Administrative Law Case Digest 

1.  BALBINA MENDOZA, recurrente, vs. PACIANO DIZON, ensu capacidad como Auditor General, recurrido.

G.R. No. L-387.October 25, 1946

BRIONES, J.:

Facts:

Performing the position of Auditor of the province of Ilocos Sur, Juan M. Cuevas died in Vigan, capital of said province. At the outbreak of the War on December 8, 1941, he was on active duty as such an Auditor.

In 1932 Cuevas married Florencia Cocadiz. This marriage was definitively dissolved on March 21, 1944 by virtue of a firm decree of divorce issued by the First Instance Court of Gatangas on that date. There were no offspring. 

On December 7, 1945, the President of the Commonwealth of the Philippines issued Administrative Order No. 27, which under certain conditions provided for the payment of gratuities to officials and employees of the National Government who had been in active service on December 8, 1941. , whether or not they have been called to return to their posts after liberation. Said Administrative Order was issued by the President "by virtue of the authority conferred on me by the existing law (reference is made to the emergency powers) and to carry out the recommendations of the Committee created under Joint Resolution No. 5 of the Congress of Philippines approved on July 28, 1945. " 

the Complainant had already addressed an instance to the Auditor General, accompanied by the corresponding supporting documents, stating the circumstance of her relationship with the late Juan M. Cuevas and her relationship of its assets, including certain amounts of money held by the Government, the Philippine National Bank and the Postal Savings Bank, and consequently requesting "that she be designated as the closest relative in order to enable her to receive without delay any amount owed to your deceased child ... " 

Florencia Cocadiz, the divorced wife, has not officially appeared before the Auditor General, nor has she filed any instance.

The file shows that at first the Auditor General Delegate raised the matter in consultation with the Department of Justice trying to obtain an opinion, among other points, on whether "the divorced wife mentioned here has any right to the gratification or gratuity to which the deceased husband or his intestate is credited AND to Administrative Order No. 27 dated December 7, 1945, considering that said status is equivalent to their wages for the months of January and February, 1942. "

Issue:

whether the gratification (gratuity) payable to the deceased Juan Cuevas under Administrative Order No. 27 dated December 7, 1945, belongs to his lying inheritance, or whether such gratuity should be considered pertinent to the community property of the deceased and his divorced wife.

Ruling:

ADMINISTRATIVE LAW; GRATIFICATION (GRATUITY); SIGNIFICANCE OR CONCEPT. - Administrative Order No. 27 of December 7, 1945, uses the word gratuity which has a known, categorical and strict meaning in law and jurisprudence. The authorities agree that gratuity does not equal salary, wages, or any other emolument. It means gift, prize, present, something that is given and received for a lucrative title. In the present case, the difference between the two concepts should be further emphasized if it is considered that Congress, in its Joint Resolution No. 5 approved on July 28, 1945, recommended the study of "ways and means to pay the back salaries, gratuities, bonuses or other emoluments of the loyal and deserving employees of the Commonwealth ... " The fact, then, that the President chose the term gratuity, leaving aside the other words, indicates that it is a well-calculated concession; clearly denotes the intention to strictly limit the scope of the privilege to the letter of the law.

2.  CHRISTIAN GENERAL ASSEMBLY, INC., Petitioner,
vs.
SPS. AVELINO C. IGNACIO and PRISCILLA T. IGNACIO, Respondents.

G.R. No. 164789. August 27, 2009

BRION, J.:

Facts:

On April 30, 1998, CGA entered into a Contract to Sell a subdivision lot⁴ (subject property) with the respondents – the registered owners and developers of a housing subdivision known as Villa Priscilla Subdivision located in Barangay Cutcut, Pulilan, Bulacan. Under the Contract to Sell, CGA would pay ₱2,373,000.00 for the subject property on installment basis; they were to pay a down payment of ₱1,186,500, with the balance payable within three years on equal monthly amortization payments of ₱46,593.85, inclusive of interest at 24% per annum, starting June 1998.

On August 5, 2000, the parties mutually agreed to amend the Contract to Sell to extend the payment period from three to five years, calculated from the date of purchase and based on the increased total consideration of ₱2,706,600, with equal monthly installments of ₱37,615.00, inclusive of interest at 24% per annum, starting September 2000.

CGA, it religiously paid the monthly installments until its administrative pastor discovered that the title covering the subject property suffered from fatal flaws and defects. CGA learned that the subject property was actually part of two consolidated lots (Lots 2-F and 2-G Bsd-04-000829 [OLT]) that the respondents had acquired from Nicanor Adriano (Adriano) and Ceferino Sison (Sison), respectively. Adriano and Sison were former tenant-beneficiaries of Purificacion S. Imperial (Imperial) whose property in Cutcut, Pulilan, Bulacan had been placed under Presidential Decree (PD) No. 27’s Operation Land Transfer. According to CGA, Imperial applied for the retention of five hectares of her land under Republic Act No. 6657, which the Department of Agrarian Reform (DAR) granted in its October 2, 1997 order (DAR Order). The DAR Order authorized Imperial to retain the farm lots previously awarded to the tenant-beneficiaries, including Lot 2-F previously awarded to Adriano, and Lot 2-G Bsd-04-000829 awarded to Sison. On appeal, the Office of the President and the CAupheld the DAR Order. Through the Court’s Resolution dated January 19, 2005 in G.R. No. 165650, we affirmed the DAR Order by denying the petition for review of the appellate decision.

Understandably aggrieved after discovering these circumstances, CGA filed a complaint against the respondents before the RTC on April 30, 2002. CGA claimed that the respondents fraudulently concealed the fact that the subject property was part of a property under litigation; thus, the Contract to Sell was a rescissible contract under Article 1381 of the Civil Code. CGA asked the trial court to rescind the contract; order the respondents to return the amounts already paid; and award actual, moral and exemplary damages, attorney’s fees and litigation expenses.

respondents filed a motion to dismiss asserting that the RTC had no jurisdiction over the case. Citing PD No. 957 and PD No. 1344, the respondents claimed that the case falls within the exclusive jurisdiction of the HLURB since it involved the sale of a subdivision lot.

CGA opposed the motion to dismiss, claiming that the action is for rescission of contract, not specific performance, and is not among the actions within the exclusive jurisdiction of the HLURB, as specified by PD No. 957 and PD No. 1344.

the RTC issued an order denying the respondents’ motion to dismiss.

Issue:

Whether or not an action to rescind a contract to sell a subdivision lot that the  buyer found to be under litigation falls under the exclusive jurisdiction of the HLURB

Held:

The nature of an action and the jurisdiction of a tribunal are determined by the material allegations of the complaint and the law governing at the time the action was commenced. The jurisdiction of the tribunal over the subject matter or nature of an action is conferred only by law, not by the parties’ consent or by their waiver in favor of a court that would otherwise have no jurisdiction over the subject matter or the nature of an action. Thus, the determination of whether the CGA’s cause of action falls under the jurisdiction of the HLURB necessitates a closer examination of the laws defining the HLURB’s jurisdiction and authority.

The surge in the real estate business in the country brought with it an increasing number of cases between subdivision owners/developers and lot buyers on the issue of the extent of the HLURB’s exclusive jurisdiction. In the cases that reached us, we have consistently ruled that the HLURB has exclusive jurisdiction over complaints arising from contracts between the subdivision developer and the lot buyer or those aimed at compelling the subdivision developer to comply with its contractual and statutory obligations to make the subdivision a better place to live in.

We view CGA’s contention – that the CA erred in applying Article 1191 of the Civil Code as basis for the contract’s rescission – to be a negligible point. Regardless of whether the rescission of contract is based on Article 1191 or 1381 of the Civil Code, the fact remains that what CGA principally wants is a refund of all payments it already made to the respondents. This intent, amply articulated in its complaint, places its action within the ambit of the HLURB’s exclusive jurisdiction and outside the reach of the regular courts. Accordingly, CGA has to file its complaint before the HLURB, the body with the proper jurisdiction.

3. THE UNITED STATES, complainant-appellee,
vs.
FRED L. DORR, ET AL., defendants-appellants.

G.R. No. 1051. May 19, 1903

LADD, J.:

Facts:

The defendants have been convicted upon a complaint charging them with the offense of writing, publishing, and circulating a scurrilous libel against the Government of the United States and the Insular Government of the Philippine Islands.

The complaint is based upon section

8 of Act No. 292 of the Commission, which is as follows:

The alleged libel was published as an editorial in the issue of the "Manila Freedom"... under the caption of "A few hard facts."... appointing rascally natives to important Government positions

"There is no doubt but that the Filipino office holders of the Islands are in a good many instances rascal.

"The Commission has exalted to the highest positions in the islands Filipinos who are alleged to be notoriously corrupt and rascally, and men of no personal character.

there can be no such thing as a scurrilous libel, or any sort of a libel, upon an abstraction like the Government in the sense of the laws and institutions of a country.

Issue:

Whether or not the article be regarded a embraced within the description of “scrurrilous libels against the government of the United States or the Insular Government of the Philippine Island”

Ruling:

"We understand, in modern political science, * * * by the term government, that institution or aggregate of institutions by which an independent society makes and carries out those rules of action which are necessary to enable men to live in a social state, or which... are imposed upon the people forming that society by those who possess the power or authority of prescribing them. Government is the aggregate of authorities which rule a society. By administration, again, we understand in modern times, and especially in more or less... free countries, the aggregate of those persons in whose hands the reins of government are for the time being (the chief ministers or heads of departments)." (Bouvier, Law Dictionary, 891.

The term "government" would appear to be used here in the... abstract sense of the existing political system, as distinguished from the concrete organisms of the Government the Houses of Congress and the Executive which are also specially mentioned.

Upon the whole, we are of the opinion that this is the sense in which the term is used in the enactment under consideration.

The article in question contains no attack upon the governmental system of the United States, and it is quite apparent that, though grossly abusive as respects both the Commission as a body and some of its individual members, it contains no attack upon the governmental system... by which the authority of the United States is enforced in these Islands.

It is the character of the men who are intrusted with the administration of the government that the writer is seeking to... bring into disrepute by impugning the purity of their motives, their public integrity, and their private morals, and the wisdom of their policy. The publication of the article, therefore, no seditious tendency being apparent, constitutes no offense under Act No. 292, section 8.

The judgment of conviction is reversed and the defendants are acquitted

4.

CESAR Z. DARIO, petitioner,
vs.
HON. SALVADOR M. MISON, HON. VICENTE JAYME and HON. CATALINO MACARAIG, JR., in their respective capacities as Commissioner of Customs, Secretary of Finance, and Executive Secretary, respondents.

G.R. No. 81954.August 8, 1989

SARMIENTO, J.:

FACTS:

Pres. Aquino promulgated Proclamation No. 3, providing for the intention of the President to, “completely reorganize the government, eradicate unjust and oppressive structures, and all iniquitous vestiges of the previous regime.” Subsequently, Pres. Aquino promulgated E.O. No. 127, “Reorganizing the Ministry of Finance”, where, in Sec. 59, it provided for the reorganization of the Bureau of Customs. Pursuant to the reorganization, Commissioner Mison issued separation notices to a total of 394 officials, including the petitioner, Cesar Dario, in his capacity as Deputy Commissioner.

Thus, Cesar Dario petitioned for reinstatement on the ground that the Provisional Constitution giving the power to dismiss public officials without cause ended on February 25, 1987, seeing as the public officials enjoyed security of tenure under the provisions of the 1987 Constitution. However, respondent Commissioner Mison contended that Sec. 16, Article XVIII (Transitory Provisions) allows the reorganization of the Bureau of Customs under E.O. No. 127 (authorizing separation without cause) to continue even after the ratification of the 1987 Constitution – citing the case of Jose v. Arroyo, wherein the Court decided in favor of a similar notion. Thus, there was no violation of security of tenure. 

Issue:

Does E.O. No. 127, providing reorganization, allow the “separation” of Dario from the Bureau of Customs despite his right to security of tenure under the 1987 Constitution?

Ruling:

No. The Court held that E.O. No. 127, providing reorganization, does not allow the “separation” of Dario from the Bureau of Customs despite his right to security of tenure under the 1987 Constitution.

In line with this, the Court maintains that reorganization entails that an office is abolished, thus there actually no separation or dismissal such that these concepts imply that there is an office to be separated from. However, the Court asserts that, reorganizations abolishing an office would only be valid if it passes the test of good faith. A Reorganization carried out in good faith must have for its purpose the efficiency of both the economy and bureaucracy. In this case, there is lack of good faith such that there is no showing that legitimate structural changes were made, only that personnel were reduced. Thus, it cannot be said that it was done by reason of economy or redundancy of functions. Thus, since there is lack of good faith, there is no valid reorganization that would allow the “separation” of the petitioners, in keeping with their security of tenure. The act of reorganization of the Bureau of Customs dismissing Dario is unconstitutional

5.  SPOUSES BERNYL BALANGAUAN & KATHERENE BALANGAUAN, Petitioners, v. THE HONORABLE COURT OF APPEALS, SPECIAL NINETEENTH (19^TH) DIVISION, CEBU CITY & THE HONGKONG AND SHANGHAI BANKING CORPORATION, LTD., Respondents.

[G.R. NO. 174350 : August 13, 2008]

CHICO-NAZARIO, J.:

Facts:

Petition for Certiorari assailing the Decision and Resolution of CA w/c annulled and set aside the Resolution of DOJ in HSBC vs Balanguan which dismissed the criminal complaint for Estafa filed against the Balanguan. - In this Petition, Balanguans urge the SC to reverse and set aside the decision of CA and accordingly, dismiss the complaint against them in view of the absence of probable cause - HSBC filed an estafa case against Balanguans which was dismissed by the Prosecutor in its Resolution, finding no probable cause. HSBC appealed to the Secretary of DOJ by means of a Petition for Review which was also dismissed. MR was also denied. - HSBC then went to CA by means of Petition for Certiorari thereby annulling and setting aside the resolutions of the DOJ. Balanguans filed an MR before the CA but was denied.

Issue:

Ruling:

The Prosecutor exceeded his authority and gravely abused his discretion. It must be remembered that a finding of probable cause does not require an inquiry into whether there is sufficient evidence to procure a conviction. It is enough that it is believed that the act or omission complained of constitutes the offense charged.

The Court of Appeals found fault in the DOJ's failure to identify and discuss the issues raised by HSBC in its Petition for Review. And, in support thereof, HSBC maintains that it is incorrect to argue that "it was not necessary for the Secretary of Justice to have his resolution recite the facts and the law on which it was based," because courts and quasi-judicial bodies should faithfully comply with Section 14, Article VIII of the Constitution requiring that decisions rendered by them should state clearly and distinctly the facts of the case and the law on which the decision is based.

It must be remembered that a preliminary investigation is not a quasi-judicial proceeding, and that the DOJ is not a quasi-judicial agency exercising a quasi-judicial function when it reviews the findings of a public prosecutor regarding the presence of probable cause

Though some cases describe the public prosecutor's power to conduct a preliminary investigation as quasi-judicial in nature, this is true only to the extent that, like quasi-judicial bodies18, the prosecutor is an officer of the executive department exercising powers akin to those of a court, and the similarity ends at this point.

The alleged circumstances of the case at bar make up the elements of abuse of confidence, deceit or fraudulent means, and damage under Art. 315 of the Revised Penal Code on estafa and/or qualified estafa. They give rise to the presumption or reasonable belief that the offense of estafa has been committed; and, thus, the filing of an Information against petitioners Bernyl and Katherene is warranted.

Considering the allegations, issues and arguments adduced, SC dismissed the instant petition for being the wrong remedy under the Revised Rules of Court, as well as for petitioner Bernyl and Katherene’s failure to sufficiently show that the challenged Decision and Resolution of the Court of Appeals were rendered in grave abuse of discretion amounting to lack or excess of jurisdiction.

6.

EDUARDO B. OLAGUER AND CONRADO S. REYES in their official capacity as FISCAL AGENTS OF THE PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT, petitioners,
vs.
THE REGIONAL TRIAL COURT et. al.,

G.R. No. 81385 February 21, 1989

GANCAYCO, J.:

Facts:

When the Development Bank of the Philippines (DBP) provided certain financing accommodations to Philippine Journalists, Inc. (PJI), Publisher, the voting rights over 67% of the total subscribed and outstanding voting shares of stock of the company held by the stockholders were assigned to the bank. The bank appointed some stockholders as proxies to exercise its right to vote. But when PJI defaulted, the bank cancelled the said proxies and designated as its proxies petitioner Eduardo Olaguer, Jose Mari Velez and Manuel de Leon. DBP scheduled a special stockholders meeting for the purpose of electing new set of directors. However, complaints were filed against them due to some alleged illegal acts committed by them. Among which is that Olaguer continued to exercise and retain full management and control of PJI despite of his termination of his appointment as member of the board of directors of DBP by Pres. Aquino. It was alleged that Olaguer, et. al have been acting as corporate officers and/or members of the board without their having been elected by the majority vote of stockholders and without their owning in their own right even a single qualifying share. It was also alleged in the complaint, that petitioner Reyes had been sending out notices to private respondents about an alleged stockholders meeting to be held on December 21, 1987 at the PJI building, and that in the letter written by the DBP chief legal counsel, it is stated that petitioner Olaguer and his associates who claim to be members of the board and corporate officers of PJI do not represent DBP and that they are not authorized to act in its behalf. A complaint was filed in the RTC of Manila however, Olaguer contested that he has just been designated the fiscal and team leader of the Presidential Commission on Good Government (PCGG) assigned to the PJI and that all his actions are sanctioned and reported to PCGG.

Issue:

Whether or not the trial court has jurisdiction over the case notwithstanding Olaguer's appointment as fiscal agent of the PCGG.

Ruling:

No. Olaguer, being a fiscal agent of the PCGG and Chairman of the Board of Directors of the PJI, was acting for and in behalf of the PCGG. Under Section 2 of Executive Order No. 14, the Sandiganbayan has exclusive and original jurisdiction over all cases regarding "the funds, moneys, assets and properties illegally acquired by Former President Ferdinand E. Marcos, Mrs. Imelda Romualdez Marcos, their close relatives, subordinate, business associates, dummies, agents, or nominees," civil or criminal, including incidents arising from such cases. The Decision of the Sandiganbayan is subject to review on certiorari exclusively by the Supreme Court. In the exercise of its functions, the PCGG is a co-equal body with the regional trial courts and co-equal bodies have no power to control the other. The regional trial courts and the Court of Appeals have no jurisdiction over the PCGG in the exercise of its powers under the applicable Executive Orders and Section 26, Article XVIII of the 1987 Constitution and, therefore, may not interfere with and restrain or set aside the orders and actions of the PCGG. The Commission should not be embroiled in and swamped by legal suits before inferior courts all over the land. Otherwise, the Commission will be forced to spend valuable time defending all its actuations in such courts. This will defeat the very purpose behind the creation of the Commission.

7.

CEFERINO PADUA, Petitioner, vs. HON. SANTIAGO RANADA, 

G. R. No. 141949 - October 14, 2002

SANDOVAL-GUTIERREZ, J.:

Facts:

The Toll Regulatory Board (TRB) issued Resolution No. 2001-89 authorizing provisional toll rate adjustments at the Metro Manila Skyway.

The above Resolution approving provisional toll rate adjustments was published in the newspapers of general circulation. Tracing back the events that led to the issuance of the said Resolution, it appears that Citra Metro Manila Tollways Corporation (CITRA) filed with the TRB an application for an interim adjustment of the toll rates at the Metro Manila Skyway Project – Stage 1.CITRA moored its petition on the provisions of the "Supplemental Toll Operation Agreement" (STOA), authorizing it, as the investor, to apply for and if warranted, to be granted an interim adjustment of toll rates in the event of a "significant currency devaluation."

Claiming that the peso exchange rate to a U.S. dollar had devaluated, CITRA alleged that there was a compelling need for the increase of the toll rates to meet the loan obligations of the Project and the substantial increase in debt-service burden.

Due to heavy opposition, CITRA’s petition remained unresolved. This prompted CITRA to file an "Urgent Motion for Provisional Approval," this time, invoking Section 3, Rule 10 of the "Rules of Practice and Procedure Governing Hearing Before the Toll Regulatory Board" (TRB Rules of Procedure) which provides:

 "SECTION 3. Provisional Relief. – Upon the filing of an application or petition for the approval of the initial toll rate or toll rate adjustment, or at any stage, thereafter, the Board may grant on motion of the pleader or in its own initiative, the relief prayed for without prejudice to a final decision after completion of the hearing should the Board find that the pleading, together with the affidavits and supporting documents attached thereto and such additional evidence as may have been requested and presented, substantially support the provisional order; Provided: That the Board may, motu proprio, continue to issue orders or grant relief in the exercise of its powers of general supervision under existing laws. Provided:

Finally, that pending finality of the decision, the Board may require the Petitioner to deposit in whole or in part in escrow the provisionally approved adjustment or initial toll rates." (Emphasis supplied)

· CITRA moved to withdraw its "Urgent Motion for Provisional Approval" without prejudice to its right to seek or be granted provisional relief under the above-quoted provisions of the TRB Rules of Procedure, obviously, referring to the power of the Board to act on its own initiative. · Hence, petitioners Ceferino Padua and Eduardo Zialcita, as toll payer assail before this Court the validity and legality of TRB Resolution No. 2001- 89.

· As a toll payer, Padua claims that: (1) Resolution No. 2001-89 was issued without the required publication and in violation of due process; (2) alone, TRB Executive Director Jaime S. Dumlao, Jr., could not authorize the provisional toll rate adjustments because the TRB is a collegial body; and (3) CITRA has no standing to apply for a toll fee increase since it is an "investor" and not a "franchisee-operator."

· Private respondent CITRA, in its comment counters that: (1) the TRB has primary administrative jurisdiction over all matters relating to toll rates; (2) prohibition is an inappropriate remedy because its function is to restrain acts about to be done and not acts already accomplished; (3) Resolution No. 2001- 89 was issued in accordance with law; (4) Section 3, Rule 10 of the TRB Rules is constitutional; and (5) private respondent and the Republic of the Philippines would suffer more irreparable damages than petitioner.

Issue:

Whether TRB has jurisdiction to issue Resolution No. 2001-89 authorizing provisional toll rate adjustments at the Metro Manila Skyway

Ruling:

We take cognizance of the wealth of jurisprudence on the doctrine of primary administrative jurisdiction and exhaustion of administrative remedies. In this era of clogged court dockets, the need for specialized administrative boards or commissions with the special knowledge, experience and capability to hear and determine promptly disputes on technical matters or intricate questions of facts, subject to judicial review in case of grave abuse of discretion, is indispensable. Between the power

lodged in an administrative body and a court, the unmistakable trend is to refer it to the former."[24] In Industrial Enterprises, Inc. vs. Court of Appeals,we ruled: "x x x, if the case is such that its determination requires the expertise, specialized skills and knowledge of the proper administrative bodies because technical matters or intricate questions of facts are involved, then relief must first be obtained in an administrative proceeding before a remedy will be supplied by the courts even though the matter is within the proper jurisdiction of a court." Petitioner Padua’s "Urgent Motion for Temporary Restraining Order to Stop Arbitrary Toll Fee Increases" is DENIED and petitioner Zialcita’s "Petition for Prohibition" is DISMISSED.

8.  Joson vs. Executive Secretary (290 SCRA 279, 1998)

HON. EDUARDO NONATO JOSON, in his capacity as the Governor of the Province of Nueva Ecija, Petitioner, vs. EXECUTIVE SECRETARY RUBEN D. TORRES, the DEPARTMENT OF THE INTERIOR & LOCAL GOVERNMENTS, represented by SECRETARY ROBERT Z. BARBERS and UNDERSECRETARY MANUEL R. SANCHEZ, MR. OSCAR C. TINIO, in his capacity as Provincial Vice-Governor of Nueva Ecija, and MR. LORETO P. PANGILINAN, MR. CRISPULO S. ESGUERRA, MS. SOLITA C. SANTOS, MR. VICENTE C. PALILIO, and MR. NAPOLEON G. INTERIOR, in their capacity as Provincial Board Members of Nueva Ecija, Respondents.

G.R. No. 131255 May 20, 1998

PUNO, J.

Facts:

Petitioner Governor Joson was filed a complaint before the Office of the President for barging violently into the session hall of the Sangguniang Panlalawigan in the company of armed men. The case was endorsed to the DILG. For failure to file an answer after three (3) extensions, petitioner was declared in default and ordered the petitioner 60-day preventive suspension. Petitioner later “Motion to Conduct Formal Investigation”. DILG denied the motion declaring that the submission of position papers substantially complies with the requirements of procedural due process in administrative proceedings. Later, the Executive Secretary, by authority of the President, adopted the findings and recommendation of the DILG Secretary.  The former imposed on petitioner the penalty of suspension from office for six (6) months without pay.

Issue:

Whether or not the resolution of DILG Secretary is invalid on the ground of undue delegation; that it is the President who is the Disciplining Authority, not the Secretary of DILG.

Ruling:

No.

The DILG resolution is valid. The President remains the Disciplining Authority.  What is delegated is the power to investigate, not the power to discipline. The power to discipline evidently includes the power to investigate.   As the Disciplining Authority, the President has the power derived from the Constitution itself to investigate complaints against local government officials.  A. O. No. 23, however, delegates the power to investigate to the DILG or a Special Investigating Committee, as may be constituted by the Disciplining Authority.  This is not undue delegation, contrary to petitioner Joson’s claim.

Under the doctrine of qualified political agency “…which recognizes the establishment of a single executive, all executive and administrative organizations are adjuncts of the Executive Department, the heads of the various executive departments are assistants and agents of the Chief Executive, and, except in cases where the Chief Executive is required by the Constitution or law to act in person or the exigencies of the situation demand that he act personally, the multifarious executive and administrative functions of the Chief Executive are performed by and through the executive departments, and the acts of the Secretaries of such departments, performed and promulgated in the regular course of business, are, unless disapproved or reprobated by the Chief Executive presumptively the acts of the Chief Executive.”

This doctrine is corollary to the control power of the President provided in the Constitution. Control is said to be the very heart of the power of the presidency. As head of the Executive Department, the President, however, may delegate some of his powers to the Cabinet members except when he is required by the Constitution to act in person or the exigencies of the situation demand that he acts personally. The members of Cabinet may act for and in behalf of the President in certain matters because the President cannot be expected to exercise his control (and supervisory) powers personally all the time.   Each head of a department is, and must be, the President’s alter ego in the matters of that department where the President is required by law to exercise authority.

9. Eugenio v. Civil Service Commission (242 SCRA 196, 1995)

AIDA D. EUGENIO, petitioner, vs. CIVIL SERVICE COMMISSION, HON. TEOFISTO T. GUINGONA, JR. & HON. SALVADOR ENRIQUEZ, JR., respondents.

G.R. No. 115863 March 31, 1995

PUNO, J.:

Facts:

Eugenio is the Deputy Director of the Philippine Nuclear Research Institute. She applied for a Career Executive Service (CES) Eligibility and a CESO rank,. She was given a CES eligibility and was recommended to the President for a CESO rank by the Career Executive Service Board.

Then respondent Civil Service Commission passed a Resolution which abolished the CESB, relying on the provisions of Section 17, Title I, Subtitle A. Book V of the Administrative Code of 1987 allegedly conferring on the Commission the power and authority to effect changes in its organization as the need arises. Said resolution states:

“Pursuant thereto, the Career Executive Service Board, shall now be known as the Office for Career Executive Service of the Civil Service Commission. Accordingly, the existing personnel, budget, properties and equipment of the Career Executive Service Board shall now form part of the Office for Career Executive Service.”

Finding herself bereft of further administrative relief as the Career Executive Service Board which recommended her CESO Rank IV has been abolished, petitioner filed the petition at bench to annul, among others, said resolution.

Issue: Whether the CSC given the authority to abolish the office of the CESB

Ruling: NO

The controlling fact is that the CESB was created in PD No. 1 on September 1, 1974^. It cannot be disputed, therefore, that as the CESB was created by law, it can only be abolished by the legislature. This follows an unbroken stream of rulings that the creation and abolition of public offices is primarily a legislative function

In the petition at bench, the legislature has not enacted any law authorizing the abolition of the CESB. On the contrary, in all the General Appropriations Acts from 1975 to 1993, the legislature has set aside funds for the operation of CESB.

Respondent Commission, however, invokes Section 17, Chapter 3, Subtitle A. Title I, Book V of the Administrative Code of 1987 as the source of its power to abolish the CESB.

But as well pointed out by petitioner and the Solicitor General, Section 17 must be read together with Section 16 of the said Code which enumerates the offices under the respondent Commission.

As read together, the inescapable conclusion is that respondent Commission’s power to reorganize is limited to offices under its control as enumerated in Section 16..

Thus, the CESB was intended to be an autonomous entity, albeit administratively attached to respondent Commission. As conceptualized by the Reorganization Committee “the CESB shall be autonomous. It is expected to view the problem of building up executive manpower in the government with a broad and positive outlook.”

The essential autonomous character of the CESB is not negated by its attachment to respondent Commission. By said attachment, CESB was not made to fall within the control of respondent Commission. Under the Administrative Code of 1987, the purpose of attaching one functionally inter-related government agency to another is to attain “policy and program coordination.” This is clearly etched out in Section 38(3), Chapter 7, Book IV of the aforecited Code, to wit:

(3) Attachment. — (a) This refers to the lateral relationship between the department or its equivalent and attached agency or corporation for purposes of policy and program coordination. The coordination may be accomplished by having the department represented in the governing board of the attached agency or corporation, either as chairman or as a member, with or without voting rights, if this is permitted by the charter; having the attached corporation or agency comply with a system of periodic reporting which shall reflect the progress of programs and projects; and having the department or its equivalent provide general policies through its representative in the board, which shall serve as the framework for the internal policies of the attached corporation or agency.

10. Blaquera v. Alcala (295 SCRA 411, 1989)

Government-owned or controlled corporations refer to any agency organized as a stock or non- stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the government directly  ot through its instrumentalities  either wholly, or, where applicable, as in the case of stock corporations, to the extent of at least 50% of its capital stock.

Facts:
Petitioners are officials and employees of several government departments and agencies who

were paid incentive benefits for the year 1992,  pursuant to Executive Order No. 292, otherwise known as the Administrative Code of 1987, and the Omnibus Rules Implementing Book V of EO 292.  On January 19, 1993, then President Fidel V. Ramos issued Administrative Order No. 29 authorizing the grant of productivity incentive benefits for the year 1992 in the maximum amount of P1,000.00 and reiterating the prohibition under Section 7 of Administrative Order No. 268, enjoining the grant of productivity incentive benefits without prior approval of the President.  Section 4 of AO 29 directed “all departments, offices and agencies which authorized payment of CY 1992 Productivity Incentive Bonus in excess of the amount

authorized under Section 1 hereof are hereby directed to immediately cause the return/refund   of the excess within a period of six months to commence fifteen (15) days after the issuance of this Order.”  In compliance therewith, the heads of the departments or agencies of the government concerned, who are the herein respondents, caused the deduction from petitioners’ salaries or allowances of the  amounts needed to cover the alleged overpayments.  To prevent the respondents from making further deductions from their salaries or allowances, the petitioners have come before this Court to seek relief.

The petitioner, Association of Dedicated Employees of the Philippine Tourism Authority, is an  association of employees of the Philippine Tourism Authority who were granted productivity incentive bonus for calendar year 1992 pursuant to  Republic Act   No. 6971, otherwise known as the Productivity Incentives Act of 1990.   Subject bonus was, however, disallowed by the Corporate Auditor on the ground that it was “prohibited under Administrative Order No. 29 dated January 19, 1993.” The disallowance of the bonus in question was finally brought on appeal to the Commission on Audit which denied the appeal in its Decision

of March 6, 1995 on the grounds that provisions of RA 6971 insofar as the coverage is concerned, refer to business enterprises including government owned and/or controlled corporations performing proprietary functions.

Section 1a of the Supplemental Rules Implementing RA 6971 classified such coverage as:

“All business enterprises, with or without existing duly certified labor organizations, including government owned and/or controlled corporations performing proprietary functions which are established solely for business or profit and accordingly excluding those created, maintained or acquired in pursuance of a policy of the State enunciated in the Constitution, or by law and those whose officers and employees are covered

by the Civil Service." Pursuant to Section 10 of RA 6971, the Secretary of Labor and Secretary of Finance issued Supplemental Rules to Implement the said law. With the denial of its appeal, petitioner found its way here via the petition in G.R. No. 119597, to seek relief

from the aforesaid decision of COA.

Issue:

Whether or not the PTA is within the ambit of RA 6971

Ruling:

Government-owned and controlled corporations may perform governmental or proprietary functions or both, depending on the purpose for which they have been created.  If the purpose is to obtain special corporate benefits or earn pecuniary profit, the function is proprietary.   If it is in the interest of health, safety and for the advancement of public good and welfare, affecting the public in general, the function is governmental. Powers classified as “proprietary” are those intended for private advantage and benefit.

The aforecited powers and functions of PTA are predominantly governmental, principally geared towards the development and promotion of tourism in the scenic Philippine archipelago.  But it is irrefutable that PTA also performs proprietary functions, as envisaged by its charter. To ascertain whether PTA is within the ambit of RA 6971, there is need to find out the legislative intent, and to refer to other provisions of RA 6971 and other pertinent laws, that may aid the Court in ruling on the right of officials and employees of PTA to receive bonuses under RA 6971.

Government corporations may be created by special charters or by incorporation under the general corporation law.  Those created by special charters are governed by the Civil Service Law while those incorporated under the general corporation law are governed by the Labor Code.

It is thus evident that PTA, being a government-owned and controlled corporation with original charter subject to Civil Service Law, Rules and Regulations, is already within the scope of an incentives award system under Section 1, Rule X of the Omnibus Rules Implementing EO 292 issued by the Civil Service

Commission (“Commission”). Since government-owned and controlled corporations with original charters do have an incentive award system, Congress enacted a law that would address the same concern of officials and employees of government-owned and controlled corporations incorporated under the general corporation law. All things studiedly considered in proper perspective; the Court finds no reversible error in the finding by respondent Commission that PTA is not within the purview of RA 6971.

As regards the promulgation of implementing rules and regulations, it bears stressing that   the “power of administrative officials to promulgate rules in the implementation of the  statute  is necessarily   limited   to  what   is   provided for in the legislative enactment.” In the case under scrutiny, the Supplementary Rules Implementing RA 6971 issued by the Secretary of Labor and Employment and the Secretary of Finance accord with the intendment and provisions of RA 6971.  Consequently, not being covered by RA 6971, AO 29 applies to the petitioner.

11. Lumiqued v. Exevea (282 SCRA 125, 1997)

FACTS:

Arsenio P. Lumiqued was the Regional Director of The Department of Agrarian Reform – Cordillera Autonomous Region.

Jeannette Ober Zamudio charged Lumiqued with Malversation through falsification of public documents. He allegedly falsified gasoline receipts amounting to Php 44,172.46 and made unliquidated cash advances amounting to Php 116,000.00. Zamudio also charged him with oppression and harassment after being relieved without just cause after filing the 2 cases against Lumiqued.

Acting Justice Secretary Eduardo Montenegro issued Department Order No. 145, creating a committee to investigate complaints against Lumiqued.

Lumiqued submitted his affidavit alleging that the reason the cases were filed against him was to extort money from him. He also admitted that his average daily consumption was 108.45Li which is an aggregate consumption of the 5 service vehicle issued to him and that the receipts were turned over to him by drivers for reimbursement.

Committee hearings on the complaints were conducted and Lumiqued was not assisted by a counsel since he was confident that he can defend himself. he was unable to attend the third hearing since he suffered a stroke on July 10.

Investigating Committee issued a report finding Lumiqued liable for all charges against him and Lumiqued filed a motion for reconsideration.

The Committee informed Lumiqued that the report was already forwarded to the President.

President Ramos issued AO No 52 finding Lumiqued administratively liable for dishonesty in the alteration of 15 gas receipts and he was dismissed from service. Lumiqued filed a Petition for appeal which was denied. He then file a second motion for reconsideration, alleging that he was denied constitutional right to counsel during the hearing. The second motion was denied.

Lumiqued passed away.

Petitioners fault the investigating committee for its failure to inform Lumiqued of his right to counsel during the hearing. They maintained that his right to counsel could not be waived unless the waiver was in writing and in the presence of a counsel.

Issue:

Whether or not the right to have a counsel during an administrative hearing is necessary.

Ruling:

NO. Lumiqued, a Regional Director of a major department in the executive branch of the government, graduated from the University of the Philippines (Los Baos) with the degree of Bachelor of Science major in Agriculture, was a recipient of various scholarships and grants, and underwent training seminars both here and abroad. Hence, he could have defended himself if need be, without the help of counsel, if the truth were on his side. This, apparently, was the thought he entertained during the hearings he was able to attend.

The right to counsel is not indispensable to due process unless required by the Constitution or the law.

In administrative proceedings, the essence of due process is simply the opportunity to explain one's side. One may be heard, not solely by verbal presentation but also, and perhaps even much more creditably as it is more practicable than oral arguments, through pleadings. An actual hearing is not always an indispensable aspect of due process. As long as a party was given the opportunity to defend his interests in due course, he cannot be said to have been denied due process of law, for this opportunity to be heard is the very essence of due process. Moreover, this constitutional mandate is deemed satisfied if a person is granted an opportunity to seek reconsideration of the action or ruling complained of. Lumiqueds appeal and his subsequent filing of motions for reconsideration cured whatever irregularity attended the proceedings conducted by the committee.

12. Polloso vs Gangan (355 SCRA 750, 2000)

DANTE M. POLLOSO, Petitioner, vs. HON. CELSO D. GANGAN, Chairman, COMMISSION ON AUDIT, HON. RAUL C. FLORES, COMMISSIONER, COMMISSION ON AUDIT, HON. EMMANUEL M. DALMAN, COMMISSIONER, COMMISSION ON AUDIT. Respondents.

