DOJ Opinion No. 102, s. 1994

DOJ OPINION NO. 102 , s. 1994 July 18, 1994 Mr. Jaime A. Venago Executive Director Mt. Pinatubo Commission DSWD Bldg. Batasan Complex Constitutional Hills, Quezon City Sir : This refers to your request for opinion on certain issues relative to the authority of the Mt. Pinatubo Commission to recover costs and execute deeds of conveyance and its liability for payment of taxes. llcd Specifically, you raise the following issues: 1. May the Commission "recover land acquisition and development coast from resettled victims as the purchase price of their respective lots? 2. May the Commission "legally sell lots" within the areas allotted for "commercial and institutional use such as market, store, church, school sites, etc."? 3. May the Commission recover the development costs from the beneficiaries of resettlement sites within areas reserved through Presidential Proclamations? 4. If the answer to the above three issues is in the affirmative, may the Commission enter into conditional contracts to sell with the resettled families for an amortization period extending beyond the life of the Commission but with a proviso for assumption of the contracts by its successor-in-interest. 5. May the Commission be exempted from paying real estate and capital gains taxes on lots conveyed to the resettled victims? I. The Authority of the Commission to Recover Costs On the authority of the Commission to recover costs, subjects of the first and third queries, you state that a cursory readings of R.A. No. 7637, as amended by R.A No. 7657, and Administrative Order No. 18 providing for the implementing Rules and Regulations of R.A. No. 7637, does not reveal any specific provision empowering the Commission to recover costs for land acquisition and development from the resettled victims of the eruption of Mt. Pinatubo; and that the doubt on the Commission authority to recover land acquisition and development costs is further abetted by specific provision of R.A. No. 7657 which reads: "Sec. 3. A new paragraph is hereby inserted in Section 7 [of R.A. 7637] to read as follows: (j) Any provision of law to the contrary notwithstanding, the Commission is authorized to re-loan repayments of loans of victim families under the various programs of the Commission, for the purpose of expanding the benefits to other victims who have not availed of said benefits from the funds administered by the Commission. You note that, aside from Section 7(j) which provides for repayment of loans of victim families, there is no other provision in R.A. No. 7637, as amended, which deals on "any other financial obligation of the resettle victims". We agree with the view that the Commission has no authority under R.A. No. 7637, as amended by R.A. No. 7657, to recover land acquisition and development costs from the resettled victims as the purchase price or their respective lots. We believe that the lands within areas established and developed as resettlement sites were intended by the lawmakers to be distributed equitably to the resettled victims-beneficiaries free of charge. In arriving at this conclusion, we are not only guided by the title of the statute which reads: "AN ACT APPROPRIATING THE SUM OF TEN BILLION PESOS FOR THE AID, RELIEF, RESETTLEMENT , REHABILITATION AND LIVELIHOOD SERVICES AS WELL AS INFRASTRUCTURE SUPPORT FOR THE VICTIMS OF THE ERUPTION OF MT. PINATUBO, CREATING THE MT. PINATUBO ASSISTANCE , RESETTLEMENT AND DEVELOPMENT COMMISSION AND FOR OTHER PURPOSES". (Emphasis supplied) but also the whole text of the statutes, particularly Sections 2 and 3 thereof which explicitly provide : "SEC. 2. Declaration of Policy . It is hereby declared by the policy of the State to assist the victims in the communities damaged or destroyed or adversely affected by the eruption of Mt. Pinatubo and its aftereffects by extending to them aid, relief, resettlement, rehabilitation and livelihood services and by undertaking construction or repeat and reconstruction of infrastructure to the end that life may return to normalcy at the earliest possible time and development of Central Luzon may be accelerated. It is further declared the policy of the State to restore and living conditions of the aetas and other members of the cultural communities in the area to their productive pre-eruption conditions, with settlement being chosen according to its suitability as permanent upland abode thereby ensuring the improvement of these communities." SEC. 3. Statement of Objectives and Guidelines . this Act is intended to help the victims of the eruption of Mt. Pinatubo and its aftereffects. It aims to provide additional funds for the immediate relief of the victims, to establish resettlement centers, homesites and townsites for displaced families ; to provide livelihood and employment opportunities; to repair, reconstruct or replace government infrastructures damaged or destroyed by said disaster whenever economically, socially and technically advisable; and to construct new infrastructure facilities needed by the community." (Emphasis supplied). Gleaned from the above declarations of policy and objectives in R.A. No. 7637 and the appropriations clause in Section 5, hereunder