deficiency withholding taxes, inclusive of penalties, for the years 1999 and 2000 in the amounts ofP1,489,065.30 andP1,462,644.90, respectively.[14]Proceedings before the Commissioner of Internal RevenueOnMay 9, 2003, petitioner protested the Letters of Demand and Assessment Notices with the Commissioner of Internal Revenue (CIR).[15]However, the latter failed to act on the protest within the prescribed 180-day period.Hence, onDecember 3, 2003, petitioner filed a Petition for Review before the CTA, docketed as C.T.A. Case No. 6827.[16]Proceedings before the CTA First DivisionThe case was raffled to the First Division of the CTA which rendered its Decision onFebruary 6, 2007, disposing of the case in this wise:IN VIEW OF ALL THE FOREGOING, the Petition for Review is hereby PARTIALLY GRANTED. Assessment Notice Nos. 00026-2003 and 00027-2003 are hereby MODIFIED and the assessment for deficiency withholding taxes on the honorarium and per diems of petitioners Board of Directors, security and janitorial services, commissions and legal and professional fees are hereby CANCELLED. However, the assessments for deficiency withholding taxes on interests are hereby AFFIRMED.Accordingly, petitioner is ORDERED TO PAY the respondent the respective amounts ofP1,280,145.89 andP1,357,881.14 representing deficiency withholding taxes on interests from savings and time deposits of its members for the taxable years 1999 and 2000.In addition, petitioner is ordered to pay the 20% delinquency interest fromMay 26, 2003until the amount of deficiency withholding taxes are fully paid pursuant to Section 249 (C) of the Tax Code.SO ORDERED.[17]Dissatisfied, petitioner moved for a partial reconsideration, but it was denied by the First Division in its Resolution datedMay 29, 2007.[18]Proceedings before the CTA En BancOnJuly 3, 2007, petitioner filed a Petition for Review with the CTAEn Banc,[19]interposingthe lone issue of whether or not petitioner is liable to pay the deficiency withholding taxes on interest from savings and time deposits of its members for taxable years 1999 and 2000, and the consequent delinquency interest of 20% per annum.[20]Finding no reversible error in the Decision datedFebruary 6, 2007and the Resolution datedMay 29, 2007of the CTA First Division, the CTAEn Bancdenied the Petition for Review[21]as well as petitioners Motion for Reconsideration.[22]The CTAEn Bancheld that Section 57 of the NIRC requires the withholding of tax at source.Pursuant thereto, Revenue Regulations No. 2-98 was issued enumerating the income payments subject to final withholding tax, among which is interest from any peso bank deposit and yield, or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements x x x.According to the CTA EnBanc, petitioners business falls under the phrase similar arrangements; as such, it should have withheld the corresponding 20% final tax on the interest from the deposits of its members.IssueHence, the present recourse, where petitioner raises the issue of whether or not it is liable to pay the deficiency withholding taxes on interest from savings and time deposits of its members for the taxable years 1999 and 2000, as well as the delinquency interest of 20% per annum.Petitioners ArgumentsPetitioner argues that Section 24(B)(1) of the NIRC which reads in part, to wit:SECTION 24.Income Tax Rates.x x x x(B)Rate of Tax on Certain Passive Income:(1)Interests, Royalties, Prizes, and Other Winnings. A final tax at the rate of twenty percent (20%) is hereby imposed upon the amount of interest from any currency bank deposit and yield or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements; x x xapplies only to banks and not to cooperatives, since the phrase similar arrangements is preceded by terms referring to banking transactions that have deposit peculiarities.Petitioner thus posits that the savings and time deposits of members of cooperatives are not included in the enumeration, and thus not subject to the 20% final tax.To bolster its position, petitioner cites BIR Ruling No. 551-888[23]and BIR Ruling [DA-591-2006][24]where the BIR ruled that interests from deposits maintained by members of cooperative are not subject to withholding tax under Section 24(B)(1) of the NIRC.Petitioner further contends that pursuant to Article XII, Section 15 of the Constitution[25]and Article 2 of Republic Act No. 6938 (RA 6938) or the Cooperative Code of the Philippines,[26]cooperatives enjoy a preferential tax treatment which exempts their members from the application of Section 24(B)(1) of the NIRC.Respondents ArgumentsAs a counter-argument, respondent invokes the legal maximUbi lex non distinguit nec nos distinguere debemos(where the law does not distinguish, the courts should not distinguish).Respondent maintains that Section 24(B)(1) of the NIRC applies to cooperatives as the phrase similar arrangements is not limited to banks, but includes cooperatives that are depositaries of their members.Regarding the exemption relied upon by petitioner, respondent adverts to the jurisprudential rule that tax exemptions are highly disfavored and construedstrictissimi jurisagainst the taxpayer and liberally in favor of the taxing power.In this connection, respondent likewise points out that the deficiency tax assessments were issued against petitioner not as a taxpayer but as a withholding agent.Our RulingThe petition has merit.Petitioners invocation of BIR Ruling No. 551-888, reiterated in BIR Ruling [DA-591-2006], is proper.OnNovember 16, 1988, the BIR declared in BIR Ruling No. 551-888 that cooperatives are not required to withhold taxes on interest from savings and time deposits of their members.The pertinent BIR Ruling reads:November 16, 1988BIR RULING NO. 551-88824 369-88 551-888Gentlemen:This refers to your letter datedSeptember 5, 1988stating that you are a corporation established under P.D. No. 175 and duly registered with the Bureau of Cooperatives Development as full fledged cooperative of good standing with Certificate of Registration No. FF 563-RR datedAugust 8, 1985; and that one of your objectives is to provide and strengthen cooperative endeavor and extend assistance to members and non-members through credit scheme both in cash and in kind.Based on the foregoing representations, you now request in effect a ruling as to whether or not you are exempt from the following:1.Payment of sales tax2.Filing and payment of income tax3.Withholding taxes fromcompensation of employees andsavings account and time deposits of members.(Underscoring ours)In reply, please be informed that Executive Order No. 93 which took effect on March 10, 1987 withdrew all tax exemptions and preferential privileges e.g., income tax and sales tax, granted to cooperatives under P.D. No. 175 which were previously withdrawn by P.D. No. 1955 effective October 15, 1984 and restored by P.D. No. 2008 effective January 8, 1986.However, implementation of said Executive Order insofar as electric, agricultural, irrigation and waterworks cooperatives are concerned was suspended untilJune 30, 1987.(Memorandum Order No. 65 dated January 21, 1987 of the President)Accordingly, your tax exemption privilege expired as ofJune 30, 1987.Such being the case, you are now subject to income and sales taxes.Moreover, under Section 72(a) of the Tax Code, as amended, every employer making payment of wages shall deduct and withhold upon such wages a tax at the rates prescribed by Section 21(a) in relation to section 71, Chapter X, Title II, of the same Code as amended by Batas Pambansa Blg. 135 and implemented by Revenue Regulations No. 6-82 as amended.Accordingly, as an employer you are required to withhold the corresponding tax due from the compensation of your employees.Furthermore, under Section 50(a) of the Tax Code, as amended, the tax imposed or prescribed by Section 21(c) of the same Code on specified items of income shall be withheld by payor-corporation and/or person and paid in the same manner and subject to the same conditions as provided in Section 51 of the Tax Code, as amended.Such being the case, and since interest from any Philippine currency bank deposit and yield or any other monetary benefit from deposit substitutes are paid by banks, you are not the party required to withhold the corresponding tax on the aforesaid savings account and time deposits of your members.(Underscoring ours)Very truly yours,(SGD.) BIENVENIDO A. TAN, JR.CommissionerThe CTA First Division,however, disregarded the above quoted ruling in determining whether petitioner is liable to pay the deficiency withholding taxes on interest from the deposits of its members.It ratiocinated in this wise:This Court does not agree. As correctly pointed out by respondent in his Memorandum, nothing in the above quoted resolution will give the conclusion that savings account and time deposits of members of a cooperative are tax-exempt. What is entirely clear is the opinion of the Commissioner that the proper party to withhold the corresponding taxes on certain specified items of income is the payor-corporation and/or person. In the same way, in the case of interests earned from Philippine currency deposits made in a bank, then it is the bank which is liable to withhold the corresponding taxes considering that the bank is the payor-corporation. Thus, the ruling that a cooperative is not the proper party to withhold the corresponding taxes on the aforementioned accounts is correct.However, this ruling does not hold true if the savings and time deposits are being maintained in the cooperative, for in this case, it is the cooperative which becomes the payor-corporation, a separate entity acting no more than an agent of the government for the collection of taxes, liable to withhold the corresponding taxes on the interests earned.[27](Underscoring ours)The CTAEn Bancaffirmed the above-quoted Decision and found petitioners invocation of BIR Ruling No. 551-88 misplaced.According to the CTAEn Banc,the BIR Ruling was based on the premise that the savings and time deposits were placed by the members of the cooperative in the bank.