[G.R. No. 140563. July 14, 2000]

KAPUNAN, J.:

Facts:

In 1994, the National Power Corporation (NPC), represented by its President Dr. Francisco L. Viray entered into a service contract with Atty. Benemerito A. Satorre. Under said contract, Satorre was to perform the following services for the Leyte-Cebu and Leyte-Luzon Interconnection Projects of the NPC.

Accordingly, the following were held to be personally liable for the amounts due to Atty. Satorre: Dr. Francisco Viray, NPC contracting party; Manolo C. Marquez, for certifying the claim as necessary, lawful and authorized; Andrea B. Roa and Romeo Gallego, for verifying the supporting documents to be complete and proper; Jesus Alio, for reviewing the supporting documents to be complete and proper; Dante M. Polloso, Project Manager II, Leyte-Cebu Interconnection Project (LCIP), National Power Corporation-Visayas Regional Center, for approving the claim; and Benemerito Satorre, as the payee.

only petitioner Dante Polloso submitted a letter-explanation refuting the alleged violation contained in the Notice of Disallowance and sought reconsideration thereof.⁵ This was denied by the Unit Auditor.

petitioner appealed the denial of the Unit Auditor to the Regional Director

OA Regional Office No. VII;⁷ the latter denied the same.

Issue:

DOES SECTION 38, CHAPTER 9, BOOK I OF EXECUTIVE ORDER NO. 292, OTHERWISE KNOWN AS THE ADMINISTRATIVE CODE OF 1987 APPLY TO PETITIONER FOR HAVING ACTED IN GOOD FAITH AND WITHOUT MALICE AND MERELY IMPLEMENTED A VALID CONTRACT ENTERED INTO BY THE PRESIDENT OF THE NATIONAL POWER CORPORATION?

Ruling:

Petitioners claim that the Circular is unconstitutional for being an invalid restriction to the practice of the law profession, is clearly bereft of any merit. The Government has its own counsel, which is the Office of the Solicitor General headed by the Solicitor General, while the Office of the Government Corporate Counsel (OGCC) acts as the principal law office of the government-owned or controlled corporations. It is only in special cases where these government entities may engage the services of private lawyers because of their expertise in certain fields. The questioned COA circular simply sets forth the prerequisites for a government agency instrumentality in hiring a private lawyer, which are reasonable safeguards to prevent irregular, unnecessary, excessive, extravagant or unconscionable expenditures or uses of government funds and properties. We fail to see how the restrictions contained in the COA circular can be considered as a curtailment on the practice of the legal profession.

Anent petitioners argument that he cannot be held liable for effecting payment of the disallowed amount because he is not privy to the service contract, we find the same to be unmeritorious. This is because petitioners liability arose from the fact that as project manager, he approved the said claim. In addition, his assertion that a refusal on his part to certify payment of the same would subject him to criminal and civil liabilities cannot hold water simply because it was his duty not to approve the same for payment upon finding that such was irregular and in contravention of COA Circular No. 86-255, dated 2 April 1986.

13. Cooperative Development Authority vs Dolefil Agrarian Reform Beneficiaries Cooperative Inc., (382 SCRA 522, 2002)

G.R. No. 137489 - May 29, 2002

DE LEON, JR., J.:

Facts:

The record shows that sometime in the later part of 1997, the CDA received from certain members of the Dolefil Agrarian Reform Beneficiaries Cooperative, Inc. (DARBCI for brevity), an agrarian reform cooperative that owns 8,860 hectares of land in Polomolok, South Cotabato, several complaints alleging mismanagement and/or misappropriation of funds of DARBCI by the then incumbent officers and members of the board of directors of the cooperative, some of whom are herein private respondents.

Acting on the complaints docketed as CDA-CO Case No. 97-011, CDA Executive Director Candelario L. Verzosa, Jr. issued an order³ dated December 8, 1997 directing the private respondents to file their answer within ten (10) days from receipt thereof.

Before the private respondents could file their answer, however, CDA Administrator Alberto P. Zingapan issued on December 15, 1997 an order,⁴ upon the motion of the complainants in CDA-CO Case No. 97-011, freezing the funds of DARBCI and creating a management committee to manage the affairs of the said cooperative.

On December 18, 1991, the private respondents filed a Petition for Certiorari⁵ with a prayer for preliminary injunction, damages and attorney's fees against the CDA and its officers namely: Candelario L. Verzosa, Jr. and Alberto P. Zingapan, including the DOLE Philippines Inc. before the Regional Trial Court (RTC for brevity) of Polomolok, South Cotabato, Branch 39. The petition which was docketed as SP Civil Case No. 25, primarily questioned the jurisdiction of the CDA to resolve the complaints against the private respondents, specifically with respect to the authority of the CDA to issue the "freeze order" and to create a management committee that would run the affairs of DARBCI.

CDA issued an order⁶ in CDA-CO Case No. 97-011 placing the private respondents under preventive suspension, hence, paving the way for the newly-created management committee⁷ to assume office on March 10, 1998.

Issue:

Whether or not CDA has the power to adjudicate intercoperative dispute.

Ruling:

It is a fundamental rule in statutory construction that when the law speaks in clear and categorical language, there is no room for interpretation, vacillation or equivocation - there is only room for application.³² It can be gleaned from the above-quoted provision of R.A. No. 6939 that the authority of the CDA is to discharge purely administrative functions which consist of policy-making, registration, fiscal and technical assistance to cooperatives and implementation of cooperative laws. Nowhere in the said law can it be found any express grant to the CDA of authority to adjudicate cooperative disputes. At most, Section 8 of the same law provides that "upon request of either or both parties, the Authority shall mediate and conciliate disputes with a cooperative or between cooperatives" however, with a restriction "that if no mediation or conciliation succeeds within three (3) months from request thereof, a certificate of non-resolution shall be issued by the commission prior to the filing of appropriate action before the proper courts". Being an administrative agency, the CDA has only such powers as are expressly granted to it by law and those which are necessarily implied in the exercise thereof.

The decision to withhold quasi-judicial powers from the CDA is in accordance with the policy of the government granting autonomy to cooperatives. It was noted that in the past 75 years cooperativism failed to flourish in the Philippines. Of the 23,000 cooperatives organized under P.D. No. 175, only 10 to 15 percent remained operational while the rest became dormant. The dismal failure of cooperativism in the Philippines was attributed mainly to the stifling attitude of the government toward cooperatives. While the government wished to help, it invariably wanted to control.38 Also, in its anxious efforts to push cooperativism, it smothered cooperatives with so much help that they failed to develop self-reliance. As one cooperative expert put it, "The strong embrace of government ends with a kiss of death for cooperatives."39

But then, acknowledging the role of cooperatives as instruments of national development, the framers of the 1987 Constitution directed Congress under Article XII, Section 15 thereof to create a centralized agency that shall promote the viability and growth of cooperatives. Pursuant to this constitutional mandate, the Congress approved on March 10, 1990 Republic Act No. 6939 which is the organic law creating the Cooperative Development Authority. Apparently cognizant of the errors in the past, Congress declared in an unequivocal language that the state shall "maintain the policy of non-interference in the management and operation of cooperatives."40

After ascertaining the clear legislative intent underlying R.A. No. 6939, effect should be given to it by the judiciary.41 Consequently, we hold and rule that the CDA is devoid of any quasi-judicial authority to adjudicate intra-cooperative disputes and more particularly disputes as regards the election of the members of the Board of Directors and officers of cooperatives. The authority to conduct hearings or inquiries and the power to hold any person in contempt may be exercised by the CDA only in the performance of its administrative functions under R.A. No. 6939.

14. In re Rodolfo U Manzano (166 SCRA 246, 1988)

Facts:

Judge Rodolfo Manzano sent a letter to the Supreme Court requesting to allow him to accept appointment as a member of the Ilocos Norte Provincial Committe on Justice create pursuant to Presidential Executive Order No. 856 as amended by EO No. 326.

Issue:

Whether or not Judge Manzano can accept appointment as a member of INPCJ.

Ruling:

No. The committee was created by the executive branch of the government where its members discharge administrative functions. Though it may be quasi-judicial, it is still administrative in nature. Judge Manzano is not a subordinate of an executive or legislative official, however eminent. His integrity in the adjudication of cases contribute to the solidity of such structure. RTC Judges may only render assistance to the aforesaid committees when such assistance are reasonably incidental to the fulfillment of their judicial functions.

15. Montemayor vs. Bundalin (405 SCRA 264, 2003)

EDILLO C. MONTEMAYOR, Petitioner, v. LUIS BUNDALIAN, RONALDO B. ZAMORA, Executive Secretary, Office of the President, AND GREGORIO R. VIGILAR, Secretary, Department of Public Works and Highways (DPWH), respondents.

G.R. No. 149335. July 1, 2003

PUNO, J.:

Facts:

In this petition for review, the petitioner assailed the decision of the Office of the President which ordered his dismissal as Regional Director of the DPWH for unexplained wealth, as a result of an investigation conducted by the PCAGC which arrived at the conclusion that the real property he had acquired in California, U.S. was unlawfully acquired for it was manifestly out of proportion to his salary.

Petitioner’s dismissal originated from an unverified letter-complaint, addressed by private respondent LUIS BUNDALIAN to the Philippine Consulate General in San Francisco, California, U.S.A. Private respondent accused petitioner, then OIC-Regional Director, Region III, of the DPWH, of accumulating unexplained wealth, in violation of Section 8 of Republic Act No. 3019. Private respondent charged that in 1993, petitioner and his wife purchased a house and lot at Los Angeles, California, making a down payment of US$100,000.00. Private respondent accused petitioner of amassing wealth from lahar funds and other public works projects.

Petitioner, represented by counsel, submitted his counter-affidavit before the PCAGC alleging that the real owner of the subject property was his sister-in-law Estela Fajardo. And that desiring to migrate in the US, they were advised by an immigration lawyer that it would be an advantage if they had real property in the U.S. Fajardo intimated to them that she was interested in buying a house and lot in Burbank, California, but could not do so at that time as there was a prohibition in her mortgage contract. Fajardo offered to buy the Burbank property and put the title in the names of petitioner.

Petitioner likewise pointed out that the charge against him was the subject of similar cases filed before the Ombudsman. He attached to his counter-affidavit the Consolidated Investigation Report of the Ombudsman dismissing similar charges for insufficiency of evidence.
The PCAGC noted that instead of adducing evidence, petitioner’s counsel exerted more effort in filing pleadings and motion to dismiss on the ground of forum shopping. Thus, it recommended petitioner’s dismissal from service pursuant to Section 8 of R.A. No. 3019. The OP concurred with the findings and adopting the recommendation of the PCAGC.

Issue(s):

1.     whether his guilt was proved by substantial evidence; and,

2.     whether the earlier dismissal of similar cases before the Ombudsman rendered the administrative case before the PCAGC moot and academic.

Ruling:

(1)          The Supreme Court dismissed the petition, ruling: that PCAGC had authority to investigate the case despite the lack of verification of the administrative complaint and the complainant’s non-appearance at the investigation; that in administrative proceedings, technical rules of procedure and evidence are not strictly applied; that petitioner’s active participation in every step of the investigation satisfied the due process requirement; that the findings of facts made by administrative agencies when supported by substantial evidence are respected on appeal.

(2)          Morevoer, the SC did not cannot sustain petitioner’s stance that the dismissal of similar charges against him before the Ombudsman rendered the administrative case against him before the PCAGC moot and academic. To be sure, the decision of the Ombudsman does not operate as res judicata in the PCAGC case subject of this review. The doctrine of res judicata applies only to judicial or quasi-judicial proceedings, not to the exercise of administrative powers. Petitioner was investigated by the Ombudsman for his possible criminal liability for the acquisition of the Burbank property in violation of the Anti-Graft and Corrupt Practices Act and the Revised Penal Code. For the same alleged misconduct, petitioner, as a presidential appointee, was investigated by the PCAGC by virtue of the administrative power and control of the President over him. As the PCAGC’s investigation of petitioner was administrative in nature, the doctrine of res judicata finds no application in the case at bar.

16. Department of Health vs Camposario (457 SCRA 438, 2005)

Administrative due process requires that, prior to imposing disciplinary sanctions, the disciplining authority must make an independent assessment of the facts and the law. On its face, a decision imposing administrative sanctions must show the bases for its conclusions. While the investigation of a case may be delegated to and conducted by another body or group of officials, the disciplining authority must nevertheless weigh the evidence gathered and indicate the applicable law. In this manner, the respondents would be informed of the bases for the sanctions and thus be able to prepare their appeal intelligently. Such procedure is part of the sporting idea of fair play in a democracy.

Facts:

[Respondents] are former employees of the Department of Health National Capital Region (hereinafter DOH-NCR). They held various positions as follows: [Respondent] Priscilla B. Camposano (hereinafter Camposano) was the Finance and Management Officer II, [Respondent] Imelda Q. Agusin (hereinafter Agustin) was an Accountant I, and [Respondent] Enrique L. Perez (hereinafter Perez) was the Acting Supply Officer III.

some concerned [DOH-NCR] employees filed a complaint before the DOH Resident Ombudsman Rogelio A. Ringpis against Dir. IV Rosalinda U. Majarais, Acting Administrative Officer III Horacio Cabrera, and [respondents], arising out of an alleged anomalous purchase by DOH-NCR of 1,500 bottles of Ferrous Sulfate 250 mg. with Vitamin B Complex and Folic Acid capsules worth P330,000.00 from Lumar Pharmaceutical Laboratory on May 13, 1996.

"On August 6, 1996, the Resident Ombudsman submitted an investigation report to the Secretary of Health recommending the filing of a formal administrative charge of Dishonesty and Grave Misconduct against [respondents] and their co-respondents.

"On August 8, 1996, the Secretary of Health filed a formal charge against the [respondents] and their co-respondents for Grave Misconduct, Dishonesty, and Violation of RA 3019. On October 25, 1996, then Executive Secretary Ruben D. Torres issued Administrative Order No. 298 (hereafter AO 298) creating an ad-hoc committee to investigate the administrative case filed against the DOH-NCR employees. The said AO was indorsed to the Presidential Commission Against Graft and Corruption (hereafter PCAGC) on October 26, 1996.

"On December 2, 1996, the PCAGC took over the investigation from the DOH. Resolution found the accused guilty and via  [Administrative Order No. 390

Respondents] filed a motion for reconsideration. Denied

Issue(s):

1.    The Court of Appeals erred in finding that the Presidential Commission Against Graft and Corruption (PCAGC) did not have jurisdiction to investigate the anomalous transaction involving respondents.

2.    The Court of Appeals erred in concluding that the authority to investigate and decide was relinquished by the Secretary of Health and that the Secretary of Health merely performed a mechanical act when she ordered the dismissal of respondents from government service.

3.    The Court of Appeals erred in ignoring the fact that an exhaustive investigation was already conducted by the Presidential Commission Against Graft and Corruption (PCAGC) which resulted in the finding that the anomalous contract for the purchase of medicines without the required public bidding is patently illegal."

Ruling:

1.     Executive Order (EO) No. 151 granted the PCAGC the jurisdiction to investigate administrative complaints against presidential appointees allegedly involved in graft and corruption. From a cursory reading of its provisions, it is evident that EO 151 authorizes the PCAGC to investigate charges against presidential, not non-presidential, appointees. In its Preamble, specifically in its "Whereas" clauses, the EO "specifically tasked [the PCAGC] to x x x investigate presidential appointees charged with graft and corruption x x x." More pointedly, Section 3 states that the "Commission shall have jurisdiction over all administrative complaints involving graft and corruption filed in any form or manner against presidential appointees x x x." We quote the pertinent provisions below:

"Section 3. Jurisdiction. - The Commission shall have jurisdiction over all administrative complaints involving graft and corruption filed in any form or manner against presidential appointees, including those in government-owned or controlled corporations." (emphasis supplied) "Section 4. Powers, Functions and Duties. - The Commission shall have the following powers, functions and duties: "(a) Investigation - The Commission shall have the power to investigate administrative complaints against presidential appointees in the executive department of the government, including those in government-owned or controlled corporations, charged with graft and corruption. In the exercise thereof, the Commission is (1) authorized to summon witnesses, administer oaths, or take testimony or evidence relevant to the investigation by subpoena ad testificandum and subpoena duces tecum, and do such other acts necessary and incidental to the discharge of its function and duty to investigate the said administrative complaints; and (2) empowered to call upon and secure the assistance of any department, bureau, office, agency, or instrumentality of the government, including government-owned or controlled corporations.

2.     Validity of Health Secretary's Decision

The Administrative Code of 1987 vests department secretaries with the authority to investigate and decide matters involving disciplinary actions for officers and employees under the former's jurisdiction.16 Thus, the health secretary had disciplinary authority over respondents.

Due process in administrative proceedings requires compliance with the following cardinal principles: (1) the respondents' right to a hearing, which includes the right to present one's case and submit supporting evidence, must be observed; (2) the tribunal must consider the evidence presented; (3) the decision must have some basis to support itself; (4) there must be substantial evidence; (5) the decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected; (6) in arriving at a decision, the tribunal must have acted on its own consideration of the law and the facts of the controversy and must not have simply accepted the views of a subordinate; and (7) the decision must be rendered in such manner that respondents would know the reasons for it and the various issues involved.

The CA correctly ruled that administrative due process had not been observed in the present factual milieu.

17. Remolona vs. Civil Service Commission (362 SCRA 304, 2001)

[G.R. No. 137473. August 2, 2001.]
PUNO, J.:

Facts:

Records show that petitioner Estelito V. Remolona is the Postmaster at the Postal Office Service while his wife Nery Remolona is a teacher at the Kiborosa Elementary School.

In a letter 3 dated January 3, 1991, Francisco R. America, District Supervisor of the Department of Education, Culture & Sports at Infanta, Quezon, inquired from the Civil Service Commission (CSC) as to the status of the civil service eligibility of Mrs. Remolona who purportedly got a rating of 81.25% as per Report of Rating issued by the National Board for Teachers.  Mr. America likewise disclosed that he received information that Mrs. Remolona was campaigning for a fee of P8,000.00 per examinee for a passing mark in the teacher’s board examinations.

CSC Chairman Sto. Tomas issued an Order directing CSC Region IV Director Amilhasan to conduct an investigation on Mrs. Remolona’s eligibility, after verification from the Register of Eligibles in the Office for Central Personnel Records revealed "that Remolona’s name is not in the list of passing and failing examinees, and that the list of examinees for December 10, 1989 does not include the name of Remolona. 

During the preliminary investigation, only petitioner Remolona appeared. He signed a written statement of facts regarding the issuance of the questioned Report of Rating of Mrs. Remolon. Furthermore, Remolona admitted that he was responsible in acquiring the alleged fake eligibility, that his wife has no knowledge thereof, and that he did it because he wanted them to be together. Based on the foregoing.

Consequently, a Formal Charge dated April 6, 1993 was filed against petitioner Remolona, Nery C. Remolona, and Atty. Hadji Salupadin for possession of fake eligibility, falsification and dishonesty.

Issue:

Whether Remolona’s right to due process was violated during the preliminary investigation because he was not assisted by counsel. 

Ruling:

The submission of Remolona that his alleged extra-judicial confession is inadmissible because he was not assisted by counsel during the investigation as required under Section 12 paragraphs 1 and 3, Article III of the 1987 Constitution deserves scant consideration.

The right to counsel under Section 12 of the Bill of Rights is meant to protect a suspect in a criminal case under custodial investigation. Custodial investigation is the stage where the police investigation is no longer a general inquiry into an unsolved crime but has begun to focus on a particular suspect who had been taken into custody by the police to carry out a process of interrogation that lends itself to elicit incriminating statements. It is when questions are initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way. The right to counsel attaches only upon the start of such investigation. Therefore, the exclusionary rule under paragraph (2), Section 12 of the Bill of Rights applies only to admissions made in a criminal investigation but not to those made in an administrative investigation. 12

While investigations conducted by an administrative body may at times be akin to a criminal proceeding, the fact remains that under existing laws, a party in an administrative inquiry may or may not be assisted by counsel, irrespective of the nature of the charges and of the respondent’s capacity to represent himself, and no duty rests on such body to furnish the person being investigated with counsel. In an administrative proceeding, a respondent has the option of engaging the services of counsel or not. This is clear from the provisions of Section 32, Article VII of Republic Act No. 2260 (otherwise known as the Civil Service Act) and Section 39, paragraph 2, Rule XIV (on discipline) of the Omnibus Rules Implementing Book V of Executive Order No. 292 (otherwise known as the Administrative Code of 1987). Thus, the right to counsel is not always imperative in administrative investigations because such inquiries are conducted merely to determine whether there are facts that merit disciplinary measure against erring public officers and employees, with the purpose of maintaining the dignity of government service. As such, the hearing conducted by the investigating authority is not part of a criminal prosecution. 

18. Pharmaceutical and Health Care Association of the Philippines vs. Duque III (535 SCRA 265, 2007)

G.R. No. 173034. October 9, 2007

AUSTRIA-MARTINEZ, J.:

Facts:

Petition for certiorari seeking to nullify the Revised Implementing Rules and Regulations (RIRR) of E.O. 51 (Milk Code). Petitioner claims that the RIRR is not valid as it contains provisions that are not constitutional and go beyond what it is supposed to implement. Milk Code was issued by President Cory Aquino under the Freedom Constitution on Oct.1986.  One of the preambular clauses of the Milk Code states that the law seeks to give effect to Art 11 of the Int’l Code of Marketing and Breastmilk Substitutes (ICBMS), a code adopted by the World Health Assembly(WHA). From 1982-2006, The WHA also adopted severe resolutions to the effect that breastfeeding should be supported, hence, it should be ensured that nutrition and health claims are not permitted for breastmilk substitutes. In 2006, the DOH issued the assailed RIRR.

Issue:

W/N the DOH acted w/o or in excess of their jurisdiction, or with grave abuse of discretion amounting to lack of excess of jurisdiction and in violation of the Constitution by promulgating the RIRR.

Ruling:

The Supreme Court PARTIALLY GRANTED the petition. Sections 4(f), 11 and 46 of Administrative Order No. 2006-0012 dated May 12, 2006 are declared NULL and VOID for being ultra vires. The Department of Health and respondents are PROHIBITED from implementing said provisions. The international instruments pointed out by the respondents, UNRC, ICESR, CEDAW, are deemed part of the law of the land and therefore the DOH may implement them through the RIRR. Customary international law is deemed incorporated into our domestic system. Custom or customary international law means “a general and consistent practice of states followed by them from a sense of legal obligation (opinio juris). Under the 1987 Constitution, international law can become part of the sphere of domestic law either by transformation or incorporation. The transformation method requires that an international law be transformed into a domestic law through a constitutional mechanism such as local legislation. “Generally accepted principles of international law” refers to norms of general or customary international law which are binding on all states. The Milk Code is a verbatim reproduction of the (ICMBS), but it did not prohibit advertising or other forms of promotion to the general public of products. Instead, the Milk Code expressly provides that advertising, promotion, or other marketing materials may be allowed if such materials are duly authorized and approved by the Inter-Agency Committee (IAC). In this regard, the WHA Resolutions adopting the ICMBS are merely recommendatory and legally non-binding. This may constitute “soft law” or non-binding norms, principles and practices that influence state behavior. Respondents have not presented any evidence to prove that the WHA Resolutions, although signed by most of the member states, were in fact enforced or practiced by at least a majority of the member states and obligatory in nature. The provisions of the WHA Resolutions cannot be considered as part of the law of the land that can be implemented by executive agencies without the need of a law enacted by the legislature. On the other hand, the petitioners also failed to explain and prove by competent evidence just exactly how such protective regulation would result in the restraint of trade. Since all the regulatory provisions under the Milk Code apply equally to both manufacturers and distributors, the Court sees no harm in the RIRR. Except Sections 4(f), 11 and 46, the rest of the provisions of the RIRR are in consonance with the objective, purpose and intent of the Milk Code.

19. Department of Agrarian Reform vs Sutton (473 SCRA 392, 2006)

G.R. No. 162070 October 19, 2005

PUNO, J.:

Facts:

• The case at bar involves a land in Aroroy, Masbate, inherited by respondents which has been devoted exclusively to cow and calf breeding. On October 26, 1987, pursuant to the then existing agrarian reform program of the government, respondents made a voluntary offer to sell (VOS) their landholdings to petitioner DAR to avail of certain incentives under the law.
• On June 10, 1988, a new agrarian law, Republic Act (R.A.) No. 6657, also known as the Comprehensive Agrarian Reform Law (CARL) of 1988, took effect. It included in its coverage farm used for raising livestock, poultry and swine.
• On December 4, 1990, in an en banc decision in the case of Luz Farms v. Secretary of DAR, this Court ruled that lands devoted to livestock and poultryraising are not included in the definition of agricultural land. Hence, we declared as unconstitutional certain provisions of the CARL insofar as they included livestock farms in the coverage of agrarian reform.
• In view of the Luz Farms ruling, respondents filed with petitioner DAR a formal request to withdraw their VOS as their landholding was devoted exclusively to cattleraising and thus exempted from the coverage of the CARL.
• On December 21, 1992, the Municipal Agrarian Reform Officer of Aroroy, Masbate, inspected respondents land and found that it was devoted solely to cattleraising and breeding. He recommended to the DAR Secretary that it be exempted from the coverage of the CARL.
• On April 27, 1993, respondents reiterated to petitioner DAR the withdrawal of their VOS and requested the return of the supporting papers they submitted in connection therewith. Petitioner ignored their request.
• On December 27, 1993, DAR issued A.O. No. 9, series of 1993, which provided that only portions of private agricultural lands used for the raising of livestock, poultry and swine as of June 15, 1988 shall be excluded from the coverage of the CARL. In determining the area of land to be excluded, the A.O. fixed the following retention limits, viz: 1:1 animalland ratio (i.e., 1 hectare of land per 1 head of animal shall be retained by the landowner), and a ratio of 1.7815 hectares for livestock infrastructure for every 21 heads of cattle shall likewise be excluded from the operations of the CARL.
• On February 4, 1994, respondents wrote the DAR Secretary and advised him to consider as final and irrevocable the withdrawal of their VOS as, under the Luz Farms doctrine, their entire landholding is exempted from the CARL.
• On September 14, 1995, then DAR Secretary Ernesto D. Garilao issued an Order partially granting the application of respondents for exemption from the coverage of CARL. Applying the retention limits outlined in the DAR A.O. No. 9, petitioner exempted 1,209 hectares of respondents land for grazing purposes, and a maximum of 102.5635 hectares for infrastructure. Petitioner ordered the rest of respondents landholding to be segregated and placed under Compulsory Acquisition.
• Respondents moved for reconsideration. They contend that their entire landholding should b exempted as it is devoted exclusively to cattleraising. Their motion was denied.
• They filed a notice of appeal with the Office of the President. On October 9, 2001, the Office of the President affirmed the impugned Order of petitioner DAR. It ruled that DAR A.O. No. 9, s. 1993, does not run counter to the Luz Farms case as the A.O. Provided the guidelines to determine whether a certain parcel of land is being used for cattleraising. However, the issue on the constitutionality of the assailed A.O. was left for the determination of the courts as the sole arbiters of such issue.
• On appeal, the Court of Appeals ruled in favor of the respondents. It declared DAR A.O. No. 9, s. 1993, void for being contrary to the intent of the 1987 Constitutional Commission to exclude livestock farms from the land reform program of the government.

Issue:

The main issue in the case at bar is the constitutionality of DAR A.O. No. 9, series of 1993, which prescribes a maximum retention limit for owners of lands devoted to livestock raising.

Ruling:

Administrative agencies are endowed with powers legislative in nature, i.e., the power to make rules and regulations. They have been granted by Congress with the authority to issue rules to regulate the implementation of a law entrusted to them. Delegated rule-making has become a practical necessity in modern governance due to the increasing complexity and variety of public functions. However, while administrative rules and regulations have the force and effect of law, they are not immune from judicial review.¹² They may be properly challenged before the courts to ensure that they do not violate the Constitution and no grave abuse of administrative discretion is committed by the administrative body concerned.

The fundamental rule in administrative law is that, to be valid, administrative rules and regulations must be issued by authority of a law and must not contravene the provisions of the Constitution.¹³ The rule-making power of an administrative agency may not be used to abridge the authority given to it by Congress or by the Constitution. Nor can it be used to enlarge the power of the administrative agency beyond the scope intended. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by administrative agencies and the scope of their regulations.¹⁴

In the case at bar, we find that the impugned A.O. is invalid as it contravenes the Constitution. The A.O. sought to regulate livestock farms by including them in the coverage of agrarian reform and prescribing a maximum retention limit for their ownership. However, the deliberations of the 1987 Constitutional Commission show a clear intent to exclude, inter alia, all lands exclusively devoted to livestock, swine and poultry- raising. The Court clarified in the Luz Farms case that livestock, swine and poultry-raising are industrial activities and do not fall within the definition of "agriculture" or "agricultural activity." The raising of livestock, swine and poultry is different from crop or tree farming. It is an industrial, not an agricultural, activity. A great portion of the investment in this enterprise is in the form of industrial fixed assets, such as: animal housing structures and facilities, drainage, waterers and blowers, feedmill with grinders, mixers, conveyors, exhausts and generators, extensive warehousing facilities for feeds and other supplies, anti-pollution equipment like bio-gas and digester plants augmented by lagoons and concrete ponds, deepwells, elevated water tanks, pumphouses, sprayers, and other technological appurtenances.¹⁵

Clearly, petitioner DAR has no power to regulate livestock farms which have been exempted by the Constitution from the coverage of agrarian reform. It has exceeded its power in issuing the assailed A.O.

20. Securities and Exchange Commission v. Interport Resources Corporation  (567 SCRA 354, 2005)

Facts:

On 6 August 1994, the Board of Directors of IRC approved a Memorandum of Agreement with Ganda Holdings Berhad (GHB).  Under the Memorandum of Agreement, IRC acquired 100% or the entire capital stock of Ganda Energy Holdings, Inc. (GEHI),[2] which would... own and operate a 102 megawatt (MW) gas turbine power-generating barge.  The agreement also stipulates that GEHI would assume a five-year power purchase contract with National Power Corporation.  At that time, GEHI's power-generating barge was 97% complete and would go... on-line by mid-September of 1994.  In exchange, IRC will issue to GHB 55% of the expanded capital stock of IRC amounting to 40.88 billion shares which had a total par value of P488.44 million.

IRC alleged that on 8 August 1994, a press release announcing the approval of the agreement was sent through facsimile transmission to the Philippine Stock Exchange and the SEC, but that the facsimile machine of the SEC could not receive it.  Upon the advice of the SEC, the

IRC sent the press release on the morning of 9 August 1994

The SEC averred that it received reports that IRC failed to make timely public disclosures of its negotiations with GHB and that some of its directors, respondents herein, heavily traded IRC shares utilizing this material insider information.  On 16 August 1994, the SEC

Chairman issued a directive requiring IRC to submit to the SEC a copy of its aforesaid Memorandum of Agreement with GHB. The SEC Chairman further directed all principal officers of IRC to appear at a hearing before the Brokers and Exchanges Department (BED) of the SEC to explain

IRC's failure to immediately disclose the information as required by the Rules on Disclosure of Material Facts.[6

In compliance with the SEC Chairman's directive, the IRC sent a letter dated 16 August 1994 to the SEC, attaching thereto copies of the Memorandum of Agreement. Its directors, Manuel Recto, Rene Villarica and Pelagio Ricalde, also appeared before the SEC on 22 August 1994 to... explain IRC's alleged failure to immediately disclose material information as required under the Rules on Disclosure of Material Facts.

On 19 September 1994, the SEC Chairman issued an Order finding that IRC violated the Rules on Disclosure of Material Facts, in connection with the Old Securities Act of 1936, when it failed to make timely disclosure of its negotiations with GHB. In addition, the SEC pronounced... that some of the officers and directors of IRC entered into transactions involving IRC shares in violation of Section 30, in relation to Section 36, of the Revised Securities Act.[8]

Respondents filed an Omnibus Motion, dated 21 September 1994, which was superseded by an Amended Omnibus Motion, filed on 18 October 1994, alleging that the SEC had no authority to investigate the subject matter, since under Section 8 of Presidential Decree No. 902-A,[9] as amended by Presidential Decree No. 1758, jurisdiction was conferred upon the Prosecution and Enforcement Department (PED) of the SEC.  Respondents also claimed that the SEC violated their right to due process when it ordered that the respondents appear... before the SEC and "show cause why no administrative, civil or criminal sanctions should be imposed on them," and, thus, shifted the burden of proof to the respondents.  Lastly, they sought to have their cases tried jointly given the identical factual situations surrounding... the alleged violation committed by the respondents.

Respondents also filed a Motion for Continuance of Proceedings on 24 October 1994, wherein they moved for discontinuance of the investigations and the proceedings before the SEC until the undue publicity had abated and the investigating officials had become reasonably free from... prejudice and public pressure.

No formal hearings were conducted in connection with the aforementioned motions, but on 25 January 1995, the SEC issued an Omnibus Order which thus disposed of the same in this wise:

To recall the show cause orders dated September 19, 1994 requiring the respondents to appear and show cause why no administrative, civil or criminal sanctions should be imposed on them.

To deny the Motion for Continuance for lack of merit.

Rhe SEC filed a Motion for Leave to Quash SEC Omnibus Orders so that the case may be investigated by the PED in accordance with the SEC Rules and Presidential Decree No. 902-A, and not by the special body whose creation the SEC had earlier ordered.[18]

Additionally, the SEC may still impose the appropriate administrative sanctions under Section 54 of the aforementioned law.[71]

Under Section 45 of the Revised Securities Act, which is entitled Investigations, Injunctions and Prosecution of Offenses, the Securities Exchange Commission (SEC) has the authority to "make such investigations as it deems necessary to determine whether any person has... violated or is about to violate any provision of this Act XXX."  After a finding that a person has violated the Revised Securities Act, the SEC may refer the case to the DOJ for preliminary investigation and prosecution.

Issue:

THE COURT OF APPEALS ERRED WHEN IT RULED THAT RULES OF PRACTICE AND PROSECUTION BEFORE THE PED AND THE SICD RULES OF PROCEDURE ON ADMINISTRATIVE ACTIONS/PROCEEDINGS ARE INVALID AS THEY FAIL TO COMPLY WITH THE STATUTORY REQUIREMENTS CONTAINED IN THE ADMINISTRATIVE CODE OF 1987.

Ruling:

The necessity for vesting administrative authorities with power to make rules and regulations is based on the impracticability of lawmakers' providing general regulations for various and varying details of management.³⁰ To rule that the absence of implementing rules can render ineffective an act of Congress, such as the Revised Securities Act, would empower the administrative bodies to defeat the legislative will by delaying the implementing rules. To assert that a law is less than a law, because it is made to depend on a future event or act, is to rob the Legislature of the power to act wisely for the public welfare whenever a law is passed relating to a state of affairs not yet developed, or to things future and impossible to fully know.  It is well established that administrative authorities have the power to promulgate rules and regulations to implement a given statute and to effectuate its policies, provided such rules and regulations conform to the terms and standards prescribed by the statute as well as purport to carry into effect its general policies. Nevertheless, it is undisputable that the rules and regulations cannot assert for themselves a more extensive prerogative or deviate from the mandate of the statute.  Moreover, where the statute contains sufficient standards and an unmistakable intent, as in the case of Sections 30 and 36 of the Revised Securities Act, there should be no impediment to its implementation.

As a consequence, in proceedings before administrative or quasi-judicial bodies, such as the National Labor Relations Commission and the Philippine Overseas Employment Agency, created under laws which authorize summary proceedings, decisions may be reached on the basis of... position papers or other documentary evidence only.  They are not bound by technical rules of procedure and evidence.[59] In fact, the hearings before such agencies do not connote full adversarial proceedings.[60] 

Thus, it is not necessary for the rules to require affiants to appear and testify and to be cross-examined by the counsel of the adverse party.  To require otherwise would negate the summary nature of the administrative or quasi-judicial proceedings.

II. The Securities Regulations Code did not repeal Sections 8, 30 and 36 of the Revised

      Securities Act since said provisions were reenacted in the new law.

The SEC retained the jurisdiction to investigate violations of the Revised Securities Act,...  reenacted in the Securities Regulations Code, despite the abolition of the PED.

21.

HIJO PLANTATION INC., DAVAO FRUITS CORPORATION, TWIN RIVERS PLANTATION, INC. and MARSMAN & CO., INC., for themselves and in behalf of other persons and entities similarly situated, petitioners, vs. CENTRAL BANK OF THE PHILIPPINES,

G.R. No. L-34526 August 9, 1988

PARAS, J.:

Facts:

Hijo Plantation, Inc. are domestic corporations duly organized and existing under the laws of the Philippines, all of... which are engaged in the production and exportation of bananas in and from Mindanao.

Owing to the difficulty of determining the exchange rate of the peso to the dollar because of the floating rate and the promulgation of Central Bank Circular No. 289 which imposes an 80% retention scheme on all dollar earners, Congress passed Republic Act No. 6125... to eliminate the necessity for said circular and... to stabilize the peso. Among others, it provides as follows

"Any export product the aggregate annual F.O.B. value of which shall exceed five million United States dollars in any one calendar year during the effectivity of this Act shall likewise be subject to the rates of tax in force during the fiscal years following its reaching... the said aggregate value."

Issue:

Whether or not respondent acted with grave abuse of discretion amounting to lack of jurisdiction when it issued Monetary Board Resolution No. 1995.

Ruling:

In the very nature of things, in many cases it becomes impracticable for the legislative department of the Government to provide general regulations for the various and varying details for the management of a particular department of the Government. It therefore becomes convenient for the legislative department of the government, by law, in a most general way, to provide for the conduct, control, and management of the work of the particular department of the government; to authorize certain persons, in charge of the management and control of such department (United States v. Tupasi Molina, 29 Phil. 119 [19141).

Such is the case in RA 6125, which provided in its Section 6, as follows:

All rules and regulations for the purpose of carrying out the provisions of the act shall be promulgated by the Central Bank of the Philippines and shall take effect fifteen days after publication in three newspapers of general circulation throughout the Philippines, one of which shall be in the national language.