quoted, is the clear intent of the lawmakers to assist the victims of the Mt. Pinatubo eruption who were displaced from their places of abode and livelihood, to recover and be restored in their former communities" to the end that life may return to normalcy at the earliest possible time" and at no cost to them, by providing a huge appropriation of Ten billion pesos to be spent according to the schedule and manner specified by the legislators in said Section 5 to wit: "SEC 5. Appropriations Clause . To carry out the purposes of this Act, the sum of Ten billion pesos (P10,000,000,000) is hereby appropriated out of any available funds in the National Treasury not otherwise appropriated. Disbursement of said Ten billion pesos (P10,000,000,000) shall be programmed as follows: '(a) From the approval of this Act to December 31, 1993, the sum of Six billion five hundred million pesos (P6,500,000,000). Three and a half billion pesos (P3,500,000,000) of which shall be for resettlement and livelihood projects and Three billion pesos (P3,000,000,000) shall be spent on dikes. (b) For the year 1994, the sum of Two billion pesos (P2,000,000,000), One billion pesos of which shall be for resettlement and livelihood projects and One billion (P1,000,000,000) for vital infrastructure. (c) For the year 1995, the sum of One billion five hundred pesos (P1,500,000,000), Five hundred million (P500,000,000) of which shall be for resettlement and livelihood projects and One billion (P1,000,000,000) for vital infrastructure." (Emphasis supplied). It will be noted from the abovequoted provision that Five billion pesos, or one half of the total appropriation of Ten billion pesos, is earmarked for " resettlement and livelihood projects". Significantly, Section 12, of the same law requires the Commission to submit to the president and to Congress a detailed quarterly report on the funds allocated indicating the amount released, obligated and disbursed for, inter alia, " aid relief, resettlement, rehabilitation and livelihood services, including the list of names of approved individual beneficiaries and contractors and the evaluation of the effectiveness of the delivery systems of such services ." This provision evidently seeks to ensure that the government funds appropriated for said projects are spent judiciously and effectively for the specific purposes mentioned in the law (resettlement being one of them), and not for any other purpose. And had it been the intention of the lawmakers to require reimbursement of government funds appropriated and spent for resettlement sites charging the resettle victims the cost of acquisition and development thereof, it could have easily provided so, and not left it to implication and conjectures. The law could have very well provided that the resettlement sites shall be sold at cost to qualified beneficiaries. The fact that it did not, brings us to the inevitable conclusion that the land in the resettlement areas are to be given without cost to the resettled victims. It is a well-settled rule in statutory construction that the best source from which to ascertain the legislative intent is the statute itself the words, phrases, sentences, sections, clauses, provisions taken as a whole and in relation to one another. Legislative intent should accordingly be ascertained from a consideration of the whole context of the statute and not from isolated part or particular provision (Agpalo, Statutory Construction , 1886, Ed., citing Aboitiz Shipping Corp., v. City of Cebu, 13 SCRA 449; Aisporna v. Court of Appeals, 113 SCRA 459). In construing a statute, courts will take into consideration all the facts and circumstances existing at the time of, and leading to, enactment of the statute of the statute . . . the evils to be remedied and the remedy to be provided (Martin Statutory Construction, Fifth Ed., citing 82 C.J.S., p. 739). A construction which will cause objectionable results should be avoided . . . and in accordance with the decisions construing statutes, a construction which will result in oppression, hardship, or inconvenience will also be avoided, as will a construction which will result in absurd consequences (82 C.J.S. pp. 623-627). In the instant case, to construe the law as requiring reimbursements from victim families of acquisition and development costs of the resettlement sites by way of purchase price would not be in keeping with the policy and objectives of the law and would result in "oppression, hardship or inconvenience" to the hapless victims of Mt. Pinatubo tragedy. Furthermore, Section 7 of R.A. 7637, as amended, enumerates the powers of the Commission to carry out its objectives, viz : "(a) To formulate policies and plans for the relief, rehabilitation, resettlement and livelihood services as well as infrastructure support in harmony with the other plans and policies of the National Government and other agencies such as the Bases Conversion and Development Authority; (b) To make a determination of the areas where the lahar flow may be diverted to spare communities and/or minimize damage to lives, habitation, infrastructure, agricultural and other resources upon through consultation with lahar experts, scientists, and