[28]Consequently, it ruled that the BIR Ruling does not apply when the deposits are maintained in the cooperative such as the instant case.We disagree.There is nothing in the ruling to suggest that it applies only when deposits are maintained in a bank.Rather, the ruling clearly states, without any qualification, that since interest from any Philippine currency bank deposit and yield or any other monetary benefit from deposit substitutes are paid by banks, cooperatives are not required to withhold the corresponding tax on the interest from savings and time deposits of their members.This interpretation was reiterated in BIR Ruling [DA-591-2006] dated October 5, 2006, which was issued by Assistant Commissioner James H. Roldan upon the request of the cooperatives for a confirmatory ruling on several issues, among which is the alleged exemption of interest income on members deposit (over and above the share capital holdings) from the 20% final withholding tax.In the said ruling, the BIR opined that:x x x x3.Exemption of interest income on members deposit (over and above the share capital holdings) from the 20% Final Withholding Tax.The National Internal Revenue Code states that a final tax at the rate of twenty percent (20%) is hereby imposed upon the amount of interest on currency bank deposit and yield or any other monetary benefit from the deposit substitutes and from trust funds and similar arrangement x x x for individuals under Section 24(B)(1) and for domestic corporations under Section 27(D)(1).Considering the members deposits with the cooperatives are not currency bank deposits nor deposit substitutes, Section 24(B)(1) and Section 27(D)(1), therefore, do not apply to members of cooperatives and to deposits of primaries with federations, respectively.It bears stressing that interpretations of administrative agencies in charge of enforcing a law are entitled to great weight and consideration by the courts, unless such interpretations are in a sharp conflict with the governing statute or the Constitution and other laws.[29]In this case, BIR Ruling No. 551-888 and BIR Ruling [DA-591-2006] are in perfect harmony with the Constitution and the laws they seek to implement. Accordingly, the interpretation in BIR Ruling No. 551-888 that cooperatives are not required to withhold the corresponding tax on the interest from savings and time deposits of their members, which was reiterated in BIR Ruling [DA-591-2006],applies to the instant case.Members of cooperatives deserve a preferential tax treatment pursuant to RA 6938, as amended by RA 9520.Given that petitioner is a credit cooperative duly registered with the Cooperative Development Authority (CDA), Section 24(B)(1) of the NIRC must be read together with RA 6938, as amended by RA 9520.Under Article 2 of RA 6938, as amended by RA 9520, it is a declared policy of the State to foster the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice. Thus, to encourage the formation of cooperatives and to create an atmosphere conducive to their growth and development, the State extends all forms of assistance to them, one of which is providing cooperatives a preferential tax treatment.The legislative intent to give cooperatives a preferential tax treatment is apparent in Articles 61 and 62 of RA 6938,which read:ART. 61.Tax Treatment of Cooperatives. Duly registered cooperatives under this Code which do not transact any business with non-members or the general public shall not be subject to any government taxes and fees imposed under the Internal Revenue Laws and other tax laws. Cooperatives not falling under this article shall be governed by the succeeding section.ART. 62.Tax and Other Exemptions. Cooperatives transacting business with both members and nonmembers shall not be subject to tax on their transactions to members.Notwithstanding the provision of any law or regulation to the contrary, such cooperatives dealing with nonmembers shall enjoy the following tax exemptions; x x x.This exemption extends to members of cooperatives.It must be emphasized that cooperatives exist for the benefit of their members.In fact, the primary objective of every cooperative is to provide goods and services to its members to enable them to attain increased income, savings, investments, and productivity.[30]Therefore, limiting the application of the tax exemption to cooperatives would go against the very purpose of a credit cooperative.Extending the exemption to members of cooperatives, on the other hand, would be consistent with the intent of the legislature.Thus, although the tax exemption only mentions cooperatives, this should be construed to include the members, pursuant to Article 126 of RA 6938, which provides:ART. 126.Interpretation and Construction.In case of doubt as to the meaning of any provision of this Code or the regulations issued in pursuance thereof,the same shall be resolved liberally in favor of the cooperatives and their members.We need not belabor that what is within the spirit is within the law even if it is not within the letter of the law because the spirit prevails over the letter.[31]Aproposis the ruling in the case ofAlonzo v. Intermediate Appellate Court,[32]to wit:But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge should be to discover in its provisions the intent of the lawmaker. Unquestionably, the law should never be interpreted in such a way as to cause injustice as this is never within the legislative intent. An indispensable part of that intent, in fact, for we presume the good motives of the legislature, is to render justice.Thus, we interpret and apply the law not independently of but in consonance with justice. Law and justice are inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid, may seem arbitrary when applied in a particular case because of its peculiar circumstances. In such a situation, we are not bound, because only of our nature and functions, to apply them just the same, [is] slavish obedience to their language. What we do instead is find a balance between the word and the will, that justice may be done even as the law is obeyed.As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded, yielding like robots to the literal command without regard to its cause and consequence. Courts are apt to err by sticking too closely to the words of a law, so we are warned, by Justice Holmes again, where these words import a policy that goes beyond them. While we admittedly may not legislate, we nevertheless have the power to interpret the law in such a way as to reflect the will of the legislature. While we may not read into the law a purpose that is not there, we nevertheless have the right to read out of it the reason for its enactment. In doing so, we defer not to the letter that killeth but to the spirit that vivifieth, to give effect to the lawmakers will.The spirit, rather than the letter of a statute determines its construction, hence, a statute must be read according to its spirit or intent.For what is within the spirit is within the statute although it is not within the letter thereof,and that which is within the letter but not within the spirit is not within the statute. Stated differently,a thing which is within the intent of the lawmaker is as much within the statute as if within the letter;and a thing which is within the letter of the statute is not within the statute unless within the intent of the lawmakers. (Underscoring ours)It is also worthy to note that the tax exemption in RA 6938 was retained in RA 9520.The only difference is that Article 61 of RA 9520 (formerly Section 62 of RA 6938) now expressly states that transactions of members with the cooperatives are not subject to any taxes and fees.Thus:ART. 61.Tax and Other Exemptions. Cooperatives transacting business with both members and non-members shall not be subjected to tax on their transactions with members.In relation to this, the transactions of members with the cooperative shall not be subject to any taxes and fees, including but not limited to final taxes on members deposits and documentary tax.Notwithstanding the provisions of any law or regulation to the contrary, such cooperatives dealing with nonmembers shall enjoy the following tax exemptions: (Underscoring ours)x x x xThis amendment in Article 61 of RA 9520, specifically providing that members of cooperatives are not subject to final taxes on their deposits, affirms the interpretation of the BIR that Section 24(B)(1) of the NIRC does not apply to cooperatives and confirms that such ruling carries out the legislative intent.Under the principle of legislative approval of administrative interpretation by reenactment, the reenactment of a statute substantially unchanged is persuasive indication of the adoption by Congress of a prior executive construction.[33]Moreover, no less than our Constitution guarantees the protection of cooperatives.Section 15, Article XII of the Constitution considers cooperatives as instruments for social justice and economic development. At the same time, Section 10 of Article II of the Constitution declares that it is a policy of the State to promote social justice in all phases of national development.In relation thereto, Section 2 of Article XIII of the Constitution states that the promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance.Bearing in mind the foregoing provisions, we find that an interpretation exempting the members of cooperatives from the imposition of the final tax under Section 24(B)(1) of the NIRC is more in keeping with the letter and spirit of our Constitution.All told, we hold that petitioner is not liable to pay the assessed deficiency withholding taxes on interest from the savings and time deposits of its members, as well as the delinquency interest of 20% per annum.In closing, cooperatives, including their members, deserve a preferential tax treatment because of the vital role they play in the attainment of economic development and social justice.Thus, although taxes are the lifeblood of the government, the States power to tax must give way to foster the creation and growth of cooperatives.To borrow the words of Justice Isagani A. Cruz: The power of taxation, while indispensable, is not absolute and may be subordinated to the demands of social justice.[34]WHEREFORE, the Petition is herebyGRANTED.The assailedDecember 18, 2007Decision of the Court of Tax Appeals and the April 11, 2008 Resolution areREVERSEDandSET ASIDE.Accordingly, the assessments for deficiency withholding taxes on interest from the savings and time deposits of petitioners members for the taxable years 1999 and 2000 as well as the delinquency interest of 20% per annum are herebyCANCELLED.SO ORDERED.