Such regulations have uniformly been held to have the force of law, whenever they are found to be in consonance and in harmony with the general purposes and objects of the law. Such regulations once established and found to be in conformity with the general purposes of the law, are just as binding upon all the parties, as if the regulation had been written in the original law itself (29 Phil. 119, Ibid). Upon the other hand, should the regulation conflict with the law, the validity of the regulation cannot be sustained (Director of Forestry vs. Muroz 23 SCRA 1183).

22.  Beja Sr. v. Court of Appeals (207 SCRA 689,1992)

G.R. No. 97149 March 31, 1992

ROMERO, J.:

Facts:

On October 21, 1988, the PPA General Manager, Rogelio A. Dayan, filed Administrative Case No. 11-04-88 against petitioner Beja and Hernando G. Villaluz for grave dishonesty, grave misconduct, willful violation of reasonable office rules and regulations and conduct prejudicial to the best interest of the service. Beja and Villaluz allegedly erroneously assessed storage fees resulting in the loss of P38,150.77 on the part of the PPA. Consequently, they were preventively suspended for the charges. After a preliminary investigation conducted by the district attorney for Region X, Administrative Case No. 11-04-88 was "considered closed for lack of merit."

On December 13, 1988, another charge sheet, docketed as Administrative Case No. 12-01-88, was filed against Beja by the PPA General Manager also for dishonesty, grave misconduct, violation of reasonable office rules and regulations, conduct prejudicial to the best interest of the service and for being notoriously undesirable. 

In his petition, Beja assails the Court of Appeals for having "decided questions of substance in a way probably not in accord with law or with the applicable decisions" of this Court. ⁵ Specifically, Beja contends that the Court of Appeals failed to declare that: (a) he was denied due process; (b) the PPA general manager has no power to issue a preventive suspension order without the necessary approval of the PPA board of directors; (c) the PPA general manager has no power to refer the administrative case filed against him to the DOTC-AAB, and (d) the DOTC Secretary, the Chairman of the DOTC-AAB and DOTC-AAB itself as an adjudicatory body, have no jurisdiction to try the administrative case against him. Simply put, Beja challenges the legality of the preventive suspension and the jurisdiction of the DOTC Secretary and/or the AAB to initiate and hear administrative cases against PPA personnel below the rank of Assistant General Manager.

Issue:

Ruling:

Imposed during the pendency of an administrative investigation, preventive suspension is not a penalty in itself. It is merely a measure of precaution so that the employee who is charged may be separated, for obvious reasons, from the scene of his alleged misfeasance while the same is being investigated.  Thus, preventive suspension is distinct from the administrative penalty of removal from office such as the one mentioned in Sec. 8(d) of P.D. No 857. While the former may be imposed on a respondent during the investigation of the charges against him, the latter is the penalty which may only be meted upon him at the termination of the investigation or the final disposition of the case.

An attached agency has a larger measure of independence from the Department to which it is attached than one which is under departmental supervision and control or administrative supervision. This is borne out by the "lateral relationship" between the Department and the attached agency. The attachment is merely for "policy and program coordination." With respect to administrative matters, the independence of an attached agency from Departmental control and supervision is further reinforced by the fact that even an agency under a Department's administrative supervision is free from Departmental interference with respect to appointments and other personnel actions "in accordance with the decentralization of personnel functions" under the Administrative Code of 1987.  Moreover, the Administrative Code explicitly provides that Chapter 8 of Book IV on supervision and control shall not apply to chartered institutions attached to a Department. 

23. United Residents of Dominican Hills, Inc. v. Commission on the Settlement of Land Problems (353 SCRA 782, March 7, 2001)

Facts:

Dominican Hills, formerly registered as Diplomat Hills in Baguio City, was mortgaged to the United Coconut Planters Bank (UCPB).  It was eventually foreclosed and acquired later on by the said bank as the highest bidder.  On 11 April 1983, through its President Eduardo Cojuangco Jr., the subject property was donated to the Republic of the Philippines.  The deed of donation stipulated that Dominican Hills would be utilized for the "priority programs, projects, activities in human settlements and economic development and governmental purposes" of the Ministry of Human Settlements.

On December 12, 1986, then President Corazon Aquino issued EO 85 abolishing the Ministry of Human Settlements. All agencies under the its supervision as well as all its assets, programs and projects, were transferred to the Presidential Management Staff (PMS).

On 18 October 1988, United (Dominican Hills) submitted its application before the PMS to acquire a portion of the Dominican Hills property.  In a MOA, PMS and United agreed that the latter may purchase a portion of the said property from HOME INSURANCE GUARANTY CORPORATIO, acting as originator, on a selling price of P75.00 per square meter.

Thus, on June 12, 1991, HIGC sold 2.48 hectares of the property to UNITED. The deed of conditional sale provided that ten (10) per cent of the purchase price would be paid upon signing, with the balance to be amortized within one year from its date of execution. After UNITED made its final payment on January 31, 1992, HIGC executed a Deed of Absolute Sale dated July 1, 1992.

Petitioner alleges that sometime in 1993, private respondents entered the Dominican Hills property allocated to UNITED and constructed houses thereon. Petitioner was able to secure a demolition order from the city mayor.  Unable to stop the razing of their houses, private respondents, under the name DOMINICAN HILL BAGUIO RESIDENTS HOMELESS ASSOCIATION (ASSOCIATION, for brevity) filed an action for injunction before RTC Baguio City.  Private respondents were able to obtain a temporary restraining order but their prayer for a writ of preliminary injunction was later denied. 

The ASSOCIATION filed a separate civil case for damages, injunction and annulment of the said MOA.  It was later on dismissed upon motion of United. The said Order of dismissal is currently on appeal with the Court of Appeals.

The demolition order was subsequently implemented by the Office of the City Mayor and the City Engineer's Office of Baguio City. However, petitioner avers that private respondents returned and reconstructed the demolished structures.

To forestall the re-implementation of the demolition order, private respondents filed a petition for annulment of contracts with prayer for a temporary restraining order before the Commission on the Settlement of Land Problems (COSLAP) against petitioner, HIGC, PMS, the City Engineer's Office, the City Mayor, as well as the Register of Deeds of Baguio City. On the very same day, public respondent COSLAP issued the contested order requiring the parties to maintain the status quo.  Without filing a motion for reconsideration from the aforesaid status quo order, petitioner filed the instant petition questioning the jurisdiction of the COSLAP.

Issue:

Whether COSLAP is empowered to hear and try a petition for annulment of contracts with prayer for a TRO and to issue a status quo order and conduct a hearing.

Ruling:

COSLAP is not justified in assuming jurisdiction over the controversy. It discharges quasi-judicial functions: 

"Quasi-judicial function" is a term which applies to the actions, discretion, etc. of public administrative officers or bodies, who are required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action and to exercise discretion of a judicial nature."

However, it does not depart from its basic nature as an administrative agency, albeit one that exercises quasi-judicial functions. Still, administrative agencies are not considered courts; they are neither part of the judicial system nor are they deemed judicial tribunals. The doctrine of separation of powers observed in our system of government reposes the three (3) great powers into its three (3) branches — the legislative, the executive, and the judiciary — each department being co-equal and coordinate, and supreme in its own sphere. Accordingly, the executive department may not, by its own fiat, impose the judgment of one of its own agencies, upon the judiciary. Indeed, under the expanded jurisdiction of the Supreme Court, it is empowered "to determine whether or not there has been grave abuse of discretion amounting to lack of or excess of jurisdiction on the part of any branch or instrumentality of the Government."

24.  Pangasinan Transportation Company v. Manaila Railroad Company

GR. No. 41471. September 15, 1934

MALCOLM, J.:

Facts:

The petitioner and appellant in this case complains that the Public Service Commission erred in granting to the Manila Railroad Company a certificate of public convenience to invade the regular route adequately and efficiently served by the Pangasinan Transportation Company.

The Pangasinan Transportation Company operates an autobus service in the Province of Pangasinan and other provinces. The Manila Railroad Company operates the Benguet Auto Line from Baguio by way of Kennon Road to Sison. The railroad now desires to extend its auto line from Sison to Binalonan via Pozorrubio in the Province of Pangasinan. If this be permitted it will be a competitor of the busses of the Pangasinan Transportation Company.

Ruling:

In one class of cases it has oft been emphasized, and properly, that the convenience of the public must be taken into account and is a prime criterion. In another class of cases it has as appropriately been emphasized that the investments made by public service operators must be protected rather than destroyed. Here we have the two principles meeting in collision. It is our desire at once to afford all reasonable facilities to the public and to afford all reasonable safeguards for capital invested in the transportation business.

On the one hand it is shown that there are a few passengers whose convenience would be better served if the Manila Railroad Company was permitted to extend its buss service from Sison to Binalonan. However, their convenience is more fancied than real, for the busses of the Pangasinan Transportation Company and the Manila Railroad Company meet at Sison and if there is any difference in the hour of meeting this could readily be arranged. On the other side, it is disclosed that while busses of the Pangasinan Transportation Company have a capacity for thirty-two pay passengers, they are only carrying an average load of six passengers on these trips. It has further been established that from June, 1932, to May, 1933, the Pangasinan Transportation Company lost P2,733.29 on this line alone. Under these conditions, can it be said that public necessity is more compelling than what amounts to ruinous competition?

The true effect of granting the petition of the Manila Railroad Company would be to force the Pangasinan Transportation Company out of the Sison-Pozorrubio-Binalonan territory. Moreover, if the railroad company could extend its auto line to Binalonan, it requires no vast amount of imagination to visualize the company extending its line to the next municipality and so on indefinitely, to the great disadvantage of other operators and with the result that they would be deprived of substantial revenue. With all due respect to the Public Service Commission which we are the first to uphold when its decisions can be justified, we are unable to put the stamp of our approval on the principle it has invoked and sanctioned in this case.

25. Realty Exchange Venture Co. vs. Sendino, 233 SCRA 665 (1994)

Facts: Lucina Sendino filed a complaint for Specific Performance against REVI before the office of Appeals, Adjudication and Legal Affairs (OAALA) of HLURB. REVI Cancelled the contract (entitled Reservation Agreement) for the reservation of Sendino of a 120 sqm house and lot in Paranaque. For the alleged non-compliance with the requirement of Sendino as provided in the Reservation Agreement. OAALA decided in favour of Sendino ordering to comply and continue with the sale. On Appeal of the decision was affirmed. This was further appealed to the Office of the President but the case was dismissed. MR was also denied.

Issue:

W/N the Office of the Pres committed a Serious Error in declaring that HLURB has quasi-judicial functions even though there’s not express grant by EO 90.

Decision:

NO. Section 1 of PD 1344, provides: ‘Section 1. In the exercise of its functions to regulate real estate trade and business and in addition to its powers provided for in Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following nature:chanrob1es virtual 1aw library ‘A. Unsound real estate business practices; ‘B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the project owner, developer, dealer, broker or salesman; and ‘C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or condominium unit against the owner, developer, dealer, broker or salesman.’ There is no question that a statute may vest exclusive original jurisdiction in an administrative agency over certain disputes and controversies falling within the agency’s special expertise. The constitutionality of such grant of exclusive jurisdiction to the National Housing Authority (now Housing and Land Use Regulatory Board) over cases involving the sale of lots in commercial subdivisions was upheld in Tropical Homes Inc. v. National Housing Authority (152 SCRA 540 [1987]) and again sustained in a later decision in Antipolo Realty Corporation v. National Housing Authority (153 SCRA 399 [1987]) where We restated that the National Housing Authority (now HLURB) shall have exclusive jurisdiction to regulate the real estate trade and business in accordance with the terms of PD No. 957 which defines the quantum of judicial or quasi-judicial powers of said agency. HLURB must interpret and apply contracts, determine the rights of the parties under these contracts, and award damages whenever appropriate. 15 We fail to see how the HSRC - which possessed jurisdiction over the actions for specific performance for contractual and statutory obligations filed by buyers of subdivision lots against developers - had suddenly lost its adjudicatory powers by the mere fiat of a change in name through E.O. 90. One thrust of the multiplication of administrative agencies is that the interpretation of such contracts and agreements and the determination of private rights under these agreements is no longer a uniquely judicial function. 16 The absence of any provision, express or implied, in E. O. 90, repealing those quasi-judicial powers inherited by the HSRC from the National Housing Authority, furthermore militates against petitioners' position on the question WHEREFORE, premises considered, the petition is hereby DISMISSED for lack of merit. Costs against petitioners.

26. PHILIPPINE INTERNATIONAL TRADING CORPORATION, petitioner, vs.
ANGELES, respondent
G.R. No. 108461. October 21, 1996

Facts:

The Philippine International Trading Corporation, a government owned and controlled corporation issued Administrative Order No. SOCPEC 89-08-01 under which application to the PITC for importation from the People’s Republic of China (PROC) must be accompanied by a viable and confirmed Export Program of the Philippine Products to China carried out by the importer himself or through a tie-up with a legitimate importer from PROC in an amount equivalent to the value of importation from PRC being applied for, or simply at one-to one ratio.

Two domestic corporations, Remington and Firestone, both applied for authority to import from PROC, which were granted, but later on were withheld for failure to comply with the require one to one ratio of import and export.

They filed a complaint asserting that the administrative order is unconstitutional. The RTC ruled that the order was a restraint of trade in violation of Section 1 and 19 of Article XII of the 1987 Constitution. PITC elevated the case to the Supreme Court.

Issue:

Whether or not Administrative Order No. SOCPEC 89-08-01 is valid.

Ruling:

The order was not valid.

The PITC is a line agency of the Department of Trade and Industry which was the primary coordinative, promotive, facilitative and regulatory arm of the government for the country’s trade. The PITC as an integral part of the DTI was given the task of the implementing the departments’ program. It has the authority to issue the questioned order and may legally exercise that authority under the supervision of the DTI. The grant t quasi-legislative powers in administrative bodies are not unconstitutional. It has become necessary to create more administrative bodies to help in the regulation of its activities. Because hey specializes in the field assigned to them, they can deal and dispatch problems with more expertise than the legislature or the courts of justice.

In sum, the PITC was legally empowered to issue the Administrative Orders as a valid exercise of a power ancillary to legislation; however, it does not imply that the order was valid. First, it was never published, thus it is not effective. Second, the same is inconsistent with the declared policy of the government to then effect that it will develop and strengthen trade relations with the PROC. Since the order was a unnecessary barrier to trade, the same is not a valid exercise of its authority.

27. MCC Industrial Sales Corp. vs Sangyong Corpotation (536 SCRA 408, 2007)

G.R. No. 170633. October 17, 2007

NACHURA, J.:

Facts:

Petitioner MCC Industrial Sales (MCC), a domestic corporation with office at Binondo, Manila, is engaged in the business of importing and wholesaling stainless steel products. One of its suppliers is the Ssangyong Corporation (Ssangyong), an international trading company with head office in Seoul, South Korea and regional headquarters in Makati City, Philippines. The two corporations conducted business through telephone calls and facsimile or telecopy transmissions. Ssangyong would send the pro forma invoices containing the details of the steel product order to MCC; if the latter conforms thereto, its representative affixes his signature on the faxed copy and sends it back to Ssangyong, again by fax.

Following the failure of MCC to open a letters of credit to facilitate the payment of imported stainless steel products, Ssangyong through counsel wrote a letter to MCC, on September 11, 2000, canceling the sales contract under ST2-POSTS0401-1 /ST2-POSTS0401-2, and demanding payment of US$97,317.37 representing losses, warehousing expenses, interests and charges.

Ssangyong then filed, on November 16, 2001, a civil action for damages due to breach of contract against defendants MCC, Sanyo Seiki and Gregory Chan before the Regional Trial Court of Makati City. In its complaint, Ssangyong alleged that defendants breached their contract when they refused to open the L/C in the amount of US$170,000.00 for the remaining 100MT of steel under Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2.

After Ssangyong rested its case, defendants filed a Demurrer to Evidence alleging that Ssangyong failed to present the original copies of the pro forma invoices on which the civil action was based. In an Order dated April 24, 2003, the court denied the demurrer, ruling that the documentary evidence presented had already been admitted in the December 16, 2002 Orde and their admissibility finds support in Republic Act (R.A.) No. 8792, otherwise known as the Electronic Commerce Act of 2000. According to the aforesaid Order, considering that both testimonial and documentary evidence tended to substantiate the material allegations in the complaint, Ssangyong's evidence sufficed for purposes of a prima facie case.

Issue:

Whether the print-out and/or photocopies of facsimile transmissions are electronic evidence and admissible in evidence.

Ruling:

R.A. No. 8792, otherwise known as the Electronic Commerce Act of 2000, considers an electronic data message or an electronic document as the functional equivalent of a written document for evidentiary purposes. The Rules on Electronic Evidence regards an electronic document as admissible in evidence if it complies with the rules on admissibility prescribed by the Rules of Court and related laws, and is authenticated in the manner prescribed by the said Rules. An electronic document is also the equivalent of an original document under the Best Evidence Rule, if it is a printout or output readable by sight or other means, shown to reflect the data accurately.

Thus, to be admissible in evidence as an electronic data message or to be considered as the functional equivalent of an original document under the Best Evidence Rule, the writing must foremost be an "electronic data message" or an "electronic document."

In an ordinary facsimile transmission, there exists an original paper-based information or data that is scanned, sent through a phone line, and re-printed at the receiving end. Be it noted that in enacting the Electronic Commerce Act of 2000, Congress intended virtual or paperless writings to be the functional equivalent and to have the same legal function as paper-based documents. Further, in a virtual or paperless environment, technically, there is no original copy to speak of, as all direct printouts of the virtual reality are the same, in all respects, and are considered as originals. Ineluctably, the law's definition of "electronic data message," which, as aforesaid, is interchangeable with "electronic document," could not have included facsimile transmissions, which have an original paper-based copy as sent and a paper-based facsimile copy as received. These two copies are distinct from each other, and have different legal effects. While Congress anticipated future developments in communications and computer technology when it drafted the law, it excluded the early forms of technology, like telegraph, telex and telecopy (except computer-generated faxes, which is a newer development as compared to the ordinary fax machine to fax machine transmission), when it defined the term "electronic data message."We, therefore, conclude that the terms "electronic data message" and "electronic document," as defined under the Electronic Commerce Act of 2000, do not include a facsimile transmission. Accordingly, a facsimile transmission cannot be considered as electronic evidence. It is not the functional equivalent of an original under the Best Evidence Rule and is not admissible as electronic evidence.

Since a facsimile transmission is not an "electronic data message" or an "electronic document," and cannot be considered as electronic evidence by the Court, with greater reason is a photocopy of such a fax transmission not electronic evidence. In the present case, therefore, Pro Forma Invoice Nos. ST2-POSTS0401-1 and ST2-POSTS0401-2 (Exhibits "E" and "F"), which are mere photocopies of the original fax transmittals, are not electronic evidence, contrary to the position of both the trial and the appellate courts.

28. Office of the Solicitor General v. Ayala Land, Inc. (600 SCRA 617, 2008)

Facts:

Respondents operate or lease out shopping malls that have parking facilities. The people that use said facilities are required to pay parking fees by the respondents. Senate committees conducted an investigation to determine the legality of said practice which the same found to be against the National Building Code. Respondents then received an information from various government agencies enjoining them from collecting parking fees and later a civil case against them. Respondents argued that the same constitutes undue taking of private property. OSG argues that the same is implemented in view of public welfare more specifically to ease traffic congestion. The RTC ruled in favor of the respondents. Hence petition for certiorari.

Issue(s):

1.     Whether the CA erred in affirming the ruling of RTC that respondents are not obliged to provide free parking spaces to their customers or the public.

2.     Whether the petition of OSG for prohibiting the collection of parking fees is a valid exercise of the police power of State.

Ruling:

1.     No. The CA was correct in affirming the ruling of RTC, and the respondents are not obliged to provide free parking spaces. SC found no merit in the OSG’s petition.

The explicit directive of the above is that respondents, as operators/lessors of neighborhood shopping centers, should provide parking and loading spaces with the minimum ratio of one slot per 100 square meters of shopping floor area. There is nothing therein pertaining to the collection (or non-collection) of parking fees by respondents. In fact, the term “parking fees” cannot even be found at all in the entire National Building Code and its IRR. One rule of statutory construction is that if a statute is clear and unequivocal, it must be given its literal meaning and applied without any attempt at interpretation. Since Section 803 of the National Building Code and Rule XIX of its IRR do not mention parking fees, then simply, said provisions do not regulate the collection of the same

The OSG cannot rely on Section 102 of the National Building Code to expand the coverage of Section 803 of the same Code and Rule XIX of the IRR, so as to include the regulation of parking fees. The OSG limits its citation to the first part of Section 102 of the National Building Code declaring the policy of the State “to safeguard life, health, property, and public welfare, consistent with the principles of sound environmental management and control”; but totally ignores the second part of said provision, which reads, “and to this end, make it the purpose of this Code to provide for all buildings and structures, a framework of minimum standards and requirements to regulate and control their location, site, design, quality of materials, construction, use, occupancy, and maintenance.” While the first part of Section 102 of the National Building Code lays down the State policy, it is the second part thereof that explains how said policy shall be carried out in the Code. Section 102 of the National Building Code is not an all-encompassing grant of regulatory power to the DPWH Secretary and local building officials in the name of life, health, property, and public welfare. On the contrary, it limits the regulatory power of said officials to ensuring that the minimum standards and requirements for all buildings and structures, as set forth in the National Building Code, are complied with.

Consequently, the OSG cannot claim that in addition to fixing the minimum requirements for parking spaces for buildings, Rule XIX of the IRR also mandates that such parking spaces be provided by building owners free of charge. If Rule XIX is not covered by the enabling law, then it cannot be added to or included in the implementing rules. The rule-making power of administrative agencies must be confined to details for regulating the mode or proceedings to carry into effect the law as it has been enacted, and it cannot be extended to amend or expand the statutory requirements or to embrace matters not covered by the statute. Administrative regulations must always be in harmony with the provisions of the law because any resulting discrepancy between the two will always be resolved in favor of the basic law.

2.     No. The petition of OSG to prohibit collection of parking fees is not a valid exercise of the police power of State.

It is not sufficient for the OSG to claim that “the power to regulate and control the use, occupancy, and maintenance of buildings and structures carries with it the power to impose fees and, conversely, to control, partially or, as in this case, absolutely, the imposition of such fees.” Firstly, the fees within the power of regulatory agencies to impose are regulatory fees. It has been settled law in this jurisdiction that this broad and all-compassing governmental competence to restrict rights of liberty and property carries with it the undeniable power to collect a regulatory fee. It looks to the enactment of specific measures that govern the relations not only as between individuals but also as between private parties and the political society. True, if the regulatory agencies have the power to impose regulatory fees, then conversely, they also have the power to remove the same. Even so, it is worthy to note that the present case does not involve the imposition by the DPWH Secretary and local building officials of regulatory fees upon respondents; but the collection by respondents of parking fees from persons who use the mall parking facilities. Secondly, assuming arguendo that the DPWH Secretary and local building officials do have regulatory powers over the collection of parking fees for the use of privately owned parking facilities, they cannot allow or prohibit such collection arbitrarily or whimsically. Whether allowing or prohibiting the collection of such parking fees, the action of the DPWH Secretary and local building officials must pass the test of classic reasonableness and propriety of the measures or means in the promotion of the ends sought to be accomplished.

Without using the term outright, the OSG is actually invoking police power to justify the regulation by the State, through the DPWH Secretary and local building officials, of privately owned parking facilities, including the collection by the owners/operators of such facilities of parking fees from the public for the use thereof. The Court finds, however, that in totally prohibiting respondents from collecting parking fees, the State would be acting beyond the bounds of police power.

Police power is the power of promoting the public welfare by restraining and regulating the use of liberty and property. It is usually exerted in order to merely regulate the use and enjoyment of the property of the owner. The power to regulate, however, does not include the power to prohibit. A fortiori, the power to regulate does not include the power to confiscate. Police power does not involve the taking or confiscation of property, with the exception of a few cases where there is a necessity to confiscate private property in order to destroy it for the purpose of protecting peace and order and of promoting the general welfare; for instance, the confiscation of an illegally possessed article, such as opium and firearms.

When there is a taking or confiscation of private property for public use, the State is no longer exercising police power, but another of its inherent powers, namely, eminent domain. Eminent domain enables the State to forcibly acquire private lands intended for public use upon payment of just compensation to the owner.

Normally, of course, the power of eminent domain results in the taking or appropriation of title to, and possession of, the expropriated property; but no cogent reason appears why the said power may not be availed of only to impose a burden upon the owner of condemned property, without loss of title and possession. It is a settled rule that neither acquisition of title nor total destruction of value is essential to taking. It is usually in cases where title remains with the private owner that inquiry should be made to determine whether the impairment of a property is merely regulated or amounts to a compensable taking. A regulation that deprives any person of the profitable use of his property constitutes a taking and entitles him to compensation, unless the invasion of rights is so slight as to permit the regulation to be justified under the police power. Similarly, a police regulation that unreasonably restricts the right to use business property for business purposes amounts to a taking of private property, and the owner may recover therefor.

Although in the present case, title to and/or possession of the parking facilities remain/s with respondents, the prohibition against their collection of parking fees from the public, for the use of said facilities, is already tantamount to a taking or confiscation of their properties. The State is not only requiring that respondents devote a portion of the latter’s properties for use as parking spaces, but is also mandating that they give the public access to said parking spaces for free. Such is already an excessive intrusion into the property rights of respondents. Not only are they being deprived of the right to use a portion of their properties as they wish, they are further prohibited from profiting from its use or even just recovering therefrom the expenses for the maintenance and operation of the required parking facilities.

Thus, the total prohibition against the collection by respondents of parking fees from persons who use the mall parking facilities has no basis in the National Building Code or its IRR. The State also cannot impose the same prohibition by generally invoking police power, since said prohibition amounts to a taking of respondents’ property without payment of just compensation.

29. BPI Leasing Corporation vs Court of Appeals (416 SCRA 4, 2003)

Facts:

BLC is a corporation engaged in the business of leasing properties. For the calendar year 1986, BLC paid the Commissioner of Internal Revenue (CIR) a total of P1,139,041.49 representing 4% contractors percentage tax then imposed by Section 205 of the National Internal Revenue Code (NIRC).

the CIR issued Revenue Regulation 19-86. Section 6.2 thereof provided that finance and leasing companies registered under Republic Act 5980 shall be subject to gross receipt tax of 5%-3%-1% on actual income earned. This means that companies registered under Republic Act 5980, such as BLC, are not liable for contractors percentage tax under Section 205 but are, instead, subject to gross receipts tax under Section 260 (now Section 122) of the NIRC. Since BLC had earlier paid the aforementioned contractors percentage tax, it re-computed its tax liabilities under the gross receipts tax and arrived at the amount of P361,924.44.

BLC filed a claim for a refund with the CIR for the amount of P777,117.05, representing the difference between the P1,139,041.49 it had paid as contractors percentage tax and P361,924.44 it should have paid for gross receipts tax. Four days later, to stop the running of the prescriptive period for refunds, petitioner filed a petition for review with the CTA. CTA dismissed the petition and denied BLCs claim of refund. The CTA held that Revenue Regulation 19-86, as amended, may only be applied prospectively such that it only covers all leases written on or after January 1, 1987. The CTA ruled that, since BLCs rental income was all received prior to 1986, it follows that this was derived from lease transactions prior to January 1, 1987, and hence, not covered by the revenue regulation.

Issue:

1.     Whether or not Revenue Regulation 19-86 is legislative rather than interpretative in character

2.     Whether or not its application should be prospective or retroactive. PROSPECTIVE

Ruling:

1.      The Court finds the questioned revenue regulation to be legislative in nature. Section 1 of Revenue Regulation 19-86 plainly states that it was promulgated pursuant to Section 277 of the NIRC. Section 277 (now Section 244) is an express grant of authority to the Secretary of Finance to promulgate all needful rules and regulations for the effective enforcement of the provisions of the NIRC. The Court recognized that the application of Section 277 calls for none other than the exercise of quasi-legislative or rule-making authority. Verily, it cannot be disputed that Revenue Regulation 19-86 was issued pursuant to the rule-making power of the Secretary of Finance, thus making it legislative, and not interpretative as alleged by BLC.

2.     The principle is well entrenched that statutes, including administrative rules and regulations, operate prospectively only, unless the legislative intent to the contrary is manifest by express terms or by necessary implication. In the present case, there is no indication that the revenue regulation may operate retroactively. Furthermore, there is an express provision stating that it shall take effect on January 1, 1987, and that it shall be applicable to all leases written on or after the said date. Being clear on its prospective application, it must be given its literal meaning and applied without further interpretation. Thus, BLC is not in a position to invoke the provisions of Revenue Regulation 19-86 for lease rentals it received prior to January 1, 1987.

30. Commissioner of Internal Revenue v. Court of Appeals (261 SCRA 236, 1991)

Facts:

Issue:

Ruling:

31. Peralta v. Civil Service Commisssion (211 SCRA 425, 1992)

Facts:

Pursuant to Civil Service Act of 1959 (R.A. No. 2260) which conferred upon the Commissioner of Civil Service to prescribe, amend and enforce suitable rules and regulations for carrying into effect the provisions of this Civil Service Law, the Commission interpreted provisions of Republic Act No. 2625 amending the Revised Administrative Code and adopted a policy that when an employee who was on leave of absence without pay on a day before or on a day time immediately preceding a Saturday, Sunday or Holiday, he is also considered on leave of absence without pay on such Saturday, Sunday or Holiday. Petitioner Peralta, affected by the said policy, questioned the said administrative interpretation.

Issue:

Whether or not the Civil Service Commission’s interpretative construction is valid and constitutional.

Ruling:

NO. The construction by the respondent Commission of R.A. 2625 is not in accordance with the legislative intent. R.A. 2625 specifically provides that government employees are entitled to leaves of absence with full pay exclusive of Saturdays, Sundays and Holidays. The law speaks of the granting of a right and the law does not provide for a distinction between those who have accumulated leave credits and those who have exhausted their leave credits in order to enjoy such right. Ubi lex non distinguit nec nos distinguere debemus.The fact remains that government employees, whether or not they have accumulated leave credits, are not required by law to work on Saturdays, Sundays and Holidays and thus they cannot be declared absent on such non-working days. They cannot be or are not considered absent on non-working days; they cannot and should not be deprived of their salary corresponding to said non-working days just because they were absent without pay on the day immediately prior to, or after said non-working days. A different rule would constitute a deprivation of property without due process.

Administrative construction, is not necessarily binding upon the courts. Action of an administrative agency may be disturbed or set aside by the judicial department if there is an error of law, or abuse of power or lack of jurisdiction or grave abuse of discretion clearly conflicting with either the letter or the spirit of a legislative enactment. When an administrative or executive agency renders an opinion or issues a statement of policy, it merely interprets a pre-existing law; and the administrative interpretation of the law is at best advisory, for it is the courts that finally determine what the law means.

The general rule vis-a-vis legislation is that an unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is in legal contemplation as inoperative as though it had never been passed.

But, as held in Chicot County Drainage District vs. Baxter State Bank:

. . . . It is quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to such determination is an operative fact and may have consequences which cannot always be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects — with respect to particular relations, individual and corporate; and particular conduct, private and official.

To allow all the affected government employees, similarly situated as petitioner herein, to claim their deducted salaries resulting from the past enforcement of the herein invalidated CSC policy, would cause quite a heavy financial burden on the national and local governments considering the length of time that such policy has been effective. Also, administrative and practical considerations must be taken into account if this ruling will have a strict restrospective application. The Court, in this connection, calls upon the respondent Commission and the Congress of the Philippines, if necessary, to handle this problem with justice and equity to all affected government employees.

32. Executive Secretary v. Southwing Heavy Industries, Inc. (482 SCRA 673)

Facts: This is a petition to annul the decision of a RTC of Olongapo declaring unconstitutional the EO 156 Art. 2 Sec. 3.1. The said executive issuance prohibits the importation into the country, inclusive of the Special Economic and Freeport Zone or the Subic Bay Freeport (SBF or Freeport), of used motor vehicles, subject to a few exceptions. CA upheld the ruling of the RTC on the ground of lack of any statutory basis for the President to issue the same. It held that the prohibition on the importation of used motor vehicles is an exercise of police power vested on the legislature and absent any enabling law, the exercise thereof by the President through an executive issuance, is void. The petitioners argue that EO 156 is constitutional because it was issued pursuant to EO 226, the Omnibus Investment Code of the Philippines and that its application should be extended to the Freeport because the guarantee of RA 7227 on the free flow of goods into the said zone is merely an exemption from customs duties and taxes on items brought into the Freeport and not an open floodgate for all kinds of goods and materials without restriction.

Issue: Whether or not the EO is valid?

Ruling: Partially Yes. It is valid insofar as it is outside the Freeport zone, but void if the vehicles are within the Freeport zone. According to the SC, Police power is inherent in a government to enact laws, within constitutional limits. It is lodged primarily with the legislature. By virtue of a valid delegation of legislative power, it may also be exercised by the President and administrative boards, as well as the lawmaking bodies on all municipal levels, including the barangay. Such delegation confers upon the President quasi-legislative power which may be defined as the authority delegated by the law-making body to the administrative body to adopt rules and regulations intended to carry out the provisions of the law and implement legislative policy.17 To be valid, an administrative issuance, such as an executive order, must comply with the following requisites:

1.     Its promulgation must be authorized by the legislature;

2.     It must be promulgated in accordance with the prescribed procedure;

3.     It must be within the scope of the authority given by the legislature; and

4.     It must be reasonable.

First requisite Delegation of legislative powers to the President is permitted in Section 28(2) of Article VI of the Constitution through Congress’ delegation by law. The relevant statutes to execute this provision are: 1) The Tariff and Customs Code which authorizes the President, in the interest of national economy, general welfare and/or national security, to, inter alia, prohibit the importation of any commodity. 2) Executive Order No. 226, the Omnibus Investment Code of the Philippines that empowers the President to approve or reject the prohibition on the importation of any equipment or raw materials or finished products 3) Republic Act No. 8800, otherwise known as the "Safeguard Measures Act" (SMA), ," Second requisite: The general rule is that, the promulgation of administrative issuances requires previous notice and hearing, the only exception being where the legislature itself requires it and mandates that the regulation shall be based on certain facts as determined at an appropriate investigation. This exception pertains to the issuance of legislative rules. An interpretative rule, however, give no real consequence more than what the law itself has already prescribed; and are designed merely to provide guidelines to the law which the administrative agency is in charge of enforcing. A legislative rule, on the other hand, is in the nature of subordinate legislation, crafted to implement a primary legislation. The SC adds that when an administrative rule goes beyond merely providing for the means that can facilitate or render less cumbersome the implementation of the law and substantially increases the burden of those governed, the agency must let those who are going to be affected be heard and informed, before the issuance is given the force and effect of law. In the instant case, EO 156 is obviously a legislative rule as it seeks to implement or execute primary legislative enactments intended to protect the domestic industry by imposing a ban on the importation of a specified product. Third requisite According to the petitioners, the purpose of the EO is for the domestic industry. EO 156, however, exceeded the scope of its application by extending the prohibition on the importation of used cars to the Freeport, which RA 7227, considers to some extent, a foreign territory. The domestic industry which the EO seeks to protect is actually the "customs territory" which is defined under the Rules and Regulations Implementing RA 7227.  Fourth requisite: This brings us to the fourth requisite. Rules and regulations must be reasonable and fairly adapted to secure the end in view. The SC found no logic in the all encompassing application of the assailed provision to the Freeport which is outside the customs territory. As long as the used motor vehicles do not enter the customs territory, the injury or harm sought to be prevented or remedied will not arise.

33. Dagan v Philippine Racing Commission (211 SCRA 425, 1992)

Ruling:The validity of an administrative issuance, such as the assailed guidelines, hinges on compliance with the following requisites:

1.     Its promulgation must be authorized by the legislature;

2.     It must be promulgated in accordance with the prescribed procedure;

3.     It must be within the scope of the authority given by the legislature;

4.     It must be reasonable.

All the prescribed requisites are met as regards the questioned issuances. Philracom’s authority is drawn from P.D. No. 420.  The delegation made in the presidential decree is valid. Philracom did not exceed its authority.  And the issuances are fair and reasonable.  Xxx

P.D. No. 420 hurdles the tests of completeness and standards sufficiency.

Philracom was created for the purpose of carrying out the declared policy in Section 1 which is “to promote and direct the accelerated development and continued growth of horse racing not only in pursuance of the sports development program but also in order to insure the full exploitation of the sport as a source of revenue and employment.” Furthermore, Philracom was granted exclusive jurisdiction and control over every aspect of the conduct of horse racing, including the framing and scheduling of races, the construction and safety of race tracks, and the security of racing.  P.D. No. 420 is already complete in itself.

Clearly, there is a proper legislative delegation of rule-making power to Philracom.  Clearly too, for its part Philracom has exercised its rule-making power in a proper and reasonable manner.  More specifically, its discretion to rid the facilities of MJCI and PRCI of horses afflicted with EIA is aimed at preserving the security and integrity of horse races.

Petitioners also question the supposed delegation by Philracom of its rule-making powers to MJCI and PRCI.

There is no delegation of power to speak of between Philracom, as the delegator and MJCI and PRCI as delegates.  The Philracom directive is merely instructive in character.  Philracom had instructed PRCI and MJCI to “immediately come up with Club’s House Rule to address the problem and rid their facilities of horses infected with EIA.”  PRCI and MJCI followed-up when they ordered the racehorse owners to submit blood samples and subject their race horses to blood testing.  Compliance with the Philracom’s directive is part of the mandate of PRCI and MJCI under Sections 11 of R.A. No. 7953 and Sections 1 and 2 of 8407.

As correctly proferred by MJCI, its duty is not derived from the delegated authority of Philracom but arises from the franchise granted to them by Congress allowing MJCI “to do and carry out all such acts, deeds and things as may be necessary to give effect to the foregoing.” As justified by PRCI, “obeying the terms of the franchise and abiding by whatever rules enacted by Philracom is its duty.”

