Tolentino vs. Senate Electoral Tribunal

The SET's jurisdiction as sole judge of all contests relating to the election, returns, and qualifications of senators is limited to matters affecting the validity of the protestant's title and does not extend to interpreting or invalidating contracts between third parties; until a contract provision is declared void in a proper proceeding, the SET may properly rely on and enforce it.

Senator Francis N. Tolentino filed an election protest against Senator Leila M. De Lima before the Senate Electoral Tribunal (SET) following the May 9, 2016 national elections, contesting the official results of the senatorial race. The COMELEC had procured 92,509 Vote Counting Machines (VCMs) and related paraphernalia from Smartmatic-TIM under Automated Election System (AES) contracts in the nature of a lease with option to purchase. Section 6.9 of those contracts provided that all goods still in the COMELEC's possession as of December 1, 2016 because of any election contest or audit requirement would be considered sold to the COMELEC pursuant to its option to purchase, with the COMELEC to pay the corresponding price, without prejudice to the COMELEC requiring the protestant to shoulder such costs. The protestant's election protest necessitated the retention of certain VCMs and CCS laptops beyond the lease period, triggering the operation of this provision and giving rise to the dispute over who should bear the retention costs.

During the May 9, 2016 National, Local, and ARMM Elections, the COMELEC utilized 92,509 Vote Counting Machines (VCMs) and related paraphernalia procured from Smartmatic-TIM under Automated Election System (AES) contracts in the nature of a lease with option to purchase. Section 6.9 of those contracts provided that all goods still in the COMELEC's possession as of December 1, 2016 because of any election contest or audit requirement would be considered sold to the COMELEC pursuant to its option to purchase, with the COMELEC to pay the corresponding price within ten working days from receipt of the invoice, without prejudice to the COMELEC requiring the protestant to shoulder such costs.

On June 20, 2016, Senator Francis N. Tolentino filed an election protest against Senator Leila M. De Lima before the SET, contesting the official results of the senatorial elections. The SET, acting on the protest, issued Resolution No. 16-01 on July 7, 2016, directing the COMELEC to safeguard and preserve all election materials, data storage devices, and paraphernalia used in the May 9, 2016 senatorial elections. When the COMELEC sought clarification on the coverage of the protection order, the SET issued Resolution No. 16-06 on August 15, 2016, modifying the order to exclude hardware and suppletory components that did not contain election data. Pursuant to Section 6.9 of the AES Contracts, the SET Executive Committee also required the COMELEC to provide the amount to be paid by the protestant as retention costs of the VCMs and CCS laptops.

Thereafter, the SET issued Resolution No. 16-15 on November 9, 2016, requiring the protestant to manifest his intended course of action regarding the retained equipment. In compliance, Tolentino submitted a Manifestation on November 18, 2016 requesting that 45 VCMs and 6 CCS laptops be retained, and filed a Motion on the same date praying that an additional 106 VCMs and their SD cards and other materials be safeguarded and preserved. Acting thereon, the SET issued Resolution No. 16-17 on November 22, 2016, directing the COMELEC to retain, safeguard, and preserve the specified machines and equipment subject to the protestant's cash deposit of P3,315,785.36, computed as the cost of 6 CCS laptops at P29,909.16 each, 45 VCMs at P20,770.40 each, and 106 VCMs at P20,770.40 each. The protestant initially deposited P1,114,122.96 on December 1, 2016, covering the cost of the 45 VCMs and 6 CCS laptops.

The SET, in Resolution No. 16-37 dated March 2, 2017, acknowledged the initial payment and required the protestant to deposit the remaining balance of P2,201,662.40 within fifteen days, under threat of dismissal of the election protest for non-compliance. The SET clarified that any right arising from the protestant's payment would be threshed out between him and the COMELEC. The protestant's motion for reconsideration was denied in Resolution No. 16-49 dated May 25, 2017. On June 13, 2018, the protestant paid the remaining balance.