------------------------------------------------------------------------Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. Nos. 179431-32 June 22, 2010LUIS K. LOKIN, JR., as the second nominee of CITIZENS BATTLE AGAINST CORRUPTION (CIBAC),Petitioner,vs.COMMISSION ON ELECTIONS and the HOUSE OF REPRESENTATIVES,Respondents.x - - - - - - - - - - - - - - - - - - - - - - -xG.R. No. 180443LUIS K. LOKIN, JR.,Petitioner,vs.COMMISSION ON ELECTIONS (COMELEC), EMMANUEL JOEL J. VILLANUEVA, CINCHONA C. GONZALES and ARMI JANE R. BORJE,Respondents.D E C I S I O NBERSAMIN,J.:The principal question posed in these consolidated special civil actions for certiorari and mandamus is whether the Commission on Elections (COMELEC) can issue implementing rules and regulations (IRRs) that provide a ground for the substitution of a party-list nominee not written in Republic Act (R.A.) No. 7941,1otherwise known as the Party-List System Act, the law that the COMELEC thereby implements.Common AntecedentsThe Citizens Battle Against Corruption (CIBAC) was one of the organized groups duly registered under the party-list system of representation that manifested their intent to participate in the May 14, 2007 synchronized national and local elections. Together with its manifestation of intent to participate,2CIBAC, through its president, Emmanuel Joel J. Villanueva, submitted a list of five nominees from which its representatives would be chosen should CIBAC obtain the required number of qualifying votes. The nominees, in the order that their names appeared in the certificate of nomination dated March 29, 2007,3were: (1) Emmanuel Joel J. Villanueva; (2) herein petitioner Luis K. Lokin, Jr.; (3) Cinchona C. Cruz-Gonzales; (4) Sherwin Tugna; and (5) Emil L. Galang. The nominees certificates of acceptance were attached to the certificate of nomination filed by CIBAC. The list of nominees was later published in two newspapers of general circulation, The Philippine Star News4(sic) and The Philippine Daily Inquirer.5Prior to the elections, however, CIBAC, still through Villanueva, filed a certificate of nomination, substitution and amendment of the list of nominees dated May 7, 2007,6whereby it withdrew the nominations of Lokin, Tugna and Galang and substituted Armi Jane R. Borje as one of the nominees. The amended list of nominees of CIBAC thus included: (1) Villanueva, (2) Cruz-Gonzales, and (3) Borje.Following the close of the polls, or on June 20, 2007, Villanueva sent a letter to COMELEC Chairperson Benjamin Abalos,7transmitting therewith the signed petitions of more than 81% of the CIBAC members, in order to confirm the withdrawal of the nomination of Lokin, Tugna and Galang and the substitution of Borje. In their petitions, the members of CIBAC averred that Lokin and Tugna were not among the nominees presented and proclaimed by CIBAC in its proclamation rally held in May 2007; and that Galang had signified his desire to focus on his family life.On June 26, 2007, CIBAC, supposedly through its counsel, filed with the COMELECen bancsitting as the National Board of Canvassers a motion seeking the proclamation of Lokin as its second nominee.8The right of CIBAC to a second seat as well as the right of Lokin to be thus proclaimed were purportedly based on Party-List Canvass Report No. 26, which showed CIBAC to have garnered a grand total of 744,674 votes. Using all relevant formulas, the motion asserted that CIBAC was clearly entitled to a second seat and Lokin to a proclamation.The motion was opposed by Villanueva and Cruz-Gonzales.Notwithstanding Villanuevas filing of the certificate of nomination, substitution and amendment of the list of nominees and the petitions of more than 81% of CIBAC members, the COMELEC failed to act on the matter, prompting Villanueva to file a petition to confirm the certificate of nomination, substitution and amendment of the list of nominees of CIBAC on June 28, 2007.9On July 6, 2007, the COMELEC issued Resolution No. 8219,10whereby it resolved to set the matter pertaining to the validity of the withdrawal of the nominations of Lokin, Tugna and Galang and the substitution of Borje for proper disposition and hearing. The case was docketed as E.M. No. 07-054.In the meantime, the COMELECen banc,sitting as the National Board of Canvassers, issued National Board of Canvassers (NBC) Resolution No. 07-60 dated July 9, 200711to partially proclaim the following parties, organizations and coalitions participating under the Party-List System as having won in the May 14, 2007 elections, namely: Buhay Hayaan Yumabong, Bayan Muna, CIBAC, Gabriela Women's Party, Association of Philippine Electric Cooperatives, Advocacy for Teacher Empowerment Through Action, Cooperation and Harmony Towards Educational Reforms, Inc., Akbayan! Citizen's Action Party, Alagad, Luzon Farmers Party, Cooperative-Natco Network Party, Anak Pawis, Alliance of Rural Concerns and Abono; and to defer the proclamation of the nominees of the parties, organizations and coalitions with pending disputes until final resolution of their respective cases.The COMELECen bancissued another resolution, NBC Resolution No. 07-72 dated July 18, 2007,12proclaiming Buhay Hayaan Yumabong as entitled to 2 additional seats and Bayan Muna, CIBAC, Gabriela Women's Party, and Association of Philippine Electric Cooperatives to an additional seat each; and holding in abeyance the proclamation of the nominees of said parties, organizations and coalitions with pending disputes until the final resolution of their respective cases.With the formal declaration that CIBAC was entitled to an additional seat, Ricardo de los Santos, purportedly as secretary general of CIBAC, informed Roberto P. Nazareno, Secretary General of the House of Representatives, of the promulgation of NBC Resolution No. 07-72 and requested that Lokin be formally sworn in by Speaker Jose de Venecia, Jr. to enable him to assume office. Nazareno replied, however, that the request of Delos Santos could not be granted because COMELEC Law Director Alioden D. Dalaig had notified him of the pendency of E.M. 07-054.On September 14, 2007, the COMELECen bancresolved E.M. No. 07-05413thuswise:WHEREFORE, considering the above discussion, the Commission hereby approves the withdrawal of the nomination of Atty. Luis K. Lokin, Sherwin N. Tugna and Emil Galang as second, third and fourth nominees respectively and the substitution thereby with Atty. Cinchona C. Cruz-Gonzales as second nominee and Atty. Armi Jane R. Borje as third nominee for the party list CIBAC. The new order of CIBAC's nominees therefore shall be:1. Emmanuel Joel J. Villanueva2. Cinchona C. Cruz-Gonzales3. Armi Jane R. BorjeSO ORDERED.The COMELECen bancexplained that the actions of Villanueva in his capacity as the president of CIBAC were presumed to be within the scope of his authority as such; that the president was charged by Section 1 of Article IV of the CIBAC By-Laws to oversee and direct the corporate activities, which included the act of submitting the party's manifestation of intent to participate in the May 14, 2007 elections as well as its certificate of nominees; that from all indications, Villanueva as the president of CIBAC had always been provided the leeway to act as the party's representative and that his actions had always been considered as valid; that the act of withdrawal, although done without any written Board approval, was accomplished with the Boards acquiescence or at least understanding; and that the intent of the party should be given paramount consideration in the selection of the nominees.As a result, the COMELECen bancproclaimed Cruz-Gonzales as the official second nominee of CIBAC.14Cruz-Gonzales took her oath of officeas a Party-List Representative of CIBAC on September 17, 2007.15Precs of the Consolidated CasesIn G.R. No. 179431 and G.R. No. 179432, Lokin seeks through mandamus to compel respondent COMELEC to proclaim him as the official second nominee of CIBAC.In G.R. No. 180443, Lokin assails Section 13 of Resolution No. 7804 promulgated on January 12, 2007;16and the resolution dated September 14, 2007 issued in E.M. No. 07-054 (approving CIBACs withdrawal of the nominations of Lokin, Tugna and Galang as CIBACs second, third and fourth nominees, respectively, and the substitution by Cruz-Gonzales and Borje in their stead, based on the right of CIBAC to change its nominees under Section 13 of Resolution No. 7804).17He alleges that Section 13 of Resolution No. 7804 expanded Section 8 of R.A. No. 7941.18the law that the COMELEC seeks to thereby implement.In its comment, the COMELEC asserts that a petition for certiorari is an inappropriate recourse in law due to the proclamation of Cruz-Gonzales as Representative and her assumption of that office; that Lokins proper recourse was an electoral protest filed in the House of Representatives Electoral Tribunal (HRET); and that, therefore, the Court has no jurisdiction over the matter being raised by Lokin.For its part, CIBAC posits that Lokin is guilty of forum shopping for filing a petition for mandamus and a petition for certiorari, considering that both petitions ultimately seek to have him proclaimed as the second nominee of CIBAC.IssuesThe issues are the following:(a) Whether or not the Court has jurisdiction over the controversy;(b) Whether or not Lokin is guilty of forum shopping;(c) Whether or not Section 13 of Resolution No. 7804 is unconstitutional and violates the Party-List System Act; and(d) Whether or not the COMELEC committed grave abuse of discretion amounting to lack or excess of jurisdiction in approving the withdrawal of the nominees of CIBAC and allowing the amendment of the list of nominees of CIBAC without any basis in fact or law and after the close of the polls, and in ruling on matters that were intra-corporate in nature.RulingThe petitions are granted.AThe Court has jurisdiction over the caseThe COMELEC posits that once the proclamation of the winning party-list organization has been done and its nominee has assumed office, any question relating to the election, returns and qualifications of the candidates to the House of Representatives falls under the jurisdiction of the HRET pursuant to Section 17, Article VI of the 1987 Constitution. Thus, Lokin should raise the question he poses herein either in an election protest or in a special civil action forquo warrantoin the HRET,not in a special civil action for certiorari in this Court.We do not agree.Anelection protestproposes to oust the winning candidate from office. It is strictly a contest between the defeated and the winning candidates, based on the grounds of electoral frauds and irregularities, to determine who between them has actually obtained the majority of the legal votes