other technical consultants and personnel. (c) To prioritize, coordinate and supervise the implementation of the various programs and projects of the Commission; (d) To sue and be sued in its name, and adopt, alter and use a seal; (e) To enter into, make, perform and carry out contracts of every class, kind and description which are necessary to the realization of its purposes with any person, firm or corporation, private or public, and upon consultation with the President, with foreign government entities, subject to the usual accounting and auditing requirements; (f) To apply for, receive, and accept grants and donation of funds, equipment, materials and services needed for the development of the area, within and outside the Philippines; (g) To monitor the progress of the relief, rehabilitation, resettlement and livelihood as well as infrastructure support programs and projects; (h) To coordinate and consult with concerned national and local officials, both elective and appointive, as well as accredited non-government organizations (NGOs) in the prioritization and prosecution of the programs and projects; (i) To call upon any department, office, instrumentality, agency, or any political subdivision of the Government for such assistance as may be necessary for the attainment of the objectives of the Commission; and (j) Any provision of law to the contrary notwithstanding, the Commission is authorized to re-loan repayments of loans of victim families under the various programs of the Commission, for the purpose of expanding the benefits to other victims who have not availed of said benefits from the funds administered by the Commission". (k) In general, to perform such other powers as may be necessary and proper to carry out the purpose of this Act." Well settled is the rule that an administrative agency has only such powers as are expressly granted to it or necessarily implied therefrom, and any power sought to be exercised must be found within the four corners of the statute under which the agency proceeds (Makati Stock Exchange vs. Securities and Exchange Commission, 14, SCRA 620; American Brass Co. vs. Wisconsin State Board of Health, 15 NW 2d 27 [1977]; Union Pacific Co. vs. Public Service Commission, 134 p 2d 469 [1943]). It is also a familiar rule that statutes conferring powers or investing duties upon officers/agencies/officials must be strictly construed and must be treated not merely as grants or powers, but also as limitations thereon; that powers should not be extended by implication beyond what may be necessary for their just reasonable execution (Secretary of Justice op. No. 100 s. 1987, Nos. 22 and 208, s. 1988). In the absence, therefore, of any provision of law which clearly authorized the Commission to recover land acquisition and development costs from the resettled victims as the purchase price of their respective lots, it is believed that the Commission may not do so without violating the intent of the statute as embodied in its declared policy and objectives. The intent of the statute is the gist of enactment, and the material disregard of the statutory intent is a violation of the substance of the enactment (Getzen v. Sumter Country, 89 Fla 45, 103 So, 104, 107 [1925]). II. The Authority of the Commission to Sell Commercial and Industrial Lots The second issue raised relates to whether the Commission may sell areas for "commercial and industrial use" to " commercial entrepreneurs and religious sects/church" and other institutional users like schools. It is believed that the Commission, likewise, does not have such authority. There is no express grant of such power to the Commission under Section 7. supra . of R.A. No. 7637, as amended. Neither may such powers be implied from any if its express powers under said Act, not even from its general power to enter into contracts. Not being a public corporation, as hereinafter discussed, the Commission holds all property within the Mt. Pinatubo areas for and in behalf of the Republic of the Philippines. For the Commission to legally dispose of such property, there must be a clear legal provision empowering it do so (see Laurel vs. Executive Secretary, 187 SCRA 797). At present, there is none. Nonetheless, it is believed that the power of disposal is vested in the President pursuant to Section 48, Book I of the Administrative Code of 1987 (E.O. No. 292) which authorizes the President to execute deeds of conveyance covering property titled in the name of the Republic, in relation to Act No. 3038 which empowers the Secretary of Environment and Natural Resources to dispose of lands of the private domain of the government, and in the light of the doctrine of qualified political agency under which the President may directly assume or discharge powers specifically lodged in his Department Secretaries (see Araneta vs. Dinglasan, 101, Phil. 328 and dissenting opinion of Justice Florentino P. Feliciano in Laurel vs. Executive Secretary, supra ). III. Authority of the Commission to Executive Deeds of Conveyance The foregoing discussions under Parts I and II hereof dispose of the fourth issue relative to the authority of the Commission to Execute deeds of conveyance