On October 3, 2018, the protestant filed a Motion for the Return of Payments, asserting that despite paying the full amount of P3,315,785.36, he never enjoyed ownership rights over the machines and equipment, which remained in the COMELEC's custody. He contended that the machines were not utilized in his election protest because the COMELEC failed to make them accessible for forensic examination, rendering the payment purposeless. The COMELEC countered that the payments were for retention of the election paraphernalia in relation to the protest, not for the purchase of the items themselves, and that no contract of sale existed between the protestant and the COMELEC. The protestant replied that the retention cost was too onerous, invoked the SET's power to invalidate Section 6.9 of the AES Contracts as illegal, and noted that the COMELEC had exercised its option to purchase through a Deed of Sale dated January 12, 2018, which supposedly negated the necessity of charging him retention costs.

The SET denied the Motion for Return of Payments in Resolution No. 16-141 dated February 21, 2019, opining that the power to interpret and pass upon the legality of Section 6.9 of the AES Contracts rests with the regular courts, and that any action by the Tribunal on the matter would be wanting of legal basis. The SET also directed the immediate turn-over of the P3,315,785.36 to the COMELEC. The protestant's Motion for Reconsideration was denied in Resolution No. 16-143 dated May 6, 2019, prompting the present Petition for Certiorari.

• Grave Abuse of Discretion: Petitioner imputed grave abuse of discretion on the SET for intentionally refusing to rule on the return of his cash deposit and on the alleged invalidity and unconstitutionality of Section 6.9 of the AES Contracts, arguing that such inaction constituted a failure to exercise the SET's constitutional mandate to judge all contests relating to the election, returns, and qualifications of senators.
• Unjust Enrichment: Petitioner claimed that the release of his cash deposits to the COMELEC amounted to unjust enrichment, since the election machines and equipment were not used for forensic audit as intended due to reasons directly attributable to the COMELEC, which had admitted that the use of the paraphernalia posed serious technical challenges and that the Election Management System was non-operational.
• Onerous Retention Cost: Petitioner contended that considering the entire cost of the election machines and equipment as "retention cost" was too onerous and contravened his right to free access to an electoral tribunal and election protest, characterizing the requirement as financially cumbersome and discriminatory to litigants.
• Illegality of Section 6.9: Petitioner argued that Section 6.9 of the AES Contracts was illegal and invalid because it bestowed upon the COMELEC the sole discretion to determine whether or not the protestant should shoulder the retention costs, without any parameters or measures on how such discretion should be exercised.
• Subordination of the SET: Petitioner maintained that the SET subordinated itself to Section 6.9 by giving it too much weight and by deferring resolution of the controversy between him and the COMELEC to a separate forum, insisting that the SET, as sole judge of his election protest with inherent power to control its proceedings, should have settled the controversy itself.
• Administrative Authority to Return Deposits: Petitioner claimed that the SET possessed administrative authority to return the cash deposits or, at the very least, to withhold their disposition pending resolution of the legal issues between him and the COMELEC.

• Improper Remedy: Respondents asserted that the Petition for Certiorari was improper to question the alleged inaction of the SET, as the SET had no jurisdiction to rule on the issues pertaining to the cash deposit and on the alleged invalidity and unconstitutionality of Section 6.9 of the AES Contracts, its constitutional mandate being limited to matters affecting the protestant's title.
• Collateral Attack: Respondents propounded that petitioner should have instituted a separate direct action to declare the nullity of Section 6.9 of the AES Contracts, rather than collaterally attacking the same in his election protest before the SET and in the petition for certiorari, which neither the SET nor the Supreme Court could take cognizance of.
• Presumption of Validity: Respondents stressed that unless declared void in a proper proceeding, the AES Contracts remained valid and the SET correctly relied on Section 6.9 when it ordered the release of the retention costs to the COMELEC.
• Valid Payment to Smartmatic-TIM: Respondents highlighted that there could be no return of the payments because the COMELEC validly paid the same to Smartmatic-TIM upon the lapse of the period to return the leased goods under Section 6.9 of the AES Contracts.
• Awareness of Obligation: Respondents underscored that petitioner was well aware of his obligation to shoulder the retention costs, yet willingly moved for the safeguarding and preservation of the machines and equipment, which the COMELEC in fact did in compliance with the SET's directive, such that petitioner could not successfully claim that the payments did not bear their purpose.
• Violation of Public Purpose Requirement: Respondents submitted that reimbursing the retention money to petitioner would mean using government funds to pay the retention costs to Smartmatic-TIM, violating the fundamental principle under P.D. No. 1445 that government funds or property shall be spent or used solely for public purposes, as petitioner's election protest does not pass the "public purpose test."