cast and is entitled to hold the office. It can only be filed by a candidate who has duly filed a certificate of candidacy and has been voted for in the preceding elections.A special civil action forquo warrantorefers to questions of disloyalty to the State, or of ineligibility of the winning candidate. The objective of the action is to unseat the ineligible person from the office, but not to install the petitioner in his place. Any voter may initiate the action, which is, strictly speaking, not a contest where the parties strive for supremacy because the petitioner will not be seated even if the respondent may be unseated.The controversy involving Lokin is neither an election protest nor an action forquo warranto,for it concerns a very peculiar situation in which Lokin is seeking to be seated as the second nominee of CIBAC. Although an election protest may properly be available to one party-list organization seeking to unseat another party-list organization to determine which between the defeated and the winning party-list organizations actually obtained the majority of the legal votes, Lokins case is not one in which a nominee of a particular party-list organization thereby wants to unseat another nominee of the same party-list organization. Neither does an action forquo warrantolie, considering that the case does not involve the ineligibility and disloyalty of Cruz-Gonzales to the Republic of the Philippines, or some other cause of disqualification for her.Lokin has correctly brought this special civil action for certiorari against the COMELEC to seek the review of the September 14, 2007 resolution of the COMELEC in accordance with Section 7 of Article IX-A of the 1987 Constitution, notwithstanding the oath and assumption of office by Cruz-Gonzales. The constitutional mandate is now implemented by Rule 64 of the 1997 Rules of Civil Procedure, which provides for the review of the judgments, final orders or resolutions of the COMELEC and the Commission on Audit. As Rule 64 states, the mode of review is by a petition for certiorari in accordance with Rule 65 to be filed in the Supreme Court within a limited period of 30 days. Undoubtedly, the Court has original and exclusive jurisdiction over Lokins petitions for certiorari and for mandamus against the COMELEC.BPetitioner is not guilty of forum shoppingForum shopping consists of the filing of multiple suits involving the same parties for the same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment. Thus, forum shopping may arise: (a) whenever as a result of an adverse decision in one forum, a party seeks a favorable decision (other than by appeal orcertiorari) in another; or (b) if, after having filed a petition in the Supreme Court, a party files another petition in the Court of Appeals, because he thereby deliberately splits appeals "in the hope that even as one case in which a particular remedy is sought is dismissed, another case (offering a similar remedy) would still be open"; or (c) where a party attempts to obtain a writ of preliminary injunction from a court after failing to obtain the writ from another court.19What is truly important to consider in determining whether forum shopping exists or not is the vexation caused to the courts and the litigants by a party who accesses different courts and administrative agencies to rule on the same or related causes or to grant the same or substantially the same reliefs, in the process creating the possibility of conflicting decisions being rendered by the different fora upon the same issue.20The filing of identical petitions in different courts is prohibited, because such act constitutes forum shopping, a malpractice that is proscribed and condemned as trifling with the courts and as abusing their processes. Forum shopping is an improper conduct that degrades the administration of justice.21Nonetheless, the mere filing of several cases based on the same incident does not necessarily constitute forum shopping. The test is whether the several actions filed involve the same transactions and the same essential facts and circumstances.22The actions must also raise identical causes of action, subject matter, and issues.23Elsewise stated, forum shopping exists where the elements oflitis pendentiaare present, or where a final judgment in one case will amount tores judicatain the other.24Lokin has filed the petition for mandamus to compel the COMELEC to proclaim him as the second nominee of CIBAC upon the issuance of NBC Resolution No. 07-72 (announcing CIBACs entitlement to an additional seat in the House of Representatives), and to strike down the provision in NBC Resolution No. 07-60 and NBC Resolution No. 07-72 holding in abeyance "all proclamation of the nominees of concerned parties, organizations and coalitions with pending disputes shall likewise be held in abeyance until final resolution of their respective cases." He has insisted that the COMELEC had the ministerial duty to proclaim him due to his being CIBACs second nominee; and that the COMELEC had no authority to exercise discretion and to suspend or defer the proclamation of winning party-list organizations with pending disputes.On the other hand, Lokin has resorted to the petition for certiorari to assail the September 14, 2007 resolution of the COMELEC (approving the withdrawal of the nomination of Lokin, Tugna and Galang and the substitution by Cruz-Gonzales as the second nominee and Borje as the third nominee); and to challenge the validity of Section 13 of Resolution No. 7804, the COMELECs basis for allowing CIBACs withdrawal of Lokins nomination.Applying the test for forum shopping, the consecutive filing of the action for certiorari and the action for mandamus did not violate the rule against forum shopping even if the actions involved the same parties, because they were based on different causes of action and the reliefs they sought were different.CInvalidity of Section 13 of Resolution No. 7804The legislative power of the Government is vested exclusively in the Legislature in accordance with the doctrine of separation of powers. As a general rule, the Legislature cannot surrender or abdicate its legislative power, for doing so will be unconstitutional. Although the power to make laws cannot be delegated by the Legislature to any other authority, a power that is not legislative in character may be delegated.25Under certain circumstances, the Legislature can delegate to executive officers and administrative boards the authority to adopt and promulgate IRRs. To render such delegation lawful, the Legislature must declare the policy of the law and fix the legal principles that are to control in given cases. The Legislature should set a definite or primary standard to guide those empowered to execute the law. For as long as the policy is laid down and a proper standard is established by statute, there can be no unconstitutional delegation of legislative power when the Legislature leaves to selected instrumentalities the duty of making subordinate rules within the prescribed limits, although there is conferred upon the executive officer or administrative board a large measure of discretion. There is a distinction between the delegation of power to make a law and the conferment of an authority or a discretion to be exercised under and in pursuance of the law, for the power to make laws necessarily involves a discretion as to what it shall be.26The authority to make IRRs in order to carry out an express legislative purpose, or to effect the operation and enforcement of a law is not a power exclusively legislative in character, but is rather administrative in nature. The rules and regulations adopted and promulgated must not, however, subvert or be contrary to existing statutes. The function of promulgating IRRs may be legitimately exercised only for the purpose of carrying out the provisions of a law. The power of administrative agencies is confined to implementing the law or putting it into effect. Corollary to this is that administrative regulation cannot extend the law and amend a legislative enactment. It is axiomatic that the clear letter of the law is controlling and cannot be amended by a mere administrative rule issued for its implementation. Indeed, administrative or executive acts shall be valid only when they are not contrary to the laws or the Constitution.27To be valid, therefore, the administrative IRRs must comply with the following requisites to be valid:281. Its promulgation must be authorized by the Legislature;2. It must be within the scope of the authority given by the Legislature;3. It must be promulgated in accordance with the prescribed procedure; and4. It must be reasonable.The COMELEC is constitutionally mandated to enforce and administer all laws and regulations relative to the conduct of an election, a plebiscite, an initiative, a referendum, and a recall.29In addition to the powers and functions conferred upon it by the Constitution, the COMELEC is also charged to promulgate IRRs implementing the provisions of the Omnibus Election Code or other laws that the COMELEC enforces and administers.30The COMELEC issued Resolution No. 7804 pursuant to its powers under the Constitution, Batas Pambansa Blg. 881, and the Party-List System Act.31Hence, the COMELEC met the first requisite.The COMELEC also met the third requisite. There is no question that Resolution No. 7804 underwent the procedural necessities of publication and dissemination in accordance with the procedure prescribed in the resolution itself.Whether Section 13 of Resolution No. 7804 was valid or not is thus to be tested on the basis of whether the second and fourth requisites were met. It is in this respect that the challenge of Lokin against Section 13 succeeds.As earlier said, the delegated authority must be properly exercised. This simply means that the resulting IRRs must not beultra viresas to be issued beyond the limits of the authority conferred. It is basic that an administrative agency cannot amend an act of Congress,32for administrative IRRs are solely intended to carry out, not to supplant or to modify, the law. The administrative agency issuing the IRRs may not enlarge, alter, or restrict the provisions of the law it administers and enforces, and cannot engraft additional non-contradictory requirements not contemplated by the Legislature.33Section 8 of R.A. No. 7941 reads:Section 8.Nomination of Party-List Representatives.