As to the second requisite, petitioners raise some infirmities relating to Philracom’s guidelines. They question the supposed belated issuance of the guidelines, that is, only after the collection of blood samples for the Coggins Test was ordered.  While it is conceded that the guidelines were issued a month after Philracom’s directive, this circumstance does not render the directive nor the guidelines void.  The directive’s validity and effectivity are not dependent on any supplemental guidelines.  Philracom has every right to issue directives to MJCI and PRCI with respect to the conduct of horse racing, with or without implementing guidelines.  

On publication: Petitioners also argue that Philracom’s guidelines have no force and effect for lack of publication and failure to file copies with the University of the Philippines (UP) Law Center as required by law.

As a rule, the issuance of rules and regulations in the exercise of an administrative agency of its quasi-legislative power does not require notice and hearing,  In Abella, Jr. v. Civil Service Commission, this Court had the occasion to rule that prior notice and hearing are not essential to the validity of rules or regulations issued in the exercise of quasi-legislative powers since there is no determination of past events or facts that have to be established or ascertained.

The third requisite for the validity of an administrative issuance is that it must be within the limits of the powers granted to it.  The administrative body may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute.

The assailed guidelines prescribe the procedure for monitoring and eradicating EIA.  These guidelines are in accord with Philracom’s mandate under the law to regulate the conduct of horse racing in the country.

Anent the fourth requisite, the assailed guidelines do not appear to be unreasonable or discriminatory.  In fact, all horses stabled at the MJCI and PRCI’s premises underwent the same procedure.  The guidelines implemented were undoubtedly reasonable as they bear a reasonable relation to the purpose sought to be accomplished, i.e., the complete riddance of horses infected with EIA.

It also appears from the records that MJCI properly notified the racehorse owners before the test was conducted. Those who failed to comply were repeatedly warned of certain consequences and sanctions.

Furthermore, extant from the records are circumstances which allow respondents to determine from time to time the eligibility of horses as race entries. The lease contract executed between petitioner and MJC contains a proviso reserving the right of the lessor, MJCI in this case, the right to determine whether a particular horse is a qualified horse.  In addition, Philracom’s rules and regulations on horse racing provide that horses must be free from any contagious disease or illness in order to be eligible as race entries.

All told, we find no grave abuse of discretion on the part of Philracom in issuing the contested guidelines and on the part MJCI and PRCI in complying with Philracom’s directive.

34. Perez v. LPG Refillers Association of the Philippines, Inc. (492 SCRA 638, 2006)

Facts:

Batas Pambansa Blg. 33, as amended, penalizes illegal trading, hoarding, overpricing, adulteration, under delivery, and underfilling of petroleum products, as well as possession for trade of adulterated petroleum products and of underfilled liquefied petroleum gas (LPG) cylinders.

The said law sets the monetary penalty for violators to a minimum of P20,000 and a maximum of P50,000.

On June 9, 2000, Circular No. 2000-06-010 was issued by the DOE to implement B.P. Blg. 33.

LPG Refillers Association of the Philippines, Inc. asked the DOE to set aside the Circular for being contrary tolaw. The Department of Energy (DOE), however, denied the request for lack of merit.

LPG Refillers Association of the Philippines, Inc. then filed a petition for prohibition and annulment with prayer for temporary restraining order and/or writ of preliminary injunction before the trial court. After trial on the merits, the trial court nullified the Circular on the ground that it introduced new offenses not included in the law. The court intimated that the Circular, in providing penalties on a per cylinder basis for each violation, might exceed the maximum penalty under the law.

The Petitioner, DOE, moved for a motion for reconsideration, however this was denied by the trial court. Hence, this petition.

Issue:

Whether or not B.P Blg. 33, RA No. 8479 and RA 7638 penalizes the acts and omissions enumerated in the Circular.

Ruling:

For an administrative regulation, such as the Circular in this case, to have the force of penal law:(1) The violation of the administrative regulation must be made a crime by the delegating statute itself; and (2) The penalty for such violation must be provided by the statute itself

35. Eastern Telecommunications Philippines, Inc. v. International Communication Corporation (481 SCRA  163, 2006)

Ruling:

Undoubtedly, the CSC like any other agency has the power to interpret its own rules and any phrase contained in them with its interpretation significantly becoming part of the rules themselves.

x x x It must be remembered that Lands Administrative Order No. 6 is in the nature of procedural rules promulgated by the Secretary of Agriculture and Natural Resources pursuant to the power bestowed on said administrative agency to promulgate rules and regulations necessary for the proper discharge and management of the functions imposed by law upon said office. x x x x Recognizing the existence of such rule-making authority, what is the weight of an interpretation given by an administrative agency to its own rules or regulations? Authorities sustain the doctrine that the interpretation given to a rule or regulation by those charged with its execution is entitled to the greatest weight by the Court construing such rule or regulation, and such interpretation will be followed unless it appears to be clearly unreasonable or arbitrary

The interpretation of an agency of its own rules should be given more weight than the interpretation by that agency of the law it is merely tasked to administer (underscoring supplied).

36. Securities and Exchange Commission (SEC) v. PICOP Resources

G.R. NO. 164314 : September 26, 2008

REYES, R.T., J.:

Facts:

PICOP Resources, Inc. (PICOP) filed with petitioner Securities and Exchange Commission (SEC) an application for amendment of its Articles of Incorporation (AOI) extending its corporate existence for another fifty (50) years. PICOP paid the filing fee of P210.00 based on SEC Memorandum Circular No. 2, Series of 1994 (1994 Circular).

 SEC, however, informed PICOP of the appropriate filing fee of P12 Million, or 1/5 of 1% of its authorized capital stock of P6 Billion.³ PICOP sought clarification of the applicable filing fee and the reduction of the amount of P12 Million prescribed by the SEC.⁴ What followed were several exchanges of correspondence on the applicable filing fee for amended AOI extending the corporate term of PICOP

Issue:

Ruling:

We resolve the question in the affirmative. The 1986 Circular is the proper basis of the computation since it specifically provided for filing fees in cases of extension of corporate term. A proviso of the same nature is wanting in the other circulars relied on by the SEC at the time PICOP filed its request for extension.

The rule is well-entrenched in this jurisdiction that the interpretation given to a rule or regulation by those charged with its execution is entitled to the greatest weight by the courts construing such rule or regulation. While this Court has consistently yielded and accorded great respect to such doctrine, it will not hesitate to set aside an executive interpretation if there is an error of law, abuse of power, lack of jurisdiction or grave abuse of discretion clearly conflicting with the letter and spirit of the law.

In Eastern Telecommunications Philippines, Inc. v. International Communication Corporation, the Court laid the guidelines in resolving disputes concerning the interpretation by an agency of its own rules and regulations, to wit: (1) Whether the delegation of power was valid; (2) Whether the regulation was within that delegation; (3) Whether it was a reasonable regulation under a due process test.

In the case under review, there is an evident violation of the due process requirement. It is admitted that the SEC failed to satisfy the requirements for promulgation when it filed the required copies of the said regulation at the UP Law Center only fourteen (14) years after it was supposed to have taken effect.

The SEC violated the due process clause insofar as it denied the public prior notice of the regulations that were supposed to govern them. The SEC cannot wield the provisions of the 1990 Circular against PICOP and expect its outright compliance. The circular was not yet effective during the time PICOP filed its request to extend its corporate existence in 2002. In fact, it was only discovered in 2004, fifteen (15) days before the SEC filed its second motion for reconsideration.

37. Republic v. Pilipinas Shell Petroleum Corporation (550 SCRA 680, 2008)

Facts:

 Respondent is a corporation duly organized existing under the laws of the Philippines. It is engaged in the business of refining oil, marketing petroleum, and other related activities.

The Department of Energy (DOE) is a government agency under the direct control and supervision of the Office of the President. The Department is mandated by Republic Act No. 7638 to prepare, integrate, coordinate, supervise and control all plans, programs, projects and activities of the Government relative to energy exploration, development, utilization, distribution and conservation.

Oil Price Stabilization Fund (OPSF) was created under Presidential Decree No. 1956 for the purpose of minimizing frequent price changes brought about by exchange rate adjustments and/or increase in world market prices of crude oil and imported petroleum products.

Letter of Instruction No. 1431 dated 15 October 1984 was issued directing the utilization of the OPSF to reimburse oil companies the additional costs of importation of crude oil and petroleum products due to fluctuation in foreign exchange rates to assure adequate and continuous supply of petroleum products at reasonable prices.

Letter of Instruction No. 1441, issued on 20 November 1984, mandated the Board of Energy (now, the Energy Regulatory Board) to review and reset prices of domestic oil products every two months to reflect the prevailing prices of crude oil and petroleum. The prices were regulated by adjusting the OPSF impost, increasing or decreasing this price component as necessary to maintain the balance between revenues and claims on the OPSF.

Issue:

THE SURCHARGE IMPOSED BY MINISTRY OF FINANCE (MOF) CIRCULAR No. 1-85 HAS BEEN AFFIRMED BY E.O. NO. 137 HAVING RECEIVED VITALITY FROM A LEGISLATIVE ENACTMENT, MOF CIRCULAR NO. 1-85 CANNOT BE RENDERED INVALID BY THE SUBSEQUENT ENACTMENT OF A LAW REQUIRING REGISTRATION OF THE MOF CIRCULAR WITH THE OFFICE OF THE NATIONAL REGISTER

Ruling:

This petition is without merit.

As early as 1986, this Court in Tañada v. Tuvera enunciated that publication is indispensable in order that all statutes, including administrative rules that are intended to enforce or implement existing laws, attain binding force and effect, to wit:

We hold therefore that all statutes, including those of local application and private laws, shall be published as a condition for their effectivity, which shall begin fifteen days after publication unless a different effectivity date is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by the President in the exercise of legislative powers whenever the same are validly delegated by the legislature or, at present, directly conferred by the Constitution. Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation. (Emphasis provided.)

Under the doctrine of Tanada v. Tuvera, the MOF Circular No. 1-85, as amended, is one of those issuances which should be published before it becomes effective since it is intended to enforce Presidential Decree No. 1956. The said circular should also comply with the requirement stated under Section 3 of Chapter 2, Book VII of the Administrative Code of 1987 - filing with the ONAR in the University of the Philippines Law Center - for rules that are already in force at the time the Administrative Code of 1987 became effective. These requirements of publication and filing were put in place as safeguards against abuses on the part of lawmakers and as guarantees to the constitutional right to due process and to information on matters of public concern and, therefore, require strict compliance.

Applying the doctrine enunciated in Tañada v. Tuvera, the Court has previously declared as having no force and effect the following administrative issuances: (1) Rules and Regulations issued by the Joint Ministry of Health-Ministry of Labor and Employment Accreditation Committee regarding the accreditation of hospitals, medical clinics and laboratories; (2) Letter of Instruction No. 1416 ordering the suspension of payments due and payable by distressed copper mining companies to the national government; (3) Memorandum Circulars issued by the Philippine Overseas Employment Administration regulating the recruitment of domestic helpers to Hong Kong; (4) Administrative Order No. SOCPEC 89-08-01 issued by the Philippine International Trading Corporation regulating applications for importation from the People's Republic of China; (5) Corporation Compensation Circular No. 10 issued by the Department of Budget and Management discontinuing the payment of other allowances and fringe benefits to government officials and employees; and (6) POEA Memorandum Circular No. 2 Series of 1983 which provided for the schedule of placement and documentation fees for private employment agencies or authority holders.

In all these cited cases, the administrative issuances questioned therein were uniformly struck down as they were not published or filed with the National Administrative Register. On the other hand, in Republic v. Express Telecommunications Co., Inc, the Court declared that the 1993 Revised Rules of the National Telecommunications Commission had not become effective despite the fact that it was filed with the National Administrative Register because the same had not been published at the time. The Court emphasized therein that "publication in the Official Gazette or a newspaper of general circulation is a condition sine qua non before statutes, rules or regulations can take effect."

38. GMA Network, Inc. v. Movie and Television Review and Classification Board (514 SCRA 191, 2007)

CORONA, J.:

Facts:

GMA Network, Inc. operates and manages the UHF television station, EMC Channel 27. On January 7, 2000, respondent MTRCB issued an order of suspension against petitioner for airing "Muro Ami: The Making" without first securing a permit from it as provided in Section 7 of PD 1986.

The penalty of suspension was based on Memorandum Circular 98-17 dated December 15, 1998⁴ which provided for the penalties for exhibiting a program without a valid permit from the MTRCB.

Petitioner moved for reconsideration of the suspension order

Issue:

Whether Memorandum Circular No. 98-17 was enforceable and binding on petitioner.

Ruling:

MTRCB had jurisdiction over the subject program, Memorandum Circular 98-17, which was the basis of the suspension order, was not binding on petitioner. The Administrative Code of 1987, particularly Section 3 thereof, expressly requires each agency to file with the Office of the National Administrative Register (ONAR) of the University of the Philippines Law Center three certified copies of every rule adopted by it. Administrative issuances which are not published or filed with the ONAR are ineffective and may not be enforced.

Memorandum Circular No. 98-17, which provides for the penalties for the first, second and third offenses for exhibiting programs without valid permit to exhibit, has not been registered with the ONAR as of January 27, 2000. Hence, the same is yet to be effective. It is thus unenforceable since it has not been filed in the ONAR. Consequently, petitioner was not bound by said circular and should not have been meted the sanction provided thereunder.

39. Abella Jr. vs CSC ( 442 SCRA 507, 2004)

Facts:

Petitioner Francisco A. Abella, Jr., a lawyer, retired from the Export Processing Zone Authority (EPZA), now the Philippine Economic Zone Authority (PEZA), on July 1, 1996 as Department Manager of the Legal Services Department. He held a civil service eligibility for the position of Department Manager, having completed the training program for Executive Leadership and Management in 1982 under the Civil Service Academy, pursuant to CSC Resolution No. 850 dated April 16, 1979, which was then the required eligibility for said position.

Two years after his retirement, petitioner was hired by the Subic Bay Metropolitan Authority (SBMA) on a contractual basis. On January 1, 1999, petitioner was issued by SBMA a permanent employment as Department Manager III, Labor and Employment Center. However, when said appointment was submitted to respondent Civil Service Commission Regional Office No. III, it was disapproved on the ground that petitioner’s eligibility was not appropriate. Petitioner was advised by SBMA of the disapproval of his appointment. In view thereof, petitioner was issued a temporary appointment as Department Manager III, Labor and Employment Center, SBMA on July 9, 1999.

Ruling:

Approval Required for Permanent Appointment

A permanent appointment in the career service is issued to a person who has met the requirements of the position to which the appointment is made in accordance with the provisions of law, the rules and the standards promulgated pursuant thereto.It implies the civil service eligibility of the appointee. Thus, while the appointing authority has the discretion to choose whom to appoint, the choice is subject to the caveat that the appointee possesses the required qualifications.

 To make it fully effective, an appointment to a civil service position must comply with all legal requirements. Thus, the law requires the appointment to be submitted to the CSC which will ascertain, in the main, whether the proposed appointee is qualified to hold the position and whether the rules pertinent to the process of appointment were observed. The applicable provision of the Civil Service Law reads:

“SECTION 9. Powers and Functions of the Commission. — The Commission shall administer the Civil Service and shall have the following powers and functions:

 “(h) Approve all appointments, whether original or promotional, to positions in the civil service, except those of presidential appointees, members of the Armed Forces of the Philippines, police forces, firemen, and jail guards, and disapprove those where the appointees do not possess the appropriate eligibility or required qualifications. An appointment shall take effect immediately upon issue by the appointing authority if the appointee assumes his duties immediately and shall remain effective until it is disapproved by the Commission, if this should take place, without prejudice to the liability of the appointing authority for appointments issued in violation of existing laws or rules: Provided, finally, That the Commission shall keep a record of appointments of all officers and employees in the civil service. All appointments requiring the approval of the Commission as herein provided, shall be submitted to it by the appointing authority within thirty days from issuance, otherwise, the appointment becomes ineffective thirty days thereafter.”

40. Yu vs. Orchard Golf and Country Club, Inc.

G.R. NO. 150335: March 1, 2007

CORONA, J.:

Facts:

petitioners Ernesto Yu and Manuel Yuhico went to the Orchard Golf & Country Club to play a round of golf with another member of the club. At the last minute, however, that other member informed them that he could not play with them.⁴ Due to the "no twosome" policy of the Orchard contained in the membership handbook prohibiting groups of less than three players from teeing off on weekends and public holidays before 1:00 p.m.,⁵ petitioners requested management to look for another player to join them.

Because petitioners were unable to find their third player, petitioner Yu tried to convince Francis Montallana, Orchard's assistant golf director, to allow them to play twosome, even if they had to tee off from hole no. 10 of the Palmer golf course. Montallana refused, stating that the flights which started from the first nine holes might be disrupted. Petitioner Yu then shouted invectives at Montallana, at which point he told petitioner Yuhico that they should just tee off anyway, regardless of what management's reaction would be.⁶ Petitioners then teed off, without permission from Montallana. They were thus able to play, although they did so without securing a tee time control slip before teeing off, again in disregard of a rule in the handbook.⁷ As a result of petitioners' actions, Montallana filed a report on the same day with the board of directors (the board).⁸

Issue:

Whether or not the regulation is valid for it was not published.

Ruling:

Yes. Ironically, in attempting to demonstrate the nullity of the guidelines, petitioners themselves gave the very reason why their effectivity was unaffected by their lack of publication. Petitioners attached, as an annex to their petition, a letter from then SEC general counsel Eugenio Reyes explaining that "said guidelines was (sic) not published as it (sic) was primarily intended only for the guidance of and compliance by the hearing officers concerned."²⁸ Interpretative regulations and those merely internal in nature regulating only the personnel of the administrative agency and not the public need not be published.²⁹

41. Manila Public School v. Garcia ( 841 SCRA 352, October 2, 2017)

Facts: This is a Petition for Review on Certiorari¹ of the Court of Appeals (CA) Decision² rendered in CA-G.R. SP No. 105797. The CA issued a writ of Prohibition against the immediate and retroactive application of the Premium-Based Policy (PBP), Automatic Policy Loan and Policy Lapse (APL) and Claims and Loans Interdependency Policy (CLIP) to the teacher­-petitioners' claims, without or prior to a complete determination and reconciliation of the employer-share liabilities of the Department of Education (DepEd).³

Issue:

Whether or not Presidential Decree (P.D.) No. 1146 is required to be published to make it valid.

Issue: Covered by this rule are presidential decrees and executive orders promulgated by the President in the exercise of legislative powers whenever the same are validly delegated by the legislature or, at present, directly conferred by the Constitution. Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation.

After Tañada, the Administrative Code of 1987⁴⁰ was enacted, with Section 3(1) of Chapter 2, Book VII, specifically providing that:

Filing. (1) Every agency shall file with the University of the Philippines Law Center three (3) certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are not filed within three (3) months from the date shall not thereafter be the basis of any sanction against any party or persons.

In Republic v. Pilipinas Shell Petroleum Corp.,⁴¹ this Court held that the requirements of publication and filing must be strictly complied with, as these were designed to safeguard against abuses on the part of lawmakers and to guarantee the constitutional right to due process and to information on matters of public concern. Even in cases where the parties participated in the public consultation and submitted their respective comments, strict compliance with the requirement of publication cannot be dispensed with.⁴²

While GSIS filed copies of the subject resolutions with the Office of the National Administrative Register (ONAR), it only did so after the claims of the retirees and beneficiaries had already been lodged.⁴³ The resolutions were not published in either the Official Gazette or a newspaper of general circulation in the country.

TOPIC: III. G QUASI JUDICIAL POWER

42. METROPOLITAN BANK and TRUST COMPANY, INC.,   vs. NATIONAL WAGES AND PRODUCTIVITY COMMISSION and REGIONAL TRIPARTITE WAGES AND PRODUCTIVITY BOARD - REGION II

G.R. NO. 144322 . February 6, 2007

Facts: On October 17, 1995, the Regional Tripartite Wages and Productivity Board, Region II, Tuguegarao, Cagayan (RTWPB), by virtue of Republic Act No. 6727 (R.A. No. 6727), otherwise known as the Wage Rationalization Act, issued Wage Order No. R02-03 (Wage Order), as follows: Section 1. Upon effectivity of this Wage Order, all employees/workers in the private sector throughout Region II, regardless of the status of employment are granted an across-the-board increase of P15.00 daily.

The Wage Order was published in a newspaper of general circulation on December 2, 1995 and took effect on January 1, 1996. Its Implementing Rules were approved on February 14, 1996. Per Section 13 of the Wage Order, any party aggrieved by the Wage Order may file an appeal with the National Wages and Productivity Commission (NWPC) through the RTWPB within 10 calendar days from the publication of the Wage Order.

Banker’s Council in a letter inquiry to NWPC requested for ruling to seek exemption from coverage of the wage order since the members bank are paying more than the regular wage. NWPC replied that the member banks are covered by the wage order and does not fall with the exemptible categories.

In another letter inquiry, Metrobank asked for the interpretation of the applicability of the wage order. NWPC referred it to RTWPB. RTWPB in return clarified that establishments in Region 2 are covered by the wage order. Petitioner filed a petition with the CA and denied the petition.

Issue(s):

(1)  whether Wage Order No. R02-03 is void and of no legal effect

(2)  whether the respondent is exercising quasi or judicial functions in the issuance of the assailed wage order ?

Held:

1. As to the second issue, petitioner submits that ultra vires acts of administrative agencies are correctible by way of a writ of certiorari and prohibition; that even assuming that it did not observe the proper remedial procedure in challenging the Wage Order, the remedy of certiorari and prohibition remains available to it by way of an exception, on grounds of justice and equity; that its failure to observe procedural rules could not have validated the manner by which the disputed Wage Order was issued.
   
   Respondents counter that the present petition is fatally defective from inception since no appeal from the Wage Order was filed by petitioner; that the letter-query to the NWPC did not constitute the appeal contemplated by law; that the validity of the Wage Order was never raised before the respondents; that the implementation of the Wage Order had long become fait accompli for prohibition to prosper. Respondents insist that, even if petitioner's procedural lapses are disregarded, the Wage Order was issued pursuant to the mandate of R.A. No. 6727 and in accordance with the Court's pronouncements in the ECOP case;^[23] that the Wage Order is not an intrusion on property rights since it was issued after the required public hearings; that the Wage Order does not undermine but in fact recognizes the right to collective bargaining; that the Wage Order did not result in wage distortion.
   
   The Court shall first dispose of the procedural matter relating to the propriety of petitioner's recourse to the CA before proceeding with the substantive issue involving the validity of the Wage Order.
   
   Certiorari as a special civil action is available only if the following essential requisites concur: (1) it must be directed against a tribunal, board, or officer exercising judicial or quasi-judicial functions; (2) the tribunal, board, or officer must have acted without or in excess of jurisdiction or with grave abuse of discretion amounting lack or excess of jurisdiction; and (3) there is no appeal nor any plain, speedy, and adequate remedy in the ordinary course of law.^[24]
   
   On the other hand, prohibition as a special civil action is available only if the following essential requisites concur: (1) it must be directed against a tribunal, corporation, board, officer, or person exercising functions, judicial, quasi-judicial, or ministerial; (2) the tribunal, corporation, board or person has acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting lack or excess of jurisdiction; and (3) there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law.^[25]
   
   A respondent is said to be exercising judicial function where he has the power to determine what the law is and what the legal rights of the parties are, and then undertakes to determine these questions and adjudicate upon the rights of the parties.^[26] Quasi-judicial function is a term which applies to the action, discretion, etc., of public administrative officers or bodies, who are required to investigate facts or ascertain the existence of facts, hold hearings, and draw conclusions from them as a basis for their official action and to exercise discretion of a judicial nature.^[27] Ministerial function is one which an officer or tribunal performs in the context of a given set of facts, in a prescribed manner and without regard to the exercise of his own judgment upon the propriety or impropriety of the act done.^[28]
   
   In the issuance of the assailed Wage Order, respondent RTWPB did not act in any judicial, quasi-judicial capacity, or ministerial capacity. It was in the nature of subordinate legislation, promulgated by it in the exercise of delegated power under R.A. No. 6727. It was issued in the exercise of quasi-legislative power. Quasi-legislative or rule-making power is exercised by administrative agencies through the promulgation of rules and regulations within the confines of the granting statute and the doctrine of non-delegation of certain powers flowing from the separation of the great branches of the government.

43. G.R. No. 189571. January 21, 2015

THE HONORABLE MONETARY BOARD
vs. PHILIPPINE VETERANS BANK,

Facts:  Respondent established a pension loan product for bona fide veterans or their surviving spouses, as well as salary loan product for teachers and low-salaried employees pursuant to its mandate under Republic Act (RA) Nos. 3518³ and 7169⁴ to provide financial assistance to veterans and teachers.

As its clientele usually do not have real estate or security to cover their pension or salary loan, other than their continuing good health and/or employment, respondent devised a program by charging a premium in the form of a higher fee known as Credit Redemption Fund(CRF) from said borrowers. Resultantly, Special Trust Funds were established by respondent for the pension loans of the veteran-borrowers, salary loans of teachers and low-salaried employees. These trust funds were, in turn, managed by respondent’s Trust and Investment Department, with respondent as beneficiary. The fees charged against the borrowers were credited to the respective trust funds, which would be used to fully pay the outstanding obligation of the borrowers in case of death.

An examination was conducted by the Supervision and Examination Department (SED) II of the Bangko Sentral ng Pilipinas (BSP). It found, among other things, that respondent’s collection of premiums from the proceeds of various salary and pension loans of borrowers to guarantee payment of outstanding loans violated Section 54 of RA No. 8791⁵ which states that banks shall not directly engage in insurance business as insurer.

Subsequently, respondent wrote a letter to petitioners justifying the existence of the CRF.

Thus, respondent was requested to discontinue the collection of said fees.

On February 24, 2004, respondent complied with the BSP’s directive and discontinued the collection of fees for CRF.

On September 16, 2005, petitioners issued Monetary Board (MB) Resolution No. 1139 directing respondent’s Trust and Investment Department to return to the borrowers all the balances of the CRF in the amount of ₱144,713,224.54 as of August31, 2004, and to preserve the records of borrowers who were deducted CRFs from their loan proceeds pending resolution or ruling of the Office of the General Counsel of the BSP.

Thus, respondent requested reconsideration However denied in a letter dated December 5, 2006.  The RTC granted respondent’s petition for declaratory relief

when it collected additional fees known as "Credit Redemption Fund (CRF)" from its loan borrowers was not directly engaged in insurance business as insurer; hence, it did not violate Sec. 54, R.A. 8791, otherwise known as the "General Banking Law of 2000."

The Monetary Board Resolution No. 1139 dated August 26, 2005 is hereby DECLARED null and void.

Issue: whether or not the petition for declaratory relief is proper.

Held:  We rule in the negative.

Section 1, Rule 63 of the Rules of Court governs petitions for declaratory relief, viz.:

SECTION 1. Who may file petition. – Any person interested under a deed, will, contract or other written instrument, whose rights are affected by a statute, executive order or regulation, ordinance, or any other governmental regulation may, before breach or violation thereof, bring an action in the appropriate Regional Trial Court to determine any question of construction or validity arising, and for a declaration of his rights or duties, thereunder.

Declaratory relief is defined as an action by any person interested in a deed, will, contract or other written instrument, executive order or resolution, to determine any question of construction or validity arising from the instrument, executive order or regulation, or statute; and for a declaration of his rights and duties thereunder. The only issue that may be raised in such a petition is the question of construction or validity of provisions in an instrument or statute.⁹ Ergo, the Court, in CJH Development Corporation v. Bureau of Internal Revenue,¹⁰ held that in the same manner that court decisions cannot be the proper subjects of a petition for declaratory relief, decisions of quasijudicial agencies cannot be subjects of a petition for declaratory relief for the simple reason that if a party is not agreeable to a decision either on questions of law or of fact, it may avail of the various remedies provided by the Rules of Court.

In view of the foregoing, the decision of the BSP Monetary Board cannot be a proper subject matter for a petition for declaratory relief since it was issued by the BSP Monetary Board inthe exercise of its quasi-judicial powers or functions.

The authority of the petitioners to issue the questioned MB Resolution emanated from its powers under Section 37¹¹ of RA No. 7653¹² and Section 66¹³ of RA No. 8791¹⁴ to impose, at its discretion, administrative sanctions, upon any bank for violation of any banking law.

The nature of the BSP Monetary Board as a quasi-judicial agency, and the character of its determination of whether or not appropriate sanctions may be imposed upon erring banks, as anexercise of quasi-judicial function, have been recognized by this Court in the case of United Coconut Planters Bank v. E. Ganzon, Inc.,¹⁵ to wit:

A perusal of Section 9(3) of Batas Pambansa Blg. 129, as amended, and Section 1, Rule 43 of the 1997 Rules of Civil Procedure reveals that the BSP Monetary Board is not included among the quasi-judicial agencies explicitly named therein, whose final judgments, orders, resolutions or awards are appea lable to the Court of Appeals. Such omission, however, does not necessarily mean that the Court of Appeals has no appellate jurisdiction over the judgments, orders, resolutions, or awards of the BSP Monetary Board.

It bears stressing that Section 9(3) of Batas Pambansa Blg. 129, as amended, on the appellate jurisdiction of the Court of Appeals, generally refers to quasi-judicial agencies, instrumentalities, boards or commissions. The use of the word "including" in the said provision, prior to the naming of several quasi-judicial agencies, necessarily conveys the very idea of non-exclusivity of the enumeration. The principle of expressio unius est exclusio alterius does not apply where other circumstances indicate that the enumeration was not intended to be exclusive, or where the enumeration is by way of example only.

Similarly, Section 1, Rule 43 of the 1997 Revised Rules of Civil Procedure merely mentions several quasi-judicial agencies without exclusivity in the phraseology. The enumeration of the agencies therein mentioned is not exclusive. The introductory phrase "[a]mong these agencies are" preceding the enumeration of specific quasi-judicial agencies only highlights the fact that the list is not meant to be exclusive or conclusive. Further, the overture stresses and acknowledges the existence of other quasi-judicial agencies not included inthe enumeration but should be deemed included.

A quasi-judicial agency or body isan organ of government other than a court and other thana legislature, which affects the rights of private parties through either adjudication or rule-making. The very definition of an administrative agency includes itsbeing vested with quasi-judicial powers. The ever increasing variety of powers and functions given to administrative agencies recognizes the need for the active intervention of administrative agencies in matters calling for technical knowledge and speed in countless controversies which cannot possibly be handled by regular courts. A "quasi-judicial function" is a term which applies to the action, discretion, etc. of public administrative officers or bodies, who are required to investigate facts, or ascertain the existence of facts, hold hearings, and draw conclusions from them, as a basis for their official action and to exercise discretion of a judicial nature.

Undoubtedly, the BSP Monetary Board is a quasi-,judicial agency exercising quasi-,judicial powers or functions. As aptly observed by the Court of Appeals, the BSP Monetary Board is an independent central monetary authority and a body corporate with fiscal and administrative autonomy, mandated to provide policy directions in the areas of money, banking, and credit. It has the power to issue subpoena, to sue for contempt those refusing to obey the subpoena without justifiable reason, to administer oaths and compel presentation of books, records and others, needed in its examination, to impose fines and other sanctions and to issue cease and desist order. Section 37 of Republic Act No. 7653, in particular, explicitly provides that the BSP Monetary Board shall exercise its discretion in determining whether administrative sanctions should be imposed on banks and quasi-banks, which necessarily implies that the BSP Monetary Board must conduct some form of investigation or hearing regarding the same.¹⁶

A priori, having established that the BSP Monetary Board is indeed a quasi-judicial body exercising quasi-judicial functions, then its decision in MB Resolution No. 1139 cannot be the proper subject of declaratory relief.

TOPIC: III.H LICENSING AND RATE FIXING POWER

44.  PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner,
vs.
THE SECRETARY OF EDUCATION, CULTURE AND SPORTS, respondent.

G.R. No. 78385 August 31, 1987

GANCAYCO, J.:

This is an original Petition for prohibition with a prayer for the issuance of a writ of preliminary injunction.

Petitioner Philippine Consumers Foundation, Inc. is a non-stock, non-profit corporate entity duly organized and existing under the laws of the Philippines. The herein respondent Secretary of Education, Culture and Sports is a ranking cabinet member who heads the Department of Education, Culture and Sports of the Office of the President of the Philippines.

On February 21, 1987, the Task Force on Private Higher Education created by the Department of Education, Culture and Sports (hereinafter referred to as the DECS) submitted a report entitled "Report and Recommendations on a Policy for Tuition and Other School Fees." The report favorably recommended to the DECS the following courses of action with respect to the Government's policy on increases in school fees for the schoolyear 1987 to 1988 —

(1) Private schools may be allowed to increase its total school fees by not more than 15 per cent to 20 per cent without the need for the prior approval of the DECS. Schools that wish to increase school fees beyond the ceiling would be subject to the discretion of the DECS;

(2) Any private school may increase its total school fees in excess of the ceiling, provided that the total schools fees will not exceed P1,000.00 for the schoolyear in the elementary and secondary levels, and P50.00 per academic unit on a semestral basis for the collegiate level. 

through the respondent Secretary of Education, Culture and Sports issued an Order authorizing, inter alia, the 15% to 20% increase in school fees as recommended by the Task Force. The petitioner sought a reconsideration of the said Order, apparently on the ground that the increases were too high. ² Thereafter, the DECS issued Department Order No. 37 dated April 10, 1987 modifying its previous Order and reducing the increases to a lower ceiling of 10% to 15%, accordingly. ³ Despite this reduction, the petitioner still opposed the increases.

In support of the first argument, the petitioner argues that while the DECS is authorized by law to regulate school fees in educational institutions, the power to regulate does not always include the power to increase school fees. ⁵

Regarding the second argument, the petitioner maintains that students and parents are interested parties that should be afforded an opportunity for a hearing before school fees are increased. In sum, the petitioner stresses that the questioned Order constitutes a denial of substantive and procedural due process of law.

Held:

We disagree.

The function of prescribing rates by an administrative agency may be either a legislative or an adjudicative function. If it were a legislative function, the grant of prior notice and hearing to the affected parties is not a requirement of due process. As regards rates prescribed by an administrative agency in the exercise of its quasi-judicial function, prior notice and hearing are essential to the validity of such rates. When the rules and/or rates laid down by an administrative agency are meant to apply to all enterprises of a given kind throughout the country, they may partake of a legislative character. Where the rules and the rates imposed apply exclusively to a particular party, based upon a finding of fact, then its function is quasi-judicial in character. ⁹a

Is Department Order No. 37 issued by the DECS in the exercise of its legislative function? We believe so. The assailed Department Order prescribes the maximum school fees that may be charged by all private schools in the country for schoolyear 1987 to 1988. This being so, prior notice and hearing are not essential to the validity of its issuance.

45. REPUBLIC OF THE PHILIPPINES vs. MANILA ELECTRIC COMPANY

G.R. No. 141314.November 15, 2002

PUNO, J.:

46. PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION, 
vs. JOSE LUIS A. ALCUAZ

G.R. No. 84818 December 18, 1989

REGALADO, J.:

Facts:

The petition before us seeks to annul and set aside an Order 1 issued by respondent Commissioner Jose Luis Alcuaz of the National Telecommunications Commission

Herein petitioner is engaged in providing for services involving telecommunications. Charging rates for certain specified lines that were reduced by order of herein respondent Jose Alcuaz Commissioner of the National Telecommunications Commission. The rates were ordered to be reduced by fifteen percent (15%) due to Executive Order No. 546 which granted the NTC the power to fix rates. Said order was issued without prior notice and hearing.

Under Section 5 of Republic Act No. 5514, petitioner was exempt from the jurisdiction of the then Public Service Commission, now respondent NTC. However, pursuant to Executive Order No. 196 issued on June 17, 1987, petitioner was placed under the jurisdiction, control and regulation of respondent NTC

Issue: Whether Executive Order 546 is unconstitutional.

Held:

In Vigan Electric Light Co., Inc. vs. Public Service Commission the Supreme Court said that although the rule-making power and even the power to fix rates- when such rules and/or rates are meant to apply to all enterprises of a given kind throughout the Philippines-may partake of a legislative character. Respondent Alcuaz no doubt contains all the attributes of a quasi-judicial adjudication. Foremost is the fact that said order pertains exclusively to petitioner and to no other

The respondent admits that the questioned order was issued pursuant to its quasi-judicial functions. It, however, insists that notice and hearing are not necessary since the assailed order is merely incidental to the entire proceedings and, therefore, temporary in nature but the supreme court said that While respondents may fix a temporary rate pending final determination of the application of petitioner, such rate-fixing order, temporary though it may be, is not exempt from the statutory procedural requirements of notice and hearing

The Supreme Court Said that it is clear that with regard to rate-fixing, respondent has no authority to make such order without first giving petitioner a hearing, whether the order be temporary or permanent. In the Case at bar the NTC didn’t scheduled hearing nor it did give any notice to the petitioner

47.

ERNESTO B. FRANCISCO, JR. and JOSE MA. O. HIZON, Petitioners, vs.TOLL REGULATORY BOARD, PHILIPPINE NATIONAL CONSTRUCTION CORPORATION, MANILA NORTH TOLLWAYS CORPORATION, BENPRES HOLDINGS CORPORATION, FIRST PHILIPPINE INFRASTRUCTURE DEVELOPMENT CORPORATION, TOLLWAY MANAGEMENT CORPORATION, PNCC SKYWAY CORPORATION, CITRA METRO MANILA TOLLWAYS CORPORATION and HOPEWELL CROWN INFRASTRUCTURE, INC., Respondents.

G.R. No. 166910. October 19, 2010

Velasco, Jr. J.

Respondent: Toll Regulatory Board, Philippine National Construction Corporation, Manila North Tollways Corporation, Benpres Holdings Corporation, First Philippine Infrastructure Development Corporation, Tollway Management Corporation, PNCC Skyway Corporation, Citra Metro Manila Tollways Corporation, and Hopewell Crown Infrastructure, Inc.