• SET Jurisdiction over Contract Validity: Whether the SET committed grave abuse of discretion when it refused to rule on the alleged invalidity and unconstitutionality of Section 6.9 of the AES Contracts between the COMELEC and Smartmatic-TIM.
• Release of Cash Deposits: Whether the SET properly relied on Section 6.9 of the AES Contracts when it ordered the release of the protestant's cash deposit of P3,315,785.36 to the COMELEC.
• Return of Payments: Whether the protestant was entitled to the return of his cash deposits on the ground that the election machines and equipment were not used for forensic audit as intended.

• SET Jurisdiction over Contract Validity: No. The SET did not commit grave abuse of discretion; its constitutional mandate as sole judge of senatorial election contests is limited to matters affecting the validity of the protestant's title and does not include the power to interpret or invalidate contracts between third parties such as the COMELEC and Smartmatic-TIM.
• Release of Cash Deposits: Yes. The SET properly relied on Section 6.9 of the AES Contracts, which enjoys the presumption of validity until declared void in a proper proceeding, in ordering the release of the cash deposits to the COMELEC as retention costs.
• Return of Payments: No. The protestant was not entitled to the return of his deposits, as the COMELEC had validly paid the same to Smartmatic-TIM upon the lapse of the lease period, and reimbursing the protestant would result in the use of government funds for a private electoral contest in violation of the public purpose requirement under P.D. No. 1445.

• SET Jurisdiction over Contract Validity: Section 17, Article VI of the 1987 Constitution vests in the SET the status of "sole judge of all contests relating to the election, returns, and qualifications" of senators. The word "sole" underscores the categorical and complete jurisdiction of the SET over such contests, to the exclusion of all other tribunals. Drawing on Javier vs. COMELEC, the phrase "election, returns and qualifications" is interpreted in its totality as referring to all matters affecting the validity of the contestee's title — "election" referring to the conduct of the polls, "returns" to the canvass and proclamation, and "qualifications" to matters that could be raised in a quo warranto proceeding. The SET's express, inherent, and implied powers under its own Rules (Rules 8, 9, and 10 of the 2020 SET Rules) do not include the authority to declare void or unconstitutional a contract provision between third parties. While the SET has the power to control its proceedings, such power cannot be construed as including the power to interpret, much less invalidate, a contract between the COMELEC and Smartmatic-TIM. Any issue concerning that contract is beyond the jurisdiction and constitutional mandate of the SET. Had the SET ruled on the validity of Section 6.9, it would have acted beyond its authority and itself committed grave abuse of discretion. The proper remedy to assail the disputed provision is a direct action for nullity before the regular courts, not a collateral attack in an election protest.

• Release of Cash Deposits: The COMELEC's authority to procure election machines and equipment is spelled out in Section 12 of R.A. No. 8436, as amended by R.A. No. 9369. Pursuant to this authority, the COMELEC entered into AES Contracts with Smartmatic-TIM in the nature of a lease with option to purchase. Section 6.9 of those contracts stipulates that goods still in the COMELEC's possession as of December 1, 2016 due to any election contest shall be considered sold to the COMELEC, with the latter requiring the protestant to shoulder the costs. Similar lease-with-option-to-purchase contracts entered into by the COMELEC with Smartmatic-TIM for the May 10, 2010 elections were upheld as valid in Capalla vs. COMELEC. Until and unless Section 6.9 is declared void or unconstitutional in a proper proceeding, the presumption tilts in favor of its validity. The SET therefore cannot be faulted for relying on and enforcing the provision when it ordered the release of the protestant's cash deposits. The protestant's contention that the SET subordinated itself to Section 6.9 is untenable, as the SET merely recognized the provision's presumptive validity.