-Each registered party, organization or coalition shall submit to the COMELEC not later that forty-five (45) days before the election a list of names, not less than five (5), from which party-list representatives shall be chosen in case it obtains the required number of votes.A person may be nominated in one (1) list only. Only persons who have given their consent in writing may be named in the list. The list shall not include any candidate of any elective office or a person who has lost his bid for an elective office in the immediately preceding election.No change of names or alteration of the order of nominees shall be allowed after the same shall have been submitted to the COMELEC except in cases where the nominee dies, or withdraws in writing his nomination, becomes incapacitated in which case the name of the substitute nominee shall be placed last in the list. Incumbent sectoral representatives in the House of Representatives who are nominated in the party-list system shall not be considered resigned.The provision is daylight clear. The Legislature thereby deprived the party-list organization of the right to change its nominees or to alter the order of nominees once the list is submitted to the COMELEC, except when: (a) the nominee dies; (b) the nominee withdraws in writing his nomination; or (c) the nominee becomes incapacitated. The provision must be read literally because its language is plain and free from ambiguity, and expresses a single, definite, and sensible meaning. Such meaning is conclusively presumed to be the meaning that the Legislature has intended to convey. Even where the courts should be convinced that the Legislature really intended some other meaning, and even where the literal interpretation should defeat the very purposes of the enactment, the explicit declaration of the Legislature is still the law, from which the courts must not depart.34When the law speaks in clear and categorical language, there is no reason for interpretation or construction, but only for application.35Accordingly, an administrative agency tasked to implement a statute may not construe it by expanding its meaning where its provisions are clear and unambiguous.36The legislative intent to deprive the party-list organization of the right to change the nominees or to alter the order of the nominees was also expressed during the deliberations of the Congress, viz:MR. LAGMAN:And again on Section 5, on the nomination of party list representatives, I do not see any provision here which prohibits or for that matter allows the nominating party to change the nominees or to alter the order of prioritization of names of nominees. Is the implication correct that at any time after submission the names could still be changed or the listing altered?MR. ABUEG: Mr. Speaker, that is a good issue brought out by the distinguished Gentleman from Albay and perhaps a perfecting amendment may be introduced therein. The sponsoring committee will gladly consider the same.MR. LAGMAN:In other words, what I would like to see is that after the list is submitted to the COMELEC officially, no more changes should be made in the names or in the order of listing.MR. ABUEG: Mr. Speaker, there may be a situation where in the name of a particular nominee has been submitted to the Commission on Elections but before election day the nominee changed his political party affiliation. The nominee is therefore no longer qualified to be included in the party list and the political party has a perfect right to change the name of that nominee who changed his political party affiliation.MR. LAGMAN: Yes of course.In that particular case, the change can be effected but will be the exception rather than the rule.Another exception most probably is the nominee dies, then there has to be a change but any change for that matter should always be at the last part of the list so that the prioritization made by the party will not be adversely affected.37The usage of "No" in Section 8 "No change of names or alteration of the order of nominees shall be allowed after the same shall have been submitted to the COMELEC except in cases where the nominee dies, or withdraws in writing his nomination, or becomes incapacitated, in which case the name of the substitute nominee shall be placed last in the list" renders Section 8 a negative law, and is indicative of the legislative intent to make the statute mandatory. Prohibitive or negative words can rarely, if ever, be directory, for there is but one way to obey the command "thou shall not," and that is to completely refrain from doing the forbidden act,38subject to certain exceptions stated in the law itself, like in this case.Section 8 does not unduly deprive the party-list organization of its right to choose its nominees, but merely divests it of the right to change its nominees or to alter the order in the list of its nominees names after submission of the list to the COMELEC.The prohibition is not arbitrary or capricious; neither is it without reason on the part of lawmakers. The COMELEC can rightly presume from the submission of the list that the list reflects the true will of the party-list organization. The COMELEC will not concern itself with whether or not the list contains the real intended nominees of the party-list organization, but will only determine whether the nominees pass all the requirements prescribed by the law and whether or not the nominees possess all the qualifications and none of the disqualifications. Thereafter, the names of the nominees will be published in newspapers of general circulation. Although the people vote for the party-list organization itself in a party-list system of election, not for the individual nominees, they still have the right to know who the nominees of any particular party-list organization are. The publication of the list of the party-list nominees in newspapers of general circulation serves that right of the people, enabling the voters to make intelligent and informed choices. In contrast, allowing the party-list organization to change its nominees through withdrawal of their nominations, or to alter the order of the nominations after the submission of the list of nominees circumvents the voters demand for transparency. The lawmakers exclusion of such arbitrary withdrawal has eliminated the possibility of such circumvention.DExceptions in Section 8 of R.A. 7941 are exclusiveSection 8 of R.A. No. 7941 enumerates only three instances in which the party-list organization can substitute another person in place of the nominee whose name has been submitted to the COMELEC, namely: (a) when the nominee dies; (b) when the nominee withdraws in writing his nomination; and (c) when the nominee becomes incapacitated.The enumeration is exclusive, for, necessarily, the general rule applies to all cases not falling under any of the three exceptions.When the statute itself enumerates the exceptions to the application of the general rule, the exceptions are strictly but reasonably construed. The exceptions extend only as far as their language fairly warrants, and all doubts should be resolved in favor of the general provision rather than the exceptions. Where the general rule is established by a statute with exceptions, none but the enacting authority can curtail the former. Not even the courts may add to the latter by implication, and it is a rule that an express exception excludes all others, although it is always proper in determining the applicability of the rule to inquire whether, in a particular case, it accords with reason and justice.391avvphi1The appropriate and natural office of the exception is to exempt something from the scope of the general words of a statute, which is otherwise within the scope and meaning of such general words. Consequently, the existence of an exception in a statute clarifies the intent that the statute shall apply to all cases not excepted. Exceptions are subject to the rule of strict construction; hence, any doubt will be resolved in favor of the general provision and against the exception. Indeed, the liberal construction of a statute will seem to require in many circumstances that the exception, by which the operation of the statute is limited or abridged, should receive a restricted construction.ESection 13 of Resolution No. 7804 expandedthe exceptions under Section 8 of R.A. No. 7941Section 13 of Resolution No. 7804 states:Section 13. Substitution of nominees. A party-list nominee may be substituted only when he dies, or his nomination is withdrawn by the party, or he becomes incapacitated to continue as such, or he withdraws his acceptance to a nomination.In any of these cases, the name of the substitute nominee shall be placed last in the list of nominees.No substitution shall be allowed by reason of withdrawal after the polls.Unlike Section 8 of R.A. No. 7941, the foregoing regulation provides four instances, the fourth being when the "nomination is withdrawn by the party."Lokin insists that the COMELEC gravely abused its discretion in expanding to four the three statutory grounds for substituting a nominee.We agree with Lokin.The COMELEC, despite its role as the implementing arm of the Government in the enforcement and administration of all laws and regulations relative to the conduct of an election,40has neither the authority nor the license to expand, extend, or add anything to the law it seeks to implement thereby. The IRRs the COMELEC issues for that purpose should always accord with the law to be implemented, and should not override, supplant, or modify the law. It is basic that the IRRs should remain consistent with the law they intend to carry out.41Indeed, administrative IRRs adopted by a particular department of the Government under legislative authority must be in harmony with the provisions of the law, and should be for the sole purpose of carrying the laws general provisions into effect. The law itself cannot be expanded by such IRRs, because an administrative agency cannot amend an act of Congress.42The COMELEC explains that Section 13 of Resolution No. 7804 has added nothing to Section 8 of R.A. No. 7941,43because it has merely reworded and rephrased the statutory provisions phraseology.The explanation does not persuade.To reword means to alter the wording of or to restate in other words; torephraseis to phrase anew or in a new form.44Both terms signify that the meaning of the original word or phrase is not altered.However, the COMELEC did not merely reword or rephrase the text of Section 8 of R.A. No. 7941, because it established