Facts:

President Marcos issued PD 1112 authorizing the establishment of toll facilities on public improvements. It acknowledged the huge financial requirements and the need to tap the resources of the private sector to implement the government’s infrastructure programs. PD 1112 allowed the collection of toll fees for the use of certain public improvements that would allow a reasonable rate of return on investments. The same decree created the Toll Regulatory Board, vesting it with the power to enter into contracts for the construction, maintenance, and operation of tollways, grant authority to operate a toll facility, issue the necessary Toll Operation Certificate (TOC) and fix initial toll rates, and adjust it from time to time after due notice and hearing. PD 1113 was issued granting the Philippine National Construction Corporation for a period of 30 years, a franchise to operate toll facilities in the North Luzon and South Luzon Expressways. Subsequently, PD 1894 was issued further granting the PNCC a franchise over the Metro Manila Expressway and the expanded delineated NLEX and SLEX.

Then came the 1987 Constitution with its franchise provision. In 1993, the Government Corporate

Counsel held that the PNCC may enter into a joint venture agreement with private entities without going into public bidding. On February 1994, the DPWH together with other private entities executed a MOU to open the door for entry of private capital in the Subic and Clark extension projects. PNCC entered into a financial and technical JVAs with entities for the toll operation of its franchised areas. Several Supplemental Toll Operation Agreements (STOA) were entered for the South Metro Manila Skyway, NLEX Expansion, and South Luzon Expressway Projects.

 Petitioners seek to nullify the various STOAs and assail the constitutionality of Sections 3(a and d) of PD 1112 in relation to Section 8(b) of PD 1894. Insofar as they vested the TRB the power to issue, modify, and promulgate toll rate changes while given the ability to collect tolls.

Issue: Whether or not the TRB may be empowered to grant authority to operate the toll facility/system.

Ruling:

The TRB was granted sufficient power to grant a qualified person or entity with authority to operate the toll facility/system. By explicit provisions of the PDs, the TRB was given power to grant administrative franchise for toll facility projects. The limiting thrust of Article 11, Section 11 of the Constitution on the grant of franchise or other forms of authorization to operate public utilities may, in context, be stated as follows: (a) the grant shall be made only in favor of qualified Filipino citizens or corporations; (b) Congress can impair the obligation of franchises, as contracts; and (c) no such authorization shall be exclusive or exceed fifty years. Under the 1987 Constitution, Congress has an explicit authority to grant a public utility franchise. However, it may validly delegate its legislative authority, under the power of subordinate legislation, to issue franchises of certain public utilities to some administrative agencies.

Dispositive:

The petitions in G.R. Nos. 166910 173630, and 169917 are hereby DENIED for lack of merit. The petition in G.R. No. 183599 is GRANTED.

TOPIC: IV.A SEPARATION OF ADMIN POWERS AND OTHER POWERS

(A. DOCTRINE OF NON-DELEGATION OF POWERS)

48. G.R. No. L-16812            October 31, 1963

KISHU DALAMAL, Petitioner, vs. DEPORTATION BOARD,

Facts:

Kishu Dalamal, a British subject, was charged, together with other aliens, with having committed certain irregularities in violation of the Central Bank Rules and Regulations before the Deportation Board in a complaint filed by a Special Prosecutor of the Department of Justice.  

Acting on the complaint, the Chairman of the Deportation Board issued a warrant of arrest against Dalamal pursuant to the authority given to said Board by Section 1-(b) of Executive Order No. 398. On August 5, 1958, Dalamal was accordingly arrested, but he was subsequently released upon filing a bond.

Considering that the warrant for his arrest issued by the Deportation Board is illegal because it was issued in violation of Section l-(3), Article III, of our Constitution, Dalamal interposed the present petition for habeas corpus seeking the annulment of the warrant of arrest as well as the cancellation of the bond filed by him for his provisional liberty.  

The grounds on which the illegality of the warrant of arrest are predicated may be itemized as follows: (a) Section 1-(b) of Executive Order No. 398 under which the warrant of arrest was issued by the Deportation Board is repugnant to Section 1-(3), Article III, of our Constitution, under which only judges are empowered to issue warrants, either of arrest or of search, and only upon probable cause, to be determined by a judge after examination under oath or affirmation of the complainant or the witnesses he may produce; and (b) assuming arguendo that the President has the power to order the arrest of an alien as an incident of his power of investigation with a view to his deportation, the delegation of such power to the Deportation Board is unlawful it being in violation of the principle that a power that has been delegated by congress cannot in turn be delegated.  

Issue:

Whether Executive Order No. 398 insofar as it authorizes the Deportation Board to issue warrants of arrest against aliens is null and void.

Held:

Yes.

During the American regime it was the Governor General who exercised the power to deport aliens upon the authority of Section 69 of Act 2711, known as the Administrative Code of 1917. Pursuant thereto, the Governor General designates an agent for the purpose of investigating the charges preferred against him, and upon the report he may later submit, the alien's deportation is either ordered or denied. The investigation is conducted in the manner and form prescribed in said Section 69 (In re McCulloch Dick, 38 Phil. 41).  

Section 69 provides:

SEC. 69. Deportation of subject to foreign power. - A subject of a foreign power residing in the Philippines shall not be deported, expelled, or excluded from said Islands or repatriated to his own country by the President of the Philippines except upon prior investigation, conducted by said Executive or his authorized agent, on the ground upon which such action is contemplated. In such case the person concerned shall be informed of the charge or charges against him and he shall be allowed not less than three days for the preparation of his defense. He shall also have the right to be heard by himself or counsel, to produce witnesses in his own behalf, and to cross-examine the opposing witnesses.

In re McCulloch Dick, supra, this Court stated:

xxx           xxx           xxx

... deportation of aliens by the Governor-General, as an act of state, upon prior investigation conducted in the manner and form prescribed in section 69 of the Administrative Code may properly be regarded as made "under the combined powers" of the Governor-General and the Philippine Legislature; authority for such deportations having been conferred upon the Governor-General, so far as that may be necessary, by the provisions of that section.  

... the Supreme Court of the United States has held, in the case of Tiaco v. Forbes (supra), not only that Congress has the power so to do, but that it did in fact delegate full power to the Philippine Government to deport aliens as an act of state; and, further, that when the Governor-General does in fact deport an alien, by authority of an Act of the Philippine Legislature, the deportation may properly be treated as an act of state, done "under the combined powers" of the Philippine Legislature and the Governor-General. (38 Phil., pp. 71, 98-99.)

Whenever, therefore, the President exercises his power of deporting an alien upon prior investigation conducted in the manner and form prescribed in Section 69 of the Administrative Code of 1917, he does so, not only as an act of state, but also "under the combined powers" of the President and the Legislature. As an act of state, the President has the inherent power to order the deportation of an alien and as incident thereof, his arrest, while at the same time that power may be deemed vested in him thru delegation by the Legislature thru the enactment of an appropriate statute (Section 69, Revised Administrative Code.) But insofar as his power to order the arrest of an alien is concerned, either as a measure to insure his appearance at the investigation proceedings to determine if he is liable to deportation, or an incident of his inherent power to deport to make effective his deportation order, assuming only arguendo that he has such incidental power, that power cannot be delegated either under the principle of delegata potesta non potest delegare,¹or upon the theory that it is non-delegable because it involves the exercise of judgment or discretion.  

Thus, in a case we recently decided, we made, thru Mr. Justice Barrera, the following observation:

Unquestionably, the exercise of the power to order the arrest of an individual demands the exercise of discretion by the one issuing the same, to determine whether under specific circumstances, the curtailment of the liberty of such person is warranted. The fact that the Constitution itself, as well as the statute relied upon, prescribe the manner by which the warrant may be issued, conveys the intent to make the issuance of such warrant dependent upon conditions the determination of the existence of which requires the use of discretion by the person issuing the same. In other words, the discretion of whether a warrant of arrest shall issue or not is personal to the one upon whom the authority devolves. And authorities are to the effect that while ministerial duties may be delegated, official functions requiring the exercise of discretion and judgment, may not be so delegated. Indeed, an implied grant of power, considering that no express authority was granted by the law on the matter under discussion, that would serve as a curtailment or limitation on the fundamental right of a person, such as his security to life and liberty, must be viewed with caution, if we are to give meaning to the guarantee contained in the Constitution. If this is so, then a delegation of that implied power, nebulous as it is, must be rejected as inimical to the liberties of the people. The guarantees of human rights and freedom can not be made to rest precariously on such a shaky foundation. (Qua Chee Gan, et al. v. The Deportation Board, G.R. No. L-10280, September 30, 1963.)

Our conclusion, therefore, is that Executive Order No. 398 insofar as it authorizes the Deportation Board to issue warrants of arrest against aliens complained of is null and void, it being a power that cannot be delegated, nor is authorized by Section 69 of the Revised Administrative Code.  

50.

EQUI-ASIA PLACEMENT, INC., petitioner, vs. DEPARTMENT OF FOREIGN AFFAIRS (DFA) represented by the HON. DOMINGO L. SIAZON, JR., SECRETARY, DEPARTMENT OF LABOR AND EMPLOYMENT (DOLE), represented by HON. BIENVENIDO LAGUESMA, respondents.

G.R. No. 152214. September 19, 2006

CHICO-NAZARIO, J.:

Facts:

OFW Manny dela Rosa Razon died of ied of acute cardiac arrest while asleep at the dormitory of the Samsong Textile Processing Factory in South Korea. As a result thereof, the OWWA requested petitioner Equi-Asia, the agency responsible for Razon’s recruitment and deployment, to provide for Prepaid Ticket Advice (PTA) and assistance for the repatriation of Razon’s remains. Equi-Asia denied responsibility for providing such assistance arguing that Razon violated his employment contract by unlawfully escaping from his company assignment without prior authorization. In lieu of such assistance, it suggested that Razon’s relatives can avail of the benefits provided for by OWWA in cases involving undocumented/illegal Filipino workers abroad. OWWA, in response to petitioner’s denials, invoked Sections  52 to 55 of the Implementing Rules Governing RA 8042^[1] provding that “the repatriation of OFW, his/her remains and transport of his personal effects is the primary responsibility of the principal or agency and to immediately advance the cost of plane farewithout prior determination of the cause of worker's repatriation”. In consequence thereof, Equi-Asia filed a petition for certiorari with the Court of Appeals questioning the legality and constitutionality of said provisions in the implementing rules on the ground that it expanded Section 15 of RA 8042. It contends thus - Sec. 15^[2] of R.A. 8042 clearly contemplates prior notice and hearing before responsibility thereunder could be established against the agency that sets up the defense of sole fault in avoidance of said responsibility -.Besides, the sections in question unduly grant the powers to require advance payment of the plane fare, to impose the corresponding penalty of suspension in case of non-compliance therewith, within 48 hours and to recover said advance payment from the dead worker's estate upon the return of his remains to the country before the NLRC, when the law itself does not expressly provide for the grant of such powers.

Issue:

Whether or not Sections 52, 53, 54 and 55 of the Omnibus Rules and Regulations Implementing RA 8042, issued by DFA and POEA, is illegal and/or violative of due process such that POEA acted without or in excess of its jurisdiction and/or in grave abuse of discretion in issuing said order to pay said expenses.

Held:

The petition of the petitioner should be dismissed on the following grounds:

(1)  [Procedural] For a petition for certiorari to prosper, the writ must be directed against a tribunal, a board or an officer exercising judicial or quasi-judicial functions. Citing Abella, Jr. v. Civil Service Commission, the Court prefatorily defined and distinguished between quasi-judicial and quasi-legislative powers exercised by administrative agencies. In exercising its quasi-judicial function, an administrative body adjudicates the rights of persons before it, in accordance with the standards laid down by the law. The determination of facts and the applicable law, as basis for official action and the exercise of judicial discretion, are essential for the performance of this function. On these considerations, it is elementary that due process requirements, must be observed. Other hand, quasi-legislative power is exercised by administrative agencies through the promulgation of rules and regulations within the confines of the granting statute and the doctrine of non-delegation of certain powers flowing from the separation of the great branches of the government. Prior notice to and hearing of every affected party, as elements of due process, are not required since there is no determination of past events or facts that have to be established or ascertained. In this case, petitioner assails certain provisions of the Omnibus Rules. However, these rules were clearly promulgated by respondents Department of Foreign Affairs and Department of Labor and Employment in the exercise of their quasi-legislative powers or the authority to promulgate rules and regulations. Because of this, petitioner was, thus, mistaken in availing himself of the remedy of an original action for certiorari as obviously, only judicial or quasi-judicial acts are proper subjects thereof.

(2)  [Delegation of Administrative functions; Rationale] It is now well-settled that delegation of legislative power to various specialized administrative agencies is allowed in the face of increasing complexity of modern life. Given the volume and variety of interactions involving the members of today's society, it is doubtful if the legislature can promulgate laws dealing with the minutiae aspects of everyday life. Hence, the need to delegate to administrative bodies, as the principal agencies tasked to execute laws with respect to their specialized fields, the authority to promulgate rules and regulations to implement a given statute and effectuate its policies. All that is required for the valid exercise of this power of subordinate legislation is that the regulation must be germane to the objects and purposes of the law; and that the regulation be not in contradiction to, but in conformity with, the standards prescribed by the law. Under the first test or the so-called completeness test, the law must be complete in all its terms and conditions when it leaves the legislature such that when it reaches the delegate, the only thing he will have to do is to enforce it. The second test or the sufficient standard test, mandates that there should be adequate guidelines or limitations in the law to determine the boundaries of the delegate's authority and prevent the delegation from running riot.

(3)  [Compliance with test of delegation] Section 53 of the Omnibus Rules is not invalid for contravening Section 15 of the law which states that a placement agency shall not be responsible for a worker's repatriation should the termination of the employer-employee relationship be due to the fault of the OFW. The statute merely states the general principle that in case the severance of the employment was because of the OFW's own undoing, it is only fair that he or she should shoulder the costs of his or her homecoming. Section 15 of Republic Act No. 8042, however, certainly does not preclude a placement agency from establishing the circumstances surrounding an OFW's dismissal from service in an appropriate proceeding. As such determination would most likely take some time, it is only proper that an OFW be brought back here in our country at the soonest possible time lest he remains stranded in a foreign land during the whole time that recruitment agency contests its liability for repatriation. Repatriation is in effect an unconditional responsibility of the agency and/or its principal that cannot be delayed by an investigation of why the worker was terminated from employment. To be left stranded in a foreign land without the financial means to return home and being at the mercy of unscrupulous individuals is a violation of the OFW's dignity and his human rights. These are the same rights R.A. No. 8042 seeks to protect.

51. G.R. No. L-23825      December 24, 1965

EMMANUEL PELAEZ, petitioner, vs. THE AUDITOR GENERAL, respondent.

CONCEPCION, J.:

Facts:

The President of the Philippines, purporting to act pursuant to Section 68 of the Revised Administrative Code, issued Executive Orders Nos. 93 to 121, 124 and 126 to 129; creating thirty-three (33) municipalities enumerated in the margin. Petitioner Emmanuel Pelaez, as Vice President of the Philippines and as taxpayer, instituted the present special civil action, for a writ of prohibition with preliminary injunction, against the Auditor General, to restrain him, as well as his representatives and agents, from passing in audit any expenditure of public funds in implementation of said executive orders and/or any disbursement by said municipalities.

Petitioner alleges that said executive orders are null and void, upon the ground that said Section 68 has been impliedly repealed by Republic Act No. 2370 effective January 1, 1960 and constitutes an undue delegation of legislative power. The third paragraph of Section 3 of Republic Act No. 2370, reads: “Barrios shall not be created or their boundaries altered nor their names changed except under the provisions of this Act or by Act of Congress.”

Issues:

Whether or not Section 68 of Revised Administrative Code constitutes an undue delegation of legislative power.

Ruling:

Yes.

Section 10 (1) of Article VII of our fundamental law ordains:

The President shall have control of all the executive departments, bureaus, or offices, exercise general supervision over all local governments as may be provided by law, and take care that the laws be faithfully executed.

The power of control under this provision implies the right of the President to interfere in the exercise of such discretion as may be vested by law in the officers of the executive departments, bureaus, or offices of the national government, as well as to act in lieu of such officers. This power is denied by the Constitution to the Executive, insofar as local governments are concerned. With respect to the latter, the fundamental law permits him to wield no more authority than that of checking whether said local governments or the officers thereof perform their duties as provided by statutory enactments. Hence, the President cannot interfere with local governments, so long as the same or its officers act within the scope of their authority.

It did entail an undue delegation of legislative powers. The alleged power of the President to create municipal corporations would necessarily connote the exercise by him of an authority even greater than that of control which he has over the executive departments, bureaus or offices. In other words, Section 68 of the Revised Administrative Code does not merely fail to comply with the constitutional mandate. Instead of giving the President less power over local governments than that vested in him over the executive departments, bureaus or offices, it reverses the process and does the exact opposite, by conferring upon him more power over municipal corporations than that which he has over said executive departments, bureaus or offices.

---

 52.

ROMEO P. GEROCHI, KATULONG NG BAYAN (KB) and ENVIRONMENTALIST CONSUMERS NETWORK, INC. (ECN), Petitioners, vs.
DEPARTMENT OF ENERGY (DOE), ENERGY REGULATORY COMMISSION (ERC), NATIONAL POWER CORPORATION (NPC), POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT GROUP (PSALM Corp.), STRATEGIC POWER UTILITIES GROUP (SPUG), and PANAY ELECTRIC COMPANY INC. (PECO), Respondents.

G.R. No. 159796.July 17, 2007

NACHURA, J.:

Facts:

Petitioners filed an original petition for certiorari before the Supreme Court praying that Section 34^[1] of Republic Act (RA) 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA), imposing the Universal Charge, and Rule 18 of the Rules and Regulations (IRR) which seeks to implement the said imposition, be declared unconstitutional. Petitioners also pray that the Universal Charge imposed upon the consumers be refunded and that a preliminary injunction and/or temporary restraining order (TRO) be issued directing the respondents to refrain from implementing, charging, and collecting the said charge. It mainly challenges the said provisions on the ground that the universal charge provided for and sought to be implemented under said provisions is a tax which is to be collected from all electric end-users and self-generating entities. The power to tax is strictly a legislative function and as such, the delegation of said power to any executive or administrative agency like the ERC is unconstitutional, giving the same unlimited authority. The assailed provision clearly provides that the Universal Charge is to be determined, fixed and approved by the ERC, hence leaving to the latter complete discretionary legislative authority.

Issue:

Whether or not there is undue delegation of legislative power to tax on the part of the ERC.

Ruling:

(1)  [Delegation of Powers] Potestas delegata non delegari potest (what has been delegated cannot be delegated). This is based on the ethical principle that such delegated power constitutes not only a right but a duty to be performed by the delegate through the instrumentality of his own judgment and not through the intervening mind of another. + Reiteration of Equi-Asia ruling on rationale of delegation of administrative functions.

(2)  [Compliance with test of delegation] The EPIRA, read and appreciated in its entirety, in relation to Sec. 34 thereof, is complete in all its essential terms and conditions, and that it contains sufficient standards. Although Sec. 34 of the EPIRA merely provides that within one (1) year from the effectivity thereof, a Universal Charge to be determined, fixed and approved by the ERC, shall be imposed on all electricity end-users, and therefore, does not state the specific amount to be paid as Universal Charge, the amount nevertheless is made certain by the legislative parameters provided in the law itself.  Sec. 43(b)(ii) of the EPIRA provides that the ERC shall promulgate and enforce  “Financial capability standards fo rthe generating companies, the TRANSCO, distribution utilities and suppliers: Provided, That in the formulation of the financial capability standards, the nature and function of the entity shall be considered: Provided, further, That such standards are set to ensure that the electric power industry participants meet the minimum financial standards to protect the public interest.”

            Moreover, the ERC does not enjoy a wide latitude of discretion in the determination of the Universal Charge. Sec. 51(d) and (e) of the EPIRA clearly provides that the ERC, in the performance of its functions, shall have the power to calculate the amount of the stranded debts and stranded contract costs of NPC which shall form the basis for ERC in the determination of the universal charge.

            When police power is delegated to administrative bodies with regulatory functions, its exercise should be given a wide latitude. Police power takes on an even broader dimension in developing countries such as ours, where the State must take a more active role in balancing the many conflicting interests in society. The Questioned Order was issued by the ERC, acting as an agent of the State in the exercise of police power. There should be exceptionally good grounds to curtail its exercise. This approach is more compelling in the field of rate-regulation of electric power rates. Electric power generation and distribution is a traditional instrument of economic growth that affects not only a few but the entire nation. It is an important factor in encouraging investment and promoting business. The engines of progress may come to a screeching halt if the delivery of electric power is impaired. Billions of pesos would be lost as a result of power outages or unreliable electric power services. The State thru the ERC should be able to exercise its police power with great flexibility, when the need arises.

TOPIC: IV.C SUFFICIENCY OF STANDARDS

RUBI, ET AL. (manguianes), plaintiffs, vs. THE PROVINCIAL BOARD OF MINDORO, defendant.

G.R. No. L-14078            March 7, 1919

MALCOLM, J.:

FACTS:

The case is an application for habeas corpus in favor of Rubi and other Manguianes of the Province of Mindoro. It is alleged that the Maguianes are being illegally deprived of their liberty by the provincial officials of that province. Rubi and his companions are said to be held on the reservation established at Tigbao, Mindoro, against their will, and one Dabalos is said to be held under the custody of the provincial sheriff in the prison at Calapan for having run away from the reservation.

The provincial governor of Mindoro and the provincial board thereof directed the Manguianes in question to take up their habitation in Tigbao, a site on the shore of Lake Naujan, selected by the provincial governor and approved by the provincial board. The action was taken in accordance with section 2145 of the Administrative Code of 1917, and was duly approved by the Secretary of the Interior as required by said action.

Section 2145 of the Administrative Code of 1917 reads as follows:

SEC. 2145. Establishment of non-Christian upon sites selected by provincial governor. — With the prior approval of the Department Head, the provincial governor of any province in which non-Christian inhabitants are found is authorized, when such a course is deemed necessary in the interest of law and order, to direct such inhabitants to take up their habitation on sites on unoccupied public lands to be selected by him an approved by the provincial board.

Petitioners, however, challenge the validity of this section of the Administrative Code.

Issue:

Whether section 2145 of the Administrative Code of 1917 constitute an unlawful delegation of legislative power by the Philippine Legislature to a provincial official and a department head, therefore making it unconstitutional?

Ruling:

No. The Philippine Legislature has here conferred authority upon the Province of Mindoro, to be exercised by the provincial governor and the provincial board.

In determining whether the delegation of legislative power is valid or not, the distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the later no valid objection can be made. Discretion may be committed by the Legislature to an executive department or official. The Legislature may make decisions of executive departments of subordinate official thereof, to whom it has committed the execution of certain acts, final on questions of fact. The growing tendency in the decision is to give prominence to the "necessity" of the case.

In enacting the said provision of the Administrative Code, the Legislature merely conferred upon the provincial governor, with the approval of the provincial board and the Department Head, discretionary authority as to the execution of the law. This is necessary since the provincial governor and the provincial board, as the official representatives of the province, are better qualified to judge “when such as course is deemed necessary in the interest of law and order”. As officials charged with the administration of the province and the protection of its inhabitants, they are better fitted to select sites which have the conditions most favorable for improving the people who have the misfortune of being in a backward state.

Hence, Section 2145 of the Administrative Code of 1917 is not an unlawful delegation of legislative power by the Philippine Legislature to provincial official and a department head.

WEEK 3 TOPIC: V. A ADMIN PROCEEDINGS

A. CHARACTER OF ADMIN PROCEEDINGS

54.

REPUBLIC OF THE PHILIPPINES, Petitioner, vs. TRINIDAD R.A. CAPOTE, Respondent.

G.R. No. 157043             February 2, 2007

CORONA, J.:

Facts:

In 1998, respondent Trinidad R. A. Capote (guardian ad litem) filed a petition for change of name of her ward from Giovanni Nadores Gallamaso to Giovanni Nadores. The petition alleged that: Giovanni is the illegitimate natural child of Corazon P. Nadores and Diosdado Gallamaso; he was born on July 9, 1982, prior to the effectivity of the New Family Code; his mother made him use the surname of the natural father despite the absence of marriage between them; from the time Giovanni was born and up to the present, his father failed to take up his responsibilities [to him] on matters of financial, physical, emotional and spiritual concerns; Giovanni is now fully aware of how he stands with his father and he desires to have his surname changed to that of his mother’s surname; Giovanni’s mother might eventually petition him to join her in the United States and his continued use of the surname Gallamaso, the surname of his natural father, may complicate his status as natural child; and the change of name will be for the benefit of the minor.

Having found respondent’s petition sufficient in form and substance, the trial court gave due course to the petition. Publication of the petition was ordered and the local civil registrar and the Office of the Solicitor General (OSG) was notified. Since there was no opposition to the petition, respondent moved for leave of court to present her evidence ex parte before a court-appointed commissioner. The OSG, acting through the Provincial Prosecutor, did not object; hence, the lower court granted the motion. After the reception of evidence, the trial court rendered a decision ordering the change of name from Giovanni N. Gallamaso to Giovanni Nadores. 

Petitioner Republic of the Philippines, through the OSG, filed an appeal with a lone assignment of error: the court a quo erred in granting the petition in a summary proceeding. Ruling that the proceedings were sufficiently adversarial in nature as required, the CA affirmed the RTC decision ordering the change of name. 

Petitioner appealed to the Supreme Court contending that the CA erred in affirming the trial court’s decision which granted the petition for change of name despite the non-joinder of indispensable parties. The purported parents and all other persons who may be adversely affected by the child’s change of name should have been made respondents to make the proceeding adversarial. 

Issue(s): 

1. Whether or not the petition for change of name should be granted.

2. Is a proceeding for change of name adversarial?

3. Did Capote comply with the requirement for an adversarial proceeding?

4. When is a proceeding considered adversarial?

Ruling:

1. Yes. The law and facts obtaining here favor Giovanni’s petition. Giovanni availed of the proper remedy, a petition for change of name under Rule 103 of the Rules of Court, and complied with all the procedural requirements. After hearing, the trial court found (and the appellate court affirmed) that the evidence presented during the hearing of Giovanni’s petition sufficiently established that, under Art. 176 of the Civil Code, Giovanni is entitled to change his name as he was never recognized by his father while his mother has always recognized him as her child. A change of name will erase the impression that he was ever recognized by his father. It is also to his best interest as it will facilitate his mother’s intended petition to have him join her in the United States. This Court will not stand in the way of the reunification of mother and son.

2. The OSG is correct in stating that a petition for change of name must be heard in an adversarial proceeding. Unlike petitions for the cancellation or correction of clerical errors in entries in the civil registry under Rule 108 of the Rules of Court, a petition for change of name under Rule 103 cannot be decided through a summary proceeding. There is no doubt that this petition does not fall under Rule 108 for it is not alleged that the entry in the civil registry suffers from clerical or typographical errors. The relief sought clearly goes beyond correcting erroneous entries in the civil registry, although by granting the petition, the result is the same in that a corresponding change in the entry is also required to reflect the change in name. 

3. Capote complied with the requirement for an adversarial proceeding by posting in a newspaper of general circulation notice of the filing of the petition. The lower court also furnished the OSG a copy thereof. Despite the notice, no one came forward to oppose the petition including the OSG. The fact that no one opposed the petition did not deprive the court of its jurisdiction to hear the same nor does it make the proceeding less adversarial in nature. The lower court is still expected to exercise its judgment to determine whether the petition is meritorious or not and not merely accept as true the arguments propounded. Considering that the OSG neither opposed the petition nor the motion to present its evidence ex parte when it had the opportunity to do so, it cannot now complain that the proceedings in the lower court were not adversarial enough.

4. A proceeding is adversarial where the party seeking relief has given legal warning to the other party and afforded the latter an opportunity to contest it. Respondent gave notice of the petition through publication as required by the rules. With this, all interested parties were deemed notified and the whole world considered bound by the judgment therein. In addition, the trial court gave due notice to the OSG by serving a copy of the petition on it. Thus, all the requirements to make a proceeding adversarial were satisfied when all interested parties, including petitioner as represented by the OSG, were afforded the opportunity to contest the petition (Republic of the Philippines vs Trinidad R. A. Capote, G.R. No. 157043, February 2, 2007).

TOPIC: V.B JURISDICTION IN ADMIN PROCEEDINGS

55. GLOBE WIRELESS LTD., petitioner, vs. PUBLIC SERVICE COMMISSION and ANTONIO B. ARNAIZ, respondents.

G.R. No. L-27520 January 21, 1987

Facts:

G.R. No. 27520 [Globe Wireless Ltd., vs. Public Service Commission and Antonio B. Arnaiz]. — Challenged in this petition for certiorari is the jurisdiction of the defunct Public Service Commission [PSC] under Section 21 of Commonwealth Act No. 146, as amended, to discipline and impose a fine upon petitioner, Globe Wireless, Ltd., a duly organized Philippines corporation engaged in ;international telecommunication business under a franchise granted by Public Acts Nos. 3495, 3692 and 4150 as amended by Republic Act No. 4630.

A message addressed to Maria Diaz, Monte Esquina 30, Madrid, Spain, filed by private respondent Antonio B. Arnaiz with the telegraph office of the Bureau of Telecommunications in Dumaguete City was transmitted to the Bureau of Telecommunications in Manila. It was forwarded to petitioner Globe Wireless Ltd. for transmission to Madrid. Petitioner sent the message to the American Cable and Radio Corporation in New York, which, in turn, transmitted the same to the Empresa Nacional de Telecommunicaciones in Madrid. The latter, however, mislaid said message, resulting in its non-delivery to the addressee.

After being informed of said fact, private respondent Arnaiz, sent to then Public Service Commissioner Enrique Medina an unverified letter-complaint relating the incident. The complaint was docketed as PSC Case No. 65-39-OC and petitioner was required to answer the same. Petitioner, in its answer, questioned PSC's jurisdiction over the subject matter of the letter-complaint, even as it denied liability for the non-delivery of the message to the addressee.

Hearing ensued, after which the PSC issued an order finding petitioner "responsible for the inadequate and unsatisfactory service complained of, in violation of the Public Service Act" and ordering it "to pay a fine of TWO HUNDRED [P200.00] PESOS under Sec. 21 of Com. Act 146, as amended." petitioner was likewise required to refund the sum of P19.14 to the remitter of the undelivered message. [Annex "C", petition, . 23, Rollo].

Its motion for reconsideration having been denied, petitioner instituted the instant petition.

Issue:

Whether or not PSC has the power to fine the petitioner

Ruling:

The act complained of consisted in petitioner having allegedly failed to deliver the telegraphic message of private respondent to the addressee in Madrid, Spain. Obviously, such imputed negligence had nothing whatsoever to do with the subject matter of the very limited jurisdiction of the Commission over petitioner.

Moreover, under Section 21 of C.A. No. 146, as amended, the Commission was empowered to impose an administrative fine in cases of violation of or failure by a Public service to comply with the terms and conditions of any certificate or any orders, decisions or regulations of the Commission. petitioner operated under a legislative franchise, so there were no terms nor conditions of any certificate issued by the Commission to violate. Neither was there any order, decision or regulation from the Commission applicable to petitioner that the latter had allegedly violated, disobeyed, defied or disregarded.

Too basic in administrative law to need citation of jurisprudence is the rule that the jurisdiction and powers of administrative agencies, like respondent Commission, are limited to those expressly granted or necessarily implied from those granted in the legislation creating such body; and any order without or beyond such jurisdiction is void and ineffective. The order under consideration belonged to this category.

ACCORDINGLY, the instant petition is hereby granted and the order of respondent Public Service Commission in PSC Case No. 65-39-OC is set aside for being null and void.

56.

NATIONAL HOUSING AUTHORITY, Petitioner, v. COMMISSION ON THE SETTLEMENT OF LAND PROBLEMS, MUNICIPALITY OF SAN JOSE DEL MONTE, BULACAN, SPS. ANGEL and ROSARIO CRUZ, RUFINO LAAN, RUFINO LAAN SANTOS, ANDRES NEPOMUCENO, SPS. ALBERTO and HERMINIA HAGOS, LEON GUILALAS, SPS. OSCAR and HAYDEE BADILLO, Respondents.

[G.R. NO. 142601 : October 23, 2006]

SANDOVAL-GUTIERREZ, J.:

The undisputed facts are:

Since 1968, there has been an existing boundary dispute between the Municipality of San Jose del Monte, Bulacan (one of herein respondents) and the City of Caloocan. In order to resolve the long-challenged conflict, the Sangguniang Bayan of San Jose del Monte passed and approved Resolution No. 20-02-94³ on February 10, 1994. This resolution recognizes the official boundary of respondent municipality and the City of Caloocan, described as follows:

ON JOINT MOTION of all members present;

RESOLVED, as it is hereby resolved to recognize the official boundary of the Municipality of San Jose del Monte, Bulacan and the City of Caloocan, Metro Manila as the true and correct line marking between the two Local Government Units as shown by the attached certified true copy of the geographic position and plain grid coordinates of Caloocan, Rizal per CAD-267 specifically from MBM (Municipal Boundary Monument) 22 to MBM 33;

x x x

On August 8, 1995, another Resolution⁴ was passed by the Sangguniang Bayan of San Jose del Monte recognizing the geographic position and plane coordinates of Tala Estate, Caloocan City contained in BM No. 11-24 as the "lot lines" delineating the boundary between the Municipality of San Jose del Monte and Caloocan City. This prompted the Department of Environment and Natural Resources (DENR), Region III to conduct a relocation survey.

On September 15, 1995, the survey team submitted a Comprehensive Report,⁵ some excerpts of which provide:

ISSUES, PROBLEMS AND ANALYSIS

1. The geographic positions of MBM Nos. 22 to 33, Cad 267, Caloocan Cadastre was the basis for the establishment of the true and correct boundary between the municipality and Caloocan City. However, during the dialogue with concerned government agencies on May 12, 1995, the municipality of San Jose del Monte, Bulacan, emphasized that the boundary between the two local government units is the imaginary straight line between two boundary monuments, starting from MBM Nos. 22 to 33.

2. The FNSP-G surveying team plotted/drafted in a topographic map all pertinent records affecting boundary disputes of the two locality, such as the geographic positions and coordinates of MBM Nos. 22 to 33 Cad 267 Caloocan Cadastre, BM Nos. 11 to 23 of Tala Estate lot lines. Tala Estate lot lines were plotted approximately by scale, because there were no records on its geographic coordinates and incomplete cadastral maps. The findings are the following:

a) The plotted positions of MBM Nos. 23 to 30, 32 and 33 Cad 267 Caloocan Cadastre are almost identical or equivalent to BM Nos. 12 to 16, 18 to 20, 22 and 23 of Tala Estate.

b) The lot lines of Tala Estate traverses thru Marilao River.

c) The northern portion of the lot lines of Parcels 1, 2 and 3 SWO-41615 Tala Estate indicated that it traverses thru Marilao River.

3. In Municipal Resolution No. 06-08-95 dated August 8, 1995, it is requested that the geographic positions of BM Nos. 11 to 24, Tala Estate shall be recognized as the official lots lines which delineates the boundaries of San Jose del Monte, Bulacan and Caloocan City. Moreover, the resolution is opposed to the delineation of Marilao River as the boundary of two localities, as embodied in SWO-41615.

4. If the lot lines of Parcels 1, 2 and 3, SWO-41615 will be the basis for the boundaries of the two LGUs, Marilao River will be the natural boundary between the two LGUs; if BM 11 to 24, Tala Estate shall be the basis for the boundaries, some northern portions of Parcels 1, 2 and 3, SWO-41615, portions of Bankers Village and Pangarap Village belongs to the Municipality of San Jose del Monte, Bulacan."

The Comprehensive Report states that the San Jose del Monte Sangguniang Bayan Resolutions contradict the delineation embodied in SWO-41615 of the Tala Estate, a 598-hectare property allotted by the government mainly for housing and resettlement site under the administration of the National Housing Authority (NHA), pursuant to Presidential Proclamation No. 843 issued by then President Ferdinand E. Marcos on April 26, 1971.

Unsatisfied with the report of the DENR, respondent municipality filed a complaint with the Commission on Settlement of Land Problems (COSLAP),⁶ against petitioner NHA. Several residents of San Jose del Monte, namely: spouses Angel and Rosario Cruz, Rufino Laan, Rufina Laan Santos, Andres Nepomuceno, spouses Alberto and Herminia Hagos, Leon Guilalas, spouses Oscar and Haydee Badillo, and Leoncio Laan (herein private respondents) joined the municipality as complainants in the said case. They alleged that their properties are within the Municipality of San Jose del Monte; that Presidential Proclamation No. 843 does not cover their properties; and that the NHA's Bagong Silang Resettlement Project encroaches on their landholdings. They prayed that the NHA be ordered to award them damages. Incidentally, the City of Caloocan was not impleaded as a party in their complaint.

On June 22, 1998, the COSLAP rendered its Resolution ruling that the correct boundary between respondents San Jose del Monte and Caloocan City is that specified in the twin Resolutions of the Sangguniang Bayan of said respondents. The COSLAP likewise held that all other issues, such as those raised by respondents, are mere incidents of such ruling. In effect, the COSLAP ruled that the land covered by the NHA project, being within the Municipality of San Jose del Monte, encroaches upon respondents' properties.

On January 14, 1999, petitioner NHA, upon invitation of the Bureau of Local Government Supervision of the Department of Interior and Local Government (Bureau), attended a meeting held on January 26, 1999 between the local officials of respondent municipality and Caloocan City. The purpose of the meeting was to provide an avenue for the discussion of the territorial boundary between the two local government units. During the meeting, petitioner NHA posed strong opposition to the COSLAP Resolution, contending that the latter has no jurisdiction over the boundary dispute. Subsequently, the Bureau directed the parties to submit their respective position papers within 30 days.

Instead of submitting a position paper, respondent municipality filed with the COSLAP a motion for execution of its Resolution dated June 22, 1998. On May 17, 1999, the COSLAP granted the motion and issued a writ of execution.