• Return of Payments: The protestant himself moved for the COMELEC to retain custody of 151 VCMs and 6 CCS laptops for safeguarding and preservation, believing them necessary for his election protest. He was fully apprised that he had to shoulder the retention costs under Section 6.9. The COMELEC retained possession of the machines solely because of the pending election protest; otherwise, the paraphernalia would have been returned to Smartmatic-TIM prior to December 1, 2016. When the lease period lapsed, the COMELEC became bound to pay Smartmatic-TIM under the AES Contracts. Reimbursing the protestant would mean that government funds would be used to pay the retention costs to Smartmatic-TIM, violating Section 4(2) of P.D. No. 1445, which mandates that government funds or property shall be spent or used solely for public purposes. The protestant's election protest, aimed at advancing his personal interest as a senatorial candidate, does not fall within the expanded concept of "public purpose" as elaborated in Yap vs. COA. The protestant's claim that the payments did not bear their purpose is untenable, as the COMELEC did in fact preserve and safeguard the equipment pursuant to the SET's directive. The protestant's contention that payment of the retention cost made him owner of the machines is also erroneous, as the amount deposited constituted only a portion of the purchase price — specifically the lease or rental fee component — not the full cost of the machines and equipment.

• Exclusive Jurisdiction of Electoral Tribunals — Under Section 17, Article VI of the 1987 Constitution, the SET is the "sole judge of all contests relating to the election, returns, and qualifications" of senators. The use of the word "sole" emphasizes the exclusive character of the jurisdiction conferred, which is as full, clear, and complete as if it had remained originally in the legislature. The phrase "election, returns and qualifications" is interpreted in its totality as referring to all matters affecting the validity of the contestee's title. The Court applied this doctrine by holding that the SET's jurisdiction does not extend to interpreting or invalidating contracts between third parties, as such matters do not affect the validity of the protestant's title.

• Presumption of Validity of Contracts — Until and unless a contract provision is declared void or unconstitutional in a proper proceeding, the presumption tilts in favor of its validity. The Court applied this principle by holding that the SET properly relied on and enforced Section 6.9 of the AES Contracts, as the provision had not been declared void in a direct action before the regular courts.

• Public Purpose Requirement — Under Section 4(2) of P.D. No. 1445 (Government Auditing Code of the Philippines), government funds or property shall be spent or used solely for public purposes. The concept of "public use" has evolved beyond strict "use by the public" and is now synonymous with "public interest," "public benefit," and "public convenience," as elaborated in Yap vs. COA. The Court applied this doctrine by holding that the protestant's election protest, which advances his personal interest as a senatorial candidate, does not constitute a public purpose warranting the disbursement of government funds to cover retention costs.

• Judicial Non-Interference with Electoral Tribunals — The judgments of electoral tribunals are beyond judicial interference, except upon a clear showing that the decision or resolution was rendered without or in excess of jurisdiction, or with grave abuse of discretion constituting a denial of due process, or upon a demonstration of a very clear unmitigated error manifestly constituting grave abuse of discretion. The Court's function is to check whether the SET has exceeded the limits of its jurisdiction, not to ascertain the intrinsic correctness or merits of its resolutions.

• "A cursory reading of the foregoing unmistakably would show that the SET has no express, inherent or implied power to declare void or unconstitutional Section 6.9 of the AES Contracts, which requires the protestant to shoulder the retention costs. The authority of the SET is limited to matters affecting the validity of the protestant's title." — This passage articulates the ratio decidendi on the scope of the SET's jurisdiction, establishing that the power to control proceedings does not extend to invalidating contracts between third parties.

• "Until and unless Section 6.9 of the AES Contracts is declared void or unconstitutional in a proper proceeding, the presumption tilts in favor of its validity. Thus, the SET cannot be faulted for relying and enforcing the said provision." — This passage states the application of the presumption of validity of contracts to the SET's enforcement of Section 6.9, a principle frequently invoked when government contracts are collaterally challenged.

• "Indisputably, petitioner's election protest, which is aimed at advancing his personal interest as a senatorial candidate, does not fall within the expanded concept of 'public purpose' to warrant the disbursement of government funds." — This passage defines the boundary of the public purpose doctrine in the context of election protests, establishing that a private electoral contest cannot justify the expenditure of public funds.

• "The function of this Court is simply to check whether the SET has exceeded the limits of its jurisdiction and not to ascertain the intrinsic correctness or merits of its resolutions." — This passage restates the doctrine of judicial non-interference with electoral tribunals, limiting the Supreme Court's role to jurisdictional review rather than merits review.