an entirely new ground not found in the text of the provision. The new ground granted to the party-list organization the unilateral right to withdraw its nomination already submitted to the COMELEC, which Section 8 of R.A. No. 7941 did not allow to be done. Neither was the grant of the unilateral right contemplated by the drafters of the law, who precisely denied the right to withdraw the nomination (as the quoted record of the deliberations of the House of Representatives has indicated). The grant thus conflicted with the statutory intent to save the nominee from falling under the whim of the party-list organization once his name has been submitted to the COMELEC, and to spare the electorate from the capriciousness of the party-list organizations.We further note that the new ground would not secure the object of R.A. No. 7941 of developing and guaranteeing a full, free and open party-list electoral system. The success of the system could only be ensured by avoiding any arbitrariness on the part of the party-list organizations, by seeing to the transparency of the system, and by guaranteeing that the electorate would be afforded the chance of making intelligent and informed choices of their party-list representatives.The insertion of the new ground was invalid. An axiom in administrative law postulates that administrative authorities should not act arbitrarily and capriciously in the issuance of their IRRs, but must ensure that their IRRs are reasonable and fairly adapted to secure the end in view. If the IRRs are shown to bear no reasonable relation to the purposes for which they were authorized to be issued, they must be held to be invalid and should be struck down.45FEffect of partial nullity of Section 13 of Resolution No. 7804An IRR adopted pursuant to the law is itself law.46In case of conflict between the law and the IRR, the law prevails. There can be no question that an IRR or any of its parts not adopted pursuant to the law is no law at all and has neither the force nor the effect of law.47The invalid rule, regulation, or part thereof cannot be a valid source of any right, obligation, or power.Considering that Section 13 of Resolution No. 7804 to the extent that it allows the party-list organization to withdraw its nomination already submitted to the COMELEC was invalid, CIBACs withdrawal of its nomination of Lokin and the others and its substitution of them with new nominees were also invalid and ineffectual. It is clear enough that any substitution of Lokin and the others could only be for any of the grounds expressly stated in Section 8 of R.A. No. 7941. Resultantly, the COMELECs approval of CIBACs petition of withdrawal of the nominations and its recognition of CIBACs substitution, both through its assailed September 14, 2007 resolution, should be struck down for lack of legal basis. Thereby, the COMELEC acted without jurisdiction, having relied on the invalidly issued Section 13 of Resolution No. 7804 to support its action.WHEREFORE,we grant the petitions for certiorari and mandamus.We declare Section 13 of Resolution No. 7804 invalid and of no effect to the extent that it authorizes a party-list organization to withdraw its nomination of a nominee once it has submitted the nomination to the Commission on Elections.Accordingly, we annul and set aside:(a) The resolution dated September 14, 2007 issued in E. M. No. 07-054 approving Citizens Battle Against Corruptions withdrawal of the nominations of Luis K. Lokin, Jr., Sherwin N. Tugna, and Emil Galang as its second, third, and fourth nominees, respectively, and ordering their substitution by Cinchona C. Cruz-Gonzales as second nominee and Armi Jane R. Borje as third nominee; and(b) The proclamation by the Commission on Elections of Cinchona C. Cruz-Gonzales as a Party-List Representative representing Citizens Battle Against Corruption in the House of Representatives.We order the Commission on Elections to forthwith proclaim petitioner Luis K. Lokin, Jr. as a Party-List Representative representing Citizens Battle Against Corruption in the House of Representatives.We make no pronouncements on costs of suit.SO ORDERED.====================================================================================Republic of the PhilippinesSUPREME COURTManilaEN BANCG.R. No. 191890 December 04, 2012EVALYN I. FETALINO and AMADO M. CALDERON,Petitioners,MANUEL A. BARCELONA, JR.,Petitioner-Intervenor,vs.COMMISSION ON ELECTIONS,Respondent.D E C I S I O NBRION,J.:Before us is a Petition forCertiorari,Mandamus and Prohibition with Application for Writ of Preliminary Injunction and/or Temporary Restraining Order,1seeking to nullify and enjoin the implementation of Commission on Elections (Comelee)Resolution No. 8808 issued on March 30, 2010.2Republic Act(R.A.)No. 1568, as amended,3extends a five-year lump sum gratuity to the chairman or any member of the Comelec uponretirement,after completion of the term of office;incapacity;death; andresignationafter reaching 60 years of age but before expiration of the term of office. The Comelecen bancdetermined that former Comelec Commissioners Evalyn I. Fetalino4and Amado M. Calderon5(petitioners) - whosead interimappointments were not acted upon by the Commission on Appointments (CA) and, who were subsequently, not reappointed are not entitled to the five-year lump sum gratuity because they did not complete in full the seven year term of office.The Antecedent FactsOn February 10, 1998, President Fidel V. Ramos extended an interim appointment to the petitioners as Comelec Commissioners, each for a term of seven (7) years, pursuant to Section 2, Article IX-D of the 1987 Constitution.6Eleven days later (or on February 21, 1998), Pres. Ramos renewed the petitionersad interimappointments for the same position. Congress, however, adjourned in May 1998 before the CA could act on their appointments. The constitutional ban on presidential appointments later took effect and the petitioners were no longer re-appointed as Comelec Commissioners.7Thus, the petitionersmerely served as Comelec Commissioners for more than four months, or from February 16, 1998 to June 30, 1998.8Subsequently, on March 15, 2005, the petitioners applied for their retirement benefits and monthly pension with the Comelec, pursuant to R.A. No. 1568.9The Comelec initially approved the petitioners claims pursuant to its Resolution No. 06-136910dated December 11, 2006 whose dispositive portion reads:The Commission RESOLVED, as it hereby RESOLVES, to approve the recommendation of Director Alioden D. Dalaig, Law Department, to grant the request of former Comelec Commissioners Evalyn Fetalino and Amado Calderon for the payment of their retirement benefits, subject to release of funds for the purpose by the Department of Budget and Management.11On February 6, 2007, the Comelec issued Resolution No. 07-0202 granting the petitioners a pro-rated gratuity and pension.12Subsequently, on October 5, 2007, the petitioners asked for a re-computation of their retirement pay on the principal ground that R.A. No. 1568,13does not cover a pro-rated computation of retirement pay. In response, the Comelec issued a resolution referring the matter to its Finance Services Department for comment and recommendation.14On July 14, 2009, the Comelec issued another resolution referring the same matter to its Law Department for study and recommendation.15In the presently assailed Resolution No. 880816dated March 30, 2010, the Comelec, on the basis of the Law Departments study, completely disapproved the petitioners claim for a lump sum benefit under R.A. No. 1568. The Comelec reasoned out that:Of these four (4) modes by which the Chairman or a Commissioner shall be entitled to lump sum benefit, only the first instance (completion of term) is pertinent to the issue we have formulated above. It is clear that thenon-confirmation and non-renewal of appointmentis not a case of resignation or incapacity or death. The question rather is: Can it be considered as retirement from service for havingcompletedones term of office?xxxxThe full term of the Chairman and the Commissioners is seven (7) years. When there has been a partial service, what remains is called the "unexpired term." The partial service is usually called tenure. There is no doubt in the distinction between a term and tenure. Tenure is necessarily variable while term is always fixed. When the law, in this case, RA 1568 refers to completion of term of office, it can only mean finishing up to the end of the seven year term. By completion of term, the law could not have meant partial service or a variable tenure that does not reach the end. It could not have meant, the "expiration of term" of the Commissioner whose appointment lapses by reason of non-confirmation of appointment by the Commission on Appointments and non-renewal thereof by the President. It is rightly called expiration of term but note: it is not completion of term. RA 1568 requires having completed his term of office for the Commissioner to be entitled to the benefits.Therefore, one whose ad interim appointment expires cannot be said to have completed his term of office so as to fall under the provisions of Section 1 of RA 1568 that would entitle him to a lump sum benefit of five (5) years salary.17(emphasis, italics and underscores ours)On this basis, the Comelec ruled on the matter, as follows:Considering the foregoing, the Commission RESOLVED, as it hereby RESOLVES, to APPROVE and ADOPT the study of the Law Department on the payment of retirement benefits to members of the Commission.Consequently, the following former Chairman and Commissioners of this Commission whose appointments expired by reason of nonapproval by Commission on Appointments and non-renewal by the Presidentare not entitled to a lump sum benefit under Republic Act 1528(sic):NamePositionDate of Service

1. Alfredo Benipayo, Jr.ChairmanFeb. 16, 2001 to June 5, 2002

2. Evalyn FetalinoCommissionerFeb. 16, 1998 to June 30, 1998

3. Amado CalderonCommissionerFeb. 16, 1998 to June 30, 1998

4. Virgilio GarcilianoCommissionerFeb. 12, 2004 to June 10, 2005

5. Manuel Barcelona, Jr.CommissionerFeb. 12, 2004 to June 10, 2005

6. Moslemen MacarambonCommissionerNov[.] 05, 2007 to Oct. 10, 2008

7. Leonardo LeonidaCommissionerJuly 03, 2008 to June 26, 2009