Petitioner NHA then filed with the Court of Appeals a petition for certiorari alleging that in issuing the June 22, 1998 Resolution and the writ of execution, COSLAP acted without jurisdiction.

On November 16, 1999, the Appellate Court dismissed the petition for having been filed out of time and for petitioner's failure to avail of the remedy of appeal.

Petitioner then filed a motion for reconsideration but it was denied.

Hence, this Petition for Review on Certiorari .

At the threshold, let it be stated that a judgment issued by a quasi-judicial body without jurisdiction is void. It can never become final and executory, hence, an appeal is out of the question.⁷

The main issue for our resolution is whether the COSLAP has jurisdiction over the boundary dispute between respondent municipality and Caloocan City.

COSLAP was created by Executive Order No. 561 issued on September 21, 1979 by then President Ferdinand E. Marcos. The Commission is an administrative body established as a means of providing a mechanism for the expeditious settlement of land problems to avoid social unrest. Its objective is to settle land conflicts among small settlers, landowners and members of cultural minorities.

The powers and functions of the COSLAP are laid down in Section 3 of Executive Order No. 561, thus:

Sec. 3. Powers and Functions. - The Commission shall have the following powers and functions:

x x x

2. Refer and follow up for immediate action by the agency having appropriate jurisdiction any land problem or dispute referred to the Commission: Provided, That the Commission may, in the following cases, assume jurisdiction and resolve land problems or disputes which are critical and explosive in nature considering, for instance, the large number of parties involved, the presence or emergence of social tension or unrest, or other similar critical situations requiring immediate action:

(a) Between occupants/squatters and pasture lease agreement holders or timber concessionaires;

(b) Between occupants/squatters and government reservation grantees;

(c) Between occupants/squatters and public land claimants or applicants;

(d) Petitions for classification, release and/or subdivisions of lands of the public domain; andcralawlibrary

(e) Other similar land problems of grave urgency and magnitude.

x x x

Administrative agencies, like the COSLAP, are tribunals of limited jurisdiction and as such could wield only such as are specifically granted to them by the enabling statutes.⁸ In acting on a land dispute, the COSLAP may either assume jurisdiction if the matter falls under paragraph 2(a) to (e) or refer the matter to an agency having appropriate jurisdiction.

There is no provision in Executive Order No. 561 that COSLAP has jurisdiction over boundary dispute between two local government units. Under Republic Act No. 7160 or the Local Government Code, the respective legislative councils of the contending local government units have jurisdiction over their boundary disputes. Sections 118 and 119 provide:

Section 118. Jurisdictional Responsibility for Settlement of Boundary Dispute.

x x x

(d) Boundary disputes involving a component city or municipality on the one hand and a highly urbanized city on the other, or two (2) or more highly urbanized cities, shall be jointly referred for settlement to the respective sanggunians of the parties.

(e) In the event the Sanggunian fails to effect an amicable settlement within sixty (60) days from the date the dispute was referred thereto, it shall issue a certification to that effect. Thereafter, the dispute shall be formally tried by the Sanggunian concerned which shall decide the issue within sixty (60) days from the date of the certification referred to above.

Section 119. Appeal. - Within the time and manner prescribed by the Rules of Court, any party may elevate the decision of the Sanggunian concerned to the proper Regional Trial Court having jurisdiction over the area in dispute. The Regional Trial Court shall decide the appeal within one (1) year from the filing thereof. Pending final resolution of the disputed area prior to the dispute shall be maintained and continued for all legal purposes.

Rule III implementing the above provisions states:

Rule III

SETTLEMENT OF BOUNDARY DISPUTES

Art. 15. Definition and Policy. - There is boundary dispute when a portion or the whole of the territorial area of an LGU is claimed by two or more LGUs. Boundary disputes between or among LGUs shall, as much as possible, be settled amicably.

Art. 16. Jurisdictional Responsibility. - Boundary disputes shall be referred for settlement to the following:

(a) Sangguniang Panlungsod or Sangguniang Bayan for disputes involving two (2) or more barangays in the same city or municipality, as the case may be;

(b) Sangguniang panlalawigan for those involving two (2) or more municipalities within the same province;

(c) Jointly, to the sanggunians of provinces concerned, for those involving component cities or municipalities of different provinces; or

(d) Jointly, to the respective sanggunians, for those involving a component city or municipality and a highly urbanized city or two (2) or more highly-urbanized cities. x x x

Thus, instead of assuming jurisdiction over the case, the COSLAP should have referred respondents' complaint to the Sangguniang Panglungsod of Caloocan City and the Sangguniang Bayan of San Jose del Monte. Their decision may be appealed to the proper Regional Trial Court.

Consequently, we rule that the COSLAP does not have jurisdiction over the boundary dispute between San Jose del Monte and Caloocan City. We have consistently ruled that a judgment for want of jurisdiction is no judgment at all. It cannot be the source of any right or the creator of any obligation. All acts performed pursuant to it and all claims emanating from it have no legal effect. Hence, it can never become final and any writ of execution based on it is void.⁹ Such nullity is correctable only by certiorari .¹⁰ And certiorari cannot be dismissed for timeliness inasmuch as a void judgment never acquires finality and any action to declare its nullity does not prescribe.¹¹ Having no legal effect, the situation is the same as it would be as if there was no judgment at all. It leaves the parties in the position they were in before the trial.¹²

Clearly, the Court of Appeals erred in disposing NHA's petition for certiorari . It should have dismissed the petition, not on the grounds that it was filed late and that certiorari is not a substitute for a lost appeal, but solely on the ground that the COSLAP has no jurisdiction over the subject boundary dispute.

WHEREFORE, we GRANT the petition. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 54495 are SET ASIDE.

SO ORDERED.

TOPIC : V.C PROCEDURE TO BE FOLLOWED IN ADMIN PROCEEDINGS

Since petitioner did not rescind the Contract to Sell it executed with the respondents by a notarial act, the said Contract still stands. Both parties must comply with their obligations under the said Contract. As ruled by the HLURB Board of Commissioners, and affirmed by the Office of the President and the Court of Appeals, the respondents must first pay the balance of the purchase price of the subject property, after which, the petitioner must execute and deliver the necessary Deed of Sale and TCT of said property.

WHEREFORE, premises considered, the instant Petition is hereby DENIED. Costs against the petitioner.

57. Valencia vs. CA (401 SCRA 666, 2003). G.R. No. 122363. April 29, 2003. BELLOSILLO, J.:

Petitioner contends that an appeal to the Office of the President from the Secretary of Agrarian Reform is proper under the doctrine of exhaustion of administrative remedies. On the other hand, it is the contention of public respondent, the Office of the Solicitor General, that an exception to this well-settled principle is the doctrine of qualified political agency. Where the respondent is a Department Secretary, whose acts as an alter ego of the President bear the implied or assumed approval of the latter, unless the President actually disapproves them, administrative remedies have already been exhausted. Recourse to the court may be made at that point, according to private respondents, a view that was sustained by the Court of Appeals. In this case, the appellate court ruled that the appeal before it was filed beyond the reglementary period as petitioner appealed to the Office of the President, and not to the Court of Appeals, where it should have been brought. In Tan v. Director of Forestry this Court ruled that even if the respondent was a Department Secretary, an appeal to the President was proper where the law expressly provided for exhaustion.²⁰cräläwvirtualibräry

As a valid exercise of the Secretarys rule-making power to issue internal rules of procedure, DAR Memo. Circ. No. 3, series of 1994, expressly provides for an appeal to the Office of the President. Thus, petitioner Valencia filed on 24 November 1993 a timely appeal by way of a petition for review under Rule 43 to the Court of Appeals from the decision of the Office of the President, which was received on 11 November 1993, well within the fifteen (15)-day reglementary period.

An administrative decision must first be appealed to administrative superiors up to the highest level before it may be elevated to a court of justice for review. The power of judicial review may therefore be exercised only if an appeal is first made by the highest administrative body in the hierarchy of the executive branch of government.

58. Ponce v. National Labor Relations Commission (466 SCRA 348)

[A] party can not invoke the jurisdiction of a court to secure affirmative relief against his opponent and, after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction.

. . . [I]t was further said that the question whether the court had jurisdiction either of the subject-matter of the action or of the parties is barred from such conduct not because the judgment or order of the court is valid and conclusive as an adjudication, but for the reason that such a practice can not be tolerated obviously for reasons of public policy.

Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of the court. . . And in Littleton v. Burges, 16 Wyo, 58, the Court said that it is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief, to afterwards deny that same jurisdiction to escape a penalty.

59. Anillo v. Commission on the Settlement of Land Problems (534 SCRA 228, 2007)

G.R. NO. 157856 : September 27, 2007.

TINGA, J.:

In administrative proceedings, procedural due process has been recognized to include the following: (1) the right to actual or constructive notice of the institution of proceedings which may affect a respondent's legal rights; (2) a real opportunity to be heard personally or with the assistance of counsel, to present witnesses and evidence in one's favor, and to defend one's rights; (3) a tribunal vested with competent jurisdiction and so constituted as to afford a person charged administratively a reasonable guarantee of honesty as well as impartiality; and (4) a finding by said tribunal which is supported by substantial evidence submitted for consideration during the hearing or contained in the records or made known to the parties affected.

60. Ang Tibay v. Court of Industrial Relation (69 Phil 635, 1940)

G.R. No. L-46496             February 27, 1940

LAUREL, J.:

Facts:

Teodoro Toribio owns and operates Ang Tibay, a leather company which supplies the Philippine Army. Due to alleged shortage of leather, Toribio caused the lay off of a number of his employees. However, the National Labor Union, Inc. (NLU) questioned the validity of said lay off as it averred that the said employees laid off were members of NLU while  no members of the rival labor union National Workers Brotherhood (NWB) were laid off. NLU claims that NWB is a company dominated union and Toribio was merely busting NLU.

The case reached the Court of Industrial Relations (CIR) where Toribio and NWB won. Eventually, NLU went to the Supreme Court invoking its right for a new trial on the ground of newly discovered evidence. The Supreme Court agreed with NLU. The Solicitor General, arguing for the CIR, filed a motion for reconsideration.

Issue: 

Whether or not the National Labor Union, Inc. is entitled to a new trial.

Ruling:

Yes. The records show that the newly discovered evidence or documents obtained by NLU, which they attached to their petition with the SC, were evidence so inaccessible to them at the time of the trial that even with the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of Industrial Relations. Further, the attached documents and exhibits are of such far-reaching importance and effect that their admission would necessarily mean the modification and reversal of the judgment rendered (said newly obtained records include books of business/inventory accounts by Ang Tibay which were not previously accessible but already existing).

The SC also outlined that administrative bodies, like the CIR, although not strictly bound by the Rules of Court must also make sure that they comply to the requirements of due process. For administrative bodies, due process can be complied with by observing the following:

ü  The right to a hearing which includes the right of the party interested or affected to present his own case and submit evidence in support thereof.

ü  Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented.

ü  While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. A decision with absolutely nothing to support it is a nullity, a place when directly attached.

ü  Not only must there be some evidence to support a finding or conclusion but the evidence must be “substantial.” Substantial evidence is more than a mere scintilla It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.

ü  The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected.

ü  The administrative body or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision.

ü  The administrative body should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decisions rendered. The performance of this duty is inseparable from the authority conferred upon it.

61. Cruz v. Minister of Labor and Employment (120 SCRA 15, 1983)

Facts: On November 21, 1979, respondent bank Rizal Commercial Banking Corporation (RCBC) filed an application for clearance to terminate the services of its remittance clerk, Ma. Lourdes Cruz, for gross negligence which was opposed by the latter by filing a complaint for illegal dismissal. On February 11, 1980, the Regional Director resolved the case by lifting petitioners preventive suspension and directing the bank to reinstate her with full back-wages. In support of his order, the Director held that the record is bereft of any substantial proof tending to show that Lourdes Cruz has committed act of gross negligence as imputed to her. RCBC appeal on the ground of abuse discretion.

Ruling: Petitioner's claim that she was denied due process is likewise without basis. She was given the chance to explain and exonerate herself of the charges during the investigation. It was incumbent upon her to prove her innocence but she failed to do so. Her allegation in her complaint that she acted only in obedience to her superior's order is an obvious after thought which should not be given credence. She failed to adduce an iota of evidence to support her allegation.

62. Var-orient Shipping Co., Inc. v. Achacoso (161 SCRA 732). G.R. No. 81805 May 31, 1988. GRIÑO-AQUINO, J.:

Facts: petitioners filed a complaint with the Workers' Assistance and Adjudication Office, Philippine Overseas Employment Administration (POEA) against the private respondents Edgar T. Bunyog, Vedasto Navarro, Eugenio Capalad, Raul Tumasis, Antonio Tanioan, Celestino Cason, Danilo Manela and Roberto Genesis, crew members of the MPV "Silver Reefer," for having allegedly violated their Contracts of Employment with the petitioners which supposedly resulted in damages arising from the interdiction of the vessel by the International Transport Workers' Federation (ITF) at Kiel Canal, Germany, in March 1986.

After joinder of the issues, the case was heard on March 4, 1987 where the parties agreed to submit their respective position papers and thereafter the case would be submitted for decision. Only the private respondents submitted a position paper.

Issue:  they were denied due process of law because the respondent Administrator resolved the case without any formal hearing

Ruling: Equally unmeritorious is the petitioners 'allegation that they were denied due process because the decision was rendered without a formal hearing. The essence of due process is simply an opportunity to be heard (Bermejo vs. Banjos, 31 SCRA 764), or, as applied to administrative proceedings, an opportunity to explain one's side (Tajonera vs. Lamaroza, 110 SCRA 438; Gas Corporation of the Phil. vs. Hon. Inciong, 93 SCRA 653; Cebu Institute of Technology vs. Minister of Labor, 113 SCRA 257), or an opportunity to seek a reconsideration of the action or ruling complained of (Dormitorio vs. Fernandez, 72 SCRA 388).

63. Garcia v. Pajaro  (384 SCRA 122, 2002). [G.R. No. 141149. July 5, 2002.] PANGANIBAN, J.:

The city treasurer of Dagupan has the authority to institute disciplinary actions against subordinate officers or employees. The essence of due process in an administrative proceeding is the opportunity to explain one’s side, whether written or verbal. The constitutional mandate is satisfied when a petitioner complaining about an action or a ruling is granted an opportunity to seek reconsideration.

Facts:  Evidence for the petitioner tends to show that petitioner SEBASTIAN GARCIA, 61, married, employee at the City Treasurer’s Office, Dagupan City and resident of Lucao, Dagupan City, has been employee thereat since June 15, 1974 as Revenue Collector appointed to that position by then City Mayor Cipriano Manaois. He was ordered suspended by City Treasurer Juanito Pajaro from June 1, 1990 to March 15, 1992 and directed the withholding of his salary because of the Formal Charge filed against him. He resumed work on March 16, 1992 as Local Treasury Officer III. When he was suspended, his position was Local Treasury Officer and Revenue Officer with a salary of P6,800.00 a month. When he resumed work, his salary was already P7,615.00 monthly. From June 1, 1990 up to March 15, 1992, he had been reporting for work because he did not honor the suspension order as the City Treasurer acted as the complainant, investigator and judge and there was no complaint against him from the Office of the City Mayor. He did not believe in the Order; he did not submit himself for investigation. He was not paid his salary because of the suspension order which caused his sleepless nights, his two (2) children stopped schooling, he has to beg from his relatives. He has a wife with four (4) children in college, one in Commerce, another taking up Dentistry. During the 1990 earthquake, there was calamity loan granted to employees but he could not avail of it because the City Treasurer would not approve the loan. He is asking P1,000,000.00 for his mental anguish and sufferings. From July to October, 1987 the City Treasurer refused to give him his COLA, differential, cash gift, salary and mid-year bonus amounting to P6,800.00 up to the present. His salary now is P13,715.00 as Treasury Officer III. Contrary to the charges of the City Treasurer, he has been doing his duties and obligations; that for the acts of charging him in the Department of Finance and for charging him for neglect of duties, he felt deeply hurt and is asking P250,000.00 for that; his agreement with his counsel is P25% of what will be awarded to him.

Issue: Whether petitioner’s right to due process was violated

Ruling: Petitioner argues that his right to due process was violated, because he was not heard during the administrative proceedings. 40 We are not convinced.

In an administrative proceeding, the essence of due process is simply the opportunity to explain one’s side. 41 Such process requires notice and an opportunity to be heard before judgment is rendered. 42 One may be heard, not solely by verbal presentation in an oral argument, but also — and perhaps even many times more creditably and practicably — through pleadings. 43 So long as the parties are given the opportunity to explain their side, the requirements of due process are satisfactorily complied with. 44 Moreover, this constitutional mandate is deemed satisfied if a person is granted an opportunity to seek reconsideration of an action or a ruling.

64. Adamson and Adamson v. Amores (152 SCRA 237, 1987)

While administrative tribunals exercising quasi-judicial powers are free from the rigidity of certain procedural requirements they are bound by law and practice to observe the fundamental and essential requirements of due process in justiciable cases presented before them.²⁰ However, the standard of due process that must be met in administrative tribunals allows a certain latitude as long as the element of fairness is not ignored.²¹ Hence, there is no denial of due process where records show that hearings were held with prior notice to adverse parties.²² But even in the absence of previous notice, there is no denial of procedural due process as long as the parties are given the opportunity to be heard.²³

Based on the foregoing, We rule that petitioner was not deprived of its right to procedural due process in the BOI. In the first place, it was notified of the May 14, 1980 hearing. The notice specified that the hearing was on the petition although it also stated therein with particularity, petitioner's prayer for a stop and desist order. Necessarily, it is immaterial that said notice was sent before Johnson filed its answer to the petition and there was yet no joinder of issues considering that the proceeding was before an administrative tribunal where technicalities that should be observed in a regular court may be dispensed with.

Secondly, during the hearing, petitioner was given the opportunity to present its case, including its prayer for a stop and desist order. As clearly enunciated in the minutes of the hearing which We have painstakingly studied and set forth herein to determine if any irregularity attended the questioned BOI proceeding, it was conducted for the purpose of hearing the arguments and receiving evidence of the parties "to resolve the case expeditiously." Having been given the opportunity to put forth its case, petitioner has only itself, or, better still, its counsel and officers who were present therein, to blame for its failure to do so.²⁴

Petitioner's right to procedural due process was not violated when the hearing was conducted before a director of the BOI and not before the members of the board themselves who decided the case. The requirements of a fair hearing do not mandate that the actual taking of testimony or the presentation of evidence be before the same officer who will make the decision on the case.²⁵ 1avvphi1

Neither does the absence of stenographers during the hearing affect petitioner's right to due process. Section 16 of Republic Act No. 5186, which provides for the powers and duties of the BOI, does not specify that said board is a board of record. The first paragraph of said section merely mentions minutes" in connection with proceedings of the board. Therefore, the absence of a transcript of stenographic notes taken during the BOI hearing cannot be claimed to have deprived petitioner of due process of law.²⁶

65. Ocampo v. Office of the Ombudsman (322 SCRA 17, 2000)

Petitioner is the Training Coordinator of NIACONSULT, INC., a subsidiary of the National Irrigation Administration.

On March 21, 1988, K.N. Paudel of the Agricultural Development Bank of Nepal (ADBN) Mote a letter to NIACONSULT requesting a training proposal on small-scale community irrigation development.³

On November 17, 1988, petitioner as the training coordinator of the NIACONSULT, sent a letter-proposal requested by ABDN.⁴ Another letter was sent by petitioner on January 31, 1989 to Dr. Peiter Roeloffs of ADBN confirming the availability of NIACONSULT to conduct the training program and formally requesting advance payment of thirty (30%) percent of the training fee⁵ in the amount of US $9,600.00 or P204,960.00.

On April 1, 1991, NIACONSULT, through its president, Wilfredo S. Tiongco, wrote a letter to petitioner demanding the turn-over of the total training fee paid by ADBN which petitioner personally received.⁸ Despite receipt of the letter, petitioner failed to remit the said amount prompting NIACONSULT through its president, Maximino Eclipse, to file an administrative case before respondent OMBUDSMAN for serious misconduct and/or fraud or willful breach of trust.⁹

Finding enough basis to proceed with the administrative case, the Administrative Adjudication Bureau of the respondent OMBUDSMAN, on February 17, 1992, issued an order¹⁰ requiring petitioner to file his counter-affidavit within ten (10) days from receipt with a caveat that failure to file the same would be deemed a waiver of his right to present evidence. Despite notice, petitioner failed to comply with the said order.

A year later, or on March 17, 1993, respondent OMBUDSMAN issued another order¹¹ giving petitioner another chance to file his counter-affidavit and controverting evidence. Again, petitioner failed. Thus, on April 14, 1993, private respondent was required to appear before the OMBUDSMAN to present evidence to support its complaint.¹²

Issue: Whether or not the petitioner’s right to due process was violated

Ruling: The essence of due process is an opportunity to be heard. One may be heard, not solely by verbal presentation but also, and perhaps even many times more creditably and practicable than oral argument, through pleadings. In administrative proceedings, moreover, technical rules of procedure and evidence are not strictly applied; administrative due process cannot be fully equated to due process in its strict judicial sense.²⁰

Petitioner has been amply accorded the opportunity to be heard. He was required to answer the complaint against him. In fact, petitioner was given considerable length of time to submit his counter-affidavit. It took more than one year from February 17, 1992 before petitioner was considered to have waived his right to file his counter-affidavit and the formal presentation of the complainant's evidence was set. The March 17, 1993 order was issued to give the petitioner a last chance to present his defense, despite the private respondent's objections. But petitioner failed to comply with the second order.1âwphi1.nêt

Thus, petitioner's failure to present evidence is solely of his own making and cannot escape his own remissness by passing the blame on the graft investigator. While the respondent OMBUDSMAN has shown forbearance, petitioner has not displayed corresponding vigilance. He therefore cannot validly claim that his right to due process was violated. We need only to reiterate that a party who chooses not to avail of the opportunity to answer the charges cannot complain of a denial of due process

66. Lastimoso v. Asoyo (539 SCRA 381, 2007)

G.R. No. 154243 . December 22, 2007

AUSTRIA-MARTINEZ, J.:

Facts: Before the Court is respondent’s Motion for Reconsideration of the Decision promulgated on March 6, 2007. In said Decision, the Court granted the petition, holding that the Philippine National Police (PNP) Chief had jurisdiction to take cognizance of the civilian complaint against respondent and that the latter was accorded due process during the summary hearing.

Respondent insists that the summary hearing officer did not conduct any hearing at all but only relied on the affidavits and pleadings submitted to him, without propounding further questions to complainant's witnesses, or calling in other witnesses such as PO2 Villarama. It should, however, be borne in mind that the fact that there was no full-blown trial before the summary hearing officer does not invalidate said proceedings

Issue: Whether or not petitioners right to due process was violated.

Ruling: In Samalio v. Court of Appeals,¹ the Court reiterated the time-honored principle that:

Due process in an administrative context does not require trial-type proceedings similar to those in courts of justice. Where opportunity to be heard either through oral arguments or through pleadings is accorded, there is no denial of procedural due process. A formal or trial-type hearing is not at all times and in all instances essential. The requirements are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. The standard of due process that must be met in administrative tribunals allows a certain degree of latitude as long as fairness is not ignored. In other words, it is not legally objectionable for being violative of due process for an administrative agency to resolve a case based solely on position papers, affidavits or documentary evidence submitted by the parties as affidavits of witnesses may take the place of their direct testimony.² (Emphasis supplied)

67. Sarapat v. Salonga (538 SCRA 324, 2007). [G.R. NO. 154110 : November 23, 2007] AUSTRIA-MARTINEZ, J.:

Facts: Felizardo B. Sarapat, Amelita Durian and Fermin G. Castillo (petitioners) are President, Treasurer and Director, respectively, of the Philippine Veterans Bank Employees Union-National Union of Bank Employees (PVBEU-NUBE). Sylvia Salanga and Liwayway Silapan (respondents) are members of PVBEU-NUBE.

Sometime in 1985, the Philippine Veterans Bank (PVB) went bankrupt and was placed under receivership/liquidation by the Central Bank. As a result, the services of PVB employees were terminated. When PVB re-opened in 1992, the PVB employees were not re-hired. Thus, PVBEU-NUBE filed a notice of strike and cases of unfair labor practice against PVB before the National Labor Relations Commission (NLRC)

PVB and PVBEU-NUBE entered into a Compromise Agreement for the amicable settlement of all their cases and claims then pending with the NLRC and other tribunals. T

respondents, in their behalf and in behalf of 43 other PVBEU-NUBE members, filed with the Department of Labor and Employment-National Capital Region (DOLE-NCR) a petition³ requesting an audit of the finances of the PVBEU-NUBE.

Pre-audit conferences were called. However, despite notices and directives served upon petitioners for them to appear and submit pertinent documents for the audit, they failed to do so.

Petitioners filed an appeal with the Bureau of Labor Relations (BLR) questioning the Order calling for the conduct of a general membership meeting. LR issued an Order⁷ taking cognizance of the requested audit and accounting of the litigation expenses incurred by the union in the prosecution of its labor cases. e parties and PVBEU-NUBE were summoned to appear before the BLR. At said conference, Jose P. Umali, representing PVBEU-NUBE, denied participation in the preparation and execution of the Compromise Agreement relative to the PVBEU-NUBE cases with the NLRC. October 5, 2000, the BLR issued a Resolution⁹ declaring the Statement of Receipts and Disbursements as insufficient to prove the actual litigation expenses incurred in the prosecution of labor cases or to justify the 5% special assessment fee since no official receipts, disbursement vouchers, checks, acknowledgment receipts and such other documents which would show actual disbursement of funds and the purpose thereof were submitted.

Issue: THE COURT OF APPEALS COMMITTED GRAVE ERROR IN HOLDING THAT PETITIONERS WERE NOT DENIED DUE PROCESS OF LAW.

Ruling: The petition is bereft of merit for the following reasons.

Firstly, petitioners cannot maintain that they were denied due process. Well-settled is the rule that the essence of due process is simply an opportunity to be heard, or, as applied to administrative proceedings, an opportunity to explain one's side or an opportunity to seek a reconsideration of the action or ruling complained of.²² Not all cases require a trial-type hearing. The requirement of due process in labor cases is satisfied when the parties are given the opportunity to submit their position papers to which they are supposed to attach all the supporting documents or documentary evidence that would prove their respective claims.²³ Thus, in Samalio v. Court of Appeals,²⁴ the Court held:

Due process in an administrative context does not require trial-type proceedings similar to those in courts of justice. Where opportunity to be heard either through oral arguments or through pleadings is accorded, there is no denial of procedural due process. A formal or trial-type hearing is not at all times and in all instances essential. The requirements are satisfied where the parties are afforded fair and reasonable opportunity to explain their side of the controversy at hand. The standard of due process that must be met in administrative tribunals allows a certain degree of latitude as long as fairness is not ignored. In other words, it is not legally objectionable for being violative of due process for an administrative agency to resolve a case based solely on position papers, affidavits or documentary evidence submitted by the parties as affidavits of witnesses may take the place of their direct testimony

68. Saunar v. Ermita (848 SCRA 351, 2017). G.R. No. 186502, December 13, 2017. MARTIRES, J.:

Facts:

Saunar was a former Regional Director of the National Bureau of Investigation (NBI), which he joined as an agent in 1988. Through the years, he rose from the ranks and eventually became the Chief of the Anti-Graft Division. During his time as chief of the said division, Saunar conducted an official investigation regarding the alleged corruption relative to the tobacco excise taxes and involving then Governor Luis "Chavit" Singson, former President Joseph E. Estrada (President Estrada), and former Senator Jinggoy Estrada. President Estrada's assailed involvement in the tobacco excise tax issue became one of the predicate crimes included in his indictment for plunder.

Saunar received an order from the Presidential Anti-Graft Commission (PAGC).

OP found Saunar guilty of Gross Neglect of Duty and of violating Section 3(e) of Republic Act (R.A.) No. 3019, and dismissed him from service.

Saunar moved for reconsideration but it was denied by the OP in its 12 June 2007 resolution.¹¹ Undeterred, he appealed before the CA.

Issue: WHETHER THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PETITIONER WAS NOT DENIED DUE PROCESS 

Ruling

The petition is meritorious.:

In Arboleda v. National Labor Relations Commission (Arboleda),³⁰ the Court expounded that administrative due process does not necessarily connote full adversarial proceedings, to wit:

The requirement of notice and hearing in termination cases does not connote full adversarial proceedings as elucidated in numerous cases decided by this Court. Actual adversarial proceedings become necessary only for clarification or when there is a need to propound searching questions to witnesses who give vague testimonies. This is a procedural right which the employee must ask for since it is not an inherent right, and summary proceedings may be conducted thereon.³¹ (

Thus, while the Court in Arboleda recognized that the lack of a formal hearing does not necessarily transgress the due process guarantee, it did not however regard the formal hearing as a mere superfluity. It continued that it is a procedural right that may be invoked by the party. It is true that in subsequent cases,³² the Court reiterated that a formal hearing is not obligatory in administrative proceedings because the due process requirement is satisfied if the parties are given the opportunity to explain their respective sides through position papers or pleadings. Nonetheless, the idea that a formal hearing is not indispensable should not be hastily thrown around by administrative bodies.

In fact, the seminal words of Ang Tibay manifest a desire for administrative bodies to exhaust all possible means to ensure that the decision rendered be based on the accurate appreciation of facts. The Court reminded that administrative bodies have the active duty to use the authorized legal methods of securing evidence and informing itself of facts material and relevant to the controversy. As such, it would be more in keeping with administrative due process that the conduct of a hearing be the general rule rather than the exception.

The observance of a formal hearing in administrative tribunal or bodies other than judicial is not novel. In Perez v. Philippine Telegraph and Telephone Company,³³ the Court opined that in illegal dismissal cases, a formal hearing or conference becomes mandatory when requested by the employee in writing, or substantial evidentiary disputes exists, or a company rule or practice requires it, or when similar circumstances justify it

Thus, administrative bodies should not simply brush aside the conduct of formal hearings and claim that due process was observed by merely relying on position papers and/or affidavits. Besides, the Court in Joson recognized the inherent limitations of relying on position papers alone as the veracity of its contents cannot be readily ascertained. Through the examination and cross-examination of witnesses, administrative bodies would be in a better position to ferret out the truth and in turn, render a more accurate decision.

In any case, the PAGC violated Saunar's right to due process because it failed to observe fairness in handling the case against him. Its unfairness and unreasonableness is readily apparent with its disregard of its own rules of procedure.

69. Philippine Long Distance Telephone Company, Inc. v. NLRC (276 SCRA 1, 1997) G.R. No. 99030. July 31, 1997.

Facts:

Private respondent was employed as Facility Man JG-5 at the Lexal Office of petitioner. One of his duties was to assign telephone lines to telephone applicants. This includes conducting field surveys and preparing the necessary documents for the installation of telephone facilities.

In February 1986, Mr. Tomas Enriquez, a resident of Sambahayan Condominium Building No. 5 in Makaturing Street, Mandaluyong, Metro Manila, filed a complaint to petitioner that his application for a telephone line was by-passed when DJ Sambahayan Fastfood which was also located in the same building was provided with a telephone line on February 23, 1986, thus violating the company’s first-come-first-serve policy.

After investigating on the complaint, petitioner discovered that: (1) Mr. Enriquez’s application (numbered RA-75-1984) enjoyed higher priority than that of DJ Sambahayan Fastfood (numbered RA-76-17797); (2) there were three other telephone applications in the same building having higher priority than that of DJ Sambahayan Fastfood and they were also by-passed when a telephone line was installed at DJ Sambahayan Fastfood; (3) Sambahayan Condominium Building No. 5 had no entrance cable facility; and (4) DJ Sambahayan Fastfood was provided with a telephone line using the entrance cable facilities of Sambahayan Condominium Building No. 3. Petitioner also found that it was private respondent who processed and assigned telephone facilities to DJ Sambahayan Fastfood.

Issue: Whether or not it is the burden of proof is upon the employer.

Ruling: An employer can terminate the services of an employee only for valid and just causes which must be supported by clear and convincing evidence. 7 The employer has the burden of proving that the dismissal was indeed for a valid and just cause. 8

In the case at bar, petitioner failed to establish private respondent’s culpability by clear and convincing evidence

An employer can terminate the services of an employee only for valid and just causes which must be supported by clear and convincing evidence. The employer has the burden of proving that the dismissal was indeed for a valid and just cause

70. Go v. Colegio de San Letran (683 SCRA 385, 2012)

Facts; In October 2001, Mr. George Isleta, the Head of Letran’s Auxiliary Services Department, received information that certain fraternities were recruiting new members among Letran’s high school students, together with the list of allegedly involved students.

The school conducted medical examinations on the students involved and on November 20, 2002, Dr. Emmanuel Asuncion, the school physician, reported that six (6) students bore injuries on the posterior portions of their thighs. Mr. Rosarda, the Assistant Prefect for Discipline, conferred with the students and asked for their explanations in writing.

Four (4) students, admitted that they were neophytes of the Tau Gamma Fraternity and were present in a hazing rite held in Tondo, Manila. They also identified the senior members of the fraternity present at their hazing. These included Kim, then a fourth year high school student.

In the meantime, the school’s security officer, prepared an incident report that the Tau Gamma Fraternity has been recruiting members from Letran’s high school department. He had spoken to one of the fraternity neophytes and obtained a list of eighteen (18) members of the fraternity currently enrolled at the high school department. Kim’s name was also in the list.

Mr. Rosarda has informed Kim’s mother, Mrs. Go, that her son is a fraternity member whereas she expressed her disbelief stating that her son has always been in constant supervision.

Mr. Rosarda thereafter spoke to Kim and asked him to explain his side. Kim responded through a written statement dated December 19, 2001; he denied that he was a fraternity member.

In time, the respondents found that twenty-nine (29) of their students, including Kim, were fraternity members. The respondents found substantial basis in the neophytes’ statements that Kim was a senior fraternity member. Based on their disciplinary rules, the Father Prefect for Discipline (respondent Rev. Fr. Jose Rhommel Hernandez) recommended the fraternity members’ dismissal from the high school department rolls

On January, 2002, the petitioners filed a complaint for damages before the RTC of Caloocan City claiming that the respondents had unlawfully dismissed Kim. They refused to accept the respondents’ finding that Kim was a fraternity member. They likewise insisted that due process had not been observed. Mr. and Mrs. Go also sought compensation for the “business opportunity losses” they suffered while personally attending to Kim’s disciplinary case.

In ruling for the petitioners, the RTC ruled that Kim was dismissed without due process, his membership in the fraternity was not duly proven, and the the school had no authority to dismiss KIM from school.

The Court of Appeals disagreed with the RTC and reversed the decision, thereby prompting the petitioners to elevate the matter to the Supreme Court.

Issue: Whether or not due process was violated.

Ruling No. `On the issue of due process, the petitioners insist that the question be resolved under the guidelines for administrative due process in Ang Tibay v. Court of Industrial Relations. They argue that the respondents violated due process (a) by not conducting a formal inquiry into the charge against Kim; (b) by not giving them any written notice of the charge; and (c) by not providing them with the opportunity to cross-examine the neophytes who had positively identified Kim as a senior member of their fraternity. The petitioners also fault the respondents for not showing them the neophytes’ written statements, which they claim to be unverified, unsworn, and hearsay.

These arguments deserve scant attention.

In Ateneo de Manila University v. Capulong,the Court held that Guzman v. National University, not Ang Tibay, is the authority on the procedural rights of students in disciplinary cases. In Guzman, we laid down the minimum standards in the imposition of disciplinary sanctions in academic institutions, as follows:

It bears stressing that due process in disciplinary cases involving students does not entail proceedings and hearings similar to those prescribed for actions and proceedings in courts of justice. The proceedings in student discipline cases may be summary; and crossexamination is not, contrary to petitioners’ view, an essential part thereof. There are withal minimum standards which must be met to satisfy the demands of procedural due process; and these are, that (1) the students must be informed in writing of the nature and cause of any accusation against them; (2) they shall have the right to answer the charges against them, with the assistance of counsel, if desired; (3) they shall be informed of the evidence against them; (4) they shall have the right to adduce evidence in their own behalf; and (5) the evidence must be duly considered by the investigating committee or official designated by the school authorities to hear and decide the case.

---

 71. Samalio v. Court of Appeals (454 SCRA 462, 2005).

 G.R. No. 140079.March 31, 2005

CORONA, J.:

Before proceeding to the merits of the instant Petition, this Court deems it necessary to first address the allegation of Bungubung that he was denied due process by the Ombudsman.  The fact that no formal hearing took place is not sufficient ground to say that due process was not afforded Bungubung. It is well-settled that in administrative proceedings, including those before the Ombudsman, cases may be submitted for resolution on the basis of affidavits and pleadings. The standard of due process that must be met in administrative tribunals allows a certain degree of latitude as long as fairness is not ignored. It is, therefore, not legally objectionable for being violative of due process for an administrative agency to resolve a case based solely on position papers, affidavits or documentary evidence submitted by the parties as affidavits of witnesses may take the place of their direct testimonies. [Samalio v. Court of Appeals, G.R. No. 140079, 31 March 2005, 454 SCRA 462, 473, citing CMP Federal Security Agency, Inc. v. National Labor Relations Commission, 362 Phil. 439, 450 (1999)]Undoubtedly, due process in administrative proceedings is an opportunity to explain one’s side or an opportunity to seek reconsideration of the action or ruling complained of, [Vertudes v. Buenaflor, G.R. No. 153166, 16 December 2005, 478 SCRA 210, 227-228, citing Velasquez v. Hernandez, G.R. No. 150732, 31 August 2004, 437 SCRA 357, 368; Adiong v. Court of Appeals, 422 Phil. 713, 720 (2001); Vda. de Dela Cruz v. Abille, 405 Phil. 357, 366 (2001)] which requirement was afforded Bungubung.