• Lazatin vs. HRET, 250 Phil. 390 (1988) — Followed. The Court relied on this case to emphasize that the use of the word "sole" in Section 17, Article VI of the Constitution underscores the exclusive character of the electoral tribunals' jurisdiction, described as "full, clear and complete."

• Javier vs. COMELEC, 228 Phil. 193 (1986) — Followed. The Court applied the interpretation of "election, returns and qualifications" as referring to all matters affecting the validity of the contestee's title, originally articulated in relation to the COMELEC's jurisdiction under the 1973 Constitution, to the SET's jurisdiction under the 1987 Constitution, noting that the constitutional language has not changed.

• Pangilinan vs. COMELEC, 298 Phil. 685 (1993) — Followed. The Court cited this case to confirm that the SET and HRET succeeded to the COMELEC's former jurisdiction over election contests pertaining to members of the Batasang Pambansa, divesting the COMELEC of that jurisdiction.

• Capalla vs. COMELEC, 687 Phil. 617 (2012) — Followed. The Court cited this case to establish that lease-with-option-to-purchase contracts entered into by the COMELEC with Smartmatic-TIM for election equipment are not novel and have been recognized as valid and advantageous to the government.

• Yap vs. COA, 633 Phil. 174 (2010) — Followed. The Court relied on this case's elaboration of the expanded concept of "public use" or "public purpose" in relation to the disbursement of government funds, applying it to conclude that the protestant's election protest does not qualify as a public purpose.

• Marrero vs. Bocar, 66 Phil. 429 (1938) — Followed. The Court cited this case for the doctrine that the power of the Electoral Commission is beyond judicial interference except upon a clear showing of arbitrary and improvident use of power constituting a denial of due process.

• Co vs. HRET, 276 Phil. 758 (1991) — Followed. The Court paraphrased this case to articulate that the Supreme Court does not venture into correcting perceived errors of independent branches of government but intervenes only to vindicate a denial of due process or correct grave abuse of discretion so grave that the Constitution calls for remedial action.

• Section 17, Article VI, 1987 Constitution — Establishes the SET as the "sole judge of all contests relating to the election, returns, and qualifications" of senators, composed of nine members including three Supreme Court Justices. Applied to define the limits of the SET's jurisdiction and to hold that it does not include the power to invalidate contracts between third parties.

• Section 12, Republic Act No. 8436, as amended by Republic Act No. 9369 — Authorizes the COMELEC to procure supplies, equipment, materials, software, facilities, and other services by purchase, lease, rent, or other forms of acquisition. Applied to confirm the COMELEC's authority to enter into the AES Contracts with Smartmatic-TIM in the nature of a lease with option to purchase.

• Section 6.9, AES Contracts between COMELEC and Smartmatic-TIM — Provides that all goods still in the COMELEC's possession as of December 1, 2016 because of any election contest or audit requirement shall be considered sold to the COMELEC pursuant to its option to purchase, without prejudice to the COMELEC requiring the protestant to shoulder such costs. Applied as the contractual basis for the SET's order requiring the protestant to deposit retention costs and for the release of those funds to the COMELEC.

• Section 4(2), Presidential Decree No. 1445 (Government Auditing Code of the Philippines) — Mandates that government funds or property shall be spent or used solely for public purposes. Applied to hold that reimbursing the protestant's retention costs would constitute an invalid disbursement of public funds for a private electoral contest.

• Rules 8, 9, and 10, 2020 Rules of the Senate Electoral Tribunal — Enumerate the express, implied, and inherent powers of the SET, including the power to control its processes and proceedings. Applied to demonstrate that none of these powers includes the authority to declare void or unconstitutional a contract provision between third parties.

• Section 1, Rule 65, Rules of Court — Defines the petition for certiorari as an extraordinary remedy available only upon showing that a tribunal exercising judicial or quasi-judicial functions has acted without or in excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction. Applied to test whether the SET committed grave abuse of discretion in the assailed resolutions.

Hernando, Carandang, Lazaro-Javier, Inting, Zalameda, M. Lopez, Delos Santos, Gaerlan, and Rosario, JJ., concurred.