This resolution shall also apply to all requests of former COMELEC Chairmen and Commissioners similarly situated. All previous resolutions which are inconsistent herewith are hereby AMENDED or REVOKED accordingly.Let the Finance Services and Personnel Departments implement this resolution.18(emphasis ours)The PetitionsThe petitioners sought the nullification of Comelec Resolution No. 8808viaa petition forcertiorariunder Rule 65 of the Rules of Court. Petitioner intervenor Manuel A. Barcelona, Jr. later joined the petitioners in questioning the assailed resolution. Like the petitioners, Barcelona did not complete the full seven-year term as Comelec Commissioner since he served only from February 12, 2004 to July 10, 2005. The petitioners and Barcelona commonly argue that:(1) the non-renewal of theirad interimappointments by the CA until Congress already adjourned qualifies asretirementunder the law and entitles them to the full five-year lump sum gratuity;(2) Resolution No. 06-1369 that initially granted the five-year lump sum gratuity is already final and executory and cannot be modified by the Comelec; and(3) they now have a vested right over the full retirement benefits provided by RA No. 1568 in view of the finality of Resolution No. 06- 1369.19In the main, both the petitioners and Barcelona pray for a liberal interpretation of Section 1 of R.A. No. 1568. They submit that the involuntary termination of theirad interimappointments as Comelec Commissioners should be deemed by this Court as a retirement from the service. Barcelona, in support of his plea for liberal construction, specifically cites the case ofOrtiz v. COMELEC.20The Court ruled in this cited case that equity and justice demand that the involuntary curtailment of Mario D. Ortizs term be deemed a completion of his term of office so that he should be considered retired from the service.In addition, the petitioners also bewail the lack of notice and hearing in the issuance of Comelec Resolution No. 8808. Barcelona also assails the discontinuance of his monthly pension on the basis of the assailed Comelec issuance.21The Case for the RespondentsOn July 22, 2010, the Comelec filed its Comment22through the Office of the Solicitor General. The Comelec prays for the dismissal of the petition on the grounds outlined below:First, it submits that the petitioners reliance on Section 13, Rule 18 of the Comelec Rules of Procedure to show that Resolution No. 06-1369 has attained finality is misplaced as this resolution is not the final decision contemplated by the Rules. It also argues that estoppel does not lie against the Comelec since the erroneous application and enforcement of the law by public officers do not estop the Government from making a subsequent correction of its errors.23Second, the Comelec reiterates that the petitioners are not entitled to the lump sum gratuity, considering that they cannot be considered as officials who retired after completing their term of office. It emphasizes that R.A. No. 1568 refers to the completion of the term of office, not to partial service or to a variable tenure that does not reach its end, as in the case of the petitioners. The Comelec also draws the Courts attention to the case ofMatibag v. Benipayo24where the Court categorically ruled that anad interimappointment that lapsed by inaction of the Commission on Appointments does not constitute a term of office.25Third, it argues that the petitioners do not have any vested right on their retirement benefits considering that the retirements benefits afforded by R.A. No. 1568 are purely gratuitous in nature; they are not similar to pension plans where employee participation is mandatory so that they acquire vested rights in the pension as part of their compensation. Without such vested rights, the Comelec concludes that the petitioners were not deprived of their property without due process of law.26The Courts RulingWe DISMISS the petition and DENY Barcelonas petition for intervention.Preliminary ConsiderationsR.A. No. 1568 provides two types of retirement benefits for a Comelec Chairperson or Member: agratuityor five-year lump sum, and anannuityor a lifetime monthly pension.27Our review of the petitions, in particular, Barcelonas petition for intervention, indicates that he merely questions the discontinuance of his monthly pension on the basis of Comelec Resolution No. 8808.28As the assailed resolution, by its plain terms (cited above), only pertains to the lump sum benefit afforded by R.A. No. 1568, it appears that Barcelonas petition for intervention is misdirected. We note, too, that Barcelona has not substantiated his bare claim that the Comelec discontinued the payment of his monthly pension on the basis of the assailed Resolution.To put the case in its proper perspective, the task now before us is to determine whether the petitioners are entitled to the full five-year lump sum gratuity provided for by R.A. No. 1568. We conclude under our discussion below that they are not so entitled as they did not comply with the conditions required by law.The petitioners are not entitled to the lump sum gratuity under Section 1 of R.A. No. 1568, as amendedThat the petitioners failed to meet conditions of the applicable retirement law Section 1 of R.A. No. 156829 is beyond dispute. The law provides:Sec. 1. When the Auditor General or the Chairman or any Member of the Commission on Elections retires from the service for having completed his term of office or by reason of his incapacity to discharge the duties of his office, or dies while in the service, or resigns at any time after reaching the age of sixty years but before the expiration of his term of office, he or his heirs shall be paid in lump sum his salary for one year, not exceeding five years, for every year of service based upon the last annual salary that he was receiving at the time of retirement, incapacity, death or resignation, as the case may be: Provided, That in case of resignation, he has rendered not less than twenty years of service in the government; And, provided, further, That he shall receive an annuity payable monthly during the residue of his natural life equivalent to the amount of monthly salary he was receiving on the date of retirement, incapacity or resignation. [italics supplied]To be entitled to the five-year lump sum gratuity under Section 1 of R.A. No. 1568, any of the following events must transpire:(1)Retirement from the service for having completed the term of office;(2) Incapacity to discharge the duties of their office;(3) Death while in the service; and(4) Resignation after reaching the age of sixty (60) years but before the expiration of the term of office. In addition, the officer should have rendered not less than twenty years of service in the government at the time of retirement.Death during the service obviously does not need to be considered in the present case, thus leavingretirement,incapacityandresignationas the event that must transpire in order to be entitled to the lump sum gratuity.We note that the termination of the petitionersad interimappointments could hardly be considered as incapacity since it was not the result of any disability that rendered them incapable of performing the duties of a Commissioner. Thus, incapacity is likewise effectively removed from active consideration."Resignation is defined as the act of giving up or the act of an officer by which he declines his office and renounces the further right to it. To constitute a complete and operative act of resignation, the officer or employee must show a clear intention to relinquish or surrender his position accompanied by the act of relinquishment."30In this sense, resignation likewise does not appear applicable as a ground because the petitioners did not voluntarily relinquish their position as Commissioners; their termination was merely a consequence of the adjournment of Congress without action by the CA on theirad interimappointments.This eliminative process only leaves the question of whether the termination of the petitionersad interim appointments amounted to retirement from the service after completion of the term of office. We emphasize at this point that theright to retirement benefitsaccrues only when two conditions are met:first,when the conditions imposed by the applicable law in this case, R.A. No. 1568 are fulfilled; andsecond,when an actual retirement takes place.31This Court has repeatedly emphasized that retirement entails compliance with certain age and service requirements specified by law and jurisprudence, and takes effect by operation of law.32Section 1 of R.A. No. 1568 allows the grant of retirement benefits to the Chairman or any Member of the Comelec who has retired from the service after having completed his term of office. The petitioners obviously did not retire under R.A. No. 1568, as amended, since they never completed the full seven-year term of office prescribed by Section 2, Article IX-D of the 1987 Constitution; they served as Comelec Commissioners for barely four months,i.e.,from February 16, 1998 to June 30, 1998. In the recent case ofRe: Application for Retirement of Judge Moslemen T. Macarambon under Republic Act No. 910, as amended by Republic Act No. 9946,33where the Court did not allow Judge Macarambon to retire under R.A. No. 910 because he did not comply with the age and service requirements of the law, the Court emphasized:Strict compliance with the age and service requirements under the law is the rule and the grant of exception remains to be on a case to case basis.We have ruled that the Court allows seeming exceptions to these fixed rules for certain judges and justices only and whenever there are ample reasons to grant such exception. (emphasis ours; citations omitted)More importantly, we agree with the Solicitor General that the petitioners service, if any, could only amount totenure in officeand not to theterm of officecontemplated by Section 1 of R.A. No. 1568.Tenureandterm of officehave well-defined meanings in law and jurisprudence. As early as 1946, the Court, inTopacio Nueno v. Angeles,34provided clear distinctions between these concepts in this wise:The term means the time during which the officer may claim to hold the office as of right, and fixes the interval after which the several incumbents shall succeed one another.The tenure represents the term during which the incumbent actually holds the office. The term of office is not affected by the hold-over. The tenure may be shorter than the term for reasons within or beyond the power of the incumbent. There is no principle, law or doctrine by which the term of an office may be extended by reason of war. [emphasis ours]This is the