In Manggagawa ng Komunikasyon sa Pilipinas v. National Labor Relations Commission, [G.R. No. 90964, 10 February 1992, 206 SCRA 109, 115] this Court held that:

[A]ctual adversarial proceeding becomes necessary only for clarification or when there is a need to propound searching questions to unclear witnesses.  This is a procedural right which the employee must, however, ask for it is not an inherent right, and summary proceedings may be conducted.  This is to correct the common but mistaken perception that procedural due process entails lengthy oral arguments.  Hearings in administrative proceedings and before quasi-judicial agencies are neither oratorical contests nor debating skirmishes where cross examination skills are displayed.  Non-verbal devices such as written explanations, affidavits, positions papers or other pleadings can establish just as clearly and concisely aggrieved parties’ predicament or defense.  What is essential is ample opportunity to be heard, meaning, every kind of assistance that management must accord the employee to prepare adequately for his defense.

72. Solid Homes, Inc. v. Laserna (550 SCRA 613, 2008)

It must be stated that Section 14, Article VIII of the 1987 Constitution need not apply to decisions rendered in administrative proceedings, as in the case a bar. Said section applies only to decisions rendered in judicial proceedings. In fact, Article VIII is titled "Judiciary," and all of its provisions have particular concern only with respect to the judicial branch of government. Certainly, it would be error to hold or even imply that decisions of executive departments or administrative agencies are oblige to meet the requirements under Section 14, Article VIII.

The rights of parties in administrative proceedings are not violated as long as the constitutional requirement of due process has been satisfied.³⁴ In the landmark case of Ang Tibay v. CIR, we laid down the cardinal rights of parties in administrative proceedings, as follows:

1) The right to a hearing, which includes the right to present one’s case and submit evidence in support thereof.

2) The tribunal must consider the evidence presented.

3) The decision must have something to support itself.

4) The evidence must be substantial.

5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected.

6) The tribunal or body or any of its judges must act on its or his own independent consideration of the law and facts of the controversy and not simply accept the views of a subordinate in arriving at a decision.

7) The board or body should, in all controversial question, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reason for the decision rendered.³⁵

As can be seen above, among these rights are "the decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected;" and that the decision be rendered "in such a manner that the parties to the proceedings can know the various issues involved, and the reasons for the decisions rendered." Note that there is no requirement in Ang Tibay that the decision must express clearly and distinctly the facts and the law on which it is based. For as long as the administrative decision is grounded on evidence, and expressed in a manner that sufficiently informs the parties of the factual and legal bases of the decision, the due process requirement is satisfied.

73. San Luis v. Court of Appeals (174 SCRA 258, 1989) G.R. No. L-80160 June 26, 1989 CORTES, J.:

The general rule, under the principles of administrative law in force in this jurisdiction, is that decisions of administrative officers shall not be disturbed by the courts, except when the former have acted without or in excess of their jurisdiction, or with grave abuse of discretion. Findings of administrative officials and agencies who have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but at times even finality if such findings are supported by substantial] evidence. . . . [Lianga Bay Logging Co., Inc. v. Lopez Enage, G.R. No. L-30637, July 16, 1987,152 SCRA

74. People vs. Neri

The land in question was allegedly bought by Encarnacion Lamorena from Bonifacio Baldomera (or Palmera) and Lucas Lamonte. In 1938, Lamorena filed in the Court of First Instance of Davao "Expediente No. 291, G.L.R.O. No. 53114," a petition for registration of the said 81-hectare land

Lamorena and one Mariano Lamorena, who appears to be the former’s brother, executed a "deed of sale with right to repurchase" the same tract of land within one year from November 8, 1938 in consideration of the amount of P4,112.00 in favor of Baldomera G. Caburian. The parties stipulated in the contract that if the vendors should fail to exercise the right to repurchase, such right would be forfeited and the contract, without executing another document therefore, would be considered as an absolute sale and the vendor would abandon and vacate the premises. The parties also agreed that the vendor would pay the vendee an "annual rental" of P150.00 "payable on or before November, 8, 1939."

Lamorena filed in "Expediente No. 291" a petition praying for the dismissal of her application for registration and for a declaration that the land subject of the petition or application for registration is part of the public domain. 

the court rendered a decision declaring the area applied for as public land; recognized Lamorena as the owner and possessor of all the improvements thereon, and recommended that she be given preference by the Director of Lands in the acquisition of the said land in accordance with law 

Caburian, exercising her alleged acquired right of ownership over the land, demanded from Neri and the others working on the land, the share of the Lamorenas in its produce. Some complied with the demand but the rest who refused to do so, were ordered by Caburian to vacate the premises. Hence, on August 25, 1947, Justo Charmen, Adriano Archi (Archie or Arche). Paterno Madanlo, Fernando Mansilagan, Gervacio Valenteros, Agapito Gurnot (Gornot), Federico Vargas, Heirs of Francisco Magundag and Gabriel Palmera, represented by Leopoldo Lopez, petitioned the President to intervene in their behalf in the controversy.

In the decisions all dated October 23, 1951, then Director of Lands Jose P. Dans dismissed the claim of the homestead applicants on the basis of his finding that they were either tenants of the Lamorenas or mere intruders. 6 On the other hand, in B.L. Conflict No. 58 (N), the Director of Lands considered the homestead application of Rufo Neri and rejected the free patent applications of the Lamorenas on the ground that "Baldomera Caburian has been subrogated to the ownership of the improvements existing on the land described in Psu-46022 and to whatever rights the respondents Lamorenas have acquired to the land in question."

Director of Lands: 

claims of Rufo Neri to the portion which is outside of his Homestead Application No. 183913 (E-99319) should be, as hereby it is dismissed. The Free Patent Applications (all new) of Encarnacion, Mariano, Carmen and Gloria all surnamed Lamorena, are hereby rejected.

The homestead applicants and the Lamorenas appealed to the Secretary of Agriculture and Natural Resources: appeals were dismissed.

Lamorenas elevated the case to the Office of the President on the sole issue of whether the contract between then and Caburian was a deed of sale with right to repurchase or an equitable mortgage.

Executive Secretary Juan A. Pajo, acting on the strength of the opinion of the Secretary of Justice, deemed the contract as one of equitable mortgage and therefore reversed the decision appealed from and The decision of the Office of the President having become final and executory

Undaunted, Caburian (now represented by her heir and special administratrix Guillermina Garcia Vda. de Mitre) elevated the case to the Court of Appeals

Issue:

Whether the nature of the contract between Caburian and the Lamorenas may be a subject of res juridicata?

Ruling:

No. Res judicata also may not apply with respect to the decision of the Office of the President finding that the transaction between Lamorena and Caburian was an equitable mortgage, but for another reason. The decision was solely based on the appeal of Lamorena but unfortunately, the issue raised therein, i.e., the nature of the contract between Caburian and the Lamorenas, was a judicial one, over which the Executive Branch has no jurisdiction. The instant cadastral proceeding, therefore, cannot be barred by the final and executory decision of the Office of the President in the absence of a requisite in the applicability of the doctrine of res judicata: the Office of the President had no jurisdiction over the subject matter of the appeal. [The requisites of res judicata are the following: (a) the presence of a final former judgment; (b) the former judgment was rendered by a court having jurisdiction over the subject matter and the parties; (c) the former judgment is a judgment on the merits; and (d) there is between the first and the second actions, identity of parties, of subject matter, and of cause of action 

75. RUCILLO vs. OFFICE OF THE OMBUDSMAN

G.R. No. 159876.June 26, 2007

Facts:

• The instant case turns on the charge filed by the respondent Presidential Commission on Good Government (PCGG) against the then board members/officers of both Phil-Asia Food Industries Corporation (PAFICO) and the Development Bank of the Philippines (DBP) for corrupt practices arising from the alleged "behest" loan DBP extended to PAFICO to finance the latter’s soybeans processing plant project.
• petitioner Crucillo was the Manager of the DBP’s Agricultural Projects Department I (APD I). Petitioner Tengco, on the other hand, sat as member of DBP’s Board of Governors. 
• Sandiganbayan to which the case was docketed ordered the OOMB to conduct a preliminary investigation, whereby it recommends that charges against them be dismissed, the same having been previously resolved with finality on by the Office in DBP v. Phil-Asia Food Industries Corporation (PAFICO)
• MR Was Partially Granted finding probable cause
• Hence the petition, Petitioners argument: It is the petitioners’ common contention that the instant case is barred by res judicata, petitioner Tengco submitting, in addition, that his liability, if there be any, was extinguished by the compromise agreement entered into by and between the Republic of the Philippines (RP), through the PCGG, and Benedicto wherein the latter ceded the PAFICO complex to the PCGG which then sold it to the General Milling Corporation, through the Asset Privatization Trust, for Php 330 million.²⁰ This sale, petitioner Tengco would claim, argues against the idea of the government incurring damages or placed at a disadvantage as a consequence to the alleged behest loan grant.

Issue:

Whether Res judicata applies in admin cases

Ruling:

YES.  The suggestion that decisions or orders of the Ombudsman and other quasi-judicial bodies cannot attain the force of res judicata is simply specious. For, as jurisprudence teaches, public policy demands that, even at the risk of occasional errors, judgments of courts as well as administrative decisions should become final at some definite time fixed by law and that parties should not be permitted to litigate the same issues over again.⁴⁵ This is the raison d’etre upon which the doctrine of res judicata rests.⁴⁶ The rule of non quieta movere prescribes that what was already terminated should not be disturbed or altered at every step. And as we articulated in Macailing v. Andrada,⁴⁷ citing a host of cases, the rule which forbids the reopening of a matter once judicially determined by competent authority "applies as well to the judicial and quasi-judicial acts of public, executive, or administrative officers and boards acting within their jurisdiction."

76. WINNIE C. LUCENTE and ALICIA G. DOMINGO, complainants, vs. ATTY. CLETO L. EVANGELISTA, JR., respondent.

A.C. No. 5957. February 4, 2003

Facts:

In a sworn letter-complaint filed with the (IBP) Commission on Bar Discipline, Winnie C. Lucente and Alicia G. Domingo charged Atty. Cleto L. Evangelista, Jr. with gross misconduct, deceit, malpractice and crimes involving moral turpitude for falsification of public documents.

• alleged that respondent is the son of the late Atty. Cleto Evangelista, who during his lifetime notarized a Deed of Quitclaim executed by Pedro et. Al all surnamed Tan, and one Sabina Mascareas, in favor of Asuncion T. Yared and Cynthia Yared Estudillo, involving a Lot; and a Deed of Absolute Sale executed by Wenceslao Magallanes et al. in favor of Salvador Estudillo and Cynthia Yared Estudillo, involving a Lot located in Poblacion, Ormoc City. On January 30, 1990, respondent Atty. Cleto L. Evangelista, Jr. issued certified true copies of the said instruments. On the basis of the certified true copies of the subject deeds, the Register of Deeds issued s Transfer Certificate of Title No. 23889 in favor of Asuncion T. Yared.
• Respondent filed a motion to dismiss the complaint interposing res adjudicata, arguing that the allegations in the complaint raise the same issues as those in the criminal case for falsification of public document filed against him before the Ormoc City Prosecution Office

Issue:

WON the doctrine of res judicata applies only to judicial or quasi-judicial proceedings and not to the exercise of the Courts administrative powers

Ruling:

YES.

Neither does res adjudicata lie against the complainants. Similarly, the doctrine applies only to judicial or quasi-judicial proceedings and not to the exercise of the Courts administrative powers,¹⁰ as in this case. Neither can it be argued that the instant disbarment case has been adjudicated in the criminal case for falsification of public documents. Respondent was proceeded against as a private individual in said case. In the present disbarment action, Atty. Cleto L. Evangelista, Jr. is sought to be disciplined as a lawyer under the Courts plenary authority over members of the legal profession.

77. MAXIMA REALTY MANAGEMENT AND DEVELOPMENT CORPORATION vs.
PARKWAY REAL ESTATE DEVELOPMENT CORPORATION.

GR. No. 136492. February 13, 2004

FACTS:

• Sometime in April 1990, Parkway and petitioner Maxima Realty Management and Development Corporation (Maxima) entered into an agreement to buy and sell, on installment basis, Unit #702 in consideration of the amount of 3 Million Pesos.⁴ It was further agreed that failure to pay any of the installments on their due dates shall entitle Parkway to forfeit the amounts paid by way of liquidated damages.
• Maxima defaulted in the payment of the installments due but was granted several grace periods until it has paid a total of P1,180,000.00, leaving a balance of P1,820,000.00.
• Parkway, with the consent of Segovia, executed a Deed of Assignment transferring all its rights in the condominium unit in favor of Maxima. 
• This Deed was intended to enable Maxima to obtain title in its name and use the same as security for P1,820,000.00 loan with Rizal Commercial Banking Corporation (RCBC), which amount will be used by Maxima to pay its obligation to Parkway. 
• On the other hand, Segovia and Maxima agreed to transfer title to the condominium unit directly in Maxima’s name subject to the condition that the latter shall pay Segovia
• RCBC granted maxima’s loan
• Maxima failed to pay Segovia. Parkway cancelled its agreement with maxima
• Maxima filed with the Office of Appeals, Adjudication and Legal Affairs of the Housing and Land Use Regulatory Board (HLURB), a complaint for specific performance.
• Office of Appeals granted though HURB in a separate judgment on December 17, 1992  modified the decision of the Appeals
• On May 10, 1994, Maxima appealed¹⁷ to the Office of the President which dismissed the appeal for having been filed out of time.
• Maxima filed a petition for review with the Court of Appeals. On October 1, 1998.  Court of Appeals affirmed in toto the Decision of the Office of the President.

ISSUE: Was petitioner’s appeal before the Office of the President filed within the reglementary period?

HELD: NO. t was settled that the period within which to appeal the decision of the Board of Commissioners of HLURB to the Office of the President is fifteen (15) days from receipt of the assailed decision, pursuant to Section 15²¹ of Presidential Decree No. 957 (otherwise known as the Subdivision and Condominium Buyer’s Protection Decree) and Section 2²² of Presidential Decree No. 1344.²³ The Court ruled that the thirty (30) day period to appeal to the Office of the President from decisions of the Board as provided in Section 27 of the 1994 HLURB Rules of Procedure,²⁴ is not applicable, because special laws providing for the remedy of appeal to the Office of the President, such as Presidential Decree No. 597 and Presidential Decree No. 1344, must prevail over the HLURB Rules of Procedure. X XX X X X

such thirty-day period is subject to the qualification that there are no other statutory periods of appeal applicable. If there are special laws governing particular cases which provide for a shorter or longer reglementary period, the same shall prevail over the thirty-day period provided for in the administrative order. This is in line with the rule in statutory construction that an administrative rule or regulation, in order to be valid, must not contradict but conform to the provisions of the enabling law.

78. Amadore v. Romulo (466 SCRA 397, 2005)

Finally, petitioner argues that he will be placed in double jeopardy if the administrative case against him will not be dismissed because of the decision of the Ombudsman finding no probable cause to indict him before the Sandiganbayan for violation of Section 3(g) of Rep. Act No. 3019, as amended.

We are not convinced. As a general rule, the following requisites must be present for double jeopardy to attach: (1) a valid indictment, (2) before a court of competent jurisdiction, (3) the arraignment of the accused, (4) a valid plea entered by him, and (5) the acquittal or conviction of the accused, or the dismissal or termination of the case against him without his express consent.⁴⁸

In the case before us, all the elements necessary to invoke double jeopardy are absent. Moreover, the fact that the administrative case and the case filed before the Ombudsman are based on the same subject matter is of no moment. It is a fundamental principle of administrative law that the administrative case may generally proceed against a respondent independently of a criminal action for the same act or omission and requires only a preponderance of evidence to establish administrative guilt as against proof beyond reasonable doubt of the criminal charge.

79. In the Matter to Declare in Contempt of Court Hon. S. Datumanong (497 SCRA 626, 2006)

Petitioner was charged administratively before the Office of the Ombudsman. Accordingly, the provisions of the Ombudsman Act and its Rules of Procedure should apply in his case. It is a principle in statutory construction that where there are two statutes that apply to a particular case, that which was specially designed for the said case must prevail over the other.

In fine, Secretary Datumanong cannot be held in contempt of court for issuing the Memorandum Order in the absence of malice or wrongful conduct in issuing it. The remedy of the petitioner is not to file a petition to cite him in contempt of court but to elevate the error to the higher court for review and correction.

However, two events supervened since the filing of this petition that would support its dismissal. First, on March 28, 2005, the Court in G.R. No. 144694 affirmed the decisions of the Court of Appeals and Administrative Adjudication Bureau of the Office of the Ombudsman ordering petitioner dismissed from the service for dishonesty, falsification of public documents, misconduct, and conduct prejudicial to the best interest of the service.

Well-settled is the rule that procedural laws are construed to be applicable to actions pending and undetermined at the time of their passage, and are deemed retroactive in that sense and to that extent. As a general rule, the retroactive application of procedural laws cannot be considered violative of any personal rights because no vested right may attach to nor arise therefrom.

In the case at bar, the Rules of Procedure of the Office of the Ombudsman are clearly procedural and no vested right of the petitioner is violated as he is considered preventively suspended while his case is on appeal. Moreover, in the event he wins on appeal, he shall be paid the salary and such other emoluments that he did not receive by reason of the suspension or removal. Besides, there is no such thing as a vested interest in an office, or even an absolute right to hold office. Excepting constitutional offices which provide for special immunity as regards salary and tenure, no one can be said to have any vested right in an office. 

80. Republic v. Canastillo (524 SCRA 546, 2007).

G.R. No. 172729.June 8, 2007

YNARES-SANTIAGO, J.:

Facts: Respondent was found guilty for respondents guilty of Simple Neglect of Duty

Issue: Whether or not decisions of Ombudsman is appealable in court

Ruling: it is also settled that decisions of administrative agencies which are declared final and unappealable by law are still subject to judicial review if they fail the test of arbitrariness, or upon proof of gross abuse of discretion, fraud or error of law. When such administrative or quasi-judicial bodies grossly misappreciate evidence of such nature as to compel a contrary conclusion, the Court will not hesitate to reverse the factual findings

81. Matienzo v. Abellera (162 SCRA 7, 1988) G.R. No. L-45839 June 1, 1988

GUTIERREZ, JR., J.:

Thus, the respondents correctly argue that "as the need of the public changes and oscillates with the trends of modern life, so must the Memo Orders issued by respondent jibe with the dynamic and flexible standards of public needs. ... Respondent Board is not supposed to 'tie its hands' on its issued Memo Orders should public interest demand otherwise" (Answer of private respondents, p. 121, Rollo).

The fate of the private respondent's petitions is initially for the Board to determine. From the records of the case, acceptance of the respondent's applications appears to be a question correctly within the discretion of the respondent Board to decide. As a rule, where the jurisdiction of the BOT to take cognizance of an application for legalization is settled, the Court enjoins the exercise thereof only when there is fraud, abuse of discretion or error of law. Furthermore, the court does not interfere, as a rule, with administrative action prior to its completion or finality . It is only after judicial review is no longer premature that we ascertain in proper cases whether the administrative findings are not in violation of law, whether they are free from fraud or imposition and whether they find substantial support from the evidence.

83. Philippine Air Lines vs Civil Aeronautic Board

G.R. No. L-24219.June 13, 1968

Facts:

• Pursuant to Republic Act No. 4147, granting thereto "a franchise to establish, operate and maintain transport services for the carriage of passengers, mail, industrial flights and cargo by air in and between any and all points and places throughout the Philippines and other countries",
• Fairways filed with CAB the corresponding application for a "certificate of public convenience and necessity"
• CAB hearing officer began to receive evidence on said application.
• Fairways filed an "urgent petition for provisional authority to operate" under a detailed "program of implementation. GRANTED despites PAL’s opposition.
• Reconsideration of this resolution having been denied, PAL filed the present civil action against CAB for excess of its jurisdiction or with grave abuse of discretion

ISSUE: WON (2) CAB had no evidence before it that could have justified the granting of the provisional authority complained of;

HELD: Such presumption is particularly strong as regards administrative agencies, like the CAB, vested with powers said to be quasi-judicial in nature, in connection with the enforcement of laws affecting particular fields of activity, the proper regulation and/or promotion of which requires a technical or special training, aside from a good knowledge and grasp of the overall conditions, relevant to said field, obtaining in the nation.³ The consequent policy and practice underlying our Administrative Law is that courts of justice should respect the findings of fact of said administrative agencies, unless there is absolutely no evidence in support thereof or such evidence is clearly, manifestly and patently insubstantial.⁴ This, in turn, is but a recognition of the necessity of permitting the executive department to adjust law enforcement to changing conditions, without being unduly hampered by the rigidity and the delays often attending ordinary court proceedings or the enactment of new or amendatory legislations. In the case at bar, petitioner has not satisfactorily shown that the aforementioned findings of the CAB are lacking in the necessary evidentiary support.

84. SMART COMMUNICATIONS, INC. (SMART) and PILIPINO TELEPHONE CORPORATION (PILTEL) vs. NATIONAL TELECOMMUNICATIONS COMMISSI

G.R. No. 151908     August 12, 2003

FACTS: Pursuant to its rule-making and regulatory powers, the National Telecommunications Commission issued a Memorandum Circulars on the billing of telecommunications services and on measures in minimizing, if not eliminating, the incidence of stealing of cellular phone unit.  Isla Communications Co., Inc. (IslaCom) and Pilipino Telephone Corporation (PilTel) filed an action for the declaration of nullity of the memorandum circulars, alleging that NTC has no jurisdiction to regulate the sale of consumer goods as stated in the subject memorandum circulars.  Such jurisdiction belongs to the DTI under the Consumer Acts of the Philippines.  Soon thereafter, Globe Telecom, Inc. and Smart Communications, Inc. filed a joint motion for leave to intervene and to admit complaint-in-intervention.  This was granted by the trial court.

The trial court issued a TRO enjoining NTC from implementing the MCs. NTC filed a Motion to Dismiss, on the ground that petitioners failed to exhaust administrative remedies.  The defendant's MD is denied for lack of merit.  NTC filed a MR but was later on denied by the trial court.  The CA, upon NTC's filing of a special action for certiorari and prohibition, reversed the decision of the lower court.  Hence this petition.

ISSUE: W/N the CA erred in holding that the private respondents failed to exhaust administrative remedies?

RULING: Administrative agencies possess quasi-legislative or rule-making powers and quasi-judicial or administrative adjudicatory powers. Quasi-legislative or rule-making power is the power to make rules and regulations which results in delegated legislation that is within the confines of the granting statute and the doctrine of non-delegability and separability of powers.

The rules and regulations that administrative agencies promulgate, which are the product of a delegated legislative power to create new and additional legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the legislature to the administrative agency. It is required that the regulation be germane to the objects and purposes of the law, and be not in contradiction to, but in conformity with, the standards prescribed by law. They must conform to and be consistent with the provisions of the enabling statute in order for such rule or regulation to be valid. Constitutional and statutory provisions control with respect to what rules and regulations may be promulgated by an administrative body, as well as with respect to what fields are subject to regulation by it. It may not make rules and regulations which are inconsistent with the provisions of the Constitution or a statute, particularly the statute it is administering or which created it, or which are in derogation of, or defeat, the purpose of a statute. In case of conflict between a statute and an administrative order, the former must prevail.

Not to be confused with the quasi-legislative or rule-making power of an administrative agency is its quasi-judicial or administrative adjudicatory power. This is the power to hear and determine questions of fact to which the legislative policy is to apply and to decide in accordance with the standards laid down by the law itself in enforcing and administering the same law. The administrative body exercises its quasi-judicial power when it performs in a judicial manner an act which is essentially of an executive or administrative nature, where the power to act in such manner is incidental to or reasonably necessary for the performance of the executive or administrative duty entrusted to it. In carrying out their quasi-judicial functions, the administrative officers or bodies are required to investigate facts or ascertain the existence of facts, hold hearings, weigh evidence, and draw conclusions from them as basis for their official action and exercise of discretion in a judicial nature.

The doctrine of primary jurisdiction applies only where the administrative agency exercises its quasi-judicial or adjudicatory function. Thus, in cases involving specialized disputes, the practice has been to refer the same to an administrative agency of special competence pursuant to the doctrine of primary jurisdiction. The courts will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact, and a uniformity of ruling is essential to comply with the premises of the regulatory statute administered. The objective of the doctrine of primary jurisdiction is to guide a court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court. It applies where the claim is originally cognizable in the courts and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, has been placed within the special competence of an administrative body; in such case, the judicial process is suspended pending referral of such issues to the administrative body for its view.

However, where what is assailed is the validity or constitutionality of a rule or regulation issued by the administrative agency in the performance of its quasi-legislative function, the regular courts have jurisdiction to pass upon the same. The determination of whether a specific rule or set of rules issued by an administrative agency contravenes the law or the constitution is within the jurisdiction of the regular courts. Indeed, the Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the regional trial courts. This is within the scope of judicial power, which includes the authority of the courts to determine in an appropriate action the validity of the acts of the political departments. Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.

85. NESTLE PHILIPPINES, INC. and NESTLE WATERS PHILIPPINES, INC. v UNIWIDE SALES, INC.,

G.R. No. 174674 : October 20, 2010

CARPIO, J.:

Facts:

Respondents filed in the Securities and Exchange Commission (SEC) a petition for declaration of suspension of payment, formation and appointment of rehabilitation receiver, and approval of rehabilitation plan.

The newly appointed Interim Receivership Committee filed a rehabilitation plan in the SEC. The plan was anchored on return to core business of retailing; debt reduction via cash settlement and dacion en pago; loan restructuring; waiver of penalties and charges; freezing of interest payments; and restructuring of credit of suppliers, contractors, and private lenders.

The Interim Receivership Committee filed in the SEC an Amended Rehabilitation Plan (ARP). The ARP took into account the planned entry of Casino Guichard Perrachon, envisioned to infuse P3.57 billion in fresh capital. SEC approved the ARP.

The Interim Receivership Committee filed in the SEC a Second Amendment to the Rehabilitation Plan (SARP) in view of Casino Guichard Perrachon's withdrawal. SEC approved the SARP.

Petitioners, as unsecured creditors of respondents, appealed to the SEC praying that the Order approving the SARP be set aside and a new one be issued directing the Interim Receivership Committee, in consultation with all the unsecured creditors, to improve the terms and conditions of the SARP.

SEC denied petitioners' appeal for lack of merit. Court of Appeals denied for lack of merit the petition for review filed by petitioners. Petitioners moved for reconsideration, which was also denied.

Issue:

Whether or not the SARP should be revoked and the rehabilitation proceedings terminated?

Ruling: Court of Appeals decision is sustained.

CONSTITUTIONAL LAW: administrative law; doctrine of primary administrative jurisdiction

In light of supervening events that have emerged from the time the SEC approved the SARP on 23 December 2002 and from the time the present petition was filed on 3 November 2006, any determination by this Court as to whether the SARP should be revoked and the rehabilitation proceedings terminated, would be premature.

Undeniably, supervening events have substantially changed the factual backdrop of this case. The Court thus defers to the competence and expertise of the SEC to determine whether, given the supervening events in this case, the SARP is no longer capable of implementation and whether the rehabilitation case should be terminated as a consequence.

Under the doctrine of primary administrative jurisdiction, courts will not determine a controversy where the issues for resolution demand the exercise of sound administrative discretion requiring the special knowledge, experience, and services of the administrative tribunal to determine technical and intricate matters of fact.

In other words, if a case is such that its determination requires the expertise, specialized training, and knowledge of an administrative body, relief must first be obtained in an administrative proceeding before resort to the court is had even if the matter may well be within the latter's proper jurisdiction.

The objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court.

Petition for review is DISMISSED.

86.  REPUBLIC vs. CARLITO LACAP

G.R. No. 158253             March 2, 2007

AUSTRIA-MARTINEZ, J.:

Facts:

• District Engineer of Pampanga issued and duly published an "Invitation To Bid"  Carwin Construction was pre-qualified was awarded the contract for the concreting of Sitio 5 Bahay Pare.
• Office of the District Engineer issued Certificates of Final Inspection and Final Acceptance( 100% Completed)
• Thereafter, respondent sought to collect payment for the completed project.
• However, the DPWH withheld payment from respondent after the District Auditor of the Commission on Audit (COA) disapproved the final release of funds on the ground that the contractor’s license of respondent had expired at the time of the execution of the contract
• respondent filed the complaint for Specific Performance and Damages against petitioner before the RTC.
• OSG), filed a Motion to Dismiss the complaint on the grounds that the complaint states no cause of action and that the RTC had no jurisdiction over the nature of the action since respondent did not appeal to the COA the decision of the District Auditor to disapprove the claim.
• RTC Denied the MD as well as MR. though OSG filed its Answer invoking the defenses of non-exhaustion of administrative remedies and the doctrine of non-suability of the State.
• RTC decide in favor of the contractor and CA affirmed with modification.

ISSUES:

1. RESPONDENT FAILED TO EXHAUST ADMINISTRATIVE REMEDIES; AND
2. IT IS THE COMMISSION ON AUDIT WHICH HAS THE PRIMARY JURISDICTION TO RESOLVE RESPONDENT’S MONEY CLAIM AGAINST THE GOVERNMENT

HELD:

The general rule is that before a party may seek the intervention of the court, he should first avail of all the means afforded him by administrative processes.²⁹ The issues which administrative agencies are authorized to decide should not be summarily taken from them and submitted to a court without first giving such administrative agency the opportunity to dispose of the same after due deliberation.

Corollary to the doctrine of exhaustion of administrative remedies is the doctrine of primary jurisdiction; that is, courts cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact.

Nonetheless, the doctrine of exhaustion of administrative remedies and the corollary doctrine of primary jurisdiction, which are based on sound public policy and practical considerations, are not inflexible rules. There are many accepted exceptions, such as: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively small so as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice;³² (f) where judicial intervention is urgent; (g) when its application may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) when the issue of non-exhaustion of administrative remedies has been rendered moot;³³ (j) when there is no other plain, speedy and adequate remedy; (k) when strong public interest is involved; and, (l) in quo warranto proceedings.³⁴ Exceptions (c) and (e) are applicable to the present case.

Notwithstanding the legal opinions of the DPWH Legal Department rendered in 1993 and 1994 that payment to a contractor with an expired contractor’s license is proper, respondent remained unpaid for the completed work despite repeated demands. Clearly, there was unreasonable delay and official inaction to the great prejudice of respondent.

Furthermore, whether a contractor with an expired license at the time of the execution of its contract is entitled to be paid for completed projects, clearly is a pure question of law. Exhaustion of administrative remedies does not apply, because nothing of an administrative nature is to be or can be done.³⁶ The issue does not require technical knowledge and experience but one that would involve the interpretation and application of law.

X x x x the administrative remedy available to respondent is an appeal of the denial of his claim by the District Auditor to the COA itself, the Court holds that, in view of exceptions (c) and (e) narrated above,

NB: Not part of Admin issue but somehow related: Besides, Article 22 of the Civil Code which embodies the maxim Nemo ex alterius incommode debet lecupletari (no man ought to be made rich out of another’s injury) states:

Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.

87. A.M. No. RTJ-06-2017 . June 19, 2008

LT. GEN. ALFONSO P. DAGUDAG v.  JUDGE MAXIMO G.W. PADERANGA

Facts:

The Region VII Philippine National Police Regional Maritime Group (PNPRMG) received information that MV General Ricarte of NMC Container Lines, Inc. was shipping container vans containing illegal forest products from Cagayan de Oro to Cebu. The shipments were falsely declared as cassava meal and corn grains to avoid inspection by the Department of Environment and Natural Resources (DENR).

inspected the container vans. The team discovered the undocumented forest products and the names of the shippers and consignees.

crew of MV General Ricarte failed to produce the certificate of origin forms and other pertinent transport documents covering the forest products.

DENR Forest Protection Officer posted notices on the CENRO and PENRO bulletin boards and at the NMC Container Lines, Inc. building informing the unknown owner about the administrative adjudication scheduled. Nobody appeared, hence, confiscated in favor of the government.

A complaint had been filed by Edma before Judge Paderanga. Judge issued a writ of replevin⁸ ordering Sheriff Reynaldo L. Salceda to take possession of the forest products

The motion to quash the writ had been denied.

Gen. Dagudag filed with the Office of the Court Administrator (OCA) an affidavit-complaint¹² dated 8 July 2005 charging Judge Paderanga with gross ignorance of the law and conduct unbecoming a judge.

OCA found that Judge Paderanga (1) violated the doctrine of exhaustion of administrative remedies; (2) violated the doctrine of primary jurisdiction; 

Issue:

WON Judge is guilty of gross ignorance of the law and unbecoming as a judge?

Ruling:

YES. The DENR is the agency responsible for the enforcement of forestry laws. Section 4 of Executive Order No. 192 states that the DENR shall be the primary agency responsible for the conservation, management, development, and proper use of the country’s natural resources. Further, Section 68 of Presidential Decree No. 705, as amended by Executive Order No. 277, Section 68-A states that the DENR Secretary or his duly authorized representatives may order the confiscation of any forest product illegally cut, gathered, removed, possessed, or abandoned.

In the instant case, the forest products were possessed by NMC Container Lines, Inc. without the required legal documents and were abandoned by the unknown owner. Consequently, the DENR seized the forest products.

Judge Paderanga should have dismissed the replevin suit outright for three reasons. First, under the doctrine of exhaustion of administrative remedies, courts cannot take cognizance of cases pending before administrative agencies. In Factoran, Jr. v. Court of Appeals,²⁰ the Court held that:

The doctrine of exhaustion of administrative remedies is basic. Courts, for reasons of law, comity and convenience, should not entertain suits unless the available administrative remedies have first been resorted to and the proper authorities have been given an appropriate opportunity to act and correct their alleged errors, if any, committed in the administrative forum. (Emphasis ours)

In the instant case, Edma did not resort to, or avail of, any administrative remedy. He went straight to court and filed a complaint for replevin and damages. Section 8 of Presidential Decree No. 705, as amended, states that (1) all actions and decisions of the Bureau of Forest Development Director are subject to review by the DENR Secretary; (2) the decisions of the DENR Secretary are appealable to the President; and (3) courts cannot review the decisions of the DENR Secretary except through a special civil action for certiorari or prohibition.

D. Doctrine of Exhaustion of Administrative Agencies.

88. MONTANEZ v (PARAD)

[G.R. NO. 183142 : September 17, 2009]

Facts:

Petitioner was the owner of two (2) parcels of land with an aggregate area of 35.5998 hectares, both located at Negros Occidental. In October 1999, the DAR caused the publication of a Notice of Land Coverage for Negros Occidental, and later, the DAR notified petitioner that her property, to the extent of 32.4257 hectares, has been placed under CARP and offered to compensate herthe amount of PhP 5,592,3001.60 based on the valuation of the LBP, subject to price adjustment to conform to the actual area coverage. Albeit petitioner rejected the offer, LBP later issued in her favor a certification of deposit, in cash and in bonds, corresponding to the amount aforestated. DAR secured from the Negros Occidental Registry the cancellation of petitioner’s titles and the issuance, in lieu thereof, titles in the name of the Republic. Later on the same day, CLOAs were issued. Evidently, such notations on the

CLOAs were erroneous, the aggregate land area stated in the CLOAs being larger than what was reflected in the titles whence the CLOAs emanate.  In any event, said CLOAs were registered in the name of, and delivered to, individual respondents as CARP beneficiaries. Petitioner forthwith filed a Petition PARAB for the annulment/cancellation of titles in view of the CLOAs on the ground of irregular and anomalous issuance thereof. However, said petition was denied. Therefrom, petitioner went straight to the CA via a petition for certiorari under Section 54of RA 6657. Public respondents sought the dismissal of this recourse on the ground of non-exhaustion of administrative remedies. CA, on the holding that the petitioner is entitled to the rectification of the technical error referred to above, but that the DAR is the proper office to effect the correction, rendered a decision.

Issue:

Whether or not petitioner failed to observe the doctrine of exhaustion of administrative remedies.

Ruling: 

Following the lessons of Paatand Asia International Auctioneers, Inc., the denial of the instant petition is clearly indicated. It bears to stress at the outset that, as aptly observed by the CA, there is no challenge from either of the parties to the jurisdiction of the PARAB or the provincial agrarian adjudicator to take cognizance of the basic petition of petitioner for annulment/cancellation of titles.  Just as well. For, the DARAB and its regional and provincial adjudication boards have jurisdiction to adjudicate all agrarian disputes and controversies or incidents involving the implementation of CARP under RA 6657 and other agrarian law and their implementing rules and regulations. Such jurisdiction of DARAB includes cases involving the issuance, correction, and cancellation of CLOAs and EPs which are registered with the Land Registration Authority.

For the purpose of applying the rule on exhaustion, the remedies available to the petitioner are clearly set out in the DARAB 2003 Rules of Procedure, which took effect on January 17, 2004.²⁸ Under Section 1.6, Rule II, the "adjudicator shall have primary and exclusive jurisdiction to determine and adjudicate x x x cases x x x involving the correction, x x x cancellation, secondary and subsequent issuances of [CLOAs] and [EPs] which are registered with the Land Registration Authority.

The proper remedy from an adverse final resolution, order, or resolution on the merits of the adjudicator is an appeal to the DARAB Proper which, among others, require the filing of a notice of appeal and payment of an appeal fee. And from the decision of the DARAB Proper, an appeal may be taken to the CA pursuant to Rule XV

Given the above perspective, the CA acted correctly and certainly within its sound discretion when it denied, in its amended decision, petitioner's petition for certiorari to nullify the PARAD's decision. Under the grievance procedure set forth in the DARAB Rules of Procedure, PARAD Alegario's decision was appealable to the DARAB Proper. The CA's appellate task comes later to review the case disposition of the DARAB Proper when properly challenged.

89. ADDITION HILLS MANDALUYONG CIVIC & SOCIAL ORGANIZATION, INC.,Petitioner,v. MEGAWORLD PROPERTIES & HOLDINGS, INC., WILFREDO I. IMPERIAL, in his capacity as Director, NCR, and HOUSING AND LAND USE REGULATORY BOARD, DEPARTMENT OF NATURAL RESOURCES, Respondents.