covering resettlement lots and commercial and institutional areas. Not being expressly authorized by law to sell and convey the lots within the resettlement sites and the areas for commercial and institutional uses, the Commission cannot execute deeds of conveyance over the property, irrespective of the terms or periods thereof. IV. The Tax liability of the Commission The fifth issue on whether the Commission can be exempted from payment of taxes assumes that the Commission is a public corporation endowed with a juridical personality separate and distinct from that of the national government. But a reading of the law, particularly Section 6 of R.A. No. 7637, would show that it is not a corporate body but a mere ad hoc government agency with a limited existence of nine (9) years at the most, unless extended by Congress. Section 6 provides: "SEC. 6. Creation of the Mt. Pinatubo Assistance, Resettlement and Development Commission . For purposes of this Act, there is hereby created the Mt. Pinatubo Assistance, Resettlement and Development Commission, hereinafter referred to as the Commission. It shall be organized within thirty (30) days after the approval of this Act. It shall have a term of six (6) years from its organization: Provided , that the President by proclamation may, within six (6) months prior to the expiration of term, extend the period of its existence once for not more three (3) years. Such amount as may be necessary for the initial organization and/or operational expenses of the Commission shall be set aside from the amount herein appropriated. For administrative purposes, the Commission shall be attached to the Office of the President." The tests to determine whether the law has created a corporate body or not had been extensively discussed in previous opinions of this Department. Opinion No. 13, s.1990, in particular instructive: "As aptly observed in Opinion No. 79, s. 1985, 'the usual practice by which the legislative authority invests an entity with a juridical personality is (a) to expressly declare that it is a 'body corporate' or a 'government corporation' or a 'public corporation'; (b) to specifically confer it with general corporate powers such as to enter into contracts, to sue and be sued or acquire and own property; and (c) to explicitly state that it possesses all the rights, powers and privileges incident to corporations". " A legislative intent to create a government corporation will not be inferred from a provision vesting a public body with some powers normally pertaining to corporation such as to enter into contracts, to borrow money or acquire real property, in the absence of express language constituting a corporate body . A specific example is Sacobia Development Authority which is not considered a government corporation but a regular government agency because, as stated in Opinion No. 79, s. 1985, 'E.O. No. 586 creating SACOBIA does not in express terms constitute a corporate body. It does not possess standard corporate powers which are ordinarily granted to, or inherent in corporate entities, such as the power to sue and be sued, to have continuous succession, to adopt and use a corporate seal, to prescribe, amend and repeal its by-laws. While it has been given the powers to contract, to borrow money, to acquire, purchase, own, dispose of or otherwise deal in real and personal property, this is not indicative or corporate existence in the absence of an express provision giving it corporate personality. Moreover, SACOBIA has no corporate funds. It receives a regular appropriation from the Government ." "Pertinently, existing law (Administrative Order No. 59) defines 'government-owned or controlled corporations' as follows: (a) Government-owned and/or controlled corporation hereinafter referred to as GOCC or government corporation, is a corporation which is created by special law of organized under the Corporation Code in which the Government, has ownership of the majority of the capital or has voting control; Provided , That an acquired asset corporations as defined in the next paragraph shall not be considered as GOCC or government corporation." xxx xxx xxx There is no better and surer way to determine whether a particular government body is or is not a government corporation than to apply the aforestated definition." There is nothing in R.A. No. 7637 nor in the amendatory law (R.A. No. 7657) which clearly and categorically endows the Commission with corporate existence. The vesting of some corporate powers, like the power to sue and be sued, to enter into contracts, to accept donations, etc., in the Commission does not, by itself , indicate corporate life, in the absence of an express provision creating the Commission as corporate body. Based thereon, it is our view that the Commission is not a public corporation but a mere agency of the government which is attached to the Office of the President for administrative purposes. As such, it is not subject to tax because it only represents its principal, the National Government, in all of its transactions designated to carry out and implement the mandate reposed in it by R.A. No. 7637, as amended. Very truly yours, (SGD.) FRANKLIN M. DRILON Secretary