ruling that has been followed since then and is the settled jurisprudence on these concepts.35While we characterized anad interimappointment inMatibag v. Benipayo36"as a permanent appointment that takes effect immediately and can no longer be withdrawn by the President once the appointee has qualified into office," we have also positively ruled in that case that "anad interimappointment that has lapsed by inaction of the Commission on Appointmentsdoes not constitute a term of office."37We consequently ruled:However, anad interimappointment that has lapsed by inaction of the Commission on Appointments does not constitute a term of office.The period from the time thead interimappointment is made to the time it lapses is neither a fixed term nor an unexpired term.To hold otherwise would mean that the President by his unilateral action could start and complete the running of a term of office in the COMELEC without the consent of the Commission on Appointments. This interpretation renders inutile the confirming power of the Commission on Appointments.38(emphasis ours; italics supplied)Based on these considerations, we conclude that the petitioners can never be considered to have retired from the service not only because they did not complete the full term, but, more importantly, because they did not serve a "term of office" as required by Section 1 of R.A. No. 1568, as amended.Ortiz v. COMELEC cannot be applied to the present caseWe are not unmindful of the Courts ruling inOrtiz v. COMELEC39which Barcelona cites as basis for his claim of retirement benefits despite the fact that like the petitioners he did not complete the full term of his office.In that case, the petitioner was appointed as Comelec Commissioner, for a term expiring on May 17, 1992, by then President Ferdinand E. Marcos, and took his oath of office on July 30, 1985. When President Corazon Aquino assumed the Presidency and following the lead of the Justices of the Supreme Court, Ortiz together with the other Comelec Commissioners tendered his courtesy resignation on March 5, 1986. On July 21, 1986, President Aquino accepted their resignations effective immediately. Thereafter, Ortiz applied for retirement benefits under R.A. No. 1568, which application the Comelec denied. The Court, however, reversed the Comelec and held that "[t]he curtailment of [Ortizs] term not being attributable to any voluntary act on the part of the petitioner, equity and justice demand that he should be deemed to have completed his term xxx. [That he] should be placed in the same category as that of an official holding a primarily confidential position whose tenure ends upon his superiors loss of confidence in him." Thus, as "he is deemed to have completed his term of office, [Ortiz] should be considered retired from the service."40A close reading ofOrtizreveals that it does not have the same fact situation as the present case and is thus not decisive of the present controversy. We note that the impact of the principle ofstare decisisthat Barcelona cited as basis is limited;specific judicial decisions are binding only on the parties to the case and on future parties withsimilar or identicalfactual situations.41Significantly, the factual situation inOrtizis totally different so that its ruling cannot simply be bodily lifted and applied arbitrarily to the present case.First, inOrtiz,Ortizs appointment was a regular appointment made by then President Marcos, while the petitioners were appointed by President Ramosad interimor during the recess of Congress.Second, Ortizs appointment was made under the 1973 Constitution which did not require the concurrence of the CA. Notably, the 1973 Constitution abolished the CA and did not provide for an executive limit on the appointing authority of the President. In the present case, the petitionersad interimappointment was made under the 1987 Constitution which mandated that an appointment shall be effective only until disapproval by the CA or until the next adjournment of Congress.Third,inOrtiz,the Court addressed the issue of whether a constitutional official, whose "courtesy resignation" had been accepted by the President of the Philippines during the effectivity of the Freedom Constitution, may be entitled to retirement benefits under R.A. No. 1568. In the present case, the issue is whether the termination of the petitionersad interimappointments entitles them to the full five-year lump sum gratuity provided for by R.A. No. 1568.No occasion for liberal construction since Section 1 of R.A. No. 1568, as amended, is clear and unambiguousThe petitioners appeal to liberal construction of Section 1 of R.A. No. 1568 is misplaced since the law is clear and unambiguous. We emphasize that the primary modality of addressing the present case is to look into the provisions of the retirement law itself. Guided by the rules of statutory construction in this consideration, we find that the language of the retirement law is clear and unequivocal; no room for construction or interpretation exists, only the application of the letter of the law.The application of the clear letter of the retirement law in this case is supported by jurisprudence. As early as 1981, in the case ofIn Re: Claim of CAR Judge Noel,42the Court strictly adhered to the provisions of R.A. No. 910 and did not allow the judges claim of monthly pension and annuity under the aforementioned law, considering that his length of government service fell short of the minimum requirements.Similarly, inRe: Judge Alex Z. Reyes,43the Court dismissed CTA Judge Reyes invocation of the doctrine of liberal construction of retirement laws to justify his request that the last step increment of his salary grade be used in the computation of his retirement pay and terminal leave benefits, and held:InBorromeo, the court had occasion to say: "It is axiomatic that retirement laws are liberally construed and administered in favor of the persons intended to be benefited. All doubts as to the intent of the law should be resolved in favor of the retiree to achieve its humanitarian purposes."Such interpretation in favor of the retiree is unfortunately not called for nor warranted, where the clear intent of the applicable law and rules are demonstrably against the petitioner's claim.(Paredes v. City of Manila, G.R. No. 88879, March 21, 1991). Section 4 is explicit and categorical in its prohibition and, unfortunately for Judge Reyes, applies squarely to the instant case.44(emphasis ours; italics supplied)Finally, inGovt Service Insurance System v. Civil Service Commission,45the Court was asked to resolve whether government service rendered on aper diembasis is creditable for computing the length of service for retirement purposes. In disregarding the petitioners plea for liberal construction, the Court held:The law is very clear in its intent to excludeper diemin the definition of "compensation." Originally,per diemwas not among those excluded in the definition of compensation (See Section 1(c) of C.A. No. 186), not until the passage of the amending laws which redefined it to excludeper diem.The law not only defines the word "compensation," but it also distinguishes it from other forms of remunerations. Such distinction is significant not only for purposes of computing the contribution of the employers and employees to the GSIS but also for computing the employees' service record and benefits.x x x xPrivate respondents both claim that retirement laws must be liberally interpreted in favor of the retirees.However, the doctrine of liberal construction cannot be applied in the instant petitions, where the law invoked is clear, unequivocal and leaves no room for interpretation or construction.Moreover, to accommodate private respondents' plea will contravene the purpose for which the law was enacted, and will defeat the ends which it sought to attain (cf. Re: Judge Alex Z. Reyes, 216 SCRA 720 [1992]).46[italics supplied; emphasis ours]No compelling reasons exist to warrant the liberal application of Section 1 of R.A. No. 1568, as amended, to the present caseWe find no compelling legal or factual reasons for the application of the Courts liberality in the interpretation of retirement laws to the present case. The discretionary power of the Court to exercise the liberal application of retirement laws is not limitless; its exercise of liberality is on a case-to-case basis and only after a consideration of the factual circumstances that justify the grant of an exception. The recent case ofRe: Application for Retirement of Judge Moslemen T. Macarambon under Republic Act No. 910, as amended by Republic Act No. 994647fully explained how a liberal approach in the application of retirement laws should be construed,viz:The rule is that retirement laws are construed liberally in favor of the retiring employee.However, when in the interest of liberal construction the Court allows seeming exceptions to fixed rules for certain retired Judges or Justices, there are ample reasons behind each grant of an exception.The crediting of accumulated leaves to make up for lack of required age or length of service is not done indiscriminately. It is always on a case to case basis.In some instances, the lacking elementsuch as the time to reach an age limit or comply with length of service isde minimis. It could be that the amount of accumulated leave credits is tremendous in comparison to the lacking period of time.More important,there must be present an essential factorbefore an application under thePlanaorBritanicorulings may be granted. The Court allows a making up or compensating for lack of required age or service only if satisfied that the career of the retiree was marked by competence, integrity, and dedication to the public service; it was only a bowing to policy considerations and an acceptance of the realities of political will which brought him or her to premature retirement. (emphases and italics ours; citation omitted)In the present case, as previously mentioned,Ortizcannot be used as authority to justify a liberal application of Section 1 of R.A. No. 1568, as amended not only because it is not on all fours with the present case; more importantly, the Court inOrtizhad ample reasons, based on the unique factual circumstances of the case, to grant an exception to the service requirements of the law. InOrtiz, the Court took note of the involuntariness of Ortizs "courtesy resignation," as well as the peculiar circumstances obtaining at that time President Aquino is