G.R. No. 175039: April 18, 2012
LEONARDO-DE CASTRO, J.:

Facts:

MEGAWORLD was the registered owner of a parcel of land located along Lee Street, Barangay Addition Hills, Mandaluyong City. It conceptualized the construction of a residential condominium complex on the said parcel of land called the Wack-Wack Heights Condominium consisting of a cluster of six (6) four-storey buildings and one (1) seventeen (17) storey tower. MEGAWORLD thereafter secured the necessary clearances, licenses and permits for the condominium project

Thereafter, construction of the condominium project began, but on June 30, 1995, the plaintiff-appellee AHMCSO filed a complaint before the Regional Trial Court of Pasig City, to annul the Building Permit, CLV, ECC and Development Permit granted to MEGAWORLD; to prohibit the issuance to MEGAWORLD of Certificate of Registration and License to Sell Condominium Units; and to permanently enjoin local and national building officials from issuing licenses and permits to MEGAWORLD.

MEGAWORLD filed a Motion to Dismiss the case for lack of cause of action and that jurisdiction over the case was with the public respondent HLURB and not with the regular courts.

The trial court ruled in favor of petitioner. On appeal, the CA reversed the trial court decision. Hence, the petitioner filed the instant petition.

Issue:

Whether or not petitioner failed to exhaust all administrative remedies

Ruling:

 Yes. CA Decision Affirmed.

Political Law- doctrine of exhaustion of administrative remedies; doctrine of primary jurisdiction

The thrust of the rule is that courts must allow administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence. The rationale for this doctrine is obvious. It entails lesser expenses and provides for the speedier resolution of controversies. Comity and convenience also impel courts of justice to shy away from a dispute until the system of administrative redress has been completed.

In the case of Republic v. Lacap, the SC held that before a party may seek the intervention of the court, he should first avail of all the means afforded him by administrative processes. The issues which administrative agencies are authorized to decide should not be summarily taken from them and submitted to a court without first giving such administrative agency the opportunity to dispose of the same after due deliberation.

Corollary to the doctrine of exhaustion of administrative remedies is the doctrine of primary jurisdiction; that is, courts cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact.

What is apparent, however, is that petitioner unjustifiably failed to exhaust the administrative remedies available with the Housing and Land Use Regulatory Board (HLURB) before seeking recourse with the trial court. Under the rules of the HLURB which were then in effect.

DENIED

90.  [G.R. No. 146382. August 7, 2003.]
SYSTEMS PLUS COMPUTER COLLEGE OF CALOOCAN CITY v. CALOOCAN CITY

Facts: Petitioner Systems Plus Computer College is a non-stock and non-profit educational institution. As such, it enjoys property tax exemption from the local government on its buildings but not on the parcels of land which petitioner is renting for P5,000 monthly from its sister companies, (Consolidated Assembly) and (Pair Management)

Petitioner requested respondent city government of Caloocan, through respondent Manahan, City Assessor and Administrator, to extend tax exemption to the parcels of land claiming that the same were being used actually, directly and exclusively for educational purposes in pursuant to the Constitution and Local Gov’t Code.  (DENIED)

Twice debunked, petitioner filed a petition for mandamus with the respondent Regional Trial Court which, however, dismissed it for being premature. Its timely motion for reconsideration having been denied, petitioner filed the instant petition for certiorari when ruled that petitioner failed to exhaust available administrative remedies.

Issue: Whether exhausted all available remedies?

Ruling:  NO. Under Section 226 of RA 7160, 12 the remedy of appeal to the Local Board of Assessment Appeals is available from an adverse ruling or action of the provincial, city or municipal assessor in the assessment of property.

X

The petitioner cannot bypass the authority of the concerned administrative agencies and directly seek redress from the courts even on the pretext of raising a supposedly pure question of law without violating the doctrine of exhaustion of administrative remedies. Hence, when the law provides for remedies against the action of an administrative board, body, or officer, as in the case at bar, relief to the courts can be made only after exhausting all remedies provided therein. Otherwise stated, before seeking the intervention of the courts, it is a precondition that petitioner should first avail of all the means afforded by the administrative processes.

91. ASSOCIATION OF PHILIPPINE COCONUT DESICCATORS vs. PHILIPPINE COCONUT AUTHORITY

G.R. No. 110526 February 10, 1998

MENDOZA, J.:

Facts:

• seven desiccated coconut processing companies belonging to the APCD brought suit in the Regional Trial Court, National Capital Judicial Region in Makati, Metro Manila, to enjoin the PCA from issuing permits to certain applicants for the establishment of new desiccated coconut processing plants. Petitioner alleged that the issuance of licenses to the applicants would violate PCA's Administrative Order No. 02, series of 1991, as the applicants were seeking permits to operate in areas considered "congested" under the administrative order.

• The trial court issued a temporary restraining order 

• PCA issued RV. 018 -93, providing for the withdrawal of the Philippine Coconut Authority from all regulation of the coconut product processing industry. While it continues the registration of coconut product processors, the registration would be limited to the "monitoring" of their volumes of production and administration of quality standards

Issue:

Whether RN 018-93 is null and void for being an undue exercise of legislative power by an administrative body

Ruling:

Petition is GRANTED. PCA Resolution No. 018-93 and all certificates of registration issued under it are hereby declared NULL and VOID for having been issued in excess of the power of the Philippine Coconut Authority to adopt or issue.

The rule of requiring exhaustion of administrative remedies before a party may seek judicial review, so strenuously urged by the Solicitor General on behalf of respondent, has obviously no application here. The resolution in question was issued by the PCA in the exercise of its rule-making or legislative power. However, only judicial review of decisions of administrative agencies made in the exercise of their quasi-judicial function is subject to the exhaustion doctrine. The exhaustion doctrine stands as a bar to an action which is not yet complete 4 and it is clear, in the case at bar, that after its promulgation the resolution of the PCA abandoning regulation of the desiccated coconut industry became effective.

92. Hongkong & Shanghai Banking Corporation, Ltd. v. G.G. Sportswear Manufacturing Corporation (489 SCRA 578, 2006)

CORONA, J.:

The doctrine of exhaustion of administrative remedies is a cornerstone of our judicial system. The thrust of the rule on exhaustion of administrative remedies is that the courts must allow the administrative agencies to carry out their functions and discharge their responsibilities within the specialized areas of their respective competence.

Facts:

G.G. Sportswear (G.G.) filed a petition with the SEC for a "Declaration of State of Suspension of Payments, for Approval of Proposed Rehabilitation Plan and for Appointment of Management Committee.”

The SEC hearing panel issued an order directing the suspension of all actions, claims and proceedings against G.G. pending before any court, tribunal, office, board, body and/or commission. The SEC hearing panel likewise enjoined G.G. from disposing of any of its properties in any manner except in the ordinary course of business and from making any payment outside the legitimate and ordinary expenses of its business operation during the pendency of the proceedings. The hearing panel also scheduled a creditors’ meeting on October 29, 1997 and directed the publication of a notice to this effect in a newspaper of general circulation once a week for two (2) consecutive week

Three of respondent’s creditors, Philippine Commercial and International Bank (PCIB), Dao Heng Bank and Standard Chartered Bank filed an urgent motion for the immediate constitution of a management committee. Another creditor, FEB Leasing and Finance Corporation, on the other hand, filed a motion for exclusion with manifestation. Despite notice, respondent’s representatives failed to appear at the hearings, as well as at the scheduled creditors’ meeting.

The hearing panel issued an order dated October 30, 1997 dismissing respondent’s petition and lifting the suspension order.

Respondent filed a motion to withdraw its amended petition with a view to filing another one to include its sister corporation, Magic Apparel Corporation (MAC), as co-petitioner

The SEC hearing panel in SEC Case No. 17-99-6374 dismissed the joint petition filed by respondent G.G. and its sister company MAC.

Respondent filed a "petition for certiorari, prohibition and mandamus with a prayer for the issuance of a restraining order/injunction" with the Court of Appeals.

On May 31, 2000, the Court of Appeals rendered the assailed decision reversing the SEC hearing panel and, on December 14, 2000, the assailed resolution denying reconsideration.

Issue: Whether or not respondent is excepted in exhausting administrative remedies.

Ruling: The exceptions to the doctrine of exhaustion of administrative remedies, as enumerated in Province of Zamboanga del Norte v. Court of Appeals ²⁸ are: (1) when there is a violation of due process; (2) when the issue involved is purely a legal question; (3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction; (4) when there is estoppel on the part of the administrative agency concerned; (5) when there is irreparable injury; (6) when the

respondent is a department secretary whose acts as an alter ego of the President bears the implied and assumed approval of the latter; (7) when to require exhaustion of administrative remedies would be unreasonable; (8) when it would amount to a nullification of a claim; (9) when the subject matter is a private land in land case proceedings; (10) when the rule does not provide a plain, speedy and adequate remedy, and (11) when there are circumstances indicating the urgency of judicial intervention, and unreasonable delay would greatly prejudice the complainant; (12) where no administrative review is provided by law; (13) where the rule of qualified political agency applies and (14) where the issue of non-exhaustion of administrative remedies has been rendered moot.

From among these exceptions, respondent claims denial of due process by the hearing panel and grave abuse of discretion on the part of the hearing panel amounting to lack or excess of jurisdiction. The facts on record, however, do not bear out respondent’s allegations. Respondent did not dispute that the hearing panel extended the suspension order in its favor three times for a total period of almost eight months. During this time, the panel provided respondent more than ample opportunity to present its evidence. Neither did respondent dispute the fact that the cross-examination of its witness, external auditor Mainrado M. Laygo, was suspended during the hearing due to its own failure to attach the requisite financial documents and records to its petition, in violation of the SEC Policy Guidelines. When the cross-examination was terminated, if anyone was deprived of due process, it was the creditors who were unable to propound searching questions to respondent’s witness.

Legal and Practical Reasons for Doctrine of Exhaustion of Administrative Remedies

93. Merida Water District v. Bacarro (567 SCRA 203, 2008)

G.R. NO. 165993 : September 30, 2008

PUNO, C.J.:

Facts: Merida Water District, a government-owned and controlled corporation4 that operates the water utility services in the municipality of Merida, Leyte conducted a public hearing for the purpose of increasing the water rate

March 7, 2002: Merida Water District received a letter from the Local Water Utilities Administration (LWUA) that on March 5, 2002, the LWUA Board of Trustees, per Board Resolution No. 63, series of 2002, confirmed Merida Water District’s proposed water rates.

September 3, 2002: Merida implemented a water rate increase of P90 for the first ten cubic meters of water consumption.

February 13, 2003: consumers of Merida Water District, filed a Petition for Injunction, etc. because the rates are contrary to the rate increase agreed upon during the public hearing

Merida filed a motion to dismiss (then later motion for reconsideration) with the RTC due to failure to exhaust administrative remedies under Presidential Decree (P.D.) No. 198, the Provincial Water Utilities Act of 1973, as amended by P.D. Nos. 768 and 1479 - denied

Petition for Review on Certiorari with the CA (then later motion for reconsideration) - denied

Petition for Review on Certiorari with the SC

Issue: Whether or not there is lack of jurisdiction with the RTC since the primary jurisdiction should belong to the NWRB under P.D. No. 1067. 

Ruling: Yes.

Petitioners failed to cite any law which impliedly grants the NWRB original and exclusive jurisdiction to resolve a dispute regarding the increase of water rates. A grant of exclusive jurisdiction cannot be implied from the language of a statute in the absence of a clear legislative intent to that effect. An administrative agency with quasi-judicial power is a tribunal of limited jurisdiction, and its jurisdiction should be interpreted in strictissimi juris."

The doctrine of exhaustion does not apply when jurisdiction is exclusive. An administrative agency’s exclusive jurisdiction over a certain dispute renders the courts without jurisdiction to adjudicate the same at that stage. The doctrine of exhaustion applies "where a claim is cognizable in the first instance by an administrative agency alone; judicial intervention is withheld until the administrative process has run its course. To cite Abe-Abe v. Manta as the authority to support the allegation that the NWRB has original and exclusive jurisdiction over a dispute regarding a water rate increase is a strained construction of this Court’s pronouncements. Thus, petitioners’ contention that the RTC has no jurisdiction because the NWRB has original and exclusive jurisdiction over a dispute concerning the increase of water rates is clearly without merit.

One of the reasons for the doctrine of exhaustion is the separation of powers, which enjoins upon the Judiciary a becoming policy of non-interference with matters coming primarily (albeit not exclusively) within the competence of the other departments. The theory is that the administrative authorities are in a better position to resolve questions addressed to their particular expertise and that errors committed by subordinates in their resolution may be rectified by their superiors if given a chance to do so… It may be added that strict enforcement of the rule could also relieve the courts of a considerable number of avoidable cases which otherwise would burden their heavily loaded dockets.  

Although the doctrine of exhaustion does not preclude in all cases a party from seeking judicial relief, cases where its observance has been disregarded require a strong showing of the inadequacy of the prescribed procedure and of impending harm.  Respondents justify their failure to observe the administrative process on the following exceptions to the doctrine of exhaustion of administrative remedies: (1) patent illegality; and (2) a denial of due process. However, respondents fail to show that the instant case merits the application of these exceptions.

Jurisprudence affirming the failure to observe the doctrine of exhaustion due to a denial of due process involves instances when the party seeking outright judicial intervention was denied the opportunity to be heard.  Here, respondents admit that Merida Water District conducted a public hearing. . The existence of a hearing for this purpose renders the allegation of a denial of due process without merit.  The failure of the respondents to show that the instant case falls within the exceptions to the doctrine of exhaustion necessitates in the due observance of exhausting the proper administrative remedies before seeking judicial intervention.

94. Dimson (Manila), Inc. v. Local Water Utilities Administration (631 SCRA 59, 2010)

G.R. No. 168656 : September 22, 2010

PERALTA, J.:

Facts:

Petitioners Dimson (Manila), Inc. and PHESCO, Inc. are duly organized domestic corporations that had entered into a joint venture agreement¹ for the specific purpose of placing their bid to execute the Urdaneta Water Supply Improvement Project (the Urdaneta Project) of respondent LWUA. LWUA is the lead government agency vested by Presidential Decree No. 198with the principal function of facilitating the improvement and development of provincial water utilities.

On December 10 and 18, 2004, LWUA had caused the publication of an invitation to bid on the Urdaneta Project.

Sixteen contractors, including petitioners' joint venture, responded to the invitation and eight of them submitted bid proposals. Petitioners submitted to LWUA's Bids and Awards Committee (BAC) their proposal in two (2) sealed envelopes each containing their compliance with eligibility requirements as a joint venture and their financial proposal as such to undertake the project. Petitioners passed the eligibility requirements and were found to have placed the lowest calculated bid.

However, on April 19, 2005, petitioners were informed by LWUA Administrator Lorenzo Jamora that following the post-qualification stage of the evaluation process, the joint venture would have to be disqualified by the BAC on the finding that Dimson (Manila), Inc.'s joint venture with another contractor.

 petitioners' request for reconsideration was declined. To prevent the execution of the project by R-II Builders, petitioners filed the instant petition for certiorari , prohibition and mandamus alleging grave abuse of discretion on the part of LWUA when it post-disqualified their joint venture from taking part in the project

Issue: Whether or not petitioner exhausted all available administrative remedies?

Ruling:

The doctrine of exhaustion of administrative remedies requires that when an administrative remedy is provided by law, relief must be sought by exhausting this remedy before judicial intervention may be availed of. No recourse can be had until all such remedies have been exhausted, and the special civil actions against administrative officers should not be entertained if there are superior administrative officers who could grant relief. Carale v. Abarintos²⁴ explains the reason for the rule, thus:

Observance of the mandate regarding exhaustion of administrative remedies is a sound practice and policy. It ensures an orderly procedure which favors a preliminary sifting process, particularly with respect to matters within the competence of the administrative agency, avoidance of interference with functions of the administrative agency by withholding judicial action until the administrative process had run its course, and prevention of attempts to swamp the courts by a resort to them in the first instance. The underlying principle of the rule rests on the presumption that the administrative agency, if afforded a complete chance to pass upon the matter, will decide the same correctly. There are both legal and practical reasons for this principle. The administrative process is intended to provide less expensive and [speedier] solutions to disputes. Where the enabling statute indicates a procedure for administrative review, and provides a system of administrative appeal, or reconsideration, the courts, for reasons of law, comity and convenience, will not entertain the case unless the available administrative remedies have been resorted to and the appropriate authorities have been given an opportunity to act and correct the errors committed in the administrative forum.

Accordingly, the party with an administrative remedy must not merely initiate the prescribed administrative procedure to obtain relief, but also pursue it to its appropriate conclusion before seeking judicial intervention in order to give the administrative agency an opportunity to decide the matter by itself correctly and prevent unnecessary and premature resort to the court.

One final note. The doctrine of exhaustion of administrative remedies is a judicial recognition of certain matters that are peculiarly within the competence of the administrative agency to address. It operates as a shield that prevents the overarching use of judicial power and thus hinders courts from intervening in matters of policy infused with administrative character. The Court has always adhered to this precept, and it has no reason to depart from it now.

WHEREFORE, the Petition is DISMISSED.

Exceptions to the Doctrine of Exhaustion of Administrative Remedies

95. Philippine Health Insurance Corporation v. Chinese General Hospital andMedical Center (456 SCRA 459, 2005)  

G.R. NO. 163123. April 15, 2005

CORONA, J.:

Facts:

The facts, as culled by the Court of Appeals, follow.

On February 14, 1995, Republic Act No. 7875, otherwise known as "An Act Instituting a National Health Insurance Program for all Filipinos and Establishing the Philippine Health Insurance Corporation For the Purpose," was approved and signed into law. As its guiding principle, it is provided in Section 2 thereof, thus:

Prior to the enactment of R.A. 7875. CGHhad been an accredited health care provider under the Philippine Medical Care Commission (PMCC), more popularly known as Medicare.

As such, petitioner filed its Medicare claims with the Social Security System (SSS), which, together with the Government Service Insurance System (GSIS), administered the Health Insurance Fund of the PMMC. Thus, petitioner filed its claim from 1989 to 1992 with the SSS, amounting to EIGHT MILLION ONE HUNDRED TWO THOUSAND SEVEN HUNDRED EIGHTY-TWO and 10/100 (P8,102,782.10). Its application for the payment of its claim with the SSS was overtaken by the passage of R.A. 7875, which in Section 51 and 52.

If the delay in the filing is due to natural calamities or other fortuitous events, the health care provider shall be accorded an extension period of sixty (60) calendar days.

If the delay in the filing of the claim is caused by the health care provider, and the Medicare benefits had already been deducted, the claim will not be paid. If the claim is not yet deducted, it will be paid to the member chargeable to the future claims of the health care provider.

Instead of giving due course to petitioner's claims totaling to EIGHT MILLION ONE HUNDRED TWO THOUSAND SEVEN HUNDRED EIGHTY-TWO and 10/100 (P8,102,782.10), only ONE MILLION THREE HUNDRED SIXTY-FIVE THOUSAND FIVE HUNDRED FIFTY-SIX and 32/100 Pesos (1,365,556.32) was paid to petitioner, representing its claims from 1989 to 1992 (sic).

Petitioner again filed its claims representing services rendered to its patients from 1998 to 1999, amounting to SEVEN MILLION FIVE HUNDRED FIFTY FOUR THOUSAND THREE HUNDRED FORTY TWO and 93/100 Pesos (P7,554,342.93). For being allegedly filed beyond the sixty (60) day period allowed by the implementing rules and regulations, Section 52 thereof, petitioner's claims were denied by the Claims Review Unit of Philhealth

Petitioner's claim was denied with finality by PHILHEALTH in its assailed decision 

Issue: Whether the petitioner is exempted to exhaust administrative remedies?

Ruling: Yes. Petitioner likewise contends that respondent failed to exhaust administrative remedies before resorting to judicial intervention. We disagree.

Under the doctrine of exhaustion of administrative remedies, an administrative decision must first be appealed to the administrative superiors at the highest level before it may be elevated to a court of justice for review.

This doctrine, however, is a relative one and its flexibility is conditioned on the peculiar circumstances of a case. There are a number of instances when the doctrine has been held to be inapplicable. Among the established exceptions are:

1) when the question raised is purely legal;

2) when the administrative body is in estoppel;

3) when the act complained of is patently illegal;

4) when there is urgent need for judicial intervention;

5) when the claim involved is small;

6) when irreparable damage will be suffered;

7) when there is no other plain, speedy and adequate remedy;

8) when strong public interest is involved;

9) when the subject of the controversy is private land;

10) in quo warranto proceedings.

As explained by the appellate court:

It is Our view that the instant case falls as one of the exceptions, concerning as it does public interest. As mentioned earlier, although they were not made parties to the instant case, the rights of millions of Filipinos who are members of PHILHEALTH and who obviously rely on it for their health care, are considered, nonetheless, parties to the present case. This Court is mandated herein to take conscious and detailed consideration of the interplay of the interests of the state, the health care giver and the members. With these in mind, We hold that the greater interest of the greater number of people, mostly members of PHILHEALTH, is paramount.

96. Land Bank of the Philippines v. Celoada (479 SCRA 495, 2006)

G.R. No. 164876. January 23, 2006

YNARES-SANTIAGO, J.:

Facts: Respondent Leonila P. Celada owns 22.3167 hectares of agricultural land of which 14.1939 hectares was identified in 1998 by the Department of Agrarian Reform (DAR) as suitable for compulsory acquisition under the Comprehensive Agrarian Reform Program (CARP). The matter was then indorsed to petitioner Land Bank of the Philippines (LBP) for field investigation and land valuation.

In due course, LBP valued respondent's land at P2.1105517 per square meter for an aggregate value of P299,569.61.  The DAR offered the same amount to respondent as just compensation, but it was rejected. Nonetheless, on August 27, 1999, LBP deposited the said sum in cash and bonds in the name of respondent.  

Pursuant to Section 16(d) of Republic Act (RA) No. 6657 or the Comprehensive Agrarian Reform Law of 1988, the matter was referred to the DAR Adjudication Board (DARAB), Region VII-Cebu City, for summary administrative hearing on determination of just compensation. The case was docketed as DARAB Case No. VII-4767-B-990.

While the DARAB case was pending, respondent filed, on February 10, 2000, a petition  for judicial determination of just compensation against LBP, the DAR and the Municipal Agrarian Reform Officer (MARO) of Carmen, Bohol, before the Regional Trial Court of Tagbilaran City.

Issue:  Whether or not exhaust administrative remedies applies in the case at bar

Ruling: In the same vein, there is no merit to petitioner's contention that respondent failed to exhaust administrative remedies when she directly filed the petition for determination of just compensation with the SAC even before the DARAB case could be resolved. The issue is now moot considering that the valuation made by petitioner had long been affirmed by the DARAB in its order dated April 12, 2000. As held in Land Bank of the Philippines v. Wycoco,[25] the doctrine of exhaustion of administrative remedies is inapplicable when the issue is rendered moot and academic, as in the instant case.

97. Republic v. Lacap (517 SCRA 255, 2007)

G.R. No. 158253             March 2, 2007

AUSTRIA-MARTINEZ, J.:

Facts: The District Engineer of Pampanga issued and duly published an "Invitation To Bid" dated January 27, 1992. Respondent, doing business under the name and style Carwin Construction and Construction Supply (Carwin Construction), was pre-qualified together with two other contractors. A Contract Agreement was executed by respondent and petitioner. On September 25, 1992, District Engineer Rafael S. Ponio issued a Notice to Proceed with the concreting of Sitio 5 Bahay Pare.⁵ Accordingly, respondent undertook the works, made advances for the purchase of the materials and payment for labor costs.

Office of the District Engineer conducted a final inspection of the project and found it 100% completed in accordance with the approved plans and specifications. Accordingly, the Office of the District Engineer issued Certificates of Final Inspection and Final Acceptance.

Thereafter, respondent sought to collect payment for the completed project.⁸ The DPWH prepared the Disbursement Voucher in favor of petitioner.⁹ However, the DPWH withheld payment from respondent after the District Auditor of the Commission on Audit (COA) disapproved the final release of funds on the ground that the contractor’s license of respondent had expired at the time of the execution of the contract.

The District Engineer sought the opinion of the DPWH Legal Department on whether the contracts of Carwin Construction for various Mount Pinatubo rehabilitation projects were valid and effective although its contractor’s license had already expired when the projects were contracted.¹⁰

In a Letter-Reply dated September 1, 1993, Cesar D. Mejia, Director III of the DPWH Legal Department opined that since Republic Act No. 4566 (R.A. No. 4566), otherwise known as the Contractor’s License Law, does not provide that a contract entered into after the license has expired is void and there is no law which expressly prohibits or declares void such contract, the contract is enforceable and payment may be paid, without prejudice to any appropriate administrative liability action that may be imposed on the contractor and the government officials or employees concerned.

In a Letter dated July 4, 1994, the District Engineer requested clarification from the DPWH Legal Department on whether Carwin Construction should be paid for works accomplished despite an expired contractor’s license at the time the contracts were executed.¹²

Cesar D. Mejia, Director III of the Legal Department, recommended that payment should be made to Carwin Construction, reiterating his earlier legal opinion.¹³ Despite such recommendation for payment, no payment was made to respondent.

Thus, on July 3, 1995, respondent filed the complaint for Specific Performance and Damages against petitioner before the RTC.

Issue: Whether or not exhaust administrative remedies applies in the case at bar

Ruling: No.  The present petition is bereft of merit.

The general rule is that before a party may seek the intervention of the court, he should first avail of all the means afforded him by administrative processes. The issues which administrative agencies are authorized to decide should not be summarily taken from them and submitted to a court without first giving such administrative agency the opportunity to dispose of the same after due deliberation.

Corollary to the doctrine of exhaustion of administrative remedies is the doctrine of primary jurisdiction; that is, courts cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal prior to the resolution of that question by the administrative tribunal, where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact.

Nonetheless, the doctrine of exhaustion of administrative remedies and the corollary doctrine of primary jurisdiction, which are based on sound public policy and practical considerations, are not inflexible rules. There are many accepted exceptions, such as: (a) where there is estoppel on the part of the party invoking the doctrine; (b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction; (c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant; (d) where the amount involved is relatively small so as to make the rule impractical and oppressive; (e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice; (f) where judicial intervention is urgent; (g) when its application may cause great and irreparable damage; (h) where the controverted acts violate due process; (i) when the issue of non-exhaustion of administrative remedies has been rendered moot; (j) when there is no other plain, speedy and adequate remedy; (k) when strong public interest is involved; and, (l) in quo warranto proceedings. Exceptions (c) and (e) are applicable to the present case.

Notwithstanding the legal opinions of the DPWH Legal Department rendered in 1993 and 1994 that payment to a contractor with an expired contractor’s license is proper, respondent remained unpaid for the completed work despite repeated demands. Clearly, there was unreasonable delay and official inaction to the great prejudice of respondent.

98.  Corpus v. Cuaderno, Sr. (4 SCRA 749, 1962)

G.R. No. L-17860             March 30, 1962

DE LEON, J.:

Facts: While petitioner-appellant was holding the position of Special Assistant to the Governor of the Central Bank of the Philippines — a position declared by the President of the Philippines as "highly technical in nature and placed in the exempt class" (Appendix "D", Exhibit "VV"), he was, on or about March 7, 1958, charged in an administrative case, for alleged dishonesty, incompetence, neglect of duty and/or abuse of authority, oppression, misconduct, etc. preferred against him by employees of the Bank, resulting in his suspension by the Monetary Board of the Bank and the creation of a 3-man committee to investigate him. The committee was composed of representatives of the Bank, Bureau of Civil Service and the Office of the City Fiscal of Manila. After receiving the answer of the respondent therein, the committee heard the case, receiving testimonies of witnesses on both sides. he committee submitted its Final Report.

Unable to agree with the committee report, the Monetary Board adopted Resolution No. 957 on July 20, 1959 which considered "the respondent, R. Marino Corpus, resigned as of the date of his suspension."

Three days after, the Monetary Board adopted Resolution No. 995, dated July 23, 1959, approving the appointment of herein respondent Mario Marcos to the position involved in place of petitioner R. Marino Corpus.

On August 18, 1959, petitioner filed a petition for certiorari, mandamus and quo warranto, with preliminary mandatory injunction and damages, against the herein respondents.

Issue: Whether or not exhaust administrative remedies applies in the case at bar

Ruling: Yes

On the other hand, the doctrine does not apply where, by the terms or implications of the statute authorizing an administrative remedy, such remedy is permissive only, warranting the conclusion that the legislature intended to allow the judicial remedy even though the administrative remedy has not been exhausted (42 Am. Jur. 583).

The reason is obvious. While it may be desirable that administrative remedies be first resorted to, no one is compelled or bound to do so; and as said remedies neither are prerequisite to nor bar the institution of quo warranto proceedings, it follows that he who claims the right to hold a public office allegedly usurped by another and who desires to seek redress in the courts, should file the proper judicial action within the reglementary period. As emphasized in Bautista vs. Fajardo, 38 Phil. 624, and Tumulak vs. Egay, 46 O.G. 3683, public interest requires that the right to a public office should be determined as speedily as practicable.

Upon the foregoing, we have to disagree with the legal opinion of the trial judge and hold that the doctrine of exhaustion of administrative remedies is inapplicable and does not bar the present proceedings.

Considering the two views we have taken in the case, we deem it unnecessary to pass upon the second and third assignments of error which partially involve the evaluation of facts. The court below has started to receive the evidence, and it is better equipped and should be given the chance to pass upon the credibility of the witnesses who testified before it (Veraguth vs. Isabela Sugar Co., 57 Phil. 266).

Exhaustion of Administrative Remedies Doctrine and Primary Jurisdiction Doctrine Distinguished

99. Regino v. Pangasinan Colleges of Science and Technology (443 SCRA 56,2005)

G.R. NO. 156109 : November 18, 2004

PANGANIBAN, J.:

Upon enrolment, students and their school enter upon a reciprocal contract. The students agree to abide by the standards of academic performance and codes of conduct, issued usually in the form of manuals that are distributed to the enrollees at the start of the school term. Further, the school informs them of the itemized fees they are expected to pay. Consequently, it cannot, after the enrolment of a student, vary the terms of the contract. It cannot require fees other than those it specified upon enrolment.

Facts:

Petitioner Khristine Rea M. Regino was a first year computer science student at Respondent Pangasinan Colleges of Science and Technology (PCST). Reared in a poor family, Regino went to college mainly through the financial support of her relatives. During the second semester of school year 2001-2002, she enrolled in logic and statistics subjects under Respondents Rachelle A. Gamurot and Elissa Baladad, respectively, as teachers.

In February 2002, PCST held a fund raising campaign dubbed the "Rave Party and Dance Revolution," the proceeds of which were to go to the construction of the school's tennis and volleyball courts. Each student was required to pay for two tickets at the price of P100 each. The project was allegedly implemented by recompensing students who purchased tickets with additional points in their test scores; those who refused to pay were denied the opportunity to take the final examinations.

Financially strapped and prohibited by her religion from attending dance parties and celebrations, Regino refused to pay for the tickets.

Respondents Rachelle A. Gamurot and Elissa Baladad - - allegedly disallowed her from taking the tests

petitioner filed, as a pauper litigant, a Complaint for damages against PCST, Gamurot and Baladad. 

respondents filed a Motion to Dismiss on the ground of petitioner's failure to exhaust administrative remedies. According to respondents, the question raised involved the determination of the wisdom of an administrative policy of the PCST; hence, the case should have been initiated before the proper administrative body, the Commission of Higher Education (CHED).

Issue: whether or not doctrine of administrative remedies is applicable in the case.

Ruling: No. CHED cannot award damages.

Respondents anchored their Motion to Dismiss on petitioner's alleged failure to exhaust administrative remedies before resorting to the RTC. According to them, the determination of the controversy hinge on the validity, the wisdom and the propriety of PCST's academic policy. Thus, the Complaint should have been lodged in the CHED, the administrative body tasked under Republic Act No. 7722 to implement the state policy to "protect, foster and promote the right of all citizens to affordable quality education at all levels and to take appropriate steps to ensure that education is accessible to all."

Petitioner counters that the doctrine finds no relevance to the present case since she is praying for damages, a remedy beyond the domain of the CHED and well within the jurisdiction of the courts.

Petitioner is correct. First, the doctrine of exhaustion of administrative remedies has no bearing on the present case. In Factoran Jr. v. CA, the Court had occasion to elucidate on the rationale behind this doctrine:

"The doctrine of exhaustion of administrative remedies is basic. Courts, for reasons of law, comity, and convenience, should not entertain suits unless the available administrative remedies have first been resorted to and the proper authorities have been given the appropriate opportunity to act and correct their alleged errors, if any, committed in the administrative forum. x x x. "

Petitioner is not asking for the reversal of the policies of PCST. Neither is she demanding it to allow her to take her final examinations; she was already enrolled in another educational institution. A reversal of the acts complained of would not adequately redress her grievances; under the circumstances, the consequences of respondents' acts could no longer be undone or rectified.

Second, exhaustion of administrative remedies is applicable when there is competence on the part of the administrative body to act upon the matter complained of. Administrative agencies are not courts; they are neither part of the judicial system, nor are they deemed judicial tribunals. Specifically, the CHED does not have the power to award damages. Hence, petitioner could not have commenced her case before the Commission.

Third, the exhaustion doctrine admits of exceptions, one of which arises when the issue is purely legal and well within the jurisdiction of the trial court.  Petitioner's action for damages inevitably calls for the application and the interpretation of the Civil Code, a function that falls within the jurisdiction of the courts.

Relation between Doctrine of Exhaustion of Administrative Remedies and Due Process Concept

100. Ruvivar v. Office of the Ombudsman (565 SCRA 324, 2008)

G.R. NO. 165012 : September 16, 2008

BRION, J.:

Facts:

the private respondent filed an Affidavit-Complaint charging the petitioner before the Ombudsman of serious misconduct, conduct unbecoming of a public official, abuse of authority, and violations of the Revised Penal Code and of the Graft and Corrupt Practices Act.⁶ The private respondent stated in her complaint that she is the President of the Association of Drug Testing Centers (Association) that conducts drug testing and medical examination of applicants for driver's license. In this capacity, she went to the Land Transportation Office (LTO) on May 17, 2002 to meet with representatives from the Department of Transportation and Communication (DOTC) and to file a copy of the Association's request to lift the moratorium imposed by the LTO on the accreditation of drug testing clinics. Before proceeding to the office of the LTO Commissioner for these purposes, she passed by the office of the petitioner to conduct a follow up on the status of her company's application for accreditation. While there, the petitioner -- without provocation or any justifiable reason and in the presence of other LTO employees and visitors -- shouted at her in a very arrogant and insulting manner, hurled invectives upon her person, and prevented her from entering the office of the LTO Commissioner. The petitioner also accused the private respondent of causing intrigues against her at the DOTC. To prove her allegations, the private respondent presented the affidavits of three witnesses.⁷

Ombudsman rendered the November 4, 2002 Decision based on the pleadings and the submitted affidavits. It found the petitioner administratively liable for discourtesy in the course of her official functions and imposed on her the penalty of reprimand.

Issue:

Ruling:

Doctrine of Exhaustion of Administrative Remedies

We deny the Petition.

While we find that the Court of Appeals erred in its ruling on the appropriate mode of review the petitioner should take, we also find that the appellate court effectively ruled on the due process issue raised - the failure to provide the petitioner the affidavits of witnesses - although its ruling was not directly expressed in due process terms. The CA's finding that the petitioner failed to exhaust administrative remedies (when she failed to act on the affidavits that were belatedly furnished her) effectively embodied a ruling on the due process issue at the same time that it determined the propriety of the petition for certiorari that the CA assumed arguendo to be the correct remedy.

Under this situation, the error in the appellate court's ruling relates to a technical matter - the mode of review that the petitioner correctly took but which the CA thought was erroneous. Despite this erroneous conclusion, the CA nevertheless fully reviewed the petition and, assuming it arguendo to be the correct mode of review, also ruled on its merits. Thus, while it erred on the mode of review aspect, it correctly ruled on the exhaustion of administrative remedy issue and on the due process issue that the exhaustion issue implicitly carried. In these lights, the present petition essentially has no merit so that its denial is in order.

Due Process Concept.

The CA Decision dismissed the petition for certiorari on the ground that the petitioner failed to exhaust all the administrative remedies available to her before the Ombudsman. This ruling is legally correct as exhaustion of administrative remedies is a requisite for the filing of a petition for certiorari.³⁴ Other than this legal significance, however, the ruling necessarily carries the direct and immediate implication that the petitioner has been granted the opportunity to be heard and has refused to avail of this opportunity; hence, she cannot claim denial of due process. In the words of the CA ruling itself: "Petitioner was given the opportunity by public respondent to rebut the affidavits submitted by private respondent. . . and had a speedy and adequate administrative remedy but she failed to avail thereof for reasons only known to her."

For a fuller appreciation of our above conclusion, we clarify that although they are separate and distinct concepts, exhaustion of administrative remedies and due process embody linked and related principles. The "exhaustion" principle applies when the ruling court or tribunal is not given the opportunity to re-examine its findings and conclusions because of an available opportunity that a party seeking recourse against the court or the tribunal's ruling omitted to take. Under the concept of "due process," on the other hand, a violation occurs when a court or tribunal rules against a party without giving him or her the opportunity to be heard. Thus, the exhaustion principle is based on the perspective of the ruling court or tribunal, while due process is considered from the point of view of the litigating party against whom a ruling was made. The commonality they share is in the same "opportunity" that underlies both. In the context of the present case, the available opportunity to consider and appreciate the petitioner's counter-statement of facts was denied the Ombudsman; hence, the petitioner is barred from seeking recourse at the CA because the ground she would invoke was not considered at all at the Ombudsman level. At the same time, the petitioner - who had the same opportunity to rebut the belatedly-furnished affidavits of the private respondent's witnesses - was not denied and cannot now claim denial of due process because she did not take advantage of the opportunity opened to her at the Ombudsman level.

Under these circumstances, we cannot help but recognize that the petitioner's cause is a lost one, not only for her failure to exhaust her available administrative remedy, but also on due process grounds. The law can no longer help one who had been given ample opportunity to be heard but who did not take full advantage of the proffered chance.